Peer Assocs. v. Dep't of Human Servs.

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Peer Associates LLC, Petitioner v. Department of Human Services, Respondent

No. 394 C.D. 2021

Commonwealth Court of Pennsylvania

June 16, 2023

OPINION NOT REPORTED

Argued: March 9, 2022

BEFORE: HONORABLE RENÉE COHN JUBELIRER, President Judge HONORABLE PATRICIA A. McCULLOUGH, Judge HONORABLE ANNE E. COVEY, Judge HONORABLE MICHAEL H. WOJCIK, Judge HONORABLE ELLEN CEISLER, Judge HONORABLE LORI A. DUMAS, Judge HONORABLE STACY WALLACE, Judge

MEMORANDUM OPINION

PATRICIA A. MCCULLOUGH, JUDGE.

Peer Associates LLC (Petitioner) petitions for review of the April 2, 2021 final administrative adjudication of the Department of Human Services (Department), Bureau of Hearings and Appeals (BHA), dismissing for lack of jurisdiction Petitioner's appeal from a local Behavioral Health Managed Care Organization's (BH-MCO) decision to deny Petitioner's request to be an In-Network Provider in its provider network. Petitioner also seeks summary relief and judgment pursuant to Pennsylvania Rule of Appellate Procedure (Pa. R.A.P.) 1532(b).^[1]

The question before us concerns whether a managed care plan's individualized decision not to add a licensed peer support services provider to its provider network constitutes a "decision of the Department" for purposes of Section 1102(a) of the Act of December 3, 2002, P.L. 1147 (Act 142), which provides as a general rule:

A provider that is aggrieved by a decision of the [D]epartment regarding the program may request a hearing before the [BHA] in accordance with this chapter.

67 Pa. C.S. § 1102(a).

Here, the Department determined that BH-MCO's decision to deny Petitioner's request to be an In-Network Provider was not a "decision of the Department," and, therefore, BHA lacked jurisdiction to hear Petitioner's purported appeal from said decision.

I. Factual and Procedural Background

The Medical Assistance (MA) Program is organized under Title XIX of the federal Social Security Act and under the Pennsylvania Human Services Code^[2] to provide payment for medical services to persons eligible for MA. 42 U.S.C. §§ 1396-1-1396w-6; Sections 201, 441.1-449.2 of the Human Services Code, 62 P.S. §§ 201, 441-449.2. One of the covered benefits under the MA Program is behavioral health services. 42 U.S.C. § 1396d(a); 42 CFR § 440.130. Pennsylvania's MA program's mandatory behavioral health managed care delivery system is known as the HealthChoices Behavioral Health Program (HealthChoices BH Program).^[3]

Petitioner is a licensed peer support provider with a certificate of compliance issued by the Department^[4] to provide peer support services from its facility located in West Chester, Chester County, Pennsylvania. (Reproduced Record (R.R.) at 54a.) Petitioner is enrolled in the MA Program, which makes it eligible to receive payment for services rendered to MA beneficiaries. To receive payment for MA services, however, Petitioner must contract with a BH-MCO.

Effective January 1, 2020, the Department, through the Office of Mental Health and Substance Abuse Services, entered into an agreement with the County of Chester (Chester County) to administer the HealthChoices BH Program (HealthChoices Agreement).^[5] The HealthChoices Agreement incorporated by reference the "HealthChoices Behavioral Health Program, Program Standards and Requirements" (PSR), which was issued by the Department's Office of Mental Health and Substance Abuse Services and provides the standards and requirements of the HealthChoices BH Program.

The HealthChoices Agreement authorized Chester County, as the Department's "Primary Contractor," to contract with a BH-MCO (as a subcontractor) to provide the behavioral health services required under the HealthChoices Agreement. Pursuant to the HealthChoices Agreement, Chester County subcontracted with a nonprofit behavioral health managed care organization, Community Care Behavioral Health Organization (CCBH), as the County's BH-MCO subcontractor to provide behavioral health services, including the development of a network of peer support providers (Provider Network). CCBH, in turn, contracts with behavioral healthcare professionals (providers) to provide care for its members with behavioral disabilities and pursuant to these contracts, CCBH agrees to pay the providers negotiated rates for medical services rendered to MA recipients. The HealthChoices Agreement does not require CCBH to enter into contracts with any particular healthcare providers. It does require Chester County and CCBH to demonstrate to the Department that they created and maintained the network with "[s]ufficient Provider capacity and expertise for all covered services, for timely implementation of services, and for reasonable choice by Members of a Provider(s) within each level of care." See PSR, § II-5(D)(1)(a).

On April 10 and 11, 2020, Petitioner submitted a request to CCBH to participate as a Network Provider^[6] in CCBH's Chester County network of peer support providers.^[7] (R.R. at 67a-68a.) After several procedural steps, on May 11, 2020, CCBH sent a letter to Petitioner denying its request to participate as a Network Provider on the basis that "the proposed expansion [of peer support services] is not indicated as a network need in the Chester network," and "there is sufficient access to peer support services in Chester County." (R.R. at 71a.)^[8] The May 11, 2020 denial letter informed Petitioner of its right to request reconsideration, and upon review of Petitioner's subsequent request for reconsideration, CCBH maintained its position that there was sufficient access to peer support services in Chester County. Id. at 76a.

On August 7, 2020, Petitioner initiated a provider appeal to the BHA by filing a request for hearing pursuant to 55 Pa. Code § 41.31(a).^[9] Among other things, Petitioner asserted that it had satisfied all lawful requirements to enroll as a Network Provider of peer support services in the MA HealthChoices BH Program in Chester County and that the Department, acting through CCBH, unlawfully denied its enrollment request based on an asserted lack of need for peer support services.

On November 2, 2020, the Department filed a motion to dismiss Petitioner's appeal for "lack of jurisdiction" on the grounds that CCBH's denial of Petitioner's request was not an "agency action" under 55 Pa. Code § 41.31(a), and further, Petitioner was "not aggrieved" by the denial. (R.R. at 79a-82a.) Petitioner filed a motion in opposition to the Department's motion to dismiss, and a motion for summary judgment, asserting that there was no genuine issue of fact that it had satisfied all lawful regulatory prerequisites to enroll as a Network Provider in the MA HealthChoices BH Program.

On March 1, 2021, a BHA Administrative Law Judge (ALJ) issued an order and findings denying the Department's motion to dismiss and ruling that BHA had jurisdiction over Petitioner's appeal. (R.R. at 175a-79a.) The ALJ determined that CCBH's denial of Petitioner's Network Provider request constituted an "agency action" and that Petitioner was aggrieved by the decision. Id. The ALJ reasoned that the Department is the sole agency in the Commonwealth with authority to administer the MA Program; that in denying Petitioner's request, CCBH was acting as a contractor or subcontractor of the Department in administering the HealthChoices BH Program on behalf of the Department; and that the Department retained oversight over CCBH, specifically regarding the sufficiency and capacity of providers for covered services. Id. The ALJ further concluded that Petitioner was aggrieved by the denial of its Network Provider enrollment request because the Department licensed and enrolled Petitioner to be a MA provider of peer support services to MA members and denial of the request limited Petitioner's access to MA members and MA payments for services rendered. Id.

On March 11, 2021, the Department filed a motion for reconsideration, requesting that the Department's Secretary reconsider and reverse the BHA's March 11, 2021 order. Petitioner filed a brief in opposition thereto on March 23, 2021. On March 25, 2021, the Secretary issued an order with no findings granting the Department's motion for reconsideration, reversing the March 11, 2021 Order "as BHA does not have jurisdiction in this matter," and remanding to BHA to issue an "appropriate final order." (Secretary's March 25, 2021 Order.)

In accord with the Secretary's March 25, 2021 Order, the ALJ entered an order on April 2, 2021, dismissing Petitioner's appeal for lack of jurisdiction, without ruling on Petitioner's pending motion for summary judgment. On that same date, BHA entered a final administrative order affirming the ALJ's dismissal of the appeal.

Petitioner thereafter filed this petition for review in this Court, raising two issues: (1) whether the BHA has jurisdiction over a BH-MCO's decision to deny the MA provider's request to enroll as a Network Provider in the HealthChoices BH Program; and (2) whether Petitioner is entitled to summary relief and judgment as a matter of law under Pa. R.A.P. 1532(b).^[10]

II. Discussion

BHA is the Department's administrative tribunal. The General Assembly has limited BHA's jurisdiction to appeals of "decisions of the Department." Section 1102(a) of Act 142 provides:

A provider that is aggrieved by a decision of the [D]epartment regarding the [MA] [P]rogram may request a hearing before the [BHA] in accordance with this chapter.

67 Pa. C.S. § 1102(a) (emphasis added).

A "hearing" before the BHA is defined in Act 142 as:

A proceeding commenced in accordance with this chapter by a provider concerning an adjudication of the department relating to the administration of the [MA] [P]rogram. The term includes an action relating to a provider's

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