In re Mayo Health Care, Inc.

• Decision Date: 22 July 2003
• Docket Number: No. 02-326.,02-326.
• Parties: In re MAYO HEALTH CARE, INC.
• Court: Vermont Supreme Court

830 A.2d 129

In re MAYO HEALTH CARE, INC.

No. 02-326.

Supreme Court of Vermont.

July 22, 2003.

Present AMESTOY, C.J., DOOLEY, JOHNSON, SKOGLUND, JJ., and ERNEST W. GIBSON III, J. (Ret.), Specially Assigned.

ENTRY ORDER

¶ 1. Appellant Mayo Health Care, Inc. (Mayo) appeals from a trial court order granting summary judgment to the Agency of Human Services Division of Rate Setting (Division). Mayo is a licensed nursing facility in Northfield, Vermont that receives reimbursement from the state for care delivered to its Medicaid residents. This dispute arises out of efforts by Mayo to obtain a rate adjustment from the Division following a decision by the Division to disallow wages for unlicensed geriatric aides in calculating Medicaid reimbursement rates. Mayo contends that the trial court incorrectly construed the rules governing appeals from Division decisions to grant summary judgment in favor of the Division on procedural grounds. Mayo also appeals from the denial of its summary judgment motion. Mayo claims that the Division's disallowance of the wages for geriatric aides (geriaides) was inconsistent with its prior rulings and should not have been enforced retroactively. We affirm.

¶ 2. This dispute centers around the appeals procedures laid out in the Vermont Division of Rate Setting Rules (V.D.R.S.R.), which govern the establishment of Medicaid payment rates for long-term care facilities. The rules provide several routes through which Medicaid providers are able to apply for a rate adjustment. We agree with the trial court that the correctness of the categorization of geriaide costs as indirect costs is not properly at issue herein because Mayo failed to raise the issue in the filings it made with the Division. This case started when Mayo filed an application for a rate adjustment pursuant to V.D.R.S.R. § 8.2.¹ Section 8.2 establishes that a nursing care provider can apply for a higher rate of reimbursement to cover "additional costs that are a necessary result of complying with changes in applicable federal and state laws, and regulations, or the orders of a State agency that specifically requires an increase in staff or other expenditures." The Division's final order denied Mayo's application, and Mayo appealed to the superior court pursuant to 33 V.S.A. § 909(a)(2), granting nursing home facilities the right to a de novo appeal from a final order of the Division. The superior court ruled on the parties' cross-motions for summary judgment, denying Mayo's motion and rendering judgment for the Division.

¶ 3. This Court reviews a decision to grant summary judgment de novo. Agency of Natural Res. v. United States Fire Ins. Co., 173 Vt. 302, 305, 796 A.2d 476, 478 (2001). Summary judgment is appropriate only when the record shows there is no genuine issue of material fact and the movant is entitled to judgment as a matter of law. Bacon v. Lascelles, 165 Vt. 214, 218, 678 A.2d 902, 905 (1996). In determining whether a genuine issue of material fact exists, all reasonable doubts and inferences are allowed to the nonmoving party. Samplid Enters. v. First Vt. Bank, 165 Vt. 22, 25, 676 A.2d 774, 776 (1996).

¶ 4. We agree with the trial court that as a matter of law Mayo does not meet the criteria for a rate adjustment pursuant to V.D.R.S.R. § 8.2. Section 8.2 allows for a rate adjustment where a change in law results in increased costs. Mayo argues that the recategorization of geriaide salaries as indirect, rather than direct, costs results in "additional costs" to it because direct costs are eligible for higher Medicaid reimbursement rates. The term "additional costs" as used in § 8.2 is defined in V.D.R.S.R. § 8.7(m) to mean "the incremental costs of providing resident care directly and proximately caused by [a change in the law]." While clearly the change in categorization resulted in decreased reimbursement for Mayo, the lower reimbursement rate in no way raised Mayo's cost of providing services and does not qualify Mayo for rate adjustment under § 8.2.

¶ 5. In its arguments to the trial court and again to this Court, Mayo asserted that although it had not appealed the Division's treatment of its 1997 cost report and its reclassification of geriaides, we should treat this as an appeal from the denial of a motion to reopen the cost report. As the trial court found, and we affirm, Mayo's argument cannot succeed because no such motion to reopen the cost report was made herein.² Section 15.3(e) of V.D.R.S.R. prevents this Court from considering any issues concerning a cost report that Mayo may raise before the Division but failed to include in its appeal. V.D.R.S.R. § 15.3(e) ("Issues not raised in the Request for Reconsideration shall not be raised later in this proceeding or in any subsequent proceeding arising from the same action of the Division, including appeals pursuant to 33 V.S.A. § 909.").

¶ 6. Mayo asserts that V.D.R.S.R. § 3.5(b) provides a narrow exception to § 15.3's restrictions on the jurisdiction of courts reviewing Division decisions. Mayo construes § 3.5(b) to permit reexamination of an otherwise final cost report determination within three years for reasons delineated in the rule. Section 3.5 provides a mechanism for reopening when the reopening is mandated by "a determination by the Secretary or a court of competent jurisdiction that the determination is inconsistent with...