San Joaquin Cmty. Hosp. v. Pacificare of Cal.,
No. G029327 (Cal. App. 4th Dist. Jan. 14, 2003).
After
a health plan's intermediary failed to pay over $3 million in reimbursements
to a hospital, the hospital terminated its contract with the intermediary and
sought to bill the health plan directly for services provided to the plan's
enrollees. The hospital and health plan were unable to work out an agreement,
however, and the health plan refused to pay the hospital for over $8 million
of care provided to its enrollees during the negotiation period despite
the fact that the health plan had been authorizing its enrollees to receive
care at the hospital during that time. The hospital sued the health plan seeking
damages for breach of an implied contract and quantum meruit. The California
Appellate Court for the Fourth District found that the lower court had improperly
dismissed the lawsuit on behalf of the health plan on these causes of action
and held that the Knox Keene Act does not preempt common law causes of action.