1201 J Street, Suite 200, Sacramento, California November 13, 2015

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1 1201 J Street, Suite 200, Sacramento, California Writer s Direct Contact (916) ldo@cmanet.org Honorable Tani Cantil-Sakauye, Chief Justice and Honorable Associate Justices Supreme Court of California 350 McAllister Street San Francisco, California Re: Maria Marquez et al. v. California Department of Health Care Services (Supreme Court no. S229927; Court of Appeal (1st App. Dist.) no. A140488) Amicus Curiae Letter Brief of California Medical Association et al. in Support of Petition for Review Dear Chief Justice Cantil-Sakauye and Associate Justices: The California Medical Association, California Academy of Family Physicians, Latino Physicians of California, and Physicians for Reproductive Health (collectively, the Physician Coalition ) submit this letter as amicus curiae, pursuant to rule 8.500(g) of the California Rules of Court ( CRC ), in support of the petition for review by plaintiffs and appellants Maria Marquez et al. in the above-mentioned matter. As explained below, review of the court of appeal s published opinion, Marquez v. Department of Health Care Services, 240 Cal. App. 4th 87 (2015), is necessary to settle an important question of law that will have a widespread impact on the physician community and the Medi-Cal patients they serve. See CRC, rule 8.500(b)(1). I. INTERESTS OF AMICI CURIAE The Physician Coalition is comprised of non-profit member associations or organizations representing the experience and interests of physicians throughout the state of California. The members of the Physician Coalition practice medicine or provide health care in all modes of practice and settings, including specifically through the Medi- Cal program. More detailed descriptions of the Physician Coalition s membership and mission are included in the attached Appendix.

2 Page 2 The Physician Coalition members share the goal of strengthening and improving the Medi-Cal program to meet the increasing demands of surging beneficiary enrollment and an aging state population. Specifically, the Physician Coalition and their members believe that improving access to care and continuity of care for beneficiaries should be the highest priorities for the Medi-Cal program. The court of appeal s opinion bears directly on such concerns. II. REVIEW IS WARRANTED The petitioners in this case seek fundamental procedural protections for Medi-Cal beneficiaries, pursuant to Welfare and Institutions Code section ( Section ) and California Code of Regulations title 22, section ( Reg ), that would protect beneficiaries uninterrupted access to necessary medical care. The court of appeal, however, found that the Department of Health Care Services ( DHCS ) does not undertake an action that would trigger these procedural protections whenever it assigns an other health care coverage ( OHC ) code, or a new or different OHC code, to a beneficiary in its Medi-Cal Eligibility Database System ( MEDS ). Citing Madrid v. McMahon (1986) 183 Cal. App. 3d 151, 156, the court found that DHCS s miscoding of OHC does not have a significant effect on the claimant s application for or receipt of the aid or other service provided by [DHCS]. Op. at 20. Key to this ruling was the court s conclusion that OHC miscoding only results in de minimis harm: Id. [M]ost importantly, OHC coding ultimately results in a delay, not a denial or reduction, of services. OHC coding events do not preclude coverage or treatment altogether. Even if the provider declines the service and refers the beneficiary to his or her purported OHC, there is merely a delay in the time it takes the beneficiary to obtain an appointment with the OHC; if the OHC coding is erroneous or inadequate, there is additional delay but only delay while obtaining a correction or bypass of the code. And while we do not trivialize the inconvenience and frustration caused by such delays or ignore their possible medical consequences the point is that a coding event, even if erroneous, does not deprive a beneficiary of the service. To the contrary, OHC errors can lead to harmful delays and denials of needed medical care that have a deleterious impact on the health and well being of Medi-Cal beneficiaries. Not only did the court of appeal err in its application and interpretation of Section and Reg , its published opinion additionally cannot be reconciled with the express purpose of the Medicaid program to eliminate a two-tiered health care

3 Page 3 system wherein the neediest population must settle for subpar health care. To be sure, the court of appeal s opinion forces Medi-Cal beneficiaries to accept delays and disruptions in care, even to the detriment of their health, while those with private insurance benefit from state laws protecting continuity of care and removing all sorts of barriers to access. A. Delays in Care Due to Miscoded OHC Can Cause Real, Substantial Harm to Medi-Cal Patients and Substantial Costs to the Overall Health Care Delivery System. The experiences of physicians treating Medi-Cal patients belie the assertion in the court of appeal s opinion that delays in care caused by OHC coding errors only amount to inconvenience and frustration. Medi-Cal beneficiaries, and the overall health care delivery system, in fact can suffer real harm by the delays and disruptions that have been documented in this case. Underserved communities largely make up Medi-Cal s beneficiary population. Latinos comprise 54 percent of Medi-Cal enrollees, and more than 40 percent of beneficiaries speak a primary or preferred language other than English. See Medi-Cal Facts and Figures: A Program Transforms, CAL. HEALTHCARE FOUND. at 18 (May 2013). On average Medicaid beneficiaries are significantly less healthy than other populations. They are far more likely than either the privately insured or the uninsured to report being in fair or poor health and to report having activity limitations and chronic conditions. Among adults under age 65, Medi-Cal beneficiaries had higher percentages of diabetes, ulcers, kidney disease, and liver disease than those covered by private insurance or who were uninsured. See Measuring Access to Medi-Cal Covered Healthcare Services, CAL. DEP T HEALTH CARE SERVS. at 13 (Sept. 2011). Such acute health conditions require constant monitoring and care, not to mention preventive and active diagnostic care. Medi-Cal beneficiaries often do not receive needed preventive, primary or ongoing care for their chronic conditions. Instead they receive episodic care, often delivered in the emergency room at roughly three times the cost of office- or clinic-based care. A recent survey found that, despite national efforts at health care reform, Medicaid recipients are increasingly more likely to get their care in emergency rooms. See Armour, Stephanie, U.S. Emergency-Room Visits Keep Climbing, WALL STREET J. (May 4, 2015) (citing survey of 2,098 emergency-room doctors conducted in March 2015 that showed about three-quarters said ER visits had risen since January 2014). During these episodes, they see multiple physicians and other health care providers with little or no continuity and are likely to have duplicate lab work, X-rays and other tests. Without

4 Page 4 access to preventive care, conditions prevalent among Medi-Cal beneficiaries such as hypertension and diabetes progress to complex disease states, which are more expensive to treat and often leave patients more debilitated and dependent. When Medi-Cal beneficiaries do have access to primary or specialist care, they often must wait weeks or months for an available time slot with a participating provider. More than half of Medicaid providers participating in managed care plans could not offer appointments to any enrollees. See Office of the Inspector General, Access to Care: Provider Availability in Medicaid Managed Care, U.S. DEPT. HEALTH AND HUMAN SERVS. at 1 (Dec. 2014). Of those who could see patients, the median wait time was 2 weeks, but over 25 percent of these providers did not have open appointments for more than a month. Id. Additionally, some beneficiaries have to travel long distances to access Medi-Cal physicians in certain parts of the state. The excessive wait times for appointments and necessity to travel far are the result of decades of inadequate reimbursement for Medi-Cal providers; many physicians simply cannot afford to see Medi-Cal patients. Hence, errors in OHC coding e.g., falsely indicating that a Medi-Cal beneficiary has secondary coverage can mean that Medi-Cal beneficiaries do not get to see their physician after waiting weeks or months for an open appointment. After correcting any OHC miscoding, the Medi-Cal beneficiary may then have to wait additional months for another available appointment slot. Far from being mere inconveniences or frustrations, given the chronic conditions many Medi-Cal beneficiaries face, such months-long delays in receiving medical care can result in significant harm or deterioration of health. For example, untreated diabetes can lead to permanent limb injuries, loss of limbs, or blindness. Uncontrolled hypertension can lead to heart attack or stroke, aneurysm, or heart failure. Contrary to the court of appeal s opinion, OHC coding errors therefore do have a significant effect on the claimant s application for or receipt of the aid or other service provided by [DHCS]. Madrid, 183 Cal. App. 3d at 156. Providing notice to beneficiaries and an opportunity for a hearing can better ensure that Medi-Cal beneficiaries have continuous coverage rather than imposing barriers and delays to care. B. OHC Errors Also Can Cause Significant Disruptions to Physician Practices. Completely overlooked in the court of appeal s opinion is the disruption to physician practices that can result from OHC errors. Such disruptions harm not only physicians but will dissuade medical providers from treating Medi-Cal beneficiaries and ultimately further strain their access to care.

5 Page 5 Physician practices are strained to keep up with the surge in Medi-Cal enrollment that has come in recent years. Nearly 30 percent of the California population 11.3 million people are now enrolled in Medi-Cal. Participating physicians are being asked to take on more and more Medi-Cal patients, while reimbursement rates remain stagnant. Additionally, administrative pressures and burdens from the demands of managed care, quality/performance rating, and utilization review are making practicing medicine a precarious venture. The percentage of physicians who spend more than one day per week on paperwork increased from 58% in 2013 to 70% in See Terry, Ken, et al., Top 15 challenges facing physicians in 2015, MEDICAL ECONOMICS (Dec. 1, 2014). In particular, physicians spend on average 20 hours per week just dealing with obtaining prior authorization and coverage verifications. Id. In the current practice environment, OHC miscoding not only exacerbates the administrative strain on physician practices, but the disruption can actually impair patient care. Physicians have to explain to dismayed patients why they cannot be seen. The conversation not only takes time away from patient care but can often interfere with the physician-patient relationship. Moreover, patients who are turned away on the day of their appointment due to OHC miscoding are leaving unfilled appointment slots that cannot be given to other patients. Such hassles of dealing with OHC miscoding can give physicians pause when considering accepting more Medi-Cal patients or whether to enroll in Medi-Cal at all. On a grand scheme, the court of appeal s failure to afford procedural protections against OHC errors can impede Medi-Cal beneficiaries access to care. C. The Court of Appeal s Opinion Relegates Medi-Cal Beneficiaries to a Second-Class Health Care System. The court of appeal s opinion will have the effect of segregating those who depend on Medi-Cal for their care from everyone else whose care is provided through private payor sources. Review is warranted for the additional reason that the court of appeal s opinion disserves the purpose of the Medi-Cal program. Congress created the Medicaid program with the express goal of providing health care services for those individuals unlikely to have access to such services on the private market including children, the elderly, those with certain disabilities, and the poor. See, e.g., Medicare and Medicaid, Hearings Before the S. Comm. on Finance, 91st Cong., 2d Sess., pt. I, at 57 (1970) (statement of Hon. John G. Veneman, Under-Secretary, Department of Health, Education, and Welfare). Medicaid was specifically designed to eliminate or at least ameliorate the dual-track system in which those of means

6 Page 6 received medical care from private physicians, whereas those who could not afford such treatment received care in ambulatory clinics and emergency rooms, if at all. See Paul Starr, THE SOCIAL TRANSFORMATION OF AMERICAN MEDICINE (1982). It is no overstatement to say that meaningful access to medical services is the linchpin of the Medicaid program. The court of appeal s opinion, however, will have the effect of impairing access to care for Medi-Cal beneficiaries. As explained, the opinion denies procedural protections against OHC errors that will lead to deleterious delays and disruptions in medical care. By contrast, individuals who enroll with private health insurers and managed care plans benefit from strong legal protections against delays and interruptions in care. State laws and regulations impose geographic provider-patient ratio standards as well as requirements for timely appointments with primary care providers and specialists. See, e.g., Health & Safety Code 1367 and ; Insurance Code ; 28 C.C.R ; 10 C.C.R , Coordination of benefits laws also provide for a systematic and orderly process to determine responsibility for payment when a patient has dual private coverage. See Insurance Code ; 10 C.C.R ; 28 C.C.R These laws reflect a public policy in favor of preserving access to care and continuity of care because substantial delays in medical care can result in real harm to beneficiaries and the entire medical care delivery system. Medi-Cal beneficiaries too need and deserve access to care and continuity of care. Not only are they generally sicker than the general population due to infrequent access to care and other socioeconomic factors, Medicaid law requires that the Medi-Cal program be implemented in a manner such that care and services are available under the plan at least to the extent that such care and services are available to the general population in the geographic area. 42 USC 1396a(a)(30)(a). Similarly, the Centers for Medicare and Medicaid Services ( CMS ) has declared that efforts to reduce ED use [by Medicaid recipients] should focus not on merely reducing the number of ED visits, but also on promoting continuous coverage for eligible individuals and improving access to appropriate care settings to better address the health needs of the population. CMS Informational Bulletin, Reducing Nonurgent Use of Emergency Departments and Improving Appropriate Care in Appropriate Settings, CIB (Jan. 16, 2014) (emphasis added). The court of appeal s opinion frustrates, if not impedes, these Medicaid mandates.

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8 Page 8 APPENDIX (Description of Amicus Curiae Parties) California Medical Association ( CMA ) is a not-for-profit professional association for physicians with nearly 40,000 members. CMA physician members practice medicine in all specialties and modes of practice throughout California, including participating in the Medi-Cal program. CMA encourages physician participation in government health care programs, such as Medi-Cal, in order to ensure that all Californians have adequate access to medically necessary health care services. For more than 150 years, CMA has promoted the science and art of medicine, the care and well-being of patients, the protection of the public health and the betterment of the medical profession. CMA carries out this mission through advocacy on behalf of organized medicine in the courts and before legislatures and regulators. California Academy of Family Physicians ( CAFP ) is the organization family physicians most rely on to advance the personal and professional development of family physicians; assist members throughout their careers with resources and support; analyze and disseminate trends and information to assist family physicians in their practices; and advocate for positions that promote the health of Californians and enhance the role and practice of family physicians collectively and individually. With more than 8,500 members, including active practicing family physicians, residents in family medicine, and medical students interested in the specialty, CAFP is the largest primary care medical society in California. Latino Physicians of California ( LPOC ) is a 501(c)(3), tax-exempt, charitable organization, established in 2011 to address the principal issue that - while Latinos represent the largest ethnic group in California - access to the positive social determinants in life have continued to elude them. LPOC noticed a pattern of inequity across income and poverty; health status and disparity; and educational access, attainment and dropout rates all measurements of well-being and social standing of Latinos. While LPOC s core purpose is rooted, governed and influenced by the needs of Latino physicians, making a difference requires considering what has made them successful, imparting those keys to success to future Latino physicians, and finding ways to support all Latino physicians and their affiliates in the effort to eliminate health disparity, promote and optimize health, and the quality of life for Latinos. Physicians for Reproductive Health ( PRH ) unites the medical community and concerned supporters in advocating for comprehensive reproductive health care, including contraception and abortion, and work to improve access to this care, especially

9 Page 9 to meet the health care needs of economically disadvantaged patients. PRH brings the physician s distinctive voice to debates over reproductive health care and uses scientific expertise and patients real-life experiences to influence legislation, medical practice, and public opinion. PRH advocates for reproductive health as a core part of all medical curricula, and trains doctors to educate their colleagues and other health professionals on best practices in reproductive and sexual health care, offering the strength of the PRH network to physicians all over the world.

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11 SERVICE LIST Michael Keys BAY AREA LEGAL AID 1035 Market St., 6th Floor San Francisco, CA Robert D. Newman Richard A. Rothschild WESTERN CENTER ON LAW AND POVERTY 3701 Wilshire Blvd., Suite 208 Los Angeles, CA Alice Bussiere Maria Ramiu YOUTH LAW CENTER 200 Pine St., Suite 300 San Francisco, CA Lucy Quacinella MULTIFORUM ADVOCACY SOLUTIONS 275 Fifth St., Suite 416 San Francisco, CA Shoshana Krieger NEIGHBORHOOD LEGAL SERVICES OF LOS ANGELES COUNTY Van Nuys Blvd. Pacoima, CA Cheryl Feiner Joshua Sondheimer CALIFORNIA ATTORNEY GENERAL S OFFICE 455 Golden Gate Ave., Suite San Francisco, CA Clerk of the Court CALIFORNIA COURT OF APPEAL First Appellate District, Division Five 350 McAllister Street San Francisco, CA Attorneys for Plaintiffs and Petitioners Maria Marquez et al. Attorneys for Plaintiffs and Petitioners Maria Marquez et al. Attorneys for Plaintiffs and Petitioners Maria Marquez et al. Attorneys for Plaintiffs and Petitioners Maria Marquez et al. Attorneys for Plaintiffs and Petitioners Maria Marquez et al. Attorneys for Defendants and Respondents California Department of Health Care Services Court of Appeal no. A140488

12 SERVICE LIST Hon. Peter J. Busch Department 204 SAN FRANCISCO SUPERIOR COURT 400 McAllister St. San Francisco, CA Hon. Richard A. Kramer Department 303 SAN FRANCISCO SUPERIOR COURT 400 McAllister St. San Francisco, CA Superior Court no. CPF Superior Court no. CPF