Electrostim Medical Services, Inc. v. Health Care Service Corporation

Filing 154

ORDER entered: Electrostim must file the unredacted spreadsheets under seal and file in the public records a redacted version that removes personal identifiers but is otherwise complete, by September 18, 2017. (Signed by Chief Judge Lee H Rosenthal) Parties notified.(leddins, 4)

United States District Court
Southern District of Texas

ENTERED
IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF TEXAS
HOUSTON DIVISION
§
§
§
Plaintiff,
§
§
v.
§
§
HEALTH CARE SERVICE CORPORATION, §
A MUTUAL LEGAL RESERVE COMPANY, §
§
Defendant.
§

September 11, 2017
David J. Bradley, Clerk

ELECTROSTIM MEDICAL SERVICES,
INC.,

CIVIL ACTION NO. H-11-2745

ORDER
Electrostim Medical Services sued Health Care Service Corporation, a health insurance
company that does business in Texas as Blue Cross Blue Shield of Texas, alleging that Blue Cross
improperly denied or underpaid thousands of reimbursement claims that Electrostim submitted for
providing medical services and products to patients with Blue Cross insurance plans. The court
dismissed Electrostim’s claims, and the Fifth Circuit affirmed in part, reversed in part, and
remanded, Electrostim Med. Servs., Inc. v. Health Care Serv. Corp., 614 F. App’x 731 (5th Cir.
2015). After remand, Electrostim filed its third amended complaint, and the court held a hearing and
issued a Memorandum and Order identifying deficiencies in that complaint and allowing Electrostim
to file another motion for leave to amend with a proposed amended complaint that corrected the
deficiencies. (Docket Entry No. 145). Electrostim then filed a motion for leave to file its fourth
amended complaint and Blue Cross responded. (Docket Entry Nos. 150, 153).
The court’s order established guidelines for Electrostim’s new amended complaint. (Docket
Entry No. 145). The new complaint was to limit its factual basis to the 8,000 pretermination claims
and 273 posttermination claims identified in the Blue Cross spreadsheets incorporated into the

second amended complaint; identify the claims in the Blue Cross spreadsheets that are ERISA
claims and those that are non-ERISA claims; limit the factual basis for relief to the non-ERISA
claims; clearly identify the claims from the spreadsheets that are rate-of-payment claims that are not
foreclosed by the Fifth Circuit opinion; not plead claims under a third-party-beneficiary theory
because amendment under that theory would be futile; and on its breach-of-contract claims, plead
enough facts, with enough detailed information, to make those claims plausible.
In its proposed amended complaint, Electrostim alleges that it has created new spreadsheets
that cross-reference individuals with the claims identified in the Blue Cross spreadsheets. (Docket
Entry No. 150, Ex. 1 at p. 4). Electrostim has provided copies of the new spreadsheets to Blue
Cross, but it did not file them with the court due to HIPAA restrictions, patient-privacy concerns,
and the terms of the court’s protective order. Electrostim indicated that it is willing to file the
spreadsheets under seal or to provide a separate copy to the court.
Because the new spreadsheets are incorporated by reference in the proposed amended
complaint, they are relevant to whether the complaint complies with the court’s order and states a
plausible claim for relief. Electrostim must file the unredacted spreadsheets under seal and file in
the public records a redacted version that removes personal identifiers but is otherwise complete,
by September 18, 2017.
SIGNED on September 11, 2017, at Houston, Texas.
______________________________________
Lee H. Rosenthal
Chief United States District Judge

2