Cal. state ct enforces Medicaid 30(A) via mandamus

An intermediate appellate state court in California affirmed a writ of mandamus requiring the California Department of Health Services (DHS) to conduct an annual review of Medicaid reimbursement rates for providers of home health services. However, the court denied a writ of mandamus to change the reimbursement rates. The suit was based on a provision of the California Medicaid state plan and the broad right to seek mandamus relief under California law. California Ass’n for Health Services at Home v. Dep’t of Health Services, 2007 WL 768464 (Cal.App. 3 Dist. Mar. 15, 2007).

The suit was filed by a home health care provider, an association of home health care providers, and a disability rights advocacy group.  The decision was based on a duty to conduct annual reviews of reimbursement rates for home health services contained in a state plan provision which the state repealed after the suit was filed.  Nevertheless, the court found that the case was not moot, since the issue was the lack of reviews of reimbursement rates for the years of 2001 through 2005, when the state plan provision was in effect.  The state plan provision had stated that the purpose of the annual rates was to ensure that the rates comply with federal law, 42 U.S.C. § 1396a(a)(30)(A), which requires the state plan to “provide such methods and procedures relating to the utilization of, and the payment for, care and services available under the plan … to assure that payments are consistent with efficiency, economy, and quality of care and are sufficient to enlist enough providers so that care and services are available under the plan at least to the extent that such care and services are available to the general population in the geographic area.”

 

DHS alleged that the plaintiffs did not have any right to enforce the state plan.  The court agreed that the state plan “creates no explicit private right of action for damages” but held that the state plan could be a basis for the issuance of a writ of mandamus.  The court stated (citing California state court cases): “Mandamus is not an action for damages, because it is an equitable, not a legal remedy.  An action in ordinary mandamus is proper where, as here, the claim is that an agency has failed to act as required by law.”

 

DHS directed the court’s attention to the Ninth Circuit’s decision in Sanchez v. Johnson, 416 F.3d 1051 (9th Cir. 2005), which held that plaintiffs could not enforce § 1396a(a)(30)(A) pursuant to 42 U.S.C. § 1983.  DHS argued that, as a result, plaintiffs could not obtain a writ of mandamus to enforce § 1396a(a)(30)(A).  The court rejected that argument on two grounds.

 

First, the court noted that the suit was not based on a violation of federal law, but rather on a violation of the state plan.  The court stated: “whether the state plan is in the nature of a contract or a law, DHS is required by [California] regulation to follow it.  Thus, if DHS violates the terms of the state plan, it has violated state law as embodied in a regulation.”  The court held that the violation of the terms of a state plan “itself gives plaintiffs standing” in state court. 

 

Second, the court cited California state law for the principle that even if a provision of federal law does not create a private right of action, a writ of mandamus is an appropriate method for enforcing federal law.  The court held that mandamus relief was available under the California state code, even in the absence of a privately enforceable right under section 1983.  The court stated:

 

The nature of the remedy afforded by section 1983 is more limited than the broader remedy available under [California law].  Unlike section 1983, which requires the violation of a private right, privilege, or immunity to confer standing, [California law] confers a broad right to issuance of a traditional writ to those who are beneficially interested within the meaning of [California law].

 

The court noted that under California law, “a beneficial interest means the petitioner has a special interest over and above the interest of the public at large.”  The court found that both beneficiaries and providers met this standard and therefore “plaintiffs have standing to contest the adequacy of the rates paid by DHS.”

 

The court then addressed the merits of the case.  The court held that the state plan “prescribed a ministerial duty to perform an annual review of the reimbursement rates ‘to ensure that the rates comply with federal regulation.’”  The court directed the trial court to issue a writ of mandate compelling DHS to conduct an annual review of the Medicaid reimbursement rates for the years 2001 to 2005. 

 

Yet the court denied the plaintiffs request for a writ of mandate to change the rates.  The court stated: “it is not a function of the writ of mandamus in this setting to compel the setting of rates, regardless of plaintiffs’ showing of inadequacy.  It is only when the state has performed that function that a challenge to any determination by the state may be made.”

 

This case demonstrates that mandamus is a viable route for enforcing provisions of federal law in state court, at least in California.  Advocates in other states may want to compare their state laws regarding mandamus to the California code to determine applicability to other jurisdictions.