965 N.W.2d 707
Mich. Ct. App.2020Background
- The Home Help Program is Michigan’s Medicaid personal-care program; DHHS administers and enforces provider participation under state law and the federally approved State Plan.
- DHHS issued a series of Medical Services Administration (MSA) bulletins; MSA 18-09 (final) required home-help agencies to directly employ workers and suspended beneficiary consent for agency employees with certain criminal histories.
- DHHS had previously allowed beneficiaries to consent to agency workers with permissive (non‑mandatory) convictions; MSA 18-09 removed that option for agency-employed workers and provided removal/ disenrollment, audit, and appeal procedures.
- The Association of Home Help Care Agencies (AHHCA) sued in the Court of Claims, challenging MSA 17-32 and MSA 18-09 on statutory, APA-notice, procedural due process, and equal-protection grounds and sought injunctive relief.
- The Court of Claims granted summary disposition for defendants (DHHS and State); AHHCA appealed and the Court of Appeals affirmed, rejecting AHHCA’s statutory, procedural‑due‑process, and equal‑protection claims and finding notice to be in substantial compliance.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether MSA 18-09 violates the federally approved State Plan / MCL 400.111a | The State Plan’s language (“individuals who contract with or are employed by an agency”) means DHHS must allow agencies to contract with workers. | The Plan merely describes who may serve as providers; it does not mandate that agencies be allowed to use contractors. DHHS has delegated authority to set participation rules. | Held: No violation; the State Plan does not require DHHS to permit agency contracting and MSA 18-09 is within DHHS authority. |
| Whether DHHS may bar agency workers with permissive convictions | DHHS cannot exclude workers with permissive convictions (42 U.S.C. §1320a‑7(b); MCL 333.20173a). | Federal §1320a‑7(b) is permissive (‘may’); states may exercise discretion. MCL 333.20173a addresses mandatory convictions and does not require permitting permissive-conviction providers. | Held: No infirmity. DHHS may exclude agency workers with permissive convictions; plaintiff’s statutory reading fails. |
| Whether notice for MSA 18-09 complied with APA/consultation requirements (MCL 24.224) | Notice failed to reference the specific statutory provision as required, invalidating the rule. | Although one formal citation was omitted, DHHS substantially complied with the APA notice/consultation requirements (MCL 24.227). | Held: Substantial compliance sufficed; omission did not invalidate MSA 18-09. |
| Whether MSA 18-09 denied procedural due process (pre‑disenrollment notice/corrective opportunity) | Agencies lack adequate notice/opportunity to correct or a pre‑deprivation hearing before disenrollment, causing loss of payments and services. | MSA 18-09 provides application, audit, notice, appeal rights, and limited ability to continue providing services during appeal. Mathews balancing shows no required pre‑deprivation hearing. | Held: No due-process violation; existing notice/appeal procedures and Mathews balancing are adequate. |
| Whether MSA 18-09 violated equal protection by singling out home‑help agencies | Targeting home‑help agencies (direct employment, banning beneficiary consent) is arbitrary and treats similarly situated providers differently. | DHHS has rational bases (beneficiary safety, administrative capacity, equalizing worker benefits and oversight). Plaintiff failed to show similarly situated comparator group or irrationality. | Held: No equal protection violation; plaintiff did not meet burden and DHHS explanations are rational. |
Key Cases Cited
- Hoffner v. Lanctoe, 492 Mich 450 (Mich. 2012) (standard of review for summary disposition).
- Mathews v. Eldridge, 424 US 319 (U.S. 1976) (three‑part balancing test for procedural due process).
- In re Estate of Rasmer, 501 Mich 18 (Mich. 2017) (Medicaid participation and federal‑state framework).
- Pharm Research & Mfr of America v. Dep’t of Community Health, 254 Mich App 397 (Mich. Ct. App. 2002) (agency delegation and administrative authority).
- Shepherd Montessori Ctr. Milan v. Ann Arbor Charter Twp., 486 Mich 311 (Mich. 2010) (equal protection—need for similarly situated comparators).
- Lutwin v. Thompson, 361 F.3d 146 (2d Cir. 2004) (addressing pre‑deprivation process for home health benefit reductions).