Amended Complaint Filed No Fee

Cal. Super. - 6th Dist.September 20, 2018

22860 - 1 - FIRST AMENDED FIRST AMENDED COMPLAINT FOR DAMAGES FOR: 1. BREACH OF IMPLIED IN FACT CONTRACT; 2. BREACH OF EXPRESS CONTRACT; AND, 3. QUANTUM MERUIT. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 LAW OFFICES OF STEPHENSON, ACQUISTO & COLMAN, INC. JOY STEPHENSON-LAWS, ESQ. (SBN 113755) RICHARD A. LOVICH, ESQ. (SBN 113472) KARLENE ROGERS-ABERMAN, ESQ. (SBN 237883) DAVID F. MASTAN, ESQ. (SBN 152109) GERALDINE S. GARCIA, ESQ. (SBN 319561) 303 N. Glenoaks Blvd., Suite 700 Burbank, CA 91502 Telephone: (818) 559-4477 Facsimile: (818) 559-5484 Attorneys for Plaintiff CALIFORNIA SPINE AND NEUROSURGERY INSTITUTE, a California for profit corporation SUPERIOR COURT OF CALIFORNIA FOR THE COUNTY OF SANTA CLARA UNLIMITED JURISDICTION CALIFORNIA SPINE AND NEUROSURGERY INSTITUTE, a California for profit corporation Plaintiff, v. BLUE CROSS OF CALIFORNIA doing business as ANTHEM BLUE CROSS, a California for profit corporation; CALIFORNIA IRONWORKERS FIELD WELFARE PLAN, a voluntary employees' beneficiary association; and DOES 1 THROUGH 25, inclusive, Defendants. Case No.: 18CV335266 FIRST AMENDED COMPLAINT FOR DAMAGES FOR: 1. BREACH OF IMPLIED IN FACT CONTRACT; 2. BREACH OF EXPRESS CONTRACT; AND 3. QUANTUM MERUIT. Electronically filed by Superior Court of CA, County of Santa Clara, on 2/19/2019 3:29 PM Reviewed By:S. Uy Case #18CV335266 Env #2528467 22860 - 2 - FIRST AMENDED FIRST AMENDED COMPLAINT FOR DAMAGES FOR: 1. BREACH OF IMPLIED IN FACT CONTRACT; 2. BREACH OF EXPRESS CONTRACT; AND, 3. QUANTUM MERUIT. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 FIRST AMENDED COMPLAINT FOR DAMAGES PARTIES 1. Plaintiff California Spine and Neurosurgery Institute ("California Spine") is a for profit corporation organized and existing pursuant to the laws of the State of California. California Spine has its principal place of operation in City of Campbell, County of Santa Clara, State of California. California Spine provides minimally invasive spine surgery to patients suffering from spinal injuries and/or conditions. 2. Defendant Blue Cross of California doing business as Anthem Blue Cross ("Anthem” or “Blue Cross") is a for profit corporation that does business in California and is organized and existing pursuant to the laws of the State of California. Blue Cross has its principal place of business in the City of Thousand Oaks, County of Ventura, State of California. Among other things, Anthem sponsors and administers health plans. 3. Defendant California Ironworkers Field Welfare Plan ("Welfare Plan") is a voluntary employees' beneficiary association organized and existing pursuant 26 U.S.C. § 501(c)(9). Welfare Plan's assets pay for hospital, medical, vision, drug, and dental claims incurred under the terms of Welfare Plan's benefits plan with its participants. Welfare Plan’s monetary assets come from the California Field Ironworkers Trust Fund. 4. California Spine is unaware of the true names and capacities, whether corporate, associate, individual, partnership or otherwise of defendants Does 1 through 25, inclusive, and therefore sues such defendants by such fictitious 22860 - 3 - FIRST AMENDED FIRST AMENDED COMPLAINT FOR DAMAGES FOR: 1. BREACH OF IMPLIED IN FACT CONTRACT; 2. BREACH OF EXPRESS CONTRACT; AND, 3. QUANTUM MERUIT. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 names. California Spine will seek leave of the Court to amend this complaint to allege their true names and capacities when ascertained. 5. Anthem, Welfare Plan, and Does 1 through 25, inclusive, shall be collectively referred to as "Defendants." 6. Defendants, and each of them, at all relevant times, have transacted business in the State of California. The violations alleged within this complaint have been and are being carried out in the State of California. 7. California Spine is informed, believes, and thereon alleges that at all relevant times, each of the defendants, including the defendants named "Doe" were and are the agent, employee, employer, joint venturer, representative, alter ego, subsidiary, and/or partner of one or more of the other defendants, and were, in performing the acts complained of herein, acting within the scope of such agency, employment, joint venture, or partnership authority, and/or are in some other way responsible for the acts of one or more of the other defendants. COMMON FACTUAL BACKGROUND 8. California Spine is a medical facility dedicated to the care and treatment of spine injuries and/or conditions. California Spine provides unsurpassed patient care through the use of state-of-the-art minimally invasive surgery and motion preservation techniques. Dr. Adebukola Onibokun is the principal physician and the only neurosurgeon practicing on behalf of California Spine. Patients seek medical treatment from Dr. Onibokun at California Spine for their spine conditions because of the advantages that minimally invasive spine surgery has over traditional open spine surgery. Minimally invasive spine surgery 22860 - 4 - FIRST AMENDED FIRST AMENDED COMPLAINT FOR DAMAGES FOR: 1. BREACH OF IMPLIED IN FACT CONTRACT; 2. BREACH OF EXPRESS CONTRACT; AND, 3. QUANTUM MERUIT. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 uses advanced imaging techniques and special medical equipment to reduce tissue trauma, bleeding, hospital stays and recovery by minimizing the size of the incision used to correct the spinal condition. 9. California Spine does not have any agreement, partnership, and/or contract with any managed health care plan, health insurance agency, or employer group. It is California Spine’s practice to verify eligibility for surgery based on a patient's health care plan on or near the date the patient has their initial consultation at California Spine. California Spine also takes upon itself to obtain an approval for requested services where a patient's managed health care plan requires such. 10. California Spine is informed and believes and on that basis alleges Welfare Plan entered into a contractual relationship with Anthem which sets forth Anthem provide administrative services with respect to paying for and/or arranging for medical care to be rendered by providers like California Spine to Welfare Plan's beneficiaries. Among other duties, such an arrangement required Welfare Plan and/or Anthem to confirm a beneficiary's membership eligibility and benefits under an Anthem health plan funded by Welfare Plan to medical providers such as California Spine in order to ensure healthcare services would be provided to Welfare Plan's participants and/or beneficiaries without delay. In other words, Welfare Plan and Anthem would provide sufficient assurances to medical providers that they would be paid for the medical care expected to be rendered to Welfare Plan's beneficiaries who are subscribed to Anthem health plans. Such an arrangement thereby obligated Anthem and/or Welfare Plan to pay healthcare providers for services rendered to members of the Anthem/Welfare Plan. 22860 - 5 - FIRST AMENDED FIRST AMENDED COMPLAINT FOR DAMAGES FOR: 1. BREACH OF IMPLIED IN FACT CONTRACT; 2. BREACH OF EXPRESS CONTRACT; AND, 3. QUANTUM MERUIT. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 11. California Spine is informed and believes and on that basis alleges that at all relevant times Patient J.D. (Member ID: CFH410277X00) 1 was simultaneously a beneficiary of Welfare Plan and a subscriber of an Anthem health plan that is sponsored by Welfare Plan. To signify such a symbiotic benefits plan, Welfare Plan authorized Anthem to issue Patient J.D. an identification card that brandishes both the Anthem emblem and the insignia related to Welfare Plan. 12. Patient J.D.’s identification card shows that Patient J.D. has medical coverage under an Anthem health plan and that the sponsoring payor is Welfare Plan. On Patient J.D.’s card there appears a large blue-and-white Anthem logo, there also appears the distinguishable California Field Ironworkers Trust Fund insignia containing California’s Golden Gate bridge, the card identifies Patient J.D. by full name and identification number, and generally looks like this: 1 California Spine has limited the disclosure of patient identification information here pursuant to the privacy provisions of the federal Health Insurance Portability & Accountability Act ("HIPAA"), 42 U.S.C. §§ 1320(d) et seq., and the California Constitution, art. 1, § 1. 22860 - 6 - FIRST AMENDED FIRST AMENDED COMPLAINT FOR DAMAGES FOR: 1. BREACH OF IMPLIED IN FACT CONTRACT; 2. BREACH OF EXPRESS CONTRACT; AND, 3. QUANTUM MERUIT. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 13. Anthem instructs its members who are Welfare Plan beneficiaries to present their identification cards to medical providers, like California Spine, when seeking medical care. Consistent with that instruction, Anthem expressly states: “PROVIDERS: Please submit claims to your local [Anthem] plan.” Additionally, Anthem and Welfare Plan constructed the card to reflect respective phone numbers for eligibility and benefits, provider only claims inquiries, inpatient precertification, and outpatient review. Anthem and Welfare Plan included this information with intent that medical providers would obtain the requisite information to determine the patient’s plan information suitable for determining coverage and responsibilities of Anthem and Welfare Plan. 14. Given that Patient J.D. carried an identification card identifying Patient J.D. as belonging to an Anthem health plan sponsored, paid for, and/or administered by and on behalf of Welfare Plan, California Spine looked to Anthem and Welfare Plan to be financially responsible for paying for medical care rendered 22860 - 7 - FIRST AMENDED FIRST AMENDED COMPLAINT FOR DAMAGES FOR: 1. BREACH OF IMPLIED IN FACT CONTRACT; 2. BREACH OF EXPRESS CONTRACT; AND, 3. QUANTUM MERUIT. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 by California Spine to Patient J.D. 15. Patient J.D. had a history of progressively worsening lower back pain and left extremity pain, numbness, and paresthesia prior to Patient J.D.'s initial consultation at California Spine on May 15, 2018. Patient J.D. sought the advanced medical treatment and procedures of California Spine in order to alleviate Patient J.D.'s bodily pain caused by two herniated lumbar discs. 16. On May 16, 2018, California Spine made a telephone call to 800-527-4613, listed as “CA Field Ironworkers” on card. The telephone number leads to the Benefits Information Center, which is an agent of Welfare Plan and thus, an agent of Anthem because of the agreement between Anthem and Welfare Plan set forth above. 17. In the aforementioned phone call, the customer service representative either expressly or impliedly assured California Spine that Welfare Plan and Anthem carried the financial responsibility to pay for Patient J.D.'s anticipated medical care at the usual and customary value for such care (and not at certain set discounted rates because California Spine had no pre-existing contractual relationship with either Anthem or Welfare Plan). California Spine was informed by “Charlie M.,” representative at CA Field Ironworkers, of Patient J.D.’s benefits regarding outpatient procedures such as spine surgery and using a provider who has no existing contract with Anthem and has no existing contract with Welfare Plan. 18. California Spine made a verbal inquiry to Charlie M. as to whether the out-of-network reimbursement was based on usual and customary rates. Charlie M. responded to California Spine that out-of-network reimbursement 22860 - 8 - FIRST AMENDED FIRST AMENDED COMPLAINT FOR DAMAGES FOR: 1. BREACH OF IMPLIED IN FACT CONTRACT; 2. BREACH OF EXPRESS CONTRACT; AND, 3. QUANTUM MERUIT. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 would be based on usual and customary rates. Charlie M. also provided that insurance responsibility for reimbursement was 60%; that is, the health plan belonging to Patient J.D. would be responsible for 60% of the usual and customary rate. 19. Also, on or about May 16, 2018, as part of its practice, California Spine made a telephone call to 855-754-7271, Pacific Health Alliance. After that telephone call, California Spine received, via fax, a document entitled, “Pre-Authorization Form.” This document was provided from Pacific Health Alliance to California Spine. 20. Pacific Health Alliance, Inc. is a managed healthcare company that works in concert with third-party administrators like Anthem and/or Welfare Plan to provide medical administration such as the communications of authorizations for requested services to a medical provider regarding patients such as Patient J.D. As such, Pacific Health Alliance acted as either Anthem’s agent or Welfare Plan's agent with respect to the authorization for Patient J.D.'s care. 21. California Spine returned, via fax, the pre-authorization form completed with information indicating Patient J.D. as the patient to receive medical services, membership information that showed Patient J.D. belonged to an Anthem/Welfare Plan health plan, and a list of medical services being requested with their corresponding diagnoses. 22. Pacific Health Alliance returned, via fax, an endorsed pre- authorization form showing the request for outpatient services was approved with the signatures of Pacific Health Alliance's medical director and case manager/care counselor and authorization number #201805170290016. 22860 - 9 - FIRST AMENDED FIRST AMENDED COMPLAINT FOR DAMAGES FOR: 1. BREACH OF IMPLIED IN FACT CONTRACT; 2. BREACH OF EXPRESS CONTRACT; AND, 3. QUANTUM MERUIT. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 23. On June 18, 2018, in reliance upon existence of an identification card issued by Anthem and Welfare Plan, the telephone call with Charlie M., and the pre-procedure authorization issued by Pacific Health Alliance on behalf of Anthem and/or Welfare Plan, and the express and/or implied resultant assurances that California Spine would be paid its usual and customary value of its medical services anticipated to be rendered to Patient J.D., California Spine provided medically necessary and minimally invasive spine surgery upon Patient J.D. The surgery performed by Dr. Onibokun was spinal decompression surgery performed by microscope. 24. As directed by Patient J.D.'s Anthem/Welfare Plan identification card, California Spine timely and properly submitted a bill to Anthem for medically necessary services, supplies, and/or equipment it rendered to Patient J.D. in the amount of $77,000, which represents California Spine's usual and customary charges for such services. California Spine expected Anthem and/or Welfare Plan to reimburse California Spine at its usual and customary rate for such care. 25. On or about July 27, 2018, Anthem mailed payment in the form of a check to California Spine in the amount of $2,551.79. On or about September 28, 2018, Anthem mailed an additional payment to California Spine in the amount of $2,531.86. 26. On or about September 20, 2018, Welfare Plan issued an Explanation of Benefits (“EOB”) indicating there had been $5,083.65 paid on the claim, with $3,389.10 assigned as the patient’s co-insurance amount, and $68,527.25 in disallowed charges. The EOB indicates $8,472.75 as the allowed charges. 22860 - 10 - FIRST AMENDED FIRST AMENDED COMPLAINT FOR DAMAGES FOR: 1. BREACH OF IMPLIED IN FACT CONTRACT; 2. BREACH OF EXPRESS CONTRACT; AND, 3. QUANTUM MERUIT. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 27. The allowed charges of $8,472.75 do not amount to California Spine’s usual and customary amount of $77,000. Based on California Spine’s telephone call to CA Field Ironworkers, the amount that Anthem and/or Welfare Plan is responsible for is 60% of its usual and customary rate, that is $46,200. After deduction of the $5,083.65 payment, Anthem and/or Welfare Plan has failed to pay the balance of $41,116.35 for the medical care rendered to Patient J.D. 28. California Spine initiated a provider dispute with Anthem on or around August 17, 2018. Subsequently, on or around September 19, 2018, Anthem sent letter correspondence stating that the claim was reviewed, and its determination was upheld because “the claim was processed by the Third Party Administrator (TPA).” The letter specified Welfare Plan as the TPA. California Spine then reached out to Welfare Plan to seek payment of the balance. Welfare Plan has declined to make any additional payment of the unpaid balance. As a result of both Anthem and Welfare Plan’s refusal to fully pay California Spine for the medically necessary services and treatment rendered to Patient J.D., California Spine has been damages in the amount of $41,116.35, exclusive of prejudgment interest. FIRST CAUSE OF ACTION (BREACH OF IMPLIED IN FACT CONTRACT) (Against all Defendants) 29. California Spine incorporates by reference and re-alleges paragraphs 1 through 28 here as though set forth in full. 30. As is custom and practice in the health care industry, sometimes 22860 - 11 - FIRST AMENDED FIRST AMENDED COMPLAINT FOR DAMAGES FOR: 1. BREACH OF IMPLIED IN FACT CONTRACT; 2. BREACH OF EXPRESS CONTRACT; AND, 3. QUANTUM MERUIT. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 hospitals and health plans form contracts through their conduct even though they do not exchange express promises; contracts under which a medical provider agrees to render medically necessary health care to a beneficiary of a health plan and in return the health plan agrees to pay for such health care for the usual and customary value of such care (typically at the medical provider's billed rates). Such implied-in-fact contracts can arise from a variety of manifested conduct which includes, among other things, when a health plan issues an identification card to its beneficiaries, when a health plan instructs those beneficiaries to present such identification card to medical providers so as to give assurances to those medical providers that such care will be paid for, when a medical provider telephones a health plan to ask for authorization to render medical care for a particular beneficiary of that health plan, when the health plan communicates medical eligibility benefits for that particular beneficiary advising the medical provider that the health plan will make full payment of their stated obligation, and when the health plan sends written approval the specified medical services for that beneficiary. 31. On or about May 16, 2018, California Spine contacted CA Field Ironworkers, for the purposes of determining whether Anthem and/or Welfare Plan would be financially responsible for paying for the medical services to be rendered to Patient J.D. In response, CA Field Ironworkers’ representative gave California Spine information confirming that Patient J.D. belonged to an Anthem health plan sponsored, paid for, and/or administered by and on behalf of Welfare Plan, and made no indication to California Spine that Anthem and/or Welfare Plan would not pay its obligation of 60% the usual and customary value of such care. 32. Also, on or about May 16, 2018, at Anthem and/or Welfare 22860 - 12 - FIRST AMENDED FIRST AMENDED COMPLAINT FOR DAMAGES FOR: 1. BREACH OF IMPLIED IN FACT CONTRACT; 2. BREACH OF EXPRESS CONTRACT; AND, 3. QUANTUM MERUIT. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Plan's request, California Spine submitted a request for services on a Pre- Authorization Form to Pacific Health Alliance. On May 22, 2018, Pacific Health Alliance's medical director and case manager issued an endorsed copy of the pre- procedure authorization form to California Spine. 33. By such conduct and assurances, and by virtue of custom and practice within the hospital reimbursement industry, it was understood between California Spine, Anthem, and Welfare Plan that Anthem and/or Welfare Plan would pay the usual and customary value of the anticipated medically necessary services, supplies, and/or equipment to be rendered to Patient J.D. By their course of conduct, an implied-in-fact contract arose between California Spine, Anthem, and Welfare Plan. 34. Accordingly, in reliance upon the terms of that implied-in-fact contract, on June 18, 2018, Dr. Onibokun of California Spine performed medically necessary and minimally invasive spine surgery upon Patient J.D. California Spine reasonably relied upon the conduct and representations of Anthem and Welfare Plan and/or their agents for reimbursement. In the absence of such conduct, California Spine could have made alternate payment arrangements for Patient J.D.'s medical care or could have decided to not provide such services at all. 35. California Spine rendered all promised medically necessary procedures and treatment to Patient J.D. and performed all conditions, covenants, and promises required on its part to be performed in accordance with terms and conditions of the above-described implied-in-fact contract. // // 22860 - 13 - FIRST AMENDED FIRST AMENDED COMPLAINT FOR DAMAGES FOR: 1. BREACH OF IMPLIED IN FACT CONTRACT; 2. BREACH OF EXPRESS CONTRACT; AND, 3. QUANTUM MERUIT. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 36. Anthem and/or Welfare Plan breached that implied-in-fact contract by refusing without justification to fully pay California Spine for Patient J.D.'s care at 60% of California Spine's usual and customary rate of $77,000, less credits for a $5,083.65 payment. As a result, California Spine suffered damages in the sum of $41,116.35, exclusive of interest and costs. SECOND CAUSE OF ACTION (BREACH OF EXPRESS CONTRACT) (Against all Defendants) 37. California Spine incorporates by reference and re-alleges paragraphs 1 through 28 here as though set forth in full. 38. As is custom and practice in the health care industry, sometimes medical providers and health plans form express contracts - under which a medical provider agrees to render medically necessary health care to a beneficiary of a health plan and in return the health plan agrees to pay for such health care - but which omits a price term upon which the parties rely upon industry custom and practice to supply. Industry custom and practice dictates that when a non- contracted medical provider contacts a health plan for authorization to render medical care for a beneficiary of that health plan, that the medical provider and the health plan thereby agree the medical provider will provide medical care to the beneficiary of the health plan and in exchange the health plan agrees to pay for such care at the usual and customary value of such care less the patient/beneficiary’s responsibility Typically, the usual and customary value of the medical provider's services are the medical provider's billed rates. 39. Based on the conduct of Welfare Plan and Anthem (issuing an 22860 - 14 - FIRST AMENDED FIRST AMENDED COMPLAINT FOR DAMAGES FOR: 1. BREACH OF IMPLIED IN FACT CONTRACT; 2. BREACH OF EXPRESS CONTRACT; AND, 3. QUANTUM MERUIT. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Anthem/Welfare Plan identification card to its members, providing verbal verification of eligibility and benefits, providing a pre-procedure authorization form, and stating reimbursement is based on the provider’s usual and customary rate) as stated above, Welfare Plan and/or Anthem expressly agreed and understood that a medical provider, like California Spine, would render medically necessary treatment and procedures to a member of the Anthem/Welfare Plan health plan, submit bills for such care to Anthem, and that Anthem and/or Welfare Plan would pay that medical provider for the medically necessary treatment and procedures rendered to that Anthem/Welfare Plan member. Anthem/Welfare Plan fully expected California Spine to provide services to Patient J.D. and then bill Anthem for such care. CA Field Ironworkers represented that Patient J.D. was a member of Anthem’s health plan sponsored, paid for, and/or administered by and on behalf of Welfare Plan. 40. California Spine fulfilled all conditions, covenants, required pursuant to the express contract. California Spine reasonably relied on Anthem and/or Welfare Plan’s conduct and promise to pay an obligation of 60% of the usual and customary rate and provided medical services to Patient J.D. in reliance on this promise and upon such conduct. 41. Anthem and/or Welfare Plan breached that express contract by underpaying California Spine for the medically necessary services, supplies, and/or equipment rendered or supplied to Patient J.D. 42. As a result of Anthem and/or Welfare Plan’s breach of express contract, California Spine has suffered damages in the sum of $41,116.35, exclusive of interest and costs. 22860 - 15 - FIRST AMENDED FIRST AMENDED COMPLAINT FOR DAMAGES FOR: 1. BREACH OF IMPLIED IN FACT CONTRACT; 2. BREACH OF EXPRESS CONTRACT; AND, 3. QUANTUM MERUIT. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 THIRD CAUSE OF ACTION (QUANTUM MERUIT) (Against all Defendants) 43. California Spine incorporates by reference and re-alleges paragraphs 1 through 28 here as though set forth in full. 44. On or about May 16, 2018, by their words and/or conduct, a representative of CA Field Ironworkers provided assurances to California Spine that a member of the Anthem/Welfare Plan (i.e., Patient J.D.) had eligibility for medical benefits specifically for an outpatient procedure such as surgery, and that any medical procedures or treatment rendered to Patient J.D. would be paid by Anthem and/or Welfare Plan at 60% of that care's usual and customary rate so long as California Spine obtained medical necessity approval from Pacific Health Alliance. 45. Prior to surgery, California Spine completed the pre- authorization process and obtained pre-procedure authorization for the requested medical services from Pacific Health Alliance, as stated above. 46. California Spine's rendering of medically necessary procedures and treatment, services, supplies, and/or equipment to Patient J.D. was intended to, and did, benefit Patient J.D., who was a member of Anthem health plan sponsored, paid for, and/or administered by and on behalf of Welfare Plan, and therefore benefitted Anthem and Welfare Plan by helping Anthem and Welfare Plan fulfill their contractual and/or statutory duties to provide for and/or arrange for delivery of medical care to one of their beneficiaries. 22860 - 16 - FIRST AMENDED FIRST AMENDED COMPLAINT FOR DAMAGES FOR: 1. BREACH OF IMPLIED IN FACT CONTRACT; 2. BREACH OF EXPRESS CONTRACT; AND, 3. QUANTUM MERUIT. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 47. For rendering the medically necessary procedures and treatment, supplies, and/or equipment to Patient J.D., California Spine reasonably expected Anthem and/or Welfare Plan to pay its obligation of 60% usual and customary value of its care. 48. Despite demands from California Spine to pay for the medically necessary procedures and treatment, services, supplies and/or equipment rendered to Patient J.D., Anthem and/or Welfare Plan paid only $5,083.65. 49. California Spine’s rendering of medically necessary procedures and treatment to Patient J.D. was intended to, and did benefit Patient J.D., a beneficiary of Welfare Plan and subscriber of an Anthem health plan, and therefore benefited Welfare Plan and Anthem. 50. After giving credit for that $5,083.65 payment, Anthem and Welfare Plan have been unjustly enriched (and California Spine has been damaged) in the amount of $41,116.35, which represents the remaining unpaid obligation of usual and customary value of the medical care rendered to Patient J.D., exclusive of prejudgment interest. Anthem and Welfare Plan have been unjustly enriched because they have collected monthly premiums from its beneficiaries (including Patient J.D.) for the express purpose of providing for and/or arranging for medical care for its beneficiaries and yet have not fully and properly paid California Spine. Since Patient J.D. obtained medically necessary care from California Spine, and since California Spine relieved Anthem and Welfare Plan from their statutory and/or contractual responsibility owed to Patient J.D. to provide for and/or arrange for such care, and Anthem and Welfare Plan have obtained a benefit with full appreciation of the facts, making it inequitable for Anthem and/or Welfare Plan to retain that benefit without payment of its 22860 - 17 - FIRST AMENDED FIRST AMENDED COMPLAINT FOR DAMAGES FOR: 1. BREACH OF IMPLIED IN FACT CONTRACT; 2. BREACH OF EXPRESS CONTRACT; AND, 3. QUANTUM MERUIT. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 reasonable value, Anthem and Welfare Plan should be ordered to pay sum of $8,472.75 exclusive of interest. PRAYER FOR RELIEF WHEREFORE, California Spine prays for judgment as follows: For all Causes of Action: 1. for the principal sum of $41,116.35; 2. for interest on such principal sum at the rate of 15% per annum, pursuant to Cal. Health & Safety Code § 1371; or, in the alternative, for interest on such principal sum at the rate of 10% per annum, pursuant to Cal. Civ. Code § 3289; 3. for all costs of suit incurred herein; and, 4. for such other and further relief as the Court deems just and proper. //// //// Dated: 19 February 2019 LAW OFFICES OF STEPHENSON, ACQUISTO & COLMAN, INC. /s/Geraldine S. Garcia GERALDINE S. GARCIA Attorneys for CALIFORNIA SPINE AND NEUROSURGERY INSTITUTE, a California for profit corporation p o s a m - 1 C O M P L A 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 PROOF OF SERVICE I am employed in the county of Los Angeles, State of California. I am over the age of 18 and not a party to the within action; my business address is 303 North Glenoaks Boulevard, Suite 700, Burbank, California 91502-3226. On 19 February 2019, I served the foregoing document(s) entitled: FIRST AMENDED COMPLAINT FOR DAMAGES FOR: 1. BREACH OF IMPLIED IN FACT CONTRACT; 2. BREACH OF EXPRESS CONTRACT; AND 3. QUANTUM MERUIT. by placing a true copy thereof enclosed in a sealed envelope addressed per the attached Service List. [X ] BY U.S. MAIL: I am "readily familiar" with the firm's practice of collection and processing correspondence for mailing. Under that practice it would be deposited with the United States Postal Service on that same day with postage thereon fully prepaid at Burbank, California in the ordinary course of business. I am aware that on motion of the party served, service is presumed invalid if postal cancellation date or postage meter date is more than one day after date of deposit for mailing in affidavit. [C.C.P. 1013a(3); F.R.C.P. 5(b)] [ ] BY FEDERAL EXPRESS: I caused such envelope(s), with overnight Federal Express Delivery Charges to be paid by this firm, to be deposited with the Federal Express Corporation at a regularly maintained facility on the aforementioned date. [C.C.P. 1013(c) 1013(d)] [ ] BY PERSONAL SERVICE: I caused the above-stated document(s) to be served by personally delivering a true copy thereof to the individuals identified above. [C.C.P. 1011(a); F.R.C.P. 5(b)] [ ] BY EXPRESS MAIL: I caused such envelope(s), with postage thereon fully prepaid and addressed to the party(s) shown above, to be deposited in a facility operated by the U.S. Postal Service and regularly maintained for the receipt of Express Mail on the aforementioned date. [C.C.P. 1013(c)] [ ] BY TELECOPIER: Service was effected on all parties at approximately ___:____ am/pm by transmitting said document(s) from this firm's facsimile machine (818/559-4477) to the facsimile machine number(s) shown above. \DOOVONUIAUJNH ,_. O 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Transmission to said numbers was successful as evidenced by a Transmission Report produced by the machine indicating the documents had been transmitted completely and without error. C.R.C. 2008(6), Cal. Civ. Proc. Code § 1013(6). [X] BY ELECTRONIC SERVICE: By emailing true and correct copies to the persons at the electronic notification address(es) shown 0n the accompanying service list. The document(s) was/were served electronically and the transmission was reported as complete and without error. [ X ] State: I declare under penalty of perjury under the laws of the State of California that the above is true and correct. Executed on 19 February 2019 in Burbank, California.W LORENA BENCOMO lbencomo sacfirm.com SERVICE LIST Kenneth N. Smersfelt, Esq. Michael J Korda, Esq. Karen Braje, Esq. Raphael Shannon-Kraw, Esq. Nicole Medeiros, Esq. Katherine McDonough, Esq. Reed Smith LLP Kraw Law Group, APC 355 South Grand Street, Suite 2900 605 Ellis Street, Suite 200 Los Angeles, CA 90071 Mountain View, CA 94043 (213) 457-8000 (650) 3 14-7800 (213) 457-8080 fax (650) 3 14-7899 fax ksmersfelt@reedsmith.com mkorda@kraw.com kbra'e reedsmith.com rshannonkraw@kraw.com nmedeiros@reedsmith.com kmcdonough@kraw.com