Rcj Medical Services, Inc. v. Bonta'
Decision Date | 23 August 2001 |
Docket Number | No. B143160.,B143160. |
Court | California Court of Appeals Court of Appeals |
Parties | RCJ MEDICAL SERVICES, INC., Plaintiff and Respondent, v. Diana BONTA', as Director, etc., Defendant and Appellant. |
Bill Lockyer, Attorney General, Charlton G. Holland, III, Senior Assistant Attorney General, John H. Sanders, Lead Supervising Deputy Attorney General; and Patricia L. Nagler, Deputy Attorney General, for Defendant and Appellant.
Hooper, Lundy & Bookman, Inc., and Patric Hooper, Los Angeles, for Plaintiff and Respondent.
This case involves a postpayment audit of a Medi-Cal provider's claims. Such audits are required under both federal and state law. (42 C.F.R. §§ 447.45(f)(2), 456.3; Welf. & Inst.Code, § 14170, subd. (a)(1).) No Medi-Cal payments were withheld from the provider.
The California Department of Health Services (DHS) administers Medi-Cal, the federal Medicaid program in California. The DHS contracted with the California Controller's office (the Controller) to audit Medi-Cal payments to providers. The Health Care Financing Administration (HCFA), part of the United States Department of Health and Human Services, is the federal agency responsible for administering the Medicaid program. On December 17, 1999, the HCFA, a federal agency, specifically approved in writing the DHS's delegation of audit authority to the Controller.
This appeal is from a judgment granting a peremptory writ of administrative mandate directed at defendant, the Director of the DHS. The peremptory writ of mandate requires the DHS to set aside its final decision in the administrative appeal of RCJ Medical Services, Inc. (RCJ), "insofar as it relies upon the audit findings of the State Controller. . . ." RCJ contends federal Medicaid law, and specifically the single state agency requirement, precludes the DHS's delegation of audit authority to the Controller.1 The question in this case is whether the HCFA's December 17, 1999, written approval of the DHS's delegation of audit responsibility to the Controller is based on a reasonable construction of the federal statutory single state agency provision and the implementing regulation. We defer to the HCFA's construction of the federal law that it administers as reflected in its action of December 17, 1999. Accordingly, we reverse.
In 1965, Congress enacted Title XIX of the Social Security Act (the Medicaid Act) to provide medical assistance to needy persons. (42 U.S.C. § 1396 et seq.) The purpose of the act was to provide a nationwide program of medical assistance for low-income families and individuals. (Schweiker v. Hogan (1982) 457 U.S. 569, 571, 102 S.Ct. 2597, 73 L.Ed.2d 227; West Virginia University Hospitals, Inc. v. Casey (3rd Cir.1989) 885 F.2d 11, 15, affd. (1991) 499 U.S. 83, 111 S.Ct. 1138, 113 L.Ed.2d 68.)
The Second Circuit Court of Appeals described the joint federal-state operation of the Medicaid program and the single state agency requirement in Bethphage Lutheran Service, Inc. v. Weicker (2nd Cir.1992) 965 F.2d 1239, 1240 as follows: (Accord, West Virginia University Hospitals., Inc. v. Casey, supra, 885 F.2d at p. 15.)
The single state agency requirement is set forth in a federal statute. Pursuant to title 42 of the United States Code, section 1396a(a)(5)2, a state participating in the federal Medicaid program must establish a state plan that meets stated requirements. Among other things, the state plan must "provide for the establishment or designation of a single State agency to administer or to supervise the administration of the plan. . . ."3 (Italics added.)
The single state agency requirement originally appeared in the Social Security Act of 1935 with reference to the Title I Old-Age Assistance Program. (Act of Aug. 14, 1935, ch. 531, § 2, 49 Stat. 620.) The single state agency language was incorporated into Title XIX when the Medicaid program was enacted in 1965. (Pub.L. No. 89-97, 1965 U.S.Code Cong. & Admin. News, at pp. 305, 371; Sobky v. Smoley (E.D.Cal.1994) 855 F.Supp. 1123, 1145.) The purposes of the single state agency requirement have been described in various ways. In Rolland v. Cellucci (D.Mass. 1999) 52 F.Supp.2d 231, 243, the district court held: In Sobky v. Smoley, supra, 855 F.Supp. at page 1145, Judge David F. Levi wrote, "The legislative history of the 1965 Medicaid Act's single state agency requirement U.S.C. § 1396a(a)(5)— maintains this concentration on administrative efficiency." (Accord, Hillburn by Hillburn v. Maker, supra, 795 F.2d at pp. 260-261.) Judge Levi concluded after House and Senate amendments were factored into the competing evidence of legislative intent that Congress's adoption of the single state agency was because, "administrative efficiency appears to have been the overriding purpose. . . ." (Sobky v. Smoley, supra, 855 F.Supp. at p. 1145.) In Fulkerson v. Commissioner, Maine Dept. of Human Services (D.Maine 1992) 802 F.Supp. 529, 538, the district court held:
The HCFA regulation implementing the single state agency requirement is found at title 42, Code of Federal Regulations, part 431.10(e) (44 Fed.Reg. 17930 (March 23, 1979)) which states: (Italics added; e.g. Reynolds v. Giuliani (S.D.N.Y.2000) 118 F.Supp.2d 352, 358; Meachem v. Wing (S.D.N.Y. 1999) 77 F.Supp.2d 431, 444-45.)
The federal single state agency regulation (42 C.F.R. § 431.10(e)) was first published in the Federal Register in 1971. (36 Fed. Reg. 3861-3862 (Feb. 27, 1971).) It was originally promulgated, however, in a supplement to a federal handbook issued upon enactment of the Medicaid Act—the United States Department of Health, Education, and Welfare, Welfare Administration, Bureau of Family Services, Handbook of Public Assistance Administration ("Handbook"), Supplement D—Medical Assistance Programs Under Title XIX of the Social Security Act, D 2130 (June 17, 1966) ("Supplement D"). The purpose of the Handbook was described as follows: (Handbook, supra, Introduction (June 12,1963).)
Supplement D stated in part: ...
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