BILL ANALYSIS
SENATE JUDICIARY COMMITTEE
Senator Ellen M. Corbett, Chair
2009-2010 Regular Session
AB 839
Assemblymember Emmerson
As Amended: March 26, 2009
Hearing Date: July 7, 2009
Welfare and Institutions Code
NRB:jd
SUBJECT
Medi-Cal; Providers; Remedies
DESCRIPTION
This bill would provide that the proper legal action to obtain
judicial relief from denial by the Department of Health Care
Services (DHCS) of a specified Medi-Cal reimbursement claim is a
petition for writ of mandate pursuant to Code of Civil Procedure
Section 1085. This bill also would specify that existing
time-bars on enrollment in the Medi-Cal program begin to run on
the date DHCS initially denies an application or terminates a
provider, prior to any appeals.
BACKGROUND
DHCS, the sponsor of this measure, is responsible for managing
the state's Medi-Cal program for vulnerable Californians. Among
its responsibilities, DHCS is charged with ensuring that
Medi-Cal providers meet standards defined in statute necessary
to ensure effective and lawful delivery of health care services
to the public. If a provider falls short of these standards,
DHCS is authorized to deny their ability to participate in the
program and/or deny Medi-Cal payments to providers.
According to the author, this bill would amend two provisions of
existing law for the purpose of expediting the handling of legal
challenges to DHCS decisions and to ensure that existing
time-bars on provider participation in Medi-Cal run from the
date of the initial adverse decision by DHCS, regardless of
whether the provider appeals that decision.
(more)
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CHANGES TO EXISTING LAW
1. Existing law establishes the Medi-Cal program, administered
by the DHCS, which provides comprehensive health care coverage
for low-income individuals and their families, pregnant women,
elderly, blind, or disabled persons; and nursing home
residents who meet specified eligibility criteria. (Welf. &
Inst. Code Sec. 14000 et seq.)
Existing law requires the Director of DHCS, by regulation, to
adopt procedures for the review of a grievance or complaint
concerning the processing or payment of money alleged by a
provider of services to be payable under the Medi-Cal program.
(Welf. & Inst. Code Sec. 14104.5.)
Existing law states that if a provider is not satisfied with
the DHCS decision on his or her claim, he or she may, within
one-year of receiving notice of the decision, "seek
appropriate judicial remedies." (Id.)
Existing law provides that "[a] writ of mandate may be issued
by any court to any inferior tribunal, corporation, board, or
person, to compel the performance of an act which the law
specially enjoins, as a duty resulting from an office, trust,
or station, or to compel the admission of a party to the use
and enjoyment of a right or office to which the party is
entitled, and from which the party is unlawfully precluded by
such inferior tribunal, corporation, board, or person." (Code
Civ. Proc. Sec. 1085, subd. (a).)
This bill would specify that the proper legal action to obtain
judicial relief from a DHCS claim decision is a petition for
writ of mandate pursuant to Code of Civil Procedure Section
1085.
2. Existing law requires that health care providers apply to,
and be certified by, DHCS prior to their participation in the
Medi-Cal program, as specified. (Welf. & Inst. Code Sec.
14043.26.) Existing law further allows DHCS, if specified
conditions are met, to grant provisional provider status or
preferred provisional provider status to an applicant or
provider. (Welf. & Inst. Code Sec. 14043.27.)
Existing law provides that if a Medi-Cal provider's
application is denied or provider status is terminated by
DHCS, the provider may file a written appeal with the
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Director, as specified. (Welf. & Inst. Code Sec. 14043.65.)
If the provider is dissatisfied with the Director's decision
on the appeal, existing law permits the provider to further
appeal the decision via petition for writ of mandate pursuant
to Code of Civil Procedure Section 1085. (Id.)
Existing law provides that if a Medi-Cal provider's
application is denied or its status is terminated, the
provider is prohibited from reapplying for enrollment for a
period of three or ten years, depending upon the basis of the
denial, from the date the application package is denied, the
provisional provider status is terminated, or the issuance of
a "final decision following an appeal from that denial or
termination." (Welf. & Inst. Code Sec. 14043.28, subd.
(a)(1), (3).)
This bill would amend existing law to establish that the
time-bar on enrollment begins to run from the date the
provider's application is denied or provider status is
terminated by the DHCS, prior to any appeals.
COMMENT
1. Stated need for the bill
The author writes:
This bill would amend two areas of the Welfare and
Institutions Code related to Medi-Cal providers appeal
remedies. Section 14104.5 would be amended to clarify that
the judicial remedy for Medi-Cal providers seeking to appeal
the denial of a grievance, complaint or reimbursement is to
file a petition for writ of mandate in the superior court,
pursuant to Code of Civil Procedure section 1085. This change
would conform the appeals process currently used to review the
denial of Treatment Authorization Requests (TAR). Section
14043.28 would be amended so Medi-Cal providers and applicants
are no longer penalized when they exercise their right to
appeal their denial and/or termination of enrollment in
Medi-Cal.
2. Establishing writ of mandate as the proper judicial remedy for
claim denials.
The author contends that by permitting Medi-Cal providers to
"seek appropriate judicial remedies" when they are aggrieved by
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a DHCS claim decision, existing law creates a host of problems
for both the state and providers. For instance, the wide-open
nature of existing law has prompted providers to file a variety
of legal actions applying equally various theories to obtain
reimbursement, ranging from damages claims to breach of contract
actions. Such divergent lawsuits create confusion, generate
more work, and cost for both litigants and courts on matters
that should present a relatively simple legal question - whether
the DHCS has properly denied a claim for reimbursement pursuant
to statute. Further, such lawsuits typically are designated as
general civil litigation, which lack priority in the courts, and
thus tend to linger for long periods of time on court dockets.
The author and DHCS suggest that these problems will be greatly
diminished by specifying the exclusive legal remedy to a DHCS
reimbursement denial is a writ of mandate. In general, a writ
of mandate is an extraordinary writ to compel the performance of
a ministerial duty. (8 Witkin Cal. Proc. Writs Sec. 23 (2009,
5th ed.).) The rules governing writ practice vary with the
court, however, local rules generally ensure that traditional
writs of mandate are resolved more quickly than general
litigation, without extensive pretrial discovery:
Unlike ordinary civil actions, writ proceedings often do not
involve discovery. Usually, extensive memoranda are filed in
advance of the "trial," which in most cases is more akin to a
law and motion hearing. The judge reviews the memoranda and
any permissible documentary evidence, hears argument at a
hearing that may last as little as 30 minutes, and then enters
a judgment granting or denying the writ petition. (Cal. Civil
Writ Practice Sec. 5.2 (Cal. CEB 2008).)
According to the author, this proposed change in law will
benefit the state and Medi-Cal providers by creating a speedy,
equitable remedy for claims against a government entity.
3.Eliminate extension of time-bar for participation in Medi-Cal
upon appeal of DHCS decision.
Depending upon the basis of an application denial or provider
termination, existing law bars a Medi-Cal provider from
participating in the program for a period of three or 10 years
beginning from the later of the DHCS determination, or final
resolution of any subsequent appeal of that determination. The
author contends that current law unfairly penalizes Medi-Cal
providers and applicants who exercise their right to appeal
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their denial and/or termination of enrollment in the program.
AB 839's proposed amendment to Welfare and Institutions Code
Section 14043.28 addresses this issue by specifying that the
debarment period begins to run from the date of DHCS's initial
determination to deny an application or terminate a provider.
Support : California Medical Association; Judicial Council
Opposition : None Known
HISTORY
Source : Department of Health Care Services
Related Pending Legislation : None Known
Prior Legislation : AB 1226 (Hayashi, Ch. 693, Stats. 2007),
which revised Medi-Cal provider enrollment procedures to
simplify re-enrollment of Medi-Cal physicians relocating within
the same county and to expedite enrollment of specified and
established physicians into the Medi-Cal program.
Prior Vote :
Assembly Health Committee (Ayes 19, Noes 0)
Assembly Judiciary Committee (Ayes 10, Noes 0)
Assembly Appropriations Committee (Ayes 16, Noes 0)
Assembly Floor (Ayes 77, Noes 0)
Senate Health Committee (Ayes 6, Noes 0)
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