Missionary Guadalupanas of the Holy Spirit, Inc. v. Rouillard (Aug. 6, 2019, C083232) __ Cal.App.5th __ [2019 WL 3561824]
The Knox-Keene Act requires all health care service plans to offer “basic health care services ‘where medically necessary,’ ” including “preventative health services.” (Health & Saf. Code, § 1367, subd. (i)). The legislature delegated to the Department of Managed Health Care the authority to enact regulations governing the basic services that must be covered. The minimum coverages are set forth in California Code of Regulations, title 28, section 1300.67, which requires plans to include, inter alia, “ ‘a variety of voluntary family planning services.’ ” After approving health insurance policies that limited or excluded coverage for voluntary abortions, the DMHC sent letters to seven plans stating that it had erred in approving them because the Knox-Keene Act prohibits coverage limits or exclusions for legal abortions. DMHC required the plans to file amended documents removing the abortion restrictions.
A Catholic religious order filed a petition for writ of mandate alleging the DMHC’s letters were “underground regulations” that violated the Administrative Procedure Act. The petitioners also objected to the requirement that plans cover “voluntary” abortions since, by definition, those services are not “medically necessary.” The trial court sustained the DMHC’s demurrer, ruling that the letters did not violate the APA because “the only legally tenable interpretation of the law is that all abortion procedures are deemed medically necessary as basic health care services under Knox-Keene.”
The Court of Appeal affirmed. The APA establishes procedures that state agencies must follow when adopting regulations, which include furnishing notice and an opportunity to be heard to persons affected by a regulation. A non-complying regulation is nullified as an “underground regulation,” but the APA does not apply to regulations embodying “the only legally tenable interpretation of a provision of law.” (Gov. Code, § 11340.9, subd. (f).) The court explained that an abortion is one of two possible medically necessary procedures when a patient is pregnant: medical services to facilitate labor and delivery, or medical services to terminate the pregnancy. Both types of services are medically necessary “voluntary family planning services” to treat the condition of pregnancy that fall within the statutory requirement of coverage for “basic health care services.” Accordingly, although the DMHC’s letters were a regulation, they were not subject to the APA because they resolved no ambiguities in the Knox-Keene Act; they instead reflected “the only legally tenable interpretation of the statute.”
