Marquez v. Dep't of Health Care Servs.

• Decision Date: 02 September 2015
• Docket Number: A140488
• Citation: 240 Cal.App.4th 87,192 Cal.Rptr.3d 391
• Court: California Court of Appeals Court of Appeals
• Parties: Maria MARQUEZ et al., Plaintiffs and Appellants, v. DEPARTMENT OF HEALTH CARE SERVICES et al., Defendants and Respondents.

240 Cal.App.4th 87

192 Cal.Rptr.3d 391

Maria MARQUEZ et al., Plaintiffs and Appellants,

v.DEPARTMENT OF HEALTH CARE SERVICES et al., Defendants and Respondents.

A140488

Court of Appeal, First District, Division 5, California.

Filed September 2, 2015

As Modified on Denial of Rehearing September 30, 2015

Western Center on Law and Poverty, Robert D. Newman and Richard A. Rothschild ; Bay Area Legal Aid, Michael Keys ; Youth Law Center, Alice Bussiere and Maria Ramiu ; Multiforum Advocacy Solutions, Lucy Quacinella for Plaintiffs and Appellants.

Neighborhood Legal Services of Los Angeles County, Catherine S. Murphy for Plaintiff and Appellant Maricella Rivera.

Abigail K. Coursolle, Kimberly Lewis and Shyaam Subramanian for National Health Law Program as Amicus Curiae on behalf of Appellants.

Kamala D. Harris, Attorney General, Julie Weng–Gutierrez, Assistant Attorney General, Susan M. Carson, Joshua N. Sondheimer and Cheryl L. Feiner, Deputy Attorneys General, for Defendants and Respondents.

NEEDHAM, J.

Pursuant to federal law, California's Medi–Cal program requires Medi–Cal beneficiaries to utilize services available through any other health coverage (OHC) they may have before accessing Medi–Cal benefits. To this end, respondent State Department of Health Care Services (DHCS) maintains a database with codes that indicate whether a Medi–Cal beneficiary has OHC and, to some extent, the type or scope of that coverage. These codes are available to Medi–Cal providers when a beneficiary seeks services.

Medi–Cal beneficiaries Maria Marquez, Maricella Rivera, and Robert Planthold (petitioners) sought a writ of mandate in the trial court under Code of Civil Procedure section 1085 to require respondents' compliance with their duties in administering this and related aspects of the Medi–Cal program. Because DHCS allegedly permits Medi–Cal providers to refuse nonemergency services to beneficiaries with OHC, and because the codes related to OHC are not always correct and the information maintained in the DHCS database is limited, petitioners argued that beneficiaries may be improperly denied service and referred to other health care providers even when, in reality, there is no OHC available for the requested service. As a result, petitioners urged, beneficiaries experience delays in receiving nonemergency care and, in some circumstances, may be subject to a higher copayment than permitted under Medi–Cal. Petitioners contended, among other things, that the assignment of an OHC code should trigger notice and a hearing. The trial court declined to issue a writ.

In this appeal, petitioners claim entitlement to a writ of mandate requiring respondents to (1) comply with Welfare and Institutions Code section 10950 ( section 10950 ) and California Code of Regulations, title 22, section 50951 (regulation 50951) by providing notice and an opportunity for a hearing whenever DHCS assigns a new or different OHC code to a beneficiary; (2) comply with the due process clauses of the California Constitution by providing such notice and opportunity for a hearing; and (3) comply with duties under state and federal law to provide medically necessary services to Medi–Cal beneficiaries when those services are not actually available from OHC, provide such services promptly and humanely, ensure that beneficiaries are not required to pay copayments above those permitted by federal law, and follow "pay-and-chase" procedures for prenatal or pediatric preventive care and for beneficiaries who have medical support orders.

We conclude that neither section 10950 nor regulation 50951 nor the California Constitution requires DHCS to provide a hearing or notice whenever it assigns a new or different code with respect to OHC. We further conclude that petitioners have not established any violation by respondents of a ministerial duty subject to enforcement by a writ of mandate. We therefore affirm the judgment.

I. FACTS AND PROCEDURAL HISTORY

We begin with an overview of California's Medi–Cal program for context, and then discuss the parties' factual and legal contentions in this litigation.

A. California's Medi–Cal Program

Medi–Cal is California's program under the joint federal-state program known as Medicaid. ( Welf. & Inst.Code, § 14000 et seq. ) Medicaid provides federal financial assistance to participating states to support the provision of health care services to certain categories of low-income individuals and families, including the aged, blind, and disabled, as well as pregnant women and others. ( 42 U.S.C. § 1396 et seq. )

Because California has opted to participate in the Medicaid program and receive federal matching funds, it must comply with all federal Medicaid requirements. ( Conlan v. Bontá (2002) 102 Cal.App.4th 745, 753, 125 Cal.Rptr.2d 788 ( Conlan ).) Among other things, the state must administer its Medicaid program through a plan that has been approved by the federal Centers for Medicare and Medicaid Services (CMS). (See 42 U.S.C. § 1396a ; 42 C.F.R. §§ 430.10, 430.15(b) (2014) ; Welf. & Inst.Code, § 14100.1.)

By state statute, Medi–Cal is intended to provide, to the extent practicable, medically necessary care to California residents "who lack sufficient annual income to meet the costs of health care, and whose other assets are so limited that their application toward the costs of such care would jeopardize the person or family's future minimum self-maintenance and security." ( Welf. & Inst.Code, § 14000.) Under Medi–Cal, beneficiaries may receive a broad range of services, including physician and hospital services, optometry, mental health care, and prescription medications. ( Welf. & Inst.Code, § 14132 ; Cal. Code Regs., tit. 22, §§ 51301, 51305, 51308 – 51317 ; see 42 U.S.C. § 1396d(a)(xvii).)

The Medi–Cal program does not directly provide services; instead, it reimburses participating health care plans and providers for covered services provided to Medi–Cal beneficiaries. ( Cowan v. Myers (1986) 187 Cal.App.3d 968, 990, 232 Cal.Rptr. 299 ( Cowan ).) Medi–Cal accomplishes this on a fee-for-service basis or a managed care basis. (See Welf. & Inst.Code, § 14016.5, subd. (b).)

About a third of Medi–Cal beneficiaries receive services under the fee-for-service system in which health care practitioners are reimbursed for each covered service they provide. The beneficiary can obtain care from any provider that participates in Medi–Cal, is willing to treat the beneficiary, and is willing to accept reimbursement from DHCS at a set amount for the services provided. ( Welf. & Inst.Code, § 14016.5, subd. (b)(1).)

About two-thirds of Medi–Cal beneficiaries receive services through a Medi–Cal managed care plan. Under managed care, DHCS contracts with health maintenance organizations (HMOs) and other managed care plans to provide health coverage to Medi–Cal beneficiaries, and the plans are paid a predetermined amount for each beneficiary per month, whether or not the beneficiary actually receives services. ( Welf. & Inst.Code, §§ 14204, 14301, subd. (a) ; see Cal. Code Regs., tit. 22, § 53800 et seq. ) The beneficiary then obtains medical services from a provider within the managed care plan's network. ( Welf. & Inst.Code, § 14304.5.)

Medi–Cal is administered by respondent DHCS. (See Welf. & Inst.Code, § 14100.1 ; 42 U.S.C. § 1396a(a)(5).) Respondent Toby Douglas was DHCS's director. Respondents acknowledge they "have a legal duty to adopt and implement policies and procedures to ensure that Medi–Cal recipients are able to obtain necessary Medi–Cal benefits and services."

In the 2011–2012 fiscal year, Medi–Cal provided health coverage for approximately 8.3 million beneficiaries at a cost of some $63 billion of combined federal and state funds.

1. Medi–Cal Does Not Pay for Services Covered by Third Parties

Critical to this appeal is the fact that Congress intended Medicaid to be the "payer of last resort." ( Arkansas Dept. of Health and Human Servs. v. Ahlborn (2006) 547 U.S. 268, 291, 126 S.Ct. 1752, 164 L.Ed.2d 459.) Consistent with this principle, Medi–Cal statutes preclude coverage for health care services available to the beneficiary through OHC, whether public or commercial.¹ ( Welf. & Inst.Code, § 10020, subd. (a) ["No person having private health care coverage shall be entitled to receive the same health care items or services furnished or paid for by a publicly funded health care program"]; § 14000, subd. (b) [Medi–Cal benefits "shall not duplicate those provided under other federal or state laws or under other contractual or legal entitlements of the person or persons receiving them"]; § 14005, subd. (a) [Medi–Cal benefits and services must be provided to eligible residents only "to the extent that such services are neither provided under any other federal or state law nor provided nor available under other contractual or legal entitlements of the person"].) Further, DHCS regulations specify that a beneficiary with OHC is not entitled to receive Medi–Cal benefits or services until available OHC has been exhausted or denied for lack of service coverage. ( Cal. Code Regs., tit. 22, § 50761 ; see Palumbo v. Myers (1983) 149 Cal.App.3d 1020, 1027, 197 Cal.Rptr. 214 ["Where the same service is otherwise available to an applicant, it is not covered by Medi–Cal"].)

2. Determination of Beneficiaries' OHC

To ensure that the state does not pay for services for which another party may be responsible, Congress required states to determine the potential responsibility of third parties (including health insurers, self-insured plans, group health plans, and managed care organizations) for payment for services provided under the state's program, and to pursue claims against them. ( 42 U.S.C. § 1396a(a)(25).)

To this end, each state Medicaid agency must ensure that information is collected from applicants and beneficiaries regarding potentially liable third parties when they apply for benefits or are reviewed for continued eligibility, and must establish electronic data...