News & Insights

Cases & Deals

August 6, 2021

In Dispute Against Kaiser, California Jury Finds the Reasonable Value of Kaweah Health's Services is 90% of Its Charges

Daron Tooch and Ariana Fuller of King & Spalding won a unanimous jury verdict on behalf of Plaintiff Kaweah Health Medical Center (“Kaweah”) in California Superior Court for the County of Tulare.  Kaweah filed suit against Kaiser Foundation Health Plan (“Kaiser”) after Kaiser unilaterally reduced its reimbursement to Kaweah for emergency medical services provided to Kaiser’s members.  This was an out-of-network dispute related to Kaiser’s statewide strategy in California, implemented in 2015, to reduce the amounts it paid non-Kaiser facilities for emergency care provided to Kaiser members.  Under California law, hospitals are entitled to the reasonable value of the emergency services provided to Kaiser members.  Several other California hospitals have also sued Kaiser for its unilateral reduction in payment to non-Kaiser hospitals for emergency care.  With health plans unwilling to negotiate reasonable rates, and with plan contract language becoming more onerous, more healthcare providers are forced to go out-of-network.

During the two-week jury trial, Kaweah argued that the reasonable value of its services was 98% of its charges, while Kaiser argued that the reasonable value was only 39%.  After deliberating for an afternoon and a short morning, the jury unanimously found that the reasonable value of Kaweah’s services is 90% of its charges.  This will result in a significant and much needed payment to the hospital.