Case 5:19-cv-02417-LHK Document 30 Filed 10/17/19 Page 1 of 22
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`LAW OFFICES OF STEPHENSON, ACQUISTO & COLMAN, INC.
`JOY STEPHENSON-LAWS, ESQ.
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`(SBN 113755)
`RICHARD A. LOVICH, ESQ.
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`(SBN 113472)
`CHRISTOPHER HAPAK, ESQ.
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`(SBN 267212)
`GERALDINE S. GARCIA, ESQ.
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`(SBN 319561)
`303 N. Glenoaks Blvd., Suite 700
`Burbank, CA 91502
`Telephone: (818) 559-4477
`Facsimile:
`(818) 559-5484
`
`Attorneys for Plaintiff
`CALIFORNIA SPINE AND NEUROSURGERY INSTITUTE,
`a California for profit corporation
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`UNITED STATES DISTRICT COURT
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`NORTHERN DISTRICT OF CALIFORNIA
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`SAN FRANCISCO DIVISION
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`CALIFORNIA SPINE AND
`NEUROSURGERY INSTITUTE, a
`California for profit corporation
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`Case No.: 5:19-cv-2417-LHK
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`SECOND AMENDED COMPLAINT
`FOR DAMAGES FOR:
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`Plaintiff,
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`v.
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`1.
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`BREACH OF IMPLIED IN FACT
`CONTRACT;
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`UNITED HEALTHCARE INSURANCE 2.
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`3.
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`COMPANY, a Connecticut for profit
`corporation; APPLE, INC., a California
`for profit corporation; and DOES 1
`THROUGH 25, inclusive,
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`BREACH OF EXPRESS
`CONTRACT; AND
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`QUANTUM MERUIT.
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`Defendants.
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`Complaint Filed: 12/20/19
`FAC Filed: 2/25/19
`Removed: 5/3/19
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`22855
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`- 1 -
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`SECOND AMENDED COMPLAINT FOR DAMAGES
`FOR: 1. BREACH OF IMPLIED IN FACT
`CONTRACT; 2. BREACH OF EXPRESS CONTRACT;
`AND, 3. QUANTUM MERUIT.
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`Case 5:19-cv-02417-LHK Document 30 Filed 10/17/19 Page 2 of 22
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`SECOND AMENDED COMPLAINT FOR DAMAGES
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`PARTIES
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`1.
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`Plaintiff California Spine and Neurosurgery Institute
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`("California Spine") is a for profit corporation organized and existing pursuant to
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`the laws of the State of California. California Spine has its principal place of
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`operation in City of Campbell, County of Santa Clara, State of California.
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`California Spine provides minimally invasive spine surgery to patients suffering
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`from spinal injuries and/or conditions.
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`2.
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`Defendant UNITED HEALTHCARE INSURANCE
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`COMPANY (“United”) is a for profit corporation that does business in California
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`is organized and existing pursuant to the laws of the State of Connecticut. United
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`has its principal place of business in the City of Hartford, County of Hartford, State
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`of Connecticut. Among other things, United sponsors and administers health plans.
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`3.
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`Defendant Apple Inc. ("Apple") is a for profit corporation that
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`does business in California and is organized and existing pursuant to the laws of
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`the State of California. Apple has its principal place of business in City of Palo
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`Alto, County of Santa Clara, State of California. Among other things, Apple
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`sponsors and administers health plans for their employees and their dependents.
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`4.
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`California Spine is unaware of the true names and capacities,
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`whether corporate, associate, individual, partnership or otherwise of defendants
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`Does 1 through 25, inclusive, and therefore sues such defendants by such fictitious
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`names. California Spine will seek leave of the Court to amend this complaint to
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`allege their true names and capacities when ascertained.
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`22855
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`- 2 -
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`SECOND AMENDED COMPLAINT FOR DAMAGES
`FOR: 1. BREACH OF IMPLIED IN FACT
`CONTRACT; 2. BREACH OF EXPRESS CONTRACT;
`AND, 3. QUANTUM MERUIT.
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`

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`Case 5:19-cv-02417-LHK Document 30 Filed 10/17/19 Page 3 of 22
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`5.
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`United, Apple, and Does 1 through 25, inclusive, shall be
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`collectively referred to as "Defendants."
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`6.
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`Defendants, and each of them, at all relevant times, have
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`transacted business in the State of California. The violations alleged within this
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`complaint have been and are being carried out in the State of California.
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`7.
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`California Spine is informed, believes, and thereon alleges that
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`at all relevant times, each of the defendants, including the defendants named "Doe"
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`were and are the agent, employee, employer, joint venturer, representative, alter
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`ego, subsidiary, and/or partner of one or more of the other defendants, and were, in
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`performing the acts complained of herein, acting within the scope of such agency,
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`employment, joint venture, or partnership authority, and/or are in some other way
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`responsible for the acts of one or more of the other defendants.
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`COMMON FACTUAL BACKGROUND
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`8.
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`California Spine is a medical facility dedicated to the care and
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`treatment of spine injuries and/or conditions. California Spine provides
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`unsurpassed patient care through the use of state-of-the-art minimally invasive
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`surgery and motion preservation techniques. Dr. Adebukola Onibokun is the
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`principal physician and the only neurosurgeon practicing on behalf of California
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`Spine. Patients seek medical treatment from Dr. Onibokun at California Spine for
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`their spine conditions because of the advantages that minimally invasive spine
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`surgery has over traditional open spine surgery. Minimally invasive spine surgery
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`uses advanced imaging techniques and special medical equipment to reduce tissue
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`trauma, bleeding, hospital stays and recovery by minimizing the size of the
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`incision used to correct the spinal condition.
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`22855
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`- 3 -
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`SECOND AMENDED COMPLAINT FOR DAMAGES
`FOR: 1. BREACH OF IMPLIED IN FACT
`CONTRACT; 2. BREACH OF EXPRESS CONTRACT;
`AND, 3. QUANTUM MERUIT.
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`Case 5:19-cv-02417-LHK Document 30 Filed 10/17/19 Page 4 of 22
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`9.
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`California Spine does not have any pre-existing agreement,
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`partnership, and/or contract with any managed health care plan, health insurance
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`agency, or employer group. It is California Spine's practice to verify eligibility for
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`surgery based on a patient's health care plan on or near the date the patient has their
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`initial consultation at California Spine. California Spine also takes upon itself to
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`obtain an approval for requested services where a patient's managed health care
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`plan requires such.
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`10. California Spine is informed and believes and on that basis
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`alleges Apple entered into a contractual relationship with United for United to
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`provide administrative services with respect to paying for and/or arranging for
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`medical care to be rendered by providers like California Spine to Apple's
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`participants. Among other duties, such an arrangement required United to confirm
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`a beneficiary's eligibility and benefits to medical providers such as California
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`Spine in order to ensure healthcare services would be provided to Apple's
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`participants and/or beneficiaries without delay. In other words, United on Apple's
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`behalf would provide sufficient assurances to medical providers that they would be
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`paid for the medical care expected to be rendered to Apple's beneficiaries. Such an
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`arrangement thereby obligated Defendants to pay healthcare providers for services
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`rendered to Apple's beneficiaries.
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`Patient D.B.
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`11. California Spine is informed and believes and, on that basis,
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`alleges that all relevant times Patient D.B. (Member ID: 917788981)1 was a
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`beneficiary of a health plan sponsored, paid for, and/or administered by
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`1 California Spine has limited the disclosure of patient identification information here pursuant to
`the privacy provisions of the federal Health Insurance Portability & Accountability Act
`("HIPAA"), 42 U.S.C. §§ 1320(d) et seq., and the California Constitution, art. 1, § 1.
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`22855
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`- 4 -
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`SECOND AMENDED COMPLAINT FOR DAMAGES
`FOR: 1. BREACH OF IMPLIED IN FACT
`CONTRACT; 2. BREACH OF EXPRESS CONTRACT;
`AND, 3. QUANTUM MERUIT.
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`

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`Case 5:19-cv-02417-LHK Document 30 Filed 10/17/19 Page 5 of 22
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`Defendants. To signify such membership, Apple authorized United to issue Patient
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`D.B. a United/Apple identification card and instructed Patient D.B. to present that
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`card to medical providers (including California Spine) in order to obtain medical
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`care. United and Apple did so with the intent to assure medical providers that they
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`would be paid for medical care rendered to Apple's beneficiaries at a percentage of
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`the usual and customary value for such care (unless a medical provider had a pre-
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`existing contractual relationship with United to provide such medical care at
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`certain set discounted rates).
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`12. Patient D.B.'s Apple medical plan administered by United is
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`Apple Plus PPO Plan. According to plan's summary outlined in the Apple Benefits
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`Book effectuated January 2017, beneficiaries under the Apple Plus PPO Plan may
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`receive care from any provider, including an out-of-network provider. The benefits
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`for using an out-of-network provider read as:
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`“When you receive care through an out-of-network provider, the plan
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`pays 70% of eligible expenses after the out-of-network deductible is
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`met, and benefits are based on usual, customary, and reasonable
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`(UCR) rates."
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`Page 39 of Apple Benefits Book.
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`13. Patient D.B. presented symptoms of severe lower back pain and
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`bilateral lower extremity pain prior to Patient D.B.'s initial consultation with
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`California Spine on 23 January 2018. Patient D.B. sought the medical services of
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`California Spine in order to alleviate Patient D.B's pain caused by a weakening of
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`the vertebra of the spine and compression of the spinal nerves by herniated disc or
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`joint. After the consultation, California Spine requested coverage for services from
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`United.
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`22855
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`- 5 -
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`SECOND AMENDED COMPLAINT FOR DAMAGES
`FOR: 1. BREACH OF IMPLIED IN FACT
`CONTRACT; 2. BREACH OF EXPRESS CONTRACT;
`AND, 3. QUANTUM MERUIT.
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`

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`Case 5:19-cv-02417-LHK Document 30 Filed 10/17/19 Page 6 of 22
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`14. On or about 7 February 2018, California Spine received a prior
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`authorization letter from OrthoNet LLC., on behalf of United, in response to
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`California Spine’s request for coverage of services.
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`15. OrthoNet, LLC. (“OrthoNet”) is a health utilization
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`management company that works in concert with third-party administrators like
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`United to provide medical administration such as the communications of
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`authorizations for requested services to a medical provider regarding patients such
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`as Patient D.B. OrthoNet specifically deals with orthopedic specialist benefit
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`management. As such, OrthoNet acted as United’s agent and/or Apple’s agent
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`with respect to the authorization for Patient D.B.'s care.
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`16. OrthoNet’s letter states that they received a request to review
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`inpatient services for Patient D.B. and based on the information submitted, they
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`determined that the treatment was medically necessary. OrthoNet determined
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`treatment was to be performed as inpatient and the healthcare professional was to
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`be Dr. Adebukola Onibokun. Service Ref #: A038972049.
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`17. Given that Patient D.B. carried an identification card
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`identifying Patient D.B. as belonging to a health plan sponsored, paid for, and/or
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`administered by Defendants, on or about 8 February 2018, staff at California Spine
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`telephoned United to verify Patient D.B.'s medical eligibility benefits. A United
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`client services representative – acting on behalf of Defendants – verified Patient
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`D.B.'s healthcare coverage under a health benefit plan sponsored, paid for and/or
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`administered by Defendants. The representative either expressly or impliedly
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`assured California Spine that Defendants carried the financial responsibility to pay
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`for Patient D.B.'s anticipated medical care at 70% of the usual and customary value
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`for such care.
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`22855
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`- 6 -
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`SECOND AMENDED COMPLAINT FOR DAMAGES
`FOR: 1. BREACH OF IMPLIED IN FACT
`CONTRACT; 2. BREACH OF EXPRESS CONTRACT;
`AND, 3. QUANTUM MERUIT.
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`

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`Case 5:19-cv-02417-LHK Document 30 Filed 10/17/19 Page 7 of 22
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`18. California Spine was informed that Patient D.B. was the
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`subscriber of the plan. At time of insurance verification, $499.68 of the $700
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`individual deductible had been met. Resulting in a remaining $200.32 deductible.
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`19. On or about 8 February 2018, California Spine was informed by
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`United’s client services representative, known as "Celine D.,” of Patient D.B.'s
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`benefits regarding outpatient procedures such as spine surgery and using a provider
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`who is non-contracted with Apple.
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`20. On 5 March 2018, based upon existence of an identification
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`card issued by United and Apple, the phone call with Apple, the prior authorization
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`issued by OrthoNet on behalf of United, and the express and/or implied resultant
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`assurances that California Spine would be paid at least 70% of the usual and
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`customary value of its medical services anticipated to be rendered to Patient D.B.,
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`California Spine provided medically necessary and minimally invasive spine
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`surgeries upon Patient D.B. performed by Dr. Onibokun; namely, spinal fusion
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`surgery with insertion of a device and spinal decompression surgery.
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`21. As directed by Patient D.B.'s United/Apple identification card,
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`California Spine timely and properly submitted a bill to United for medically
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`necessary services, supplies, and/or equipment it rendered to Patient D.B. in the
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`amount of $157,500 which represents California Spine's usual and customary
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`charges for such services (and such care's reasonable and customary value). By
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`doing so, California Spine expected Defendants to pay a minimum of 70% of the
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`usual and customary value for such care.
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`22. Defendants paid only $60,330.30 of the $157,500 bill for the
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`medically necessary procedures and treatment rendered to Patient D.B. by
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`22855
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`- 7 -
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`SECOND AMENDED COMPLAINT FOR DAMAGES
`FOR: 1. BREACH OF IMPLIED IN FACT
`CONTRACT; 2. BREACH OF EXPRESS CONTRACT;
`AND, 3. QUANTUM MERUIT.
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`Case 5:19-cv-02417-LHK Document 30 Filed 10/17/19 Page 8 of 22
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`California Spine. According to the Provider Remittance Advice (“RA”) generated
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`by United, United allowed $153,000 of the total charges, marked as $155,000
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`instead of the billed $157,500, and indicated that the $153,000 was to be the claim
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`payment amount. The RA also specified that Patient D.B.’s responsibility was
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`$2,000. Starting from the $153,000 allowed amount, after the $200.32 remaining
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`deductible, accounting for the 30% discount from California Spine's usual and
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`customary rates, and subsequently, crediting the $60,330.30 payment, Defendants
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`have failed to pay the balance of $46,629.47 for the medical care rendered to
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`Patient D.B.
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`23. As a result of Defendant's refusal to fully pay California Spine
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`for the medically necessary procedures and treatment rendered to Patient D.B.,
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`California Spine has been damaged in the amount of $46,629.47, exclusive of
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`prejudgment interest.
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`Patient L.M.
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`24. California Spine is informed and believes and on that basis
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`alleges that all relevant times Patient L.M. (Member ID: 942498952)¹ was a
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`beneficiary of a health plan sponsored, paid for, and/or administered by
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`Defendants. To signify such membership, Apple authorized United to issue Patient
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`L.M. a United/Apple identification card and instructed Patient L.M. to present that
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`card to medical providers (including California Spine) in order to obtain medical
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`care. United and Apple did so with the intent to assure medical providers that they
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`would be paid for medical care rendered to Apple's beneficiaries at a percentage of
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`the usual and customary value for such care (unless a medical provider had a pre-
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`existing contractual relationship with United to provide such medical care at
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`certain set discounted rates).
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`22855
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`- 8 -
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`SECOND AMENDED COMPLAINT FOR DAMAGES
`FOR: 1. BREACH OF IMPLIED IN FACT
`CONTRACT; 2. BREACH OF EXPRESS CONTRACT;
`AND, 3. QUANTUM MERUIT.
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`

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`Case 5:19-cv-02417-LHK Document 30 Filed 10/17/19 Page 9 of 22
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`25. Patient L.M.'s Apple medical plan administered by United is
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`Apple Plus PPO Plan, the same plan as Patient D.B., earlier mentioned in
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`paragraph 12. According to plan's summary outlined in the Apple Benefits Book
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`effectuated January 2017, beneficiaries under the Apple Plus PPO Plan may
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`receive care from any provider, including an out-of-network provider. The benefits
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`for using an out-of-network provider read as:
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`“When you receive care through an out-of-network provider, the plan
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`pays 70% of eligible expenses after the out-of-network deductible is
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`met, and benefits are based on usual, customary, and reasonable
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`(UCR) rates."
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`Page 39 of Apple Benefits Book. (Same as ¶ 12.)
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`26. Patient L.M. presented symptoms of progressively worsening
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`lower back pain and bilateral gluteal pain prior to Patient L.M.'s initial consultation
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`with California Spine. Patient L.M. sought the medical services of California
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`Spine in order to alleviate Patient L.M.'s pain caused by herniated discs in the
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`lumbar spine resulting in nerve root compression.
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`27. Given that Patient L.M. carried an identification card
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`identifying Patient L.M. as belonging to a health plan sponsored, paid for, and/or
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`administered by Defendants, on or about 19 July 2018, staff at California Spine
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`telephoned United to verify Patient L.M.’s medical eligibility benefits. A United
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`client services representative – acting on behalf of Defendants – verified Patient
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`L.M.'s healthcare coverage under a health benefit plan sponsored, paid for and/or
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`administered by Defendants. The representative either expressly or impliedly
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`assured California Spine that Defendants carried the financial responsibility to pay
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`for Patient L.M.'s anticipated medical care at 70% of the usual and customary
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`value for such care (and not at a certain adjusted rate because California Spine had
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`22855
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`- 9 -
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`SECOND AMENDED COMPLAINT FOR DAMAGES
`FOR: 1. BREACH OF IMPLIED IN FACT
`CONTRACT; 2. BREACH OF EXPRESS CONTRACT;
`AND, 3. QUANTUM MERUIT.
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`

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`Case 5:19-cv-02417-LHK Document 30 Filed 10/17/19 Page 10 of 22
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`no pre-existing contractual relationship with United or Apple).
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`28. On or about 19 July 2018, California Spine was informed by
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`United client services representative, known as "Keith S.," of Patient L.M.'s
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`benefits regarding outpatient procedures such as spine surgery and using a provider
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`who is non-contracted with Apple.
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`29. Also, on or about 19 July 2018, United's client services
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`representative represented to California Spine that under the terms of Patient
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`L.M.’s health plan, no pre-authorization was required for outpatient procedures
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`such as the surgeries received by Patient L.M.
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`30. On 19 July 2018, based upon existence of an identification card
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`issued by United and Apple, the telephone call with Apple, and the express and/or
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`implied resultant assurances that California Spine would be paid at least 70% of
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`the usual and customary value of its medical services anticipated to be rendered to
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`Patient L.M., California Spine provided medically necessary and minimally
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`invasive spine surgeries upon Patient L.M. performed by Dr. Onibokun; namely,
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`the removal of portions of herniated lumbar discs.
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`31. As directed by Patient L.M.'s United/Apple identification card,
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`California Spine timely and properly submitted a bill to United for medically
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`necessary services, supplies, and/or equipment it rendered to Patient L.M. in the
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`amount of $91,500 which represents California Spine’s usual and customary
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`charges for such services (and such care's reasonable and customary value). By
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`doing so, California Spine expected Defendants to pay a minimum of 70% of the
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`usual and customary value for such care rendered to Patient L.M.
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`22855
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`- 10 - SECOND AMENDED COMPLAINT FOR DAMAGES
`FOR: 1. BREACH OF IMPLIED IN FACT
`CONTRACT; 2. BREACH OF EXPRESS CONTRACT;
`AND, 3. QUANTUM MERUIT.
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`Case 5:19-cv-02417-LHK Document 30 Filed 10/17/19 Page 11 of 22
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`32. California Spine was informed that Patient L.M. was a
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`spouse/dependent of the plan. At time of insurance verification, $1,212 of the
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`$1,800 family deductible had been met. Resulting in a remaining $588 deductible.
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`33. Defendants paid only $4,969.27 of the $91,500 bill for the
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`medically necessary procedures and treatment rendered to Patient L.M. by
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`California Spine. After crediting Patient L.M.’s remaining deductible of $588,
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`accounting for the 30% discount from California Spine’s usual and customary
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`rates, and crediting payment of $4,969.27 and previous payment of $2,530.73,
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`Defendants have failed to pay the balance of $56,138.40 for the medical care
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`rendered to Patient L.M.
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`34. As a result of Defendant's refusal to fully pay California Spine
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`for the medically necessary procedures and treatment rendered to Patient L.M.,
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`California Spine has been damaged in the amount of $56,138.40, exclusive of
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`prejudgment interest.
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`Patient M.B.
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`35. California Spine is informed and believes and on that basis
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`alleges that all relevant times Patient M.B. (Member ID: 908422262)¹ was a
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`beneficiary of a health plan sponsored, paid for, and/or administered by
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`Defendants. To signify such membership, Apple authorized United to issue Patient
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`M.B. a United/Apple identification card and instructed Patient M.B. to present that
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`card to medical providers (including California Spine) in order to obtain medical
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`care. United and Apple did so with the intent to assure medical providers that they
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`would be paid for medical care rendered to Apple's beneficiaries at a percentage of
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`the usual and customary value for such care (unless a medical provider had a pre-
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`existing contractual relationship with United to provide such medical care at
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`22855
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`
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`- 11 - SECOND AMENDED COMPLAINT FOR DAMAGES
`FOR: 1. BREACH OF IMPLIED IN FACT
`CONTRACT; 2. BREACH OF EXPRESS CONTRACT;
`AND, 3. QUANTUM MERUIT.
`
`

`

`Case 5:19-cv-02417-LHK Document 30 Filed 10/17/19 Page 12 of 22
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`certain set discounted rates).
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`36. Patient M.B.'s Apple medical plan administered by United is
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`Apple Saver PPO Plan. According to plan's summary outlined in the Apple
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`Benefits Book effectuated January 2017, beneficiaries under the Apple Saver PPO
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`Plan may receive care from any provider, including an out-of-network provider.
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`The benefits for using an out-of-network provider read as:
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`“When you receive care through an out of network provider,
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`preventive care services are covered at 70 percent with no deductible,
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`and non-preventive care is covered at 70 percent after the deductible
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`based on usual, customary, and reasonable (UCR) rates within the
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`United States."
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`Page 31 of Apple Benefits Book.
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`37. Patient M.B. presented symptoms of severe lower back pain
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`and bilateral lower extremity pain prior to Patient M.B.'s initial consultation with
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`California Spine. Patient M.B. sought the medical services of California Spine in
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`order to alleviate Patient M.B's pain caused by a stress fracture in the vertebrae and
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`by an enlarged joint in the spinal canal.
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`38. Given that Patient M.B. carried an identification card
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`identifying Patient M.B. as belonging to a health plan sponsored, paid for, and/or
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`administered by Defendants, on or about 31 January 2018, staff at California Spine
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`telephoned United to verify Patient M.B.'s medical eligibility benefits. A United
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`client services representative – acting on behalf of Defendants – verified Patient
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`M.B.'s healthcare coverage under a health benefit plan sponsored, paid for and/or
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`administered by Defendants. The representative either expressly or impliedly
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`assured California Spine that Defendants carried the financial responsibility to pay
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`22855
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`
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`- 12 - SECOND AMENDED COMPLAINT FOR DAMAGES
`FOR: 1. BREACH OF IMPLIED IN FACT
`CONTRACT; 2. BREACH OF EXPRESS CONTRACT;
`AND, 3. QUANTUM MERUIT.
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`

`

`Case 5:19-cv-02417-LHK Document 30 Filed 10/17/19 Page 13 of 22
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`for Patient M.B.'s anticipated medical care at 70% of the usual and customary
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`value for such care (and not at a certain adjusted rate because California Spine had
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`no pre-existing contractual relationship with United or Apple).
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`39. On or about 31 January 2018, California Spine was informed by
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`United client services representative, known as "Shirley S.," of Patient M.B.'s
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`benefits regarding outpatient procedures such as spine surgery and using a provider
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`who is non-contracted with Apple.
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`40. Also, on or about 31 January 2018, United's client services
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`representative represented to California Spine that under the terms of Patient
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`M.B.'s health plan, no pre-authorization was required for outpatient procedures
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`such as the surgeries received by Patient M.B.
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`41. On 16 July 2018, based upon existence of an identification card
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`issued by United and Apple, the telephone call with Apple, and the express and/or
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`implied resultant assurances that California Spine would be paid at least 70% of its
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`usual and customary value of its medical services anticipated to be rendered to
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`Patient M.B., California Spine provided medically necessary and minimally
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`invasive spine surgeries upon Patient M.B. performed by Dr. Onibokun; namely,
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`spinal fusion surgery with insertion of a device and spinal decompression surgery.
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`42. As directed by Patient M.B.'s United/Apple identification card,
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`California Spine timely and properly submitted a bill to United for medically
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`necessary services, supplies, and/or equipment it rendered to Patient M.B. in the
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`amount of $170,000 which represents California Spine’s usual and customary
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`charges for such services (and such care's reasonable and customary value). By
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`doing so, California Spine expected Defendants to pay a minimum of 70% of the
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`22855
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`
`
`- 13 - SECOND AMENDED COMPLAINT FOR DAMAGES
`FOR: 1. BREACH OF IMPLIED IN FACT
`CONTRACT; 2. BREACH OF EXPRESS CONTRACT;
`AND, 3. QUANTUM MERUIT.
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`Case 5:19-cv-02417-LHK Document 30 Filed 10/17/19 Page 14 of 22
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`usual and customary value for such care once Patient M.B.’s deductible is met.
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`43. California Spine was informed that Patient M.B. was a
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`spouse/dependent of the plan. At time of insurance verification, $2,412.75 of the
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`$3,000 family deductible had been met. Resulting in a remaining $587.25
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`deductible.
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`44. Defendants paid only $14,447.13 of the $170,000 bill for the
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`medically necessary procedures and treatment rendered to Patient M.B. by
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`California Spine. After crediting Patient M.B.’s remaining deductible of $587.25,
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`accounting for the 30% discount from California Spine’s usual and customary
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`rates, and crediting payment of $14,447.13, Defendants have failed to pay the
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`balance of $104,141.79 for the medical care rendered to Patient M.B.
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`45. As a result of Defendant's refusal to fully pay California Spine
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`for the medically necessary procedures and treatment rendered to Patient M.B.,
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`California Spine has been damaged in the amount of $104,141.79, exclusive of
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`prejudgment interest.
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`FIRST CAUSE OF ACTION
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`(BREACH OF IMPLIED IN FACT CONTRACT)
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`(Against all Defendants)
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`46. California Spine incorporates by reference and re-alleges
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`paragraphs 1 through 45 here as though set forth in full.
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`47. As is custom and practice in the health care industry, sometimes
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`hospitals and health plans form contracts through their conduct even though they
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`22855
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`
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`- 14 - SECOND AMENDED COMPLAINT FOR DAMAGES
`FOR: 1. BREACH OF IMPLIED IN FACT
`CONTRACT; 2. BREACH OF EXPRESS CONTRACT;
`AND, 3. QUANTUM MERUIT.
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`Case 5:19-cv-02417-LHK Document 30 Filed 10/17/19 Page 15 of 22
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`do not exchange express promises; contracts under which a medical provider
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`agrees to render medically necessary health care to a beneficiary of a health plan
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`and in return the health plan agrees to pay for such health care at the usual,
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`customary, and reasonable value of such care (typically at the medical provider's
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`billed rates). Such implied-in-fact contracts can arise from a variety of manifested
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`conduct which includes, among other things, when a health plan issues an
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`identification care to its beneficiaries, when a health plan instructs those
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`beneficiaries to present such identification cards to medical providers so as to give
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`assurances to those medical providers that such care will be paid for, when a
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`medical provider telephones a health plan to ask for authorization to render
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`medical care for a particular beneficiary of that health plan, when the health plan
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`communicates medical eligibility benefits for that particular beneficiary without
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`advising the medical provider that the health plan will not make full payment, and
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`when the health plan indicates pre-authorization is not required for outpatient
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`medical services for that beneficiary.
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`48. On various dates, California Spine contacted United for the
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`purposes of determining whether Defendants would be financially responsible for
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`paying for the medical services to be rendered to Patient D.B., Patient L.M., and
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`Patient M.B. In response, United's client services representatives gave California
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`Spine information confirming that Patient D.B., Patient L.M., and Patient M.B.
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`each belonged to a health plan sponsored, administered, and/or paid for by
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`Defendants, and confirmed that they would pay at least 70% of the usual and
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`customary value of California Spine’s care less credit for these patients’ deductible
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`obligations.
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`49. By such conduct and assurances, and by virtue of custom and
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`practice within the hospital reimbursement industry, it was understood between
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`22855
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`- 15 - SECOND AMENDED COMPLAINT FOR DAMAGES
`FOR: 1. BREACH OF IMPLIED IN FACT
`CONTRACT; 2. BREACH OF EXPRESS CONTRACT;
`AND, 3. QUANTUM MERUIT.
`
`

`

`Case 5:19-cv-02417-LHK Document 30 Filed 10/17/19 Page 16 of 22
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`
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`California Spine and Defendants that Defendants would pay at least 70% of the
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`usual and customary value of California Spine’s anticipated medically necessary
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`services, supplies, and/or equipment to be rendered to Patient D.B., Patient L.M.,
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`and Patient M.B.; in other words, an implied-in-fact contract arose between
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`California Spine and Defendants even though express words of assent were not
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`used.
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`50. Consistent with the terms of that implied-in-fact contract, on
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`their respective dates, Dr. Onibokun of California Spine performed medically
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`necessary and minimally invasive spine surgeries upon Patient D.B., Patient L.M.,
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`51. California Spine reasonably relied on that conduct and
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`representations. In the absence of such conduct and representations by Defendants'
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`agent at United, California Spine could have made alternative payment
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`arrangements for Patient D.B., Patient L.M., and Patient M.B.'s medical care or
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`could have ch