Conlan v. Bonta

• Decision Date: 30 September 2002
• Docket Number: No. A093003.,A093003.
• Citation: 125 Cal.Rptr.2d 788,102 Cal.App.4th 745
• Court: California Court of Appeals Court of Appeals
• Parties: Kevin CONLAN et al., Plaintiffs and Appellants, v. Diana M. BONTA, as Director, etc., et al., Defendants and Respondents.

125 Cal.Rptr.2d 788

102 Cal.App.4th 745

Kevin CONLAN et al., Plaintiffs and Appellants, v. Diana M. BONTA, as Director, etc., et al., Defendants and Respondents.

No. A093003.

Court of Appeal, First District, Division 3.

September 30, 2002.

As Modified on Denial of Rehearing October 29, 2002.

Michael D. Keys, Bay Area Legal Aid, San Francisco, CA, Michele Melden, Neighborhood Legal Services of Los Angeles County, Pacoima, CA, Richard A. Rothschild, Robert D. Newman, Western Center on Law & Poverty, Los Angeles, CA, Counsel for appellants.

Bill Lockyer, Attorney General, James M. Humes, Ralph M. Johnson, Deputy Attorneys General, San Francisco, CA, Counsel for respondents.

POLLAK, J.

Petitioners and appellants (petitioners) are three beneficiaries of California's Medi-Cal program, a state-administered participant in the federal Medicaid program. Petitioners Asher Schwarzmer and Kevin Conlan requested and received fair hearings at which each asked an administrative law judge (AL J) to order the State Department of Health Services (DHS or the Department) to reimburse him directly for covered expenses that he had paid while his Medi-Cal application was pending. Petitioner Thomas Stevens requested a fair hearing to recover reimbursement for copayments he had erroneously paid his provider. Although there is no dispute as to whether each of the petitioners is entitled to reimbursement, their claims were dismissed on the ground that reimbursement must be obtained from the provider of the services and that there is no procedure under which a Medi-Cal recipient may obtain reimbursement directly from DHS. The petitioners' application for a writ of mandate in the superior court, sought under Code of Civil Procedure sections 1094.5 and 1085, was denied on much the same ground. We conclude that the state has failed to establish a reasonable procedure by which recipients may obtain prompt reimbursement for covered services for which they paid during the three months prior to applying for Medi-Cal coverage, as required by federal law, and that DHS therefore should have been ordered to take appropriate measures to ensure that at least two of the petitioners receive their reimbursement.

Facts¹

Petitioner Asher Schwarzmer applied for Supplemental Security Income/State Supplementary Program (SSI/SSP) in August 1992, and benefits were granted to him in August 1994. He was then granted Medi-Cal benefits retroactive to May 1992. From 1993 to 1994, while awaiting a decision on his SSI/SSP application, Schwarzmer paid for office visits with his provider. After Schwarzmer was granted retroactive benefits, the provider wrote multiple letters to DHS seeking payment for the services for which Schwarzmer had paid, so that Schwarzmer could be reimbursed, but despite persistent appeals has not been entirely successful in obtaining these payments and therefore has not fully reimbursed Schwarzmer.² Schwarzmer sought direct reimbursement from DHS. After a hearing, the ALJ denied his request for direct reimbursement on the ground that the Department lacked jurisdiction. The ALJ stated that Schwarzmer's remedy was to have the provider pursue the "provider appeal process." The ALJ reasoned that "[s]tate hearings are limited in jurisdiction to disputes between applicants and recipients of aid and the DHS or county welfare departments. The claimant's primary complaint concerns reimbursement from a provider and that provider's problems with the fiscal intermediary.... [¶] Nor is there any authority in state law or state regulation to order the state to circumvent the fiscal intermediary and pay the claimant directly for his out of pocket expenses."

In 1997, petitioner Kevin Conlan applied for Aid to Families with Dependent Children (AFDC), a form of Medi-Cal benefit.³ Conlan applied for these benefits as the father of an unborn child. He was not eligible for the benefits until the child was born so the application was not processed immediately. The child was born in October 1997, and the application was granted in April 1998. Once granted, Conlan's benefits were retroactive to October 1997. After he received his Medi-Cal card, he presented it to his medical provider and requested that the provider bill DHS for the services that Conlan had already paid for, but the provider refused to do so. Conlan requested a hearing with DHS to seek reimbursement for $2,196 in medical bills that he had been required to pay while his application was pending. Conlan testified at the hearing that he did not wish to file a complaint against the provider for fear of jeopardizing their relationship. As of the date of the hearing, Conlan had not requested direct reimbursement from DHS, but before the ALJ issued a decision, he contacted both DHS's fiscal intermediary and DHS itself to request reimbursement. Both indicated that they would not directly reimburse Conlan and insisted that he seek reimbursement through his medical provider. Conlan was told that if his provider refused to cooperate, the only remedy was to file a complaint with the Department. Thereafter, his request for direct reimbursement was dismissed by the ALJ on the ground that there was no jurisdiction to order DHS to pay Conlan directly. The ALJ ruled: "It is undisputed that there is currently no procedure available to the claimant to request or obtain direct reimbursement from DHS or the county for the medical payments made by the claimant. Therefore, the county is correct in not assisting the claimant with obtaining reimbursement directly from DHS."

From August 1994 through June 1996, petitioner Thomas Stevens made approximately $1,374 in copayments for prescription medications. During this time, he was insured by a Blue Cross Health Maintenance Organization and participated in the Health Insurance Premium Payment Medi-Cal Program (HIPP). Under HIPP, Medi-Cal pays insurance premiums for individuals who had private insurance prior to becoming eligible for Medi-Cal benefits. Recipients thus avoid a disruption in benefits. As a participant in HIPP, Stevens was not obligated to make drug copayments of more than one dollar. He did not become aware of this fact, however, until June 18, 1996, when he called a Medi-Cal information line. On June 19, 1996, Stevens requested a hearing, asking that DHS reimburse him directly for the copayments he erroneously made. DHS argued that Stevens had notice of the copay provisions in the booklet "Medi-Cal, What It Means To You" and that the pharmacy had been issued guidelines explaining Medi-Cal coverage of copayments and refunds of copayments erroneously collected. The ALJ denied Stevens' request for direct payment on the ground that his dispute was with his provider, not with DHS, and that there is no authority for ordering direct payments to a Medi-Cal recipient.⁴

Procedural History

After denial of their fair hearing claims, petitioners jointly brought a petition for writ of mandate in San Francisco Superior Court. The petition was framed as one for both administrative mandamus under Code of Civil Procedure section 1094.5 and ordinary mandamus under Code of Civil Procedure section 1085. In their petition under section 1094.5, petitioners asked the court to order DHS to directly reimburse them for the covered out-of-pocket expenses they paid. Under section 1085, petitioners asked the court to "compel respondents to ensure that Medi-Cal recipients who incur out-of-pocket medical expenses during the period of time covered by their Medi-Cal eligibility and which are eligible for coverage by Medi-Cal are able to secure reimbursement of these costs by means of corrective payments."

The trial court concluded that "[t]he exclusive remedy to attack the legality of [the] decisions is pursuant to CCP 1094.5 ..." and that "Petitioners are not entitled to ordinary mandamus review." The court denied the petition, holding that the failure to provide direct reimbursement did not violate the "promptness" requirement of Welfare and Institutions Code section 10000, the "amount of aid" provisions of section 10500, the fair hearing provisions of section 10950, or the corrective payment provision of 42 Code of Federal Regulations section 431.246. The court further held that Welfare and Institutions Code section 14019.3, which provides that in cases such as these, the recipient "shall be entitled to a refund from the provider," requires that reimbursement be made by the medical provider and satisfies the Department's statutory mandate to make medical assistance available.

Discussion

Petitioners Are Entitled to Seek Appropriate Relief Under Both Code of Civil Procedure Sections 1094.5 and 1085

Although this petition was properly presented under Code of Civil Procedure section 1094.5, relief is also available under section 1085 for reasons that will be explained in the discussion that follows. Administrative mandamus under section 1094.5 is appropriate to inquire "into the validity of any final administrative order or decision made as the result of a proceeding in which by law a hearing is required to be given, evidence is required to be taken, and discretion in the determination of facts is vested in the inferior tribunal...." (Code Civ. Proc, § 1094.5, subd. (a).) By comparison, a writ of mandate under section 1085 is available where the petitioner has no plain, speedy and adequate alternative remedy; the respondent has a clear, present and usually ministerial duty to perform; and the petitioner has a clear, present and beneficial right to performance. (Unnamed Physician v. Board of Trustees of Saint Agnes Medical Center (2001) 93 Cal.App.4th 607, 618, 113 Cal. Rptr.2d 309; Payne v. Superior Court (1976) 17 Cal.3d 908, 925, 132 Cal.Rptr. 405, 553 P.2d 565; Barnes v. Wong (1995) 33 Cal.App.4th 390, 394, 39 Cal.Rptr.2d 417; San Gabriel Tribune v. Superior Court (1983) 143 Cal.App.3d 762, 771, 192 Cal.Rptr. 415.) Where a petition challenges an agency's failure to perform an act...