Roger v. Corvel Healthcare Corp. (Summary)

CONTRACT BREACH

Roger v. Corvel Healthcare Corp., No. G045935 (Cal. Ct. App. May 16, 2013)  

The Court of Appeal for the Fourth District of California affirmed a lower court’s order in favor of a medical provider network as to an orthopedic surgeon’s breach of contract claim.  The surgeon joined a medical provider network that specialized in workers’ compensation injuries. The surgeon commonly used four nonstandard treatments for his patients, none of which were recommended by the medical treatment schedule of the state workers’ compensation division. In order to circumvent this issue, the surgeon began upcoding his patients to similar tests that were approved by the state, even though the unapproved procedure was in fact being performed. The surgeon was often unreachable to discuss his patient care with independent physicians, often refusing to return calls unless explicitly requested. The physician was eventually terminated after refusing to comply with his contract.

The appellate court held that the network had ample ground to terminate the surgeon’s contract. The court stated that, while the surgeon’s contract did not require him to compromise his judgment, it did lay out a procedure for physicians who may want to utilize treatments not approved by the state. The surgeon did not follow any of these procedures which, according to the court, inflicted administrative costs on the network that it did not have to bear under its contract.

The appellate court also affirmed the process of termination, even though the network failed to follow the “three offenses” termination procedure.  The court held that the termination process itself was not a cause of the surgeon’s decline in business. Based on the surgeon’s refusal to follow the network’s guidelines, his termination was inevitable regardless of the process.