287 P.3d 40
Wash. Ct. App.2012Background
- Evergreen Washington Healthcare Frontier LLC challenged the Department’s 2006 and 2007 Medicaid rate adjustments in a suit for declaratory judgment and mandamus to recalculate rates.
- Washington nursing facilities’ payments are set under chapter 74.46 RCW, with rates composed of seven components and annual adjustments via vendor rate increases (VRIs).
- Administrative review for rate disputes exists, including conferences and Board adjudication, with a 28-day window to pursue review after notice of rates.
- Life Care Centers of America litigation shaped methodology challenges to applying VRIs, leading to a superior court remand and a Life Care settlement affecting later rate adjustments.
- Evergreen did not timely pursue administrative review in 2006 and 2007, but did later seek rate adjustments under RCW 74.46.531 in 2009; the Department denied relief and Evergreen pursued further action.
- The trial court dismissed Evergreen’s declaratory judgment and mandamus petitions for lack of jurisdiction, finding exhaustion of administrative remedies required.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Evergreen exhausted administrative remedies before suit. | Evergreen exhausted 2009 remedies under RCW 74.46.531. | Remedies in 2006–2007 were adequate and Evergreen failed to pursue within 28 days. | Exhaustion required; court dismissed for lack of jurisdiction. |
| Whether 2006–2007 rate letters were final agency actions triggering exhaustion. | Letters were not final actions or not subject to exhaustion. | Letters fixed payment obligations and were final and appealable within 28 days. | Letters constituted final agency action, requiring exhaustion. |
| Whether APA review governs the rate determinations and precludes other relief. | APA review could proceed notwithstanding non-APA challenges. | APA review was exclusive for these rate determinations; other relief not appropriate. | APA governs review; other relief barred when exhaustion absent. |
| Whether constitutional claims excuse exhaustion. | Constitutional challenges avoid exhaustion requirements. | Constitutional claims do not excuse failure to exhaust when APA review is available. | Constitutional claims do not excuse exhaustion; claims dismissed. |
Key Cases Cited
- Life Care Centers of America Northwest Division v. Dep’t of Soc. & Health Servs., 162 Wn. App. 370 (2011) (APA-era rate methodology disputes and related remand effects)
- South Hollywood Hills Citizens Ass’n for Pres. of Neighborhood Safety & Env’t v. King County, 101 Wn.2d 68 (1984) (exhaustion principles in administrative challenges)
- Bock v. State Bd. of Pilotage Comm’rs, 91 Wn.2d 94 (1978) (APA review required when available; mandamus/ declaratory relief not available)
- Citizens for Mount Vernon v. City of Mount Vernon, 133 Wn.2d 861 (1997) (exhaustion of administrative remedies before judicial review)
- Stafne v. Snohomish County, 174 Wn.2d 24 (2012) (approval of appellate review when right to appeal exists)