Young v. JessonYoung v. Jesson
Aрpellant, a recipient of home- and community-based services under Minnesota’s elderly-waiver medical-assistance program pursuant to section 1915(c) of the Social Security Act, challenges the decision of respondent Minnesota Commissioner of Human Services affirming a decision by respondent Steele County Board of Commissioners to refuse to contract with appellant’s chosen provider for those services. Because we conclude that the commissioner erred by determining that the county had authority to restrict appellant’s free choice of providers by declining to contract with a provider otherwise qualified to render services to appellant, we reverse and remand for further proceedings.
FACTS
In 2007, the Steele County Board of Commissioners (county) contracted with Valleyview of Owatonna, LLC, (Valley-view), an assisted-living and memory-care facility, to purchase customized-living services under the Minnesota elderly-waiver program. This program is a home- and community-based-services program operating under a waiver to Minnesota’s medical-assistancе plan, as authorized by section 1915(c) of the Social Security Act.
Minnesota operates approved medical-assistance waiver programs under both sections 1915(b) and 1915(c) of the Social Security Act. See
Appellant Harold Young, who is 80 years old and has Alzheimer’s disease, was placed in the memory-care unit at Valley-view and began receiving customized-living services through the elderly-waiver program in June 2008. Less than two weeks after Young’s admission to Valleyview, however, Steele County Human Services informed Young’s daughter, who is now his guardian, that the county had voted to terminate its сontract with Valleyview and would no longer permit the use of elderly-waiver funds to cover services at Valley-view after June 30.
Appellant sought a hearing with the Minnesota Department of Human Services (DHS) pursuant to
For reasons not in the record, appellant later became ineligible for the managed-care plan. As a result, in December 2008, the county issued another notice, stating that it would deny appellant elderly-waiver services effective January 1, 2009, because appellant was no longer receiving care
At an evidentiary hearing before a human-services judge, appellant’s daughter testified thаt she wanted appellant to remain at Valleyview, which was providing appropriate care and was located close to her home and appellant’s physician. She testified that three of the five alternate facilities the county offered for appellant’s care were located outside of Steele County.
The Steele County social-services supervisor testified that, to her knowledge, Val-leyview was licensed by the Minnesota Department of Health (DOH) and appeared on the DHS website as a qualified prоvider of services for appellant. She testified that, although the DOH had notified the county about certain health and safety issues at Valleyview, she was not aware if those issues had adversely affected Valley-view’s license. She testified that one factor in the county’s decision to terminate Valleyview’s contract was the county’s financial liability in assuming case-management services for people from another county who would be using Valleyview’s services. She did not know about other possible reasons for the termination.
The Steele County humаn-services director testified that, prior to Valleyview’s opening, the county received a list of health-and-safety-related concerns, which had delayed the opening, but the county had nonetheless decided to contract with Valleyview for a period of time. He testified that DHS has delegated responsibility for oversight of the elderly-waiver program to the county; that even if a provider is a “qualified provider” as licensed by the department of health, the county had no duty to contract with that provider; that Valleyview no longer had a contract with the county; and that appellant’s free choice could be exercised by staying at a facility with which the county contracted.
The DHS aging-and-adult-serviees manager testified that Minnesota’s elderly-waiver application did not authorize the county to refuse to contract with a vendor who is otherwise qualified and meets the needs of a recipient. She agreed that appellant’s situation was a novel one and that it was ultimately the state’s responsibility to ensure that the elderly-waiver program was operated in compliance with federal law. She testified that DHS was not taking a position on whether appellant had free choice of providers.
The human-services judge issued findings of fact, conclusions of law, and an order, concluding that a qualified provider was a provider that had a contract with a lead agency, such as the county; that Val-leyview was not a qualified provider because it did not have a contract with the county; and that appellant has free choice of qualified providers because he could stay at any other facility with which thе county did have a contract. The commissioner issued a decision adopting the findings, conclusion, and order. Appellant appealed to the district court, which affirmed the commissioner’s determination, and this appeal follows.
I. Does the commissioner have authority to review the county’s action of declining to contract with Valleyview?
II. Is the commissioner’s decision that the county had the authority to decline to provide elderly-waiver services to appellant at Valleyview arbitrary and capricious or affected by legal error?
ANALYSIS
I
As a preliminary matter, the county contends that the commissioner lacked authority to review its decision to terminate its contract with Valleyview for elderly-waiver services because the county was not acting as a “county agency” in making its contracting decision. Whether a state agency’s decision exceeded its authority presents a question of law, which this court reviews de novo. St. Otto’s Home v. Minn. Dep’t of Human Servs.,
Minnesota lаw provides that the commissioner “may initiate a review of any action or decision of a county agency.”
We reject this argument. The Minnesota legislature has grantеd the commissioner specific powers to carry out designated duties to “[ajdminister and supervise all forms of public assistance provided for by state law”; to “monitor ... the performance of county agencies in the operation and administration of human services”; and to “enforce compliance with statutes, rules, federal laws, regulations, and policies governing welfare services.”
We also note that appellant has the right to a state-agency hearing on the change in his receipt of benefits. See
II
Appellant argues that the commissioner legally erred by determining that appel
Our review of this issue requires examination of the relevant federal statutory and regulatory framework and Minnesota law implementing that framework. Statutory and regulatory construction presents a legal issue, which we review de nоvo. Martin,
When interpreting a statute or rule, we first examine whether the language is clear or ambiguous on its face. Am. Fam. Ins. Group v. Schroedl,
The federal Medicaid program “is jointly funded with the states as a ‘cooperative endeavor in which the [fjederal [gjovernment provides financial assistance to participating [sjtates to aid them in furnishing health care to needy persons.’ ” In re Estate of Barg,
Home- and community-based waiver programs, such as Minnesota’s elderly-waiver program, allow persons who would otherwise be eligible to receive Medicaid benefits in a traditional institution to instead obtain care in their homes or in community-based residences. Ball v. Rodgers,
The free-choice provision of the federal Medicaid statute — which is at the heart of this dispute — requires that a state medical-assistance plan allow a Medicaid recipient to have “free choice” in obtaining services from a qualified provider who is willing to provide those services.
The parties dispute whether Valleyview is a “qualified provider” under the Social Security Act. That act states that a Medicaid recipient may obtain medical services and care from “any institution, agency, community pharmacy, or person, qualified to perform the service or services required.”
Regulatory standards
To review the commissioner’s decision, we turn first to the regulatory framework governing Medicaid waivered services. Federal regulations provide that, in general, a Medicaid recipient may obtain services from any “organization that is ... [qualified to furnish the services; and ... [willing to furnish them to that particular recipient.” 42 C.F.R. 431.51 (b) (i) — (ii) (2010). A state agency may, however, “[set] reasonable standards relating to the qualifications of providers.”
To address this argument, we must determine what “reasonable standard[s]” the state has set for the elderly-waiver program. A state must set out standards for providers when it requests federal approval of its waiver request.
Minnesota’s elderly-waiver application contains no language that allows a restriction of providers based on a county agency’s decision not to execute a contract with a certain provider. The elderly-waiver application provides that it is based on a quality framework, with a participant-based mission. Application for a § 1915(c) HOBS Waiver 1 (July 1, 2008). It states
We also note that federal approval of Minnesota’s elderly-waiver application is now conditioned on meeting standards specified in a designated elderly-waiver-service-provider contract template. State of Minnesota, DHS Bull. No. 9-25-03, DHS Issues Template for contracts with Elderly Waiver and Alternative Care providers 2 (Apr. 20, 2009); see Shagalow,
Taken together, the federal statutes and regulations, waiver application, and state bulletin indicate that a waiver recipient must be accorded a free choice of qualified providers. See Occhino v. Grover,
State statutes
Notwithstanding the absence of language in the waiver application authorizing the county to restrict providers by declining to contract with them, the county argues that the commissioner’s decision is supported by two Minnesota statutes:
The commissioner determined that Valleyview did not meet the standards of a qualified provider because it did not have a contract with the county based, in part, on the application of
Other subdivisions of
When subdivisions 3e and 3f are read in the context of the statute as a whole, it is apparent that those subdivisions refer only to the procedures which must be followed in contracting for customized-living services, not to the determination of which providers are qualified to furnish those services. See Schroedl,
The county also argues that
If the loсal agency in the county where the vendor is located declines to negotiate a contract with [a] vendor or fails to [timely] respond [to a request to purchase services],under paragraph (c), the inquiring agency is authorized to negotiate a contract and must notify the local agency that declined or failed to respond.
But subdivision 6(d) must be read in conjunction with subdivision 6(c), which addresses the situation in which a county seeks to negotiate with a vendor located in a different county. Subdivision 6(d) does not come into play until a local agency requests to purchase services from an out-of-county vendor under subdivision 6(c). It is not relevant to the present issue because Valleyview is located in Steele County. In addition, when read together, the language of subdivisions 6(d) and 6(c) indicates that a local agency’s decision to “decline[ ] to negotiate a cоntract with [a] vendor” refers to the decision “not [to] negotiate a contract with [that] vendor because of concerns related to clients’ health and safety.”
Here, the commissioner found that the county articulated health and safety concerns with respect to contracting with Valleyview for elderly-waiver services. But although the Steele County human-services director testified that health and safety concerns originally delayed Valley-view’s opening, and that it was one among several issues considered by the county in its initial contracting decision, the county has presented no evidence that these concerns were ongoing. In fact, the county did contract with Valleyview for a period of time. Therefore, substantial evidence does not support a finding that these concerns currently justify the county’s decision not to contraсt with Valleyview. The terms of the county’s previous contract with Valleyview required that, as a provider, Valleyview must continue to comply with relevant standards of licensure and certification to meet the standards of the elderly-waiver program, and there is no evidence that Valleyview does not currently comply with those requirements. Therefore, we conclude that the commissioner legally erred by determining that the county had authority to decline to contract with Valleyview as a qualified provider of appellant’s elderly-waiver services and that the county acted arbitrarily and capriciously by denying appellant his “free
DECISION
We conclude that the commissioner had authority to review the county’s authority to restrict an elderly-waiver client’s “free choice” of providers. But we also conclude that the commissioner legally erred by determining that the county had authority to restrict appellant’s “free choice” of qualified providers by terminating its contract with appellant’s chosen provider, absent evidence that this provider was not properly licensed or otherwise unqualified to provide appellant’s care. Because the commissioner’s decision was affected by legal error, we reverse and remand to the district court for an order requiring the county to execute a contract with appellant’s chosen qualified provider.
Reversed and remanded.
Notes
. The commissioner did not submit a brief and informed this court that it was an inac-live party to this appeal.
. In 2009, the Minnesota legislature amended portions of