OPINION
McAllen Hospitals, L.P. and Fort Duncan Medical Center, L.P. (the Hospitals)
Factual and Procedural History
The Agency, Its Departments, and Its Duties
The Texas Health and Human Services Commission (THHSC) oversees the Texas Medicaid Program. Having entered into Medicaid provider agreements with the THHSC, the Hospitals are Medicaid providers. As such, the Hospitals provide medically necessary treatment to Texas Medicaid beneficiaries and submit claims to the THHSC for reimbursement.
The THHSC’s Office of Inspector General (OIG) bears the responsibility for reviewing and determining the payment or denial of claims submitted by enrolled healthcare providers. Among its other duties, the OIG is legislatively charged with the specific duties of “prevention, detection, audit, inspection, review, and investigation of fraud, waste, and abuse in the provision and delivery of all health and human services in the state ... and the enforcement of state law relating to the provision of those services.” See Tex. Gov’t Code Ann. § 581.102(a) (West Supp. 2013).
Within the OIG is the Utilization Review (UR) Department, which is governed by Title 1, Chapter 371, Subchapter C of the Texas Administrative Code. The UR Department of the THHSC is charged with implementing the Texas Medical Review Program (TMRP). More specifically, the TMRP “is the inpatient hospital utilization review process used by the [THHSC] for hospitals reimbursed under the [THHSCJs prospective payment system.” Id. § 371.200(a) (2013) (Tex. Health & Human Servs. Comm’n, Inpatient Hospital Utilization Review Program). The Texas Administrative Code thoroughly outlines the TMRP review process and provides that “[t]he TMRP review process includes, but is not limited to ... [a]dmission review to evaluate the medical necessity of the admission.” Id. § 371.203(a)(1) (2013) (Tex. Health & Human Servs. Comm’n, Texas Medical Review Program (TMRP) Review Process). “For purposes of the TMRP reviews, medical necessity means the patient has a condition requiring treatment that can be safely provided only in the inpatient setting.” Id.
In the event that a reviewed claim is deemed medically unnecessary or provided in an inappropriate setting, the THHSC will notify the enrolled provider of the denial decision and instruct the claims administrator to recoup payment on that claim. Id. § 371.206(a) (2013) (Tex. Health & Human Servs. Comm’n, Denials and Recoupments for Texas Medical Review Program (TMRP), Tax Equity and Fiscal Responsibility Act (TEFRA), and LoneSTAR Select II Contracted Hospitals) amended 38 Tex. Reg. 9479 (2013) (effective Jan. 1, 2014).
With respect to a provider’s remedies upon receiving a denial of payment under Section 371.206, the Texas Administrative Code provides the following:
If a hospital receives notification from the [THHSC] Utilization Review Unit of an adverse decision regarding medical necessity of admission, days of stay, diagnosis related group (DRG) validation, or a final technical denial, the hospital may appeal to [the THHSC]. The written notification of adverse decision will set out the responsible area and time frame within which the appeal must be received by [the THHSC]. The Texas Medicaid Policy and Procedure Manual provides additional information on the appeal process.
Id. § 371.208 (2013) (Tex. Health & Human Servs. Comm’n, Appeals Related to Utilization Review Department Review Decisions).
Payments and Actions at Issue
Between June 26, 2004, and January 7, 2008, the Hospitals rendered medical treatment on an inpatient basis to the patients whose medical treatment forms the underlying basis of this suit. At the time of medical treatment, these patients were recipients of Texas Medicaid medical bene
Two to three years after the medical services in question were rendered, the THHSC conducted a sample study of patients who were admitted to the Hospitals. See id. § 371.201 (2013) (Tex. Health & Human Servs. Comm’n, Case Selection Process). The OIG, through its UR Unit and under the authority provided by the TMRP, reviewed the medical records of each of the patients at issue to determine if the inpatient setting was medically necessary and the appropriate treatment setting or whether the treatment could have been rendered on an outpatient basis. In each case at issue, the UR Unit determined that it was not medically necessary for the treatment to be rendered in an inpatient setting and sent to the Hospitals a Notice of Admission Denial, informing the Hospitals that admissions on an inpatient basis were not medically necessary for these patients and directing that the payments be recouped.
The Hospitals appealed the OIG UR Unit’s decision to the THHSC’s UR/Medical Appeals Unit,
Subsequently, the UR/Medical Appeals Unit denied the Hospitals’ appeal, upholding the OIG UR Unit’s decision that the inpatient setting was not medically necessary.
The Hospitals maintain that, to preserve their rights to additional administrative review, they sent requests to the OIG Manager of Sanctions that their appeals be forwarded to the Office of General Counsel (OGC) to be docketed, pursuant to 1 Tex. Admin. Code § 371.1667 (2011) (Tex. Health & Human Servs. Comm’n, Due Process for Administrative Sanctions) repealed 37 Tex. Reg. 7998 (2012) (proposed Aug. 10, 2012), and 1 Tex. Admin. Code § 371.1669 (2011) (Tex. Health & Human Servs. Comm’n, Notice of Appeal) repealed 37 Tex. Reg. 7998 (2012) (proposed Aug. 10, 2012). By letter dated June 16, 2010, the OIG denied the Hospitals’ requests, outlining the OIG’s positions that its determination was the final administrative decision, that the Hospitals had availed themselves of their appellate remedies, and that there were no further avenues for appeal available to the Hospitals.
Litigation Ensues
In July 2010, the Hospitals filed their Original Petition against the appellees.
The THHSC responded by filing its plea to the jurisdiction and, alternatively, its affirmative defenses and general denial. On May 3, 2011, the trial court signed its Order Granting Defendants’ Plea to the Jurisdiction on All Claims Except on Plaintiffs’ Claim for Judicial Review, in which the trial court specifically withheld its ruling on the Hospitals’ claim for judicial review and permitted the Hospitals to re-plead their allegations seeking declaratory judgment that the THHSC deprived the Hospitals of property without a meaningful opportunity to be heard. On May 8, 2012, after the Hospitals repleaded and after the THHSC re-urged its plea to the jurisdiction, the trial court signed its Order Granting Defendants’ Plea to the Jurisdiction on Plaintiffs’ Claims for Judicial Review and Denying Plaintiffs’ Declaratory Judgment Ultra Vires Claim, effectively disposing of all claims and parties.
Appeal of the Trial Court’s Order
On appeal, the Hospitals have presented three issues for this Court’s consideration:
(1) whether the trial court erred by finding that the recoupment of an overpayment by the THHSC’s UR Unit is not a sanction;
(2) whether the trial court erred by granting Appellees’ plea to the jurisdiction, based on its finding that the Hospitals do not have a right to judicial review; and (3) whether the trial court erred by denying the Hospitals’ petition for writ of mandamus and/or request for declaratory judgment, as they relate to technical denials. The procedural posture of this case and the import of the trial court’s disposition of this case by way of a plea to the jurisdiction require us to address the issues raised in a slightly different manner.
Applicable Law and Standard of Review
A plea to the jurisdiction challenges the court’s authority to decide a case. Heckman v. Williamson Cnty.,
We review de novo a trial court’s ruling on a plea to the jurisdiction. See Tex. Dep’t of Parks & Wildlife v. Miranda,
Issue Two: Right to Judicial Review
The Hospitals cite the general principle upon which they premise their contention that they are entitled to judicial review: “Texas law recognizes no right to judicial review of an administrative order unless (1) a statute provides the right, (2) the order adversely affects a vested property right, or (3) the order otherwise violates some constitutional right.” See Cont’l Cas. Ins. Co. v. Functional Restoration Assocs.,
Takings, Due Process, and Due Course of Law Claims
In their second amended petition, the Hospitals attack the THHSC’s actions as a violation of federal due process protection and state due course of law protection and also characterize the recoupment of funds in their entirety, without accounting for the reimbursement of medical services that were properly rendered, as an unconstitutional taking under the Texas Constitution. See U.S. Const, amend. XIV; Tex. Const.- art. I, §§ 17, 19. We will address the trial court’s jurisdiction as it relates to the allegations of these several constitutional violations.
Takings Claims Generally
The Texas Constitution provides that “[n]o person’s property shall be taken, damaged, or destroyed for or applied to public use without adequate compensation being made, unless by the consent of such person.” Tex. Const, art. I, § 17(a). Similarly, the United States Constitution provides that “private property [shall not] be taken for public use, without just compensation.” U.S. Const, amend. V. Sovereign
To establish a takings claim, the claimant must seek compensation because the defendant intentionally performed actions that resulted in taking, damaging, or destroying property for public use without the owner’s consent. Id. at 390-91. Whether a taking has occurred depends largely on definitional and conceptual issues. Id. at 391. The Hospitals’ takings claims, as well as their due process and due course of law allegations, require that the Hospitals have a vested property interest at stake. See Combs v. City of Webster,
Discussion
The Hospitals maintain that, even if they were not entitled to further administrative review of the UR Unit’s decision that the inpatient setting for treatment of the patients at issue was not medically necessary, they were still entitled to reimbursement for the portion of services that were properly rendered. To recoup the payments in their entirety, contend the Hospitals, is an unconstitutional taking without the protections of due course of law. For this reason, the Hospitals maintain, they are entitled to judicial review.
In response, the THHSC turns to a case from the Austin Court of Appeals in which that court examined the “vested property interest” exception in the context of a re-coupment and redistribution of local sales tax revenues. See City of Webster,
Much like the appellees’ interests in sale tax revenues remained subject to adjustment, here, the Hospitals’ interests in reimbursement is subject to utilization review. Until such time has passed that their interests are no longer subject to adjustment or recoupment under the Texas Administrative Code’s utilization review
Procedural Due Process and Due Course of Law
Looking at the Hospitals’ procedural due process and due course of law claims separate and apart from their other constitutional claims, we note another deficiency as to these particular claims. It is true that, if an individual is deprived of a property right, the government must afford an appropriate and meaningful opportunity to be heard consistent with the requirements of procedural due process. See Perry v. Del Rio,
It is important to realize that any inpatient stay billed to Texas Medicaid is subject to retrospective review by the [T] HHSC UR Unit with the possibility for denial if the admission is determined not medically necessary. If the inpatient admission is denied as not medically necessary, [T] HHSC UR may allow services rendered during the first 23 hours (less than 24 hours) to be rebilled to TMHP [Texas Medicaid and Healthcare Partnership] as an outpatient claim if a physician’s order for outpatient observation is present in the hospital medical record (per [1 Tex. Admin. Code] § 371.206(b)). The claim must be submitted to TMHP within 120 days from the date of the UR notification letter.
Here, however, the record reveals nothing regarding whether the Hospitals attempted to avail themselves of the re-billing remedy, and the Hospitals do not allege that they did. Because the Hospitals fail to show that they availed themselves of the procedures available to them to remedy the matter of which they now complain, we cannot conclude they have asserted a viable procedural due process claim. See City of Paris v. Abbott,
So, for this additional reason, the Hospitals’ procedural due process and due course of law claims fail, and the trial court properly granted the THHSC’s plea to the jurisdiction on those claims. See City of Webster,
Judicial Review of Final Agency Decision
The Hospitals also contend that the decision to recoup funds previously paid to the Hospitals is a final agency decision issued by the THHSC’s UR/Medical Appeals Unit. That being so, the Hospitals maintain, they are entitled to judicial review of the UR/Medical Appeals Unit’s decision under the statutory right provided to them by APA. In pertinent part, the APA provides that a “person who has exhausted all administrative remedies available within a state agency and who is aggrieved by a final decision in a contested case is entitled to judicial review under this chapter.” Tex. Gov’t Code Ann. § 2001.171. A “contested case” is a “proceeding, including a ratemaking or licensing proceeding, in which the legal rights, duties, or privileges of a party are to be determined by a state agency after an opportunity for adjudicative hearing.” Id. § 2001.003(1) (West 2008).
The THHSC acknowledges that the APA creates a statutory right of judicial review for contested case proceedings. See Tex. Dep’t of Protective & Regulatory Servs. v. Mega Child Care, Inc.,
Indeed, not every dispute between an agency and another party constitutes a “contested case” proceeding falling within the APA’s provision regarding judicial review. To illustrate, the Texas Historical Commission’s proceedings resulting in the agency’s decision to “award” or not “award” a marker, approve or reject text or historical content, or any of the incidental decisions the agency makes during the historical marker approval process were not “contested eases” within the meaning of the APA and were, therefore, not subject to judicial review under Section 2001.171. See Bacon v. Tex. Historical Comm’n,
Looking at the relevant provisions applicable to the UR appeals at issue here, it appears that the UR/Medical Appeals Unit’s determination is not a “final decision in a contested case.” To the contrary, the Texas Administrative Code defines the UR appeal here as specifically “not a hearing,” and the APA defines a “contested case” as a “proceeding, including a rate-making or licensing proceeding, in which the legal rights, duties, or privileges of a party are to be determined by a state agency after an opportunity for adjudicative hearing.” Compare 1 Tex. Admin. Code § 354.2201(12), with Tex. Gov’t Code Ann. § 2001.003(1). The Hospitals may disfavor this mechanism, but their disfavor does not alter the nature of the proceeding from which the determination at issue resulted; the determination at issue did not result from a “contested case” as contemplated by the APA, and, therefore, the APA does not provide the Hospitals the right to judicial review. See West,
Issues Ones and Three: Declaratory and Mandamus Relief
The Hospitals also complain that the trial court erred by denying its requests for declaratory and mandamus relief. We first address the Hospitals’ claims seeking declaratory relief.
The Hospitals Claims Seeking Declaratory Relief
On appeal, the Hospitals complain that the trial court erred by denying their request for declaratory relief as it relates to the Hospitals’ position regarding the three “insufficient documentation” cases, see supra note 5, in which the UR/Medical Appeals Unit concluded that there was “incomplete and insufficient” documentation. The Hospitals have maintained that they were entitled to notices of a preliminary technical denial and that, therefore, the THHSC violated the relevant regulations that would require such notices whenever the record was deemed insufficient. See 1 Tex. Admin. Code § 371.206, § 371.210 (2013) (Tex. Health & Human Servs. Comm’n, Inpatient Utilization Review for Hospitals Reimbursed under the Tax Equity and Fiscal Responsibility Act (TEFRA) Principles of Reimbursement or LoneSTAR Select II Contracting Program) amended 38 Tex. Reg. 9479 (2013) (effective Jan. 1, 2014).
The Declaratory Judgments Act (DJA) does not enlarge a court’s jurisdiction; it is a procedural device for deciding cases already within a court’s jurisdiction. See Sawyer Trust,
Not having independently established the trial court’s subject-matter jurisdiction over their claims, the Hospitals cannot assert those claims as claims for declaratory relief; the trial court lacks jurisdiction over them. See Sawyer Trust,
Mandamus Relief
At this point, we address the Hospitals’ requests for mandamus relief as it relates to (1) the cases which the Hospitals claim should have been docketed pursuant to former Sections 371.1667 and 371.1669 as administrative appeals from the imposition of administrative sanctions and (2) the three “insufficient documentation” cases that the Hospitals claim fall within the “preliminary technical denials” provisions of the Texas Administrative Code. In the first of their two requests for mandamus, the Hospitals request that the THHSC be compelled to comply with the appeals process outlined in former Sections 371.1667 and 371.1669 of the Texas Administrative Code, a process the THHSC staunchly máintains it need not have implemented in this case. In fact, much of the debate and analysis of the relevant regulations stem from the Hospitals’ claims for mandamus relief relating to the nondiscretionary duty they claim arises from their construction of the relevant regulations and the THHSC’s contrary position that the applicable provisions mandate no such duty because re-coupment under the UR process is not properly considered a “sanction.” While the parties’ conflicting constructions of the regulations and the issues concerning whether recoupment in this case is a “sanction” warranting further administrative review are interesting issues, the merits of these issues are not properly before us for the reasons that follow.
The Texas Constitution empowers district courts to issue writs of mandamus to compel public officials to perform ministerial acts. Brennan v. City of Willow Park,
The THHSC reiterates on appeal the position that it espoused in the trial court: Proper construction of the applicable provisions reveals that the THHSC does not have the duty that the Hospitals’ mistaken construction of the provision would impose on the THHSC. However, the merits of the mandamus claims — that is, whether the requesting party has shown itself entitled to mandamus relief — is of no moment when determining the issue of the district court’s jurisdiction to hear the matter.
We look to a similar contention made before the Fort Worth Court of Appeals.
Appellees’ adequate-remedy-at-law argument is not relevant to whether or not the trial court possesses subject matter jurisdiction over Appellants’ pleaded claim seeking mandamus relief. The trial court possesses subject matter jurisdiction over Appellants’ claim for a writ of mandamus. That Appellants may, as Appellees argue, possess an adequate remedy at law and may therefore not be entitled to mandamus relief does not operate to deprive the trial court of subject matter jurisdiction over Appellants’ mandamus action. Any determination that Appellants may possess an adequate remedy by appeal would be a determination of the merits of Appellants’ claim for mandamus relief, not related to the trial court’s subject matter jurisdiction.
Id. (citations omitted). The Brennan court concluded that the district court did have subject-matter jurisdiction over the appellants’ mandamus claims, reversed the trial court’s order granting the appellees’ plea to the jurisdiction, and remanded the cause to the district court for further proceedings. See id. at 927-28.
Here, the trial court’s orders did not touch on the merits of the Hospitals’ mandamus claims; it did not grant or deny mandamus relief. Perhaps, one could contend, implied within the trial court’s orders is its conclusion that the Hospitals failed to show themselves entitled to mandamus relief, but that is not how the trial court expressly disposed of the case.
Whether the recoupment at issue here is properly deemed a “sanction” which may have entitled the Hospitals to further administrative appeal under former Sections 371.1667 and 371.1669 goes to the substantive “duty” element of the Hospitals’ mandamus claims. See Brennan,
Conclusion
Because the trial court lacked jurisdiction over the Hospitals’ claims relating to constitutional deprivations, judicial review, and declaratory relief, the trial court properly granted the THHSC’s plea to the jurisdiction. To the extent the trial court concluded that it lacked jurisdiction over the Hospitals’ requests for mandamus relief, it erred.
Accordingly, we reverse the portion of the trial court’s order granting the THHSC’s plea to the jurisdiction only as it relates to the Hospitals’ claims for mandamus relief and remand that portion of the cause to the trial court for further proceedings. We affirm the trial court’s order in all other respects. See Tex.R.App. P. 43.2(a), (d).
Notes
. As is relevant to this appeal, McAllen Hospitals, L.P. operates McAllen Medical Center, Edinburg Regional Medical Center, Edinburg Children’s Hospital, and McAllen Heart Hospital. Fort Duncan Medical Center, L.P. operates Fort Duncan Regional Medical Center.
. The Texas Administrative Code also outlines the THHSC and OIG’s duties in this regard by identifying the THHSC, through the OIG, as the "state agency responsible for investigating fraud and abuse in the Medicaid and other [Health and Human Services] programs. In addition, the Inspector General is responsible for the enforcement of state law relating to the provision of health and human services in Medicaid.” 1 Tex. Admin. Code § 371.1(c) (2010) (Tex. Health & Human Servs. Comm’n, Purpose and Scope).
. The current, amended version of this section is titled “Denials and Recoupments for Texas Medical Review Program (TMRP), Tax Equity and Fiscal Responsibility Act (TEFRA) Hospitals, and Facility-Specific Per Diem Methodology Reviews.”
. In correspondence, the THHSC has also identified this department as the Medical & Utilization Review (UR) Appeals Unit.
. As to three of the cases appealed, the THHSC’s UR/Medical Appeals Unit upheld the OIG UR Unit’s decision that the inpatient setting was not medically necessary either on a slightly different basis or with an additional observation. In making this determination in these three cases, the UR/Medical Appeals Unit stated as follows: “The medical record provided does not include the official laboratory results of diagnostic tests ordered by the physician. Because the documentation provided is incomplete and insufficient, the inpatient admission denial by the HHSC OIG UR unit is upheld.” We will refer to these three cases later in this opinion as the "insufficient documentation” cases.
. In a letter brief to the trial court, the Hospitals asserted that they had not alleged any ultra vires act, maintaining that their claims in this regard are not properly characterized as falling within the ultra vires exception. Consistent with that position, the Hospitals have not briefed any issue related to ultra vires on appeal. That said, we will not consider issues directly relating to the ultra vires exception. See generally City of El Paso v. Heinrich,
. The current, amended, version of this section is titled "Inpatient Utilization Review for Hospitals Reimbursed Under the Tax Equity and Fiscal Responsibility Act (TEFRA) Principles of Reimbursement, and Facility-Specific Per Diem Methodology Reviews.”
. To refresh, the Hospitals’ first issue asks this Court to determine "whether the trial court erred by finding that the recoupment of an overpayment by the THHSC Utilization Review Unit is not a sanction.” We do not see in the record where the trial court made this explicit finding. Again, the finding could arguably be implied if we were to read the order as disposing of the merits of the Hospitals’ requests for mandamus, but we do not read it thusly. Further, at the hearing held before the trial court on March 29, 2011, there was a great deal of debate concerning the competing constructions of the Texas Administrative Code provisions at play, and there was a great deal of argument concerning the trial court’s subject-matter jurisdiction over the Hospitals’ claims. As the Hospitals’ counsel aptly described it: "So we’re all tangled up, merits and jurisdiction.” Following that thorough hearing, the trial court made no pronouncements that would imply such a finding and, instead, took the case under advisement.