CT Ohio Portsmouth, LLC v. Ohio Dep't of Medicaid
| Decision Date | 29 October 2020 |
| Docket Number | No. 19AP-588,19AP-588 |
| Parties | CT OHIO PORTSMOUTH, LLC, d/b/a Portsmouth Health and Rehab, Plaintiff-Appellee/Cross-Appellant, v. The OHIO DEPARTMENT OF MEDICAID et al., Defendants-Appellants/Cross-Appellees. |
| Court | Ohio Court of Appeals |
DECISION
{¶ 1} Defendants-appellants/cross-appellees Ohio Department of Medicaid ("ODM") and the Director of ODM, Maureen M. Corcoran (collectively "appellants") appeal a judgment of the Franklin County Court of Common Pleas overruling appellants' objections to a magistrate's decision and entering judgment in favor of plaintiff-appellee/cross-appellant, CT Ohio Portsmouth, LLC, d/b/a/ Portsmouth Health and Rehab ("Portsmouth"), on its claims that R.C. 5165.771 violates the due process protections of the Ohio Constitution and the United States Constitution and that appellants were not authorized to terminate Portsmouth's participation in Ohio's Medicaid program until April 19, 2019 pursuant to R.C. 5165.771(B)(3). Portsmouth filed a cross-appeal of the common pleas court judgment, which also overruled Portsmouth's objections to the magistrate's decision and entered judgment in favor of appellants on Portsmouth's claim that R.C. 5165.771 violates the constitutional non-delegation doctrine and that appellants were not authorized to terminate Portsmouth's participation in Ohio's Medicaid program until May 31, 2019 pursuant to R.C. 5165.771(D). Portsmouth has also moved to dismiss the appeal, arguing it has been rendered moot by subsequent events. For the following reasons, we deny Portsmouth's motion to dismiss and affirm in part and reverse in part the judgment of the common pleas court.
{¶ 2} Portsmouth operates a skilled nursing facility in Portsmouth, Ohio, named Portsmouth Health and Rehab. This appeal arises from an action filed to prevent appellants from terminating Portsmouth's participation in the Ohio Medicaid program.
{¶ 3} Prior to May 1, 2018, the facility now known as Portsmouth was operated by Pristine Senior Living of Portsmouth, LLC, and known as Pristine Senior Living & Post Acute Care of Portsmouth ("Pristine"). Pristine entered into a Medicaid provider agreement with ODM in 2015. On March 8, 2018, the Ohio Department of Health ("ODH") issued a letter advising Pristine it had been selected for the Special Focus Facility ("SFF") program. The Federal Centers for Medicare and Medicaid Services ("CMS") published an SFF list on April 19, 2018 identifying Pristine as a facility that was newly added to the SFF program.
{¶ 4} On May 1, 2018, Portsmouth took over operations of Pristine and renamed the facility. Portsmouth entered into a new Medicaid provider agreement with ODM effective May 1, 2018. On February 15, 2019, ODM advised Portsmouth it intended to terminate Portsmouth's Medicaid provider agreement as of March 9, 2019 pursuant to R.C. 5165.771(B)(3).
{¶ 5} On March 7, 2019, Portsmouth filed a complaint in the common pleas court seeking declaratory and injunctive relief. Portsmouth sought a temporary restraining order, preliminary injunction, and permanent injunction prohibiting appellants from enforcing R.C. 5165.771 and terminating Portsmouth's Medicaid provider agreement. Portsmouth's complaint asserted five counts: (1) R.C. 5165.771 violated Article I, Section 16, of the Ohio Constitution, (2) R.C. 5165.771 violated the Fifth and Fourteenth Amendments to the United States Constitution, (3) R.C. 5165.771 violated the non-delegation doctrine of the Ohio and United States Constitutions, (4) appellants violated R.C. 5165.771(B)(3) by attempting to terminate Portsmouth's Medicaid provider agreement earlier than allowed under the statute, and (5) appellants violated R.C. 5165.771(D) by attempting to terminate Portsmouth's Medicaid provider agreement before the Ohio Department of Aging provided four months of technical assistance to Portsmouth. An agreed temporary restraining order was entered the day the complaint was filed, prohibiting appellants from enforcing R.C. 5165.771 against Portsmouth and terminating its provider agreement. A magistrate of the common pleas court conducted a hearing on the complaint on March 28, 2019. The agreed temporary restraining order was extended until the magistrate issued a decision.
{¶ 6} The magistrate concluded R.C. 5165.771 was facially unconstitutional because it violated the due process protections provided under the Ohio Constitution and the United States Constitution by denying nursing facilities continued participation in the Medicaid program without due process of law. The magistrate further concluded R.C. 5165.771 did not violate the constitutional non-delegation doctrine. The magistrate found appellants were not authorized to terminate Portsmouth from the Medicaid program until April 19, 2019, and terminating Portsmouth's provider agreement prior to that date would violate R.C. 5165.771(B)(3). The magistrate also found appellants did not violate the statute by seeking to terminate Portsmouth from the Medicaid program before the Ohio Department of Aging had provided four months of technical assistance as required under R.C. 5165.771(D). Finally, the magistrate concluded Portsmouth was entitled to a permanent injunction prohibiting enforcement of R.C. 5165.771.
{¶ 7} Appellants and Portsmouth submitted objections to the magistrate's decision. The common pleas court issued a judgment overruling all objections and adopting the magistrate's decision. The court entered judgment in favor of Portsmouth on its first and second claims for relief, holding R.C. 5165.771 violated the due process protections of the Ohio Constitution and United States Constitution, and on its fourth claim for relief, holding appellants violated R.C. 5165.771(B)(3) by seeking to terminate Portsmouth's Medicaid provider agreement prior to April 19, 2019. The court entered judgment in favor of appellants on Portsmouth's third claim for relief, finding R.C. 5165.771 did not violate the constitutional non-delegation doctrine, and its fifth claim for relief, finding appellants did not violate R.C. 5165.771(D). The common pleas court permanently enjoined appellants from enforcing R.C. 5165.771 and terminating Portsmouth from the Medicaid program under that statute.
{¶ 8} Appellants appeal and assign the following three assignments of error for our review:
{¶ 9} Portsmouth filed a cross-appeal and assigns the following sole assignment of error for our review:
The trial court erred in finding that R.C. 5165.771 does not violate the non-delegation doctrine.
{¶ 10} Medicaid, which provides joint federal and state funding for medical care for individuals who cannot afford to pay medical costs, began in 1965 with the enactment of Title XIX of the Social Security Act. Arkansas Dept. of Health & Human Servs. v. Ahlborn , 547 U.S. 268, 275, 126 S.Ct. 1752, 164 L.Ed.2d 459 (2006). On the federal level, Medicaid is administered by the Secretary of the Department of Health and Human Services, who exercises authority through CMS. Ahlborn . Although states are not compelled to participate in Medicaid, all states have chosen to join the program. Id. ODM is the agency charged with supervising the Medicaid program in Ohio. R.C. 5162.03. An operator of a nursing facility in Ohio may enter into a provider agreement to receive Medicaid payments for services provided to Medicaid-eligible residents if: (1) the nursing facility is certified by the Director of ODH for participation in Medicaid, (2) the nursing facility is licensed by the Director of ODH as a nursing home, if required by law, and (3) both the operator and the nursing facility comply with all applicable state and federal laws and rules. R.C. 5165.06.
{¶ 11} Each state is responsible for certifying that nursing facilities are in compliance with the requirements of law by performing inspections, referred to as "surveys." 42 U.S.C. 1395i-3(g)(1)(A) and 1396r(g)(1)(A). Under federal law, a regular "standard survey" of each facility must be conducted at least once every 15 months. 42 U.S.C. 1395i-3(g)(2)(A) and 1396r(g)(2)(A). Facilities found to have provided substandard care are subject to further extended surveys. 42 U.S.C. 1395i-3(g)(2)(B) and 1396r(g)(2)(B). In Ohio, ODH conducts surveys of nursing facilities in accordance with federal and state regulations, guidelines, and procedures. R.C. 5165.64.
{¶ 12} A facility's failure to meet a requirement under the law is referred to as a "deficiency." See 42 C.F.R. 488.301 ; R.C. 5165.60(D)(1). Deficiencies are graded by scope and severity, and can be grouped into four categories: (1) deficiencies that pose no actual harm with potential for minimal harm ("A," "B," or "C" deficiencies), (2) deficiencies that pose no actual harm with potential for more than minimal harm that is not immediate jeopardy ("D," "E," or "F"), (3) deficiencies that constitute actual harm that is not immediate jeopardy ("G," "H," or "I"), and (4) deficiencies that represent immediate jeopardy to resident health or safety ("J," "K," or "L"). A facility is deemed to be in substantial compliance with Medicaid requirements when any identified deficiencies are no greater than category C. After being notified of a deficiency, a facility is given ten days to submit a plan of correction describing the actions that will be taken to correct each deficiency and the date...
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