United Cerebral Palsy of Georgia, Inc. v. Georgia Department of Behavioral Health and Developmental Disabilities ( 2020 )

FIRST DIVISION
BARNES, P. J.,
MERCIER and BROWN, JJ.
NOTICE: Motions for reconsideration must be
physically received in our clerk’s office within ten
days of the date of decision to be deemed timely filed.
http://www.gaappeals.us/rules
January 7, 2020
In the Court of Appeals of Georgia
A19A2203, A19A2225. UNITED CEREBRAL PALSY OF
GEORGIA, INC. et al. v. GEORGIA DEPARTMENT OF
BEHAVIORAL HEALTH AND DEVELOPMENTAL
DISABILITIES et al.
BARNES, Presiding Judge.
Following the grant of their application for discretionary review, United
Cerebral Palsy of Georgia, Inc., Coastal Center for Developmental Services, Inc.
DBA Employability, Hope Haven of Northeast Georgia, Inc., and Creative
Community Services, Inc. appeal the superior court’s order affirming the final
administrative decision reached by the Commissioner of the Georgia Department of
Community Health (“DCH”) in this dispute over Medicaid reimbursements to service
providers.1 In the same order, the superior court dismissed the plaintiffs’ related
putative class action brought against the DCH, the Georgia Department of Behavioral
Health and Developmental Disabilities (“DBHDD”), and the commissioners of those
two agencies in their official capacities on the ground that the plaintiffs failed to
exhaust their administrative remedies, and the plaintiffs also challenge that ruling on
appeal. For the reasons discussed more fully below, we vacate the superior court’s
order in so far as it affirmed the DCH Commissioner’s final agency decision, and we
remand with direction that the superior court vacate the final agency decision and
remand the case to the Commissioner for further action consistent with this opinion.
We affirm the superior court’s order in so far as it dismissed the plaintiffs’ putative
class action.
Overview of the Medicaid Program. Medicaid is a joint federal-state program
in which the federal government subsidizes the states to provide medical assistance
to certain individuals in need. See UCP II, 298 Ga. at 780 (1) (a); Cook v. Glover, 295
1
This case has previously been before this Court and our Supreme Court. See
Ga. Dept. of Behavioral Health & Developmental Disabilities v. United Cerebral
Palsy of Ga., 298 Ga. 779 (784 SE2d 781) (2016) (“UCP II”); United Cerebral Palsy
of Ga. v. Ga. Dept. of Behavioral Health & Developmental Disabilities, 331 Ga. App.
616 (771 SE2d 251) (2015) (physical precedent only) (“UCP I”), rev’d, 298 Ga. 779
(2016), and vacated, 339 Ga. App. 894 (2016).
2
Ga. 495, 496 (761 SE2d 267) (2014). State participation in the Medicaid program is
voluntary, but once a state chooses to join, it must comply with federal statutory and
regulatory requirements. See Wilder v. Va. Hosp. Assn., 496 U.S. 498, 502 (I) (A)
(110 SCt 2510, 110 LE2d 455) (1990); UCP II, 298 Ga. at 780 (1) (a). Georgia has
elected to participate in the Medicaid program, and the DCH is the state agency
responsible for administering the state’s Medicaid plan. See OCGA § 49-4-142 (a);
Cook, 295 Ga. at 496.
With federal approval, states can obtain waivers that exempt them from certain
federal mandates that otherwise would attach to the provision of Medicaid funds. See
42 USC § 1396n (b); UCP II, 298 Ga. at 780 (1) (a). At issue in this case are two
Medicaid waiver programs instituted in Georgia that were approved by the federal
government in 2007, the New Options Waiver Program (“NOW”) and the
Comprehensive Supports Waiver Program (“COMP”). See UCP II, 298 Ga. at 780
(1) (a). The two waiver programs permit Medicaid funds to be used for providing
services to Medicaid recipients with intellectual and developmental disabilities in
home or community-based settings rather than in institutions. See UCP II, 298 Ga.
at 780 (1) (a). The requirements of the two waiver programs are incorporated into the
3
contracts, known as statements of participation, entered between the DBHDD2 and
the providers of Medicaid services to individuals with intellectual and developmental
disabilities. Id. Under the provisions of the waiver programs, the statements of
participation, and the DCH’s Medicaid policy manuals, Medicaid providers are
entitled to certain reimbursement rates for their services.
Administrative Review and Administrative Hearings. When there is a dispute
over reimbursements to Medicaid service providers, “[t]he General Assembly has
recognized the need for a robust formal administrative review process to address [the
providers’] complaints.” UCP II, 298 Ga. 781 (1) (b). In this regard, OCGA § 49-4-
153 (b) (2) (A) and (B)3 provide that any Medicaid provider aggrieved by “a decision
2
The DBHDD is the state administrative agency charged with establishing,
administering, and supervising “state programs for mental health, developmental
disabilities, and addictive diseases.” OCGA § 37-1-20 (1).
3
OCGA § 49-4-153 (b) (2) (A) and (B) provide:
(2)(A) A provider of medical assistance may request a hearing on
a decision of the Department of Community Health with respect to a
denial or nonpayment of or the determination of the amount of
reimbursement paid or payable to such provider on a certain item of
medical or remedial care of service rendered by such provider by filing
a written request for a hearing in accordance with Code Sections
50-13-13 and 50-13-15 with the Department of Community Health. The
Department of Community Health shall, within 15 business days of
receiving the request for hearing from the provider, transmit a copy of
the provider’s request for hearing to the Office of State Administrative
4
of the [DCH] with respect to a denial or nonpayment of or the determination of the
amount of reimbursement paid or payable to such provider on a certain item of
medical or remedial care of service rendered by such provider” may obtain a hearing
before an administrative law judge (“ALJ”) from the Office of State Administrative
Hearings (“OSAH”) by filing a proper written request with the DCH. See UCP II, 298
Ga. at 781-782 (1) (b). The ALJ’s decision may be appealed by the losing party to the
DCH Commissioner (or his or her designated representative) for a final agency
Hearings. The provider’s request for hearing shall identify the issues
under appeal and specify the relief requested by the provider. The
request for hearing shall be filed no later than 15 business days after the
provider of medical assistance receives the decision of the Department
of Community Health which is the basis for the appeal.
(B) The Office of State Administrative Hearings shall assign an
administrative law judge to hear the dispute within 15 days after
receiving the request. The hearing is required to commence no later than
90 days after the assignment of the case to an administrative law judge,
and the administrative law judge shall issue a written decision on the
matter no later than 30 days after the close of the record except when it
is determined that the complexity of the issues and the length of the
record require an extension of these periods and an order is issued by an
administrative law judge so providing, but no longer than 30 days. Such
time requirements can be extended by written consent of all the parties.
Failure of the administrative law judge to comply with the above time
deadlines shall not render the case moot.
5
decision, see OCGA § 49-4-153 (b) (2) (D),4 and a provider aggrieved by the final
agency decision then may petition for review in the appropriate superior court. See
OCGA §§ 49-4-153 (c);5 UCP II, 298 Ga. at 783-785 (1) (b).
The DCH is authorized to establish regulations regarding the manner in which
the administrative review process is conducted under OCGA § 49-4-153 (b), see
OCGA § 49-4-153 (a), and the DCH has established such regulations. See Ga. Comp.
R. and Regs. r. 350-4-.01 to 350-4-.30 (the “Rules” or “Rule”).6 The DCH also has
4
OCGA § 49-4-153 (b) (2) (D) provides:
Should the decision of the administrative law judge be adverse to
a party and should a party desire to appeal that decision, the party must
file a request therefor, in writing, with the commissioner within ten days
of his or her receipt of the hearing decision. Such a request must
enumerate all factual and legal errors alleged by the party. The
commissioner, or the commissioner’s designated representative, may
affirm, modify, or reverse the decision appealed from.
5
OCGA § 49-4-153 (c) provides in part:
If any aggrieved party exhausts all the administrative remedies
provided in this Code section, judicial review of the final decision of the
commissioner may be obtained by filing a petition within 30 days after
the service of the final decision of the commissioner or, if a rehearing is
requested, within 30 days after the decision thereon. The petition may
be filed in the Superior Court of Fulton County or in the superior court
of the county of residence of the petitioner. . . .
6
The Rules refer to the Department of Medical Assistance, which was the
former name of the DCH. See Perkins v. Dept. of Medical Assistance, 252 Ga. App.
35, 36, n. 1 (555 SE2d 500) (2001).
6
issued a Medicaid manual that sets out the deadlines and procedures for
administrative proceedings. See DCH, Division of Medicaid, Part I, Policies and
Procedures for Medicaid/PeachCare for Kids (the “Medicaid Procedures Manual”).
The DCH Rules and Medicaid Procedures Manual establish more than one path
that a service provider can pursue to obtain an administrative remedy. For example,
Rule 350-4-.047 states that when the DCH proposes to take an “adverse action”
against a provider, the DCH first “shall offer” the provider an opportunity for
administrative review “prior to implementation of the proposed action.” An “adverse
action” includes circumstances where the DCH “denies or reduces the amount of
reimbursement claimed by a provider” or “sets or changes a provider’s reimbursement
7
Rule 350-4-.04 provides:
The Department shall offer the opportunity for Administrative
Review to any provider against whom it proposes to take an adverse
action unless the Department is otherwise authorized by law to take such
action without opportunity for appeal by the provider prior to the
action’s implementation. The procedures and deadlines for obtaining
such Administrative Review and the deadlines for decisions thereon
shall be published in the Policies and Procedures Manual for each
service category to which they apply. Administrative Review shall be
completed, if not waived by the provider, prior to implementation of the
proposed action. Whenever the opportunity for Administrative Review
is available to the provider, such Administrative Review must be timely
obtained and completed for the provider to be entitled to a hearing.
7
rate.” Medicaid Procedures Manual, p. 9 (¶4). If the provider is aggrieved by the
result of that administrative review, the provider then can seek an administrative
hearing before an ALJ. Rule 350-4-.04; 350-4-.05 (1) (b) (2). The deadlines and
procedures for obtaining administrative review of a proposed adverse action followed
by an administrative hearing before an ALJ are set out in Sections 505-506 of the
Medicaid Procedures Manual.
Separate from the administrative review process under Rule 350-4-.04 for
proposed adverse actions by the DCH, a provider can request an administrative
hearing before an ALJ to challenge the “denial of, or the determination of the
amount” of payment to the provider “on a certain item of medical or remedial care or
service rendered by such provider.” Rule 350-4-.01 (1) (a). To obtain a hearing before
an ALJ where the provider wishes to contest the denial of a specific payment, the
provider first must request an “initial review” of the claim through the DCH’s web
portal, the Georgia Medicaid Management Information System (the “GAMMIS Web
Portal”), within 30 days of the denial of the requested claim payment. See Medicaid
Procedures Manual §§ 207, 502. Each request for an initial review of a denied
payment must be submitted on a separate form through the GAMMIS Web Portal. See
id. § 502. If the DCH’s initial review finds against the provider on the payment claim,
8
the provider may request an administrative review by the DCH, and if unsatisfied
with the administrative review determination, can then pursue an administrative
hearing before an ALJ. See id. §§ 502, 505-506.
The Prior Lawsuit. The plaintiffs in this case are nonprofit corporations that
provide services to Georgia Medicaid patients with intellectual and developmental
disabilities under the COMP and/or NOW waiver programs. In August 2013, the
plaintiffs filed in the Superior Court of Fulton County a putative class action against
the DCH, the DBHDD, and those two agencies’ commissioners in their official
capacities.8 Among other things, the complaint alleged that since 2008, the defendants
have used “various unapproved and secretive methods,” including the use of an
undisclosed algorithm, to reduce the reimbursements rates paid to providers and to
limit the amount of services that Medicaid recipients can receive. According to the
complaint, the defendants made these reductions in reimbursements and services
without public notice and comment as required by federal and state law and without
giving providers advanced notice of the changes as required by the statements of
participation, federal and state law, and constitutional due process. The complaint
8
Four individuals who received Medicaid services and their family
representatives also were named plaintiffs. Those individuals are not named plaintiffs
in the current lawsuit.
9
sought declaratory and injunctive relief, damages, and attorney fees and expenses for
alleged breach of contract, violations of the plaintiffs’ rights to administrative
remedies, and violations of their constitutional rights. The plaintiffs did not pursue
the DCH’s administrative review process before filing their lawsuit in superior court.
See UCP II, 298 Ga. at 786 (1) (c).
The superior court dismissed the plaintiffs’ complaint for failure to exhaust
administrative remedies before the DCH. This Court reversed the superior court,
concluding that the defendants’ failure to give the plaintiffs written notice of their
proposed adverse action of denying or reducing service providers’ reimbursements
as required by Medicaid Procedures Manual § 505 and the applicable Rules excused
the plaintiffs from their failure to exhaust administrative remedies. See UCP I, 331
Ga. App. at 621-622 (3). However, our Supreme Court granted certiorari and reversed
the decision of this Court, determining that the plaintiffs first had to pursue their
claim of defective notice and their substantive claims through the DCH’s
administrative review process established by OCGA § 49-4-153 and the Rules. See
UCP II, 298 Ga. at 790-791 (2) (c). In so ruling, the Supreme Court explained:
The plaintiffs devote much of their briefs to arguing the merits of
whether they got proper notice of the allegedly invalid agency actions
10
and decisions, asserting that until they did, they could not start the
administrative review process established by OCGA § 49-4-153. But the
plaintiffs clearly had actual notice of the actions and decisions they
dispute by the time they filed their complaint disputing these matters in
August 2013. The question is whether at that point they could file their
complaint in court and bypass the administrative review process.
Allowing them to do so would require courts to decide both the notice
issues and the underlying substantive issues in the first instance.
Administrative law commits both sets of issues to the administrative
process in the first instance.
Id. at 790 (2) (c). The Supreme Court pointed to “three basic possible outcomes
(which might vary with regard to particular claims and claimants)” once the issue of
defective notice and the plaintiffs’ substantive claims were properly presented to the
DCH with a demand for hearing before an ALJ:
(1) a ruling that no notice of adverse action was required, because there
was no change in the rates of reimbursement or amount of services
allowed; (2) a ruling that notice was properly given earlier and a
consequent dismissal of the underlying substantive claims as untimely;
or (3) a ruling that notice was not properly given and a corresponding
ruling about whether the untimeliness of the substantive claims can and
should be excused (or proper notice ordered to be given now) as a matter
of contractual, regulatory, statutory, or constitutional law. If the ALJ
reached the plaintiffs’ substantive claims and found them to be
11
meritorious, the ALJ could craft appropriate remedies based on the
judge’s expertise with the Medicaid statutes and rules.
Id. at 790 (2) (c). The Supreme Court further noted that if the plaintiffs were
unsatisfied with the ALJ’s ruling, they could seek review by the DCH Commissioner,
and then, if still unsatisfied, they could pursue judicial review. Id. at 790-791 (2) (c).
The Administrative Proceedings. In January 2017, the Superior Court entered
a judgment on remittitur dismissing the plaintiffs’ lawsuit. A few days later, each of
the plaintiffs served the DCH with a written request for an administrative review and
hearing that included the allegations of defective notice and the substantive legal
claims raised in the prior lawsuit against the defendants. Among other things, the
plaintiffs asserted that because the defendants failed to provide the required written
notification of their proposed adverse action of denying or reducing the amount of
service providers’ reimbursements, “any deadlines for Administrative Review or
Administrative Hearing have not begun and/or are tolled.” The plaintiffs also
requested that the defendants be ordered to correct the defective notice by now
providing proper written notification of their adverse action to the plaintiffs, and they
attached a proposed order to that effect.
12
In addition to delivering their written request for administrative review and
hearing by hand delivery and certified mail, each plaintiff also inputted an individual
disputed payment claim through the GAMMIS Web Portal. Those four payment
claims had originally been paid by DCH on October 25, 2010, February 21, 2011,
February 28, 2011, and December 17, 2012, respectively. Each plaintiff wrote in the
“Comments” field on the GAMMIS Web Portal that the individual claim that it had
electronically inputted was intended to be representative and that the full breadth of
the plaintiffs’ claims against the defendants were set out in their written request for
an administrative review and hearing that had been delivered to the DCH.
The DCH denied the plaintiffs’ requests for administrative review, after which
each plaintiff submitted a petition for administrative hearing before an ALJ. The DCH
subsequently referred the matter to the OSAH, and the ALJ assigned to the matter
consolidated the plaintiffs’ petitions. See Rule 350-4.22 (1).9 The plaintiffs then filed
9
Rule 350-4-.22 (1) provides:
When two or more providers appeal matters involving common
issues of law or fact, the appeals may be consolidated by the Department
or by the appointed Administrative Law Judge(s) and heard together if
it appears that a joint hearing would serve to expedite or simplify
consideration of those issues and that no party would be prejudiced
thereby.
13
a consolidated petition for administrative hearing that reiterated their claims of
defective notice and their substantive claims against the defendants.
The defendants filed an answer in which they admitted that they used an
algorithm to determine individual budget allocations to Medicaid service providers
but otherwise denied the plaintiffs’ claims. The defendants thereafter filed a motion
for summary determination, asserting that the issues for determination could be
resolved as a matter of law by the ALJ without need of an administrative hearing. See
Rule 350-4-.26.10 In their statement of “Undisputed Material Facts Related to the Four
10
Rule 350-4-.26 provides in pertinent part:
(1) Any party may move, if supported by affidavits or other
probative evidence, for a summary determination in its favor upon any
of the issues being adjudicated on the basis that there is no genuine issue
of material fact for determination. . . .
(2) When a motion for summary determination is made and
supported as provided in this Rule, a party opposing the motion may file
and serve a response or a countermotion. The respondent may not rest
upon mere allegations or denials, but must show, by affidavit or other
probative evidence, that there is a genuine issue of material fact for
determination in the hearing.
...
(4) If all factual issues are decided by summary adjudication, no
hearing will be held and the Administrative Law Judge shall prepare a
decision. . . .
See Rule 350-4-.06 (b) (“The Administrative Law Judge may dismiss a request for
a hearing for the following reasons: . . . there is no genuine issue of law or fact which
requires a hearing determination.”); Rule 616-1-2-.15 (addressing summary
determination before ALJs). See also Piedmont Healthcare v. Ga. Dept. of Human
14
Claims,” the defendants asserted that the four individual disputed claims that the
plaintiffs inputted on the GAMMIS Web Portal had been “paid in full” as originally
submitted by the plaintiffs for payment in 2010-2012 based on the standard rates set
forth in the relevant Medicaid manual for COMP payments. In the legal argument
section of their motion, the defendants then asserted that summary determination was
appropriate on two grounds. First, the defendants asserted that the only claims
properly before the ALJ were the four individual disputed payment claims because
those were the only claims inputted by the plaintiffs on the GAMMIS Web Portal in
accordance with Medical Procedures Manual § 502. Second, the defendants asserted
that any challenge to the four individual payments was time-barred because the
Georgia Supreme Court’s decision in UCP II, 298 Ga. at 790 (2) (c), reflected as a
matter of law that the plaintiffs had actual notice of the actions and decisions they
disputed by no later than August 2013 when they filed their prior lawsuit, yet the
plaintiffs waited until 2017 to contest any payments before the DCH instead of
Resources, 282 Ga. App. 302, 304-305 (1) (638 SE2d 447) (2006) (noting that the
grant of summary determination is “similar to a summary judgment” and that if an
“issue is proper for summary adjudication, [the ALJ] is not required to hold a
hearing”).
15
utilizing the procedure for initial review of disputed claims set forth in Medicaid
Procedures Manual § 502.
Opposing the motion for summary determination, the plaintiffs responded that
their claims were not limited to the four individual disputed payments that they had
inputted through the GAMMIS Web Portal. Rather, the plaintiffs asserted, they had
submitted a request for administrative review and hearing that sought review more
broadly of all of the plaintiffs’ claims of Medicaid reimbursements being
miscalculated or underpaid from 2008 to the present as a result of the defendants’
undisclosed algorithm. The plaintiffs further asserted that having been deprived of the
required written notice of the defendants’ proposed adverse actions pertaining to the
implementation of the algorithm, “fundamental fairness, due process, Georgia law,
and the parties’ contracts” required that the plaintiffs now be afforded an opportunity
to be heard on their broad substantive claims rather than be shoehorned into the more
narrow procedural framework for disputing individual payment claims through the
GAMMIS Web Portal. According to the plaintiffs, they were entitled to full
administrative review and their claims were not untimely in light of the “secretive
nature” of the defendants’ “unlawful scheme” that required “years of research and
investigation to piece together the facts” now alleged by the plaintiffs. (Emphasis in
16
original.) Additionally, the plaintiffs asserted that even if the four individual claims
inputted through the GAMMIS Web Portal were originally paid at the maximum
approved rates, the defendants’ use of the undisclosed algorithm nevertheless “caused
those payments to be less than what they should be” by, for example, preventing the
providers from billing for certain services.
The ALJ subsequently entered its initial decision granting the defendants’
motion for summary determination. In its section entitled “Undisputed Material
Facts,” the ALJ found that each plaintiff had inputted a single disputed payment claim
through the GAMMIS Web Portal, and that each claim had been “paid in full” as
submitted in 2010-2012 based on the “standard rate set forth” in the DCH’s Medicaid
manual for COMP payments. In its “Conclusions of Law,” the ALJ, relying on
Medicaid Procedures Manual § 502, concluded that a service provider wishing to
contest the payment of a claim must do so via the GAMMIS Web Portal within 30
days of the date of the denial of the payment. The ALJ went on to state:
In its March 25, 2016 decision, the Georgia Supreme Court unanimously
held that [the plaintiffs] in this case “clearly had actual notice of the
actions and decisions they dispute by the time they filed their complaint
disputing these matters in August 2013.” [UCP II,] 290 Ga. at 790 [(2)
(c)]. Consequently, whether [the plaintiffs] received written notice from
17
[the defendants] or not is irrelevant. They had actual knowledge of [the
defendants’] action at least by August 2013.
The ALJ then concluded that once the plaintiffs had actual notice, they “then had
thirty (30) days to contest the [DCH’s] decision – an action which must take place via
the [DCH’s] GAMMIS system.” Because the plaintiffs waited until 2017 to contest
any payments through the GAMMIS Web Portal, the ALJ concluded that the
plaintiffs’ claims were barred for failing “to comply with the filing time-periods noted
above.”
The plaintiffs appealed the initial decision of the ALJ to the DCH
Commissioner. The DCH Commissioner, through a designated representative, entered
a final agency decision incorporating the findings of fact and conclusions of law of
the ALJ and affirming the ALJ’s initial decision.11
The Current Lawsuit. In March 2018, the plaintiffs filed their “Class Action
Complaint or, in the Alternative, Petition for Judicial Review of Commissioner’s
Decision” in the Superior Court of Fulton County. The plaintiffs’ putative class action
complaint contained the same factual allegations as in the prior lawsuit as well as
11
For ease of reference, we will hereafter refer to the findings of fact and
conclusions of law as being those of the “Commissioner” without separate reference
to the ALJ.
18
claims for breach of contract and violation of their constitutional rights, but the
complaint also asserted that the administrative proceedings had demonstrated that
further agency review would be futile and that the DCH’s administrative procedures
were inadequate to provide the broad relief requested by the plaintiffs. Alternatively,
the plaintiff sought judicial review of the Commissioner’s final agency decision.
The defendants filed a motion to dismiss the plaintiffs’ putative class action
complaint and opposed the plaintiffs’ petition for judicial review of the
Commissioner’s final agency decision. Subsequently, the superior court entered its
order granting the defendants’ motion to dismiss the plaintiffs’ putative class action
complaint for failure to exhaust administrative remedies and affirming the
Commissioner’s final agency decision. Among other things, the superior court
concluded that the only process for administrative review now available to the
plaintiffs was the one specified by Medicaid Procedures Manual § 502, which
provides for the review of the denial of individual payment claims through the
GAMMIS Web Portal. In this regard, the superior court rejected the plaintiffs’
argument that “administrative review should have occurred in the same manner as if
they had been provided prior notice of adverse action,” reasoning that the
administrative review process afforded by Medicaid Procedures Manual § 505 for
19
proposed adverse actions by the DCH “does not contemplate looking backwards at
past conduct.” The superior court further concluded that the plaintiffs had failed to
come forward with any evidence in the administrative proceeding reflecting that they
had been denied or underpaid any reimbursements, and thus had failed to show any
“adverse action” by the defendants for which they would have been entitled to receive
advanced written notice. In reaching this conclusion, the superior court noted that the
Commissioner’s findings of fact included findings that the four individual payment
claims inputted by the plaintiffs via the GAMMIS Web Portal had been paid in full
as submitted under the standard rate set forth in the Medicaid manual for COMP
payments. And given the Commissioner’s “finding that the claims were paid in full
as required by the applicable Medicaid manual,” the superior court ruled that it was
“irrelevant” whether the Commissioner erred when it determined that the plaintiffs’
claims were untimely.
The plaintiffs now appeal from the rulings of the superior court.
1. In several related enumerations of error, the plaintiffs contend that the
superior court erred in affirming the Commissioner’s final agency decision granting
summary determination to the defendants on their petition for administrative review
and hearing.
20
Under Georgia’s Administrative Procedure Act, [OCGA §
50-13-1 et seq.,] parties aggrieved by an agency’s final decision are
entitled to judicial review in superior court. The review shall be
conducted by the court without a jury and shall be confined to the record
and the court shall not substitute its judgment for that of the agency as
to the weight of the evidence on questions of fact and may affirm the
decision of the agency or remand the case for further proceedings. The
reviewing court may reverse or modify the agency’s decision if
substantial rights of the appellant have been prejudiced because the
administrative findings, inferences, conclusions, or decisions are: (1) in
violation of constitutional or statutory provisions; (2) in excess of the
statutory authority of the agency; (3) made upon unlawful procedure; (4)
affected by other error of law; (5) clearly erroneous in view of the
reliable, probative, and substantial evidence on the whole record; or (6)
arbitrary or capricious or characterized by abuse of discretion or clearly
unwarranted exercise of discretion.
(Footnotes and punctuation omitted.) UHS of Anchor v. Ga. Dept. of Community
Health, 351 Ga. App. 29, 31-32 (1) (830 SE2d 413) (2019). See OCGA § 50-13-19;
Central Ga. Elec. Membership Corp. v. Ga. Pub. Svc. Comm., 351 Ga. App. 69, 71
(830 SE2d 459) (2019). “When reviewing the affirmance of an administrative agency
decision, our duty is not to review whether the record supports the superior court’s
decision but whether the record supports the final decision of the administrative
agency.” (Citation and punctuation omitted.) City of Rincon v. Couch, 276 Ga. App.
21
567, 568 (623 SE2d 754) (2005). And when the final agency decision at issue is the
grant of summary determination, we review the law and the evidence de novo. See
Piedmont Healthcare, 282 Ga. App. at 303, 305 (1) (applying de novo standard of
review where ALJ granted summary determination and agency entered final
administrative decision affirming ALJ’s decision); Children’s Hosp. of Pittsburgh v.
Ga. Dept. of Medical Assistance, 235 Ga. App. 697, 700 (1) (509 SE2d 725) (1998)
(same).
Guided by these principles, we turn to the arguments raised by the plaintiffs in
this appeal. Among other things, the plaintiffs argue that the superior court erred in
affirming the Commissioner’s final agency decision because the Commissioner
erroneously concluded that the plaintiff’s written notice argument was “irrelevant.”
According to the plaintiffs, the Commissioner acted in an arbitrary and capricious
manner by ignoring “the clear direction of the Supreme Court to determine whether
notice was properly given.”
The lynchpin of the plaintiffs’ claims in the prior lawsuit and the administrative
proceedings was that the defendants failed to give them advanced written notice of
the proposed adverse action of implementing the algorithm to calculate
reimbursements as required by Rule 350-4-.04 and Medicaid Procedures Manual §
22
505. Based on the defendants’ alleged failure to give such required notice, the
plaintiffs argued in the administrative proceedings that relief should be fashioned by
the DCH that now affords them the opportunity to broadly challenge the
implementation of the algorithm to reduce reimbursements from 2008 to the present,
rather than being restricted to the review process for the denial of individual payment
claims through the GAMMIS Web Portal as contemplated by Medicaid Procedures
Manual § 502. Thus, whether the plaintiffs were entitled to, but failed to receive,
advanced written notice of the defendants’ implementation of the algorithm to
calculate reimbursements went to the core of the dispute in this case.
The Commissioner, however, sidestepped the written notice issue by
emphasizing that the Supreme Court stated in UCP II, 298 Ga. at 790 (2) (c), that the
plaintiffs had actual notice by August 2013, and then by concluding that the
plaintiffs’ claims were time-barred based on actual notice. But the Supreme Court
clearly did not intend for its statement regarding actual notice to supplant the legal
analysis undertaken by the Commissioner. Indeed, as previously noted, in laying out
a roadmap for the administrative proceedings, the Supreme Court in UCP II, 298 Ga.
at 790 (2) (c), identified “three possible outcomes,” which centered on resolving
whether written notice of adverse action was required, whether such notice was given,
23
and if not, “whether the untimeliness of the substantive claims can and should be
excused (or proper notice ordered to be given now) as a matter of contractual,
regulatory, statutory, or constitutional law.” Furthermore, the Commissioner did not
explain why actual versus written notice would have triggered any of the time
deadlines set forth in the Medicaid Procedures Manual, including the 30-day deadline
imposed by Medicaid Procedures Manual § 502 for the DCH’s denial of a payment.
Nor did the Commissioner explain why actual notice after the defendants’
implementation of the algorithm would cure the defendants’ failure to provide
advanced written notice of the proposed implementation of the algorithm and the
opportunity at that point to obtain administrative review under Rule 350-4-.04 and
Medicaid Procedures Manual § 505, rather than the narrower review of each
individual payment submitted through the GAMMIS Web Portal afforded by Rule
350-4-.01 (1) (a) and Medicaid Procedures Manual § 502.
Appellate courts can order that an administrative final decision be vacated and
the case remanded to the agency if further clarification is needed before the agency’s
decision can be properly reviewed under OCGA § 50-13-19. See Cobb County School
Dist. v. Barker, 271 Ga. 35, 40 (3) (518 SE2d 126) (1999); Subsequent Injury Trust
Fund v. Knight-Ridder Newspapers-Macon Telegraph & News, 207 Ga. App. 368,
24
369 (427 SE2d 844) (1993). Accordingly, because the DCH Commissioner did not
address the plaintiffs’ central argument regarding written advance notice of an
adverse action and did not fully explain the rationale for its decision based on actual
notice, we vacate the superior court’s order in so far as it affirmed the final agency
decision with direction that the final agency decision be vacated and the case
remanded to the Commissioner for further clarification. See Cobb County School
Dist., 271 Ga. at 40 (3); Subsequent Injury Trust Fund, 207 Ga. App. at 369. Cf.
Lamar Co. v. Whiteway Neon-Ad, 303 Ga. App. 495, 499 (693 SE2d 848) (2010)
(agency decision was arbitrary and capricious when agency did not address principle
issue that was to be resolved in the administrative proceedings).
In reaching this conclusion, we note that in affirming the Commissioner’s final
agency decision, the superior court ruled that the administrative review afforded by
Rule 350-4-.04 and Medicaid Procedures Manual § 505 for proposed adverse actions
was no longer available even if the defendants failed to comply with the advanced
written notice requirement, and that, in addition, the plaintiffs failed to come forward
with evidence in response to the motion for summary determination that there had
been an “adverse action” requiring advanced notice. However, the Commissioner did
not address whether the administrative review afforded by Rule 350-4-.04 and
25
Medicaid Procedures Manual § 505 could be pursued when a provider fails to receive
the required advanced notice of an adverse action from the DCH. Nor did the
Commissioner make a determination that there had been no “adverse action”
requiring advanced notice as that term is used in the applicable regulations and
Medicaid Procedures Manual. Resolving these questions involves agency expertise
and thus must be decided in the first instance in the administrative process rather than
on appeal in the superior court. See UCP II, 298 Ga. at 789 (2) (b) (noting that the
“complex administrative decisions” involved in cases such as this one “are clearly
within the purview of administrative review, and executive agencies are entitled to
apply their expertise to obtain uniformity of results by deciding such questions in the
first instance”); Pruitt Corp. v. Ga. Dept. of Community Health, 284 Ga. 158, 159 (2)
(664 SE2d 223) (2008) (noting judicial deference that should be afforded an
“agency’s interpretation of statutes it is charged with enforcing or administering and
the agency’s interpretation of rules and regulations it has enacted to fulfill the
function given it by the legislative branch”). Furthermore, the defendants did not
move for summary determination on the ground that there had been no “adverse
action” requiring advanced notice; instead, they expressly stated that they were
seeking summary determination on whether the plaintiffs were limited to contesting
26
the four payment claims inputted on the GAMMIS Web Portal and whether those
claims were untimely. Consequently, the Commissioner’s final agency decision could
not be affirmed on the alternative grounds articulated by the superior court. See id.
Cf. Dennis v. First Nat. Bank of the South, 293 Ga. App. 890, 890 (668 SE2d 479)
(2008) (noting that reviewing courts generally should not “affirm the grant of
summary judgment on a ground not raised below”) (citation and punctuation omitted).
2. The plaintiffs contend that the superior court erred in dismissing their
putative class action complaint for failure to exhaust administrative remedies. We
disagree.
“Where, as here, exhaustion of administrative remedies is a precondition for
suit, the satisfaction of this requirement by the class plaintiff normally will avoid the
necessity for each class member to satisfy this requirement individually.” (Citation
and punctuation omitted.) Barnes v. City of Atlanta, 281 Ga. 256, 258 (1) (637 SE2d
4) (2006). See UCP II, 298 Ga. at 789 (2) (b), n.6. However, in light of our decision
supra in Division 1, the administrative process with respect to the plaintiffs (the
putative class representatives) is not complete. Hence, administrative remedies have
not yet been exhausted, and the superior court properly dismissed the plaintiffs’
putative class action complaint. See Perkins, 252 Ga. App. at 37-38 (1), 38 (3)
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(concluding that it was proper to dismiss putative class action where claims of both
representative plaintiffs were subject to dismissal, including claims against one of the
representative plaintiffs for failure to exhaust administrative remedies).12
Judgment affirmed in part and vacated in part, and case remanded with
direction. Mercier and Brown, JJ., concur.
12
Given our decision in Division 2 that dismissal was appropriate on the basis
that administrative remedies have not been exhausted, we need not decide whether,
apart from the exhaustion requirement, the plaintiffs were entitled to simultaneously
pursue in the superior court both the petition for judicial review of the DCH
Commissioner’s final agency decision and the putative class action. See State Health
Planning Agency v. Coastal Empire Rehabilitation Hosp., 261 Ga. 832, 832 (412
SE2d 532) (1992) (party could not simultaneously appeal administrative decision in
superior court and file a declaratory judgment action against the agency).
28