ASSOCIATION OF HOME HELP CARE AGENCIES, Plaintiff-Appellant, v DEPARTMENT OF HEALTH AND HUMAN SERVICES and STATE OF MICHIGAN, Defendants-Appellees.
No. 349405
STATE OF MICHIGAN COURT OF APPEALS
November 19, 2020
FOR PUBLICATION. Court of Claims LC No. 18-000100-MZ.
Before: MARKEY, P.J., and METER and GADOLA, JJ.
Plaintiff, Association of Home Help Care Agencies (AHHCA), appeals by right the order of the Court of Claims granting summary disposition in favor of defendants, State of Michigan and Department of Health and Human Services (DHHS), under
I. BACKGROUND
This dispute concerns DHHS‘s administration of the Home Help Program, which is a Medicaid program that provides personal care services to individuals who require hands-on assistance with the functions of daily living.1 DHHS is tasked with monitoring, regulating, and policing home health or help agencies2 in Michigan
A. STATUTORY FRAMEWORK FOR IMPLEMENTING STATE MEDICAID POLICIES AND THE APPROVED STATE PLAN
As part of the Social Welfare Act,
(1) The director of the department of community health, after appropriate consultation with affected providers and the medical care advisory council established according to federal regulations, may establish policies and procedures that he or she considers appropriate, relating to the conditions of participation and requirements for providers established by section 111b and to applicable federal law and regulations, to assure that the implementation and enforcement of state and federal laws are all of the following:
(a) Reasonable, fair, effective, and efficient.
(b) In conformance with law.
(c) In conformance with the state plan for medical assistance adopted under section 10 and approved by the United States department of health and human services.
(2) The consultation required by this section shall be conducted in accordance with guidelines adopted by the state department of community health according to section 24 of the administrative procedures act of 1969,
1969 PA 306 ,MCL 24.224 .
In May 1997, “[a]ll the statutory authority, powers, duties, functions and responsibilities of the Home Help Program” stated in
The “consultation” requirement referenced in
(1) Before the adoption of a guideline, an agency shall give electronic notice of the proposed guideline to the committee, the office of regulatory reform, and each person who requested the agency in writing or electronically for advance notice of proposed action that may affect the person. . . . The notice shall be given by mail, in writing, or electronically transmitted to the last address specified by the person requesting the agency for advanced notice of proposed action that may affect that person. . . .
(2) The notice required by subsection (1) shall include all of the following:
(a) A statement of the terms or substance of the proposed guideline, a description of the subjects and issues involved, and the proposed effective date of the guideline.
(b) A statement that the addressee may express any views or arguments regarding the proposed guideline or the guideline‘s effect on a person.
(c) The address to which written comments may be sent and the date by which comments shall be mailed or electronically transmitted, which date shall not be less than 35 days from the date of
the mailing or electronic transmittal of the notice. (d) A reference to the specific statutory provision about which the proposed guideline states a policy.3
The Social Security Act sets forth conditions for home health agencies’ participation in Medicaid.
The federal government approved a State Plan for Michigan in August 2007. “The State plan is a comprehensive written statement submitted by the agency describing the nature and scope of its Medicaid program and giving assurance that it will be administered in conformity with [federal law].”
B. DHHS POLICIES GOVERNING HOME HELP AGENCIES IN MICHIGAN
In 2008, DHHS issued Medical Services Administration (MSA) Bulletin Number 08-28, setting forth the wage rate for agency providers of home help services and indicating that future wage increases for both individual and agency providers would occur concurrently and be based on minimum-wage-law changes and legislative appropriations. An agency was eligible for DHHS approval if it had a federal tax identification number and if it employed or subcontracted with two or more persons to provide home help care. In 2015, DHHS issued MSA 15-13, requiring home help agencies to employ workers directly, although it held this requirement in abeyance until further notice for agencies approved before June 1, 2015. DHHS further allowed home help agency workers who had permissive or non-mandatory convictions to provide services with the consent of the beneficiary. In 2017, DHHS
DHHS subsequently provided notice of a proposed policy draft that became MSA 18-09, updating the standards governing home help agencies. DHHS required agencies to employ workers directly, and it suspended the ability of a beneficiary to consent to allowing an agency employee with a criminal history to provide services. Agencies that did not comply with the requirements of the policy could be removed from the Approved Agency List or disenrolled. Agencies removed from the approved list would still be eligible for reimbursement but at the individual provider rate. If an agency was disenrolled, DHHS would notify the agency of the disenrollment determination within 10 days, and this decision could be appealed. An agency could provide services while an appeal was pending if the agency accepted responsibility to repay funds if the disenrollment determination was upheld.
In response to DHHS‘s solicitation of comments, one commenter disagreed with the suspension of the availability of a beneficiary to consent to receive services from an agency provider who had a criminal record, claiming that it would result in a shortage of eligible providers. DHHS indicated that it did not have the capacity to monitor all the consent arrangements in order to ensure the safety of beneficiaries although DHHS would still permit beneficiaries who knew and trusted their provider to employ that person as an individual provider rather than through an agency despite the criminal history. Another commenter disagreed with the direct employment requirement because it would create a financial hardship for agencies. DHHS responded that it was covering some of the taxes and costs for agencies and that agencies would also be paid a higher rate of compensation in light of the added costs so that agencies could continue to confer the same level of benefits on their employees. When DHHS issued MSA 18-09, it notified agencies that the direct employment requirement would apply to all agencies.
AHHCA filed a complaint in the Court of Claims, challenging the validity of MSA 17-32 and MSA 18-09 on constitutional and statutory grounds. AHHCA also sought a temporary restraining order and a preliminary injunction. The Court of Claims denied all injunctive relief and AHHCA‘s motion for reconsideration regarding injunctive relief. The parties subsequently moved for summary disposition. The Court of Claims granted defendants’ motion for summary disposition but denied AHHCA‘s competing motion for summary disposition. The Court of Claims subsequently denied AHHCA‘s motion for reconsideration of the order summarily dismissing its complaint.
II. ANALYSIS
A. SUMMARY DISPOSITION
1. STANDARD OF REVIEW
This Court reviews de novo a trial court‘s ruling on a motion for summary disposition. Hoffner v Lanctoe, 492 Mich 450, 459; 821 NW2d 88 (2012).4 We
2. ALLEGED STATUTORY VIOLATIONS
States that choose to participate in Medicaid must follow federal requirements. In re Estate of Rasmer, 501 Mich 18, 25; 903 NW2d 800 (2017). “Medicaid is a program that uses a form of cooperative federalism under which coordinated state and federal efforts coexist within a complementary framework in regard to administration.” People v Kanaan, 278 Mich App 594, 612; 751 NW2d 57 (2008). Federal requirements for state participation in Medicaid do not deprive a state of its own “authority to set parameters and controls relative to Medicaid.” Id. This Court has described DHHS‘s authority to implement and administer a Medicaid program:
Pursuant to the Social Welfare Act . . . , [DHHS] is responsible for establishing and administering medical assistance programs in the state, including the Medicaid program. See
MCL 330.3101 . Consistently with separation of powers principles, and in light of the complex nature of the endeavor, the Legislature has delegated broad authority to [DHHS] to enable it to accomplish its statutory responsibilities. . . . However, consonant with the delegation doctrine, such authority is circumscribed by the addition of substantive standards, including, for example, eligibility requirements, types of services provided, and the directive to develop policies andprocedures regarding the participation of, and reimbursement to, health care service providers. See MCL 400.106 ,400.109 ,400.111a . . . . Generally, then, [DHHS] has been delegated the responsibility of establishing and administering health care programs . . . that most effectively meet the needs of those persons eligible for Medicaid and state-funded services, using the state‘s limited resources in the most efficient manner possible. In the absence of a specific legislative directive that modifies its authority, [DHHS] is obligated to fulfill its statutory duties to establish, administer, and maintain the integrity of such programs. [Pharm Research & Mfr of America v Dep‘t of Community Health, 254 Mich App 397, 404-405; 657 NW2d 162 (2002).]
AHHCA argues that MSA 18-09‘s direct employment mandate violates the approved State Plan. And
AHHCA next argues that MSA 18-09‘s exclusion of agency workers with permissive convictions violates
Furthermore,
3. PROCEDURAL DUE PROCESS
The United States and Michigan Constitutions prohibit the deprivation “of life, liberty, or property, without due process of law.”
More precisely, our prior decisions indicate that identification of the specific dictates of due process generally requires consideration of three distinct factors: First, the private interest that will be affected by the official action; second, the risk of an erroneous deprivation of such interest through the procedures used, and the probable value, if any, of additional or substitute procedural safeguards; and finally, the Government‘s interest, including the function involved and the fiscal and administrative burdens that the additional or substitute procedural requirement would entail.
“[P]rocedural due process requires that a party be provided notice of the nature of the proceedings and an opportunity to be heard by an impartial decision maker at a meaningful time and in a meaningful manner.” Mettler Walloon, LLC v Melrose Twp, 281 Mich App 184, 213-214; 761 NW2d 293 (2008).
AHHCA argues that MSA 18-09 does not give providers constitutionally adequate notice of violations of the policy and an opportunity to correct the violations or
For enrolled agencies, removal from the approved list and disenrollment are both options for DHHS to take against an agency that does not meet the requirements of the bulletin, so it does not follow that disenrollment is immediate and automatic for all agencies that do not comply with the policies of MSA 18-09. Additionally, again, the removal of an agency from the approved list does not require its complete shutdown because such agencies are eligible to receive the individual provider rate. Therefore, AHHCA‘s argument that agencies will be disenrolled without the opportunity to take corrective action, although possible, is not the only procedure contemplated by the bulletin.
AHHCA states that “pending payments will be lost resulting in a retroactive effect as payments are made in arrears.” AHHCA cites no support for this assertion, nor does the bulletin support this statement. MSA 18-09 indicates, as noted earlier, that a provider appealing a disenrollment decision “may continue to provide services during the appeal period if the agency provider accepts responsibility for the repayment of funds should the [DHHS] decision be upheld.” This provision contemplates either continued or at least retroactive payment.
Moreover, AHHCA‘s focus on the adequacy of the opportunity to challenge a disenrollment determination fails to fully analyze the issue because it does not address the Mathews balancing test. AHHCA emphasizes the disruption of services and payment without addressing the risk of error resulting from the current procedure, the value added by providing an opportunity for a hearing or to take corrective action before disenrollment, and defendants’ interests, including the administrative burden of providing agencies with an opportunity to be heard or overseeing agencies’ efforts to take corrective action. The United States Court of Appeals for the Second Circuit concluded that balancing a beneficiary‘s interest in receiving home health benefits with the “fiscal and administrative burden” to the state did not require the state to provide a beneficiary with “a pre-deprivation review
4. EQUAL PROTECTION
AHHCA argues that MSA 18-09 violated equal protection by singling out home help care agencies in imposing the direct employment requirement and in removing an agency‘s ability to obtain a beneficiary‘s agreement to receive services from a worker with a permissive conviction. “The Equal Protection Clauses of the United States and Michigan Constitutions provide that no person shall be denied the equal protection of the law.” Wysocki v Kivi, 248 Mich App 346, 350; 639 NW2d 572 (2001). “This constitutional guarantee requires that persons similarly situated be treated alike.” Rose v Stokely, 258 Mich App 283, 295-296; 673 NW2d 413 (2003). Different levels of review apply depending on the basis of the classification scheme. Phillips v Mirac, Inc, 470 Mich 415, 432-433; 685 NW2d 174 (2004). “In Michigan, courts have applied the rational basis test principally to economic and social legislation.” Wysocki, 248 Mich App at 354. “Where the proponent of an equal protection argument is not a member of a protected class, or does not allege violation of a fundamental right, the equal protection claim is reviewed using the rational basis test.” Houdek v Centerville Twp, 276 Mich App 568, 585-586; 741 NW2d 587 (2007). “Under this test, a statute is constitutional if it furthers a legitimate governmental interest and if the challenged statute is rationally related to achieving that interest.” Barrow v City of Detroit Election Comm, 301 Mich App 404, 419-420; 836 NW2d 498 (2013). The party asserting an equal protection violation must show that the policy “is arbitrary and wholly unrelated in a rational way to the objective of the” policy. Wysocki, 248 Mich App at 354 (quotation marks and citation omitted).
Like AHHCA‘s procedural due process claim, its equal protection argument is devoid of factual support and proper legal analysis. Central to an equal protection analysis is a comparison of similarly-situated entities experiencing differential treatment. Shepherd Montessori Ctr Milan v Ann Arbor Charter Twp, 486 Mich 311, 328-329; 783 NW2d 695 (2010). That type of comparison is absent from AHHCA‘s equal protection argument. AHHCA is correct that MSA 18-09 applies to home help care agencies only, but introducing a policy bulletin that sets
Even assuming differential treatment, AHHCA has not shown that MSA 18-09 fails the rational-basis test, which entails examination of the purpose of the policy. See Phillips, 470 Mich at 434-435. “A classification reviewed on this basis passes constitutional muster if the legislative judgment is supported by any set of facts, either known or which could reasonably be assumed, even if such facts may be debatable.” Harvey v Michigan, 469 Mich 1, 7; 664 NW2d 767 (2003). A policy is presumed valid, and the party asserting an equal protection violation has the burden of proving otherwise. Shepherd Montessori, 486 Mich at 318-319. DHHS produced the responses to the comments received before it issued MSA 18-09, addressing the policies regarding direct employment and permissive convictions. As to precluding beneficiary consent to a provider with a criminal record, DHHS stated that it did “not have the capacity to sufficiently monitor agency assignments to ensure the safety of beneficiaries who use a provider with a criminal history.” In addition, DHHS acknowledged that beneficiaries could still agree to receive services from a known and trusted individual provider with a criminal history. AHHCA has not countered DHHS‘s stated safety concern. In response to a commenter‘s disagreement with the direct employment requirement, DHHS stated that it paid “the employer‘s share of federal taxes and unemployment” and that “[a]gencies are paid at a higher rate so that all personal care staff who work for the agency receive the same benefit.” That is, the direct employment requirement served to equalize treatment of workers. AHHCA has not shown that DHHS lacked a rational basis for implementing the policies; rather, AHHCA asserts that the policies are arbitrary because they did not exist before. This argument fails to identify a shortcoming in DHHS‘s explanations. AHHCA has not met its burden of establishing that the policy had no rational basis and violated equal protection.
B. RECONSIDERATION
AHHCA argues that the Court of Claims erred by denying its motion for reconsideration, raising issues that the Court of Claims had addressed and rejected in the motion for summary disposition, and which we have now addressed and rejected in this opinion as part of our ruling affirming the Court of Claims. Accordingly, there was no abuse of discretion in denying the motion for reconsideration,
C. PRELIMINARY INJUNCTION
Finally, AHHCA challenges the denial of injunctive relief. This issue is now moot. “An issue is moot if an event has occurred that renders it impossible for the court to grant relief.” Gen Motors Corp v Dep‘t of Treasury, 290 Mich App 355, 386; 803 NW2d 698 (2010). Because we have affirmed summary dismissal of AHHCA‘s claims in this lawsuit, which claims provided the support for the request for injunctive relief, the issue of injunctive relief has been rendered moot.
We affirm. Having fully prevailed on appeal, defendants may tax costs under
/s/ Jane E. Markey
/s/ Patrick M. Meter
/s/ Michael F. Gadola
Notes
In Hegadorn v Dep‘t of Human Servs Dir, 503 Mich 231, 245-246; 931 NW2d 571 (2019), our Supreme Court summarized the general mechanics of Medicaid, observing:
The Medicaid program is governed by a complex web of interlocking statutes, as well as regulations and interpretive documents published by state and federal agencies. The program was created by Title XIX of the Social Security Act of 1965, PL 89-97; 79 Stat 343, codified at
42 USC 1396 et seq. Medicaid is generally a need-based assistance program for medical care that is funded and administered jointly by the federal government and individual states. At the federal level, the program is administered by the Secretary of Health and Human Services through the Centers for Medicare & Medicaid Services (CMS). The State Medicaid Manual is published by CMS to help guide states in their administration of the program, including how to determine an applicant‘s eligibility for benefits. Each participating State develops a plan containing reasonable standards for determining eligibility for and the extent of medical assistance within boundaries set by the Medicaid statute and Secretary of Health and Human Services. In formulating those standards, States must provide for taking into account only such income and resources as are, as determined in accordance with standards prescribed by the Secretary, available to the applicant. [Citations, quotation marks, emphasis, and ellipses omitted.]
In general,
MCR 2.116(C)(10) provides for summary disposition when there is no genuine issue regarding any material fact and the moving party is entitled to judgment or partial judgment as a matter of law. A motion brought underMCR 2.116(C)(10) tests the factual support for a party‘s claim. A trial court may grant a motion for summary disposition underMCR 2.116(C)(10) if the pleadings, affidavits, and other documentary evidence, when viewed in a light most favorable to the nonmovant, show that there is no genuine issue with respect to any material fact. A genuine issue of material fact exists when the record, giving the benefit of reasonable doubt to the opposing party, leaves open an issue upon which reasonable minds might differ. The trial court is not permitted to assess credibility, weigh the evidence, or resolve factual disputes, and if material evidence conflicts, it is not appropriate to grant a motion for summary disposition underMCR 2.116(C)(10) . A court may only consider substantively admissible evidence actually proffered relative to a motion for summary disposition underMCR 2.116(C)(10) . [Citations and quotation marks omitted.]
In Wayne Co v AFSCME Local 3317, 325 Mich App 614, 633-634; 928 NW2d 709 (2018), this Court recited the rules of statutory construction:
The primary task in construing a statute is to discern and give effect to the Legislature‘s intent, and in doing so, we start with an examination of the language of the statute, which constitutes the most reliable evidence of legislative intent. When the language of a statutory provision is unambiguous, we must conclude that the Legislature intended the meaning that was clearly expressed, requiring enforcement of the statute as written, without any additional judicial construction. Only when an ambiguity in a statute exists may a court go beyond the statute‘s words to ascertain legislative intent. We must give effect to every word, phrase, and clause in a statute, avoiding a construction that would render any part of the statute nugatory or surplusage. [Citations omitted.]