Shaffer v. Nebraska Dept. of Health & Human Servs., 857 N.W.2d 313

Coventry challenged a Medicaid eligibility ruling affecting Shaffer; Shaffer's PDN benefits were denied by Coventry and reviewed initially at Coventry and then at the Department’s State fair hearing.
The State fair hearing held January 22, 2013, involved Coventry, Shaffer, and Shaffer’s guardian; Coventry defended its denial and was treated as a party, with testimony and exhibits.
The Department issued an order denying PDN services as not medically necessary; Shaffer petitioned for judicial review under the APA seeking de novo review in Lancaster County.
The district court reversed the Department’s order, finding PDN services medically necessary; Coventry appealed to the Nebraska Supreme Court on several theories, including standing and party status.
Nebraska appellate review focused on whether Coventry was a proper party of record in the district court appeal and whether Coventry had standing to appeal; the court ultimately vacated and dismissed the district court’s judgment due to lack of a necessary party.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether Coventry had standing to appeal	Coventry had a financial and contractual stake; it was a party of record at the fair hearing	Department argued Coventry was not a party of record in the district court appeal	Coventry had standing to appeal
Whether Coventry was a necessary party in the district court appeal	Coventry was a party of record and should be joined	Department contends Coventry was not a necessary party	Coventry was a necessary party; district court lacked jurisdiction without Coventry
Whether the Department was a proper party to the district court appeal	Department acted beyond neutral factfinder role and thus was a party of record	Department can be or is a party of record in APA review	Department was a party of record for judicial review
Whether the PDN services were medically necessary	Records support medical necessity of PDN	Record shows PDN not medically necessary	(Not reached due to disposition) vacated for jurisdictional defects; issue not decided on appeal

McDougle v. State ex rel. Bruning, 853 N.W.2d 159 (Neb. 2014) (agency role can be more than neutral factfinder when enforcing public health powers)
Beatrice Manor v. Department of Health, 362 N.W.2d 45 (Neb. 1985) (agency role in certificate-of-need appeals; public interest responsibility)
Thorson v. Nebraska Dept. of Health & Human Servs., 740 N.W.2d 27 (Neb. 2007) (jurisdictional review in APA context)
In re Application of Metropolitan Util. Dist., 704 N.W.2d 237 (Neb. 2005) (independent appellate review of statutory interpretations)
Rozmus v. Rozmus, 595 N.W.2d 893 (Neb. 1999) (standards for standing in appeals)
Oklahoma Foundation v. Dept. of Central, 180 P.3d 1 (Okla. Civ. App. 2007) (definition of party of record in administrative appeals)
Litowitz v. Growth Management Bd., 966 P.2d 422 (Wash. App. 1998) (definition of party of record in administrative actions)