APPEAL from a judgment of the Superior Court of Sacramento County, Gail D. Ohanesian, Judge. Affirmed. Super. Ct. No. 07CS00160).
The opinion of the court was delivered by: Sims, J.
CERTIFIED FOR PUBLICATION
Golden Drugs Co., Inc., doing business as Golden Drugs Pharmacy (Pharmacy), appeals from a judgment denying its petition for a writ of mandamus (Code Civ. Proc., § 1085), which challenged the termination of Pharmacy's Medi-Cal provisional provider license by defendant Sandra Shewry, as then director of the Department of Health Care Services (the Department). (Health & Saf. Code, § 20 [name change from Dept. of Health Services]; Welf. & Inst. Code, § 14043.65.*fn1 ) Pharmacy disputes that it allowed a pharmacy technician to dispense medication without direct supervision and control of a pharmacist. Pharmacy contends (1) this court should consider extra-record evidence; (2) the evidence is insufficient to support the judgment; and (3) the Department's actions were arbitrary and capricious and denied due process. We shall affirm the judgment.
STATUTORY AND REGULATORY FRAMEWORK
The Department administers the Medi-Cal program, by which California participates in the federal Medicaid program (42 U.S.C. § 1396 et seq.) to provide medical services to eligible persons. (§§ 10720 et seq.; 14000 et seq.; Cal. Code Regs., tit. 22, § 51000 et seq.; Marvin Lieblein, Inc. v. Shewry (2006) 137 Cal.App.4th 700, 707.)
To obtain reimbursement for services provided through Medi-Cal, a medical professional must enroll as a Medi-Cal "provider," i.e., an entity that "provides services, goods, supplies, or merchandise" to Medi-Cal beneficiaries. (§ 14043.1.) In order to be a Medi-Cal provider, the medical professional must comply with Medi-Cal statutes and regulations, as well as statutes and regulations governing the provider's profession. (§§ 14043.1, 14043.27.*fn2
The practice of pharmacy is a profession subject to the Pharmacy Law (Bus. & Prof. Code, §§ 4000-4426, 4050). Pharmacies must be licensed by the California State Board of Pharmacy (the Board), which has as its "highest priority" the "[p]rotection of the public." (Bus. & Prof. Code, §§ 4001.1, 4110.) Every pharmacy must have a "pharmacist- in-charge" who is licensed by the Board and "responsible for the pharmacy's compliance with all state and federal laws and regulations pertaining to the practice of pharmacy." (Bus. & Prof. Code, §§ 4036, 4113.) A pharmacist may be assisted by a "pharmacy technician," who must be licensed as such and is "an individual who assists a pharmacist in a pharmacy in the performance of his or her pharmacy related duties, as specified in Section 4115." (Bus. & Prof. Code, §§ 4038, 4115, subd. (e).)
Business and Professions Code section 4115 states in part:
"(a) A pharmacy technician may perform packaging, manipulative, repetitive, or other non-discretionary tasks, only while assisting, and while under the direct supervision and control of a pharmacist.
"(b) This section does not authorize the performance of any tasks specified in subdivision (a) by a pharmacy technician without a pharmacist on duty.
"(c) This section does not authorize a pharmacy technician to perform any act requiring the exercise of professional judgment by pharmacist.
"(d) The board shall adopt regulations to specify tasks pursuant to subdivision (a) that a pharmacy technician may perform under the supervision of a pharmacist."
The Board adopted a regulation (Cal. Code Regs., tit. 16, § 1793.2 (regulation 1793.2)), stating, "`Non-discretionary tasks' as used in Business and Professions Code section 4115, include: [¶] (a) removing the drug or drugs from stock; [¶] (b) counting, pouring, or mixing pharmaceuticals; [¶] (c) placing the product into a container; [¶] (d) affixing the label or labels to the container; [and] [¶] (e) packaging and repackaging." Another regulation states that "[o]nly a pharmacist" (or an intern pharmacist acting under the pharmacist's supervision) may: interpret a prescription, "[s]upervise the packaging of drugs and check the packaging procedures and product upon completion"; and "[p]erform all functions which require professional judgment." (Cal. Code Regs., tit. 16, § 1793.1 (regulation 1793.1).)
FACTUAL AND PROCEDURAL BACKGROUND
On February 3, 2006, the Department sent a letter to Pharmacy, located in Los Angeles, stating the Department was terminating Pharmacy's Medi-Cal provisional provider status, effective on February 21, 2006, in accordance with section 14043.27, footnote 2, ante, because during a field audit, an auditor and consultant "directly observed the pharmacy technician dispensing medication intended for delivery to clients without direct supervision and control of a pharmacist. This violates California Business and Professions Code [section] 411 [sic: 4115] (a) and (f), which states in part: [¶] `... a pharmacy technician may perform packaging, manipulative, repetitive, or other non-discretionary tasks, only while assisting, and while under the direct supervision and control of a pharmacist.... [T]he pharmacy technician shall be within the pharmacist's view...."*fn3
On February 16, 2006, the Department sent Pharmacy an amended letter correcting the Medi-Cal provider number.
On February 22, 2006, Pharmacy's attorney responded that there must be some mistake and requested an informal meeting to "obviate the expenditure of resources" on an administrative appeal.
As alleged in Pharmacy's writ petition, Pharmacy's attorney and its pharmacist-in-charge (PIC) Luther Jenkins met in Sacramento on March 22, 2006, with Jan Inglish, Chief of the Department's Medical Review Branch, Audits and Investigations Section, and members of her staff. Jenkins allegedly provided documents and live "testimony" contradicting the Department's facts, and Inglish allegedly asked inappropriate questions about the ethnic make-up of the community where Pharmacy was located; the national origin of Pharmacy's owners; and the relative salaries of the owners and pharmacist.
On May 25, 2006, the Department sent an "Amendment to Letter Dated February 16, 2006" to Luther Jenkins, President, Chief Executive Officer and PIC of Golden Drugs Co., Inc. The letter stated the Department "is terminating your Medi-Cal provisional provider status, suspending you from enrollment and participation in the Medi-Cal program, and deactivating your provider number... [effective] June 14, 2006, in accordance with... [section] 14043.27 [fn. 2, ante]."
In addition to the facts asserted in the prior termination letter, the May 2006 letter said that it conducted an onsite review on November 28, 2005, which revealed (1) Pharmacy changed ownership in May 2003; (2) after the change in ownership, Pharmacy's monthly Medi-Cal payments increased from a monthly average of $82,240, to a monthly average of $280,109; (3) Jenkins, the majority owner and PIC, earned less than the two minority owners; (4) Pharmacy's daily dispensing report showed it dispensed 282 prescriptions or 35 prescriptions per hour on November 28, 2005, 364 prescriptions or 43 per hour on November 30, 2005, and 406 prescriptions or 50 per hour on December 1, 2005, while having only one pharmacist on hand.
The May 2006 letter provided further detail regarding the substance of the prior termination letter, stating: "On December 2, 2005, the Department's reviewers consisting of a Health Program Auditor and Pharmacy Consultant directly observed a pharmacy technician dispensing medication intended for delivery to clients without direct supervision and control of a pharmacist, i.e., the person selected the prescription label; placed them [sic] on the counter; went to the shelves to get the medications; counted out the medications; put them in vials; put caps on the vials; put the medications in bags; returned the medication containers back to the shelves or discarded in the trash empty containers; placed the bags in an office adjacent to the pharmacy; and no pharmacist checked or viewed this person's work. The observed actions of the pharmacy technician coupled with the lack of direct supervision by a licensed pharmacist represent an immediate threat to harm and danger to both Medi-Cal beneficiaries and the general public. This is because a pharmacy technician does not possess the necessary knowledge and professional judgment to act independently while dispensing medications. Potential errors in dispensing of medication could result in serious or even fatal medication complications to clients of the pharmacy."
The letter said Pharmacy thus violated Business and Professions Code section 4115 as well as Medi-Cal regulations by submitting claims for services not performed by a pharmacist (22 Cal. Code Regs., § 51470 [provider shall not submit claims for benefits not provided]), misrepresenting the actual provider (22 Cal. Code Regs., § 51485 [provider shall not submit false or misleading statement of material fact]), and subjecting customers to the risk of error from inadequate supervision (22 Cal. Code Regs., § 51481 [provider shall not engage in conduct inimical to the public health, morals, welfare and safety of any Medi-Cal beneficiary].)
The May 2006 letter advised that the Department was terminating Pharmacy's provisional provider status under section 14043.27 (fn. 2, ante), which authorizes termination if (a) the provider has provided material information that was false or misleading at the time it was provided, and (b) the provider commits any violation of a federal or state statute or regulation governing the provider's profession or occupation and the violation represents threat of immediate jeopardy of significant harm to any Medi-Cal beneficiary or to the public welfare.
The May 25 letter also ...