Insurers owe emergency service providers a duty of care not to delegate responsibility to pay for emergency services to a medical provider that the insurer knows or should know is insolvent and unable to pay the providers’ claims. Under state and federal law, emergency medical facilities are required to provide their emergency services without regard to a patient’s ability to pay or medical insurance but health insurers bear a statutory responsibility to pay for emergency medical services provided to their insureds. Under state law, health insurers may delegate that responsibility to medical providers with whom the insurers contract. This decision holds that insurers owe emergency service providers a duty of care not to delegate the financial responsibility to a medical provider that the insurer knows or should know is insolvent and unable to pay emergency service providers’ claims. Delegation of responsibility is intended to affect emergency service providers as a class. The harm to emergency service providers is foreseeable and closely connected with the allegedly negligent conduct. Also, it is morally blameworthy to use financially insolvent intermediaries as a means of forcing emergency service providers to treat insured patients for free. Health insurers also owe emergency service providers a continuing duty to reassume financial responsibility for paying for emergency services given to insureds once the insurer becomes or should become aware that there is no reasonable expectation that the entity to which it had delegated that duty will be able to pay covered claims for emergency services.
California Supreme Court (Cantil-Sakauye, C.J.); November 14, 2016; 2016 WL 6678432