Under California law, hospitals must provide emergency room services without regard for a patient's ability to pay or who will ultimately bear responsibility for the medical bill. (Prospect Medical Group, Inc. v. Northridge Emergency Medical Group (2009) 45 Cal.4th 497, 501-502 [87 Cal.Rptr.3d 299, 198 P.3d 86] (Prospect).) Depending on who pays the bill for emergency room services, billing rates for the same treatment can vary substantially. (Howell v. Hamilton Meats & Provisions, Inc. (2011) 52 Cal.4th 541, 552, 560 [129 Cal.Rptr.3d 325, 257 P.3d 1130] (Howell).) After patients have received their care, hospitals often face the difficult and complex task of trying to secure payment for the emergency room services. The final cost and identity of the responsible payer of the emergency room services can remain unresolved for years.
Sometimes a patient needs emergency room care due to negligent driving by a third party tortfeasor with automobile liability insurance coverage. In such an instance, the hospital with the emergency room must determine whether the medical bills are the responsibility of the patient, the patient's health care service plan, the tortfeasor, the tortfeasor's liability insurer, or some combination of these potential payers. (Prospect, supra, 45 Cal.4th at pp. 501-502; Parnell v. Adventist Health System/West (2005) 35 Cal.4th 595, 598 [26 Cal.Rptr.3d 569, 109 P.3d 69] (Parnell); Health & Saf. Code, § 1371.4, subd. (b).) Further complicating a hospital's endeavor to bill for emergency room services are varying limits on financial responsibility for the medical services. A patient's financial responsibility may be limited to the copayment amounts specified by the health care service plan. (Parnell, at p. 611, fn. 15.) The patient's health care service plan may be limited to paying a negotiated rate that is less than the hospital's customary billing rate.
The health care service plan in this case, Kaiser Permanente (Kaiser), covered three patients who received care at an emergency room operated by Dameron Hospital Association (Dameron). The patients were injured due to the negligence of third party tortfeasors who had automobile liability insurance with California Automobile Association Inter-insurance Bureau (AAA)
Upon learning of the settlements, Dameron sued AAA and Allstate to recover on its HLA liens. The trial court granted the automobile liability insurers' motions for summary judgment on grounds the patients' debts had already been fully satisfied by their health care service plans. Reasoning the HLA liens were extinguished for lack of any underlying debt, the trial court dismissed the case. The trial court further found dismissal was warranted because Dameron failed to timely file some of its HLA liens against AAA.
The central question presented in Dameron's appeal is this: Does a health care service plan's payment of a previously negotiated rate for emergency room services insulate the tortfeasor's automobile liability insurer from having to pay the customary rate for medical care rendered? AAA and Allstate contend they are not responsible for any amount after Kaiser paid in full the bill for the emergency room services provided by Dameron. Dameron responds that it contracted with Kaiser to preserve its rights to recover the customary billing rates from tortfeasors and their automobile liability insurers. Dameron asserts the tortfeasors and their liability insurers are responsible for the entire bill for medical services at the customary rate — not just the difference between the reimbursement received from Kaiser and the customary billing rate.
More importantly for purposes of this case, the Parnell court held that "the solution lies in the hands of the hospitals. By precluding the Community Hospital from asserting a lien under the HLA in this case, we `simply give[] effect to' its contracts. (Lopez v. Morley [(2004)] 352 Ill.App.3d 1174 [288 Ill.Dec. 234, 817 N.E.2d [592,] 599].) If hospitals wish to preserve their right to recover the difference between usual and customary charges and the negotiated rate through a lien under the HLA, they are free to contract for this right. Our decision today does not preclude hospitals from doing so. (See, e.g., Andrews [v. Samaritan Health System (Ct.App. 2001) 201 Ariz. 379] 36 P.3d [57,] 61.)" (Parnell, supra, 35 Cal.4th at p. 611, fn. omitted.)
Although Dameron claims it should benefit from the California Supreme Court's holding that it may avoid extinguishment of its HLA liens upon receiving payments from health insurers, the contract in this case preceded Parnell by 10 years. The Dameron/Kaiser contract did not seek to avail itself of the Parnell court's guidance. Instead, the Dameron/Kaiser contract is silent as to whether Dameron may collect from tortfeasors and their automobile insurers after receiving negotiated rate payments from the patients' health care service plans. Dameron attempts to supply the contract term by relying on a history of "uniform conduct" in which Dameron and Kaiser have cooperated in seeking payment from third party tortfeasors and their liability insurers.
In July 2010, Dameron sued AAA and Allstate for damages as well as injunctive and declaratory relief. Dameron's complaint alleges it gives emergency room care to patients regardless of their ability to pay, as required by Health and Safety Code section 1317. Thus, Dameron provided emergency room services to Denise H.
Dameron also provided emergency room services to Rita H., Sara M., and D.S. Rita H.'s emergency room bill totaled $33,831.74, Sara M.'s was $1,976, and D.S.'s was $2,029.76. After these patients were discharged, Dameron learned they were all injured by drivers insured by AAA.
The record indicates Kaiser provided health insurance for each of these patients except Rita H. and D.S. For each of these patient's emergency room services bills Dameron served HLA liens on all entities known to Dameron and who might be liable for causing each patient's injuries. And, for each of these patients, Dameron learned AAA or Allstate paid a settlement to the patient without satisfying any part of Dameron's HLA liens. Dameron filed the present action within a year of learning of the settlements and judgments.
Dameron further alleges each of the contracts with health care service plans for the patients in this case contains an "applicable rate agreement" that "preserves Dameron's HLA rights, as contemplated by the California Supreme Court in Parnell[, supra, 35 Cal.4th at p. 611]." Dameron asserts it follows the same procedure in collecting on its HLA liens whenever a third party has caused injury to an emergency room patient who has coverage with a health insurer having a rate agreement contract with Dameron. Specifically, Dameron bills the full amount of the emergency room costs to the injured patient's health plan per Dameron's contract with the health plan. Dameron also bills the full amount of emergency room costs to the third party
If the tortfeasor, tortfeasor's liability insurer, or any responsible party pays Dameron's HLA claim before the patient's health care service plan pays Dameron the negotiated rate, Dameron cancels its bill to the patient's health care service plan. However, if the patient's health plan pays the negotiated rate under the applicable rate agreement before any other responsible party pays under the HLA lien, Dameron "holds the health plan's payment in abeyance (as well as any co-payment received from the injured patient), pending resolution of Dameron's HLA claim." If Dameron recovers money on its HLA claim following payment from the patient's health care service plan, Dameron refunds the patient's copayment and then refunds the health care service plan from the proceeds of the HLA lien recovery. If there are any proceeds remaining after reimbursements to the patient and patient's health plans, Dameron keeps the remainder. In any event, Dameron does not "attempt to collect or retain more than its reasonable and necessary charges in any patient's account."
Dameron's complaint also alleges payments of settlements and judgments to patients while ignoring HLA liens "are not isolated or random events. Rather the HLA violations ... are part of an industry-wide business strategy adopted primarily by automobile liability insurers in California ... and by other similarly situated responsible parties under the HLA." In addition to violating the HLA, Dameron claimed the practices also violated the unfair competition law (Bus. & Prof. Code, § 17200 et seq.).
AAA and Allstate each moved for summary judgment, arguing Dameron could not recover anything under the HLA liens because the underlying debts had been extinguished by payments in full by the patients' health plans. AAA also argued two of the three claims asserted by Dameron were time-barred.
Dameron opposed summary judgment on grounds the Dameron/Kaiser contract allowed collection of the HLA liens against AAA and Allstate. Dameron also asserted its claims against AAA were not time-barred because the hospital filed the HLA lien notices within a year of discovering the identity of the responsible payers.
The trial court granted summary judgment in favor of AAA and Allstate. The trial court reasoned Kaiser's payment of an agreed-upon rate for emergency room payments extinguished the debt owing to Dameron and had the effect of also extinguishing the HLA liens. As to two of the claims against AAA, the trial court found the discovery rule did not apply to render the HLA claims timely.
Dameron timely filed notices of appeal from the judgments of dismissal.
We apply the independent standard of review to the trial court's order granting summary judgment. (Guz v. Bechtel National, Inc. (2000) 24 Cal.4th 317, 334 [100 Cal.Rptr.2d 352, 8 P.3d 1089].) As this court has noted, "We review the issues framed by the pleadings to determine the scope of the issues tendered and to determine whether the moving party has established facts negating the opponent's claim and justifying a judgment in the moving party's favor. (AARTS Productions, Inc. v. Crocker National Bank (1986) 179 Cal.App.3d 1061, 1064-1065 [225 Cal.Rptr. 203].) In so doing we determine whether the opposition to the motion demonstrates the existence of a triable issue of material fact. (Ibid.) We review the evidence in the light [most] favorable to the opposition to the motion, and liberally construe the opposition's evidence, while strictly scrutinizing the successful party's evidence and resolving any evidentiary ambiguities in the opposition's favor. (Saelzler v. Advanced Group 400 (2001) 25 Cal.4th 763, 768 [107 Cal.Rptr.2d 617, 23 P.3d 1143].)" (Avidity Partners, LLC v. State of California (2013) 221 Cal.App.4th 1180, 1192 [165 Cal.Rptr.3d 299].) We also independently review contractual agreements, including the question of whether the language used in a contract is ambiguous. (American Alternative Ins. Corp. v. Superior Court (2006) 135 Cal.App.4th 1239, 1245 [37 Cal.Rptr.3d 918].) Finally, "[w]e are not bound by the trial court's reasons for granting summary judgment because we review the trial court's ruling, and not its rationale." (Avidity, supra, at p. 1192.)
Dameron's right to recover its customary rates for emergency room services from third party tortfeasors and their liability insurers depends on whether the hospital's HLA liens are extinguished when accepting payments by the emergency room patients' health care service plans. The HLA provides a hospital with a statutory lien against any judgment, settlement, or compromise paid by a third party tortfeasor or tortfeasor's liability insurer to a patient who received emergency room care. (Parnell, supra, 35 Cal.4th at p. 598; Civ. Code, § 3045.2.) Civil Code section 3045.1 states a hospital that "furnishes emergency and ongoing medical or other services to any person injured by reason of an accident or negligent or other wrongful act ... shall,
For the HLA lien to become effective, the hospital must serve written notice of "the amount claimed as reasonable and necessary charges" on each person or entity "known to the hospital and alleged to be liable to the injured person ... for the injuries sustained prior to the payment of any moneys to the injured person." (Civ. Code, § 3045.3.) The HLA notice must also be served on any known liability insurers responsible for the actions of the alleged tortfeasors. (Civ. Code, § 3045.3.) However, the hospital need not provide notice of the HLA lien to the emergency room patient. (Parnell, supra, 35 Cal.4th at p. 601.)
Tortfeasors and their liability insurers are required to satisfy the HLA lien at the same time as they pay any money to the emergency room patients. As the Parnell court explained, "If the tortfeasor pays the injured person `after the receipt of the notice as provided by [Civil Code] Section 3045.3, without paying to the' hospital `the amount of its lien claimed in the notice, or so much thereof as can be satisfied out of 50 percent of the moneys due under any final judgment, compromise, or settlement agreement,' then the tortfeasor `shall be liable to the' hospital `for the amount of its lien claimed in the notice which the hospital was entitled to receive as payment for [the] medical care and services rendered to the injured person.' ([Civ. Code,] § 3045.4.)" (Parnell, supra, 35 Cal.4th at pp. 601-602.) This statutory penalty payment to the hospital does not come from recovery of funds paid to the injured patient, but must be paid separately by the tortfeasor or tortfeasor's liability insurer. (Mercy Hospital & Medical Center v. Farmers Ins. Group of Companies (1997) 15 Cal.4th 213, 221 [61 Cal.Rptr.2d 638, 932 P.2d 210].)
The typical dependence of a lien on an underlying debt led the Parnell court to conclude payment of the underlying debt — such as by an injured patient's health plan — extinguished the hospital's HLA lien. (Parnell, supra, 35 Cal.4th 595, 602-603.) Thus, a hospital's acceptance of "`payment in full'" from a health care service plan relieved the third party tortfeasor and his or her liability insurer from any further payment under the HLA. (35 Cal.4th at p. 599.) However, the Parnell court noted hospitals could contractually preserve the right to recover their usual and customary rates from tortfeasors and their liability insurers. Parnell states that "[i]f hospitals wish to preserve their right to recover the difference between usual and customary charges and the negotiated rate through a lien under the HLA, they are free to contract for this right." (Id. at p. 611.) Parnell further noted neither the Insurance Code nor the Health and Safety Code "precludes hospitals from contractually preserving their right to recover `reasonable and necessary charges' pursuant to a lien under the HLA." (35 Cal.4th at p. 611, fn. 15.)
In holding California hospitals may contractually reserve the right to recover their customary billing rates from third party tortfeasors, the Parnell court cited the example of Andrews v. Samaritan Health System, supra, 36 P.3d 57, 61 (Andrews), disapproved on another ground in Blankenbaker v.
The other rationale in Andrews arose from the language of the contracts between the defendant hospitals and the patients' health care services plans. Andrews explained that "the instant contracts each contained language stating that the hospitals accepted the plaintiffs' insurer's payment as `payment in full,' and all ... expressly reserved the right to recapture the difference between any payments made by the insurer and the providers' customary charges. Unlike the contracts in the cases from other jurisdictions, this reservation clearly qualifies the `payment in full' language and sets forth the hospitals' expectation to recover their customary charges when possible." (Andrews, supra, 36 P.3d at pp. 60-61, italics added.) As a consequence, "[t]he fact that the hospitals have no personal recourse against plaintiffs, by virtue of their insurance coverage, does not alter the fact that a debt remains between the hospitals' customary charges and the amounts paid by plaintiffs' insurers." (Id. at p. 61.) This contract-based rationale for preserving a hospital's right to recover its customary charges from third party tortfeasors was cited with approval by the California Supreme Court in Parnell, supra, 35 Cal.4th at page 611.
Notably, the patients in Andrews, supra, 36 P.3d 57 did not have their recoveries from third party tortfeasors reduced by the hospitals' ability to recover their customary charges when the patients' health plans paid only a negotiated rate because "[i]n their various personal injury suits, plaintiffs all quantified their damages by including the hospitals' full charges for medical services, rather than the discounted amount paid by their insurers." (Andrews, supra, 36 P.3d at p. 59.) In other words, the plaintiffs in Andrews were able to claim damages in the amount of customary rates based on the express contracts between the hospitals and the health care service plans. (Ibid.) The Andrews plaintiffs nonetheless argued the hospitals' reservation of rights to customary rates constituted an unfair assignment of their personal injury
Taken together, Parnell, supra, 35 Cal.4th 595 and Andrews allow for statutory medical liens to recover customary billing rates for emergency room services if the hospital has an express contract with the health care service plan to that effect.
AAA and Allstate argue Parnell, supra, 35 Cal.4th 595 is no longer valid authority for the proposition that hospitals can contractually reserve the right to recover their customary rates even after being paid the negotiated rate by injured patients' health plans. In so arguing, AAA and Allstate rely on the Knox-Keene Health Care Service Plan Act of 1975 (Knox-Keene Act) (Health & Saf. Code, § 1340 et seq.) and the California Supreme Court's subsequent decisions in Prospect, supra, 45 Cal.4th 497 and Howell, supra, 52 Cal.4th 541. We conclude these authorities do not undermine Parnell's holding that hospitals may contractually preserve their right to recover their customary rates from third party tortfeasors and their liability insurers.
California hospitals are required to provide emergency care without regard to the injured patient's ability to pay. (Health & Saf. Code, § 1317, subd. (d).) The treating hospital may require only that "the patient or his or her legally responsible relative or guardian ... execute an agreement to pay therefor or otherwise supply insurance or credit information promptly after the services are rendered." (Ibid.) The Knox-Keene Act requires health plans to reimburse hospitals for emergency care even if the hospital is not included in the health care service plan's network. (Health & Saf. Code, § 1371.4, subds. (a) & (d).)
The Knox-Keene Act also includes the following patient-protection provisions: "(a) Every contract between a plan and a provider of health care services shall be in writing, and shall set forth that in the event the plan fails
We reject the contentions of AAA and Allstate that section 1379 insulates them from balance billing by hospitals. Section 1379 does not mention balance billing, third party tortfeasors, or liability insurance companies. Instead, the statute mentions only health care service plans, providers of medical care, and patients. The clear import of section 1379 is to protect patients with health care service plan coverage from any collection attempts by providers of such medical care as emergency room services.
Section 1379's patient protections were examined by the California Supreme Court in Prospect, supra, 45 Cal.4th 497. Prospect involved billing disputes between health care service plans and emergency room physicians with whom they did not have preexisting contractual relationships. (45 Cal.4th at p. 503.) The health care service plans argued the Knox-Keene Act (along with other provisions of law) prevented the emergency room physicians from billing the patients for the difference between the bill submitted and the amount paid by the health care service plans. (45 Cal.4th at pp. 501, 505.) Thus, the question presented for the Supreme Court was whether the lack of contract between the health care service plans and the emergency physicians precluded section 1379's prohibition on "balance billing" — i.e., billing for the difference between the usual and customary rate and the negotiated rate paid. (45 Cal.4th at pp. 505-506.)
The Prospect court concluded the Knox-Keene Act precludes any attempt to bill patients for the amount exceeding the negotiated rate paid by health care service plans. (Prospect, supra, 45 Cal.4th at p. 502.) Instead, the health care service plans and emergency room physicians are required to resolve their billing disputes without injecting their patients into the process. (Ibid.) On this point, the Prospect court noted that "the Legislature contemplated there may be disputes over the amounts owed to noncontracting providers such as emergency room doctors, and therefore the Knox-Keene Act requires that each [health maintenance organization] `shall ensure that a dispute resolution mechanism is accessible to noncontracting providers for the purpose of resolving billing and claims disputes.' (§ 1367, subd. (h)(2); see also § 1371.38, subd. (a) [directing the Dept. of Managed Health Care to adopt
The California Supreme Court's decision in Prospect does not mention its earlier case of Parnell, supra, 35 Cal.4th 595. (See Prospect, supra, 45 Cal.4th at pp. 497-511.) This omission is explained by the fact Prospect did not involve any claim of recovery against third party tortfeasors or their liability insurers. (Ibid.) "An opinion is not authority for a point not raised, considered, or resolved therein." (Styne v. Stevens (2001) 26 Cal.4th 42, 57 [109 Cal.Rptr.2d 14, 26 P.3d 343].) Nothing in Prospect abrogates Parnell's holding that hospitals may contract with health care service plans to preserve rights to recover customary billing rates via HLA liens against third party tortfeasors.
We reject AAA's argument that the California Supreme Court's decision in Howell, supra, 52 Cal.4th 541 overruled its earlier statement in Parnell that hospitals may contract with health care service plans to preserve the right to balance bill third party tortfeasors. Howell involved the question of whether an injured patient could sue a tortfeasor for damages that included the customary charges for emergency room care billed by the hospital. (Id. at p. 548.) The Howell court concluded that when the hospital has accepted a lesser amount as full payment under the terms of a prior agreement with the health care service plan, the injured patient could only recover this negotiated rate. (Ibid.)
Howell explains that "[t]he collateral source rule, which precludes deduction of compensation the plaintiff has received from sources independent of the tortfeasor from damages the plaintiff `would otherwise collect from the tortfeasor' [citation], ensures that plaintiff ... may recover in damages the amounts her [or his] insurer paid for her [or his] medical care. The rule, however, has no bearing on amounts that were included in a provider's bill but for which the plaintiff never incurred liability because the provider, by prior agreement, accepted a lesser amount as full payment. Such sums are not damages the plaintiff would otherwise have collected from the defendant. They are neither paid to the providers on the plaintiff's behalf nor paid to the plaintiff in indemnity of his or her expenses. Because they do not represent an economic loss for the plaintiff, they are not recoverable in the first instance." (Howell, supra, 52 Cal.4th at pp. 548-549.)
Howell addressed whether a patient could recover the customary billing rate from a tortfeasor, whereas this case involves a claim by the hospital
Rather than overruling Parnell, the Supreme Court in Howell repeatedly cited its earlier decision with approval. In each of the four instances in which Howell cited Parnell, the California Supreme Court expressly noted Parnell involved a situation in which the hospital accepted a negotiated rate as payment in full. (Howell, supra, 52 Cal.4th at pp. 554, 557, 558, 563.) For example, the Howell court noted it "reached the same conclusion in Parnell ..., holding the hospital could not assert a lien against a patient's tort recovery for its full bill when it had agreed to accept an insurer's lesser reimbursement as full payment." (Howell, supra, 52 Cal.4th at p. 554, some italics added.) Similarly, Howell reiterated its holding that, "[h]aving agreed to accept the negotiated amount as full payment, a provider may not recover any difference between that and the billed amount through a lien on the tort recovery. (Parnell ..., supra, 35 Cal.4th at p. 598.)" (Howell, supra, 52 Cal.4th at p. 558.) Based on the hospital's acceptance of a negotiated rate as payment in full, Howell concluded that "[p]laintiff cannot meaningfully be said ever to have incurred the full charges. (See Parnell ..., supra, 35 Cal.4th at p. 609 [where hospital had agreed with plaintiff's health plan to accept discounted amounts as payment in full, plaintiff owed hospital nothing beyond those discounted payments]....)" (Howell, supra, at p. 557.) In short, Howell does not overrule the Parnell court's statement that hospitals have the ability to enter into agreements with health care service plans that preserve the right to recover customary rates from tortfeasors for emergency room care provided.
We are also not persuaded by AAA that its interpretation of Howell, supra, 52 Cal.4th 541 was confirmed in Corenbaum v. Lampkin (2013) 215 Cal.App.4th 1308 [156 Cal.Rptr.3d 347] (Corenbaum). AAA argues Corenbaum stands for the proposition that "the tortfeasor, and by extension his [or her] insurer, is not liable for the delta between what the hospital `charged' and what it accepted from the health insurer." AAA overstates the scope of decision in Corenbaum. The Corenbaum court expressly noted that: "As in Howell, the medical providers who treated plaintiffs ... accepted, pursuant to prior agreements, less than the full amount of their medical billings as payment in full for their services." (Corenbaum, supra, at p. 1318.) Based on the similarity in the hospitals' acceptance of the negotiated rate as payment in full, Corenbaum holds evidence of the customary rate for emergency room
Also based on the Supreme Court's guidance in Howell, the Corenbaum court reasoned that "[a]n insured plaintiff incurs no liability for the negotiated rate differential and suffers no pecuniary loss in that amount." (Corenbaum, supra, 215 Cal.App.4th at p. 1325.) Thus, "[e]vidence of the full amount billed ... is not relevant to the amount of damages for past medical expenses if the plaintiff never incurred liability for that amount." (Id. at p. 1327.) As in Howell, the decision in Corenbaum did not involve any action by the hospital against the third party tortfeasor or tortfeasor's liability insurer.
Based on our survey of decisional authority following the Supreme Court's unanimous decision in Parnell, supra, 35 Cal.4th 595, we conclude no case undermines Parnell's guidance to hospitals that they may preserve the right to recover from a third party tortfeasor the differential between the negotiated rate paid by an injured patient's health care service plan and the customary rate billed for the emergency room services. Moreover, neither the HLA nor applicable provisions of Knox-Keene has been amended by the Legislature since the Supreme Court's 2005 decision in Parnell. (Civ. Code, §§ 3045.2, 3045.3, 3045.4 [pertinent HLA statutes]; § 1379 [pertinent Knox-Keene statute].) Thus, the Legislature has not changed how the HLA statutory lien operates either in substance or procedure since the Parnell court examined the HLA statutory scheme. In short, Parnell remains valid insofar as it allows hospitals to contract for a reservation of rights to recover from tortfeasors the differential between the negotiated and the usual and customary rates for emergency room services provided.
Having concluded Dameron had the prerogative under Parnell, supra, 35 Cal.4th 595 to enter into a contract to preserve its billing rights against third party tortfeasors liable for injuries to its emergency room patients, we consider whether the Dameron/Kaiser contract actually preserved such rights.
Here, the Dameron/Kaiser contract was entered into in 1995, a decade before the California Supreme Court issued its decision in Parnell, supra, 35 Cal.4th 595. The contract does not expressly reserve to Dameron a right to recover its customary billing rates for emergency room services from anyone. The Dameron/Kaiser contract does not mention HLA liens, third party tortfeasors, or liability insurers for third party tortfeasors. Instead, the contract sets forth the reciprocal obligations of Dameron to provide emergency medical services and Kaiser to pay negotiated rates for those services.
This contract provision does not reserve to Dameron any right to recover additional payments from any other person or entity. Moreover, it imposes on
Dameron argues the italicized language renders this contract provision sufficiently ambiguous to allow extrinsic evidence to prove that "another responsible payer" includes tortfeasors and their liability insurers. A contract is ambiguous when it contains language that is reasonably susceptible to more than one meaning. (MacKinnon v. Truck Ins. Exchange (2003) 31 Cal.4th 635, 648 [3 Cal.Rptr.3d 228, 73 P.3d 1205].) For several reasons, the contract's reference to "another responsible payer" cannot reasonably be construed to refer to third party tortfeasors or their liability insurers.
First, the reference to another responsible payer is qualified by the restriction that Dameron is limited to "compensation for Hospital Services rendered to Members under this Agreement." (Italics added.) The purpose of the Dameron/Kaiser contract is to agree upon negotiated billing rates and to insulate patients covered by Kaiser from charges beyond their individual copayment responsibilities. Under this agreement, there is no mention of customary billing rates or HLA liens.
Second, the paragraphs immediately following language cited by Dameron serve to limit Dameron's "claims for compensation" to copayments, services after coverage is exhausted or disallowed by Kaiser, instances in which the patient turns out to have no Kaiser coverage at all, and "regular Medicare." Even if the meaning of "another responsible payer" were ambiguous, these paragraphs preclude any interpretation of the phrase to include third party tortfeasors or their liability insurers.
Third, any interpretation of "another responsible payer" as including third party tortfeasors would create a conflict with the portion of the Dameron/Kaiser contract in which Dameron has agreed to accept the negotiated rates "as payment in full for Covered Services, irrespective of the cost to [Dameron] of providing such services." (Italics added.) We reject this interpretation as introducing an unnecessary internal inconsistency into the Dameron/Kaiser contract. "It is a cardinal rule of construction that a contract is to be construed as a whole, effecting harmony among and giving meaning to all the parts thereof. (Civ. Code, § 1641....)" (People ex rel. Dept. of Parks and Recreation v. West-A-Rama, Inc. (1973) 35 Cal.App.3d 786, 793 [111 Cal.Rptr. 197].)
Dameron correctly points out that "[n]either law nor equity requires that every term and condition be set forth in a contract." (Frankel v. Board of Dental Examiners (1996) 46 Cal.App.4th 534, 545 [54 Cal.Rptr.2d 128].) Thus, "usual and reasonable terms found in similar contracts may be considered, unexpressed provisions of the contract may be inferred from the writing, external facts may be relied upon, and custom and usage may be resorted to in an effort to supply a deficiency if it does not alter or vary the terms of the agreement." (Ibid.) However, supplying implied terms to give effect to the expressed intent of the contract does not allow us to impose new duties and obligations to which the parties never agreed. "[C]ourts cannot make better agreements for parties than they themselves have been satisfied to enter into or rewrite contracts because they operate harshly or inequitably. It is not enough to say that without the proposed implied covenant, the contract would be improvident or unwise or would operate unjustly. Parties have the right to
Although Parnell, supra, 35 Cal.4th 595 allows Dameron to contractually reserve the right to recover its customary billing rate for emergency room services for Kaiser patients and caused by third party tortfeasors, Dameron has not done so in this case.
The judgment is affirmed. Each party shall bear its own costs. (Cal. Rules of Court, rule 8.278(a)(5).)
Robie, Acting P. J., and Butz, J., concurred.
Finally, we do not address whether the billing scheme asserted by Dameron to be its contractually reserved right complies with California law by reimbursing Kaiser for the entirety of its payments if Dameron recovers the full customary billing rate from a third party tortfeasor or tortfeasor's liability insurer.