OAH 16-1800-20026-2
STATE OF
OFFICE OF ADMINISTRATIVE HEARINGS
FOR THE DEPARTMENT OF HUMAN SERVICES
|
In the Matter of
the Appeal by the Bemidji Area Schools, |
RECOMMENDATION ON MOTIONS FOR SUMMARY DISPOSITION |
This matter is before
Administrative Law Judge Manuel J. Cervantes (“ALJ”) on a joint motion for summary
disposition brought by the Department of Human Services (“Department”) and Bemidji
Area Schools, Independent School District # 31 (“District”). On November 21, 2008, the Department served a
Notice and Order for Prehearing on the District by
The Department’s Initial
Memorandum in support of its administrative action was received on January 16,
2009. The District’s Initial Memorandum
in opposition to the Department’s administrative action was received on
February 6, 2009. The Department’s Reply
Memorandum was received on February 17, 2009. The District’s Reply Memorandum was received
on February 18, 2009. The matter was
argued orally on March 5, 2009, commencing at 9:30 a.m. at the Office of
Administrative Hearings,
Robin C. Vue-Benson and Jan M. Haapala, Assistant
Attorneys General, appeared on behalf of the Department. Four Department staff members were also in
attendance: Jesusa Williams, Mark
Perrone, Karen Lukken, and Genie Potosky.
Kevin J. Rupp and Christian R. Shafer, attorneys
with Ratwik, Roszak & Maloney, P.A., appeared on behalf of the District. Bob Vaadeland, Assistant Superintendent for
the District, also attended.
ISSUE
The issue in this case
is whether the Department correctly denied the District’s request to adjust the
“settle-up” rate based on revised Personal care/Paraprofessional (Paraprofessional)
services provided by the District during the 2005-2006 school year, pursuant to
Minn. R. 9505.0450, subp. 2.
Based upon all the
files, records and proceedings herein, IT IS HEREBY RECOMMENDED:
1.
That
the Department’s motion for Summary Disposition affirming its administrative
action be DENIED;
2.
That
the District’s Motion for Summary Disposition to
adjust the “settle-up” rate based on revised Paraprofessional services provided
by the District be GRANTED; and
3.
That
the Commissioner enter an Order directing the Department to re-process the
revised Paraprofessional services consistent with the Memorandum below.
Dated: April
17, 2009
s/Manuel
J. Cervantes
|
MANUEL
J. CERVANTES Administrative
Law Judge |
Reported: Digitally Recorded
This report is a recommendation, not a
final decision. The Commissioner will
make the final decision after reviewing this report, the file, and the hearing record. The Commissioner may adopt, reject, or modify
these Conclusions and Recommendations.
Under Minn. Stat. § 14.61, the Commissioner may not make a final decision
until after the parties have had access to this report for at least 10
days. During that time, the Commissioner
must give any party adversely affected by this report an opportunity to file
objections to the report and to present argument supporting its position. Parties should contact Cal Ludeman, Commissioner
of the Department of Human Services,
The record of this proceeding closes
upon the filing of exceptions to the report and the presentation of argument to
the Commissioner, or upon the expiration for doing so. The Commissioner must notify the parties of
the date on which the record closes. If
the Commissioner fails to issue a final decision within 90 days of the close of
the record, this report will constitute the final agency decision.
Under Minn. Stat. § 14.62, subd. 1,
the Commissioner is required to serve his final decision upon each party and
the ALJ by first class mail or as otherwise provided by law.
MEMORANDUM
l.
Contentions of the Parties
This is an appeal by the District from the
Department’s determination letter dated August 25, 2008 from Larry Woods,
Director of Health Operations, denying the District’s request to adjust the “settle-up
rate” to reflect the accurate paraprofessional services actually performed by
District personnel in the July 1, 2005 – June 30, 2006 school year (2005-2006).
The basis for the denial was the application of Minn. R. 9505.0450,
subp. 2. With application of the
Rule, the Department deemed the District’s request as untimely. The District contends that the Rule does not
apply to the District because there is no statutory authority for its
application to it.
ll. Scope and Standard of Review
Summary disposition is the administrative equivalent of summary judgment in district court practice. Summary disposition is appropriate where there is no genuine issue as to any material fact and one party is entitled to judgment as a matter of law when the law is applied to those undisputed facts.[3] The Office of Administrative Hearings has generally followed the summary judgment standards developed in judicial courts when considering motions for summary disposition regarding contested case matters.[4] A genuine issue is considered one that is not frivolous or a sham, and a material fact is one whose resolution will affect the result or outcome of the case.[5] A moving party, both parties herein, has the initial responsibility of showing no material fact is in dispute. The ALJ is to make a recommendation about the appropriate interpretation of the law and about how that law applies to the undisputed facts.
lll. Jurisdiction
The ALJ and the Department
have jurisdiction pursuant to Minn. Stat. §§ 14.55, and 256B.0643. The District was given notice of the hearing
in this matter and the Department has complied with all relevant procedural
requirements.
lV. Facts
The Department, under
Minnesota Statutes, Chapter 256B, is charged with administering the “statewide
program of medical assistance.” Under
chapter 256B, the Department is required to make payments to medical service
providers (“providers”) that are enrolled in the Medical Assistance program,
have provided medically necessary services and have complied with relevant state
and federal laws and regulations. School
districts may enroll as Medical Assistance Providers.[6]
The District is
obligated by Federal law to provide special education and “related services” to
students in need of such services. “Related
services” include personal care assistant/paraprofessional services, among
others. Minn. Stat. § 256B.0625, subd.
26, enumerates “related services” which if provided by the District, constitute
covered services for which Medical Assistance payment may be requested.
The Department provides
payments to a school district, as it does to other Medical Assistance providers,
for covered services as the district submits claims for services actually
provided and those claims are adjudicated and approved at an interim rate. The interim rate is based upon the individual
district’s cost-based school year rate, established by the Department based
upon a previous school year, two years prior.
One year after the close of any given school year, the Department
determines the “settle-up rate” for that school year’s payments. The Department then recalculates all payments
it made to a district during the course of the school year to reflect the
settle-up rate, by re-processing the claims at the settle-up rate. If the settle-up rate is higher than the
interim rate, the district receives additional payment from the
Department. If the settle-up rate is
lower, the Department reflects this as a credit balance. Future payments to the district are applied
to the credit balance until paid off. The
Department determines the settle-up rate through a mathematical formula that
takes into account two basic elements: 1) the number of times that covered
services were provided to eligible individuals, termed “encounters”; and 2) the
number of program direct service hours of covered services that were provided
by district employees or contractors.
The District is enrolled
as a Medical Assistance provider. During
the 2005-2006 school year, the District provided covered services to special
education students. It submitted requests
for payment to the Department throughout the year as the covered services were
provided. The Department remitted
payments to the District for these services in accordance with the interim rate.
On June 7, 2007, the
District reported to the Department 24,556.45 hours and 14,828 encounters for Paraprofessional
services as the total number of covered services for the 2005-2006 school
year. On August 1, 2007, the Department
sent the District a letter dated stating the District’s settle-up rate for the
2005-2006 school year for Paraprofessional services was $34.80 per hour of
service. The settle-up rate for
Paraprofessional services was lower than the District’s interim rate for
2005-2006. As a result, on October 30,
2007, a negative credit balance was reflected for the District after deductions
of $93,700.05 and $4,748.06 (totaling -$98,448.11). These deductions left a negative credit
balance of $90,875.16 for the District to be paid down by applying payments from
future billings to the balance. Also on
that date, the rate of $34.80/hour became the District’s interim rate for
Paraprofessional services for the 2007-2008 school year.
In March of 2008,
conversations between Eileen Campbell, a District employee responsible for
overseeing the District’s third party billing program, and Cathy Griffin at the
Minnesota Department of Education (“MDE”), resulted in the District discovering
that its settle-up rate for Paraprofessional services for the 2005-2006 school
year was lower than the District’s interim rate because the District had
reported substantially fewer Program service hours and encounters of Paraprofessional
service than it had in the past. Ms.
Campbell then reviewed the 2005-2006 data and discovered the source of the
discrepancy. Due to personnel changes in
the District during the 2005-2006 school year, the District had erroneously
reported 24,556.45 hours and 14,828 encounters of Paraprofessional services
when it had, according to its records, provided 40,289.53 hours and 15,017
encounters for such services. Ms.
Campbell reported the correct data to Robert Vaadeland, the District’s
Assistant Superintendent and Director of Special Education. On June 17, 2008, Mr. Vaadeland sent a letter
to the Department requesting an appeal from the 2005-2006 settle-up rate
determination and subsequent deduction.
Minn. R. 9505.0450,
subp. 2, states, in relevant part, that
[a] provider shall submit a claim for payment no later than 12 months
after the date of service to the recipient and shall submit a request for an
adjustment to a payment no later than six months after the payment date. The department has no obligation to pay a
claim or make an adjustment to a payment if the provider does not submit the claim
within the required time.
On August 1, 2008, Richard
Tester, a State Program Administration Manager for the Department, contacted
Mr. Vaadeland by telephone. Mr. Tester
stated that the District’s 2005-2006 settle-up rate for Paraprofessional
services would be adjusted to reflect the accurate data.
While the Department
does not question the accuracy of the corrected number of direct service hours
or encounters of Paraprofessional services, the Department denied the
District’s request as untimely, relying on Minn. R. 9505.0450, subp. 2. On August 25, 2008, Larry Woods,
Director of Health Care Operations for the Department, sent the District a
letter which stated that: 1) the Department does not have a formal appeal
process available to the District; 2) the Department was not obligated to
consider the District’s request because of Minn. R. 9505.0450, subp. 2; 3)
the letter constituted the Department’s final decision on this matter; and 4)
the District may appeal this decision through the contested case process in
accordance with the terms described in Minn. Stat. § 256B.0643.
If the District’s appeal
is upheld, the District’s rate for Paraprofessional services will be calculated
according to the revised amounts of 40,289.53 hours and 15,017 encounters,
resulting in a settle-up rate of $56.35, and Paraprofessional services for
2005-2006 will be paid for accordingly by re-processing the claims at the
revised amount.
V. Analysis
The administration of the Medical Assistance
Program was delegated to the Department by the legislature in 1967.[7] The
hands-on delivery of medical assistance services was delegated to the counties.[8] It is
clear from a reading of the entire statute that Section 256B.04 was
specifically written with the counties in mind.
Eligibility to participate in Medical
Assistance Programs was expanded 20 years later, or in 1989, to include
The District
argues that the Department’s rulemaking authority is limited by Section
256B.04, subd. 2 to rulemaking for county agencies only, and therefore, Rule 9505.0450
does not apply to the District. The
Department, on the other hand, relies on
Section 256B.04 to argue that it
has broad authority to make uniform rules to carry out and enforce the
administration of medical assistance “in an efficient, economical, and
impartial manner, and to the end that the medical assistance system may be
administered uniformly throughout the state . . . consistent with the
spirit and purpose of the program . . . .”[11] Section
256B.04, subd. 2 is the sole statutory provision cited by the Department as authority
for its rulemaking in the medical assistance area. The
Department also relies on Minn.Stat. §§ 125A.74 and 256B.0625 in support of its
position that the Rule applies to school districts.
There are several
problems with the Department’s analysis.
First, the Department urges the ALJ to read, as applicable to school
districts, the rulemaking authority in Section 256B.04, subd. 2. While the ALJ has given this argument serious
consideration, it is difficult to overcome the following express language of
the statute: “… which rules shall be
furnished immediately to all county
agencies, and shall be binding on
all county agencies.”[12]
When
the words of a law in their application to an existing situation are clear and
free from all ambiguity, the letter of the law shall not be disregarded under
the pretext of pursuing the spirit.[13] The above-quoted language of the statute does not say, “and
other medical assistance providers”, following the words, “county
agencies”. This tribunal is reluctant to
impute such language to the statute; therefore, the ALJ declines to apply Rule
9505.0450 to the District. There is a well-recognized rule that where a statute
expresses one thing, it excludes another.
Under this maxim if a statute assumes to specify the effects of a
certain provision, other effects are excluded.[14] Therefore, the express language making
Section 256B.04 rules applicable and “binding on all county agencies”,
excludes others from the statute and from its subsequently promulgated rules.
Second,
given that the Rule predates the statutory authority for school districts to provide
medical assistance services, it is unlikely that it was contemplated that it
would apply to school districts since school districts did not have authority to
provide medical assistance services at the time the Rule was promulgated. The object of all statutory interpretation is
to determine the intent of the legislature.
The ALJ has employed a similar analysis to the Rule. Failure to apply the Rule to the District
does not violate the Department’s intent at the time.
Third,
the fact that providers, other than school districts, may comply with the Rule,
does not add weight to the Department’s case where, as found here,
Section 256B.04 whose authority for rulemaking is limited, makes its
application dubious as to other providers as well.
Fourth,
nor does the Department’s position relative to Sections 125A.74 or 256B.0625
bear on the applicability of Section 256B.04, subd. 2 to school districts. Minn. Stat. § 125A.74 states, in
relevant part, that “[in order] [t]o receive medical assistance payments, the
district must . . . comply with relevant provisions of state and
federal statutes and regulations governing the medical assistance program.”
This statute is general in nature in that it requires compliance with relevant state and federal medical
assistance statutes and rules but does not specify what those laws or rules
are. (Emphasis mine). The quoted language above of Section 125A.74
is procedural, not substantive. One must
look to other substantive laws and rules for enforcement. If Rule 9505.0450 is not relevant because it
is not applicable to school districts, then school districts need not comply
with it. Thus, failure to comply with Rule
9505.0450, under these circumstances, does not violate Section 125A.74.
Fifth, Minn.
Stat. § 256B.0625 does not support the applicably of Section 256B.04,
subd. 2 to school districts either. Section 256B.0625 spells out the types of care
and services school districts may provide under the medical assistance program and
under what conditions reimbursement may be obtained. Section 256B.0625, subd. 26, specifies
the same as it relates to special education services provided by school
districts. It is silent, however, on the
question of whether Section 256B.04, subd. 2 applies to school districts.[15]
Finally,
the Department’s argument that the “Provider agreement” between the parties
makes Section 256B.04 applicable to school districts meets with a similar
analysis.[16] Like the language in Section 125A.74, the
language quoted by the Department in its reply brief is general in nature and
does not reference Section 256B.04 or Rule 9505.0450.
The ALJ
finds that the rulemaking authority contained in Section 246B is, as currently
written, limited to the promulgation of rules applicable to county agencies and
therefore, Minn. R. 9505.0450 is inapplicable to the District. The ALJ recommends that the Commissioner
order the Department to accept the corrected amounts[17] for
Paraprofessional services for 2005-2006 and order that the Department to re-process
the claims at the settle-up rate of $56.35.
M. J. C.
[1] Notice and Order for Prehearing.
[2] Scheduling Order.
[3] Sauter v.
Sauter, 70 N.W.2d 351, 353 (
[4] See,
[5]
Illinois
Farmers insurance Co. v. Tapemark Co., 273 N.W.2d 630, 634 (
[6] Minn.Stat. § 125A.74 (2000).
[7]
[8]
[9] Minn. Stat. § 125A.74, subd. 1 (1989).
[10]
[11]
[12] Minn. Stat. § 256B.04, subd. 2 (1967), (emphasis
mine).
[13]
[14] See, e.g., Anderson
v. Twin City Rapid Transit Co., 84 N.W.2d 593 (
[15] See also,
Minn.Stat. § 256B.02, subd. 8, which refers to Section 256B.0625 as an enumeration
of medical care and services.
[16] The Department did not submit a copy of the Provider
agreement. The ALJ attempted to retrieve
the information cited by the Department on p. 7 of its reply memorandum via the
internet but received an “error” message.
[17] The corrected Paraprofessional service amounts are
40, 289.53 hours and 15, 017 encounters.