P.A.M. Transport, Inc. v. Arkansas Blue Cross & Blue Shield

David Newbern, Justice.

This is an insurance contract case. The appellant, P.A.M. Transport, Inc. (PAM), entered a contract with the appellee, Arkansas Blue Cross and Blue Shield (BCBS), which provided that BCBS would administer the health care claims of PAM employees. BCBS was to adjust and then pay all claims submitted by PAM employees. BCBS would then bill PAM, monthly, for reimbursement of the claims plus an administrative fee. The agreement provided PAM’s annual liability for insurance claims would not exceed a “cap.” The cap was calculated using a formula based on the number of employees…