Legal and Factual Issues
Heinz also asserts that Anthem and/or CalPERS, separately, severally, or jointly, (1) breached their contractual duties, (2) misrepresented in a manner that perpetrated a fraud on plan participants, (3) omitted material terms, (4) breached their fiduciary duties including failed to adequately disclose, including that they were offering a nonstandard PPO plan that produced a greatly reduced “Allowable Amount” for non-emergency “out-of-network” medical expenses; (5) failed to act consistent with their legal, fiduciary, and other duties and obligations under law and statute, (6) failed to act in good faith and deal fairly, and (7) otherwise acted unlawfully or incorrectly as described herein.
Heinz individually and as a representative of a proposed class of those similarly situated also asserts claims against CalPERS and/or Anthem, individually, severally, or jointly, for (1) breach of contract, (2) misrepresentation, (3) breach of the implied covenant of good faith and fair dealing, (4) unlawful, unfair and fraudulent business practices, (5) conversion, (6) unjust enrichment, (7) accounting, (8) breach of their various fiduciary duties, and (9) breaches of their various other duties.
- Common factual issues predominate, including: (1) What are appropriate benchmarks or bases for determining the “Allowable Amount” and reimbursement for “out-of-network” non-emergency medical services under the PPO coverage? (2) Did CalPERS and Anthem use appropriate benchmarks or other industry standards for calculating “Allowable Amounts” and reimbursement for out-of-network non-emergency medical services in the PPO coverages?
- Common legal and contract interpretation issues predominate, including:
- Do the Knox Keene Act statutes in Health and Safety Code§1340 et seq and regulations 28 CCR § 1300.71 et seq. apply in whole or in part?
- Should the totality of the language, examples, and terms in the EOC be considered?
- Does the language and placement of the third subpart of the “Allowable Amount” definition in the Evidence of Coverage (EOC) allow Anthem and/or CalPERS unfettered discretion to calculate the “Allowable Amount” for purposes of reimbursement at rates substantially below (i) the contracted rate; (ii) the “usual, customary, and reasonable” (UCR) rate, and (iii) other prevailing standards?
- Did CalPERS violate its fiduciary duties, including by the reduced “Allowable Amount,” unreasonably low reimbursement, inadequate oversight of Anthem, inadequate disclosure, or other acts or omissions? For example, although CalPERS could provide Anthem additional “compensation based on carrier performance” under Government Code22864(b)(1), did any “performance-based compensation” paid to Anthem breach CalPERS’ duty of loyalty to class members that contracted for PPO health insurance coverage by compensating Anthem for reducing the reimbursement to those class members?
- Did CalPERS and/or Anthem breach the PPO contract(s) by the greatly reduced “Allowable Amount,” unreasonably low reimbursement, inadequate disclosure, or other acts or omissions?
- Did CalPERS and/or Anthem misrepresent, undertake unfair business practices, unjustly enrich themselves, or by act or omission violate Plaintiffs’ legal rights raised herein?