In overturning a trial court decision made two years ago and ordering a new trial to establish damages, California’s Fifth District Court of Appeals has ruled that hospitals can no longer expect to seek reimbursement from health plans in amounts well in excess of the actual value of services rendered to plan members. (Case No. F065603, The Court of Appeal of the State of California Fifth Appellate District)
In issuing its decision in Children’s Hospital Central California v. Blue Cross of California, the appellate court has shifted the state’s health care provider reimbursement landscape, according to one of the lawyers who originally tried the case.
“This decision will have a major impact on the financial relationship between health plans and health providers in the context of managed care,” said attorney Dan Baxter, a litigation partner at the Sacramento-based law firm of Wilke, Fleury, Hoffelt, Gould & Birney. Baxter was a member of the legal team that tried the original case in 2012 on behalf of Blue Cross before Judge Dale J. Blea in the Madera County Superior Court.
“The ‘charge master’ system—whereby providers sought, for example, $10.00 in reimbursement for the provision of two aspirin—will no longer stand as a legitimate, defining measure of expected compensation,” Baxter said.
The appellate court found the trial court erred in not allowing Blue Cross to present evidence of the reasonable value of the services rendered by Children’s Hospital Central California, Baxter said. The court ordered the case retried and awarded Blue Cross its appellate costs. (Case No. F065603, The Court of Appeal of the State of California Fifth Appellate District).
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