On October 28, 2020, attorneys Jin Hee Park and Paul Buckley won a motion for judgment on the pleadings in a health care reimbursement arbitration.  Acute care hospitals had filed an arbitration demand against Taylor | Anderson, LLP’s client, a healthcare insurance company, alleging breach of the parties’ written agreement by underpaying the claims.  Ms. Park and Mr. Buckley successfully argued that the contractual statute of limitations barred the hospitals’ claims, resulting in a dismissal of the entire breach of contract case.    

All states have codified statutes of limitation.  In California, the codified statute of limitations provides that claims for breach of contract must be commenced within 4 years for a written contract.  However, in California and in most states, if the parties have equal bargaining power they may agree to shorten or extend the statutory limitations period.  Under California law, the statute of limitations “clock” starts once the insurer has issued an unequivocal denial of payment in writing.  In the healthcare reimbursement context, when there is no specific provision in the parties’ contract regarding when the clock starts to run, California courts have held that the date of Explanation of Payment (EOP) or Explanation of Benefits (EOB) is the date the claim accrues for statute of limitations purposes.  Therefore, the clock would start from when the healthcare provider has knowledge of an unequivocal denial of payment from the EOP.

In our case, the parties’ agreement set forth a one-year time limit to pursue disputed claims in arbitration.  The central issue of this case was whether the claim accrued upon the initial EOP dates, or whether the provider dispute process would delay the start of the claim accrual when there is no specific provision in the agreement as to when the claim arose. 

Ms. Park and Mr. Buckley scrupulously reviewed the pertinent contract and successfully debunked the hospitals’ arguments that the claim arose after the provider dispute process was complete.  Upon considering the parties’ briefs, the arbitrator granted our client’s motion, permitting the Claimants leave to amend their claims within 15 days.  The hospitals never amended their demand, and the case closed on November 20, 2020, just five months after it was filed.   

 Taylor | Anderson, LLP attorneys excel in representing healthcare insurance companies in arbitration and in civil court.  For more information regarding our services in the healthcare arena, please contact Jin Hee Park at 858-224-1528; jhpark@talawfirm.com or Paul Buckley at 858-369-5140; pbuckley@talawfirm.com.

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