Court Opinion

ID: 5666875
Source: CourtListenerOpinion
Date Created: 2022-01-12 03:58:26.764832+00
Date Added: 2024-06-11T08:39:23.678816
License: Public Domain

BIGELOW, P. J., Dissenting.
I respectfully dissent.
This appeal presents two issues for resolution. First, whether the Office of Administrative Hearings (OAH) had jurisdiction to order Harbor Regional Center (Harbor) to reimburse Hannah G., 1 a consumer of disability services, for her out-of-pocket expenditures that supplemented the hourly wage rate paid to her caregiver, Irma Murphy, by Murphy’s employer, Cambrian Home Care, a Harbor vendor. Second, whether the OAH had jurisdiction to order Harbor to provide additional funding so that Murphy will receive an increase in her hourly wage from Cambrian. Both issues arise in a context in which Harbor and Cambrian negotiated hourly rates for the services provided by Cambrian, based on the type of service involved, and included those negotiated hourly rates in a vendor contract that was subject to regulation by the State Department of Developmental Services (DDS).
*318I am compelled to follow the plain language of the legislation governing this issue, which ensures that each and all of California’s recipients of developmental disability services are treated equitably. As a result, I disagree with the majority’s conclusion that the OAH had jurisdiction to order Harbor to provide funding so that Murphy alone receives an increased hourly wage from Cambrian. The hourly rate that Harbor pays to Cambrian for services provided is set by their negotiated contract. The order requiring Harbor to pay more to Cambrian, so that Cambrian can give a pay raise solely to Murphy, contravenes the statutory and regulatory procedures for adjusting the hourly rates that regional centers pay to their vendors. Accordingly, I would reverse the trial court’s judgment on Harbor’s petition for writ of administrative mandate.

The Lanterman Act

In 1977, our Legislature enacted comprehensive legislation addressing the subject of services for persons with developmental disabilities. (Stats. 1977, ch. 1252, p. 4283 et seq.) The 1977 legislation established DDS (see Welf. & Inst. Code, § 4400 et seq.),2 and vested it with “jurisdiction over the execution of the laws relating to the care, custody, and treatment of developmentally disabled persons, as provided in [the Welfare and Institutions Code]” (§ 4416). The 1977 legislation also enacted the Lanterman Developmental Disabilities Services Act (hereafter the Act or Lanterman Act; § 4500 et seq.).3 With the Lanterman Act, our state has “accepted] a responsibility for persons with developmental disabilities and an obligation to them which it must discharge.” (§ 4501.)
Under the Lanterman Act, “the state [acting through DDS] shall contract with appropriate agencies to provide fixed points of contact in the community for persons with developmental disabilities and their families, to that end that these persons may have access to the services . . . .” (§ 4620, subd. (a).) These fixed-point agencies are known as “regional centers.” Criteria for contracts between DDS and regional centers, and for the operations of regional centers, are subject to specific statutory terms. (§§ 4620-4639.75.)
A. Services
Regional centers are responsible for assessing persons for eligibility for services (§§ 4642-4644), and for developing individual program plans (IPP) *319for eligible persons, to be created through a process of individualized needs determination (§ 4646 et seq.). In order to achieve the stated objectives of a person’s IPP, the regional center is required to secure needed services and supports. (§ 4648, subd. (a).) A regional center “may, pursuant to vendorization or a contract, purchase services or supports for a consumer from any individual or agency which the regional center and consumer or, where appropriate, his or parents, legal guardian, or conservator, or authorized representatives, determines will best accomplish all or any part of that consumer’s [IPP].” (§ 4648, subd. (a)(3).)
When a regional center proposes to take any action concerning services for a person with disabilities, the Lanterman Act provides for an “appeal procedure” (see § 4700 et seq.) that includes a “fair hearing procedure” (see § 4710 et seq.). “Any applicant for or recipient of services . . . who is dissatisfied with any decision or action of [a regional center] which he or she believes to be . . . not in the recipient’s or applicant’s best interests, shall . . . be afforded an opportunity for a fair hearing” before DDS. (§ 4710.5; see §§ 4710.6-4712.) DDS has designated the OAH as the independent hearing officer for the appeal/fair hearing process. (Hayes v. California Dept. of Developmental Services (2006) 138 Cal.App.4th 1523, 1531-1532 [42 Cal.Rptr.3d 363]; see § 4712, subd. (b).) A decision by the OAH is binding as to administrative proceedings, and a losing party may seek review of the decision by petition for writ of administrative mandate to the superior court. (§ 4712.5, subd. (a).)
B. Rates
Under the Lanterman Act, regional centers “may, pursuant to vendorization or a contract,” purchase services or supports which “will best accomplish all or any part” of an IPP for persons with disabilities, or a “consumer.” (§ 4648, subd. (a)(3).) “Vendorization or contracting is the process for identification, selection, and utilization of service vendors or contractors, based on the qualifications and other requirements necessary in order to provide the service.” (Id., subd. (a)(3)(A).) DDS is required to “adopt regulations governing the vendorization process to be utilized by the department, regional centers, vendors and the individual or agency requesting vendorization.” (§ 4648, subd. (a)(3)(B).) Here, it is undisputed that Harbor has a negotiated vendor contract with Cambrian pursuant to which Cambrian provides services to Hannah, and Harbor pays Cambrian at negotiated hourly rates set in their contract.
Under section 4690of the Lanterman Act, DDS must “establish, maintain, and revise, as necessary, an equitable process for setting rates of state payment for nonresidential services purchased by regional centers . . . .” *320Under section 4690.2 of the Lanterman Act, DDS must also “develop program standards and establish, maintain, and revise, as necessary, an equitable process for setting rates of state payment, based upon those standards, for in-home respite services purchased by regional centers . . . .” In other words, when a regional center contracts with a vendor to provide services, the rates that DDS will pay (through the regional center) for the services provided by the vendor is overseen by DDS. Under both sections 4690 and 4690.2, DDS “may promulgate regulations” establishing the process to be used for setting the rates of state payment for services purchased by regional centers.
In accord with its statutory authority, DDS has promulgated regulations governing the vendorization and contract process, including regulations governing the rates for services purchased by regional centers from vendors. These regulations specifically address ratesetting for in-home respite services (see Cal. Code Regs., tit. 17, § 58000 et seq.)4 and provide: “Each fiscal year, [DDS] shall establish a payment rate for each vendor” (Regs., § 58210, subd. (a).) Vendors may seek to adjust rates according to prescribed procedures, basically by showing specific circumstances justifying an adjustment. (Regs., §§ 58410, 58420.) A vendor may appeal an adverse decision to the deputy director of DDS. (Regs., §§ 58440, 58441.) A vendor may appeal an adverse appeal decision by the Deputy Director of DDS to the Director of DDS. (Reg., § 58442.) “An appeal filed with the Director is the final level of appeal. The decision rendered by the Director . . . shall be deemed final.” (Regs., § 58442, subd. ([e]).)

Analysis

According to the decision issued by the OAH hearing officer, the current case arose in this context. On several occasions from mid- to late 2008, Hannah “requested that Harbor provide funding to increase Mrs. Murphy’s wages to $15.00 per hour.” (Italics added.) By 2009, Harbor effectively denied Hannah’s requests. Hannah initiated the appeal procedure or “fair hearing procedure” with DDS, in the OAH forum. On September 10, 2009, the OAH hearing officer issued a decision granting Hannah’s “request to give a pay raise to Irma Gibson Murphy from $12.50 to $15.00 per hour,” and ordered Harbor to “provide the necessary funding to implement [the pay raise] order.” (Italics added.) The decision further ordered Harbor to reimburse Hannah “the amount of supplemental salary paid to Irma Gibson Murphy from June 1, 2009, to [the date of the decision].”
As I understand the statutory scheme, if the events in the current case involve a “vendor rate dispute” between Harbor and Cambrian, the OAH *321does not have jurisdiction. But, if the events in the case involve a “service dispute” between Harbor and Hannah, the matter was properly submitted and resolved under the provisions of the Lanterman Act, and accompanying DDS regulations, calling for a “fair hearing” administrative review by the DDS in the OAH forum.
The majority finds this case involves a “service dispute.” I find this case involves a “rate dispute” not within the OAH’s jurisdiction. Hannah receives services that are provided through a vendor, Cambrian. As such, the rates of reimbursement that Harbor pays to Cambrian are subject to the ratesetting regulations summarized above. Under the regulations summarized above, the negotiated rate between Harbor and Cambrian is the maximum rate of reimbursement allowed. (Regs., § 57332, subd. (a).)
There is no denial of services presented here. The type of service that Hannah has received has remained relatively consistent, except for a temporary change in the specific caregiver employee. The matter being raised is purely a rate matter—whether Harbor shall pay one rate ($12.50 per hour) to Cambrian as negotiated between Harbor and Cambrian, or a different, higher rate ($15 per hour). And, as Murphy has now moved on, the crux of the dispute concerns reimbursement of money already expended to pay a higher hourly wage to Murphy.
In the final analysis, the OAH has singled out Hannah from among all the regional center clients, each of whom has unique needs, to receive care at an hourly rate that is higher than the rate negotiated between Harbor and Cambrian, which by law is the maximum rate allowed under the regulations. The majority approves of this procedure because it “presume[s]” the standard pay rate will be sufficient for most of Harbor’s special needs clients, but that Hannah “does not fall into that vast middle” and instead “is more of an outlier.” (Maj. opn., ante, at p. 313.) I am sympathetic to Hannah’s plight and recognize that her disease stems from a rare genetic defect, but there is no evidence in the record to support the majority’s presumptions. In fact, the attorney for Harbor advised us at oral argument that it deals with many such special needs individuals and every client of the regional center has unique needs.
The record also does not support the majority’s conclusion that Harbor failed to object to OAH jurisdiction earlier because it must have considered OAH’s jurisdiction “clear enough.” (Maj. opn., ante, at p. 314.) There is no evidence here of Harbor’s motive for its legal decision. More importantly, speculation about the reason behind a party’s decision to delay contesting jurisdiction provides no legal basis to resolve the issues presented.
*322In my view, the majority opinion opens the state coffers for an increased pay rate only to one person, which places at risk continued funding for all special needs clients and can cause budgets to be thrown into doubt. The procedures for ratesetting provide predictability and permit budgeting of scarce regional center resources. This is necessary to ensure continued funding for all special needs clients. If the contracted amount of pay required to retain services like those Murphy provided is inadequate, the statutory scheme contemplates a means for changing funding to provide such an increase each fiscal year. (Reg., § 58210, subd. (a).) Vendors can show the need for an adjustment by pointing to specific circumstances. (Regs., §§ 58410, 58420.) This procedure also guarantees that if the contracted amount of pay required to retain services like those provided by Murphy is inadequate, all special needs persons requiring them will receive the benefit of the same increase.
The decision of the majority, in my view, creates precedent that largely eviscerates the cost control purposes of the ratesetting statutes and regulations under the Lanterman Act, to the detriment of all of California’s recipients of developmental disability services. Ratesetting to provide the services that meet each client’s unique needs must be uniformly decided though an established process in order to be fairly distributed to this state’s many special needs clients. The statutory scheme indicates that is to be done by DOS, not on an individualized basis by an administrative law judge.

 References to Hannah include her mother, Sandra G.

 All further section references are to the Welfare and Institutions Code, unless otherwise designated.

 The Lanterman Act is derived from earlier legislation addressing services for persons with developmental disabilities. (See Stats. 1965, ch. 1244, p. 3109 et seq.; Health & Saf. Code, former § 38000 et seq.)

 All references to Regulations are to title 17 of the California Code of Regulations.