American Indian Health & Services Corporation v. Kent (June 19, 2018, C081338) __Cal.App.5th __ [2018 WL 3031822]
A group of federally qualified health centers (FQHCs) and rural health clinics (RHCs), filed a petition for writ of mandate seeking to compel the California Department of Health Care Services to process their claims for retroactive payment for dental, chiropractic, and podiatric services provided to Medi-Cal eligible patients. The Department had withheld payment for these services under Welfare and Institutions Code section 14131.10, which excluded coverage for these services to the extent permitted by federal law, on the basis that they were not “physicians’ services” under the Medicaid Act. While the Ninth Circuit in Cal. Ass’n of Rural Health Clinics v. Douglas (9th Cir. 2013) 738 F.3d 1007 (CARHC) had previously ruled that section 14131.10 was invalid to the extent it eliminated coverage for these services when provided by FQHCs and RHCs, the Department refused to reimburse Plaintiffs for care provided before the date of the CARHC decision. The trial court granted the petition in part, ruling that the Department had to process and pay for all services provided before the CARHC decision, and had to follow existing regulations governing late claims.
The Court of Appeal affirmed, explaining that a mandamus proceeding is not barred by sovereign immunity when it seeks to compel compliance with a mandatory duty, even if that duty requires the release of funds. Since the plaintiffs’ petition merely sought a process that could lead to payment of qualified claims, and since the judgment itself did not award damages, sovereign immunity did not bar the action. Additionally, the court held that CARHC applied retroactively to this and other cases still pending because it did not declare new law but merely interpreted the clear and unambiguous requirement that dental, chiropractic, and podiatric services were “physicians’ services” and therefore subject to reimbursement under the Medicaid Act. Accordingly, the Department should have anticipated that the Ninth Circuit would hold section 14131.10 to be invalid.
Prepared by H. Thomas Watson and Peder K. Batalden, Horvitz & Levy, LLP
California Society for Healthcare Attorneys
1215 K Street, Suite 800
Sacramento, CA 95814
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