Cmty. Health Choice, Inc. v. Acs Primary Care Physicians Sw., P.A.

676 S.W.3d 150

COMMUNITY HEALTH CHOICE, INC. and Community Health Choice Texas, Inc., Appellants

v.ACS PRIMARY CARE PHYSICIANS SOUTHWEST, P.A., Appellee

NO. 14-21-00519-CV

Court of Appeals of Texas, Houston (14th Dist.).

Opinions filed August 15, 2023

Rehearing Enbanc Denied October 24, 2023

John Zavitsanos, Sammy Ford IV, Michael Killingsworth, Houston, for Appellee.

Courtney B. Glaser, Kelsey Hope, Cameron P. Pope, John B. Shely, Houston, for Appellants.

Panel consists of Justices Bourliot, Hassan, and Wilson

OPINION

Meagan Hassan, Justice Appellee ACS Primary Care Physicians Southwest, P.A. ("ACS") sued appellants Community Health Choice, Inc. and Community Health Choice Texas, Inc. (together, "Community Health"), for violations of the Texas Insurance Code, quantum meruit, breach of an implied-in-fact contract, and unjust enrichment. Specifically, ACS alleged that Community Health underpaid ACS for medical services provided by its doctors. Community Health filed a plea to the jurisdiction asserting it was immune as to ACS's statutory tort claims. The trial court denied the plea and Community Health filed this interlocutory appeal. See Tex. Civ. Prac. & Rem. Code Ann. §§ 51.014(a)(8), 101.001. For the reasons below, we affirm the denial of Community Health's plea to the jurisdiction.

BACKGROUND

Harris County Hospital District d/b/a Harris Health System ("Harris Health") was created to "furnish medical aid and hospital care to indigent and needy persons residing in the district." See Tex. Health & Safety Code Ann. § 281.002. Harris Health, in turn, created Community Health as a charitable organization to "facilitate the management of a district health care program by providing or arranging health care services, developing resources for health care services, or providing ancillary support services for the district." See id. § 281.0565(b).

Community Health is licensed as a health maintenance organization ("HMO") by the Texas Department of Insurance. In 2014, Community Health entered the Federal Health Insurance Marketplace program and began providing health insurance plans pursuant to the Affordable Care Act. See Tex. Ins. Code Ann. § 1271.004(b) ("[a] health maintenance organization may provide an individual health care plan").

ACS is a Texas corporation that provides physician staffing to hospitals with emergency departments in the greater Houston area. According to ACS, in this role it provides emergency services to all patients regardless of insurance coverage or ability to pay — including patients with health insurance issued or underwritten by Community Health.

ACS sued Community Health in February 2019, alleging that Community Health had underpaid ACS for medical services it rendered to members of Community Health's insurance plans. Contending that Texas law requires HMOs to reimburse health care providers "at the usual and customary rate," ACS alleged that Community Health "reimburs[ed] ACS at amounts far below the usual and customary rate for more than 16,000 individual healthcare claims."

Community Health filed a plea to the jurisdiction challenging all ACS's claims on the basis of lack of standing. The trial court granted the plea as to ACS's claim premised on section 1271.155 of the Texas Insurance Code and denied the plea as to ACS's other claims. See Tex. Ins. Code Ann. § 1271.155(a) (an HMO "shall pay for emergency care performed by non-network physicians or providers at the usual and customary rate or at an agreed rate").

Community Health filed a second plea to the jurisdiction, asserting that immunity barred ACS's claim based on section 541.060 of the Texas Insurance Code. See id. § 541.060 (unfair settlement practices). ACS filed a response and the trial court held a hearing on the plea. On September 10, 2021, the trial court signed an order denying Community Health's second plea. Community Health filed this interlocutory appeal.

ANALYSIS

We begin by addressing our jurisdiction over this appeal.¹

I. Appellate Jurisdiction

Our appellate jurisdiction generally is confined to appeals of final judgments. Rusk State Hosp. v. Black , 392 S.W.3d 88, 92 (Tex. 2012). However, the Legislature has specified circumstances in which a litigant may immediately appeal from an order that would otherwise be unappealable because a final judgment has not been rendered in the matter. See Tex. Civ. Prac. & Rem. Code Ann. § 51.014(a) ; see also Cherokee Water Co. v. Ross , 698 S.W.2d 363, 365 (Tex. 1985) (orig. proceeding) (per curiam) ("Unless there is a statute specifically authorizing an interlocutory appeal, the Texas appellate courts have jurisdiction only over final judgments."). Community Health relies on one of these provisions, which permits a litigant to appeal from a trial court's interlocutory order that "grants or denies a plea to the jurisdiction by a governmental unit as that term is defined in [Texas Civil Practice and Remedies Code] Section 101.001." See Tex. Civ. Prac. & Rem. Code Ann. § 51.014(a)(8).

Section 101.001 delineates the types of agencies, subdivisions, and organizations that may be considered a "governmental unit." See id. § 101.001(3) ; see also Rosenberg Dev. Corp. v. Imperial Performing Arts, Inc. , 571 S.W.3d 738, 747-48 (Tex. 2019) (" Rosenberg II ") (describing this definition of "governmental unit" as "broad[ ]"). This definition does not explicitly include a "charitable organization" like Community Health.

But our statutory inquiry does not end there because "[a] charitable organization created by a district under this section is a unit of local government only for purposes of Chapter 101, Civil Practice and Remedies Code." See Tex. Health & Safety Code Ann. § 281.0565(c) (emphasis added). Examining similar statutory language governing economic development corporations,² the Texas Supreme Court reasoned:

Because the Legislature expressly expanded section 101.001 ’s governmental-unit definition to include economic development corporations, [appellant] is a governmental unit for purposes of the interlocutory appeal authorized by section 51.014(a)(8).

Rosenberg II , 571 S.W.3d at 748.

Guided by this holding, we also conclude that the Legislature expressly expanded section 101.001 ’s governmental-unit definition to include charitable organizations like Community Health. See Tex. Health & Safety Code Ann. § 281.0565(c) ; see also Rosenberg II , 571 S.W.3d at 748. Therefore, Community Health is a governmental unit for purposes of the interlocutory appeal permitted by section 51.014(a)(8), and we may exercise our jurisdiction over this appeal. See Tex. Civ. Prac. & Rem. Code Ann. § 51.014(a)(8) ; see also Rosenberg II , 571 S.W.3d at 748.

II. ACS's Motion to Dismiss

While the appeal was pending, ACS filed a motion to dismiss. Citing a recent decision from the Texas Supreme Court, ACS requested that we dismiss the appeal as moot because it "no longer has a cognizable claim against Community Health under section 541.060." See Tex. Med. Res., LLP v. Molina Healthcare of Tex., Inc. , 659 S.W.3d 424 (Tex. 2023).

In Texas Medical Resources, LLP , emergency-medicine doctors sued an insurer, alleging that the insurer did not pay the doctors at the usual and customary rates for treating its insureds. Id. at 427. In this context, the supreme court examined whether the doctors could bring a claim for unfair settlement practices under chapter 541 of the Texas Insurance Code. See id. at 437-48. The Supreme Court focused on the language in section 541.060(a), which states that "[i]t is an unfair method of competition or an unfair or deceptive act or practice in the business of insurance to engage in the following unfair settlement practices with respect to a claim by an insured or beneficiary ...." Id. at 437 (quoting Tex. Ins. Code Ann. § 541.060(a) ) (emphasis in original). Reasoning that the doctors were "neither insureds nor beneficiaries," the supreme court concluded that the doctors could not pursue their section 541.060 claims for unfair settlement practices. Id. at 438.

Relying on Texas Medical Resources, LLP , ACS asserts that this interlocutory appeal is moot because ACS is not "an insured or beneficiary" as necessary to pursue its section 541.060 claims against Community Health. In response, Community Health asserts that the issues raised in its interlocutory appeal are not moot.

Because we conclude that the requirements necessary to assert a section 541.060 claim fall outside the scope of this interlocutory appeal, we deny ACS's motion to dismiss.

In Texas Medical Resources, LLP , the supreme court noted that the issues it addressed (including its conclusion that section 541.060 claims are limited to "insured or beneficiaries") were each "a pure issue of law pertaining to the merits that should have been raised in the trial court by traditional motion for summary judgment or under Rule 91a — not in a plea to the jurisdiction." Id. at 441. Continuing on, the Court held that "the satisfaction of a statutory or common-law prerequisite to a plaintiff's filing suit or recovering on a claim is not an issue of standing but of merits ." Id. (emphasis added); see also Steel Co. v. Citizens for a Better Env't , 523 U.S. 83, 91, 118 S.Ct. 1003, 140 L.Ed.2d 210 (1998) ("the failure of a cause of action does not automatically produce a failure of jurisdiction"). The court explained that it reached these issues only because "both parties agree that we can render a decision on the merits." Tex. Med. Res., LLP , 659 S.W.3d at 441.

Here, because this is an interlocutory appeal from the denial of Community Health's plea to the jurisdiction, our appellate jurisdiction is limited to issues of subject matter jurisdiction. See, e.g., Houston Indep. Sch. Dist. v. 1615 Corp. , 217 S.W.3d 631, 635 (Tex. App.—Houston [14th Dist.] 2006, pet. denied) (in an appeal from the denial of a plea to the jurisdiction, the court's jurisdiction "is limited to the issues of subject matter jurisdiction"); see also Tex. Civ. Prac. & Rem. Code...