Case Number: EC062238    Hearing Date: August 22, 2014    Dept: NCD

TENTATIVE RULING (8-22-14)
#6
EC 062238
METHODIST HOSPITAL OF SOUTHERN CALIFORNIA v. LOCAL INITIATIVE HEALTH AUTHORITY GOVERNING BOARD

Defendant’s Demurrer to First Amended Complaint
TENTATIVE:
Demurrer is SUSTAINED.
The First Amended Complaint is brought against a public entity, but fails to allege compliance with the Government Claims requirements. In addition, there does not appear to be any private right of action under Health & Safety Code § 1371.4. See California Pacific Regional Medical Center v. Global Excel Management, Inc. (2013 USDC N.D. Cal) 2013 U.S. Dist. LEXIS 78520, and analysis set forth. [Defendant’s Index of Federal Authorities in Support of Demurrer, Ex. 1].
Demurrer is overruled on all other grounds.

Ten days leave to amend.

SUMMARY OF FACTS:
Plaintiff Methodist Hospital alleges that it rendered medically necessary treatment to certain patients who were beneficiaries of the Med-Cal program in Los Angeles County, and that defendant L.A. Care, which is authorized to accept, process and pay claims for the value of medical care rendered to Medi-Care beneficiaries, failed to fully pay claims submitted by plaintiff.

ANALYSIS:
First Cause of Action—Violation of California Health and Safety Code § 1371.4
Defendant argues that the single cause of action asserted in the complaint must fail because the pleading fails to allege compliance with the Government Claims Act.

Under Government Code sections section 905 and 945.5, no suit for money damages may be brought against a public entity until a written claim has been presented and been acted on or deemed to be rejected. Under Dilts v Cantua Elementary School District (1987) 189 Cal.App.3d 27, “the plaintiff must allege compliance with or circumstances excusing compliance, or the complaint is subject to general demurrer.”

Here, it is alleged in the pleading that defendant is a local “public entity…” [Para. 2]. There are no allegations showing a written claim has been presented. The demurrer is sustained on this ground, with leave to amend.

Defendant also argues that the cause of action cannot be pursued because there is no private right of action under the subject statute, Health & Safety Code § 1371.4.
As argued by defendant, a review of this statute in its entirety establishes that it does not expressly provide a remedy or for a court action for its enforcement. Defendant relies on California Pacific Regional Medical Center v. Global Excel Management, Inc. (2013 USDC N.D. Cal) 2013 U.S. Dist. LEXIS 78520, in which the federal district court, interpreting California law, granted a motion to dismiss a case without leave to amend, finding that Health & Safety Code § 1371.4 does not provide to medical providers an independent private right for its violation. [Copy attached to Index of Federal Authorities, Ex. 1].

The federal court reviewed the statutory language, finding no express private right, and then reviewed the legislative history of the statute, part of the Knox-Keene Act, and noted that the California Court of Appeal had observed that private parties do not have a general power to enforce the Knox-Keene Act, but that such power had been entrusted exclusively to the California Department of Managed Health Care. California Pacific Regional Medical Center, at 12-13. (California cases have noted that private individuals can bring suit under the UCL for violations of the Knox-Keene Act. See Blue Cross of California, Inc. v. Superior Court (2009) 180 Cal.App.4th 1237, 1250). The legislative history reviewed indicates that the intent of the section was to require health care service plans to pay for emergency services that were not preapproved in certain circumstances, and that the statute had been amended three times without the addition of any language creating a private right of enforcement. The district court accordingly found that a medical center could not bring an action for failure to reimburse for emergency services rendered to an enrollee in a health care service plan under the statute.

The opposition relies on case law in which it is generally stated that the Knox Keene Act is to be considered “in the context of the statutory framework as a whole in order to determine its scope and purpose and to harmonize the various parts of the enactment.” See Prospect Medical Group, Inc. v. Northridge Emergency Medical Group (2009) 45 Cal.4th 497. This is the inquiry undertaken in California Pacific, which also took into account the failure of the legislature in subsequent amendments to create an express private right of action. The demurrer is therefore sustained on this ground. The opposition indicates that plaintiff can amend the pleading to allege a right to recovery under other theories. The demurrer is therefore sustained with leave to amend.

Finally, defendant argues that the complaint is uncertain. CCP § 430.10.

Permitting demurrer for uncertainty is based on the policy which favors parties having notice of the liability alleged, and the pleading must be sufficiently certain to apprise the defendant of the basis upon which the plaintiff is seeking relief. Perkis v. Superior Court (1981) 117 Cal.App.3d 1, 6. It is generally held, “Demurrers for uncertainty are disfavored. We strictly construe such demurrers because ambiguities can reasonably be clarified under modern rules of discovery.” Lickiss v. Financial Industry Regulatory Authority (2012) 208 Cal.App.4th 1125, 1135.

Here, while the pleading is brief, and does not quote any specific provision of the subject statute which has been violated, facts are pleaded which would show that payment was not made for emergency and post-stabilization medical care rendered to covered patients. [See para. 16]. The pleading is not so unclear that defendant is not apprised of what is being alleged here. The demurrer is not sustained on this ground.