Clark v. Coye

60 F.3d 600, 95 D.A.R. 9373, 95 Cal. Daily Op. Serv. 5489, 95 Daily Journal DAR 9373, 1995 U.S. App. LEXIS 17168
CourtCourt of Appeals for the Ninth Circuit
DecidedJuly 17, 1995
DocketNos. 93-15930, 94-15002, 15276
StatusPublished
Cited by40 cases

This text of 60 F.3d 600 (Clark v. Coye) is published on Counsel Stack Legal Research, covering Court of Appeals for the Ninth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Clark v. Coye, 60 F.3d 600, 95 D.A.R. 9373, 95 Cal. Daily Op. Serv. 5489, 95 Daily Journal DAR 9373, 1995 U.S. App. LEXIS 17168 (9th Cir. 1995).

Opinions

Opinion by Chief Judge WALLACE; Dissent by Judge PREGERSON.

WALLACE, Chief Judge:

Kimberly Belshe, Director of the California Department of Health Services (Department), appeals from the district court’s order enjoining it from implementing section 54 of California’s Senate Bill 35, Welfare & Institutions Code § 14132(h) (1993) (Bill 35). Bill 35 restricts the eligibility of patients to be treated for certain dental procedures under Denti-Cal, California’s program for providing dental care to its low-income population. We have resolved the issue of attorneys’ fees in a separate unpublished disposition. Here we address only the question of whether the district court abused its discretion when it enjoined enforcement of Bill 35 on the ground that it violated a previous permanent injunction issued by the court. We have jurisdiction over this timely appeal pursuant to 28 U.S.C. § 1292. We reverse and remand.

I

In 1965, Congress established the Medicaid program under Title XIX of the Social Security Act, 42 U.S.C. § 1396, as a cooperative federal-state program to provide medical assistance to the needy. To be eligible for federal financial assistance, participating states must administer their programs in accordance with federal guidelines. California participates in Medicaid through the California Medicaid Assistance Program, commonly known as “Medi-Cal” for medical services, and “Denti-Cal” for dental services.

In 1987, class plaintiffs, made up of individuals who received maternity and dental care under Medi-Cal and Denti-Cal, sued the Department, alleging that they were unable to obtain maternity or dental care because the Department failed to comply with federal Medicaid statutes and regulations. In November 1989, the maternity issues were concluded when the district court approved a consent decree that required the Department to provide written notice before reducing the rates for certain maternity services and to sponsor and support proposed legislation authorizing a single global reimbursement rate for maternity services.

The dental care claim proceeded to trial. In October 1990, the district court held that the Department’s reimbursement rate violated the equal access provision of the Medicaid Act, 42 U.S.C. § 1396a(a)(30)(A). Clark v. Kizer, 758 F.Supp. 572, 575-80 (E.D.Cal.1990) (Clark). The equal access provision requires states to set reimbursement rates at a level sufficient to enlist enough providers so that services are available equally to recipients and to the insured general population within a defined geographic area. The district court found that fewer than 40 percent of the licensed dentists in the state treat any Denti-Cal recipients, and that Denti-Cal recipients have a 32 percent utilization rate, compared to the 67 percent utilization rate for the insured general population.

The district court also concluded that the Department’s policies violated the comparability of services provision of the Medicaid Act, 42 U.S.C. § 1396a(a)(10)(B). Id. at 580. This provision mandates that the medical assistance made available to one recipient shall not be less in amount, duration, or scope than the medical assistance made available to other recipients. Although the district court’s October 1990 judgment resolved the liability aspects of these claims, it deferred determination of the appropriateness of injunctive relief. Id. at 581.

The parties elected to proceed before a magistrate judge on the issue of remedies. The magistrate judge allowed the Department to develop a plan, and it proposed to raise its reimbursement rates for 56 primary care procedures from 40 percent to 55 per[603]*603cent of the average amount billed by dentists. The magistrate judge rejected this plan because he concluded that the rate would not be sufficient to bring the Department into compliance with federal law, and ordered the Department to raise the rate to 80 percent of average billing. In an unpublished disposition, we affirmed the judgment of liability, and remanded on the issue of the appropriate rate increase.

The magistrate judge conducted an eviden-tiary hearing and concluded that, after one year of experimentation, the 55 percent reimbursement rate did not increase significantly either the number of active providers or the utilization rate. Therefore, on October 15, 1992, the magistrate judge entered an order reimposing the 80 percent reimbursement rate. The order reserved jurisdiction to modify and to enforce the terms of the judgment and to enter further orders on “any matter related thereto.” The order was affirmed on appeal in an unpublished disposition.

In June 1998, the California legislature enacted Bill 35, a law that changed the eligibility requirements of some adult Denti-Cal recipients for certain dental procedures. Bill 35 provides that Denti-Cal will cover certain dental procedures only if the dentist can document a “medical necessity due to a special medical disorder.” Beginning in July 1993, the Department issued a series of bulletins informing dentists of the new law.

On October 29, 1993, plaintiff class filed a motion for an Order of Contempt, Monetary Sanctions and/or Other Remedies. Plaintiff class alleged that the Department’s implementation of Bill 35 undermined the remedial purpose of the district court’s October 15, 1992, injunction to ensure equal access to dental care, and directly violated paragraphs 5 and 7 of the injunction. On December 8, 1993, the Department moved for modification of the injunction to permit the Department to implement Bill 35.

Paragraph 5 of the injunction requires the Department to reimburse participating providers 80 percent of the average amount billed for certain dental procedures. Bill 35 affected eligibility requirements for 14 of these procedures. Paragraph 7 requires the Department to implement Attachment C of the Department’s compliance plan. Attachment C eliminated x-ray submission requirements, prior authorization, and many documentation requirements for certain dental procedures. Bill 35 affected 7 of the 38 procedures listed in Attachment C. The magistrate judge entered an order on December 17, 1993, which was amended on January 24, 1994. In the order, the magistrate judge stated that the language of the injunction was “specific and unambiguous.” He went on to state: “The court declines to find at this time that the defendant is in contempt of the judgment, but will issue the following order to ensure that the express provisions of the judgment are complied with.” The magistrate judge then ordered, among other things, that the Department cease implementing Bill 35 with respect to the procedures listed in the October 15,1992, injunction. The magistrate judge also summarily dismissed the Department’s motion for modification of the injunction as moot.

II

We begin by recognizing that under the Supremacy Clause, U.S. Const, art. VI, § 2, the Department must follow federal law in the face of conflicting state law.

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Bluebook (online)
60 F.3d 600, 95 D.A.R. 9373, 95 Cal. Daily Op. Serv. 5489, 95 Daily Journal DAR 9373, 1995 U.S. App. LEXIS 17168, Counsel Stack Legal Research, https://law.counselstack.com/opinion/clark-v-coye-ca9-1995.