Young v. Jesson
| Decision Date | 12 April 2011 |
| Docket Number | A10-1303 |
| Parties | Harold Young, Appellant, v. Lucinda Jesson, Commissioner of Human Services, Respondent, Steele County Human Services, Respondent. |
| Court | Minnesota Court of Appeals |
OPINION TEXT STARTS HERE
Reversed and remanded
Steele County District Court
Charles H. Thomas, Southern Minnesota Regional Legal Services, Inc., Mankato, Minnesota (for appellant)
Lori Swanson, Attorney General, Barry Greller, Assistant Attorney General, St. Paul, Minnesota (for respondent Commissioner); and
Daniel A. McIntosh, Steele County Attorney, Owatonna, Minnesota (for respondent Steele County)
Considered and decided by Peterson, Presiding Judge; Toussaint, Judge; and Hudson, Judge.
A healthcare provider that meets applicable state licensing and certification standards is a qualified provider for purposes of rendering customized-living services under Minnesota's elderly-waiver medical-assistance program established under section 1915(c) of the Social Security Act, 42 U.S.C. § 1396n (2006). A county agency responsible for contracting for those services may not restrict a medical-assistance recipient's free choice of qualified providers by refusing to contract with a qualified provider.
Appellant, a recipient of home- and community-based services under Minnesota's elderly-waiver medical-assistance program pursuant to section 1915(c) of the Social Security Act, challenges the decision of respondent Minnesota Commissioner of Human Services affirming a decision by respondent Steele County Board of Commissioners to refuse to contract with appellant's chosen provider for those services. Because we conclude that the commissioner erred by determining that the county had authority to restrict appellant's free choice of providers by declining to contract with a provider otherwise qualified to render services to appellant, we reverse and remand for further proceedings.
In 2007, the Steele County Board of Commissioners (county) contracted with Valleyview of Owatonna, LLC, (Valleyview), an assisted-living and memory-care facility, to purchase customized-living services under the Minnesota elderly-waiver program. This program is a home- and community-based-services program operating under a waiver to Minnesota's medical-assistance plan, as authorized by section 1915(c) of the Social Security Act. 42 U.S.C. § 1396n(c). The elderly-waiver program serves persons age 65 or older who would otherwise be eligible to receive Medicaid benefits in a traditional institution and allows them instead to obtain care in their homes or in community-based residences.
Minnesota operates approved medical-assistance waiver programs under both sections 1915(b) and 1915(c) of the Social Security Act. See 42 U.S.C. § 1396n(b)(1), (c)(1). Section 1915(b) relates to the provision of services for recipients who are enrolled in managed-care organizations. 42 U.S.C. § 1396n(b)(1). Section 1915(c) allows for home- and community-based alternatives to nursing-facility care for individuals who are not enrolled in managed-care organizations. See 42 U.S.C. § 1396n(c)(1).
Appellant Harold Young, who is 80 years old and has Alzheimer's disease, was placed in the memory-care unit at Valleyview and began receiving customized-living services through the elderly-waiver program in June 2008. Less than two weeks after Young's admission to Valleyview, however, Steele County Human Services informed Young's daughter, who is now his guardian, that the county had voted to terminate its contract with Valleyview and would no longer permit the use of elderly-waiver funds to cover services at Valleyview after June 30.
Appellant sought a hearing with the Minnesota Department of Human Services (DHS) pursuant to Minn. Stat. § 256.045, subds. 3(1), 6 (2008), challenging the county's action. In October 2008, before a hearing could be held, it was discovered that appellant was enrolled in a multi-county managed-care plan, which had a contract with DHS and the county to provide medical-assistance benefits, including elderly-waiver services, to enrolled participants. When it became apparent that this managed-care plan would pay for appellant's elderly-waiver services at Valleyview retroactive to July 1, 2008, the human-services judge dismissed appellant's appeal.
For reasons not in the record, appellant later became ineligible for the managed-care plan. As a result, in December 2008, the county issued another notice, stating that it would deny appellant elderly-waiver services effective January 1, 2009, because appellant was no longer receiving care through a managed-care plan. Therefore, he would be receiving services on a fee-for-service basis, and because the county did not have a contract with Valleyview to provide elderly-waiver services for appellant, he would need to move to another facility. Appellant appealed the county's decision to DHS, arguing that the county's decision abridged his right to free choice among qualified medical-assistance providers in violation of 42 U.S.C. § 1396a(a)(23)(A) (2006).
At an evidentiary hearing before a human-services judge, appellant's daughter testified that she wanted appellant to remain at Valleyview, which was providing appropriate care and was located close to her home and appellant's physician. She testified that three of the five alternate facilities the county offered for appellant's care were located outside of Steele County.
The Steele County social-services supervisor testified that, to her knowledge, Valleyview was licensed by the Minnesota Department of Health (DOH) and appeared on the DHS website as a qualified provider of services for appellant. She testified that, although the DOH had notified the county about certain health and safety issues at Valleyview, she was not aware if those issues had adversely affected Valleyview's license. She testified that one factor in the county's decision to terminate Valleyview's contract was the county's financial liability in assuming case-management services for people from another county who would be using Valleyview's services. She did not know about other possible reasons for the termination.
The Steele County human-services director testified that, prior to Valleyview's opening, the county received a list of health-and-safety-related concerns, which had delayed the opening, but the county had nonetheless decided to contract with Valleyview for a period of time. He testified that DHS has delegated responsibility for oversight of the elderly-waiver program to the county; that even if a provider is a "qualified provider" as licensed by the department of health, the county had no duty to contract with that provider; that Valleyview no longer had a contract with the county; and that appellant's free choice could be exercised by staying at a facility with which the county contracted.
The DHS aging-and-adult-services manager testified that Minnesota's elderly-waiver application did not authorize the county to refuse to contract with a vendor who is otherwise qualified and meets the needs of a recipient. She agreed that appellant's situation was a novel one and that it was ultimately the state's responsibility to ensure that the elderly-waiver program was operated in compliance with federal law. She testified that DHS was not taking a position on whether appellant had free choice of providers.
The human-services judge issued findings of fact, conclusions of law, and an order, concluding that a qualified provider was a provider that had a contract with a lead agency, such as the county; that Valleyview was not a qualified provider because it did not have a contract with the county; and that appellant has free choice of qualified providers because he could stay at any other facility with which the county did have a contract. The commissioner issued a decision adopting the findings, conclusion, and order. Appellant appealed to the district court, which affirmed the commissioner's determination, and this appeal follows.1
I. Does the commissioner have authority to review the county's action of declining to contract with Valleyview?
II. Is the commissioner's decision that the county had the authority to decline to provide elderly-waiver services to appellant at Valleyview arbitrary and capricious or affected by legal error?
As a preliminary matter, the county contends that the commissioner lacked authority to review its decision to terminate its contract with Valleyview for elderly-waiver services because the county was not acting as a "county agency" in making its contracting decision. Whether a state agency's decision exceeded its authority presents a question of law, which this court reviews de novo. St. Otto's Home v. Minn. Dep't of Human Servs., 437 N.W.2d 35, 39-40 (Minn. 1989). The commissioner's authority to review the county's decision is controlled by statute. We review questions of statutory interpretation de novo. Martin ex rel. Hoff v. City of Rochester, 642 N.W.2d 1, 9 (Minn. 2002).
Minnesota law provides that the commissioner "may initiate a review of any action or decision of a county agency." Minn. Stat. § 256.045, subd. 6(a) (2010). But the county argues that the county board of commissioners is the body that decides whether to offer a contract to a provider. And the county maintains that because the statutory term "county agency" does not refer to the county board, but rather to Steele County Human Services, the county board's contractual decisions are not subject to review by the commissioner.
We reject this argument. The Minnesota legislature has granted the commissioner specific powers to carry out designated duties to "[a]dminister and supervise all forms of public assistance provided for by state law"; to "monitor . . . the performance of county agencies in the operation and administration of human services"; and to "enforce compliance with statutes, rules,...
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