Keup v. DHFS

• Decision Date: 04 March 2004
• Docket Number: No. 02-0456.,02-0456.
• Citation: 2004 WI 16,675 N.W.2d 755,269 Wis.2d 59
• Court: Wisconsin Supreme Court
• Parties: Althea M. KEUP, Plaintiff-Petitioner-Appellant, v. WISCONSIN DEPARTMENT OF HEALTH & FAMILY SERVICES, Respondent-Respondent, Helene NELSON, in her official capacity as Secretary of the Department of Health and Family Services, Defendant-Respondent.

269 Wis.2d 59

2004 WI 16

675 N.W.2d 755

Althea M. KEUP, Plaintiff-Petitioner-Appellant, v. WISCONSIN DEPARTMENT OF HEALTH & FAMILY SERVICES, Respondent-Respondent, Helene NELSON, in her official capacity as Secretary of the Department of Health and Family Services, Defendant-Respondent.

No. 02-0456.

Supreme Court of Wisconsin.

Oral argument October 13, 2003.

Decided March 4, 2004.

For the plaintiff-petitioner-appellant there were briefs by Carol J. Wessels and Senior LAW Legal Action of Wisconsin, Inc., Milwaukee, and oral argument by Carol J. Wessels.

For the respondent-respondent and the defendant-respondent the cause was argued by Bruce A. Olsen, assistant attorney general, with whom on the brief was Peggy A. Lautenschlager, attorney general.

An amicus curiae brief was filed by Mitchell Hagopian, Madison, on behalf of Wisconsin Coalition for Advocacy, Legal Aid Society of Milwaukee, Elder Law Center of the Coalition of Wisconsin Aging Groups, Employment Resources, Inc., and ABC for Health.

¶ 1. N. PATRICK CROOKS, J

This case is before us on certification from the court of appeals pursuant to Wis. Stat. § (Rule) 809.61 (1999-2000).¹ Althea M. Keup (Keup) appeals from an order of the circuit court, which denied Keup's motion for summary judgment, and granted the Department of Health & Family Services' (DHFS) motion for summary judgment. Keup filed a request for a fair hearing with the Division of Hearings and Appeals (Division) to recoup the full amount paid by her as a private pay patient at the nursing home facilities of a medical assistance provider. The Division concluded that it did not have jurisdiction to hear Keup's claim and dismissed her fair hearing request.

¶ 2. Keup then filed an action in Ozaukee County Circuit Court, seeking review of the Division's order dismissing her fair hearing request, and also pleading an independent claim under 42 U.S.C. § 1983 (1999).² The circuit court granted DHFS' motion for summary judgment. Keup appealed from the circuit court's grant of summary judgment, and, as noted, the court of appeals then certified this case to us.

¶ 3. First, we address the certified question of whether, after the State has retroactively compensated a medical assistance provider for nursing home services provided to a private pay patient and the provider has reimbursed the patient in the amount of the medical assistance, the patient has a federally protected right to reimbursement from the provider for the amount originally paid by the patient in excess of the medical assistance reimbursement. Second, we address the certified question of whether the Division has jurisdiction, under Wis. Stat. § 49.45(5)(a) (1999-2000),³ to grant a private pay patient's request for full reimbursement from a medical assistance provider.

¶ 4. We conclude that the circuit court properly granted DHFS' motion for summary judgment. We hold that a private pay patient does not have a federally protected right to reimbursement from the provider for the amount originally paid by the patient in excess of the medical assistance reimbursement. At the time of admittance, Keup was neither a medical assistance applicant nor a recipient. Pursuant to 42 U.S.C. § 1396r(c)(4)(B)(i) and 42 C.F.R. § 483.12(c)(2) (1999),⁴ medical assistance providers may charge private pay patients any rate they deem appropriate, provided that the patient has notice as to the amount of the charge. We conclude that Wis. Stat. § 49.49(3m), Wis. Admin. Code § HFS 104.01(11) (Apr. 1999),⁵ and the Medical Assistance Provider Handbook, Section VI, page A6-002 (Handbook) appropriately require medical assistance providers to refund only the amount paid by the medical assistance program on behalf of retroactively eligible persons.⁶ We further hold that the Division did not have jurisdiction to hear this claim, as none of the statutory bases for jurisdiction under Wis. Stat. § 49.45(5)(a) or Wis. Admin. Code § HFS 104.01(5)(a)1 were satisfied.

I

¶ 5. In late September 1999, Keup moved into Mequon Care Center (Mequon), a nursing home facility. Mequon is a medical assistance service provider for the Medical Assistance Program, a federal health insurance program administered by the states. Upon admittance, Mequon accepted Keup as a private pay patient. Keup prepaid the October 1999 charge at the private monthly rate of $4540.38.

¶ 6. On October 21, 1999, after she had already moved into Mequon, Keup applied for medical assistance benefits. On October 29, 1999, Keup was approved for benefits retroactive to October 1, 1999. DHFS, the Wisconsin agency responsible for administering the medical assistance program, paid Mequon for Keup's care in October in the amount of $3471.52 at the then prevailing rate of $106.26 per day. In accordance with State policy, Mequon then refunded the same to Keup. Thus, Keup's total out-of-pocket expenses were $1068.86.

¶ 7. Believing she was entitled to a refund of the full amount she had paid, Keup filed a request for a fair hearing with the Division pursuant to Wis. Stat. § 49.45(5).⁷ A hearing was held before a Division examiner. At the hearing, Keup contested the validity of the policy regarding refunds reflected in Wis. Stat. § 49.49(3m),⁸ Wis. Admin. Code § HFS 104.01(11),⁹ and the Handbook,¹⁰ alleging that the provisions conflicted with federal regulations. Keup requested that DHFS be required to give her a full refund of the total amount she had paid. The Division concluded that Keup's request did not invoke any of the instances under § 49.45(5)(a) sufficient to confer jurisdiction upon the Division. The Division further concluded that it did not have jurisdiction under Wis. Admin. Code § HFS 104.01(5)(a)1,¹¹ which grants jurisdiction "when [an applicant or recipient is] aggrieved by action or inaction of the agency or the department." Pursuant to these findings, the Division dismissed Keup's fair hearing request.

¶ 8. Keup filed this action against DHFS and the Secretary of DHFS¹² in Ozaukee County Circuit Court, seeking review of the Division's order dismissing her fair hearing request. Keup also pled an independent claim under 42 U.S.C. § 1983, alleging that Wis. Stat. § 49.49(3m), Wis. Admin. Code § HFS 104.01(11), and the Handbook, which require medical assistance providers to refund only the amount paid by the medical assistance program on behalf of retroactively eligible persons, were contrary to federal statutes and regulations.

¶ 9. Both Keup and DHFS filed motions for summary judgment. The circuit court granted DHFS' motion for summary judgment with respect to both issues. The circuit court, the Honorable Tom R. Wolfgram presiding, upheld the Division's ruling that it lacked jurisdiction to grant the relief Keup sought. Regarding the 42 U.S.C. § 1983 action, the court concluded that Wis. Stat. § 49.49(3m), Wis. Admin. Code § HFS 104.01(11), and the Handbook did not violate federal statutes and regulations.

¶ 10. Keup appealed the circuit court's decision. Keup alleged that the Secretary of DHFS implemented Wis. Stat. § 49.49(3m), Wis. Admin. Code § HFS 104.01(11), and the Handbook and, in administering these provisions, acted under color of state law, and deprived her of the rights set forth in federal statutes and regulations.

¶ 11. As stated previously, the court of appeals certified two issues to this court.¹³ The first issue certified is whether, after the State has retroactively compensated a medical assistance provider for nursing home services provided to a private pay patient and the provider has reimbursed the patient in the amount of the medical assistance, the patient has a federally protected right to reimbursement from the provider for the amount originally paid by the patient in excess of the medical assistance reimbursement. The second issue is whether the Division has jurisdiction, under Wis. Stat. § 49.45(5)(a), to grant a private pay patient's request for full reimbursement from a medical assistance service provider.

II

[1]

¶ 12. We now consider whether private pay patients have a federally protected right to reimbursement for the amount paid in excess of the medical assistance reimbursement. This issue involves statutory interpretation, which is a question of law that this court reviews de novo. Hutson v. State Pers. Comm'n, 2003 WI 97, ¶ 31, 263 Wis. 2d 612, 665 N.W.2d 212. Thus, we are not bound by an administrative agency's determination. Id. Nevertheless, we have generally used one of three standards of review, with varying degrees of deference, to review an agency's conclusions of law or statutory interpretation. Id. The three standards of deference this court typically applies to such agency decisions are great weight, due weight, or de novo. Id.

[2]

¶ 13. The highest level of deference accorded to an agency decision is great weight. We give an agency decision great weight deference when the following four criteria are met:

"`(1) the agency was charged by the legislature with the duty of administering the statute; (2) [] the interpretation of the agency is one of long-standing; (3) [] the agency employed its expertise or specialized knowledge in forming the interpretation; and (4) [] the agency's interpretation will provide uniformity and consistency in the application of the statute.'"

UFE Inc. v. LIRC, 201 Wis. 2d 274, 284, 548 N.W.2d 57 (1996) (quoting Harnischfeger Corp. v. LIRC, 196 Wis. 2d 650, 660, 539 N.W.2d 98 (1995)).

¶ 14. Under the great weight standard, an agency's interpretation of a statute will be upheld provided that it is "reasonable and not contrary to the clear meaning of the statute, ... even if the court finds that another interpretation is more reasonable." Hutson, 263 Wis. 2d 612, ¶ 32; UFE, 201 Wis. 2d at 286-87.

[4, 5]

¶ 15. The intermediate level of deference is due weight. Due weight deference is appropriate when the agency has some experience in a particular area, but has not developed the expertise which necessarily...