AARON, J. —
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, a company that operates urgent care facilities in San Diego, for services rendered to Sharp managed care members. Sharp is an Independent Practice Association (IPA), which is an association of physicians that contracts to provide medical care to members. (See Inland Empire Health Plan v. Superior Court (2003) 108 Cal.App.4th 588, 590 [133 Cal.Rptr.2d 735] ["[A]n IPA is an association of physicians that contracts to provide medical care to HMO members in the physicians' own offices. The IPA in turn contracts with each of its independent practitioner members regarding the terms of participation in the IPA, including payment."]; see also Heritage Provider Network, Inc. v. Superior Court (2008) 158 Cal.App.4th 1146, 1149, fn. 2 [70 Cal.Rptr.3d 645] ["IPA's contract with health maintenance organizations (HMO's) to provide medical care to HMO members. The IPA's, which provide administrative services such as the credentialing of physicians and eligibility verifications of the HMOs' members, then contract with medical professionals to treat members. The medical professionals are typically deemed independent contractors responsible for their own separate medical practices"].) In its role as an IPA, Sharp provides health care insurance to its managed care members, and pays claims for health care services that are provided to its members.
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, subd. (a)(3)(B); see id., subd. (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.
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 Association" which "require the use of Current Procedural Terminology (`CPT') codes and other codes that identify, among other things, the type of services provided, and where the services are provided." Wanke also stated
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."
The trial court entered judgment in favor of Sharp on August 30, 2016. YDM filed a timely notice of appeal.
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. (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.
Sharp contends that urgent care centers are not licensed hospital emergency departments, and that they therefore cannot, as a matter of law, bill health care service plans for emergency services provided to the plan's members. Sharp argues that the law imposes an obligation on health care service plans to reimburse only emergency departments for any emergency services provided because the law imposes a duty on emergency departments — but not on urgent care centers — to provide emergency care to anyone, regardless of ability to pay. Sharp further contends that Doctors Express failed to designate any of the services provided to Sharp's members as "emergency services" through the CPT codes used in the claims that it submitted for payment to Sharp.
YDM, standing in the shoes of Doctors Express,
"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) 25 Cal.4th 826, 850 [107 Cal.Rptr.2d 841, 24 P.3d 493] (Aguilar).) In moving for summary judgment, "all that the defendant need do is to show that the plaintiff cannot establish at least one element of the cause of action — for example, that the plaintiff cannot prove element X." (Id. at p. 853.) "A defendant moving for summary judgment or summary adjudication need not conclusively negate an element of the plaintiff's cause of action. [Citations.] Instead, the defendant may show through factually devoid discovery responses that the plaintiff does not possess and cannot reasonably obtain needed evidence." (Collin, supra, 228 Cal.App.4th at p. 587.)
"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 facts exists as to that cause of action or affirmative defense. [Citations.] The plaintiff may not simply rely on the allegations of its pleadings but, instead, must set forth the specific facts showing the existence of a triable issue of material fact. [Citation.] A triable issue of material fact exists if, and only if, the evidence reasonably permits the trier of fact to find the contested fact in favor of the plaintiff in accordance with the applicable standard of proof." (Collin, supra, 228 Cal.App.4th at p. 588.)
"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) 151 Cal.App.4th 653, 658 [60 Cal.Rptr.3d 124].) Our task is to determine whether a triable issue of material fact exists. (Collin, supra, 228 Cal.App.4th at p. 588.) In independently
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:
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, 45 Cal.4th at p. 504.) The intent and purpose of the Legislature in enacting the Knox-Keene Act was "to promote the delivery and the quality of health and medical care to the people of the State of California who enroll in, or subscribe for the services rendered by, a health care service plan or specialized health care service plan." (Health & Saf. Code, § 1342.)
Most relevant to the matters raised here, pursuant to section 1300.71 of title 28 of the California Code of Regulations, a health service plan must reimburse a noncontracted provider for "the reasonable and customary value" of emergency services provided to the plan's enrollee. (Cal. Code Regs., tit. 28, § 1300.71, subd. (a)(3)(B).)
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 facilities 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, 226 Cal.App.4th at p. 1266.) Sharp argues that the managed care system would be "turned on its head" if noncontracted urgent care centers would be permitted to obtain reimbursement from a health care service plan for the reasonable and customary value of their services by "mischaracterizing urgent care services as `emergent'" because there would be no incentive to patients to seek in-network treatment with the plan's contracted urgent care centers or primary care physicians. Sharp raises a dire alarm that the troubling effects from what YDM proposes in this case would "destroy the managed care system."
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, 112 Cal.App.4th at p. 607.) Plaintiff's expert Nissanoff concedes in his declaration that "[t]he type of service identified by the CPT code allows the recipient to ascertain the nature of the services provided...." He further concedes that "based on the services described in a CPT code, it can be determined what services were furnished...."
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) 161 Cal.App.4th 735, 742 [74 Cal.Rptr.3d 715] (Garibay), arguing that because Wanke did not supply the "verbatim substance of out-of-court records of which [she] has no personal knowledge," and failed to establish a proper foundation for the admissibility of those records, the trial court should not have admitted or considered Wanke's declaration. According to YDM, Wanke offered an expert opinion, based "solely on her recitation in a spreadsheet ... of the verbatim contents of the assigned out-of-court hearsay claims involve[d] in this case, allegedly setting forth the CPT Codes for such services, which she offers for the truth of the matter asserted (i.e., none of these CPT codes are for emergency services)."
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, 161 Cal.App.4th at p. 741.) This case, however, is not a medical malpractice case, and Wanke's declaration was not offered to provide medical expert opinion to prove or disprove that Doctors Express met a particular standard of care. Rather, Wanke's declaration was offered to establish that Doctors Express had submitted claims to Sharp seeking payment for services that it had rendered, and to establish that Doctors Express had not utilized any CPT codes that would indicate that it had provided emergency services. Wanke offered
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 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.
Further, to the extent that YDM attempts to challenge the trial court's admission of the spreadsheets that Wanke caused to be created because they are a summary of the claims submitted by Doctors Express, and are not the "underlying hearsay claims," we reject that challenge. Sharp offered the spreadsheets as secondary evidence, pursuant to Evidence Code section 1521, which provides in relevant part: "(a) The content of a writing may be proved by otherwise admissible secondary evidence. The court shall exclude secondary evidence of the content of writing if the court determines either of the following: [¶] (1) A genuine dispute exists concerning material terms of the writing and justice requires the exclusion. [¶] (2) Admission of the secondary evidence would be unfair."
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, 25 Cal.4th at p. 850.) YDM relied upon Nissanoff's declaration to attempt to establish the existence of a triable issue of material fact. YDM argues that Nissanoff's declaration places in dispute the material facts on which Sharp relies, which are based on evidence from Wanke's declaration.
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 provision emergency services — i.e., CPT codes 99281, 99282, 99283, 99284, and 99285 — are not, in fact, used to identify the provision of emergency services. Nor does Nissanoff state that there are additional CPT codes, other than the ones that Wanke identifies, that identify emergency services. Thus, there is no dispute that Doctors Express did not utilize CPT codes that would indicate to a health care service plan that it had provided emergency services. By not billing Sharp with CPT codes utilized to communicate that emergency services were provided, Doctors Express essentially conceded that it was not claiming that it had provided emergency services.
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 Department of Managed Health 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 evidence in determining whether summary judgment was properly granted. We conclude that summary judgment in favor of Sharp is appropriate based on Wanke's original declaration, which Sharp submitted in support of its motion for summary judgment. The fact that Sharp submitted this additional evidence in reply, even if doing so was improper, does not alter our analysis.
The judgment is affirmed.
Haller, Acting P. J., and O'Rourke, J., concurred.
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.