Marquez v. State Department of Health Care Services (240 Cal. App. 4th 87, 2015)

Opinion

NEEDHAM, J.

Pursuant to federal law, California’s Medi-Cal program requires Medi-Cal beneficiaries to utilize services available through any other health coverage (OHC) they may have before accessing Medi-Cal benefits. To this end, respondent State Department of Health Care Services (DHCS) maintains a database with codes that indicate whether a Medi-Cal beneficiary has OHC and, to some extent, the type or scope of that coverage. These codes are available to Medi-Cal providers when a beneficiary seeks services.

Medi-Cal beneficiaries Maria Marquez, Maricella Rivera, and Robert Planthold (petitioners) sought a writ of mandate in the trial court under Code of Civil Procedure section 1085 to require respondents’ compliance with their duties in administering this and related aspects of the Medi-Cal program. Because DHCS allegedly permits Medi-Cal providers to refuse nonemergency services to beneficiaries with OHC, and because the codes related to OHC are not always correct and the information maintained in the DHCS database is limited, petitioners argued that beneficiaries may be improperly denied service and referred to other health care providers even when, in reality, there is no OHC available for the requested service. As a result, petitioners urged, beneficiaries experience delays in receiving nonemergency care and, in some circumstances, may be subject to a higher copayment than permitted under Medi-Cal. Petitioners contended, among other things, that the assignment of an OHC code should trigger notice and a hearing. The trial court declined to issue a writ.

In this appeal, petitioners claim entitlement to a writ of mandate requiring respondents to (1) comply with Welfare and Institutions Code section 10950 (section 10950) and California Code of Regulations, title 22, section 50951 (regulation 50951) by providing notice and an opportunity for a hearing whenever DHCS assigns a new or different OHC code to a beneficiary; (2) comply with the due process clauses of the California Constitution by providing such notice and opportunity for a hearing; and (3) comply with duties under state and federal law to provide medically necessary services to Medi-Cal beneficiaries when those services are not actually available from OHC, provide such services promptly and humanely, ensure that beneficiaries are not required to pay copayments above those permitted by federal law, and follow “pay-and-chase” procedures for prenatal or pediatric preventive care and for beneficiaries who have medical support orders.

We conclude that neither section 10950 nor regulation 50951 nor the California Constitution requires DHCS to provide a hearing or notice whenever it assigns a new or different code with respect to OHC. We further conclude that petitioners have not established any violation by respondents of a ministerial duty subject to enforcement by a writ of mandate. We therefore affirm the judgment.

I. FACTS AND PROCEDURAL HISTORY

We begin with an overview of California’s Medi-Cal program for context, and then discuss the parties’ factual and legal contentions in this litigation.

A. California’s Medi-Cal Program

Medi-Cal is California’s program under the joint federal-state program known as Medicaid. (Welf. & Inst. Code, § 14000 et seq.) Medicaid provides federal financial assistance to participating states to support the provision of health care services to certain categories of low-income individuals and families, including the aged, blind, and disabled, as well as pregnant women and others. (42 U.S.C. § 1396 et seq.)

Because California has opted to participate in the Medicaid program and receive federal matching funds, it must comply with all federal Medicaid requirements. (Conlon v. Bonta' (2002) 102 Cal.App.4th 745, 753 [125 Cal.Rptr.2d 788] (Conlan).) Among other things, the state must administer its Medicaid program through a plan that has been approved by the federal Centers for Medicare and Medicaid Services (CMS). (See 42 U.S.C. § 1396a; 42 C.F.R. §§430.10, 430.15(b) (2014); Welf. & Inst. Code, § 14100.1.)

By state statute, Medi-Cal is intended to provide, to the extent practicable, medically necessary care to California residents “who lack sufficient annual income to meet the costs of health care, and whose other assets are so limited that their application toward the costs of such care would jeopardize the person or family’s future minimum self-maintenance and security.” (Welf. & Inst. Code, § 14000.) Under Medi-Cal, beneficiaries may receive a broad range of services, including physician and hospital services, optometry, mental health care, and prescription medications. (Welf. & Inst. Code, § 14132; Cal. Code Regs., tit. 22, §§ 51301, 51305, 51308-51317; see 42 U.S.C. § 1396d(a)(xvii).)

The Medi-Cal program does not directly provide services; instead, it reimburses participating health care plans and providers for covered services provided to Medi-Cal beneficiaries. (Cowan v. Myers (1986) 187 Cal.App.3d 968, 990 [232 Cal.Rptr. 299] (Cowan).) Medi-Cal accomplishes this on a fee-for-service basis or a managed care basis. (See Welf. & Inst. Code, § 14016.5, subd. (b).)

About a third of Medi-Cal beneficiaries receive services under the fee-for-service system in which health care practitioners are reimbursed for each covered service they provide. The beneficiary can obtain care from any provider that participates in Medi-Cal, is willing to treat the beneficiary, and is willing to accept reimbursement from DHCS at a set amount for the services provided. (Welf. & Inst. Code, § 14016.5, subd. (b)(1).)

About two-thirds of Medi-Cal beneficiaries receive services through a Medi-Cal managed care plan. Under managed care, DHCS contracts with health maintenance organizations (HMOs) and other managed care plans to provide health coverage to Medi-Cal beneficiaries, and the plans are paid a predetermined amount for each beneficiary per month, whether or not the beneficiary actually receives services. (Welf. & Inst. Code, §§ 14204, 14301, subd. (a); see Cal. Code Regs., tit. 22, § 53800 et seq.) The beneficiary then obtains medical services from a provider within the managed care plan’s network. (Welf. & Inst. Code, § 14304.5.)

Medi-Cal is administered by respondent DHCS. (See Welf. & Inst. Code, § 14100.1; 42 U.S.C. § 1396a(a)(5).) Respondent Toby Douglas was DHCS’s director. Respondents acknowledge they “have a legal duty to adopt and implement policies and procedures to ensure that Medi-Cal recipients are able to obtain necessary Medi-Cal benefits and services.”

In the 2011-2012 fiscal year, Medi-Cal provided health coverage for approximately 8.3 million beneficiaries at a cost of some $63 billion of combined federal and state funds.

1. Medi-Cal Does Not Pay for Services Covered by Third Parties

Critical to this appeal is the fact that Congress intended Medicaid to be the “ ‘payer of last resort.’ ” (Arkansas Dept. of Health and Human Servs. v. Ahlborn (2006) 547 U.S. 268, 291 [164 L.Ed.2d 459, 126 S.Ct. 1752].) Consistent with this principle, Medi-Cal statutes preclude coverage for health care services available to the beneficiary through OHC, whether public or commercial. (Welf. & Inst. Code, §§ 10020, subd. (a) [“No person having private health care coverage shall be entitled to receive the same health care items or services furnished or paid for by a publicly funded health care program.”], 14000, subd. (b) [Medi-Cal benefits “shall not duplicate those provided under other federal or state laws or under other contractual or legal entitlements of the person or persons receiving them.”], 14005, subd. (a) [Medi-Cal benefits and services must be provided to eligible residents only “to the extent that such services are neither provided under any other federal or state law nor provided nor available under other contractual or legal entitlements of the person”].) Further, DHCS regulations specify that a beneficiary with OHC is not entitled to receive Medi-Cal benefits or services until available OHC has been exhausted or denied for lack of service coverage. (Cal. Code Regs., tit. 22, § 50761; see Palumbo v. Myers (1983) 149 Cal.App.3d 1020, 1027 [197 Cal.Rptr. 214] [“Where the same service is otherwise available to an applicant, it is not covered by Medi-Cal.”].)

2. Determination of Beneficiaries’ OHC

To ensure that the state does not pay for services for which another party may be responsible, Congress required states to determine the potential responsibility of third parties (including health insurers, self-insured plans, group health plans, and managed care organizations) for payment for services provided under the state’s program, and to pursue claims against them. (42 U.S.C. § 1396a(a)(25).)

To this end, each state Medicaid agency must ensure that information is collected from applicants and beneficiaries regarding potentially liable third parties when they apply for benefits or are reviewed for continued eligibility, and must establish electronic data exchanges regarding potential third party responsibility with other public agencies and programs. (42 C.F.R. §§ 433.137, 433.138 (2014).)

California’s state Medicaid plan (State Plan) includes provisions implementing these requirements, which have been approved by CMS. As part of its data exchange system, DHCS has established a system for coding and maintaining OHC information in its Medi-Cal Eligibility Database System (MEDS), which includes information regarding the existence of OHC, the OHC carrier (e.g., Kaiser HMO), and the general scope of coverage by category of services (e.g., vision care, dental, comprehensive).

3. Regulations Designed to Avoid Covering Services Subject to OHC

Medi-Cal applicants and beneficiaries, counties, DHCS, and providers each have responsibilities in assuring that beneficiaries utilize available OHC for a service before accessing Medi-Cal benefits.

a. Beneficiaries Report OHC to Counties

Medi-Cal applicants and beneficiaries must apply for and retain available OHC when “no cost is involved.” (Cal. Code Regs., tit. 22, § 50763, subd. (a)(1).) They must disclose any entitlement to OHC to the county when applying for benefits and upon any benefit redetermination, and must report any changes in coverage. (Cal. Code Regs., tit. 22, § 50763, subd. (a)(2).) (DHCS specifically advises them: “If you are a Medi-Cal beneficiary and have individual or group private health (or dental) insurance coverage, you are required by federal and state law to report it.”) And beneficiaries must utilize “available” OHC before utilizing Medi-Cal coverage. (Cal. Code Regs., tit. 22, § 50763, subd. (a)(3).) A beneficiary’s failure to comply with these requirements may constitute a misdemeanor. (Welf. & Inst. Code, § 14023.)

According to evidence submitted in connection with petitioners’ motion for a writ of mandate, one DHCS representative indicated that approximately 500,000 of 7.1 million Medi-Cal beneficiaries had OHC, while another DHCS representative estimated that approximately 700,000 of 8.3 million beneficiaries had OHC (other than Medicare).

b. Counties Code OHC

Counties are responsible for determining Medi-Cal eligibility, enrolling applicants, and conducting eligibility redeterminations. (Welf. & Inst. Code, § 14100; see Cal. Code Regs., tit. 22, § 50101.) As part of these processes, counties are responsible for determining whether an applicant or beneficiary has OHC; coding the name, type, and scope of OHC into the MEDS database, according to DHCS coding guidelines; reporting OHC information to DHCS as requested; and notifying DHCS of any lapse in, or change to, a beneficiary’s OHC. (Cal. Code Regs., tit. 22, § 50765; see 42 C.F.R. § 433.138(a) & (b) (2014).) DHCS does not require counties to report the amount or duration of OHC, exclusions from coverage, or the copayment and out-of-pocket costs assessed by the OHC.

c. DHCS Updates MEDS with Other OHC Information

In addition to receiving OHC information coded into MEDS by the counties, DHCS compares data on beneficiaries in MEDS with millions of records from the major commercial health insurance carriers in California. Specifically, as mandated by federal and state law, DHCS obtains membership and coverage information through monthly electronic exchanges with private insurers and health plans to help identify beneficiaries who have commercial health insurance, as well as the carrier and scope of the coverage and any changes in coverage status. (42 C.F.R. § 433.138(d) (2014); Welf. & Inst. Code, § 14124.90.) Each month, DHCS receives membership records from commercial health carriers regarding approximately 30 million individuals. Based on this information, DHCS may add OHC information into the system or delete OHC codes for a particular beneficiary.

d. Provider Is Informed of Beneficiary’s OHC Status

When seeking Medi-Cal services from a provider, beneficiaries disclose their personal Medi-Cal number (by inputting it online or by phone, or by swiping their benefits identification card (BIC) in a point of service device). This gives the provider access to the beneficiary’s Medi-Cal information in the Automated Eligibility Verification System, including whether DHCS has identified the beneficiary as having OHC and, if so, the plan carrier and contact information and any codes identifying the scope of coverage. The provider may contact the OHC to determine whether the OHC information is accurate, the requested service is covered, and a copayment is required.

e. Providers’ Options in Handling Beneficiaries with OHC

A provider may not refuse to provide services to a Medi-Cal beneficiary merely because OHC is potentially responsible for payment for the service. (42 U.S.C. § 1396a(a)(25)(D).) DHCS instructs providers of this obligation.

However, in light of the law barring Medi-Cal’s payment for services that a beneficiary is entitled to receive through OHC, DHCS also instructs providers that if the beneficiary’s OHC is a managed care plan (i.e., an HMO) or other network of which the provider is not a member, the provider may (1) decline to provide nonemergency treatment and refer the beneficiary to the OHC plan for the service, or (2) contact the OHC carrier for authorization to provide the service and to first bill the OHC, rather than DHCS, for the service. If the beneficiary needs emergency services, the provider must provide it or refer the beneficiary to an appropriate emergency facility. (See Health & Saf. Code, § 1317.)

f. Providers’ Reimbursement for Services

After providing nonemergency services to beneficiaries with OHC, Medi-Cal providers generally must first bill the OHC; if the OHC denies coverage or fails to make payment up to the Medi-Cal rate, the providers may seek reimbursement from Medi-Cal for amounts not paid by the OHC up to the Medi-Cal rate. (Welf. & Inst. Code, § 14124.90; see Cal. Code Regs., tit. 22, § 50769.) Billing the OHC first is referred to as “cost-avoidance” billing.

There are, however, exceptions to cost-avoidance billing, two of which are relevant here. First, federal law effectively requires the state to pay providers directly for prenatal and preventative pediatric care (without the provider having to bill any third party responsible for payment), and then “chase” the third party to collect for the Medicaid program. (See 42 U.S.C. § 1396a(a)(25)(E).) Second, a similar exception applies as to individuals benefiting from a court order requiring a noncustodial parent to provide health coverage. (See 42 U.S.C. § 1396a(a)(25)(F).) In this instance, the provider bills the responsible third party first, but if the third party fails to reimburse the provider within 30 days after the services were furnished, the provider may bill Medi-Cal, and Medi-Cal must pay the provider and chase the third party.

B. This Litigation

Petitioners filed their petition for writ of mandate in September 2009. DHCS filed a demurrer, and petitioners filed a first amended petition before the demurrer was heard. DHCS filed another demurrer, which the court sustained in part, granting leave to amend. Petitioners’ second amended petition for writ of mandate, filed in July 2010, is the operative pleading in this appeal.

1. Petitioners’ Second Amended Petition

Petitioners assert two causes of action. The first alleges that respondents are failing to comply with their legal duties under state and federal laws to ensure that Medi-Cal beneficiaries receive Medi-Cal covered services when the OHC does not provide such services, or the same amount and scope of such services, or imposes a charge not allowed by the Medi-Cal program. Petitioners’ second cause of action alleges that respondents are unlawfully denying Medi-Cal beneficiaries written notice and an opportunity to be heard when the beneficiaries are denied Medi-Cal covered benefits on the basis of the availability of OHC.

2. Petitioners’ Motion for Peremptory Writ of Mandate

Petitioners filed a motion for a peremptory writ of mandate in January 2013. Based in part on evidence obtained during depositions of DHCS officials, petitioners argued that OHC codes are often erroneous or incomplete, DHCS nonetheless instructs Medi-Cal providers to refer beneficiaries to OHC HMOs for treatment, DHCS provides neither notice nor a hearing when OHC is assigned or services are denied due to OHC, and the process for correction or removal of erroneous information is inadequate. Petitioners asserted that Medi-Cal beneficiaries therefore suffer delay and harm because respondents are not complying with their legal duties. The following summarizes petitioners’ evidence as relevant to this appeal.

a. Errors in OHC Coding

Errors in OHC codes arise from various sources. The primary source is the counties’ entry of incorrect OHC information into the system.

Another source of error lies in OHC’s “data matching” between MEDS and information DHCS obtains from private insurance. This process may mistakenly match a Medi-Cal beneficiary without OHC with another individual who has OHC because of the ways “people spell their names and dates of birth, and social security numbers and so on.” One DHCS official testified that the “problem with inaccurate social security numbers” was “rampant” in part because insureds often are not required to provide a Social Security number to obtain health insurance and, as a result, “less than half of the health insurance records have social security numbers on them.” Nevertheless, upon a data match, the beneficiary’s electronic file is coded to indicate OHC, the scope of OHC, and how OHC is delivered (e.g., through an HMO or a prepaid health plan).

Errors in OHC codes also occur in regard to children on Medi-Cal who have OHC as the result of a support order. DHCS receives OHC codes from the Department of Child Support Services for these children, and DHCS is required to input these codes into the Medi-Cal files. A “significant” percentage of this OHC information is unreliable, however, in part because it comes from noncustodial parents who have a legal obligation to provide health insurance as part of child support (or a justification for not doing so; see Cal. Code Regs., tit. 22, § 50185(a)(12)) but may be “less than honest” or “incorrect” in claiming they obtained it.

In addition, there are errors in the OHC information even for beneficiaries who do have OHC. DHCS’s “COV” codes are supposed to set forth the scope of coverage available from the OHC. But when “information about a [Medi-Cal] recipient’s insurance [coverage] is not available,” DHCS assigns an OHC code of “Comprehensive,” which signifies “coverage for all medical services except long term care and dental.” The actual scope of benefits available from the OHC may be less. Thus, respondents admit that the “OHC coding system does not determine or reflect the amount and scope of medical services which are actually available to the Medi-Cal recipient through the OHC.”

Petitioners also point out that OHC codes do not relate certain information that may be important. The coverage codes do not reflect service restrictions, limitations, or utilization caps for included benefits, so they do not indicate definitively whether a requested service would be covered by the OHC. Nor do the codes indicate whether the OHC requires copayments or other cost sharing such as deductibles, or, if so, in what amount. As discussed post, federal law limits the copayments and other cost sharing that beneficiaries may be charged. (See, e.g., 42 U.S.C: § 1396o(b).)

b. No Notice of OHC Codes or Service Denials

DHCS does not notify beneficiaries before assigning them an OHC code for the first time or changing their OHC code. Petitioners alleged that many beneficiaries do not discover that their Medi-Cal file includes an OHC code until they seek treatment and their Medi-Cal provider checks their eligibility, sees the code, and declines to treat them.

c. Delays Due to OHC Coding Errors

An erroneous OHC code, combined with DHCS’s instructions to providers (i.e., allowing providers to refer a beneficiary to the OHC for service, without requiring them to first confirm the beneficiary has OHC that would cover the service) may result in the beneficiary being denied (at that juncture) services that would otherwise be received through Medi-Cal. The primary problem, it was alleged, is “long delays in the correction of Medi-Cal records to delete the incorrect OHC code for clients with urgent medical needs, or sometimes even no correction after repeated requests.”

In 2011, DHCS received approximately 100 to 150 requests per day to address OHC problems, most of them relayed by counties. While DHCS’s “goal is to complete an OHC request within 30 days of receipt” and 48 hours for “urgent” requests, processing could “take up to 60 days.” Even urgent requests to remove OHC coding errors could take days or weeks. Furthermore, after removal of erroneous codes, the errors might reappear.

3. Respondents’ Opposition to the Motion for Writ of Mandate

Respondents opposed petitioners’ motion, asserting that DHCS procedures adequately dealt with the issues and that, at any rate, petitioners had not established a violation of law or any ministerial duty with which respondents did not comply.

In particular, respondents provided evidence of their measures to remedy coding errors so that the errors would not, in fact, provide a barrier to Medi-Cal services. By February 2011, DHCS had cleared all backlogged requests for removal of OHC codes that DHCS had identified as urgent and “acting as a barrier to care,” and such requests were handled “on a daily basis again.” As of February 2013, the “Other Coverage Unit” at DHCS handled an average of 150 requests each day to modify or remove OHC information, and these requests were normally handled within 24 hours. If OHC could result in the beneficiary not receiving services, “DHCS always honors the request to suppress the other health coverage so that the beneficiary can get timely medical treatment from a Medi-Cal provider for a Medi-Cal service.” It is DHCS policy “to immediately suppress any [OHC] identifier once DHCS is made aware that it is a potential barrier to receiving needed services.” (Italics added.)

Beneficiaries, providers, county eligibility workers, and others may contact the Other Coverage Unit at DHCS to obtain correction of OHC coding information. DHCS’s publication Medi-Cal; What It Means to You — issued to all Medi-Cal applicants — advises that any erroneous OHC information can be addressed by contacting a county eligibility worker or DHCS. Indeed, counties may process an “immediate need transaction” to override OHC information that is incorrect because “the coverage has ended,” or for other reasons, where it presents a “barrier to care” for a beneficiary.

In addition, while petitioners noted the unreliability of information received from the Department of Child Support Services regarding OHC for children under medical support orders, by 2011 DHCS began to use more reliable data provided by commercial carriers to identify and correct inaccuracies.

Furthermore, DHCS has taken steps to ensure that OHC information, once identified as incorrect, will not improperly reappear for beneficiaries with the same name as another individual with OHC. This is accomplished by placing those beneficiaries on a “suppression list” and coding their records so they are excluded from OHC matching.

4. Trial Court’s Denial of Petitioners’ Motion

At a hearing on March 29, 2013, the trial court asked the parties to submit further briefing regarding petitioners’ standing and the impact of CMS’s approval of the State Plan. The court also asked petitioners to submit a revised proposed writ specifying the actions they believed DHCS should be ordered to take to comply with its alleged ministerial duties. Petitioners’ revised proposed writ would have required respondents to (1) provide Medi-Cal beneficiaries a written “notice of action” and an opportunity to have an administrative hearing whenever an OHC code is assigned or removed, and whenever a beneficiary’s Medi-Cal benefits or services are denied, terminated, suspended, reduced, or delayed as a result of OHC and (2) adopt and implement policies and procedures to (a) require Medi-Cal providers who are outside an OHC’s HMO or exclusive provider network not to decline services to a beneficiary due to OHC when services are not actually available from the OHC; (b) ensure that whenever copayments or other cost sharing is imposed by OHC on a beneficiary whose Medi-Cal provider is not in the HMO or network, the beneficiary is relieved of cost sharing in excess of Medi-Cal limits; (c) ensure that Medi-Cal is available to beneficiaries living in an urban ZIP Code when the provider is over 60 miles or 60 minutes away; (d) use the “pay and chase” methodology for prenatal and preventative pediatric care and the 30-day pay and chase methodology for children with medical support orders when the provider does not belong to the OHC’s HMO or provider network; and (e) ensure prompt access to medical services when OHC is not actually available and the provider is not in the OHC or provider network.

After this briefing and a second hearing on July 31, 2013, the court ruled that petitioners had standing to seek mandamus relief under the “ ‘public right/public duty’ ” exception to the beneficial interest requirement. (Green v. Obledo (1981) 29 Cal.3d 126, 145 [172 Cal.Rptr. 206, 624 P.2d 256] (Green).) However, the court held, petitioners failed to demonstrate that respondents had violated any alleged ministerial duty, and the process by which respondents determined whether there is OHC does not create a denial, termination, or reduction of services mandating notice and a hearing under federal or state law.

Judgment was entered for respondents in October 2013, disposing of all issues between the parties.

This appeal followed.

II. DISCUSSION

To obtain a writ of mandate under Code of Civil Procedure section 1085, the petitioner has the burden of proving a clear, present, and usually ministerial duty on the part of the respondent, and a clear, present, and beneficial right in the petitioner for the performance of that duty. (Armando D. v. State Dept. of Health Services (2004) 124 Cal.App.4th 13, 21-22 [21 Cal.Rptr.3d 66].)

On appeal from the denial of a motion for such a writ, we resolve questions of law — including questions of statutory interpretation and the adequacy of the alleged ministerial acts at issue in this appeal — by de novo review and the exercise of our independent judgment. (County of San Diego v. State of California (1997) 15 Cal.4th 68, 109 [61 Cal.Rptr.2d 134, 931 P.2d 312] (County of San Diego).)

Applying these principles, we address each of petitioners’ contentions in turn.

A. Section 10950 and Regulation 50951 Do Not Require a Hearing

Petitioners contend that respondents have a duty under California statutory and regulatory law to provide Medi-Cal beneficiaries with notice and the opportunity for a hearing whenever DHCS assigns an OHC code, or a new or different OHC code, including codes pertaining to the type or scope of coverage. For brevity, we will refer to these incidents as a “coding event.”

1. Law

With certain exceptions inapplicable here, the California Code of Regulations provides the right to a state hearing to a Medi-Cal applicant or beneficiary dissatisfied with any “action or inaction” of DHCS “relating to Medi-Cal eligibility or benefits.” (Reg. 50951, subd. (a), italics added.) This right to a hearing is “governed by the provisions of Sections 10950 through 10965, Welfare and Institutions Code.” (Reg. 50951, subd. (b).)

Section 10950 provides “an opportunity for a state hearing,” with some exceptions, to “any applicant for or recipient of public social services [who] is dissatisfied with any action of the county department [and, pursuant to regulation 50951, DHCS] relating to his or her application for or receipt of public social services.” (Italics added.) “ ‘Public social services’ ” include programs, such as Medi-Cal, administered by DHCS. (Welf. & Inst. Code, § 10051.)

The question, therefore, is whether a coding event constitutes a DHCS “action” that triggers the right to a hearing under section 10950 and regulation 50951. In this regard, our fundamental goal is to ascertain the Legislature’s intent, and effectuate the statute’s purpose, by giving the statutory language a commonsense interpretation in light of the statutory scheme. (Wallace v. McCubbin (2011) 196 Cal.App.4th 1169, 1196 [128 Cal.Rptr.3d 205]; In re David S. (2005) 133 Cal.App.4th 1160, 1164 [35 Cal.Rptr.3d 309].)

Our Supreme Court has observed that, in light of the statutory scheme, the fair hearing mechanism in section 10950 is intended to provide a “speedy” and “informal” “ ‘means to challenge an administrative action which may reduce or terminate vitally needed social service benefits.’ ” (Lentz v. McMahon (1989) 49 Cal.3d 393, 402 [261 Cal.Rptr. 310, 777 P.2d 83] (Lentz), quoting People v. Sims (1982) 32 Cal.3d 468, 494 [186 Cal.Rptr. 77, 651 P.2d 321] (dis. opn. of Kaus, J.); see Knight v. McMahon (1994) 26 Cal.App.4th 747, 755 [31 Cal.Rptr.2d 832], disapproved on other grounds in American Federation of Labor v. Unemployment Ins. Appeals Bd. (1996) 13 Cal.4th 1017, 1023 [56 Cal.Rptr.2d 109, 920 P.2d 1314].) Thus, the right to a hearing under section 10950 typically arises when the county denies an individual’s application to enroll in benefits or reduces or terminates the benefits (e.g., County of Madera v. Holcomb (1968) 259 Cal.App.2d 226 [66 Cal.Rptr. 428]); it may also occur when DHCS directly denies coverage for a specific requested service (Jeneski v. Myers (1984) 163 Cal.App.3d 18, 32 [209 Cal.Rptr. 178] (Jeneski)).

However, an “action” triggering fair hearing rights under section 10950 and regulation 50951 does not include every event during the process of applying for and receiving social services. As the Court of Appeal recognized in Madrid v. McMahon (1986) 183 Cal.App.3d 151 [228 Cal.Rptr. 14] (Madrid): “The term ‘action’ in section 10950 must be given a commonsense construction in keeping with the legislative scheme of which it is a part. [Citation.] The Legislature could not have intended that every event occurring during the processing of an application and the delivery of benefits — no matter how trivial or inconsequential-could be the subject of a demand for an administrative fair hearing.” (Id. at p. 156.)

In Madrid, the court concluded that the test for whether an agency action is subject to challenge in a hearing under section 10950 is “whether it has a significant effect on the claimant’s application for or receipt of the aid or other service provided by the county agency.” (Madrid, supra, 183 Cal.App.3d at p. 156.) There, the petitioner had contended that she was entitled to a hearing based on an agency’s actions in computing an overpayment of benefits, referring the matter to a special fraud investigation department (SIU), the SIU’s investigation, referring the case to the district attorney, and filing criminal charges against her. (Id. at pp. 155-156.) But none of these events, the court held, constituted an “action” entitling the petitioner to a hearing: the failure of the county to demand return of the overpayment strongly suggested that it had not made a final determination of overpayment; the referral of the case to the SIU, the investigation by the SIU, and the referral to the district attorney were all internal actions with no immediate or direct impact on plaintiff’s application for or receipt of benefits; and the fair hearing process could not be used for the sole purpose of affecting a collateral criminal case. (Id. at pp. 156-157.)

Although not directly on point factually, Madrid illustrates that state hearings are reserved for agency actions that have an immediate, direct, and significant impact on the ability of a beneficiary to obtain, in this case, medical services. With these precepts in mind, we turn to the record.

2. Coding Events Are Not Actions That Trigger a Hearing

OHC coding events are an integral part of ensuring that Medi-Cal is a payor of last resort. The aim of OHC coding is not to deprive a Medi-Cal beneficiary of any service, but to help assure that the cost of that service is borne in the first instance by available OHC. Coding events are therefore qualitatively distinct from a determination that a beneficiary is ineligible for a benefit program overall or a direct denial of a specific request for treatment: if a beneficiary is not coded with OHC, the beneficiary receives the covered service; if the beneficiary is coded with OHC, the beneficiary may have to go to another provider, but is still entitled to receive the service to the extent of available coverage.

This distinguishing characteristic of OHC coding manifests itself in several ways — discussed next — that ultimately compel the conclusion that OHC coding does not affect a beneficiary’s receipt of services so significantly as to require a state hearing.

First, unlike most outright denials of benefit eligibility or specific requests for treatment authorization, OHC coding events have no immediate impact. A coding event, in itself, does not affect the beneficiary until he or she has the need to seek a service covered by Medi-Cal from a Medi-Cal provider.

Second, unlike denials of eligibility or treatment authorizations for a specified beneficiary, OHC coding events will eventually affect only a limited subset of beneficiaries. When a beneficiary seeks an emergency service from a Medi-Cal provider, there is no substantial negative impact the OHC code has, since the provider is required to deliver necessary emergency services. And even when the beneficiary seeks nonemergency services, an OHC code has no substantial negative impact if it is accurate: the beneficiary would have actual or constructive knowledge of the OHC, as well as the law that OHC must be exhausted before Medi-Cal. (Welf. & Inst. Code, §§ 10020, subd. (a), 14005, subd. (a).) Only if the OHC code turns out to be erroneous or misleading does the coding event potentially impact the delivery of services otherwise covered by Medi-Cal.

Third, even as to this subset of affected beneficiaries, DHCS coding does not directly dictate whether a service will be provided by the first Medi-Cal provider the beneficiary sees, let alone whether the service will ever be received. If the beneficiary with an OHC code (even if erroneous) goes to a provider who is within the OHC provider network, the provider will presumably render the service. If the provider is not within the OHC network, DHCS suggests the provider may refer the beneficiary to the OHC, but DHCS does not mandate that the provider do so. A provider may elect to (1) confirm whether OHC exists to cover the service and whether there may be any obstacles (including copayment) interfering with the availability of OHC, and treat or refer the patient accordingly; (2) seek authorization from the OHC to treat the patient; (3) refer the patient to the outside OHC network to receive the service; or (4) treat the patient at risk of not obtaining reimbursement from the beneficiary’s OHC. This decision lies with the private provider, not DHCS. (And it is therefore not state action subject to hearing rights under § 10950 or reg. 50951; see Blum v. Yaretsky (1982) 457 U.S. 991, 1003-1005 [73 L.Ed.2d 534, 102 S.Ct. 2777] [no state action for due process purposes].)

Fourth, and most importantly, OHC coding ultimately results in a delay, not a denial or reduction, of services. OHC coding events do not preclude coverage or treatment altogether. Even if the provider declines the service and refers the beneficiary to his or her purported OHC, there is merely a delay in the time it takes the beneficiary to obtain an appointment with the OHC; if the OHC coding is erroneous or inadequate, there is additional delay — but only delay — while obtaining a correction or bypass of the code. And while we do not trivialize the inconvenience and frustration caused by such delays — or ignore their possible medical consequences — the point is that a coding event, even if erroneous, does not deprive a beneficiary of the service. Accordingly, a coding event is not an “action” requiring a state hearing. (See Lentz, supra, 49 Cal.3d at p. 402 [hearing for actions that may “ ‘reduce or terminate vitally needed social service benefits’ ”]; Madrid, supra, 183 Cal.App.3d at p. 156 [action must have “significant effect on . . . application for or receipt of the aid or other service” (italics added)]; see also 42 C.F.R. §431.201 (2014) [“action” means termination, suspension, or reduction of eligibility or covered services]; 42 U.S.C. § 1396a(a)(3) [hearing for denials of claims for medical assistance].)

Finally, as a public policy matter, OHC coding events are not the type of actions for which a hearing would be necessary or appropriate. The purpose of the fair hearing system is to provide a “speedy” and “informal” means of resolving a matter that may reduce or terminate vitally needed benefits. (Lentz, supra, 49 Cal.3d at p. 402.) But in the context of OHC coding, this goal is better met by existing DHCS procedures, which allow beneficiaries to resolve urgent OHC problems through their county eligibility worker or DHCS immediately or within 24 hours if posing a barrier to care (according to DHCS), or perhaps weeks (according to petitioners); resolution of a matter by a state hearing would take much longer. (See Welf. & Inst. Code, §§ 10952 [hearing to commence within 30 working days after request filed], 10957 [continuance of up to 30 days], 10958 [proposed decision filed within 75 days after hearing], 10959 [director’s decision within 30 days of receipt of proposed decision], 10960 [request for rehearing].) Based on the record in this appeal, requiring notice and hearing rights for OHC coding events would impose a more time-consuming and formal process at no appreciable benefit to beneficiaries.

For all these reasons, an OHC coding event is not an “action” for which Medi-Cal beneficiaries are entitled to a hearing under section 10950 or regulation 50951.

3. Petitioners’ Arguments Are Unavailing

Besides the arguments we have implicitly addressed in our discussion so far, petitioners assert three additional arguments in favor of requiring a state hearing for coding events. We find them unpersuasive.

a. Language of Section 10950 and Regulation 50951

Petitioners point out that section 10950 provides a right to a hearing for any recipient “dissatisfied with any action . . . relating to his or her application for or receipt of public social services” (id., subd. (a), italics added), and regulation 50951 states that a beneficiary “shall have the right to a State hearing if dissatisfied with any action or inaction of . . . [DHCS] . . . relating to Medi-Cal eligibility or benefits” (id., subd. (a), italics added). They urge that the words “any” and “relating” should be viewed expansively and inclusively. (Citing Delaney v. Superior Court (1990) 50 Cal.3d 785, 798 [268 Cal.Rptr. 753, 789 P.2d 934]; People v. Dunbar (2012) 209 Cal.App.4th 114, 117-118 [146 Cal.Rptr.3d 673]; Barnick v. Longs Drug Stores, Inc. (1988) 203 Cal.App.3d 377, 382 [250 Cal.Rptr. 10].)

The question, however, is not the breadth generally communicated by the words “any” or “relating,” but the commonsense meaning of the word “action” in light of the particular statutory scheme now before us. That commonsense meaning of “action” — to include only events that have a significant effect on the application for or receipt of aid or service — was articulated nearly three decades ago in Madrid and is consistent with the description of the language by our Supreme Court in Lentz. Despite the appearance of the words “any” and “relating,” petitioners do not provide us with a single instance in which a court required a state hearing under section 10950 or regulation 50951 merely because an agency assigned a beneficiary with a status (e.g., OHC) that might in the future affect a private service provider’s decision whether to deliver services or refer the beneficiary to another provider.

b. Regulation 50179

Petitioners also point us to California Code of Regulations, title 22, section 50179 (regulation 50179), which governs when counties must send a beneficiary a “ ‘Notice of Action.’ ” (Reg. 50179, subd. (a).) Under this regulation, a beneficiary must be notified of their “Medi-Cal-only eligibility or ineligibility, and of any changes made in their eligibility status or share of cost.” (Ibid.) “Eligibility” relates to requirements concerning income, assets, and aid categories (aged, blind, disabled, etc.). (See Welf. & Inst. Code, § 14005 et seq.; 42 U.S.C. § 1396a(a)(10)(A); Cal. Code Regs., tit. 22, § 50173.)

The notice of action must include information about the “approval, denial or discontinuance of eligibility,” the rescission of a denial or discontinuance, or a change in the share of cost. (Reg. 50179, subd. (c)(1).) The notice also must inform the beneficiary of the right to request a state hearing if he or she is dissatisfied with county action affecting Medi-Cal eligibility or share of cost, and of any DHCS action that “affects” the applicant’s or beneficiary’s Medi-Cal benefits. (Reg. 50179, subd. (c)(4).) Petitioners argue that this reference to a state hearing regarding an action that merely “affects” benefits shows that the state hearing process does not apply only to the termination of Medi-Cal eligibility or benefits.

If anything, regulation 50179 confirms that OHC coding events should not trigger a hearing. After all, the requirement that the beneficiary be informed of a hearing right as to DHCS action that “affects” Medi-Cal benefits only applies when a notice of action is required. A notice of action is required only to inform the beneficiary of “Medi-Cal-only eligibility or ineligibility, and of any changes made in their eligibility status or share of cost.” (Reg. 50179, subd. (a), italics added.) The regulation thus suggests that a hearing is required if there is a change in the beneficiary’s Medi-Cal eligibility (or changes in cost sharing); but there is no indication whatsoever that a hearing would be required for merely changing a beneficiary’s code in a manner that might in the future affect the type of provider through whom the beneficiary may obtain a service.

c. Jeneski

Lastly, petitioners suggest that Jeneski, supra, 163 Cal.App.3d 18 compels the conclusion that DHCS is obligated to provide a hearing for every OHC coding event. In Jeneski, Medi-Cal recipients sought to enjoin the Department of Health Services and state officials from implementing laws that would delete certain drugs from those for which Medi-Cal would provide reimbursement, and would place other drugs on a list requiring prior authorization; prior authorization could be obtained by a provider submitting a treatment authorization request (TAR) to Medi-Cal. (Jeneski, supra, 163 Cal.App.3d at p. 22 & fn. 3; see Welf. & Inst. Code, § 14133.) The trial court initially issued an order restraining defendants from implementing the laws pending a public hearing, but later denied a requested extension and modification and ultimately dissolved the injunction. (Jeneski, supra, 163 Cal.App.3d at pp. 22-23.) The Court of Appeal reversed, concluding that the prior authorization procedures necessary for obtaining certain drugs were invalid because, among other things, the system did not provide a hearing before the denial of a TAR, and “the person seeking medical assistance should be entitled to a hearing” under section 10950. (Jeneski, at p. 32; see Cowan, supra, 187 Cal.App.3d at p. 986 [agreeing with Jeneski that, if the department intends to deny a TAR, it must afford the Medi-Cal recipient the opportunity for a predenial hearing].)

Jeneski is inapposite. The rejection of a TAR is an action by Medi-Cal that directly and categorically precludes Medi-Cal coverage for a particular individual for a particular service or benefit, based on Medi-Cal’s assessment of its medical necessity or propriety. If the beneficiary has no other coverage besides Medi-Cal (and cannot pay for the service), the beneficiary will not receive the service. OHC coding, by contrast, merely assigns a status that might, in the future, lead a private provider to delay the beneficiary’s receipt of the service. If the beneficiary in fact has available OHC, he or she will receive the service from the OHC; if the beneficiary does not actually have available OHC, the problem can be remedied by an informal process DHCS has already established, so that the beneficiary will still receive the service. Jeneski does not compel the conclusion that an OHC coding event triggers a hearing under section 10950.

Petitioners fail to establish that DHCS has a ministerial duty under section 10950 or regulation 50951 to provide a hearing for OHC coding events.

B. The California Constitution Does Not Require a Hearing

Petitioners next contend that respondents have a duty, under the due process clauses of the California Constitution, to provide notice and hearing rights when DHCS changes a Medi-Cal beneficiary’s status to OHC. (See Cal. Const., art. I, §§ 7, subd. (a), 15.)

“[Application of the [due process] clauses [of the California Constitution] must be determined in the context of the individual’s due process liberty interest in freedom from arbitrary adjudicative procedures.” (People v. Ramirez (1979) 25 Cal.3d 260, 263-264 [158 Cal.Rptr. 316, 599 P.2d 622] (Ramirez).) Thus, when a person is “deprived of a statutorily conferred benefit,” there must be an “assessment of what procedural protections are constitutionally required in light of the governmental and private interests at stake.” (Id. at p. 264.) “The required procedural safeguards are those that will, without unduly burdening the government, maximize the accuracy of the resulting decision and respect the dignity of the individual subjected to the decisionmaking process.” (Oberholzer v. Commission on Judicial Performance (1999) 20 Cal.4th 371, 390 [84 Cal.Rptr.2d 466, 975 P.2d 663] (Oberholzer).)

1. Statutorily Conferred Benefit or Interest

Respondents argue that petitioners have not satisfied the threshold requirement — that they have been deprived of a “statutorily conferred benefit” or interest. (Ramirez, supra, 25 Cal.3d at p. 264; Ryan v. California Interscholastic Federation-San Diego Section (2001) 94 Cal.App.4th 1048, 1071 [114 Cal.Rptr.2d 798].) According to respondents, OHC coding and DHCS guidelines allowing providers to refer beneficiaries to their OHC for services do not themselves deprive the beneficiary of Medi-Cal services; furthermore, a provider’s refusal of service or referral to other providers does not constitute state action to which state due process protections may apply. (Citing Garfinkle v. Superior Court (1978) 21 Cal.3d 268, 281-282 [146 Cal.Rptr. 208, 578 P.2d 925].) Petitioners counter that Medi-Cal is a statutory benefit, and erroneously coding a recipient as having OHC terminates or suspends enjoyment of that benefit.

We question whether changing a Medi-Cal beneficiary’s status to OHC and entering or maintaining other OHC-related codes constitutes an “adjudicative procedure[]” (Ramirez, supra, 25 Cal.3d at p. 264) targeted by our state’s due process clause. We also question petitioners’ assertion that coding a beneficiary as having OHC in itself terminates or suspends statutory entitlement to Medi-Cal services. Nonetheless, OHC codes do affect the likelihood that some beneficiaries will promptly obtain services otherwise mandated by the Medi-Cal statutes. We will therefore assume the threshold requirement is met and proceed with a due process analysis.

2. The Ramirez Test

In determining what process is due, consideration must be given to “(1) the private interest that will be affected by the official action, (2) the risk of an erroneous deprivation of such interest through the procedures used, and the probable value, if any, of additional or substitute procedural safeguards, (3) the dignitary interest in informing individuals of the nature, grounds and consequences of the action and in enabling them to present their side of the story before a responsible government official, and (4) the governmental interest, including the function involved and the fiscal and administrative burdens that the additional or substitute procedural requirement would entail.” (Ramirez, supra, 25 Cal.3d at p. 269, italics added.)

a. Beneficiary’s Private Interest Affected by Coding

As discussed ante, a coding event, in itself, has no immediate effect on the beneficiary until the beneficiary seeks a nonemergency service covered by Medi-Cal from a Medi-Cal provider, the OHC codes turn out to be erroneous or misleading, and the Medi-Cal provider opts not to provide the service and instead refers the beneficiary to another provider, thus risking a delay in the beneficiary’s receipt of medical services. Petitioners maintain that such a delay in treatment, however, can exacerbate medical conditions. They insist that some recipients are denied urgently needed treatment for weeks or months as they navigate DHCS or county procedures to obtain removal or correction of OHC codes. They produce evidence that delays in service can result in severe pain, a lack of affordable medication, sleeplessness, the need to pay out of pocket for medications, and deteriorating health. And while DHCS counters that these delays are not significant in light of procedures designed to correct errors within days (or immediately if DHCS is advised that the OHC codes are posing a barrier to care), there is at least a potential effect on the beneficiary’s interest in receiving prompt medical services under Medi-Cal.

b. Risk of Violation; Value of Additional Safeguards

We next consider the risk that this private interest will be violated, and the probable value of the additional procedural safeguards that petitioners propose.

Petitioners contend there is a high risk that OHC coding will violate the private interests of beneficiaries because of a “rampant” problem with incorrect Social Security numbers entered into computer records, faulty information from noncustodial parents concerning medical support orders, and partial services covered by insurance companies incorrectly designated as “comprehensive.” Petitioners also note that, at one point in time, DHCS was receiving approximately 100 to 150 requests per day to correct OHC problems.

However, petitioners have included nothing in the record to actually quantify this risk. They do not provide evidence indicating the percentage of coding events that are erroneous, the number or percentage of Medi-Cal beneficiaries who are affected, or the number or percentage who experience a delay due to incorrect OHC codes. (Indeed, petitioners themselves do not allege that they suffered any coding error at all.) Even the statistic of 100 to 150 daily requests to fix OHC coding problems would equate to fewer than 40.000 requests a year out of seven or eight million beneficiaries, of whom 500.000 to 700,000 have OHC. In short, petitioners fail to show a high risk that the private interests of a Medi-Cal beneficiary will be adversely affected by any particular coding event.

As to the second aspect of this element — the probable value of the proposed additional procedural safeguards — -petitioners do not point to any evidence in the record, or even substantially argue, that the additional safeguard or procedure of a hearing for every OHC coding event (or even for erroneous codes) would have any significant value above the procedures DHCS already has.

Instead, petitioners turn their attention to DHCS providing contemporaneous notice of a coding event, so" a beneficiary can take steps to obtain correction of the error before the beneficiary “makes a doctor’s appointment, is turned away at the office, and then must wait weeks or months for care.”

It is true that immediate notice of OHC coding might enable beneficiaries who know they do not actually have OHC to obtain correction of the error before seeking medical services. The question, however, is whether petitioners have shown that this potential benefit is so significantly advantageous over existing procedures as to compel DHCS — which could not know what codes are incorrect at the time of coding — to notify all beneficiaries of each and every coding event, even though a coding error may exist only as to some subset of codes and beneficiaries. After all, there are millions of Medi-Cal beneficiaries in the system, and hundreds of thousands who are coded with OHC.

Based on the appellate record, we agree with respondents that the probable value of providing contemporaneous notice of coding events is relatively low. As things stand now, beneficiaries will discover any OHC coding error if they are turned down for service by a provider (as occurred with petitioners Marquez and Rivera). At that point, the beneficiary may assess whether the OHC information is incorrect and request correction or suppression through the county or DHCS. The most recent evidence in the record is that such requests are normally handled within 24 hours.

Petitioners nevertheless complain that merely giving beneficiaries the ability to contact the county or DHCS does not suffice for due process notice, and DHCS is improperly shifting the burden of notice to beneficiaries. (Citing Vargas v. Trainor (7th Cir. 1974) 508 F.2d 485, 489-490; Ortiz v. Eichler (D.Del. 1985) 616 F.Supp. 1046, 1062, on reargument (D.Del. 1985) 616 F.Supp. 1066, affd. (3d Cir. 1986) 794 F.2d 889.) In Vargas and Ortiz, however, it was undisputed that the recipients were entitled to a hearing on the agency’s decision to reduce or terminate their benefits. The question before those courts, therefore, was not whether a beneficiary was entitled to notice of an occurrence (such as a coding event), but whether the beneficiary was given adequate notice of the agency’s decision so it could be challenged meaningfully at the upcoming hearing. (Vargas, supra, 508 F.2d at pp. 487-490; Ortiz, supra, 616 F.Supp. at pp. 1051-1053, 1061-1062.) Here, unlike the recipients in Vargas and Ortiz, the beneficiaries do not have undisputed entitlement to a hearing for a coding event — indeed, their entitlement to a hearing is an issue before us. Petitioners’ reliance on Vargas and Ortiz thus puts the cart before the horse. Moreover, beneficiaries do have adequate notice, for purposes of challenging an incorrect OHC code, when they are told by providers that they are being referred due to their apparent OHC: with this information, they can turn to the county or DHCS for relief, and there is nothing more that DHCS could tell them.

c. Beneficiary’s Dignitary Interest

We next turn to the dignitary interest beneficiaries have in being informed of the nature, grounds, and consequences of the DHCS action and in being able to present their side of the story before a responsible government official. The point here is that, even if participation in the decisionmaking process would not alter the outcome, the fact of participation recognizes the dignity of the individual affected. (See Ramirez, supra, 25 Cal.3d at p. 268.)

Beneficiaries who believe there has been an error in OHC coding may be “heard” informally through existing procedures, in which beneficiaries provide information necessary to change or remove their OHC coding to their provider, county workers, or DHCS. They are informed of the nature, grounds, and consequences of the DHCS action and are able to present their side of the story to a government official.

Petitioners nonetheless argue that respondents’ existing procedures do not treat beneficiaries with respect and dignity. They offer a situation when a mother arrives with her child for a doctor’s appointment only to be unexpectedly turned away and told she cannot get treatment for her child unless she makes a payment she cannot afford; or when a woman in pain and suspecting infection after having a Caesarean section resorts to pulling out her surgical staples when unable to access medical care. But petitioners are talking about what might happen as a result of an incorrect code, if it is not corrected. The question here is whether a hearing or the notice of a coding event is necessary for the beneficiary to have dignity by way of input and participation in the process for deciding whether the coding is correct. Petitioners cite no evidence in the record on this point.

Lastly, petitioners’ reliance on Barron v. Superior Court (2009) 173 Cal.App.4th 293 [92 Cal.Rptr.3d 394] (Barron) is unhelpful. There, a trial court ruling was reversed, in part because it was based on a matter the court raised without warning at the hearing, and thus the proceeding did not adequately comport with due process. (Id. at pp. 297-300.) Barron says nothing about the adequacy of the DHCS procedures with respect to OHC coding.

d. Governmental Interests

The final part of the due process analysis is consideration of the “governmental interest, including the function involved and the fiscal and administrative burdens that the additional or substitute procedural requirement would entail.” (Ramirez, supra, 25 Cal.3d at p. 269.) The government’s interests in conserving scarce fiscal and administrative resources and in not imposing further burdens on providers are substantial. Although this governmental interest does not in itself outweigh the recipient’s interest in obtaining services, it is a legitimate state concern. (Frank v. Kizer (1989) 213 Cal.App.3d 919, 924-925 [261 Cal.Rptr. 882].)

Here, it is undisputed, based on the evidence in the record, that hundreds of thousands of Medi-Cal beneficiaries have OHC at any given time. Moreover, coverage information is updated by DHCS monthly, and evidence in the record suggests that OHC information changes frequently. It may fairly be inferred from the record that formal notice and hearing procedures would necessarily impose fiscal and administrative burdens on the state.

e. Balancing the Interests

An OHC coding event has a potential effect on a beneficiary’s interest in receiving nonemergency medical services under Medi-Cal without undue delay. However, petitioners have not shown a high risk that any particular OHC code is erroneous or would cause intolerable delay. Nor have they demonstrated that a hearing — or notice of a coding event (or referral to an OHC provider) — would have significant value over DHCS’s existing procedures, given the record of prompt resolution of coding errors. Furthermore, the dignitary interest of beneficiaries is facilitated by existing procedures, which allow beneficiaries to partici