Grier

Defendants and appellants Kenneth Kizer, Director of the Department of Health Services, State of California (Director), and the Department of Health Services, State of California (Department) (sometimes collectively referred to as Department), appeal a judgment granting plaintiff and respondent Dr. Raymond E. Grier’s (Grier) petition for writ of administrative mandamus (Code Civ. Proc., § 1094.5). Grier’s petition successfully challenged an administrative determination that he overcharged the Department. We affirm the judgment.

Summary Statement

The Department used an in-house random sampling and extrapolation method to audit the claims for payment of physicians who were Medi-Cal providers. The Department viewed this method of auditing as consistent with accepted auditing principles and as a rule of internal management; as such, the auditing procedure was exempt from the necessity of promulgating a regulation pursuant to the Administrative Procedure Act (APA). (Gov. Code, §§ 11340 et seq., 11370).

After losing at the administrative level, Grier, one of the physicians, filed a petition for writ of administrative mandamus to challenge the Department’s audit of his claims…