7th Mar 2017

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Kaiser; various Kaiser entities

Kaiser Health Plan, aka health plan

The health plan is a “health care service plan” defined under Health & Safety Code § 1345(f)(1), (also known as the Knox-Keene Healthcare Service Plan Act of 1975).  Compare § U11 UNDERWRITING [§ U11:2 Post-claim underwriting; health insurance].

 Health plans are not healthcare providers under any provision of law [Civil Code § 3428(c)] but health care service plans such as Kaiser Health “may employ, or contract with, any professional licensed in the state”.  [Health & Safety Code § 1395(b); see Gopal v. Kaiser Foundation Health Plan (2016) 248 Cal. App. 4th 425, 430]

Health plans are not vicariously liable for any negligent acts of any other separate Kaiser entity.  [Gopal v. Kaiser Foundation Health Plan (2016) 248 Cal. App. 4th 425, 431]  Compare § V10 VICARIOUS LIABILITY [§ V10:1 Vicarious liability rule in general]

Southern California Permanente Medical Group (SCPMG)

Kaiser Health Plan is a separate entity, separate from Southern California Permanente Medical Group.  Health plan has an exclusive contract with Southern California Permanente Medical Group.  Kaiser health plan is not, by statute, vicariously liable for the negligent acts of SCPMG.  [Gopal v. Kaiser Foundation Health Plan (2016) 248 Cal. App. 4th 425, 431; Health & Safety Code § 1371.25]  compare § F13 FARMERS INSURANCE

Kaiser Hospital

Kaiser hospitals are separate and distinct entities from the health plan and from Southern California Permanente Medical Group.  The health plan exclusively contracts with Kaiser Hospitals (a separate entity).  [Gopal v. Kaiser Foundation Health Plan (2016) 248 Cal. App. 4th 425, 430-431]  The health plan is not vicariously liable for acts of Kaiser Hospital.  The theory of joint enterprise liability or alter ego does not apply.  [Gopal v. Kaiser Foundation Health Plan (2016) 248 Cal. App. 4th 425, 431]  Compare § V10 VICARIOUS LIABILITY, COVERAGE FOR [§ V10:1 Vicarious liability: Rule in general].

Enterprise liability, alter ego theories

The doctrine of joint enterprise, or alter ego liability is applied when one corporation uses another to perpetrate fraud circumvent a statute, or accomplish other wrongful or inequitable purpose.  In these situations, a court may disregard the corporate entity and treat the respondent’s acts as if they were done by the persons actually controlling the corporation.  [Robbins v. Blecher (1997) 52 Cal. App. 4th 886, 892]  Corporate entities presumed to have separate existences, in a corporate form, will be disregarded only when the ends of justice require this result.  [Gopal v. Kaiser Foundation Health Plan (2016) 248 Cal. App. 4th 425, 431]

The two conditions generalized in liability required for the application of joint-enterprise-liability are:  (1) such a unity of interest and ownership that the separate corporate personalities are merged, so that one corporation is a mere adjunct of another or the two companies form a single enterprise; and (2) an inequitable result if the acts in question are treated as those of one corporation alone.  [Gopal v. Kaiser Foundation Health Plan (2016) 248 Cal. App. 4th 425, 431, (holding that the above principles do not apply to the Kaiser Foundation entities)]

References in bold are to Mr. Cornblum’s text CALIFORNIA INSURANCE LAW DICTIONARY AND DESK REFERENCE, 2016 Edition, published by ThomsonReuters (1-800-344-5008 to order 3-Volume text).

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