San Jose Neurospine v. Aetna Health of California, Inc.

On April 10, 2017, S.H. went to a hospital emergency room

with “excruciating back pain.” A hospital emergency room

physician called Doctor Adebukola Onibokun for assistance.

Onibokun is the owner of SJN, a company that provides medical

treatment and care. Onibokun consulted with S.H. and

determined she had “lumbar disc herniations at 2 levels.” On the

same day, he performed “a two level lumbar microdiscectomy”

surgery on S.H.

S.H. was employed by the company KPMG, which funded a

group health insurance policy for its employees that was

administered by Aetna. That plan contained coverage for medical

emergency services.

SJN submitted two claims to Aetna for reimbursement for

the medical services provided to S.H. Aetna granted the claims

only for “non-emergency surgery” and did not provide

reimbursement to SJN for emergency medical services.

SJN claims that almost one month after S.H.’s surgery, it

sent an appeal letter to “Aetna Provider Appeals,” claiming

reimbursement because of “underpayments on AN EMERGENCY

SURGERY CASE.” Again Aetna did not pay SJN for the

emergency services it provided for S.H.

Two months after sending the letter, SJN filed a civil action

against Aetna alleging seven causes of action. It stated, “This

action arises out of Aetna’s unjustified failure to pay $75,200 for

emergency medical services provided by SJN to [S.H.],” a “patient

insured by Aetna.” SJN alleged: 1) Aetna operates a “health care

service plan” as described in the Knox-Keene Care Service Plan

Act of 1975 (Knox-Keene Act) (Health & Saf. Code, § 1371.4,

subd. (b)); 2) SJN submitted “valid claims for reimbursement to

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Aetna in a timely manner”; and 3) Aetna denied the claims and

“refuse[d] to make payment.”1

In its first cause of action, SJN alleged Aetna violated

section 1371.4. Section 1371.4, subdivision (b) provides, in

relevant part, “A health care service plan . . . shall reimburse

providers for emergency services and care provided to its

enrollees . . . .” In its second cause of action, SJN alleged Aetna

breached an implied contract based on its “prior dealing” with

Aetna by not paying for the emergency medical services it

rendered to a patient covered by Aetna’s health care service plan.

After filing its answer, Aetna filed a motion for summary

judgment or, alternatively, summary adjudication of issues.

Aetna claimed: 1) SJN “submitted two bills on Health Insurance

Claim Form 1500” using “CPT [Current Procedural Terminology]

codes 63030, 63035, and 69990”; 2) these were codes for “nonemergency surgery”; 3) Aetna processed these claims as nonemergency services; 4) Aetna “processed the out-of-network

services at the 180% of the Medicare rate” pursuant to S.H.’s

health plan and “applied the entirety of that amount, $2,783.22,

to [S.H.’s] deductible.” Aetna claimed that because SJN did not

use the correct codes, SJN was not entitled to payment for

emergency services and all its causes of action had to be

dismissed.

SJN opposed summary judgment claiming, among other

things, that its second bill was “rebilled as emergency [services]

with ‘ER’ placed in number 24C of the [billing] form.” SJN

attached deposition testimony; the declarations of its counsel,

S.H., and S.H.’s doctor; and other documentary evidence. It

1 All statutory references are to the Health and Safety Code

unless otherwise stated.

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claimed that evidence proved these services were emergency

services and that Aetna was responsible for paying for them.

At the hearing the trial judge said, “If the doctor doesn’t

submit the correct coding on a health insurance claim, he doesn’t

get paid for it.” The court granted Aetna’s motion for summary

judgement. It also issued a summary adjudication of issues order

with findings that each of SJN’s causes of action could not be

sustained.

DISCUSSION

Triable Issues of Fact

SJN claims there are triable issues of fact as to whether it

rendered and billed for emergency services and was entitled to

reimbursement from Aetna. We agree.

Summary judgment provides courts with “a mechanism to

cut through the parties’ pleadings in order to determine whether,

despite their allegations, trial is in fact necessary to resolve their

dispute.” (Collin v. CalPortland Co. (2014) 228 Cal.App.4th 582,

587.) A defendant may obtain summary judgment by showing

one or more elements of plaintiff’s cause of action is missing or

that there is a complete defense to the cause of action. (Ibid.)

“ ‘On appeal, the reviewing court makes “ ‘an independent

assessment of the correctness of the trial court’s ruling [regarding

summary judgment], applying the same legal standard as the

trial court in determining whether there are any genuine issues

of material fact or whether the moving party is entitled to

judgment as a matter of law.’ ” ’ ” (YDM Management Co., Inc. v.

Sharp Community Medical Group, Inc. (2017) 16 Cal.App.5th

613, 622 (YDM).) “Our task is to determine whether a triable

issue of material fact exists.” (Ibid.) “[A]ny doubts as to the

propriety of granting a summary judgment motion should be

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resolved in favor of the party opposing the motion.” (Reid v.

Google, Inc. (2010) 50 Cal.4th 512, 535.)

“Under state and federal law, emergency services and care

‘shall be provided to any person requesting the services or care’

by any licensed health facility that has appropriate facilities and

qualified personnel.” (YDM, supra, 16 Cal.App.5th at p. 623.)

“[T]he Knox-Keene Act imposes a requirement that health care

service plans must reimburse a provider who has provided

emergency services or care to a health care service plan’s

enrollee.” (Id. at p. 624.)

“[P]ursuant to section 1300.71 of title 28 of the California

Code of Regulations, a health service plan must reimburse a

noncontracted provider for ‘the reasonable and customary value’

of emergency services provided to the plan’s enrollee.” (YDM,

supra, 16 Cal.App.5th at p. 625.) “[M]edical providers use CPT

codes to describe and communicate the nature of the medical

services that have been provided to a patient.” (Id. at p. 627.)

State law substantially limits the authority of health care

service plans to deny claims for emergency services. (Prospect

Medical Group, Inc. v. Northridge Emergency Medical Group

(2009) 45 Cal.4th 497, 504.) “ ‘ “Payment for emergency services

and care may be denied only if the health care service plan

reasonably determines that the emergency services and care were

never performed . . . .” ’ ” (Ibid., italics added.) Providers of

emergency medical services whose claims are denied may, in

appropriate cases, pursue claims for reimbursement based on an

“implied-in-law right to recover for the reasonable value of [their]

services.” (Bell v. Blue Cross of California (2005) 131 Cal.App.4th

211, 221.)

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Aetna cites YDM, supra, 16 Cal.App.5th 613, and notes the

claimant did not use the proper codes for emergency services in

its billing claims. The appellate court held the claimant was not

entitled to reimbursement for emergency services and summary

judgment was proper. Aetna contends that because SJN did not

use the correct codes for emergency services, it has no cause of

action for reimbursement.

In YDM, the court said the claimant ‘s billing codes did not

indicate “in any way that the services it provided were ‘emergency

services.’ ” (YDM, supra, 16 Cal.App.5th at p. 633, fn. 13, italics

added.) SJN claims YDM is distinguishable because here it filed

a “corrected claim” indicating that the services it provided were

emergency room services. It contends that, even though it may

not have used the correct CPT code numbers, a trier of fact could

reasonably infer Aetna was on notice these services were

emergency service claims that should have been granted.

In the corrected billing, SJN sought compensation for

$46,500 worth of services in the “ER”; $24,500 worth of services

in the “ER”; and $4,200 worth of services also in the “ER.” It set

forth the term “ER” three times on the corrected billing claim

form. The trial court found there were no triable issues of fact

because there was no showing what “ER” means.

But there are triable issues of fact regarding the

reasonable, well-understood meaning of “ER” on the corrected

claim form. And there are triable issues concerning what a

medical insurance company should know and do when it sees

such an “ER” reference.

The term “ER” is a well-known abbreviation for “emergency

room.” (See, e.g., Sigala v. Goldfarb (1990) 222 Cal.App.3d 1450,

1453; Cleveland v. United States (5th Cir. 2006) 457 F.3d 397,

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400; United States ex rel. Parikh v. Citizens Medical Center (S.D.

Tex. 2013) 977 F.Supp.2d 654, 666-667; Kasongo v. United States

(N.D. Ill. 2007) 523 F.Supp.2d 759, 776.) In hospitals, the term

“ER” is commonly used and understood. It is a term well known

in common parlance, literature, and popular culture. (MerriamWebster’s Collegiate Dict. (10th ed. 1999) p. 1382; American

Heritage Dict. (3d college ed. 2000) p. 465; ER (medical drama

television series).) If medical professionals and the public

understand what ER means, there is a reasonable inference that

those in the medical insurance industry also understand its

meaning.

A trier of fact could reasonably infer: 1) the “ER” initials on

the corrected billing form referred to the emergency room, 2)

Aetna was consequently on notice that these services were

emergency services, and 3) Aetna was therefore not in a position

to claim emergency services “were never performed.” (Prospect

Medical Group, Inc. v. Northridge Emergency Medical Group,

supra, 45 Cal.4th at p. 504.) If Aetna could not determine that

emergency services “were never performed,” that would support

SJN’s claim that Aetna improperly denied its emergency medical

services claim. (Ibid.; § 1371.4, subd. (c).)

Aetna notes that it filed objections to the declarations SJN

filed in opposition to summary judgment. The trial court

sustained them, but they are not part of the record. But Aetna’s

objections to SJN’s declarations are, in fact, part of the record

that SJN produced for this appeal. Aetna’s response to SJN’s

separate statement of undisputed facts sets forth its objections to

those declarations. We have reviewed those objections and

conclude that many of Aetna’s objections did not state valid

grounds to exclude relevant and admissible evidence contained in

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SJN’s declarations. At oral argument, counsel for SJN claimed

the trial court did not sustain Aetna’s objections. To resolve this

dispute, we have taken judicial notice of those relevant trial court

documents. (Cal. Rules of Court, rule 8.55(a)(1); American

Contractors Indemnity Co. v. County of Orange (2005) 130

Cal.App.4th 579, 581, fn. 1.) The record shows that the trial

court incorrectly sustained a number of objections or did not

consider relevant and admissible evidence in the declarations of

SJN’s counsel, S.H., and Onibokun.

Aetna claims there was no admissible evidence to show

that SJN’s services were emergency services. But SJN’s counsel

filed a declaration attaching a portion of the deposition testimony

of Aetna’s employee Regina Devrinskas. Counsel declared that

she was “Aetna’s Person Most Knowledgeable.” In her

deposition, Devrinskas discussed the initial SJN claim and the

corrected claim. She said, among other things, “So that’s the

claim we initially used. And then [SJN] rebilled with the [billing

code] 21 and E.R. to indicate that it was an emergency.” (Italics

added.)

Devrinskas was asked, “So would it be fair to say that the

provider in this case submitted his claim and then resubmitted it

to identify it as an emergency room claim?” (Italics added.) She

answered, “In this instance, yes, but the claim had already been

processed.” (Italics added.) Her testimony is admissible

evidence. (YMD, supra, 16 Cal.App.5th at pp. 630-631.) A trier

of fact could reasonably infer this portion of her testimony,

coupled with the “ER” references on the claim form, supported

SJN’s position that Aetna was on notice that SJN provided

emergency services.

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SJN produced additional evidence showing these services

were emergency services. Patients may testify from their own

personal knowledge about why they went to the hospital, and a

patient’s doctor may testify about the type of treatment the

patient received. (Evid. Code, § 800; People v. Becerrada (2017) 2

Cal.5th 1009, 1032; People v. Lewis (2001) 26 Cal.4th 334, 356;

Schreiber v. Estate of Kiser (1999) 22 Cal.4th 31, 39; Bowman v.

Motor Transit Co. (1930) 208 Cal. 652, 655; Gunn v. Employment

Development Dept. (1979) 94 Cal.App.3d 658, 664, fn. 6 [there is

usually “no better evidence of the state of one’s health” than the

medical opinions from the patient’s treating doctor].)

In her declaration, S.H. said that she went to the

“Emergency Room with excruciating back pain, lower extremity

weakness and pain, and the inability to walk.” She said she

“underwent an emergency microdiscectomy.” She declared, “I felt

without immediate emergency care, I would suffer a permanent

injury or death.”

S.H. was not a medical expert. But she was in a position to

know from her own personal knowledge why she went to the

emergency room, her symptoms, and what she was feeling at that

time. (Evid. Code, § 800; People v. Becerrada, supra, 2 Cal.5th at

p. 1032; Bowman v. Motor Transit Co., supra, 208 Cal. at p. 655.)

Onibokun declared that he was the doctor who “performed

the emergency medical procedures at issue in this case in the

emergency room.” (Italics added.) “On April 10th, 2017, I was

called by the El Camino Hospital Emergency Room physician to

consult on patient S.H.” He said, “The patient was emergently

taken to the operating room on the same day and she underwent

a two level lumbar microdiscectomy. The surgery resulted in

immediate and significant improvement of her symptoms and she

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was able to be discharged home the day after surgery.” (Italics

added.) Onibokun was qualified to testify about the nature of the

medical services he performed for his patient. (Gunn v.

Employment Development Dept., supra, 94 Cal.App.3d at p. 664,

fn. 6.)

Onibokun also declared that due to a mistake the services

were coded under “service code 21” when they should have been

coded under “service code 23 for emergency.” He said SJN’s

corrected billing to Aetna showed “the services were emergency

services by indicating an ‘ER’ in column 24c ‘EMG.’ ” (Italics

added.) Aside from citations to billing code numbers, Aetna has

not cited to any portion of the record that would refute the claim

that SJN provided emergency services. Nor has it made any

showing that “ER” means anything other than emergency room.

In his declaration, SJN’s counsel said that one month after

the surgery, SJN sent an “appeal letter” to Aetna “indicating the

services were emergency services.” A copy of that letter to the

“Aetna Provider Appeals/Dispute Resolution” was attached as an

exhibit to his declaration. The letter indicates it was a claim

involving “underpayments on AN EMERGENCY SURGERY

CASE.”

But the declaration of SJN’s counsel did not state sufficient

facts to lay a foundation for the admissibility of this appeal letter,

and the letter contained hearsay. Counsel indicated that he had

personal knowledge about that appeal. But he did not state

sufficient foundational facts to authenticate the document other

than stating he was SJN’s lawyer. He did not state whether he

was familiar with SJN’s operations and procedures, whether he

personally knew what treatment S.H. received, whether he had

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participated in the decision to appeal, or how he would personally

know that such an appeal was authorized by SJN.

But the issue about this appeal letter was also raised in

Onibokun’s declaration. He said that “[d]uring [the first week of

the month after the surgery], [SJN] also sent in an emergency

surgery underpayment appeal letter to Aetna which clearly

explains the emergency nature of the services provided.” (Italics

added.) Onibokun testified in his earlier deposition that appeals

are handled by “[his] billing company” and he did not review the

wording of the appeal letter before it was sent to Aetna. But

because Onibokun was both SJN’s owner and the doctor who

performed the services, he was in a position to know whether

SJN authorized an appeal for his services, the grounds and

nature of the services provided and claimed, and whether SJN

was underpaid.

Onibokun’s declaration refers to the exhibit containing the

appeal letter.2 Onibokun was in the position to identify it as the

appeal SJN authorized because of the specific confidential

medical and personal content in the letter that only he as the

treating physician would know about. (Evid. Code, § 1421.)

Aetna has not shown why Onibokun could not testify about why

such an appeal should prevail, nor has it made any showing that

it was not aware of that appeal. Although the appeal letter

contains some hearsay, Aetna has not shown why it could not be

admitted for the non-hearsay purpose of showing Aetna was on

notice that SJN was again claiming that it provided emergency

services. (Weathers v. Kaiser Foundation Hospitals (1971) 5

Cal.3d 98, 109; People v. Jimenez (1995) 38 Cal.App.4th 795, 802,

2 Onibokun described the appeal letter as exhibit C, but he

was apparently referring to exhibit D which contains that letter.

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fn. 11; People v. Harvey (1991) 233 Cal.App.3d 1206, 1220; People

v. Fields (1998) 61 Cal.App.4th 1063, 1069.)

Yet even aside from whether the appeal letter is admitted,

Aetna has not shown why Onibokun, as SJN’s owner and the

treating doctor, could not testify that SJN appealed the denied

claim for his emergency services and Aetna thereafter did not pay

him.

SJN notes that, during the hearing on the summary

judgment motion, the trial court said, “If the doctor doesn’t

submit the correct coding on a health insurance claim, he doesn’t

get paid for it.” But the evidence about the coding is disputed.

Aetna produced evidence that it determined that SJN did not use

correct coding. But there was deposition testimony from

Devrinskas that the billing did contain a code that refers to the

emergency room. She was asked, “So in this case the patient did

present to the emergency room, though, as far as you know,

correct?” Devrinskas: “Only by the claim. They billed a 450.”

(Italics added.) She was asked, “Which means it was the

emergency room?” Devrinskas: “Right.” She also said, however,

that the form did not contain the references to the authorization

for “surgical procedures.” From this testimony a trier of fact

could find that, notwithstanding mistakes in SJN’s billing code

filings, there was a reference to a code that correctly identified

the “emergency room.”

Aetna claimed its responsibility for paying for SJN’s

emergency services ended when it determined that SJN

submitted incorrect billing codes notwithstanding SJN’s efforts to

later correct the claim and appeal. But the California Legislature

requires health care service plans to have “a dispute resolution

mechanism” that “is accessible to noncontracting providers for

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the purpose of resolving billing and claims disputes.” (§ 1367,

subd. (h)(2).) That demonstrates that the Legislature did not

intend to end responsibility for paying claims at the initial claims

filing stage. It knew that doctors and health care service plans

make mistakes on initial claim filings and that there must be a

method to allow legitimate claims to ultimately be granted.

Consequently, where the health care service plan knows

that emergency services were in fact provided, a coding mistake

on a billing claim does not automatically excuse or terminate its

duty to pay for the services under section 1371.4, subdivision (c).

The statute provides, in relevant part, “Payment for emergency

services and care may be denied only if the health care service

plan . . . reasonably determines that the emergency services and

care were never performed . . . .” (§ 1371.4, subd. (c), italics

added; see also Bell v. Blue Cross of California, supra, 131

Cal.App.4th at pp. 215-216.)

This is a remedial statute that must be interpreted

liberally to promote the underlying legislative goal. (Clemente v.

Amundson (1998) 60 Cal.App.4th 1094, 1102.) That goal is to

provide payment for emergency services actually provided

notwithstanding a mistake in a billing code. (Prospect Medical

Group, Inc. v. Northridge Emergency Medical Group, supra, 45

Cal.4th at p. 504; Allstate Fire & Cas. Ins. Co. v. Perez ex rel.

Jeffrey Tedder, M.D., P.A. (Fla. Ct.App. 2013) 111 So.3d 960, 964

[insurer may have to look beyond the CPT code billing to

determine whether the doctor’s services must be reimbursed].) A

trier of fact could reasonably infer that a health insurance

company could violate section 1371.4, subdivision (c), if it: 1)

knew or was on notice that emergency medical services were

provided; or 2) ignored evidence that they were provided, and

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then merely denied the claim solely based on a doctor’s incorrect

billing code reference. There are triable issues of fact.

The judgment is reversed and the case is remanded for further proceedings consistent with this opinion. The trial court’s summary adjudication order involving issues one and two, which dismissed SJN’s first and second causes of action, is reversed and vacated. Costs on appeal are awarded to appellant.