Case 2:08-cv-07046-CAS-MAN Document 1 Filed 10/24/08 Page 1 of 24 Page ID #:1

1 LYNN S. CARMAN, State Bar 028860 Medicaid Defense Fund
2 28 Newport Landing Dr. Novato, CA 94949-8214
3 Telephone: (415) 927-4023 Facsimile: (415) 499-1687
4 Email: a7827@comcast.net
5 STANLEY L. FRIEDMAN, State Bar 120551 445 S. Figueora St., 27th Floor
6 Los Angeles, CA 90071-1631 Telephone: (213) 629-1500
7 Facsimile: (213) 489-6899 Email: friedman@friedmanlaw .org
8 Attorneys for California Medical
9 Transportation Association, Inc.

. .
co ~ ~'1:c -;:J
-I

10

11

IN THE UNITED STATES DISTRICT COURT

12

FOR THE CENTRAL DISTRICT OF CALIFORNIA

13

WESTERN DIVISION

14 CALIFORNIA MEDICAL

15 TRANSPORTATION ASSOCIATION, INC.,

16

Plaintiff,

17 -vs.-

18 SANDRA SHEWRY, Director of

Department of Health Care Services

19 of the State of California, and DOES 1

through 50, 20

Defendants.

I 21

COMPLAINT FOR INJUNCTION AND DECLARATORY RELIEF

22

23

Case 2:08-cv-07046-CAS-MAN Document 1 Filed 10/24/08 Page 2 of 24 Page ID #:2

1

The plaintiff CALIFORNIA MEDICAL TRANSPORTATION

2 ASSOCIATION, INC., complains of the Defendant SANDRA SHEWRY, Director of
Department of Health Care Services of the State of California, and DOES 1 through 50,
3
and claims for relief alleges: 4
INTRODUCTION

5
1. Plaintiff challenges:

6

- (1) the validity of an across-the-board ten percent reduction, ("Ten Percent Rate

7

Reduction") under Assembly Bill X3 5 ("AB 5"), in reimbursement rates to

8

providers of non-emergency medical transportation ("NEMT") services to

9

beneficiaries of California's Medicaid ("Medi-Cal") fee-for-service ("FFS")

10

program, furnished on or after July 1, 2008, and,

11

- (2) the validity of an across-the-board one percent reduction, under Assembly

12

Bill ("AB") 1183, in reimbursement rates to providers ofNEMT services to

13

beneficiaries of the Medi-Cal FFS program, furnished on or after March 1, 2009,

14 which Defendant Sandra Shewry, Director of the California Department of Health Care 15 Services is responsible for implementing under AB 5, AB 1183, and Welf. & Inst. Code

16 14105.

17

Jurisdiction and venue

18

2. The Court has jurisdiction under 28 U.S.C. § 1331. Shaw v. Delta Air

19 Lines, Inc., 463 U.S. 85, 96 n.4 (1983).
3. The actions of the Defendant complained were and will be done in all parts 20
of the state of California, including the County of Los Angeles. The injuries which are
21
inflicted and threatened which are complained of, to Plaintiff, its members who are 22
NEMT providers, and their patients in the Medi-Cal FFS program, have occurred and are
23

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1 threatened to occur in all parts of the state of California, including the County ofLos
2 Angeles. The Defendant has an office in the County of Los Angeles.
Parties
3
4. The plaintiff CALIFORNIA MEDICAL TRANSPORTATION 4
ASSOCIATION, INC. ("Plaintiff CMTA") is a California nonprofit corporation, whose
5 principal place of business is Sacramento, California, and does business throughout
6 California, including the County ofLos Angeles, California.

7

5. (a) The purposes of Plaintiff CMTA, as set forth in its articles of

8 incorporation, are to promote and protect the interests of all medical transportation

9 providers in the State of California.

10

(b) As of January 1, 2008, Plaintiff CMTA had 23 members throughout the

State of California, each of whom furnished non-emergency medical transportation
11
("NEMT") services in the Medi-Cal FFS program. Since the effective date ofthe July
12
1, 2008 of AB 5, five members ofPlaintiffCMTA who were NEMT providers were
13
forced to close business due to the ten percent rate reduction of AB 5.

14

6. The Defendant SANDRA SHEWRY ("Director") is the director of the

15 California Department of Health Care Services, ("the Department"). The Director is

16 exclusively empowered by§§ 14100.1 and 14105 California Welfare & Institutions

17 ("Welf. & Inst.") Code to set all policies, rules, and regulations in the Medi-Cal program,

18 including setting all rates payable to Medi-Cal providers, including NEMT providers.

19 The Director is sued in her official capacity only.
7. The Defendants DOES 1 through 50 are persons whose identity and 20
capacities are unknown to Plaintiff CMTA, who for that reason sues them by such
21
fictitious names. Plaintiff CMTA prays leave to amend this complaint when the identify 22
of any of these Does 1 through 50 become known to counsel.
23

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1

8. Plaintiff CMTA is a corporate citizen and resident of the State of

2 California, and sues herein on its own behalf, in its own interest, and the interest of its

members, as well as also on behalf of the public of the State of California, and of the
3
Medi-Cal beneficiary patients of the members of the PlaintiffCMTA to procure the
4
performance of public duty by the defendant public officials: namely the performance of

5
the mandatory public duty of the Director, under and pursuant to the Supremacy Clause,

6 not to injure Medi-Cal beneficiaries and their providers, including NEMT providers, in

7 the Medi-Cal FFS program, by (1) implementing the federally preempted Ten Percent

8 Rate Reduction of AB 5, and by (2) implementing the federally preempted One Percent

9 Rate Reduction of AB 1183, --which aforesaid actions of the Director are preempted,

10 under the Supremacy Clause, in that the aforesaid actions violate and are hence contrary
to 42 U.S.C. § 1396a(a)(30)(A), --"Sec. 30A," --including the quality and equal access 11
clauses of Sec. 30A.
12
9. Plaintiff CMTA also sues in a prudential jus tertii capacity to assert
13
(1) the interests of its members, each of whom is a NEMT provider in the Medi-Cal FFS
14 program as well as (2) the interests of the Medi-Cal patients of the members of Plaintiff
15 CMTA, in the claims for relief, and Supremacy Clause preemption, which are sued upon

16 and sought in this within intervention complaint.

17

10. PlaintiffCMTA, --as well as the NEMT provider members of Plaintiff

18 CMTA, and the Medi-Cal beneficiary patients of the NEMT provider members of

19 PlaintiffCMTA on behalf of whom PlaintiffCMTA sues herein,-- also have standing
and a claim for relief against the Director inasmuch as each has suffered, will suffer, and 20
is threatened to suffer, concrete and irreparable injury, unless the Defendant Director is 21
restrained by an appropriate injunction from implementing the Ten Percent Rate 22
Reduction of AB 5 and the One Percent Rate Reduction of AB 1183, which actions are
23

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1 preempted under the Supremacy Clause by Sec. 30A.

2

INTRODUCTION

11. Medi-Cal is a major component of the "safety net" that ensures the State's 3
poor have access to health care services. Unfortunately for those who depend on it to
4 access basic healthcare services, the low rates at

5 LEGISLATIVE HISTORY OF ASSEMBLY BILL 5

6

12. On January 10, 2008, the California Governor proclaimed a State fiscal

7 emergency, sent a proposed 2008-2009 budget bill to the Legislature, and called the

8 Legislature into special session.

9

13. (a) On February 16, 2008 the Governor signed into law AB X3 5 ("AB 5"),

10 the Special Session health care trailer bill.
(b) Assembly BillS, eff. February 16,2008, was chaptered as Chapter 3, 11
Statutes 2007-2008 Third Extraordinary Session. 12
Assembly Bill 5
13
14. Section 14 of Assembly BillS added §14105.19 Welf. & Inst. Code, 14 which, in subds. (a), (b)(l), (b)(2), and (c)- (e) provides that reimbursement shall be cut
15 I 0% across-the-board in Medi-Cal fee-for-service to providers, including NEMT

16 providers, in the Medi-Cal fee-for-service program, for dates of service on and after July

17 1, 2008.

18

15. § 14105.245 Welf. & Inst. Code, (added by Section 15 of Assembly Bill

19 5 as set forth above), provides:

20

"(a) The Legislature finds and declares that the state faces a fiscal crisis that requires unprecedented measures to be taken to reduce General Fund expenditures

21

to avoid reducing vital government services necessary for the protection of the health, safety, and welfare of the citizens of the State of California." (Emphasis

22

supplied.)

23

16. Finally, Sees. 16 and 17 of Assembly Bill 5 provide:

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1

"SEC. 16. This act addresses the fiscal emergency declared by the Governor

by proclamation on January 10, 2008, pursuant to subdivision (f) of Section 10

2

ofArticle IV ofthe California Constitution.

3

SEC. 17. . .. In order to make statutory changes needed to implement cost

containment measures affecting health services, at the earliest possible time, it is

4

necessary that this act take effect immediately." (Emphasis supplied.)

5

Concrete injury from implementing Sees. 14 and 15 of Assembly Bill 5.

6

17. Plaintiff CMTA, as well as its NEMT provider members and their patients

7 in the Medi-Cal FFS program for whom Plaintiff CMTA is a virtual representative and a

8 jus tertii representative, have been and will, respectively, and foreseeably and inevitably,

9 suffer concrete injury, and are threatened with concrete injury, and are put at risk of
concrete injury, by the Ten Percent Rate Reduction, which was put into effect on July 1, 10
2008 and continuously since then, by the Defendants, pursuant to their policy, practice, 11
and provider bulletin to implement the aforesaid Ten Percent Rate Reduction to 12
providers in the Medi-Cal FFS program, including the NEMT providers who are
13 members of Plaintiff CMTA; --which concrete injury from the Ten Percent Rate
14 Reduction is great, immediate, and irreparable; and which irreparable injury is also both

15 presumed and inferred from the fact that the Legislature and the Director failed to 16 consider quality of services or equal access of beneficiaries in the course of the 17 Legislature enacting and the Director implementing the Ten Percent Rate Reduction of

18 AB 5. Denial of access to NEMT services
19 18. Since July 1, 2008, due to the Ten Percent Rate Reduction, persons with
20 disabilities, including those in the areas served by the NEMT providers who are
21 members of Plaintiff CMTA, (including the area of northern Los Angeles County which
22 is served by several NEMT provider-members ofPlaintiffCMTA), have more difficulty
23
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1 and will continue to have more difficulty in locating NEMT providers to enable them to
obtain access to life-necessary care and services of providers in the Medi-Cal FFS 2
program, due to the Ten Percent Rate Reduction of AB 5, and the prospective One 3
Percent Rate Reduction which commences March 1, 2009, of AB 1183.

4

19. Further, (1) many areas of California formerly served by NEMT providers

5 in the Medi-Cal FFS program have been abandoned byNEMT providers since July 1,

6 2008 due to the Ten Percent Rate Reduction, and will continue to be abandoned under
and due to the One Percent Rate Reduction which commences March 1, 2009; and 7
(2) many NEMT providers have reduced services by not accepting new Medi-Cal 8
patients, or by not accepting Medi-Cal patients at all, or by going out of business, to the
9 great injury and irreparable injury of tens of thousands of Medi-Cal beneficiaries who

10 are unable,-- by reason of no NEMT transportation services or reduced NEMT

11 transportation services, -- to obtain dialysis treatment necessary to their life, or to

12 obtain other life-vital care and treatment in the Medi-Cal FFS program; so as to cause

13 and threaten to cause great physical suffering and injury to Medi-Cal beneficiaries,

including patients of the NEMT members ofPlaintiffCMTA. 14

FIRST CLAIM FOR RELIEF 15

Against each of the Defendants, for injunctive relief to enjoin the

16

Defendants to refrain from implementing a 10% reduction of payments to

Medi-Cal fee-for-service NEMT providers under subds. (a), (b)(1), (b)(2),

17

and (c)- (e) of§ 14105.19 Welf. & Inst. Code,-- which statutes, and the

State action ofDefendants to implement the state statutes, violate, and are

18

hence preempted under the Supremacy Clause by, the quality and equal

access clauses of 42 U.S.C. § 1396a(a)(30)(A).

19
** * * ***

20 20. PlaintiffCMTA refers to and each of the allegations in each of the

21 preceding Paragraphs of this intervention complaint, as if fully set forth herein.

22

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1

21. The Medicaid Act, in 42 U.S.C. § 1396a, subd. (a)(30)(A), provides:

2

"(a) A State plan for medical assistance must- (30)(A) provide for such methods

3

and procedures relating to the utilization of, and the payment for, care and

services available under the plan (including but not limited to utilization review

4

plans as provided for in section 1396b(i)(4) of this title) as may be necessary to

safeguard against unnecessary utilization of such care and services and to assure

5

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

6

the plan at least to the extent that such care and services are available to the

general population in the geographic area; ... " (Boldface emphasis

7

supplied.)

8

22. 42 U.S.C. § 1396a, subd. (a)(30)(A), shall hereinafter be referred to as

9 "Sec. 3OA."

10

23. However, in view of the fact that on January 10, 2008, the Governor

proclaimed a fiscal emergency and called the Legislature into Special Session; and that
11
on February 16,2008 the Legislature enacted and the Governor signed into law 12
Assembly BillS, which proclaims in Sec. 15 that "the state faces a fiscal crisis that

13 requires unprecedented measures to be taken to reduce General Fund expenditures," and

14 which proclaims in Sections 16 and 17 that:

15

"SEC. 16. This act addresses the fiscal emergency declared by the Governor

by proclamation on January 10, 2008, pursuant to subdivision (f) of Section 10

16

ofArticle IV of the California Constitution.

17

SEC. 17. . .. In order to make statutory changes needed to implement cost containment measures affecting health services. at the earliest possible time, it is

necessary that this act take effect immediately." (Emphasis supplied.)

18

The sole function and purpose, and the conclusive consideration in the

19 Legislature's decision to enact subds. (a), (b)(l), (b)(2), and (c)- (e) of § 14105.19

20 Welf. & Inst. Code,-- which provide that the Defendants shall cut Medi-Cal payments to

21 providers in the Medi-Cal fee-for-service program, including NEMT services, was

22 budgetary considerations, to "address the fiscal emergency" declared bythe Governor, and to effect "cost containment measures affecting health services," by making statutory
23

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1 changes needed to reduce expenditures, (to fit the State's reduced budget), commencing July 1, 2008.
2
24. However, therein, by each and all of the above allegations, the enactment
3
of the Ten Percent Rate Reduction in respect to NEMT services and providers in the
4 Medi-Cal FFS program, by subds. (a), (b)(1), (b)(2), and (c)- (e) of § 14105.19 Welf. &
5 Inst. Code by the Legislature was without any consideration of quality and access as
6 required by Sec. 30A,1 and was without any consideration ofwhat it costs NEMT providers to perform the various services and procedures, as required by Sec. 30A;2 such
7 that the State's sole purpose, and the conclusive factor, in enacting the across-the-board
8 10% reduction in reimbursement to providers in the Medi-Cal fee- for-service program,
9 including NEMT providers, was to reduce the budget deficit. Accordingly, under the
10 standard of Orthopaedic Hasp., 103 F.3d 1491, at 1500 (1997); and Arkansas Medical
11 Society, Inc. v. Reynolds, 6 F.3d 519 (8th Cir.1983), the action ofthe Legislature to enact 12 the aforesaid subds. (a), (b)(1), (b)(2), and (c)- (e) of §14105.19 Welf. & Inst. Code,
and the policy and action of the Defendants to implement these statutes by reducing
13
payments to providers in the Medi-Cal fee-for-service program, including payments to 14 NEMT providers, by ten percent (10%), was and is arbitrary and capricious, and contrary
15 to and in violation of the quality and access provisions of Sec. 30A; so that hence, under
16 the Supremacy Clause, the aforesaid subds. (a), (b)(1), (b)(2), and (c)- (e) of §14105.19
17 Welf. & Inst. Code; and§ 14166.245 Welf. & Inst. Code are preempted by Sec. 30A. 25. Accordingly, by each and all of the foregoing facts alleged, subds. (a),
18 (b)(1), (b)(2), and (c)- (e) of § 14105.19 Welf. & Inst. Code, were and are unlawful, in
19 violation of the quality and access provisions of Sec. 30A, so as to be preempted. under
20

21

1 Othopaedic Hospital v. Belshe, 103 F.3d 1491, 1500 (9th Cir.1997).

22

2 Id., 103 F.3d at 1500; Arkansas Medical Society, Inc. v. Reynolds, 6 F.3d 519

(8th Cir. 1993).

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1 the Supremacy Clause, by the quality and access provisions of Sec. 30A, such that the
Defendant Director has been and is acting in excess of and without jurisdiction to 2
implement subds. (a), (b)(!), (b)(2), and (c)- (e) of § 14105.19 Welf. & Inst. Code, by
3 reducing payments to NEMT providers in the Medi-Cal fee-for-service program,

4 commencing July 1, 2008.

5

26. Further, unless restrained by the Court by an appropriate injunction, the

6 Defendant Director has and will implement the aforesaid subds. (a), (b)(1), (b)(2), and

(c)- (e) of § 14105.19 Welf. & Inst. Code, and thereby will cause injury to Plaintiff 7
CMTA; its members who are NEMT providers, and the patients of these NEMT 8
provider-members of Plaintiff CMTA; which injury is irreparable.

9

27. Plaintiff CMTA, its NEMT members, and the patients of the NEMT

10 members of Plaintiff CMTA, have no administrative remedy, nor any plain, speedy, or

11 adequate remedy whatsoever or at all, except by this complaint in intervention for

injunctive relief. 12
WHEREFORE, Plaintiff CMTA prays for judgment and orders as shall 13
hereinafter be specified:

14

SECOND CLAIM FOR RELIEF

15

Against the Director, for declaratory

judgment under 42 U.S.C. § 2201

16 28. Plaintiff CMTA refers to and incorporates each of the allegations in the

17 preceding Paragraphs of this Complaint as if fully set forth herein.

18

29. Welf. & Inst. Code§ 14105.19(b)(1), enacted by AB 5, provided:

19

"(b) (1) Except as otherwise provided by subdivision (c), payments shall be reduced by 10 percent for Medi-Cal fee-for-service benefits for dates of service

on and after July 1, 2008.";
20

(herein, "Subd. (b)(1)"); and subdivision (c) ofWelf. & Inst. Code§ 14105.19,

21 mentioned in the above Subd. (b)(I), did not exclude NEMT services or NEMT

22 providers. Hence the Ten Percent Rate Reduction of AB 5 expressly applied to NEMT

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1 services and NEMT providers.

30. However, the above-entitled Court did, on August 18, 2008, file an order
2
entitled:

3 "Order Granting in Part and Denying in Part Petitioners' Motion for

4

Preliminary Injunction,"

5 (Clerk's Document 121 in Case No. 2:08-cv-03315 in the above-entitled Court, ("ILC')),

6 which provided in relevant part:

7

"The Court hereby orders Defendant Director, her agents, servants, employees,

attorneys, successors, and all those working in concert with her to refrain from

8

enforcing Cal. Welf. & Inst. Code§ 14105.19(b)(l), including refraining from

reducing by ten percent payments under the Medi-Cal fee-for-service program for

9

physicians, dentists, pharmacies, adult day care health centers, clinics, health

systems, and other providers for services provided on or after July 1, 2008."

10

(Emphasis supplied.)

11

31. Subsequent to August 18, 2008, three minute orders were filed in the

12 Clerk's Docket of this Case No. 2:08-cv-03315, namely:

13

-A written order dated August 27, 2008; --being Clerk's Document 135 in ILC;

-A written order dated August 28, 2008, --being Clerk's Document 134 in ILC; 14
-A written order dated Sept. 5, 2008; --being Clerk's Document 162 in!LC; and,

15

-A written order dated Sept. 15,2008,-- being Clerk's Document 175 in!LC.

16

32. Plaintiff CMTA hereinafter refers to the five orders mentioned in

17 Paragraphs 30 and 31, collectively, as a single order, (herein, "the Order in Question").

18

33. A controversy in respect to the Order in Question has arisen between

Plaintiff CMTA and the Defendant Director, in that Plaintiff CMTA claims that the 19
Order In Question, in substance and its totality, ordered the Director to refrain from

20 enforcing Cal. Welf. & lnst. Code§ 14105.19(b)(l); but, the Director has failed at all

21 times to so obey the aforesaid provision of the Order in Question, by deducting 10%

22 from payments to NEMT providers for NEMT services in the Medi-Cal FFS program,

23 for dates of service on or after August 18, 2008.

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1

34. Further, PlaintiffCMTA claims that by virtue of the duty of the Director

not to deduct anything from payments to NEMT for NEMT services furnished in the 2
Medi-Cal FFS program on or after August 18, 2008, --which duty is set forth in the
3
Order in Question, -- that the Director has a present, existing, and continuing mandatory

4 duty to pay over all the 10% deductions to all NEMT providers which the Director has

5 made and will make in the future, to the respective NEMT providers from whose

6 payments the aforesaid deductions were and are being made, -- all, without any demand
being required by any NEMT provider to be entitled to receive such pay over.
7
35. In contrast, the Director claims that the Order in Question does not so
8
provide, and that she has a defense to, and a justification, for (1) not ceasing to make
9 these deductions and (2) not paying over the deducted amounts.

10

36. In tum, a further controversy exists between PlaintiffCMTA and the

11 Director in respect to her claims set forth in the preceding Paragraphs, in that Plaintiff
CMTA claims that under established U.S. Supreme Court decisions, that if a person
12
subject to an injunction has good and legal cause not to obey or to be excused from
13
complying with the injunction, that it is incumbent on the person to apply to the court 14 and obtain an order which amends or terminates the injunction, or excuses the

15 noncompliance with the injunction; and for failure to so apply and obtain any

16 exculpatory order, that the injunction continues in full force and effect as written, so as

17 to cause the person subject to the injunction to continue to subject thereto; but, the
Director disputes this claim of Plaintiff CMTA. 18
37. By the foregoing set forth in this Second Claim for Relief, an actual
19 controversy exists between Plaintiff CMTA, suing on behalf of its constituent member

20 NEMT providers, and the Defendant Director, such that a judgment and order should

21 issue pursuant to 28 U.S.C. § 2201 and Rule 65, Fed. Rules Civ. Proc., which:

22

-First, declares on the one hand, the rights ofNEMT providers, including the

NEMT providers who are members ofPlaintiff CMTA in respect to whom 23

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1

Plaintiff CMTA is their virtual representative and their jus tertii

representative, and,
2

3
-Second, declares on the other hand, the rights and duties of the Defendant

4

Director and her successors in office, in respect to this controversy, and,

5

6

- Third, orders the Director to perform her mandatory duty under the Order in

Question, -- namely, the mandatory duty to pay over all the 10% deductions to 7
all NEMT providers which the Director has made and will make in the future, to 8
the respective NEMT providers from whose payments the aforesaid deductions

9

were and are being made;

10 unless and until the Director applies to the Court and obtains some order from the Court

11 which relieves her from any such further duty in this respect.
38. PlaintiffCMTA, its NEMT members, and the patients of the NEMT 12
members of Plaintiff CMTA, have no administrative remedy, nor any plain, speedy, or
13
adequate remedy whatsoever or at all, except by this complaint in intervention for 14 injunctive relief.

15

WHEREFORE, Plaintiff CMTA prays for judgment and orders as shall

16 hereinafter be specified:

THIRD CLAIM FOR RELIEF
17
Against the Director and Does 1 through 50. 18
39. PlaintiffCMTA refers to and incorporates each of the allegations in the
19 preceding Paragraphs of this Complaint as if fully set forth herein.

20

40. At all times, from and after at least September 15, 2008 to the present and

21 continuing, the Order in Question prohibited and commanded the Director to refrain

22 from enforcing the Ten Percent Rate Reduction ofSubd. (b)(1) ofWelf. & Inst. Code § 14105.19.
23

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1

41. The Legislature on September 30, 20098, while the aforesaid Order in

Question was still in force, did enact Sections 44 and 45 of AB 1183, (Cal. Stats. 20082
2009, Ch. 758), which provisions, as part of one single statute, reduced the Ten Percent

3 Rate Reduction for all Medi-Cal fee-for-service benefits which had been subject to the

4 Ten Percent Rate Reduction under Subd. (b)(l) ofWelf. & Inst. Code§ 14105, (of AB

5 5) to first, a five percent (5%) reduction in Medi-Cal fee-for-service payments to

6 pharmacies, (herein "the Five Percent Rate Reduction"), and second, reduced the Ten
Percent Rate Reduction to a one percent (1 %) reduction in Medi-Cal fee-for-service 7
payments to all other providers who had been subject to the aforesaid Ten Percent Rate
8
Reduction, including NEMT providers ofNEMT services in the Medi-Cal FFS program,
9 (herein "the One Percent Rate Reduction"), for dates of service on or after March 1,

10 2009.

11

42. Sec. 45 of AB 1183 enacted subd. (f) ofWelf. & Inst. Code

§ 14105.191 to provide: 12

"(f) Notwithstanding Chapter 3.5 (commencing with Section 11340) of Part 1 of

13

Division 3 of Title 2 of the Government Code, the department may implement

and administer this section by means of provider bulletins, or similar

14

instructions, without taking regulatory action."

15 Further, the policy and practice of the Director whenever Medi-Cal rate reductions are

16 enacted by the Legislature, which contain a provision as in subd. (f) ofWelf. & Inst.
17 Code§ 14105.191, next above which permits the Director to pass through a rate cut enacted by the Legislature without taking any regulatory action herself, by use of
18 provider bulletins to the providers affected, is to always so pass through the legislative
19 Medi-Cal rate cut, without taking any regulatory action herself, by announcing the rate
20 cut to providers in bulletins, Uust as the Director did in respect to legislative rate cuts in

21 the Medi-Cal program in the 2003-2004, 2004-2005, and 2007-2008 fiscal years, which

22 contained the same above "pass through" authorization set forth in subd. (f) ofWelf. & Inst. Code§ 14105.191.
23

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1

43. Accordingly, based on the above facts alleged in Paragraphs 39 through 42

next above, Plaintiff CMTA alleges that the Director, under her aforesaid policy and 2
practice mentioned in Paragraph 42, will pass through the One Percent Rate Reduction

3
in respect to all payments to NEMT providers, (including the NEMT members of

4 PlaintiffCMTA) for NEMT services furnished on or after March 1, 2009.

5

44. However, -- due to the fact that the existing injunction of the Order in

6 Question still facially currently enjoins the Director:
- in the first ordering clause of the Order in Question, to refrain from enforcing 7
Subd. (b)(l) ofWelf. &Inst. Code§ 14105.19 (ofAB 5),
8
it follows that the Director has been enjoined to refrain from deducting anything 9
from providers such as NEMT providers ofNEMT services in the Medi-Cal FFS
10 program, without first applying to the Court and obtaining an order which terminates or

11 modifies the Order in Question to so allow.

12

45. Therein by each and all of the facts alleged in this Third Claim for Relief,

13 unless:

- (1) a declaratory judgment and order is issued pursuant to 28 U.S.C. § 2201,
14 adjudicating and declaring that the Director must first apply to the Court and

15

show by a preponderance of the evidence that the State has complied with the

16

requirements of the federal Medicaid rate-setting statute, Sec. 30A, in enacting

17

and implementing the One Percent Rate Reduction ofWelf. & Inst. Code

18

§ 14105.191, and,

19 - (2) an appropriate preliminary and permanent injunction is issued,
20

21 the Director will violate the existing Order in Question by implementing the One 22 Percent Reduction to NEMT providers (which include NEMT providers who are 23 members of Plaintiff CMTA), without first applying to the Court in the ILC case,
-14-

Case 2:08-cv-07046-CAS-MAN Document 1 Filed 10/24/08 Page 16 of 24 Page ID #:16

1 (No. 2:08-cv-03315 in the above-entitled Court), and obtaining an order in the ILC case

which terminates or modifies the August 18, 2008 preliminary injunction in the ILC 2
case, so as to permit the Director to implement AB 1183 in respect to dates ofNEMT 3
services on and after March 1, 2009.

4

46. PlaintiffCMTA, its NEMT members, and the patients of the NEMT

5 members ofPlaintiffCMTA, have no administrative remedy, nor any plain, speedy, or

6 adequate remedy whatsoever or at all, except by this complaint in intervention for

injunctive relief. 7
WHEREFORE, Plaintiff CMTA prays for judgment and orders as shall
8
hereinafter be specified:

9

FOURTH CLAIM FOR RELIEF

10

Against each of the Defendants, for injunctive relief to enjoin the

Defendants to refrain from implementmg a One Percent Rate

11

Reduction in respect to NEMT providers, -- which statute, and the State action ofDefendants to implement the state statute, violate, and are

hence preempted under the Supremacy Clause by, the quality and equal

12

access clauses of 42 U.S.C. § 1396a(a)(30)(A).

13

47. Plaintiff CMTA refers to and incorporates each ofthe allegations in the

14 preceding Paragraphs of this Complaint as if fully set forth herein.
LEGISLATIVE HISTORY OF ASSEMBLY BILL 1183
15
48. Assembly Bill ("AB") 1183, --a health trailer bill to implement the 16
budget cutting decisions of the 2008-2009 Budget Bill, was enacted September 30,
17 2008 and was chaptered as Chapter 758, Statutes 2008-2009.

18

AB 1183

19

49. AB 1183 was introduced Feb. 2, 2008 as a hazardous material bill.

However, during the record budget stalemate which preceded enactment of the 200820
2009 budget bill in late September 2008, the budget bills which had passed by each
21
house without 2/3 majority needed for enactment, were sent to the Big Four, namely, the

22 majority and minority leader of each house. When they finally made their budget deal

23

-15-

Case 2:08-cv-07046-CAS-MAN Document 1 Filed 10/24/08 Page 17 of 24 Page ID #:17

1 in late September 2008, the AB 1183 hazardous material bill was amended Sept. 15,

2008 by the Assembly Committee on Budget, passed by both houses on September 16, 2
2008, and signed by the Governor and filed with the Secretary of State on September
3
30, 2008, as part of the process of the Governor signing the Budget Bill for 2008-2009.

4

50. By such legislative history, there were no committee hearings on AB

5 1183. The reasons why its provisions are what they are, are a secret known only to the

6 Big Four leaders of the Legislature who drafted the provisions of AB 1183 in secret.
51. Further, there are hundreds of different health care subjects in AB 1183,
7
each of which required separate consideration by the Legislature if any reasoned
8
decision was to be made by any legislator in the Senate or the Assembly in deciding to
9 vote for or against particular provisions in the hundreds of different subjects contained

10 in the bill. AB 1183 was hence the pure product of pure logrolling, where, if any

11 member wished his or her health care provision in the multi-provisioned AB 1183 to be
enacted, that legislator had to accept blindly all the other provisions relating to the 12
hundreds of other subjects in the same bill.
13
52. It is a fact, and it is manifest from all the facts alleged in this Fourth 14 Claim for Relief, that individual legislators who voted on AB 1183, and the Legislature

15 as a whole, could not and did not appropriately consider whether or not the reduced

16 rates of the Five Percent Rate Reduction for pharmacy services, and the reduced rates of
the One Percent Rate Reduction, were consistent with quality of services, or consistent
17
with equal access of beneficiaries to quality services, in the Medi-Cal FFS program. 18
53. Hence, facially, the action of the Legislature in enacting, and the action of 19 the Director to implement, the One Percent Rate Reduction provisions of AB 1183 were
20 and are arbitrary, capricious, and contrary to law, (namely, contrary to the quality and

21 equal clauses of Sec. 30A; so that the provisions of(new) Welf. & Inst. Code
22 § 14105.191, subds. (a) and (b) which enacted the One Percent Rate Reduction in respect to NEMT services, effective March 1, 2009, violated and hence are preempted,
23

-16-

Case 2:08-cv-07046-CAS-MAN Document 1 Filed 10/24/08 Page 18 of 24 Page ID #:18

1 under the Supremacy Clause, by Sec. 30A. 54. Further, unless restrained by the Court by an appropriate injunction, the
2 defendant Director will implement the aforesaid One Percent Rate Reduction in respect
3 to NEMT services providers (including members of the Plaintiff CMTA); which in
4 tum will thereby result in injury to the Plaintiff CMTA; to its members who are nemt

5 providers; and to patients ofNEMT services providers (including patients of members
6 of the Plaintiff CMTA); --which injury will foreseeably result in NEMT providers (including members of Plaintiff CMTA) not accepting new Medi-Cal patients, or
7 stopping serving Medi-Cal patients at all, or by reducing kinds, amounts, locations, and
8
levels of services to Medi-Cal beneficiaries, or by going out of business, so that thereby
9 beneficiaries are and will be caused, and threatened to be caused, denial and reduction

10 of access to life-vital NEMT services and treatment in the Medi-Cal FFS program,
11 resulting in great physical suffering and injury to beneficiaries, including beneficiaries served by the members of Plaintiff CMTA, many of whom will thereby be forced into
12 institutions such as nursing homes to obtain their necessary medical treatment and
13 medicines, especially to receive dialysis treatments; and some will die; all to the
14 irreparable injury, and threat of irreparable injury, to thousands ofMedi-Cal

15 beneficiaries including the beneficiaries served by the members ofPlaintiffCMTA.

16

55. PlaintiffCMTA and the members ofPlaintiffCMTA, have no

administrative remedy, nor any plain, speedy, or adequate remedy whatsoever or at all, 17
except by this complaint in intervention for injunctive relief.
18
WHEREFORE, Plaintiff CMTA prays for judgment and orders as shall

19 hereinafter be specified:

20 II

21 II
22 II II
23

-17-

Case 2:08-cv-07046-CAS-MAN Document 1 Filed 10/24/08 Page 19 of 24 Page ID #:19

1

FIFTH CLAIM FOR RELIEF

2

Against each of the Defendants, for injunctive relief to enjoin the Defendants to refrain from implementing a One Percent Rate

3

Reduction under Sec. 45 of AB 1183 in payments to NEMT

providers, --which statute, and the State action of Defendants to

4

implement the state statute, violate, and are hence preempted under the

Supremacy Clause by, the quality and equal access clauses of 42 U.S.C.

5

§ 1396a(a)(30)(A).

6

56. Plaintiff CMTA refers to and incorporates each of the allegations in the

preceding Paragraphs of this Petition as if fully set forth herein. 7
57. However, the enactment of the One Percent Rate Reduction in respect to 8
NEMT services and providers in the Medi-Cal FFS program, by subds. (a)- (b)(l) and
9 (e)- (h) of new Welf. & Inst. Code§ 14105.191, by Sec. 45 of AB 1183, by the

10 Legislature was without any consideration of quality and access as required by Sec.

11 30A,3 and was without any consideration of what it costs providers to perform the

12 various services and procedures, as required by Sec. 30A;4 such that the State's sole

13 purpose, and the conclusive factor, in enacting the across-the-board 10% reduction in

14 reimbursement to providers in the Medi-Cal fee-for-service program, including NEMT
15 providers, was to reduce the budget deficit. 58. Accordingly, under the standard of Orthopaedic Hosp., 103 F.3d 1491, at
16 1500 (1997); and Arkansas Medical Society, Inc. v. Reynolds, 6 F.3d 519 (8th Cir.
17 1983), the action of the Legislature to enact the aforesaid subds. (a)- (b)(l) and
18 (e)- (h) of §14105.191 Welf. & Inst. Code, including the One Percent Rate Reduction
19 in respect to NEMT providers (including NEMT providers who are members of
20

21

3 Othopaedic Hospital v. Belshe, 103 F.3d 1491, 1500 (9th Cir.l997).

22

4Id, 103 F.3d at 1500; Arkansas Medical Society, Inc. v. Reynolds, 6 F.3d 519

(8th Cir. 1993). 23

-18-

Case 2:08-cv-07046-CAS-MAN Document 1 Filed 10/24/08 Page 20 of 24 Page ID #:20
1 PlaintiffCMTA); and the policy and action of the Director and the other Defendants to 2 implement these statutes by reducing payments to providers in the Medi-Cal fee-for-
service program, including payments to NEMT providers, by one percent (l%), was
3
and is arbitrary and capricious, and contrary to and in violation of the quality and 4
access provisions of Sec. 30A. 5
59. Accordingly, by each and all of the foregoing facts alleged, subds. 6 (a)- (b)(l) and (e)- (h) of§ 14105.191 Welf. & Inst. Code, and the One Percent Rate 7 Reduction and the Five Percent Rate Reduction, in respect to NEMT providers, were
8 and are contrary to and in violation of the quality and access provisions of Sec. 30A, so
9 as to be preempted. under the Supremacy Clause. by the quality and access provisions 10 of Sec. 30A, such that the Defendant Director is and will be acting in excess of and
without jurisdiction to implement subds. (a)- (b)(1) and (e)- (h) of§ 14105.191 Welf.
11
& Inst. Code, including the One Percent Rate Reduction, to NEMT providers, 12
commencing March l, 2009.
13
60. Further, unless restrained by the Court by an appropriate injunction, the 14 Defendant Director will implement the aforesaid subds. (a) - (b)(1) and (e) - (h) of 15 § 14105.191 Welf. & Inst. Code, and the One Percent Rate Reduction in payments to 16 NEMT providers, commencing March 1, 2009, and thereby will cause injury to .
17 PlaintiffCMTA; its members who are NEMT providers, and the patients of these
18 NEMT provider-members ofPlaintiffCMTA; which injury is irreparable, all, as has 19 been hereinbefore set forth in detail in the within complaint in intervention.
61. PlaintiffCMTA, its NEMT members, and the patients of the NEMT 20
members ofPlaintiffCMTA, have no administrative remedy, nor any plain, speedy, or 21
adequate remedy whatsoever or at all, except by this complaint in intervention for 22
23
-19-

Case 2:08-cv-07046-CAS-MAN Document 1 Filed 10/24/08 Page 21 of 24 Page ID #:21

1 injunctive relief.

2

WHEREFORE, Plaintiff CMTA prays for judgment and orders as follows:

A. That Plaintiff CMTA have judgment against the Defendant SANDRA
3
SHEWRY, Director of California Department of Health Services, (herein, "Director"), 4
and that Defendants take nothing.

5 B. First Claim for Relief

6

That a preliminary and permanent injunction be issued to command the

7 Defendant SANDRA SHEWRY, Director ofthe Department, and the Defendants Does

8 1 through 50, to set aside their preempted policy to implement subds. (a), (b)(1), (b)(2),

9 and (c)- (e) of§ 14105.19 Welf. & Inst. Code, and, to refrain from implementing the
10 same; including but not limited to refraining from reducing payments by ten percent
(10%) or by any lesser deduction, to providers, including non-emergency medical 11
transportation ("NEMT") providers, (including NEMT providers who are members of
12
Plaintiff CMTA), in the Medi-Cal FFS program.
13
C. Second Claim for Relief 14
FIRST: That the Court issue a declaratory judgment and order which declares
15 the rights of the parties in respect to the August 18, 2008 preliminary injunction as

16 amended by minute orders dated August 27, August 28, September 5, and September

17 15, 2008, (herein, "the Order in Question"); and that the Court fmd, adjudicate, and

18 declare that:

19

1. The Order In Question ordered the Director to refrain from enforcing Cal.

Welf. & Inst. Code§ 14105.19(b)(l), but that the Director has failed at all times to so
20
obey the aforesaid provision of the Order in Question, (by deducting 10% from
21
payments to non-emergency medical transportation ("NEMT") providers for NEMT 22
services in the Medi-Cal fee- for-service ("FFS") program, for services on or after
23

-20-

Case 2:08-cv-07046-CAS-MAN Document 1 Filed 10/24/08 Page 22 of 24 Page ID #:22

1 August 18, 2008).
2. That by virtue of the duty of the Director, under the Order in Question,
2
not to deduct anything from payments to NEMT for NEMT services furnished in the
3
Medi-Cal FFS program on or after August 18, 2008, --which duty is set forth in the 4
Order in Question, -- that the Director has a present, existing, and continuing
5
mandatory duty to pay over all the 10% deductions to all NEMT providers which the
6 Director has made and will make in the future, to the respective NEMT providers from
7 whose payments the aforesaid deductions were and are being made, -- all, without any

8 demand being required by any NEMT provider to be entitled to receive such pay over.

9

SECOND: That if the Director has a good and legal cause not to obey or to be

10 excused from complying with the Order in Question, that it is incumbent on the

Director to apply to the Court and obtain an order which amends or terminates the
11
Order in Question, or excuses the noncompliance with the Order in Question; and for
12
failure to so apply and obtain any exculpatory order, that the Order in Question
13
continues in full force and effect as written, so as to cause the Director, who is subject
14 to the Order in Question, to continue to be subject thereto.

15

THIRD: That the Court order the Director to perform her mandatory duty

16 under the Order in Question, to pay over all the 10% deductions to all NEMT providers

17 which the Director has made and will make in the future, to the respective NEMT

18 providers from whose payments the aforesaid deductions were and are being made;
19 unless and until the Director applies to the Court and obtains some order from the
Court which relieves her from any such further duty in this respect; all, without any 20
NEMT provider having to demand that this be done.
21
D. Third Claim for Relief 22
- (1) That the Court issue find, adjudicate and issue a declaratory judgment and
23

-21-

Case 2:08-cv-07046-CAS-MAN Document 1 Filed 10/24/08 Page 23 of 24 Page ID #:23

1 order pursuant to 28 U.S.C. § 2201, which adjudicates and declares that the Director

must first apply to the Court and show by a preponderance of the evidence that the
2
State has complied with the requirements of the federal Medicaid rate-setting statute,
3
Sec. 30A, in enacting and implementing the One Percent Rate Reduction in respect to
4
NEMT services, before the Director may commence to implement the new One
5
Percent Rate Reduction rate of AB 1183; and,

6

- (2) That the Court order and enjoin the Director from implementing AB 1183

7 and its One Percent Rate Reduction, -- unless and until the Director first complies with

8 the August 18,2008 injunction by (1) refraining from deducting any amounts from any

9 payments to providers in the Medi-Cal FFS program, and (2) by paying over to all
10 NEMT providers all amounts of deductions heretofore deducted by the Director from
payments to Medi-Cal providers, since the August 18, 2008 injunction was issued by
11
this Court. 12
E. Fourth and Fifth Claims for Relief 13
That a preliminary and permanent injunction be issued to command the 14 Defendant SANDRA SHEWRY, Director of the Department, and the co-Defendants
15 Does 1 through 50, to set aside their preempted policy to implement subds. (a)- (b)(1)

16 and (e) - (h) of§ 14105.191 Welf. & Inst. Code, and to refrain from implementing the

17 same; including but not limited to refraining from reducing payments by one percent

18 (1 %) or by any lesser or larger percentage or sum of deductions, to Medi-Cal fee-for-
19 service providers, including non-emergency medical transportation ("NEMT")
providers, (including members of Plaintiff CMTA), in the Medi-Cal fee- for-service 20
II 21
II
22
II
23

-22-

Case 2:08-cv-07046-CAS-MAN Document 1 Filed 10/24/08 Page 24 of 24 Page ID #:24

1

2 program.

All Claims for Relief 3
F. That PlaintiffCMTA have costs of suit incurred, together with such
4
other and further relief as may be just.

5 LYNN S. CARMAN

6

STANLEY L. FRIEDMAN

7

By: _L£_~~/~.,k;h~'~=­

Attom s for Plaintiff

8

California Medical Transportation

Association, Inc.

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

-23-

 
 Case 2:08-cv-07046-CAS-MAN Document 10 Filed 11/28/11 Page 1 of 21 Page ID #:48

1 KAMALA D. HARRIS

Attorney General of California

2 JENNIFER M. KIM

. Supervising Deputy Attorney General

3 CARMEN D. SNUGGS, State Bar No. 221935

Deputy Attorney General

4 300 South Sprmg Street, Suite 1702

Los Angeles, CA 90013

5 Telephone: (213) 897-2450

Fax: (213) 897-2805

6 E-mail: Carmen.Snuggs(w.doj.ca.gov

Attorneys for Respondent T'oby Douglas, Director,

7 Department ofI1ealth Care Services

.

8

UNITED STATES DISTRICT COURT

9

CENTRAL DISTRICT OF CALIFORNIA

10

WESTERN DIVISION

1 1

12

13 CALIFORNIA MEDICAL

Case No:: CV08-07046 CAS-MAN

TRANSPORTATION

14 ASSOCIATION, INC.,

NOTICE OF APPROVAL OF

Petitioner, STATE PLAN AMENDMENTS

15

16

v.

Judge: . Crtroom:

Hon. Christina A. Snyder 5

17 18

SANDRA SHEWRY, Director of the Department of Health Care Services . of the State of California;

Trial Date: None Set Action Filed: 10126/2008

19

DEPARTMENT OF HEALTH CARE SERVICES, a Department of

20

the State of California; and DOES 1 through 50,

21

Respondent.

22

23

Respondent Toby Douglas1 files this notice to advise the Court of a recent

24 development in the above-entitled matter. On October 27,2011, the Centers for

25 Medicare & Medicaid Services (CMS) approved the State Plan Amendment (SPA) 26

27

1 Toby Douglas is the current Director for the California Department of

Health Care- Services.

.

-

28

1

Case 2:08-cv-07046-CAS-MAN Document 10 Filed 11/28/11 Page 2 of 21 Page ID #:49

1 governing the Medi-Cal provider reimbursement rates at issue in this matter. In

2 particular, CMS approved the Medi-Cal reimbursement rate reduction for Non-

3 emergency Medical Transportation services that was in effect from July 1, 2008,

4 thru November 16, 2008, and beginning March 1, 2009, through May 3 1, 2011.

5 Copies of the October 27, 2011 letter from CMS and the relevant portion of the 6 SPA are enclosed for the Court's review.

7 Dated: November 28,2011 8 9 10

Respectfully submitted,
KAMALA D. HARRIS Attorney General of Californi~ JENNIFER M. KIM . Supervising Deputy Attorney General

11

12

13

14

LA2008602002

15

S1034588.doc

16

lsi Carmen D. Snuggs CARMEN D. SNUGGS
Deputy Attorney General Attorneys for Respondent Toby Douglas, lJirector, Department of Health Care Services

17

18

19 20

21

22

23

24

25
26

27

28

2

Case 2:08-cv-07046-CAS-MAN Document 10 Filed 11/28/11 Page 3 of 21 Page ID #:50
EXHIBIT A·

Case 2:08-cv-07046-CAS-MAN Document 10 Filed 11/28/11 Page 4 of 21 Page ID #:51

#~.Ylcts '<t,

.

~<~S~ (

DEPARTMENT OF HEALTH & HUMAN SERVICES

Centers for Medicare & Medicaid Services

Administrator

Washington, DC 20201

Toby Douglas Director of Health Care Programs California Department of Health Care Services P.O. Box 997413, MS 0000 Sacramento, CA 95899-7413

OCT2"1211l

Dear Mr. Douglas:

I am responding to the pending request for reconsideration of the decision to disapprove the California State plan amendments (SPAs) 08-009A; 08-009Bl; 08-009B2; 08-009D, which . were submitted on September 30, 2008, and SPA 08-019, which was submitted on December 31,2008. The SPAs proposed to reduce the reimbursement rates for certain services furnished under the approved State plan.

On November 18,2010, the Centers for Medicare & Medicaid Services (CMS) disapproved these amendments because the State did not provide sufficient information concerning the impact of the proposed reimbursement reductions on beneficiary access to services as required by section 1902(a)(30)(A) of the Social Security Act (the Act). Section 1902(a)(30)(A) of the Act requires that care and services are available to Medicaid beneficiaries at least to the extent that care and services are available to the general population in the geographic area. In addition, CMS was concerned that, given the time that had elapsed since the above SPAs had been submitted, the cumulative effect of approval of and subsequent implementation of these reimbursement reductions would .exacerbate beneficiary access concerns. On November 19,2010, the State requested that CMS reconsider the disapproval of the above amendments.

On March 25,2011, the State submitted documentation to support a demonstration of compliance with section 1902(a)(30)(A) of the Act, as it specifically relates to reimbursement rates that are sufficient to enlist enough providers so that care and services are available at least to the extent that care and services are available to the general population in the geographic area. From March 25, 2011, through approximately September 30,2011, CMS has been working with the State to refine the information initially submitted and, as a result of this collaborative process, the State was able to provide metrics that adequately demonstrated beneficiary access. In general, th~se metrics included data which provided:

• Total number of providers by type and geographic location and participating MediCal providers by type and geographic area
• Total number of Medi-Cal beneficiaries by eligibility type • Utilization of services by eligibility type over time • Analysis ofbenchmark service utilization where available·

3

Case 2:08-cv-07046-CAS-MAN Document 10 Filed 11/28/11 Page 5 of 21 Page ID #:52
Page 2 - Toby Douglas
Data concerning these metrics were submitted for State Fiscal Years (SFYs) 2008, 2009 and 2010.
Based on the analysis described above, the State has requested that CMS approve SPAs 08-009A, 08-009Bl, 08-009D. As part ofthe reconsideration of the above SPAs, the State has modified the SPAs to reflect that the reductions prior to 2011 will only be authorized under the plan in those years, and for those periods, during which the State actually impleme.nted the reduction. This targeting addresses the issue we had raised earlier of retroactively implementing rate cuts which might potentially affect current access. As. noted in our original letter denying the 2008 SPAs, recoupment of retroactive reductions might create access problems going forward. The arpendments to the 2008 State plan largely resolve this concern for periods prior to 2011.
Because the State implemented some reductions, CMS was able to study the correlation between the reduction to the reimbursement of those services and the change in the above metrics from SFY 2008 - SFY 2010. Based on this analysis,including a period of rate reductions, CMS was able to conclude that the implementation of the above reimbursement reductions complied with section 1902(a)(30)(A) of the Act so that care and services are available at least to the extent that care and services are available to the general population in the geographic area. As modified, the SPAs also implement payment reductions for certain services in 2011. The retroactive implementation ofrate cuts for a short time in 2011 is of far less concern than the retroactive implementation of rate cuts for several years. Nevertheless, the State demonstrated beneficiary access for SFY 2010, and also submitted a monitoring plan as part of SPA 08-009B1 by which beneficiary access will be monitored on a service-by-service basis for all the services at issue in these three SPAs. We believe that the proposed monitoring process will allow California to ensure that payment rates for 2011 are consistent with section 1902(a)(30)(A) of the Act or to promptly take corrective action if the rates prove to be insufficient. The State will monitor predetermined metrics on a quarterly or annual basis in order to ensure that beneficiary access is comparable to services available to the general population in the geographic area.
In light of the data CMS reviewed, the monitoring plan, and our consideration of stakeholder input, we have determined that these amendments comply with section 1902(a)(30)(A) of the Act and all other applicable requirements of the Act, therefore, SPAs 08-009A; 08-009Bl; 08-009D have been approved, effective July 1,2008. This approval does not affect SPA 08-009B-2 and SPA 08-019. The State has chosen not to pursue the reductions proposed via SPA 08-009B-2, therefore, we understand that the State will . withdraw its formal request for reconsideration ofthis amendment. With regard to SPA 08-019, the State incorporated the reductions initially proposed via SPA 08-019 into the reductions proposed via SPA 08-009A, therefore, we understand that the State will also withdraw its formal request for reconsideration of SPA 08-019. The revised approved plan pages and the HCFA-179 are enclosed.

Case 2:08-cv-07046-CAS-MAN Document 10 Filed 11/28/11 Page 6 of 21 Page ID #:53
Page 3 - Toby Douglas If you have any questions, please have your staff contact Dianne Heffron at (410) 786-3247.
Enclosures

Case 2:08-cv-07046-CAS-MAN Document 10 Filed 11/28/11 Page 7 of 21 Page ID #:54

. FOR: HEll.l.TlI CAR}: FJN.vtCJNG Al.IMlNlSTRAncm

fVltM foWKIJvhl,

_._~!!Yt.t!1.'~~L •• _

.. _ _ _• _ _ _ H •• _

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3.)'kOOkAM JDEN'J'IflCA'10~: TnU XIX r). THE SOCIAL SECU1tlTI' A('T (MlIDICAJD)

·l;u~A.i:-AiJMlNiSTkATOR

~. PROPOSBO EFF£CTIVE D A r t - - - - - - · - · · ......

SBRVICI$: .· J-ieALTH CARlFINANCING ADMINtsnV.nON
5. n?,:~:::~~~1ra~~~~

July 1.:!WlI
_--..1.._ _ _ _ _ _ _ _ _ _. - - ,_ __

U. I'AGE NUMIIER 01: THE-PLAN SB<!TlON OR A'ITA~'T:
~_"!i.l~:=; ~:b!ddP'1V 31
AttwbiUQiI4.1!t B. iii&id piAt' Mid'" Me ~.1 a ~.,11.1J!' \It • ".olunnl • '9 B" ...,,61*»5 , ~d"
; II.MAI..'. 151 p. ,."dptr lSI ,pc! 1M P'G)3 4,
AQ...... 't4.1~-S: AU.. • 5.1 ...&."". c.~
AM.
IU. SOHJI!CT OF AMllNDMmlT:

lMPLBMENT 10% PROVJDBll. P"YMl!NT lU!DUCI'lON POR SPBCIFIBD l'ROVlDBRS AND SERVJCl!S

11. OOVBl\N()R'S II.!VIBW (Citid 0",):

•

8o OOVERNOR'S omCE REPORTSD NO COWNENT COMMENTS OF OOVBRNOlt'S OPPlCE BNCLOSII) NO kEJ'LY JUICIYVBD WlI1llH 4~ DAYS OF SUBMl'ITAL

, X cmmR.. AS SPBCIFlRO: Govcmor'. Office cIoc:5 nol wish \0 ReYiow Slala Plan Amcond1Duil5

16. RBTURN TO:

i
I

17. D..\TI! RBCBJVED:
~I. TYPJID'NAME: (I ..,.." \"""'\)Jv\
23. REMAltY.8:

118. FOR RlWIOftAL OFlICE USK ONLY DATl!MP.ROVBD: Pl..AN APPROVl!D-ONECOPY "1TACHBD

OCT Z 7 2011

Case 2:08-cv-07046-CAS-MAN Document 10 Filed 11/28/11 Page 8 of 21 Page ID #:55

Attachment 4.19-B Page 3.1
STATE PLAN UNDER TITLE XIX .oF THE S.oCIAL SECURITY ACT STATE: California

6) For dates of service on or after July 1, 2008, through and including February 28, 2009, reimbursement for the following outpatient .services described on page 1, paragraph (2), otherwise payable in accordance with the methods and standards described on page 1, paragraph (1), 'in this Attachment 4.19-B are reduced by ten
percent:

• .outpatient hospitaf services rendered in and billed 'by

hospital outpatient departments, as described in Attachment

3.1-A, section 2a.

..

• Emergency medical transportation, as described in

Attachment 3.1-A, section 24a, and in Attachment 3.1-B,

. section 23a.

• Non-drug services provided by a pharmacy, as described in

Attachment 3.1-A, .including but not limited to sections 7c.1

through 7c.4.

• Providers and services included in Supplement 15 to this

Attachment.

The outpatient .provider types and services specified below are exempt from the ten percent reduction:

• Services :provided and billed by PhYSiCians, as described in
Attachment 3.1-A, section .5a.
• Services provided and bU'ed by Clinics, as described in Attachment 3.1-A, section 9.
• Services ·providedand billed by .optometrists, as described in Attachment 3.1-A, section 6b.
• Services provided and billed by Dentists, as described in Attachment 3.1-A, section 10.

(7) For dates of service on or,after July 1, 2008, through and including
November 16, 2008, reimbursement for the following outpatient services described on page 1, paragraph (2), otherwise payable in accordance with the methods and standards described on page 1, . paragraph (1), in this Attachment 4.19-B .are reduced by ten percent

• Nonemergency medical transportation services, as described in

Attachment 3.1-A, section 24a, and in Attachment 3.1-B, section

23a.

"

.

• Home health serv.ices, as described in Attachment 3.1-A, section 7 (refer to rates on page 20a in this Attachment).

TN No 08-00981
Supersedes TN # None·

OCT 2 7 1~11

Approval Date

Effective Date JulY 1. 2008

7

Case 2:08-cv-07046-CAS-MAN Document 10 Filed 11/28/11 Page 9 of 21 Page ID #:56

Attachment 4.1.9-B Page 3;2

STATE PLAN UNDER TITLE XIX OF THE SOCIAL SECURITY ACT

STATE: California

.

(8) For dates of service on or after March 1, 2009, reimbursement for
the following outpatient services described on page 1, paragraph (2), otherwise payable in accordance with the methods and standards described on page 1, paragraph (1), in this Attachment 4.19-B are reduced by one percent:

• Any and all services provided and billed by PhYSicians and Clinjcs to beneficiaries :Iess than age 21, as described in Attachment 3.1-A, sections 5a and 9;
• .Home health services, as described in Attachment 3.1-A, section 7 (refer to rates on 'page 20a in this Attachment).

(9) For dates of service on or after March 1, 2009, through and including ·May 31, 2011, reimbursement for outpatient services
described on page 1, paragraph (2), otherwise payable in
accordance with the methods and standards described on page 1, paragraph (1). in this Attachment 4.19-8 will be reduced by one . percent. Providers and services subject to this rt;!duction include:

• Any and all services provided and billed by Physicians and Clinics to beneficiaries aged 21 and older. as described in Attachment 3.1-A,sections 5a and 9.
• Medical transportation (emergency and nonemergency). as described in Attachment 3.1-A. section 24a, and in Attachment 3.1-B, section 23a.
• Services provided and billed by Optometrists, as described in Attachment 3.1-A, section 6b. .
• Services provided and billed by Dentists, as described in Attachment 3.1-A, section 10.
• Providers and se:rvicesincluded in Supplement 15 of this Attachment.

(10) For dates of service on or after March 1, 2009. through and including April 5, 2009, and dates of service on or after January 1,
2011, through and including April 12, 2011,reimbursement for outpatient hospital services set forth in Attachment 3. 1-A, section 2a, rendered ,in and billed by a hospital outpatient department, described on page 1, paragraph (2), otherwise payable in accordance with the methods and standards described on page 1, paragraph (1), in this Attachment 4.19-B, are reduced by one percent. .

TN No 08-009B1 ·Supersedes
TN# None

OCT 2 71611
Approval Dat~ _ __ .Effective Date July 1! 2008

Case 2:08-cv-07046-CAS-MAN Document 10 Filed 11/28/11 Page 10 of 21 Page ID #:57
Attachment 4.19-8 Page 3.3
STATE PLAN UNDER TITLE XIX OF THE SOCIAL SECURITY ACT STATE: California

(11) For dates of service on or after March 1, 2009, through and

including May 31, 2011 ,reimbursement for non-drug services

, ,

provided by a pharmacy, set forth in Attachment 3.1-A, including but

~

not limited to sections 7c.1 through 7c.4, otherwise payable in

accordance with the methods and standards described on page 1 in

this Attachment 4.19-8, are reduced by fIVe percent.

(12) The ,payment reductions provided in paragraphs (6) and (10) to
hospital outpatient department services set forth in Attachment 3.1-A, section 2a, provided and billed by small and rural hospitals, as defined in Section 124840 of California's Health and Safety
Code, will 'be Implemented as ,follows:

• For dates of service provided on or after July 1, 2008, through

and including October 31, 2008, a ten percent payment

reduction will apply.

-For dates of service provided on or after November 1, 2008,

through and including December 31, 2010, no payment

reduction will apply.

'

• For dates of service ,provided on or after January 1, 2011,

through and including April 12, 2011, a one percent payment

'.reduction will apply.

• 'For dates of service provided on or after April 13, 2011, no

payment reduction will apply.

(13) The payment reductions specified in paragraphs (6) through (12) do 'not apply to supplemental payments and only apply to the basic Medi-Cal reimbursement rate.

(14) The payment reductions specified in paragraphs (6) through (12) apply only to those services described in Attachment 3.1-A entitled, Amount, Duration, and Scope of Medical and Remedial Care and
Service Provided to the Categorically Needy and Attachment 3.1-8
entitled, Amount, Duration and Scope of Services Provided Medically Needy Group(s), which are billed to the Department directly by the provider that rendered the service.

(15) The payment reductions specified in paragraphs (6) through (12), set
forth on pages 3.1 through 3.4 do not apply to the following provider types and services:

TN No 08-00981
Supersedes TN#- None

Approval Date OCT 2 7'lB\!ffective Date July 1. 2008

Case 2:08-cv-07046-CAS-MAN Document 10 Filed 11/28/11 Page 11 of 21 Page ID #:58

Attachment 4.19-B Page 3.4
STATE PLAN UNDER TITLE XIX OF THE SOCIAL SECURITY ACT STATE: Califorrua

• Federally quatifledhealth center services, described in Attachment

3.1-A, sections 2c and 2d, including those facilities deemed to have

federally qualified health center status pursuant to a waiver under

subdivision (a) of Section 1115 of the federal Social Security Act.

• Rural health clinic services, as described in Attachment 3.1-A,

section 2b.

• Payments to facilities owned or operated by the State Department

ofMental Health for psychology services, as defined in Attachment

3.1-A, section 6d.1 or to the State Department of Developmental

Services for targeted case management services, as defined in

Attachment 3.1-A, ·section 19.

• Services ,provided by local education agencies, as described in

Attachment 3.1-A, section 24g, and Attachment 3.1-8, section 23g.

. • Breast and cervical cancer treatment services, including but not

Umited to diagnostic, screening, and treatment services related to

breast and cervical cancer, as described in Attachment 3.1-A,

sections 2a and 5a.

• FamiJy·planning services and supplies, as described in Attachment

. 3.1-A, item 4c, provided by the Famf/y Planning, Access, Care, and

Treatment (Family PACn Program.

.

.•. Hospice se.rvices, as described in Attachment 3.1-A, section 18.

(16) The effect of the payment reductions in paragraphs (6) through (12) wiJIbe monitored in accordance with the monitoring plan at Attachment 4.19-F, entitled "Monitoring Access to Medi-Cal Covered Healthcare Services".

TN No 08-00981 Supersedes
1..1 _ _ _ TILI~
II.. ,.. . ....UII'O

OCT 2 72t111

Approval Date

Effective Date July 1, 2008

10

Case 2:08-cv-07046-CAS-MAN Document 10 Filed 11/28/11 Page 12 of 21 Page ID #:59

Supplement 15 to Attachment 4.19-8 Page 1

OTHER OUTPAT1ENT PROVIDERS SUBJECTTO PROV1DER PAYMENT· REDUCTIONS
The providers and serv1ces included In this Supplement are subject to the payment reductions desulbedon pages 3.1-3.4 of Attachment 4. 19-8 when billed to the Department by the provider who rendered the serAee'. The services are described in Attachment 3.1-A entitled, "Amount '. Duration and Scope of Medical and Remedial Care and Service Provided to the Categortca'lIy Needy'.

Provider Type

Allowable Services

Umltatlons on

Attachment 3.1-A

. Assistive Device and Sick'Room Durable Medical Equipment

7c.2

. Page 14 "

Supply Dealers. (Durable Medical . Medical Supplies

7c.1

Page 13

. Equipment)

Eye~'ances

12d

' Page 18

Hearlng AIds

7c.3

.Page 14

, Audiologists

Audiological Services , Speech Pathology Services

28

Page 2

. 2a

. Page2

Hearing Aids

7c.3

Page 14

Blood Banks

Blood and Blood Derivatives

. "2a

Page 2

"Certified Nurse Midwife

Nurse Midwife Services

17

Page 22

Famllv Planning Services Laboratory Services

4c

Page9d

3

. Page 4

Extended Services far Pregnant Women 20

Page 24

Chiropractors

Chiropractic Services

6c

' Page 11

Certlfled Nurse Practitioner,

Certified Pediatric or Family Nurse

23

Certified Nurse Practitioner

Practitioner Services

Family, and Certlfled Nurse Practitioner Pediatric

Family Planning Services Laboratory Services

4c

Page 9d

.3

Page 4

Extended Services for Pregnant Women 20

.Page 24

Clinical laboratories

laboratory and Pathology Services

3

Page 4 .

Radiology/Nuclear Medicine Services

3

Page 4

Group Certified Nurse

. Certified Pediatric or Family Nurse

23

PractItioner,

Pract1tioner Services

Group Certified Nurse 'Practitioner Family, and Group Certified ·Nurse Practitioner Pediatric

Family P,lannlng Services

4c

LabonrtoryServkes

3

Extended Services for Pregnant Women 20

Page 9d
Page 4 Page 24

,Fabricating Optical Laboratory! Lenses and Frames

12d'

See Eyeglasses

Prison Industry Authorlty

and Other Eye

Appliances

Page 18

Dispensing Opticians
TN No. 08-00981
Supersedes
TN No.N/.A

Eye Appliances
.OCT Approval Date. 2 7 2011

12d

Page 18

Effective Date. _ __

/1

Case 2:08-cv-07046-CAS-MAN Document 10 Filed 11/28/11 Page 13 of 21 Page ID #:60

Supplement 15 to Attachmem 4.19-8 Page 2

Hearing Aid Dispensers

Hearing Aids AudIological Services

7c.3

Page 14

21,

: Page 2

, N~rseAnesthetlsts

Nurse Anesthetists Services .

&:1.2

P.age 118

; Laboratory Services

3

Page 4

Occupational Therapists

Occupational Therapy

11

Page 16

Orthotlsts

Orthotic Appl.\ances

12c

Page 18

Medical Supplies

7c.1

' Page 13

Durable Medical Equipment

' 7c.2

Page 14

Physical Therapists

Physical Therapy

11

Page 16

Podiatrists

Podiatry

6a

Page10b

laboratory Services

3

Page 4

Durable Medical Equtpment

7c.2

Page 14

Orthotic Appliances

12c

PagelS

'Portable X-Ray

Radiology/Nuclear Medicine ServIces

3

Page 4

Prosthetlsts
!
I
i
1 , Psychologists

Prosthetic Appliances Medical Supplies Durable Medical Equipment Orthotic AppUances Psychology ServIces

12c

Page 18

7c.1

Page 13

7c.2

Page 14

I2c

' Page 18

6d.l

Page ItA

Certtfled Aalpuncturlst

Acupuncture Services

6d3

Page 12

I

Genetic Disease Testing

I!.

Speech TherapIsts

Expanded Alpha Fete-Protein Screening 3 Services

Speech Pathology Services

11

AucUologlca' ServIces

2a

See Laboratory Services Page 4
' Page 16 Page 2

Certified Hospice Service,

: Hospice Services

18

; Page 22

; Outpatient Heroin Detoxlflcatlon Outpatient Heroin Oetox. services

lSd.3

Pase 19

Center

Resplratory'Care Practitioners Respiratory Care Practitioner SeJVIces , 22

Health Access Program

Extended Services for Pregnant Women 20

Page 24

Outpatient Clinic Services

2a,9

Page(s) 2 and 15

Group Respiratory Care

'Respiratory Care Practitioner Services ' 22.

Practitioners

Individual Nurse Providers

' EPSDr Supplemental Services .

; 4b

Page9a

callfornla Children's Services/Genetically

CCS/GHPP Services Including PhysiCians, Sa, 9 Clink and Case Management Services

, 'See Physician and CIl'nlc Services

Handicapped Person Program (CCS/GHP,p) Non-lnstltutional Licensed Midwife (LMW)

Physician and Clinic Services Related to Sa, 9

Page(s) 9d and 15 See Physician and

Obstetrics, Gynecology, and Maternal care Services

Clinic Services Page{sl9d and 15-

TN No. 08-00981
Supersedes
TN No. N/.A

Approval Date: OCT 2 ·7 2011

Effective Date: _ __

/A,

Case 2:08-cv-07046-CAS-MAN Document 10 Filed 11/28/11 Page 14 of 21 Page ID #:61
Attachment 4.19-8 Page 64
STATE PLAN UNDER TITLE XIX OF THE SOCIAL SECURITY ACT STATE: CALIFORNIA
REIMBURSEMENT FOR ADULT DAY HEALTH CARE CENTERS
(1)Reimbu~entfor services provided in an Adult Day Health Care (ADHC) Center shall be equal to 90 percent of the rate established for Nursing FaciUties - ,Level A for the corresponding rate year, pursuant tQ the methodology described in Attachment 4.19-D, beginning on page lO.
(2) For dates of service on or after March 1, 2009, through and including March 8, 2009,payments for services provided in an ADHC Center shall be,the rate as calculated in paragraph (1), less 5 percent
(3) For dates of servtce March 1, 2011, through and including May 31, 2011, payments for services provided in ADHC Centers located within specified Medical Service Study Areas (MSSAs) in Alameda, Contra Costa, Los Angeles, Marin, Orange, Riverside, San Bemar:clino, San Diego, San Frallcisco, San Mateo, Santa Clara, Santa Cruz and Ventura counties shan be the rate as calculated in paragrapi1 (1), less 5 percent.
MSSAs are the defined geographic analysis 'unit for the California Office of Statewide Health Planning and Development (OSHPD). They are composed of one or more complete U.S. Census 8ureau census tracts. and are reproclucedon the decadal census. The boundaries are approved by the Heatth Manpower Policy Commission and the U.S. Department of Health and Human Services, Health Resources Service and Administration (HRSA), form~11y recognizes Califomia MSSAs as the Rational Service Area for 'medical service for California. MSSAs are published at on the OSHPD website at: ' http://www.oshpd.ca.gov/GeneralinfoIMSSAIAtoC.html.

TN No 08-00981
Supersedes TN No. None

. vn\r.T1

'1 $.I

17 'l1\11
I LV~ I

Approval Date_ _ __

Effective Date: _ __

/3

Case 2:08-cv-07046-CAS-MAN Document 10 Filed 11/28/11 Page 15 of 21 Page ID #:62
Attachment 4.19-B Page 64
STATE PLAN UNDER TITLE XIX OF THE SOCIAL SECURITY ACT STATE: .CALIFORN'IA
REIMBURSEMENT FOR ADULT DAY HEALTH CARE CENTERS
(1) Reimbursement for services provided in an Adult Day Health Care. (ACHC) Center shan be equaJ to 90 percent of the rate established for Nursing Facilities - Level A for the corresponding rate year, pursuant to the methodology described in Attachment 4.19':0, beginning on.page 10.
(2) For dates of service on or ~fter March 1, 2009, through and including March 8, 2009, payments for services provided in an ADHC Center shall be the rate as calculateclinparagraph (1), less 5 percent
(3) For dates of service March 1, 2011, through and including May 31, 2011, payments for services prov.ided .in ADHC Centers located within specified Medical Service Study Areas (MSSAs) in Alameda, Contra Costa, Los Angeles, Marin, Orange, R~verside, San Bernardino, San Diego, San Francisco, San Mateo, Santa Clara, Santa Cruz and Ventura counties shall be the rate as calculated in paragraph (1), tess 5 percent.
MSSAs are the defined geographic analysis unit for the California Office of Statewide Health Planning and Development (OSHPD). They are composed of one or.more complete U.S. Census Bureau census tracts. and are reproduced on the decadal census. The boundaries are approved by the Health Manpower Policy Commission and the U.S. Department of Health and Human Services, Health Resources Service and Administratfon (HRSA), formally recogniz~s California MSSAs as the Rational Servjce Area for medical service for California. MSSAs are published at on the OSHPD website at: http://www.oshod.ca.gov/Generallnfo/MSSAlAtoC.html.

TN No 08-00981
Supersedes TN No. None

nrT
\I\. I

~'1

I'T I

"L"U«l I

Approval Date

Effective Date: _ __

/4

Case 2:08-cv-07046-CAS-MAN Document 10 Filed 11/28/11 Page 16 of 21 Page ID #:63

Attachment 4.1 ~O Page 15.4

2. A skilled nursing facility that is a distinct part of a general acute care hospital as defined in Section 72041 of Title 22 of the California Code of ReguJations.
3. A subacute care program, as described in Section 14132.25 or
subacute care unit, as described in Sections 51215.5 and 51215.8
of TltIe 22 of the California Code of Regulations.
K. Unless otherwise specified, in this Section K, the facility types listed below will be reimbursed at the prospective rate for services provided in the particular rate year. The tables below reflect rate reductions at specified percentages (or rates that remain unchanged) with respect to the prospec:tiv$ rate applicable for the particular time period. ·Prospective rate- means the prospective rate established for a given rate year in accordance with this Part IV (and other provisions of this Attachment, as applicable). Reductions specified below will only be applied for the dates listed.
1. Nursing FacUities - Level A (NF-Al

Period 07/01/08 - 07/31/08 OB/01/0B - 02128/09 03/01/09 - Present

Nursing Facilities 'Level A Reduction 10%
10%
5%

'Wlth Respect to:
Prospective rate for 2007/08
ProspeCtive .rate for ; 2008109
Prospective rate for 2008109

2. Skilled Nursing Facilnies that are Distinct parts of General Acute 'Care Hospitals - Level B JDPINF-B)

Distinct Part Nursing Facilities Level B

Period

Reduction

With Respect to:

07/01/08 - 07/31/08 .

10%

Prospective rate for • 2007108

08101/08 - 02128109

10%

Prospective rate for . 2008/09

Prospective rate for

. 03101/09 - 04/05109

5%

2008/09

Set at Prospective rate for

,

08/01/09 - 02123110 •

2008/09

Prospective rate for .

03/01/11 - Present

5%

2008/09

TN. No. 08-0090

Supersedes

OCT 2 72011

, ,

TN. No. 03-041

Approval 'Date

Effective Date July 1. 2008

--!

Case 2:08-cv-07046-CAS-MAN Document 10 Filed 11/28/11 Page 17 of 21 Page ID #:64

Attachment 4.19-0 Page 15.4a

3. Subacute Care Units that are. or are parts of. Distinct Parts of General Acute Care HosDitalstDPINF Subacute)

Distinct Part Adult Subacute

Period

Reduction

With .Respect to:

Prospective rate for

07/01/08 - 07/31/08

10%

2007/08

'Prospective rate for

08/01/08 - 02128109

10%

2008/09

Prospective rate for

03/01/09 -04105109

5%

2008109

Set at Prospective rate for

08101/09 - 02123110

2008109

TN. No. Q8-OQ90 Supersedes TN.No.NlA

...,. 1..1....... \:~l ova__ D_a_t_A_._O_C_T_._2_7_·201 Ap.•.L._.nPl_ 1

_

n _.... ~""'''''lyg wal.g ,",UIY I, ,u"unge

/0

Case 2:08-cv-07046-CAS-MAN Document 10 Filed 11/28/11 Page 18 of 21 Page ID #:65

Attachment 4.19-0 Page 15.4b

4. Freestanding Pediatric Subacute Care Unit

Freestanding 'Pediatric Subacute

Period

Reduction

With Respect to:

Set at Prospective rate for

: 08101/09· Present

2008/09

5. Pediatric Subacute Care Units that are. or are Darts of. Distinct Parts of Generm Acute Hospitals (DPINF Pediatric Subacute)

Distinct Part Pediatric Subacute

i '

Period

Reduction

WrthRespect to:

07/01/08·07/31/08

Prospective rate for

10%

'2007/08

08/01/08·02128109

Prospective rate for

10%

2008109

03/01/09·04/05/09

Prospective rate for

5%

2008109

Set at Prospective rate for

08/01/09 -,02123110

2008109

6. Intermediate Care Facilities for the Developmentally Disabled nCFIDDl

Period 08/01109 - Present

ICFIDD
Reduction
Set at Prospective rat~ for 2008109

With Respect to:

7. Intermediate Care Facilities for the Developmentally Disabled-

Habifitative (ICFIDD-H)

, ,

Period

ICF/DD - H Reduction
Set at Prospective rate for

With Res~ct to:

f
i
t
t
f

08101/09· Present

2008109

!
r

t

i

TN.No.O~D
Supersedes
TN. No. N/A

OCT 2 7 2011

'

Approval Date

Effective Date July 1J 2008

17

Case 2:08-cv-07046-CAS-MAN Document 10 Filed 11/28/11 Page 19 of 21 Page ID #:66

Attachment 4.1 Q..O Page 15.4c

8. Intermediate Care FacUities for the Developmentally Disabled Nursing (ICFIDD-N)

Period 08101/09 - Present

ICFIDD -N
Reduction
Set at Prospective rate for. 2008109

With Respect to:

9. Rural Swing Bed

Period 07/01/08 - 07/31/08 08101/08 -10/31/08 08101/09 - 02123110 , 03/01111 - Present

Rural SWing Bed Reduction
10%
10% Set at Prospective rate for
2008109 .Set at Prospective rate for
2008109

With Respect to:
Prospective rate for 2007/08
Prospective rate for 2008/09

L. The payment reductions in boxes (1) through (9) will be monitored in accordance with the monitoring plan at Attachment 4.19-F, entitled ~Monitoring Access to Medi-Cal Covered Healthcare Services·.

TN. No. 08-0090
Supersedes rN.No.NiA

orT 9 i"f ?ni~
Approval Oate- -. ,., , l.IH J Effective Date July 1.2008

/8

Case 2:08-cv-07046-CAS-MAN Document 10 Filed 11/28/11 Page 20 of 21 Page ID #:67

t' " !

Attachment 4.19-0 , Page 15.4d

V. ,DETERMINATION OF RATES FOR NEW OR REVISED PROGRAMS
A. When State adopts a new service or significantly revises an existing service, the rate of reimbursement shall be based upon comparable and appropriate cost ,information which is available. Comparable rate and cost data shall be selected and combined in such a manner that the rate ,is reasonably expected to approximate median audited facUity costs, had accurate cost reports ,been available for the particular class of facility. Such factors as mandated staffing levels and salary levels tin comparable facilities shall be taken into account. This method of .rate-setting shall ordinarity be relied upon to set rates only until such time as accurate cost reports which are representative of ongoing operations become available.
·B. 'When ·it is determined that cost report data from a class of facilities is not reliable for rate-setting purposes due to inaccuracies or reporting errors, a random sample of such facilities shall be' selected for audit and the resulting audited costs shall be used for the rate study. After five years from the end of the fiscal year in which a facility begins participating in a program for Medi-Cal reimbursement, the reimbursement rate methodology will ,either revert to the provisions described in Section I through IV of Attachment 4.19 - 0 or be subject to new provisions as described in a State Plan Amendment.

---.-....-- ..TN. No.08-OQ90
~ .\,J. . . . . . . ,~
TN: No. NlA

Of'T '}
"""1 IJ

17
I

,.",nuHn

Approval Date

Effective Date JulY 1, 2008

11

Case 2:08-cv-07046-CAS-MAN Document 10 Filed 11/28/11 Page 21 of 21 Page ID #:68

1
2
3 Case 4 Name:
5

CERTIFICATE OF SERVICE

California Medical Transportation Association, Inc. v Sandra Shewry, et al.

No. CV08-07046 CAS-MAN

6

I hereby certify that on November 28, 2011, I electronically filed the following

7 document with the Clerk of the Court by using the CMlECF system:

8

9

NOTICE OF APPROVAL OF STATE PLAN AMENDMENTS

10

11

Participants in the case who are registered CM/ECF users will be served by

12 the CM/ECF system.

l3

14

I declare under penalty of perjury under the laws of the State of California the

15 foregoing is true and correct.

16

Executed 'On November 28,2011, at Los Angeles, California.

17

18

M. Chacon

19

Declarant

20

Is/M. Chacon
Signature

21

22

23 24 25 26

27

28

3

 
 Case: 2:08-cv-7046 As of: 02/09/2013 02:44 PM PST 1 of 2
(MANx), CLOSED, DISCOVERY, RELATED−G
UNITED STATES DISTRICT COURT for the CENTRAL DISTRICT OF CALIFORNIA (Western Division − Los Angeles)
CIVIL DOCKET FOR CASE #: 2:08−cv−07046−CAS−MAN

California Medical Transporation Association, Inc. v. Sandra Shewry et al Assigned to: Judge Christina A. Snyder Referred to: Magistrate Judge Margaret A. Nagle Related Case: 2:08−cv−03315−CAS−MAN Cause: 28:2201 Constitutionality of State Statute(s)
Plaintiff

Date Filed: 10/24/2008 Date Terminated: 06/01/2011 Jury Demand: None Nature of Suit: 950 Constitutional − State Statute Jurisdiction: Federal Question

California Medical Transporation Association, Inc.

represented by Lynn S Carman Medicaid Defense Fund 8 Waterbury Lane Novato, CA 94949−8239 415−927−4023 Fax: 415−499−1687 Email: lynnscarman@hotmail.com LEAD ATTORNEY ATTORNEY TO BE NOTICED

Stanley L Friedman Law Offices of Stanley L Friedman 445 South Figueroa Street 27th Floor Los Angeles, CA 90071−1631 213−629−1500 Fax: 213−489−6899 Email: friedman@friedmanlaw.org LEAD ATTORNEY ATTORNEY TO BE NOTICED

V.
Defendant
Sandra Shewry Director of Department of Health Care Services of the State of California
Defendant
DOES 1 through 50

Date Filed 10/24/2008
10/24/2008 10/24/2008 10/24/2008

# Docket Text
1 COMPLAINT against Defendants Sandra Shewry, DOES 1 through 50. (Filing fee $ 350 PAID.), filed by Plaintiff California Medical Transporation Association, Inc. [Given Dismissal of Does.] (et) (Additional attachment(s) added on 10/27/2008: # 1 Notice of Assignment, # 2 Summons, # 3 Civil Cover Sheet) (ds). (Entered: 10/27/2008)
20 DAY Summons Issued re Complaint − (Discovery) 1 as to Defendants Sandra Shewry, DOES 1 through 50. (et) (Entered: 10/27/2008)
2 CERTIFICATION AND NOTICE of Interested Parties filed by Plaintiff California Medical Transporation Association, Inc. (et) (ds). (Entered: 10/27/2008)
3 NOTICE of Related Case(s) filed by Plaintiff California Medical Transporation Association, Inc.. Related Case(s): CV 08−3315 CAS (MANx) (rn) (Entered:

Case: 2:08-cv-7046 As of: 02/09/2013 02:44 PM PST 2 of 2

10/30/2008 11/03/2008
11/04/2008 01/13/2009 08/19/2009 06/01/2011
11/28/2011

10/29/2008)
4 ORDER RE TRANSFER PURSUANT TO GENERAL ORDER 08−05 −Related Case− filed. Related Case No: CV 08−3315 CAS (MANx). Case transfered from Magistrate Judge Jennifer T. Lum and Judge Otis D Wright, II to Judge Christina A. Snyder and Magistrate Judge Margaret A. Nagle for all further proceedings. The case number will now reflect the initials of the transferee Judge CV 08−7046 CAS (MANx).Signed by Judge Christina A. Snyder (rn) (Entered: 10/30/2008)
5 ORDER RE: RESPONDENT'S EX PARTE APPLICATION FOR ORDER STAYING THE ACTION AND THE TWO NEW RELATED CASES OR, IN THE ALTERNATIVE, CONTINUING HEARING ON PETITIONERS' THIRD MOTION FOR PRELIMINARY INJUNCTION AND EXTENDING TIME TO RESPOND TO THE TWO NEW RELATED CASES by Judge Christina A. Snyder: Respondent Sandra Shewry, Director of the California Department of Health Care Services' Ex Parte Application for Order Staying the Action and the Two New Related Cases or, in the Alternative, Continuing Hearing on Petitioners' Third Motion for Preliminary Injunction and Extending Time to Respond to the Two New Related Cases [filed under CV 08−03315 CAS (MANx)] is GRANTED in part and DENIED in part. The following cases are hereby stayed in their entirety until further order of Court: CV 08−07045 CAS (MANx): California Association for Health Services at Home v. Sandra Shewry; CV 08−07046 CAS (MANx): California Medical Transportation Association v. Sandra Shewry; and CV 08−03315 CAS Independent Living et al v. Sandra Shewry. The Third Motion for Preliminary Injunction [filed under CV 08−03315 CAS (MANx)] shall be heard on 11/17/2008 at 10:00 AM, as originally scheduled. (gk) (Entered: 11/04/2008)
6 NOTICE TO COUNSEL by Judge Christina A. Snyder: This case has been assigned to the calendar of Judge Christina A. Snyder. Counsel are advised that the Court expects strict compliance with the provisions of the Local Rules and the Federal Rules of Civil Procedure. See document for details. (gk) (Entered: 11/04/2008)
7 NOTICE Voluntary Dismissal of Third, Fourth and Fifth Claims for Relief (Federal Rule of Civil Procedure 41 (a)(1) filed by Plaintiff California Medical Transporation Association, Inc.. (Friedman, Stanley) (Entered: 01/13/2009)
8 ORDER DENYING TRANSFER by the Judicial Panel on Multidistrict Litigation, MDL 2069, that the motion by Plaintiffs in an action in the Northern District of California (3:08−5173), pursuant to 28 U.S.C. Section 1407, for centralization of the six actions listed on Schedule A (attached) is denied. (gk) (Entered: 08/19/2009)
9 MINUTES (IN CHAMBERS) − ORDER REMOVING ACTION FROM THE ACTIVE LIST OF CASES, PURSUANT TO A STAY IN THE ACTION by Judge Christina A. Snyder: THE COURT, having approved a stay in this matter on 11/3/2008; IT IS HEREBY ORDERED that this action is hereby removed from this Court's active caseload until further application by the parties or order of this Court. IT IS FURTHER ORDERED that counsel shall file a joint report detailing the status of the case within 90 days and every quarter thereafter until the action has been reactivated on this Court's active caseload or a stipulation for dismissal is filed. This Court retains full jurisdiction over this action and this Order shall not prejudice any party to this action. (Made JS−6. Case Terminated.) Court Reporter: Not Present. (gk) (Entered: 06/02/2011)
10 NOTICE OF APPROVAL OF STATE PLAN AMENDMENTS filed by Respondent Sandra Shewry. (Snuggs, Carmen) (Entered: 11/28/2011)