River Park Hospital v. BlueCross BlueShield & Volunteer State Health

This case involves a dispute over rates paid to a TennCare health care provider. The plaintiff hospital had been a participating provider for the defendant TennCare managed care organization ("MCO") for several years, being paid an agreed contractual rate for services provided to the MCO's enrollees. When the parties' contract expired, it was not renewed. After expiration of the contract, the hospital continued to provide emergency services to the MCO's enrollees, as it was required to do under federal law. For those emergency services, the hospital billed the MCO at its full, standard rates. The MCO refused to pay the hospital's standard rates, and instead paid the hospital the same rate it had paid under the parties' expired contract. This was the same rate the MCO paid hospitals that were participating providers. The hospital filed this lawsuit against the MCO, seeking to recover its full, standard rates for the emergency services provided to the MCO's enrollees after expiration of the parties' contract. After hearing proof on liability, but not damages, the trial court initially denied recovery on all grounds. The hospital moved for reconsideration and to reopen the proof. The trial court granted the motion and ultimately determined that the MCO had been unjustly enriched by the hospital's provision of services to its enrollees. Both parties appealed. We affirm, finding a contract implied in law, and remand to the trial court to determine a reasonable rate for services provided by the hospital and, based on this, for a determination of damages.