Texas Attorney General eyes abatement of El Paso Children’s lawsuits

By Caroline Salls

Pittsburgh, June 4 – The Office of the Texas Attorney General asked a federal court to abate three lawsuits filed in El Paso Children’s Hospital Corp.’s Chapter 11 case, according to a Wednesday filing with the U.S. Bankruptcy Court for the Northern District of Texas.

Specifically, the office is seeking abatement of an adversary complaint and application for injunction filed against El Paso County Hospital District, which does business as University Medical Center of El Paso (UMC), an adversary complaint filed against El Paso First Health Plans, Inc. and an adversary complaint filed against Navigant Healthcare Cymetrix Corp.

The attorney general’s office said the lawsuits should be abated pending mediation “in an attempt to resolve the myriad issues raised by the debtor without the need for litigation and to preserve the limited assets of the debtor.”

In the UMC proceeding, El Paso Children’s asserted claims stemming from the alleged avoidability of UMC’s preferential lien filing and from obligations allegedly taken on by the children’s hospital at the insistence of UMC for inadequate consideration.

The suit also seeks an injunction to prevent UMC from moving forward with any claim that the various agreements between the children’s hospital and UMC terminated before the bankruptcy filing date and seeks a ruling in connection with UMC’s obligating El Paso Children’s to make allegedly overpriced rental payments for its use of the premises on the UMC campus.

In the El Paso First Health proceeding, the children’s hospital asserted claims stemming from its alleged transfer of services to enrollees of First Health for which it allegedly received inadequate consideration in the form of under-market reimbursement from First Health.

El Paso Children’s said it is entitled to recover for the alleged overpayments at below-cost levels.

In the Navigant suit, El Paso Children’s asserted several claims stemming from alleged issues under a master services agreement. Under that agreement, Navigant performed cash flow-related services, including processing reimbursement from insurers and operating the children’s hospital’s financial services department.

Based in El Paso, Texas, El Paso Children’s Hospital provides pediatric patient care, research and education services. The hospital filed for bankruptcy on May 19 under the Chapter 11 case number 15-30784.

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