PROVIDERS
CANNOT ENFORCE MEDICAID SINGLE STATE AGENCY REQUIREMENT
In San Lazaro
Association, Inc. v. Connell (2002) 02 CDOS 634, a joint state and the FBI
investigation, utilizing an audit from the state Controller, identified
fraudulent Medi-Cal payment requests from a number of health care
providers. The state Department of Health Services (DHS) then instructed
the Controller to withhold Medi-Cal payments to the providers. The
providers sought an injunction in federal court to prevent the withholding
on the ground that the delegation of authority by DHS to the Controller to
withhold payments violated the requirement in the federal Medicaid Act
that a single state agency administer the state’s Medicaid program, and
that the providers had a right under the Act to enforce the single state
agency requirement.
The Ninth
Circuit held that the Medi-Cal providers did not have a right under the
Act to enforce the single state agency requirement because there was
nothing in the Medicaid Act or analogous Social Security Act that
indicated that the single state agency requirement to centralize
administration and supervision of the Medicaid program in the states was
created to benefit providers.
