California Supreme Court Watch

#21-533 Family Health Centers of San Diego v. State Dept. of Health Care Services, S270326. (C089555; 67 Cal.App.5th 356; Sacramento County Superior Court; 34201880002953CUWMGDS.) Petition for review after the Court of Appeal denied a petition for writ of mandate. This case presents the following issue: Are community outreach service expenses incurred by a qualified health center reimbursable as allowable costs under Medi-Cal as related to patient care, or are they non-reimbursable advertising to increase patient utilization?

Review granted: 11/17/2021

Case fully briefed: 4/12/2022

Cause argued and submitted: 5/09/2023

Opinion filed: Judgment reversed: 7/24/2023

See the Court of Appeal Opinion.

See the Petition for Review.

See the Oral Argument.

See the California Supreme Court Opinion.  (Family Health Centers of San Diego v. State Dept. of Health Care Services (2023) 15 Cal.5th 1.)

“In this case, an FQHC operator seeks reimbursement from the state Medicaid program for the costs of outreach and education activities aimed at Medicaid-eligible patients. The State Department of Health Care Services concluded the costs were categorically nonreimbursable. The Court of Appeal affirmed. We conclude the Department’s conclusion rested on a misunderstanding of relevant legal principles governing the reimbursement of medical provider costs. We therefore reverse and remand for further proceedings.”

Justice Kruger authored the opinion of the Court, in which Chief Justice Guerrero and Justices Corrigan, Liu, Groban, Jenkins, and Evans concurred.