Albemarle Mental Health Center v. N.C. Department of Health & Human Services

582 S.E.2d 651, 159 N.C. App. 66, 2003 N.C. App. LEXIS 1422

• Court: Court of Appeals of North Carolina
• Decided: July 15, 2003
• Docket: COA02-635
• Status: Published

Opinions

TIMMONS-GOODSON, Judge.

The North Carolina Department of Health and Human Services, Division of Medical Assistance (“respondent”) appeals from the judgment of the trial court declaring a final agency decision by respondent to be null and void. For the reasons stated herein, we affirm the judgment of the trial court.

The pertinent substantive and procedural facts of the instant appeal are as follows: On 29 June 2001, Albemarle Mental Health Center Developmental Disabilities, Substance Abuse Services (“petitioner”) and N.C. Council of Community Mental Health, Developmental Disabilities and Substance Abuse Programs, Inc. (“petitioner-intervenor”) filed a joint petition for judicial review of a final agency decision issued by respondent 30 May 2001. The 30 May 2001 final agency decision rejected a recommended decision by an administrative law judge, who determined respondent had unlawfully and arbitrarily withheld Medicaid reimbursements to petitioner in 1998. The recommended decision by the administrative law judge concluded that petitioner was entitled to 1.5 million dollars from respondent as reimbursement for deficient Medicaid payments.

On 22 January 2002, the petition for judicial review of the final decision by respondent came before the trial court. After reviewing the procedural facts of the case, the trial court determined that respondent had failed to issue its decision within the ninety-day time limit required under section 150B-44 of the North Carolina General Statutes. Because respondent did not timely enter its decision, the trial court concluded that respondent adopted the decision of the administrative law judge as its final decision as a matter of law, and that the 30 May 2001 decision purporting to reject the recommended decision by the administrative law judge was therefore of no effect. Accordingly, the trial court entered judgment declaring the 30 May 2001 decision by respondent to be null and void. From the judgment of the trial court, respondent appeals.

Respondent asserts that the trial court erred in declaring the 30 May decision void, in that respondent properly extended the deadline for issuing its final decision. Respondent further contends that the administrative law judge exceeded his authority in issuing his recommended decision. For the reasons stated herein, we affirm the judgment of the trial court.

Respondent argues it complied with the statutory mandates for issuing a final decision under section 150B-44, and that the trial court erred in finding otherwise. During the time period relevant to the instant proceedings, section 150B-44 provided in pertinent part as follows:

Unreasonable delay on the part of any agency or administrative law judge in taking any required action shall be justification for any person whose rights, duties, or privileges are adversely affected by such delay to seek a court order compelling action by the agency or administrative law judge. An agency that is subject to Article 3 of this Chapter and is not a board or commission has 90 days from the day it receives the official record in a contested case from the Office of Administrative Hearings to make a final decision in the case. This time limit may be extended by the parties or, for good cause shown, by the agency for an additional period of up to 90 days.... If an agency subject to Article 3 of this Chapter has not made a final decision within these time limits, the agency is considered to have adopted the administrative law judge’s recommended decision as the agency’s final decision.

N.C. Gen. Stat. § 150B-44 (1999).¹ Respondent is an Article 3 agency and thereby subject to the mandates of section 150B-44. See N.C. Gen. Stat. § 150B-l(c) (2001). It received the official record of the contested case hearing in the instant case from the Office of Administrative Hearings on 22 January 2001. Thus, the final decision by respondent was due in ninety days, on 23 April 2001. By letter dated 12 April 2001, respondent notified the parties that “the time frame within which the Final Agency Decision will be made is hereby extended for an additional period of 60 days.” Respondent issued its final decision 30 May 2001. Respondent asserts that it properly extended the deadline for issuing its decision under the statutory mandates of section 150B-44. We disagree.

In interpreting section 150B-44, as with any statutory construction, the primary function of this Court is to “ensure that the purpose of the Legislature in enacting the law, sometimes referred to as legislative intent, is accomplished.” Comr. of Insurance v. Rate Bureau, 300 N.C. 381, 399, 269 S.E.2d 547, 561 (1980). To determine legislative intent, we examine the language and purpose of the statute. See id) Occaneechi Band of the Saponi Nation v. N.C. Comm’n of Indian Affairs, 145 N.C. App. 649, 653, 551 S.E.2d 535, 538, disc. rev. denied, 354 N.C. 365, 556 S.E.2d 575 (2001). It is moreover well established that where “ ‘the language of a statute is clear and unambiguous, there is no room for judicial construction and the courts must give the statute its plain and definite meaning, and are without power to interpolate, or superimpose, provisions and limitations not contained therein.’ ” State v. Green, 348 N.C. 588, 596, 502 S.E.2d 819, 824 (1998) (quoting In re Banks, 295 N.C. 236, 239, 244 S.E.2d 386, 388-89 (1978)), cert. denied, 525 U.S. 1111, 142 L. Ed. 2d 783 (1999).

The primary purpose of the North Carolina Administrative Procedure Act is to “provide procedural protection for persons aggrieved by an agency decision” and its provisions are “ ‘liberally construed... to preserve and effectuate such right.’ ” Holland Group v. N.C. Dept. of Administration, 130 N.C. App. 721, 725, 504 S.E.2d 300, 304 (1998) (quoting Empire Power Co. v. N.C. Dept. of E.H.N.R., 337 N.C. 569, 594, 447 S.E.2d 768, 783 (1994)). The specific purpose of section 150B-44 is to “guard those involved in the administrative process from the inconvenience and uncertainty of unreasonable delay.” Id. To that end, the statute requires a final agency decision to be issued within ninety days, and the failure of an agency to conduct its review and make a decision within the statutory time period is prima facie an unreasonable delay. See, e.g., N.C. Gen. Stat. § 150B-44; Occaneechi Band of the Saponi Nation, 145 N.C. App. at 655, 551 S.E.2d at 539; HCA Crossroads Residential Ctrs. v. N.C. Dept. of Human Res., 327 N.C. 573, 583-84, 398 S.E.2d 466, 473 (1990) (Whichard, J., dissenting). An extension of the ninety-day time period may occur only under two specific circumstances: (1) by agreement of the parties or (2) by the agency “for good cause shown.” N.C. Gen. Stat. § 150B-44; Occaneechi Band of the Saponi Nation, 145 N.C. App. at 653, 551 S.E.2d at 538. The parties in the instant case did not agree to extend the deadline. Thus, the extension could only occur “for good cause shown.” In its letter to the parties, respondent stated that it was “hereby extending]” the ninety-day time deadline. Respondent offered no grounds for its action or other “good cause” to support the extension. Respondent argues that the requirement of “good cause shown” in section 150B-44 necessitates only that good cause to extend a deadline be shown to the agency rather than by the agency. Respondent asserts that, as an agency, its actions are presumed to be reasonable and lawful, and that it is not required to articulate any grounds for extension of the deadline under section 150B-44. We are not so persuaded.

As respondent notes, “the law presumes that a public official or governing body will discharge its duty in a regular manner and act within its delegated authority.” City of Raleigh v. Riley, 64 N.C. App. 623, 636, 308 S.E.2d 464, 473 (1983). Further, under the North Carolina Administrative Procedure Act, respondent is prohibited from acting in an arbitrary or capricious manner. See N.C. Gen. Stat. § 150B-51(b) (2001). As such, respondent’s interpretation of section 150B-44 would render the words “for good cause shown” superfluous. See HCA Crossroads Residential Ctrs., 327 N.C. at 578, 398 S.E.2d at 470 (stating that “a statute must be construed, if possible, to give meaning and effect to all of its provisions”); cf. N.C. Gen. Stat. § 150B-4(a) (2001) (requiring an agency to issue a declaratory ruling “except when the agency for good cause finds issuance of a ruling undesirable”). Respondent argues that section 150B-44 requires it to have good cause to extend a deadline, yet such would be respondent’s duty regardless of the statutory language of section 150B-44. The more reasonable interpretation of section 150B-44 is that, where respondent wishes to extend the ninety-day deadline, there must exist good cause to do so and respondent must state the grounds demonstrating such good cause. Cf. Occaneechi Band of the Saponi Nation, 145 N.C. App. at 656, 551 S.E.2d at 540 (noting that the agency informed the parties that good cause existed to extend the statutory deadline because of the complexity of the case). Because respondent failed to articulate any grounds for its decision, much less “good cause,” the trial court did not err in concluding that respondent failed to properly extend the deadline. We note that, contrary to the views expressed in the dissent, our conclusion does not require an agency to seek judicial review of “good cause” before extending its deadline. Rather, an agency should merely articulate its grounds for extending the deadline to the parties. Whether or not these articulated grounds constitute “good cause” would then be one of the many aspects of an agency decision that may be reviewed by a trial court upon petition for judicial review. Respondent therefore did not issue its decision within the ninety-day deadline required under section 150B-44, and the recommended decision by the administrative law judge became the final decision in the case by operation of law. See N.C. Gen. Stat. § 150B-44; Occaneechi Band of the Saponi Nation, 145 N.C. App. at 655, 551 S.E.2d at 539; Holland Group, 130 N.C. App. at 729, 504 S.E.2d at 306. We overrule respondent’s first assignment of error.

By its second assignment of error, respondent argues that the administrative law judge exceeded his authority in issuing the recommended decision. The recommended decision determined that respondent had unlawfully deviated from the statutory methodology used to calculate Medicaid reimbursement in 1998, resulting in a reimbursement reduction of 1.5 million dollars to petitioner. In addition to ordering respondent to reimburse petitioner for the deficient Medicaid payments, the recommended decision states that “[a]ll future calculations for Medicaid reimbursement rates for ‘Y-Code’ reimbursement services should be based on the actual unit cost and weighted averages experienced by the petitioner.” Because the recommended decision mandates the manner in which future reimbursement rates are to be calculated, respondent argues that the administrative law judge exceeded his statutory authority. We have determined, however, that by failing to issue its decision within the statutorily-mandated time frame, respondent adopted the recommended decision as its own final decision by operation of law. The decision declaring future calculation methods for Medicaid reimbursement is now, therefore, the decision of the agency and not of the administrative law judge. Respondent’s assertion that the recommended decision exceeds the administrative law judge’s authority is thus moot, and we overrule this assignment of error.

For the reasons stated herein, we affirm the judgment of the trial court.

Affirmed.

Judge WYNN concurs. Judge LEVINSON dissents.

1 . Section 150B-44 has since been amended, shortening the applicable time period from ninety days to sixty days. The effective date of amendment, 1 January 2001, applies to cases arising after the instant case. See N.C. Sess. Laws 2000-190 § 14.