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. | Dec 9, 2015Background
- Shamrock Psychiatric (provider) had funds withheld by Texas HHSC/OIG under a statutory temporary payment hold based on alleged fraud and sought a SOAH hearing to recover the withheld funds.
- HHSC later abandoned the credible-allegation-of-fraud basis for the payment hold but did not return the withheld funds; Shamrock continued to seek relief at SOAH.
- SOAH ALJ issued Order No. 11 and dismissed aspects of the proceeding (including the final overpayment hearing) after HHSC attempted to withdraw claims; no final agency order adopting Order No. 11 was issued.
- Shamrock sued in district court seeking mandamus relief to (a) compel return of funds withheld under the payment hold and (b) compel HHSC/OIG to docket the general overpayment (recoupment) claims at SOAH for a contested-case hearing.
- The trial court dismissed Shamrock’s suit for lack of jurisdiction; Shamrock appeals (this reply brief argues the dismissal was error).
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether HHSC’s "non‑suit" or abandonment of fraud allegations deprived SOAH of jurisdiction over the payment‑hold appeal | Shamrock: HHSC could not unilaterally extinguish Shamrock’s pending request for return of withheld funds; abandonment required return of funds and did not moot the SOAH appeal | HHSC: Abandonment/non‑suit defeated jurisdiction and combined/defeated the payment‑hold and overpayment proceedings | Trial court dismissed for lack of jurisdiction; Shamrock contends dismissal was error and that SOAH retained jurisdiction over the payment‑hold appeal (appeal ongoing) |
| Whether the trial court had mandamus jurisdiction to order HHSC/OIG to return payment‑hold funds after HHSC abandoned fraud allegations | Shamrock: Mandamus was proper; when HHSC abandoned the fraud basis but retained funds, trial court could order return (Janek analog) | HHSC: Distinguishes Janek because no final SOAH proposal/agency order existed and Order No. 11 did not order release of funds | Trial court dismissed; Shamrock argues Janek controls and mandamus should compel fund return (appeal challenges dismissal) |
| Whether a timely request for a payment‑hold hearing also satisfies statutory notice for a general overpayment (recoupment) hearing under section 531.1201 | Shamrock: Section 531.1201 links payment‑hold and general recoupment notice; timely payment‑hold request suffices to trigger an overpayment contested‑case hearing | HHSC: Contends separate notices/pleading sufficiency and timeliness issues could bar the general overpayment hearing | Trial court declined jurisdiction; Shamrock argues factual disputes over timeliness/waiver belong to SOAH (citing Hawkins) |
| Whether exhaustion of administrative remedies bars judicial relief here | Shamrock: No final agency order existed (Order No. 11 was not adopted), so exhaustion doctrine does not apply and mandamus is appropriate | HHSC: Asserts administrative remedies and procedures apply and should be exhausted | Trial court treated the case as non‑justiciable; Shamrock argues exhaustion is inapplicable because there was no final agency action to appeal |
Key Cases Cited
- Hawkins v. Community Health Choice, Inc., 127 S.W.3d 322 (Tex. App.—Austin 2004) (trial court may compel agency to submit disputed payment matters to SOAH where factual disputes about compliance with statutory notice exist)
- Janek v. Harlingen Family Dentistry, P.C., 451 S.W.3d 97 (Tex. App.—Austin 2014) (trial court had authority to order return of funds withheld on temporary payment hold where SOAH found no credible fraud and agency did not appeal)
- Texas Mut. Ins. v. Ledbetter, 251 S.W.3d 31 (Tex. 2008) (non‑suit principles: a party’s nonsuit does not necessarily affect another party’s pending claims for affirmative relief)
- Lindsay v. Sterling, 690 S.W.2d 560 (Tex. 1985) (addresses exhaustion and appealability principles for agency decisions)