Pacific Bay Recovery, Inc. v. California Physicians’ Services, Inc. (May 19, 2017, D070561) __ Cal.App.5th __ [2017 WL 2200162]
Pacific Bay Recovery provided substance abuse treatment to a patient after confirming with Blue Shield that the patient had health insurance under a PPO plan that covered Pacific Bay’s out-of-network services. Pacific Bay sent Blue Shield invoices for 31 days of treatment at the rate of $3,500 each day, but Blue Shield paid only for six days of treatment as provided in the “Evidence of Coverage” (EOC) contract between Blue Shield and the patient. Pacific Bay then sued Blue Shield for the unpaid invoices under theories of quantum meruit and breach of contract, alleging that Blue Shield had promised to pay all treatment costs. The trial court sustained Blue Shield’s demurrer without leave to amend, and Pacific Bay appealed.
The Court of Appeal affirmed. It held that, because Pacific Bay did not provide “emergency services” to the patient, Blue Shield’s obligation to Pacific Bay was limited by the EOC under section 1300.71 of title 28 of the California Code of Regulations (an obligation Blue Shield did not breach). The court also rejected Pacific Bay’s implied breach of contract claim because its allegations showed at most that Blue Shield had admitted that the patient was covered by one of its plans and that it would pay something for treatment, but there was no meeting of the minds regarding the extent of that payment obligation.
Thomas Watson
htwatson@horvitzlevy.com
Horvitz & Levy LLP
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