My name is Douglas Gregory. I represent ElectroStim Medical Services Inc. Also, we commonly refer to it as EMSI. May I please the court I'd like to reserve five minutes of my time. This case tends to get complex over what really is a fairly simple subject. The overarching issue is whether the district court aired in dismissing with prejudice all of EMSI's claims, EMSI's a medical provider that provides a specific product in this case in mainly 10 units and the supplies to use those units. And it supplies those products by prescription from a physician or a chiropractor around the country. EMSI has worked with and used the defendant, Blue Cross Blue Shield of Texas, for many, many years, including during a time period prior to a contract being entered into when they were an out of network provider. Also during January 2007, a contract, provider contract was put in place that requires the payment of four covered services of which throughout the country, the blue's plans cover 10 units and the supplies. And it requires Blue Cross Blue Shield of Texas to pay according to a fee schedule, which is in this case basically a percentage of the charge, for all those subscribers for which it either ensures or for which it for plans it administers. And that can be both in Texas and out of Texas. And so the the the the reach goes not just to those individuals that live in Texas or for product that was given and provided in Texas, but rather it imposes an obligation upon Blue Cross Blue Shield of Texas to administer plans throughout the state. And it's your position that your client was not paid at all on some and also that the payment rate claims are an issue, right? So both payment at all and payment rate are an issue. Well both are at issue because there are roughly 13,000 claims in the during the contractual period and there is approximately 20,000 claims that arise in the post contract period. And EMSI as we sit here today do not always know what the adjudication if any had been made of some of the claims because frankly some of the claims were never adjudicated by Texas. And did you dispute the different conclusion that a number of those claims were incorrectly submitted to the Blue Cross Blue Shield entity that was offended in this case when in fact they should have been submitted to a different entity? Do you dispute that conclusion? I do because because I think what you're getting at judges during the time that the contract was in place the claims were properly submitted to Texas, Blue Cross Texas
. Then when that contract was terminated August of 2010 EMSI continued to provide products and services but too many of the same individuals both living in Texas and elsewhere that it was providing during the contract term. The those claims which are roughly 20,000 post termination claims were in great respects submitted to other Blue Cross plans and returned the reason they were submitted to other Blue Cross plans was because at that time in the summer of 2010 Blue Cross Blue Shield National issued a policy directive that said from henceforth we want all providers to submit their claims not to where they've been submitting them not to who they have a contract with necessarily but the claims should go to the Blue's plan in the state where the product was delivered and the patient resides. So EMSI attempted to comply with that directive and that's why it sent those claims to those states. Well apparently those states weren't in a position or weren't willing to start executing that policy so they returned all of those claims unadjudicated. It was those claims that we then wanted to submit to Texas and that the court just record ordered at a hearing in February 2013 that we submit those claims to Texas. That was then rescinded at the subsequent hearing in April 2013. I don't understand that. Can you explain that to me? Why it was rescinded? Well the court says at the hearing that because Blue Cross is simply going to deny the claims that it really makes no sense to submit all of these claims to. You need to tee up your breach of contract and you're it tees it up for you to be able to submit it to the right entity. Well we want to question with all the claims. The fact that they might deny them doesn't mean that you shouldn't be able to submit them. That's exactly what we're saying. The fact that they might deny them at least then gets us to a point where okay we have a a existing lawsuit in which we claim that these claims should be paid and discovery can then go forward to address whether the claims were legitimately denied or not. Because at that point you don't just have breach of contract. You also have quantum maroet claims for services rendered don't you? Well I'm not sure that we have quantum maro
. The court got into a discussion of quantum maroet and it appears as though I think the right that we don't have a quantum maroet claim but that we do have claims potentially for breach of implied contract breach a third party beneficiary. So even though you pled quantum maroet you're not seeking that relief from us in remand. Right I think the court was correct in its quantum maroet analysis that that would not apply but but but the other claims whether they be prompt payment third party beneficiary implied contract and a risk of- I have a third party beneficiary claim under Texas law. Pardon me? How do you have a third party beneficiary claim under Texas law? Because it's like your quantum maroet's a better argument that you don't have that. So why how do you have a third party beneficiary claim? The third party beneficiary claim arises from the fact that there is a contract that exists between the patient and Blue Cross Texas or some other blues plan. We are we as a provider are a third party beneficiary of that contract that allows us to submit that that then puts us in a position whereby we can submit claims for services and products provided to that patient and expect payment and return. Okay but Texas law is clear that you're not third healthcare providers are not third party beneficiaries unless you have specific facts that show in the contract that you were intended to be third party beneficiary. Isn't that correct? Well I think that's correct but I think that we do have specific- where the court says that the controlling factor in determining whether third party may enforce a contract is the contracting party's intent and I submit that we can allege to the extent we have failed to allege the intent of the parties in allowing for non-participating providers those without a contract with Blue Cross to recover claims that we can allege an intent to ask between Blue Cross and the patients the subscribers to pay for services provided to that patient. Is it your position that you did allege or that you need leave to amend in order to allege? Well that we in this instance that we need leave to order to allege the court as a third party beneficiary breach of implied contract and suit on an open account actually set forth the the allegations that need to be alleged to state a claim under for those causes of action. I've got a written down here I don't know that you want me to go through all of them but we EMSI could go back on an minute pleading and make that allegation and make those allegations and allege those elements they all exist and we could follow the court's directive on that. What is somewhat confusing is the court says in its order that they're going to dismiss all the claims with prejudice even the breach of contract claim for the claims. It's just dismiss all with prejudice because repeated attempts to amend have not been appropriate and any further amendment attempts would be futile. Well the truth of the matter is there was never repeated attempts to amend. We found our original complaint which was just a bare bones complaint in state court. That then sat for about approximately one year because the parties were working together to try to resolve the various issues
. When it became clear that that was not going to come to fruition we then filed our first amended complaint in which we added additional causes of action. That was then answered but Blue Cross also filed a motion to dismiss but as council for Blue Cross admits at the August, rather the April 23rd hearing, he states that the motion to dismiss that he filed was very narrow one on the state and federal government issues only and that is indeed the case when there was 77 claims that were arose out of state and government employee or retiree situations and that was what they moved to dismiss. They even admitted to the court that they were not seeking a dismissal of the breach of contract claims although they reserved the right to do that in the future if they thought it was appropriate but they weren't seeking a dismissal of the breach of contract. Then the court at a hearing on August the second 2012 says I'm not ordering that you put into the complaint a full list of claims. I think that's pleading evidence but I am ordering that you at least be much clearer about the source and nature of the claims. That was the only discussion and the only reason for the dismissal of the first amended complaint. There was never any discussion of the other causes of action that had been pleading and were existing. So we went back, we admitted to the play, we added that and in conjunction with that the court said I want you folks to exchange spreadsheets that gives the universe a claim that gives certain information so we indeed did that. We located and itemized on a spreadsheet with all the various information. 13,000 claims. Bluegrass came up with 8800 claims but in any event there's a substantial number of claims then after that was filed which would then be the second amended complaint. They moved to dismiss that. Again relying largely not on an breach of contract and arrests on the claims that had been pled but rather narrowly focusing on a few of the claims which was known as the bluecard claims which were roughly 2,200 claims and then the federal and state government employee claims. At the hearing on April the 23rd which was a status hearing so up until this time no discussion with the court about any of the other claims no discussion about having to amend to that we haven't stated the causes of action for breach of contract. The court and everyone was just trying to get their head around what claims are we talking about how many are there? Gregory your time expired
. Thank you. You still have five minutes. Dr. Cavanaugh. Good morning, ma'am. Please the court council. My name is Brian Cavanaugh and I represent Healthcare Service Corporation generally referred to by the acronym HCSE in the pleading in the proceedings below. With my time today I'd like to make three points. First I would like to explain why this court should affirm the district court's exercise of its sound discretion in denying electrostim leave to file a fourth iteration of its complaint. Second if this court affirms the district court's denial of leave to amend based on claims that were conceded either in the district court or in briefing on appeal or waived by failing to argue any error on appeal this court would only need to address whether or not the district court aired as a matter of law and dismissing the breach of contract in Arissa section 502 a one claims plead in the second amendment complaint. Third there is there are also the claims of suit on account unjust enrichment the third party benefit why would it be left with only the breach of contract in Arissa? Yes, your honor. The unjust enrichment breach of implied contract and quantum marewitt claims in electrostim's briefing they can see that they're only challenging the district court's denial of leave to amend. They're not alleging that the district court are asserting that the district court aired as a matter of law and dismissing those claims in the second amendment complaint. So our position is if you address the leave to amend issue and affirm the district court then this court need only consider whether or not the district court aired as a matter of law in finding the second amendment complaint failed to state a claim for breach of contract or for benefits under 502 a one. The third point I wanted to make the court not error in not allowing them to amend on those because that those hadn't been the subject of problems you know the the previous amendments were based upon the contract claims for the most part you know the what was deficient in that and those hadn't been a focus so how did they know that there was something wrong and how were they given a chance? Your honor I believe that the the chronology in this case is critical this is not a typical situation or a situation in which the district court entertain motions to dismiss shortly after the filing of a complaint and then dismiss those claims without an opportunity
. The party's litigated in federal court for two years prior to the final dismissal of those claims with prejudice prior to that the claim the case had been pending although these causes of action had not been asserted for approximately a year as counsel for electrostem noted during the two years that the parties were before the district court there were extensive conversations with the court and between the parties in an effort to just understand what claims are an issue and what electrostem's theory of recovery was so I will I will concede that that the briefing maybe didn't address in the motion to dismiss the first amendment and complaint some of these causes of action but these issues were addressed with the court over and over and over again. Yes that in the record that would tell me that they were told ahead of time that there was a deficiency given a chance to cure and they failed to cure. Well I think the court observed numerous times that the complaint that was filed was a bare bones complaint in fact if we go back to the first amended petition the court did not and where were they told that there were specific deficiencies in the state law claims and given an opportunity to correct that those well they were told that in in HCSC's motions to dismiss at a minimum they had an opportunity to seek leave to amend they didn't do it but how did they know that the court believed there was some deficiency that's the question. I will say the court the court noted numerous times that there was an inability to understand from the face of the second amendment complaint what was that issue. Okay the court the your your your correct your honor the court did not say you failed to plead quantum merit for x reason or you right or did or you're not a third party beneficiary because tuxus law doesn't allow it for these three reasons there's not there's not that interchange on the state law claims because the whole focus seems to be the contract claims. I agree that I don't think the district court gave plaintiffs a road map as to how to properly plead their claims or told them that they were deficient. I believe they gave them a chance to cure such that prejudice dismissal with prejudice would be appropriate. I think the district court gave ample notice that they're complaint as a whole was deficient. She did not your your correct honor the district court did not get into detail on the specific causes of action. I believe the district court worked extensively with the parties to try to understand what claims were an issue and this is something in the record you would want me to go back and look at in particular that would a suasion and concern I would have with regard to the state law claims and they're being dismissed with prejudice. With respect to the district court specifically addressing for example quantum marioid or unjust enrichment. Well he says he's not relying on quantum marioid but it's unjust enrichment suit on account third party beneficiary. No no your honor I can't I can't point to something before from the court prior to that point in time that said HCSE raised those issues in a motion to dismiss in opposing that motion to dismiss electors to him did not seek leave to amend. I never sought leave to amend once until after the district court dismissed those claims of prejudice but I would add on the causes of action your honor just noted the district court also found that amendment would be futile because of the nature of those claims and I'm not sure I get there frankly that they're futile. I think in order to I think in order to understand that we have to divide the two universes of claims so as to the 20,000 claims that were submitted to other blue cross blue shield entities so not my client not HCSE in the order to blue cross his own procedure that you're supposed to submit in their state
. Well I think council said blue cross blue shield association which is a completely different entity than health care service corporation. Right but they had a policy and they were front of follow that policy. Correct but it's not HCSE's policy and it's a certain they have a chance then to file them with the correct people. I don't believe that the district court entered in order that would as a matter of race due to Kata bar them from submitting their claims or suing another party on those claims. The only defendant in this case- I think the district court did not discourage them from resubmitting those claims to the Brecht parties. No the district court told I don't believe the district court order them not to submit the claims. The district court observed that submitting them to us would be futile because they acknowledged they were not claims that had any connection to HCSE. After the contract was terminated, electricity is providing goods and services to patients. The only right they would have to submit a claim to my client is whether they're is as an ass in e of those patients. They conceded but they submitted those claims to the entities they thought they were to submit them to. There's no there's nothing in the record there's nothing in the second amended complaint that indicates that any of those claims relate to patients or beneficiaries of a policy of insurance issued by my client or a health care plan under a risk of that's administered by HCSE which is why we raised the article three standing issue. There's there's simply no connection between those claims and my client. To be sure, electricity says they weren't paid and if we assume that to be true they have an injury but they don't have a causal connection to my client. Councillor, we know that the well I guess the court ordered the district court ordered the exchange of spreadsheets and connection with these claims. How much discovery if any was done aside from that in this case? There were discovery requests propounded deadlines came and went there were a motion to compel file by HCSE but at the end of the day the only thing that got exchanged for the most part were those spreadsheets because I think the district court spent its time trying to work with parties to come to an understanding of what are the who are the patients and what are the services that you're suing on and in essence what we see here is electricity essentially wants to put every claim
. Who propounded the discovery they get founded? Both sides propounded discovery. But to be clear, Your Honor, I don't believe the spreadsheets per se or directly responsive to a particular discovery request. That was something that the parties had exchanged in their own mediation discussions and which the district court encouraged further exchange of to help understand the University of Claims issue. Did they ask for the EOBs and the contracts and did they receive them before they report out on them? Did Electrostom ask for EOBs in contracts? Yes. One of the criticisms that the court has is that they can't say in particular what the contract service was and their position is that without the EOBs and the contracts they can't plead any more particularity and that information is in your control. Not at least not in their control. I think that raises the question of whether or not they did what they were required to do before filing a lawsuit. They have an opportunity to get... Did they plead for the... Can you answer my question first? Yes. I don't
... Ask in discovery for these items and did they receive these items in discovery before they were poured out and before they were dismissed? I'm sorry I'm using a cloak wheel Texas phrase that I'm sure you're familiar with. I have to go find... I suspect I kind of... I have to imagine they would have asked for it. Absolutely. They would have asked for it and they did not receive it. Well, we also need to be clear that my client doesn't necessarily have that information. That's another problem here is that they're challenging coverage. If they want the summary plan descriptions and the plan documents they need to get those from the plan administrator
. That's not something HCSC is going to have. The vast vast majority of claims in this case it's a bizarre situation admittedly but I think you heard consuls say that there are Florida provider sending these tens units all over the country. They obtained a contract with Texas based on a storefront that they had in Texas. Most of the claims in this case had nothing to do with Texas. They're administered by other other Blue Cross Blue Shield entities. They may be... There may be active employer groups that are administering their own plans and using a Blue Cross entity solely for claims administration. We don't necessarily have that information. Do you have the EOBs? They have the EOBs too. They said they don't have the EOBs. In their initial disclosures they identified EOBs as one of the documents that they had and they would use to prove up their case. They have some EOBs but they're missing large quantities of the EOBs which make it hard for them to plead with any more particularity. They are probably missing
... I don't know whether they're missing or not but EOBs for the blue card claims are not something my client would have. If the claim is administered by a Blue Cross Blue Shield plan other than one under the umbrella of HCSC then we wouldn't have the EOB. We don't hold the benefits. My client doesn't administer that plan. It is simply facilitating the processing of a claim. And I think that again it's important to draw a distinction between the... Mr. Client, have you authority to deny the product claim? On coverage? No. If a Blue Card claim? On coverage? No. We don't make that determination. If a electricity... Here's a hypothetical. If a electricity ship attends unit to a patient who has their insurance with Blue Cross Blue Shield of Michigan or has a member of an employer-sponsored plan that's administered by Blue Cross Blue Shield of Michigan. Let's say that Michigan patient actually happened to be with physically within the boundaries of Texas and it received that unit there. They submit the claim to Texas. We process it and this is for the period where they were a contracted provider. We process it which means we forward it on to Michigan. Michigan then decides based on its knowledge of the plan. Is this a covered claim or is it not? And then it sends back that adjudication. So no, HCSC with respect to plans that are not administered by us does not make that determination. So your client was not responsible for paying any of these claims? During the contract period the check would have been issued if it was a covered claim and payment was allowed. The check would have come from Blue Cross Blue Shield Texas to its network provider electricity. So your client would have made the payments even though you say that Michigan would have decided whether or not to pay. Pursuant to the Blue Card program between the Blue's plans the check would be issued by Texas but Texas would not have financial responsibility for it
... Here's a hypothetical. If a electricity ship attends unit to a patient who has their insurance with Blue Cross Blue Shield of Michigan or has a member of an employer-sponsored plan that's administered by Blue Cross Blue Shield of Michigan. Let's say that Michigan patient actually happened to be with physically within the boundaries of Texas and it received that unit there. They submit the claim to Texas. We process it and this is for the period where they were a contracted provider. We process it which means we forward it on to Michigan. Michigan then decides based on its knowledge of the plan. Is this a covered claim or is it not? And then it sends back that adjudication. So no, HCSC with respect to plans that are not administered by us does not make that determination. So your client was not responsible for paying any of these claims? During the contract period the check would have been issued if it was a covered claim and payment was allowed. The check would have come from Blue Cross Blue Shield Texas to its network provider electricity. So your client would have made the payments even though you say that Michigan would have decided whether or not to pay. Pursuant to the Blue Card program between the Blue's plans the check would be issued by Texas but Texas would not have financial responsibility for it. That one- You say, nation sue, Michigan, even though the check comes from you, you're client? If we're talking about, well, pre-termination, if we're talking about a coverage determination and we're talking about a RISSA, I think a RISSA requires them to name that plan administrator because that's the only person who's going to have the administrative record of why that decision was made. If we're talking about that information, don't you have to tell them, oh, it's really Michigan is your plan administrator so then they can amend to bring them in and y'all have that information in your document retention area. Well, first before most the EOB would come from Michigan, it wouldn't come from us and so that would indicate it. Second, they have the patient's insurance information, they have their insurance card, they know it's Michigan, not us. Third, even if they didn't and even if they, and by the way we learned well into the case, the right one of the challenges with not having the information is they were using a third party clearing house to do this so they didn't have the claims information themselves. But even if they didn't have it, it had a time and they should have and they had the ability to get it. In the claim spreadsheet that we provide them as early as January 2012, all that information is right there on a claim by claim basis and it's also in the claim spreadsheets that were filed under seal with the court in February of 2013. For every single claim, we identify what is the plan if it's not us. Is it Michigan? Is it Anthem? Is it California? Who is it other than Blue Cross? Is that in the appellate record? It is. I'll get you the reference. I believe the spreadsheets are at 953 and 954. Why is there such a discrepancy between the two of you on 13,000 versus 8800? I can't say why they think they have 13,000 claims. We? They have it on their list and you have 8800 on your list. So why the list's not matched? They don't have claims numbers on their list. They have patients names and dates and things like that
. That one- You say, nation sue, Michigan, even though the check comes from you, you're client? If we're talking about, well, pre-termination, if we're talking about a coverage determination and we're talking about a RISSA, I think a RISSA requires them to name that plan administrator because that's the only person who's going to have the administrative record of why that decision was made. If we're talking about that information, don't you have to tell them, oh, it's really Michigan is your plan administrator so then they can amend to bring them in and y'all have that information in your document retention area. Well, first before most the EOB would come from Michigan, it wouldn't come from us and so that would indicate it. Second, they have the patient's insurance information, they have their insurance card, they know it's Michigan, not us. Third, even if they didn't and even if they, and by the way we learned well into the case, the right one of the challenges with not having the information is they were using a third party clearing house to do this so they didn't have the claims information themselves. But even if they didn't have it, it had a time and they should have and they had the ability to get it. In the claim spreadsheet that we provide them as early as January 2012, all that information is right there on a claim by claim basis and it's also in the claim spreadsheets that were filed under seal with the court in February of 2013. For every single claim, we identify what is the plan if it's not us. Is it Michigan? Is it Anthem? Is it California? Who is it other than Blue Cross? Is that in the appellate record? It is. I'll get you the reference. I believe the spreadsheets are at 953 and 954. Why is there such a discrepancy between the two of you on 13,000 versus 8800? I can't say why they think they have 13,000 claims. We? They have it on their list and you have 8800 on your list. So why the list's not matched? They don't have claims numbers on their list. They have patients names and dates and things like that. But in terms of claims that were submitted to us in January of 2012, HCSC queried its system and gave them a list of every claim that they had submitted to Texas in the time period issue. They then handed back this spreadsheet with 13,000 or many, many more thousands of lines on it and did not have claim numbers. Did you go back and check those against your database of people that you'd provided services or sent? Yes, HCSC cross-reference their list against the list that we have provided them in January of 2012 and that's what resulted in the 8800 matches. And those were the spreadsheets of the district court required us to file, we filed those under seal. And so what about those 8800? Why don't they have a viable claim as to those 8800? So as to the pre-termination claims, the 8800 first, we believe they're complaint alleged a claim only for the claims that were fit we failed to pay the denied claims. So for coverage reasons, I believe number one, they don't allege anything in the second amendment complaint to indicate why they're challenging those determinations. So if it's an arrissa-governed claim, why are they challenging coverage? What element of the patient's plan entitles them to have that sort? Don't they have to know why you denied it before they can know why they're challenging your denial? And they have that information. How did they have that information? They received that, well in two ways, one, they receive a provider claim summary from HCSC that indicates whether the claim was when it is part of this litigation. No, no, no, no, no, the patient- normal course of business. Okay, they wouldn't have received it, the patient would have received it, right? No, the patient would receive an explanation of benefits from their plan administrator. So if that was one of our plans, an HCSC plan, it would have come from HCSC if it was Michigan or California, or whomever it would have come from Michigan or California. Then in addition to that, while they were a contracted provider, Blue Cross Blue Shield Texas would provide them what is called a provider claim summary indicating payment was being made or not being made. And does it say why not being made? And does it also say in the amount we're rejecting? Because they also have partial rate claims. They have payment rate claims in addition to payment failure claims, and I don't find that those are really dealt with in any detail. The provider claim summary has a series of codes on it that indicate why a claim is being emitted or denied, but I want to also direct the court to the contract
. But in terms of claims that were submitted to us in January of 2012, HCSC queried its system and gave them a list of every claim that they had submitted to Texas in the time period issue. They then handed back this spreadsheet with 13,000 or many, many more thousands of lines on it and did not have claim numbers. Did you go back and check those against your database of people that you'd provided services or sent? Yes, HCSC cross-reference their list against the list that we have provided them in January of 2012 and that's what resulted in the 8800 matches. And those were the spreadsheets of the district court required us to file, we filed those under seal. And so what about those 8800? Why don't they have a viable claim as to those 8800? So as to the pre-termination claims, the 8800 first, we believe they're complaint alleged a claim only for the claims that were fit we failed to pay the denied claims. So for coverage reasons, I believe number one, they don't allege anything in the second amendment complaint to indicate why they're challenging those determinations. So if it's an arrissa-governed claim, why are they challenging coverage? What element of the patient's plan entitles them to have that sort? Don't they have to know why you denied it before they can know why they're challenging your denial? And they have that information. How did they have that information? They received that, well in two ways, one, they receive a provider claim summary from HCSC that indicates whether the claim was when it is part of this litigation. No, no, no, no, no, the patient- normal course of business. Okay, they wouldn't have received it, the patient would have received it, right? No, the patient would receive an explanation of benefits from their plan administrator. So if that was one of our plans, an HCSC plan, it would have come from HCSC if it was Michigan or California, or whomever it would have come from Michigan or California. Then in addition to that, while they were a contracted provider, Blue Cross Blue Shield Texas would provide them what is called a provider claim summary indicating payment was being made or not being made. And does it say why not being made? And does it also say in the amount we're rejecting? Because they also have partial rate claims. They have payment rate claims in addition to payment failure claims, and I don't find that those are really dealt with in any detail. The provider claim summary has a series of codes on it that indicate why a claim is being emitted or denied, but I want to also direct the court to the contract. Just to make clear, then the patient gets the information says your claim is denied because and they're given a reason. The explanation of benefits that goes to the patient? To the actual patient, right? But their their company does not get that information. I don't know whether their company gets an EOB or not from all these other plans, but what they do get from Texas through the contract is a provider claim summary that has that information in a more summary fashion. It's not an Arissa adverse benefit determination with all of the content that that typically has to have, but it has other information. Then how can they know if they have Arissa claims? If they don't know why it's denied under an Arissa's very technical and they don't know why it's denied, then how can they plead any more technically than they have? Well, they do know why it's denied because the provider claim summary as well indicates whether or not a claim is denied based on coverage. I also like the director. I don't know why. What's wrong with the coverage? Is it that the person doesn't have a plan? They didn't pay their premium and they got fired at their job, or is it because the plan doesn't cover for this procedure unless you've had a referral from the right expert doctor. There's so many reasons and so they need to know why so they can penetrate whether or not they have Arissa claims. Two things I would say in response to that for the pre-termination period, particularly given the courts focus on Arissa. Number one, there are vehicles that Arissa provides to get that information. If there's any ambiguity in their minds, if they truly are assenees, and by the way, there's nothing in the record that demonstrates they had a valid assignment to pursue those claims. This is not like a lone star where the defendant is invoking Arissa to block state law claims. They brought claims as an assenee under 502A1. Number one, Arissa provides an avenue to get planned documents to get additional information
. Just to make clear, then the patient gets the information says your claim is denied because and they're given a reason. The explanation of benefits that goes to the patient? To the actual patient, right? But their their company does not get that information. I don't know whether their company gets an EOB or not from all these other plans, but what they do get from Texas through the contract is a provider claim summary that has that information in a more summary fashion. It's not an Arissa adverse benefit determination with all of the content that that typically has to have, but it has other information. Then how can they know if they have Arissa claims? If they don't know why it's denied under an Arissa's very technical and they don't know why it's denied, then how can they plead any more technically than they have? Well, they do know why it's denied because the provider claim summary as well indicates whether or not a claim is denied based on coverage. I also like the director. I don't know why. What's wrong with the coverage? Is it that the person doesn't have a plan? They didn't pay their premium and they got fired at their job, or is it because the plan doesn't cover for this procedure unless you've had a referral from the right expert doctor. There's so many reasons and so they need to know why so they can penetrate whether or not they have Arissa claims. Two things I would say in response to that for the pre-termination period, particularly given the courts focus on Arissa. Number one, there are vehicles that Arissa provides to get that information. If there's any ambiguity in their minds, if they truly are assenees, and by the way, there's nothing in the record that demonstrates they had a valid assignment to pursue those claims. This is not like a lone star where the defendant is invoking Arissa to block state law claims. They brought claims as an assenee under 502A1. Number one, Arissa provides an avenue to get planned documents to get additional information. In addition, as a contracted provider with HCSE, the contract provides a claim reconsideration and appeal process. If they have any question, number one, they can log in online and get additional information. Number two, they can engage in a dialogue through that process. Council for electricity can see it during one of the status conferences, and I can get the reference for the court, that electricity never engaged in any appeal of any of its claims. There are avenues through the contract and through Arissa to get that information before you come to the court and say, we want to put an issue every single claim, and then let's sort it out in discovery and figure out which ones we have are valid and which are not. That's precisely what electricity said during the April 23rd, I believe, conference. It told the court, pardon me. It told the court, well, if it turns out there's no coverage, then we can see that claim. I think that the judge O'Connor and the Northern District of Dallas and the Innova case correctly cited IKBOL on a very similar circumstance saying, you know, Rulie doesn't unlock the doors of discovery to a party that comes forward with just nothing but conclusionary allegations, which is what we have in the second amendment. The problem is that they're not. They don't have to plead. I don't have high pleading under rule line. And the second circuit has spoken to this rather eloquently about when the information is in the control of the other party. And your position though is that it's not in the control of the other party. I see my time's up, but let me answer your honors question
. In addition, as a contracted provider with HCSE, the contract provides a claim reconsideration and appeal process. If they have any question, number one, they can log in online and get additional information. Number two, they can engage in a dialogue through that process. Council for electricity can see it during one of the status conferences, and I can get the reference for the court, that electricity never engaged in any appeal of any of its claims. There are avenues through the contract and through Arissa to get that information before you come to the court and say, we want to put an issue every single claim, and then let's sort it out in discovery and figure out which ones we have are valid and which are not. That's precisely what electricity said during the April 23rd, I believe, conference. It told the court, pardon me. It told the court, well, if it turns out there's no coverage, then we can see that claim. I think that the judge O'Connor and the Northern District of Dallas and the Innova case correctly cited IKBOL on a very similar circumstance saying, you know, Rulie doesn't unlock the doors of discovery to a party that comes forward with just nothing but conclusionary allegations, which is what we have in the second amendment. The problem is that they're not. They don't have to plead. I don't have high pleading under rule line. And the second circuit has spoken to this rather eloquently about when the information is in the control of the other party. And your position though is that it's not in the control of the other party. I see my time's up, but let me answer your honors question. I see that it's, if the claim was, if coverage was determined by a party other than my client, then it may not be in our possession. In addition, they have avenues to get that information. It's not information that is exclusively in the control of the claims processor here, HCSC. They have it as if they're an assidant of the patient with a proper authorization, they can get that information from the plan. The case says that we have to, that they have to have done that before through the arissa mechanism or through the other mechanisms. What case is that? Or they bring their lawsuit to get the information from you all. Your honor, I don't believe this is a settle issue in the fifth circuit. There are numerous district court opinions obviously holding that. We cite them in our brief, but the fifth circuit, you're correct, this court is not. It would be expanding it ball to rule your way. I don't believe you would, your honor. I think we're taking the simple principles required to state a claim for breach of contract or for arissa. And again, the fifth circuit hasn't addressed it directly, but to state that you have an entitlement to plead a plausible claim for relief under arissa, you need to establish that you had a right under the plan that entitled you to coverage for those benefits. You can't do that if you're not referencing the plan. And they had an avenue to get that information, multiple avenues to get that information before they file to
. I see that it's, if the claim was, if coverage was determined by a party other than my client, then it may not be in our possession. In addition, they have avenues to get that information. It's not information that is exclusively in the control of the claims processor here, HCSC. They have it as if they're an assidant of the patient with a proper authorization, they can get that information from the plan. The case says that we have to, that they have to have done that before through the arissa mechanism or through the other mechanisms. What case is that? Or they bring their lawsuit to get the information from you all. Your honor, I don't believe this is a settle issue in the fifth circuit. There are numerous district court opinions obviously holding that. We cite them in our brief, but the fifth circuit, you're correct, this court is not. It would be expanding it ball to rule your way. I don't believe you would, your honor. I think we're taking the simple principles required to state a claim for breach of contract or for arissa. And again, the fifth circuit hasn't addressed it directly, but to state that you have an entitlement to plead a plausible claim for relief under arissa, you need to establish that you had a right under the plan that entitled you to coverage for those benefits. You can't do that if you're not referencing the plan. And they had an avenue to get that information, multiple avenues to get that information before they file to. Thank you. Thank you. Good read. The truth of the matter is we did, we did not get that claim's information. We never were titled to get any information as to what were arissa plans and what were arissa plans. Why didn't you get that? Because we asked for it in discovery. We compounded it. We were the case ever started through the arissa. Because we were in title to get it. Why not? Because they won't disclose it. If you say, send a request and if you're talking about 10,000 claims, 13,000, what's arissa, what's not, Blue Cross Texas isn't going to be able to give you that information? Making a cross, cross purposes here. I'm asking when the claim was denied in the particular case and you got your, you provided your unit to provide services for people. I mean, help someone. And then it's denied. At that point, arissa does have a mechanism where you appeal through the arissa process, the denial
. Thank you. Thank you. Good read. The truth of the matter is we did, we did not get that claim's information. We never were titled to get any information as to what were arissa plans and what were arissa plans. Why didn't you get that? Because we asked for it in discovery. We compounded it. We were the case ever started through the arissa. Because we were in title to get it. Why not? Because they won't disclose it. If you say, send a request and if you're talking about 10,000 claims, 13,000, what's arissa, what's not, Blue Cross Texas isn't going to be able to give you that information? Making a cross, cross purposes here. I'm asking when the claim was denied in the particular case and you got your, you provided your unit to provide services for people. I mean, help someone. And then it's denied. At that point, arissa does have a mechanism where you appeal through the arissa process, the denial. This was not done in any of these. So what's happened is instead of doing these as they come and are not paid, your client has waited to bundle them all up and pursue them only in litigation. Tell me why that's not accurate. That's not accurate because we're in many instances, we did not receive any explanation of whether a thing was denied or in some cases it was partially paid. So it's an underpayment thing. It doesn't evoke arissa because it's a right to payment, a rather amount of payment issue. So arissa doesn't preempt that. There's only a few situations where we ever saw anything that showed that a coverage determination was made and that it related to an arissa plan. So we did not know when we received any information whether it was an arissa plan or not. And in fact, we were in. Making queries? Well, we didn't make any queries and we tried to get it also during the lawsuit. But the court abated discovery at the August 29th 2012 hearing and one of the parties to focus on this spreadsheet information and actually abated discovery until further order. It wasn't until the April 23rd 2013 hearing that she indicated where she sets a new discovery process. Time frame says you guys need to get going on and discover it because you need to get a lot of information. And then she says, all right, it seems to me what we ought to do is this
. This was not done in any of these. So what's happened is instead of doing these as they come and are not paid, your client has waited to bundle them all up and pursue them only in litigation. Tell me why that's not accurate. That's not accurate because we're in many instances, we did not receive any explanation of whether a thing was denied or in some cases it was partially paid. So it's an underpayment thing. It doesn't evoke arissa because it's a right to payment, a rather amount of payment issue. So arissa doesn't preempt that. There's only a few situations where we ever saw anything that showed that a coverage determination was made and that it related to an arissa plan. So we did not know when we received any information whether it was an arissa plan or not. And in fact, we were in. Making queries? Well, we didn't make any queries and we tried to get it also during the lawsuit. But the court abated discovery at the August 29th 2012 hearing and one of the parties to focus on this spreadsheet information and actually abated discovery until further order. It wasn't until the April 23rd 2013 hearing that she indicated where she sets a new discovery process. Time frame says you guys need to get going on and discover it because you need to get a lot of information. And then she says, all right, it seems to me what we ought to do is this. I will rule in the motions dismissed but if arissa is an issue in this, then it seems to me that the most I could do would be to say and I would limit the ruling frankly to those 3,000 claims. She's referring to those blue-clared claims and those federal and state employee claims. We don't even know anything about the other claims yet until you tell me differently. And if there is different, I'm eager to hear, but as to the 3,000,000 and the 8800 claims, it seems to me that the most I could say was that if there is an arissa government plan then coverage and eligibility determinations would be subject to arissa preemption. Challenges based on rate of payment would not. Those would have to be subject to breach of contract analysis. We'd have to replete but either way we try the case. So that's the final hearing that we have prior to the court entering an order dismissing with prejudice not only all of the breach of contract claims but also all the arissa claims. So because we had covered all of our bases in that regard to the extent there are arissa plans out there and it relates to coverage questions then we have an arissa cause of action. What is your best authority for the proposition that you can just say without support in your complaint that there are arissa plans to which should have been paid without identifying the arissa plan specifically? We allege arissa in the alternative as we're entitled to do in a plating because we don't know what the arissa plans are and we know that the defendant removed the case to federal court based on arissa but until discovery is conducted we can't know which ones relate to arissa and whether that was arissa whether it's rate of payment or coverage. What is your best authority for the proposition that you cannot know whether your claim relates to arissa or whether it relates to a breach of contract and that you can just you can just plead it without any support and say I'm going to wait to discovery to find out what claims I have and what amounts they are and who has to pay them under what authority. What is your best authority in the fifth circuit that would be appropriate? Well I think that under the Lormen case and Davila and under the third case that those set forth the ability of a healthcare provider to sue for claims that were underpaid or not paid at all or where coverage was denied and that as that provider is sitting there filing and sued it cannot know for instance what claims were subject to arissa and what weren't but oftentimes when you have a medical practice filing claim it's a very few claims when you have someone like my client that does the type of business it is contrary to what might be thought we were not sitting around collecting claims and just collecting them so that we could then bring one suit and one big pile those claims were hitting every single day and so where even when the contract terminated where there weren't so many claims that existed at the time of termination they then became claims because slowly but surely the Blue Cross Texas was adjudicating those claims to some extent would be that not paying them paying them partially or simply not or tabling them but at least we knew that the claims were not processed and that they were still out there and existing. Thank you Mr. Rear. Thank you
. That concludes this panel