Metropolitan News-Enterprise


Wednesday, May 13, 2009


Page 1


C.A. Denies Medi-Cal Claim, Cites Lawyers’ Lack of Diligence


By SHERRI M. OKAMOTO, Staff Writer


A hospital which provided care to a terminally ill patient is not entitled to reimbursement from the state because the attorneys  representing the patient took too long in having a special administrator appointed for his estate, this district’s Court of Appeal has ruled.

The panel held that the death of Robert Darrough had terminated the authorization of Health Advocates LLP to pursue Medi-Cal benefits on his behalf, and in an April 21 decision ordered published Monday, reversed Los Angeles Superior Court Judge David P. Yaffe’s order allowing Health Advocates to contest the denial of Darrough’s Medi-Cal application.

After Darrough was admitted to Stanford Medical Center in October 2005, he completed an application for Medi-Cal benefits and signed a form appointing Health Advocates as his authorized representative regarding his application.


Health Advocates

Health Advocates, now known as the Leibovic Law Group, described itself in court documents as a law firm representing the hospital with regard to Medi-Cal collections, having contracted with the hospital to assist indigent patients with their Medi-Cal applications.

Darrough died the day after he submitted his Medi-Cal application, which the El Dorado County Department of Social Services later denied.

On March 3, 2006, Health Advocates filed a request for an administrative hearing to appeal the denial. It represented itself as Darrough’s authorized representative and  attached a copy of the authorization form Darrough had signed to its request.

About two weeks later, Health Advocates submitted a form signed by David B. Reil—a friend of Darrough who had durable power of attorney to make health care decisions on Darrough’s behalf—which purported to authorize the firm to challenge the denial of Darrough’s application.


Standing Challenge

Citing several regulations found in the Manual of Policies and Procedures promulgated by the California Department of Social Services providing that only an administrator, executor, or relative of the decedent can file a request for a hearing if the decedent died before such a request could be filed, the county argued that Health Advocates lacked standing to appeal the denial of Darrough’s application.

Health Advocates contended that it had tried unsuccessfully to obtain authorization to request a hearing from Darrough’s mother or cousin before obtaining authorization from Reil. However, it conceded that Reil’s durable power of attorney had expired with Darrough’s death.

The administrative law judge found that Health Advocates lacked standing because Reil was neither an executor, administrator nor relative and that the form signed by Darrough before his death also did not confer standing on Health Advocates to request a hearing.

On June 21, 2006, Health Advocates filed a petition in probate court to have one of its employees appointed as special administrator of Darrough’s estate. The petition was granted June 30, and on July 11, Health Advocates sought a re-opening of its request for a hearing on the denial of Darrough’s Medi-Cal application.

The Department of Health Services denied the request by operation of law, and Health Advocates then sought a writ from the superior court directing the department to grant a rehearing.

Yaffe granted the writ, citing Welfare and Institutions Code Sec. 10950 to support his ruling.

Sec. 10950 provides that an applicant dissatisfied with the response to his application for social services “shall, in person or through an authorized representative…be accorded an opportunity for a state hearing.”


Statutory Language

But Justice Thomas L. Wilhite Jr. explained in his decision for the appellate court that the statute’s use of the present tense “presupposes that the aggrieved applicant is alive at the time the request for a hearing is made, whether made personally or through an agent.”

Noting that the statute does not prevent the filing of a request for a hearing by a legal representative or heir on behalf of a decedent, Wilhite reasoned that neither the applicant’s estate nor the health care provider is left without a remedy when the applicant dies before a hearing can be requested to contest a post-mortem denial of benefits because a representative of the applicant’s estate or one of his heirs can appoint a representative to continue to pursue the application.

He added that the estate or heir must reappoint the representative post mortem because the applicant’s death terminates the agency relationship with the representative.

Wilhite concluded that Health Advocates had not acted with reasonable diligence in securing its reappointment by petitioning to have its employee appointed as a special administrator of Darrough’s estate because it could have filed the appropriate petition before making its request for a hearing.

As Health Advocates had not acted in a timely manner in filing its petition with the probate court, Wilhite declined to find that the appointment constituted new evidence requiring the Department of Health Services to grant a rehearing.

Justices Nora M. Manella and Steven C. Suzakawa joined Wilhite in his decision.

The state was represented by Deputy Attorneys General Leslie P. McElroy and Gala E. Dunn. They could not be reached for comment.

Health Advocates was represented by Aaron J. Leibovic and Stephen Crane.

Crane said of the opinion, “the message is basically if your applicant dies during the process, move as quickly as possible to be appointed as a special administrator,” admitting that “we took too long.”

The case is Smith v. Shewry, 09 S.O.S. 2684.


Copyright 2009, Metropolitan News Company