Kate Margolis Quoted in Law360 on 5th Circuit Review of Claims in Healthcare Settlement


Media Mention

Bradley attorney Kate Margolis was quoted in Law360 regarding the Fifth Circuit’s review of a more than $200,000 settlement where a healthcare company mistakenly approved out-of-state treatment for a Florida Medicaid patient. The case may hinge on whether a letter threatening litigation against another party constitutes a claim.

eQHealth AdviseWell Inc., formerly known as eQHealth Solutions, contends that it notified its insurer of its dispute with Brookhaven Hospital in Tulsa, Oklahoma, and received a denial of coverage before settling the hospital's claims independently. eQHealth says in court filings that it accidentally sent a Florida Medicaid patient for non-covered, out-of-state treatment at Brookhaven, causing a non-payment dispute with the facility. Homeland Insurance Co. of New York says it never received a valid claim from eQHealth. The insurer contends eQHealth made a "unilateral" decision to pay the hospital and admit liability, though there was no written demand for them to do so.

The Fifth Circuit will be deciding whether a Louisiana federal court was correct to find that eQHealth never made a valid claim under its managed care errors and omissions insurance policy with Homeland. Margolis said the panel might home in on the idea of what constitutes a claim. The health company asked the panel to determine whether the trial court's refusal to consider a demand letter to eQHealth's additional insured, Florida's Agency for Health Care Administration, unfairly prevented coverage.

eQHealth's policy defined a claim as a written demand, Margolis said, causing her to wonder: "what's the difference between a demand and a mere threat," and, "what evidence might constitute a written demand"? She also asked whether the insurer's categorization of the policyholder's notifications as only a potential claim might constitute a denial, entitling the policyholder to settle without consulting the insurer.

"If the panel were to say that the evidence submitted was enough for a claim under Louisiana law — that it was more than just a potential claim, that's going to stir up the industry for sure," she explained. eQHealth has asked the panel whether its insurer's argument that it never reported a claim, or the insurer's subsequent denial of coverage, constitutes bad faith under Louisiana law.

The full article, “5th Circ. May Ponder If Threats Are Claims In Healthcare Suit,” was published by Law360 on April 25, 2024. (login required)