Kaiser Permanente must pay millions to Pomona Valley Hospital Medical Center over the years of underpayments for out-of-network emergency medical care, according to a Tuesday final judgment ending a battle of appeals between the two.
The case was initially filed by Pomona Valley Hospital in 2019 and had faced a jury in 2023. There, Pomona Valley Hospital successfully argued that the $39.8 million it received from Kaiser Health Plan, the organization’s insurance arm, between October 2017 and March 2020, for $136.6 million of total billed charges (nearly 4,100 total claims) was insufficient to cover the reasonable value of the emergency services it provided.
The jury returned a verdict for the amount Pomona Valley Hospital had sought—about $105 million.
However, the trial court later found it had improperly admitted, as evidence, a 2004 contract between Kaiser and Pomona Valley Hospital, that outlined emergency care rates between the parties until its termination in 2017.
That triggered a sequence of legal back-and-forth—the conditional granting of a new trial to Kaiser, the acceptance by Pomona Valley Hospital of a remitted judgment $8 million lower than the trial reward, Kaiser’s appeal of the remittitur and then Pomona Valley Hospital’s cross appeal regarding whether it was proper to introduce the 2004 contract during trial.
The issue then went before a state appellate court, which considered several arguments from Kaiser regarding excluded evidence and improper expert testimony during the trial and that the 2004 contract impacted liability and not just damages. Earlier this year, the appellate court shot down each of those arguments—and sided with Pomona Valley Hospital’s argument on the 2004 contract, making the lower court’s granting of a new trial motion an error—but allowed for a reduction in interest applied to the judgment amount.
A petition for California’s Supreme Court to review the case was denied last week, and on Tuesday, the lower court entered a final judgment of $82.3 million, which, according to the legal firm representing Pomona Valley Hospital, included prejudgment interest and costs.
Pomona Valley Hospital is a 427-bed nonprofit community medical center that serves patients in eastern Los Angeles and western San Bernardino counties.
Kaiser Permanente is the country’s largest nonprofit health system by operating revenue. It operates a membership-based plan that typically sees patients seeking care at its own facilities, but is required to pay out when its members instead go to a nearby outside ED during an emergency.
Fierce Healthcare has reached out to both organizations for comment on the final judgment.
Horst Legal Counsel, which was not involved in the litigation, wrote in an analysis following the appellate court’s ruling that the case is “a useful reminder that a terminated contract is not always a dead document.”
“The legal claim may change, but the prior deal may still matter. For businesses involved in post-termination payment disputes, that pricing history may become one of the most important parts of the case,” the analysis reads.