and Peder K. BataldenHorvitz & Levy, LLP

20 C~aIifiwnia health Law News

FEDERAL MENTAL HEALTHPARITY ACT REQUIRES ERISAPLANS TO PROVIDE COMPARABLERESIDENTIAL BENEFITS TOPATIENTS SEEKING MENTALHEALTH AND MEDICALTREATMENT

Danny R v. Catholic Health Initiatives,— E3d, 2018 WL 2709733 (9th Cii:June 6,2018)

A self-funded group health benefit plancovering Catholic Health Initiatives’employees and their dependents (thePlan) denied room and board coverage forplaintiff Nicole B., who was admitted to aresidential treatment program for mentalhealth issues. After exhausting the Plan’sadministrative remedies, Plaintiffs broughtan action under ERISA for wrongful denialof benefits. The district court grantedsummary judgment for the Plan, rulingthat the Paul Wellstone and Pete DomeniciMental Health Parity and Addiction EquityAct of 2008 (the Mental Health Parity Act)did not prohibit the Plan from providingcoverage for mental health stays at licensedtreatment facilities that was more restrictivethan coverage for stays at skilled nursingfacilities. Plaintiffs appealed.

The Ninth Circuit reversed, holding thatthe Mental Health Parity Act precluded thePlan from differentiating room-and-boardreimbursements for skilled nursing facilitystays from mental health treatment facilitystays. The Ninth Circuit found the generallanguage of the statute to be”quite clear”in directing that benefits and treatment

limitations for mental health problemsshall be”no more restrictive”than those formedical and surgical problems. The NinthCircuit found no contradiction between itsreading of the Act and the Interim FinalRules, which indicated that mental andmedical/surgical benefits must be congruent,and that limiting the former while notplacing a similar limitation on the latterwould be improper.

HOSPITAL CAN’T SEEKRECONSIDERATION OF DEPT. OFHEALTH DECISION “EFFECTIVEIMMEDIATELY” AND MUST SEEKWRIT RELIEF WITHIN 30 DAYS

Saint Francis Memorial Hospital v.California Department of Public Health(May 23, 2018,A 150545) — Cal.App.5th— [2018 WL 3007483], orderedpublishedJune 15,2018

The California Department of Health finedSt. Francis Hospital $50,000 for lackingappropriate sponge-count policies after asponge was left in a patient during surgery.At a subsequent hearing, an administrativelaw judge found there was no basis forthe fine because St. Francis had adequatepolicies. The Department rejected theAU’s findings and issued a final decisionaffirming the fine”effective immediately’St. Francis sought reconsideration, whichthe Department denied without notifyingSt. Francis that its request was void. St.Francis then filed a petition for writ ofadministrative mandamus. The trial courtsustained the Department’s demurrei ruling

By H. Thomas WatsonHorvitz & Levy, LLP

that (1) because the Department’s decisionwas effective immediately, St. Francis wasnot permitted to seek reconsideration andtherefore its writ petition was untimely(not filed within the 30-day deadline inGovernment Code section 11523), and(2) there was no basis for equitable tollingbecause St. Francis’s untimely filing wasattributable to a mistake of law, rather thana mistake of fact.

The Court of Appeal affirmed, holding thatSt. Francis’s request for reconsiderationdid not extend its deadline for seekingwrit relief Under Government Codesection 11521, the time to requestreconsideration expires on the effective dateof the Department’s decision. Because theDepartment made its decision”eflëctiveimmediately’it eliminated St. Francis’sopportunity to seek reconsideration.St. Francis had waited to file its writpetition until the Department decided itsreconsideration request—4 1 days after the“effective immediately”decision—and thusits petition was untimely. Additionally, thecourt held that equitable tolling did notapply. Such tolling is available when a partywith multiple available remedies pursuesone in a timely manner. Here, however; St.Francis’request for reconsideration was notan available remedy since reconsiderationwas barred by section 11521. Moreover;the Department’s failure to inform St.Francis that its request for reconsiderationwas void (because of section 11521) didnot equitably toll or estop the Departmentfrom asserting the statutory deadlinebecause the Department made no affirmativerepresentations that caused St. Francis’s

mistaken understanding of the law andSt. Francis could not reasonably rely onthe Department to correct its own legalmisunderstandings.

PREEMPTED STATE LAW NOBAR TO COMPELLING AGENCYTO PROCESS REIMBURSEMENTCLAIMS REQUIRED BY MEDICAIDACT

American Indian Health & ServicesCorporation v. Kent (June 19,2018,C081338) _CaLApp.5th — [2018 WL30318221

A group of federally qualified health centers(FQHCs) and rural health clinics (RHCs),filed a petition for writ of mandate seekingto compel the California Departmentof Health Care Services to process theirclaims for retroactive payment for dental,chiropractic, and podiatric servicesprovided to Medi-Cal eligible patients. TheDepartment had withheld payment for theseservices under Welfare and Institutions Codesection 14131.10, which excluded coveragefor these services to the extent permitted byfederal la~ on the basis that they were not“physicians’services”under the MedicaidAct. While the Ninth Circuit in Cal.Ass’nof Rural Health Clinics v. Douglas (9thCir. 2013) 738 E3d 1007 (CARHC) badpreviously ruled that section 14131.10was invalid to the extent it eliminatedcoverage for these services when provided byFQHCs and RHCs, the Department refusedto reimburse Plaintiffs for care providedbefore the date of the CARHC decision.

The trial court granted the petition in part,ruling that the Department had to processand pay for all services provided before theCARHC decision, and had to follow existingregulations governing late claims.

The Court of Appeal affirmed, explainingthat a mandamus proceeding is not barredby sovereign immunity when it seeks tocompel compliance with a mandatoryduty, even if that duty requires the releaseof funds. Since the plaintiffs’petitionmerely sought a process that could lead topayment of qualified claims, and since thejudgment itself did not award damages,sovereign immunity did not bar the action.Additionally, the court held that CARHCapplied retroactively to this and other casesstill pending because it did not declare newlaw but merely interpreted the clear andunambiguous requirement that dental,chiropractic, and podiatric services were“physicians’services”and therefore subjectto reimbursement under the Medicaid Act.Accordingly, the Department should haveanticipated that the Ninth Circuit wouldhold section 14131.10 to be invalid.

RESIDENTIAL CARE FACILITYCANNOT COMPEL ARBITRATIONOF CONSORTIUM CLAIM BYSPOUSE WHO DID NOT AGREE TOARBITRATE

Williams v. Atria Las Posas (June 27,2018, B282513) — CaLApp.5th — [2018WL 3134869]

John Williams was admitted to Atria Las

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Posas, a residential care facility, aftersuffering major brain and other injuriesin an accident. Williams signed Atria’sResidency Agreement, which included anintegration clause but not an arbitrationclause, and then he executed a separatearbitration agreement. Williams’s wife,Vicktoriya Marina-Williams, did notsign either agreement. Shortly after hisadmission, Williams walked away fromAtria and was later found in a ditch witha second brain injury. Both Williamsand Marina-Williams sued Atria and aprimary care physician for negligenceand loss of consortium. Atria petitionedto compel arbitration. The trial courtdenied Atria’s petition, concluding that theResidency Agreement integration clausewas”dispositive”and prevented the courtfrom considering the separate arbitrationagreement.

The Court of Appeal reversed in part,holding that the Residency Agreementsuperseded only prior agreements and notthe arbitration agreement later executed byWilliams and which specifically providedthat it covered claims arising out of theresidency agreement. The court affirmed inpart, holding that Marina-William couldnot be compelled to arbitrate because shedid not sign the arbitration agreementand her loss of consortium claim was notderivative of Williams’s negligence claim.Finally, the court remanded for the trialcourt to determine whether the conditionsof Code of Civil Procedure section1281.2, subdivision (c)—providing a thirdparty litigation exception to arbitration—were satisfied. The court rejected Atria’s

argument that the Federal Arbitration Act(FAA) and not section 1281.2 controlled.The court reasoned that, because theagreement stated that the parties wouldarbitrate under the FAA or California lawin the event a court determined that theFAA did not apply, the agreement did notpreclude application of section 1281.2.

CAUSATION TESTIMONY OFNONRETAINED PHYSICIAN WHOFAILED TO REVIEW MEDICALRECORDS LACKS FOUNDATION

Beffiore-Braman v. Rotenberg (June 26,2018, D072015) — Cal.App.5th [2018WL 3120174], certifiedforpublication July13, 2018

Plaintiff Angela Belfiore-Bramancomplained of sciatic nerve injuryfollowing hip replacement surgery by Dr.Daniel Rotenberg. In Belfiore-Braman’sensuing medical malpractice litigationagainst Di~ Rotenberg, she sought tointroduce medical opinion testimony froma nonretained expert, Dr. Aaron Filler,regarding an imaging study he conductedthat allegedly indicated that the surgerymay have caused her injury. The trialcourt excluded Dr. Filler’s testimony,ruling that it lacked foundation and wasunduly duplicative of Belfiore-Braman’sorthopedic surgeon expert’s testimony.The jury returned a defense judgment, andBelfiore-Braman appealed.

The Court of Appeal affirmed, holdingthat the trial court did not abuse its

discretion in excluding Dr. Filler’stestimony on causation and damages. First,Dr. Filler’s testimony lacked an adequatefoundation because he did not performthe hip replacement surgery and did notreview the operative report or medicalrecords. Additionally, the trial courtproperly excluded Dr. Filler’s profferedtestimony about possible excessive use offorce as cumulative, because plaintiff’sexpert orthopedic surgeon had alreadytestified that the operative report showedthe nerve had been stretched too far duringthe surgery and that this was a substantialfactor in contributing to plaintiff ‘s sciaticnerve injury.

THE FEDERAL TORT CLAIMSACT GOVERNS MEDICALMALPRACTICE CLAIMS, BUTTHE VETERAN’S JUDICIALREVIEW ACT GOVERNS VAADMINISTRATIVE NEGLIGENCECLAIMS

Tunac v. United States (9th Cii:, July 30,2018,No. 17-15021) _E3d_[2018WL 3614044]

Felisa Tunac sued the United States underthe Federal Tort Claims Act (FTCA) forwrongful death and medical malpracticeafter her husband Randy died from kidneyfailure while a patient at a Veterans Affairs(VA) hospital. Although Randy’s bloodtest indicated kidney failure, the VAhospital took three months to schedule abiopsy, which confirmed end-stage kidneydisease requiring dialysis. The VA hospital

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scheduled Randy’s dialysis appointmentfor nearly a month later; but he diedfrom renal failure seven days before theappointment. Two weeks later, the VA senta letter addressed to Randy notifying himthat his kidney disease required immediatetreatment or would result in “end-stagekidney disease or death.”About fourand a half years later; Tunac saw mediareports that gross mismanagement andunacceptable wait times at the VA hospitalhad contributed to preventable veterandeaths. Less than one year later; Tunacfiled an administrative claim with the VA,which it denied. In the ensuing districtcourt action, the court concluded it hadjurisdiction to hear some of Tunac’s claims,but dismissed them as untimely.

The Ninth Circuit affirmed. First itdecided the threshold jurisdiction issue,holding that the portion of Tunac’scomplaint alleged medical negligence byVA healthcare employees was governed bythe FTCA. Accordingly, those claims neednot proceed under the Veterans’JudicialReview Act (VJRA), which requiresthat VA benefits decision be reviewedexclusively by the Veterans Court, whosedecisions are reviewable exclusively by theFederal Circuit. However, to the extentTunac alleged negligence in schedulingappointments and treatment, the NinthCircuit lacked jurisdiction becausesuch allegations did not give rise to areasonable inference that VA medicalprofessionals breached their duty of care,but rather sought relief for administrativenegligence that must be channeled throughVJRA procedures. After confirming its

jurisdiction, the Ninth Circuit determinedthat Tunac’s malpractice claims accruedno later than when she received the VA’sletter explaining the potentially fatalconsequence of delayed treatment, andwere untimely because she initiated heradministrative action well after FTCA’stwo-year limitations period had elapsed.

ADMINISTRATIVE PROCEEDINGSAGAINST THE CMS IS THEEXCLUSIVE MEANS FORASSERTING A SUBSTANTIVECHALLENGE TO REDUCEDMEDICAID REIMBURSEMENTRATES

Santa Rosa Memorial Hospital, Inc. v.Kent (July3l,2018,A151588) _Cal.App.5th — [2018 WL 3629142]

A group of hospitals filed petitions forwrit of mandate against Director ofthe California Department of HealthCare Services (DHCS), seeking to voidthe DHCS’s implementation of statelegislation that reduced the Medicaidreimbursement rate to hospitals that werenot under negotiated rate contracts withthe state, and an award of nearly $100million in additional reimbursements.After the legislation was enacted, theDHCS published notices explainingthe reductions and submitted stateplan amendments incorporating themto the federal agency responsible foradministering Medicaid, the Centers forMedicare & Medicaid Services (CMS),which approved the amendments. The

hospitals’writ petitions argued that theDHCS violated sections 13(A) and 30(A)of the Medicare Act (42 U.S.C. §~1396a(a)(13)(A) & (a)(30)(A)), which set out theprocedural and substantive requirementsthat a state must follow when establishingreimbursement rates. The trial court deniedwrit relief

The Court of Appeal affirmed. First, thecourt held that it had no jurisdiction toconsider the hospitals’challenges to theDHCS’s implementation of rates approvedby the CMS based on the substantiverequirements of section 30(A). Rather;such challenges must be brought exclusivelyin administrative proceedings against theCMS, followed by judicial review of thatagency’s final determination under theAdministrative Procedures Act. The courtexplained that, while a writ of mandatemay compel performance of a ministerialduty, section 30(A) prescribes standardsthat are”so broad and nonspecific that theyare’judicially unadministrable.”Ihe courtthen held that, although the hospitalscould obtain writ relief for violations ofthe procedural requirements of section(1 3)(A), no such violation occurred here.The court rejected the hospitals’contentionthat section 13(A) was violated becausethey had inadequate notice of the statelegislation that approved the reducedreimbursement rates, explaining thatsection 13(A) permits notice of statutoryrate changes after enactment of thelegislation but prior to the effective dateof the rate change by the DHCS, which iswhat occurred here.

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ONLY EGREGIOUSUNDERSTAFFING SUPPORTSELDER ABUSE LIABILITYAGAINST NURSING FACILITY

Cochrum v. Costa Victoria Healthcare,LLC (July 12, 2018, G052934) — Cal.App.Sth — [2018 WL 3751397], orderedpublishedAugust 8,2018

Harvey Cohoon resided at a skillednursing facility while he underwent cancertreatment. After he was observed havingdifficulty swallowing, he was placed ona restricted diet, but this change was notcommunicated to the kitchen. During hisnext meal, Cohoon aspirated on his foodand ultimately passed away. His next ofkin filed suit against the facility for elderabuse, negligence, and wrongful death.The jury returned a verdict for plaintiffon all three counts. The trial courtgranted defendants’motion for judgmentnotwithstanding the verdict on the elderabuse claim, concluding that there wasinsufficient evidence of recklessness. Thetrial court also concluded that MICRAhcap on noneconomic damages applied tothe nursing facility, but not its parentcompany. Both sides appealed.

The Court of Appeal affirmed. As to theelder abuse claim, the court first notedthat plaintiff failed to show the nursingfacility was reckless in its care. Plaintiffpointed primarily to understaffing at thefacility as proof of recklessness, but thecourt noted that the facility met the legallyminimum staffing level, and that therewas no evidence that staff shortages had

contributed to patient safety issues. TheCourt of Appeal did caution, howevel;that”understaffing could amount torecklessness if it is sufficiently egregious:’Turning to defendants’cross-appeal,the court noted that MICRPis cap onnoneconomic damages applies only to a“health care providei~”While the nursingfacility itself was a health care provider,the administrator from the facility’s parentcompany responsible for understaffingthe facility was not. Thus, MICRA~snoneconomic damages cap applied only tothe portion of the damages award assessedagainst the nursing facility and not to theaward as a whole, which included damagesagainst the parent company for its directnegligence.

WORKER’S CLAIM AGAINSTUTILIZATION REVIEW PHYSICIANMUST BE RESOLVED IN THEWORKERS’ COMP SYSTEM

King v. CompPartners, Inc. (Aug. 23,2018, S232197) — Cal.5th [2018 WL4017874]

Plaintiff Kirk King was prescribed thepsychotropic medication Klonopin byhis treating physician for anxiety anddepression associated with a work-related back injury. Another physician,Di~ Naresh Sharma, later conducted aworkers’ compensation utilization reviewpursuant to Labor Code section 4610,subdivision (a), determined the Klonopinwas medically unnecessary, and decertifiedit. King and his wife then sued Dr. Sharma

and CompPartners, Inc. (Dr. Sharma’semployer) under various tort theories,seeking damages for seizures caused by theimmediate withdrawal of the Klonopin.The trial court sustained a demurrerwithout leave to amend, ruling that theKings’claims were preempted by theWorkers’CompensatiOfl Act (WCA) becausethey arose out of a utilization reviewdecision. The Court of Appeal affirmed theorder sustaining the demurrer but reversedthe denial of leave to amend, finding thatthe exclusivity provisions of the WCA didnot apply to the extent King complainedof Dr. Sharma’s failure to warn Kingof the adverse consequences of abruptlystopping Klonopin.

The Supreme Court granted review,holding that the trial court’s ordersustaining the demurrer should beaffirmed in full. The Court explained thatCalifornia’s workers’compensatiOn systemprovides the exclusive remedy not only forworkplace injuries but also for injuries“collateral to or derivative of”workplaceinjuries. Because the Kings’alleged injuriesderived from a compensable workplaceinjury, their claims fell within the scopeof the workers’cornpensatiOn bargain.Even though the Kings sought damagesagainst a third-party utilization revieworganization and its employees—insteadof the claimant’s employer—the Courtheld the WCA exclusive remedy ruleapplied because utilization reviewers arealter egos of employers for purposes ofpreemption. The statutory provisionsgoverning utilization review, viewed inthe broader context of the WCA, evince

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the Legislature’s intent that the workers’compensation system encompass alldisputes concerning utilization review,whether they result from actions takenby the employer; the employer’s insurer,or by a third-party utilization revieworganization hired to handle the reviewfor an employei: Finally, the Courtacknowledged that the exclusive remedyrule does not bar a tort claim basedon conduct that was”so extreme andoutrageous that’the defendant’in effectstepped outside of its role’ as contemplatedby the worker’s compensation scheme.”However, that exception did not apply here,even though the Kings had pleaded a claimfor intentional infliction of emotionaldistress against Di~ Sharma.

QAWI ORDER—COMPELLINGINVOLUNTARY MEDICATIONOF MENTALLY DISORDEREDOFFENDER—DID NOT VIOLATECONSTITUTIONAL RIGHTS

California Department of State Hospitalsv. A.H. (Sept. 21, 2018, B286187) — Cal.App.5th [2018 WL 4519929]

Mental health professionals at a statehospital prescribed antipsychoticmedication to A.H., a mentally disorderedoffender whose mental disorders regularlyresulted in violent outbursts againsthimself and others. A.H. objectedto the medication, claiming that hisreligion—in which he was the soleprophet and worshiper of the deityZahara—prohibited him from taking any

synthetically manufactured medication.The hospital conducted two administrativeproceedings, which confirmed that theantipsychotic medication was required.A.H. unsuccessfully petitioned the superiorcourt for writ relief. The trial courtruled that, under In re Qawi (2004) 32Cal.4th 1, the hospital was authorized toinvoluntarily administer medication totreat a dangerous or incompetent mentallydisordered offender; and substantialevidence supported the hospital’sadministrative decision to medicate A.H.A.H. appealed, contending the Qawi orderwas not supported by substantial evidenceand that it violated his First AmendmentFree Exercise and Due Process rights.

The Court of Appeal affirmed. First,A.H’s long history of violence andpsychotic episodes were substantialevidence supporting the trial court’s Qawiorder. Second, A.H.’s Free Exercise claimwas not supported by credible evidencethat his religious beliefs were genuine.He personally and recently wrote thereligious teachings specifically to supporthis claim, and his newly found religiousinsight was inconsistent with his voluntarypractice to take another syntheticantipsychotic medication. Further; thestate had a compelling interest in caringfor the mentally incompetent offender andpreventing him from hurting himself orothers. Finally, A.H.’s Due Process claimfailed because the hospital followed theestablished statutory, administrative, andcase law authority in obtaining the Qawiorder.

PROVIDERS SEEKING STATE-LAW WRIT RELIEF IN FEDERALCOURT TO COMPEL COMPLIANCEWITH MEDICAID ACT MAY SEEKATTORNEY FEES UNDER STATELAW

Indep. Living Ctr. of So. Cal., Inc. v. Kent,— E3d_, 2018 WL 6072624 (9th Cii:Nov.21, 2018)

In 2008, California enacted legislationthat reduced the Medi-Cal reimbursementrate for healthcare providers by 10 percent.A group of healthcare industry advocatesand providers filed a petition for a writof mandamus in state court against theDirector of the California Departmentof Health Care Services, alleging that thereduction violated the federal MedicaidAct. The Director removed the case tofederal court because it presented a federalquestion. Ultimately, the case settledfavorably for plaintiffs, who moved forattorneys’ fees under California’s PrivateAttorney General statute—Code of CivilProcedure section 1021.5.The districtcourt denied the motion, ruling that statelaw on attorney’s fees should not apply toan action involving federal claims.

The Ninth Circuit reversed, explaining thatthe plaintiffs did not assert a federal claimbecause the Medicaid Act did not authorizea private right of action. Instead, theirclaim arose under state law—specifically,California Code of Civil Procedure section1085, which permits”any court”to issue awrit compelling state agencies to performacts prescribed by law. The Court noted

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the peculiarity that the defendants hadremoved a state-law claim under federalquestion jurisdiction. The state-lawcharacter of the plaintiffs’claim did notbecome federal merely because they soughtto compel the defendants’compliance withfederal law and a federal court exercisedjurisdiction. Concluding that applyingstate law was also consistent with the Eriedoctrine, the Ninth Circuit held that thedistrict court should have applied the state-law statute to determine whether plaintiffswere entitled to an attorneys’fees award.

NURSING LICENSE APPLICANT’SSHOPLIFTING CON DUCTENTITLED NURSING BOARDTO RESTRICT LICENSE EVENTHOUGH HER SHOPLIFTINGCONVICTIONS COULD NOT BECONSIDERED

Moustafa v. Bd. of Registered Nursing(Dec. 10,2018,No.A150266) __Cal.App.5th — [2018 WL 6444019]

Radwa Mohamed Moustafa applied tobecome a registered nurse. She disclosedon her application to the California Boardof Registered Nursing that she had fourmisdemeanor convictions previouslydismissed under Penal Code section 1203.4upon completion of probation. The Boardgranted her only a probationary license.Moustafa petitioned the trial court for awrit of administrative mandate to removethat restriction on her license. The trialcourt granted the petition, ruling thatthe probationary license violated Business

and Professions Code section 480(c)’sprohibition against denying or restrictinga license based on convictions dismissedunder Penal Code section 1203.4.

The Court of Appeal reversed, holdingthat even if section 480(c) prohibitedrestricting a license based on a dismissedconviction, the Board could still restricta license based on the conduct underlyingthe conviction. (The court noted a recentamendment to section 480(c) that prohibitsthe Board from relying on underlyingconduct as well, but explained that theamendment won’t take effect until 2020.)The court explained that probationarylicenses are appropriate where theapplicant’s conduct was “unprofessional”and “substantially related to the practiceof nursing~’Because Moustafa’s recentconvictions involved shoplifting, the courtheld the standard was satisfied:”nurseshold positions of extreme trust and haveaccess to the property of others.”

PROSECUTOR PETITION1NGFOR CIVIL COMMITMENT OF ASEXUALLY VIOLENT PREDATORMAY OBTAIN MENTAL HEALTHTREATMENT RECORDS ANDSHARE THEM WITH A RETAINEDEXPERT

People v. Superior Court (Smith) (Dec.13,2018, No. S225562) — Cal.5th~[2018 WL 6564828]

Under the Sexually Violent PredatorsAct, an individual designated as a sexually

violent predator (SVP) may be subjectto civil commitment. The designationis determined in a trial, where thegovernment relies upon evaluations frommental health professionals chosen by theState Department of State Hospitals.

In this case, after protracted litigationdelays, the district attorney who hadoriginally petitioned to commit Smith as aSVP more than a decade earlier requestedan updated mental health evaluationand sought an order permitting the DP~sretained expert to review the Departmentevaluation and related documents. Thetrial court denied the request. The Courtof Appeal granted the DA~s petition forwrit relief, explaining that the DA alreadyhad”lawful possession”of the documentsunder the Act and the government’sinterest in protecting the public from SVPsoutweighed Smith’s privacy interest in thedocuments.

The Supreme Court granted review andaffirmed. The Legislature had amendedthe Act two years earlier to clarify thatevaluation records “shall be provided tothe attorney”filing a SVP petition. TheCourt rejected Smith’s contention that theamendment could not retroactively applyto permit the DA to review his earlierevaluations, explaining that the earlierdocuments were used in connection withSmith’s updated or replacement evaluationsand therefore fell within the scope ofdocuments the statute permitted the DA toreview. The Court further held that the Actpermits the DA to share the confidentialmental health evaluation records with his

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retained expert. According to the Court,the Act allows attorneys for both sides to“use the records in proceedings”under theAct, which necessarily encompasses expertwitness evaluation of the confidentialmental health documents.

HEALTH CARE EMPLOYEES WHOWORK MORE THAN 12 HOURS PERDAY MAY WAIVE THEIR SECONDMEAL BREAK

Gerard v. Orange Coast MemorialMedical Center (Dec. 10, 2018, No.S241655) — R3d__ [2018 WL6442036]

Labor Code section 512 requires employersto provide a second meal period toemployees working more than ten hours.Section 512 also prohibits employeesworking more than twelve hours fromwaiving this second meal period. Soonafter section 512 was enacted, theIndustrial Welfare Commission (IWC)issued Wage Order 5, which allows healthcare workers working more than twelvehours to waive their second meal period.After the IWC adopted Wage Order 5, theLegislature enacted a law mandating thatall new Wage Orders comply with section512.

In this case, health care workers whooften worked more than twelve hours perday sued their employer for permittingthem to waive their second meal period,claiming that it violated section 512 andthat they were entitled to unpaid wages.

While the litigation was pending, theLegislature again amended the Labor Codeto authorize Wage Order 5.The Court ofAppeal then held that the employer’s policyof allowing a second meal period waiverwas permissible.

The Supreme Court granted review andaffirmed, holding that Wage Order 5permits health care workers working morethan twelve hours per day to waive theirsecond meal period. The Legislature’s mostrecent amendment was not retroactive,meaning that it applied only to newWage Orders adopted after Wage Order5. Because the Legislature had previouslygranted the IWC authority to issue anyorder consistent with worker healthand welfare—”notwithstanding anyother provision of law”—Wage Order5 (allowing second meal period waiver)remained in effect.

PLAINTIFFS SEEKING NOMINALSTATUTORY DAMAGES UNDERTHE CONFIDENTIALITY OFMEDICAL INFORMATION ACTMAY DEMAND A JURY TRIAL

Brown v. Mortensen (Jan. 3,2019, No.B281704) Cal.App.5th_ [2019WL 92023]

Patient Robert Brown owed a debt tohis dentist. The dentist referred the debtto a collection agency owned by StewartMortenson, which allegedly transmittedconfidential medical information to severalconsumer credit reporting agencies.

Brown sued Mortenson for violating theConfidentiality of Medical InformationAct (CMIA) (Civ. Code, §~ 56 et seq.). Thetrial court denied Brown’s request for ajury trial on his CMIA claims for nominalstatutory damages and attorney fees.

The Court of Appeal reversed in part,holding that the state Constitution affordsa right to a jury trial in actions seekingnominal statutory damages under theCMIA. The court noted that a jury trialright exists for actions arising “at law”and that penalties—the essential functionof CMIA statutory damages—werehistorically recovered through legal, ratherthan equitable, actions. The court affirmedas to attorney fees because there is no rightto trial (let alone a jury trial) on fees underthe CMIA. The CMIA permits attorney feesas incidental relief to a prevailing plaintiff(rather than as damages), so plaintiffs mustseek them by posttrial motion.

EXPERT’S CONCLUSORYDECLARATION REGARDINGMEDICAL CAUSATION ISINSUFFICIENT TO PREVENTSUMMARY JUDGMENT

Fernandez v. Alexander (Jan. 28,2019,No. B283949) _Cal.App.5th [2019WL 336517]

Plaintiff Victoria Fernandez soughtmedical treatment for a fractured wristfrom Dr. Charles Alexandei an orthopedicsurgeon who recommended placing thewrist in a cast. Fernandez later sued Dr.

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Alexander for professional negligence,alleging that her wrist was in worsecondition after the cast was removed, andthat Dr. Alexander negligently failed torecommend and perform surgery on herwrist. Dr. Alexander moved for summaryjudgment, relying on the declarationof a medical expert who opined thatnothing Dr. Alexander did or failed todo caused any harm because either courseof treatment (a cast or surgery) mightrequire more surgery. Fernandez opposedthe motion, relying on the declarationof a medical expert who opined that Dr.Alexander breached the standard of careby not recommending surgery, whichcaused further deformation of Fernandez’sfractured wrist. The trial court grantedsummary judgment, ruling thatFernandez’s expert opinion evidence wastoo conclusory and speculative to create atriable issue regarding medical causation.Fernandez appealed.

The Court of Appeal affirmed. First, thecourt held that Dr. Alexander satisfied hisburden of making a prima facie showingthat Fernandez could not establishcausation. The court then held thatFernandez failed to produce a competentexpert declaration to the contrary. Thecourt explained that Fernandez’s expertdeclaration regarding causation was abarebones statement: it did not explainhow Dr. Alexander’s specific actionsresulted in the injury or how an initialsurgery would have produced a betteroutcome. Accordingly, the trial courtproperly granted summary judgment.

HOSPITAL LIABLE FOR DAMAGESFOR INDUCING PHYSICIAN’SMEDICAL GROUP NOT TOSCHEDULE HIM FOR WORKWITHOUT AFFORDING PEERREVIEW RIGHTS

Economy v. Sutter East Bay Hospitals(Feb. 4, 2019,A150211,A150738,A 150962) — Cal,App.5th — [2019 WL422346]

Dr. Kenneth Economy was employedby East Bay Anesthesiology MedicalGroup, which had a contract to provideall anesthesia services at Sutter East BayHospital. At an unannounced inspection,the California Department of PublicHeath found that Dr. Economy wasresponsible for numerous deficienciesregarding the use of the drug Droperidol,which placed patient safety at risk andjeopardized the hospital’s credentials. Aftercompleting a continuing education coursemandated by the hospital’s anesthesiologypeer review committee, Dr. Economy wasreinstated with monitoring. A pharmacymanager then found that Dr. Economyrepeatedly violated the hospital’s policyfor administering medication. A hospitalexecutive spoke to the medical group,which again took him off the anesthesiaschedule. The medical group told Dr.Economy he could not return to thehospital and asked him to resign. Whenhe refused to resign, the medical groupterminated him.

Dr. Economy sued Sutter, contendingit violated his right to notice and a

peer review hearing under Business andProfessions Code section 809 et seq. andhis common law due process rights underAnton v. San Antonio Community Hospital(1977) 19 Cal.3d 802. Dr. Economyprevailed at a bench trial. The courtfound that Sutter was required to providehim with a formal notice of charges andpeer review and appellate process beforeremoving him from the anesthesia schedule.The court awarded Dr. Economy nearly $4million in damages for lost past and futureincome. Sutter appealed the judgment andthe Di~ Economy cross-appealed the denialof his motion for fees and costs.

The Court of Appeal affirmed thejudgment for Dr. Economy, holding thatSutter violated his statutory and commonlaw rights to notice and peer review bydirecting his employer to remove himfrom the schedule. The court rejected thehospital’s argument that no peer reviewwas required because it never formallyrescinded Dt Economy’s privileges, andthat the medical group rather than thehospital terminated Dr. Economy. Thecourt explained that, if Sutter’s argumentwere accepted, Dr. Economy’s”right topractice medicine would be substantiallyrestricted without due process and, despitethe hospital’s concern that plaintiff wasendangering patient safety, the statelicensing board would never be notified.”Moreover, “the hospital’s decision notto accept any [anesthesiologist] scheduleon which [Dr. Economy] was includedeffectively prevented [Dt Economy] fromexercising clinical privileges at the hospitaland engaging in the practice of medicine’

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and was therefore”the functionalequivalent of a decision to suspend andlater revoke [Dr. Economy’s] clinicalprivileges.”

The court affirmed the award of lostincome, rejecting Sutter’s argumentthat Di~ Economy was required to provethat he would have prevailed at a peer-review hearing had one been held. Thecourt stated that, at most, Sutter mayhave had an affirmative defense to DnEconomy’s damages claim, but it failedto establish that Dr. Economy would nothave prevailed at a properly noticed peerreview proceeding. The court neverthelessrejected Dt Economy’s cross-appeal forfees and costs, finding that Sutter’s defensewas”not frivolous, unreasonable, withoutfoundation, or in bad faith~’

MEDICAL BOARD MUSTDEMONSTRATE GOOD CAUSEFOR PRODUCTION OF MEDiCALRECORDS THAT OVERCOMESPATIENT PRIVACY RIGHTS

Grafilo v. Cohanshohet (Jan. 22,2019,B285193) — Cal.App.5th — [2019 WL764036]

The Medical Board of California receivedan anonymous complaint alleging thatDr. Kamyar Cohanshohet was prescribingexcessive narcotics to his patients. Afterobtaining a report from the ControlledSubstance Utilization Review andEvaluation System (CURES) identifyingthe amount of controlled substancesDi~ Cohanshohet prescribed, a Board

investigator identified five patients whowere possibly prescribed excess doses. Thepatients refused to release their medicalrecords. Dr. Cohanshohet asserted hispatients’privacy rights and refused tocomply with a subpoena to turn them over.The Board then filed a petition seekingan order compelling production of therecords.

At a hearing, the Board presented theCURES report and evidence that the fivepatients were individually prescribedmedications that exceeded normalacceptable doses, and argued thattheir medical records were necessaryto determine if Dr. Cohanshohet hadperformed adequate medical examinationsand obtained proper informed consentfor these high-dose prescriptions. Inopposition, Dt Cohanshohet presentedevidence that the standards relied uponby the Board were not in effect whenprescriptions were issued and were merelyguidelines inapplicable to the cancertreatment, palliative care, and end-of-lifecare patients that Di~ Cohanshotet treated.The trial court granted the petition andDr. Cohanshohet appealed.

The Court of Appeal reversed, explainingthat the Board must demonstrate goodcause to compel the production ofmedical records that overcomes patients’significant privacy interests. In balancingthe Board’s showing against the patients’privacy interests, the court noted theBoard presented no evidence that Di~Cohanshohet failed to properly examine ordiagnose his patients, or that his practice

deviated from similarly situated doctors.The court concluded that, absent suchevidence, the Board had failed to establishgood cause.

HEALTH INSURER MAY INCLUDEOUT-OF-NETWORK PAYMENTS iNDETERMINING ITS ACA MEDiCALLOSS RATIO

Morris v. California Physicians’ Service,E3d ,No. 17-55878,2019WL

1233466 (9th Cii: Mat 18,2019)

The Affordable Care Act requires insurersto calculate a Medical Loss Ratio (MLR),which is the ratio between its paymentsfor medical services and its revenues. Theinsurer must pay a rebate to its enrolleesif its payments for medical servicesare less than 80% of its revenues. BlueShield had mistakenly included out-of-network physicians in its directory ofin-network physicians, causing enrolleesto see out-of-network physicians andpay higher rates. Blue Shield agreed toreimburse the enrollees for the higher costof the out-of-network physicians, and itincluded those reimbursement paymentsin its annual MLR calculation. A classof enrollees sued Blue Shield for payingan insufficient rebate, arguing that BlueShield improperly inflated its MLR byincluding the settlement payments. Theenrollees argued the MLR should includepayments to in-network providers only. Thetrial court dismissed this claim, reasoningthe MLR could include payments to outof-network providers.

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The Ninth Circuit affirmed. Neither thetext of the Affordable Care Act nor itsimplementing regulation distinguishesbetween in-network and out-of-networkproviders for purposes of the MLRcalculation. Further, the purpose of theMLR was to incentivize insurers to makepayments for medical services, an outcomethat is achieved by including all paymentsin the MLR calculation, regardless ofnetwork coverage.

MiCRA NOTICE OF INTENTTO SUE DOES NOT TOLLGOVERNMENT CLAIMS ACTDEADLINES

Plaintiff Jamie Harper was allegedlyinjured during a surgery at the ModocMedical Centei; a public entity. Almost ayear latei; her counsel sent Modoc noticeof intent to sue, as required by MICRA.(See Code Civ. Proc., § 364.) Modoc treatedthe notice as a government claim, andrejected it as untimely. (See Gov. Code, §911.2, subd. (a) [notice of claim must besubmitted within 6 months after the causeof action accrues].) Harper submitted anapplication for leave to file a late claim,which expressly acknowledged that herclaim had accrued nearly 14 monthsearlier but asserted that the tardinesswas excused because her counsel did notknow that Modoc was a public entity.Harper then sued Modoc for medical

malpractice. Modoc denied Harper’s lateclaim application on the ground it wasuntimely. (Gov. Code, § 911.4, subd. (b)[late claim applications must be filed within1 year after accrual].) Harper petitionedthe superior court for writ relief. (Gov.Code, § 946.6, subd. (c) [trial court maygrant relief from denial of timely lategovernment claim application].) The courtgranted Harper’~ petition, ruling thather tardiness was due to excusable neglectand that her initial notice of intent to suetolled the deadline for seeking leave to filea late claim under the rationale of Woodv.Young (1991) 53 Cal.3d 315 [medicalmalpractice statute of limitations tolled byservice of notice of intent to sue]. Modocsought writ review.

The Court of Appeal granted writ relief,holding that Harper’s notice of intent tosue did not toll the jurisdictional deadlinesunder the Government Claims Act. Anotice of intent to sue tolls the statute oflimitations for medical malpractice claims,which is distinct from the GovernmentClaims Act requirements. Because Harperfailed to present her written claim toModoc within a year after its accrual, thetrial court lacked jurisdiction to providerelief under Government Code section946.6.

MED1CAL BOARD DOESN’T SHOWGOOD CAUSE TO SUBPOENAPATIENT MEDICAL RECORDSIN INVESTIGATION OF PAINMANAGEMENT SPECIALIST

Grafilo v. Wolfsohn (April 2,2019, No.BS171234) Cal.App.Sth — [2019 WL1450733]The Department of Consumer Affairs(DCA), which oversees the Medical Board,investigated whether Dr. Marc Wolfsohn,a pain management specialist, wasoverprescribing opiate painkillers. Basedon a report from the Controlled SubstanceUtilization Review and Evaluation System(CURES), investigators identified fivepatients who may have been prescribedexcessive doses. The DCA served a subpoenaduces tecum on Dr. Wolfsohn to producemore than two years of medical recordsfor the five patients. After Dr. Wolfsohnobjected on patient privacy grounds,the DCA secured an order compellingproduction. Dr. Wolfsohn appealed.

The Court of Appeal reversed, holdingthat the DCA had failed to demonstrategood cause for overriding the patients’privacy rights. The court explained that“the Medical Board must demonstratethrough competent evidence that theparticular records it seeks are relevantand material to its inquiry sufficientfor a trial court to independently makea finding of good cause to order thematerials disclosed~’ Here, DCA~s evidencewas inadequate because it failed to show“how many patients [Dr.] Wolfsohntreats, the percentage of his patients

Last Frontier Healthcare Dist. v. SuperiorCourt ~March 26,2019, No. C087953) —

Cal.App.Sth [2019 WL 1349491]

211 ~ I

the five patients comprised, how oftensimilarly-situated pain managementspecialists might prescribe the drugs [Dr.]Wolfsohn prescribed, or the likelihood[Dr.] Wolfsohn properly issued theprescriptions.” The DCA failed tocontradict Wolfsohn’s expert’s declarationthat”the prescriptions are’not outside ofacceptable’levels for a pain managementspecialist.” The DCA also tried and failedto distinguish Grafilo v. Cohanshohet(2019) 32 Cal.App.5th 428, where it hadlikewise failed to establish good cause forcompelling production of medical recordsbecause it was reasonable to assume thatat least some patients required medicationexceeding recommended dosages.

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