Bay General Community Hospital v. County of San Diego

• Decision Date: 14 May 1984
• Court: California Court of Appeals Court of Appeals
• Parties: BAY GENERAL COMMUNITY HOSPITAL, Plaintiff and Appellant, v. COUNTY OF SAN DIEGO, et al., Defendants and Respondents. D000548. Civ. 26891.

Page 184

203 Cal.Rptr. 184

156 Cal.App.3d 944

BAY GENERAL COMMUNITY HOSPITAL, Plaintiff and Appellant, v. COUNTY OF SAN DIEGO, et al., Defendants and Respondents.

D000548.

Civ. 26891.

Court of Appeal, Fourth District, Division 1, California.

May 14, 1984.

Hearing Denied Aug. 9, 1984.

Bauer & Schultz, William J. Bauer and George J. Schultz, Bonita, for plaintiff and appellant.

Lloyd M. Harmon, Jr., County Counsel and Phillip L. Kossy, Deputy County Counsel, San Diego, for defendants and respondents.

Bruce Iwasaki, Pacoimo, Maria Rodriguez, San Francisco, and Mark Rosenbaum, Los Angeles, amicus curiae in support of plaintiff and appellant.

Alan K. Marks, County Counsel and Charles J. Larkin, Deputy County Counsel of San Bernardino County, San Bernardino, amicus curiae in support of defendants and respondents.

Floyd R.B. Viau, County Counsel and James B. Waterman, Asst. County Counsel, County of Fresno, Fresno, amicus curiae in support of defendants and respondents.

Gray, Cary, Ames & Frye and Harold C. Pope, San Diego, amicus curiae, the Hospital Council of San Diego and Imperial Counties for appellant.

STANIFORTH, Associate Justice.

Bay General Community Hospital's second amended complaint (complaint) is in the nature of a class action on behalf of all hospitals similarly situated in San Diego County (collectively, the Class or Bay General) and as assignee of the rights of an individual hospital patient, Feliciano Moreno Rios. Joined as defendants were the County of San Diego and the San Diego County Board of Supervisors (Board of Supervisors) as a group and as individuals (collectively, the County).

Bay General's action explores the parameters of Welfare & Institutions Code sections 17000 and 17003 and Government code section 29606 and seeks to compel the County (1) to reimburse the various private hospitals (the Class) for emergency medical care provided indigent residents and non-residents of San Diego County (i.e., to abandon its "no-reimbursement policy"); (2) to accept transfer to University of California-operated University Hospital of those indigent patients who were taken in by and treated for an emergency medical condition at a Class hospital (i.e., to abandon its policy of "no-transfer" of medically stabilized indigent patients from private hospitals to University Hospital, the County-subsidized hospital); (3) to modify in some unspecified way its criteria for determining indigency and admission of undocumented aliens and the "working poor" to County-supported hospital care. In its fourth cause of action, Bay General seeks to recover money in its individual capacity as assignee of Rios, an undocumented alien who was injured in an automobile accident near that hospital. Rios received medical services at Bay General in the monetary value of $11,225.25. These sums were not paid by Rios and have not been reimbursed by the County.

At the outset of the trial, the trial court granted the County's motion for judgment on the pleadings with respect to the fourth (Rios) cause of action on the ground of lack of standing. Trial then proceeded on the sole issue of "liability." After hearing the evidence the court granted defendants' motion for judgment pursuant to Code of Civil Procedure section 631.8. ¹ The court found no showing of fraud or arbitrary or capricious conduct concerning eligibility for or availability of indigent health care. Bay General appeals.

FACTS

For many years before 1966 the County owned and operated a county hospital. During that era, other hospitals (the Class here) were allowed to transfer an emergency patient to the county hospital once the patient's condition was stabilized. If the transferred patient was determined to be indigent, the transferring hospital was reimbursed by the County for the cost of emergency medical treatment.

In July 1966, the University of California Board of Regents leased the county hospital and thereafter operated it as University Hospital. From July 1966 to December 1972--when Medi-Cal regulations came into effect--University Hospital followed the same transfer and reimbursement policies as had its predecessor county hospital. Indigent emergency care patients were allowed to be transferred to University Hospital and the County reimbursed the transferring hospital, as well as University Hospital, for medical care rendered these patients.

In 1972 the County enacted certain procedural and policy regulations relating to County reimbursement for indigent emergency care which:

1. Refused reimbursement for medical care of any indigent emergency patient who received emergency medical care at a hospital other than University Hospital (the no-reimbursement policy); ²

2. Refused reimbursement to University Hospital for the emergency medical treatment of any indigent who was first treated at any other hospital in the County and then transferred to University Hospital after stabilization (the no-transfer policy) ³;

3. Set financial standards of indigency which mirror Medi-Cal financial criteria. As a consequence any person who is determined to be indigent according to County indigency standards is, ipso facto, eligible for Medi-Cal (the "financial component" of the County indigency criteria);

4. Adopted a definition of the term "lawful residence" in reliance upon Welfare and Institutions Code section 17000 ⁴ which excludes all persons whom the County believes to be undocumented aliens from provision of emergency medical services (the "residence component" of the County indigency criteria). ⁵

Conformable to the foregoing policies and procedures the County only reimburses for emergency medical treatment given:

(a) Persons who originally enter University Hospital in an emergency condition, who even if the County believes them unable to meet the residency component, meet the financial component of the County criteria for receipt of indigent medical care;

(b) Prisoners treated at University Hospital and, on very rare occasions, prisoners treated at other county hospitals;

(c) Persons initially treated for emergency conditions at University Hospital who are eligible for Medi-Cal, but who are so incapacitated due to drugs, alcohol or mental deficiencies that they are unable to complete the Medi-Cal process;

(d) Persons transferred to University Hospital out of "medical necessity" as described supra.

The County estimates the annual cost of indigent care presently shouldered by the Class at approximately $2 to $4 million. The County has no procedures whereby members of the Class may petition the County for reimbursement for indigent medical care they render. The County has no records which in any way reflect payments made by the County for indigent emergency care provided pursuant to section 17000.

In summary, the County presently pays for emergency medical care only for those indigent patients who are treated at University Hospital and who satisfy the financial component of the County's indigency standards. At present, whether a person is a "resident" does not enter into the County's decision to reimburse University Hospital for treatment of indigent patients.

DISCUSSION

I THE NO-REIMBURSEMENT POLICY

Bay General contends the County has a mandatory, statutory obligation to reimburse it and every member of the Class for costs of emergency medical care the Class delivers to indigents. This contention is primarily based upon section 17000 and Government Code Section 29606.

Section 17000 provides:

"Every county and every city and county shall relieve and support all incompetent, poor, indigent persons, and those incapacitated by age, disease, or accident, lawfully resident therein, when such persons are not supported and relieved by their relatives or friends, by their own means, or by state hospitals or other state or private institutions." (Emphasis added.)

Section 29606 provides:

"The necessary expenses incurred in the support of the county hospitals, almshouses, and the indigent sick and otherwise dependent poor, whose support is chargeable to the county, are county charges."

The board of supervisors of each county is required by section 17001 to adopt standards of aid and care for county indigents. Section 17003, also pertinent here, provides: "Every county may give such emergency relief to dependent nonresidents as the respective boards of supervisors deem necessary."

Finally, Section 17107 provides:

"The board of supervisors may establish its own policies with reference to the amount of property, if any, a person shall be permitted to have while receiving assistance, to the end that, so far as it is possible, an applicant for public relief shall be required to apply his own property to his support." (Emphasis added.)

The Supreme Court declared in Mooney v. Pickett, 4 Cal.3d 669, 94 Cal.Rptr. 279, 483 P.2d 1231: (1) "Section 17000 imposes a mandatory duty upon the counties to support 'all incompetent, poor, indigent persons and those incapacitated by age, disease or accident'." (Id., at p. 676, 94 Cal.Rptr. 279, 483 P.2d 1231; see also County of San Diego v. Viloria, 276 Cal.App.2d 350, 352, 80 Cal.Rptr. 869.) (2) Section 17001 places on the County a mandatory duty to implement the section 17000 directive with compatible regulations. (3) The obligation imposed by section 17000 is not necessarily satisfied by the existence of other specialized relief programs. In Mooney v. Pickett, supra, 4 Cal.3d at p. 681, 94 Cal.Rptr. 279, 483 P.2d 1231, it is stated, "[G]eneral assistance ... remains the residual fund from which indigents who cannot qualify for and under any specialized aid programs can still obtain the means of life." (4) The eligibility criteria imposed must carry out the objectives of the enabling legislation. (5) Regulations that arbitrarily exclude a class from eligibility for general assistance are invalid. (Rosas v. Montgomery, 10 Cal.App.3d 77, 92, 88 Cal.Rptr. 907, disapproved on another point in Woods v. Superior Court, ...