.. -,

-·

:r/s
2D

1 LLOYD A. BOOKMAN (State Bar No. 89251)

I" U, ' t'-)\

iiJ b

/I \

j r11\

I
L.

E-Mail: lbookman@health-law.com

2 FELICIA YSZE (state Bar No. 233441)
E-Mail: fsz~ealth-law.com
3 HOOPER; DY & BOOKMAN, INC.
1875 Century Park East, Suite 1600 4 LosAn_geles~California 90067-2517 ·

-~

" r->- ___ r"'"1 ,...._, { : : ;:-'J
s,.-::"~·'c ~-~: ~-'"~

...J
---="""~..:::)
:;;:no -<

Telephone: 10) 551-811 I 5 Facsmlile: ( I 0) 551-8181

z;·c ,, >'.: ~:~

I'J I'V

r-·- ,, (. ') --1 ·~(

-u

6 Attorneys for Plaintiff

#'

. - , . -··

,l,. -:'")

::>::

I -;-, -• .r-

7

p.n ,..~ 0

8

UNITED STATES DISTRICT COURT

...~ JJ CD

9

D p CENTRAL DISTRICT OF CALIFORNIA, WESTERN DIVISION

10 11 CALIFORNIA HOSPITAL
ASSOCIATION,

cAstNo.c V09- 36 94oc-~

12 Plaintiff,

COMPLAINT

13
vs.

14 DAVID MAXWELL-JOLLY,
15 DIRECTOR OF THE CALIFORNIA DEPARTMENT OF HEALTH CARE
16 SERVICES,

17

Defendant.

18

19

JURISDICTION AND VENUE

20

1. Plaintiff California Hospital Association ("CHA") brings this

21 complaint pursuant to 28 U.S.C. sections 1331, 1343, 1367, and the Supremacy

22 Clause. Shaw v. Delta Air Lines, Inc., 463 U.S. 85, 96 n. 14 (1983).

23

2. Venue lies in this judicial district under 28 U.S.C. section 1391, in that

24 Defendant David Maxwell-Jolly, Director of the California Department of Health

25 Care Services (the "Director") has offices within this judicial district and is thus

26 deemed to reside within this judicial district.

27 ///

28 II I

2019484.5

COMPLAINT

•

' --

ii
o~-
U~~0~W;;i'
z.-.:b....l.:.;"..'.8I.~n. . :
"8 - ~~01 ...
m :"<n.'o~~"~.-.
~ 0ll:: !I-L •
iS::~=
, , _ 3z >e.-: Ill.. '-?
• .... J WI lrZb!IIO
WI.IJCI~
IL.UzO
0110c(;j
. 01"-loll~
I co 0 .. -~~
1-

1 INTRODUCTION

2

3. The fabric of the health care safety net is quickly deteriorating. For

3 countless Californians, including an increasing number of uninsured and Medi-Cal

4 beneficiaries, emergency departments are the difference between life and death and

5 are the most important component of our State's health care "safety net." See Bell v.

6 Blue Cross of California, 131 CaLApp.4th 121, 222 (2005). As fewer physicians

7 participate in Medi-Cal due to the deficient reimbursement rates, more Medi-Cal

8 beneficiaries seek care from emergency service providers as their only source of

9 health care. See Independent Living Centers ofSouthern California v. Shewry, 2008

10 WL 3891211, *9 {C.D. CaL 2008). Emergency departments, in turn, are legally

11 obligated to provide medical services to evaluate or stabilize emergency medical

12 conditions. See Bell, 131 Cal.App.4th at p. 21 I. 'The prompt and appropriate

13 reimbursement of emergency providers ensures the continued financial viability of

14 California's health care delivery system." Id. at 218.

15

4. Hospital care in California is at a cross-roads. During the past 13 years,

16 90 California hospitals have permanently closed, resulting in the loss of thousands

17 of acute care beds and 41 emergency rooms. Hospitals frequently cite inadequate

18 reimbursement, including Medi-Cal reimbursement, as a key reason for the closures.

19

5. The deterioration of the California safety net is perhaps most evident in

20 Los Angeles County, where, in some areas, the healthcare system is now in crisis.

21 Emergency room and hospital closures in Los Angeles County make Los Angeles

22 County especially vulnerable to reductions in Medi-Cal payments. As other

23 providers limit their participation in the Medi-Cal program, increasing numbers of

24 patients will seek care at Los Angeles County's remaining emergency rooms, which

25 struggle operationally and financially to care for them.

26

6. By this action, hospitals seek an injunction to invalidate and stop the

27 implementation of mandated payment rates from Medi-Cal managed care plans for

28 emergency and poststabilization services provided by hospitals that do not contract

2019484.5

2
COMPLAINT

-

.,

1 with those plans (''Non-Contracted Hospitals"). The Director has established

2 payment rates to Non-Contracted Hospitals for inpatient emergency services (''Non-

3 Contracted Hospital Emergency Rates") at an average of the rates paid to certain

4 hospitals under Medi-Cal pursuant to contracts with the State. The Director has

5 established payment rates to Non-Contracted Hospitals for services provided once

6 an emergency patient is stabilized (''Non-Contracted Hospital Poststabilization

7 Rates") for most hospitals as the lesser of 90% of a hospital's interim rate (as

8 described below) and 95% of the average of the rates paid to certain hospitals

9 pursuant to Medi-Ca\ contracts with the State. This is the precise methodology of

10 payment that has recently been enjoined by the Ninth Circuit in California

11 Pharmacists Association v. Shewry (9th Cir. 2009) _F. 3d._, 2009 WL 975458.

12

7. These mandated payment rates (collectively, ''Non-Contracted Hospital

13 Rates") will drastically impair payments to hospitals for emergency and

14 poststabilization services, falling far below the costs incurred by many of these

15 hospitals for these services. These Non-Contracted Hospital Rates, by virtue of

16 being based in part or in whole on statewide average rates, are unreasonable by

17 making payments without taking into account the nature of services provided, e.g.,

18 regardless of whether the patient was a gunshot victim (which incurs a lot of

19 services and costs) or mistook indigestion for a heart attack (which often simply

20 involves monitoring the patient at minimal costs). In many cases, these amounts

21 will result in payments less than the amounts hospitals would receive from the

22 Department for the exact same services. This disparity will undoubtedly cause some

23 hospitals to consider closing emergency rooms in the struggle to remain financially

24 viable.

25

8. The Non-Contracted Hospital Rates are illegal because California

26 failed to fulfill its legal mandate under federal law to ensure that those rates are

27 consistent with efficiency, economy, quality of care and sufficiency of access. 42

28 U.S.C. § 1396a(a)(30)(A) ("Section 30(A)"). The State further violated federal law

2019484.5

COMPLAINT

;;;
o..,8-.!.:.::;;.;.
~-~ ...
- Ill I'- ...
<Z l-~ -o" 0o'--
8~m~w. _. ~!Ilil:!.!.
156~::atg::::-ta:..
.. - 3_,>~-r-.G,,; ~ -I- _Ja:) O::Zlalto
aW.I.LulzeotOa<;
Or--w~
:z:~g_:..j....

1 by mandating these rates without the proper public process required to establish

2 payment rates to hospitals. 42 U.S.C. § 1396a(a)(13)(A) ("Section 13(A)"); 42

3 C.F.R. § 447.205. Indeed, these Non-Contracted Hospital Rates require an

4 amendment to the California Medi-Cal State Plan, which may not be implemented

5 prior to federal approval.

6

9. The Non-Contracted Hospital Rates are further unlawful as an

7 unconstitutional taking because they take property from Non-Contracted Hospitals

8 to give to Medi-Cal managed care plans without any public use or public purpose.

9

10. The Non-Contracted Hospital Emergency Rates also violate and are

10 preempted by 42 U.S.C. section 1396u-2(b)(2)(D), because they do not include

11 supplemental payments to hospitals under their Medi-Cal contracts in the average

12 rates and are computed as straight, unweighted average. The Non-Contracted

13 Hospital Emergency Rates therefore are not an accurate average of the rates

14 received by hospitals under their Medi-Cal contracts, and are not a reasonable

15 computation of the amounts the Non-Contracted Hospitals would receive for 16 services under the Medi-Cal fee-for-service program for emergency services.

17

11. The Non-Contracted Hospital Poststahilization Rates are also illegal

18 because they establish a new standard of payment that does not comport with the

19 requirements of 42 U.S.C. section 1396u-2(b)(2)(A)(ii), 42 C.F.R. section 438.114 20 or California Welfare and Institutions Code section 14091.3(c)(3) that incorporates

21 by reference 42 C.F.R. section 438.114.

22

12. The Non-Contracted Hospital Rates are unlawful because they were

23 implemented as underground regulations in violation of the California

24 Administrative Procedure Act through the issuance of informal "All Plan Letters,"

25 and not formal rulemaking.

26

13. Lastly, the Non-Contracted Hospital Rates are unlawful because they

27 attempt to establish rates that are lower than: (I) the "reasonable charges" rate of

28 payment required for emergency services set forth in California Health and Safety

2019484.5

COMPLAINT

1 Code section 1317.2a(d); (2) the "charges" rate of payment for poststabilization

2 services set forth in California Health and Safety Code section 1268.2; and the

3 "reasonable and customary value" of services rate of payment required for all

4 healthcare services provided by non-contracted providers required set forth in Title 5 28, California Code of Regulations section 1300.7l(a)(3).

6

14. For these reasons and the reasons set forth below, the Non-Contracted

7 Hospital Rates violate federal law, the federal and state constitutions and California

8 law. Accordingly, Plaintiff seeks declaratory and injunctive relief to invalidate the

9 Non-Contracted Hospital Rates and to ensure that Non-Contracted Hospitals are not

10 forced to provide services at a loss, to the financial benefit ofmanaged care plans.

11

12 THE PARTffiS

13

15. Defendant DAVID MAXWELL-JOLLY IS the Director of the

14 Department of Health Care Services and, as such, has the responsibility to

15 administer the Medi-Cal program consistent with the Medicaid Act. The Director is

16 sued in his official capacity. The Department is the single state agency charged with

17 the administration of California's Medicaid program, known as Medi-Cal. See

18 California Welf. & Inst. Code §§ 14000 et seq. The Director has an office in the 19 County of Los Angeles.

20

16. Plaintiff CALIFORNIA HOSPITAL ASSOCIATION ("CHA") 1s a

21 trade association representing the interests of hospitals in the State of California

22 CHA is incorporated in the State of California as a non-profit public benefit

23 corporation with its principal office in Sacramento, California. CHA represents

24 nearly 450 hospitals and health systems throughout California, including general

25 acute care hospitals, children's hospitals, rural hospitals, psychiatric hospitals,

26 acadeinic medical centers, county and other public hospitals, investor-owned

27 hospitals, and multi-hospital health systems. These hospitals furnish vital health

28 care services to Inillions of our states' citizens. CHA also represents more than 150

2019484.5

COMPLAINT

;;;
. 0!:::;;
..uz_ -"Iol.el.'i,~..D...~w-I.t:)l
~~58~~
Z~~tCII(W)
"8' -.. m~~-~~:
.... ~ 15u::('::-~:
~_.>a,-:.U-,iJ_n,
~ 1- ...J It) D::ZIIIItl
IaooLl.,..w.,.u.<.e.z;,t_;-o:-.
.. :I: -ID_0._•.· ,_

1 Executive, Associate and Personal members. CHA brings this action on its own

2 behalf and in its representative capacity on behalf of its members, many of which

3 provide emergency and poststabilization services to Medi-Cal beneficiaries enrolled

4 in managed care plans with which the member hospitals do not contract and have

5 been and will continue to be directly and adversely affected by the implementation

6 of the Non-Contracted Hospital Rates, and on behalf of its members' patients.

7

17. CHA also has associational standing to bring its claims on behalf of its

8 members and Medi-Cal beneficiaries. The members of CHA are hospitals, many of

9 which provide emergency and poststabilization services to Medi-Cal beneficiaries

10 enrolled in managed care plans with which the hospitals do not contract These

11 hospital providers have suffered and will continue to suffer a concrete economic

12 injury in the form of reduced payment for emergency and poststabilization services

13 by the unlawful implementation of the Non-Contracted Hospital Rates. In addition,

14 CHA member hospitals have been and will continue to be adversely affected by the

15 implementation of the Non-Contracted Hospital Rates because of the impact that

16 such rates have on contract negotiations between hospitals and Medi-Cal managed

17 care plans. Medi-Cal managed care plans are frequently unwilling to pay a hospital

18 more than the Non-Contracted Hospital Rates under a contract with the hospital

19 because they would not have to pay more than such rates to the hospital without a

20 contract As a result, hospitals are forced either to go without a contract and obtain

21 the deficient and unlawful Non-Contracted Hospital Rates, or enter into contract for

22 these same below market rates.

23

18. Hospitals, as medical providers, are in a unique position to advance the

24 interests of Medi-Cal beneficiaries. CHA's hospital members have an extremely

25 close relationship with their Medi-Cal beneficiary patients who seek care from them.

26 A Medi-Cal beneficiary cannot secure medical services without his/her health care

27 providers, and without reimbursement by Medi-Cal for those services. Hospitals are

28 better positioned and informed as to the impact of a reimbursement rate cut on the

2019484.5

COMPLAINT

1 services they intend to, and in many instances, are required to, provide.

2

19. Furthermore, Medi-Cal beneficiaries face economic hindrances to their

3 ability to asse1t their own rights in this case.

4

5 FEDERAL MEDICAID LAW

6

20. Title XIX of the Social Security Act, 42 U.S.C. sections 1396 et seq.,

7 the Medicaid Act, authorizes federal financial support to states for medical

8 assistance to low-income persons who are aged, blind, disabled, or members of 9 families witli dependent children. 1 The program is jointly financed by the federal

10 and state governments and administered by the states. The states, in accordance

11 with federal law, decide eligible beneficiary groups, types and ranges of covered

12 services, payment levels for services, and administrative and operative procedures.

13 Payment for services is made directly by states to tlie individuals or entities that

14 furnish the services. 42 C.F.R. § 430.0.

15

21. In order to receive matching federal financial participation, states must

16 agree to comply with the applicable federal Medicaid law and regulations, 42 U.S.C.

17 sections 1396 et seq. Once a state has decided to participate in the Medicaid

18 program, compliance with the federal Medicaid law and regulations is mandatory.

19

22. At the state level, the Medicaid program is administered by a single

20 state agency, which is charged with the responsibility of establishing and complying

21 with a state Medicaid plan (the "State Plan") that, in tum, must comply with the

22
23 1 The Medicaid Act is distinguishable from the Medicare Act, Title XVIII of the 24 Social Security Act, 42 U.S.C. §§ 1395 et seq. The Medicare Program is a federal
health insurance program for the aged, blind and disabled under which qualified 25 health care providers, including hospitals, are reimbursed directly by the federal 26 government for the treatment and care they provide to Medicare Program
beneficiaries. The Medicare program directly contracts with certain managed care 27 plans to pay providers for services provided to Medicare beneficiaries.
28

2019484.5

COMPLAINT

;;

. 0~ 0

-0z -°10

n , N

· .n..

~I5'!8~~~

"'ol'-."<""~..

o:lz~

m w ~ ...

3:: b ~ I<!S :o.:: :b-.. •
z ,_ -
.. - 3D::.:ciCf'
O-:1::-z..JldOn
Wld(!t..-..
o..ozO

-.... Oa:t<;;)

...... :0r.,

..
II)

.

0
0

.....
..

1 provisions of the applicable federal Medicaid law. 42 U.S.C. § 1396a(a)(5) and 42

2 C.F.R. §§ 430.10 and 431.10. The State Plan must be submitted to the Secretary of

3 the United States Department of Health and Human Services (the "Secretary") for

4 approval and must describe the policies and methods to be used to set payment rates

5 for each type of service included in the state Medicaid plan. 42 C.F.R. §§ 430.10

6 and 447.20l(b). Changes to the State Plan may not be implemented by the state

7 prior to being approved by the Secretary.

8

23. For hospitals and certain other institutional providers, states must

9 establish rates through a public process that includes: (a) publication of proposed

10 rates, the methodologies underlying the establishment of such rates, and

11 justifications for the rates; (b) a reasonable opportunity for comment on the

12 proposed rates, methodologies and justifications by providers, beneficiaries and

13 their representatives, and other concerned State residents; and (c) publication of the

14 final rates, the methodologies underlying the establishment of such rates, and

15 justifications for such final rates. See Section 13(A); 42 C.F.R. § 447.205.

16

24. Each state's Medicaid plan must "provide such methods and

17 procedures ... relating to the utilization of, and the payment for, care and services

18 available under the plan which may be necessary ... to assure that payments are

19 consistent with efficiency, economy, and quality of care and are sufficient to enlist

20 enough providers so that care and services are available under the plan at least to the

21 extent that such care and services are available to the general public in the

22 geographic area ...." Section 30(A); 42 C.F.R. § 447.204.

23

25. Historically, services under state Medicaid programs have been

24 provided on a "fee-for-service" basis under which the state reimburses health care

25 providers directly for covered services to Medicaid beneficiaries.

26

26. States may also choose to contract with managed care organizations

27 ("MCOs"), such as health maintenance organizations, to provide or arrange for

28 services. See 42 U.S.C. §1396u-2; 42, C.F.R. Part 438. In general, through these

2019484.5

. '

q;
. 8 ~ q;
~o::..
--'In
• Ill ..... ., Zl-10.-..
~-oooo-
" - ~m.,
ol-.< ..
o~nzx
m<"'ao:<.. Kt o~ :I-J... 1z>;o<-.u.<J_--
:Ja:~~ ..J :>Iii -
• 1- JIll O:::Zizlll'l
oWl. .z.luezto~
Or~<;j
0,....0 ...... I~3.J
1"-'

1 contracts, an MCO is paid a fixed, prospective, monthly payment for each 2 beneficiary (or "member") emolled with the entity for health coverage. Medicaid 3 Managed Care, 67 Fed. Reg. 40989 (June 14, 2002) (to be codified at 42 C.F.R. pt. 4 438). The capitated payment typically is payment in full for all services listed in the 5 contract between the state agency and the MCO, regardless of the level of services 6 used by each beneficiary. In turn, the MCO assumes the financial risk of its 7 members' care and pays health service providers directly.

8

27. Prior to 2002, states may mandate emollment in a Medicaid MCO only

9 by establishing a mandatory managed care program through a federal "waiver" or

10 "demonstration" program established pursuant to section 1115 or section 1915(b) of

11 the Social Security Act (42 U.S.C. §§ 1315, 1396n.). The passage of 42 U.S.C. 12 section 1396u-2 gave states the flexibility to establish mandatory managed care

13 programs for defined populations, without having to obtain specific waivers from 14 the U.S. Department of Health and Human Services, Centers for Medicare and 15 Medicaid Services ("CMS") for 42 U.S.C. sections 1396a(a)(l) [requiring that a 16 State Plan be in effect in all political subdivisions of the State], 1396a(a)(lO)(B) 17 [requiring comparability of medical assistance among Medicaid beneficiaries and 18 between Medicaid beneficiaries and non-Medicaid beneficiaries], and

19 1396a(a)(23)(A) [freedom of choice].

20

28. There has been a proliferation of mandatory Medicaid managed care

21 programs across the country in recent years.

22

29. To deliver covered services, most MCOs contract with and establish a

23 "network" of physicians, hospitals and other in-plan medical service providers.

24 With the exception of emergency and poststabilization services, Medicaid

25 beneficiaries emolled in a MCO are generally restricted to using in-plan, network

26 providers.

27

30. Providers, such as hospitals, are not obligated to contract with MCOs,

28 nor are MCOs obligated to enter into contracts with any particular provider. When

2019484.5

COMPLAINT

1 MCOs do contract with providers of health care services, the rates generally are set

2 through arms'-length negotiations, based on market factors.

3

31. When a hospital enters into a written contract with a health plan, it

4 agrees to accept reimbursement that is discounted from the hospital's total billed

5 charges in exchange for the benefits of being a "contracted provider" (i.e., a

6 provider with a written contract with the plan). These benefits typically include an

7 increased volume of business because the health plan identifies to its members that

8 the contracted provider is "in-network," which means that the member is able to

9 obtain services from the contracted provider. Conversely, when a hospital does not

10 have a written contract with a health plan, the hospital typically receives less

11 business from the plan, but the hospital's expectation of payment is no longer

12 constrained by any contract.

13

32. Medicaid MCOs are required to pay for emergency services provided

14 to Medicaid beneficiaries enrolled in the relevant MCO, regardless of whether the

15 MCO has a written contract with the emergency service provider. 42 U.S.C. §

16 1396u-2(b)(2)(A).

17

18 CALIFORNIA MEDI-CAL PROGRAM

19

33. The State of California has elected to participate in the Medicaid

20 program. California has named its program "Medi-Cal." See Cal. Wei£ & Inst.

21 Code§§ 14000 et seq.; 22 Cal. Code of Regs.§§ 50000 et seq.

22

34. Medi-Cal healthcare payments are disbursed in two ways. The first is a

23 "fee-for-service" process whereby the Department of Health Care Services (the

24 "Department") determines whether the healthcare services are covered and

25 furnished to an eligible beneficiary, and, if so, pays the service providers directly.

26

35. The second is a managed care model under which the Department

27 contracts with MCOs which are responsible for the provision of care to Medi-Cal

28 beneficiaries enrolled with the MCO, and which pays healthcare providers for

20194&4.5

COMPLAINT

1 services furnished to their members.

2 3 The Fee-For-Service Program for Inpatient Hospital Service

4

36. Hospitals are reimbursed under the Medi-Cal fee-for-service program

5 for inpatient services in one of two ways. Hospitals which have not entered into

6 contracts to provide inpatient hospital services under the Selective Provider

7 Contracting Program ("SPCP") are reimbursed under a cost-based reimbursement

8 system. Under this system, hospitals are reimbursed the lowest of their reasonable

9 costs determined in accordance with Medicare cost reimbursement principles, an all-

10 inclusive rate per discharge limitation which is determined by establishing a base 11 cost per discharge for each hospital and adjusting the resulting rate annually to

12 reflect inflation and other factors, a peer group limitation which is the sixtieth

13 percentile rate per discharge of the peer group to which the hospital has been

14 assigned,ortheircustomarycharges. 22C.C.R. §§ 51545 etseq.

15

37. Under the cost-based reimburs=ent system, hospitals receive interim

16 payments from the Department throughout the year which are intended to be an

17 estimate of final reimbursement. These interim payments are calculated as a

18 percentage of their charges. Final reimburs=ent for a hospital's fiscal year is

19 determined well after the close of the fiscal year, after a Medi-Cal cost report is

20 submitted by the hospital and audited by the Department. The interim payments are 21 then reconciled with the amount of the fmal reimbursement.

22

38. Both interim and final payments to hospitals under the cost-based

23 reimbursement system were reduced pursuant to California Assembly Bill 5 ("AB

24 5") and Assembly Bill 1183 ("AB ll83"), passed in 2008. AB 5 added sections

25 14105.19 and 14166.245 to the Welfare and Institutions Code. Effective July I,

26 2008, these provisions reduced interim payments by ten percent and limited final 27 payments to 90% of reasonable costs.

28

39. AB 1183 amended Welfare and Institutions Code section 14166.245 to

2019484.5

COMPLAINT

•

1 retain the limitation on reimbursement to 90% of reasonable cost and, effective

2 October 1, 2008, added a limitation on reimbursement to 95% of the average

3 contract rates under SPCP contracts, as discussed in greater detail below. AB 1183

4 further amended Welfare and Institution Code section 14105.19 to make it

5 inoperative to services provided after February 28, 2009 and added Welfare and

6 Institutions Code section 14105.191 which, inter alia, modified the AB 5 reductions

7 for certain services.

8

40. The second way hospitals are reimbursed for inpatient services under

9 the Medi-Cal fee-for-service program is through the SPCP. In 1982, the California

10 Legislature authorized the Department to enter into contracts with selected hospitals

11 to furnish inpatient services under Medi-Cal, in accordance with the terms set forth

12 in those contracts, by enacting the SPCP. See Cal. Welf. and Inst. Code § 14081 et

13 seq. SPCP contracts are negotiated by the California Medical Assistance

14 Commission ("CMAC") on behalf of the Department. The State selectively

15 contracts, on a competitive basis, with those hospitals in California that agree to be

16 reimbursed under the terms of an SPCP contract for inpatient hospital services

17 provided to Medi-Cal beneficiaries. (This complaint will refer to hospitals that

18 contract with the Department pursuant to the SPCP as "SPCP Hospitals" and

19 hospitals that do not have SPCP contracts as "Non-SPCP Hospitals.") SPCP

20 Hospitals are generally paid based on negotiated per diem rates for inpatient services

21 furnished by the hospital.

22

41. A fundamental goal of the SPCP is to negotiate contract rates which

23 result in a savings to the Medi-Cal program as compared to the cost-based·

24 reimbursement system, while maintaining access for Medi-Cal beneficiaries to

25 hospital services. As a result, CMAC does not negotiate SPCP contracts to

26 reimburse a hospital's costs, regardless of how efficiently and economically

27 incurred. Instead, CMAC negotiates rates on a market driven basis to obtain the

28 lowest rates possible for inpatient hospital services. Payments to hospitals under

2019484.5

COMPLAINT

'

;;;
. 8 ~ ..
-~.- ,· Q~~
.....-. l~=-0 >~o0 ~-
"'tgm6ziSl"~~:"a.ir':.:':i~uo.~-.~-=.'~".
=:1 (l' ui tp
...JjbJ-
..~ 1- ..J ~
aff.i.Zo""z''"o~'
Ono(~
. O,...tr~ .......
z f-O_0._·.-
1-

1 SPCP contracts are generally a negotiated amount per patient day. Some hospitals

2 have separate per diem rates for certain services, such as neonatal intensive care

3 services.

4

42. In addition to the per diem payments, many hospitals receive

5 significant additional funding under their SPCP contracts, in the form of

6 "supplemental payments" from, inter alia, the Private Hospital Supplemental Fund

7 and the Distressed Hospital Fund, and under the Construction Renovation and

8 Repair Program. See Cal. Welf. & lnst. Code§§ 14166.12, 14166.23, and 14085.5.

9 This additional funding is an integral and vital part of the payment made to eligible

10 hospitals.

11

43. The SPCP operates in certain "closed" Health Facility Planning Areas

12 ("HFPAs") of the ,state where SPCP contracts have been signed and Medi-Cal

13 beneficiaries are required to receive inpatient hospital care at a contract hospital,

14 except in emergencies and other enumerated exceptions. The SPCP does not

15 operate in "open" HFPAs. These are primarily rural areas with few hospitals where

16 the principles of competitive contracting do not apply.

17

44. The rates of payment to SPCP Hospitals remain confidential from the

18 public for three years pursuant to California Government Code section 6254(q).

19

45. As of December 1, 2007, 203 out of the State's approximately 450

20 hospitals operated under a SPCP contract with the Department, a decrease of 7

21 hospitals since December 1, 2006. Twenty-one of these 203 hospitals are

22 designated public hospitals which are reimbursed on the basis of their certified

23 public expenditures for inpatient hospital services. The hospitals that do not

24 participate in the SPCP continue to be paid under the cost-based reimbursement

25 system for Medi-Cal inpatient hospital services.

26

46. The rates paid to hospitals under the SPCP result from individual

27 negotiations and may vary widely from hospital to hospital. Many factors

28 contribute to the different varying per diem rates under the SPCP. These factors

2019484.5

COMPLAINT

1 include, but are not limited to, the number of hospitals in the area, the population 2 each hospital serves, the services each hospital provides, and bed availability.

3 4 Medi-Cal Managed Care

5

47. The Department operates several managed care models under Medi-Cal

6 to provide or arrange for the provision of health care services to Medi-Cal

7 beneficiaries. The three primary Medi-Cal managed care models are the Two-Plan 8 Model, County Organized Health Systems ("COHS"), and Geographic Managed 9 Care ("GMC") plans. One Prepaid Health Plan ("PHP") also exists. Each model is 10 operated pursuant to and governed by specific statutes, regulations, and contract

11 proVISions.

12

48. Generally, each of these Medi-Cal managed care plans must be licensed

13 as a health care service plan under the Knox-Keene Health Care Service Plan Act

14 (the "Knox-Keene Act") and comply with the requirements of that licensure. Cal. 15 Health & Saf. Code§§ 1340 et seq., 22 C.C.R. §§ 53200, 53840, 53910. However, 16 California Welfare and Institutions Code section 14087.95 exempts COHS from the 17 provisions of the Knox-Keene Act for the purpose of carrying out its Medi-Cal 18 contracts with DHCS.

19

49. The State of California has received waivers from certain requirements

20 of the Medicaid Act pursuant to 42 U.S.C. section 1315 in order to conduct its

21 Medi-Cal managed care programs. These waivers have included waivers of the

22 following requirements: Freedom of Choice, Statewideness, Single State Agency,

23 Comparability, Utilization Control, Contracts, and Redeterminations. None of these 24 waivers have included waivers of Sections 30(A) or 13(A). 25

26 LEGAL REQUIREMENTS TO PROVIDE EMERGENCY SERVICES

27

50. The Emergency Medical Treatment and Active Labor Act

28 ("EMTALA"), 42 U.S.C. section 1395dd, obligates hospitals with dedicated

2019484.:5

COMPLAINT

.

;;;
g_".-,

....... 0~!~~;·;

"' .. .. :~:i5t-8I).e..., -~
0 t.-< ..

~~H

5"1_1,',a:o.~:::Ue~-~:.);:.

::>01-

~ .... .J 1ft

'"' g .. nffi.ZuOzIUo~> <;;
..... - J:CDQ ••
-...... .....

1 emergency departments, as a condition of Medicare participation, to provide

2 emergency medical services without delay, to any and all patients who present with

3 an emergency medical condition, and to inquire about or seek payment only after the

4 patient has been stabilized. EMTALA thus prohibits members of CHA from

5 denying emergency medical services based on the inadequacy of what will be paid

6 for emergency medical services.

7

51. Under federal law, emergency medical conditions are defined broadly

8 and liberally under a "prudent layperson" standard.

9

52. Under EMTALA, hospitals with dedicated emergency departments also

10 are required to treat any and all patients for treatment who present in active labor.

11

53. CMS recently adopted a rule further requiring hospitals with

12 specialized capabilities, but lacking dedicated emergency departments, to provide

13 services to medically unstable patients transferred from other hospitals that lack the

14 capacity to provide the services required.

15

54. Almost every general hospital in the United States participates in the

16 Medicare program including almost every CHA member hospital.

17

55. Moreover, California state law independently requires that, as a

18 condition of licensure, "[e]mergency services and care ... be provided to any person

19 requesting the services or care, or for whom services or care is requested, for any

20 condition in which the person is in danger of loss or life, or serious injury or illness,

21 at any [hospital] that maintains and operates an emergency department ...." Cal.

22 Health & Saf. Code § 1317(a). Emergency services and care must be provided

23 without consideration for the patient's ability to pay for medical services and must

24 be rendered without first questioning the patient as to his or her ability to pay for

25 services. Cal. Health & Saf. Code§ 1317(b), (d).

26

56. Services to a patient cease to be "emergency'' services when the patient

27 is stable for transfer to a facility contracted with the MCO. See, e.g., 42 U.S.C. §§

28 1395dd(b)(I)(A), 1395dd(e)(3); 1396u-2(b)(2)(B).

2019484.5

COMPLAINT

1

57. "Post stabilization care services" is defined by federal law as "covered

2 services, related to an emergency medical condition that are provided after an

3 enrollee is stabilized in order to maintain the stabilized condition, or ... to improve

4 or resolve the enrollee's condition." 42 C.F.R. § 438.114. "The attending

5 emergency physician, or the provider actually treating the enrollee, is responsible

6 for determining when that enrollee is sufficiently stabilized for transfer or discharge,

7 and that determination is binding" on Medi-Cal managed care entities. 42 C.F.R. §

8 438.114(d)(3).

9

10 FEDERAL LAWS GOVERNING PAYMENT FOR EMERGENCY AND

11 POSTSTABILIZATION SERVICES

12

58. Section 6085 of the Deficit Reduction Act (''DRA") of 2005 provides

13 as follows:

14

SEC. 6085. EMERGENCY SERVICES FURNISHED BY

NON-CONTRACT PROVIDERS FOR MEDICAID

15

MANAGED CARE ENROLLEES.

16

(a) In General- Section 1932{b)(2) of the Social Security

Act (42 U.S.C. l;l96u-(b)(2)) 1s amended by adding at the

17

end of the followmg new subparagraph:

18

(D) EMERGENCY SERVICES FURNISHED BY NON-

CONTRACT PROVIDERS - Any provider of emergency

19

services that does not have in effect a contract with a

Medicaid managed care entity that establishes payment

20

amounts for services furnished to a beneficiary enrolled in

the entity's Medicaid managed care plan must accept as

21

payment in full the amounts (!ess any payments for

mdirect costs of medical education and direct costs of

22

graduate medical education) that it could collect if the

beneficiary received medical assistance under this title

23

other than through enrollment in such an entity. In a state

where rates pmo to hospitals under the state plan are

24

negotiated by contract and not publicly released, the

payment amount applicable under this sul:iparagraph shall

25

be the average contract rate that would apply under the

state plan for general acute care hospitals or the average

26

cont~act rate tliat would apply under such plan for tertiary

hospitals.

27

(b) Effective Date - The amendment made by subsection

28

(a) shall take effect on January I, 2007.

201~84.5

COMPLAINT

1

59. On information and belief, section 6085 of the DRA was proposed by

2 lobbyists engaged by Medicaid MCO(s). On information and belief, Medicaid

3 MCO(s) engineered the adoption of section 6085 for their financial advantage in

4 order to avoid greater liability to Non-Contracted Hospitals.

5

60. Federal law does not mandate any specific payment rate from Medicaid

6 MCOs to Non-Contracted Hospitals for poststabilization services. 42 U.S.C. §

7 1396u-2(b)(2)(A)(ii) requires that a MCO comply with guidelines for Medicare

8 managed care plans "with regard to the coordination of post-stabilization care" "in

9 the same manner as such guidelines apply to Medicare+Choice plans" offered under 10 the Medicare Act.2 (Emphasis added.)

11

61. 42 C.F.R. section 438.114 accordingly requires that Medicaid managed

12 care plans cover and pay for poststabilization care "in accordance with provisions

13 set forth at [42 C.F.R.] Sec. 422.113(c).... In applying those provisions, reference

14 to 'M+C organization' must be read as reference to the entities responsible for

15 Medicaid payment. ..."

16

62. 42 C.F.R. section 422.113(c) does not establish any specific rate of

17 payment for poststabilization services. 42 C.F.R. section 422.113(c)(2) requires that

18 a Medicare managed care plan maintains financial responsibility for the following

19 poststabilization care: (1) poststabilization services that have been pre-approved by

20 a plan provider or other plan representative consistent with 42 C.F.R. section

21 422.214, (2) poststabilization services that are not pre-approved but are administered

22 to maintain the patient's stabilized condition within 1 hour of a request to the

23 Medicare managed care plan for pre-approval of further poststabilization services,

24

25 2 "Medicare+Choice" or "'M+C organization" is a reference to the predecessor to 26 "Medicare Advantage," the program through which the federal Medicare program
currently contracts with managed care plans to pay providers for services provided 27 to Medicare enrollees.
28

2019484.5

COMPLAINT

iii
.g!:a; -~!-D.'.~,I,..f!.n).
"' .... - z,_a~
~-: >O0o~
gH~ . 0 1- "' ••
Kf ~ 0~.
fi~~=
.., _ 5-~>"- ·-·ai
f-jZ1- ".J'nn
....n.uzo~
On<;i
........ Qr--11)~
-I ll 0 ..
,..

1 or (3) poststabilization services that are not pre-approved but administered to

2 maintain, improve, or resolve the patient's condition if (A) the plan does not

3 respond to a request for pre-approval within I hour, (B) the plan carmot be contacted

4 or (C) the plan representative and the treating physician cannot reach an agreement

5 concerning the enrollee's care and a plan physician is not available for consultation.

6 The Medicare managed care plan's responsibility to pay for poststabilization

7 services that have not been pre-approved ends when: (I) a plan physician with

8 privileges at the treating hospital assumes responsibility for the care of the patient,

9 (2) a plan physician assumes responsibility for the patient by initiating transfer of

10 the patient, (3) the plan and the treating physician reach an agreement concerning

11 the patient's care or (4) the patient is discharged.

12

63. 42 C.F.R. section 422.214 establishes that, in general, payments from

13 Medicare managed care plans to non-contracted providers must be made at the

14 amounts that would be made in full for a fee-for-service Medicare enrollee, less any

15 pass-through payments made for managed care enrollees. In other words, Medicare

16 managed care plans are required to pay Non-Contracted Hospitals for pre-authorized

17 services the amounts those providers would be p~d by the Medicare fee-for-service

18 program. This payment standard is inapplicable to poststabilization services

19 provided within 1 hour of the hospital notifying a Medicare managed care plan of

20 stabilization or if (A) the plan does not respond to a request for pre-approval within

21 I hour, (B) the plan cannot be contacted or (C) the plan representative and the

22 treating physician carmot reach an agreement concerning the enrollee's care and a

23 plan physician is not available for consultation.

24

64. The requirement in 42 C.F.R. section 438.114 that Medicaid MCOs

25 cover and pay for poststabilization care "in accordance with" 42 C.F.R. section

26 422.113(c) establishes the scope of a Medicaid managed care plan's financial

27 responsibility to pay for poststabilization care, i.e., the situations in which the

28 Medicaid managed care plan becomes financially liable for poststabilization care

20194845

COMPLAINT

' '

;;
. 8 ~;;
~o~..!..
- .... II)
:i~~~ ~-: .0o0-
a) Gil~
0 ....~. < ..
mo";szo:~._
1bz(5~~«:0~u-:~:-.
,..,_ 3"='>.O;d"1~I- .JII)
ffiZ'""
no .....uozt:o;i
... 0"'m~
I~g.}

1 and the events which terminate the plan's financial liability for poststabilization

2 care. 42 C.F.R. section 438.114's reference to 42 C.F.R. section 422.113(c) does

3 not mandate any specific payment rate.

4

65. On information and belief, no court has interpreted federal law to

S establish any specific payment rate for Medicaid managed care plans to non-

6 contracted providers of poststabilization services following an inpatient emergency

7 stay. Further, on information and belief, CMS also does not interpret its own

8 regulations to establish any specific payment rate for Medicaid managed care plans

9 to non-contracted providers of poststabilization services following an inpatient

10 emergency stay.

11

66. If 42 C.F.R. section 438.114's reference to 42 C.F.R. section

12 422.113(c) was intended to establish any specific payment rate from Medicaid

13 managed care plans to providers for pre-approved poststabilization services, that

14 rate would be the Medicare fee-for-service rate. 42 U.S.C. section 1396u-

IS 2(b)(2)(A)(ii); see also Medicaid Managed Care, 67 Fed. Reg. 40989 (June 14,

16 2002) (to be codified at 42 C.F.R. pt. 438) ("the [poststabilization] services that

17 must be covered are those that must be covered under Medicare rules ... in the

18 same manner as these rules apply to [Medicare] plans....").

19

20 CALIFORNIA STATUTES GOVERNING PAYMENT FOR NON-

21 CONTRACTED SERVICES BY HEALTH CARE SERVICE PLANS

22

67. Most Medi-Cal managed care plans are also governed by the Knox-

23 Keene Act, which is administered by the California Department of Managed Health

24 Care ("DMHC").

25

68. DMHC regulations require that a health care service plan pay a non-

26 contracted provider "the reasonable and customary value for the health care services

27 rendered based upon statistically credible information that is updated at least

28 annually and takes into consideration: (i) the provider's training, qualifications, and

20194M.S

- -------------~c=c:!c."=c=--~----COMPLAINT

·-·-----

1 length of time in practice; (ii) the nature of the services provided; (iii) the fees

2 usually charged by the provider; (iv) prevailing provider rates charged in the general

3 geographic area in which the services were rendered; (v) other aspects of the

4 economics of the medical provider's practice that are relevant; and (vi) any unusual

5 circumstances in the case ...." Tit. 28, Cal. Code Regs., § 1300.7l(a)(3). This

6 standard applies to any services provided by a non-contracted provider, regardless of

7 whether the services are classified as "emergency services" or not.

8

69. This standard matches the requirement in Health and Safety Code

9 section 1317.2a(d), which requires that third-party payors, including health care

10 service plans, be liable for the "reasonable charges" to a transferring hospital for

11 emergency services.

12

70. California law also requires most Medi-Cal managed care plans to take

13 responsibility for initiating transfer of patients who arrive through emergency rooms

14 at non-contracted hospital as soon as possible after stabilization. Cal. Health and

15 Safety Code § 1371.4; Title 28, C.C.R. §§1300.71.4(b)(3), (c). In situations in

16 which the managed care plan fails to transfer the patient, hospitals provide

17 poststabilization services in order to improve or resolve the patient's condition.

18

19

CALIFORNIA'S INVALID ATTEMPTS TO REGULATE PAYMENTS

20 FROM MEDI-CAL MANAGED CARE PLANS TO NON-CONTRACTED

21 PROVIDERS OF EMERGENCY AND POSTSTABILIZATION SERVICES

22

71. On March 16, 2007, the Department issued All Plan Letter 07-003

23 ("APL 07-003"). APL 07-003 announced that in California, the applicable rates

24 under section 6085 of the DRA were as follows:

25

For out-of-plan/network general acute care hospitals, the

applicable payment amount for emergency inpatient

26

services is the average Selective Proviaer Contracting

Program (SPCP) contract rate for general acute care

27

hospitals. For out-of-plan/network tertiary care hospitals,

the applicable payment amount for emergency inpatient

28

2019484.5

-------------~------"'~o=;:o-------
COMPLAINT

;;; u. o0 .~,,Gi
~!~;;
~~-i§ii0~
8 .. .:0. !- l ,.:~
51mz6:<~~ "a/-~:uo..-.!.f:".1-. 3gti!
.,.,_ ~t-..JWJ
ffiZ"'"
o..uzo
..... - gn<;j
... X C-ll_0,_.,•

1

services is the average SPCP contract rate for tertiary

hospitals.

2 However, because the Department determined that it would need further

3
clarification from CMS before "develop[ing)" rates of payment pursuant to section

4 6085, it "encourage[d]" Medi-Cal managed care plans to pay Non-Contracted

5 Hospitals for emergency services according to average SPCP rates published in an

6 Annual Report to the Legislature prepared by CMAC. The Department announced

7 that "[o]nee the final rates are published, the managed care plans may be required to

8 do a reconciliation process to ensure that all out-of-plan/network providers of

9

emergency services, who were paid on a transition basis the [published rate in the

10 CMAC Annual Report to the Legislature], have been reimbursed in accordance

11 with" the rates set by the Department. Due to the issuance of this letter, neither

12

Medi"Cal managed care plans nor Non-Contracted Hospitals could reasonably have

13

expected the then-published average SPCP to be the final payment rates.

14

72. On September 18, 2008, after a protracted budget stalemate, Governor

15 Schwarzenegger signed Assembly Bill 1183 ("AB 1183"), the budget trailer bill for

16

fiscal year 2008-09. A true and correct copy of pertinent sections of AB 1183 is

17

attached hereto and incorporated herein as Exhibit A.

18

73. AB 1183 was introduced originally in February 2007 as a bill

19

concerning hazardous materials. In September 2008, the Senate Committee on

20

Budget took over AB 1183 and amended it by eliminating the provisions concerning

21

hazardous materials and replacing them with budget trailer bill language, including

22

the Non-Contracted Hospital Rates at issue in this case. Prior to these amendments
23

passed in committee on September 15, 2008, the general public had never seen these

24

proposed rates. The amended version of the bill was passed the very qext day,

25

September 16, 2008, by both the Senate and the Assembly. The bill went to the

26

Governor's office for signature just four days later and ultimately was executed on

27

September 30, 2008.

28

2019484.5

COMPLAINT

;;;

oo0;";-,

z 110 N-

-~I- ll,.•.

In In

" ., .. - :~:r~~--g"'o.-~,
. .. o~-o<

mor<a:~._

w6sa:a<.::~:-:~:.

..3z>a ~

:

,...--,.

~!-..JW1

lr.ZIII'Wl

lLIIIfCI..-..

..... - o8W..o1z<O;;
:z: t-D_0,_..,,.

1-

1

74. AB 1183 amended Welfare and Institutions Code section 14166.245.

2 Section 14166.245 as amended by AB 1183 limits Medi-Cal payments to Non-

3 SPCP Hospitals for inpatient hospital services as follows effective October l, 2008:

4

a. For most Non-SPCP Hospitals, interim payments for inpatient hospital

5 services are the lesser of 90% of the interim rate or 95% of an "average regional per

6 diem contract rate." Final reimbursement is limited to the lesser of 90% of the

7 hospital's audited allowable cost per day or 95% of an "average regional per diem

8 contract rate."

9

b. "Small and rural hospitals" are exempted from these limitations

10 altogether, except that they are subject to the 10% reduction to their interim rates

11 and to their final reimbursement until November I, 2008.

12

c. Certain hospitals in open HFPAs are subject only to the 10% rate

13 reductions and not the "average regional per diem contract rate" limitations.

14

75. Welfare and Institutions Code section 14166.245 mandated that the

15 "average regional per diem contract rates" be calculated as follows:

16

(C)(i) For purposes of this subdivision and subdivision (c),

fue average regional per diem contract rates shall be

17

derived from unweig!ltoo average contractper diem rates

that are P.Ublicly avrulable on June l of eacli year, trended

18

forward based on the trends in the California Medical

Assistance Commission's Annual Report to the

19

Legislature. For tertiary hospitals, and for all other

hospitals, the regional averag~ per diem contract rates

20

shall be based on the _geogr!lPhic regions in the California

Medical Assistance Commission's Annual Report to the

21

Legislature. The applicable average reg!onar per diem

contract rates for tertiary ho~itals ana for all other

22

hospitals shall be published by tlie department on or before

October l, 2008, and these rates shal be updated annually

23

for each state fiscal _year and shall become effective each

July l, thereafter. Supplemental payments shall not be

24

included in this calculation.

25

(ii) For purposes of clause (i), both the federal and

nonfederal share of the designated public hospital cost-

26

based rates shall be included- in the determinatiOn of the

average contract rates by multiplying the hospital's interim

27

rate, established pursuant to Section 14166.4 and that is in

effect on June I of each year, by two.

28

:WI9434.5

COMPLAINf

;;;

0~.!8~.~;.;;.;

...... f5~8~~
"' - 0o~1z-- <!l..
m~~~:~"-

ld~IL.
b:~ ':-~:

.~..J~;:J.:.I;~

~ ~ ..J 1r'l

ll::Zblll

,._,_ b.
Q.

ll 0

llzt!

-0

g~r~<;;

.. :rc-o_o,_.,. ...

1

(iii) For the puwoses of this section, a terti!ll:Y hos2ital is a

clnldren's hospital specified in Section 10727, or anospital

2

that has been designated as a Level I or Level Il trauma

center by the Emergency Medical Services Authority

3

established pursuant to Section 1797.1 of the Health ano

Safety Code.

4

76. On April 6, 2009, the Ninth Circuit Court of Appeal, in California

5
Pharmacists Association v. Maxwell-Jolly, _ F.3d _, 2009 WL 975458 (9th Cir.

6
2009), stayed the application of various hospital reimbursement reductions enacted

7

by AB 1183, including the reimbursement reductions in Welfare and Institutions

8

Code section 14166.245, pending the appeal of the trial court's denial of a

9

preliminary injunction. The Ninth Circuit concluded that the plaintiff hospitals and

10

CHA had demonstrated a likelihood of success on the merits of their challenge to

11

the AB 1183 rate reductions on the basis that the rate reductions were preempted by

12

Section 30(A) and that the plaintiffs had established a likelihood of irreparable harm

13

in the form of reduced payments that could not later be recovered in federal court

14

due to the Eleventh Amendment.

15

77. AB 1183 also enacted California Welfare and Institutions Code section

16

14091.3, which states, in relevant part:

17

(c) Anyhosp_ital that does not have in effect a contract

18

With a Medi-~al mana_ged care health p_lan... shall acc~t

as payment in full, ffom all these plans, the following

19

amounts:

20

(1) For outpatient services, the Medi-Cal Fee-For-Service

(FFS) payment amounts.

21

(2) For emergency inpatient services, the average per diem

22

contract rate specifieil in paragraph (2) of subdiVIsion (b)

of Section 14166.245, except tliat the payment amount

23

shall not be reduced by 5 percent. For the purposes of this

paragraph, this _paYITlent amount shall apply to all

24

hospitals, includmg hos2itals_ that contr<fct with .the

·department under the Med1-Cal Selective Provider

25

Contracting Program described in Article 2.7

(commencmg witli Section 14081), and small and rural

26

ho~itals specified in Section 1248"40 of the Health and

Safety Code.

27

(3) J:or. poststabilization services following an _emergen_cy

28

achrusswn, payment amounts shall be consistent With

2019484.5

COMPLAINT

iii . 8!:: iii
Oo.,'
~-c:t;;
......-. ~~::;;8;2~
"'0~~.W.... ~z..:I( ~L--
W5I:al:C:~b-.:. :.. ~ ~ - ;o
...-J.:..Jg~).:, ..
O:Zid_,
8"".";-; IdlY~~
D..UzO
~
:r «< 0 --.J.J "~ '

1

subdivision (e) of Section 438.114 of Title 42 of the Code ~f Federal "Regulations. This paragraph shall only be

2

Implemented to the extent tliat contract amendment

language providing for these payments is approved by

3

CMS. For purposes of this paragrctph, this payment

amount shall apply to all hospitals, including hosP.Itals that

4

contract with the department under the Medi-Cal Selective

Provider Contracting Program pursuant to Article 2.6

5

(commencing with Section 14081).

6

78. On October 2, 2008, the Department issued another All Plan Letter

7 ("APL 08-008") regarding "Reimbursement for Non-Contracted Hospital

8 Emergency Inpatient Services." APL 08-008 announced the applicable two sets of

9 "average regional per diem contract rates," one for January I, 2007 to June 30,2008

10 and one for July 1, 2008 to June 30, 2009. A true and correct copy of APL 08-008

11 is attached hereto and incorporated herein as Exhibit B.

12

79. On November 10, 2008, the Department issued a third All Plan Letter

13 ("APL 08-010) regarding "Hospital Payment for Medi-Cal Post-Stabilization

14 Services." In that letter, the Department announced that California Welfare and

15 Institutions Code section 14091.3(c)(3) requires that non-contracted providers of

16 poststabilization services "accept as payment in full for post"stabilization services

17 the hospital's Medi-Cal Fee-For-Service (FFS) payment amounts for general acute

18 care inpatient service set forth in W&I Code Section 14!66.245." (Emphasis

19 removed.) These are the payment rates that were enjoined by the Ninth Circuit in

20 California Pharmacists Association v. Maxwell-Jolly. A true and correct copy of

21 APL 08-010 is attached hereto and incorporated herein as Exhibit C.

22

80. Plaintiffs are informed and believe and thereon allege that, like the

23 Director's failures enjoined in Independent Living Centers ofSouthern California, et

24 a!. v. Shewry, 543 F.3d 1050 (9th Cir. 2008) and California Pharmacists

25 Association v. Maxwell-Jolly, prior to enacting the Non-Contracted Hospital Rates

26 in AB 1183, or implementing these rates pursuant to APL 08-008 and APL 08-010,

27 no studies or other analyses were conducted by the Legislature or by the Director to

28 determine whether the Non-Contracted Hospital Rates would be consistent with

2019484.5

COMPLAINT

1 efficiency, economy and quality of care or with the costs of providing the services to

2 which these rates apply.

3

4 CALIFORNIA LEGISLATURE'S REGULATION OF

5 POSTSTABILIZATION SERVICES AFTERAB 1183

6

81. On September 30, 2008, the Legislature enacted Assembly Bill 1203

7 ("AB 1203"). AB 1203 enacted significant changes to the responsibilities of health

8 plans licensed pursuant to the Knox-Keene Act and Non-Contracted Hospitals with

9 regard to post-stabilization care.

10

82. AB 1203 amended California Health and Safety Code section 1262.8 to

11 require that if a hospital is able to obtain the name and contact information of a

12 patient's health care service plan (after seeking to do so as required by the section),

13 the hospital must contact the plan or the plan's contracting medical provider for

14 authorization to provide poststabilization care. Cal. Health & Sa£ Code §

15 1262.8(b).

16

83. The plan must within thirty minutes either approve the post-

17 stabilization services or decide to transfer the patient. Cal. Health & Saf. Code §

18 1371.40).

19

84. If the plan does not notify the hospital of its decision to either approve

20 post-stabilization services or transfer the patient, Health and Safety Code section

21 1268.2(d)(2) requires that the plan "shall pay charges for the care...." (Emphasis

22 added.) Likewise, if a plan decides to transfer a patient but fails to transfer the

23 patient "within a reasonable time[,]" the plan is liable to pay "charges" for the care.

24 Cal. Health &Saf. Code§ 1268.2(d)(3) (emphasis added).

25

85. Nothing in AB 1203 exempts Medi-Cal managed care plans licensed by

26 the Department of Managed Health Care from its requirements.

27

28

20194&4.5

COMPLA!Nf

1 DEFENDANT'S VIOLATIONS OF LAW

2

86. Violation of Federal Statute: The Non-Contracted Hospital Rates are

3 invalid and may not lawfully be implemented because they violate federal Medicaid

4 law, and are therefore preempted by the Supremacy Clause, because:

5

a. The Non-Contracted Hospital Rates violate Section 30(A) because:

6

t. Neither the Director rior the Legislature considered the factors of

7 efficiency, economy, quality of care, and access to services prior to enacting the AB

8 1183 Non-Contracted Hospital Rates;

9

ii. Neither the Director nor the Legislature demonstrated a

10 reasonable connection between Non-Contracted Hospital Rates and the efficient and

11 economical provision of quality care, or ensuring access to services, prior to

12 enacting the Non-Contracted Hospital Rates;

13

iii. Neither the Legislature nor the Director considered the costs of

14 providing quality care, relied on credible cost studies in enacting the Non-

15 Contracted Hospital Rates, or demonstrated a reasonable connection between Medi-

16 Cal rates as affected by the Non-Contracted Hospital Rates and provider costs;

17

tv. The Non-Contracted Hospital Rates are not consistent with

18 efficiency, economy, and quality of care, and do not ensure that Medi-Cal

19 beneficiaries have equal access to services; and/or

20

v. The Non-Contracted Hospital Rates are not reasonably related to

21 hospital costs of providing the services subject to these rates. The SPCP contract

22 rates from which the Non-Contracted Hospital Rates were derived are not based on

23 hospital costs, were not intended to cover the costs of efficient and economical

24 hospitals and were intended to be and are less than hospital costs so that the

25 California Medical Assistance Commission could show annually that the SPCP

26 saved the Medi-Cal program money as compared to the reimbursement that would

27 have been paid under the Medi-Cal program's reasonable cost reimbursement

28 methodology. The use of statewide average SPCP contract rates to determine the

2019484.5

COMPLAINT

;;;
...... .uZ--o0o.~.N ~,mn.z ... .,o_...
~:;8e

a)Q!!

0...: o( ••
mo":izl'l!.l.

KfSi:X~:.- .~_:•:

- 3z,

.a.
~

:.....,.-,.

-1-.Jin

0:: Zlllltl

-....,..,_ la&.luw"z' o......
810<;;
:I: CD 0 ..

1"-'

1 Non-Contracted Hospital Rates is not consistent with efficiency, economy and 2 quality of care, and results in rates that are not reasonably related to hospital costs

3 because, inter alia, the rates do not take into account various factors that affect

4 hospital costs, such as differences among hospitals in the types of cases (or case

5 mix) they treat; differences among hospitals in the types of patients (or patient mix)

6 they treat; differences between the average cost of treating patients under SPCP

7 contracts and the patients treated on out-of-networlc bases under Medi-Cal managed

8 care, which include primarily patients initially seen on an emergency basis; and

9 regional variances in salaries and other cost inputs.

10

b. The Non-Contracted Hospital Rates violate Section 13(A) because they

11 were not adopted through a public process as required by this provision. For 12 example:

13

1. The proposed Non-Contract Hospital Rates, the methodologies

14 underlying the establishment of these rates and the justifications for the rates were

15 never published;

16

ii. Providers, beneficiaries, and their representatives and other

17 concerned residents of the State of California were never given a reasonable

18 opportunity to review and comment on the proposed rates, methodologies and

19 justifications;

20

lli. The final Non-Contract Hospital Rates, the methodologies

21 underlying the establishment of these rates and the justifications for the rates were

22 never published; and/or

23

IV. The Non-Contract Hospital Rates do not take into account the

24 situation of hospitals which serve a disproportionate number of low-income patients

25 with special needs;

26

c. The Non-Contracted Hospital Emergency Rates violate 42 U.S.C.

27 section 1396u-2(b) because:

28

I. 42 D.S.C. section 1396u-2(b)(2)(D) reqUires payment from

2019484.5

COMPLAINT

1 Medi-Cal managed care plans at an "average contract rate," which encompasses all

2 payments from California to a hospital under the hospital's SPCP contract. The

3 Director did not include certain payments made to hospitals for inpatient services

4 under the hospitals' SPCP contracts in computing the Non-Contracted Hospital

5 Emergency Rates, including supplemental payments paid to hospitals as part of their

6 SPCP contracts; and/or

7

ll. 42 U.S.C. section 1396u-2(b)(2)(D) is intended to requrre

8 payments to Non-Contract Hospitals for emergency services to approximate the

9 amounts that hospitals would have been paid under the fee-for-service program.

10 The Non-Contracted Hospital Emergency Rates fail to accurately reflect the

11 payments under the fee-for-service program because the Director calculated the

12 Non-Contracted Hospital Emergency Rates without taking into account the

13 differences in Medi-Cal volume between facilities with SPCP contracts. In other

14 words, the Non-Contracted Hospital Emergency Rates are preempted by 42 U.S.C.

15 section 1396u-2(b)(2)(D) because they are calculated as an "unweighted" or

16 "straight" average of SPCP contract rates, rather than an average weighted based on

17 the volume of Medi-Cal inpatient services furnished by each SPCP contracted

18 hospital; and/or

19

n1. The Non-Contracted Hospital Poststabilization Rates violate 42

20 U.S.C. section 1396u-2(b)(2)(A)(ii) because inasmuch as they attempt to establish

21 poststabilization rates in compliance with federal law, they do not require that Medi-

22 Cal managed care plans comply with guidelines for Medicare managed care plans

23 with regard to poststabilization care "in the same manner as such guidelines apply"

24 to Medicare managed care plans.

25

87. Violation of Federal Regulations: The Non-Contracted Hospital Rates

26 are invalid and may not lawfully be implemented because they violate federal

27 Medicaid regulations, and are therefore preempted by the Supremacy Clause,

28 because:

2019484.5

COMPLAINT

"

-

;;;
or-o~w;'
~-c:'Wi
.. ., ., ..... z ~- ~ -k~ Jc oo ....o- ...
"" - 8m~1":-.'!:o!!,.~...
K5f~:o.~: :b:-. :..
:zJ o>-: . ; ' !- '
.. - ~
.,.,_ 15-1z-..J.i.f.t
n..uzo
o~nce;; Ot-~n--
J:!g,:j
1"-'

I

a. The Non-Contracted Hospital Rates violate 42 C.F.R. section 447.205

2 because the Department failed to give public notice as required by this provision as

3 follows:

4

1. Public notice is required because the Non-Contracted Hospital

5 Rates are a significant change in the Department's methods and standard for setting

6 payment rates for Non-Contracted Hospital services;

7

11. The Department failed to provide public notice describing the

8 proposed change in method and standards, giving an estimate of of any increase or

9 decrease in annual aggregate expenditures, explaining why the agency was changing

10 its methods and standards, identifYing a local agency in each county where copies of

11 the proposed changes were available for review, giving an address where written

12 comments may be sent and reviewed by the public, and giving the location, date and

13 time of any public hearings; and

14

m. No prior notice was ever published as a public announcement in

15 a suitable publication as defined in 42 C.F.R. § 447 205(d)(2); and/or

16

b. The Non-Contracted Hospital Poststabilization Rates violate 42 C.F.R.

17 section 438.114 because, if and to the extent this regulation establishes any rate of

18 payment to Non-Contracted Hospitals for poststabilization services, it requires

19 payment for poststabilization services at the Medicare fee-for-service rates, and the

20 Non-Contracted Hospital Poststabilization Rates are generally lower than the

21 Medicare fee-for-service rates.

22

88. No State Plan Amendment: The Non-Contracted Hospital Rates are

23 invalid and may not lawfully be implemented because they are inconsistent with and

24 violate the State Plan, including, but not limited to, Attachment 4.19-A of the State

25 Plan as to hospital inpatient services. The Non-Contracted Hospital Rates are

26 therefore preempted by the Supremacy Clause. The Director may not lawfully

27 implement the AB 1183 Rate Reductions unless and until he obtains federal

28 approval of the necessary amendments to the State Plan from the federal

2019481.5

COMPLAINT

''

-

-

1 government. Plaintiffs are informed and believe, and thereon allege, that the

2 Director has not obtained federal approval of a State Plan Amendment for the Non-

3 Contracted Hospital Rates.

4

89. Violation of U.S. and California Constitution: The Non-Contracted

5 Hospital Rates violate the Fifth Amendment of the U.S. Constitution and Article I,

6 section 19 of the California Constitution by effectuating a taking of the property of

7 hospitals to Medi-Cal managed care plans without any public use or purpose. In this

8 regard:

9

a. The Non-Contracted Hospital Rates force Plaintiff and its members to

10 absorb losses and thereby directly subsidize privately owned and operated Medi-Cal

11 managed care plans;

12

b. Givt;n the prevailing capitation payment arrangements with the

13 Department, the Medi-Cal managed care plans are the sole, direct and substantial

14 beneficiaries ofthe Non-Contracted Hospital Rates;

15

c. No public purpose for the Non-Contracted Hospital Rates was

16 enunciated in section 6085 of the Deficit Reduction Act, Assembly Bill 1183 or any

17 ofthe Department's All Plan Letters;

18

d. Any public benefit that might result from plaintiffs members accepting

19 the Non-Contracted Hospital Rates is, at best, indirect, incidental, and attenuated;

20 and/or

21

e. The Non-Contracted Hospital Rates were enacted at the instance and

22 for the pecuniary benefit of the managed care industry as a means of enhancing the

23 profitability of private managed care plans; any intended or alleged public benefit is

24 pretextual.

25

90. Violation of State Law:

26

a. The Non-Contracted Hospital Poststabilization Rates violate Welfare

27 and Institutions Code section 14091.3(c)(3) because the Non-Contracted Hospital

28 Poststabilization Rates are not consistent with 42 C.F.R. section 438.114(e) as

20194845

COMPLAJNT

a;

o~'-
uo;;~
z'P""-

- f:- :;;8' !~:ID!

coo.~

:oil.:':'i<az(:

..
.::1.

I5l:al:~:~-~:.:

....""'- 5..J>a:.-G,,
ff-ilZ- b..Jl"~ ~'

.. "- g ..ll..O<zO;;
:::r: m-_o,_.,.

t"-'

1 required by section 14091.3(c)(3). To the extent 42 C.F.R. section 438.114(e)

2 specifies a payment rate, it specifies a payment rate equal to the amount that would

3 have been paid on a fee-for-service basis under the Medicare program through its

4 references to various Medicare regulations. The Non-Contracted Hospital

5 Poststabilization Rates are generally lower than the Medicare fee-for-service rates;

6

b. To the extent that 42 C.F.R. section 438.114(e) does not specify a rate

7 of payment, the Non-Contracted Hospital Poststabilization Rates are invalid because

8 they result from an invalid delegation of legislative authority to the Department and

9 the Director pursuant to Welfare and Institutions Code section 14091.3(c), as the

10 Department and the Director are provided no standards whatsoever by the

11 legislature for the development of Non-Contracted Hospital Poststabilization Rates.

12 This delegation without standards violates the California Constitution by

13 impermissibly authorizing the executive branch of state government to assume

14 legislative functions which are the exclusive province of the state legislature;

15

c. The Non-Contracted Hospital Rates are invalid as underground

16 rulemaking without compliance with the procedural requirements of the California

17 Administrative Procedure Act, Government Code sections 11340, et seq. The Non-

18 Contracted Hospital Rates constitute regulations under California law because they

19 are rules of general application. However, they were implemented pursuant to APL

20 08-008 and APL 08-010, neither of which was adopted in accordance with the

21 California Administrative Procedure Act;

22

d. The Non-Contracted Hospital Rates are invalid because they conflict

23 with the "reasonable and customary" payment standard of Title 28, California Code

24 of Regulations, section 1300.7l(a)(3);

25

e. The Non-Contracted Hospital Poststabilization Rates are invalid

26 because they attempt to establish a lower rate of payment for poststabilization

27 services that is almost always lower than hospital charges in direct contradiction of

28 the statutory requirem~tnt in AB 1203 that a plan pay charges for care if it does not

2tll94ll4.S

COMPLAINT

.1 notify the hospital of its decision to either approve post-stabilization services or

2 transfer the patient or if a plan decides to transfer a patient but fails to transfer the

3 patient "within a reasonable time;"

4

f. The Non-Contracted Hospital Rates are invalid because they attempt to

5 establish a lower rate of payment for emergency services than those required by

6 California Health and Safety Code section 1317.2a(d); and/or

7

g. The Non-Contracted Hospital Rates are invalid because they violate

8 Title 22, California Code of Regulations, section 50004, by establishing rates that

9 are inconsistent with and violate the State Plan which currently does not include the

10 Non-Contractual Hospital Rates.

11

12

FIRST CAUSE OF ACTION

13

(VIOLATION OF 42 U.S.C. § 1396a(a)(30)(A)/SUPREMACY CLAUSE)

14

91. Plaintiff hereby incorporates by reference paragraphs 1 through 90,

15 inclusive, as though fully set forth herein.

16

92. The Non-Contracted Hospital Rates violate Section 30(A) of the

17 Medicaid Act because:

18

a. Neither the Director nor the Legislature considered the factors of

19 efficiency, economy, quality of care, and access to services prior to enacting the

20 Non-Contracted Hospital Rates;

21

b. Neither the Director nor the Legislature demonstrated a reasonable

22 connection between the Non-Contracted Hospital Rates and the provision of quality

23 care in an efficient and economic manner, or ensuring access to services, prior to

24 enacting the Non-Contracted Hospital Rates; and

25

c. Neither the Legislature nor the Director considered the costs of

26 providing quality care or demonstrated a reasonable connection between Medi-Cal

27 rates as affected by the Non-Contracted Hospital Rates and provider costs.

28

d. The Non-Contracted Hospital Rates are not consistent with efficiency,

2019484.5

------·---------;=~=c-----------­
COMPLAINT

1 economy, and quality of care, and do not ensure that Medi-Cal beneficiaries have

2 equal access to services; and/or

3

e. The Non-Contracted Hospital Rates are not reasonably related to

4 hospital costs of providing the services subject to these rates.

5

93. The Non-Contracted Hospital Rates and the provisions of California

6 law pursuant to which they have been implemented are thus preempted by the

7 Supremacy Clause of the United States Constitution, art. IV, because the mandated

8 rates, enacted solely for the benefit of Medi-Cal managed care plans in disregard of

9 the Section 30(A) statutory factors, stand as an obstacle to the accomplishment and

10 execution of the full purposes and objectives of Congress in the enactment of said

;;;
o.ooW!:::1m,
~~c:tn z<(-Ir:ll;r0-&- ~.n-.
" - X10a.-.
0 }-- <( ..
o:j!z~
m ... ~""
" - ~ll::k,..
5~S::
z3«>u, .i',C_-¥ -l- ..J n
0::ZIIJW1
Will~--
D..UzO
0W1c(;j
0~"-411 .......
-_,_, :I: Cll 0 ..
",_'

11 Section. Moreover, the Non-Contracted Hospital rates are preempted under the

12 Supremacy Clause because the Director cannot simultaneously comply with the

13 provisions of California law requiring the implementation of the Non-Contracted

14 Hospital Rates and Section 30(A).

15

16

SECOND CAUSE OF ACfiON

17

(VIOLATION OF 42 U.S.C. § 1396a(a)(13)(A)

18

SUPREMACY CLAUSE/42 U.S.C. § 1983)

19

94. Plaintiff hereby incorporates by reference paragraphs 1 through 93,

20 inclusive, as though fully set forth herein.

21

95. The Non-Contracted Hospital Rates violate Section 13(A) because they

22 were not adopted through a public process as required by this provision.

23

96. Specifically, the Non-Contracted Hospital Rates were not enacted in

24 accordance with Section 13(A) because:

25

a. The proposed Non-Contract Hospital Rates, the methodologies

26 underlying the establishment of these rates and the justifications for the rates were

27 never published;

28

b. Providers, beneficiaries, and their representatives and other concerned

2019~.5

COMPLAINT

"

; o~;ona";-'
~-':i;Q
~~-:~>o:0'o.~01!!
0..: <( ••
fil3H
,ax~.
6:~ :~-::
3z >~..-'l-' :>w- 1- ..J ltl B::'ZUJin
Io&.J.ldo6z...o-..
Oo n....-<Ojl;~j
:.:~g..J w
~

1 residents of the State of California were never given a reasonable opportunity to

2 review and comment on the proposed rates, methodologies and justifications;

3

c. The final Non-Contract Hospital Rates, the methodologies underlying

4 the establishment of these rates and the justifications for the rates were never 5 published; and/or

6

d. The Non-Contract Hospital Rates do not take into account the situation

7 of hospitals which serve a disproportionate number of low-income patients with

8 special needs; and/or

9

97. The Non-Contracted Hospital Rates have been adopted by the

10 Department under color of state law. CHA represents the interests of hospitals that

11 have been deprived of their privately enforceable rights conferred by 42 U.S.C.

12 section l396a(a)(I3)(A). Accordingly, the Director has violated 42 U.S.C. section

13 1983 by adopting the Non-Contracted Hospital Rates.

14

98. The Non-Contracted Hospital Rates are also preempted by the

15 Supremacy Clause of the United States Constitution, art IV. Moreover, the Non-

16 Contracted Hospital rates are preempted under the Supremacy Clause because the

17 Director cannot simultaneously comply with the provisions of· California law

18 requiring the implementation of the Non-Contracted Hospital Rates and Section

19 13(A).

20

21

TIDRD CAUSE OF ACTION

22

(VIOLATION OF 42 U.S.C. § 1396u-2(b)

23

SUPREMACY CLAUSE/42 U.S.C. § 1983)

24

99. Plaintiff hereby incorporates by reference paragraphs I through 99,

25 inclusive, as though fully set forth herein.

26

100. The Non-Contracted Hospital Emergency Rates violate 42 U.S.C.

27 section 1396u-2(b)(2)(D) because they fail to include all the payments to hospitals

28 pursuant to their SPCP contracts by excluding supplemental payments to hospitals.

20194845

COMPLAINT

;;; . 0!:: ;;
02:°~~'t!'t1•; • w .... IQ
" .....-. z~e»~
~-::0 >o0-
8~~.~.~~~~.. "o"-
l4i !( IL. •
~~~~- =
z~ -
,".",.'_- 3t~:.OIP • '"" ..J In f5Z111tn
o..uzo
. Oo.,.a..<..;..:..i.
:c~3.J

1

101. The Non-Contracted Hospital Emergency Rates further violate 42

2 U.S.C. section 1396u-2(b)(2)(D) because they fail to accurately reflect the amounts

3 hospitals would have been paid from the Medi-Cal fee-for-service program by

4 calculating the average contract amounts as a straight, unweighted average.

5

102. The Non-Contracted Hospital Poststabilization Rates violate 42 U.S.C.

6 section 1396u-2(b)(2)(A)(ii) because inasmuch as they attempt to establish

7 poststabilization rates in compliance with federal law, they do not require that Medi-

8 Cal managed care plans comply with guidelines for Medicare managed care plans

9 with regard to poststabilization care "in the same manner as such guidelines apply''

10 to Medicare managed care plans.

11

103. The Non-Contracted Hospital Rates have been adopted by the

12 Department under color of state law. CHA represents the interests of hospitals that

13 have been deprived of their privately enforceable rights conferred by 42 U.S.C.

14 section 1396u-2(b)(2). Accordingly, the Director has violated 42 U.S.C. section

15 1983 by adopting the Non-Contracted Hospital Rates.

16

104. The Non-Contracted Hospital Rates are also preempted by ·the

17 Supremacy Clause of the United States Constitution, art. N. Moreover, the Non-

18 Contracted rates are preempted under the Supremacy Clause because the Director

19 cannot simultaneously comply with the provisions of California law requiring the

20 implementation of the Non-Contracted Hospital Rates and 42 U.S.C. sections

21 1396u-2(b)(2)(D) and 1396u-2(b)(2)(A)(ii).

22

23

FOURTH CAUSE OF ACTION

24

(VIOLATION OF 42 C.KR. § 447.205/SUPREMACY CLAUSE)

25

105. Plaintiff hereby incorporates by reference paragraphs 1 through 105,

26 inclusive, as though fully set forth herein.

27

28

2019484.5

COMPLAINT

1

106. The Non-Contracted Hospital Rates violate 42 C.F.R. section 447.205

2 because the Department failed to give public notice as required by this provision as

3 follows:

4

a. Public notice is required because the Non-Contracted Hospital Rates

5 are a significant change in the Department's methods and standard for setting

6 payment rates for Non-Contracted Hospital services;

7

b. The Department failed to provide public notice describing the proposed

8 change in method and standards, giving an estimate of of any increase or decrease in

9 annual aggregate expenditures, explaining why the agency was changing its

10 methods and standards, identifying a local agency in each county where copies of

11 the proposed changes were available for review, giving an address where written

12 comments may be sent and reviewed by the public, and giving the location, date and

13 time of any public hearings; and

14

c. No prior notice was ever published as a public announcement in a

15 suitable publication as defined in 42 C.F.R. §447.205(d)(2).

16

17

FIFI'H CAUSE OF ACTION

18

(VIOLATION OF 42 C.F.R. § 438.114/SUPREMACY CLAUSE)

19

107. Plaintiff hereby incorporates by reference paragraphs I through 106,

20 inclusive, as though fully set forth herein.

21

108. The Non-Contracted Hospital Poststabilization Rates are invalid and

22 may not lawfully be implemented because they are inconsistent with 42 C.F.R.

23 section 438.114 because if that regulation establishes any rate of payment for pre-

24 approved poststabilization services, that rate would be equal to the Medicare fee-for-

25 service rate.

26

I09. The Non-Contracted Hospital Poststabilization Rates are thus

27 preempted by the Supremacy Clause of the United States Constitution, art. IV.

28 Moreover, the Non-Contracted Hospital Poststabilization Rates are preempted under

2019484.5

COMPLAINT

1 the Supremacy Clause because the Director cannot simultaneously comply with the

2 provisions of California law requiring the implementation of the Non-Contracted

3 Hospital Emergency Rates and 42 C.F.R. section 438.114.

4

5

SIXTH CAUSE OF ACTION

6

(FAILURE TO AMEND STATE PLAN/SUPREMACY CLAUSE)

7

110. Plaintiff hereby incorporates by reference paragraphs 1 through 109,

8 inclusive, as though fully set forth herein.

9

111. The Director may not lawfully implement the Non-Contracted Hospital

10 Rates because they are inconsistent with and violate the State Plan unless and until it

11 obtains federal approval of the necessary amendments to the State Plan to the

12 federal government.

13

112. The Non-Contracted Hospital Rates are thus preempted by the

14 Supremacy Clause of the United States Constitution, art. IV. Moreover, the Non-

15 Contracted Hospital rates are preempted under the Supremacy Clause because the

16 Director cannot simultaneously comply with the provisions of California law

17 requiring the implementation of the Non-Contracted Hospital Rates and the State

18 Plan.

19

20

SEVENTH CAUSE OF ACTION

21

(VIOLATION OF U.S. CONSTITUTION TAKINGS CLAUSE

22

SUPREMACY CLAUSE/42 U.S.C. § 1983)

23

113. Plaintiff hereby incorporates by reference paragraphs 1 through 112,

24 inclusive, as though fully set forth herein.

25

114. The takings clause of the Fifth Amendment to the U.S. Constitution

26 prohibits the taking of "private property" by the government "without just

27 compensation."

28

115. Takings are not limited to outright seJ=es or condemnations of

2019484.S

COMPLAINT

;;; u. .8.!a ::;~;;
~-':'In
a Ill ,.. In
Z ~f -:- >oD 0o~IQCII~
0.: < ..
·-lil3 H
ld~~-
l3z';>.•:<:<~.:-3.-l''-.--..... ..J C'l
ab0:J.:Zuwb.z1,Co. '. .I.
gn,.<.,~_
:t:~g..:;
"...'

1 physical property, but may include the forced diminution in the value of private

2 property resulting from governmental regulation of the use of private business or

3 property.

4

116. The "public use" clause of the Fifth Amendment permits any taking of

5 private property only for a public purpose.

6

117. The takings affected by the Non-Contracted Hospital Rates are not for a

7 public purpose. In this regard:

8

a. The Non-Contracted Hospital Rates force Plaintiff and its members to

9 absorb losses and thereby directly subsidize privately owned and operated Medi-Cal

10 managed care plans;

11

b. Given the prevailing capitation payment arrangements with the·

12 Department, the Medi-Cal managed care plans are the sole, direct and substantial

13 beneficiaries of the Non-Contracted Hospital Rates;

14

c. No public purpose for the Non-Contracted Hospital Rates was

15 enunciated in section 6085 of the Deficit Reduction Act, Assembly Bill 1183 or any

16 of the Department's All Plan Letters;

17

d. Any public benefit that might result from plaintiff's members accepting

18 the Non-Contracted Hospital Rates is, at best, indirect, incidental, and attenuated;

19

e. The Non-Contracted Hospital Rates were enacted at the instance and

20 for the pecuniary benefit of the managed care industry as a means of enhancing the

21 profitability of private managed care plans; any intended or alleged public benefit is

22 pretextual.

23

118. Accordingly, the takings effectuated by the Non-Contracted Hospital

24 Rates are per se unconstitutional takings.

25

119. The Non-Contracted Hospital Rates have been adopted by the

26 Department under color of state law. CHA represents the interests of hospitals that

27 have been deprived of their privately enforceable right to be free of unlawful takings

28 guaranteed under the U.S. Constitution. Accordingly, the Director has violated 42

2019484.5

COMPLAINT

'

-

I U.S.C. section 1983 by adopting the Non-Contracted Hospital Rates.

2

120. Also, the Non-Contracted Hospital Rates are preempted by the

3 Supremacy Clause of the United States Constitution, art. IV. Moreover, the Non-

4 Contracted Hospital rates are preempted under the Supremacy Clause because the

5 Director cannot simultaneously comply with the provisions of California law

6 requiring the implementation of the Non-Contracted Hospital Rates and the 7 Constitutional prohibition of takings without a public use. 8

9

IO

EIGIITH CAUSE OF ACI'ION

II

(PEmiON FOR WRIT OF MANDATE

I2

CALIFORNIA CODE OF CIVIL PROCEDURE § I085)

13

121. Plaintiff hereby incorporates by reference paragraphs I through 120,

I4 inclusive, as though fully set forth herein.

IS

122. Plaintiff has a beneficial interest that rates established for non-contract

I6 hospitals comply with the requirements of the California Constitution and other I7 California statutes.

I8

123. The Director has a duty to comply with the federal laws, the U.S. and

I9 California Constitutions and other California statutes, but has violated this duty, by

20 adopting the Non-Contracted Hospital Rates in violation of 42 U.S.C. sections

2I 1396a(a)(30)(A), 1396a(a)(13)(A), 1396u-2(b)(2)(D) and 1396u-2(b)(2)(A)(ii), 42

22 C.F.R. sections 447.205 and 438.114, the State Plan, the Fifth Amendment of the

23 U.S. Constitution, section 19 of Article I of the California Constitution, California

24 Welfare and Institutions Code sections 14091.3(c)(3), California Health and Safety

25 Code sections 1268.2 and 1317.2a(d), the California Administrative Procedure Act,

26 California Government Code section 11340, et seq., Title 22, California Code of

27 Regulations, section 50004 and Title 28, California Code of Regulations, section

28 l300.71(a)(3).

2019484.5

--~---=~-c=;;-------­
COMPLAINT

1

124. Specifically, the Non-Contracted Hospital Rates violate the California

2 Constitution and California statutes as follows:

3

125. Section 19 of Article I of the California Constitution permits the taking

4 of "private property'' by the government only when the taking is "for a public use

5 and only when just compensation ... has first been paid to, or into court for, the 6 owner."

7

126. Takings are not limited to outright seizures or condemnations of

8 physical property, but may include the forced diminution in the value of private

9 property resulting from governmental regulation of the use of private business or 10 property.

11

127. The "public use" clause of the section 19 of Article I of the California

12 Constitution permits any taking of private property only for a public purpose.

13

128. The takings affected by the Non-Contracted Hospital Rates are not for a

14 public purpose. In this regard:

15

a. The Non-Contracted Hospital Rates force Plaintiff and its members to

16 absorb losses and thereby directly subsidize privately owned and operated Medi-Cal 17 managed care plans;

18

b. Given the prevailing capitation payment arrangements with the

19 Department, the Medi-Cal managed care plans are the sole, direct and substantial

20 beneficiaries of the Non-Contracted Hospital Rates;

21

c. No public purpose for the Non-Contracted Hospital Rates was

22 enunciated in Assembly Bill 1183 or any of the Department's All Plan Letters;

23

d. Any public benefit that might result from plaintiff's members accepting

24 the Non-Contracted Hospital Rates is, at best, indirect, incidental, and attenuated;

25

e. The Non-Contracted Hospital Rates were enacted at the instance and

26 for the pecuniary benefit of the managed care industry in California as a means of

27 enl!ancing the profitability of private managed care plans; any intended or alleged

28 public benefit is pretextual.

2019484.5

COMPLAINT

1

129. Accordingly, the takings effectuated by the Non-Contracted Hospital

2 Rates are per se unconstitutional pursuant to the California Constitution.

3

130. The Non-Contracted Hospital Poststabilization Rates violate Welfare

4 and Institutions Code section 14091.3(c)(3) because the Non-Contracted Hospital

5 Poststabilization Rates are not consistent with 42 C.F.R. section 438.114(e) as

6 required by section 14091.3(c)(3). To the extent 42 C.F.R. section 438.114(e)

7 specifies a payment rate, it specifies a payment rate equal to the amount that would

8 have been paid on a fee-for-service basis under the Medicare program through its

9 references to vanous Medicare regulations. Non-Contracted Hospital

10 Poststabilization Rates are generally lower than the Medicare fee-for-service rates.

11

131. To the extent that 42 C.F.R. section 438.114(e) does not specify a rate

12 of payment, the Non-Contracted Hospital Poststabilization Rates are invalid because

13 they result from an invalid delegation of legislative authority to the Department and

14 the Director pursuant to Welfare and Institutions Code section 14091.3(c), as the

15 Department and the Director are provided no standards whatsoever by the

16 legislature for the development of Non-Contracted Hospital Poststabilization Rates.

17 This delegation without standards violates the California Constitution by

18 impermissibly authorizing the executive branch of state government to assume

19 legislative functions which are the exclusive province ofthe state legislature.

20

132. The Non-Contracted Hospital Rates are invalid as underground

21 rulemaking without compliance with the procedural requirements of the California

22 Administrative Procedure Act, Government Code sections 11340, et seq. The Non-

23 Contracted Hospital Rates constitute regulations under California law because they

24 are rules of general applications. However, they were implemented pursuant to APL

25 08-008 and APL 08-010, neither of which was adopted in accordance with the

26 California Administrative Procedure Act.

27

133. The Non-Contracted Hospital Rates are invalid because they conflict

28 with the "reasonable and customary'' payment standard of Title 28, California Code

2019484_5

COMPLAINT

•

;;;
. " uoo;n"!f-l
-Z~N- ~ ..... 10
zt-10 ....... < (~- o 0- 0
"' - LU)Oio(q
0o:1:--!<z~·-
m w ~~~...
w1s:.a:;s:_:<:.b-..-.:'_•-
. - z>-u_
3a:.D~ ~ ~I- ..JID O:::Zidl"'
lo&. .luk zl "o-
Oa<;;)
-_,_., O,...ltl~
J:CDQ,.
1-

1 ofRegulations, section 1300.7l(a)(3).

2

134. The Non-Contracted Hospital Poststabilization Rates are invalid

3 because they attempt to establish a lower rate of payment for poststabilization

4 services in direct contradiction of the statutory requirement in AB 1203 that a plan

5 pay charges for care if it does not notify the hospital of its decision to either approve

6 post-stabilization services or transfer the patient or if a plan decides to transfer a

7 patient but fails to transfer the patient "within a reasonable time."

8

135. The Non-Contracted Hospital Rates are invalid because they attempt to

9 establish a lower rate of payment for emergency services than those required by

10 California Health and Safety Code section 1317.2a(d).

11

136. The Non-Contracted Hospital Rates are invalid because they violate

12 Title 22, California Code of Regulations, section 50004, by establishing rates that

13 are inconsistent with and violate the State Plan.

14

137. Plaintiff has performed all conditions precedent to the filing of the

15 petition for mandamus. No other adequate remedies exist under statute, regulation

16 or other provision of law. The existence of declaratory relief and injunctive relief

17 does not prevent the use of mandate. (County ofLos Angeles v. State Department of

18 Public Health (1958) !58 Cal.App.2d 425, 446.)

19

20

NINTH CAUSE OF ACTION

21

(DECLARATORY RELIEF)

22

138. Plaintiff hereby incorporates by reference paragraphs I through 137,

23 inclusive, as though fully set forth herein.

24

139. An actual and justiciable controversy exists between Plaintiff and the

25 Director regarding the validity of the Non-Contracted Hospital Rates. Plaintiff

26 contends that the Non-Contracted Hospital Rates are invalid and unlawful in

27 violation of federal statute, federal regulations, the State Plan, the U.S. and

28 California Constitutions, and California laws, while the Director contends that the

2019484..5

COMPLAINr

•

1 Non-Contracted Hospital Rates are valid in all respects.

;;;

u. o0 .!':,.«i
zU>~~<~-

-

-

I W)

.h) t-In

zt-ID..-..

"'(- 0 0

8":E~~;;

m

~1--~~
"'o

~
~·-
..

s:: 5 ~ 14 ya::k-. •

z >- -

3a:u)~

. , , _ ff-iZ"..>. "....1,'>-11

o..uzo
Oa<;;

Ot-11)---
.. I -co_0,_.,.

1-

2

140. Accordingly, pursuant to 28 U.S.C. section 2201, Plaintiff requests this

3 Court to declare that the Non-Contracted Hospital Rates are invalid and unlawful.

4

141. No administrative appeal process or other administrative remedy is

5 available to Plaintiffs to challenge the AB 1183 Rate Reductions.

6

142. All of the said injuries are great and immediate, for which damages at

7 law are inadequate, and for which plaintiffs have no plain, adequate or speedy relief

8 at law or otherwise.

9

10

WHEREFORE, Plaintiff prays for judgment as follows:

11

1. For an Order declaring that the Non-Contracted Hospital Rates violate

12 42 U.S.C. sections 1396a(a)(30)(A), 1396a(a)(13) and 1396u-2(b)(2), 42 C.F.R.

13 section 447.205, and the Fifth Amendment of the United States Constitution and are

14 thus invalid and/or preempted by the Supremacy Clause of the United States

15 Constitution, art. IV;

16

2. For an Order declaring that the Non-Contracted Hospital

17 Poststabilization Rates violate 42 C.F.R. section 438.114 and are thus invalid and/or

18 preempted by the Supremacy Clause of the United States Constitution, art. IV;

19

3. For an Order declaring that the Non-Contracted Hospital Rates

20 represent a de facto amendment to the State Plan and therefore said rate reductions

21 cannot be imposed without federal approval;

22

4. For an Order declaring that the Non-Contracted Hospital Rates violate

23 section 19 of Article I (takings clause) and section 3 of Article III (separation of

24 powers) of the California Constitution, the California Administrative Procedure Act,

25 California Government Code section 11340, et seq., Title 22, California Code of

26 Regulations, section 50004, and Title 28, California Code of Regulations

27 1300.7l(a)(3), and are thus invalid;

28

5. For an Order declaring that the Non-Contracted Hospital Emergency

2019484.5

COMPLAINT

•

;;; . 8!:;;;
~~~~
- •m
Z~:t;-"I8'D"!:m.-!. -a~
2~...~~~....
J~.d:a::.:::~.-..:.
3z ,a:.::>•=m-~ ffi~1-..Jin
z01m
. - .l8.:.u""~.'S:;".~"Je ",..

1 Rates violate California Health and Safety Code section 1317.2a(d), and are thus

2 invalid;

3

6. For an Order declaring that the Non-Contracted Hospital

4 Poststabilization Rates violate California Health and Safety Code section 1268.2,

5 and Welfare and Institutions Code section 1409l.3(c)(3), and are thus invalid;

6

7. For an Order declaring that, when setting Non-Contracted Hospital

7 Rates in the future, the Department must consider whether the rates have a

8 reasonable relationship to the costs of providing services to Medi-Cal beneficiaries

9 to comply with federal Medicaid requirements and so as to prevent a taking for the

10 sole, primary benefit of a private party;

11

8. For a Writ of Mandate invalidating the Non-Contracted Hospital Rates

12 because they violate 42 U.S.C. sections 1396a(a)(30)(A), 1396a(a)(13) and 1396u-

13 2(b)(2), 42 C.P.R. section 447.205, the Fifth Amendment of the United States

14 Constitution, section 19 of Article I (takings clause) and section 3 of Article ill

15 (separation of powers) of the California Constitution, the California Administrative

16 Procedure Act, California Government Code section 11340, et seq., Title 22,

17 California Code of Regulations, section 50004, and Title 28, California Code of

18 Regulations l300.7l(a)(3), and ordering the Director not to implement the Non-

19 Contracted Hospital Rates;

20

9. For a Writ of Mandate invalidating the Non-Contracted Hospital

21 Emergency Rates because they violate California Health and Safety Code section

22 1317.2a(d), and ordering the Director not to implement the Non-Contracted Hospital

23 Emergency Rates;

24

I 0. For a Writ of Mandate invalidating the Non-Contracted Hospital

25 Poststabilization Rates because they violate 42 C.P.R. section 438.114, California

26 Health and Safety Code section 1268.2, and California Welfare and Institutions

27 Code section 14091.3(c)(3) and ordering the Director not to implement the Non-

28 Contracted Hospital Poststabilization Rates;

2019484.5

COMPLAINT

t
•

;;;

..~·8 !~:.:;:;.;

-• - ld

,.•..

II) II)

~ ZJ-:-:Io >iD0o--.

" ......-.. 0 J- < ..

32 0
Ol

~lr!..l

5;<~: a : - KS:.::~r...

3za>,:..,;'_l-'

-1-.JID IX'ZEI.IID
lai...IuIIJzIJo-.
011)<;;
.. Oz:fc'-.o_co,_o.,-.

1

11. For an Order preliminarily and permanently enjoining Director from

2 effectuating the Non-Contracted Hospital Rates;

3

12. For the costs of suit, including reasonable attorneys' fees incurred by

4 Plaintiff pursuant to 42 U.S.C. § 1988 or as may otherwise be authorized by law;

S and

6

13. Such other and further relief as may be just and proper.

7

8 DATED: May 22, 2009

9

10

By:

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

21)19484.5

COMPLAINT

UNITEDSTA
D) I (a) PLAINTIFFS (Oleck box if you are representing yourself
CALIFORNIA IIOSPITAL ASSOCIATION

F CALIFORNIA
DEFENDANTS
DAVID MAXWELL-lOLLY, DIRECTOR OF THE CA UFORNIA DEPARTMENT OF HEALTH CARE SERVICES

(b) Alt(lrneys (Firm Nmne, Address and Telephone Number. Ifyou are represen1ing ~ourself, 2rovide same.)
Lloyd A. Bookman and Felicia Y Sze Hooper, Lundy & Bookman, Inc., 1875 Century Park East, Suite 1600 Los Angeles, CA 90067 (310)551-8111

Attorneys (If Known)

rt. BASIS OF JURISDlcnON (Place an X in one b<lx only.)

Ill. CITIZENSHIP OF PRINCIPAL PARTIES· For Diversity Cases Only (Place an X in one box for plairtiff and one for defenatnt.}

D I U.S. Govemmenl Plaintiff D 2 U.S_ Govcrmnenl Defendllfli

1813 Federal Question (U.S
Govemmenl Not RParty

Citiz.en of This State

PTF DEF
01 01

0 4 Diversity (Indicate Citizenship Cilizen of Another Shtc
ofParties in 11em Ill)

02 02

03 03 Citizen or Subject of a Foreign COllllry

PTF DEF
0• 0< ncorporated or Principal Place
!of Business in lhis State

Os 0> ncorporated f'lld Principal Place
fBusincss in Anothet Stale

oreign Nalion

06 06

1:811 p p 0 0 0 IV. ORiGIN (Place ao X in one box on! .)

Originol

2 Removed from 3 Remanded from

4 Reinstl'lted or

5 Transferred from another district (specify):

6Multi-

p 7 Appeallo District

Proceeding

State Court

Appellate Court

Reopened

District

Judge from

Liti~ation

Magistrate Judge

V. REQUESTED IN COMPLAINT: JURY DEMAND: 0 Yes [81- No (Check 'Yes' only ifdemarded in complaint)

0 CLASS ACflON under F.R.C.P. 23: Yes'[$.No

0 MONJ:Y DEMANDED IN COMPLAINT: S ~.00

VI. CAUSE OF ACTION (Cite the U.S. C1vd Statute under winch you are fi1mg llfld wnte a bnefstatement of cause. Do notCIIejunsdictJOnR.I S1atutes unless d1versaty.)

Plaintiff claims that Defendan(s Non-Contracted Hospital Rates violate the federal Medicaid Act, 42 V.S.C. ss. 1396a(a)(3)(A),

1395a(a)(13)(A) and 13%v-2()(2), 42 C.F.R. ss. 447.205 and 438.114, the U.S. and California Constitutions' takings clauses, and state laws.

VJI. NATURE OF SUIT Phu:e an X In one box o

o ;oo:f~is;r,\j'lfm ,~;; ·sm~;·Re~po-rti~~;;,t · 0 410 Antitrust

120 Marine

tr:J·,-o ... . 'I'Qit'fs . . ..
.: -P.ERSP81AUNJ0i<;Y A~pi~~

TORTS
~:: .PE~At _,
. PROPERTY:..

~RI:fONfu<. :

LAnoli '.·

[

···
j

SJOPEMT;I,T;i:o1.0,.0ioSv<.'·;_•"'

tf 710 F~i;Labo; St~ndards
Act

0 430 Banks and Banking

0 130 Miller Act

D 31 S Airplane Product

370 Other Fraud

Senlence Habea5 720 Labor/MgmL

D 4SO Commerce/ICC
Rates/etc.

0 140 Negotiable Instrument 0 0 ISO Recovery of

Liability 320 AsSIIult. Libel &

371 Truth in Lending

Corpus

0 380 Other Personal

530 General

Rclatkms 730 Labor/Mgml.

D 460 DeportRtion D 470 Racketeer Influenced

Overpayment & Enforcemenl of

Slander

Property Damage 535 Death Penalty

0 330 Fed. Employers'

385 Property Damage 540 Mandamus/

Reporting & Disclosure Act

and Corrupt

Judgment

Liability

Product Liability

Other

740 Rl'lilway Labor 1\ct

Organi7.alions

151 Medicare Act

340 Marine

~BANf<;JaJP.;tC.Y,_-·.- ~-- 550 Civil Rights

790 Other Labor

D 480 Comumer Credit 0 490 Cable/Sat TV D 810Sclectivc Service D 850 Securities/Commodities/
Exchange
D 875 Customer Dlallenge 12

1!52 Recovery of Defaulted Studenl Loan (Excl. Vetenms)
153 Recovery of Overpayment of Veteran's Benefits

345 Marine Product L~bility
0 350 Motor Velriele 0 355 Motor Vehicle
Product Liability
0 360 O!her Peisonal

22 Appeal 28 USC 15&
423 Withdrawal28

0 555 Prison Condition

Lit.igation

, c;.;_'fuRffim:JRKI; · . 0 791 Empl. RcL Ino.

;~~::;-::::;'~~~.A~~--·

Set:urily Act

----. USC 157 ·pJ.YJQ1ti1;JJif~·~;:·

610 Agdcullure 6200therFood &

.. ,PRQ1'1lR1"i''IUOH'i'S 820 Copyrighls

441 Voling

Drug

830 Patent

usc 3410 D 890 Other Statutory Actions

160 Stockholders' Suits 190 Other Contract

lnjwy
D 362 Personal Jnjury-

442 Employment 443 Hou~ing/Acco·

625 Drug Relaled Seizure of

840 Trademark
_-SOC•Al. SECURITY

D 891 Agricultural Act
0 892 Economic SLabiJizalion

195 Contract Producl Liability

Med Malpraclice
0 365 Personal Injury.

mmodalions 444 Welfare

Property 21 USC 881

61 HIA(I395fl) 862 131ack Lung (92.])

~~~It~ ~!~!~~J~'·:;,- ~~t~~:~~nal Act
D 893 F..nvironmental Maners 0 894 Energy Allocation Act 0 89!5 Freedom of Info. Aet D 900 Appeal oFFee Determi·

196 Franchise

j_

0

220 Foreclosure 230 Rent Lease & Ejectment

Product LiOOility
368 _ Lia~i!i!Y. .
J~GJl,A,flOJ\1

445 American with DisabtlitiesEmployment
446 American wilh Oisabilities-

630 Liquor l.aws 640R..R.& Truck 650 Airline Regs 660 Occupalional
Safety 1He6lth

863 DJWC/DlWW 405(g))
864 SSJD Title XVI 865 RSI (405(g)) · FEOER.Al. TAX SUITS

nali011 Under Equal Access m Justice ~ 950 Constitulionality ofState
Stlllutes

240 "forts 10 LIUlll 245 Tort Product Liability 290 All Other Real Property

462 Natumlization Applicalion
463 Habeas Corpus· Alien Detainee

0 Other 440 Other Civil Righls

690 Other

870 Taxes (U.S. Plai.miiT
or Dc-l"cndflJll)
D 871 IRS-Third Party 26
usc 7609

FOR OFFICE USE ONLY: Case Number: CV-11 (OSlO&)

CIVIL COVER SHEET

I I Amwk:arl L.eg&IN81, Inc.

Page I of2

~.FormaWOfldJow.~

UNITED ST~TES DISTRICT COURT, CENTRAL DISTRIC'l'1)'F CALIFORNIA
------------------------------------------~C~IY~IL.COVERS~~ET
filed in this court and dismissed, remanded or closed? ~NoD Yc:s
0No0Yes
Civil ea&e!!l are deemed related if a prniously filed cue 11nd the present ease:
(Check li\1 boxes that apply) [gl A. Arise from the SHme or closely relarcd transHctions, happenings, or events; or [gl B. Call for detem1ination of the same or substantially related or similar questions ofiHw and fact; or
DC. For other reasons Muld entail subsLRntial duplication or labor if heard by different judges; or
D D. Involve the same patent. trademark or copyright, and one of the nu;tors identified above in a, b or c also is present.
IX. VENUE: (When c.ompletitg lhe following infomll'.tion, use an additional sheet if necessary.)

County in this District•

CalifomiR County outside of this District; State. if other than Califomia; or Foreign Country
CALIFORNIA HOSPITAL ASSOCIATION- Sacramento County

(b) l.i5t the ColBlly in this Di!rtriet; California County outside or Uris District~ St11.te if other than California; or Foreign Cmmtry, in whicl! EACH named defi:ndant resides,
0 Check here ifthe govcrntnenl, its agencies or employees is a named defendant lflhis boK is checked. go to item (c).

County in lhis District:•

California County oul!ide ofrl1is District; State, if other than California; or foreign Country

DAVID MAXWELL-lOLLY, DIRECTOR OF THE CALIFORNIA DEPARTMENT OF HEALTH CARE SERVICES located in Sacramento County but has offices in Los Angeles Coun

(c) Lisl the Coiii"lty in this Di!rtricl; Cll1ifomia County outside of this District; State ifolher thnn CaliforniA; or Foreign Cmmtry, in which EACH claim arose. Notr:: In lnd ~ndemn11ion cases, usr: lhe location C?L!~~~rn='~'~o~f~l•~n~d~l~n~v~o~lv~«<,.,_.- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -

Collll in this District:•

California Coun ou!Side oflhis District; State, if other than California; or Fore'

Noricc lo Couo&cl/PIIJ"Iies: Tbe CV-71 (JS-44) Civil Cover Shoo and the information contained herein neither replace nor supplement the tiling and serv1ce of pleadings
or other papers as required by law. This tbrm. opproved by the Judicilll Conferenc~ of the United States in September 1974, is required pursuant to Loca1 Ru}e 3 -I is not ftled
but i.J used by the Clerk: of the Cowt for lhepurpose ofstatistics, venue and initiallng the civil docket sheet. (For more detailed iruiJuctions, see separate instructions sheet.)

CY-71 (0511!8)

CIVIL COVER SHEET

I I Page 2 of2 Americ::un lagaiNut. Inc. -.FomiS~.ca"ll

 
 UNITED STATES DISTRICT COURT CENTRAL DISTRICT OF CALIFORNIA

Case No. Title

CIVIL MINUTES - GENERAL

CV 09-3694 CAS (MANx)

Date November 23, 2009

CALIFORNIA HOSPITAL ASSOCIATION v. DAVID MAXWELL-JOLLY

Present: The Honorable CHRISTINA A. SNYDER

CATHERINE JEANG Deputy Clerk

LAURA ELIAS Court Reporter / Recorder

N/A Tape No.

Attorneys Present for Plaintiffs:

Attorneys Present for Defendants:

Jordan Keville

Shannon Chambers Kara Read-Spangler

Proceedings:

Attorneys Present for Proposed Intervenors:
Thomas Blanford
INTERVENOR CALIFORNIA ASSOCIATION OF HEALTH PLANS' MOTION TO INTERVENE (filed 10/30/09)

I. INTRODUCTION & BACKGROUND

On May 22, 2009, plaintiff California Hospital Association (“CHA”) filed the instant suit against David Maxwell-Jolly, as Director of the California Department of Health Care Services (“DHCS”). Plaintiff seeks to enjoin and stop implementation of mandated rates of reimbursement for emergency and post-stabilization services provided by certain CHA member hospitals to members of Medi-Cal Managed Care Organizations (“MCOs”). The payment rates at issue only apply when there is no written contract between the hospital and the particular health plan responsible for the MCO (“NonContracted Hospitals”). Plaintiff challenges the California statutes that place limits on these payment rates, as implemented by DHCS (collectively, “Non-Contracted Hospital Emergency Rates”), on the grounds that they violate federal and state law, including the section 30(A) Medicaid Act.

On October 30, 2009, California Association of Health Plans (“proposed intervenor”) filed the instant motion to intervene as a third party defendant. On November 9, 2009, plaintiff filed an opposition on November 9, 2009 and defendant filed a notice of non-opposition. A reply was filed on November 16, 2009. A hearing was held on November 23, 2009. After carefully considering the arguments set forth by the

CV-90 (06/04)

CIVIL MINUTES - GENERAL

Page 1 of 7

UNITED STATES DISTRICT COURT CENTRAL DISTRICT OF CALIFORNIA

Case No. Title

CIVIL MINUTES - GENERAL

CV 09-3694 CAS (MANx)

Date November 23, 2009

CALIFORNIA HOSPITAL ASSOCIATION v. DAVID MAXWELL-JOLLY

parties, the Court finds and concludes as follows.

II. LEGAL STANDARD

Upon compliance with Fed. R. Civ. Proc. 24, a nonparty may be permitted to intervene in the action, which gives the intervenor full party status, including the right to engage in discovery, to participate at trial, and to appeal the judgment. See International Mining & Smelting Co., 325 U.S. 335, 338 (1945); United States v. California Mobile Home Park Magt. Co., 107 F.3d 1374, 1378 (9th Cir. 1997).

A. INTERVENTION OF RIGHT

Fed. R. Civ. Proc. 24(a) provides as follows:

Intervention of Right. On timely motion, the court must permit anyone to intervene who: (1) is given an unconditional right to intervene by a federal statute; or (2) claims an interest relating to the property or transaction that is the subject of the action, and is so situated that disposing of the action may as a practical matter impair or impede the movant's ability to protect its interest, unless existing parties adequately represent that interest.

The Ninth Circuit has adopted a four-part test for applying Rule 24(a)(2):

(1) the applicant must timely move to intervene; (2) the applicant must have a significantly protectable interest relating to the property or transaction that is the subject of the action; (3) the applicant must be situated such that the disposition of the action may impair or impede the party’s ability to protect that interest; and (4) the applicant’s interest must not be adequately represented by existing parties.

Arakaki v. Cayetano, 324 F.3d 1078, 1083 (9th Cir. 2003). Each of these elements must be demonstrated in order to provide a non-party with a right to intervene. League of United Latin Am. Citizens v. Wilson, 131 F.3d 1297, 1302 (9th Cir. 1997). The rule is construed broadly in favor of applicants for intervention. United States v. Oregon, 839 F.2d 635, 637 (9th Cir. 1988).

B.
CV-90 (06/04)

PERMISSIVE INTERVENTION
CIVIL MINUTES - GENERAL

Page 2 of 7

UNITED STATES DISTRICT COURT CENTRAL DISTRICT OF CALIFORNIA

Case No. Title

CIVIL MINUTES - GENERAL

CV 09-3694 CAS (MANx)

Date November 23, 2009

CALIFORNIA HOSPITAL ASSOCIATION v. DAVID MAXWELL-JOLLY

As to permissive intervention, Fed. R. Civ. P. 24(b)(1) provides as follows:

On timely motion, the court may permit anyone to intervene who: (A) is given a conditional right to intervene by a federal statute; or (B) has a claim or defense that shares with the main action a common question of law or fact. The Ninth Circuit has held that in considering the timeliness of the motion, the Court considers “the stage of the proceedings, the prejudice to existing parties, and the length of and reason for the delay.” League of United Latin Am. Citizens, 131 F.3d at 1308.

III. DISCUSSION

Proposed intervenor California Association of Health Plans (“CAHP”) is an association representing the interests of health plans operating in California. Mot. at 2-3. According to CAHP, its membership includes all twenty-two health plans operating MCOs under California’s Medicaid program. Id.

A. INTERVENTION OF RIGHT

CAHP contends that it is entitled to intervene as a matter of right pursuant to Fed. R. Civ. P. 24(a). First, CAHP argues that its motion is timely because it was filed in accordance with the Court’s scheduling order.1 Mot. at 4. It further argues that based on the current deadline for discovery, December 31, 2009, there is sufficient time to complete discovery after intervention. Id. Second, CAHP argues that its member health plans have both contractual and financial interests that will be affected by plaintiff’s proposed remedy. Id. at 5. Specifically, CAHP asserts that its members have written contracts with DHCS specifying the rules that plans are obligated to follow in reimbursing Non-Contracted Hospitals. Id. It argues, as a result, that “the ruling in this case will directly dictate the amount of payments that [CAHP’s member health plans] must make to plaintiff CHA’s members.” Id. at 6. Third, CAHP argues that the existing parties do not adequately represent its interests. Id. at 7. According to CAHP, plaintiff’s interest in the Non-Contracted Hospital Emergency Rates is diametrically opposed to CAHP’s. Id. Furthermore, it argues that the goals of DHCS are different than CAHP

1 In its August 10, 2009 order, the Court scheduled the deadline for requests for

leave to filed amended pleadings or to add parties for October 30, 2009.

CV-90 (06/04)

CIVIL MINUTES - GENERAL

Page 3 of 7

UNITED STATES DISTRICT COURT CENTRAL DISTRICT OF CALIFORNIA

Case No. Title

CIVIL MINUTES - GENERAL

CV 09-3694 CAS (MANx)

Date November 23, 2009

CALIFORNIA HOSPITAL ASSOCIATION v. DAVID MAXWELL-JOLLY

because while resolution of this matter may materially affect the required rates and thus financially impact the health plans, “DHCS is largely immune from the financial impact because it does not directly pay for the services at issue here.”2 Id. Fourth, CAHP argues that its interests will be impaired if not permitted to intervene because as previously discussed, plaintiff’s requested relief directly impacts its members business interests. Id. at 8. It further argues that CAHP may not have another opportunity to protect these interests if the Court grants the requested relief of plaintiff. Id.

Plaintiff responds that CAHP’s motion should be denied because CAHP and the existing defendant, DHCS, share the same objective — to uphold the current methodologies controlling Non-Contracted Hospital Emergency Rates. Opp’n at 1, 9-10. According to plaintiff, when the proposed intervenor and the existing defendant share the same “ultimate objective,” there is a presumption of adequate representation. Id. at 9 (citing Prete v. Bradbury, 438 F.3d 949, 956 (9th Cir. 2006)). Plaintiff further argues that this presumption is strengthened when, as in this case, a private party and a government agency are both seeking to uphold a state law. Id. (citing League of United Latin Am. Citizens, 131 F.3d at 1305; Prete, 438 F.3d at 949). Accordingly, plaintiff contends that CAHP fails to make a “compelling”showing to overcome the presumption that DHCS can adequately represent both parties. Id. at 10-11. Plaintiff further contends that even if the Court finds that the presumption does not apply, the factors used to assess adequacy of representation weigh against allowing CAHP to intervene.3 Id. at 9, 11. Plaintiff argues that CAHP does not demonstrate that DHCS will not capably make all the arguments it would or that it brings any necessary elements to the proceedings that

2 In support of this argument, CAHP asserts that a CAHP member, Molina Healthcare of California Partner Plan, Inc., previously sued DHCS to invalidate a portion of the emergency reimbursement rates. Mot. at 7. Plaintiff responds that this case did not involve a generalized challenge to the rates, as in this case, and accordingly does not demonstrate that DHCS’ and CAHP’s interests are adverse in this case. Opp’n at 10.

3 In Prete, 438 F.3d at 956, the Ninth Circuit held that the relevant factors include

“whether [a present party] will undoubtedly make all of the intervenor's arguments,

whether [a present party] is capable of and willing to make such arguments, and whether

the intervenor offers a necessary element to the proceedings that would be neglected”).

CV-90 (06/04)

CIVIL MINUTES - GENERAL

Page 4 of 7

UNITED STATES DISTRICT COURT CENTRAL DISTRICT OF CALIFORNIA

Case No. Title

CIVIL MINUTES - GENERAL

CV 09-3694 CAS (MANx)

Date November 23, 2009

CALIFORNIA HOSPITAL ASSOCIATION v. DAVID MAXWELL-JOLLY

otherwise would be neglected.4 Id. at 12.

Furthermore, plaintiff contends that the instant motion should be deemed untimely because CAHP delayed five months before seeking to intervene and fails to offer any explanation for that delay. Id. at 1, 5-8 (citing League of United Latin Am. Citizens, 131 F.3d at 1308, which held that in determining the timeliness of the motion, the Court considers “the stage of the proceedings, the prejudice to existing parties, and the length of and reason for the delay”). According to plaintiff, allowing CAHP to intervene now would necessarily delay and complicate the proceedings.5 Id.

CAHP reiterates that the motion is timely. Reply at 2-5. It further replies that while plaintiff is correct that the State has an interest in upholding the legality of its actions, CAHP’s members have their own unique interests by virtue of the structure of California’s Medicaid system. Id. at 7. Specifically, it emphasizes that because plaintiff is not seeking monetary damages from the State, but rather is seeking to invalidate the reimbursement rates established by the State, the result would be to increase the amount health plans pay to hospitals without a related payment increase to health plans, and thus, at no financial cost to the State. Id. As to a presumption of adequate representation, CAHP counters that such a presumption does not apply, or at least has been rebutted, because unlike the proposed intervenors in Prete and League of United Latin Am. Citizens, CAHP has a separate economic and contractual interest from that of the State. Id. at 8-9 (citing Southwest Ctr. For Biological Diversity v. Berg, 268 F.3d 810, 823 (9th Cir. 2001) (finding the presumption rebutted because applicant had private economic

4 Plaintiff further argues that given the nature of its claims and that DHCS has extensive experience regarding most of the legal theories on which it is relying due to related litigation, see, e.g. Independent Living Center of Southern California v. MaxwellJolly, 572 F.3d 644, 651-52 (9th Cir. 2009), that DHCS is better equipped to defend against them than proposed intervenor CAHP. Opp’n at 12.

5 Plaintiff emphasizes that based on the August 10, 2009 scheduling order, the

close of discovery is “less than two months away,” and that while the deadline for filing

motions is April 2, 2010, Fed. R. Civ. P. 56 “would require that any summary judgment

motions in the case be filed by January 30, 2010.” Opp’n at 3, 5-6. In addition, plaintiff

asserts that CAHP’s motion caused the existing parties to postpone a settlement

conference originally scheduled for November 19, 2009. Id. at 3, 8.

CV-90 (06/04)

CIVIL MINUTES - GENERAL

Page 5 of 7

UNITED STATES DISTRICT COURT CENTRAL DISTRICT OF CALIFORNIA

Case No. Title

CIVIL MINUTES - GENERAL

CV 09-3694 CAS (MANx)

Date November 23, 2009

CALIFORNIA HOSPITAL ASSOCIATION v. DAVID MAXWELL-JOLLY

interest in the litigation, not shared by the government agency)).

B. PERMISSIVE INTERVENTION

In the alternative, proposed intervenor CAHP argues that the Court should grant permissive intervention under Fed. R. Civ. P. 24(b). Mot. at 9. It argues that the interests it represents share common questions of law and fact with the main litigation on the basis that the outcome of the case will determine the Non-Contracted Hospital Emergency Rates that its members will have to pay to plaintiff. Id. CAHP reiterates its argument that the motion is timely, and contends that the Court has jurisdiction pursuant to 28 U.S.C. § 1331. Id.

Plaintiff responds that CAHP does not meet all of the threshold requirements for permissive intervention because the motion is not timely. Opp’n at 13. It contends that the timeliness requirement is analyzed more strictly in the context of permissive intervention. Id. Moreover, plaintiff argues that the Court should deny the motion for the same reasons it argued that intervention as a matter of right was improper. Id.

IV. CONCLUSION

The Court finds that CAHP has timely moved to intervene. The Court further finds that CAPH demonstrates a significantly protectable interest that would as a practical matter be impaired by plaintiff’s requested relief. If the legislature is enjoined, CAPH’s members will suffer a loss unique to them because they will have to pay more to NonContracted Hospitals. See Forest Conservation Council v. United States Forest Serv., 66 F.3d 1489, 1494 (9th Cir.1995) (finding an applicant demonstrates a “significantly protectable interest” when “the injunctive relief sought by the plaintiffs will have direct, immediate, and harmful effects upon a third party's legally protectable interests” ). Finally, the Court finds that even if it could be said that DHCS and CAPH share the same “ultimate objective,” they do not have sufficiently congruent interests such that DHCS can be expected to protect, and thus adequately represent, CAPH’s private economic interests. See Berg, 268 F.3d at 823. For these reasons, the Court concludes that intervention as a matter of right is appropriate. Alternatively, the Court finds it appropriate to grant CAHP permissive invention.

In accordance with the foregoing, the Court GRANTS CAHP’s motion to

CV-90 (06/04)

CIVIL MINUTES - GENERAL

Page 6 of 7

UNITED STATES DISTRICT COURT CENTRAL DISTRICT OF CALIFORNIA

Case No. Title

CIVIL MINUTES - GENERAL

CV 09-3694 CAS (MANx)

Date November 23, 2009

CALIFORNIA HOSPITAL ASSOCIATION v. DAVID MAXWELL-JOLLY

intervene.

IT IS SO ORDERED.

Initials of Preparer

00

:

07

CMJ

CV-90 (06/04)

CIVIL MINUTES - GENERAL

Page 7 of 7

 
 Case: 2:09-cv-3694 As of: 10/26/2017 10:15 PM PDT 1 of 9
(MANx),CLOSED,DISCOVERY,RELATED−G
UNITED STATES DISTRICT COURT CENTRAL DISTRICT OF CALIFORNIA (Western Division − Los Angeles)
CIVIL DOCKET FOR CASE #: 2:09−cv−03694−CAS−MAN

California Hospital Association v. David Maxwell−Jolly 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: 05/22/2009 Date Terminated: 06/01/2011 Jury Demand: None Nature of Suit: 950 Constitutional − State Statute Jurisdiction: Federal Question

California Hospital Association

represented by Felicia Y Sze Rotenberg & Sze 572 17th Avenue San Francisco, CA 94121 415−686−7531 Email: felicia@rshealthlaw.com LEAD ATTORNEY ATTORNEY TO BE NOTICED

Jordan Brian Keville Hooper Lundy & Bookman PC Watt Plaza 1875 Century Park East Suite 1600 Los Angeles, CA 90067−2799 310−551−8111 Fax: 310−551−8181 Email: jkeville@health−law.com LEAD ATTORNEY ATTORNEY TO BE NOTICED

Lloyd Alan Bookman Hooper Lundy and Bookman PC 1875 Century Park East Suite 1600 Los Angeles, CA 90067 310−551−8111 Fax: 310−551−8181 Email: lbookman@health−law.com LEAD ATTORNEY ATTORNEY TO BE NOTICED

V.
Defendant
David Maxwell−Jolly Director of the California Department of Health Care Services

represented by Kara Read−Spangler CAAG − Office of the Attorney General California Department of Justice 1300 I Street Suite 125 P O Box 944255 Sacramento, CA 94244−2550 916−323−3903 Fax: 916−324−5567 Email: kara.readspangler@doj.ca.gov LEAD ATTORNEY ATTORNEY TO BE NOTICED
Shannon M Chambers State Personnel Board Appeals − Administrative Law Judge 801 Capitol Mall

Case: 2:09-cv-3694 As of: 10/26/2017 10:15 PM PDT 2 of 9
Sacramento, CA 95814 916−653−0544 LEAD ATTORNEY ATTORNEY TO BE NOTICED
Brenda Ann Ray CAAG − Office of the Attorney General California Department of Justice 1300 I Street Suite 1101 Sacramento, CA 95814 916−324−5208 Fax: 916−324−5567 Email: brenda.ray@doj.ca.gov ATTORNEY TO BE NOTICED
Elizabeth Ann Linton CAAG − Office of the Attorney General Department of Justice 1300 I Street Suite 125 Sacramento, CA 95814 916−323−8549 ATTORNEY TO BE NOTICED

V. Intervenor Defendant California Association of Health Plans

represented by Neil H O'Donnell Rogers Joseph O'Donnell Robert Dollar Bldg 311 California St, 10th Fl San Francisco, CA 94104 415−956−2828 Email: nodonnell@rjo.com LEAD ATTORNEY ATTORNEY TO BE NOTICED
Thomas David Blanford Rogers Joseph O'Donnell 311 California Street 10th Floor San Francisco, CA 94104 415−956−2828 Email: thomas.blanford@mckesson.com LEAD ATTORNEY ATTORNEY TO BE NOTICED

Date Filed 05/22/2009 05/22/2009 05/22/2009 05/22/2009
05/26/2009

# Docket Text
1 COMPLAINT against Defendant David Maxwell−Jolly. (Filing fee $ 350 PAID.), filed by Plaintiff California Hospital Association. (et) (ds). (Entered: 05/27/2009)
20 DAY Summons Issued re Complaint − (Discovery) 1 as to Defendant David Maxwell−Jolly. (et) (Entered: 05/27/2009)
2 CERTIFICATE AND NOTICE of Interested Parties filed by Plaintiff California Hospital Association. (et) (ds). (Entered: 05/27/2009)
3 NOTICE of Related Case(s) filed by Plaintiff California Hospital Association. Related Case(s): CV 08−3315 CAS (MANx); CV 09−0382 CAS (MANx) and CV 09−0722 CAS. (et) (ds). (Entered: 05/27/2009)
4 MINUTES OF (IN CHAMBERS) ORDER by Judge Dean D. Pregerson. This action has been assigned to the calendar of Judge Dean D. Pregerson. Counsel are encouraged to review the Central Districts website for additional information. It is not necessary to clear a motion date with the Court Clerk prior to filing the motion. The Court hears

Case: 2:09-cv-3694 As of: 10/26/2017 10:15 PM PDT 3 of 9

06/01/2009 06/01/2009 06/02/2009
06/08/2009 06/16/2009 06/16/2009 06/19/2009
07/21/2009 07/23/2009
07/23/2009 07/24/2009

motions only on Mondays at 10:00 a.m. The Court requires delivery of two non−blue backed Mandatory Chambers Copies of only the following manual and electronically filed documents: (1) All noticed motions and related documents; (2) All ex parte applications and related documents; and (3) All exhibits and attachments must be separately tabbed. [Refer to the Court's General Order No. 08−02 regarding ECF Courtesy Paper Copies.] (sch) (Entered: 05/27/2009)
5 PROOF OF SERVICE Executed California Hospital Association, upon David Maxwell−Jolly served on 5/27/2009, answer due 6/16/2009. The Summons and Complaint were served by Personal service, by Federal statute, upon Janet Alexander, Attorney. Due Dilligence declaration None. Original Summons Not Returned. (Sze, Felicia) (Entered: 06/01/2009)
6 PROOF OF SERVICE Executed California Hospital Association, upon The Summons and Complaint were served by Personal service, by Federal statute, upon Yolanda Sagarminaga, Senior Legal Analyst. Due Dilligence declaration None. Original Summons Not Returned. (Sze, Felicia) (Entered: 06/01/2009)
7 ORDER RE TRANSFER PURSUANT TO GENERAL ORDER 08−05 −Related Case− filed. Related Case No: CV 08−03315 CAS (MANx). Case transferred from Magistrate Judge Jacqueline Chooljian and Judge Dean D. Pregerson 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 09−03694 CAS (MANx).Signed by Judge Christina A. Snyder (rn) (Entered: 06/02/2009)
8 NOTICE TO COUNSEL by U.S. District Judge Christina A. Snyder. (pp) (Entered: 06/08/2009)
9 ANSWER to Complaint − (Discovery) 1 filed by defendant David Maxwell−Jolly.(Chambers, Shannon) (Entered: 06/16/2009)
10 Notice of Interested Parties filed by defendant David Maxwell−Jolly, (Chambers, Shannon) (Entered: 06/16/2009)
11 MINUTES (IN CHAMBERS) − ORDER SETTING SCHEDULING CONFERENCE by Judge Christina A. Snyder: Scheduling Conference set for 8/10/2009 11:00 AM before Judge Christina A. Snyder. The parties are reminded of their obligations to disclose information and confer on a discovery plan not later than 21 days prior to the date of the Rule 16(b) Scheduling Conference and to report to the Court not later than 14 days after they confer on a discovery plan and the other matters required by F.R.Civ.P. 26(f) and the Local Rules of this Court. If this case has been assigned to the ADR Pilot Program, counsel shall concurrently file the ADR Questionnaire. Court Reporter: Not Present. (gk) (Entered: 06/19/2009)
12 REQUEST for Consideration of Appear at 8/10/09 Scheduling Conference telephonically filed by Defendant David Maxwell−Jolly. Request set for hearing on 8/10/2009 at 11:00 AM before Judge Christina A. Snyder. (Attachments: # 1 Proposed Order on Request to Appear Telephonically)(Chambers, Shannon) (Entered: 07/21/2009)
13 NOTICE TO FILER OF DEFICIENCIES in Electronically Filed Documents. The following error(s) was found: Filer erroneously set this Request for hearing on 8/10/2009. Thus clerk has terminated the Request, only, from the judge's 8/10/2009 calendar RE: Defendant's Request to Appear Telephonically at the Scheduling Conference Set For August 10, 2009 filed 7/21/2009 12 . In response to this notice the court may order (1) an amended or correct document to be filed (2) the document stricken or (3) take other action as the court deems appropriate. (gk) (Entered: 07/23/2009)
14 ORDER by Judge Christina A. Snyder: Defendant's Request to Appear Telephonically at the Scheduling Conference set for August 10, 2009 12 is hereby granted. (gk) (Entered: 07/24/2009)
15 JOINT REPORT Rule 26(f) Discovery Plan ; estimated length of trial 3 days, filed by Plaintiff California Hospital Association.. (Sze, Felicia) (Entered: 07/24/2009)

Case: 2:09-cv-3694 As of: 10/26/2017 10:15 PM PDT 4 of 9

07/30/2009 07/30/2009 08/10/2009
09/14/2009
10/14/2009 10/30/2009 10/30/2009 11/03/2009 11/09/2009 11/09/2009
11/09/2009 11/16/2009 11/23/2009 11/30/2009 12/01/2009

16 INITIAL DISCLOSURE [Fed. R. Civ. P. 26(a)] filed by Defendant David Maxwell−Jolly (Chambers, Shannon) (Entered: 07/30/2009)
17 DISCLOSURE filed by Plaintiff California Hospital Association (Sze, Felicia) (Entered: 07/30/2009)
18 MINUTES OF SCHEDULING CONFERENCE held before Judge Christina A. Snyder. The Court confers with counsel and schedules the following dates: Request for leave to file amended pleadings or to add parties: October 30, 2009; Discovery Cut−off: December 31, 2009; Last Day to File Motions: April 1, 2010; Telephonic Status Conference re: Settlement Procedures (12:00 P.M.): September 14, 2009*;Pretrial Conference/Hearing on Motions in Limine (11:00 A.M.): June 7, 2010; and Court Trial (9:30 A.M.): June 29, 2010. Court Reporter: Laura Elias. (pp) (Entered: 08/14/2009)
19 MINUTES OF Telephonic Status Conference Re Settlement held before Judge Christina A. Snyder: The Court confers with counsel regarding settlement procedures. Counsel inform the Court of the parties' preference to go before the Magistrate assigned to the action for settlement purposes. The Court orders counsel to contact the Magistrate Judge's Courtroom Deputy Clerk forthwith regarding her availability. Court Reporter: Not Present. (gk) (Entered: 09/21/2009)
20 MINUTES OF IN CHAMBERS ORDER held before Magistrate Judge Margaret A. Nagle scheduling a Settlement Conference in this matter for 11/19/2009 10:00 AM before Magistrate Judge Margaret A. Nagle. The confidential settlement conference statements are due on or before 11/12/09 (ec) (Entered: 10/14/2009)
21 NOTICE OF MOTION AND MOTION to Intervene filed by Intervenor California Association of Health Plans. Motion set for hearing on 11/23/2009 at 10:00 AM before Judge Christina A. Snyder. (kpa) (Entered: 11/02/2009)
22 MEMORANDUM OF POINTS AND AUTHORITIES in Support of MOTION to Intervene 21 filed by Intervenor California Association of Health Plans. (kpa) (Entered: 11/02/2009)
23 MINUTES OF IN CHAMBERS ORDER held before Magistrate Judge Margaret A. Nagle taking off calendar the settlement conference presently scheduled in this matter for 11/19/09. (ec) (Entered: 11/03/2009)
24 NOTICE OF NON−OPPOSITION to MOTION to Intervene 21 filed by Defendant David Maxwell−Jolly. (Chambers, Shannon) (Entered: 11/09/2009)
25 NOTICE of Change of Attorney Information for attorney Jordan Brian Keville counsel for Plaintiff California Hospital Association. Adding Jordan B. Keville as attorney as counsel of record for California Hospital Association for the reason indicated in the G−06 Notice. Filed by Plaintiff California Hospital Association (Keville, Jordan) (Entered: 11/09/2009)
26 OPPOSITION MOTION TO INTERVENE re: MOTION to Intervene 21 filed by Plaintiff California Hospital Association. (Attachments: # 1 Declaration of Jordan B. Keville)(Keville, Jordan) (Entered: 11/09/2009)
27 REPLY Support of a Motion MOTION to Intervene 21 filed by Movant California Association of Health Plans. (O'Donnell, Neil) (Entered: 11/16/2009)
28 MINUTES OF Motion Hearing held before Judge Christina A. Snyder: The Court GRANTS California Association of Health Plans' Motion to Intervene 21 . Court Reporter: Laura Elias. (gk) (Entered: 11/23/2009)
29 ANSWER filed by Intervenor California Association of Health Plans.(O'Donnell, Neil) (Entered: 11/30/2009)
30 NOTICE TO FILER OF DEFICIENCIES in Electronically Filed Documents. The following error(s) was found: No Certification of Interested Parties, Local Rule 7.1−1 RE: Intervenor's Answer filed 11/30/2009 29 . In response to this notice the court may order (1) an amended or correct document to be filed (2) the document stricken or (3) take other action as the court deems appropriate. (gk) (Entered: 12/02/2009)

Case: 2:09-cv-3694 As of: 10/26/2017 10:15 PM PDT 5 of 9

12/04/2009
12/28/2009 12/29/2009 01/05/2010 01/07/2010 01/08/2010 01/25/2010 02/02/2010 02/19/2010 03/04/2010 03/05/2010

31 Notice of Interested Parties filed by Intervenor California Association of Health Plans, identifying Aetna, Alameda Alliance for Health, Anthem Blue Cross, Blue Shield of California, CalOptima, Care 1st Health Plan, CareMore Health Plan, CenCal Health, Central Coast Alliance for Health, Central Health Plan of California, Chinese Community Health Plan, CIGNA HealthCare of California, Inc., Citizens Choice Halthplan, Community Health Group, Community Health Plan, Contra Costa Health Plan, Easy Choice Health Plan, Health Net of California, Health Plan of San Joaquin, Health Plan of San Mateo, Heritage Provider Network, Inland Empire Health Plan, Inter Valley Health Plan, Kaiser Foundation Health Plan, Kern Health Systems, L.A. Care Health Plan, Molina Healthcare of Californiam, On Lok Lifeways, PacifiCare of California, Partnership Health Plan of California, PrimeCare Health Plan, San Francisco Health Plan, Santa Clara Family Health Plan, SCAN Health Plan, Sharp Health Plan, SIMNSA, Sistemas Medicos Nationales, SA de CV, Valley Health Plan, Ventura County Health Care Plan, Western Health Advantage. (O'Donnell, Neil) (Entered: 12/04/2009)
32 MINUTES OF IN CHAMBERS ORDER SETTING SETTLEMENT CONFERENCE held before Magistrate Judge Margaret A. Nagle. IT IS ORDERED that the parties shall appear for a settlement conference on January 28, 2010 at 10:00 a.m. On or before January 21, 2010, each party shall deliver or fax a Confidential Settlement Conference Statement. (mz) (Entered: 12/29/2009)
33 NOTICE OF MOTION AND MOTION to Compel RESPONSE TO DEMAND FOR INSPECTION AND PRODUCTION OF DOCUMENTS, SET ONE filed by Plaintiff California Hospital Association. Motion set for hearing on 1/26/2010 at 10:00 AM before Magistrate Judge Margaret A. Nagle. (Attachments: # 1 Supplement Joint Stipulation, # 2 Declaration Declaration in Support of Joint Stipulation)(Keville, Jordan) (Entered: 12/29/2009)
34 MINUTES (IN CHAMBERS): ORDER by Magistrate Judge Margaret A. Nagle: Taking Off Calendar 33 Motion to Compel (ec) (Entered: 01/05/2010)
35 EX PARTE APPLICATION for Order for Authorizing Magistrate Judge to Hear Motion to Compel filed by Plaintiff California Hospital Association. (Attachments: # 1 Supplement Points and Authorities; Declaration in Support, # 2 Proposed Order re Ex Parte Application, # 3 Supplement Certificate of Service)(Keville, Jordan) (Entered: 01/07/2010)
36 ORDER by Judge Christina A. Snyder: Ex Parte Application for Order Authorizing Magistrate Judge to Hear Motion to Compel 35 DENIED. (jre) (Entered: 01/11/2010)
37 MINUTES OF IN CHAMBERS ORDER held before Magistrate Judge Margaret A. Nagle taking off calendar the settlement conference presently scheduled in this matter for 1/28/10 (ec) (Entered: 01/25/2010)
38 MINUTES OF IN CHAMBERS ORDER held before Magistrate Judge Margaret A. Nagle scheduling a Settlement Conference in this matter for 2/19/2010 10:00 AM before Magistrate Judge Margaret A. Nagle. The confidential settlement conference statements are due on or before 2/12/10 (ec) (Entered: 02/02/2010)
39 MINUTES OF Settlement Conference held before Magistrate Judge Margaret A. Nagle. No settlement was reached at this time. The Court schedules a Telephonic Follow−up Status Conference for 3/9/2010 12:15 PM before Magistrate Judge Margaret A. Nagle.Court Recorder: cs. (ec) (Entered: 02/19/2010)
40 Joint STIPULATION to Reschedule Trial Date filed by Defendant David Maxwell−Jolly. (Attachments: # 1 Proposed Order)(Read−Spangler, Kara) (Entered: 03/04/2010)
41 ORDER by Judge Christina A. Snyder. The Court has reviewed the parties Joint Stipulation to extend the trial and other dates for a period of approximately two months in order to provide time for the parties to engage in further settlement discussions 40 . Good cause appearing, the Court hereby amends the current scheduling order [Dkt # 18] and reschedules the following dates: Last day to file Motions 6/1/2010., Pretrial Conference/Hearing on Motions in Limine from 6/7/2010 to 8/9/2010 at 11:00 AM. Trial from 6/29/1010 to 8/31/2010 at 9:30 AM. (jp) (Entered: 03/09/2010)

Case: 2:09-cv-3694 As of: 10/26/2017 10:15 PM PDT 6 of 9

03/09/2010 04/06/2010 04/27/2010 04/27/2010 05/04/2010 05/11/2010 05/18/2010 05/26/2010 06/09/2010 06/23/2010 06/29/2010 07/01/2010 07/15/2010 08/10/2010

42 MINUTES OF Telephone Conference re Settlement held before Magistrate Judge Margaret A. Nagle. The Court schedules a Further Telephone Follow−up Status Conference for 4/6/2010 12:00 PM before Magistrate Judge Margaret A. Nagle.Court Recorder: N/A. (ec) (Entered: 03/09/2010)
43 MINUTES OF Telephone Conference re Settlement held before Magistrate Judge Margaret A. Nagle. The Court schedules a Further Telephone Follow−up Status Conference for 5/4/2010 12:00 PM before Magistrate Judge Margaret A. Nagle.Court Recorder: N/A. (ec) (Entered: 04/06/2010)
44 Joint STIPULATION to Reschedule Trial and Other Dates filed by Plaintiff California Hospital Association. (Attachments: # 1 Proposed Order)(Keville, Jordan) (Entered: 04/27/2010)
45 ORDER by Judge Christina A. Snyder re Stipulation to Reschedule 44 Motions due by 8/2/10; Expert disclosures by 7/6/10; Motion in limine hearing on 10/18/2010 at 11:00 AM; Court Trial set for 11/2/2010 at 9:30 AM; Final Pretrial Conference set for 10/18/2010 at 11:00 AM. (pp) (Entered: 04/29/2010)
46 MINUTES OF Telephone Conference re Settlement held before Magistrate Judge Margaret A. Nagle. The Court schedules a Further Telephone Follow−up Status Conference for 5/11/2010 12:00 PM before Magistrate Judge Margaret A. Nagle.Court Recorder: N/A. (ec) (Entered: 05/04/2010)
47 MINUTES OF Telephone Conference re Settlement held before Magistrate Judge Margaret A. Nagle. The Court schedules a further telephonic follow−up status conference for 5/19/2010 12:00 PM before Magistrate Judge Margaret A. Nagle.Court Recorder: N/A. (ec) (Entered: 05/11/2010)
48 MINUTES OF IN CHAMBERS ORDER held before Magistrate Judge Margaret A. Nagle rescheduling the follow−up telephone status conference from 5/19/10 to 5/26/2010 12:00 PM before Magistrate Judge Margaret A. Nagle. (ec) (Entered: 05/18/2010)
49 MINUTES OF Telephone Conference re Settlement held before Magistrate Judge Margaret A. Nagle. The Court schedules a further telephonic follow−up status conference for 6/09/2010 12:00 PM before Magistrate Judge Margaret A. Nagle. Court Recorder: N/A. (ec) (Entered: 05/26/2010)
50 MINUTES OF Telephone Conference re Settlement held before Magistrate Judge Margaret A. Nagle. The Court schedules a further telephonic follow−up status conference for 6/23/2010 12:00 PM before Magistrate Judge Margaret A. Nagle. Court Recorder: N/A. (ec) (Entered: 06/09/2010)
51 MINUTES OF Telephone Conference re Settlement held before Magistrate Judge Margaret A. Nagle. The Court schedules a further telephonic follow−up status conference for 7/15/2010 12:00 PM before Magistrate Judge Margaret A. Nagle.Court Recorder: N/A. (ec) (Entered: 06/23/2010)
52 Joint STIPULATION to Continue Trial and Other Dates Re: Order, Set Deadlines/Hearings,, 45 filed by Plaintiff California Hospital Association. (Attachments: # 1 Proposed Order re Joint Stipulation)(Keville, Jordan) (Entered: 06/29/2010)
53 ORDER by Judge Christina A. Snyder: Expert disclosure: 9/7/10, Last day to file motions: 10/1/10, Pretrial conference/hearings on motions in limine 12/20/10 at 11:00 a.m. Trial: 1/4/11 at 9:30 a.m. (bp) (Entered: 07/02/2010)
54 MINUTES OF Telephone Conference re Settlement held before Magistrate Judge Margaret A. Nagle. The Court schedules a further telephonic follow−up status conference for 8/5/2010 12:30 PM before Magistrate Judge Margaret A. Nagle. Court Recorder: N/A. (ec) (Entered: 07/15/2010)
55 MINUTES OF IN CHAMBERS ORDER held before Magistrate Judge Margaret A. Nagle rescheduling the Follow−up Telephone Conference for 8/26/2010 01:30 PM before Magistrate Judge Margaret A. Nagle. (ec) (Entered: 08/10/2010)

Case: 2:09-cv-3694 As of: 10/26/2017 10:15 PM PDT 7 of 9

08/26/2010 09/02/2010 09/02/2010 09/02/2010 09/02/2010 09/02/2010 09/03/2010 09/03/2010 09/07/2010
09/07/2010
09/07/2010 09/08/2010 09/23/2010

56 MINUTES OF Telephone Conference held before Magistrate Judge Margaret A. Nagle: The Court confers, off the record, with counsel regarding the status of settlemetn discussions.Court Recorder: N/A (ec) (Entered: 08/30/2010)
57 EX PARTE APPLICATION to Stay Case pending the Case Proceedings and Memorandum of Points and Authorities in Support of Application filed by Defendant David Maxwell−Jolly.(Read−Spangler, Kara) (Entered: 09/02/2010)
58 DECLARATION of Kara Read−Spangler In Support of EX PARTE APPLICATION to Stay Case pending the Case Proceedings and Memorandum of Points and Authorities in Support of Application 57 for Stay filed by Defendant David Maxwell−Jolly. (Read−Spangler, Kara) (Entered: 09/02/2010)
59 EXHIBIT Filed filed by Defendant David Maxwell−Jolly. [Proposed] Order as to EX PARTE APPLICATION to Stay Case pending the Case Proceedings and Memorandum of Points and Authorities in Support of Application 57 . (Read−Spangler, Kara) (Entered: 09/02/2010)
60 Joint STIPULATION to Extend Discovery Cut−Off Date to October 7, 2010 and November 1, 2010 filed by Plaintiff California Hospital Association. (Attachments: # 1 Proposed Order Granting Stipulation)(Keville, Jordan) (Entered: 09/02/2010)
61 OPPOSITION to EX PARTE APPLICATION to Stay Case pending the Case Proceedings and Memorandum of Points and Authorities in Support of Application 57 ; and Declaration of Jordan B. Keville filed by Plaintiff California Hospital Association. (Keville, Jordan) (Entered: 09/02/2010)
62 NOTICE OF ERRATA filed by Defendant David Maxwell−Jolly. correcting Exhibit (non−trial) 59 (Read−Spangler, Kara) (Entered: 09/03/2010)
63 NOTICE OF LODGING filed re EX PARTE APPLICATION to Stay Case pending the Case Proceedings and Memorandum of Points and Authorities in Support of Application 57 (Attachments: # 1 Proposed Order)(Read−Spangler, Kara) (Entered: 09/03/2010)
64 NOTICE TO FILER OF DEFICIENCIES in Electronically Filed Documents RE: Exhibit (non−trial) 59 . The following error(s) was found: This document tendered for the judge's approval should have been submitted as a separate PDF attachment to the Ex Parte Application, document number 57, or a Notice of Lodging.. In response to this notice the court may order (1) an amended or correct document to be filed (2) the document stricken or (3) take other action as the court deems appropriate. You need not take any action in response to this notice unless and until the court directs you to do so. (cbr) (Entered: 09/08/2010)
66 ORDER by Judge Christina A. Snyder granting Ex Parte Application to stay all proceedings in this case pending resolution of the pending petitions for certiorari in Maxwell−Jolly v. Independent Living Center of Southern California, No. 09−958 (U.S. February 26, 2010), Maxwell−Jolly v. California Pharmacists Association, No. 09−1158 (U.S. March 24,2010), and Maxwell−Jolly v. Santa Rosa Memorial Hospital, No. 10−283 (U.S. August 25, 2010) 57 . This case is stayed, pending the resolution of the above−listed petitions for certiorari in the United States Supreme Court. Within 45 days from the date of thisorder or upon disposition of the petitions for certiorari, whichever first occurs, theparties shall file a joint status report. (jp) (Entered: 09/09/2010)
67 ORDER by Judge Christina A. Snyder: Upon Joint Stipulation 60 , the Court hereby amends the current scheduling order 53 to move the following dates in this case: Expert disclosure 10/7/2010. Last day to file motions 11/2/2010. (gk) (Entered: 09/09/2010)
65 REPLY In Support EX PARTE APPLICATION to Stay Case pending the Case Proceedings and Memorandum of Points and Authorities in Support of Application 57 filed by Defendant David Maxwell−Jolly. (Linton, Elizabeth) (Entered: 09/08/2010)
68 MINUTE ORDER IN CHAMBERS by Judge Christina A. Snyder: Due to clerical error, the Court hereby vacates the Order Extending the Expert Disclosure and Motion Cut−Off Dates. On September 7, 2010, the Court GRANTED Defendant Maxwell−Jollys Ex Parte Application for a Stay of the Proceedings, Re: Order,

Case: 2:09-cv-3694 As of: 10/26/2017 10:15 PM PDT 8 of 9

10/20/2010 12/16/2010
12/16/2010
01/19/2011 06/01/2011
07/01/2011 10/05/2011 01/05/2012 05/18/2012 05/22/2012 05/29/2012
10/09/2012 10/09/2012

Set/Reset Deadlines 67 . (vv) (Entered: 09/23/2010)
69 STATUS REPORT [JOINT] filed by Intervenor Defendant California Association of Health Plans, Plaintiff California Hospital Association, Defendant David Maxwell−Jolly. (Keville, Jordan) (Entered: 10/20/2010)
70 MINUTES (IN CHAMBERS) by Judge Christina A. Snyder: THE COURT, having been notified by counsel that the action has been settled on 9/7/2010; The Court has received the Joint Status Report filed 10/20/2010, pursuant to this Court's Order of 9/7/2010; IT IS ORDERED that counsel shall continue to file a Joint Status Report within 90 days and every quarter thereafter or upon disposition of the petitions for certiorari, whichever occurs first. This Court retains full jurisdiction over this action and this Order shall not prejudice any party to this action. All dates in this action are hereby VACATED. Court Reporter: Not Present. (gk) (Entered: 12/16/2010)
71 AMENDED MINUTES (IN CHAMBERS) 70 by Judge Christina A. Snyder: THE COURT, having granted a stay on 9/7/2010; The Court has received the Joint Status Report filed 10/20/2010, pursuant to this Court's Order of 9/7/2010; IT IS ORDERED that counsel shall continue to file a Joint Status Report within 90 days and every quarter thereafter or upon disposition of the petitions for certiorari, whichever occurs first. This Court retains full jurisdiction over this action and this Order shall not prejudice any party to this action. All dates in this action are hereby VACATED. Court Reporter: Not Present. (gk) (Entered: 12/16/2010)
72 STATUS REPORT (JOINT) filed by Plaintiff California Hospital Association. (Keville, Jordan) (Entered: 01/19/2011)
73 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 9/7/2010; 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 30 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)
74 STATUS REPORT (Joint) filed by Defendant David Maxwell−Jolly. (Linton, Elizabeth) (Entered: 07/01/2011)
75 STATUS REPORT Joint filed by Defendant David Maxwell−Jolly. (Read−Spangler, Kara) (Entered: 10/05/2011)
76 STATUS REPORT Joint filed by Defendant David Maxwell−Jolly. (Read−Spangler, Kara) (Entered: 01/05/2012)
77 STATUS REPORT Joint filed by Defendant David Maxwell−Jolly. (Read−Spangler, Kara) (Entered: 05/18/2012)
78 EXHIBIT Filed filed by Defendant David Maxwell−Jolly. Exhibit A as to Status Report 77 . (Read−Spangler, Kara) (Entered: 05/22/2012)
79 NOTICE TO FILER OF DEFICIENCIES in Electronically Filed Documents RE: Exhibit A to Joint Status Report filed 5/22/2012 78 . The following error(s) was found: Title page is missing. In response to this notice the court may order (1) an amended or correct document to be filed (2) the document stricken or (3) take other action as the court deems appropriate. You need not take any action in response to this notice unless and until the court directs you to do so. (gk) (Entered: 05/30/2012)
80 STATUS REPORT Joint filed by Defendant David Maxwell−Jolly. (Read−Spangler, Kara) (Entered: 10/09/2012)
81 Notice of Electronic Filing re Status Report 80 e−mailed to tdb@rjo.com and elizabeth.linton@doj.ca.gov bounced due to 5.1.0 − Unknown address error 550. The primary e−mail address associated with the attorney record has been for Elizabeth Linton has been deleted. Primary e−mail address associated with the attorney record

Case: 2:09-cv-3694 As of: 10/26/2017 10:15 PM PDT 9 of 9

07/26/2013 07/26/2013 11/05/2013
04/17/2015 04/23/2015

for Thomas Blanford has been corrected. Notification resent to tblanford@rjop.com. Pursuant to the General Order and Local Rules it is the attorneys obligation to maintain all personal contact information including e−mail address in the CM/ECF system. THERE IS NO PDF DOCUMENT ASSOCIATED WITH THIS ENTRY.(tyw) TEXT ONLY ENTRY (Entered: 10/10/2012)
82 NOTICE of Change of Attorney Business or Contact Information: for attorney Brenda Ann Ray counsel for Defendant David Maxwell−Jolly. Changing Office of the Attorney General to 1300 I Street, Sacramento, CA 95814. Changing Brenda.Ray@doj.ca.gov to (916)324−5567. Filed by Attorney for Defendant Brenda A. Ray. (Ray, Brenda) (Entered: 07/26/2013)
83 Notice of Electronic Filing re Notice of Change of Attorney Business or Contact Information (G−06), 82 e−mailed to tblandford@rjop.com bounced due to 550 5.1.1 RESOLVER.ADR.RecipNotFound; not found. Primary e−mail address corrected. Notice of Electronic Filing resent addressed to thomas.blanford@mckesson.com. Pursuant to Local Rules it is the attorneys obligation to maintain all personal contact information including e−mail address in the CM/ECF system. THERE IS NO PDF DOCUMENT ASSOCIATED WITH THIS ENTRY.(tyw) TEXT ONLY ENTRY (Entered: 07/26/2013)
84 MINUTES (IN CHAMBERS) STAY OF PROCEEDINGS by Judge Christina A. Snyder: By order dated 7/8/2013, the Court directed the parties in these matters to submit a joint status report. Dkt. #242, in case no. 2:11−CV−09688−CAS(MANx). The joint status report was filed on 7/23/2013. Dkt. #243, in case no. 2:11−CV−09688−CAS(MANx). The Court has reviewed the parties' positions set forth therein, as well as the issues presented by the petition for writ of certiorari now pending in the United States Supreme Court, see Supreme Court Docket No. 13−253. Based on the foregoing, the Court finds that there is good cause to stay the proceedings or, if applicable, to continue the existing stay of the proceedings in the above−entitled cases, pending notification from this Court. The parties are directed to file a joint status report with this Court within 14 days after the Supreme Court has taken any action with respect to the above−referenced petition for writ of certiorari. Court Reporter: Not Present. (gk) (Entered: 11/06/2013)
85 EX PARTE APPLICATION to Dismiss Case filed by Plaintiff California Hospital Association. (Attachments: # 1 Memorandum of Points and Authorities in Support of Plaintiff's Ex Parte Application for Voluntary Dismissal of Action, # 2 Declaration of Jordan B. Keville in Support of Plaintiff's Ex Parte Application for Voluntary Dismissal of Action, # 3 Proposed Order on Plaintiff's Ex Parte Application for Voluntary Dismissal of Action)(Keville, Jordan) (Entered: 04/17/2015)
86 ORDER ON PLAINTIFF'S EX PARTE APPLICATION FOR VOLUNTARY DISMISSAL OF ACTION by Judge Christina A. Snyder: IT IS HEREBY ORDERED, that Plaintiff's Ex Parte Application 85 is GRANTED. Pursuant to Federal Rule of Civil Procedure 4l(a)(2), Case No. 2:09−cv−03694 is hereby dismissed with prejudice, with each party to the case to bear its own costs. (gk) (Entered: 04/24/2015)