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Health Insurers Fear Texas Trial Lawyers Seek Billions in New Litigation

March 30, 2016 Mark Curriden

© 2015 The Texas Lawbook.

By Robert Garrett of The Dallas Morning News

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AUSTIN (March 31) — Texas health insurers and hospitals clashed Wednesday over whether the insurance companies face a dire threat from computer-assisted, mischief-making trial lawyers.

The issue is whether plaintiffs’ lawyers, assisted by data mining companies, are about to collect billions from insurers for dragging their feet on reimbursement claims.

In recent months, insurers and advocates of lawsuit limits have warned of potential abuse of a penalty system on insurers that state lawmakers embraced in 2003 as a way to discourage chronically late payments to doctors and hospitals.

San Antonio trial lawyer Mikal Watts’ letters to fellow lawyers have been cited by insurers and advocates of lawsuit limits.

Insurers and lawsuit-limit proponents have pointed to solicitation letters that San Antonio personal-injury lawyer Mikal Watts sent to fellow lawyers in 2013.

In the letters, Watts offered incentives for lawyers to refer health care providers to his joint venture with data mining companies – a 20 percent “referral fee on any fees earned.”

While Watts did not specify the fee arrangement his law firm had with 29 hospitals and thousands of other medical caregivers, he speculated that Texas providers could recover between $6 billion and $8 billion by invoking the Texas Prompt Pay Act.

But Jeff Cody, a partner at Norton Rose Fulbright in Dallas who represents nonprofit hospitals, told a Texas House panel Wednesday that a recent court decision probably would dissolve efforts to gin up the huge lawsuits that insurers fear.

Last month, a three-judge panel of the 5th U.S. Circuit Court of Appeals ruled that penalties and interest the Texas law slaps on late payers don’t apply to missteps by employers’ “self-funded” health plans.

For more on this article, please visit DallasNews.com at trailblazersblog.dallasnews.com.

© 2016 The Texas Lawbook. Content of The Texas Lawbook is controlled and protected by specific licensing agreements with our subscribers and under federal copyright laws. Any distribution of this content without the consent of The Texas Lawbook is prohibited.

If you see any inaccuracy in any article in The Texas Lawbook, please contact us. Our goal is content that is 100% true and accurate. Thank you.

Mark Curriden

Mark Curriden is a lawyer/journalist and founder of The Texas Lawbook. In addition, he is a contributing legal correspondent for The Dallas Morning News.

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©2025 The Texas Lawbook.

Content of The Texas Lawbook is controlled and protected by specific licensing agreements with our subscribers and under federal copyright laws. Any distribution of this content without the consent of The Texas Lawbook is prohibited.

If you see any inaccuracy in any article in The Texas Lawbook, please contact us. Our goal is content that is 100% true and accurate. Thank you.

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