229 Cal. App. 4th 549
Cal. Ct. App.2014Background
- Dameron Hospital Association (Dameron) sues AAA Northern California, Nevada and Utah Insurance Exchange and Allstate for HLA liens on emergency room services provided to Kaiser patients.
- Kaiser paid negotiated rates for emergency services; Dameron seeks to recover its customary rates from tortfeasors/insurers via HLA liens.
- Dameron’s Kaiser contract did not expressly state preservation of HLA rights; parties argue over whether it implicitly preserves the right to recover the difference between usual and negotiated rates.
- Parnell held hospitals may preserve the right to recover customary rates via HLA liens only if the hospital contracts expressly to do so; payment in full extinguishes the lien otherwise.
- Dameron sought to rely on a longstanding practice of pursuing third-party payers, but the contract is silent on HLA and third-party collections; trial court granted summary judgment for AAA and Allstate.
- Court analyzes whether Parnell remains valid after Prospect and Howell, and whether Dameron’s Kaiser contract preserves the right to recover customary rates from tortfeasors.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Can Dameron recover its customary ER rates from tortfeasors under HLA after negotiated-rate payment? | Dameron maintains it reserved HLA rights via Kaiser contract. | Contract does not preserve such rights; negotiated-rate payment extinguishes HLA lien. | Parnell allows reservation if contract expressly so provides; Dameron did not preserve that right. |
| Did Dameron’s Dameron/Kaiser contract preserve HLA rights? | Contract language supports recovery of customary rates from third parties. | Contract shows negotiated rate as payment in full; no HLA reservation. | Contract does not expressly preserve; no right to recover customary rates from tortfeasors. |
| Is Parnell still valid post Prospect/Howell to preserve HLA rights? | Parnell remains controlling authority enabling contractual preservation. | Prospect/Howell undermine or limit Parnell’s scope. | Parnell remains valid; Knox-Keene/Prospect/Howell do not negate it. |
| Was Rita H.’s HLA lien timely under Civil Code 3045.5? | Discovery rule should toll the one-year period based on diligent inquiry. | Dameron failed to show diligent, particularized discovery efforts. | Claims relating to Rita H. untimely; discovery rule not applied. |
| Did Dameron adequately show diligence to invoke discovery rule for Rita H.? | Dameron acted with diligence in investigating settlements. | No specific, detailed diligence tied to Rita H. lien. | Trial court correct; no sufficient diligence shown. |
Key Cases Cited
- Parnell v. Adventist Health System/West, 35 Cal.4th 595 (Cal. 2005) (hospitals may preserve right to recover difference via HLA if contract does so; payment in full extinguishes lien otherwise)
- Howell v. Hamilton Meats & Provisions, Inc., 52 Cal.4th 541 (Cal. 2011) (when hospital accepts negotiated rate as full payment, cannot recover difference via lien)
- Prospect Medical Group, Inc. v. Northridge Emergency Medical Group, 45 Cal.4th 497 (Cal. 2009) (Knox-Keene Act precludes balance billing to patients; dispute resolution mechanisms required; no injection into patient’s claims)
- Andrews v. Samaritan Health System, 36 P.3d 57 (Ariz. Ct. App. 2001) (contractual reservation of rights to recover difference discussed; cited by Parnell)
- Corenbaum v. Lampkin, 215 Cal.App.4th 1308 (Cal. Ct. App. 2013) (Corenbaum held evidence of full billed charges not admissible to prove past medical expenses when negotiated rate paid)