Kaiser Permanente will pay Pomona Valley Medical Center more than $80 million to resolve an ongoing dispute over reimbursement for out-of-network emergency services. The 427-bed nonprofit community medical center serves patients in eastern Los Angeles and western San Bernardino counties in California.
The legal wrangling began in 2019, when the hospital alleged that Kaiser Permanente underpaid for emergency medical services provided to its members after the two organizations terminated their formal provider contract four years earlier. Health plans are required under California laws to reimburse hospitals for emergency services provided to their enrollees, even when those hospitals are not part of the plan's contracted network.
The disagreement hinged on whether to base reimbursement rates on the hospital's "reasonable and customary" charges or on rates previously established under the terminated contract. The hospital argued that the Kaiser had paid only $39.8 million of the $136.6 million it had billed for nearly 4,100 claims.
In 2023, a jury awarded the Pomona Valley Medical Center the $105 million it had sought. However, the court later ruled that a 2004 contract between the two parties, which detailed emergency care rates until 2017, should not have been admitted as evidence. This ruling affected damages but not liability.
The hospital then was awarded a lower judgment, which Kaiser Permanente appealed, leading to a series of hearings over the last several years. This week, the California Second District Court of Appeals ruled that Kaiser Permanente remains bound by the financial terms of the contract that the parties previously had terminated. This underscores the legal principle that contractual obligations can persist beyond the formal expiration of an agreement if specific regulatory or statutory conditions are met, World Today Journal reported.
The final judgment of $82.3 million represents the difference between what Kaiser paid and what Pomona Valley claimed was owed under the contract's terms. The decision will not be subject to further appeal after the California Supreme Court declined to review it.
Kaiser Permanente is the country's largest nonprofit health system as ranked by operating revenue. It operates a membership-based plan that typically sees patients seeking care at its own facilities but is required to pay when its members instead go to a nearby outside emergency department during an emergency.
© Arc, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to TMSalesOperations@arc-network.com. For more information visit Asset & Logo Licensing.