California Lawyers Association

Business Law Health Law Committee

Updates from the BLS Health Law Committee

Jane Winter was responsible for reviewing patient medical records at Gardens Regional Hospital and Medical Center to determine whether admission orders met the Hospital’s medical necessity admission criteria. Shortly after a nursing home acquired ownership in the management company that oversaw operations at the Hospital, Winter alleges she noticed a spike in the number of emergency room patients transported from the nursing home—an overwhelming majority of whom were admitted for inpatient treatment. Read more
Mason Fish was involved in an automobile accident that killed three people and severely injured three more. Fish told law enforcement that he was under the care of a psychotherapist who had prescribed antidepressant and antipsychotic medications to him. The prosecution charged Fish with gross vehicular manslaughter while intoxicated, and subpoenaed his psychotherapist’s treatment records. Read more
Marisol Lopez took her infant daughter Olivia to a dermatology clinic owned by Dr. Glenn Ledesma to assess a spot developing on Olivia’s scalp. Physician assistant Suzanne Freesemann examined Olivia and requested her insurer to approve an “excision and biopsy.” Brian Hughes, another physician assistant at the clinic, saw Olivia one month later and performed a “shave biopsy” of the lesion. The doctor who examined the biopsied tissue found no malignancy. Read more
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. Read more
Local Initiative Health Care Authority of Los Angeles County (LA Care) operates a managed care plan that provides health coverage under Medi-Cal, California’s Medicaid program. Dignity Health operates Northridge Hospital, which did not have an inpatient service contract with LA Care during the relevant time period. Dignity provided inpatient poststabilization services to LA Care patients and sought reimbursement from LA Care at its full rates. LA Care paid Dignity at lower state-set rates known as “All Patient Refined Diagnosis Related Group” (APR-DRG). Dignity sued, alleging that LA Care’s failure to pay its full rates breached an implied contract and violated Health and Safety Code sections 1262.8 and 1371.4. Dignity moved for summary judgment, arguing that the inpatient treatment constitutes “managed care inpatient days,” which is exempt from APR-DRG rates under Welfare and Institutions Code section 14105.28, subdivision (b)(1)(B) (section 14105.28). Read more
The Child Abuse and Neglect Reporting Act (CANRA) requires mandated reporters (e.g., marriage and family therapists, psychologists, and drug and alcohol counselors) to report incidents of suspected “child abuse or neglect,” including “sexual abuse” and “sexual exploitation.” In 2014, Assembly Bill 1775 (AB1775) expanded the definition of “sexual exploitation” to include “[a] person who depicts a child in, or who knowingly develops, duplicates, prints, downloads, streams, accesses through any electronic or digital media, or exchanges, a film, photograph, videotape, video recording, negative, or slide in which a child is engaged in an act of obscene sexual conduct.” Read more
Dr. Sundar Natarajan, a hospitalist at St. Joseph’s Medical Center of Stockton (a Dignity facility), had difficulty completing timely medical records. When the problems persisted despite a warning by the medical executive committee, a committee was assigned to investigate. The investigatory committee confirmed Dr. Natarajan’s record keeping problems, identified additional problems regarding untimely responses while on call and the length of patients’ stays, and recommended that that the medical executive committee revoke Dr. Natarajan’s medical staff privileges. The executive committee adopted that recommendation and Dr. Natarajan appealed to the hospital’s peer review committee. Read more
Issue class could be certified to address hospital’s billing of uninsured patients at chargemaster rates.

Following an automobile accident, plaintiff Tony Sarun received emergency care at Northridge Hospital Medical Center. Sarun, who had no health insurance, signed an agreement requiring him to pay the hospital’s “full charges, unless other discounts apply.” “Full charges” were defined as “the Hospital’s published rates (called the chargemaster), prior to any discounts or reductions.” After receiving an invoice reflecting chargemaster rates and an “uninsured discount,” Sarun filed a putative class action alleging unfair or deceptive business practices under the UCL and violations of the Consumers Legal Remedies Act. Read more
A resident at ResCare, a long-term health care facility, developed a history of maladaptive and self-injurious behavior. However, his physicians did not classify him as a suicide risk and did not order any special measures beyond medication. Although ResCare had nursing care and behavior plans in place and monitored the resident frequently, he choked to death on a small towel left within his reach. The Department of Public Health cited ResCare for violating two regulations (Cal. Code Regs., tit. 22, §§ 76918, subd. (a), 76875, subd. (a)(2)) by failing to ensure that the resident was free from neglect and protected from injuring himself. ResCare sued the Department to challenge the citation. Read more
Dr. Novarro Stafford is a retired anesthesiologist whose clinical privileges were terminated by the medical staff at USC Medical Center prior to his retirement. While Dr. Stafford worked at the Medical Center, a female patient had complained that Dr. Stafford had acted inappropriately during an examination. The medical staff summarily suspended Dr. Stafford’s privileges and referred him for a neurocognitive evaluation. The medical staff then terminated Dr. Stafford’s privileges after he failed to timely submit to the evaluation. Dr. Stafford appealed and requested an administrative hearing. A hearing officer (James Lahana) was appointed. Read more

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