Long Beach Memorial Medical etc. v. Kaiser Foundation Health Plan

FACTS AND PROCEDURAL BACKGROUND

I. Facts

A. The parties 1. The hospitals The Long Beach Memorial Medical Center and the Orange Coast Memorial Medical Center (individually, Long Beach Memorial and Orange Coast Memorial; collectively, the hospitals) operate three hospitals in the region encompassing the southern portion of Los Angeles County as well as the northern portion of Orange County. The hospitals price their medical services using two rates— namely, (1) the full-price rate they bill, which operates like the “sticker price,” and (2) the discounted rate they agree to accept. The hospitals collect their full, billed rate only one to 10 percent of the time. Usually, the hospitals agree to accept a lesser amount, which is typically expressed as a percentage of the full, billed rate. That amount varies, depending on whether the payor is a government program (such as Medicare or Medi-Cal), a health plan or health insurance company that has negotiated a contract with the hospitals (a so-called “managed care agreement”), a member of a so-called “rental network” which negotiates rates with hospitals on behalf of network members, or an individual paying cash.

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