A significant legal battle has emerged between a regional medical center and a county government over reimbursement for critical healthcare services. The Regional Medical Center of San Jose, along with Good Samaritan Hospital, filed a complaint against the County of Santa Clara in the Court of Appeal of the State of California on July 30, 2024. The hospitals allege that the county, operating through Valley Health Plan (VHP), failed to adequately reimburse them for emergency and post-stabilization services provided to patients insured by VHP.
The dispute centers around claims that the County did not pay the "reasonable and customary value" for services rendered by the hospitals, as mandated by the Knox-Keene Act. This act requires health plans to reimburse medical providers for emergency care if no contract exists between them. The trial court initially ruled in favor of Santa Clara County, citing immunity under the Government Claims Act. However, this decision was challenged after the California Supreme Court's ruling in County of Santa Clara v. Superior Court (2023) 14 Cal.5th 1034, which clarified that such immunity does not apply to quantum meruit claims enforcing statutory duties.
In their second amended complaint, the hospitals asserted causes of action including breach of implied contract and violation of several provisions within the Health and Safety Code and Code of Civil Procedure. They argued that they were entitled to reimbursement from VHP for services provided to its enrollees. The trial court sustained demurrers filed by Santa Clara County without leave to amend, agreeing with the county's assertion that it was immune from these claims under Government Code section 815.
However, following the Supreme Court's decision in Santa Clara, which stated that public entities are not immune from contract-based claims or obligations under statutory duties like those outlined in the Knox-Keene Act, both parties moved for a summary reversal of judgment. This motion was granted to allow further proceedings consistent with this new legal interpretation.
The plaintiffs seek declaratory relief and compensation based on an implied-in-law contract claim derived from their statutory duty under Knox-Keene Act provisions. They argue that since state and federal laws mandate emergency medical services regardless of insurance status or ability to pay, they should be reimbursed fairly by health plans like VHP.
Representing Regional Medical Center of San Jose and Good Samaritan Hospital are attorneys whose names were not disclosed in this document. The case is presided over by Judges Greenwood P.J., Bamattre-Manoukian J., and Wilson J., with Case ID H050491.