Whiteside v. Tenet Healthcare Corp.

124 Cal. Rptr. 2d 580, 101 Cal. App. 4th 693, 2002 Cal. Daily Op. Serv. 7927, 2002 Daily Journal DAR 9900, 2002 Cal. App. LEXIS 4562
California Court of Appeal·Decided August 27, 2002·No. B149093, B152364·Published·Cited by 25 cases

Opinion

Opinion

VOGEL (C. S.) P. J.—

Introduction

In the first of these consolidated appeals, plaintiff Robert K. Whiteside appeals from summary judgment granted in favor of defendants Tenet Healthcare Corporation and its related entities (collectively Tenet). White-side sued Tenet, the entity which owns and operates a hospital at which Whiteside received medical treatment, claiming that Tenet breached its admissions agreement with Whiteside and also its agreement with White-side’s health insurance company, by accepting an additional payment from another insurer with whom Whiteside holds a group health insurance policy. 1 Because we conclude the contracts at issue specifically allowed Tenet to accept payment from other insurers, and because Tenet’s actions are permitted by California law, we conclude summary judgment was properly entered. We affirm.

In the second of the consolidated appeals, Whiteside appeals from the trial court’s award of contractual attorney fees in favor of Tenet. We conclude that the award of attorney fees against Whiteside was not authorized by the contract between Tenet and Whiteside’s insurer. We reverse the order awarding attorney fees.

Case No. B149093 Factual and Procedural Background

Whiteside had two health insurance policies, Blue Shield of California, an individual policy, and New York Life Care (NYL Care), a group policy. Tenet had contractually agreed with Blue Shield to accept specified discounted rates for services rendered at its hospitals to Blue Shield policyholders. Tenet’s Desert Hospital was a “preferred provider hospital” under Whiteside’s Blue Shield policy, and pursuant to the terms of Whiteside’s policy with Blue Shield he would enjoy greater benefits for using a preferred provider than he would if he used a nonpreferred provider.

Whiteside’s Blue Shield policy stated: “Nothing in this Agreement shall preclude a Preferred Provider from seeking reimbursement from other third *699 party payers for the balance of his billed charges for Services rendered under this Agreement.”

The agreement between Blue Shield and Tenet contained the following provisions:

“3.1: Hospital shall not collect from Blue Shield’s subscribers for any services covered under the applicable subscriber contract, except for deductibles and copayments. . . .”
“6.3: Hospital is not precluded from seeking reimbursement from other third party payors; however, the liability of Blue Shield and its subscriber to Hospital for covered services shall not exceed the applicable inpatient or outpatient rate. If the subscriber is concurrently eligible for hospital benefits from another third party payor which is responsible on a ‘primary’ basis, then Blue Shield as a ‘secondary’ or ‘tertiary’ payor will pay for covered hospital services on the basis of the usual billing rate charged the majority of patients at the Hospital . . . .”

Whiteside was treated at Desert Hospital in December 1998. Before receiving treatment, he signed a document entitled “Conditions of Services.” It stated in paragraph 7, entitled “Financial Obligations,” “The undersigned agree(s), that in return for the services to be rendered for the patient, the undersigned hereby individually obligates himself/herself to pay the account of the hospital in accordance with the regular rates and terms of the hospital. However, if the patient is eligible to receive benefits under a health care service plan with which this hospital has contracted, the patient shall not be obligated to pay for services covered under the plan which are paid for pursuant to the contract. . . .”

Paragraph 8, entitled “Assignment of Insurance or Health Plan Benefits to Hospital” states: “The undersigned assigns and hereby authorizes, whether he/she signs as agent or as patient, direct payment to the hospital of all insurance and plan benefits otherwise payable to or on behalf of the patient for this hospitalization or for these outpatient services, including emergency services if rendered, at a rate not to exceed the hospital’s regular charges. It is agreed that payment to the hospital pursuant to this authorization by an insurance company or health plan shall discharge said insurance company or health plan of any and all obligations under the policy to the extent of such payment. It is understood by the undersigned that he/she is financially responsible for charges not covered by this assignment.”

Whiteside incurred regular medical service charges of $3,032.31. Pursuant to its agreement with Tenet, Blue Shield paid Tenet $1,090 for the medical *700 services provided to Whiteside; the customary charge was reduced by $1,942.31 under the Blue Shield agreement with Tenet.

Whiteside then apparently submitted to NYL Care a statement from Tenet listing the full amount of hospital services incurred by Whiteside, $3,032.31. Portions of the statement under the headings “payer” and “provider no.” were redacted, and a handwritten notation reads: “Pay Patient.” NYL Care, evidently under the terms of its own contract with Tenet, paid directly to Tenet $2,183.26 for the medical services rendered to Whiteside. 2 When Whiteside complained, Tenet refunded to Whiteside $240, the difference between the combined amounts paid to Tenet by NYL Care and Blue Shield and the total amount of the bill.

Whiteside then filed the present action against Tenet, alleging causes of action for breach of third party beneficiary contract, breach of contract, conversion, money had and received, and violation of the Unfair Competition Act (Bus. & Prof. Code, § 17200). In essence, he contends that Tenet agreed to accept as payment in full the amount of insurance proceeds paid to it by Blue Shield, and that Tenet was not entitled to keep the insurance proceeds paid to it by NYL Care. He characterizes Tenet’s acceptance of payment from both insurers as a “coordination of benefits,” which he argues is prohibited by California law.

Tenet moved for summary judgment, contending that its actions were fully supported by the contracts entered into between Tenet and Blue Shield, and between Tenet and Whiteside, and were not prohibited by law. White-side filed opposition.

After hearing argument, the trial court granted summary judgment in favor of Tenet, concluding that Tenet’s actions were not prohibited and were expressly allowed under the contracts at issue.

This appeal followed.

B149093 Discussion

Whiteside contends this case concerns the practice of “ ‘balance billing,’ where a hospital takes money from a health plan with whom it agreed to accept a discount rate as payment in full, but then bills the *701 ‘balance’ of its regular charges to the patient.

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Whiteside v. Tenet Healthcare Corp., 124 Cal. Rptr. 2d 580, 101 Cal. App. 4th 693, 2002 Cal. Daily Op. Serv. 7927, 2002 Daily Journal DAR 9900, 2002 Cal. App. LEXIS 4562 (Cal. Ct. App. 2002).

124 Cal. Rptr. 2d 580 (Whiteside v. Tenet Healthcare Corp.) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

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