Indiana Family & Social Services Administration v. Legacy Healthcare, Inc.

756 N.E.2d 567, 2001 Ind. App. LEXIS 1755, 2001 WL 1191981
CourtIndiana Court of Appeals
DecidedOctober 10, 2001
Docket29A04-0103-CV-85
StatusPublished
Cited by8 cases

This text of 756 N.E.2d 567 (Indiana Family & Social Services Administration v. Legacy Healthcare, Inc.) is published on Counsel Stack Legal Research, covering Indiana Court of Appeals primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Indiana Family & Social Services Administration v. Legacy Healthcare, Inc., 756 N.E.2d 567, 2001 Ind. App. LEXIS 1755, 2001 WL 1191981 (Ind. Ct. App. 2001).

Opinion

OPINION

VAIDIK, Judge

Case Summary

The Indiana Family & Social Services Administration (FSSA) 1 appeals the trial court's stay of termination of Legacy Healthcare, Inc., d/b/a New Horizon Developmental Center's (New Horizon) 2 Medicaid funding. Because we find that the trial court lacked subject matter jurisdiction, we vacate the trial court's order and dismiss.

Facts and Procedural History 3

New Horizon operated an Intermediate Care Facility for the Mentally Retarded *569 (ICF/MR). Medicaid benefits funded the care of New Horizon residents. Indiana may ouly provide Medicaid benefits to those facilities that have been certified by the Indiana State Department of Health (the Department) to meet Medicaid health and safety rules. Once a facility has been certified, it may enter into a provider agreement with FSSA to participate in the Medicaid program. New Horizon was certified by the Department and had entered into a provider agreement with the FSSA to receive Medicaid funds to operate its facility.

On September 2, 1999, the Department sent a letter to New Horizon indicating that because New Horizon did not meet program standards New Horizon's certification should be canceled effective September 1, 1999. Specifically, the letter stated that:

[Clertification for participation in the Medicaid program as an Intermediate Care Facility for the Mentally Retarded should be canceled effective September 1, 1999. This notice will be forwarded to the Office of Medicaid Policy and Planning with a recommendation that they terminate your provider agreement.

Appellant's App. P. 311. In addition, the letter informed New Horizon that in order to preserve its rights for appeal it needed to file a request for review with the Department by September 19, 1999. Appellant's App. P. 312. New Horizon did not file a request for review by the Department regarding its certification decision.

The Department also sent a letter to the FSSA recommending that the FSSA terminate New Horizon's Medicaid provider agreement. On September 9, 1999, the FSSA sent New Horizon a letter in which the FSSA terminated New Horizon's provider agreement. New Horizon appealed the FSSA's termination of the provider agreement.

On January 29, 2000, the FSSA cut off Medicaid payments to New Horizon in keeping with its termination notice of September 9, 1999. On March 24, 2000, New Horizon petitioned the trial court to review the FSSA's termination of New Horizon's provider agreement. In response, the FSSA filed a brief stating that New Horizon had not appealed the Department's decertification decision and that as a result the FSSA had to follow the Department's decertification determination with termination of the provider agreement. The trial court denied New Horizon's petition to review the termination.

The FSSA filed a motion for summary judgment on May 26, 2000. The FSSA argued that it was entitled to judgment as a matter of law regarding the termination of New Horizon's provider agreement because there was no genuine issue of fact regarding whether New Horizon met the certification requirements for participation in the Medicaid program. On August 21, 2000, the Administrative Law Judge (ALJ) granted summary judgment in favor of the FSSA and held that once the Department recommends decertification of a facility, the FSSA must terminate the facility's provider agreement. In addition, the ALJ held that New Horizon's failure to appeal the Department's decertification precluded further review of the certification decision.

Initially, New Horizon petitioned the trial court for a stay of the termination on March 24, 2000. The trial court denied the petition. Again on September 7, 2000, New Horizon requested a stay of the termination from the trial court until it received a full evidentiary hearing.

On January 23, 2001, the trial court granted a stay of the September 9, 1999 termination until a full evidentiary hearing was granted to New Horizon. In part, the trial court stated that the Department had *570 no authority to decertify and that the FSSA was required to provide New Horizon with a hearing. When granting the stay, the trial court relied in part on its own prior decision in ISDH v. Legacy Healthcare, Inc., d/b/a New Horizon Dev. Ctr. (New Horizon I). 4 In New Horizon I, the Department challenged the trial court's holding that the Department lacked the authority to decertify ICFs/MR. In granting the stay in this case, the trial court provided the following conclusion which rested in part on conclusions from its own opinion in New Horizon I. In particular, the trial court stated:

The FSSA's argument that it can ignore the clear instruction of that regulation and foree New Horizon to appeal the [Department's] September 2, 1999 notice of canceling certification instead of the FSSA's September 9, 1999 termination of the provider agreement directly con-tradiets Conclusions of Law 10 and 11 of the July 19, 2000 decision of this Court in New Horizon I:
10. New Horizon is an intermediate care facility for the mentally retarded. 42 CFR. § 481.15l1(@)(@) allows an appeal by "an intermediate care facility for the mentally - retarded (ICF/MR) that is dissatisfied with a State's finding of noncompliance that has resulted in the denial, termination, or nonrenewal of its provider agreement.".... It is obvious that the regulation contemplates the appeal at the point of actual impact of the provider, i.e., when the provider's participation in the program is ended via termination of the provider agreement. That is the role of the FSSA, not [the Department]. A finding of noncompliance with the certification requirements by [the Department], standing alone, does not end the provider's participation in the program.
11. [The Department] suggests that New Horizon is confusing the definition of "participation" by not specifying whether the term refers to de-certification or termination of the provider agreement. But New Horizon's position is clear and unambiguous: [the Department] does not have regulatory authority to terminate New Horizon's participation in the Medicaid program and force New Horizon to appeal at that point. That is the holding of AP-M-162-98 and it is the intention of 42 C.F.R. § 4831.151(a)(2), calling for an appeal when [the Department] finding of noncompliance "has resulted in" termination of the provider agreement, which is the action that terminates the provider's participation.

Appellant's App. P. 19-20 (emphases in original). On appeal, this court reversed the trial court's holding in New Horizon I. We held that the Department has the authority to decertify ICFsz/MR in general and had the authority to decertify New Horizon in particular.

Meanwhile, on December 22, 2000, the FSSA entered final agency action and affirmed the ALJ's August 21, 2000 order.

Free access — add to your briefcase to read the full text and ask questions with AI

Related

Robin Marsh v. Nathan Marsh
Indiana Court of Appeals, 2025
Woodruff v. Indiana Family & Social Services Administration
964 N.E.2d 784 (Indiana Supreme Court, 2012)
Woodruff v. Indiana Family & Social Services Administration
947 N.E.2d 934 (Indiana Court of Appeals, 2011)
Legacy Healthcare, Inc. v. Barnes & Thornburg
837 N.E.2d 619 (Indiana Court of Appeals, 2005)
Indiana Family and Social Services Administration v. Walgreen Co.
769 N.E.2d 158 (Indiana Supreme Court, 2002)
Department of Labor Ex Rel. Commons v. Green Giant Co.
394 A.2d 753 (Superior Court of Delaware, 1978)

Cite This Page — Counsel Stack

Bluebook (online)
756 N.E.2d 567, 2001 Ind. App. LEXIS 1755, 2001 WL 1191981, Counsel Stack Legal Research, https://law.counselstack.com/opinion/indiana-family-social-services-administration-v-legacy-healthcare-inc-indctapp-2001.