By Robert Garrett of The Dallas Morning News
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.