In County of Santa Clara v. Superior Court (Doctors Medical Center of Modesto), published July 10, 2023, the California Supreme Court reversed a lower appellate court decision directing a trial court to sustain a demurrer. Under the Knox-Keene Health Care Service Plan Act of 1975, Health & Safety Code section 1304 et seq., if a medical provider provides emergency medical services to a patient enrolled in a health care service plan, the plan must reimburse the provider. (Health & Safety Code, § 1371.4, subd. (b).) If the plan does not have a contract with the provider addressing the reimbursement rate, the plan must pay the provide the reasonable and customary value of the care provided, under Cal. Code Regs., tit. 28, § 1300.71, subd. (a)(3)(B). Under case law, if the plan fails to pay the reasonable and customary value of the services, the provider may sue the plan for reimbursement under a quantum meruit theory. Real party hospitals provided emergency services to persons enrolled in a health care services plan operated by the petitioner county. The hospitals submitted reimbursement claims to the county. The county paid only a portion of the amount claimed. The hospitals sued the county for the remaining amounts, based on the Knox-Keene reimbursement provisions. The trial court found that the hospitals could state a quantum meruit claim against the county. On a writ petition by the county, the appellate court ruled that the cause of action was barred by Government Code section 815, which immunizes public entities from nonstatutory causes of action seeking damages.
The Supreme Court reversed. The liability and immunity provisions of the Government Claims Act, such as section 815, are directed toward tort claims. Government Code section 814 provides that nothing in this part affects liability based on contract or the right to obtain relief other than money or damages against a public entity or employee. The Government Claims Act's liability and immunity provisions do not bar quantum meruit actions seeking statutory reimbursement, such as the ones in this case. The legislative history of the Act, and appellate decisions interpreting the Act, establish that the Act's immunity provisions are intended to limit public entities' exposure to liability for money damages in tort cases, not every conceivable claim that might be pressed against a public entity. That the hospitals must present claims to seek damages does not subject their causes of action to the Act's liability or immunity provisions. The claims presentation requirements of the Government Claims Act are broader in scope than the Act's public entity immunity or liability provisions. The court also distinguished cases holding that private parties who fail to enter into legal contracts with public entities may not use quantum meruit or promissory estoppel theories to recover damages from the entities. Those cases do not apply to quantum meruit claims seeking damages based on statute, not contract.
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