CLC OF BILOXI, LLC D/B/A BILOXI COMMUNITY LIVING CENTER APPELLANT
MISSISSIPPI DIVISION OF MEDICAID AND DAVID J. DZIELAK, IN HIS OFFICIAL CAPACITY AS EXECUTIVE DIRECTOR OF THE DIVISION OF MEDICAID APPELLEES
OF JUDGMENT: 06/21/2016
PATRICIA D. WISE COURT FROM WHICH APPEALED: HINDS COUNTY
CHANCERY COURT, FIRST JUDICIAL DISTRICT
ATTORNEYS FOR APPELLANT: JAMES RAY MOZINGO, LYDIA QUARLES,
HORACE HUNTER TWIFORD IV
ATTORNEYS FOR APPELLEES: JANET MCMURTRAY, LAURA L. GIBBES
GRIFFIS, P.J., BARNES AND FAIR, JJ.
CLC Biloxi sought a per diem reimbursement from the
Mississippi Division of Medicaid (DOM) for their
respiratory-therapist expenses. The DOM denied CLC
Biloxi's request. After an administrative hearing, the
DOM executive director affirmed the DOM. CLC Biloxi then
appealed to Hinds County Chancery Court, which also affirmed
the DOM. Finally, CLC appealed to this Court. After review,
we find the DOM's decision to deny CLC reimbursement for
respiratory-therapist expenses on a per diem basis was
supported by substantial evidence. Accordingly, we affirm.
CLC Biloxi is a long-term skilled nursing facility that
entered into a contract with the DOM to provide nursing-home
services to Mississippi residents. In turn, the costs of the
services provided by CLC Biloxi were reimbursed by the DOM in
two ways: (1) as an expense could be billed directly to
Medicaid for reimbursement of a specific service; and (2) CLC
Biloxi could file an annual cost report with the DOM, which
could include certain allowable costs or services that have
been incurred to provide reasonable care to Medicaid
patients; the cost report would be used to calculate a per
diem cost of care for Medicaid patients.
Among the numerous services CLC Biloxi provided to Medicaid
patients, respiratory therapy was utilized to treat
nursing-home patients who suffered from a pulmonary illness.
Although most respiratory-therapy services could be treated
by a regular nursing staff, CLC Biloxi employed
"respiratory therapists" to provide certain
respiratory treatments to patients.
On May 29, 2009, CLC Biloxi filed its annual cost report for
allowable expenses incurred during 2008. It listed its
respiratory therapists' salaries on Form 6, Line 2, under
therapy expenses. In response to CLC Biloxi's original
2008 cost report, the DOM performed a "desk review,
" to ensure that necessary adjustments were made before
the DOM reimbursed CLC Biloxi for services rendered. Upon
review of the cost report, the DOM determined not to
reimburse CLC Biloxi for the respiratory-therapist salaries
once it calculated the appropriate per diem to be provided.
On August 2, 2010, CLC Biloxi filed an amended cost report
with the DOM. Unlike the original 2008 cost report, CLC
Biloxi sought reimbursement for the respiratory-therapist
salaries as a direct care expense on Form 6, Line 1. In
contrast to the initial desk review of the original 2008 CLC
Biloxi cost reports, the first amended desk review handed
down by the DOM on January 12, 2011, allowed the respiratory
therapists' salaries to be used to calculate CLC
Biloxi's per diem. Accordingly, approximately $82, 000 in
salaries for respiratory therapists was included in CLC's
per diem calculation.
Upon discovery of the improper classification made by CLC
Biloxi, the DOM issued a second amended desk review on March
2, 2012. Consequently, the DOM removed the
respiratory-therapist salaries from CLC Biloxi's per diem
calculation, as was done in the original desk review. As a
result, the DOM sought to recoup the $82, 000 that had been
paid to CLC Biloxi for the inclusion of respiratory-therapist
salaries in their per diem rates.
In response, on March 30, 2012, CLC Biloxi requested an
administrative appeal of the adjustments handed down by the
DOM in the second amended desk review. Less than a month
later, the DOM denied the appeal. Upon denial of the appeal,
CLC Biloxi requested an administrative hearing. Following the
hearing, the hearing officer recommended and the DOM
executive director affirmed the DOM's disallowance of the
respiratory therapists' salaries as part of CLC
Biloxi's per diem calculation.
On October 23, 2013, CLC Biloxi filed a complaint in the
Hinds County Chancery Court seeking declaratory and
injunctive relief to prevent the DOM from breaching its
contract with CLC Biloxi and from adopting what CLC Biloxi
believed to be "an arbitrary and capricious
interpretation of its controlling regulations." The DOM
then filed a motion to dismiss the complaint and challenged
the chancery court's jurisdiction to hear administrative
appeals from the DOM. The case was stayed pending the outcome
of the interlocutory appeal in Mississippi Division of
Medicaid v. Alliance Health Center, 174 So.3d 254, 263
(¶26) (Miss. 2015), in which the Mississippi Supreme
Court affirmed the jurisdiction of the chancery court over
appeals from the DOM.
On March 29, 2016, the chancery court heard oral arguments on
the dispute. Ultimately, on June 21, 2016, the court affirmed
the DOM's final decision and held that the language found
in the State Medicaid Plan (State Plan), its policy provider
manual, and cost report "does not include respiratory
therapists within those categories of therapists that are
allowed to enroll as Medicaid providers and thus receive
direct reimbursement for their services." Further, the
court found that CLC Biloxi did not fall within the
categories of medical facilities that are allowed a per diem
reimbursement for respiratory therapists'
CLC Biloxi filed the instant appeal.
We will reverse the decision of an administrative agency only
if the decision (1) was unsupported by substantial evidence;
(2) was arbitrary or capricious; (3) was beyond the power of
the administrative agency to make; or (4) violated the
complaining party's statutory or constitutional right.
Hinds Cty. Sch. Dist. Bd. of Trs. v. R.B. ex rel.
D.L.B., 10 So.3d 387, 394-95 (¶17) (Miss. 2008). An
agency may not adopt rules and regulations that are contrary
to statutory provisions, or that exceed or conflict ...