Judge Thomas Falls, Case KC069796 2022-08-04 Tentative Ruling

Pomona Valley Hospital Medical Center v. Kaiser Foundation Health Plan, Inc., et al. (KC069796)

DEFENDANT KAISER FOUNDATION HEALTH PLAN, INC.’S MOTION FOR LEAVE TO ISSUE THIRD PARTY DEPOSITION SUBPOENA TO VICKY ASENCIO

DEFENDANT KAISER FOUNDATION HEALTH PLAN, INC.’S MOTION FOR LEAVE TO ISSUE THIRD PARTY DEPOSITION SUBPOENA TO VICKY ASENCIO

is GRANTED. Discovery is re-opened only for the limited purpose of deposing Asencio.

Plaintiff Pomona Valley Hospital Medical Center (“Pomona Valley”) alleges that Plaintiff was underpaid for emergency medical services Plaintiff provided to members of Kaiser Foundation Health Plan, Inc. (“Kaiser”), both during the term of the parties’ contract, and after the termination of the contract.

On March 27, 2019, Plaintiff filed a First Amended Complaint against KAISER FOUNDATION HEALTH PLAN, INC.; KAISER PERMANENTE INSURANCE COMPANY; KAISER FOUNDATION HOSPITALS; THE PERMANENTE MEDICAL GROUP; SOUTHERN CALIFORNIA PERMANENTE MEDICAL GROUP; and DOES 1 through 100:

On April 13, 2021, the court granted Defendants Kaiser Foundation Hospitals’ and Kaiser Foundation Health Plan’s Motion to Bifurcate for a Separate Trial on Issue of “Reasonable Value.”[1]

On February 22, 2022, Plaintiff filed the instant Motion to Reopen Discovery on a Limited Basis to Update Its List of Patient Claims, which the court denied on June 29, 2022.

On July 8, 2022, Defendant filed the instant Motion for Leave to Issue Third Party Deposition Subpoena to Vicky Asencio (“Motion”).

Except as otherwise provided, “any party shall be entitled as a matter of right to complete discovery proceedings on or before the 30th day, and to have motions concerning discovery heard on or before the 15th day, before the date initially set for trial of the action.” (Code Civ. Proc., § 2024.020(a).) “[A] continuance or postponement of the trial date does not operate to reopen discovery proceedings” unless a motion to reopen discovery is filed and granted pursuant to CCP section 2024.050. (Code Civ. Proc., § 2024.020(b); Pelton-Shepherd Industries, Inc. v. Delta Packaging Products, Inc. (2008) 165 Cal.App.4th 1568.) CCP section 2024.050 provides that “[o]n motion of any party, the court may grant leave to complete discovery proceedings, or to have a motion concerning discovery heard, closer to the initial trial date, or to reopen discovery after a new trial date has been set.” (Code Civ. Proc., § 2024.050(a).)

“The purpose of imposing a time limit on discovery is to expedite and facilitate trial preparation and to prevent delay. Without a cutoff date, the parties could tie up each other and the trial court in discovery and discovery disputes right up to the eve of trial or beyond. Furthermore, . . . to be effective the cutoff date must be firm or some litigants will manipulate the proceedings to avoid the cut-off date.” (Beverly Hosp. v. Superior Court (1993) 19 Cal.App.4th 1289, 1295.) The reopening of discovery is a matter that is committed to the trial court’s sound discretion. (Code Civ. Proc., § 2024.050(a), (b).) In exercising that discretion, the trial court considers “any matter relevant to the leave requested,” including:

(2) The diligence or lack of diligence of the party seeking the discovery or the hearing of a discovery motion, and the reasons that the discovery was not completed or that the discovery motion was not heard earlier.

(3) Any likelihood that permitting the discovery or hearing the discovery motion will prevent the case from going to trial on the date set, or otherwise interfere with the trial calendar, or result in prejudice to any other party.

(4) The length of time that has elapsed between any date previously set, and the date presently set, for the trial of the action.

A motion to reopen discovery pursuant to CCP section 2024.050 must be accompanied by a meet and confer declaration demonstrating a good faith effort at informal resolution. (Code Civ. Proc., § 2024.050(a).)

Defendant seeks to re-open discovery “on a limited basis to issue a subpoena for the deposition of PVHMC’s former director of patient accounting, Vicky Asencio, whose testimony is necessary to challenge PVHMC’s contention that its billed charges were the ‘reasonable value’ of its services – the sole issue set for jury trial in January 2023.” (Notice of Motion p. 1.)

Before engaging in the merits, Plaintiff’s argues that it would be unfair to reopen discovery for Defendant when it but recently denied Plaintiff’s motion to reopen discovery. The court disagrees because this situation is distinguishable from that of Plaintiff’s request because the parties expressly agreed that even after the close of discovery Defendant may depose Asencio. Specifically, counsel for Kaiser stated:

We still want to proceed with Ms. Asencio given her role at the time the contract was terminated, and her communications with Ms. Hester. However, if Ms. Hester can speak to this, we may agree to forego Ms. Asencio’s deposition. Accordingly, we are willing to defer Ms. Asencio’s deposition upon the express agreement that we do so without prejudice if we need to reset it after close of discovery, and that PVHMC agrees that Ms. Asencio will not be called at witness at trial, as PVHMC identified her as a person with knowledge of disputed claims.

Moreover, Plaintiff avers Defendant’s motion is an example of gamesmanship because it is brought one week after the court denied Plaintiff’s motion. The court is not persuaded that Defendant is acting in bad faith because Kaiser notified PVHMC that it intended to depose Ms. Asencio on March 8, 2022 (Motion p. 5), which was well over three months before the court’s ruling on Plaintiff’s motion.

Therefore, as one factor the court considers is the “reason[] that the discovery was not completed earlier,” the court finds Defendant’s withdrawal of Asencio’s deposition at the request of Plaintiff to be a compelling reason to re-open discovery.

Defendant explains that in an internal email, Asencio made commentary “to reflect a sentiment among PVHMC’s executives that the claims paid under the contract rate were in excess of their reasonable value and that PVHMC enjoyed a windfall, which was ‘good while it lasted. Now the question will be what will they pay us for post-stabilization care.’” (Motion p. 7, Chen Decl., Ex. E.) Consequently, Ms. Asencio’s knowledge of the contract and its rates serve as a defense to PVHMC’s litigation position that its full billed charges are the reasonable value.

In Opposition, Plaintiff argues that Defendant’s interpretation of the email ignores a “far more reasonable explanation” which is that “the hospital believed the contract was at or near reasonable value, and now they anticipated Kaiser would be paying less than reasonable value.” (Opp. p. 7.)

Here, the court agrees with Plaintiff that the determination of the reasonable and customary value of reimbursement for emergency medical services does not hinge upon the subjective belief of what a hospital employee believes is the reasonable value of medical services. After all, Defendant itself cites to Children’s Hospital Central California v. Blue Cross of California (2014) 226 Cal.App.4th 1260 (“Children’s Hospital”), which provides guidance in determining the reasonable market value or fair market value of medical services. Defendant, however, misconstrues the court’s finding in Children’s Hospital. Sure, the court stated that “under settled quantum meruit principles, relevant evidence of the reasonable/market value of the services provided includes the full range of fees that Hospital both charges and accepts as payment.” (Id. at 1276, see also Motion. p. 6.) However, the court, relying upon the factors set forth in Gould v. Workers’ Comp. Appeals Bd. (1992) 4 Cal.App.4th 1059, came to such a determination not because the evidence of what the hospital believes is the reasonable value but based upon the evidence of the rates accepted by or paid to Hospital by other payors in the same general geographic area. The court stated that, in deciding whether fees more than the schedule are reasonable, evidence of “the fees usually charged by the medical provider [and] the fees usually charged in the general geographical area in which the services were rendered” should be considered. (Children’s Hospital, supra, 226 Cal.App.4th at p. 1272.) Put differently, what is relevant is what Pomona Valley bills other insurance carriers; not what Asencio subjectively believes is the reasonable value.

Therefore, as the “reasonable value is calculated by looking at the full range of fees charged and accepted in the market [citation], and thus encompasses the lower rates grounded in contracts as well as the higher rates charged and accepted where no contract exists” and not based upon a hospital employee’s non-expert opinion about what is a reasonable value, the court finds the discovery is not a necessity. (See Long Beach Memorial Medical Center v. Kaiser Foundation Health Plan, Inc. (2021) 71 Cal.App.5th 323, 345.)[2]

Though the court finds the testimony is not a necessity, the court is confronted with a difficult situation because the parties had an explicit agreement that Defendant would be allowed to depose Asencio, an agreement honored by Defendant at the request of Plaintiff. To resolve the issue the court turns to the factor of prejudice.

Here—as it is but (i) a single deposition that would not require the continuation of trial and (ii) Plaintiff’s opposition was silent as to any prejudice—the court determines that deposing Asencio would not be prejudicial to Plaintiff.

[1] Following the bifurcation ruling, the parties reached a resolution of the Phase II claims through a partial settlement agreement and identified a list of claims to present to the jury for a determination of reasonable value with dates of service from late 2017 through March 2020. Additionally, the parties stipulated to apply the jury’s verdict to claims with dates of service from April 2020 to December 2020.

[2] To the extent that Defendant argues the testimony bears on the factor of “any unusual circumstances in the case,” Defendant has not provided an analysis to persuade the court how this testimony meets one of the non-exhaustive factors used in determining the reasonable and customary value of health care services. (Reply p. 3.)