Court Opinion

ID: 9939459
Source: CourtListenerOpinion
Date Created: 2024-02-09 22:02:21.579448+00
Date Added: 2024-06-11T13:41:15.020255
License: Public Domain

Filed 2/9/24
                  CERTIFIED FOR PUBLICATION

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

                 SECOND APPELLATE DISTRICT

                         DIVISION EIGHT

 GARDENA HOSPITAL, L.P.,                B316529

         Plaintiff and Appellant,       Los Angeles County
                                        Super. Ct. No. 20STCP02501
         v.

 MICHELLE BAASS, as Director,
 etc., et al.,

      Defendants and
 Respondents.

      APPEAL from an order of the Superior Court of
Los Angeles County, James C. Chalfant, Judge. Affirmed.
      Athene Law, Long X. Do, Felicia Y. Sze, and Kyle R. Brierly
for Plaintiff and Appellant.
      Rob Bonta, Attorney General, Cheryl L. Feiner, Senior
Assistant Attorney General, Gregory D. Brown and Benjamin G.
Diehl, Supervising Deputy Attorneys General, and Michael E.
Byerts, Deputy Attorney General for Defendant and Respondent.
                       ____________________
      Two state manuals guide health care facility accounting.
Both set out principles for counting patient days, but only one
says anything specific about how to count “bed holds” when
calculating Medi-Cal reimbursement. We affirm because the
trial court was right to rule the specific manual governed.
                                   I
       State regulatory authorities classify medical care into
categories like “Acute Care” (which includes, for example,
coronary care and burn care) and “Long-Term Care” (which
includes subacute care and skilled nursing care).
       Appellant Gardena Hospital offers general acute care, and
also houses a separate 69-bed area where skilled nurses provide
subacute care. The hospital furnishes long-term care in its
subacute area.
       The hospital cares for Medi-Cal patients, and the
respondent state has agreed to reimburse the hospital for that
care. The state determines how much to pay based on data the
hospital supplies it.
       The controversy turns on the proper way for the hospital to
report its data. These data drive a reimbursement formula. If
the hospital reports fewer patient days, it gets a larger per diem
from the state, because the governing formula divides costs by
patient days. The hospital wants a larger per diem. The state
does not.
       The data disagreement is over bed holds.
       A bed hold is a day when a patient is not in the hospital’s
subacute section but is expected to return in the near future.
During a bed hold day, the patient’s long-term bed remains
empty because the facility is saving it for the patient’s return.
       Suppose you are in a long-term care facility. But then an
accident or another unwelcome event forces you to leave,
temporarily, for more intensive but short-term medical treatment

                                2
available only elsewhere: you must go to the hospital. What if,
in your temporary absence, your long-term facility gives away
your bed to someone else whose needs are also pressing? You
might want a guarantee that, when your temporary treatment is
complete, you can return to the same long-term facility.
       State bed hold regulations respond to this kind of situation.
They entitle patients to a seven-day bed hold under some
circumstances. (Cal. Code Regs., tit. 22, § 72520, subd. (a).)
       The hospital lowered its reported patient days by excluding
bed hold days from reported patient days. The government
conducted its yearly audit and told the hospital it must include
those days. The state’s change would reduce reimbursement to
the hospital by about $160,000 annually.
       The hospital unsuccessfully appealed this point, first
informally and then, separately, as a formal matter. Next the
hospital sought a writ of mandate from the superior court. The
trial court issued a thoughtful and comprehensive 31-page single-
spaced ruling in the state’s favor. We affirm.
                                  II
       The specific controls the general. That was the crux of the
trial court’s decision. We affirm this venerable principle. (See
Sieg v. Fogt (2020) 55 Cal.App.5th 77, 88 [independent review of
legal questions].)
                                  A
       The hospital wants to exclude bed holds. To justify this
exclusion, the hospital points to a state manual titled the
Accounting and Reporting Manual for California Hospitals, which
everyone in the case calls the “Hospital Manual.” “This Manual
is the foundation for uniform accounting and reporting for

                                 3
hospitals within the State.” (Hospital Manual, Preface, section
1001 (July 2003) <https://hcai.ca.gov/wp-content/uploads/2020/
10/Chpt1000.pdf> [as of February 8, 2024], archived at
<https://perma.cc/YQE5-MZ95>.)
       The Hospital Manual lists generally accepted accounting
principles in Chapter 1000, and then in Chapter 2000 includes a
“System of Accounts” for various medical activities, such as
“MEDICAL/SURGICAL ACUTE,” “PEDIATRIC ACUTE,” and
“PSYCHIATRIC ACUTE - ADULT,” addressed in separate
sections. Following these is a different section devoted to “SUB-
ACUTE CARE.” (Hospital Manual at chapter 2000 (July 2003)
<https://hcai.ca.gov/wp-content/uploads/2020/10/Chpt2000.pdf>
[as of February 8, 2024], archived at <https://perma.cc/85CM-
QLY6>.)
       This section continues with a heading entitled “Standard
Unit of Measure: Number of Patient (Census) Days.” Under that
heading are these words (to which we add italics) that the
hospital says are controlling: “Report patient (census) days of
care for all adult patients provided sub-acute care.” (Ibid.)
       The Hospital Manual does not refer specifically to bed
holds, here or elsewhere.
       The hospital’s logic is that it is not providing care to anyone
during a bed hold. That bed is empty: there is no patient to
receive care. So therefore, the hospital reasons, it must exclude
bed holds from reports to the state.
       This argument is logical at some level, but the fact remains
that the Hospital Manual never specifically refers to bed holds.
       The state, on the other hand, points to a second manual:
the Accounting and Reporting Manual for California Long-Term
Care Facilities, commonly called the “Long-Term Manual.” This

                                  4
manual specifically states bed hold days should be included in
total patient days. We italicize key words:
       “Bed-hold and Leave of Absence Revenue - Skilled nursing
facilities may be paid for bed-hold or leave days, which are for
specific patients on a short leave from the facilities. Each bed-
hold or leave day is to be counted as a patient day ....”
       This section, located in Chapter 3000 of the Long-Term
Manual (<https://hcai.ca.gov/wp-content/uploads/2020/10/
Chpt3000-1.pdf> [as of February 8, 2024], archived at <https://
perma.cc/3Y3E-VE6T>), includes 200 more words about the
proper accounting, reporting, and revenue treatment of bed holds.
We need not quote or belabor these additional words. The point
is that the Long-Term Manual specifically addresses the issue of
bed holds, and does so at length.
       The trial court correctly concluded the specific provision
controlled the general one.
                                   B
       In 1843, Jeremy Bentham explained the specific/general
principle, with our italics. “If there should be any particular
provision that appears at first sight to be repugnant to one more
general, they should, if possible, be reconciled: if not, let the
particular provision prevail over the general. For this reason,—
the particular provision is established upon a nearer and more
exact view of the subject than the general, of which it may be
regarded as a correction.” (Bentham, General View of a Complete
Code of Laws, in The Works of Jeremy Bentham, vol. 3 (Tait
edit., 1843) <https://oll.libertyfund.org/title/bowring-the-works-of-
jeremy-bentham-vol-3> [as of February 8, 2024], archived at
<https://perma.cc/ZHX2-33LV>. (Bentham).)

                                 5
       Bentham’s logic stated common sense, and general
American law incorporates that common sense. A specific statute
controls a general one, regardless of the priority of enactment,
unless there is a clear intention to the contrary. (Morton v.
Mancari (1974) 417 U.S. 535, 550–551.) The principle is that
these two provisions are not actually in conflict but can exist in
harmony. “The specific provision does not negate the general one
entirely, but only in its application to the situation that the
specific provision covers.” (Scalia & Garner, Reading Law: The
Interpretation of Legal Texts (2012) p. 185.)
       In 1872, California law enshrined this principle in a
statute. Section 1859 of our Code of Civil Procedure states that,
“when a general and particular provision are inconsistent, the
latter is paramount to the former. So a particular intent will
control a general one that is inconsistent with it.”
       Case law follows this precept. (E.g., Cumero v. Public
Employment Relations Bd. (1989) 49 Cal.3d 575, 587.)
       This makes common sense. When we are concentrating on
a particular detail and giving a specific instruction about it, our
studied pronouncement governs more general declarations. We
are paying more attention to the detail than when we are
speaking generally, and our focused and considered words are
more valuable and reliable. As Bentham wrote, and as we repeat
for emphasis, the particular provision is a nearer and more exact
view of the subject than the general, of which it may be regarded
as a correction.
       Suppose your parent advises you, “Always be on time.” On
some different date, that parent says, “When you are to meet
with Chris Smith, show up 10 minutes late, for Chris Smith
always arrives 15 minutes after the set time.” These instructions

                                 6
are not in conflict, no matter their temporal order. The specific
controls the general. The specific may be regarded as a correction
to the general.
      The trial court was right to give decisive weight to the
government manual dealing specifically with bed holds.
                                  C
      The hospital’s six appellate arguments do not overcome this
old wisdom.
      First, the hospital says the trial court’s approach violated a
regulation that, with our italics, provides:
      “(k) A separate and distinct cost center shall be established
and maintained in order to identify and segregate costs for adult
and/or pediatric subacute patients separately from costs for other
patients who may be served within the certified nursing facility.
      “(1) Cost reporting for the adult subacute or pediatric
subacute unit in freestanding certified nursing facilities shall be
maintained according to generally accepted accounting principles
and the uniform accounting system adopted by the State and
specified in the Accounting and Reporting Manual for California
Long-Term Care Facilities [the Long-Term Manual], pursuant to
Section 97019, and shall be submitted in the manner approved by
the State specified in the Accounting and Reporting Manual for
California Long-Term Care Facilities, pursuant to Section 97019.
      “(2) Cost reporting for the adult subacute or pediatric
subacute unit in distinct part skilled nursing units in general
acute care hospitals shall be maintained according to generally
accepted accounting principles and the uniform accounting
system adopted by the State and specified in the Accounting and
Reporting Manual for California Hospitals [the Hospital
Manual], pursuant to Section 97018, and shall be submitted in

                                 7
the manner approved by the State specified in the Accounting
and Reporting Manual for California Hospitals, pursuant to
Section 97019.” (Cal. Code Regs., title 22, § 51215.6(k), italics
added.)
       In short, the hospital argues this regulation specifically
directs it to use the Hospital Manual and not the Long-Term
Manual, and that means exclude the bed holds.
       The state responds that a different regulation is
controlling. The trial court agreed, finding that the hospital’s
skilled nursing facility provided long-term care. The trial court
correctly concluded California Code of Regulations, title 22,
section 97019 governed.
       Section 97019, subdivision (a), states, with our emphasis:
       “To assure uniformity of accounting and reporting
procedures among long-term care facilities, the Office shall
publish an “Accounting and Reporting Manual for California
Long-term Care Facilities,” [the Long-Term Manual,] which will
be supplemental to the system adopted by this Chapter. . . . All
long-term care facilities must comply with the systems and
procedures detailed in the applicable version of the Manual. . . .
The Manual published by the Office shall be the official and
binding interpretations of accounting and reporting treatment
within the long-term care facility accounting and reporting
system.”
       We pause to note a wrinkle. Section 51215.6 is more
specific than section 97019 in a sense. It refers to the very type
of facility at issue here, while section 97019 applies to long-term
care facilities generally. In particular, section 51215.6 applies
specifically to “the adult subacute . . . unit in distinct part skilled
nursing units in general acute care hospitals,” which all agree is

                                   8
what we have here, while section 97019 generally applies to “[a]ll
long-term care facilities.” But this specificity is not decisive here
because only one manual mentions bed holds.
       The Long-Term Manual’s extremely specific reference to bed
holds is the specificity that matters. This is the greatest degree
of specificity anywhere in this regulatory landscape. The
regulations we interpret refer to particular agency manuals, and
one of those manuals spotlights the precise issue at hand: how to
treat bed holds. In this situation, we give decisive weight to the
most specific treatment of the matter.
       We therefore follow section 97019’s directive that long-term
care facilities, like the hospital’s, use the Long-Term Manual,
which contains specific instructions to include bed holds in the
hospital reports.
       That concludes our treatment of the hospital’s first
argument.
       Turning now to the second argument, the hospital protests
this ruling would create a “hodgepodge approach of selecting
provisions from both manuals” that would leave hospitals to the
state’s whimsical decisions about which manual governs what.
       The hospital does not identify any specific uncertainties
this supposed clash of manuals will produce. As presented in the
hospital’s opening brief, then, this fear is hypothetical. An
ungrounded horrible is not a good reason to depart from the rule
that the specific governs the general. Specific accounting rules
must be interpreted as correcting the general ones, as Bentham
suggested. The trial court ruling was correct.
       Third, and in the same vein, the hospital writes that the
trial court’s judgment “is wrong for the additional reason that it
leads to an absurd, unworkable result. [Gardena Hospital] is a

                                 9
single hospital required to comply with a ‘uniform accounting
system’ for all of its departments. The Hospital Manual is
intended to ‘assure uniformity of accounting and reporting
procedures among California hospitals.’ Cal. Code Regs., tit. 22,
§97018(a). The court’s decision would apply different accounting
rules to different departments of the same hospital, resulting in
one patient being counted as being located in two different
departments of the hospital on a given day. In the absence of any
explicit law or regulation warranting such an outcome, hospitals
are left in the untenable position of the haphazard application of
either [government] manual based on the whim of [the
government authority] and its determination of what would be
financially beneficial for the State. This constitutes a gross
miscarriage of due process.”
       Correcting the general by reference to the specific, however,
is neither absurd nor unworkable. Nor is it a gross miscarriage
of due process. The specific provisions of the Long-Term Manual
correct the uniform approach of the Hospital Manual. This
approach is straightforward and workable.
       Fourth, referring to email responses from a state agency,
the hospital contends the trial court analysis countered the
government’s own interpretation of its regulations. As the trial
court correctly pointed out, however, the state office sending
these messages confessed it had “no authority to define the
collection of data required for Medi-Cal cost reimbursement . . . .”
       Fifth, the hospital maintains the trial court result is
contrary “to a broad scheme of Medicaid laws and authorities.”
The hospital refers to general authorities, but none is more
specific about bed holds than the Long-Term Manual. The trial
court made this very point.

                                10
       Sixth, the hospital identifies important policies it says
support its position. Similarly, it maintains the trial court ruling
will lead to “absurd results” and to “confusion.” In the field of
health care, however, judges for the most part are in a poor
position to assess appeals to wise policy or to predict what is
workable. For decades, the nation has debated how to structure
and finance health care. We have learned the matter is complex
and controversial. We cannot override a specific text with a
judicial policy analysis about what makes for sound health care
policy.
                           DISPOSITION
       We affirm the order and award costs to the respondent.

                                           WILEY, J.

We concur:

             STRATTON, P. J.

             GRIMES, J.

                                 11