Shamrock Psychiatric Clinic, P.A. v. Texas Health and Human Services Commission Charles Smith, Executive Commissioner of the Texas Health and Human Services Commission And Stuart W. Bowen Jr., Inspector General for the Texas Health and Human Services Commission Office of Inspector General
03-15-00349-CV
| Tex. App. | Aug 10, 2016Background
- Shamrock Psychiatric Clinic (Medicaid provider) received a payment hold from HHSC-OIG in Jan 2013 and sought an expedited SOAH hearing; OIG proposed consolidating the payment-hold and an anticipated overpayment recoupment into one SOAH proceeding.
- Parties corresponded by email in Oct 2013 and agreed to consolidate; SOAH continued the hearing to March 2014 to allow consolidation and discovery.
- OIG issued a Final Notice of Overpayment on Dec 2, 2013 identifying $1,611,709 in alleged overpayments and stating a provider must file a written appeal request received by OIG within 15 days.
- Shamrock filed a written SOAH appeal on Jan 2, 2014 (31 days after the Final Notice); OIG moved to dismiss the SOAH payment-hold docket, arguing Shamrock failed to timely request the overpayment appeal and thus the overpayment determination was final.
- The SOAH ALJ dismissed the docketed payment-hold case after OIG withdrew that claim; Shamrock sued in district court seeking declaratory relief and mandamus to require OIG or the ALJ to docket and hear the overpayment claim.
- Trial court granted the State’s plea to the jurisdiction (sovereign immunity), dismissing Shamrock’s suit; Shamrock appealed arguing the OIG had a ministerial duty to docket the overpayment and/or enforce the parties’ agreement to consolidate.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether OIG had a ministerial duty under Tex. Gov’t Code §531.1201(a) to file a SOAH docketing request for an overpayment hearing | Shamrock: emails and status report (Oct) plus parties’ consolidation agreement satisfied the required written request or created a duty to docket | State: statutory duty to docket arises only on receipt of a timely written request meeting §531.1201 and applicable SOAH rule content and timing (15 days after Final Notice) | Held: No ministerial duty arose because Shamrock’s written request arrived after the 15-day statutory period; Oct emails/status report did not meet rule content or constitute the Final Notice-triggered request |
| Whether pre-Final-Notice communications should be treated as timely or deemed effective under doctrines for prematurely filed notices | Shamrock: Oct communications were within 15 days of an Oct 2 OIG email and should count; alternatively, rules like Tex. R. App. P. 27.2 / Tex. R. Civ. P. 306c render premature filings timely | State: Oct 2 email was not a “final notice” (did not state amount/basis) and the administrative rules require the request follow a Final Notice; procedural rules for premature appeals do not apply | Held: Rejected — Oct communications were informal and did not satisfy the content/timing requirements; prematurity doctrines inapplicable here |
| Whether an enforceable party agreement (SOAH Rule 155.415 / Rule 11) created a ministerial duty on OIG or ALJ to docket or proceed | Shamrock: the parties agreed to consolidate and that created an enforceable obligation; ALJ had duty to enforce | State: even an enforceable agreement (if valid) would not convert into a ministerial duty of the agency to perform the action; the only ministerial duty arises from a timely statutory request | Held: Rejected — any party agreement does not create a statutory ministerial duty to docket absent the timely written request |
| Whether OIG’s withdrawal of the payment-hold claim improperly deprived Shamrock of a hearing or relief | Shamrock: withdrawal plus retention of funds effectively denied relief; analogous to nonsuit rules that protect pending affirmative claims | State: Shamrock forfeited the right to an administrative hearing by failing to timely request appeal once Final Notice issued; overpayment became final and OIG could retain funds to offset debt | Held: Rejected — Shamrock’s failure to timely appeal caused the recoupment determination to become final and OIG was authorized to retain funds |
Key Cases Cited
- Anderson v. City of Seven Points, 806 S.W.2d 791 (Tex. 1991) (distinguishes ministerial vs. discretionary duties)
- City of Lancaster v. Chambers, 883 S.W.2d 650 (Tex. 1994) (ministerial act defined as obedience to a duty with no discretion)
- City of El Paso v. Heinrich, 284 S.W.3d 366 (Tex. 2009) (ultra vires/ministerial-duty exception to sovereign immunity)
- Community Health Choice, Inc. v. Hawkins, 328 S.W.3d 10 (Tex. App.—Austin 2010) (discussing mandamus to compel ministerial acts by agencies)
- El Paso Electric Co. v. Public Utility Commission, 715 S.W.2d 734 (Tex. App.—Austin 1986) (agency rehearing timing/prejudice context; distinguished)
- Texas Mut. Ins. Co. v. Ledbetter, 251 S.W.3d 31 (Tex. 2008) (nonsuit rule effects on pending affirmative claims; cited by analogy)
- Janek v. Harlingen Family Dentistry, P.C., 451 S.W.3d 97 (Tex. App.—Austin 2014) (payment-hold return of funds after ALJ found no credible evidence of fraud; distinguished)