226 A.3d 762
Me.2020Background
- DHHS audited AngleZ Behavioral Health Services' MaineCare claims for Feb 13–Jul 20, 2013 (universe: $613,929.18) by reviewing a random 100-claim sample.
- The Department initially calculated an 80.25% error rate (seeking $492,684.09), revised to 70.20% after informal review, and—after hearing adjustments—reduced to 63.95% (Department sought $392,603.31; parties agree final adjustment should be $373,704.05).
- At the administrative hearing DHHS introduced a spreadsheet summarizing findings for each sampled claim and presented witness testimony; detailed records were offered for 34 sampled claims; no underlying records were submitted for 32 sampled claims.
- The hearing officer adopted DHHS’s extrapolation and recoupment amount; the Acting Commissioner adopted that decision; AngleZ sought review in Superior Court under M.R. Civ. P. 80C.
- The Superior Court vacated the agency decision, finding DHHS had not submitted "proper evidence" for 32 claims; the Supreme Judicial Court reversed, holding the spreadsheet (in context with testimony and the record) constituted substantial evidence and the hearing officer’s extrapolation was not arbitrary or capricious, and remanded for correction of the total recoupment amount.
Issues
| Issue | AngleZ's Argument | Department's Argument | Held |
|---|---|---|---|
| Whether DHHS's summary spreadsheet (without underlying records for 32 sampled claims) constituted substantial evidence to support recoupment for those claims | Spreadsheet and summaries are not competent evidence; hearing officer must determine facts de novo, so underlying records were required | Spreadsheet is admissible evidence; combined with testimony and representative detailed records it gave the hearing officer enough information for individual assessment | Spreadsheet was admissible and, in context of the full record, was substantial evidence supporting the hearing officer’s findings |
| Whether the hearing officer’s use of the revised sample/extrapolation was arbitrary or capricious after DHHS reduced recoupment for some claims | The overall error rate should have been revised downward to reflect reductions during/after hearing | Reductions reflected production of documentation for specific claims; hearing targeted categorical legal issues and representative claims, so applying conclusions to the sample was reasonable | Not arbitrary or capricious; the hearing officer reasonably found DHHS’s revised sample "reasonably representative" of the claims universe |
| Whether Superior Court erred in vacating the agency decision for lack of evidence | Vacatur appropriate because many claims lacked underlying documentation supporting recoupment | Superior Court erred; agency record (spreadsheet + testimony + representative files) sufficed | Superior Court’s vacatur reversed; matter remanded to correct numerical recoupment amount |
Key Cases Cited
- Forest Ecology Network v. Land Use Regulation Comm’n, 39 A.3d 74 (Me. 2012) (standard of review for agency decisions and when interlocutory relief may unduly interfere with administrative procedures)
- Int’l Paper Co. v. Bd. of Envtl. Prot., 737 A.2d 1047 (Me. 1999) (appellate review defers to agency factfinding if supported by substantial evidence)
- Friends of Lincoln Lakes v. Bd. of Envtl. Prot., 989 A.2d 1128 (Me. 2010) (definition of substantial evidence: vacate only if no competent evidence supports findings)
- Kroeger v. Dep’t of Envtl. Prot., 870 A.2d 566 (Me. 2005) (definition and high threshold for arbitrary or capricious review)