EMERUS HOSPITAL PARTNERS, LLC, et al., Plaintiffs, v. HEALTH CARE SERVICE CORPORATION, et al., Defendants No. 13 C 8906 United States District Court, N.D. Illinois, Eastern Division Signed July 17, 2015 Counsel J. todd Trombley, Pro Hac Vice, Alexander B. Klein, III, The Klein Law Firm, Houston, TX, Carlton E. Odim, Odim Law Offices, Chicago, IL, for Plaintiffs. Martin J. Bishop, Rebecca R. Hanson, Meredith Ann Shippee, Thomas Charles Hardy, Reed Smith LLP, Chicago, IL, for Defendant Health Care Service Corporation. Meredith Ann Shippee, Thomas Charles Hardy, Reed Smith LLP, Chicago, IL, for Defendant Blue Cross Blue Shield of Texas. Charles M. Gering, Pedersen & Houpt, Chicago, IL, Alexander B. Klein, III, The Klein Law Firm, Houston, TX, for Defendant Availity. Rowland, Mary M., United States Magistrate Judge ORDER *1 Plaintiffs’ Motion to Compel Written Discovery [63] is GRANTED IN PART AND DENIED IN PART. Defendants’ Motion for Protective Order [65] is GRANTED IN PART AND DENIED IN PART. Plaintiffs’ Motion for Sanctions [102] is DENIED. STATEMENT A. Background Plaintiffs allege that Defendants violated the Texas Prompt Pay Act (TPPA), Tex. Ins. Code §§ 843.001–.464, 1301.101–.202, by failing to comply with the TPPA's statutory obligations. Defendants are insurers as defined in the TPPA. Plaintiffs are a group of health care providers and physicians who provide emergency care services to patients in Texas. From November 1, 2009, through the present, Plaintiffs provided out-of-network—nonpreferred—emergency care services to patients insured by Defendants. The TPPA requires an insurer to act on a “clean claim” submitted by a preferred provider within a specified deadline by (1) determining whether the claim is payable, and (2) paying the payable claim or portion of the claim that is payable, or notifying the provider in writing why a claim will not be fully or partially paid.[1] Tex. Ins. Code §§ 843.336, 843.338, 1301.101, 1301.103; accord Team Healthcare Diagnostic Corp. v. Blue Cross & Blue Shield of Texas, No. 10 C 1441, 2012 WL 1617087, at *3 (N.D. Tex. May 7, 2012). Failure to adhere to these provisions “results in penalties for the insurer, which increase in accordance with the extent of the insurer's delay in responding to the claims.” Health Care Serv. Corp. v. Methodist Hosps. of Dallas, No. 13 C 4946, 2015 U.S. Dist. LEXIS 54357, at *13 (N.D. Tex. Jan. 28, 2015); see Tex. Ins. Code § 1301.137. In addition, the TPPA “allows for the award of attorneys’ fees and court costs for any physician or provider who recovers payment.” Health Care Serv., 2015 U.S. Dist. LEXIS 54357, at *13; see Tex. Ins. Code § 1301.108. “Under TPPA's plain language, the provisions related to prompt payment ... apply to out-of-network providers if they provide to an insured: (1) care related to an emergency or its attendant episode of care as required by state or federal law; or (2) specialty or other medical care or health care services at the request of the insurer or an in-network provider because the services are not reasonable available from a provider within the network.” Team Healthcare, 2012 WL 1617087, at *3; see Tex. Ins. Code §§ 843.351, 1301.069. A nonpreferred provider can recover under the TPPA only if the emergency services in question were required by state or federal law. Emergency Health Ctr. at Willowbrook, L.L.C. v. UnitedHealthcare of Texas, Inc., 892 F. Supp. 2d 847, 851 (S.D. Tex. 2012). B. Motion to Compel Plaintiffs’ Motion to Compel seeks an order compelling Defendants to produce information and materials requested in Plaintiffs’ First Set of Interrogatories and First Set of Requests for Production. The Court rules as follows. 1. Interrogatory No. 1 *2 Interrogatory No. 1 seeks the reasons that the claims at issue were not fully paid. Defendants have agreed to produce the information once Plaintiffs have identified the claims at issue. On June 29, 2015, the Court ordered Plaintiffs to produce certain data for all claims at issue in this case by July 30, 2015, in an electronic format agreed to by Defendants. (Dkt. 138). Plaintiffs’ request to compel a response to Interrogatory No. 1 is GRANTED. Once Plaintiffs have complied with the Court's June 29 Order, Defendants shall have 30 days to provide the reasons that the claims at issue were not fully paid. 2. Interrogatory No. 3 Interrogatory No. 3 seeks the identity of other medical providers that Defendants paid for emergency care. Defendants object as irrelevant, overbroad, burdensome, and oppressive. Plaintiffs’ request to compel a response to Interrogatory No. 3 is DENIED. The Court finds that the identity of other medical providers is not reasonably calculated to lead to the discovery of admissible evidence. Fed. R. Civ. P. 26(b)(1). The issue here is whether Defendants properly and timely paid Plaintiffs’ claims. 3. Interrogatory No. 4 Interrogatory No. 4 seeks the identity of emergency-care providers that had in-network contracts with Defendants. While Defendants objected generally, they provided a link to their website, which lists those providers who participate in Defendants’ network. The Court finds that Defendants have fully responded. See Fed. R. Civ. P. 33(d) (an interrogatory answer may refer the requesting party to electronically stored information). Plaintiffs’ request to compel a further response to Interrogatory No. 4 is DENIED. 4. Interrogatory No. 5 Interrogatory No. 5 seeks Defendants’ procedures for determining whether “a facility is an appropriate facility for payment at an emergency care rate.” Defendants generally objected but also responded as follows: Defendant “electronically evaluates claims submitted by licensed Texas facilities for Texas members to determine whether several factors noted on a claim, which may include the diagnoses codes, locations of services, procedures rendered, and onset dates, qualify the claim to process and be reimbursed as emergency care pursuant to a member's health benefit plan.” The Court finds that Defendants have not fully responded to this interrogatory. The interrogatory seeks information about how Defendants determine whether a facility qualifies to provide emergency care such that claims from that facility would be reimbursed at an emergency care rate. If Defendants do not make such a determination, they should affirmatively state so. Plaintiffs’ request to compel a further response to Interrogatory No. 5 is GRANTED. Defendants shall fully respond to this request by August 3, 2015. 5. Interrogatory No. 6 Interrogatory No. 6 seeks the identity of specific materials—procedures, forms, manuals, and templates—Defendants relied on to comply with TPPA. Defendants generally object but agree to provide documents regarding the adjudication of Plaintiffs’ claims. The Court finds that Defendants’ response is not fully responsive to Plaintiffs’ request. Further, the Court finds that this request is directly relevant to the subject matter involved in this action. Fed. R. Civ. P. 26(b)(1). Indeed, the TPPA requires insurers to provide providers with “copies of all applicable utilization review policies and claim processing policies or procedures.” Tex. Ins. Code § 1301.106(a); see id. § 1301.069 (applying the Prompt Payment provisions—of which § 1301.106 is a part—to emergency care providers such as Emerus). Plaintiffs’ request to compel a further response to Interrogatory No. 6 is GRANTED. Defendants shall fully respond to this request by August 3, 2015. 6. Interrogatory No. 7 *3 Interrogatory No. 7 seeks the steps taken by Defendants to process Plaintiffs’ claims. Defendants generally objected but provided a detailed description for how they evaluate claims submitted by Texas providers for Texas members and make a claim determination. The Court finds that Defendants’ response is fully responsive. Plaintiffs’ request to compel a further response to Interrogatory No. 7 is DENIED. 7. Interrogatory No. 8 Interrogatory No. 8 seeks the identity of consultants Defendants consulted with in connection with TPPA requirements. Defendants object as irrelevant. Plaintiffs’ request to compel a response to Interrogatory No. 8 is GRANTED. The Court finds that the identity of TPPA consultants is reasonably calculated to lead to the discovery of admissible evidence. Fed. R. Civ. P. 26(b)(1). Nevertheless, the Court is not opining on whether any evidence from such consultants would be admissible or whether they may be deposed. 8. Interrogatory No. 9 Interrogatory No. 9 requests Defendants to identify all manuals, policies and procedures, or documents used in connection with evaluating Texas claims. Defendants generally object and also contend that this request is duplicative of Document Requests Nos. 1–8, 11, 12, 14, 17, 18, and 24, which Defendants agreed to produce. The Court agrees. Indeed, many of these document requests seek the exact information described in this interrogatory. Plaintiffs’ request to compel a further response to Interrogatory No. 9 is DENIED. 9. Request for Production Nos. 1–5 and 8 Requests 1–5 and 8 seek documents related to Defendants’ policies, procedures and rates governing claims made by emergency care and urgent care providers. Defendants object as overbroad, burdensome, and oppressive, but agree to produce responsive documents limited to the claims submitted by Plaintiffs. Defendants’ objections are overruled. The Court finds that these requests are directly relevant to the subject matter involved in this action. Fed. R. Civ. P. 26(b)(1). Indeed, the TPPA requires insurers to provide providers with “copies of all applicable utilization review policies and claim processing policies or procedures.” Tex. Ins. Code § 1301.106(a). Plaintiffs’ requests to compel a complete response to Requests 1–5 and 8 are GRANTED. Defendants shall provide all documents responsive to these requests by August 3, 2015. 10. Request for Production Nos. 6–7 Requests 6 and 7 seek documents related to contracts with other emergency care providers and rates for in-network emergency care. Defendants object as confidential, proprietary, and irrelevant. The Court finds that contracts and rates with other emergency care providers are not reasonably calculated to lead to the discovery of admissible evidence. Fed. R. Civ. P. 26(b)(1). The issue here is whether Defendants properly and timely paid Plaintiffs’ claims based on the policies in place with Plaintiff's patients. Plaintiffs’ requests to compel documents responsive to Requests 6 and 7 are DENIED. 11. Request for Production No. 9 Request 9 seeks copies of complaints that implicate an improper rate of payment for emergency or urgent care in Texas. Defendants object that they need not produce documents already in Plaintiffs’ possession. Defendants’ objection is improper and is overruled. Without a compelling burdensome argument, Defendants must produce documents in their files even if they believe the documents are equally available to Plaintiffs. Plaintiffs’ request to compel a complete response to Request 9 is GRANTED. Defendants shall provide all documents responsive to this request by August 3, 2015. 12. Request for Production Nos. 10, 13, 16 and 21 *4 Requests 10, 13, 16 and 21 seek documents related to Plaintiffs’ claims. Defendants object that Plaintiffs have not identified the claims at issue, but have agreed to produce this information on a rolling basis. On June 29, 2015, the Court ordered Plaintiffs to produce certain data for all claims at issue in this case by July 30, 2015, in an electronic format agreed to by Defendants. (Dkt. 138). Plaintiffs’ requests to compel all documents responsive to Requests 10, 13, 16 and 21 are GRANTED. Once Plaintiffs have complied with the Court's June 29 Order, Defendants shall have 30 days to provide the reasons that the claims at issue were not fully paid. 13. Request for Production Nos. 11, 12, 14, 17, 18 and 24 Requests 11, 12, 14, 17, 18 and 24 seek manuals, guidance and policies, and internal protocol or procedures related to claims processing, handling, guidance, assistance, and payment during the relevant time period. Defendants object as overbroad, burdensome, and oppressive, but agree to produce responsive documents limited to the claims submitted by Plaintiffs. Defendants’ objections are overruled. The Court finds that these requests are directly relevant to the subject matter involved in this action. Fed. R. Civ. P. 26(b)(1). Indeed, the TPPA requires insurers to provide providers with “copies of all applicable utilization review policies and claim processing policies or procedures.” Tex. Ins. Code § 1301.106(a). Plaintiffs’ requests to compel complete responses to Requests 11, 12, 14, 17, 18 and 24 are GRANTED. Defendants shall provide all documents responsive to these requests by August 3, 2015. 14. Request for Production Nos. 15, 19, 20 and 23 Requests 15 seeks documents related to communications with third parties regarding the claims at issue. Requests 19, 20 and 23 seek organizational charts, personnel certifications and job descriptions for personnel involved in processing Plaintiffs’ claims. Defendants object as overbroad, burdensome, oppressive and not calculated to lead to admissible evidence. Defendants’ objections are overruled. The Court finds that these requests are directly relevant to the subject matter involved in this action. Fed. R. Civ. P. 26(b)(1). Plaintiffs’ requests to compel responses to Requests 15, 19, 20 and 23 are GRANTED. Defendants shall provide all documents responsive to these requests by August 3, 2015. C. Defendants’ Motion for Protective Order In their Motion for Protective Order [65], Defendants seek an order limiting or denying certain of Plaintiffs’ discovery requests in Plaintiffs’ first set of requests for production.[2] Specifically, Defendants seek protection from Plaintiffs’ First Set of Interrogatory Nos. 1 and 7, and Plaintiffs’ First Set of Requests for Production Nos. 13, 15, 16, 17 and 18.[3] (Dkt. 65 at 8). As discussed above, Defendants’ request for a protective order is GRANTED as to Interrogatory No. 7. *5 Defendants argue that they cannot respond to Interrogatory No. 1 and Requests 13 and 16 until Plaintiffs identify the claims at issue. As discussed above, Plaintiffs have been ordered to produce certain data for all claims at issue in this case by July 30, 2015. Once Plaintiffs have complied with the Court's June 29 Order, Defendants shall have 30 days to provide the reasons that the claims at issue were not fully paid. Defendants’ request for a protective order is DENIED as to Interrogatory No. 1 and Requests 13 and 16. Defendants also contend that Requests 15, 16 and 18 are inappropriate “pattern and practice” requests that are not calculated to lead to the discovery of admissible evidence. Defendants contend that because the TPPA focuses on individual claims, information that does not specifically relate to one of the claims at issue is overbroad, inadmissible and irrelevant. Whether “pattern and practice” evidence is admissible is a question best left to the District Judge. In any event, as discussed above, the Court finds that the TPPA requires the information requested to be provided to Plaintiffs. Tex. Ins. Code § 1301.106(a). Defendants’ requests for a protective order as to Requests 15, 16 and 18 are DENIED. D. Plaintiffs’ Motion for Sanctions In their Motion for Sanctions [102], Plaintiffs contend that Defendants should be sanctioned for their dilatory discovery tactics pursuant to the Court's inherent powers and the provisions of Rule 37. Specifically, Plaintiffs argue that Defendants’ Rule 30(b)(6) deponent admitted that certain documents requested by Plaintiffs are readily available and Defendants should be forced to produce them. (Dkt. 102 at 1–2). Plaintiffs’ request is premature. Defendants have not failed to comply with a court order or to respond to discovery requests. Cf. Fed. R. Civ. P. 37(b)(2)(A), (d)(1)(A)(ii). That Plaintiffs disagree with Defendants’ objections to Plaintiffs’ discovery requests is not a reason to impose sanctions. Plaintiffs’ Motion for Sanctions is DENIED. Footnotes [1] A “clean claim” is a nonelectronic or electronic claim submitted to an insurer that complies with all the necessary elements as set forth in the TPPA. Tex. Ins. Code § 1301.131. [2] The Motion also requested the Court to strike Topics 2, 3 and 11 from Plaintiffs’ Amended Notice of Rule 30(b)(6) Deposition. On April 13, 2015, the Court denied Topic 11 with prejudice and Topics 2 and 3 without prejudice. (Dkt. 70). [3] Defendants also apparently seek protection from Plaintiffs’ Second Set of Requests for Production Nos. 1 and 3 (Dkt. 65 at 8) but offered no argument related to these requests. Accordingly, Defendants’ requests for protection from these requests are DENIED WITHOUT PREJUDICE.