Need for Medi-Cal Cutoff Notice Upheld : Court Also Rules Benefits Must Be Paid While Action Is Appealed

SAN FRANCISCO —  The state Medi-Cal program must give 10 days’ notice before cutting off benefits and continue funding during a recipient’s appeal, an appellate court ruled.

In a 3-0 decision issued Friday, the 1st District Court of Appeal said the state is violating longstanding federal regulations by notifying only patients in long-term care and some cancer and kidney patients before their Medi-Cal benefits are reduced or eliminated.

A Medi-Cal official has estimated that it would cost the state over $90 million a year to continue benefits for all patients while they appealed cutoffs, a figure that lawyers for the patients called speculative and unfounded.

“Cost-consciousness must not take precedence over the legitimate medical needs of the recipient for continued services,” said Presiding Justice Harry Low in the ruling. He said the state should ask the federal government to change its rules if they incur unneeded costs.

Appeal Expected

Deputy Atty. Gen. John Klee said he expects the state to appeal the ruling to the state Supreme Court.

“They (the court) are asking us to do the impossible,” he said, noting that most hospital stays last far less than 10 days.

He also said the state Department of Health Services, which runs Medi-Cal, has followed the same procedures for more than 20 years and has never been told by the federal government that it was violating any rules.

The suit was filed in Alameda County on behalf of two women, from Berkeley and Orange County, whose Medi-Cal benefits were cut off without notice.

Laurie Frank, 47, of Berkeley had been taking oxygen at home for four years under Medi-Cal for an extreme allergic condition called severe chemical hypersensitivity. The state notified her on Aug. 3, 1988, that her benefits had been eliminated two days earlier.

She appealed and ultimately won retroactive benefits to last January. Before then, Frank said, she had to pay the $380-a-month oxygen bill by taking money from her $575 monthly aid to the disabled check and by cutting back on food.

Marguerite Cronin, 81, of Stanton was being treated for a lung condition and a stroke at a Long Beach hospital last October when the state discontinued her Medi-Cal. A court order prevented the hospital from evicting her, and the state restored her benefits when her condition worsened three weeks later.

Her son and guardian, John Cronin, said that the state did not notify the family of the cutoff and that a hospital representative improperly told him that he had no right to appeal.

Alameda County Superior Court Judge Dawn Girard ruled in the women’s favor and ordered the state to follow the federal regulations. Her order took effect in June.

The appeal court, upholding most of Girard’s ruling, said the state was violating federal regulations dating from the early 1970s that require 10 days’ written notice before elimination or reduction of medical aid.

The rules require the state to continue paying aid if a recipient appeals a cutoff, the court said. They also require the notice to say why the benefits are being stopped and mention the right to a hearing.

Medi-Cal rules permit reduction or elimination of aid when a physician consultant for the state decides treatment is no longer necessary, and the rules are frequently applied. In a recent year, according to medical officials, payment was denied for 153,000 patient days of acute care in hospitals statewide.

The court rejected the state’s argument that federal regulations require notice and continued aid only if a cutoff would threaten severe harm or death to the patient.

The federal government has interpreted its regulations as covering all types of medical cases, and the courts should defer to that interpretation, Low said in the ruling.