In re Surveillance & Integrity Rev.

999 N.W.2d 843

In the MATTER OF the SURVEILLANCE AND INTEGRITY REVIEW (SIRS) Appeal by Nobility Home Health Care, Inc.

A21-1477

Supreme Court of Minnesota.

Filed: January 10, 2024

Syllabus by the Court

1. The meaning of "abuse" in Minnesota Statutes section 256B.064 (2022), includes the failure to maintain health service records as required bylaw and submitting claims for services for which underlying health service records are inadequate, even if the person did not seek to deceive the Department of Human Services. Accordingly, the portions of Minnesota Rule 9505.2165 (2021) defining such conduct as "abuse" do not conflict with the statute and such conduct may be grounds for sanctions under Minnesota Statutes section 256B.064, subdivision 1b, and monetary recovery under Minnesota Statutes section 256B.064, subdivision 1c.

2. Given the lack of analysis and inadequate record below, we decline to interpret or apply the phrase "improperly paid … as a result of" abuse contained in section 256B.064, subdivision 1c—which governs the grounds for monetary recovery—and we remand to the Department of Human Services to permit further evidence to be taken or additional findings to be made in accordance with the applicable law.

Court of Appeals

Ll. Rhyddid Watkins, Martin Hild, PA, Aurora, Colorado, for relator.

Keith Ellison, Attorney General, Drew D. Bredeson, Scott H. Ikeda, Assistant Attorneys General, Saint Paul, Minnesota, for respondent.

John A. Kvinge, Matthew W. Bergeron, Larkin Hoffman Daly & Lindgren Ltd., Minneapolis, Minnesota, for amicus curiae Minnesota First Provider Alliance.

OPINION

THISSEN, Justice.

This case addresses the sanctions and monetary recovery the Commissioner of the Department of Human Services (DHS) may collect from a Medicaid vendor for failure to maintain certain types of paperwork. Minnesota Statutes section 256B.064 (2022) provides that the Commissioner may impose sanctions on, and/or obtain monetary recovery from, a Medicaid vendor for (among other things) "fraud, theft, or abuse in connection with the provision of medical care to recipients of public assistance." Minn. Stat. § 256B.064, subds. 1a(a), 1c.¹ Abuse is not defined in the statute. In its corresponding administrative rules, however, DHS deems "[a]buse" to include "submitting repeated claims, or causing claims to be submitted, from which required information is missing or incorrect," "submitting repeated claims, or causing claims to be submitted, for health services which are not reimbursable under the programs," and "failing to develop and maintain health service records" in accordance with other DHS rules. Minn. R. 9505.2165, subp. 2.A (2021). The DHS rules regarding health service records must be obeyed as a condition of receiving payments through Medicaid. Minn. R. 9505.2175 (2021).

We conclude that the statutory definition of "abuse" includes the failure to maintain health service records as required by law and submitting claims for services for which underlying health service records are inadequate, even if the person did not engage in such conduct in an effort to deceive the Department of Human Services. And based on this interpretation of the statute, we find no conflict between the rule and the statute. We also hold, however, that DHS failed to explain why payments to Nobility were "improperly paid … as a result of" the abuse. Accordingly, we remand to DHS for further analysis of that issue.

FACTS

The appellant, Nobility Home Health Care, Inc. (Nobility), provides personal care assistant (PCA) services in Minnesota and receives reimbursement for services through Medical Assistance, the DHS Medicaid program. DHS is required to oversee Medicaid payments and monitor for overpayments. See 42 U.S.C. § 1396c (requiring that states comply with program requirements to receive federal funding). As part of its oversight of Medicaid, DHS has a Surveillance and Integrity Review Section (SIRS) that conducts audits and investigations into suspected noncompliance with program requirements.

DHS first began investigating Nobility after DHS learned that patients from another PCA agency—Preferred Home Choice Care, LLC (Preferred)—were encouraged to transfer to Nobility. At the time, Preferred was under criminal investigation and DHS suspected that Nobility was a ploy to continue Preferred’s business. DHS found no evidence that the transfer of clients from Preferred to Nobility—the justification for the inquiry into Nobility—was a ploy.

As part of the inquiry, however, DHS discovered some issues with the documentation prepared and maintained by Nobility which prompted further investigation (the General Investigation). Nobility cooperated with this investigation. As background, state statute requires PCA agencies to maintain certain documentation, including "time sheets for each personal care assistant" and a personal care plan for each recipient of care, which must be updated annually. Minn. Stat. § 256B.0659, subds. 7, 28(a)(4) (2022); see also Minn. R. 9505.2175, subps. 1, 2, 7 (setting forth health service records requirements for PCA providers). Minnesota Statutes section 256B.0659 (2022) requires that care plans include "start and end date[s] of the care plan" and a plan for how the recipient will use PCA services over the course of the year. Minn. Stat. § 256B.0659, subd. 7. Time sheets must include the "full name of personal care assistant and individual provider number," "signatures of recipient or the responsible party," and "arrival and departure times with a.m. or p.m. notations." Id., subd. 12(c)(1), (4), (5).

The General Investigation uncovered two categories of problems: problems with Nobility’s time sheets and problems with care plan forms. Some of the time sheets lacked a provider ID (a unique identifier for each PCA), some time sheets lacked a signature, and some time sheets had no a.m./p.m. designations. And the General Investigation determined that the care plans for recipients were incomplete and lacked needed information to guide appropriate client care.

While the General Investigation was ongoing, DHS received a complaint that a specific Nobility client, E.B., was not receiving proper care. DHS began a separate investigation into E.B.’s care (the E.B. Investigation) with which Nobility cooperated. Dakota County Adult Protection visited E.B.’s residence; her apartment smelled of cat urine and apparently had not been vacuumed in months. The record, however, also disclosed that E.B. claimed that she was receiving care. The DHS investigator reviewed time sheets relating to E.B.’s care and noted that several appeared to be photocopies of other time sheets because E.B.’s signature stamp appeared in the exact same place on all the documents. Several other time sheet errors were observed, including lack of identification numbers or a.m./p.m. designations, illegible time sheets, and lack of time sheets documenting reported services. The investigation disclosed that multiple PCAs reported hours even though only one PCA was authorized to provide care. In addition, one of E.B.’s PCAs submitted hours for E.B. at the same time she reported hours for another agency. Nobility also failed to create a new 2018 care plan for E.B. after her 2017 care plan expired, so the services that Nobility provided in 2018 were provided without a valid care plan.

At the conclusion of the investigations, DHS sent Nobility a notice seeking a fine and monetary recovery based on three different categories of conduct. For the deficiencies in care plans related to patients other than E.B., DHS imposed a $5,000 fine but did not seek monetary recovery for overpayment.² For time sheet deficiencies not pertaining to E.B., DHS sought a monetary recovery of $52,673.65, but no fine.³ For the time sheet errors and care plan deficiencies relating to E.B., DHS also sought monetary recovery of $273,035.38, but no fine.

Nobility promptly paid the $5,000 fine for care plan deficiencies not related to E.B., so that issue is not before us. In October of 2019, DHS amended the notice. In the amended notice, DHS sought monetary recovery of $57,283.38 for the time sheet errors relating to clients other than E.B. and $273,035.80 for the deficiencies in time sheets and care plans uncovered in the E.B. Investigation.

The administrative law judge (ALJ) held a hearing and heard testimony from a DHS investigator and from Nobility’s owner. The investigator testified to each of the grounds for overpayment and identified specific examples of time sheets and care plans lacking proper documentation. DHS’s attorney argued that these errors constituted "abuse" and thus DHS is entitled to an overpayment recovery. Nobility’s attorney argued to the ALJ that DHS could not seek an overpayment because the violations were all "paperwork errors" and the statute only permits a fine—not monetary recovery of an overpayment—for the first occurrence of paperwork errors.

The ALJ concluded that errors in statutorily required paperwork are "abuse" under the statute and recommended that DHS recover most of the overpayments sought. The Commissioner agreed with the recommendation and ultimately ordered that Nobility return nearly $330,000 to account for the overpayments related to E.B. ($271,505.08) and other clients ($57,-129.66).⁴

Nobility appealed the Commissioner’s order, arguing that (1) the Commissioner had no authority to recover overpayments for paperwork errors because the statute limits the sanction for first-time paperwork errors to a maximum $5,000 fine, and (2) DHS and the ALJ erred by concluding that the time sheet errors and documentation errors relating to E.B. were "abuse" under the statute. See In re SIRS by Nobility Home Health Care, Inc., No. A21-1477, 2022 WL 3711485, at *2 (Minn. App. Aug. 29, 2022). Nobility also argued that the Commissioner’s decision should be reversed because it was unsupported by substantial evidence and was arbitrary or capricious. Id. at *4–5, 4 n.2; see Mi...