California Ass'n for Health Services at Home v. State Department of Health Care Services
204 Cal. App. 4th 676
| Cal. Ct. App. | 2012Background
- This is an appeal from a judgment granting a supplemental writ of mandate challenging Medi-Cal home health agency rate reviews for 2001–2005.
- Plaintiffs sought mandamus relief to compel a rate review consistent with legal requirements and Ninth Circuit guidance in Orthopaedic Hospital v. Belshe.
- The trial court found the Department of Health Care Services had not performed a proper rate review and issued a writ for a further review.
- The Department concluded in 2009 that 2001–2005 rates complied with 30(A) but did not consider provider costs.
- The court ultimately upheld mandamus authority to require a refined rate review, directing compliance with the state plan and 30(A).
- The court’s disposition awarded partial affirmation and partial reversal, remanding for a further rate review.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether mandamus lies to compel rate-review action. | CAHSAH argues mandamus lies to correct abuse of discretion. | Department contends mandamus does not mandate its discretionary considerations. | Mandamus lies to compel lawful action. |
| Whether the Department must consider provider costs or follow Orthopaedic in reviewing rates. | CAHSAH contends Orthopaedic requires cost-based consideration and data reliability. | Department argues no required cost-based methodology and no mandated Orthopaedic compliance. | Department not required to use Orthopaedic methodology or consider provider costs. |
| Whether the 2001–2005 rate review complied with section 30(A) and quality/access criteria. | CAHSAH asserts the review relied on outdated/irrelevant data and failed to ensure access/quality. | Department maintained its factors supported efficiency, economy, quality, and access. | Department's review was arbitrary and lacked evidentiary support; remand warranted. |
| Whether a supplemental rate review should be ordered. | CAHSAH seeks a proper cost-based, quality-focused review for 2001–2005. | Department argues existing framework suffices absent cost-based mandate. | Yes; remand to conduct a proper rate review under state plan and 30(A). |
Key Cases Cited
- Orthopaedic Hospital v. Belshe, 103 F.3d 1491 (9th Cir. 1997) (costs may inform rate sufficiency; data reliability essential)
- California Assn. for Health Services at Home v. State Dept. of Health Services, 148 Cal.App.4th 696 (Cal. App. Dist. 1 2007) (annual rate reviews; limits on methodology)
- California Hospital Assn. v. Maxwell-Jolly, 188 Cal.App.4th 559 (Cal. App. Dist. 6 2010) (mandamus and administrative action review standards)
- Rite Aid, Inc. v. Houstoun, 171 F.3d 842 (3d Cir. 1999) (statutory requirement vs. method; result-oriented interpretation)
- Methodist Hospitals, Inc. v. Sullivan, 91 F.3d 1026 (7th Cir. 1996) (no strict method mandated to achieve statutory results)
- O.W.L. Foundation v. City of Rohnert Park, 168 Cal.App.4th 568 (Cal. App. Dist. 6 2008) (arbitrary and capricious review standard for agency action)