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Tag: 2025 News

Supreme Court Limits ER Price Disclosure Obligations to Patients

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Taylor Capito received treatment in the emergency room of San Jose Healthcare System LP dba Regional Medical Center San Jose on two occasions. Regional is a major hospital in San Jose with an emergency room.

Capito filed a class action complaint against Regional under the Consumer Legal Remedies Act (CLRA), challenging Regional’s “unfair, deceptive, and unlawful practice of charging [an EMS fee] without any notification of its intention to charge a prospective emergency room patient such a Fee for the patient’s emergency room visit.”

Regional demurred and moved to strike the class allegations. In doing so, it briefed the legislative history behind the Payers’ Bill of Rights (Health & Saf. Code, § 1339.50 et seq.) and other federal and state regulations governing its pricing disclosures.The trial court sustained the demurrer and dismissed the case.

And the Court of Appeal affirmed the dismissal in the unpublished case of Capito v. San Jose Healthcare System, LP – H049022, – H049646 (April 2023).

However, there are conflicting opinions on this issue in other California courts. In another case, Joshua Naranjo filed a class action lawsuit against the Doctors Medical Center of Modesto Inc., seeking similar relief, however his case resulted in a conflicting opinion. In Naranjo v. Doctors Medical Center of Modesto (2023) 90 Cal.App.5th 1193, a published decision of the Fifth Appellate District in which the court had ruled that the hospital was required to further disclose the EMS fee prior to treating ER patients.

The California Supreme Court agreed to hear the Capito case, and it resolved the conflicting decisions in the case of Capito v. San Jose Healthcare System, LP -S280018 (December 2024)

The question here is whether hospitals have a duty, beyond what is required by the relevant statutory and regulatory scheme, to notify emergency room patients that they will be charged EMS fees.

“Hospitals do not have a duty under the UCL or CLRA, beyond their obligations under the relevant statutory and regulatory scheme, to disclose EMS fees prior to treating emergency room patients. Requiring such disclosure would alter the careful balance of competing interests, including price transparency and provision of emergency care without regard to cost, reflected in the multifaceted scheme developed by state and federal authorities. Capito has not sufficiently alleged facts showing that the lack of such disclosure is “unlawful, unfair or fraudulent” on any theory she presents under the UCL or CLRA.”

Accordingly, the California Supreme Court affirmed the Court of Appeal’s judgment in favor of Regional.

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SoCal Laboratory, and Owners Resolve Kickbacks Case for $15M

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A former Van Nuys physician, a medical center he founded, a laboratory he co-owned, and an executive at these entities have agreed to pay $15 million to settle allegations that they submitted false claims to Medicare and Medi-Cal from the payment of illegal kickbacks and self-referring patients.

Mohammad Rasekhi, who surrendered his medical license in December 2024; Sheila Busheri; Southern California Medical Center (SCMC); and R & B Medical Group, Inc. d/b/a Universal Diagnostic Laboratories (UDL) agreed to pay the amount.

Rasekhi is the founder and chief medical officer of SCMC and the co-owner of UDL. Busheri is the chief executive officer of SCMC and the co-owner and chief executive officer of UDL. SCMC is a federally qualified health center that operates six clinics in Southern California. UDL is a reference and esoteric laboratory in Southern California.

Medicaid is funded jointly by the states and the federal government. The State of California paid a portion of the Medicaid claims at issue and will receive approximately $7 million from the settlement.

The United States alleged that the defendants knowingly submitted or caused the submission of false claims to Medicare and Medi-Cal by:

– – paying kickbacks to marketers to refer Medicare and Medi-Cal beneficiaries to SCMC clinics in violation of the Anti-Kickback Statute (AKS):
– – paying kickbacks to third-party clinics in the form of above-market rent payments, complimentary and discounted services to clinic staff, and write-offs of balances owed by patients and clinic staff in exchange for referring Medicare and Medi-Cal beneficiaries to UDL for laboratory tests in violation of the AKS; and
– – referring Medicare and Medi-Cal beneficiaries from SCMC clinics to UDL for laboratory tests in violation of the Stark Act’s prohibition against self-referrals.

The AKS prohibits parties who participate in federal health care programs from knowingly and willfully offering or paying remuneration in return for referring an individual to, or arranging for the furnishing of any item or services for which payment is made by, a federal health care program.

Likewise, the Stark Act, which is also known as the Physician Self-Referral Law, prohibits physicians from referring patients to receive “designated health services” payable by Medicare or Medicaid from entities with which the physician or an immediate family member has a financial relationship, unless an exception applies.

The settlement announced resolves claims brought under the qui tam, or “whistleblower,” provisions of the False Claims Act in a joint filing by Ferzad Abdi, Julia Butler, Jameese Smith, and Karla Solis, who were former employees or managers of SCMC and UDL. The qui tam provisions permit a private party called a “relator” to file an action on behalf of the United States and receive a portion of any recovery. The qui tam case is captioned United States ex rel. Abdi v. Rasekhi, No. 18-cv-03966 (C.D. Cal.). The settlement includes a $10 million payment for the portion of the case handled by the United States and a $5 million payment in a separate settlement between the relators and the defendants.

Assistant United States Attorney Jack D. Ross of the Civil Fraud Section and Justice Department Trial Attorney Samson Asiyanbi of the Fraud Section handled this matter for the United States.

The claims resolved by the settlement are allegations only and there has been no determination of liability.

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