Appeals court reverses ruling in health insurance case

By Charmaine Little | Aug 31, 2018

NEW ORLEANS -- The Court of Appeal for the Fourth Circuit of Louisiana reversed a lower court’s ruling March 21 that denied an insurance company its exceptions of res judicata and no cause of action.

Judge Daniel L. Dysart, Judge Regina Bartholomew Woods, and Judge Paula A. Brown authored the opinion.

Louisiana Health Service & Indemnity Company (doing business as Blue Cross Blue Shield of Louisiana, Blue Cross & Blue Shield of Louisiana, Inc., and HMO of Louisiana, Inc.) were defendants in the case and subsequently filed the appeal after a lower court’s ruling. The plaintiffs are St. Charles Surgical Hospital LLC and Center for Restorative Breast Surgery LLC, out-of-network health care providers for the insurance company.

In their working relationship, the plaintiffs said they called the defendants or looked at their websites to confirm the insurance benefits form their patients. The plaintiffs said the defendants verbally represented a certain amount that they would pay the plaintiffs but failed to make good on full payment. 

Judge Regina Bartholomew Woods   State of Louisiana Court of Appeal, Fourth Circuit

After months of back-and-forth, the plaintiffs sued for abuse of process and fraud, leading to the defendants’ request for exceptions of res judicata (an issue already decided on by a court, blocking the same party from pursuing it) and no cause of action. The trial court denied the request and the defendants appealed.

The appeals court, concerning res judicata, said the plaintiffs should not be allowed to sue for fraud and abuse of process because these allegations came from the same incidents that sparked litigation in their federal lawsuit against the defendants. The federal court dismissed this case with prejudice. The appeals court also pointed out that the plaintiffs decided to dismiss their own fraud claim with prejudice.

The appeals court also pointed out that the plaintiffs’ allegations that the defendants’ refusal to pay caused them harm. The appeals court agreed with the lower court’s decision on this exception. It reversed the trial court’s ruling concerning the exception of res judicata and granted the defendants’ request for a writ. It also dismissed the plaintiffs’ lawsuit with prejudice.

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