Mendocino Community Health Clinic v. State Department of Health Care Services

Filed 5/2/13 CERTIFIED FOR PUBLICATION

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA THIRD APPELLATE DISTRICT (Sacramento) ----

MENDOCINO COMMUNITY HEALTH CLINIC et C067826 al., (Super. Ct. No. Plaintiffs and Respondents, 34-2010-80000436-CU-WM- GDS) v.

STATE DEPARTMENT OF HEALTH CARE SERVICES,

Defendant and Appellant.

APPEAL from a judgment of the Superior Court of Sacramento County, Michael P. Kenny, Judge. Reversed with directions.

Kamala D. Harris, Attorney General, and Ismael A. Castro and Pauline Gee, Deputy Attorneys General, for Defendant and Appellant.

Law Offices of Douglas S. Cumming and Douglas S. Cumming for Plaintiffs and Respondents.

In this appeal, we must determine whether the Department of Health Care Services (Department), which administers Medi-Cal, may limit payment to federally-qualified

1

health centers (FQHC‟s) for psychological services to two visits per month per patient. The Department concluded that it can, but the trial court granted the petition of Mendocino Community Health Clinic and other related clinics (the Mendocino Clinics), which are FQHC‟s, for a writ requiring payment beyond the two-visit limit. We conclude that the petition was improperly granted. Federal law does not prohibit a state‟s application of utilization controls to psychology services rendered at an FQHC, and state law provides for those utilization controls. BACKGROUND At the time relevant to this appeal, the Medi-Cal program, which is California‟s application of federal Medicaid law, provided coverage of outpatient clinic psychology services. These services, however, are subject to utilization controls. (Cowan v. Myers (1986) 187 Cal.App.3d 968, 973; Welf. & Inst. Code, § 14132, subd. (a).) Welfare and Institutions Code section 14132, subdivision (a) provides that outpatient psychology services are covered by Medi-Cal, “subject to utilization controls.” Section 51304, subdivision (a) of title 22 of the California Code of Regulations states: “[Medi-Cal] coverage of services specified in Section[] . . . 51309 [psychology services] . . . is limited to a maximum of two services from among those services set forth in those sections in any one calendar month.” Subdivision (b) of the same section states: “For purposes of this section, „services‟ means all care, treatment, or procedures provided a beneficiary by an individual practitioner on one occasion.” The Mendocino Clinics, which are FQHC‟s, are Medi-Cal providers of outpatient clinic services. FQHC‟s were described in a federal case (Three Lower Counties Community Health Services, Inc. v. State of Maryland (4th Cir. 2007) 498 F.3d 294 (Three Lower Counties)), upon which the Mendocino Clinics rely in this case: “The federal Medicaid program provides federal financial assistance to States that choose to participate in the program and requires the States to reimburse healthcare providers who provide services to Medicaid enrollees. . . . States need not participate in