423 F.Supp.3d 947
D. Haw.2019Background
- Kaiser Foundation Health Plan (HMO) and The Queen’s Medical Center, Inc. (with North Hawai‘i Community Hospital and Molokai General) had express provider agreements that terminated May 30, 2019.
- On June 3, 2019 QMC notified Kaiser that, beginning May 31, QMC would provide emergency services but bill at “100% of billed charges” and members "will be billed for any claim for services not reimbursed by Kaiser."
- Kaiser sued (filed June 12, 2019) seeking declaratory and injunctive relief to prevent QMC from balance billing members and to constrain charges; QMC moved to dismiss for failure to state a contract-based claim.
- Parties litigated the motions, mediated unsuccessfully, and the court heard argument on October 23, 2019; decision issued October 31, 2019.
- The court found no implied-in-fact contract (no mutual assent) and no implied-in-law contract (statutory or common-law restitution theories fail), dismissed all claims with prejudice, and denied Kaiser’s preliminary injunction as moot.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether an implied in-fact contract exists between Kaiser and QMC | Kaiser: course of dealing and provision of emergency care to members imply a contract obligating Kaiser to pay | QMC: June 3 letter and negotiations show parties rejected each other’s terms; no mutual assent or meeting of minds | No implied in-fact contract; mutual assent lacking, dismissal granted |
| Whether statute creates an implied-in-law contract obligating Kaiser to pay non‑contract providers for emergency care | Kaiser: HMO statutes require HMOs to provide/arrange emergency care, analogous to California cases that impose payment obligations | QMC: Hawai‘i statutes do not impose an obligation on Kaiser to pay non‑contract providers nor provide reimbursement/regulatory framework like California | No implied-in-law contract based on Hawai‘i statute; California precedent inapposite |
| Whether common-law restitution (Restatement §114) creates an implied-in-law obligation | Kaiser: equitable restitution/unjust enrichment principles entitle a non‑performing party to be charged for emergency services provided to its members | QMC: Restitution rule applies to party who performs duty of another; here QMC performed its own statutory duty; Kaiser did not perform a duty for QMC | No implied-in-law contract via common-law restitution; theory does not fit the facts |
| Whether claims to prevent balance billing or to limit charges survive absent a contract | Kaiser: there is a general prohibition against balance billing emergency patients (relied on California law) | QMC: Kaiser’s claims are contract‑dependent; Hawai‘i law lacks a comparable statutory/regulatory scheme to California | Claims dismissed: Hawai‘i law does not furnish a general ban on balance billing for non‑contract emergency care; claims cannot proceed without a contract |
Key Cases Cited
- Ashcroft v. Iqbal, 556 U.S. 662 (pleading standard for plausibility)
- Bell Atl. Corp. v. Twombly, 550 U.S. 544 (Twombly pleading framework)
- Durette v. Aloha Plastic Recycling, Inc., 100 P.3d 60 (Haw. 2004) (standard for implied in‑fact contracts under Hawai‘i law)
- River Park Hosp., Inc. v. BlueCross BlueShield of Tenn., Inc., 173 S.W.3d 43 (Tenn. Ct. App. 2002) (no implied in‑fact contract where parties never agreed on rate)
- Prospect Med. Grp., Inc. v. Northridge Emergency Med. Grp., 198 P.3d 86 (Cal. 2009) (California framework limiting balance billing due to legislative/regulatory scheme)
- Bell v. Blue Cross of Cal., 31 Cal. Rptr. 3d 688 (Cal. Ct. App. 2005) (statutory regime requiring reimbursement to non‑contract emergency providers)
- Winter v. Natural Res. Def. Council, Inc., 555 U.S. 7 (standard for preliminary injunction)
- Global Horizons, Inc. v. U.S. Dep’t of Labor, 510 F.3d 1054 (9th Cir. 2007) (no injunction if no chance of success on merits)