MICHAEL STORTZ (No. 153378)
PROTECTION AND ADVOCACY, INC.
449 15th St., Suite 401
1 Oakland, CA 94612
MARILYN HOLLE (No. 61530)
3 SANDRA PETTIT (No. 54317)
PROTECTION AND ADVOCACY, INC.
4 3580 Wilshire Blvd., Suite 902
Los Angeles, CA 90010-2512
5 (213) 427-8747
6 Attorneys for Petitioners
CALIFORNIA SUPERIOR COURT
IN AND FOR THE COUNTY OF SAN FRANCISCO
ERIC HANSEN, MELISSA SILVA, ) Case No. 984402
12 DEBORAH LEE, JOSEPH FRIEDMAN )
) EX PARTE APPLICATION FOR A TRO STAY
13 Petitioners, ) PENDING HEARING ON MANDAMUS RELIEF;
) MEMORANDUM OF POINTS & AUTHORITIES IN
14 v. ) SUPPORT THEREOF.
15 KIMBERLY BELSHÉ, as Director of ) Hearing Date: February 3, 1997
Department of Health Services, and ) Time: 2:00 p.m.
16 CALIFORNIA DEPARTMENT OF ) Department: 8
HEALTH SERVICES, )
18 ___________________________________ )
21 Petitioners apply ex parte for an order staying termination of Short-Doyle Mental
22 Health Medi-Cal case management services pending a hearing on entitlement to mandamus relief.
24 This is a case about the right of Medi-Cal beneficiaries to a written notice and an
25 opportunity for a predeprivation hearing before Medi-Cal services are reduced or terminated.
26 Petitioners ask for the relief required by the federal Medicaid Act and its implementing regulations
27 and by Frank v. Kizer (1989) 213 Cal.App.3d 919, 261 Cal.Rptr. 882 -- namely a continuation of
Petitioners' Ex Parte App'n Stay; Supporting Mdm. of P&As Page 1
their services until they are sent a notice of action which complies with federal Medicaid
1 requirements. Notice is essential in order to provide Petitioners and others similarly situated
2 with an opportunity for a hearing and for services to continue pending the hearing.
3 Petitioners are young adults whose psychiatric impairments qualify them for
4 Supplemental Security Income (SSI) benefits from the Social Security Administration. Because
5 Petitioners receive SSI benefits, they are categorically eligible for Medi-Cal benefits. Petitioners
6 received care and treatment at California House, a residential program operated by Fred Finch
7 Youth Center, which is certified to provide Medi-Cal covered mental health services in Alameda
8 County. While California House was not a Medi-Cal certified residential treatment program,
9 some of the rehabilitative mental health and case management services provided to petitioners by
10 Fred Finch Youth Center were Medi-Cal covered services. Effective February 1, 1997, Alameda
11 County Behavioral Health Services discontinued its contract with Fred Finch Youth Center for the
12 provision of services to California House residents, including Petitioner Friedman, and aftercare
13 case management services for California House graduates, including Petitioners Hansen, Silva,
14 and Lee. Based on information and belief, Fred Finch Youth Center recommended to Alameda
15 County Behavioral Health Services that petitioners and other residents and graduates continue to
16 receive case management services upon expiration of its contract. Alameda County Behavioral
17 Health Services determined that the petitioners no longer needed case management or other
18 Medi-Cal covered mental health services. Declaration of Michael Stortz. Petitioners did not
19 receive written notification of such determination. Until advised by Protection & Advocacy,
20 petitioners did not know that the case management services they were receiving were Medi-Cal
21 services. Declarations of Petitioners.
22 About the Short-Doyle Medi-Cal Program
23 There are two Medi-Cal programs through which beneficiaries receive mental health
24 services: Fee-For-Service Medi-Cal (FFS/MC) and Short-Doyle Medi-Cal (SD/MC). For adult
25 Medi-Cal recipients, the Fee-for-Service system is limited to outpatient psychiatric and
26 psychologist visits plus medications. Most Medi-Cal covered mental health services, including
27 mental health case management (Welf. & Inst. Code Section 14021.3) and rehabilitation services
Petitioners' Ex Parte App'n Stay; Supporting Mdm. of P&As Page 2
(Welf. & Inst. Code Section 14021(e)) are available only through the SD/MC program.1
1 DHS entered into an Interagency Agreement with the California Department of Mental
2 Health (DMH) by which DHS delegated to DMH the responsibility for ensuring that SD/MC local
3 mental health services are available to eligible Medi-Cal beneficiaries in need of such services.
4 Interagency Agreement, p.5, enclosed at Exhibit M. DMH shall ensure that each local mental
5 health program provide, or contract for provision of, the Medi-Cal covered services. Exhibit M,
6 p.6. DMH has performance contracts with the counties for the provision of mental health
7 services, including SD/MC mental health services. Welf. & Inst. Code Sections 5651 & 5666.
8 Counties may directly provide or contract with private organizations or private nonprofit
9 organizations for the provision of necessary services. Welf. & Inst. Code Section 5657.
10 Counties are obligated to provide mental health services to Medi-Cal beneficiaries. Welf. &
11 Inst'ns Code Section 5718(a)(1).
12 The funding of SD/MC services is summarized in Petition paragraphs 12 and 13.
13 Counties receive only a limited amount of state Realignment funds each year. Realignment
14 funds are then used as matching funds to draw down federal reimbursement for services provided
15 to Medi-Cal recipients through the community mental health system. Welf. & Inst. Code
16 Sections 5700 & 5718.
17 Petitioners expect to look to the Medi-Cal fair hearing process to determine whether they
18 continue to qualify for SD/MC case management services. The medical necessity standards used
19 in the Short-Doyle program are set out in the SD/MC Manual. Exhibit M, 3-1 to 3-4. The overall
20 medical necessity standard used in the Medi-Cal program is that set out at Welf. & Inst. Code
21 Section 14059.5 as follows: "...[W]hen [a service] is reasonable and necessary to protect life, to
22 prevent significant illness or significant disability, or to alleviate severe pain." However, for
23 persons under age 21 (including Petitioners Hansen and Lee), the standard is that applicable to
The description of rehabilitative mental health services and targeted case
management services as defined in the State Medicaid plan are set out in the California
26 Department of Mental Health's "Short Doyle/Medi-Cal Manual For The Rehabilitation
27 Option And Targeted Case Management" (hereinafter "SD/MC Manual"), are excerpted at
Petitioners' Ex Parte App'n Stay; Supporting Mdm. of P&As Page 3
EPSDT (Early and Periodic Screening, Diagnosis and Treatment) services, 42 U.S.C.
1 Section 1396d(r) -- namely services necessary to correct or ameliorate defects and physical and
2 mental illnesses and conditions. See also 22 CCR § 51340e)(3)(A).
5 1. A Stay and Mandamus Relief is the Appropriate Remedy
6 Petitioners, like the petitioners in Frank v. Kizer (1989) 213 Cal.App.3d 919, 261 Cal.Rptr.
7 882, and Diaz v. Quitoriano (1969) 268 Cal.App. 2d 807, 74 Cal.Rptr. 358, ask that Respondents
8 be directed to comply with their mandatory and ministerial duty to insure Petitioners receive the
9 notice and other due process protections required under federal and state law. Petitioners need
10 mandamus relief in order to access the Medi-Cal fair hearing process to resolve their substantive
11 disputes concerning entitlement to Short-Doyle Medi-Cal mental health services.
12 Pending the hearing on the entitlement to mandamus relief, petitioners ask that the case
13 management services they had been receiving through Friday, January 31, 1997, be continued
14 until the hearing or, as set out in the proposed stay pending writ hearing, until Petitioner
15 Friedman's administrative law judge rules on his request for aid paid pending or for relief pursuant
16 to Welf. & Inst. Code Section 10967, or until Petitioners Hansen, Silva and Lee and the other
17 Medi-Cal recipients who had been receiving aftercare Short-Doyle case management services
18 through Fred Finch Youth Center, are sent a notice of action which contains the information
19 required by 42 C.F.R. Section 431.210 and which is sent ten days prior to the termination of
21 The general standards for a preliminary injunction are also applicable to a stay and
22 temporary restraining order. In such cases the court looks to the probability of petitioner's
23 ultimate success on the merits and which of the parties is more likely to be injured by the granting
24 or refusing the injunction. Robbins v. Superior Court (1985) 38 Cal.3d 199, 205, 211 Cal.Rptr.
25 398, 401. Where the equities are on the side of petitioners, only a "reasonable probability" of
26 ultimately prevailing should be required. Continental Baking Co. v. Katz (1968) 68 Cal.2d 512,
27 528, 67 Cal.Rptr. 761, 771. If the potential harm to petitioners is sufficiently serious, "it is only
Petitioners' Ex Parte App'n Stay; Supporting Mdm. of P&As Page 4
necessary that there be a fair chance of success on the merits." William Inglis Sons Baking Co. v.
1 ITT Continental Baking Co. (9th Cir. 1975) 526 F.2d 86, 88. Finally, the court may consider how
2 the public interest may be served by the requested stay. City of San Diego v. Southern Cal. Tel.
3 Corp. (1954) 42 Cal.2d 110, 120, 266 Pac.2d 14, 21.
4 Petitioners and others receiving aftercare Short-Doyle Medi-Cal case management
5 services through Fred Finch Youth Center are persons who have been diagnosed as having a
6 psychiatric disabilities and who have been relying on case management services to enable them to
7 function in the community. Declarations of Petitioners. Loss of case management services
8 contributed to the decompensation and hospitalization of Petitioner Hansen late on Friday, January
9 31. Declaration of Mr. and Mrs. Hansen. Loss of case management services also jeopardizes the
10 ability of Petitioners Silva, Lee and Friedman and other Medi-Cal recipients terminated from the
11 case management services they had been receiving from Fred Finch Youth Center to live stablely
12 and successfully in the community. Declarations of Petitioners. For Petitioners and others
13 similarly situated the case management services assist to overcome functional limitations related
14 to their psychiatric impairments -- just as walkers or wheelchairs assist to overcome functional
15 impairments related to mobility impairments. Petitioners are much more likely to be harmed
16 without the stay than Respondents would be by the issuance of the stay.
17 Further, as set forth below, there is a strong likelihood that Petitioners will prevail
18 on the merits -- namely that as Medi-Cal beneficiaries they are entitled to notice and an
19 opportunity for a predeprivation hearing.
2. Frank v. Kizer Requires that Petitioners and Other Similarly
21 Situated Medi-Cal Beneficiaries Receive Notices and An
Opportunity for a Predeprivation Hearing before Short-Doyle
22 Mental Health Medi-Cal Services are Terminated.
Frank v. Kizer, supra, is controlling authority concerning the State's obligation to
insure that Medi-Cal beneficiaries receive notice and an opportunity for a hearing before current
Petitioners' Ex Parte App'n Stay; Supporting Mdm. of P&As Page 5
Medi-Cal services are terminated or reduced. 2 The court in Frank v. Kizer found that while
1 participation in the Medicaid program is voluntary, once a state elects to participate it is required
2 to comply with federal statutes and regulations in implementing its medical assistance program.
3 That includes the notice and fair hearing regulations. With respect to the notice and fair hearing
4 regulations, the court went on to explain that
[t]he notice and evidentiary hearing provisions were adopted in response to the
5 due process standards announced in Goldberg v. Kelly (1970) 397 U.S. 254, 90
S.Ct. 1011, 25 L.Ed.2d 287, which required a noticed hearing before government
6 welfare benefits were terminated. (At p. 264, 90 S.Ct. at p. 1018; Moffitt v.
Austin (W.D.Ky.1984) 600 F.Supp. 295, 297.) [FN3] Although conceding that
7 these regulations were triggered by the Goldberg decision, the Department [of
health services] would have us limit the requirements for prior notice and continued
8 benefits to those situations which are life threatening or involve severe harm to the
recipient. We cannot sanction such an exemption. The constitutional due process
9 requirements announced in Goldberg constitute minimal criteria and do not restrict
HHS's power to fashion procedures it determines due process requires. This same
10 conclusion was reached in Becker v. Blum [S.D.N.Y. 1978] 464 F.Supp.  at
page 157. ... [T]he district court rejected the same argument raised here, that the
11 Goldberg decision did not require notice in all cases, and therefore neither do the
regulations. (Ibid.) Whether due process is satisfied by lesser standards than
12 contained in the HHS regulations is not open to debate in this forum. The
interpretation by HHS of its own regulations is entitled to great weight and
13 deference. (New York Dept. of Social Services v. Dublino (1973) 413 U.S. 405,
421, 93 S.Ct. 2507, 2516, 37 L.Ed.2d 688; Potter v. James (M.D.Ala.N.D.1980)
14 499 F.Supp. 607, 612.) "Absent constitutional constraints or extremely compelling
circumstances" (Vermont Yankee Nuclear Power Corp. v. NRDC (1978) 435 U.S.
15 519, 543, 98 S.Ct. 1197, 1211, 55 L.Ed.2d 460), the federal regulations must be
FN3. 42 Code of Federal Regulations section 431.205, subdivision
17 (d) states: "The hearing system must meet the due process
standards set forth in Goldberg v. Kelly, 397 U.S. 254, 90 S.Ct.
18 1011, 25 L.Ed.2d 287 (1970), and any additional standards specified
in this subpart."
20 Frank v. Kizer, 213 Cal. App.3d at 923-924, 261 Cal.Rptr. at 885-886. See also paragraphs 17
21 and 18 of the Petition setting out the State Medi-Cal program's notice and due process protections.
3. Federal Medicaid Statutes and Regulations Require that
24 Short-Doyle Medi-Cal Recipients be Afforded Notice and Right
to a Hearing before Medical Services are Denied or Terminated.
Some years prior to Frank v. Kizer the state Medi-Cal program settled a class
26 action by agreeing to provide notice to Medi-Cal recipients when it -- including its agents,
27 contractors, and grantees -- denied requests for services. Jackson v. Rank, CCH Medi-Cal
Guide ¶ 7199, No. Civ. S-83-1451-LKK (E.D. Cal. June 9, 1986).
Petitioners' Ex Parte App'n Stay; Supporting Mdm. of P&As Page 6
1 Medicaid is a joint federal-state program which provides medical assistance to qualified
2 recipients. 42 U.S.C. Sections 1396 et seq. The program at the federal level is administered by
3 the Health Care Financing Administration (HCFA) of the Department of Health and Human
4 Services (HHS). A state must submit a plan to HCFA for approval, which includes an agreement
5 to comply with the requirements of 42 U.S.C. Section 1396a. One of those requirements is that
6 set out at 42 U.S.C. Section 1396a(a)(3):
provide for granting an opportunity for a fair hearing before the State agency to any
7 individual whose claim for medical assistance under the plan is denied or not acted
upon with reasonable promptness; . . .
9 Subpart E to 42 C.F.R. Part 431 contains the regulations which implement the above statutory
10 notice and hearing requirement and are described more fully at paragraph 16 of the petition. The
11 regulations require advance notice and hearing whenever the Medicaid agency takes action 3 to
12 suspend, terminate, or reduce services. 42 C.F.R. Sections 431.200 et seq. The notice must be
13 mailed 10 days in advance of the proposed action. 42 C.F.R. Section 431.211. What must be in
14 a notice is detailed in 42 C.F.R. Section 431.210 and includes a statement about the action
15 intended to be taken, the reason and authority for the action, the right to request a fair hearing, and
16 "[a]n explanation of the circumstances under which Medicaid is continued if a hearing is
17 requested." 42 C.F.R. Section 431.210(e).
18 4. Other Courts Have Found the Requirements for Advance Notice
and Hearing are Mandatory Even Where the Denials,
19 Terminations and Reductions are by Entities to Which the State
Has Delegated Authority.
21 While California may have delegated the authority to deny, reduce and terminate
22 Short-Doyle Medi-Cal services to local Short-Doyle Medi-Cal programs (see paragraph 15 of
23 Petition), it is the single state agency with responsibility for insuring all aspects of the Medi-Cal
24 program complies with federal Medicaid requirements including the due process requirements.
25 See Daniels v. Wadley (M.D. Tenn, 1996) 926 F.Supp. 1305, 1311.
27 "Action is defined as the "termination, suspension, or reduction of Medicaid
eligibility or covered services. § 431.201, emphasis added.
Petitioners' Ex Parte App'n Stay; Supporting Mdm. of P&As Page 7
The holding in Frank v. Kizer is thus consistent with the holdings of other courts
1 even where the state had delegated to another entity its authority to reduce or terminate Medicaid
2 services: Catanzano by Catanzano v. Dowling (W.D. N.Y. 1994) 847 F.Supp. 1070, 1084, aff'd
3 by 902 F.2d 1556 (Table, No. 89-9163) (compliance with Medicaid due process regulations
4 required where home health agencies authorized to reduce services after consulting with treating
5 physician; notice through consultation with treating physician does not replace notice to Medicaid
7 Daniels v. Wadley at 1310-1314 (Tennessee responsible for compliance with Medicaid due
8 process requirements when contractor managed care organizations deny, reduce, terminate,
9 suspend Medicaid services);
10 J.K. v. Dillenberg (D. Ariz. 1993) 836 F.Supp. 694 (Medicaid due process protections even
11 where decisions are by Regional Behavioral Health Authorities contracting with the State);
12 King by King v. Fallon (D. R.I. 1992) 801 F.Supp. 925 (In a case involving access to
13 Medicaid funded intermediate care facilities and community alternatives administered by the state
14 developmentally disabled agency, it was the state Medicaid agency that was found in violation of
15 Medicaid Act provisions requiring written notice when making an adverse level-of-care decision);
16 Perry v. Chen, D. Ariz. February 9, 1996, No CV 95-140-TUC-RMB, CCH Medicare &
17 Medicaid Guide New Dev. ¶ 44,044 at p. 48,046 (full Medicaid due process requirements apply to
18 contract health care provider).
5. The United States and California Constitutions Require Notice
20 and an Opportunity for a Predeprivation Hearing.
22 The landmark Supreme Court case requiring adequate notice to an individual who
23 is denied public benefits such as the Medi-Cal case management services at issue here is Goldberg
24 v. Kelly (1970) 397 U.S. 254, 90 S.Ct. 1011. Under Goldberg, recipients of public benefits such
25 as Short-Doyle Medi-Cal services “are entitled to be given timely and adequate notice detailing
26 the reasons for the unfavorable action and an opportunity to defend by confronting any adverse
27 witness and by presenting [their] own arguments and evidence orally.” Easley v. Arkansas Dept.
Petitioners' Ex Parte App'n Stay; Supporting Mdm. of P&As Page 8
Of Human Services (E.D. Ark. 1986) 645 F.Supp. 1535, 1542, citing Goldberg. The notice must
1 advise of the availability of an appeal process and also include enough information on the grounds
2 for the action to enable the individual to adequately prepare for a hearing. Memphis Light, Gas &
3 Water Divison v. Craft (1978) 436 U.S. 1, 14-15 and n. 15, 98 S.Ct. 1554.
6 For the reasons set forth above, Petitioners respectfully request that this court order relief
7 that will insure that Petitioners and others similarly situated receive the relief requested to protect
8 their due process rights and rights under the federal Medicaid Act.
9 Date: February 3, 1997
10 Respectfully submitted
11 PROTECTION & ADVOCACY, INC.
13 by: ____________________________
Petitioners' Ex Parte App'n Stay; Supporting Mdm. of P&As Page 9