Troy W. Simmons, D.D.S., P.C. and Troy W. Simmons, D.D.S. v. Texas Health and Human Services Commission

ACCEPTED
12-14-00256-CV
TWELFTH COURT OF APPEALS
TYLER, TEXAS
1/12/2015 4:11:57 PM
CATHY LUSK
CLERK
No. 12-14-00256-CV
IN THE COURT OF APPEALS
FOR THE TWELFTH JUDICIAL DISTRICT FILED IN
12th COURT OF APPEALS
TYLER, TEXAS TYLER, TEXAS
1/12/2015 4:11:57 PM
TROY W. SIMMONS, D.D.S., P.C. AND TROY W. SIMMONS, D.D.S.,
CATHY S. LUSK
Appellants, Clerk
v.
TEXAS HEALTH AND HUMAN SERVICES COMMISSION,
Appellee.
On Appeal from the County Court at Law No. 2, Gregg County, Texas
Cause No. 2014-933-CCL2
APPELLEE’S BRIEF
KEN PAXTON
Attorney General of Texas
CHARLES E. ROY
First Assistant Attorney General
JAMES E. DAVIS
Deputy Attorney General for Civil Litigation
JENNIFER L. HOPGOOD
State Bar No. 24073010
Administrative Law Division
RAYMOND C. WINTER
State Bar No. 21791950
Chief, Civil Medicaid Fraud Division
Assistant Attorneys General
P. O. Box 12548
Austin, TX 78711-2548
Attorneys for
Texas Health and Human Services
Commission, Office of Inspector General
Oral Argument Requested
IDENTITY OF PARTIES AND COUNSEL
The following is a complete list of all parties, as well as the names and addresses
of all counsel.
Plaintiffs/Appellants Trial and Appellate Counsel
Troy W. Simmons, D.D.S., P.C. and Joseph R. Willie
Troy W. Simmons, D.D.S. Willie & Associates, P.C.
4151 Southwest Freeway,
Suite 490
Houston, Texas 77027
Defendant/Appellee Trial and Appellate Counsel
Texas Health and Human Services Office of the Attorney General
Commission Jennifer L. Hopgood
Administrative Law Division
Raymond C. Winter
Chief, Civil Medicaid Fraud Division
Assistant Attorneys General
P.O. Box 12548
Austin, TX 78711-2548
i
TABLE OF CONTENTS
IDENTITY OF PARTIES AND COUNSEL ............................................................ i
TABLE OF CONTENTS .......................................................................................... ii
INDEX OF AUTHORITIES.................................................................................... iv
STATEMENT OF THE CASE ................................................................................ ix
ISSUE PRESENTED - CORRECTED......................................................................x
APPELLEE’S BRIEF ................................................................................................1
STATEMENT OF FACTS ........................................................................................2
The Parties.............................................................................................................2
HHSC-OIG’s administrative enforcement actions to combat waste, fraud,
and abuse ...............................................................................................................3
Failure to Appeal Final Notice of Overpayment ...............................................5
Separate Payment Hold Proceeding against Dr. Simmons ..............................7
Applying Payment Hold Monies to Satisfy Final Overpayment Debt ............8
Attack on Agency’s Final Determination ...........................................................9
SUMMARY OF THE ARGUMENT ......................................................................10
STANDARD OF REVIEW .....................................................................................13
ARGUMENT ...........................................................................................................13
I. The trial court properly granted HHSC’s Plea to the Jurisdiction. ........13
A. Sovereign immunity bars suit, and Dr. Simmons fails to argue ........13
waiver. ..............................................................................................................13
1. Improper Suit for Judicial Review .......................................................15
2. Improper Attempt to Control State Action .........................................16
ii
3. HHSC’s discretionary authority to turn overpayment sanction into a
final debt ..........................................................................................................16
B. Simmons failed to exhaust his administrative remedies and now .....20
seeks a collateral attack on a final agency decision. ....................................20
C. Dr. Simmons’ UDJA claim, even if valid, could not confer
jurisdiction on a trial court and would result only in an advisory opinion.
24
1. Independent Jurisdiction Not Conferred.............................................24
2. Advisory Opinion ...................................................................................25
II. Dr. Simmons’ Purported Issue No. 2 is not properly before the Court.
27
CONCLUSION AND PRAYER .............................................................................27
CERTIFICATE OF COMPLIANCE .......................................................................29
CERTIFICATE OF SERVICE ................................................................................29
APPENDIX ..............................................................................................................30
iii
INDEX OF AUTHORITIES
Cases
Anderson v. City of Seven Points, 806 S.W.2d 791, 793 (Tex. 1991) .....................22
AVCO Corp. v. Interstate Sw., Ltd., 251 S.W.3d 632, 663 (Tex. App.—Houston
[14th Dist.] 2007, pet. denied) .................................................................................31
Bacon v. Tex. Historical Comm’n, 411 S.W.3d 161, 173 (Tex. App.—Austin 2013,
no pet.)......................................................................................................................17
Billings v. Concordia Heritage Assoc., 960 S.W.2d 688, 693 (Tex. App.—El Paso
1997, writ denied) ....................................................................................................33
Cash Am. Int'l Inc. v. Bennett, 35 S.W.3d 12, 15 (Tex. 2000) ......................... 25, 26
City of Athens v. MacAvoy, 260 S.W.3d 676, 678 (Tex. App.—Tyler 2008, no pet.)
..................................................................................................................................15
City of El Paso v. Heinrich, 284 S.W.3d 366, 371-72 (Tex. 2009) ...... 12, 21, 22, 23
City of Longview v. Head, 33 S.W.3d 47, 51 (Tex. App.—Tyler 2000, no pet.) ....15
City of Tyler v. Smith, No. 12-08-00159-CV, 2009 WL 4757576, at *4 (Tex.
App.—Tyler Dec. 14, 2009, no pet.) (mem. op.) ....................................................16
Creedmoor-Maha Water Supply Corp. v. Tex. Comm’n on Envtl. Quality, 307
S.W.3d 505, 526 (Tex. App.—Austin 2010, no pet.) ..............................................29
Desi Driving Sch. v. Tex. Educ. Agency, 2014 WL 1018086, at *1 (Tex. App.—
Austin Mar. 14, 2014, no pet.) .................................................................................32
Dir. of Dep’t of Agric. & Env’t v. Printing Indus. Ass’n of Tex., 600 S.W.2d 264,
265 (Tex. 1980) ........................................................................................................20
iv
Friends of Canyon Lake v. Guadalupe-Blanco River Auth., 96 S.W.3d 519, 524
(Tex. App.—Austin 2002, pet. denied) ...................................................................29
Friends of Canyon Lake, Inc. v. Guadalupe-Blanco River Auth., 96 S.W.3d 519,
525 (Tex. App.—Austin 2002, pet. denied) ............................................................13
Griffin v. Hawn, 341 S.W.2d 151, 152-53 (Tex. 1960) ...........................................20
Harris Cnty. v. Sykes, 136 S.W.3d 635, 639 (Tex. 2003)........................................35
Hill v. Bd. of Trs. of the Ret. Sys. of Tex., 40 S.W.3d 676, 678 (Tex. App.—Austin
2001, no pet.) ...........................................................................................................27
Hosner v. DeYoung, 1 Tex. 764, 769 (1847) ...........................................................16
In re O'Quinn, 355 S.W.3d 857, 862 (Tex. App.—Houston [1st Dist.] 2011, orig.
proceeding [mand. denied]) .....................................................................................30
Jackson v. State Office of Admin. Hearings, 351 S.W.3d 290, 301 (Tex. 2011) ....14
Kentucky v. Graham, 473 U.S. 159, 166 (1985)......................................................19
Lueck v. State, 325 S.W.3d 752, 765-66 (Tex. App.—Austin 2010, pet. denied) 26,
27
Marble Falls Indep. Sch. Dist., 275 S.W.3d 558, 566-67 (Tex. App.—Austin 2008,
pet. denied) ...............................................................................................................32
Mayhew v. Town of Sunnyvale, 964 S.W.2d 922 (Tex. 1998).................................14
MBM Fin. Corp. v. Woodlands Operating Co., 292 S.W.3d 660, 669 (Tex. 2009)28
McAllen Hosps. v. Suehs, 426 S.W.3d 304, 316 (Tex. App.—Amarillo 2014, no
pet.)...........................................................................................................................21
Prairie View A&M v. Chatha, 381 S.W.3d 500, 511 (Tex. 2012) ................... 12, 27
v
Reed v. Prince, 194 S.W.3d 101, 107 (Tex. App.—Texarkana 2006, pet. denied)19,
27
Republic Ins. Co. v. Davis, 856 S.W.2d 158, 164 (Tex. 1993) ...............................31
State Bar of Tex. v. Heard, 603 S.W.2d 829, 833 (Tex. 1980) ...............................20
Subaru of Am., Inc. v. David McDavid Nissan, Inc., 84 S.W.3d 212, 221 (Tex.
2002) ........................................................................................................................24
Tex. A&M Unìv. Sys. v. Koseoglu, 233 S.W.3d 835, 844 (Tex. 2007)............. 15, 19
Tex. Ass’n of Bus. v. Tex. Air Control Bd., 852 S.W.2d 440, 444 (Tex. 1993) 15, 31,
32, 33
Tex. Comm’n on Envtl. Quality v. Kelsoe, 286 S.W.3d 91, 94-95 (Tex. App.—
Austin 2009, pet. denied) .................................................................................. 24, 29
Tex. Dep’t of Ins. v. Reconveyance Servs., Inc., 306 S.W.3d 256, 258-59 (Tex.
2010) ........................................................................................................... 12, 21, 23
Tex. Dep’t of Protective & Regulatory Servs. v. Mega Child Care, l45 S.W.3d 170,
198 (Tex. 2004) ........................................................................................................16
Tex. Dep’t of Transp. v. Jones, 8 S.W.3d 636, 638 (Tex. 1999) (per curiam) ........19
Tex. Dep’t of Transp. v. Sefzik, 355 S.W.3d 618, 621 (Tex. 2011) .................. 11, 18
Tex. Natural Res. Conservation Comm’n v. IT-Davy, 74 S.W.3d 849, 853 (Tex.
2002) ..................................................................................................... 11, 14, 19, 30
Tex. Parks & Wildlife Dep’t v. Garland, 31 S.W.3d 920, 925 (Tex. App.—Tyler
2010, no pet.) ...........................................................................................................17
TFJA v. Tex. Comm’n on Envtl. Quality, 368 S.W.3d 727, 735-36 (Tex. App.—
Austin 2012, pet. denied) .........................................................................................29
vi
Twenty Wings Ltd. v. Tex. Alcoholic Beverage Comm’n, No. 2-05-355-CV, 2006
WL 1791707, at *1 (Tex. App.—Fort Worth June 29, 2006, no pet.) (mem. op.) .26
Vickery v. Stanley, 2010 WL 4638714, at *4 (Tex. App.—Tyler Nov. 17, 2010, no
pet.)...........................................................................................................................28
Wilson v. Tex. Workers’ Comp. Comm’n, No. 12-01-00337-CV, 2003 WL
22681793, at *3 (Tex. App.—Tyler Nov. 13, 2003, no pet.) (mem. op.) ...............16
Wilson v. Wilson, 378 S.W.2d 156, 160 (Tex. App.—Tyler, 1964 no writ) ...........30
Statutes
42 U.S.C. § 1396 ........................................................................................................4
Tex. Civ. Prac. & Rem. Code § 15.014 ...................................................................23
Tex. Civ. Prac. & Rem. Code § 37.002(b)...............................................................31
Tex. Civ. Prac. & Rem. Code § 37.003(a) ...............................................................30
Tex. Civ. Prac. & Rem. Code § 65.023(a) ...............................................................23
Tex. Gov’t Code Ann. § 2001.171.............................................................. 18, 26, 27
Tex. Gov’t Code Ann. § 2001.176.......................................................................2, 34
Tex. Gov’t Code Ann. § 2001.176(b)(1) .................................................................18
Tex. Gov’t Code Ann. § 531.001 ...............................................................................4
Tex. Gov’t Code Ann. § 531.102 ...............................................................................3
Tex. Gov’t Code Ann. § 531.1201(a) ....................................................................6, 7
Tex. Hum. Res. Code Ann. § 32.021(a) ....................................................................2
vii
Tex. Hum. Res. Code Ann. § 32.039(b)(1)................................................................4
Tex. R. App. P. 38.2(a)(1)(B) ................................................................................x, 7
Rules
1 Tex. Admin. Code § 371.11 ....................................................................................8
1 Tex. Admin. Code § 371.1605 ................................................................................4
1 Tex. Admin. Code § 371.1607(50) .........................................................................8
1 Tex. Admin. Code § 371.1617 ................................................................................5
1 Tex. Admin. Code § 371.1617(b) ...........................................................................7
1 Tex. Admin. Code § 371.1617(e)(1)...................................................... 5, 9, 13, 22
1 Tex. Admin. Code § 371.1711(d)(2) ......................................................................6
1 Tex. Admin. Code § 371.1721(a) ...........................................................................4
1 Tex. Admin. Code § 371.1721(b)(l) .......................................................................4
1 Tex. Admin. Code § 371.1723 ..........................................................................5, 25
viii
STATEMENT OF THE CASE
Nature of the Case: This is an appeal from a final judgment by the County
Court in Gregg County granting the Texas Health and
Human Services Commission’s (“HHSC”) plea to the
jurisdiction and dismissing Troy W. Simmons, D.D.S.,
P.C. and Troy W. Simmons, D.D.S.’s (“Dr. Simmons”)
petition for declaratory judgment (“Trial Court Petition”).
CR 4-11.
Trial Court: County Court at Law No. 2 Gregg County, the Honorable
Vincent L. Dulweber, Presiding.
Trial Court Proceeding: Appellant Dr. Simmons brought suit seeking an order from
the trial court to extinguish his liability to HHSC for a final
overpayment debt and to compel HHSC to release to Dr.
Simmons funds it had applied to satisfy a portion of the
final debt. See CR 4-11. HHSC filed a plea to the
jurisdiction, asserting that the trial court lacked
jurisdiction over Dr. Simmons’ suit because of sovereign
immunity, a lack of an ultra vires exception, and failure to
exhaust administrative remedies. CR 12-40, 45-109. After
considering the arguments of the parties, and holding a
hearing, the trial court granted HHSC’s plea to the
jurisdiction and dismissed Dr. Simmons’ lawsuit. CR 124.
Trial Court Disposition: The trial court entered a final order granting HHSC’s plea
to the jurisdiction and dismissing Dr. Simmons’ lawsuit.
See Final Order, CR 124, and letter from Judge Dulweber,
attached at Appendix 1. Dr. Simmons appeals this final
order. CR 130.
ix
ISSUE PRESENTED - CORRECTED
1. Whether the trial court properly granted HHSC’s Plea to the Jurisdiction.1
1
Dr. Simmons’ purported second issue, whether HHSC failed to exhaust its administrative
remedies, is not properly before the Court. See Tex. R. App. P. 38.2(a)(1)(B). This proffered issue
goes to the merits of Dr. Simmons’ request for relief and was not, therefore, considered or ruled
on by the trial court.
x
No. 12-14-00256-CV
IN THE COURT OF APPEALS
FOR THE TWELFTH JUDICIAL DISTRICT
TYLER, TEXAS
TROY W. SIMMONS, D.D.S., P.C. AND TROY W. SIMMONS, D.D.S.,
Appellants,
v.
TEXAS HEALTH AND HUMAN SERVICES COMMISSION,
Appellee.
On Appeal from the County Court at Law No. 2, Gregg County, Texas
Cause No. 2014-933-CCL2
APPELLEE’S BRIEF
TO THE HONORABLE TWELFTH COURT OF APPEALS:
The trial court properly granted HHSC’s plea to the jurisdiction, dismissing
for want of jurisdiction Dr. Simmons’ suit for declaratory judgment, because
declaratory judgment did not lie in this case where Dr. Simmons failed to plead or
prove any waiver of sovereign immunity or ultra vires exceptions or failed to
exhaust his administrative remedies.
Dr. Simmons brought suit asking the trial court to (1) issue a declaration that
Dr. Simmons’ alleged liability to HHSC to be released and extinguished and (2)
order HHSC to release and forward funds that HHSC applied to satisfy an
overpayment of Medicaid funds HHSC had paid to Dr. Simmons based on
improperly submitted Medicaid claims. See CR 7 (emphasis added). These funds
1
were used by HHSC-OIG to satisfy a portion of the debt that had become final after
Dr. Simmons failed to appeal a final notice of overpayment. 2
Moreover, while styled as an action for declaratory judgment, the relief
requested by Dr. Simmons reveals this case to be a petition for writ of mandamus,
alleging ultra vires conduct by HHSC. Specifically, Dr. Simmons contends that
HHSC has illegally retained Medicaid reimbursements that were subject to an
administrative payment hold. The relief he requests, that the trial court declare his
liability to the State has been extinguished and order HHSC to return the held funds,
is actually an attempt to obtain mandamus relief against the State.
STATEMENT OF FACTS
The Parties
Appellee HHSC is an agency of the State of Texas with responsibility to
administer the Texas Medicaid program. Tex. Hum. Res. Code Ann. § 32.021(a)
(West 2013).
2
If Dr. Simmons had correctly appealed HHSC’s final determination of overpayment, venue
would have been mandatory in Travis County, Texas. Tex. Gov’t Code Ann. § 2001.176 (suits for
judicial review “must be filed in a Travis County district court”).
In addition to its plea, HHSC also filed a motion to transfer venue. If the Court were to
reverse the granting of HHSC’s plea, HHSC will ask the trial court to grant its motion to transfer
to Travis County. Simmons ought not be allowed to lie behind the log and circumvent the
mandatory venue provisions to appeal HHSC-OIG’s final determination in a venue other than
Travis County.
2
Appellant Dr. Simmons is a Longview- and Palestine-based orthodontic and
general dentistry practice that voluntarily enrolled as a Texas Medicaid provider to
perform general dentistry and orthodontia services. See, e.g., THSteps Dental
Provider Enrollment Application, signed by Dr. Simmons’ office manager, dated
Mar. 12, 2012, at CR 72-83.
Between at least 2007 and 2012, Dr. Simmons was a Texas Medicaid
provider. The Office of the Inspector General (“HHSC-OIG”) investigated the
billing submissions Dr. Simmons sent to HHSC for reimbursement of services he
claimed he made to Medicaid patients. See Final Notice of Overpayment, dated Nov.
13, 2013, at CR 31-35. As a result of this investigation, HHSC-OIG determined that
Dr. Simmons had made false statements and misrepresentations, in violation of
HHSC Medicaid rules. See id. at CR 32.
HHSC-OIG’s administrative enforcement actions to combat waste,
fraud, and abuse
HHSC-OIG is the administrative enforcement arm of HHSC and is
responsible for the investigation of waste, fraud, and abuse in the provision of health
and human services “and the enforcement of state law relating to the provision of
those services.” Tex. Gov’t Code Ann. § 531.102 (West 2013). Specifically, HHSC-
OIG is responsible for the investigation of waste, fraud, and abuse in the Texas
3
Medicaid program. Id. 3 Additionally, chapter 32 of the Human Resources Code
provides for the imposition of damages and administrative penalties against a person
who presents or causes to be presented to the department a claim that “contains a
statement or representation the person knows or should know to be false.” Tex. Hum.
Res. Code Ann. § 32.039(b)(1). The statutory authority for the rules governing
HHSC-OIG includes both chapters 32 and 36 of the Human Resources Code. Tex.
Gov’t Code Ann. § 531.001; 1 Tex. Admin. Code § 371.1605 (2005).
HHSC-OIG Rule 371.1721 provides that HHSC-OIG may assess
administrative penalties against a person who submits a claim that the person knows
or should know is false, or who presents a claim that contains a statement that the
person knows or should know is false. 1 Tex. Admin. Code § 371.1721(a), (b)(l)
(2005). A person who commits such a violation is liable for: (1) the amount paid as
a result of the violation; (2) interest; (3) an administrative penalty of not more than
twice the amount paid; and (3) administrative penalties of up to $10,000 per
violation. 1 Tex. Admin. Code § 371.1723 (2005). HHSC-OIG may apply monies
withheld in a payment hold action “to satisfy any portion of an unpaid assessment
3
Medicaid is a government program providing health care to qualified impoverished people.
It is jointly funded by state and federal tax dollars. 42 U.S.C. § 1396. While jointly funded,
Medicaid is administered by the states. Defendant HHSC has responsibility to administer the Texas
Medicaid program. Tex. Hum. Res. Code § 32.021(a).
4
of overpayments.” 1 Tex. Admin. Code § 371.1617(e)(1), copy at CR 68-69.
Failure to Appeal Final Notice of Overpayment
HHSC-OIG conducted an investigation of Dr. Simmons’ claims submitted to
Texas Medicaid and determined that HHSC had overpaid Dr. Simmons. See Final
Notice of Overpayment, dated Nov. 13, 2013, at CR 21-25. As a result of its
investigation, HHSC-OIG determined that HHSC had overpaid Dr. Simmons in the
amount of $2,609,436.00 and that, between 2007 and 2012, Dr. Simmons had
violated 1 Tex. Admin. Code § 371.1617 (2005). See Final Notice of Overpayment,
at CR 21-22. The overpayment amount arose out of claims Dr. Simmons submitted
to HHSC “for payment under Medicaid or other HHS programs.” CR 21. The Final
Notice of Overpayment lists several violations, all of which are based on requests
for prior authorization or claims for reimbursement that Dr. Simmons submitted to
HHSC. Id.
When a provider receives a final notice of overpayment, the provider has
fifteen days to request an appeal. Tex. Gov’t Code Ann. § 531.1201(a), copy at CR
88-89. 4 Dr. Simmons received the Final Notice of Overpayment. See Certified Mail
4
See also 1 Tex. Admin. Code § 371.1711(d)(2) (Recoupment of Overpayment and Debt)
(“A person may request an administrative appeal hearing after receipt of a final notice of potential
recoupment in accordance with § 371.1615 of this subchapter (relating to Appeals). [HHSC-] OIG
must receive the written request for an appeal no later than 15 days after the date the person
receives final notice.”) (emphasis added).
5
Receipt, signed by C. Sampson of Willie & Associates, Nov. 15, 2013, at CR 25.
Subsequent to his receipt of the Final Notice, Dr. Simmons had until November 30,
2013 to send HHSC-OIG a written request for an appeal. Dr. Simmons failed,
however, to provide HHSC with a request to appeal the Final Notice, as required by
Tex. Gov’t Code Ann. § 531.1201(a) and 1 Tex. Admin. Code § 371.1711(d)(2). As
a result of Dr. Simmons’ failure to appeal the Final Notice of Overpayment, HHSC-
OIG never docketed the overpayment proceeding. 5 The recoupment sanction
became a final debt on December 1, 2013. See Tex. Gov’t Code Ann. § 531.1201(a);
1 Tex. Admin. Code § 371.1617(b) (2012), copy at CR 68-69.6
Thus, Dr. Simmons’ failure to request an overpayment appeal hearing within
the fifteen-day period precluded him from seeking judicial review of HHSC-OIG’s
final decision to recoup the overpayment and resulted in the “creat[ion] of a final
debt in favor of the State of Texas.” See 1 Tex. Admin. Code § 371.1617(b) (2012),
copy at CR 68-69.
5
Also pursuant to Government Code section 531.1201(a), a provider has the right to elect
the venue where the appeal is to be docketed. A provider may have the appeal heard at either
HHSC Appeals Division or at the State Office of Administrative Hearings (“SOAH”). Tex. Gov't
Code § 531.1201(a).
6
Dr. Simmons’ brief contains a misstatement of fact. The overpayment matter was not, as
he erroneously claims, docketed before SOAH, nor did the overpayment proceeding ever receive
a docket number. See Appellant’s Brief at p. 1; Tex. R. App. P. 38.2(a)(1)(B). The docket number
referred to, 529134981, was, rather, the docket number for the payment hold proceeding, a case
entirely independent and separate from the overpayment proceeding.
6
Separate Payment Hold Proceeding against Dr. Simmons
Prior to the overpayment investigation and final determination, HHSC-OIG
had initiated a payment hold proceeding against Dr. Simmons. HHSC-OIG is
required by law to institute a payment hold if it has reason to believe the provider
has engaged in fraud against the Medicaid program. 7
The payment hold contested case, docketed at SOAH in Travis County, was
distinct from the overpayment proceeding. The SOAH payment hold proceeding was
styled Troy Simmons, D.D.S. v. Tex. Health & Human Servs. Comm’n, SOAH
Docket No. 529134981. See, e.g., Respondent’s Mot. to Dismiss, at CR 27 (bearing
docket number 529134981). The lifting of the payment hold by HHSC mooted the
contested case, and Order No. 10 cancelled the hearing. See Notice of Lift of
Payment Hold, dated Feb. 5, 2014, a true and correct copy is attached as Appendix
7
The Texas Legislature empowered, and requires, HHSC-OIG to combat unlawful conduct
by providers who fraudulently take money from Medicaid. See, e.g., 1 Tex. Admin. Code § 371.11
(Purpose and Scope) (Inspector General “administers program integrity and enforces program
violations” and is responsible for “pursuing Medicaid . . . fraud, abuse, overpayment, and waste”).
A payment hold (suspension of payments) is defined as:
An administrative sanction that withholds all or any portion of payments due a
provider until the matter in dispute, including all investigation and legal
proceedings, between the provider and the Commission or an operating agency or
its agent(s) are resolved. This is a temporary denial of reimbursement under the
Medicaid or other HHS program for items or services furnished by a specified
provider.
1 Tex. Admin. Code § 371.1607(50) (Definitions) (emphasis added).
7
2; Order No. 10, copy at CR 116-19. This lifting of the payment hold disposed of
SOAH case number 529134981.
Applying Payment Hold Monies to Satisfy Final Overpayment Debt
After a recoupment sanction becomes a final debt, HHSC-OIG is authorized
to apply monies from a payment hold to satisfy the amount the State overpaid a
provider. 1 Tex. Admin. Code § 371.1617(e)(1), copy at CR 68-69. Here, after Dr.
Simmons failed to appeal the Final Notice by the deadline of November 30, 2013, a
final debt was created. See id. HHSC-OIG then did as it was authorized to do by
statute: HHSC-OIG used money it had withheld from Dr. Simmons in the payment
hold proceeding to satisfy a portion of the final overpayment debt. 8
HHSC-OIG then moved to enforce the collection of the overpayment against
Dr. Simmons. HHSC submitted a State Action Request (“SAR”) to set up a
repayment receivable to collect on the overpayment amount, and HHSC-OIG then
filed the Notice of Lift of Payment Hold. App. 2 (noting the SAR attached as Exhibit
A to the Notice). See also letter to J. Willie, counsel for Dr. Simmons, from J. Day,
counsel for HHSC-OIG, dated Mar. 4, 2014 (explaining that HHSC intended to refer
8
In order to apply the money from the payment hold to satisfy the overpayment balance,
HHSC-OIG filed a motion to dismiss. See Mot. to Dismiss without Prejudice, dated Dec. 16, 2013,
at ¶¶ 4 – 9 and Certificate of Service, showing service upon Plaintiffs’ counsel. CR 27-36. This
motion also gave Dr. Simmons further notice of the consequences of failing to timely appeal the
Final Notice of Overpayment.
8
to the Office of Attorney General the collection of the overpayment amount owed
by Plaintiffs), copy at CR 38-40. On February 29, 2014, the SOAH ALJ disposed of
the payment hold case. See Order No. 10, copy at CR 116-19.
Attack on Agency’s Final Determination
Subsequent to HHSC’s decision to apply the payment hold monies to satisfy
a portion of the final debt, Dr. Simons filed the Trial Court Petition on May 8, 2014.
CR 4-11. In response, HHSC filed a Plea to the Jurisdiction (“HHSC’s Plea”),
arguing that the County Court lacked jurisdiction to hear the merits of Dr. Simmons’
suit because the doctrines of sovereign immunity and failure to exhaust
administrative remedies precluded the County Court from considering the merits of
Dr. Simmons’ Trial Court Petition. CR 12-40, 45-109.
After a hearing on HHSC’s Plea, the County Court of Gregg County, the Hon.
Vincent Dulweber, presiding, issued a final order, granting HHSC’s Plea and
dismissing Dr. Simmons’ lawsuit. See Order, dated Aug. 25, 2014, at CR 124.
Dr. Simmons subsequently filed the instant appeal of the County Court’s final
order. See Notice of Appeal, at CR 130-31.
9
SUMMARY OF THE ARGUMENT
The trial court properly granted HHSC’s Plea to the Jurisdiction because Dr.
Simmons’ lawsuit is barred by the doctrine of sovereign immunity. Dr. Simmons
failed to plead a valid waiver of sovereign immunity. Moreover, he failed to exhaust
his administrative remedies when he failed to appeal the final notice of overpayment.
Where a court lacks jurisdiction, a UDJA claim, even if a valid claim, cannot
independently confer jurisdiction.
A court has subject-matter jurisdiction over a matter only if a plaintiff pleads
a valid waiver of sovereign immunity. Tex. Natural Res. Conservation Comm’n v.
IT-Davy, 74 S.W.3d 849, 853 (Tex. 2002) (“Immunity from suit bars a suit against
the State unless the Legislature expressly consents to the suit.”). Here, Dr. Simmons
has failed to plead a valid waiver of sovereign immunity; and, the Court, therefore,
lacks jurisdiction over the claim.
Dr. Simmons brings this action under the Uniform Declaratory Judgment Act
(“UDJA”), Tex. Civ. Prac. & Rem. Code ch. 37, but the UDJA does not waive
sovereign immunity. Tex. Dep’t of Transp. v. Sefzik, 355 S.W.3d 618, 621 (Tex.
2011) (“we conclude that, under Heinrich, sovereign immunity bars UDJA actions
against the state and its political subdivisions absent a legislative waiver”) (citing
City of El Paso v. Heinrich, 284 S.W.3d 366, 371-72 (Tex. 2009)); see also Prairie
View A&M v. Chatha, 381 S.W.3d 500, 511 (Tex. 2012) (waiver must be clear and
10
unambiguous). Therefore, the Court has no jurisdiction over this case based only on
Dr. Simmons’ UDJA claim.
Dr. Simmons asserted that the trial court had jurisdiction on the premise that
HHSC is acting unlawfully in not returning money retained in the payment hold.
Thus, this claim is nothing more than an ultra vires claim against HHSC. The Texas
Supreme Court, however, has repeatedly held that agencies do not act ultra vires;
only agency officials can act ultra vires. Tex. Dep’t of Ins. v. Reconveyance Servs.,
Inc., 306 S.W.3d 256, 258-59 (Tex. 2010) (holding that court lacked jurisdiction in
ultra vires claim where plaintiff only named agency and failed to name “Department
officials acting in their official capacities”) (citing Heinrich, 284 S.W.3d 366)).
Therefore, the head of a state agency must be named in an ultra vires suit. Id.
Even if Dr. Simmons had named the proper party, the Executive
Commissioner of HHSC, his jurisdictional defect could still not be cured because
Dr. Simmons has failed to plead a valid ultra vires claim. Here, HHSC officials acted
within their sound discretion and, as allowed by HHSC Rules, applied payment hold
monies to satisfy a portion of a final debt. See 1 Tex. Admin. Code § 371.1617(e)(1),
copy at CR 68-69. See also letter to J. Willie, counsel for Plaintiffs, from J. Day,
counsel for HHSC-OIG, dated Mar. 4, 2014 (explaining that HHSC intended to refer
11
to the Office of Attorney General the collection of the overpayment amount owed
by Plaintiffs), at CR 116-19.
Moreover, because Dr. Simmons failed to exhaust his administrative
remedies, a court lacks jurisdiction to review HHSC’s decision to create a final
overpayment determination. See Friends of Canyon Lake, Inc. v. Guadalupe-Blanco
River Auth., 96 S.W.3d 519, 525 (Tex. App.—Austin 2002, pet. denied) (“It is well
settled that a party must exhaust its administrative remedies before seeking judicial
review of an agency decision.”).
Even if Dr. Simmons had brought a viable UDJA claim, that UDJA cause of
action cannot independently confer jurisdiction. The UDJA is a procedural
mechanism only and provides a remedy only when a court already has jurisdiction.
Jackson v. State Office of Admin. Hearings, 351 S.W.3d 290, 301 (Tex. 2011).
Because the trial court had no jurisdiction to entertain Dr. Simmons’ request for
relief in the first place, his request for declaratory judgment, assuming in the
alternative it was a proper UDJA claim, would not provide jurisdiction.
The Court should, therefore, affirm the trial court’s granting of HHSC’s Plea
to the Jurisdiction.
12
STANDARD OF REVIEW
Whether or not a trial court has subject-matter jurisdiction is a question of law
and is subject to de novo review by the appellate court. IT-Davy, 74 S.W.3d at 855
(rulings on jurisdictional pleas are reviewed de novo); Mayhew v. Town of
Sunnyvale, 964 S.W.2d 922, 928 (Tex. 1998); Tex. Ass’n of Bus. v. Tex. Air Control
Bd., 852 S.W.2d 440, 444 (Tex. 1993); City of Athens v. MacAvoy, 260 S.W.3d 676,
678 (Tex. App.—Tyler 2008, no pet.).
ARGUMENT
I. The trial court properly granted HHSC’s Plea to the Jurisdiction.
A. Sovereign immunity bars suit, and Dr. Simmons fails to argue
waiver.
A plaintiff bears the burden of alleging facts that affirmatively demonstrate
the trial court’s subject-matter jurisdiction. Tex. Air Control Bd., 852 S.W.2d at 446;
City of Longview v. Head, 33 S.W.3d 47, 51 (Tex. App.—Tyler 2000, no pet.). And
when the defendant is a state entity or official, sovereign immunity generally
deprives the trial court of jurisdiction. Tex. A&M Unìv. Sys. v. Koseoglu, 233 S.W.3d
835, 844 (Tex. 2007); Wilson v. Tex. Workers’ Comp. Comm’n, No. 12-01-00337-
CV, 2003 WL 22681793, at *3 (Tex. App.—Tyler Nov. 13, 2003, no pet.) (mem.
op.). See also City of Tyler v. Smith, No. 12-08-00159-CV, 2009 WL 4757576, at *4
(Tex. App.—Tyler Dec. 14, 2009, no pet.) (mem. op.) (“it has long been recognized
13
that no State can be sued in her own courts without her consent, and then only in the
manner indicated by that consent”) (citing Hosner v. DeYoung, 1 Tex. 764, 769
(1847)).
A person who is aggrieved by a final agency decision cannot seek judicial
review of that decision unless there is statutory authorization; otherwise, the suit is
barred by the doctrine of sovereign immunity. See Tex. Dep’t of Protective &
Regulatory Servs. v. Mega Child Care, l45 S.W.3d 170, 198 (Tex. 2004); Bacon v.
Tex. Historical Comm’n, 411 S.W.3d 161, 173 (Tex. App.—Austin 2013, no pet.)
(“state agency decisions generally cannot be challenged in court unless the
Legislature has enacted a statute expressly authorizing such review”); see also
Chatha, 381 S.W.3d at 511 (waiver must be clear and unambiguous); Tex. Parks &
Wildlife Dep’t v. Garland, 313 S.W.3d 920, 925 (Tex. App.—Tyler 2010, no pet.)
(same).
Accordingly, Simmons’ suit fails for two reasons. First, no statutory
authorization allows for Simmons’ suit because Simmons failed to preserve his right
to obtain judicial review of HHSC’s final decision when he failed to timely appeal
HHSC-OIG’s Final Notice of Overpayment by November 30, 2013. Second, Dr.
Simmons’ request for relief is nothing more than an impermissible attempt to control
state action.
14
Lastly, the UDJA does not “waive the state's sovereign immunity.” Sefzik, 355
S.W.3d at 621.
1. Improper Suit for Judicial Review
Simmons asks this Court to declare that his liability to the State has been
“released and extinguished.” Petition at ¶ VII.I, at CR 7. The relief Simmons
requests is nothing more than a request for judicial review of HHSC’s final
determination that Simmons owed over $2 million to Texas Medicaid and HHSC’s
decision to apply payment hold money to satisfy a portion of that final debt. A
provider who is subject to a final agency decision or determination in an
administrative action may appeal by filing a petition for judicial review. Tex. Gov’t
Code Ann. § 2001.171. The petition, however, may only be filed after the provider
first exhausts his administrative remedies and must be filed in Travis County. Id.;
Tex. Gov’t Code Ann. § 2001.176(b)(1) (“Unless otherwise provided by statute . . .
the petition must be filed in a Travis County district court.”), copy at CR 91-92.
Because Dr. Simmons had failed to timely request an appeal of the Final
Notice of Overpayment, he failed to exhaust his administrative remedies and was
thus precluded from filing a petition for judicial review. See Tex. Gov't Code Ann.
§ 2001.171 (West 2013) (requiring party to “exhaust all administrative remedies
available within a state agency” before being “entitled to judicial review”) (emphasis
added). See also Reed v. Prince, 194 S.W.3d 101, 107 (Tex. App.—Texarkana 2006,
15
pet. denied) (holding that where plaintiff failed to exhaust administrative remedies,
compliance with statutory provisions was “a jurisdictional prerequisite to suit”).
2. Improper Attempt to Control State Action
Simmons’ second request, that all retained funds be “released and
immediately forwarded” to Simmons, is an effort to control state action. See Trial
Court Petition at CR 7. Under the doctrine of sovereign immunity, this Court has no
jurisdiction over a suit to control state action. Absent a clear legislative waiver of
immunity, HHSC is not subject to suit.9 IT-Davy, 74 S.W.3d at 853; Tex. Dep’t of
Transp. v. Jones, 8 S.W.3d 636, 638 (Tex. 1999) (per curiam); Dir. of Dep’t of Agric.
& Env’t v. Printing Indus. Ass’n of Tex., 600 S.W.2d 264, 265 (Tex. 1980); Griffin
v. Hawn, 341 S.W.2d 151, 152-53 (Tex. 1960). Here, Simmons has not pled a valid
waiver of sovereign immunity; nor does one exist.
3. HHSC’s discretionary authority to turn overpayment
sanction into a final debt
Although Simmons does not use the exact phrase “ultra vires,” he claims that
HHSC has “acted outside its statutory authority in continuing to withhold payment
from [Dr. Simmons] after it dismissed its administrative cause of action.” (emphasis
9
If properly pled, and the HHSC executive commissioner had been named as a defendant,
he would have been protected by official immunity. A suit against a state official in his official
capacity “actually seeks to impose liability against the governmental unit rather than on the
individual specifically named and ‘is, in all respects other than the name, . . . a suit against the
entity.’” Koseoglu, 233 S.W.3d at 844 (quoting Kentucky v. Graham, 473 U.S. 159, 166 (1985)).
16
added). Appellant Brief, at p. 3.
a. Simmons’ suit is actually a petition for writ of
mandamus.
Courts look to the substance of pleadings to determine the nature of a suit, not
what the suit is titled. See State Bar of Tex. v. Heard, 603 S.W.2d 829, 833 (Tex.
1980) (“We look to the substance of a plea for relief to determine the nature of the
pleading, not merely at the form of title given to it.”). Although styled a suit for
declaratory relief, this suit is actually a petition for writ of mandamus. Dr. Simmons
seeks from this Court the following relief:
A declaration that the Plaintiffs’ alleged liability to the Defendant has been
released and extinguished and that all funds that have been retained by the
Defendant as a consequence of the payment hold be released and
immediately forwarded to the Plaintiff[s].
Plaintiffs’ Petition at ¶ VII (emphasis added), at CR 7. See Reconveyance Servs., 306
S.W.3d at 258 (noting that although “Reconveyance’s pleading did not include the
term “ultra vires” . . . Reconveyance’s allegations and requested declarations are, in
substance ultra vires claims”). Thus, if a court were to grant Dr. Simmons’ relief—
that the balance of the payment hold funds be reimbursed to Simmons, that court
would first have to find that Dr. Janek or the Inspector General were acting either
outside their statutory authority or failing to perform a ministerial act. See Heinrich,
284 S.W.3d at 372; cf. McAllen Hosps. v. Suehs, 426 S.W.3d 304, 316 (Tex. App.—
17
Amarillo 2014, no pet.) (noting that district court may “issue writs of mandamus to
compel public officials to perform ministerial acts”).
b. The Inspector General acted within his legal authority
when he decided to apply payment hold monies to
satisfy the overpayment final debt.
To establish an ultra vires exception, Simmons must prove that an agency
official “acted without legal authority or failed to perform a purely ministerial act.”
Heinrich, 284 S.W.3d at 372. First, the Inspector General acted within his legal
authority to apply the monies from the payment hold proceeding to satisfy part of
the overpayment debt. See 1 Tex. Admin. Code § 371.1617(e)(1) (2012) (providing
for HHSC-OIG to apply monies withheld in a payment hold action toward the
balance of overpayment that became a final debt), copy at CR 68-69. Simmons fails
to cite any statutory authority that contravenes the Inspector General’s authority to
apply payment hold monies to satisfy a final debt.
Second, an act is ministerial only when “the law clearly spells out the duty to
be performed by the official with sufficient certainty that nothing is left to the
exercise of discretion.” Anderson v. City of Seven Points, 806 S.W.2d 791, 793 (Tex.
1991). Here, the Inspector General, acted within his sound discretion when he
decided, after the overpayment sanction became a final debt, to apply monies
collected via payment hold to satisfy the final overpayment debt.
18
Moreover, a court lacks jurisdiction over ultra vires claims when a plaintiff
sues only the agency and not the agency official. Tex. Dep’t of Insurance v.
Reconveyance Servs., 306 S.W.3d at 258-59 (citing Heinrich, 284 S.W.3d at 371-
73). Here, Dr. Simmons only named HHSC as defendant, and the Court, therefore,
lacks jurisdiction over this suit. 10
Lastly, because Dr. Simmons failed to avail himself of an adequate remedy
by appeal—here a timely appeal of the final notice of overpayment—mandamus is
not available to him. See Tex. Comm’n on Envtl. Quality v. Kelsoe, 286 S.W.3d 91,
94-95 (Tex. App.—Austin 2009, pet. denied) (where a party “had an adequate
remedy by appeal” complaints of an agency decision “were not proper subjects for
common-law mandamus relief”). Kelsoe is particularly instructive in the instant
matter. Similar to Dr. Simmons, Kelsoe missed a deadline to appeal a final agency
decision. See id. at 96 (missing deadline for filing petition for judicial review of
10
Assuming Dr. Simmons could bring a viable ultra vires action, Dr. Simmons needed to
have named Dr. Kyle Janek, Executive Commissioner of HHSC (“Dr. Janek”) as a defendant.
Otherwise, a court lacks jurisdiction to mandamus HHSC, a state agency. Id. After adding Dr.
Janek as a party, Travis County would then be the mandatory venue. See Tex. Civ. Prac. & Rem.
Code § 15.014 (requiring that suit for mandamus action “against the head of a department of state
government” be brought in Travis County).
Defendant HHSC also argued to the trial court, in its motion to transfer venue, at CR 16,
in the alternative, to the extent Dr. Simmons asks for injunctive relief, venue would be mandatory
in Travis County – the domicile of HHSC. See Tex. Civ. Prac. & Rem. Code § 65.023(a) (“writ of
injunction against a party who is a resident of this state shall be tried in a district or county court
in the county in which the party is domiciled”).
19
denial of application). The Kelsoe court held that the trial court lacked jurisdiction
over a mandamus action because Kelsoe missed a deadline to challenge a final
agency decision. Id. at 97-98.
B. Simmons failed to exhaust his administrative remedies and now
seeks a collateral attack on a final agency decision.
An agency has exclusive jurisdiction over a dispute “when a pervasive
regulatory scheme indicates that [the Legislature] intended for the regulatory process
to be the exclusive means of remedying the problem to which the regulation is
addressed.” Subaru of Am., Inc. v. David McDavid Nissan, Inc., 84 S.W.3d 212, 221
(Tex. 2002). The Inspector General initiated the administrative enforcement case to
seek recoupment in the only forum in which he has the authority: an administrative
forum. The underlying administrative enforcement case was an action to recover
administrative remedies for statutory (chapters 36 and 32 of the Human Resources
Code) and regulatory (chapter 371 of the Administrative Code) violations. The
administrative remedies that the Inspector General sought against Dr. Simmons –
recoupment of overpayments and collection of administrative penalties – are
remedies only HHSC can award. See 1 Tex. Admin. Code § 371.1723 (2005)Error!
Bookmark not defined..
HHSC, acting by and through Dr. Janek, its Executive Commissioner, has the
exclusive authority to make final decisions in cases brought by HHSC-OIG.
20
Therefore, HHSC and Dr. Janek have exclusive jurisdiction over HHSC-OIG’s
administrative claims, and Dr. Simmons was required to exhaust his administrative
remedies before subject-matter jurisdiction was conferred on a trial court. Subaru v.
McDavid, 84 S.W.3d at 221; see also Cash Am. Int'l Inc. v. Bennett, 35 S.W.3d 12,
15 (Tex. 2000) (“An agency has exclusive jurisdiction when the Legislature gives
the agency alone the authority to make the initial determination in a dispute.”). In
Cash, the Texas Supreme Court noted: “When the Legislature vests exclusive
jurisdiction in an agency, exhaustion of administrative remedies is required.” Id.; see
also Lueck v. State, 325 S.W.3d 752, 765-66 (Tex. App.—Austin 2010, pet. denied)
(affirming trial court’s order granting Department’s plea where Lueck failed to
exhaust administrative remedies).
Where there is exclusive jurisdiction, “courts may review the administrative
action only at the time and in the manner designated by statute.” Cash, 35 S.W.3d at
15; see also Twenty Wings Ltd. v. Tex. Alcoholic Beverage Comm’n, No. 2-05-355-
CV, 2006 WL 1791707, at *1 (Tex. App.—Fort Worth June 29, 2006, no pet.) (mem.
op.) (“If an administrative body has exclusive jurisdiction, a party must exhaust all
administrative remedies before seeking judicial review of the decision.”); Tex. Gov’t
Code Ann. § 2001.171 (providing that person aggrieved by agency order may only
seek judicial review if he first exhausted administrative remedies).
21
Exclusive jurisdiction bars a court from ruling in a proceeding where a party
failed to exhaust its administrative remedies. Hill v. Bd. of Trs. of the Ret. Sys. of
Tex., 40 S.W.3d 676, 678 (Tex. App.—Austin 2001, no pet.) (“It is well-settled that
a party must exhaust its administrative remedies before seeking judicial review of
an agency order.”); see also Lueck, 325 S.W.3d at 765-66 (affirming trial court’s
order granting Department’s plea where Lueck failed to exhaust administrative
remedies).
Dr. Simmons failed to exhaust his administrative remedies because he failed
to timely appeal the Final Notice of Overpayment. His failure to appeal precluded
his ability to file a suit for judicial review. See Tex. Gov't Code Ann. § 2001.171
(“A person who has exhausted all administrative remedies available within a state
agency and who is aggrieved by a final decision in a contested case is entitled to
judicial review . . .”) (emphasis added); see also Chatha, 381 S.W.3d at FN21
(noting that in “suits against governmental entities, a timely filed petition for judicial
review is a statutory prerequisite to suit, so that failure to comply deprives the trial
court of jurisdiction”); Reed v. Prince, 194 S.W.3d at 107Error! Bookmark not
defined.. See also Vickery v. Stanley, 2010 WL 4638714, at *4 (Tex. App.—Tyler
Nov. 17, 2010, no pet.) (“The UDJA cannot be invoked when it would interfere with
some other entity’s exclusive jurisdiction.”) (citing MBM Fin. Corp. v. Woodlands
22
Operating Co., 292 S.W.3d 660, 669 (Tex. 2009)).
Therefore, a district court is barred from determining whether “Plaintiffs’
alleged liability to the Defendant has been released and extinguished.” See Trial
Court Petition, at CR 7. Simmons should have brought this claim in a suit for judicial
review, an avenue that he made impossible when he failed to timely appeal the final
notice of overpayment.
Related to the failure to exhaust administrative remedies, this suit is an
impermissible collateral attack on a final agency decision. Here, Dr. Simmons is
attempting to cure his failure to timely appeal the Final Notice of Overpayment. To
the extent Plaintiffs seek a collateral attack on a final agency determination, the trial
court also lacked jurisdiction over Simmons’ suit.
Courts have repeatedly rejected attempts to use the UDJA to attack final
agency orders. See, e.g., Creedmoor-Maha Water Supply Corp. v. Tex. Comm’n on
Envtl. Quality, 307 S.W.3d 505, 526 (Tex. App.—Austin 2010, no pet.); Kelsoe, 286
S.W.3d at 96-97 (court lacks jurisdiction to consider appeal where party failed to
timely file petition for judicial review). See also TFJA v. Tex. Comm’n on Envtl.
Quality, 368 S.W.3d 727, 735-36 (Tex. App.—Austin 2012, pet. denied) (“failure to
timely file a petition for judicial review . . . entirely deprives a trial court of
jurisdiction to consider an appeal of [an agency’s] decision”); Friends of Canyon
23
Lake, 96 S.W.3d at 524.
C. Dr. Simmons’ UDJA claim, even if valid, could not confer
jurisdiction on a trial court and would result only in an advisory
opinion.
1. Independent Jurisdiction Not Conferred
The trial court also lacked jurisdiction because Dr. Simmons’ UDJA claim is
not a waiver of sovereign immunity sufficient to confer jurisdiction on the court. The
UDJA does not enlarge the existing jurisdiction of a court or create new jurisdiction.
IT-Davy, 74 S.W.3d at 855.
Rather, a court must have an independent basis for jurisdiction to hear an
action for declaratory relief against the State. Tex. Civ. Prac. & Rem. Code §
37.003(a); Wilson v. Wilson, 378 S.W.2d 156, 160 (Tex. App.—Tyler 1964, no writ).
The UDJA, ch. 37 of the Civil Practice & Remedies Code, is “merely a procedural
device for deciding cases already within a court's jurisdiction rather than a legislative
enlargement of a court’s power.” In re O'Quinn, 355 S.W.3d 857, 862 (Tex. App.—
Houston [1st Dist.] 2011, orig. proceeding [mand. denied]) (quoting Tex. Air Control
Bd., 852 S.W.2d at 444). The UDJA “cannot be invoked as an affirmative ground of
recovery to revise or alter existing rights or legal relations.” AVCO Corp. v.
Interstate Sw., Ltd., 251 S.W.3d 632, 663 (Tex. App.—Houston [14th Dist.] 2007,
pet. denied) (quoting Republic Ins. Co. v. Davis, 856 S.W.2d 158, 164 (Tex. 1993)).
24
See also Tex. Civ. Prac. & Rem. Code § 37.002(b) (“This chapter is remedial; its
purpose is to settle and to afford relief from uncertainty and insecurity with respect
to rights, status, and other legal relations”).
Because Dr. Simmons UDJA claim is incidental to a mandamus claim or
request for injunctive relief, the trial court properly granted HHSC’s plea to the
jurisdiction. 11
2. Advisory Opinion
Dr. Simmons’ suit is also barred to the extent he asked the trial court to issue
an advisory opinion. See Appellate Brief at p. 5 (“the trial court was requested to
construe the validity and to make a declaration of the relative rights of the parties
concerning Order No. 5 and Order No. 10”). Dr. Simmons’ request that his liability
be “release and extinguished” relies in his interpretation of Orders No. 5 and 10.
The SOAH ALJ’s Order No. 5 in the payment hold proceeding did nothing
other than deny the Inspector General’s motion to dismiss the payment hold
contested case. CR at 9-11. 12 Therefore, any declaration or ruling regarding the
11
This suit is also an invalid UDJA claim because if Simmons had timely filed a suit for
judicial review, he would not have needed to file a UDJA claim. The relief he seeks is redundant
of the relief he could have pursued in an appeal of HHSC-OIG’s overpayment determination. See
Tex. Air Control Bd., 852 S.W.2d at 444 (a declaratory judgment action is merely a procedural
device for deciding matters already within a court's subject matter jurisdiction).
12
Order No. 5, other than denying HHSC-OIG’s request to dismiss the payment hold case,
only otherwise purported to answer the following question: “Did Dr. Simmons fail to timely
provide OIG with a written request for an appeal?” CR 10-11. The only relief that Dr. Simmons
could have sought would have been an order from a Travis County district court to compel the
25
overpayment proceeding is tantamount to an advisory opinion, which Texas courts
are not allowed to issue. See Tex. Air Control Bd., 852 S.W.2d at 444. And because
the overpayment proceeding was not docketed at SOAH, the administrative body
that issued Order Nos. 5 and 10, SOAH did not have jurisdiction over the
overpayment proceeding.
Also, the orders did not somehow result in the complete extinguishing of Dr.
Simmons’ liability in the overpayment proceeding. A declaration as to the specific
orders and pleadings in the payment hold proceeding would thus have no effect on
whether HHSC-OIG had the authority to apply the payment hold monies to satisfy
the overpayment amount. See Billings v. Concordia Heritage Assoc., 960 S.W.2d
688, 693 (Tex. App.—El Paso 1997, writ denied) (“declaratory judgment is
Executive Commissioner to docket the overpayment case, either at HHSC Appeals or at SOAH.
If such a suit had been brought, HHSC would have argued that the SOAH ALJ in the payment
hold case lacked jurisdiction in the overpayment proceeding.
And even if the AJL did have jurisdiction in the overpayment case, the SOAH ALJ’s
reasoning in Order No. 5 conflicted with holdings from the Third Court of Appeals. See Desi
Driving Sch. v. Tex. Educ. Agency, 2014 WL 1018086, at *1 (Tex. App.—Austin Mar. 14, 2014,
no pet.) (where party prematurely filed suit for judicial review, district court lacked jurisdiction)
(citing Marble Falls Indep. Sch. Dist. v. Scott, 275 S.W.3d 558, 566-67 (Tex. App.—Austin 2008,
pet. denied)). Here, any request made prior to the issuance of the final notice of overpayment
would have failed to invoke the jurisdiction of a court, including SOAH. See id.
Order No. 10 only cancelled the payment hold hearing. CR 116. The order also purports to
“remand” the payment hold matter to HHSC. If Dr. Simmons’ suit were ever heard on the merits,
HHSC would argue that after the Notice of Lift of Payment Hold, filed before the issuance of
Order No. 10, the payment hold proceeding was disposed of in its entirety and there was nothing,
therefore, to remand to HHSC.
And neither Order somehow cured Dr. Simmons’ failure to exhaust his administrative
remedies after he failed to appeal the Final Notice of Overpayment by November 30, 2014.
26
appropriate when a real controversy exists between parties, and the entire
controversy may be determined by judicial declaration”).
II. Dr. Simmons’ Purported Issue No. 2 is not properly before the Court.
Dr. Simmons states as his second issue that HHSC failed to exhaust its
administrative remedies. This assertion was part of Dr. Simmons’ briefing in the trial
court and goes to the merits of his argument, an argument that the trial court in
granting HHSC’s Plea, did not consider. See, e.g., Dr. Simmons’ Post-Submission
Brief, at CR 6 (claiming that HHSC “did not seek judicial review of [Order Nos. 5
and 10]”). The Court would have to first deny HHSC’s plea and remand for an
opportunity for the trial court to consider the merits of Dr. Simmons’ claims.
Therefore, because issue number two is not properly before the Court, for all the
reasons stated in section I, supra, issue two should be overruled.13
CONCLUSION AND PRAYER
The trial court correctly ruled that it was without jurisdiction to hear
Simmons’ complaints because sovereign immunity barred him from bringing suit
13
HHSC does note that despite Dr. Simmons’ assertion, HHSC could not, nor need not, have
availed itself of Tex. Gov’t Code Ann. § 2001.176 and have sought a suit for judicial review for
either Order No. 5 or Order No. 10. As explained in FN 12 supra, Order No. 5 was neither final
nor appealable. Order No. 5 merely denied HHSC-OIG’s motion to dismiss the payment hold case.
And Order No. 10 cancelled the payment hold hearing, precisely the action HHSC-OIG wished
the ALJ to take. And, in any event, HHSC-OIG’s Notice of Lift of Payment Hold, filed Feb. 5,
2014, disposed entirely of the payment hold proceeding and made moot any effect Orders No. 5
and 10 may have had on any parties.
27
and because Simmons had failed to exhaust his administrative remedies. The
jurisdictional defects cannot be cured. See Harris Cnty. v. Sykes, 136 S.W.3d 635,
639 (Tex. 2003).
Appellee HHSC prays the Court will affirm the trial court’s granting of
HHSC’s Plea to the Jurisdiction.
Respectfully submitted,
KEN PAXTON
Attorney General of Texas
CHARLES E. ROY
First Assistant Attorney General
JAMES E. DAVIS
Deputy Attorney General for Civil Litigation
/s/ Jennifer L. Hopgood____________
JENNIFER L. HOPGOOD
State Bar No. 21791950
(512) 936-1660 direct line
jennifer.hopgood@texasattorneygeneral.gov
RAYMOND C. WINTER
Chief, Civil Medicaid Fraud Division
Assistant Attorneys General
P. O. Box 12548
Austin, Texas 78711-2548
(512) 499-0712 facsimile
28
CERTIFICATE OF COMPLIANCE
I certify that this Appellee’s Brief has 6,723 words.
/s/ Jennifer L. Hopgood____________
Jennifer L. Hopgood
CERTIFICATE OF SERVICE
I certify that I have on this 12th day of January 2015, served copies of this
Appellee’s Brief to the following:
Via e-file
Joseph R. Willie
Willie & Associates, P.C.
4151 Southwest Freeway, Suite 490
Houston, Texas 77027
COUNSEL FOR TROY W. SIMMONS, D.D.S., P.C.
AND TROY W. SIMMONS, D.D.S.
/s/ Jennifer L. Hopgood____________
JENNIFER L. HOPGOOD
29
APPENDIX
30
SOAH DOCKET NO. XXX-XX-XXXX
HHSC-OIG CASE NO.: P20121327937016421
TROY W. SIMMONS, D.D.S., P.C., § BEFORE THE STATE OFFICE
Petitioner, §
§
vs. §
§ OF
TEXAS HEALTH AND HUMAN §
SERVICES COMMISSION, OFFICE §
OF INSPECTOR GENERAL, §
Respondent. § ADMINISTRATIVE HEARINGS
NOTICE OF LIFT OF PAYMENT HOLD
NOW COMES the Texas Health and Human Services Commission, Office of Inspector
General (“HHSC-OIG” or “Respondent”) and respectfully files this Notice of Lift of Payment
Hold. Respondent hereby gives notice that the hold imposed, in accordance with 1 Tex. Admin.
Code § 371.1709(a), 371.1709 (b)(3) (2012) and 42 C.F.R. § 455.23 (2011), on payments of
future claims for reimbursement submitted by Troy W. Simmons, D.D.S, P.C. (Petitioner) is
no longer in effect. Respondent would respectfully show the Court as follows:
1. On November 13, 2013, HHSC-OIG served Petitioner, by and through his counsel of
record, with a Final Notice of Overpayment in accordance with the mandates of Tex. Gov’t Code
§531.1201 (2013).
2. On November 15, 3013, Petitioner, by and through his counsel of record, received the
Final Notice of Overpayment.
3. Petitioner failed to make a written request for appeal of the Final Notice of Overpayment
by the 15th calendar day after receipt in accordance with Tex. Govt Code § 531.1201 (2013),
which supersedes and controls any administrative rule in place prior to September 1, 2013. Tex.
Govt Code § 53 1.1201(a) (2013) specifically states:
SOAR Docket No. XXX-XX-XXXX
Page 1 of 4
A provider must request an appeal not later than the 15 th
day after the date the
provider is notified that the commission or the commissions office of inspector
general will seek to recover an overpayment or debt from the provider. On receipt
of a timely written request by a provider who is the subject of a recoupment of
overpayment or recoupment of debt arising out of a fraud or abuse investigation,
the office of inspector general shall file a docketing request with the State Office
of Administrative Hearings or the Health and Human Services Commission
appeals division, as requested by the provider, for an administrative hearing
regarding the proposed recoupment amount and any associated damages or
penalties. (emphasis added).
4. Because Petitioner did not make a timely request for appeal of imposition of the final
sanction, HHSC-OIG has not and cannot file a docketing request with regard to the overpayment.
The sanction identified in the Final Notice of Overpayment became final as a matter of law on
December 15, 2013 (thirty (30) calendar days after receipt of the notice of final sanction). 1 Tex.
Admin. Code. § 371.1617(a)(1) (2012).
5. According to HHSC-OIG agency rules, HHSC-OIG lifted the payment hold and applied
the held funds to the established overpayment. See Exhibit A, the 01/30/2014 SAR from HHSC
OIG to TMHP, and Exhibit B, the 02/04/2014 SAR from TMHP to HHSC-OIG confirming
termination of the payment hold and application of the funds.
6. On February 4, 2014, HHSC-OIG received confirmation from the Texas Medicaid &
Healthcare Partnership (TMHP) that the payment hold had been lifted and is no longer in effect.
See Exhibit B.
7. HHSC-OIG previously moved for a dismissal of this payment hold proceeding on the
ground of mootness.
8. HHSC-OIG wishes to advise the Court that the hold previously imposed on payments of
future claims for reimbursements submitted by Petitioner, Troy W. Simmons, D.D.S, P.C., is no
longer in effect.
SOAH Docket No. 529-13-498 1
Page 2 of 4
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5
Filed this day of February, 2014.
Respectfully submitted,
Douglas C. Wilson
Inspector General
Joy Sparks
Chief Counsel
De ty Inspector General
James . Day II
ssoc te Counsel
te ar No. 24029507
11101 Metric Blvd., Building I
Austin, Texas 78758
(512) 491-2052 Phone
(512)491-2009 Fax
James.day@hhsc.state.tx.us
ATTORNEY FOR TEXAS HEALTH
AND HUMAN SERVICES
COMMISSION OFFICE OF
INSPECTOR GENERAL
SOAH Docket No. XXX-XX-XXXX
Page 3 of 4
CERTIFICATE OF SERVICE
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5
By my signature below, I certify that on this day of February, 2014, I caused to be served
a true and correct copy of the foregoing document Via Facsimile upon the State Office of
Administrative Hearings and upon Petitioner as follows:
Via Facsimile: (512) 322-2061
State Office of Administrative Hearings
300 West 15th
Street, Room 504
P.O. Box 13025
Austin, Texas 78711-3025
Via Facsimile: (713) 599-1659
Troy W. Simmons, D.D.S., P.C.
do Joseph R. Willie, II, D.D.S., J.D.
Willie & Associates, P.C.
Attorneys and Counselors At law
4151 Southwest Freeway, Suite 490
Houston, Texas 77027-7307
ames Day II
.
ATONEY
HHOIG
SOAH Docket No. XXX-XX-XXXX
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