Long Beach Memorial Medical Center v. Kaiser Foundation Health Plan, Inc.
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A hospital must provide “necessary stabilizing treatment” for any person in an “emergency medical condition,” 42 U.S.C. 1395dd(b), Health & Saf. Code 1317(a). California’s Knox-Keene Act (section 1340) requires that the patient's health insurance plan reimburse the hospital for providing “emergency services and care.” If the hospital and plan do not have an existing contract, the plan must pay the “reasonable and customary value." If a plan without a contract pays reimbursement that the hospital believes is below the “reasonable and customary value,” the hospital may sue the plan in quantum meruit for the shortfall.
The court of appeal held that a hospital may not additionally sue for the tort of intentionally paying an amount that is less than what a jury might later determine is the “reasonable and customary value” of the services, and thereby obtain punitive damages, nor may the hospital sue for injunctive relief under California’s unfair competition law to enjoin the plan from paying too little in possible future claims. In the quantum meruit claim, a trial court properly instructs the jury that the “reasonable value” of emergency medical services is “the price that a hypothetical willing buyer would pay a hypothetical willing seller for the services, [when] neither [is] under compulsion to buy or sell, and both hav[e] full knowledge of all pertinent facts.” Rejecting challenges to several evidentiary rulings, the court affirmed the jury’s verdict finding that the plan paid the suing hospital the reasonable and customary value of its emergency medical services.
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