In County of Santa Clara v. Superior Court, the Supreme Court today holds that medical providers can assert a statutory claim against publicly operated health care service plans, just as they can sue privately operated plans, to get reimbursement for emergency services provided to plan enrollees. Santa Clara County, which operates a plan, had asserted that a separate statutory scheme — the Government Claims Act — immunizes it from reimbursement lawsuits when the provider doesn’t have a contract with the plan.

Horvitz & Levy successfully petitioned for review, briefed, and argued the case in the Supreme Court for the prevailing hospitals.

Rejecting the County’s “proposed two-tier system” under which medical providers in some circumstances would have recourse against private, but not public, plans, the court’s unanimous opinion by Chief Justice Patricia Guerrero notes that immunity under the Claims Act is “directed toward tort claims; they do not foreclose liability based on contract or the right to obtain relief other than money or damages.” The hospitals’ action can proceed, the court finds, because, even though the hospitals don’t have a contract with the County’s plan, they “have not alleged a conventional common law tort claim seeking money damages,” but rather “an implied-in-law contract claim based on the reimbursement provision of the Knox-Keene Act, and [they] seek only to compel the County to comply with its statutory duty.” (Link added.)

The opinion says that disallowing claims against public plans “would undermine an important purpose of the Knox-Keene Act” — “ ‘ “The prompt and appropriate reimbursement of emergency providers ensures the continued financial viability of California’s health care delivery system. . . . [D]enying emergency providers judicial recourse to challenge the fairness of a health plan’s reimbursement determination[ ] allows a health plan to systematically underpay California’s safety-net providers . . . .” ’ ”

The court reverses the published opinion of the Sixth District Court of Appeal. Also, while the court doesn’t expressly disapprove them, several Court of Appeal decisions — Sheppard v. North Orange County Regional Occupational Program (2010) 191 Cal.App.4th 289 [Fourth District, Division Three]; Lundeen Coatings Corp. v. Department of Water & Power (1991) 232 Cal.App.3d 816 [Second District, Division Five], Janis v. California State Lottery Com. (1998) 68 Cal.App.4th 824 [Second District, Division Seven], and Los Angeles Equestrian Center, Inc. v. City of Los Angeles (1993) 17 Cal.App.4th 432 [Second District, Division Seven] — are criticized as reading too broadly an early Supreme Court opinion about the unavailability of quantum meruit claims against public entities.


Review granted — see here.

Case briefs — see here.

Oral argument video.