St. Jude Healthcare, Ltd. v. Tex. Health & Human Servs. Comm'n
| Decision Date | 14 December 2021 |
| Docket Number | 01-20-00076-CV |
| Parties | ST. JUDE HEALTHCARE, LTD., Appellant v. TEXAS HEALTH AND HUMAN SERVICES COMMISSION, DEPARTMENT OF AGING AND DISABILITY SERVICES; AND PHIL WILSON, ACTING EXECUTIVE COMMISSIONER OF HHSC, Appellees[1] |
| Court | Texas Court of Appeals |
ST. JUDE HEALTHCARE, LTD., Appellant
v.
TEXAS HEALTH AND HUMAN SERVICES COMMISSION, DEPARTMENT OF AGING AND DISABILITY SERVICES; AND PHIL WILSON, ACTING EXECUTIVE COMMISSIONER OF HHSC, Appellees[1]
No. 01-20-00076-CV
Court of Appeals of Texas, First District
December 14, 2021
On Appeal from the 419th District Court Travis County, Texas [2] Trial Court Case No. D-1-GN-17-005517
Panel consists of Chief Justice Radack and Justices Rivas-Molloy and Guerra.
MEMORANDUM OPINION
VERONICA RIVAS-MOLLOY, JUSTICE
Appellant St. Jude Healthcare, Ltd. ("St. Jude") held a Home and Community Support Services Agency ("HCSSA") license issued by the Health and Human Services Commission ("HHSC"). After HHSC declined to provide notice and hearing on St. Jude's alleged failure to mail a timely renewal application for its license, St. Jude sought declaratory and mandamus relief against Appellees HHSC, Charles Smith, former HHSC Executive Commissioner, and Sylvia Rodriguez, former Home and Community Support Services Agency manager for the Department of Aging and Disability Services ("DADS"). St. Jude appeals the district court's final judgment granting Appellees' plea to the jurisdiction and crossmotion for summary judgment and denying St. Jude's motion for summary judgment and petition for writ of mandamus.
In two points of error, St. Jude asserts the trial court erred in holding it lacked jurisdiction to determine (1) whether the HHSC/DADS "has a ministerial duty to provide St. Jude a [contested] hearing on the timeliness of St. Jude's renewal
application," and (2) "whether due process prohibits the retroactive application of the State's [license] termination decision."
We affirm.
Factual Background
Prior to September 2017, DADS was the state agency responsible for the licensing of Home and Community Support Services agencies.[3] In 2014, DADS renewed St. Jude's HCSSA license (No. 009466), under which St. Jude provided Medicare and Medicaid reimbursed services to elderly and disabled persons. St. Jude was licensed to provide Licensed and Certified Home Health Services, as well as Licensed Home Health Services and Personal Assistance Services. St. Jude's license was due to expire on December 31, 2016.
On August 10, 2016, DADs notified St. Jude in writing that its HCSSA license would expire on December 31, 2016, unless it submitted its complete license renewal application, any applicable documents, and the required license fee to DADS before the expiration date. The notice stated: "Your application, documents, and required fee for renewal of the HCSSA license must be postmarked 45 days prior to the expiration date of the license or you will be charged a late fee. If an agency fails to
apply for license renewal prior to the expiration date of the license, the agency must cease operation upon expiration of the license." See TEX. HEALTH & SAFETY CODE § 142.0105(c) (stating that "[n]ot later than the 120th day before the date a person's license is scheduled to expire," HHSC must notify license holder in writing about impending expiration date and provide license holder with application for license renewal and instructions for completing application).
St. Jude contends it mailed its complete license renewal application together with a check for the filing fee to DADS at the proper address on December 16, 2016. DADS claims it never received St. Jude's renewal application and St. Jude does not appear to challenge DADS' assertion. Because DADS did not receive a renewal application from St. Jude, it took no action on St. Jude's alleged mailed renewal application.
On February 23, 2017, Hazel Flores ("Flores"), a Licensing and Permit Specialist IV (LP IV) with HHSC's HCSSA Licensing and Certification unit, and Sylvia Rodriguez ("Rodriguez"), former Home and Community Support Services Agency manager for DADS, spoke on the telephone with St. Jude's administrator, Glenda Sanchez ("Sanchez"). They informed Sanchez that because St. Jude's license had expired on December 31, 2016, St. Jude had been operating without a state license and could be subject to administrative penalties. They informed Sanchez that if St. Jude wanted to continue to operate, it needed to submit an initial
application for a new HCSSA license "as soon as possible," along with the appropriate filing fee. That same day, DADS sent St. Jude a "NOTIFICATION OF CHANGE" stating the type of action as "Agency closed effective 12/31/2016, due to Expired license." Subsequently, on March 13, 2017, DADS informed Palmetto GBA ("Palmetto"), the federal Centers for Medicare &Medicaid Services' ("CMS") Medicare Administrative Contractor for St. Jude, that St. Jude "ha[d] failed to renew [its] HCSSA license and CMS has requested that DADS contact the agency's MAC [Medicare Administrative Contractor] ...."
On March 28, 2017, St. Jude's legal counsel, Brooks &Acevedo, submitted an affidavit from Sanchez to DADS attesting to the timely mailing of St. Jude's license renewal application and the calls placed by St. Jude to ensure delivery and ask about the status of the application. In her affidavit, Sanchez asserted that on "December 16, 2016, I placed the [renewal] application and a check for the applicable fee in United States First Class Mail addressed to" the proper address and "made repeated calls to the staff at the Texas Department of Aging and Disability services to inquire as to the status of the application" before December 31, 2016.
On March 28, 2017, DADS responded to St. Jude's email and informed St. Jude's counsel that St. Jude's license had expired because St. Jude had failed to submit a renewal application. DADS specified it had no record of receiving the
referenced license renewal application.[4] DADS further advised St. Jude that it should not continue to operate without a license and if it wanted to continue to operate, St. Jude needed to submit an initial application to obtain a new HCSSA license. St. Jude's counsel responded that he was aware DADS did not have a record of receipt for St. Jude's renewal application. He nonetheless asserted that Sanchez's affidavit and St. Jude's other supporting documents were sufficient to prove St. Jude mailed its renewal application before December 31, 2016, and he asked DADS to consider the renewal application as timely filed.[5]
On September 19, 2017, nine months after the expiration date of its license, St. Jude mailed an HCSSA renewal license application to HHSC together with a check in the amount of $1, 750. Rodriguez called and advised Sanchez that she was returning St. Jude's renewal application because St. Jude had allowed its license to expire on December 31, 2016, and therefore, there was no license that could be renewed. Rodriguez reiterated that St. Jude needed to "close and cease business because by continuing to operate and bill Medicare without a State HCSSA license [St. Jude] was committing Medicare Fraud." Rodriguez also explained to Sanchez
that she was "going to notify CMS, [Palmetto], and send [a] surveyor out to [St. Jude] because she admitted she was knowingly operating her HCSSA without a license."
On September 28, 2017, HHSC's HCSSA Licensing Unit again informed St. Jude that its HCSSA license had expired and that it was "returning [its] invalid renewal application" and refunding the "$1750 to the address on file." It further instructed St. Jude to cease operating:
You failed to submit your application for renewal and your HCSSA license to operate an agency expired on December 31, 2016. Be advised that as of December 31, 2016, St. Jude Home Health license # 009466 is no longer valid.
Please note that it is a violation of the Texas Health and Safety Code, Chapter 142, and the Texas Administrative Code 40 § 97.1(a)(2) to operate an agency without a license. Failure to comply may result in a referral of the matter to the Office of the Attorney General or local prosecuting attorney for monetary and/or injunctive relief.
After receiving this notice, St. Jude started transferring patients and ceased operations as a home health agency. St. Jude contends this September 28, 2017 letter was the first time HHSC "unequivocally" told St. Jude its license had expired, and it had to cease operations.
On September 29, 2017, HHSC sent a Medicare/Medicaid Certification and Transmittal form to CMS. There, it notified CMS that St. Jude had "failed to renew their State Home and Community Support Services Agency (HCSSA) license which
expired on 12/31/2016, and has continued to operate and bill for Medicare services without a HCSSA license."
On October 6, 2017, HHSC received a package from St. Jude via USPS express mail containing a check purporting to pay for "Lic. #009466 renewal 2017 late fees." That same month, on October 23, 2017, HHSC received a package from St. Jude containing an initial application for a new HCSSA license.
On October 12, 2017, Palmetto informed St. Jude that its Medicare billing privileges were being revoked effective December 31, 2016, because its HCSSA license had been "revoked" on that date. St. Jude timely appealed that decision. On March 22, 2018, CMS upheld the revocation of St. Jude's Medicare billing privileges based on the nonrenewal of St. Jude's state license. CMS, however, determined that the effective date of the CMS revocation would be November 17, 2017, instead of December 31, 2016. CMS explained that "[g]iven that St. Jude's [state] license expired as opposed to being revoked, according to 42 C.F.R. § 424.535(g), the appropriate effective date for the [CMS] revocation is 30 days after CMS or the CMS contractor mails notice of its determination to the provider or supplier. Given this, the appropriate [CMS] revocation effective date is November 16, 2017." CMS rendered the following findings and decision:
St. Jude continued to operate and bill for Medicare services after the expiration...
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