Business Law

Hoag Memorial Hospital Presbyterian v. Kent (June 17, 2019, A153742) __Cal.App.5th __ [2019 WL 2499606]

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Hospital’s attempt to tether an untimely Medi-Cal reimbursement challenge to its timely administrative appeal rejected.

The California Department of Health Care Services prepared a Medi-Cal audit of Hoag Hospital’s 2009 cost report, determining that Hoag had to pay more than $2.4 million in reimbursements mandated by Assembly Bills (AB) 5 and 1183, which reduced the amount of certain Medi-Cal payments. Hoag filed a timely administrative appeal contesting the legality of the Assembly bills and the reimbursement deductions based on federal and state laws and constitutions. Hoag later filed a second appeal requesting that its existing appeal also address an alleged $620,903 calculation error to be corrected if AB 5 and 1183 were lawful. The ALJ dismissed Hoag’s first appeal for lack of jurisdiction and dismissed its calculation error appeal as untimely.

Hoag filed a petition for writ of administrative mandate seeking to reverse the ALJ’s dismissal order. The superior court denied Hoag’s petition regarding the calculation error, and remanded the main petition for the ALJ’s reconsideration in light of recent authority. Hoag appealed the portion of the judgment affirming the dismissal of its calculation error administrative appeal.

The Court of Appeal affirmed, explaining that, under the controlling regulations, Hoag was required to specify each issue it was challenging within 60 days after receipt of the audit results. The court rejected Hoag’s contention that the calculation error issue simply “ ‘elaborat[ed] on’ ” the legality of the reimbursement reduction. The court concluded “the reality [is] that the ‘math issue’ was a completely new and distinct challenge.” Accordingly, Hoag’s calculation error appeal was untimely because Hoag had failed to set forth its contentions as to that issue within the 60-day time frame set forth in the governing regulation.

The bulletin describing the Court of Appeal’s decision was originally prepared for the California Society for Healthcare Attorneys (CSHA) by H. Thomas Watson and Peder K. Batalden, Horvitz & Levy LLP, and is republished with permission.

For more information regarding this bulletin, please contact H. Thomas Watson, Horvitz & Levy LLP, at 818-995-0800 or

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