TEXARKANA, Texas —A proposed class action lawsuit pending in a Texarkana federal court accuses the company that operates Wadley hospital and a medical billing company of violating state law and engaging in fraud in auto accident injury cases.
The complaint was filed in July by Texarkana lawyer Jim Wyly on behalf of Bowie County resident Beverly Williams and seeks certification as a class action which would represent others who've sought treatment at hospitals operated by Steward Health Care System in Texas including Wadley Regional Medical Center in Texarkana, Texas.
Steward and billing contractor Medical Reimbursements of America are named as defendants. Neither company responded to email requests for comment Friday.
The complaint alleges that MRA, acting on Steward's behalf, seeks to augment hospital revenue by increasing automobile claim payments illegally.
According to the complaint, Williams sought treatment at Wadley after being injured July 5, 2018, on Highway 59 in Cass County, Texas. Williams was a passenger in a car which was struck when another motorist crossed the median and struck the car she was riding in.
Williams alleges that she notified Wadley personnel that she has health insurance through Blue Cross Blue Shield of Texas.
"However, during the screening process, defendants had in place their unlawful system, which upon identifying plaintiff as having been involved in an automobile accident, listed defendant MRA as the 'Primary insurance.' Further, defendants' unlawful system omitted plaintiff's health insurance plan as the source for payment, listed her as 'Self Pay,' and further coded her financial status as 'Legal,'" the complaint states.
After being treated, Williams' bill came to $9,750.79. The complaint alleges that amount is higher than the total of what Blue Cross would have been required to pay through its contract with the hospital plus the amount Williams would have been responsible for out-of-pocket in co-pay and deductible. The complaint alleges MRA and Steward are guilty of charging a higher price for services than allowed by Williams' coverage under her Blue Cross policy.
The complaint alleges MRA attempted to collect $9,750.79 from the insurance company, Safeway, which insured the driver of the car which hit the car in which Williams was riding. The letter sent to Safeway asks that if the company reaches a settlement with Williams they should send $9,750.79 of the settlement to the hospital.
The complaint alleges MRA's conduct is illegal for several reasons. First the complaint alleges the hospital is required to bill a patient's health insurance.
"Because she was insured and defendants refused to bill her insurance company, defendant's only claim against plaintiff was statutorily limited to her co-pay or deductible amounts," the complaint states.
The complaint further alleges that MRA, a Tennessee-based company, is required as a third-party debt collector to file a surety bond with the Texas Secretary of State and that without such bond "has no right to collect a debt in Texas."
The complaint alleges that after Williams' lawyer sent a letter to MRA in February 2019 directing them to bill her health insurance, MRA responded by claiming the medical coverage "will not process" if services were rendered subsequent to an auto accident. The complaint alleges the response amounts to a full admission of the "deceptive scheme" of falsely declaring health insurance will not cover auto accident injuries, intentionally not billing health insurance plans and seeking payment of an inflated bill from the patient or a third party.
"As of the date of the filing of this lawsuit, defendants have not submitted plaintiff's medical bills for services at Wadley to her health insurance carrier," the complaint states.
The complaint further alleges that Texas law requires hospitals to bill health insurance plans for services within 11 months or within a time specified in the hospital's contract with the carrier. Because Williams' health plan was never billed, the complaint alleges the hospital cannot "recover from the patient any amount that the patient would not otherwise have been obligated to pay (such as a co-pay and/or deductible)."
The complaint alleges that the billing scheme is common to Steward hospitals in Texarkana, Odessa, Big Springs, San Antonio, Houston and Port Arthur, Texas. The complaint seeks to include as plaintiffs Texas residents who were treated for auto accident related injuries at those hospitals whose health insurance wasn't billed and a claim for payment was asserted "against the patient, the patient's attorney, an auto or liability insurer, and/or any third party based on the patient's third-party tort claim."
The complaint further seeks to include Texas residents who received treatment at a Texas hospital for auto accident injuries and MRA asserted a claim against them or a third party.
The complaint accuses Steward and MRA of violating the Texas Finance Code, the Texas Deceptive Trade Practices Act and of committing fraud. The complaint asks the court to declare the billing practices violate Texas law, for an injunction halting the conduct, for restitution of monies collected in violation of Texas law, for damages and certification as a class action.
The case is assigned to U.S. District Judge Robert Schroeder III in the Texarkana Division of the Eastern District of Texas. Neither of the defendants has filed a response.