Weinstein v. County of Los Angeles

237 Cal. App. 4th 944, 188 Cal. Rptr. 3d 557, 2015 Cal. App. LEXIS 524
CourtCalifornia Court of Appeal
DecidedJune 17, 2015
DocketB250857
StatusPublished
Cited by13 cases

This text of 237 Cal. App. 4th 944 (Weinstein v. County of Los Angeles) is published on Counsel Stack Legal Research, covering California Court of Appeal primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Weinstein v. County of Los Angeles, 237 Cal. App. 4th 944, 188 Cal. Rptr. 3d 557, 2015 Cal. App. LEXIS 524 (Cal. Ct. App. 2015).

Opinion

Opinion

JOHNSON, J. —

In February 2012, the County of Los Angeles (County) approved a no-bid contract with Ramsell Public Health Rx, LLC (Ramsell), for pharmacy administrator services to assist the County in implementing provisions of the Patient Protection and Affordable Care Act (ACA) (Pub.L. No. 111-148 (Mar. 23, 2010) 124 Stat. 119). After AIDS Healthcare Foundation (AHF) challenged the award of the contract, the trial court invalidated the contract in June 2012. Days later, the County approved another no-bid contract with Ramsell substantially identical to the first contract, but which had a one-year term. AHF challenged the second contract.

The trial court found that an exception in the Los Angeles County Code permitting no-bid contracts where the contract was for personal services of an “extraordinary and technical nature” and where the services were temporary did not apply because the County had not demonstrated any specialized skills were required to administer the pharmacy benefits under the contract; rather, rudimentary computer and organizational skills were sufficient.

On appeal, the County argues that the trial court failed to accord sufficient deference to the County’s conclusion that the exception applied; the contract was exempt from competitive bidding because it was a personal services contract that (1) could not be performed by County employees in the time available, (2) involved services of an extraordinary professional or technical nature, and (3) remedied an emergency situation that required quick action. Finally, the County asserts that voiding the Ramsell contract on the very last day of its term made a mockery of the equitable nature of the mandate remedy. We agree with the County that the trial court failed to accord sufficient deference to the County’s evaluation of its needs for the services of a pharmacy administrator, which could provide the necessary data management and provision of pharmaceuticals to address its needs in implementing provisions of the ACA, and reverse with directions that the trial court enter judgment in the County’s favor.

*949 FACTUAL BACKGROUND AND PROCEDURAL HISTORY

1. The Parties

AHF is a California nonprofit corporation and participant in the state’s Medi-Cal program. AHF provides medicine and advocacy to persons with HIV/AIDS regardless of ability to pay. AHF operates 11 health care centers and pharmacies throughout California primarily serving low-income patients. AHF operates Positive Healthcare, a primary care case management program for Medi-Cal patients with AIDS under a contract with the Los Angeles County Department of Health Services (DHS). AHF is qualified to provide the same pharmacy network administrative services as contemplated on the Ramsell contracts. Michael Weinstein (Weinstein) is the president of AHF.

Ramsell is a California limited liability company located in Oakland, California. Ramsell is an administrator that provides and manages 340B pharmacy programs, 1 provides pharmacy claims processing and adjudication, negotiates and manages contracts between itself and its network pharmacies, provides 340B program administrative services and provides for other related pharmacy benefit administrative services.

The DHS is the County agency responsible for providing certain health services to residents in Los Angeles County and operates hospitals throughout the County.

2. Governing Legal Principles

Los Angeles County Code chapter 2.121, Contracting With Private Businesses, provides that it applies to contracts “with private businesses to perform personal services which are currently performed by county employees, or which could be performed by county employees through the recruitment of additional county personnel.” (L.A. County Code, § 2.121.250, subd. A.) Competitive bidding is designed to “ ‘invit[e] competition, to guard against favoritism, improvidence, extravagance, fraud and corruption, and to secure the best work or supplies at the lowest price practicable.’ ” (Domar Electric, Inc. v. City of Los Angeles (1994) 9 Cal.4th 161, 173 [36 Cal.Rptr.2d 521, 885 P.2d 934].)

As a rule, such contracts are awarded by competitive sealed bidding “unless it is determined in writing by the department recommending the *950 award of a contract that this method is not practicable.” (L.A. County Code, §2.121.320, subd. A.) If the use of competitive sealed bidding is not practicable, “a contract may be awarded by competitive negotiation.” (Ibid.) “A contract may be made by noncompetitive negotiation only when competition is not feasible, as determined in writing prior to award by the department recommending the award of the contract.” (L.A. County Code, § 2.121.350.)

There are two notable exceptions to the competitive bidding requirements of Los Angeles County Code chapter 2.121. Relevant here, Los Angeles County Code chapter 2.121 does not apply in the first instance where, among other things, (1) “[t]he service cannot be performed adequately or competently or satisfactorily by civil service employees and it is impossible to recruit such personnel to perform such service for the period of time such service is needed by the county .' . .”; or (2) “[t]he service is of an extraordinary professional or technical nature and the services are of a temporary nature . . . .” (L.A. County Code, § 2.121.250, subd. B.2., 3.)

3. The Affordable Care Act and Transition of Patients from Ryan White to Low Income Health Plan Based Drug Programs

On March 23, 2010, the federal government passed the ACA (42 U.S.C. § 300gg et seq.), which anticipated the extension of Medicaid coverage in 2014 to over one million previously uninsured California citizens. Under the ACA, beneficiaries needed to be transferred from the Ryan White Comprehensive AIDS Resources Emergency Act of 1990 (42 U.S.C. § 300gg-12 et seq.) (Ryan White), which had provided pharmaceuticals to the Low Income Health Plan (LIHP). The County’s LIHP is known as “Healthy Way LA.” Healthy Way LA provided for the creation of a pharmacy network to expand pharmacy access to patients with HIV/AIDS and to streamline billing and federal reimbursement for health care providers who became part of the network.

In November 2010, in anticipation of the changes made by the ACA, the State Department of Health Care Services implemented a new state Medicaid program known as the “Bridge to Reform.” The Bridge to Reform employed a new Medicaid section 1115 waiver 2 to help the state meet the challenges of enrolling the significant number of patients who were newly eligible under the ACA. In particular, the Bridge to Reform provided for the creation of pharmacy networks that would expand pharmacy access to HIV/AIDS patients. At the time, over 15,000 persons received benefits under Ryan White,

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Cite This Page — Counsel Stack

Bluebook (online)
237 Cal. App. 4th 944, 188 Cal. Rptr. 3d 557, 2015 Cal. App. LEXIS 524, Counsel Stack Legal Research, https://law.counselstack.com/opinion/weinstein-v-county-of-los-angeles-calctapp-2015.