In a June 2014 opinion, the California Court of Appeals determined that reasonable & customary (R&C) charge valuations can consider actual payments accepted by a hospital for its services, not just the billed charges based on its charge master. This means that when determining the R&C values of services, California courts are required to consider the discounted amounts hospitals accept from governmental payers such as Medicare and Medi-Cal (Medicaid) and private plans. On the other hand, the Court also indicated that a provider’s cost may not be relevant to R&C valuations.

The case, Children’s Hospital Central California v. Blue Cross of California, 226 Cal.App.4th 1260 (Cal. Ct. App. 2014) which involved a dispute between an out-of-contract hospital and Blue Cross of California regarding amount of reimbursement owed to the hospital for post-stabilization services rendered to certain Medi-Cal beneficiaries enrolled in the plan.

California Department of Managed Health Care codified the so-called “Gould factors” in the Code of Regulations, title 28, section 1300.71, that are used to determine R&C value for reimbursement of claims. Under Gould v. Workers’ Comp. Appeals Bd. (1992) 4 Cal.App.4th 1059, R&C value of services rendered is to be based upon statistically credible information that is updated at least annually and takes into consideration:


Continue Reading California Court of Appeal Revisits Litigation on Valuing Reasonable & Customary Charges

On March 20, Governor Jerry Brown signed AB 369, mandating that plans allow Californians whose individual health plans were canceled by the Affordable Care Act to continue to receive coverage for their non-participating providers through treatment for pregnancy, cancer, and chronic conditions, among others. The bill passed unanimously and as an urgency measure, allowing it