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Rivera v. Kent

California Court of Appeals, First District, Fourth Division

June 27, 2019

FRANCES RIVERA et al., Plaintiffs and Respondents,
JENNIFER KENT, as Director, etc., et al., Defendants and Appellants.

          Alameda County Super. Ct. No. RG14740911

          Kamala D. Harris and Xavier Becerra, Attorneys General, Julie Weng-Gutierrez, Senior Assistant Attorney General, Susan M. Carson, Supervising Deputy Attorney General, Hadara R. Stanton, Deputy Attorney General for Defendants and Appellants.

          Bay Area Legal Aid, Michael Keys; Western Center on Law and Poverty, Jennifer Flory, Mona Tawatao, Richard Rothschild; Multiform Advocacy Solutions, Lucy Quacinella; Central California Legal Services, Inc., Carmen Romero; Neighborhood Legal Services of Los Angeles County, David Kane, Michelle Kezirian; National Health Law Program, Kimberly Lewis, and Corilee Racela for Plaintiffs and Respondents.

          STREETER, J.

         Several applicants for benefits under the Medi-Cal program and an advocacy organization working on their behalf (plaintiffs) petitioned the trial court for a writ of mandate compelling the California Department of Health Care Services (DHCS) to make Medi-Cal eligibility determinations within 45 days of the application date, as well as other relief. The court granted the petition in part, ordering DHCS to make Medi-Cal eligibility determinations within 45 days unless certain exceptions applied. DHCS appealed, and enforcement of the judgment has been stayed during the pendency of the appeal.

         On appeal, DHCS argues principally that (1) the court should have abstained from deciding the case due to DHCS's ongoing efforts in conjunction with federal officials to reduce delays in the processing of Medi-Cal applications, and (2) no legal authority imposes a duty on DHCS to perform as the trial court directed. We conclude the court did not abuse its discretion by declining to abstain and addressing the merits of the dispute. We also conclude, however, that the provisions of California law relied on by the plaintiffs and by the trial court do not impose on DHCS a duty to make all Medi-Cal eligibility determinations within 45 days. We will therefore reverse the judgment.

         The statutory interpretation issues presented here are highly complex, but boil down to whether 42 Code of Federal Regulations part 435.912 (federal regulation 435.912), as incorporated into California law by cross-reference in Welfare and Institutions Code[1] section 15926, subdivision (f)(5), imposes on DHCS an obligation that is sufficiently clear and plain to be enforceable by writ of mandate. We believe there is an obligation to determine eligibility for Medi-Cal applicants within 45 days under federal regulation 435.912(c)(3)(ii), but that obligation is subject to exceptions. Although the trial court addressed these exceptions by incorporating them expressly into its writ, we think the exceptions bear on more than the scope of writ relief. In our view, they demonstrate that the underlying obligation is not sufficiently clear and plain to be enforceable in mandate at all.

         We do agree with the trial court that the 45-day deadline set forth in federal regulation 435.912(c)(3)(ii) is not merely precatory, and that Medi-Cal applicants who face indefinite delays are not remediless. But in resolving the issues presented, we must focus on the overall statutory and regulatory scheme, not just on federal regulation 435.912(c)(3)(ii) in isolation. Read as a whole, in our view, the governing statutes and regulations prevent DHCS from invoking exceptions to the 45-day rule so frequently that, in the aggregate, the deadline is missed in more than 10 percent of all cases (in other words, DHCS must ensure that completed applications are resolved within 45 days 90 percent of the time). The record sheds no light on whether, at the time this case arose, or at the time the writ issued, DHCS was out of compliance with this overall performance benchmark. What we hold here is that, absent such evidence, it was error to issue writ relief applicable across-the-board for every applicant.

         I. BACKGROUND

         A. The Statutory Framework

         “Medi-Cal is California's program under the joint federal-state program known as Medicaid. (Welf. & Inst. Code, § 14000 et seq.) Medicaid provides federal financial assistance to participating states to support the provision of health care services to certain categories of low-income individuals and families, including the aged, blind, and disabled, as well as pregnant women and others. (42 U.S.C. § 1396 et seq.)

         “Because California has opted to participate in the Medicaid program and receive federal matching funds, it must comply with all federal Medicaid requirements. [Citation.] Among other things, the state must administer its Medicaid program through a plan that has been approved by the federal Centers for Medicare and Medicaid Services (CMS). (See 42 U.S.C. § 1396a; 42 C.F.R. §§ 430.10, 430.15(b) []; Welf. & Inst. Code, § 14100.1.)” (Marquez v. State Dept. of Health Care Services (2015) 240 Cal.App.4th 87, 93-94 (Marquez).)

         Medi-Cal is administered by DHCS. (See § 14100.1; 42 U.S.C. § 1396a(a)(5); Marquez, supra, 240 Cal.App.4th at p. 94.) In general, counties are responsible for determining initial and ongoing Medi-Cal eligibility in accordance with applicable regulations. (§ 14015.5, subd. (c); Cal. Code Regs., tit. 22, §§ 50005, subd. (c), 50101, subd. (a)(1).)

         B. The Backlog in Making Medi-Cal Eligibility Determinations

         The evidence presented in the trial court showed that, beginning in late 2013 and early 2014, there were delays in the determination of applications for Medi-Cal benefits. Evidence submitted by plaintiffs showed that, in some cases, delays in determining eligibility had severe consequences for applicants who did not obtain needed medical care.

         DHCS submitted evidence that multiple factors contributed to the delays, including (1) the filing of an unexpectedly large volume of applications in late 2013 and early 2014 (particularly in March and April 2014), in connection with the implementation of the federal Patient Protection and Affordable Care Act (ACA) (Pub. L. No. 111-148 (Mar. 23, 2010) 124 Stat. 119), which both expanded eligibility for Medicaid/Medi-Cal and changed the method for determining eligibility for many applicants, (2) technology issues associated with the quick design and launch (also in connection with the changed methods of determining eligibility under the ACA) of an automated eligibility system, the California Healthcare Eligibility, Enrollment, and Retention System (CalHEERS), including the electronic health information transfer interface (eHIT) between CalHEERS and preexisting county-based automated eligibility systems, and (3) a large number of duplicate applications and data entry errors.

         By March 2014, there were 900, 000 applications for Medi-Cal benefits that had not been resolved. This total fell to 600, 000 by June 2014, to 350, 000 by September 2014, to about 134, 000 by November 2014, and to about 100, 000 by December 2014. The trial court found that, after plaintiffs filed the present action in September 2014, a reduction in the backlog occurred as a result of DHCS's providing provisional benefits and certain notices to applicants.

         DHCS submitted evidence that it sought to reduce the backlog by working with counties, technology vendors and advocates to identify causes for the delays and implement solutions and workarounds. DHCS also worked with CMS, the federal agency responsible for overseeing the Medicaid program. DHCS kept CMS apprised of its efforts to resolve the backlog and submitted a mitigation plan to CMS. At different stages in this process, DHCS, with CMS's approval, implemented a practice (known in its later phases as “accelerated enrollment”) of issuing temporary provisional benefits to some applicants pending a final determination of their eligibility. DHCS apparently applied this policy to individuals who applied for benefits between November 15, 2014 and July 30, 2015.

         C. The Present Action

         Plaintiffs are applicants for Medi-Cal and a nonprofit organization that assists people in applying for Medi-Cal as well as providing other services. They filed a petition for a writ of ordinary mandate under Code of Civil Procedure section 1085 in September 2014. The petition contends that, under California law, DHCS and its director have legal duties to (1) grant Medi-Cal benefits to otherwise eligible applicants pending verification of their income (First and Fifth Causes of Action), (2) make Medi-Cal eligibility determinations within 45 days of the application date (Second and Fifth Causes of Action), and (3) provide Medi-Cal applicants whose applications are delayed with notice that they may challenge the delay at an administrative hearing (Third, Fourth and Fifth Causes of Action). The petition requested issuance of a writ of mandate compelling DHCS to comply with these duties. The petition did not seek certification of a plaintiff class.

         Plaintiffs moved for a preliminary injunction in October 2014. After receiving briefing and holding a hearing over several days, the trial court granted the motion in part in January 2015. As we discuss further below, the court concluded DHCS had a duty under California law (partly through its incorporation of federal regulation 435.912) to determine applicants' eligibility for Medi-Cal within a 45-day “timeliness standard[].” The court ordered DHCS to determine eligibility for Medi-Cal applications not based on disability within 45 days from the date of the application. The court also ordered that, in cases where this deadline was not met, DHCS could comply with the preliminary injunction by (1) issuing provisional benefits to applicants who appear likely to be eligible, and (2) issuing a notice of hearing rights to other applicants.

         In March 2015, plaintiffs filed a motion for a writ of ordinary mandate under Code of Civil Procedure section 1085. After further briefing and a hearing, the court granted the motion in part in August 2015. The court again determined DHCS has a duty to issue Medi-Cal eligibility determinations (for applications not based on disability) within 45 days of receipt of an application for benefits. The court also held (as it had in connection with the preliminary injunction motion) that DHCS has a duty to issue notice to applicants of the right to request an administrative hearing if eligibility is not determined within 45 days. The court denied plaintiffs' request for a writ requiring DHCS to provide provisional or temporary benefits pending determination of eligibility.

         In a judgment entered in December 2015 and an amended writ of mandate issued in January 2016, the court ordered DHCS to issue an eligibility determination for each Medi-Cal application not based on disability within 45 days of receipt of the application, unless certain exceptions specified in federal or state regulations applied. The court also ordered that, “[a]s an alternate means of complying with” the legal duty to issue eligibility determinations within 45 days, DHCS “may” provide provisional benefits to applicants who are likely eligible for benefits and a notice of hearing rights to other applicants.[2] DHCS appealed.[3] The judgment and writ have been stayed pending appeal, and in May 2016 the trial court denied a motion by plaintiffs to enforce the writ.


         A. Abstention

         DHCS contends the trial court should have abstained from deciding the claims presented by plaintiffs in their petition for a writ of mandate. Trial courts have “discretion to abstain from providing equitable relief, such as restitution and injunctions, in cases requiring them to assume or interfere with an administrative agency's function or to take on an unnecessary burden in monitoring or enforcing injunctive relief, where other, more effective remedies exist.” (Shuts v. Covenant Holdco LLC (2012) 208 Cal.App.4th 609, 618.) “Courts may also abstain when federal enforcement of the subject law would be ‘ “more orderly, more effectual, less burdensome to the affected interests.”' ” (Alvarado v. Selma Convalescent Hospital (2007) 153 Cal.App.4th 1292, 1298.)

         DHCS argues abstention (or “defer[ence]” to CMS) was appropriate here because CMS was actively exercising its oversight responsibilities over the Medi-Cal program, and DHCS was working closely with CMS to achieve substantial compliance with the 45-day timeliness standard. DHCS relies principally on Acosta v. Brown (2013) 213 Cal.App.4th 234, 237-238 (Acosta), in which Division Two of this court affirmed a trial court's decision to abstain from issuing a writ of mandate ...

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