Maxwell-Jolly

California Hospital Association (CHA), a trade association representing the interests of California hospitals, appeals from the denial of its petition for writ of mandate (Code Civ. Proc., § 1085), challenging the manner in which the State Department of Health Care Services (the Department) has been paying hospitals that operate distinct part nursing facilities (DP/NF’s) under California’s Medicaid program, known as Medi-Cal. CHA claims the Department violated state and federal law, by imposing two separate limitations on the reimbursement rates for skilled nursing services rendered by DP/NF’s to Medi-Cal beneficiaries. We reverse.

L BACKGROUND

A. Statutory Framework

1. Federal Law

Medicaid is a cooperative federal-state program through which the federal government provides financial assistance to states so that they may furnish medical care to needy individuals. ( 42 U.S.C. § 1396 ; Wilder v. Virginia Hospital Assn. (1990) 496 U.S. 498, 502 [ 110 L.Ed.2d 455 , 110 S.Ct. 2510 ]; Mission Hospital Regional Medical Center v. Shewry (2008) 168 Cal.App.4th 460, 469 [ 85 Cal.Rptr.3d 639 ] (Mission Hospital).) Although state participation is voluntary, if a state chooses to…