Tran v. State

303 Neb. 1

926 N.W.2d 641

Ann TRAN, appellant,

v.STATE of Nebraska and Nebraska Department of Health and Human Services, Division of Medicaid and Long-Term Care, appellees.

No. S-17-1303.

Supreme Court of Nebraska.

Filed May 3, 2019.

Julie A. Jorgensen, of Morrow, Willnauer & Church, L.L.C., Omaha, for appellant.

Douglas J. Peterson, Attorney General, and Ryan C. Gilbride, Lincoln, for appellees.

Heavican, C.J., Miller -Lerman, Cassel, Stacy, Funke, Papik, and Freudenberg, JJ.

Funke, J.Ann Tran appeals the order of the district court for Lancaster County affirming the decision of the Nebraska Department of Health and Human Services (DHHS) to terminate her status as a Medicaid service provider. We affirm.

BACKGROUND

Tran immigrated to the United States from Vietnam in 2002. In 2015 and 2016, Tran provided personal assistance services (PAS) to Nebraska Medicaid clients. Tran fulfilled a need for service providers for elderly Vietnamese individuals, especially due to her ability to speak Vietnamese.

On October 7, 2016, DHHS issued a letter to Tran indicating that DHHS was conducting a review of Tran’s claims for payment due to overlapping services and that her payments under the Nebraska Medical Assistance Program, also known as Medicaid, had been suspended pending the outcome of the review. The letter stated that the review would be performed "to ensure that funds are only spent on medically necessary and appropriate services." As part of the review, DHHS asked Tran to submit documents, including service needs assessments and authorizations for each client, monthly or weekly work logs, and required billing forms. DHHS advised Tran to conduct a self-audit on all services she provided from May 2015 through October 7, 2016.

At the conclusion of its investigation, DHHS determined that Tran had overlapped services between clients and had failed to provide DHHS documentation of her services. Based on these failures to adhere to the standards for participation in Medicaid, DHHS terminated Tran’s provider agreements for good cause. On November 23, 2016, DHHS issued a letter to Tran informing her of her permanent exclusion from the Medicaid program, effective immediately.

Tran timely appealed to DHHS. In her appeal request, Tran admitted she may have overlapped services because of emergency situations. She indicated that her work schedule required flexibility in order to accommodate the special needs of her clientele. Tran further admitted that she did not retain copies of her weekly timesheets. Tran apologized and said that the audit was a learning experience for her.

An administrative hearing was held on March 15, 2017, after which the DHHS director of the Division of Medicaid and Long-Term Care (Director) issued a written order affirming DHHS’ action. The Director found that Tran "billed for overlapping services and when requested to present documents to support billing admitted that she does not keep documentation." The Director found that Tran’s actions were contrary to the Medicaid regulations and that DHHS’ action was proper. Tran timely filed a petition for review in district court pursuant to the Administrative Procedure Act (APA), Neb. Rev. Stat. §§ 84-901 to 84-920 (Reissue 2014 & Cum. Supp. 2016).

On November 28, 2017, the district court entered an order affirming DHHS’ decision to terminate Tran as a Medicaid service provider. The court found that DHHS’ decision was supported by the evidence and applicable authority. The court rejected Tran’s argument that she was never informed that she was required to retain records of the services she provided. The court found that Tran’s (1) presentment of false claims for payment, (2) failure to make available to DHHS her records of services, and (3) breach of the terms of her provider agreements each constituted grounds for sanctions, and that the sanction imposed of permanent exclusion from the Medicaid program was within the Director’s discretion. Tran timely appealed from the adverse decision of the district court. We moved the appeal to our docket pursuant to our statutory authority to regulate the caseloads of the appellate courts of this State.¹

ASSIGNMENTS OF ERROR

Tran assigns, restated and consolidated, that the district court erred in (1) finding that Tran billed for overlapping services and (2) affirming DHHS’ excessive sanction of permanent exclusion from the Medicaid program.

STANDARD OF REVIEW

A judgment or final order rendered by a district court in a judicial review pursuant to the APA may be reversed, vacated, or modified by an appellate court for errors appearing on the record.² When reviewing an order of a district court under the APA for errors appearing on the record, the inquiry is whether the decision conforms to the law, is supported by competent evidence, and is neither arbitrary, capricious, nor unreasonable.³ An appellate court, in reviewing a district court’s judgment for errors appearing on the record, will not substitute its factual findings for those of the district court where competent evidence supports those findings.⁴

ANALYSIS

Tran argues on appeal that (1) the court’s finding that Tran billed for overlapping services is not based on competent evidence and (2) DHHS’ sanction to permanently exclude Tran from the Medicaid program is arbitrary and capricious.

Agency regulations properly adopted and filed with the Secretary of State of Nebraska have the effect of statutory law.⁵ Statutory language is to be given its plain and ordinary meaning, and we will not resort to interpretation to ascertain the meaning of statutory words which are plain, direct, and unambiguous.⁶

Medicaid is administered by DHHS.⁷ DHHS is required by state and federal law to review activities related to the kind, amount, and frequency of Medicaid services billed to ensure that funds are spent only for medically necessary and appropriate services.⁸ Medicaid covers PAS under the program guidelines and limitations.⁹ Medicaid PAS are typically provided in a client’s home.¹⁰ These services include, for example, providing assistance with hygiene, toileting, mobility, nutrition, and medications.¹¹

To be eligible to participate in Medicaid, each provider must have an approved service provider agreement (SPA) with DHHS.¹² Each PAS provider must adhere to the provider standards listed in the SPA.¹³ DHHS may terminate a provider’s SPA for failing to meet the conditions of the agreement.¹⁴ By signing the SPA, a provider agrees to:

1. Fully meet standards established by the federal Department of Health and Human Services, and any applicable state and federal laws governing the provision of their services;

2. Provide services according to the regulations and procedures of [DHHS].

....

6. Submit claims which are true, accurate, and complete; [and]

7. Maintain records for all services provided for which a claim has been made, and furnish, on request, the records to [DHHS].¹⁵

On July 8, 2015, Tran signed an SPA with DHHS. In doing so, Tran agreed to comply with applicable DHHS regulations, policies, and procedures. Tran assured that she would document and retain records "to fully disclose the extent of the services provided to support and document all claims, for a minimum period of six years," and allow "[state] offices responsible for program administration or audit to review services records." Tran executed an addendum to the agreement in which she agreed to provide PAS for Medicaid recipients and assured that she would "bill only for services which are authorized and actually provided." On July 17, 2016, Tran electronically signed and submitted a new SPA, in which she agreed to adhere to all conditions of the Nebraska Medicaid regulations and acknowledged that she may be terminated from the program if any of the conditions were violated. From May 2015 through October 2016, Tran provided PAS to Medicaid clients pursuant to the DHHS-approved agreements and submitted certified timesheets in support of claims for payment.

COMPETENT EVIDENCE OF OVERLAPPING SERVICES

Tran argues the court’s determination that she billed for overlapping services is not supported by the record. She claims that she provided her clients services for the full number of hours that were authorized. She argues that DHHS initiated the audit based on inaccurate information and that DHHS failed to account for its "mistaken belief" prior to terminating Tran as a Medicaid service provider.¹⁶

The administrative record established that DHHS’ investigation of Tran began based on a concern that Tran had overlapped her Medicaid service hours with other employment. Tran worked as a substitute teacher at Lincoln Public Schools (LPS) on an on-call basis. On September 30, 2016, DHHS’ program integrity unit received a fraud referral concerning Tran’s billing practices. The record showed that, for example, Tran submitted claims to DHHS for providing PAS to Medicaid clients on September 24, 2015, from 8 a.m. to noon and 12:30 to 3:30 p.m. Yet, Tran’s payroll information at LPS showed that she worked on September 24 from 8:15 a.m. to 3:45 p.m. DHHS submitted audit documents into the record which identified 41 instances, from September 2015 through September 2016, in which Tran overlapped Medicaid service hours with hours worked at LPS.

Upon learning of DHHS’ investigation, Tran contacted DHHS’ program integrity investigator to inform her that LPS’ payroll information did not accurately reflect the hours that Tran had actually worked at LPS. Prior to the hearing, a human resources official for LPS submitted an affidavit informing DHHS of LPS’ payroll practices. The official explained that "[w]hen a substitute works 3.75 hours or more it is reflected as a full day on payroll. The time entries displayed on the payroll summaries for our substitutes are therefore not necessarily accurate as to the employee’s actual hourly schedule." In addition, a substitute at LPS receives a full day of payment even if the need for the substitute is canceled, and...