Health Plan Administrator Seeks Declaration That State Prompt-Pay Law Does Not Apply

In Aetna Life Insurance Company v. Methodist Hospitals of Dallas, Aetna (the “TPA”) has asked the U.S. District Court for the Southern District of Texas to find that the Texas Prompt Pay Act does not apply to the self-funded plans it administers.

The TPA alleges that Methodist Hospital demanded more than $10 million from the TPA on the basis that it failed to make payment as required by the Texas Prompt Pay Act. The TPA alleges it made payment pursuant to the terms of its agreement with Methodist Hospital and that the Act should not apply to its self-funded customers. Specifically, the TPA asks the court to declare that “(1) the Texas Prompt Pay Act, by its terms, does not apply to self-funded plans, which do not involve the insurance relationship that is required under the statute, or (2) if the statutes do apply to self-funded plans, they are preempted by ERISA.”

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