Bhatt v. Department of Health Services

• Decision Date: 05 October 2005
• Docket Number: No. B179321.,B179321.
• Citation: 35 Cal.Rptr.3d 335,133 Cal.App.4th 923
• Court: California Court of Appeals Court of Appeals
• Parties: Shaileshkumar BHATT, Plaintiff and Appellant, v. The DEPARTMENT OF HEALTH SERVICES FOR the STATE of California, Defendant and Respondent.

35 Cal.Rptr.3d 335

133 Cal.App.4th 923

Shaileshkumar BHATT, Plaintiff and Appellant, v. The DEPARTMENT OF HEALTH SERVICES FOR the STATE of California, Defendant and Respondent.

No. B179321.

Court of Appeal, Second District, Division Two.

October 5, 2005.

As Modified October 27 and November 4, 2005.

Norman L. Schafler, Los Angeles, for Plaintiff and Appellant.

Bill Lockyer, Attorney General, Thomas R. Yanger, Assistant Attorney General, John H. Sanders and Susan A. Nelson, Deputy Attorneys General, for Defendant and Respondent.

DOI TODD, J.

Appellant Shaileshkumar Bhatt appeals from the judgment denying his petition for writ of administrative mandamus following an audit of his dental practice by respondent The Department of Health Services for the State of California (the Department). Two questions are presented here: (1) Whether reports prepared by a fiscal intermediary on behalf of the Department qualify as official records pursuant to Evidence Code section 1280, and (2) whether a dentist working for a dentist enrolled in the Denti-Cal/Medi-Cal program must also be enrolled in the program in order to receive payments from Denti-Cal for services rendered. We conclude that the answer to both questions is yes. We affirm.

FACTUAL AND PROCEDURAL BACKGROUND

Appellant is a dentist who is enrolled as a Denti-Cal provider. Delta Dental, which is the "fiscal intermediary" for respondent's Denti-Cal/Medi-Cal program,¹ conducted an audit of appellant's records for the period of February 1, 1997 through February 1, 2000, and issued an audit report on May 3, 2001. The audit report found that there was inadequate or no documentation for certain billed services and that some of the dentists rendering services in appellant's office were not enrolled in the Denti-Cal program as required, entitling respondent to recover payment for the services. In response to the audit, appellant filed a statement of disputed issues. The Office of Medi-Cal Dental Services conducted an "on the record" review and issued a report of findings. Appellant disputed the findings and requested a formal hearing.

The matter was heard before respondent's Administrative Law Judge (ALJ) Robert L. Carisoza over three days on April 3 and September 4 and 5, 2002. Oral and documentary evidence was received. On the first day of the administrative hearing, Darrell Carlson, an employee of Delta Dental, which is a private company, testified that he had worked as an on-site representative for just over three years and that his duties included comparing patient records with information contained in each Medi-Cal patient's claim detail report (CDR) during an audit. He testified that a CDR shows the services rendered to the patient and the amount paid for each service by Denti-Cal, which is a division of Delta Dental. The information as to what services were rendered is taken by Denti-Cal from the claim forms submitted by the provider to Denti-Cal. Copies of the CDRs in the record show that they are entitled "California Dental—Medicaid Management Information System, Department of Health Services, Surveillance and Utilization Review, Recipient Claim Detail Report." Mr. Carlson did not personally prepare the CDRs, but retrieved them from a database.

On the last day of the evidentiary hearing, appellant's counsel objected to admission of the CDRs on the ground that they did not qualify as a business record exception to the hearsay rule under Evidence Code section 1271. ALJ Carisoza accepted the documents into evidence as hearsay.

On June 23, 2003, ALJ Carisoza issued a proposed decision granting appellant's appeal. ALJ Carisoza found: "Where timely objection is made to the introduction of the Department's Claim Detail Report (CDR), and the Department did not offer the testimony of any witness who could personally attest to the mode of preparation of the CDR, that document will only be admitted into the record as hearsay evidence. As hearsay evidence, the CDR alone cannot establish a finding of fact. The CDR was relied upon as evidence by the Department to demonstrate, inter alia, the types of services rendered by the Provider, the dates the services were rendered, and the amount paid by the fiscal intermediary for those services. Thereafter, the Department compared this information with the Provider's records and determined that the Denti-Cal program had overpaid the Provider. As no other evidence was introduced to establish the accuracy of the CDR, the Department has failed to establish the reliability of its audit findings."

On August 28, 2003, the proposed decision was rejected by Chief ALJ Robert D. Tousignant, and the parties were invited to submit additional briefing. Both parties submitted written arguments. On October 27, 2003, ALJ Tousignant issued his final decision granting the appeal in part and denying it in part. ALJ Tousignant found that while the CDR did not qualify as a business record under Evidence Code section 1271, it did qualify as an official record under Evidence Code section 1280, and was therefore admissible. He also found that the dentist who actually performed the dental services billed to Denti-Cal must be enrolled in the program. Of the nine dentists employed by appellant, three were not enrolled in Denti-Cal at the time the services were rendered. ALJ Tousignant therefore upheld respondent's disallowance of services provided by the unenrolled dentists.

On November 25, 2003, appellant filed a petition for writ of administrative mandamus in the superior court, in which he argued that the CDRs were inadmissible and asked the court to "enter judgment for Petitioner consistent with Judge Carisoza's Propose[d] Decision." In a supplemental brief, appellant argued that there was no statutory or other requirement that a dentist must be enrolled in Denti-Cal in order to bill for services rendered. Respondent opposed the petition and lodged the administrative record with the court. At the hearing on the petition, the trial court designated its tentative decision as the statement of decision. The court found that substantial evidence supported the finding that the CDRs were admissible as official records, and that as a matter of law Medi-Cal cannot be billed for services rendered by unenrolled dentists. Judgment was filed on November 1, 2004, and this appeal followed.

DISCUSSION

Standard of Review

Where, as here, the trial court was called upon to decide whether an agency's administrative decision was supported by substantial evidence, the function of the appellate court is the same as that of the trial court, that is, to review the administrative decision to determine whether it is supported by substantial evidence. (Taylor Bus Service, Inc. v. San Diego Bd. of Education (1987) 195 Cal.App.3d 1331, 1340, 241 Cal.Rptr. 379.) "Substantial evidence has been defined as relevant evidence that a reasonable mind might accept as adequate support for a conclusion. [Citation.] A presumption exists that an administrative action was supported by substantial evidence. [Citation.] The burden is on the appellant to show there is no substantial evidence whatsoever to support the findings of the [agency]." (Id. at pp. 1340-1341, 241 Cal.Rptr. 379.) However, to the extent pure questions of law were decided by the trial court upon undisputed facts, a de novo standard will apply at the appellate level. (Anserv Ins. Services, Inc. v. Kelso (2000) 83 Cal.App.4th 197, 204, 99 Cal.Rptr.2d 357.)

Official Records

Appellant contends that ALJ Tousignant's finding that the CDRs were admissible as official records cannot be upheld because there was no testimony given at the administrative hearing "to authenticate" these documents.

Evidence Code section 1280 provides: "Evidence of a writing made as a record of an act, condition, or event is not made inadmissible by the hearsay rule when offered in any civil or criminal proceeding to prove the act, condition, or event if all of the following applies: [¶] (a) The writing was made by and within the scope of duty of a public employee. [¶] (b) The writing was made at or near the time of the act, condition, or event. [¶] (c) The sources of information and method and time of preparation were such as to indicate its trustworthiness."

"Although similar to the business records exception (Evid.Code, § 1271), the official records exception differs in one important respect. Evidence Code section 1271 `requires a witness to testify as to the identity of the record and its mode of preparation in every instance. In contrast, [Evidence Code] [s]ection 1280 . . . permits the court to admit an official record or report without necessarily requiring a witness to testify as to its identity and mode of preparation if the court takes judicial notice or if sufficient independent evidence shows that the record or report was prepared in such a manner as to assure its trustworthiness.' [Citations.]" (People v. Dunlap (1993) 18 Cal.App.4th 1468, 1477, 23 Cal.Rptr.2d 204; People v. George (1994) 30 Cal.App.4th 262, 274, 35 Cal.Rptr.2d 750 [same].) "The object of this hearsay exception `is to eliminate the calling of each witness involved in preparation of the record and substitute the record of the transaction instead. [Citations.]'" (Gananian v. Zolin (1995) 33 Cal.App.4th 634, 639, 39 Cal.Rptr.2d 384.) "Accordingly, for the exception to apply, `[i]t is not necessary that the person making the entry have personal knowledge of the transaction. [Citations.]'" (Id. at pp. 639-640, 39 Cal.Rptr.2d 384.)

Under these principles, appellant's contention that it was necessary for a custodian or other qualified witness to testify as to the documents' identity and mode of preparation is without merit. On this basis alone we would conclude that appellant's appeal has no merit. In any event, we find that substantial evidence supports the administrative decision.

As to the first foundational requirement for an official record under Evidence Code...