Quality Infusion Care, Inc. v. Health Care Service Corp.
2010 U.S. App. LEXIS 26119
| 5th Cir. | 2010Background
- QIC provides services to BCBS policyholders and patients assigned their reimbursement rights to QIC.
- BCBS overpaid QIC for several claims and then set off those overpayments from future QIC payments.
- The setoffs involved different patients and possibly different plans, raising mutuality and cross-plan questions.
- District court granted summary judgment for BCBS, holding setoffs were allowed by plan language and Texas Insurance Code.
- On appeal, court affirms, holding BCBS had contractual right under three plans to deduct overpayments from future QIC claims.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether BCBS had a contractual right to set off overpayments against future claims across different patients. | QIC argues no cross-patient setoff rights exist. | BCBS contends contract language permits cross-patient setoffs. | Yes; contractual rights under the plans authorize cross-patient setoffs. |
| Whether the assignment of patient benefits to QIC preserves BCBS's setoff rights. | Assignments limit setoff to same patient and plan. | Assignments transfer rights, enabling BCBS to exercise setoff against QIC's later claims. | Yes; assignees stand in assignor’s position, permitting such setoffs. |
| Whether ERS, THIRP, and Insured plans authorize deducting overpayments from subsequent claims generally. | Plan language restricts deductions to the same patient/plan. | All three plans permit deduction of overpayments from future benefit payments, broadly. | Yes; each plan allows deduction from subsequent claims, not confined to same patient. |
Key Cases Cited
- Harris Methodist Fort Worth v. Sales Support Servs. Inc. Emp. Health Care Plan, 426 F.3d 330 (5th Cir. 2005) (assignment impacts rights; assignee inherits assignor’s position)
- FDIC v. McFarland, 243 F.3d 876 (5th Cir. 2001) (assignee takes rights of assignor, subject to defenses and setoffs)
- In re New Haven Projects Ltd. Liab. Co. v. City of New Haven, 225 F.3d 283 (2d Cir. 2000) (assignment transfers rights without creating greater rights)
- Houk v. Comm’r, 173 F.2d 821 (5th Cir. 1949) (assignee stands in assignor’s position)
- Adams v. Petrade Intl., Inc., 754 S.W.2d 696 (Tex. App.—Hou. [1st Dist.] 1988) (assignee subject to defenses and setoffs)