Marin General Hosp v. Modesto & Empire

I. Background

According to its complaint, Marin General Hospital (“the Hospital”) telephoned the Medical Benefits Administrators of 13174 MARIN GENERAL v. MODESTO & EMPIRE TRACTION M.D., Inc., (“MBAMD”) on April 8, 2004, to confirm that a prospective patient had health insurance through an ERISA plan provided by his employer, Modesto & Empire Traction Co. (“Modesto”). MBAMD was the administrator of Modes- to’s plan. According to the complaint, MBAMD orally veri- fied the patient’s coverage, authorized treatment, and agreed to cover 90% of the patient’s medical expenses at the Hospi- tal.

Between April 19 and April 24, 2004, the Hospital per- formed a lumbar fusion procedure on the patient. The Hospi- tal then submitted a bill to MBAMD for $178,926.54. MBAMD paid the Hospital $46,655.54 and stated in a letter that the Hospital was not entitled to further payment. The Hospital sent MBAMD a letter stating that “[p]er your con- tract this claim should be paid at 90% of total charges.” MBAMD denied that it had such a contract with the Hospital and refused to make additional payment.

On December 8, 2006, the Hospital filed suit in California state court against Modesto, MBAMD,…