Medical Management & Rehabilitation Services, Inc. v. Maryland Department of Health & Health Hygiene

REPORTED
IN THE COURT OF SPECIAL APPEALS
OF MARYLAND
No. 02386
September Term, 2013
MEDICAL MANAGEMENT AND
REHABILITATION SERVICES, INC., ET AL.
v.
MARYLAND DEPARTMENT OF HEALTH
AND MENTAL HYGIENE
Krauser, C.J.,
Woodward,
Kenney, James A., III
(Retired, Specially Assigned),
JJ.
Opinion by Kenney, J.
Filed: October 28, 2015
October 26, 2015 Medical Management and Rehabilitation Services, Inc., and its
owner, Carolyn Miller (collectively “MMARS”), challenge the Maryland Department of
Health and Mental Hygiene’s (“the Department’s”) award of a case management contract to
The Coordinating Center (“TCC”). The Circuit Court for Talbot County granted the
Department’s Motion to Dismiss for Failure to State a Claim. MMARS presents a single
question for our review, which we have reworded as follows: Did the circuit court err in
granting the motion to dismiss the complaint for failure to exhaust administrative remedies?1
For the reasons that follow, we shall affirm.
FACTUAL AND PROCEDURAL BACKGROUND
Under Section 15-103(a) of the Health-General Article of the Maryland Code (1982,
2009 Repl. Vol.) (“HGA”), the Secretary of Health and Mental Hygiene is charged with the
administration of Maryland’s Medicaid program, which provides health care services to
qualifying low-income individuals and families throughout Maryland. Medicaid participants
with specified rare, expensive, or medically complex conditions2 can enroll in the Rare and
Expensive Case Management (“REM”) program, which is a case managed fee-for-service
reimbursement system. Approximately 4000 Medicaid participants obtain medical care
1
In its brief, MMARS presents the issue as: “Did the trial court err in granting the
Appellee/Defendant[’]s Motion to Dismiss for Failure to State a Claim and Dismissing
the Appellants[’]/Plaintiffs[’] complaint for Declaratory Judgment pursuant to [the] State
Government Article of the Maryland Code Annotated Code Section 10-125 . . . on the
grounds that the Appellants/Plaintiff[]s[‘] had not exhausted their administrative remedies
before filing in the Circuit Court for Declaratory Judgment relief?”
2
Qualifying conditions are set forth in a “Table of Rare and Expensive Disease” in
the Code of Maryland Regulations (“COMAR”). COMAR 10.09.69.17.
through the REM program.
At the inception of the REM program in 1997, the Department contracted for the
necessary case management services with several different individual agencies to facilitate
the recipients’ medical needs. The case managers from the participating agencies would
conduct an individual needs assessment, educate the recipient, provide family support,
develop treatment plans, coordinate provider services, and monitor the recipient’s progress.
MMARS was one of the case management agencies selected in 1997 and has continued as
a REM program case management provider for fifteen years. When the contract at issue was
awarded, MMARS was providing services to over 1000 REM participants.
In 2012, the Department decided to reduce the number of agencies providing REM
program case management services from four to one, after both the American Academy of
Pediatrics and the Maryland State Medical Society had expressed concern about the REM
program’s use of multiple case management providers and its effect on efficiency and
quality. It was their recommendation that one provider coordinate the case management
services.
On December 20, 2012, the Department published a Request for Proposals (“RFP”)
notifying case management providers of the Department’s intent to award the July 1, 2013
through June 30, 2016 contract for case management services to a single provider whose
proposal it deemed most advantageous to the State. The RFP also set forth the procedures
2
for protesting or disputing the RFP or the subsequent contract award,3 in addition to those
procedures already established in 10.01.03 of the Code of Maryland Regulations
(“COMAR”). It further stated that any appeals would not stay the starting date of the
contested contract.
The prior REM contracts fell under the state procurement regulations, and case
management providers were selected through the competitive bid process set forth in
COMAR 21.05.03.4 But, because the Department, in 2009, set the rates for case management
3
Section 1.14 of the Request for Proposals, titled “Protests/Disputes” provided:
Any appeal related to this solicitation shall be subject to the provisions of
COMAR 10.01.03, [which provides Procedures for Hearings Before the
Secretary of Health and Mental Hygiene, including exceptions and judicial
review,] except that the Department shall hold a hearing, consider any
exceptions and render a final decision within 30 days of the date an appeal is
filed. Appeals must be filed with the Contract Monitor within seven (7)
calendar days of the date of receipt by the Offeror of a letter of non-award, or
if the Offeror requests a debriefing, within seven (7) days of the debriefing.
The Department may make an award of this contract notwithstanding an
appeal. Appeal by an unsuccessful offeror of an award of this contract does not
stay the start date of the contract as agreed to by the Department and the
selected awardee.
4
The competitive procurement process involved “Competitive Sealed Proposals,”
see COMAR 21.05.03, wherein the Department requested bids through Requests for
Proposals, which contained information regarding submission requirements, factors
relevant to its evaluation of each submission (including their relative importance), and
other considerations, such as the price of the offer submitted. See id. Bidders responded to
these Requests for Proposals by submitting sealed offers. See id. The Department, upon
completion of all discussions following the submission of offers, awarded contracts to the
bidders whose bids it deemed most advantageous to the State. See id. The identity of each
bidder was withheld until determinations about contract awards were made. See id.
3
services by regulation5 subsequent contracts for case management services were not
procurement contracts governed by its competitive sealed proposal selection procedures.6
Five case management providers submitted proposals in response to the December 20,
2012 RFP, none of which objected to the procedures or to the reduction in the number of
providers to one. A three-person evaluation committee concluded that TCC best addressed
the evaluation factors provided in the RFP by offering a combination of a superior work plan,
corporate qualifications, and experience.
After the Department notified MMARS, on April 12, 2013, that it had not received
the contract award, MMARS challenged the award of the contract to TCC concurrently in
multiple venues, including the Office of Administrative Hearings (“OAH”), the Maryland
5
Starting on July 1, 2009, the rates paid for monthly case management services
were determined by regulation:
E. Effective July 1, 2009, the Department shall pay $406 for case
management assessment, as described in Regulation .05C of this chapter.
F. Effective July 1, 2009, the Department shall make payments monthly for
case management services at one of the rates specified below: (1) Level of
Care 1: $302; (2) Level of Care 2: $180; or (3) Level of Care 3: $95.
COMAR 10.09.69.14.E-F. COMAR 10.09.69.05C relates to case management
assessments performed by REM case managers.
6
See Md. Code (2001, 2009 Repl. Vol.), § 11-101(n)(2)(iii) of the State Finance
and Procurement Article (“SFP”) (“‘Procurement contract’ does not include: a Medicaid,
Judicare, or similar reimbursement contract for which law sets: 1. user or recipient
eligibility; and 2. price payable by the State[.]”); COMAR 21.01.02.01.B.(25)(b)
(“‘Contract’ does not include: . . . (ii) Medicaid, Medicare, Judicare, or similar
reimbursement contracts for which user eligibility and cost are set by law or regulation.”);
COMAR 21.01.02.01.B.(66-1)(“‘Procurement contract’ does not include: . . . A
Medicaid, Judicare, or similar reimbursement contract for which law sets user or recipient
eligibility and price payable by the State.”). COMAR 10.09.69.17 sets REM recipient
eligibility and COMAR 10.09.69 sets the price payable to REM case management
providers.
4
State Board of Contract Appeals (“the Board”), and the Circuit Court for Talbot County.
The Department and OAH
On April 15, 2013, MMARS, via email to the Department, objected to the award of
the case management contract to TCC, asserting that its proposal was the most advantageous
to the State based on the criteria listed in the RFP. MMARS, on April 25, 2013,
supplemented its initial objection, asserting that “[the Department’s] evaluations were tainted
by bias in favor of [TCC].” Based on its objections, the Department gave MMARS the
opportunity to discuss its proposal (although it could not discuss competing proposals) in
a debriefing on May 8, in which a procurement officer7 explained the weaknesses and
deficiencies in MMARS’s proposal. Following that debriefing, MMARS supplemented its
objections with additional complaints.
The Department, on May 6, 2013, delegated its authority to issue a proposed decision
regarding MMARS’s objections to OAH. See COMAR 10.01.03.07. The Administrative Law
Judge (“ALJ”) conducted hearings on October 2, 3, 4, and 31, and November 1, and issued
a proposed decision on December 27, 2013. The ALJ concluded that the Department did not
improperly reject MMARS’s proposal in response to the RFP and recommended that
MMARS’s appeal of the contract award be dismissed. MMARS filed exceptions to the ALJ’s
7
“Procurement officer[] means any person authorized by a procurement agency in
accordance with law or regulations to formulate, enter into, or administer contracts or
make written determinations and findings with respect to them. The term also includes an
authorized representative acting within the limits of authority.” COMAR 21.01.02.01.B.
5
proposed decision with the Secretary of the Department, but, in March of 2014, it dismissed
those exceptions.
The Board of Contract Appeals
On June 24, 2013, MMARS filed a bid protest with the Board challenging the contract
award. The Board, finding that the RFP fell outside the definition of a procurement contract,
dismissed the protest for lack of jurisdiction on September 6, 2013. MMARS filed a petition
for judicial review of that decision in the Circuit Court for Talbot County on October 1,
2013, but dismissed that petition on April 9, 2014.8
The Declaratory Judgment Action
On September 4, 2013, MMARS filed a Complaint and Motion for Temporary
Restraining Order in the Circuit Court for Talbot County. The Department filed a Motion to
Dismiss for Failure to State a Claim (“Motion to Dismiss”) and Opposition to Plaintiff’s
Motion for Temporary Restraining Order on September 20. On October 1, 2013, MMARS
withdrew its Motion for a Temporary Restraining Order and filed a response to the
Department’s Motion to Dismiss. MMARS filed an additional response on October 25, 2013.
That same day, the circuit court conducted a hearing on the Motion to Dismiss.
On December 23, 2013, the court granted the Motion to Dismiss. The court stated that
MMARS had failed to exhaust its available administrative remedies. At the time of the
8
The issue of whether the RFP fell outside the definition of a procurement contract
is not before us in this appeal, and we express no opinion on the issue.
6
court’s ruling, the petition for judicial review of the Board’s decision was pending before the
circuit court, and the exceptions and objections to the Department’s contract award were
pending before OAH.
STANDARD OF REVIEW
“[T]he grant of a motion to dismiss [is reviewed] de novo.” Reichs Ford Rd. Joint
Venture v. State Rds. Comm’n of the State Highway Admin., 388 Md. 500, 509 (2005).
During that review, we must determine whether the trial court’s decision was legally correct.
Napata v. Univ. of Md. Med. Sys. Corp., 417 Md. 724, 732 (2011), and “we must assume the
truth of the well-pleaded factual allegations of the complaint, including the reasonable
inferences that may be drawn from those allegations.” Gasper v. Ruffin Hotel Corp. Of Md.,
183 Md. App. 211, 226 (2008) (quoting Adamson v. Corr. Med. Servs., Inc., 359 Md. 238,
246 (2000)).
Determining the meaning of a statute, and in this case, the statutory definition of
“regulation,” is a question of law and subject to de novo review. See Dixon v. Dep’t of Pub.
Safety & Corr. Servs., 175 Md. App. 384, 408 (2007). In that review, we consider the
language of the statute in context, not in isolation. See State Dep’t of Assessments & Taxation
v. Andrecs, 444 Md. 585, 588-89 (2015); see also Bldg. Materials Corp. of Am. v. Bd. of
Educ. of Balt. Cnty., 428 Md. 572, 585-86 (2012). “Agency decisions premised upon case
law, . . . are not entitled to deference.” Gore Enter. Holdings, Inc. v. Comptroller of
Treasury, 437 Md. 492, 505 (2014).
7
DISCUSSION
The Trial Court’s Failure to Address Expressly MMARS’s Regulation Argument
MMARS filed a three count complaint in the circuit court captioned as follows: count
one, “Declaratory Judgment Pursuant to State Government Article of the Maryland
Annotated Code, Section 10-125 ”; count two, “Declaratory Judgment (Pursuant to the
Courts and Judicial Proceedings Article of the Maryland Annotated Code, Subtitle Four and
State Government Article of the Maryland Annotated Code, Section 10-125[)]”; and count
three, “Complaint for Temporary Restraining Order and Preliminary Permanent Injunctive
Relief.”9
The first count, as stated in the pleadings, was an “action for Declaratory Judgment
pursuant to the State Government Article of the Maryland Code, Section 10-125, . . . for the
purpose of determining questions of actual controversy between the parties and terminating
uncertainty and controversy giving rise to [this proceeding.]” According to the complaint, the
uncertainty relates to the Department’s “attempt to legalize its position[, which] rests on
certain regulations [that according to MMARS] are misrepresentations by the [Department,]
9
In the the third count, MMARS requested “a temporary restraining [o]rder and
preliminary injunctive relief pursuant to Maryland Rules 15-501 through 15-505.” and
alleged that “[the Department’s] conduct consist[ed] of a threat to [MMARS’s] rights
under [its then current] contract with the [Department] and the parties’ agreement that the
contract [would] continue until the end of the appellant [sic] process[,]” and unless it was
restrained from unilaterally cancelling that contract, MMARS would be irreparably
harmed. MMARS dismissed count three and withdrew the Motion for a Temporary
Restraining Order on October 1, 2013.
8
[and] as interpreted [by the Department, in addition to] the proposed award of th[e] RFP to
TCC, violate portions of the United States and Maryland Constitutions, . . . [and] th[ose]
interpretations or provisions exceed the statutory authority of the [Department] as a unit
under State Government Article 10-125(d)(2).” The second count, according to MMARS,
was “an action for declaratory judgment pursuant to State Government Article of the
Maryland Annotated [C]ode, Section 10-125, Sections 3-406 and 3-407 of the Courts and
Judicial Proceedings Article of the Annotated Code of Maryland for the purpose of
determining a question of actual controversy between the parties.” The claim, according to
MMARS, related to its then-current contract with the Department.
At a hearing on the Department’s Motion to Dismiss, MMARS advanced several
arguments: first, as an exception to the exhaustion doctrine, Maryland Code (1984, 2009
Repl. Vol.) § 10-125 of the State Government Article (“SG § 10-125 ”) states that an action
can be brought in the circuit court without exhausting administrative remedies; second, “by
giving [the REM contract] to one company, without any benevolent reason to the people of
Maryland [the Department created] a monopoly[;]” and finally that “[t]he RFP is a regulation
in itself that created a monopoly in itself because it changed [the REM] program and gave
it to one individual contractor when the Department had a few months before stated that all
of these contractors had done an exceptional job . . . .”
The circuit court, in granting the Department’s Motion to Dismiss, expressly stated
9
that MMARS had “clearly not exhausted [all] administrative remedies.” On appeal, MMARS
asserts that the trial court erred, contending that the exhaustion doctrine does not apply
because the single provider RFP and the subsequent contract award were, in effect, a
regulation and that SG § 10-125 provides “an exception to [the] general rule” that courts
“will review only a ‘final’ decision of an [a]gency.”
We ordinarily presume that the circuit court knows the law, and in this case, we can
presume its statement regarding MMARS’s failure to exhaust administrative remedies was
an implicit finding that the exhaustion exception in SG § 10-125 does not apply. But, even
if that were not the case, “we may affirm the judgment of a trial court to grant a motion to
dismiss on a different ground than that relied upon by the trial court, as long as the alternative
ground is before the Court properly on the record.” Forster v. State Office of Pub. Defender,
426 Md. 565, 580-81 (2012). “[W]here the record in a case adequately demonstrates that the
decision of the trial court was correct, although on a ground not relied upon by the trial court
and perhaps not even raised by the parties, [we] will affirm.” Robeson v. State, 285 Md. 498,
502 (1979). “[C]onsiderations of judicial economy justify the policy of upholding a trial court
decision which was correct although on a different ground than relied upon.” City of
Frederick v. Pickett, 392 Md. 411, 424 (2006) (quoting Robeson v. State, 285 Md. 498, 503
(1979)).
Did the RFP and Contract Award Constitute a Regulation?
10
The Department derives its authority to administer the REM program from statutes
that emphasize individualized care and appropriate case management, and that exempt REM
participants from mandatory enrollment in standard managed care organizations. See Md.
Code (1982, 2009 Repl. Vol.), §§15-102.1(b)(1),10 15-103(b)(4)(i)11 of the Health General
Article (“HGA”). Supporting regulations set forth REM participant eligibility, COMAR
10.09.69.17; case management reimbursement rates, COMAR 10.09.69.14; and the
procedures for contracting for services, see COMAR 21.01.
Regulations are to be enacted in accordance with procedures set forth in Title 10
subtitle 1 of the Maryland Administrative Procedure Act (“APA”). Md. Code (1984, 2009
Repl.Vol., 2010 Supp.). In Balfour Beatty Const. v. Md. Dep’t of Gen. Servs., 220 Md. App.
334, 356 (2014) we stated:
[An agency] “may not adopt a proposed regulation” until it has
sent a proposed draft to the Attorney General or unit counsel for
approval as to legality, and also to the General Assembly’s Joint
Administrative, Executive, and Legislative Review Committee
(“AELR Committee”). Next, the proposed regulation must be
10
“(b) The Department shall, to the extent permitted, subject to the limitations of
the State budget:
(1) Provide a comprehensive system of quality health care services with an
emphasis on prevention, education, individualized care, and appropriate case
management[.]”
11
“(b)(4)(i) The Secretary may exclude specific populations or services from the
program developed under paragraph (1) of this subsection.” Subsection (b)(1) reads: “As
permitted by federal law or waiver, the Secretary may establish a program under which
Program recipients are required to enroll in managed care organizations.”
11
published in the Maryland Register and be accompanied by a
notice that: (1) states the economic impact of the proposed
regulation on State and local government revenues and
expenditures and on groups that may be affected by it, and (2)
sets a date, time, and place for public hearing. For the next 30
out of the 45 days during which the regulation is published in
the Maryland Register, [the agency] must accept public
comment on the proposed regulation.
(Citations omitted).
Arguing that the circuit court erred in dismissing its complaint for failure to exhaust
its administrative remedies and that the contract award to TCC created an unconstitutional
monopoly, MMARS contends that the single provider RFP “changed the [REM] program”
and is effectively a regulation that was not adopted in accordance with Title 10 of the APA.
Therefore, MMARS was entitled to petition for a declaratory judgment challenging the
Department’s award of the contract to TCC because SG § 10-125(a)(1) states “[an
individual] may file a petition for a declaratory judgment on the validity of any regulation,
whether or not the person has asked the unit to consider the validity of the regulation.”
In response, the Department argues that the circuit court properly dismissed the case
for failure to exhaust administrative remedies because the RFP and the award of a case
management contract pursuant to that RFP fall outside of the APA’s definition of a
regulation and are not subject to judicial challenge through a petition for a declaratory
judgment under SG § 10-125. As evidence that MMARS had failed to exhaust all available
12
administrative remedies, the Department notes that it filed its petition for declaratory
judgment in the circuit court before the OAH had rendered a decision on its objections and
exceptions, and before the circuit court had acted on MMARS’s petition for judicial review
of the Board’s decision regarding jurisdiction over the contract award.12
The APA defines the term “regulation” as follows:
“Regulation” means a statement or an amendment or repeal of
a statement that: (i) has general application; (ii) has future
effect; (iii) is adopted by a unit to: 1. detail or carry out a law
that the unit administers; 2. govern organization of the unit; 3.
govern the procedure of the unit; or 4. govern practice before the
unit; and (iv) is in any form, including: 1. a guideline; 2. a rule;
3. a standard; 4. a statement of interpretation; or 5. a statement
of policy.
SG § 10-101(g)(1). The Court of Appeals and this Court have consistently held that an
agency action that does not “formulate new rules of widespread application, change existing
law, or apply [rules] retroactively to the detriment of an entity that had relied on the agency’s
past pronouncements . . . [is not a regulation.]” See, e.g., Balfour, 220 Md. App. at 357
(citing Md. Ass’n of Health Maint. Orgs. v. Health Servs. Cost Review Comm’n, 356 Md.
581, 601 (1999)). Neither appellate court has specifically addressed whether the selection of
a contractor under a RFP can be considered a regulation that is subject to challenge by a
12
In addition, the Department contends that MMARS’s petition failed to comply
with Maryland Rule 2-303(b), which requires that a pleading be “simple, concise, and
direct” and “not include argument, unnecessary recitals of law, evidence, or documents,
or any immaterial, impertinent, or scandalous matter.” The trial court apparently did not
consider that challenge to the petition, and we will not consider it on appeal.
13
petition for declaratory judgment under SG § 10-125. But, this Court has determined that the
introduction of previously unconsidered provisions in a single RFP and that case-by-case
agency determinations fall outside of the definition of a regulation. Balfour, 220 Md. App.
at 357-58.
In Balfour, the State issued a RFP for construction services relating to the construction
of a new juvenile detention center. Id. at 338. Prior to submitting their proposals, several
potential bidders filed a joint protest with the Department of General Services (“DGS”)
challenging the State’s inclusion of a Project Labor Agreement (“PLA”) as an evaluation
factor in the contract selection process. Id. at 338-39. The protesting bidders contended that,
by including the PLA as a factor to be considered, DGS had created a new procurement
policy in violation of state administrative rulemaking provisions. Id. at 346. We concluded
that the inclusion of the PLA in the RFP was a “pilot project” that “is neither of general
application nor future effect.” Id. at 361. Therefore, its inclusion was not a regulation. See
id. at 339 (“a novel specification included in a single RFP, without more, does not . . .
formulate a new policy of widespread application or future effect and, therefore, does not
mandate predicate rulemaking under the Maryland Administrative Procedure Act.”).
Moreover, the Court of Appeals has determined that other experimental agency
decisions, even long-lasting ones, are not considered regulations. In Md. Ass’n of Health
Maint. Orgs. v. Health Servs. Cost Review Comm’n, 356 Md. 581 (1999), the Health Services
14
Review Commission (“Review Commission” or “Commission”), seeking a more efficient,
less costly method for conducting individual rate reviews of the hospitals under its
jurisdiction, implemented an inflation adjustment system (“IAS”) into the rate setting
process. 356 Md. at 585-86. The IAS method initially was experimental, but within one year
of its implementation, the Commission determined that it was more efficient and effective
than the previous review mechanism and its implementation was adopted by resolution. Id.
at 590-91. Twenty-two years after its implementation, the IAS was challenged on the ground
that “as a statement, standard and rule of Commission policy, with general application and
future effect . . . [it was] indisputably a regulation under the APA.” Id. at 599-600. The Court
of Appeals disagreed, noting that the change in its review methodology, even at its inception,
did not “represent a change in the policies or standards applied by the Commission.” Id. at
602. Rather, it was more analogous to internal policies or methods, as found in the adoption
of a Prospective Payment System in Dep’t of Health & Mental Hygiene v. Chimes, 343 Md.
336 (1996), which implemented a growth cap on the costs factored into the agency’s
payments to providers, which was not considered a regulation. See 356 Md. at 602.
The Court of Appeals has also determined that case-by-case agency actions, even
when these actions may have farther reaching implications, are not subject to rulemaking
procedures. In Consumer Prot. Div. Office of Attorney Gen. v. Consumer Publ’g, Co., 304
Md. 731 (1985), the Consumer Protection Division of the Office of Attorney General
15
(“Division”) filed charges for false and misleading advertising practices against a business
that sold mail-order diet pills. Id. at 737-38. A final order following an administrative hearing
on these charges required that, among other things, the business significantly alter the manner
in which it advertised its products. Id. at 739-40. Because several businesses marketed
similar diet pills in the State, the business challenged the order by arguing that the Division
was making industry-wide policy that is subject to rulemaking procedures. Id. at 751, 753.
The Consumer Publ’g Co. Court, citing SEC v. Chenery Corp., 332 U.S. 194, 202–03 (1947),
stated that “even if [Consumer Publishing] had proven an industry-wide practice, the
Division would not have been required to proceed by rulemaking[,]” because an agency must
retain the authority to address problems on a case-by-case basis if the administrative process
is to be effective.
In other words, case-by-case determinations will not be considered regulations, so
long as an agency action does not apply “materially modified or new standards . . .
retroactively to the detriment of [an individual who] relied upon the [agency]’s past
pronouncements[.]” Balt. Gas & Electric v. Pub. Servs. Comm’n, 305 Md. 145, 169 (1986).
It is only when an agency creates a “substantially new generally applicable policy” will it be
considered to have promulgated a regulation that is subject to rulemaking procedures. CBS
Inc. v. Comptroller of the Treasury, 319 Md. 687, 698–99 (1990).
In this case, we are not persuaded that the Department, through the RFP, formulated
16
new rules of widespread application, changed existing law, or applied rules retroactively to
MMARS’s detriment. To be sure, the competitive bid procedure for procurement contracts
that was followed for previous RFPs under the REM program no longer applied. But, that
change in the procedure was in accordance with statute and implementing regulations
adopted in accordance with the rulemaking provisions of the APA.
Moreover, the single provider RFP, and the subsequent contract award is limited to
case management services for a finite segment of the greater Medicaid population for a single
contract period of July 1, 2013 through June 30, 2016, and applies only to the case
management agencies responding to the RFP. The Department, through the RFP and the
contract award, did not impair MMARS’s rights under the existing case management
contract. And, any claimed detrimental reliance on the Department’s previous contract
awards to multiple case management would have been unreasonable in light of the clear
language of the RFP: “[t]he Department intends to make one award to a single Offeror whose
proposal is deemed the most advantageous to the State.”
In our view, the RFP does not “formulate a new policy of widespread application or
future effect.” See, e.g., Balfour, 220 Md. App. at 357. That the Department may decide to
continue to contract with only one REM case management provider in the future does not
make the RFP or the contract award now before us a regulation. Md. Ass’n of Health Maint.
Orgs., 356 Md. at 602. A determination about how many providers would best serve the
17
REM population, like the implementation of an Inflation Adjustment System in a hospital
rate review, is a matter of methodology of how best to carry out the Department’s statutory
mandate to provide quality healthcare to the people it serves.
SG § 10-125 provides that “[a] person may file a petition for a declaratory judgment
on the validity of any regulation.” (Emphasis added). But, a court need not issue a
declaratory judgement “where there is a lack of jurisdiction or where a declaratory judgment
is not an available or appropriate type of remedy.” Christ by Christ v. Md. Dep’t of Natural
Res., 335 Md. 427, 435 (1994). We hold that the Department’s RFP and the related contract
award do not constitute a regulation under Maryland law. Therefore, MMARS was not
entitled to a declaratory judgment under SG § 10-125, but was required to exhaust its
administrative remedies.13 The granting of the motion to dismiss was legally correct.
JUDGMENT OF THE
CIRCUIT COURT FOR
TALBOT COUNTY
AFFIRMED. COSTS TO
BE PAID BY APPELLANT.
13
As noted in footnote 3, see supra p. 3, Section 1.14 of the RFP provides its
available administrative remedies for disputes and protests. It appears appellant initiated
that procedure but abandoned it prior to its conclusion.
18