Hcmc, Inc. v. Odjfs

• Decision Date: 02 December 2008
• Docket Number: No. 08AP-144.,08AP-144.
• Citation: 2008 Ohio 6223,903 N.E.2d 660,179 Ohio App.3d 707
• Parties: HCMC, INC., d.b.a. We Care Medical, Appellee and Cross-Appellant, v. OHIO DEPARTMENT OF JOB AND FAMILY SERVICES, Appellant and Cross-Appellee.
• Court: Ohio Court of Appeals

903 N.E.2d 660

179 Ohio App.3d 707

2008-Ohio-6223

HCMC, INC., d.b.a. We Care Medical, Appellee and Cross-Appellant, v. OHIO DEPARTMENT OF JOB AND FAMILY SERVICES, Appellant and Cross-Appellee.

No. 08AP-144.

Court of Appeals of Ohio, Tenth District, Franklin County.

Decided December 2, 2008.

Geoffrey E. Webster, Eric B. Hershberger, and J. Randall Richards, Columbus, for appellee/cross-appellant.

Nancy H. Rogers, Attorney General, and Henry G. Appel, Assistant Attorney General, for appellant/cross-appellee.

Kegler, Brown, Hill & Ritter, Ralph E. Breitfeller, R. Kevin Kerns, and Jennifer L. Mackanos, Columbus, for amicus curiae, Omnicare Respiratory Services.

PETREE, Judge.

{¶ 1} Appellant and cross-appellee, Ohio Department of Job and Family Services ("ODJFS," or "agency"), appeals from a judgment of the Franklin County Court of Common Pleas that reversed an order of ODJFS and remanded the matter to the agency. Appellee and cross-appellant, HCMC, Inc., d.b.a. We Care Medical ("HCMC"), cross-appeals. For reasons that follow, we affirm in part and reverse in part the judgment of the common pleas court and remand the matter to the common pleas court.

{¶ 2} HCMC is a company that provides oxygen respiratory services. Between November 2004 and November 2005, the Ohio Auditor of State audited Medicaid reimbursements that were made to HCMC for the period of October 1, 2001, through June 30, 2004. During the period under audit, HCMC received reimbursements totaling $1,436,907.52 for 7,993 claims. According to the state auditor's report, the scope of the audit was limited to claims, not involving Medicare copayments, for which HCMC rendered services to Medicaid patients, and all of HCMC's reimbursements were for the supply of oxygen concentrator services to Medicaid residents in long-term care facilities.

{¶ 3} After reviewing HCMC's Medicaid services, the state auditor determined that HCMC had received $1,010,404.26 in overpayments and separated the results into "exception testing" and "usual and customary" categories.¹ ODJFS thereafter issued a proposed adjudication order with a demand that HCMC repay $1,010,404.26, plus interest.

{¶ 4} Challenging factual and legal conclusions of the audit, HCMC requested an administrative hearing pursuant to R.C. Chapters 119 and 5111. After conducting an administrative hearing, a hearing examiner issued a report and recommendation, wherein the hearing examiner concluded that HCMC owed the full amount identified in the audit. Objecting to this report and recommendation, HCMC sought relief from ODJFS. Adopting the hearing examiner's findings of fact, conclusions of law, and recommendation, the director of ODJFS rejected HCMC's objections and issued an adjudication order directing HCMC to repay $1,010,404.26, plus interest.

{¶ 5} From this order, ODJFS appealed to the Franklin County Court of Common Pleas. On condition that HCMC post a supersedeas bond in the amount of $200,000, the common pleas court stayed enforcement of the adjudication order. Later, the common pleas court reversed the agency's adjudication order and remanded the matter to ODJFS to calculate a "usual and customary" charge based on the common pleas court's findings and conclusions. From the common pleas court judgment, ODJFS appeals and HCMC cross-appeals.

{¶ 6} Upon ODJFS's unopposed motion, this court permitted ODJFS to collect $34,250.10, plus applicable interest from HCMC, thereby excepting an amount from the common pleas court's stay order that represented the "exception testing" portion of the state's audit.

{¶ 7} In its appeal, ODJFS advances four assignments of error, as follows:

First Assignment of Error

The trial court erred by ordering further factual development of appellant's cost calculations when the appellant "chose not to supply more detailed information on its cost calculations" during the audit or the administrative hearing.

Second Assignment of Error

The lower court erred when it concluded that oxygen services provided to Medicaid and non-Medicaid patients are different because the oxygen supply company bills the nursing home and terms the service a rental.

Third Assignment of Error

The lower court erred when it ordered ODJFS to pay a surcharge to compensate a Medicaid provider for its "overhead."

Fourth Assignment of Error

The trial court erred by staying enforcement of an entire adjudication order where the Medicaid provider stipulated that it was required to repay a specific amount.

{¶ 8} On cross-appeal, HCMC advances the following two assignments of error:

Cross-Appeal Assignment Of Error No. I:

The trial court erred by remanding this matter to the department.

Cross-Appeal Assignment Of Error No. II:

The trial court abused its discretion when it failed to reverse the department's decision to exclude relevant evidence offered by HCMC at hearing.

{¶ 9} For ease of review, we shall address ODJFS's and HCMC's claims of error in a different order from the sequence offered by the parties. We shall begin, however, by sua sponte considering whether this court has subject-matter jurisdiction to consider ODJFS's appeal.

{¶ 10} An appellate court may sua sponte consider whether subject-matter jurisdiction properly lies. State ex rel. White v. Cuyahoga Metro. Hous. Auth. (1997), 79 Ohio St.3d 543, 544, 684 N.E.2d 72; Buzard v. Triplett, Franklin App. No. 05AP-579, 2006-Ohio-1478, 2006 WL 772024, at ¶ 7; Mogavero v. Lombardo (Sept. 25, 2001), Franklin App. No. 01AP-98, 2001 WL 1117542. Subject-matter jurisdiction is a condition precedent to a court's ability to consider a case. Absent subject-matter jurisdiction, a court's proclamation is void. See State ex rel. Ohio Democratic Party v. Blackwell, 111 Ohio St.3d 246, 2006-Ohio-5202, 855 N.E.2d 1188, at ¶ 8, quoting Pratts v. Hurley, 102 Ohio St.3d 81, 2004-Ohio-1980, 806 N.E.2d 992, at ¶ 11, quoting State ex rel. Tubbs Jones v. Suster (1998), 84 Ohio St.3d 70, 75, 701 N.E.2d 1002, reconsideration denied (1999), 84 Ohio St.3d 1475, 704 N.E.2d 582 ("`[subject-matter jurisdiction] is a "condition precedent to the court's ability to hear the case. If a court acts without jurisdiction, then any proclamation by that court is void."'").

{¶ 11} Fundamental to ODJFS's appeal is a contention that the common pleas court incorrectly interpreted ODJFS's administrative rules. R.C. 119.12 provides:

An appeal by the agency shall be taken on questions of law relating to the constitutionality, construction, or interpretation of statutes and rules of the agency, and, in the appeal, the court may also review and determine the correctness of the judgment of the court of common pleas that the order of the agency is not supported by any reliable, probative, and substantial evidence in the entire record.

{¶ 12} In its decision, the common pleas court stated:

It is * * * concluded that the audit did not compare rates for the same service. While the audit may constitute prima facie evidence, nothing prohibits review of the underlying premises upon which the audit is based. The Court has considered the applicable rules in pari materia and finds Appellant's interpretation legally correct. Phraseology of "usual and customary fee charged to patients for the same service" does not comport with construing rental of machines to a facility to be the same as supplying services to individual Medicaid patients.

{¶ 13} Because the common pleas court "considered the applicable rules in pari materia," its judgment involved the construction and interpretation of ODJFS's administrative rules, rather than a simple application of law to facts. Accordingly, we hold that ODJFS properly may appeal to this court. See R.C. 119.12; Wolff v. Ohio Dept. of Job & Family Serv., 165 Ohio App.3d 118, 2006-Ohio-214, 844 N.E.2d 1238, at ¶ 13 ("because the trial court's decision involved a question of law relating to the interpretation of Ohio Adm. Code 5101:3-3-06 and 5101:3-3-08, ODJFS could properly appeal to this court"); see also Enertech Elec., Inc. v. W. Geauga Bd. of Edn. (Sept. 3, 1996), Franklin App. No. 96APE03-370, 1996 WL 506825, citing Ramey v. Ohio State Bd. of Chiropractic Examiners (Aug. 3, 1995), Franklin App. No. 94APE10-1512, 1995 WL 458957. Cf. Ramey, ("[a] simple application of the law to facts does not amount to an interpretation within the meaning of R.C. 119.12"). (Citations omitted.)

{¶ 14} Pursuant to R.C. 119.12, when a common pleas court reviews an order of an administrative agency, it must consider the entire record to determine whether the agency's order is supported by reliable, probative, and substantial evidence and is in accordance with law. Univ. of Cincinnati v. Conrad (1980), 63 Ohio St.2d 108, 110-111, 17 O.O.3d 65, 407 N.E.2d 1265; see also Andrews v. Bd. of Liquor Control (1955), 164 Ohio St. 275, 280, 58 O.O. 51, 131 N.E.2d 390; Our Place, Inc. v. Ohio Liquor Control Comm. (1992), 63 Ohio St.3d 570, 571, 589 N.E.2d 1303 (defining reliable, probative, and substantial evidence).

{¶ 15} The common pleas court's "review of the administrative record is neither a trial de novo nor an appeal on questions of law only, but a hybrid review in which the court `must appraise all the evidence as to the credibility of the witnesses, the probative character of the evidence, and the weight thereof.'" Lies v. Ohio Veterinary Med. Bd. (1981), 2 Ohio App.3d 204, 207, 2 OBR 223, 441 N.E.2d 584, quoting Andrews, 164 Ohio St. at 280, 58 O.O. 51, 131 N.E.2d 390. In its review, the common pleas court must give due deference to the administrative agency's resolution of evidentiary conflicts, but the findings of the agency are not conclusive. Conrad, 63 Ohio St.2d at 111, 17 O.O.3d 65, 407 N.E.2d 1265.

{¶ 16} An appellate court's review of an administrative decision is more limited than that of a common pleas court. Pons v. Ohio State Med. Bd. (1993), 66 Ohio St.3d 619, 614 N.E.2d 748. In Pons, the Supreme Court of Ohio explained:

While it is incumbent...