MEDICARE

Christus Health Gulf Coast v. Aetna, No. 14-03-01281-CV (Tex. Ct. App. Dec. 28, 2004)

The Court of Appeals of Texas ruled that hospitals involved in a payment dispute with an HMO were required to exhaust their administrative remedies under the Medicare program prior to suing the HMO in state court. The HMO had entered into a contract with another entity to administer its Medicare+Choice product. When this entity became insolvent and failed to reimburse hospitals for services provided, they sued the HMO. The court found that the hospitals' claims "arose under" the Medicare Act, and that the hospitals were thus required to exhaust the administrative procedures called for by the Act.