Business Law

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

San Jose Neurospine v. Aetna Health of California, Inc. (Feb. 27, 2020, B296716) __ Cal.App.5th __ [2020 WL 948123]

Miscoded bill does not automatically excuse health care service plan from paying for enrollee’s emergency services.

A doctor with San Jose Neurospine (SJN) performed a lumbar microdiscectomy surgery on a patient insured by Aetna after the patient was taken to the emergency room with excruciating back pain. SJN submitted claims to Aetna for reimbursement for the medical services provided, but incorrectly cited non-emergency CPT (Current Procedural Terminology) codes. Aetna provided reimbursement for “non-emergency surgery.” SJN sent Aetna an appeal letter explaining its initial coding error, but Aetna declined to pay for the emergency services. SJN sued, alleging Aetna violated Health and Safety Code section 1371.4. Aetna moved for summary judgment, arguing that SJN was not entitled to reimbursement for emergency services because its initial bills contained non-emergency codes. SJN responded that its second bill mentioned “ER” and therefore requested reimbursement for emergency services, and filed evidence of the emergency services. The trial court granted Aetna’s motion, reasoning that: “If the doctor doesn’t submit the correct coding on a health insurance claim, he doesn’t get paid for it.” SJN appealed.

The Court of Appeal reversed, holding that “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 [Health and Safety Code] section 1371.4, subdivision (c).” Here, there were triable issues about whether SJN’s bills and its appeal letter alerted Aetna that SJN had provided emergency services. Aetna was unable to suggest an alternative meaning of the well-known abbreviation “ER” that appeared multiple times in the bills.  SJN also produced declarations and deposition testimony showing it provided emergency services. The court concluded that a trier of fact could reasonably infer from this evidence that Aetna was on notice that SJN provided emergency services, or that Aetna ignored this evidence and denied reimbursement based on solely incorrect billing codes.

The bulletin describing the California Court of Appeal decision was originally prepared for the California Society for Healthcare Attorneys (CSHA) by H. Thomas Watson and Peder K. Batalden, 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 or htwatson@horvitzlevy.com.

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