Blue Cross to pay $4.5 million to end 11-year legal dispute

Star-Telegram Staff Writer

Blue Cross and Blue Shield of Texas has ended an 11-year legal dispute with the Texas attorney general’s office by agreeing to a $4.5 million settlement that includes $500,000 payments for indigent care to three hospitals, including Children’s Medical Center Dallas and facilities in Austin and Corpus Christi.

Attorney General Greg Abbott’s office said Thursday that $1 million will reimburse the state for legal costs.

In addition, eight health clinics across the state will receive $250,000 each next year.

The designated clinics are in Amarillo, Houston, Dallas, San Antonio, El Paso, Uvalde, Longview and Richmond.

In 1996, then-Attorney General Dan Morales filed a lawsuit to block the Texas health insurer’s takeover by Blue Cross and Blue Shield of Illinois (now called Health Care Service Corp.), arguing that the Illinois firm was not a charity under Texas law. Two years later, Morales permitted the merger but said he would appeal a court’s ruling that the Texas plan was not a charity.

The Texas plan calls itself a not-for-profit health-insurance company.

The attorney general lost on appeal in 2003 but later discovered an authorized history of the plan disclosing that it had solicited and received charitable donations over the years, according to Consumers Union. But a request to have the ruling reviewed was unsuccessful, as was a petition to the state Supreme Court.

Marjorie Jarvis, a spokeswoman for Blue Cross and Blue Shield of Texas, said she had no information on the lengthy dispute and declined to comment on the settlement other than to say it was handled in an amicable manner.

“This agreement allows Blue Cross to make significant contributions to three outstanding children’s hospitals and eight very deserving healthcare clinics in Texas for their use in providing care to indigent children,” said Jarvis, who added that she did not know how the facilities were selected. She referred queries to the attorney general’s office.

Paco Felici, a spokesman for the attorney general, said the hospitals and clinics were chosen because of the quali- ty of care and the amount of charitable services they deliver, as well as the geographical reach of their services. He stressed that their selection in no way denigrated the work done by other healthcare facilities across the state.

“Today’s award recognizes Children’s Medical Center Dallas’ high-quality patient care and demonstrated commitment to serving needy families,” a news release quoted Abbott as saying. “The Office of the Attorney General will continue working to increase access to charitable care in Texas.”

Children’s Medical Center Dallas plans to use its $500,000 to create an endowment to “help increase access to consistent, ongoing healthcare for underserved children in North Texas,” said George Lister, its pediatrician-in-chief, in prepared remarks.

Editor’s Note: This article was originally published on the Star Telegram, but has been moved or deleted. We will keep it here on our site for archiving reasons.

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