Clovernook Health Care Pavilion v. Ohio Dep't of Medicaid
| Citation | 167 N.E.3d 1057 |
| Decision Date | 05 February 2021 |
| Docket Number | No. 20AP-87,20AP-87 |
| Parties | CLOVERNOOK HEALTH CARE PAVILION et al., Appellants-Appellants, v. Ohio DEPARTMENT OF MEDICAID, Appellee-Appellee. |
| Court | United States Court of Appeals (Ohio) |
DECISION
{¶ 1} Appellants Clovernook Health Care Pavilion and OVM Investment Group, LLC dba Ohio Valley Manor Nursing and Rehabilitation (collectively "Clovernook") appeal the judgment of the Franklin County Court of Common Pleas affirming an adjudication order issued by appellee, the Ohio Department of Medicaid ("ODM"), that seeks to recover certain alleged overpayments. For the following reasons, we reverse the trial court.
{¶ 2} Clovernook is a nursing and long-term care facility that participated in, and allegedly received overpayments from, the Ohio Medicaid program. ODM, as administrator of the Medicaid program, notified Clovernook in a letter dated March 12, 2019 of its intent to adjudicate certain asserted overpayments. The "Notice of Intent to Adjudicate" cites to R.C. Chapter 119 and R.C. 5165.525 and includes a "Final Debt Summary Report" that reflects, in relevant part, that Clovernook was overpaid $12,392.15 for the 2006 fiscal year and $2,006.00 for the 2013 fiscal year. (Certified Record at 1.) The notice also includes information about how to timely request a hearing "regarding a finding in the Final Debt Summary Report" within 30 days of the mailing date of the notice and warns that failure to request a hearing would lead to ODM adopting and ratifying the findings of the final debt summary report. (Certified Record at 1.)
{¶ 3} Clovernook did not request a hearing and on April 12, 2019 the director of ODM issued an adjudication order pursuant to R.C. Chapters 5165 and 119 that adopted and ratified the findings in the final debt summary report and sought repayment of the debt owed. Clovernook filed a timely notice of appeal of the adjudication order to the Franklin County Court of Common Pleas. In support of its appeal, Clovernook argued that, before ODM can commence an action to recover the alleged overpayment, R.C. 5164.57(A)(1)1 requires ODM to notify a provider of an alleged overpayment within five years immediately following the end of the fiscal year in which the overpayment allegedly occurred. According to Clovernook, if this notice requirement is not satisfied, ODM is without authority or jurisdiction to recover the debt. Clovernook asserted that the notice in this case did not comply with R.C. 5164.57(A)(1) and therefore ODM did not have subject-matter jurisdiction to enter the April 12, 2019 Adjudication Order and the order is void.
{¶ 4} ODM responded that Clovernook failed to exhaust its administrative remedies and waived this issue since, despite receiving proper notice, Clovernook failed to request an administrative hearing where it could have raised this argument. ODM further argued that Clovernook referred to facts outside of the record and that ODM had subject-matter jurisdiction to issue the notice letter because R.C. 5164.57 reflects a directory, rather than a mandatory and jurisdictional, timeframe.
{¶ 5} The court of common pleas issued a decision and judgment on January 9, 2020 affirming the April 12, 2019 adjudication order. The court of common pleas first found that, after consideration of the record, ODM was authorized by R.C. 5164.39 to issue the adjudication order since ODM "properly served Clovernook with the [n]otice and [d]ebt [s]ummary by certified mail, as required by R.C. 119.07," the notice set forth the proper information, and Clovernook did not request a hearing within 30 days of ODM mailing the notice. (Decision at 5.) Then, considering the parties’ "[a]rguments on [a]ppeal," the court of common pleas found that R.C. 5164.57(A)(1) is expressly "directory" not "mandatory." (Decision at 5.) The court reasoned that "[a]s an initial matter, R.C. 5164.57 does not use the word ‘shall’ " and noted that in AmCare, Inc. v. Ohio Dept. of Job & Family Servs. , 161 Ohio App.3d 350, 2005-Ohio-2714, 830 N.E.2d 406 (10th Dist.), this court found that even the legislature's use of the word "shall" in another statute did not lead to the conclusion that the statute was mandatory. (Decision at 7.) The court of common pleas also concluded that reading the instant statute as including a mandatory condition precedent to ODM's right to recover overpayments "is at odds with R.C. 5164.57(C)." (Decision at 7.) Based on the foregoing analysis, the court of common pleas concluded that the adjudication order at issue in this case was supported by reliable, probative, and substantial evidence and was in accordance with law.
{¶ 6} Clovernook filed a timely appeal.
{¶ 7} Clovernook asks this court to review the following sole assignment of error:
THE LOWER COURT ERRED IN FINDING THAT R.C. 5164.57(A)(1) ’s FIVE-YEAR NOTICE REQUIREMENT IS MERELY DIRECTORY AND NOT MANDATORY AND JURISDICTIONAL.
{¶ 8} "Review of an adjudication order issued by ODM is governed by R.C. 119.12." Physician's Ambulance Serv., Inc. v. Ohio Dept. of Medicaid , 10th Dist. No. 20AP-32, 2020-Ohio-6842, 2020 WL 7631657, ¶ 19, citing Meadowwood Nursing Facility v. Ohio Dept. of Job & Family Servs. , 10th Dist. No. 04AP-732, 2005-Ohio-1263, 2005 WL 2980591, ¶ 8. "Pursuant to R.C. 119.12, a court of common pleas must determine whether an agency's decision is supported by reliable, probative, and substantial evidence and is in accordance with law." Id. , citing R.C. 119.12(M) and Pons v. Ohio State Med. Bd. , 66 Ohio St.3d 619, 621, 614 N.E.2d 748 (1993). Ohio Historical Soc. v. State Emp. Relations Bd. , 66 Ohio St.3d 466, 471, 613 N.E.2d 591 (1993) ).
{¶ 9} "The standard of review for a court of appeals in an administrative appeal is even more limited." Melnyk v. Ohio Dept. of Medicaid , 10th Dist. No. 18AP-693, 2019-Ohio-5134, 2019 WL 6769699, ¶ 16. The trial court's determination as to whether an agency's decision is supported by reliable, probative, and substantial evidence is reviewed on appeal for an abuse of discretion. Bryant Health Care Ctr., Inc. v. Ohio Dept. of Job & Family Servs. [Ohio Dept. of Medicaid ], 10th Dist. No. 13AP-263, 2014-Ohio-92, 2014 WL 117424, ¶ 23, citing Fletcher v. Ohio Dept. of Transp. , 10th Dist. No. 12AP-46, 2012-Ohio-3920, 2012 WL 3673989, ¶ 8, citing Univ. Hosp., Univ. of Cincinnati College of Medicine v. State Emp. Relations Bd. , 63 Ohio St.3d 339, 343, 587 N.E.2d 835 (1992). "On questions of law, however, the common pleas court does not exercise discretion and the court of appeals review is plenary." Black v. State Bd. of Psychology , 160 Ohio App.3d 91, 2005-Ohio-1449, 825 N.E.2d 1192, ¶ 5 (10th Dist.), citing Univ. Hosp., Univ. of Cincinnati College of Medicine at paragraph one of the syllabus. "[W]hether a trial court correctly interpreted and applied a statute is a question of law" reviewed de novo on appeal. Myers v. Wade , 10th Dist. No. 16AP-667, 2017-Ohio-8833, 2017 WL 6016621, ¶ 8. 2200 Carnegie, L.L.C. v. Cuyahoga Cty. Bd. of Revision , 135 Ohio St.3d 284, 2012-Ohio-5691, 986 N.E.2d 919, ¶ 10 ().
{¶ 10} Resolution of this appeal centers on the narrow question Clovernook assigned for our review: whether the notice requirement in R.C. 5164.57(A)(1) is "directory" as opposed to "mandatory" and jurisdictional. (Clovernook's Brief at 1.)
We conclude that because R.C. 5164.57(A)(1) conditions ODM's authority to recover Medicaid overpayments on ODM's provision of notice to the provider within the requisite five-year period, compliance with the R.C. 5164.57(A)(1) notice provision is mandatory.
{¶ 11} The difference between a mandatory and a directory statutory requirement "depends on its effect." Miller v. Lakewood Hous. Co. , 125 Ohio St. 152, 161, 180 N.E. 700 (1932). " ‘A statute is mandatory where noncompliance with its provisions will render illegal and void the steps or acts to which it relates or for which it provides, and is directory where noncompliance will not invalidate such steps or acts.’ " AmCare, Inc. at ¶ 18, quoting State ex rel. Jones v. Farrar , 146 Ohio St. 467, 66 N.E.2d 531 (1946), paragraph one of the syllabus. The determination of whether the legislature intended a statutory provision to be mandatory or directory requires review of the specific language employed viewed in context of "the entire act, its nature, its effect and the consequences which would result from construing it one way or another." Jones at 472, 66 N.E.2d 531 ; Internatl. Paper Co. v. Testa, Tax Commr. , 150 Ohio St.3d 348, 2016-Ohio-7454, 81 N.E.3d 1225, ¶ 19.
{¶ 12} As a general rule, " ‘a statute which provides a time for the performance of an official duty will be construed as directory so far as time for performance is concerned, especially where the statute fixes the time simply for convenience or orderly procedure.’ " State ex rel. Martin v. Mannen , 113 Ohio St.3d 373, 2007-Ohio-2078, 865 N.E.2d 898, ¶ 6, quoting Jones at 472, 66 N.E.2d 531 ; In re Davis , 84 Ohio St.3d 520, 522, 705 N.E.2d 1219 (1999). However, the Supreme Court of Ohio has recognized an exception to this general rule where " ‘the nature of the act to be performed or the phraseology of the statute or of other statutes relating to the same subject-matter is such that the designation of time must be considered a limitation upon the power...
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