INTRODUCTION
Plaintiff YDM Management Company, Inc. (YDM) appeals from a judgment of the trial court in favor of defendant Sharp Community Medical Group, Inc. (Sharp), after Sharp successfully moved for summary judgment of YDM's operative complaint.
YDM, a San Diego company that purchases accounts receivable from physicians and health care providers, purchased accounts receivable from Doctors Express,
At the time that it provided the services at issue to Sharp members, Doctors Express did not have a preferred provider contract with Sharp. Providers without a contract with an IPA are reimbursed for nonemergency medical services provided to the IPA's members at amounts that tend to be significantly less than the "reasonable and customary value for the health care services rendered." ( Cal. Code Regs., tit. 28, § 1300.71, subds. (a)(3)(B), (a)(3)(C).) However, an IPA such as Sharp is required by regulation to reimburse out of network providers for the full "reasonable and customary
As the assignee of Doctors Express, YDM filed this lawsuit seeking additional reimbursement from Sharp for services provided by Doctors Express to members of Sharp's health plan, beyond the amount that Sharp had already reimbursed Doctors Express for those services. YDM has alleged that Doctors Express provided emergency medical services to Sharp members at its Doctors Express locations, and, as a result, pursuant to California regulations, Doctors Express (and now its assignee YDM) is entitled to receive reimbursement for these services at Doctors Express's "usual, customary, and reasonable rates."
Sharp moved for summary judgment, and presented evidence that the billing claims that Doctors Express submitted to Sharp for reimbursement for services did not include Current Procedural Technology codes (or CPT codes)
We conclude that the trial court did not err in granting summary judgment in favor of Sharp. We therefore affirm the judgment.
II.
FACTUAL AND PROCEDURAL BACKGROUND
Sharp contracts with independent medical providers for those providers to furnish Sharp's members with health care services at negotiated rates. Sharp pays claims for health care services that are provided to its members by both contracted, as well as noncontracted providers.
YDM filed this action against Sharp, asserting causes of action for breach of implied contract, recovery of payment for services rendered, recovery on an open book account, and quantum meruit, alleging that Doctors Express had provided "emergency medical services" to a number of Sharp's managed care patients.
It is undisputed that Doctors Express did provide medical services to Sharp members, and that prior to the assignment of its claims to YDM, Doctors Express had billed Sharp for the services that it had provided to Sharp's members. It is also undisputed that Doctors Express submitted its claims for reimbursement to Sharp by utilizing CPT codes.
YDM further alleged that California law required Sharp to compensate YDM for those "emergency medical services" at the "usual, customary, and reasonable rates" charged by Doctors Express for providing such services. According to YDM's complaint, Sharp was "obligated to pay non-contracted providers such as [Doctors Express]," and the "regulations provide a methodology for determining the rate to be paid to out-of-network emergency room providers." YDM alleged that Sharp failed to reimburse Doctors Express at its "customary, or usual" rates, as required by the regulations, and instead reimbursed the claims "at below usual, customary, and reasonable levels."
Sharp moved for summary judgment, arguing that Doctors Express operates urgent care facilities, not emergency departments, and that only emergency departments at hospitals that are licensed as such can provide " 'emergency medical services' " for which insurers are obligated to reimburse providers at their " 'usual, customary, and reasonable rates.' " Sharp submitted the declaration of Carol Wanke, Sharp's vice-president of Post-Acute Patient Financial Services and Managed Care Operations, in support of its motion for summary judgment. Wanke attested to her knowledge of the "process by which a non-contracted health care provider submits a claim to [Sharp] for payment for medical services rendered to [a Sharp] member or enrollee of a managed care health plan," and further stated that providers follow "standard billing procedures that are set forth by the American Medical
In response to Sharp's motion for summary judgment, YDM submitted the declaration of Dr. Jonathan Nissanoff, M.D., a board certified orthopedic surgeon and President of YDM. Nissanoff attested that he is familiar with "the nature and use and definitions of Current Procedural Terminology (CPT) codes and code sets maintained by the American Medical Association." He explained that "CPT codes are universally used for billing purposes to communicate to the obligor for payment ... the specific nature of the services provided," and that, specifically, "[t]hese CPT codes communicate, among other things, information that enables the recipient to identify from the CPT [c]odes whether emergency services were provided to the patient." According to Nissanoff, "urgent care centers often furnish emergency services to patients because the patients will often present to and seek immediate treatment from an urgent care center on an unscheduled, non-elective basis without fully appreciating whether their condition involves the need for emergency services." Nissanoff further attested that he "reviewed all of the claims assigned to Plaintiff which are the subject of this action and [had] knowledge of their contents, including the CPT [c]odes assigned for the services charged to the patients by the health care providers which disclose the nature of the services provided to the patients for which services w[ere] rendered." Nissanoff stated that "it is [his] opinion to a reasonable probability that all of those services which have been assigned to YDM involved the provision of emergency services to patients by the assignees."
The parties each made multiple evidentiary objections to the other's supporting declaration.
The trial court heard argument from counsel on August 19, 2016. The trial court overruled virtually all of both parties' evidentiary objections, with two exceptions of particular relevance to this case, the court sustained Sharp's objection to paragraph 16 of Nissanoff's declaration, which is the paragraph in which Nissanoff expressed his opinion that "all of those services which have been assigned to YDM involved the provision of emergency services to patients by the assignees."
"While it is conceivable that an urgent care center could provide 'emergency services', the evidence in this case indicates that none of the billings [are] coded 'emergency services.' Ms. Wanke's declaration indicates that none of the claims presented by the urgent care center involved emergency services. She specifically identifies codes used for emergency care services and states that none of them are included in the billings. [Citation.] [¶] ... [¶] Plaintiff offers noadmissible evidence to counter Ms. Wanke's declaration that Doctors Express did not bill for emergency services. Jonathan Nissanoff's Declaration that 'all of the services which have been assigned to YDM involved the provision of emergency services to patients ...' [citation] is without foundation."
The trial court entered judgment in favor of Sharp on August 30, 2016. YDM filed a timely notice of appeal.
III.
DISCUSSION
Pursuant to regulation, medical service providers who contract with a health care services plan are entitled to reimbursement at the contracted rate for those services provided to members of the plan who are covered by the contract. ( Cal. Code Regs., tit. 28, § 1300.71, subd. (a)(3)(A).) Medical service providers who provide services to members of a health care services plan but do not have a written contract with the health care services plan for the services at issue are entitled to reimbursement for the "reasonable and customary value for the health care services rendered" only for "emergency services." ( Cal. Code Regs., tit. 28, § 1300.71, subds. (a)(3)(B).) For nonemergency services, such medical service providers are entitled to reimbursement from the plan, but only for "the amount set forth in the enrollee's Evidence of Coverage." (Id. , subd. (a)(3)(C).) Often, there is a difference between the "amount set forth in the enrollee's Evidence of Coverage" and the amount billed by a medical provider; the amount billed is almost invariably more than the amount set forth in the plan. Medical providers who provide "non-emergency services" in the absence of a contract covering those services often attempt to obtain the difference between "the amount set forth in the enrollee's Evidence of Coverage" and their "reasonable and customary" (Cal. Code Regs., title 28, § 1200.71, subds. (a)(3)(B), (a)(3)(C)) rates by billing the individual patients directly, a practice referred to as "balance billing." (See Prospect Medical Group, Inc. v. Northridge Emergency Medical Group (2009)
The parties disagree as to whether Sharp is obligated, pursuant to California regulations, to reimburse YDM, as Doctors Express's assignee, at the usual, customary, and reasonable rates for emergency medical services for the services that Doctors Express provided to Sharp members. The parties agree that insurers are obligated to reimburse noncontracted providers for emergency medical services provided to their insureds at that provider's "reasonable and customary" rates. (See Cal. Code Regs., tit. 28, § 1300.71, subd. (a)(3)(B).) The parties disagree, however, as to whether an urgent care facility can ever be entitled to reimbursement from a patient's insurer for the "reasonable and customary value" (ibid. ) of emergency services.
YDM, standing in the shoes of Doctors Express,
1. Summary judgment standards
"Summary judgment and summary adjudication provide courts with a mechanism to cut through the parties' pleadings in order to determine
Generally, "the party moving for summary judgment bears an initial burden of production to make a prima facie showing of the nonexistence of any triable issue of material fact; if [that party] carries [t]his burden of production, [the moving party] causes a shift, and the opposing party is then subjected to a burden of production of his own to make a prima facie showing of the existence of a triable issue of material fact." ( Aguilar v. Atlantic Richfield Co . (2001)
"After the defendant meets its threshold burden [to demonstrate that a cause of action has no merit], the burden shifts to the plaintiff to present evidence showing that a triable issue of one or more material
"On appeal, the reviewing court makes ' "an independent assessment of the correctness of the trial court's ruling [regarding summary judgment], applying the same legal standard as the trial court in determining whether there are any genuine issues of material fact or whether the moving party is entitled to judgment as a matter of law." ' " ( Hesperia Citizens for Responsible Development v. City of Hesperia (2007)
2. Relevant statutory and regulatory background regarding the provision of, and reimbursement for, emergency services
Under state and federal law, emergency services and care "shall be provided to any person requesting the services or care" by any licensed health facility that has appropriate facilities and qualified personnel. ( Health & Saf. Code, § 1317, subd. (a), italics added; see 42 U.S.C. § 1395dd(b).)
The Health and Safety Code defines "emergency services and care," for purposes of when a licensed health facility must provide such care. Section 1317.1 of the Health and Safety Code provides in relevant part:
"Unless the context otherwise requires, the following definitions shall control the construction of this article and Section 1371.4:
"(a)
"(1) 'Emergency services and care' means medical screening, examination, and evaluation by a physician and surgeon, or, to the extent permitted by applicable law, by other appropriate licensed persons under the supervision of a physician and surgeon, to determine if an emergency medical condition or active labor exists and, if it does, the care, treatment, and surgery, if within the scope of that person's license, necessary to relieve or eliminate the emergency medical condition, within the capability of the facility.
"[¶] ... [¶]
"(b) 'Emergency medical condition' means a medical condition manifesting itself by acute symptoms of sufficient severity (including severe pain) such that the absence of immediate medical attention could reasonably be expected to result in any of the following:
"(1) Placing the patient's health in serious jeopardy.
"(2) Serious impairment to bodily functions.
"(3) Serious dysfunction of any bodily organ or part.
"(j) A patient is 'stabilized' or 'stabilization' has occurred when, in the opinion of the treating physician and surgeon, or other appropriate licensed persons acting within their scope of licensure under the supervision of a treating physician and surgeon, the patient's medical condition is such that, within reasonable medical probability, no material deterioration of the patient's condition is likely to result from, or occur during, the release or transfer of the patient as provided for in Section 1317.2, Section 1317.2a, or other pertinent statute."
The Knox-Keene Health Care Service Plan Act of 1975 (Knox-Keene Act), a comprehensive system of licensing and regulation, governs health care service plans such as Sharp's. (See Health & Saf. Code, § 1340 et seq. ; Prospect , supra ,
Given that the law elsewhere requires that emergency services and care be provided without regard to a patient's insurance or ability to pay, the Knox-Keene Act imposes a requirement that health care service plans must reimburse a provider who has provided emergency services or care to a health care service plan's enrollee. ( Health & Saf. Code, § 1371.4, subd. (b).) The Department of Managed Health Care (the Department) has promulgated regulations concerning the reimbursement of claims for emergency and nonemergency services. (See Children's Hospital Central California v. Blue Cross of California (2014)
Most relevant to the matters raised here, pursuant to
3. Analysis
We begin by noting, as the trial court did, that we have found nothing in statute or regulation that states that only facilities that are specially licensed to operate an emergency department may provide "emergency services." However, Sharp contends that Doctors Express could not seek payment for the reasonable and customary value of any emergency services that it alleges it provided to Sharp members "because Doctors Express cannot provide emergency medical services at urgent care centers as a matter of law."
Sharp also makes a public policy argument that only hospitals or other licensed health facilities with emergency departments should be able to obtain reimbursement from health care service plans for the "reasonable and customary value" ( Cal. Code. Regs., tit. 28, § 1300.71(a)(3)(B) ) of emergency services provided to plan members because only hospitals and licensed health facility with emergency departments are obligated by statute to provide emergency services to all patients, regardless of any individual's ability to pay. (See Children's Hospital , supra ,
a. Sharp's evidence presented in support of its motion for summary judgment was sufficient to make a prima facie showing of the nonexistence of any triable issue of material fact
i. The Wanke declaration is evidence that Doctors Express did not bill for providing "emergency services"
The parties agree that medical providers use CPT codes to describe and communicate the nature of the medical services that have been provided to a patient. CPT codes "were jointly developed by the American Medical Association and the Health Care Financing Administration and are the standardized nomenclature for use in insurance claims." ( Allstate Insurance , supra ,
Doctors Express's claims for payment are concessions about the nature of the services that were provided-i.e., by not using CPT codes that would signify that it had provided "emergency services" in the billings it submitted to Sharp, Doctors Express conceded that it had not provided "emergency services" to Sharp's members. Because Doctors Express's assignee, YDM stands in its shoes, YDM, is bound by Doctors Express's concessions as to the nature of the services it provided to Sharp's members. YDM may not now assert that the services provided were different from what Doctors Express communicated to Sharp through its billing claims.
ii. YDM's evidentiary challenges to the Wanke declaration are without merit
On appeal, YDM challenges the trial court's reliance on Wanke's declaration. In the trial court, YDM objected to Wanke's declaration, arguing that it constituted multiple hearsay and lacked foundation, and arguing that Wanke lacked personal knowledge about the billings. YDM relies on Garibay v. Hemmat (2008)
Garibay involved claims of professional malpractice, and expert opinion was therefore necessary to prove or disprove whether the defendant had met the requisite standard of care. (See Garibay , supra ,
In addition, Wanke laid a foundation for her testimony, and described her personal knowledge of the claims that Doctors Express submitted to Sharp for payment. Wanke attested that she is Sharp's vice-president for "Post-Acute Financial Services and Managed Care Operations," that she has been employed in a variety of positions with Sharp since 1991, and that she is familiar with the process by which noncontracted health care providers submit claims to Sharp for payment, as well as the policies and procedures of the Department of Managed Healthcare regarding the reimbursement of noncontracted health care providers. Wanke further attested to her familiarity with standard medical billing practices, including the use of CPT codes in billing. Wanke is familiar with the services described by CPT codes, and is knowledgeable about the codes used for emergency services. She also is familiar with place of services codes, which indicate the type of facility at which services were provided.
Wanke also attested to how she performed a search of Sharp's records to find information relevant to the claims that Doctors Express submitted to Sharp for payment that are at issue in this case. Wanke caused a spreadsheet to be prepared that included each claim for payment that Doctors Express submitted to Sharp for services provided between January 1, 2012 and December 31, 2014.
The spreadsheet included a column for the CPT codes submitted by Doctors Express to Sharp for services provided to Sharp members. Wanke attested that she reviewed these CPT codes and that none of the CPT codes used were the CPT codes for emergency services.
Wanke's review of the CPT codes submitted to Sharp by Doctors Express, and her reliance on those CPT codes to conclude that none of them were CPT codes used to identify emergency services, was not based on inadmissible hearsay, as YDM contends. First, Wanke was not asserting that Doctors Express actually performed the services identified by those codes. Rather, she was asserting that Doctors Express submitted these specific numeric and alphanumeric codes in its claims for reimbursement, and that the codes are used to indicate to Sharp the nature of the services provided and for which payment is being sought. Second, even if Wanke were relying on the CPT codes submitted by Doctors Express for their truth, evidence of a statement is not made inadmissible by the hearsay rule when offered against the declarant in an action to which he or she is a party. ( Evid. Code, § 1220.) Because YDM, as the assignee of Doctors Express, stands in Doctors Express's shoes, any statements made by Doctors Express are admissible
YDM also attempts to avoid the effect of Wanke's declaration by arguing in its reply brief that "the CPT 'place of service' codes and those codes
Based on Wanke's declaration, Sharp made a prima facie showing that YDM cannot establish that it is entitled to reimbursement for the provision of "emergency services." The burden thus shifted to YDM to make a prima facie showing of the existence of a triable issue of material fact. (See Aguilar , supra ,
Nissanoff's declaration, however, does not place in dispute the fact that Doctors Express did not utilize any "emergency services" CPT codes in the billings it submitted to Sharp, and that therefore, Doctors Express essentially conceded that it did not provide "emergency services" to Sharp members. YDM argues that Nissanoff's declaration creates a triable issue of material fact as to whether the services provided by Doctors Express to Sharp members were "emergency services" because Nissanoff states that he reviewed all of the claims assigned by Doctors Express to YDM, and that they all "involved the provision of emergency services." However, the trial court excluded the paragraph of Nissanoff's declaration in which he states this conclusory opinion. Although YDM challenges the trial court's ruling, we see
Finally, even if we were to consider paragraph 16 of Nissanoff's declaration despite the trial court's exclusion of it, it is insufficient to place in dispute the fact that Doctors Express did not bill Sharp for emergency services. Nissanoff's declaration concedes that CPT codes are used to communicate to a health care service plan the nature of the medical services provided and does not place in dispute Wanke's declaration stating that Doctors Express's billings did not use the CPT codes that specify the provision of emergency services. Specifically, Nissanoff does not state that the CPT codes that Wanke identifies as being the codes used to identify the
Finally, YDM contends that the trial court erred "[t]o the extent" that it considered "new evidence" that Sharp offered in support of its reply papers, and urges this court not to consider this evidence in reviewing the trial court's granting of summary judgment in favor of Sharp. YDM asserts that "a moving party on summary judgment may not offer new supporting evidence for the first time in its reply brief." Sharp submitted a reply declaration by Wanke, as well as the new declaration of Lucinda Ehnes, an attorney who served as the Director of the California Department of Managed Care. We are not convinced that the trial court considered either of these declarations that were submitted with Sharp's reply papers. In its written ruling, the trial court relied on, and cited to, Wanke's original declaration submitted in support of Sharp's moving papers. The court did not rely on any of Sharp's evidence submitted in reply. Further, this court has not considered that
DISPOSITION
The judgment is affirmed.
WE CONCUR:
HALLER, Acting P. J.
O'ROURKE, J.
Notes
"Current Procedural Technology ... Codes" or "CPT codes" are published annually by the American Medical Association and comprise a comprehensive list of medical, surgical, and diagnostic services that is widely used in the healthcare industry. (People ex rel. Allstate Insurance Co. v. Muhyeldin (2003)
The Supreme Court has concluded, however, that providers of emergency services may not " 'balance bill[ ]' " patients for emergency services, since emergency services providers are entitled to obtain their " 'reasonable and customary' " rates from health care service plans directly. (Prospect Medical, supra, 45 Cal.4th at pp. 502, 505, 507-509,
Through the assignment agreement, YDM stands in the shoes of Doctors Express. As the assignee of Doctors Express, YDM may bring all of the claims that Doctors Express could have brought, and is subject to all of the defenses that Sharp could have raised against Doctors Express if Doctors Express had filed this action. (Searles Valley Mineral s Operations, Inc. v. Ralph M. Parsons Service Co. (2011)
Section 1250 of the Health and Safety Code defines a "health facility" as "a facility, place, or building that is organized, maintained, and operated for the diagnosis, care, prevention, and treatment of human illness, physical or mental, including convalescence and rehabilitation and including care during and after pregnancy, or for any one or more of these purposes, for one or more persons, to which the persons are admitted for a 24-hour stay or longer " (italics added), including general care hospitals, psychiatric hospitals, skilled nursing facilities, intermediate care facilities, nursing facilities and hospice facilities. Health and Safety Code section 1250 does not include a reference to "urgent care" clinics or facilities.
California Code of Regulations, title 28, section 1300.71(a)(3) (hereafter Section 1300.71(a)(3) ) defines the phrase "reimbursement of a claim" in the following manner:
"(A) For contracted providers with a written contract, including in-network point-of-service (POS) and preferred provider organizations (PPO): the agreed upon contract rate;
"(B) For contracted providers without a written contract and noncontracted providers, except those providing services described in paragraph (C) below: the payment of the reasonable and customary value for the health care services rendered based upon statistically credible information that is updated at least annually and takes into consideration: (i) the provider's training, qualifications, and length of time in practice; (ii) the nature of the services provided; (iii) the fees usually charged by the provider; (iv) prevailing provider rates charged in the general geographic area in which the services were rendered; (v) other aspects of the economics of the medical provider's practice that are relevant; and (vi) any unusual circumstances in the case; and
"(C) For non-emergency services provided by non-contracted providers to PPO and POS enrollees: the amount set forth in the enrollee's Evidence of Coverage."
By excluding "non-emergency services provided by non-contracted providers" in subdivision (a)(3)(C) from the provisions of subdivision (a)(3)(B), section 1300.71(a)(3) renders subdivision (a)(3)(B) the provision governing the rate at which providers without a governing contract with the patient's health care service plan are to be reimbursed for their provision of emergency services to a plan's member.
We do not understand Sharp to be contending that urgent care centers may not, or should not, treat an individual who presents with an emergency condition requiring immediate attention. Rather, we interpret Sharp's position to be that only licensed emergency departments may be considered to have rendered "emergency services" for which health care services plans are obligated to reimburse at the reasonable and customary value for those services, pursuant to California law. According to Sharp, because urgent care centers are not required by law to provide such services to any person who walks through their doors and are not specially licensed to provide those services-unlike hospitals with emergency departments that are required to provide those services and are licensed to do so-urgent care centers are not entitled to be reimbursed by a patient's insurer or health service plan for the "reasonable and customary value" of those services. Instead, according to Sharp, urgent care centers are limited to recovering from the patient, through balance billing, the difference between the amount that the patient's insurer reimburses a noncontracted provider and the "reasonable and customary value" of the service provided by an urgent care center.
Sharp notes that the loss of the incentive to plan members to seek in-network care "would have a chilling effect on contracts between health plans and IPAs on the one hand, and physicians on the other," because the medical providers would no longer receive the benefit of access to a large group of members with an incentive to seek treatment with those particular providers. Sharp also raises the concern that health plans and IPAs such as Sharp would "face the burden of reimbursing unlicensed non-contracted urgent care centers for so-called 'emergency' services at rates higher than contracted physicians," and that "[o]ver time those higher health care costs would be reflected in higher premiums, and higher co-pays" for members.
Wanke further attests that rather than using the codes that indicate that "emergency services" were rendered, "standard evaluation and management CPT codes [were] used, similar to the types of CPT codes one would expect to see in an outpatient environment or from a medical office."
Indeed, YDM's expert also relies on the "claims assigned to Plaintiff which are the subject of this action" in attesting to certain facts in his declaration.
YDM has not raised any issue as to whether Wanke's summary is accurate or fails to adequately represent the material terms of the original claims submissions. Nor has YDM set forth any argument that admission of the summary spreadsheet is unfair. Although YDM suggests that the use of the spreadsheet "had the effect of denying Plaintiff any fair ability to cross-examine that critically missing foundational multiple hearsay evidence," this contention appears to be disingenuous. YDM clearly has access to the original claims submissions made by Doctors Express; its own expert, Nissanoff, attests that he "review[ed] [all] of the claims assigned to Plaintiff which are the subject of this action."
As Sharp points out in briefing, the full documentation for all of the claims that make up the 113 page spreadsheet that includes approximately 50 items on each page would result in over 20,000 pages of documents. Requiring the trial court to review all of that documentation, when a summary setting forth the pertinent information from the underlying documents is sufficient, would be a waste of judicial resources and time. (See Heaps v. Heaps (2004)
Citing Shugart v. Regents of University of California (2011)
At oral argument, counsel for YDM asserted that urgent care centers are prohibited from using the CPT codes identified by Wanke as the codes used to bill for "emergency services." When questioned about this, however, counsel conceded that YDM's expert did not attest to this in his declaration, and did not otherwise indicate that there are no CPT codes that an urgent care center could utilize that would indicate that emergency services had been provided. We must decide the issues before us based on the record presented, including the evidence submitted by the parties in support of and in opposition to Sharp's motion for summary judgment. There is no evidence in this record that urgent care centers are prohibited from utilizing the CPT codes identified by Wanke as the billing codes for "emergency services" or that the codes that Doctors Express used in its billings indicated in any way that the services it provided were "emergency services."