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Coast Plaza Doctors Hospital v. Blue Cross of California

May 11, 2009

COAST PLAZA DOCTORS HOSPITAL, PLAINTIFF AND APPELLANT,
v.
BLUE CROSS OF CALIFORNIA ET AL., DEFENDANTS AND RESPONDENTS.



APPEAL from a judgment of the Superior Court of Los Angeles County. William F. Fahey, Judge. Reversed. (Los Angeles County Super. Ct. No. BC365740).

The opinion of the court was delivered by: Tucker, J.*fn13

CERTIFIED FOR PUBLICATION

In California, health care providers are statutorily required to provide emergency care to a patient without regard to the patient's ability to pay for such care. (Health & Saf. Code, § 1317.)*fn1 If a patient who receives emergency care is an enrollee of a health care service plan, section 1371.4, a provision of the Knox-Keene Health Care Service Plan Act of 1975 (Knox-Keene), requires the plan to reimburse the provider for the cost of the emergency care, barring certain exceptions inapplicable here.

In this case, Coast Plaza Doctors Hospital (Coast Plaza) provided emergency care to Patient X, an enrollee of a group health plan insured by Blue Cross of California (Blue Cross). When Blue Cross did not reimburse Coast Plaza for the cost of the emergency care, Coast Plaza sued Blue Cross in superior court, alleging a number of state law claims derived from section 1371.4. Because Patient X's group health plan qualified as an employee benefit plan subject to the Employee Retirement Income Security Act of 1974 (ERISA), the trial court sustained Blue Cross' demurrer on the ground that Coast Plaza's state law claims were subject to ordinary preemption under ERISA.

We conclude that section 1371.4 is a state law that regulates insurance within the purview of ERISA's saving clause. Therefore, we reverse the judgment in favor of Blue Cross and remand for further proceedings.

FACTS AND PROCEEDINGS BELOW

A. Alleged Facts

Because Coast Plaza appeals from a judgment of dismissal after the court sustained a demurrer, we accept as true the allegations of the complaint. (See Blank v. Kirwan (1985) 39 Cal.3d 311, 318.)

Blue Cross is an insurance company licensed by the Department of Managed Health Care to operate a health care service plan pursuant to Knox-Keene. Prospect Medical Group (Prospect) provides medical care to patients, including those patients whom Blue Cross insures. Nuestra Familia Medical Group (Nuestra) is an affiliate of Prospect.*fn2

Patient X is an insured of Blue Cross.*fn3 In 2006, Coast Plaza admitted Patient X for a partial removal of the thyroid gland. Because Coast Plaza was an "out-of-network provider" (i.e., it did not contract with Blue Cross to provide services to plan participants or beneficiaries), Patient X made a cash payment to Coast Plaza in advance of the surgery. The surgery proceeded without any complications and Patient X was transferred to Coast Plaza's post-operative care unit. A few days after the surgery, Patient X suddenly developed life-threatening acute respiratory distress. An emergency room physician intubated Patient X, placed her on a ventilator, and transferred her to Coast Plaza's intensive care unit (ICU) for further treatment.

After Coast Plaza stabilized Patient X, Patient X informed Coast Plaza that she was insured by Blue Cross or Prospect, or both entities. Coast Plaza called Nuestra to have Patient X transferred to an "in-network provider." Nuestra would not authorize the transfer and refused to be involved with any decisions regarding Patient X's medical care. Patient X remained in Coast Plaza's ICU for approximately two months, after which time she was transferred to another medical facility.

On or about September 25, 2006, Coast Plaza electronically billed Blue Cross for $582,252.97, the amount of medical charges Coast Plaza claims it incurred providing emergency care to Patient X.*fn4 The next day, a representative from Nuestra informed Coast Plaza that Nuestra would not pay any portion of the bill. On or about October 2, 2006, Blue Cross followed up with correspondence stating:

"In order to process this claim, we require an authorization from the patient's assigned medical group . . . unless these services were rendered in connection with a medical emergency. If these services were rendered in connection with a medical emergency, please supply records, as an emergency condition could not be determined from the information that we have."

The complaint contains no allegation as to whether Coast Plaza provided Blue Cross with any records. It simply alleges that Blue Cross and Prospect have refused to pay, and continue to refuse to pay, any money in ...


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