Orthopedic Specialists v. CalPERS

Filed 7/15/14; pub. order 7/31/14 (see end of opn.)

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

SECOND APPELLATE DISTRICT

DIVISION TWO

ORTHOPEDIC SPECIALISTS OF B248535 SOUTHERN CALIFORNIA, (Los Angeles County Plaintiff and Appellant, Super. Ct. No. BC486953)

v.

CALIFORNIA PUBLIC EMPLOYEES’ RETIREMENT SYSTEM,

Defendant and Respondent.

APPEAL from a judgment of the Superior Court of Los Angeles County, William F. Highberger, Judge. Affirmed.

Law Offices of Gray L. Tysch, Gary L. Tysch; Snyder ♦ Dorenfeld, David K. Dorenfeld and Michael W. Brown for Plaintiff and Appellant.

Steptoe & Johnson, Edward Gregory and Jason Levin for Defendant and Respondent.

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Appellant Orthopedic Specialists of Southern California (OSSC) provided nonemergency medical services to a participant of a health plan covered by defendant California Public Employees’ Retirement System (CalPERS). OSSC is an out-of- network medical provider. CalPERS paid OSSC a small portion of the amount charged for services. OSSC insists that it is entitled to receive its higher customary and usual rate and seeks the balance of $297.46, plus damages for a putative class. The trial court sustained CalPERS’s demurrer without leave to amend. Because we agree with the trial court that there is no contractual or other requirement that CalPERS pay OSSC its usual and customary rate, we affirm the judgment of dismissal. FACTUAL AND PROCEDURAL BACKGROUND CalPERS, the PERS Choice Health Plan, the Evidence of Coverage CalPERS is a unit of the Government Operations Agency. (Gov. Code, § 20002.) In addition to administering the retirement system for employees of California and other public entities, CalPERS operates health insurance plans, including the PERS Choice health plan. It does so through contracts with third party administrators, including Anthem Blue Cross (Anthem). (Mintz v. Blue Cross of California (2009) 172 Cal.App.4th 1594, 1598–1599.) A separate contract—the Evidence of Coverage (EOC)—exists between CalPERS and individual health plan members, and governs a health plan’s obligations to its members and their dependents. (Id. at p. 1603; see also Watanabe v. California Physicians’ Service (2008) 169 Cal.App.4th 56, 67.) The EOC’s contents are regulated by the Department of Managed Health Care. (Cal. Code Regs., tit. 28, § 1300.63.1.) Allegations of the First Amended Complaint (FAC) In August 2011, OSSC, an out-of-network provider, provided nonemergency medical services to a member of the PERS Choice health plan, who had signed an Assignment of Benefits allowing OSSC to be paid directly by CalPERS. Before treating the member, OSSC contacted CalPERS, through Anthem, and was informed that the member was “insured, covered and eligible,” and that OSSC “would be paid” for performance of services. OSSC “was led to believe that it would be paid either its total