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Life Long Medical Care, Inc v. Department of Health Care Services

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA THIRD APPELLATE DISTRICT (Sacramento)


December 30, 2010

LIFE LONG MEDICAL CARE, INC., PLAINTIFF AND APPELLANT,
v.
DEPARTMENT OF HEALTH CARE SERVICES, DEFENDANT AND RESPONDENT.

(Super. Ct. No. 34200880000053CUWMGDS)

The opinion of the court was delivered by: Mauro ,j.

Life Long Med. Care v. Dept. Health Care Serv.

CA3

NOT TO BE PUBLISHED

California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.

Petitioner Life Long Medical Care, Inc. (Life Long) appeals from the trial court's judgment denying Life Long's petition for writ of mandate. Life Long contends that in calculating Life Long's Medi-Cal reimbursement rates, the Department of Health Care Services (the Department) improperly disallowed certain costs relating to unlicensed medical social workers and case managers. We conclude that Life Long forfeited its claims on appeal by failing to demonstrate error. We will affirm the judgment.

BACKGROUND

Life Long did not adequately set forth the relevant factual background in its opening brief (see Cal. Rules of Court, rule 8.204, subdivision (a)(2)(C)), and it did not raise a cognizable challenge to the sufficiency of the evidence. Under the circumstances, we will rely on the background provided by the trial court and the administrative law judge in their rulings.

Life Long operates three community health clinics enrolled in the Medi-Cal program as Federally Qualified Health Centers (clinics). (42 U.S.C. §§ 254b, 1396d(a)(2)(C).) The patients treated at the clinics are generally elderly individuals suffering from multiple chronic medical conditions. Many have dementia, limited education, low income, and families who are unable to assist them, all of which make it difficult for the patients to access and use medical services. Life Long's clinics employ medical social workers and case managers to perform clinical social work and assist these patients.

Not all clinic services are reimbursable covered services under Medi-Cal. (42 C.F.R. §405.2446 (2009).) Clinics and their professional medical staff must comply with federal and state laws, including laws regarding licensure. (42 U.S.C. § 1395x(r), (hh); 42 C.F.R. § 491.4 (2009).) Accordingly, social worker services are not covered services unless they are furnished by a licensed clinical social worker, because a license is required by state law. (Bus. & Prof. Code, § 4996, 4996.9; Cal. Code Regs., tit. 22, § 70055, subd. (a)(37); 42 U.S.C. §§ 1395x(aa)(3), 1396x(hh)(l)(C); 42 C.F.R. § 405.2450(a)(3) (2009).)

Clinics are reimbursed for covered Medi-Cal services based on a prospective "per visit" payment rate. (42 U.S.C. § 1396a(bb)(2); Welf. & Inst. Code, § 14132.100, subd. (c).) A "visit" means a face-to-face encounter between a clinic patient and a specified professional, such as a physician, registered nurse, clinical psychologist, or licensed clinical social worker. (Welf. & Inst. Code, § 14132.100, subd. (g).) The "per visit" payment rate may be adjusted subsequently to account for increases in the medicare economic index applicable to primary care services and/or to account for any increase or decrease in the scope of services provided by the clinic. (42 U.S.C. § 1396a(bb)(2), (3)(A), (B); Welf. & Inst. Code, § 14132.100, subds. (d) & (e).) Rate changes based on a change in the scope of services "shall be evaluated in accordance with Medicare reasonable cost principles" set forth in Part 413 of Title 42 of the Code of Federal Regulations. (Welf. & Inst. Code, § 14132.100, subd. (e)(1).)

"Reasonable cost includes all necessary and proper costs incurred in furnishing the services, subject to principles relating to specific items of revenue and cost." (42 C.F.R. § 413.9(a) (2009).) "Necessary and proper costs are costs that are appropriate and helpful in developing and maintaining the operation of patient care facilities and activities. They are usually costs that are common and accepted occurrences in the field of the provider's activity." (42 C.F.R. § 413.9(b)(2) (2009).) Reasonable costs may encompass both direct and indirect costs incurred in furnishing services, such as administrative costs, maintenance costs, and premium payments for employee health and pension plans (42 C.F.R. § 413.9(c)(3) (2009)), but "if the provider's operating costs include amounts not related to patient care, [or are] specifically not reimbursable under the program, . . . such amounts will not be allowable." (Ibid.)

In 2004, Life Long filed a request for an adjustment to the prospective per-visit reimbursement rates for its clinics based on changes in the scope of services. The Department disallowed the costs of salaries and fringe benefits for Life Long's medical social workers and case managers because (1) they were performing unlicensed clinical social work in place of licensed clinical social workers, (2) their services were not incident to services furnished by a physician or licensed clinical social worker, and (3) many of the services they performed were not related to patient care. (42 C.F.R. §§ 405.2413, 405.2450 (2009).)

Life Long appealed the Department's findings and an administrative law judge (ALJ) conducted a formal hearing. Life Long did not dispute that the medical social workers and case managers were not licensed clinical social workers, or that Life Long could not be reimbursed directly for their services on a per-visit basis; rather, Life Long argued that the costs related to medical social workers and case managers were allowable because they were incident to physician services. Covered services include those furnished by a physician or clinical social worker, and services and supplies furnished as an "incident to" such services. (42 U.S.C. § 1395x(aa)(3), (s)(1), (2)(A) & (N), (hh); 42 C.F.R. §§ 405.2446(b)(1),(5), 405.2412, 405.2450 (2009).) Life Long presented evidence concerning the various ways the medical social workers and case managers assisted physicians and other professional staff in providing care to the patients and the way this occurred on a regular basis in the field of geriatric care.

The ALJ ruled that Life Long's medical social workers and case managers were performing the same function as licensed clinical social workers and that the services were not performed incident to the professional services of a physician or licensed clinical social worker. Since the workers were not licensed to provide these services, the ALJ concluded that the Department properly disallowed the costs. In addition, the ALJ ruled that the services provided by the case managers at one of the clinics were not reimbursable because they were not related to patient care.

Life Long filed a petition for writ of mandate, arguing that the medical social worker and case manager costs were "allowable" because they were "reasonable in amount and proper and necessary for the efficient delivery" of clinic services. (42 C.F.R. § 405.2401(b) (2009).)

In opposition to the petition for writ of mandate, the Department reiterated its position that some of the functions performed by the medical social workers and case managers were not related to patient care, which meant they were not allowable costs. Moreover, given that direct reimbursement for unlicensed clinical social work was prohibited by law, Life Long could not use unlicensed social workers to perform the work of licensed clinical social workers and then seek indirect reimbursement via an increase in the "per-visit" rate. The Department argued this was tantamount to requiring the Department to endorse and indirectly pay for the illegal practice of unlicensed clinical social work and that Life Long was "trying to get compensated through the back door for something they can't get compensated for through the front door."

The trial court agreed with the Department, ruling that the costs for medical social workers and case managers were not allowable as costs incident to physician or licensed clinical social worker services. The trial court ruled that the Department's determination was supported by substantial evidence because the services were not furnished under the direct supervision of a physician. The trial court posited that certain medical case management services should be allowable, such as taking patient medical histories, communicating with licensed health care professionals, coordinating and arranging health care services and transportation, assisting in the implementation of medical care plans, and monitoring the effectiveness of the plans. However, substantial evidence supported the Department's determination that the services performed in this case went beyond "simple 'medical case management'" and crossed the line into clinical social work, and that the costs were not allowable because the medical social workers and case managers were unlawfully engaging in the practice of clinical social work without a license.

The trial court also found that substantial evidence supported the Department's determination that the costs were not allowable because many of the services performed were not necessary costs of providing covered services. Although some of the services provided by the medical social workers and case managers might have been allowable as reasonable costs of furnishing covered services, there was no evidence showing what portion of the services they performed were related to covered services. At no time during the administrative hearing or trial court proceedings did Life Long seek to present evidence establishing that at least some of the medical social worker and case manager services were related to patient care and did not require the services of a licensed clinical social worker. Indeed, when the ALJ asked the medical director of Life Long if she had hourly breakdowns of the time the medical social workers and case managers spent on different duties such as medical referrals, the medical director replied she did not have such a breakdown.

Accordingly the trial court denied the petition for writ of mandate.

DISCUSSION

In its 12-page opening brief, Life Long does not set forth the relevant factual background and does not discuss in any meaningful fashion the ALJ's decision, the trial court's reasoning, or the complex interplay of the relevant statutes and regulations discussed above. Life Long's appellate contentions are also insufficiently developed. It contends the Department and the trial court erred in applying the Medi-Cal statutes and regulations, but it does not address why the rationale relied on by the Department and trial court was erroneous. Life Long simply asserts that the unlicensed status of the medical social workers and case managers is a "red herring," but does not adequately explain why this is so.

Life Long also maintains that, in the alternative, we should remand the matter for a determination of which costs involve patient care and do not cross the line into the practice of clinical social work. But Life Long did not suggest in the administrative hearing or the trial court that a portion of the costs should be deemed allowable on these grounds. In its reply brief, Life Long contends that it implicitly challenged the sufficiency of the evidence in its opening brief, even though it did not set forth all of the relevant evidence or provide an argument heading alerting this court and the respondent Department that it raised such a challenge.

In response, the Department contends that under established principles of appellate procedure, Life Long has forfeited its contentions on appeal. We agree.

In a challenge to a judgment, the trial court's judgment is presumed to be correct and the appellant has the burden to prove otherwise by presenting legal authority and analysis on each point made, supported by appropriate citations to the material facts in the record, else the argument may be deemed forfeited. (Badie v. Bank of America (1998) 67 Cal.App.4th 779, 784-785 (Badie); Guthrey v. State of California (1998) 63 Cal.App.4th 1108, 1115-1116; Duarte v. Chino Community Hospital (1999) 72 Cal.App.4th 849, 856.) It is the appellant's responsibility to support claims of error with citation and authority; we are not obligated to perform that function on the appellant's behalf and may treat the contentions as forfeited. (Lewis v. County of Sacramento (2001) 93 Cal.App.4th 107, 113; Badie, supra, 67 Cal.App.4th at pp. 784-785.) In addition, the appellant may not simply incorporate by reference arguments made in papers filed in the trial court rather than brief the arguments on appeal. (Garrick Development Co. v. Hayward Unified School Dist. (1992) 3 Cal.App.4th 320, 334; see also Colores v. Board of Trustees (2003) 105 Cal.App.4th 1293, 1301, fn. 2.)

The appellant must present each point separately in the opening brief under an appropriate heading, showing the nature of the question to be presented and the point to be made. (Cal. Rules of Court, rule 8.204 (a)(1)(B); Opdyk v. California Horse Racing Bd. (1995) 34 Cal.App.4th 1826, 1830, fn. 4.) This is not a mere technical requirement; it is essential to the appellate process. Appellants must "present their case systematically and so arranged that those upon whom the duty devolves of ascertaining the rule of law to apply may be advised . . . of the exact question under consideration, instead of being compelled to extricate it from the mass." (Landa v. Steinberg (1932) 126 Cal.App. 324, 325; accord, Opdyk v. California Horse Racing Bd., supra, 34 Cal.App.4th at p. 1830, fn. 4.)

In a challenge to the sufficiency of the evidence, the reviewing court must start with the presumption that the record contains evidence sufficient to support the judgment, and it is the appellant's burden to demonstrate otherwise. (Foreman & Clark Corp. v. Fallon (1971) 3 Cal.3d 875, 881; Baxter Healthcare Corp. v. Denton (2004) 120 Cal.App.4th 333, 368.) The appellant's brief must set forth all of the material evidence bearing on the issue, not merely the evidence favorable to the appellant, and also must show how the evidence does not sustain the challenged finding. (Ibid.) If the appellant fails to do so, the claim of insufficiency of the evidence is forfeited. (Ibid.)

The appellant may not attempt to rectify any omissions and oversights for the first time in its reply brief as it deprives the respondent of an opportunity to respond. (Garcia v. McCutchen (1997) 16 Cal.4th 469, 482, fn. 10; American Drug Stores, Inc. v. Stroh (1992) 10 Cal.App.4th 1446, 1453; Reichardt v. Hoffman (1997) 52 Cal.App.4th 754, 764-765.)

Life Long's opening brief fails on all of these grounds. Under the circumstances, it has forfeited its claims of error.

DISPOSITION

The judgment is affirmed.

We concur:

BLEASE , Acting P. J. NICHOLSON , J.

20101230

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