Blue Cross Blue Shield Sued by Stanford Health Care

Stanford Health Care (Stanford), a California nonprofit corporation, is suing health insurance giant Blue Cross Blue Shield (BCBS) over claims that the company failed to pay an outstanding balance of over half a million dollars despite being contractually obligated to do so. The plaintiff is seeking damages for the breach of implied-in-fact contract and quantum meruit.

The case was originally filed in April but was removed to federal court by BCBS Tuesday. As is common for health care providers and health insurance companies, the state court complaint said, Stanford and BCBS entered into an agreement in which Stanford would “render medically necessary care to the members, enrollees and/or beneficiaries of Defendant’s health plan.” In return, BCBS contractually agreed to “pay Stanford the discounted rates negotiated in the Blue Shield Agreement.” These rates are referred to by the plaintiffs as the Blue Cross Rates.

Throughout 2019 and the beginning of 2020, Stanford provided medical care to a host of patients in its facility. They contended that BCBS and its representing agent authorized for the aforementioned medical services to take place. Over this time period, the patient’s medical charges came to a total of $526,645.58 and this bill was promptly sent to BCBS by Stanford.

Following this, the plaintiffs claim that BCBS sent a payment of just $16,608.43 rather than paying the bill in full. This left an outstanding balance owed by BCBS of $510,037.25. Stanford maintains that they “performed all conditions required,” on their part “in accordance with the terms and conditions of that implied-in-fact contract.” Stanford goes on to explain that BCBS breached this contract when they failed to pay the sum in full. They argue that they were “induced to render medical care” and have suffered “substantial detrimental damages,” as a result of the actions of the defendants.

As a result of the outstanding balance, violation of the contractual agreement, and Blue Cross rates, BCBS has not only the initial outstanding balance but also a balance of $191,245.72, determined by the Blue Cross rates agreed upon by both parties. In addition to seeking all owed damages, Stanford is also seeking compounding interest rates of 15% per annum and any other relief that the Court deems just and proper.

The plaintiff is represented by the Law Offices of Stephenson, Acquisto & Colman, while the defendant will be represented by Von Behren & Hunter LLP.