Business Law Health Law Committee

Matthew Omlansky, a relator, brought a qui tam action against Save Mart Supermarkets alleging False Claims Act violations for seeking reimbursement for prescription and nonprescription medications sold to Medi-Cal patients at rates higher than the rates charged to customers paying cash. Specifically, Omlansky alleged this practice violated a 2009 state statute capping Medi-Cal billings at Save Mart’s “usual and customary price.” (See Welf. & Inst. Code, §§ 14105.45, subd. (b), 14105.255, subd. (b).) The trial court sustained Save Mart’s demurrer and Omlansky appealed. Read more

The Federal Nursing Home Reform Amendments (FNHRA) impose various requirements on nursing homes receiving reimbursement under Medicaid. As pertinent here, they require a nursing home that transfers, discharges, or refuses to readmit a hospitalized resident to inform the resident of his or her right to appeal that decision. The state-established appeals process must provide a “fair mechanism” by which residents may challenge a decision. Read more

Health and Safety Code § 1418.8 requires an interdisciplinary team (IDT) to make healthcare decisions for “unbefriended” nursing home residents who lack capacity to make those decisions. A nursing home resident, a taxpayer, and the California Advocates for Nursing Home Reform petitioned for a writ of mandate against the Director of the Department of Public Health (Department) challenging the constitutionality of section 1418.8. The superior court granted the petition, ruling that section 1418.8 was unconstitutional because it (1) facially violated due process by failing to require notice to a resident of a physician’s determination that the resident lacks capacity, has no surrogate decisionmaker, needs a recommended medical intervention, and has a right to judicial review; (2) violated due process when applied to authorize an IDT to make decisions about administering antipsychotic medication; and (3) violated the patient’s privacy rights regarding end of life withdrawal of care decisions. The court entered judgment and prohibited enforcement of section 1418.8 to the extent it conflicted with those rulings. Both parties appealed. Read more

Residue of a special needs trust must reimburse DHCS for Medi-Cal payments to deceased beneficiary. Read more

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. Read more

Ethan Lomeli’s guardian sued medical care providers for his birth injuries. Through Medi-Cal, the California Department of Health Care Services paid for his medical care before and during the lawsuit. After Lomeli settled with defendants for $4 million, the Department moved to impose a $267,159.60 lien on the settlement, seeking reimbursement for the care it provided. The trial court granted the motion, and Lomeli appealed. Read more

The Medical Board of California issued a subpoena demanding that Dr. Ron Kennedy produce the medical records of three minor patients for whom he had provided vaccination exemptions. When Dr. Kennedy refused to comply, the Board filed a petition in the superior court under Government Code section 11187 to compel compliance. The superior court granted the petition and ordered Dr. Kennedy to produce the records, then denied Dr. Kennedy’s request to stay that order pending appellate review. Dr. Kennedy appealed and filed a petition for a writ of supersedeas seeking a stay of the production order pending appeal. Read more

The Department of Consumer Affairs (DCA), which oversees the Medical Board, investigated whether Dr. Marc Wolfsohn, a pain management specialist, was overprescribing opiate painkillers. Based on a report from the Controlled Substance Utilization Review and Evaluation System (CURES), investigators identified five patients who may have been prescribed excessive doses. The DCA served a subpoena duces tecum on Dr. Wolfsohn to produce more than two years of medical records for the five patients. After Dr. Wolfsohn objected on patient privacy grounds, the DCA secured an order compelling production. Dr. Wolfsohn appealed. Read more

MICRA notice of intent to sue does not toll Government Claims Act deadlines. Plaintiff Jamie Harper was allegedly injured during a surgery at the Modoc Medical Center, a public entity. Almost a year later, her counsel sent Modoc notice of intent to sue, as required by MICRA. (See Code Civ. Proc., § 364.) Modoc treated the notice as a government claim, and rejected it as untimely. (See Gov. Code, § 911.2, subd. (a) [notice of claim must be submitted within 6 months after the cause of action accrues].) Read more

Health care trades or businesses in which real estate is a necessary component in the delivery of health care goods and services should be aware of the business interest deduction limitation that was enacted at the end of 2017 and became effective for tax years beginning after December 31, 2017. Read more