MedImpact Healthcare Systems v. Cal. Dept. of Health Care Services CA4/1

INTRODUCTION

By executive order, Governor Newsom directed the Department of Health Care Services (DHCS or the Department) to transition all Medi-Cal pharmacy benefits and services from managed care to a fee-for-service system. As a result, DHCS solicited bids to award a multi-million dollar public contract⎯the Medi-Cal Rx contract⎯to a qualified company to service the takeover, operation, and eventual turnover of the administration of the Medi-Cal pharmacy fee-for-service system. The Department issued a Request for Proposal (RFP) and, after a multiple stage evaluation process, it awarded the Medi-Cal Rx contract to Magellan Medicaid Administration, Inc. (Magellan), who received the highest total score of the five proposals submitted. Appellant MedImpact Healthcare Systems, Inc. (MedImpact), one of the unsuccessful bidders, petitioned for writ of mandamus in the superior court to vacate the award of the contract to Magellan. The trial court denied the petition, finding the Department’s decision was not arbitrary, capricious or entirely lacking in evidentiary support. On appeal, MedImpact asserts the court applied an overly deferential standard of review and should have directed…