SUPERIOR COURT OF CALIFORNIA
COUNTY OF SACRAMENTO
DATE/TIME
JUDGE

October 2, 2015, 1:30 P.m.
HON. CHRISTOPHER E. KRUEGER

HOWARD OLIVER, D.O.,

DEPT. NO
CLERK

44
M. GRECO

Case No.: 34-2015-80002018

Petitioner,
v.
CALIFORNIA DEPARTMENT OF HEALTH CARE
SERVICES,
Respondent.

Nature of Proceedings:

PETITION FOR WRIT OF MANDATE

Following is the court’s tentative ruling granting in part and denying in part the petition
for writ of mandate, and remanding this case to Respondent.

BACKGROUND
Respondent Department of Health Care Services (“Department”) administers the Drug
Medi-Cal (DMC) program, which offers a range of services to Medi-Cal beneficiaries to treat
substance use disorders, including outpatient drug counseling services. Substance use disorder
services are covered by Medi-Cal “when determined medically necessary in accordance with
Section 51303,” 1 and if prescribed by a physician. (§ 51341.1, subd. (a).) Section 51303, in
turn, provides that Medi-Cal covers services “which are reasonable and necessary to protect life,
to prevent significant illness or significant disability, or to alleviate severe pain through the
diagnosis or treatment of disease, illness or injury.” The relevant regulations provide also that
“medical necessity is established by the physician’s admission of each beneficiary . . . , the
physician’s review and signature of each beneficiary’s treatment plan and updates . . . , and the
physician’s determination to continue services . . . .” (§ 51341.1, subd. (h)(1)(D)(i).) The
1

Undesignated section references are to title 22 of the California Code of Regulations, which contains regulations
governing all aspects of the Medi-Cal program.

1

 Department may suspend a provider from further participation in the Medi-Cal program for
violation of any statute, rule or regulation relating to the provision of Medi-Cal services. (Welf.
& Inst. Code § 14123, subd. (a); § 51452, subd. (a).) The suspension “may be for an indefinite
or specified period of time.” (Welf. & Inst. Code § 14123, subd. (a).)
Petitioner Howard Oliver is an osteopathic physician who served as the medical director
for numerous outpatient drug counseling centers that were also DMC providers. 2 As the medical
director, Oliver was the physician responsible for determining whether services were medically
necessary. All of the services at issue in this case were outpatient drug counseling services. It is
undisputed that Oliver did not actually provide any counseling services and that he never saw or
treated any beneficiaries.
In 2013, the Department created what it referred to as a “strike team” to identify DMC
providers that were providing fraudulent services. Oliver came to the Department’s attention
because he was the medical director for a large number of providers that were identified through
that process. 3 As a result, the Department began an investigation of Oliver. That investigation
ultimately led to an accusation against Oliver, alleging he had violated numerous Medi-Cal rules
and regulations. Although the accusation contained 10 separate counts, the Department
essentially charged Oliver with two violations: (1) authorizing services that were not medically
necessary, and (2) failing to provide proper “medical direction” for beneficiaries.
Oliver contested the accusation, and a four-day evidentiary hearing was held before an
Administrative Law Judge (“ALJ”) who ultimately issued a lengthy proposed decision sustaining
9 of the 10 counts. The ALJ found Oliver should be indefinitely suspended from the Medi-Cal
program. The Department adopted the ALJ’s proposed decision, and Oliver was thus suspended
from the Medi-Cal program effective January 16, 2015. This petition followed. Oliver seeks a
writ of mandate ordering the Department to set aside its decision and withdraw its order of
suspension. 4

2

A note on terminology. In the context of this case, the term “provider” refers to the entity that is certified to
provide Drug Medi-Cal substance use disorder services to eligible beneficiaries are certified locations. (§ 51341.1,
subd. (b)(19).) In other words, the provider is the drug counseling center. Although physicians can also be MediCal providers, Dr. Oliver is not the provider in this case. Instead, he was the medical director for a number of
providers.
3
Oliver challenges one of the factual findings made about this investigation. The finding is irrelevant to any of the
ultimate issues in this case.
4
Although the decision being challenged is the Department’s decision, the court will refer to it as the ALJ’s
decision in order to avoid confusion.

2

 DISCUSSION
The ALJ found in favor of the Department on 9 of its 10 counts. Oliver challenges each
finding. Many of the counts are related, and are thus discussed together.

1.

THE ‘NO MEDICAL NECESSITY’ COUNTS
Counts 3, 4, 5, 7, 8, and 9 are all based, in one way or another, on the same facts and on

the Department’s core contention that Oliver approved services for beneficiaries that were not
medically necessary. The ALJ agreed, and thus upheld all six counts on largely the same
grounds. For the reasons stated below, the court finds the ALJ’s decision on these counts is fully
supported.

A.

Counts 3, 4, 5: The Medical Necessity Determination

As noted above, Medi-Cal only covers services for substance use disorders if they are
medically necessary. (§ 51341.1, subd. (a).) Medical necessity must be established by a
physician – here, Dr. Oliver. The relevant regulation provides:
[M]edical necessity is establish by the physician’s admission of
each beneficiary pursuant to Subsection (h)(1) of this regulation,
the physician’s review and signature of each beneficiary’s
treatment plan and updates pursuant to Subsection (h)(2) of this
regulation, and the physician’s determination to continue services
pursuant to Subsection (h)(5) of this regulation.
(§ 51341.1, subd. (h)(1)(D) [emphasis added].) According to the regulation, and as found by the
ALJ, medical necessity is thus determined by the physician at three different points in time: (1)
upon initial admission to the program; (2) upon review of the beneficiary’s treatment plan (which
is required within 30 days of admission and every 90 days thereafter); and (3) upon
determination to continue services (which determination must be made every five to six months).
(p. 38.) In Counts 3, 4, and 5, the Department accused Oliver of authorizing substance abuse
disorder services that were not medically necessary at, respectively, each of these three different
points in time. As to at least some beneficiaries, the ALJ agreed.
The ALJ found that services were not medically necessary upon admission for five
beneficiaries (Nos. 18, 23, 24, 26, and 28). The ALJ also found that continuing services were

3

 not medically necessary for at least five additional patients 5 (Nos. 1, 2, 3, 4, and 17), and,
additionally, that “Dr. Oliver testified that when he signed the updated treatment plans and
justification for continuing services forms, he had no intention of finding medical necessity or
indicating by his signature that he did.” (p. 93.) The ALJ thus found that Oliver violated the
regulation requiring that he establish services are medically necessary.
Oliver challenges these findings in two ways – both purely legal. 6
First, Oliver challenges these findings by arguing that he was not required to determine
medical necessity at three different points in time. Again, the relevant regulation provides that
“medical necessity is establish by the physician’s admission of each beneficiary pursuant to
Subsection (h)(1) of this regulation, the physician’s review and signature of each beneficiary’s
treatment plan and updates pursuant to Subsection (h)(2) of this regulation, and the physician’s
determination to continue services pursuant to Subsection (h)(5) of this regulation.” (§ 51341.1,
subd. (h)(1)(D) [emphasis added].) Oliver appears to acknowledge that he is required to
determine services are medically necessary when a beneficiary is first admitted to the program.
But he argues that he is not required to make such a determining when he thereafter reviews and
signs treatment plans and updates or when he determines a beneficiary requires continued
services. 7 The court disagrees. The regulation clearly requires both that medical necessity be
established at all three points in time (i.e., upon admission, when reviewing treatment plans and
updates, and when determining to continue services), and that medical necessity be established
by “the physician.” As “the physician,” it is thus Oliver’s responsibility to determine that
services are medically necessary when he initially admits a beneficiary, whenever he reviews and
signs a beneficiary’s treatment plans, and whenever he determines whether continued services
are justified.
Oliver also challenges the ALJ’s finding that, “as part of the intake process of admitting a
beneficiary into a DMC treatment program, the physician responsible for directing DMC

5

In other words, services were medically necessary for these beneficiaries when they were first admitted, but at
some point thereafter, they were no longer medically necessary.
6
I.e., Oliver never argues the weight of the evidence demonstrates that services for beneficiary No. 26, for example,
were medically necessary.
7
He thus challenges the ALJ’s finding that, “[i]n order for the DMC to program to provide continuing counseling
services, section 51341.1(h)(2)(iii) required that every 90 days after admission, Dr. Oliver had to determine that
those services were still medically necessary.” (p. 9; see also p. 38 [“the regulation requires the physician to
determine and verify that the counseling services are medically necessary at the admission stage and every 90 days
thereafter”].)

4

 counseling services uses the DSM IV to diagnose a substance use disorder and assess treatment
needs to ‘provide medically necessary treatment services.’” (p. 69.) Oliver claims this finding
contains a “critical error of law” because the relevant regulation does not require use of the DSM
for anything beyond listing a diagnosis code, and does not require that the DSM be used to
determine whether services are medically necessary. Oliver’s argument is difficult to
understand, although it appears he may be arguing that it is proper to determine that drug
counseling services are medically necessary without reference to the DSM. If so, it is not
entirely clear why this is relevant. The ALJ found that Oliver authorized services that were not
medically necessary – not that he authorized services without listing a proper DSM diagnosis
code.
The “DSM” is the Diagnostic and Statistical Manual of Mental Disorders published by
the American Psychiatric Association. Medi-Cal regulations provide that, as part of the process
of admitting a beneficiary into a drug counseling program, the beneficiary must be diagnosed
with a “substance use disorder” using either the Third or the Fourth Edition of the DSM (known
as DSM III and DSM IV), and that, upon admission, the provider must identify the applicable
DSM diagnostic code. (§ 51341.1, subds. (b)(9) and (h)(1)(D)(ii).) The ALJ made several
findings about diagnosing substance use disorders using the DSM. (p. 70.) In particular, he
outlined the criteria used by the DSM to diagnose either “substance abuse” or “substance
dependence,” which appear to be the only two substance use disorders recognized by the DSM
III or DSM IV (if this is incorrect, the parties may so state at the hearing). 8 (p. 38.) Although
the regulations could perhaps be clearer, it is implicit that Medi-Cal only covers substance use
disorder services if a beneficiary suffers from either substance abuse or substance dependence as
defined by the DSM. To the extent Oliver argues otherwise, the court rejects the argument. 9 If
he is actually arguing something different, he may clarify this at the hearing.

8

For example, a diagnosis of substance abuse requires one or more of the following within a 12-month period: (1)
recurrent use resulting in failure to full major obligations at work, school, or home; (2) recurrent use in situations
which are physically hazardous (e.g., driving while intoxicated); (3) legal problems resulting from recurrent use; or
(4) continued use despite significant social or interpersonal problems caused by the substance use. Substance
dependence is a more serious disorder with different diagnostic criteria. (p. 70.)
9
Again, Oliver’s argument on this issue is less than clear. At times he appears to argue that it is perfectly
appropriate for him to approve substance use disorder services for beneficiaries who do not suffer from either
substance abuse or substance dependence as defined by the DSM. If so, the court rejects this argument.

5

 B.

Count 7: Excessive Services.

Count 7 seven is based on the same factual findings are Counts 3, 4, and 5. Section
51473 provides: “No provider shall render to any Medi-Cal beneficiary, or submit a claim for
reimbursement for, any health care service or services clearly in excess of accepted standards of
practice.” The ALJ found that if services were not medically necessary, then “[b]y definition”
they are “in excess of accepted standards of practice.” (p. 101.) He also found, “By authorizing
unnecessary and excessive services to beneficiaries, [Dr. Oliver] has caused the rendering and
claiming for excessive services” in violation of section 51473. (p. 102.)
Oliver’s only argument regarding this finding is that it is based on the testimony of an
expert who relied on the DSM to render her opinions on medical necessity, but use of the DSM
is prohibited by Government Code section 11340, which renders the expert’s opinions
inadmissible. The court refers to this as the “underground regulation” argument. Government
Code section 11340 is part of the Administrative Procedures Act (“APA”), which requires
agencies to comply with certain procedures in order to adopt or apply regulations. The APA
defines the term “regulation” very broadly to include “every rule, regulation, order, or standard
of general application or amendment, supplement, or revision of any rule, regulation, order, or
standard adopted by any state agency to implement, interpret, or make specific the law enforced
or administered by it, or to govern its procedure . . . .” (Gov. Code § 11342, subd. (g).) Oliver’s
argument (presumably) is that the Department has not properly adopted the DSM as a regulation,
and thus cannot discipline him based on the DSM.
Contrary to Oliver’s argument, however, the relevant Medi-Cal regulation specifically
references the DSM. In particular, and as noted above, the regulation provides that substance use
disorders must be diagnosed using the DSM and that a DSM diagnostic code must be identified
for each beneficiary in order for services to be covered. Moreover, Oliver was not disciplined
for violating the DSM; he was disciplined for violating various Medi-Cal regulations, and he
does not claim that any of these regulations were not properly adopted pursuant to the APA.

C.

Count 8: Sub-Standard Services

Count 8 is also based on the same factual findings as Counts 3, 4, and 5. Section 51472
provides, “No provider shall render to a Medi-Cal beneficiary health care services which are
below or less than the standard of acceptable quality.” The ALJ found Oliver violated this
6

 provision because “any medical service provided without proper medical direction or without a
proper determination that the service is medically necessary is by definition a sub-standard
service.” (p. 104.) The ALJ also found that Oliver’s “abject failure to further investigate the
medical conditions of beneficiaries who so manifestly deserved such care . . . clearly establishes
that he violated section 51472 by rendering sub-standard services.” (Id.)
Oliver makes no new arguments regarding this finding, stating only that they “have been
previously discussed.” They are thus also rejected for the same reasons “previously discussed.”

D.

Count 9: False Information

Medi-Cal regulations provide that “No provider shall submit or cause to be submitted any
false or misleading statement of material fact when complying with departmental regulations, or
in connection with any claim for reimbursement, or any request for authorization of services.”
(22 Cal. Code Regs § 51485.) The Department claimed that, by authorizing services that were
not medically necessary, Oliver caused false information to be submitted to Medi-Cal, in
violation of this provision. The ALJ agreed, and thus upheld this count for the reasons discussed
above. Oliver asserts the same “errors of law” regarding this finding that he asserted regarding
Counts 3, 4, and 5, and the court rejects these arguments for the same reasons discussed above.

2.

THE ‘NO MEDICAL DIRECTION’ COUNTS
Counts 1, 2, and 6 (at least as found by the ALJ) are all based on the Department’s

contention that Oliver failed to provide what it refers to as “medical direction” for beneficiaries.
The court notes at the outset that the relevant regulation (i.e., § 51341.1) never uses the term
“medical direction.” At the time of the events giving rise to this case, it also did not use the term
“medical director” or outline the responsibilities of a medical director. 10 The closest the
regulation gets to the term is the requirement that substance use disorder services must be
“provided . . . under the direction of a physician” in order to be eligible for reimbursement. (§
10

It does now. (§ 51341.1, subd. (b)(28).) It also outlines the medical director’s responsibilities. (Id.) It appears
the amendments regarding a medical director’s responsibilities went into effect only recently. The fact that the
regulation was recently amended to provide that medical directors have certain responsibilities strongly suggests
they did not have those responsibilities prior to the amendment. Indeed, given the allegations made by the
Department against Oliver, it appears the amendment may have been prompted by this very case. The court would
be willing to consider additional briefing or argument on the question of how, or whether, these amendments affect
the outcome of this case.

7

 51341.1, subd. (h) [emphasis added].) With this in mind, the court turns to the challenged
findings.

A.

Counts 1 and 2: The Initial Assessment

Counts 1 and 2 are related. Both counts are based on the requirement that the provider
must conduct a “[c]omplete assessment of the physical condition of the beneficiary within thirty
(30) calendar days of admission.” (§ 51341.1, subd (h)(1)(A)(iii) [emphasis added].) “The
assessment shall be completed by either: (a) A physical examination . . . by a physician,
registered nurse practitioner, or physician assistant . . . ; or (b) A review of the beneficiary’s
medical history, substance abuse history, and/or the most recent physical examination
documentation. If the assessment is made without benefit of a physical examination, the
physician shall complete a waiver which specifies the basis for not requiring a physical
examination.” (Id. [emphasis added].) The Department charged Dr. Oliver with failing to
perform a proper assessment (Count 1) and with failing to complete a waiver that specified the
basis for not requiring a physical examination (Count 2). The ALJ upheld this charge, in part.
It is undisputed that Dr. Oliver never physically examined (or even saw) any beneficiary,
and that all of his assessments were done solely by reviewing records. 11 The ALJ found that this
practice was specifically allowed by the regulation. Nonetheless, the ALJ also found that, for six
beneficiaries (identified by number as 4, 11, 13, 19, 24, and 25), Oliver failed to perform a
proper or adequate assessment. Why? The records of these beneficiaries revealed “a panoply of
serious medical conditions” that warranted further follow-up or a thorough health screening by a
physician or nurse practitioner, but Oliver failed to do either. (p. 58.) 12 For example, one
beneficiary (No. 4) had a history of hypertension, diabetes, and thyroid disease, but there was no
evidence that Oliver “checked to determine the current level of control” of these diseases, or
confirmed she was actually seeing a physician to manage these diseases. (p. 52.) Another
beneficiary (No. 13) had a history of bipolar disorder and depression. (p. 55.) The ALJ found
that people with psychiatric conditions like bipolar disorder “[a]rguably” “would benefit from a
health screening to better assess whether they would be able to participate in group counseling
sessions given their . . . mental illness,” and that, “[g]iven the patient’s psychiatric history . . .
11

It appears that the records he reviewed consisted primarily of three forms or questionnaires filled out by the
beneficiary and/or a drug counselor.
12
Page references are to the proposed decision.

8

 further investigation by Dr. Oliver was necessary to better assess whether this patient would be
able to participate in and benefit from group counseling sessions.” (p. 55-56.) Another
beneficiary (No. 19) was HIV positive, but there was no follow-up to determine the status of his
disease, whether he was compliant with his medications, and whether he was attending classes
about HIV or sexually transmitted diseases. (p. 56.) Finally, another beneficiary told her
counselor she had a breast lump that required biopsy, but there was “no follow-up on the
outcome of that medical procedure to see if it was cancerous.” (p. 56.) The ALJ ultimately
found Oliver failed to follow-up on the “significant medical histories” of these six beneficiaries,
and thus “in effect . . . failed to perform a proper assessment of their physical condition.” (p.
59.)
As for the waivers, it appears undisputed that Dr. Oliver used a one-page form that
identified the patient, and that had three boxes to check signifying the physician’s reason for
waiving the physical examination. Those three boxes are: (1) medical history; (2) substance
abuse history; and (3) physical examination documentation. The bottom of the form contains the
following disclaimer: “This is a tool for Drug Medi-Cal providers, which reports the specific
requirements to be documented under Title 22, California Code of Regulations, Section
51341.1(h)(1)(A)(iii). Clinical and/or program information may be added to this form; however,
we caution you to consider whether these additions would conflict with the basic requirements
within this form.” (Emphasis added.) Oliver would check one or more of these boxes (it appears
he usually checked the first two boxes), and sign the form. The form, bare bones though it is,
was created by the Department, and, according to the ALJ, “was the form which the Department
recommended that DMC providers use for medical waiver.” (p. 62.) The ALJ found that, as a
general rule, it was perfectly proper for Oliver to use the Department’s form and to “merely
check boxes” without adding any additional beneficiary-specific clinical information,
particularly in light of the Department’s “caution” about adding such information. (p. 64.) The
ALJ went on to find, however, that for the six beneficiaries with “significant medical
conditions,” “the waiver form should have specified the basis for waiving the physical
examination,” and that “the waivers for those patients were invalid.” (p. 68.) It is entirely
unclear from the decision why additional information is required in some cases but not others.
Oliver argues that, as a medical director for outpatient drug counseling centers, he has no
doctor/patient relationship with beneficiaries who are receiving counseling services, and thus no
9

 duty to manage their general medical care. Although Oliver’s argument may go too far, 13 the
court finds some of the ALJ’s findings in this case to be baffling. Does the medical director of
an outpatient drug counseling center really have a responsibility to follow up if a beneficiary
mentions to her counselor that she has a breast biopsy scheduled? The relevant regulation (i.e.,
the only regulation that Oliver was found to have violated) certainly does not explicitly impose
such a requirement. It simply requires the provider (i.e., here, the counseling center, not Oliver)
to assess each beneficiary’s physical condition. (§ 51341.1, subd. (h)(1)(iii).) It explicitly
specifies that a physical examination is not necessary, and it allows the assessment to be based
solely on a record review as long as a physician completes a waiver that specifies the basis for
not requiring a physical examination. (Id.) Arguably, the only responsibility that this regulation
imposes on a physician like Oliver is the responsibility to complete the Department’s waiver
form. The court simply does not see how one gets from the plain language of this regulation to
the rather sweeping conclusion that Oliver was derelict in his duties because he failed to follow
up with beneficiaries whose medical records revealed issues like thyroid disease, HIV, and
diabetes. It is also difficult to reconcile the ALJ’s finding that the Department’s own waiver
form cautions physicians against adding additional information, with the finding that Oliver’s
failure to add additional information made the waiver invalid. The court thus finds that the
ALJ’s findings and ultimate conclusions regarding Counts 1 and 2 are far too broad.

B.

Count 6: Medical Direction

As least as found by the ALJ, Count 6 is generally based on the same facts as Counts 1
and 2. In Count 6, the Depart accused Oliver of failure to provide “medical direction.” It
alleged:
As medical director to the drug treatment programs, [Oliver] was
responsible for the medical direction of the beneficiaries receiving
services from the drug treatment programs. Beneficiaries in need
of Drug Medi-Cal Substance Abuse services are expected to be at
risk for or have chronic or serious medical problems associated
with long-term substance abuse, such as HIV infection, liver
disease, chronic obstructive pulmonary disease, etc. [Oliver] never
saw or examined any beneficiary he admitted to the drug treatment
13

For example, and as discussed in more detail below, the regulation requires that all substance use disorder
services be provided either by or under the direction of a physician. Although Oliver did not personally provide any
substance use disorder services, they were provided under his direction, and he thus clearly has some responsibility
for directing the provision of those services.

10

 programs. [Oliver] never referred any beneficiary under his
medical direction to other physicians or healthcare providers for
treatment of medical problems. It is impossible that none of the
7,778 beneficiaries needed a referral for treatment. Therefore,
[Oliver] failed to provide the required medical direction for the
beneficiaries under his care.
The ALJ agreed, finding:
Some beneficiaries in need of DMC services are at risk for or have
chronic or serious medical problems associated with long-term
substance abuse such as HIV infection, liver disease, hypertension,
bi-polar disorder, chronic obstructive pulmonary disease, etc.
They are particularly vulnerable. The physician at the DMC
treatment program may provide their only access to health care.
[¶] California Code of Regulations, title 22, section 51341.1
clearly requires that all substance use disorder services must be
provided by or under the direction of a physician. The physician is
required to make a proper diagnosis of a substance use disorder
using DSM IV criteria to establish that the counseling services are
in fact medically necessary . . . . [¶] The evidence established that
Dr. Oliver was responsible for, but failed to provide the medical
direction for the beneficiaries receiving services from the DMC
treatment programs.
(p. 99.) In other words, the Department contended, and the ALJ agreed, that the medical director
of an outpatient drug counseling center essentially assumes some type of responsibility for the
overall medical needs of any beneficiary receiving counseling services.
Oliver argues that a medical director is primarily an administrative position and that, in
that position, he does not provide either medical care or counseling services to beneficiaries.
Oliver also argues that the beneficiaries who receive counseling services are not this patients,
and that the medical director position does not establish a doctor-patient relationship with
beneficiaries. Finally, he argues that outpatient drug counseling centers do not provide medical
care (and are not licensed to do so). The ALJ found these arguments to be “specious” because
the relevant regulation provides that substance use disorder services must be provided “under the
direction of a physician” and those services are not reimbursable unless the physician determines
they are medically necessary. (p. 41.) The ALJ thus found that, as the medical director, Oliver
assumes responsibility “to provide direction for the services in question.” (p. 42.) The court
finds that this was erroneous. Oliver’s arguments likely go too far, but they are hardly specious.
Again, the regulation that Oliver was found to have violated (i.e., § 51341.1) simply does not
11

 provide that a physician serving as medical director of a DMC treatment program also assumes
responsibility for managing or directing the general medical care of beneficiaries receiving
outpatient drug counseling. The regulation provides only that “substance use disorder services”
must be provided “under the direction of a physician” in order to be covered by Medi-Cal. (§
51341.1, subd. (h).) Again, it is simply too big a leap to get from the language of this regulation
to the rather sweeping duty that was essentially imposed on Oliver in this case (i.e., the duty to
assume direction for all of a beneficiary’s medical problems, even problems like breast cancer).

3.

OTHER FINDINGS/ISSUES
Oliver spends much time arguing the ALJ improperly relied a document published by the

American Society of Addiction Medicine (ASAM) entitled “Standards of Care for The Addiction
Specialist Physician” (“Standards”). The ALJ found they applied to Oliver in the circumstances
of this case, and Oliver argues this finding is erroneous, for two reasons. First, the Standards
were not adopted until after the events giving rise to this action. Second, the Standards have not
been formally adopted as a regulation by the Department, and that it was thus improper for the
ALJ to rely on them. Whatever their merits, these arguments are a bit of a red herring. The ALJ
found that, even assuming the Standards do not apply, “there is still ample evidence” that Oliver
should be suspended from the Medi-Cal program because he violated the various Medi-Cal
regulations noted above. (p. 22.) Moreover, the Department did not accuse Oliver of violating
the Standards (or even mention the Standards in its accusation). Thus, whether or not the
Standards apply to Oliver and whether or not he complied with those Standards in this case, the
underlying decision remains the same.
Oliver also briefly mentions other issues. For example, he states there were “numerous
discovery violations” in this case, but fails to identify (i.e., by citation to the record) or describe
the alleged violations and fails to explain how they effected the proposed decision. The court
thus does not consider these unidentified discovery violations. Oliver also attacks the
qualifications of the Department’s expert, but most of his arguments (discussed above) raise
purely legal issues involving statutory (or regulatory) interpretation that do not depend on expert
testimony. Finally, Oliver frequently attacks certain aspects of the proceedings below that
appear to have little relevance to the actual decision he is challenging. For example, he disputes
testimony given by Mark Mimnaugh, chief of the Department’s audits and investigations unit, to
12

 the effect that Oliver did not perform all of the duties described in his contracts with the various
drug treatment centers. The court does not find this relevant, because it does not appear that the
ALJ made any findings one way or that other about duties imposed on Oliver by contract (as
opposed to duties imposed on him by the applicable Medi-Cal regulations).

CONCLUSION
The petition is granted in part and denied in part for the reasons stated above. The ALJ’s
findings and conclusions regarding Counts 3,4, 5, 7, 8, and 9 are upheld; the findings and
conclusions regarding Counts 1, 2, and 6 are not. As a general rule, the court will not disturb the
penalty imposed by the Department unless Oliver demonstrates it constitutes a manifest abuse of
discretion. (See, e.g., California Real Estate Loans, Inc. v. Wallace (1993) 18 Cal. App. 4th
1575, 1580; Cadilla v. Board of Medical Examiners (1972) 26 Cal.App.3d 961, 966.) Even if
the findings regarding Counts 1, 2, and 6 are disregarded, the court cannot say the penalty of
indefinite suspension would be an abuse of discretion. However, if the court finds some of the
Department’s findings are not supported by the evidence, the matter should be remanded to the
Department if there is “real doubt” whether the same penalty would still have been imposed.
(Miller v. Eisenhower Medical Center (1980) 27 Cal.3d 614, 635.) Because there is real doubt in
this case, the case is remanded to the Department to reconsider the penalty in light of this ruling.
This tentative ruling shall become the court’s final ruling and statement of decision
unless a party wishing to be heard advises the clerk of this department no later than 4:00 p.m. on
the court day preceding the hearing, and further advises the clerk that such party has notified the
other side of its intention to appear.
The court prefers that any party intending to participate at the hearing be present in court.
Any party who wishes to appear by telephone must contact the court clerk by 4:00 p.m. the court
day before the hearing. (See Cal. Rule Court, Rule 3.670; Sac. County Superior Court Local
Rule 2.04.)
In the event that a hearing is requested, oral argument shall be limited to no more than
thirty (30) minutes per side.
If a hearing is requested, any party desiring an official record of the proceeding shall
make arrangement for reporting services with the clerk of the department not later than 4:30 p.m.
on the day before the hearing. The fee is $30.00 for civil proceedings lasting under one hour,
13

 and $239.00 per half day of proceedings lasting more than one hour. (Local Rule 9.06(B) and
Gov’t. Code § 68086.) Payment is due at the time of the hearing.

14