Morris v. Williams

Decision Date20 November 1967
Citation433 P.2d 697,63 Cal.Rptr. 689,67 Cal.2d 733
CourtCalifornia Supreme Court
Parties, 433 P.2d 697 Harvey MORRIS, Plaintiff and Respondent, v. Spencer W. WILLIAMS et al., Defendants and Appellants. Sac. 7817.

Thomas C. Lynch, Atty. Gen., Walter J. Wiesner and Richard L. Mayers, Deputy Attys. Gen., for defendants and appellants.

Peart, Hassard, Smith & Bonnington, Howard Hassard, San Francisco, Musick, Peeler & Garrett and James E. Ludlam, Los Angeles, as amici curiae on behalf of defendants and appellants.

Sheldon L. Greene, Clark F. Ide, Modesto, George Bodle, Bodle & Fogel, Los Angeles, and James Ahern, North Hollywood, for plaintiff and respondent.

Wilke, Fleury, Sapunor & Hoffelt, Richard H. Hoffelt, Sacramento, Charles P. Scully, San Francisco, David B. Finkel, Bodle, Fogel, Julber & Reinhardt, George E. Bodle, Daniel Fogel, Stephen Reinhardt and Loren R. Rothschild, Los Angeles, as amici curiae on behalf of plaintiff and respondent.

SULLIVAN, Justice.

We are called upon to inquire into the validity of certain amended regulations of the Health and Welfare Agency reducing benefits provided under the California Medical Assistance Program, popularly known as Medi-Cal. Accordingly, as required by long established and unassailable California precedents, we here discharge our responsibility to determine whether the Agency has acted in obedience to the mandate of the Legislature or has ignored or violated it. Our function is to inquire into the legality of the requlations, not their wisdom. Nor do we superimpose upon the Agency any policy judgments of our own. Administrative regulations that violate acts of the Legislature are void and no protestations that they are merely an exercise of administrative discretion can sanctify them. They must conform to the legislative will if we are to preserve an orderly system of government.

As we shall explain, we have concluded that the regulations under review are violative of the pertinent law in two major respects: (1) by restricting physicians' services for recipients of public assistance without eliminating the medically indigent from the Medi-Cal program; and (2) by eliminating certain services entirely in the absence of a showing that proportionate reductions were not feasible to some extent. We hold that the trial court properly enjoined their implementation. We therefore affirm the judgment.

Plaintiff, a recipient of welfare assistance eligible for Medi-Cal benefits, commenced the instant class action on behalf of himself and all other persons eligible for assistance under the Medi-Cal program 1 for the purpose of challenging the validity of the regulations. Defendants 2 appeal 3 from the ensuing judgment declaring the regulations invalid and permanently enjoining their implementation. 4

The Medi-Cal program is found in chapters 7 and 8 of part 3 of division 9 of the Welfare and Institutions Code (§ 14000 et seq.). 5 These statutes were enacted by the Legislature at the 1965 Second Extraordinary Session in order to establish a program of basic and extended health care services for recipients of public assistance and for medically indigent persons (§§ 14000 et seq., 14500 et seq.) and, by meeting the requirements of federal law, to qualify California for the recipt of federal funds made available under title XIX of the Social Security Act. An outline of the pertinent provisions of these statutes is essential to a grasp of the issues now presented to us.

The Federal Statute

Title XIX, enacted by Congress in 1965 as Public Law 89--97, authorizes the Secretary of Health, Education and Welfare to make payments to states whose medical assistance programs meet the requirements of the statute. (42 U.S.C.A. § 1396.) 6 A state plan must cover individuals receiving aid or assistance under federally aided state programs for the aged, blind, disabled, and needy families with children; these groups must be treated equally. Persons who do not meet the income requirements for such aid or assistance may also be covered, but in 'amount, duration, or scope' no greater than extended to cash recipients. (42 U.S.C.A. § 1396a(a)(10).) 7 A state must provide at least five categories of medical assistance: inpatient hospital services; outpatient hospital services; other laboratory and X-ray services; skilled nursing home services; and physicians' services, wherever furnished. (42 U.S.C.A. §§ 1396a(a)(13), 8 1396d(a)(1--5). 9 ) The plan may not require any contribution by the individual towards payment for inpatient hospital services. (42 U.S.C.A. § 1396a(a)(14)(A).)

In addition to these and other specific requirements, the federal statute provides that the Secretary 'shall not make payments * * * unless the State makes a satisfactory showing that it is making efforts' to broaden 'the scope of the care and services made available under the plan' and to liberalize 'the eligibility requirements for medical assistance, with a view toward furnishing by July 1, 1975, comprehensive care and services to substantially all individuals who meet the plan's eligibility standards * * *.' (42 U.S.C.A. § 1396b(e).)

The California Statute

As previously stated, the Medi-Cal program provides for basic health care (ch. 7) and extended health services (ch. 8). It is the purpose of chapter 7 'to afford basic health care and related remedial or preventive services to recipients of public assistance and to medically indigent aged and other persons, including related social services which are necessary for those receiving health care under this chapter and Chapter 8 (commencing with Section 14500).' (§ 14000, 1st par.) The Legislature expressed its intent to provide through chapter 7 'for basic health care for those aged and other persons, including family persons who lack sufficient annual income to meet the costs of health care, and whose other assets are so limited that their application toward the cost of such care would jeopardize the person or family's future minimum self-maintenance and security.' (§ 14000, 2nd par.) It also expressed its intent 'that the scope and duration of health services under this chapter and Chapter 8 (commencing with Section 14500) shall be at least equivalent to the level provided in 1964--65 under public assistance programs.' (§ 14000.1) 'Basic health care * * * may include diagnostic, preventive, corrective, and curative services and supplies essential thereto * * * for conditions that cause suffering, endanger life, result in illness or infirmity, interfere with capacity for normal activity including employment, or for conditions which may develop into some significant handicap.' (§ 14059.) The specific categories of basic health care are those listed in the federal statute. (§ 14053, following 42 U.S.C.A. § 1396d.)

The Legislature authorized the Administrator of the Health and Welfare Agency to administer the program. Section 14105, 10 reenacted by chapter 104 of the 1967 statutes, contains the legislative mandate: 'The director (the Administrator of the Health and Welfare Agency, as defined in section 14060) shall prescribe the policies to be followed in the administration * * * (of the program) and the scope of the services to be provided, and may limit the rates of payment for such services, and shall adopt such rules and regulations as are necessary for carrying out, not inconsistent with, the provisions (of the statute). * * * Insofar as practical, consistent with the efficient and economical administration of this part, the department (the Health and Welfare Agency, as defined in section 14062) shall afford recipients of public assistance free choice of arrangements under which they shall receive basic health care. * * *'

Section 14105 further requires that 'In establishing the scope of services to be provided, the director shall provide for recipients (of public assistance) at least for a minimum coverage'--defined by section 14056 as the five basic services required by 42 U.S.C.A. § 1396a(a)(13) (see fns. 8 and 9, ante)--'and insofar as possible shall include other health care and related remedial or preventive services giving priority to those services which are considered to have the greatest value in preventing or reducing the likelihood of future high cost medical services.' Section 14152 expresses 'the intention of the Legislature, whenever feasible, that the needs of recipients of public assistance for health care and related remedial or preventive services be met under the provisions of this chapter.' Explicit priorities favoring recipients of public assistance over those whose 'income and resources are comparable' are set forth in section 14006.5, 11 which provides that the 'director shall reduce services in accordance with the priorities.'

Section 14105 provides also that the Administrator 'may limit, by appropriate classifications, the number of medically indigent persons eligible, and may limit the scope and kinds of basic health care and extended health services to which such persons are entitled, to the extent necessary to operate programs under this part within the limits of appropriated funds. When and if necessary, such action shall be taken by the director with the advice of the Health Review and Program Council * * *.'

Additional standards for the Administrator's guidance are contained in chapter 1421 of the 1967 statutes, approved by the Governor and filed with the Secretary of State, August 25, 1967. The act is 'an urgency statute' which took effect immediately 'In order that the California Medical Assistance Program be permitted to operate at its present level, as contemplated by the Legislature.' (Ch. 1421, § 3.) Medi-Cal expenditures from state sources for the fiscal year 1967--68 may not exceed $305 million, 'except that with the approval of the Director of Finance additional amounts may be expended if they are obtained by transfer from other sources as authorized by the Legislature.' (Ch. 1421, §...

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