Facts

Radiologists and emergency room doctors sued Health Net of California and other health plans (the "Health Plans") for unfair competition, negligence, and other claims, seeking to recoup medical fees.

Plaintiffs concede that the Health Plans delegated the payment obligations for the medical services at issue to Independent Practice Associations ("IPAs"). The IPAs were compensated by the Health Plans under "delegation contracts" on a capitated or similar basis (e.g., an agreed dollar amount per enrollee per month). In return, the IPAs managed the medical services for the Health Plans' enrollees and accepted financial responsibility for the services.

Plaintiffs, however, in these cases seek payment for these services directly from the Health Plans.

The Health Plans filed demurrers arguing that the Knox-Keene Act expressly permits delegation of payment obligation by the Health Plans to IPAs and that the Knox-Keene Act governs the regulation of health plans and IPAs. Further, that the Health Plans were not liable for payment obligations that they had delegated to IPAs, as permitted under the Knox-Keene Act, and that Health Plans do not have to pay twice for the same services.

Result

Judge John Shepard Wiley Jr. sustained the defendants' Demurrers without leave to amend and dismissed the claims.