Missouri Department of Social Services, Division of Medical Services v. NME Hospital, Inc.

11 S.W.3d 776, 1999 Mo. App. LEXIS 2457
CourtMissouri Court of Appeals
DecidedDecember 28, 1999
DocketNos. WD 56901 to WD 56911 and WD 57007
StatusPublished
Cited by3 cases

This text of 11 S.W.3d 776 (Missouri Department of Social Services, Division of Medical Services v. NME Hospital, Inc.) is published on Counsel Stack Legal Research, covering Missouri Court of Appeals primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Missouri Department of Social Services, Division of Medical Services v. NME Hospital, Inc., 11 S.W.3d 776, 1999 Mo. App. LEXIS 2457 (Mo. Ct. App. 1999).

Opinion

ULRICH, Judge.

NME Hospital, Inc. d/b/a Lutheran Medical Center and eleven other hospitals 1 (Hospitals) appeal the judgment of the circuit court reversing the order of the Administrative Hearing Commission (AHC) finding that Hospitals were entitled to Medicaid reimbursements of over $30,-000,000 after the invalidation of a cap imposed by the Department of Social Services, Division of Medical Services (DMS) on reimbursement rates for certain inpatient psychiatric services. In reversing the AHC’s order, the circuit court found that the AHC lacked subject matter jurisdiction to hear Hospitals’ complaints. The judgment of the circuit court is affirmed.

DMS is the state agency responsible for administering the Medicaid program in the State of Missouri. Hospitals owned and operated duly licensed and accredited hospitals that provided inpatient psychiatric services for which reimbursement was provided under Missouri’s Medicaid plan. Prior to January 1, 1990, health care providers within the Missouri Medicaid program received reimbursements from DMS for such services based on a per diem rate. In 1990, DMS adopted a regulation, 13 CSR 70-15.010(15), which placed a ceiling or cap on the per diem reimbursement rates for certain inpatient psychiatric services.

In 1992 and 1993, three hospitals, in three separate cases, challenged the validity of the psychiatric reimbursement cap. This court, in Missouri Dep’t of Soc. Servs., Div. of Medical Servs. v. Great Plains Hosp., Inc., 930 S.W.2d 429, 437 (Mo.App. W.D.1996), found that the cap was invalid based on DMS’s failure to meet the procedural requirements of the Boren Amendment2 in placing the cap on per diem psychiatric reimbursements. The court then found that the hospital was entitled to be reimbursed pursuant to the last validly enacted Medicaid payment plan.3 Id. at 438. Based on the holding in [779]*779Great Plains, DMS withdrew the invalid regulation on October 1,1996.

Beginning on October 29, 1996, Hospitals filed claims with DMS demanding payment for the difference between the amounts Hospitals would have received without the cap and the amount they actually received for inpatient psychiatric services provided from 1990 through 1995, plus interest. These claims were denied by DMS. Hospitals also filed their complaints in the instant action before the AHC beginning on October 29, 1996, asserting entitlement to additional reimbursements from DMS based on the Great Plains decision. Thereafter, Hospitals filed motions for summary determination claiming that no factual, only legal, disputes existed. DMS filed its cross motions for summary determination agreeing that the cases involved only legal issues and arguing that Hospitals were not entitled to additional reimbursements under Great Plains because the AHC lacked subject matter jurisdiction to hear the complaints and Hospitals’ complaints were barred by the doctrine of sovereign immunity and the statute of limitations.

The AHC issued decisions in favor of Hospitals on May 12, 1998, and thereafter. Although the AHC found that it did not have subject matter jurisdiction over Hospitals’ claims under section 208.156.2,4 it found that jurisdiction was conferred under section 208.156.4. The AHC also found that DMS waived its sovereign immunity and that no statute of limitations applied to limit recovery. It concluded that under the decision in Great Plains and the two companion cases, Hospitals were entitled to reimbursements of over $30,000,000 withheld by imposition of the invalid cap from 1990 through 1995.

DMS filed its petitions for judicial review on June 4, 1998, in the circuit court. Hospitals filed cross petitions for judicial review alleging that the AHC failed to grant interest on the liquidated amount for the 13 month period during which Hospitals’ motions for summary determination were under consideration. The cases were consolidated, and the circuit court reversed the AHC decisions finding that the AHC lacked subject matter jurisdiction to hear Hospitals’ complaints. This appeal followed.

In an administrative review case, an appellate court will review the decision of the AHC and not the judgment of the circuit court. Psychcare Management, Inc. v. Department of Soc. Servs., Div. of Medical Servs., 980 S.W.2d 311, 312 (Mo. banc 1998). An appellate court is generally limited to determining whether the AHC’s decision is supported by substantial and competent evidence upon the whole record; whether the decision is arbitrary, capricious, or unreasonable; or whether the AHC abused its discretion. Id. The court may not determine the weight of the evidence or substitute its discretion for that of the administrative body. Id. Questions of law, however, are matters for the independent judgment of the court. Id.

The issue of the AHC’s subject matter jurisdiction in this case is disposi-tive, and the other issues raised are not addressed. Hospitals claim that the AHC had subject matter jurisdiction to hear and decide the complaints based on sections 208.156.2 and 208.156.4. The AHC is a creature of statute and “has only such jurisdiction or authority as may be granted by the legislature.” Livingston Manor, Inc. v. Department of Soc. Sews., Div. of Family Sews., 809 S.W.2d 153, 156 (Mo.App. W.D.1991). If the AHC lacks statu[780]*780tory power to consider a matter, it is without subject matter jurisdiction. Id. The AHC’s jurisdiction in Medicaid service provider cases is conferred by section 621.055, which provides in pertinent part:

Any person authorized under section 208.153, RSMo, to provide services for which benefit payments are authorized under section 208.152, RSMo, may seek review by the administrative hearing commission of any of the actions of the department of social services specified in subsection 2, 3, or 4 of section 208.156, RSMo.

§ 621.055.1. Thus, if DMS’s actions in this case fell within the purview of subsections 2, 3, or 4 of section 208.156, the AHC had jurisdiction to entertain Hospitals’ complaints. State ex rel. Oakwood Manor Nursing Ctr. v. Stangler, 809 S.W.2d 90, 92 (Mo.App. W.D.1991). Section 208.156 provides, in pertinent part:

2. Any person authorized under section 208.153to provide services for which benefit payments are authorized under section 208.152 whose claim for reimbursement for such services is denied or is not acted upon with reasonable promptness shall be entitled to a hearing before the administrative hearing commission pursuant to the provisions of chapter 621, RSMo.
3. Any person authorized under section 208.153to provide services for which benefit payments are authorized under section 208.152 who is denied participation in any program or programs established under the provisions of chapter 208 shall be entitled to a hearing before the administrative hearing commission pursuant to the provisions of chapter 621, RSMo.
4.

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11 S.W.3d 776, 1999 Mo. App. LEXIS 2457, Counsel Stack Legal Research, https://law.counselstack.com/opinion/missouri-department-of-social-services-division-of-medical-services-v-nme-moctapp-1999.