The 5th Court of Appeals reversed a trial court order dismissing with prejudice breach of claims of several hospitals’ claims against an insurer on the basis that the claims were barred by the Insurance Code.
Dallas Medical Center, LLC (d/b/a Dallas Medical Center), Prime Healthcare Services-Mesquite, LLC (d/b/a Dallas Regional Medical Center), and Knapp Medical Center v. Cigna Healthcare of Texas, Inc., Cigna Health and Life Insurance Company, and Connecticut General Life Insurance Company (No. 05-24-00679-CV; December 2, 2025) arose from a dispute between several hospitals and Cigna over reimbursement for emergency care provided to Cigna enrollees pursuant to an agreement to provide such care. After admission, the hospitals notified Cigna and requested valid, binding authorizations or the arrangement of prompt transfer of the enrollee to another facility. The hospitals charged Cigna for the their usual and customary rate until transfer. When Cigna allegedly didn’t pay that rate, the hospitals brought suit for breach of implied-in-fact contract, promissory estoppel, and negligent misrepresentation seeking to recover damages in the amount of the difference between the lower amount Cigna reimbursed and the usual and customary rate.
Cigna filed its first plea to the jurisdiction, arguing that the hospitals had repackaged “violations of the emergency care provisions of the Insurance Code as state law claims.” Such claims, Cigna argued, were barred as no private right of action exists under the Texas Insurance Code. The trial court granted Cigna’s plea and dismissed the Hospital’s claims with prejudice, but later the court granted them leave to file a first amended petition. In the amended petition, the hospitals asserted claims for promissory estoppel, breach of express contract, and breach of implied contract, alleging that they provided out-of-network emergency care to Cigna enrollees, requested Cigna either to authorize treatment or transfer the enrollees, informed Cigna of their expectation of payment, obtained Cigna’s agreement to pay the usual and customary rate, and received less reimbursement than promised. Cigna responded with a second plea to the jurisdiction, reiterating its Insurance Code argument and asserting that no express contract between the parties existed, the Hospitals waited too long to enforce any such contract, and the promise element alleged by the hospitals was insufficiently definite. The hospitals countered that this plea to the jurisdiction was an improper vehicle for a limitations defense or statute of frauds challenge. After a hearing, the hospitals’ claims were again dismissed with prejudice and Cigna’s second plea was granted. The hospitals appealed.
In an opinion by Justice Kennedy, the court of appeals reversed and remanded. The hospitals asserted that the trial court erred in granting the second plea to the jurisdiction because none of its claims were preempted by the relevant emergency care sections of the Insurance Code, §§ 1271.155(a), 1301.0053 and 1301.155. These provisions require out-of-network providers to make payments to the company’s insureds at the “usual and customary rate.” See Tex. Med. Res., LLP v Molina Healthcare of Tex., Inc., 659 S.W.3d 424, 427 (Tex. 2023). As interpreted by SCOTX, these sections do not create private causes of action. Molina, however, also held that a Rule 91a motion, not a plea to the jurisdiction, would be the appropriate motion for an issue of law pertaining to the merits. Consequently, the court conducted a Rule 91a analysis and determined that Cigna failed to proffer sufficient evidence demonstrating that the contract claims in the amended petition had anything to do with emergency care in particular. The court rejected Cigna’s argument that the hospitals merely repackaged Insurance Code claims as state law claims and concluded that the trial court erred by dismissing the claims.
Turning to Cigna’s affirmative defenses based on the statute of frauds and limitations, the court concluded that Cigna failed to establish that the hospitals’ pleadings were insufficient to provide fair notice of their claims. Furthermore, Cigna provided no evidence in support of its statute of frauds defense or that the hospitals’ implied-in-fact contract claim was insufficiently pleaded. To the contrary, the amended petition “identified specific acts and conduct the Hospitals alleged created [sic?] constituted the mutual assent and terms of the alleged implied contracts between the Hospitals and Cigna.” Thus, the trial court abused its discretion by dismissing the hospitals’ claim for breach of implied contract.
TCJL Intern Satchel Williams researched and prepared the first draft of this article.
