Robert F. Kennedy Medical Center v. Department of Health Services

— In January 1984, defendant California Department of Health Services (the Department), the agency charged with the administration of the California Medical Assistance Program (Medi-Cal), informed plaintiff Robert F. Kennedy Medical Center (Kennedy), a certified provider of hospital services under the Medi-Cal program, that it owed Medi-Cal $511,258 because of the application of the all-inclusive rate per discharge limit (Cal. Code Regs., tit. 22, § 51536) to the calculation of the hospital’s Medi-Cal reimbursement for the fiscal year ending December 31, 1981. Thereafter, by letter dated March 15, 1984, the Department agreed to defer recoupment of the funds until “the final disposition” of a federal lawsuit commenced against the Department by another hospital. The Department also agreed that no interest would “accrue or be payable by [Kennedy] to the Department on any sums ultimately determined to be due the Department but which were refunded to [Kennedy], not recouped by the Department, or otherwise paid by the Department to [Kennedy] by reason of [the parties’ agreement].”

The federal litigation terminated on December 16, 1992. In a statement of account status letter…