Ohio Academy of Nursing Homes v. Ohio Department of Job & Family Services

114 Ohio St. 3d 14
CourtOhio Supreme Court
DecidedJune 13, 2007
DocketNo. 2006-0275
StatusPublished
Cited by32 cases

This text of 114 Ohio St. 3d 14 (Ohio Academy of Nursing Homes v. Ohio Department of Job & Family Services) is published on Counsel Stack Legal Research, covering Ohio Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Ohio Academy of Nursing Homes v. Ohio Department of Job & Family Services, 114 Ohio St. 3d 14 (Ohio 2007).

Opinions

O’Connor, J.

{¶ 1} This appeal requires this court to determine the nature of relief that is available when nursing homes and their trade association seek to challenge a state agency’s denial of requests for reconsideration of Medicaid reimbursement rates. For the reasons that follow, we hold that the exclusive avenue of relief available to the nursing homes is to pursue a writ of mandamus. We affirm the judgment of the court of appeals.

Relevant Background

{¶ 2} Pursuant to R.C. Chapter 5111, the state of Ohio, through appellee Ohio Department of Job and Family Services (“ODJFS”), reimburses certain nursing homes and other facilities through the Medicaid program for the reasonable costs of services provided. Medicaid, a federal-state cooperative program, provides financial assistance to states for the provision of medical care to needy persons. See Section 1396 et seq., Title 42, U.S.Code. Under a “prospective payment” system that has been in place since 1993, Ohio reimburses a qualifying facility by paying it a per diem rate that is calculated based on the actual costs incurred by the facility in a prior period. See, generally, R.C. 5111.02 et seq.; Drake Ctr., Inc. v. Ohio Dept. of Human Servs. (1998), 125 Ohio App.3d 678, 685-686, 709 N.E.2d 532. Am.Sub.H.B. No. 152, 145 Ohio Laws, Part II, 3311, Part III, 4083 et seq., effective July 1, 1993.

[15]*15{¶ 3} A facility’s reimbursable costs under R.C. Chapter 5111 include the premium the facility pays to the state Bureau of Workers’ Compensation (“BWC”). For several years prior to 2003, the BWC had reduced employers’ premiums by about 75 percent under R.C. 4123.32 due to surpluses in the state insurance fund. However, in 2003, the BWC determined that the surplus in the state fund was insufficient to support a discount and required employers to pay their premiums in full.

{¶ 4} Plaintiffs-appellants Main Street Terrace Care Center, Arcadia Acres, Inc., Willowood Care Center of Brunswick, Inc., and Spring Meadows Care Center are Medicaid-participating nursing facilities. Plaintiff-appellant Ohio Academy of Nursing Homes, Inc., is a statewide trade group representing more than 250 Medicaid providers, including the named facilities. Because the prospective payment system set the reimbursement levels based on a year’s expenditures when the workers’ compensation premiums had been discounted, Medicaid providers were not reimbursed for the increased workers’ compensation costs in the initial year they were incurred. Seeking reimbursement of those specific workers’ compensation premium costs, appellants requested rate adjustments from ODJFS in letters dated June 27, 2003, and July 1, 2003, for the policy periods January 1, 2003, through June 30, 2004.

{¶ 5} R.C. 5111.29(A) and accompanying statutes and Administrative Code provisions provide a mechanism for seeking reconsideration of rates established under R.C. Chapter 5111. One of the grounds under which a facility may seek rate reconsideration is the “government mandate” provision of R.C. 5111.27(F).1 Former R.C. 5111.27(F), as applicable to this case, provided, “The department shall adjust the rates calculated under sections 5111.23 to 5111.28 of the Revised Code to account for reasonable additional costs that must be incurred by nursing facilities and intermediate care facilities for the mentally retarded to comply with requirements of federal or state statutes, rules, or policies enacted or amended after January 1, 1992, or with orders issued by state or local fire authorities.”2 148 Ohio Laws, Part II, 4177, 4959. See, also, former Ohio Adm.Code 5101:3-3-[16]*16241, which set forth the procedures for requesting the rate adjustment specified in R.C. 5111.27(F).3

{¶ 6} In their rate-adjustment request letters to ODJFS, appellants specifically referred to former Ohio Adm.Code 5101:3-3-241 and indicated that the requests for additional reimbursement were based on the belief that the increased workers’ compensation premium rates constituted a “government mandated increase.”

{¶ 7} ODJFS denied the requests in a letter dated August 25, 2003, asserting that the revised workers’ compensation premiums did not fall within the definition of a “government mandate” because the premiums were established under the authority of statutes that had been in place since 1953 and do not now invoke “a new statute, rule, or policy.”

{¶ 8} Appellants then filed a class action suit in the Court of Common Pleas of Franklin County seeking to force ODJFS, its director, and its deputy director to grant a rate adjustment to fully cover the increased workers’ compensation costs on a number of different grounds. In their second amended complaint, appellants sought declaratory and injunctive relief. In the alternative, appellants sought “a writ of mandamus * * * directing and ordering the Defendants to comply with the pertinent provisions of R.C. Chapter 5111 and the rates be recalculated and paid in an amount and manner in compliance with such laws.”

{¶ 9} Reasoning that it did not have subject-matter jurisdiction over the complaint, the trial court granted ODJFS’s motion to dismiss under Civ.R. 12(B)(1). The trial court determined that the essence of appellants’ complaint sought legal damages and that appellants’ mandamus claim was so intertwined with the claim for legal damages that exclusive jurisdiction over the complaint rested with the Court of Claims. Furthermore, as to the mandamus claim, the trial court determined that because the rate reimbursement sought was a matter within ODJFS’s discretion, there was no clear legal right to the requested relief.

{¶ 10} The court of appeals affirmed in part and reversed in part. Relying on the consideration that ODJFS’s decision on a rate-adjustment request is not subject to appeal, the court of appeals concluded that appellants’ only avenue for relief was in mandamus. See R.C. 5111.29(A)(5) (ODJFS’s decision “at the conclusion of the reconsideration process shall not be subject to any administrative proceedings under Chapter 119. or any other provision of the Revised Code”); former Ohio Adm.Code 5101:3-3-241(D) (ODJFS’s decision on a rate-adjustment request “is not subject to appeal pursuant to Chapter 119. of the Revised Code”). The court of appeals cited a number of cases in different [17]*17contexts for the principle that “[t]he Ohio Supreme Court has held that when an agency’s decision is discretionary and, by statute, not subject to direct appeal, a writ of mandamus is the sole vehicle to challenge the decision.” Ohio Academy of Nursing Homes v. Ohio Dept. of Job & Family Servs., 164 Ohio App.3d 808, 2005-Ohio-6888, 844 N.E.2d 384, ¶ 9.

{¶ 11} The court of appeals determined that because the Court of Claims lacks statutory jurisdiction to consider mandamus actions under R.C. 2731.02, appellants’ mandamus claim has to be brought elsewhere. Id. at ¶ 14. Furthermore, in response to ODJFS’s argument that appellants’ action sought nothing more than legal damages against the state, the court of appeals determined that “[bjecause appellants’ mandamus action seeks a specific order directing ODJFS to perform a legal duty, the common pleas court has subject-matter jurisdiction.” Id. at ¶ 16.

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Cite This Page — Counsel Stack

Bluebook (online)
114 Ohio St. 3d 14, Counsel Stack Legal Research, https://law.counselstack.com/opinion/ohio-academy-of-nursing-homes-v-ohio-department-of-job-family-services-ohio-2007.