Kaiser Permanente must pay millions to Pomona Valley Hospital Medical Center for years of underpayments for out-of-network emergency medical care, according to a final ruling Tuesday that ended an appeals battle between the two.
The case was initially brought by Pomona Valley Hospital in 2019 and faced a jury in 2023. There, Pomona Valley Hospital successfully argued that the $39.8 million it received from Kaiser Health Plan, the organization’s insurance arm, between October 2017 and March 2020, for $136.6 million in total billed charges (nearly 4,100 claims in total) were insufficient to cover the reasonable value of the emergency services it provided. he toasted.
The jury returned a verdict for the amount Pomona Valley Hospital had requested: about $105 million.
However, the trial court later determined that it had improperly admitted, into evidence, a 2004 contract between Kaiser and Pomona Valley Hospital, which outlined emergency care rates between the parties until its termination in 2017.
That set off a sequence of legal back-and-forths: the conditional granting of a new trial to Kaiser, Pomona Valley Hospital’s acceptance of a remitted judgment $8 million less than the trial award, Kaiser’s appeal of the remittitur, and then Pomona Valley Hospital’s cross-appeal over whether it was appropriate to present the 2004 contract at trial.
The issue then went before a state appeals court, which considered several arguments by Kaiser about excluded evidence and inadequate expert testimony during the trial and that the 2004 contract impacted liability and not just damages. Earlier this year, the appeals court dismissed each of those arguments and sided with Pomona Valley Hospital’s argument over the 2004 contract, making the lower court’s grant of a new trial motion in error but allowing a reduction in interest applied to the judgment amount.
A petition to have the California Supreme Court review the case was denied last week, and on Tuesday the lower court handed down a final judgment of $82.3 million, which the law firm representing Pomona Valley Hospital said included prejudgment interest and costs.
Pomona Valley Hospital is a 427-bed, nonprofit community medical center serving patients in eastern Los Angeles and western San Bernardino counties.
Kaiser Permanente is the nation’s largest nonprofit health system by operating revenue. It operates a membership-based plan that generally sees patients seeking care at its own facilities, but must pay when its members go to a nearby outside urgent care during an emergency.
Fierce Healthcare has contacted both organizations for comment on the final ruling.
Horst Legal Counsel, which was not involved in the litigation, he wrote in an analysis after the appeals court ruling that the case is “a useful reminder that a terminated contract is not always a dead document.”
“The legal claim may change, but the prior agreement may still be important. For companies involved in post-termination payment disputes, that pricing history may become one of the most important parts of the case,” the analysis reads.
