Nissanoff v. UnitedHealthcare Ins. Co. (2024) 108 Cal.App.5th Supp. 1

Health insurers regulated by the California Department of Insurance are not subject to the Knox-Keene Act.

Dr. Jonathan Nissanoff sued UnitedHealthcare Insurance Company (UHC) under the Knox-Keene Act, seeking to recover the difference between his “usual and customary” fee and the much lower amount UHC paid Dr. Nissanoff to provide emergent medical care to UHC policyholders. The trial court sustained UHC’s demurrer without leave to amend, ruling that UHC was not subject to Knox-Keene Act claims because it was regulated by the California Department of Insurance (CDI), not the Department of Managed Healthcare (DMHC). Dr. Nissanoff appealed from the ensuing judgment of dismissal.

The Court of Appeal affirmed, explaining that managed health care service plans are regulated by the DMHC and are therefore subject to the Knox-Keene Act provision compelling them to reimburse emergency healthcare providers at the “reasonable and customary value” for their services. However, insurance companies are regulated by the CDI, and are subject to the Knox-Keene Act only if they directly provide health care services through entity-owned or contracting health facilities and providers. Because UHC was regulated by the CDI, and because Dr. Nissanoff’s complaint failed to allege that UHC directly provided health services, Dr. Nissanoff could not recover damages based on UHC’s failure to pay fees required by the Knox-Keene Act.

The bulletin describing this appellate decision was originally prepared for the California Society for Healthcare Attorneys (CSHA) by H. Thomas Watson, Peder K. Batalden, and Lacey Estudillo at the appellate firm Horvitz & Levy LLP, and is republished with permission.

For more information regarding this bulletin, please contact H. Thomas Watson, Horvitz & Levy LLP, at 818-995-0800.

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