{¶ 1} Plaintiffs-appellants, Ohio Academy of Nursing Homes, Willowood Care Center of Brunswick, Inc., Spring Meadows Care Center, Arcadia Acres, Inc., and Main Street Terrace Care Center, appeal from a judgment of the Franklin County Court of Common Pleas granting the motion of defendants-appellees, Ohio Department of Job and Family Services, Director Tom Hayes, and Deputy Director Barbara Edwards (collectively, “ODJFS”), to dismiss for lack of subject-matter jurisdiction and for failure to state a claim upon which relief can be granted. Because the trial court has jurisdiction to hear appellants’ action seeking a writ of mandamus, we reverse in part.
{¶ 2} During the relevant time frame, Medicaid, through ODJFS, employed a prospective cost-related system to reimburse Medicare nursing facilities (“NFs”) and intermediate-care facilities for the mentally retarded (“ICF-MRs”) for reasonable costs of services provided. Applying a specific statutory formula, ODJFS used the annual costs for services provided in the calendar year ending prior to the effective date of the then current reimbursement rate to calculate the new annual reimbursement rate.
{¶ 3} R.C. 5111.29(A) and the accompanying rules establish a process that allows a service provider to seek reconsideration of rates established under R.C. 5111.20 to 5111.33. Pursuant to Ohio Adm.Code 5101:3-3-241, the provider may request a rate adjustment “to account for the reasonable, additional costs that must be incurred by a facility or facilities to comply with the requirements of a government mandate.” A government mandate includes federal or state statutes, rules, or policies enacted or amended after January 1, 1992, orders issued by the state of Ohio fire authorities, and orders issued by the applicable local fire authorities. Ohio Adm.Code 5101:3-3-241(A)(l) through (4); R.C. 5111.27(F) (requiring department to adjust rates for increased costs incurred as a result of compliance with “federal or state statutes, rules, or policies enacted or amended after January 1, 1992, or with orders issued by state or local fire authorities”).
*811 {¶ 4} Premiums that service providers pay to the Ohio Bureau of Workers’ Compensation (“BWC”) are considered “reasonable costs” that Medicaid reimburses through ODJFS. For several years, BWC reduced employers’ premiums by approximately 75 percent due to a surplus in the state fund, but in 2003, BWC again required payment of 100 percent of the premiums. Because of inflated costs incurred from increased BWC premiums, appellants requested a corresponding rate adjustment pursuant to Ohio Adm.Code 5101:3-3-241 and R.C. 5111.27(F). In a letter dated August 25, 2003, ODJFS declined to consider appellants’ request because it found no “government mandate” enacted or amended after January 1,1992.
{¶ 5} In response, appellants instituted a class action on behalf of its 250 member facilities. In their second amended complaint, appellants alleged that ODJFS violated both state and federal laws by refusing to grant a rate adjustment, denied them procedural and substantive due process of law, and denied them equal protection of the laws. Appellants further alleged a breach-of-contract claim, a claim under Section 1983, Title 42, U.S.Code, and a claim for unjust enrichment. Appellants sought declaratory judgment and injunctive relief or, alternatively, a writ of mandamus. In response, ODJFS moved for dismissal on two grounds: (1) failure to state a claim for which relief may be granted under Civ.R. 12(B)(6), and (2) lack of subject-matter jurisdiction under Civ.R. 12(B)(1).
{¶ 6} The trial court initially concluded that it did not have subject-matter jurisdiction. Relying on this court’s opinion in
Morning View Care Ctr.-Fulton v. Ohio Dept. of Job & Family Servs.,
{¶ 7} Appellants appeal, assigning a single error:
The common pleas court erred in granting appellees/cross appellants’ motion to dismiss as the court of common pleas has subject matter jurisdiction and the complaint states a claim upon which relief can be granted.
{¶ 8} Appellate review of a judgment granting a motion to dismiss for lack of subject-matter jurisdiction is de novo.
Groza-Vance v. Vance,
{¶ 9} The issue of subject-matter jurisdiction involve, in part, a determination of the proper vehicle for seeking relief under the circumstances present in the case. The Ohio Supreme Court has held that when an agency’s decision is discretionary and, by statute, not subject to direct appeal, a writ of mandamus is the sole vehicle to challenge the decision.
State ex rel. Pipoly v. State Teachers Retirement Sys.,
{¶ 10} “Mandamus is a writ, issued in the name of the state to an inferior tribunal, a corporation, board, or person, commanding the performance of an act which the law specially enjoins as a duty resulting from an office, trust, or station.” R.C. 2731.01. A writ of mandamus will issue if the relator demonstrates: (1) a clear legal right to the relief sought, (2) that the agency has a clear legal duty to perform the requested actions, and (3) that relator has no adequate remedy at law.
State ex rel. Ohio Assn. of Pub. School Emp. v. Batavia Local School Dist. Bd. of Edn.
(2000),
{¶ 11} In this case, appellants seek additional reimbursement pursuant to R.C. 5111.27(F) and Ohio Adm.Code 5101:3-3-241. See
Morning View Care Ctr.-Fulton v. Ohio Dept. of Human Servs.,
{¶ 12} Appellants, however, maintain that a request for declaratory judgment or an injunction is proper because a writ of mandamus will never fully redress injury caused by an administrative agency’s decision. In support of their argument, appellants rely on
Ohio Academy of Nursing Homes, Inc. v. Barry
(1990),
{¶ 13} Appellants’ reliance is misplaced. The statutes make clear that the reconsideration process is separate and distinct from that used to determine the reimbursement rate for the calendar year. The “reconsideration” process is subject to ODJFS’s discretion and is, by statute, not subject to appeal. This court specifically has held that a declaratory judgment action is not an appropriate vehicle to review an agency’s decision that is discretionary and not subject to direct appeal.
State ex rel. Swartzlander v. State Teachers Retirement Bd.
(1996),
{¶ 14} Because a writ of mandamus is the only proper vehicle to challenge a discretionary agency decision, appellants’ claims for declaratory and injunctive relief fail. Moreover, given that mandamus is appellants’ avenue for relief, their mandamus action must be brought in the courts of common pleas. Pursuant to R.C. 2731.02, the Court of Claims expressly lacks subject matter jurisdiction to consider writs of mandamus. See R.C. 2731.02 (stating that writs of mandamus “may be allowed by the supreme court, the court of appeals, or the court of common pleas”).
{¶ 15} ODJFS nonetheless argues, and the trial court found, that based on
Morning View II,
{¶ 16} In this case, appellants’ complaint seeks a specific remedy, an order by the court directing ODJFS to recalculate its reimbursement rate and comply with law. To hold that the court lacks jurisdiction because appellants’ request for a writ of mandamus is a request for legal damages would in effect deny appellants any remedy to challenge ODJFS’s exercise of its discretion. Specifically, mandamus, the only way to review a discretionary agency decision not subject to appeal, cannot be brought in the Court of Claims, but if the mandamus action is deemed to seek legal damages, the action cannot be brought in the common pleas court. Because appellants’ mandamus action seeks a specific order directing ODJFS to perform a legal duty, the common pleas court has subject-matter jurisdiction.
{¶ 17} Although jurisdiction is proper in the court of common pleas, appellants’ claim for mandamus nonetheless fails under Civ.R. 12(B)(6). When reviewing a motion pursuant to Civ.R. 12(B)(6) for failure to state a claim upon which relief may be granted, an appellate court must accept the material allegations of the complaint as true and make all reasonable inferences in favor of the plaintiff.
Keller,
supra,
{¶ 18} Appellants requested a writ of mandamus pursuant to R.C. Chapter 2731, “directing and ordering the Defendants to comply with the pertinent provisions of R.C. Chapter 5111 and [directing that] the rates be recalculated and paid in an amount and manner in compliance with such laws.” The trial court found no clear legal right to the requested mandamus relief because ODJFS’s decision to grant or deny a rate adjustment is discretionary. While the trial court’s statement is accurate to a point, ODJFS has yet to exercise its discretion. The statute and rules provide for a two-step process. Initially, ODJFS must determine whether a post-1992 government mandate, the necessary predicate to an exercise of its rate-adjustment discretion, exists. If so, then ODJFS can exercise its discretion to determine whether a rate adjustment is appropriate.
{¶ 19} At this point, ODJFS has refused to exercise its discretion concerning appellants’ request for a rate adjustment, concluding that no post-1992 government mandate exists. What appellants must seek, in the first instance, is a writ of mandamus ordering ODJFS to exercise its discretion. In that proceeding, the court will determine whether the necessary predicate to ODJFS’s
*815
exercise of discretion exists. If it does, the court will issue the writ to compel ODJFS to exercise its discretion and determine whether appellants are entitled to a rate adjustment. Such a writ would not, however, award the relief that appellants sought below — a calculation and award of money damages; and if the necessary predicate is lacking, the court will deny the writ altogether. To the extent that an agency’s decision is based on a construction of the law, a common pleas court must undertake a de novo review.
Ohio Historical Society v. State Emp. Relations Bd.
(1993),
{¶ 20} In any event, ODJFS must first exercise the discretion vested in it by virtue of the applicable statute and rules, and a complaint seeking a writ of mandamus is the proper vehicle to determine whether BWC’s action constitutes a “government mandate” and, therefore, requires the exercise of ODJFS’s discretion relating to rate adjustment. In that context, appellants’ claim for a writ of mandamus, as pleaded, does not state a claim, because it skips the first step and seeks to control ODJFS’s discretion that to date has not been exercised.
{¶ 21} Because the trial court concluded that it lacked subject-matter jurisdiction, it did not consider allowing appellants to amend their complaint yet another time to state a valid claim in mandamus in the common pleas court. Given the determinations of this opinion and the procedure to be followed, appellants, if they wish to pursue their claim, must either amend their complaint to request a writ of mandamus ordering ODJFS to exercise its discretion or file a new complaint seeking appropriate mandamus relief. Moreover, because ODJFS has not yet exercised its discretion, appellants’ additional contentions are premature. Lastly, because appellants’ claims for breach of contract and unjust enrichment, as well as their constitutional claims and their claims under Section 1983 are all efforts to seek readjustment of the reimbursement rate, they are subsumed into appellants’ mandamus action, the appropriate vehicle for addressing that issue. Accordingly, appellants’ assignment of error is sustained in part and overruled in part.
{¶ 22} Having sustained in part and overruled in part appellants’ single assignment of error, we affirm in part and reverse in part the judgment of the trial court, and we remand this matter to the trial court to allow appellants the opportunity to amend their complaint and proceed in. accordance with this opinion. Moreover, because the trial court has jurisdiction over appellants’ mandamus claim, it had no cause to transfer appellants’ complaint to the Court of Claims, rendering moot ODJFS’s cross-appeal.
Judgment affirmed in part and reversed in part, and cause remanded.