Kaiser Permanente Ordered to Pay $82.3 Million to Pomona Valley Hospital for Underpayment of Emergency Care
Kaiser Permanente must pay millions to Pomona Valley Hospital Medical Center for years of underpaying for out-of-network emergency medical care, according to a final ruling Tuesday, ending a legal dispute between the two.
Background of the Legal Dispute
In 2019, Pomona Valley Hospital initiated a lawsuit against Kaiser Permanente, arguing that between October 2017 and March 2020, the $39.8 million it received from Kaiser Health Plan for $136.6 million in total billed costs was insufficient. This represented nearly 4,100 claims for emergency services provided by the hospital.
During the 2023 jury trial, Pomona Valley Hospital successfully claimed that the fair value of its services was not met, seeking approximately $105 million. The jury sided with the hospital, awarding the full amount sought.
Controversy Over Contractual Evidence
The trial court encountered issues with the admittance of a 2004 contract between Kaiser and Pomona Valley Hospital, which had set emergency care rates until 2017. This led to a legal tussle, including Kaiser’s conditional grant for a new trial and a remanded verdict that was $8 million less than the trial award. Kaiser appealed this decision, while Pomona Valley Hospital cross-appealed regarding the appropriateness of using the 2004 contract during the trial.
Appeals and Final Ruling
The case advanced to a federal appeals court, where Kaiser challenged the exclusion of certain evidence and expert testimonies. The court upheld Pomona Valley’s position regarding the 2004 contract, stating the lower court erred by granting a new trial. However, it allowed a reduction in the interest applied to the judgment amount.
After the California Supreme Court declined to review the case last week, a final judgment of $82.3 million was issued on Tuesday, incorporating upfront interest and costs, as reported by Pomona Valley Hospital’s legal representatives.
Implications and Expert Analysis
Pomona Valley Hospital, a 427-bed nonprofit community medical center, serves East Los Angeles and West San Bernardino counties. As one of the nation’s largest nonprofit health systems, Kaiser Permanente typically treats members at its own facilities but must pay for emergency care received elsewhere.
An analysis by Horst Legal Counsel, uninvolved in the litigation, noted the significance of this case as a reminder that terminated contracts can still hold relevance in legal disputes. “The legal right may change, but the prior deal may still be significant. For companies involved in post-termination payment disputes, this pricing history may become one of the most important parts of the case,” the analysis stated.
The case underscores the complexities of healthcare reimbursements and the importance of accurately valuing emergency medical services.
Fierce Healthcare has reached out to both organizations for comment on the final ruling. Here
“`
