Janek v. Harlingen Family Dentistry, P.C.
2014 Tex. App. LEXIS 11850
| Tex. App. | 2014Background
- Harlingen Family Dentistry (the Dental Group), a Texas Medicaid provider, had a 100% payment hold on orthodontia Medicaid reimbursements imposed by HHSC OIG during a fraud investigation.
- The Dental Group requested an expedited SOAH hearing; the ALJ found no credible evidence of fraud but found billing/noncompliance in ~9% of reviewed cases.
- The ALJ recommended reducing the payment hold to 9% of orthodontia-related Medicaid reimbursement; HHSC adopted the ALJ’s findings and issued a final order dated January 7, 2013.
- By that date, approximately $1,379,335.43 had already been withheld under the hold; the Dental Group demanded release of 91% (~$1,255,195.20) of those funds.
- HHSC/OIG refused, claiming the final order had only prospective effect (reducing future holds) and did not require release of funds already held; the Dental Group sought mandamus in district court to compel release.
- The district court granted mandamus; on appeal the State argued sovereign immunity barred relief because the order was not a ministerial command to release already-held funds.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether HHSC's final order unambiguously required release of funds already held | The final order reduced the hold to 9%, thereby discontinuing the hold as to 91% of previously sequestered funds and requiring their release | The order was prospective only — it limited future withholding to 9% but did not direct release of funds already in the State's possession | The order, read with statutes/regulations, unambiguously discontinued the hold as to 91% of funds and required release; mandamus appropriate to compel ministerial performance |
| Whether mandamus is barred by sovereign immunity as a retrospective claim for monetary relief | Mandamus enforces a ministerial duty created by the agency’s final order and is prospective in nature (compelling compliance with that order) | Releasing already-held funds is retrospective monetary relief barred by sovereign immunity | The claim fell within the ultra vires/ministerial exception; sovereign immunity did not bar mandamus to enforce the final order |
| Whether HHSC/OIG had authority to maintain any portion of the hold after SOAH findings | The agency retained authority to withhold up to 9% based on non-reimbursable or noncompliant billing as found by the ALJ | N/A (State conceded or relied on ALJ/agency rule for maintaining limited hold) | HHSC/OIG could lawfully maintain a 9% hold; the remainder lacked statutory/federal basis and had to be released |
| Standard for issuing mandamus to compel release | Mandamus is appropriate to compel performance of a ministerial duty where law/orders leave no discretion | Agency discretion exists only where statute or order permits continued possession; here none supported continued possession of the 91% | Mandamus proper because the final order and governing statutes/regulations imposed a clear, nondiscretionary duty to release the improperly held funds |
Key Cases Cited
- Anderson v. City of Seven Points, 806 S.W.2d 791 (Tex. 1991) (defines ministerial act standard for mandamus)
- City of Lancaster v. Chambers, 883 S.W.2d 650 (Tex. 1994) (distinguishes ministerial from discretionary duties)
- City of El Paso v. Heinrich, 284 S.W.3d 366 (Tex. 2009) (ultra vires/ministerial exception to sovereign immunity explained)
- Community Health Choice, Inc. v. Hawkins, 328 S.W.3d 10 (Tex. App.—Austin 2010, pet. denied) (mandamus available to enforce nondiscretionary statutory duties)