Belshe

In this appeal from a judgment granting a petition for writ of mandate, we consider the application of Welfare and Institutions Code section 14171 (further undesignated statutory references are to this code), a statute designed to expedite appeals from audits by the Department of Health Services (Department) of claims submitted by institutional Medi-Cal providers. The statute imposes a penalty against the Department for delay in conducting the appeal hearing or in adopting the final decision of the administrative law judge (ALJ). In this case, the trial court found the penalty did apply to the final decisions on two administrative appeals by the institutional provider, San Joaquin General Hospital (Hospital).

The Department appeals, contending the trial court erred because the penalty only applies where the institutional provider has been overpaid, and there was never a determination that the Hospital had been overpaid for the fiscal years in question. We shall affirm in part and reverse in part.

Facts

An overview of the Medi-Cal reimbursement system is necessary to understand and resolve the issues presented in this appeal.

The federal government has instituted a…