Northern California Record

Tuesday, February 25, 2020

Appeals court says DHCS needs to comply with duty to pay Medi-Cal claims


By Kyla Asbury | Jul 16, 2018

Law money 07

SACRAMENTO — An appeals court rejected an appeal involving the State Department of Health Care Services and nearly two dozen health clinics that serve medically underserved populations in California.

The American Indian Health & Services Corp. and other health clinics filed suit over coverage of dental, chiropractic and podiatric services for adults provided from 2009 to 2013 to Medi-Cal patients.

Justice Elena J. Duarte of the California Third District Court of Appeal authored the opinion on June 19. Justices Vance W. Raye and Harry E. Hull Jr. concurred in the opinion.

“We disagree with the Department’s characterization of the Clinics’ lawsuit,” Duarte wrote. “Rather than a suit for damages, the lawsuit seeks an order to compel performance of a mandatory duty and did not result in a money judgment.”

Duarte noted that this proceeding was not barred by sovereign immunity. 

“The Department’s contentions based on spending clause legislation and separation of powers are new arguments raised for the first time on appeal,” she wrote. “We exercise our discretion to consider only the spending clause argument.”

Duarte said the court rejected the argument because it had not shown it was surprised by its obligations under Medicaid law.

“The separation of powers argument raises factual issues about appropriations that should have been presented in the trial court and we decline to consider this new argument,” Duarte wrote.

When the state suffered a budget crisis, it attempted to reduce funding for Medi-Cal. An association with the clinics filed a lawsuit to try to stop the budget reduction bill from being implemented.

In that suit, the department stated that only services provided after Sept. 26, 2013, would be reimbursed.

The clinics then filed a writ of mandate in Sacramento County Superior Court asking the court to order the department to pay claims from July 1, 2009 until Sept. 26, 2013.

The trial court ruled the department had a duty to comply with the payment of the clinics Medi-Cal claims, a ruling the department then appealed.

The appeals court affirmed the state court’s judgment and ordered the clinics' recovery costs on appeal.

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