Statements by Insurance Provider do not Constitute Defamation, COA rules

Marilyn Odendahl doe www.theindianalawyer.com

A surgery center’s defamation claim that an insurance provider was making false statements purposefully to harm the center’s business reputation was dismissed because the communication did not allege any misconduct in business practices or trade.

Columbus Specialty Surgery Center, LLC, filed a complaint for damages against insurance provider Southeastern Indiana Health Organization, Inc., after the provider allegedly told a customer base the surgery center had declined to participate in its network.

SIHO sent a letter to the employees of the Seymour Community School Corp. in April 2013 informing them that claims from the surgery center had cost the corporation’s plan in excess of $100,000 more than it otherwise would have spent. Consequently, the surgery center was going to be considered an out-of-network provider for the school system.

The surgery center responded with a lawsuit, asserting it had tried to enter the network but the insurance provider refused and SIHO’s allegations harmed the center’s business reputation.

In Bartholomew Superior Court, SIHO’s motion for judgment on the pleadings was granted and the surgery center’s defamation claim was dismissed without prejudice.

The Indiana Court of Appeals affirmed in Columbus Specialty Surgery Center v. Southeastern Indiana Health Organization, Inc. and Columbus Regional Health, 03A01-1406-PL-264, finding the surgery center did not state a claim upon which relief can be granted.

The statement at issue here falls short of the type of statement covered by a claim of defamation per se because the statement does not impute any misconduct in CSSC’s business or trade,” Judge Cale Bradford wrote for the court. “Notably, a health care provider may have a rational business reason for declining participation in an insurance provider’s network, and an unwillingness to participate does not, without more, indicate any misconduct by the health care provider. Thus, even if the statement that CSSC decided not to participate in SIHO’s network was false, it is not defamatory per se.”