Children's Hospital Central California v. Blue Cross of California

This appeal concerns a dispute between respondent Children’s Hospital Central California (Hospital) and appellants Blue Cross of California and Blue Cross of California Partnership Plan, Inc. (Blue Cross), over the reasonable value of the poststabilization emergency medical services provided by Hospital to Medi-Cal beneficiaries enrolled in Blue Cross’s Medi-Cal managed care plan. The services at issue were rendered during a 10-month period when Hospital and Blue Cross did not have a written contract that covered those beneficiaries.

Blue Cross paid Hospital approximately $4.2 million based on the Medi-Cal rates paid by the government. However, Hospital demanded its full billed charges of $10.8 million. The jury found there was an implied-in-fact contract between Hospital and Blue Cross and awarded Hospital approximately $6.6 million, the difference between the full billed charges and the $4.2 million Blue Cross had already paid.

Blue Cross contends the damages award was the result of erroneous discovery and evidence rulings that were predicated on the trial court’s misconstruction of California Code of Regulations, title 28, section 1300.71, subdivision (a)(3)(B)…