Ass'n of Home Help Care Agencies v. Dep't of Health & Human Servs. & State

• Decision Date: 19 November 2020
• Docket Number: No. 349405,349405
• Citation: 334 Mich.App. 674,965 N.W.2d 707
• Parties: ASSOCIATION OF HOME HELP CARE AGENCIES, Plaintiff-Appellant, v. DEPARTMENT OF HEALTH AND HUMAN SERVICES and State of Michigan, Defendants-Appellees.
• Court: Court of Appeal of Michigan — District of US

334 Mich.App. 674

965 N.W.2d 707

ASSOCIATION OF HOME HELP CARE AGENCIES, Plaintiff-Appellant,

v.DEPARTMENT OF HEALTH AND HUMAN SERVICES and State of Michigan, Defendants-Appellees.

No. 349405

Court of Appeals of Michigan.

Submitted November 9, 2020, at Lansing.

Decided November 19, 2020, 9:20 a.m.

Darwyn P. Fair & Associates, Detroit (by Darwyn P. Fair ) for the Association of Home Help Care Agencies.

Dana Nessel, Attorney General, Fadwa A. Hammoud, Solicitor General, and Kristin M. Heyse, Leah J. Brooks, and Stephanie M. Service, Assistant Attorneys General, for the Department of Health and Human Services and the state of Michigan.

Before: Markey, P.J., and Meter and Gadola, JJ.

Per Curiam.

Plaintiff, the Association of Home Help Care Agencies (AHHCA), appeals by right the order of the Court of Claims granting summary disposition in favor of defendants the state of Michigan and the Department of Health and Human Services (DHHS) under MCR 2.116(C)(8) and (10). We affirm.

I. BACKGROUND

This dispute concerns DHHS's administration of the Home Help Program, which is a Medicaid program that provides personal care services to individuals who require hands-on assistance with the functions of daily living.¹ DHHS is tasked with monitoring, regulating, and policing home health or help agencies² in Michigan that provide care under the program. DHHS-approved home help care agencies are eligible to join AHHCA.

A. STATUTORY FRAMEWORK FOR IMPLEMENTING STATE MEDICAID POLICIES AND THE APPROVED STATE PLAN

As part of the Social Welfare Act, MCL 400.1 et seq. , MCL 400.111a authorizes the director of DHHS to implement policies governing the provision of services:

(1) The director of the department of community health, after appropriate consultation with affected providers and the medical care advisory council established according to federal regulations, may establish policies and procedures that he or she considers appropriate, relating to the conditions of participation and requirements for providers established by section 111b and to applicable federal law and regulations, to assure that the implementation and enforcement of state and federal laws are all of the following:

(a) Reasonable, fair, effective, and efficient.

(b) In conformance with law.

(c) In conformance with the state plan for medical assistance adopted under section 10 and approved by the United States department of health and human services.

(2) The consultation required by this section shall be conducted in accordance with guidelines adopted by the state department of community health according to section 24 of the administrative procedures act of 1969, 1969 PA 306, MCL 24.224.

In May 1997, "[a]ll the statutory authority, powers, duties, functions and responsibilities of the Home Help Program" stated in MCL 400.106, MCL 400.109, and MCL 400.109c were transferred to the Department of Community Health (see Executive Order No. 1997-5(III)(1); MCL 400.224 ), which subsequently became DHHS in 2015 under Executive Order No. 2015-4.

The "consultation" requirement referred to in MCL 400.111a(1) and (2) incorporates the procedure for adopting guidelines outlined in MCL 24.224 of the Administrative Procedures Act of 1969 (APA), MCL 24.201 et seq. MCL 24.224 provides:

(1) Before the adoption of a guideline, an agency shall give electronic notice of the proposed guideline to the committee, the office of regulatory reform, and each person who requested the agency in writing or electronically for advance notice of proposed action that may affect the person.... The notice shall be given by mail, in writing, or electronically transmitted to the last address specified by the person requesting the agency for advanced notice of proposed action that may affect that person....

(2) The notice required by subsection (1) shall include all of the following:

(a) A statement of the terms or substance of the proposed guideline, a description of the subjects and issues involved, and the proposed effective date of the guideline.

(b) A statement that the addressee may express any views or arguments regarding the proposed guideline or the guideline's effect on a person.

(c) The address to which written comments may be sent and the date by which comments shall be mailed or electronically transmitted, which date shall not be less than 35 days from the date of the mailing or electronic transmittal of the notice.

(d) A reference to the specific statutory provision about which the proposed guideline states a policy.^[3]

The Social Security Act, 42 USC 301 et seq. , sets forth conditions for home health agencies' participation in Medicaid. 42 USC 1395bbb. Home health agencies must "use" home health aides who have completed certain training requirements and who are "competent to provide" home healthcare, in addition to conducting regular performance reviews and providing "regular in-service education" to ensure the continued competence of home health aides. 42 USC 1395bbb(a)(3)(B)(ii). Federal law lists convictions that result in mandatory exclusion from participation in federal healthcare programs, which include convictions for program-related crimes, patient abuse, healthcare fraud, and controlled substance offenses. 42 USC 1320a-7(a). Federal law also lists convictions that "may exclude" individuals from participation in a federal healthcare program, and those offenses, among many others, include misdemeanor convictions for fraud and financial misuse related to a healthcare program. 42 USC 1320a-7(b). AHHCA refers to the former category as "mandatory convictions" and to the latter category as "permissive convictions."

The federal government approved a State Plan for Michigan in August 2007. "The State plan is a comprehensive written statement submitted by the agency describing the nature and scope of its Medicaid program and giving assurance that it will be administered in conformity with [federal law]." 42 CFR 430.10 (2021). The approved State Plan described the services available through the Home Help Program, which—for one calendar month—are a maximum of five hours for shopping, six hours for light housekeeping, seven hours for laundry, and 25 hours for meal preparation. According to the State Plan, providers of home help services "shall be qualified individuals or individuals who contract with or are employed by an agency."

B. DHHS POLICIES GOVERNING HOME HELP AGENCIES IN MICHIGAN

In 2008, DHHS issued Medical Services Administration (MSA) Bulletin No. 08-28, setting forth the wage rate for agency providers of home help services and indicating that future wage increases for both individual and agency providers would occur concurrently and be based on minimum-wage-law changes and legislative appropriations. An agency was eligible for approval by DHHS if it had a federal tax identification number and if it employed or subcontracted with two or more persons to provide home help care. In 2015, DHHS issued MSA 15-13, which required home help agencies to employ workers directly, although DHHS held this requirement in abeyance until further notice for agencies approved before June 1, 2015. DHHS further allowed home help agency workers who had permissive or nonmandatory convictions to provide services with the consent of the beneficiary. In 2017, DHHS issued MSA 17-32, replacing all prior policies governing agency rates and setting new rates.

DHHS subsequently provided notice of a proposed policy draft that became MSA 18-09, updating the standards governing home help agencies. DHHS required agencies to employ workers directly, and it suspended the ability of a beneficiary to consent to allowing an agency employee with a criminal history to provide services. Agencies that did not comply with the requirements of the policy could be removed from DHHS's Approved Agency List or disenrolled. Agencies removed from the approved list would still be eligible for reimbursement, but at the individual provider rate. If an agency was disenrolled, DHHS would notify the agency of the disenrollment determination within 10 days, and this decision could be appealed. An agency could provide services while an appeal was pending if the agency accepted responsibility to repay funds disbursed by DHHS during the appeal if the disenrollment determination was upheld.

In response to DHHS's solicitation of comments, one commenter disagreed with the proposal to suspend a beneficiary's ability to consent to receive services from an agency provider with a criminal record, claiming that it would result in a shortage of eligible providers. DHHS indicated that it did not have the capacity to monitor all the consent arrangements in order to ensure the safety of beneficiaries, although DHHS would still permit beneficiaries who knew and trusted their provider to employ that person as an individual provider rather than through an agency despite their criminal history. Another commenter disagreed with the direct-employment requirement because it would create a financial hardship for agencies. DHHS responded that it was covering some of the taxes and costs for agencies and that agencies would also be paid a higher rate of compensation in light of the added costs so that agencies could continue to confer the same level of benefits on their employees. When DHHS issued MSA 18-09, it notified agencies that the direct-employment requirement would apply to all agencies.

AHHCA filed a complaint in the Court of Claims challenging the validity of MSA 17-32 and MSA 18-09 on constitutional and statutory grounds. AHHCA also sought a temporary restraining order and a preliminary injunction. The Court of Claims denied all injunctive relief and denied AHHCA's motion for reconsideration regarding injunctive relief. The parties subsequently moved for summary disposition. The court granted defendants' motion for summary disposition, but denied AHHCA's competing motion for summary disposition. The court subsequently denied AHHCA's motion for reconsideration of the order...