Troy W. Simmons, D.D.S., P.C. and Troy W. Simmons, D.D.S. v. Texas Health and Human Services Commission

• Court: Court of Appeals of Texas
• Decided: January 12, 2015
• Docket: 12-14-00256-CV
• Status: Published

Opinion

ACCEPTED 12-14-00256-CV TWELFTH COURT OF APPEALS TYLER, TEXAS 1/12/2015 4:11:57 PM CATHY LUSK CLERK

No. 12-14-00256-CV IN THE COURT OF APPEALS FOR THE TWELFTH JUDICIAL DISTRICT FILED IN 12th COURT OF APPEALS TYLER, TEXAS TYLER, TEXAS 1/12/2015 4:11:57 PM TROY W. SIMMONS, D.D.S., P.C. AND TROY W. SIMMONS, D.D.S., CATHY S. LUSK Appellants, Clerk v. TEXAS HEALTH AND HUMAN SERVICES COMMISSION, Appellee.

On Appeal from the County Court at Law No. 2, Gregg County, Texas Cause No. 2014-933-CCL2 APPELLEE’S BRIEF

KEN PAXTON Attorney General of Texas

CHARLES E. ROY First Assistant Attorney General

JAMES E. DAVIS Deputy Attorney General for Civil Litigation

JENNIFER L. HOPGOOD State Bar No. 24073010 Administrative Law Division RAYMOND C. WINTER State Bar No. 21791950 Chief, Civil Medicaid Fraud Division Assistant Attorneys General P. O. Box 12548 Austin, TX 78711-2548 Attorneys for Texas Health and Human Services Commission, Office of Inspector General

Oral Argument Requested IDENTITY OF PARTIES AND COUNSEL

The following is a complete list of all parties, as well as the names and addresses of all counsel.

Plaintiffs/Appellants Trial and Appellate Counsel

Troy W. Simmons, D.D.S., P.C. and Joseph R. Willie Troy W. Simmons, D.D.S. Willie & Associates, P.C. 4151 Southwest Freeway, Suite 490 Houston, Texas 77027

Defendant/Appellee Trial and Appellate Counsel

Texas Health and Human Services Office of the Attorney General Commission Jennifer L. Hopgood Administrative Law Division Raymond C. Winter Chief, Civil Medicaid Fraud Division Assistant Attorneys General P.O. Box 12548 Austin, TX 78711-2548

i TABLE OF CONTENTS

IDENTITY OF PARTIES AND COUNSEL ............................................................ i TABLE OF CONTENTS .......................................................................................... ii

INDEX OF AUTHORITIES.................................................................................... iv STATEMENT OF THE CASE ................................................................................ ix ISSUE PRESENTED - CORRECTED......................................................................x

APPELLEE’S BRIEF ................................................................................................1 STATEMENT OF FACTS ........................................................................................2 The Parties.............................................................................................................2 HHSC-OIG’s administrative enforcement actions to combat waste, fraud, and abuse ...............................................................................................................3 Failure to Appeal Final Notice of Overpayment ...............................................5 Separate Payment Hold Proceeding against Dr. Simmons ..............................7 Applying Payment Hold Monies to Satisfy Final Overpayment Debt ............8 Attack on Agency’s Final Determination ...........................................................9 SUMMARY OF THE ARGUMENT ......................................................................10

STANDARD OF REVIEW .....................................................................................13

ARGUMENT ...........................................................................................................13 I. The trial court properly granted HHSC’s Plea to the Jurisdiction. ........13 A. Sovereign immunity bars suit, and Dr. Simmons fails to argue ........13 waiver. ..............................................................................................................13 1. Improper Suit for Judicial Review .......................................................15 2. Improper Attempt to Control State Action .........................................16

ii 3. HHSC’s discretionary authority to turn overpayment sanction into a final debt ..........................................................................................................16 B. Simmons failed to exhaust his administrative remedies and now .....20 seeks a collateral attack on a final agency decision. ....................................20 C. Dr. Simmons’ UDJA claim, even if valid, could not confer jurisdiction on a trial court and would result only in an advisory opinion. 24 1. Independent Jurisdiction Not Conferred.............................................24 2. Advisory Opinion ...................................................................................25 II. Dr. Simmons’ Purported Issue No. 2 is not properly before the Court. 27

CONCLUSION AND PRAYER .............................................................................27

CERTIFICATE OF COMPLIANCE .......................................................................29 CERTIFICATE OF SERVICE ................................................................................29

APPENDIX ..............................................................................................................30

iii INDEX OF AUTHORITIES

Cases

Anderson v. City of Seven Points, 806 S.W.2d 791, 793 (Tex. 1991) .....................22

AVCO Corp. v. Interstate Sw., Ltd., 251 S.W.3d 632, 663 (Tex. App.—Houston [14th Dist.] 2007, pet. denied) .................................................................................31

Bacon v. Tex. Historical Comm’n, 411 S.W.3d 161, 173 (Tex. App.—Austin 2013, no pet.)......................................................................................................................17

Billings v. Concordia Heritage Assoc., 960 S.W.2d 688, 693 (Tex. App.—El Paso 1997, writ denied) ....................................................................................................33

Cash Am. Int'l Inc. v. Bennett, 35 S.W.3d 12, 15 (Tex. 2000) ......................... 25, 26

City of Athens v. MacAvoy, 260 S.W.3d 676, 678 (Tex. App.—Tyler 2008, no pet.) ..................................................................................................................................15

City of El Paso v. Heinrich, 284 S.W.3d 366, 371-72 (Tex. 2009) ...... 12, 21, 22, 23

City of Longview v. Head, 33 S.W.3d 47, 51 (Tex. App.—Tyler 2000, no pet.) ....15

City of Tyler v. Smith, No. 12-08-00159-CV, 2009 WL 4757576, at *4 (Tex. App.—Tyler Dec. 14, 2009, no pet.) (mem. op.) ....................................................16

Creedmoor-Maha Water Supply Corp. v. Tex. Comm’n on Envtl. Quality, 307 S.W.3d 505, 526 (Tex. App.—Austin 2010, no pet.) ..............................................29

Desi Driving Sch. v. Tex. Educ. Agency, 2014 WL 1018086, at *1 (Tex. App.— Austin Mar. 14, 2014, no pet.) .................................................................................32

Dir. of Dep’t of Agric. & Env’t v. Printing Indus. Ass’n of Tex., 600 S.W.2d 264, 265 (Tex. 1980) ........................................................................................................20

iv Friends of Canyon Lake v. Guadalupe-Blanco River Auth., 96 S.W.3d 519, 524 (Tex. App.—Austin 2002, pet. denied) ...................................................................29

Friends of Canyon Lake, Inc. v. Guadalupe-Blanco River Auth., 96 S.W.3d 519, 525 (Tex. App.—Austin 2002, pet. denied) ............................................................13

Griffin v. Hawn, 341 S.W.2d 151, 152-53 (Tex. 1960) ...........................................20

Harris Cnty. v. Sykes, 136 S.W.3d 635, 639 (Tex. 2003)........................................35

Hill v. Bd. of Trs. of the Ret. Sys. of Tex., 40 S.W.3d 676, 678 (Tex. App.—Austin 2001, no pet.) ...........................................................................................................27

Hosner v. DeYoung, 1 Tex. 764, 769 (1847) ...........................................................16

In re O'Quinn, 355 S.W.3d 857, 862 (Tex. App.—Houston [1st Dist.] 2011, orig. proceeding [mand. denied]) .....................................................................................30

Jackson v. State Office of Admin. Hearings, 351 S.W.3d 290, 301 (Tex. 2011) ....14

Kentucky v. Graham, 473 U.S. 159, 166 (1985)......................................................19

Lueck v. State, 325 S.W.3d 752, 765-66 (Tex. App.—Austin 2010, pet. denied) 26, 27

Marble Falls Indep. Sch. Dist., 275 S.W.3d 558, 566-67 (Tex. App.—Austin 2008, pet. denied) ...............................................................................................................32

Mayhew v. Town of Sunnyvale, 964 S.W.2d 922 (Tex. 1998).................................14

MBM Fin. Corp. v. Woodlands Operating Co., 292 S.W.3d 660, 669 (Tex. 2009)28

McAllen Hosps. v. Suehs, 426 S.W.3d 304, 316 (Tex. App.—Amarillo 2014, no pet.)...........................................................................................................................21

Prairie View A&M v. Chatha, 381 S.W.3d 500, 511 (Tex. 2012) ................... 12, 27

v Reed v. Prince, 194 S.W.3d 101, 107 (Tex. App.—Texarkana 2006, pet. denied)19, 27

Republic Ins. Co. v. Davis, 856 S.W.2d 158, 164 (Tex. 1993) ...............................31

State Bar of Tex. v. Heard, 603 S.W.2d 829, 833 (Tex. 1980) ...............................20

Subaru of Am., Inc. v. David McDavid Nissan, Inc., 84 S.W.3d 212, 221 (Tex. 2002) ........................................................................................................................24

Tex. A&M Unìv. Sys. v. Koseoglu, 233 S.W.3d 835, 844 (Tex. 2007)............. 15, 19

Tex. Ass’n of Bus. v. Tex. Air Control Bd., 852 S.W.2d 440, 444 (Tex. 1993) 15, 31, 32, 33

Tex. Comm’n on Envtl. Quality v. Kelsoe, 286 S.W.3d 91, 94-95 (Tex. App.— Austin 2009, pet. denied) .................................................................................. 24, 29

Tex. Dep’t of Ins. v. Reconveyance Servs., Inc., 306 S.W.3d 256, 258-59 (Tex. 2010) ........................................................................................................... 12, 21, 23

Tex. Dep’t of Protective & Regulatory Servs. v. Mega Child Care, l45 S.W.3d 170, 198 (Tex. 2004) ........................................................................................................16

Tex. Dep’t of Transp. v. Jones, 8 S.W.3d 636, 638 (Tex. 1999) (per curiam) ........19

Tex. Dep’t of Transp. v. Sefzik, 355 S.W.3d 618, 621 (Tex. 2011) .................. 11, 18

Tex. Natural Res. Conservation Comm’n v. IT-Davy, 74 S.W.3d 849, 853 (Tex. 2002) ..................................................................................................... 11, 14, 19, 30

Tex. Parks & Wildlife Dep’t v. Garland, 31 S.W.3d 920, 925 (Tex. App.—Tyler 2010, no pet.) ...........................................................................................................17

TFJA v. Tex. Comm’n on Envtl. Quality, 368 S.W.3d 727, 735-36 (Tex. App.— Austin 2012, pet. denied) .........................................................................................29

vi Twenty Wings Ltd. v. Tex. Alcoholic Beverage Comm’n, No. 2-05-355-CV, 2006 WL 1791707, at *1 (Tex. App.—Fort Worth June 29, 2006, no pet.) (mem. op.) .26

Vickery v. Stanley, 2010 WL 4638714, at *4 (Tex. App.—Tyler Nov. 17, 2010, no pet.)...........................................................................................................................28

Wilson v. Tex. Workers’ Comp. Comm’n, No. 12-01-00337-CV, 2003 WL 22681793, at *3 (Tex. App.—Tyler Nov. 13, 2003, no pet.) (mem. op.) ...............16

Wilson v. Wilson, 378 S.W.2d 156, 160 (Tex. App.—Tyler, 1964 no writ) ...........30

Statutes

42 U.S.C. § 1396 ........................................................................................................4

Tex. Civ. Prac. & Rem. Code § 15.014 ...................................................................23

Tex. Civ. Prac. & Rem. Code § 37.002(b)...............................................................31

Tex. Civ. Prac. & Rem. Code § 37.003(a) ...............................................................30

Tex. Civ. Prac. & Rem. Code § 65.023(a) ...............................................................23

Tex. Gov’t Code Ann. § 2001.171.............................................................. 18, 26, 27

Tex. Gov’t Code Ann. § 2001.176.......................................................................2, 34

Tex. Gov’t Code Ann. § 2001.176(b)(1) .................................................................18

Tex. Gov’t Code Ann. § 531.001 ...............................................................................4

Tex. Gov’t Code Ann. § 531.102 ...............................................................................3

Tex. Gov’t Code Ann. § 531.1201(a) ....................................................................6, 7

Tex. Hum. Res. Code Ann. § 32.021(a) ....................................................................2

vii Tex. Hum. Res. Code Ann. § 32.039(b)(1)................................................................4

Tex. R. App. P. 38.2(a)(1)(B) ................................................................................x, 7

Rules

1 Tex. Admin. Code § 371.11 ....................................................................................8

1 Tex. Admin. Code § 371.1605 ................................................................................4

1 Tex. Admin. Code § 371.1607(50) .........................................................................8

1 Tex. Admin. Code § 371.1617 ................................................................................5

1 Tex. Admin. Code § 371.1617(b) ...........................................................................7

1 Tex. Admin. Code § 371.1617(e)(1)...................................................... 5, 9, 13, 22

1 Tex. Admin. Code § 371.1711(d)(2) ......................................................................6

1 Tex. Admin. Code § 371.1721(a) ...........................................................................4

1 Tex. Admin. Code § 371.1721(b)(l) .......................................................................4

1 Tex. Admin. Code § 371.1723 ..........................................................................5, 25

viii STATEMENT OF THE CASE

Nature of the Case: This is an appeal from a final judgment by the County Court in Gregg County granting the Texas Health and Human Services Commission’s (“HHSC”) plea to the jurisdiction and dismissing Troy W. Simmons, D.D.S., P.C. and Troy W. Simmons, D.D.S.’s (“Dr. Simmons”) petition for declaratory judgment (“Trial Court Petition”). CR 4-11.

Trial Court: County Court at Law No. 2 Gregg County, the Honorable Vincent L. Dulweber, Presiding.

Trial Court Proceeding: Appellant Dr. Simmons brought suit seeking an order from the trial court to extinguish his liability to HHSC for a final overpayment debt and to compel HHSC to release to Dr. Simmons funds it had applied to satisfy a portion of the final debt. See CR 4-11. HHSC filed a plea to the jurisdiction, asserting that the trial court lacked jurisdiction over Dr. Simmons’ suit because of sovereign immunity, a lack of an ultra vires exception, and failure to exhaust administrative remedies. CR 12-40, 45-109. After considering the arguments of the parties, and holding a hearing, the trial court granted HHSC’s plea to the jurisdiction and dismissed Dr. Simmons’ lawsuit. CR 124.

Trial Court Disposition: The trial court entered a final order granting HHSC’s plea to the jurisdiction and dismissing Dr. Simmons’ lawsuit. See Final Order, CR 124, and letter from Judge Dulweber, attached at Appendix 1. Dr. Simmons appeals this final order. CR 130.

ix ISSUE PRESENTED - CORRECTED

1. Whether the trial court properly granted HHSC’s Plea to the Jurisdiction.1

1 Dr. Simmons’ purported second issue, whether HHSC failed to exhaust its administrative remedies, is not properly before the Court. See Tex. R. App. P. 38.2(a)(1)(B). This proffered issue goes to the merits of Dr. Simmons’ request for relief and was not, therefore, considered or ruled on by the trial court.

x No. 12-14-00256-CV IN THE COURT OF APPEALS FOR THE TWELFTH JUDICIAL DISTRICT TYLER, TEXAS TROY W. SIMMONS, D.D.S., P.C. AND TROY W. SIMMONS, D.D.S., Appellants, v. TEXAS HEALTH AND HUMAN SERVICES COMMISSION, Appellee.

On Appeal from the County Court at Law No. 2, Gregg County, Texas Cause No. 2014-933-CCL2

APPELLEE’S BRIEF

TO THE HONORABLE TWELFTH COURT OF APPEALS:

The trial court properly granted HHSC’s plea to the jurisdiction, dismissing

for want of jurisdiction Dr. Simmons’ suit for declaratory judgment, because

declaratory judgment did not lie in this case where Dr. Simmons failed to plead or

prove any waiver of sovereign immunity or ultra vires exceptions or failed to

exhaust his administrative remedies.

Dr. Simmons brought suit asking the trial court to (1) issue a declaration that

Dr. Simmons’ alleged liability to HHSC to be released and extinguished and (2)

order HHSC to release and forward funds that HHSC applied to satisfy an

overpayment of Medicaid funds HHSC had paid to Dr. Simmons based on

improperly submitted Medicaid claims. See CR 7 (emphasis added). These funds

1 were used by HHSC-OIG to satisfy a portion of the debt that had become final after

Dr. Simmons failed to appeal a final notice of overpayment. 2

Moreover, while styled as an action for declaratory judgment, the relief

requested by Dr. Simmons reveals this case to be a petition for writ of mandamus,

alleging ultra vires conduct by HHSC. Specifically, Dr. Simmons contends that

HHSC has illegally retained Medicaid reimbursements that were subject to an

administrative payment hold. The relief he requests, that the trial court declare his

liability to the State has been extinguished and order HHSC to return the held funds,

is actually an attempt to obtain mandamus relief against the State.

STATEMENT OF FACTS The Parties

Appellee HHSC is an agency of the State of Texas with responsibility to

administer the Texas Medicaid program. Tex. Hum. Res. Code Ann. § 32.021(a)

(West 2013).

2 If Dr. Simmons had correctly appealed HHSC’s final determination of overpayment, venue would have been mandatory in Travis County, Texas. Tex. Gov’t Code Ann. § 2001.176 (suits for judicial review “must be filed in a Travis County district court”). In addition to its plea, HHSC also filed a motion to transfer venue. If the Court were to reverse the granting of HHSC’s plea, HHSC will ask the trial court to grant its motion to transfer to Travis County. Simmons ought not be allowed to lie behind the log and circumvent the mandatory venue provisions to appeal HHSC-OIG’s final determination in a venue other than Travis County.

2 Appellant Dr. Simmons is a Longview- and Palestine-based orthodontic and

general dentistry practice that voluntarily enrolled as a Texas Medicaid provider to

perform general dentistry and orthodontia services. See, e.g., THSteps Dental

Provider Enrollment Application, signed by Dr. Simmons’ office manager, dated

Mar. 12, 2012, at CR 72-83.

Between at least 2007 and 2012, Dr. Simmons was a Texas Medicaid

provider. The Office of the Inspector General (“HHSC-OIG”) investigated the

billing submissions Dr. Simmons sent to HHSC for reimbursement of services he

claimed he made to Medicaid patients. See Final Notice of Overpayment, dated Nov.

13, 2013, at CR 31-35. As a result of this investigation, HHSC-OIG determined that

Dr. Simmons had made false statements and misrepresentations, in violation of

HHSC Medicaid rules. See id. at CR 32.

HHSC-OIG’s administrative enforcement actions to combat waste, fraud, and abuse

HHSC-OIG is the administrative enforcement arm of HHSC and is

responsible for the investigation of waste, fraud, and abuse in the provision of health

and human services “and the enforcement of state law relating to the provision of

those services.” Tex. Gov’t Code Ann. § 531.102 (West 2013). Specifically, HHSC-

OIG is responsible for the investigation of waste, fraud, and abuse in the Texas

3 Medicaid program. Id. 3 Additionally, chapter 32 of the Human Resources Code

provides for the imposition of damages and administrative penalties against a person

who presents or causes to be presented to the department a claim that “contains a

statement or representation the person knows or should know to be false.” Tex. Hum.

Res. Code Ann. § 32.039(b)(1). The statutory authority for the rules governing

HHSC-OIG includes both chapters 32 and 36 of the Human Resources Code. Tex.

Gov’t Code Ann. § 531.001; 1 Tex. Admin. Code § 371.1605 (2005).

HHSC-OIG Rule 371.1721 provides that HHSC-OIG may assess

administrative penalties against a person who submits a claim that the person knows

or should know is false, or who presents a claim that contains a statement that the

person knows or should know is false. 1 Tex. Admin. Code § 371.1721(a), (b)(l)

(2005). A person who commits such a violation is liable for: (1) the amount paid as

a result of the violation; (2) interest; (3) an administrative penalty of not more than

twice the amount paid; and (3) administrative penalties of up to $10,000 per

violation. 1 Tex. Admin. Code § 371.1723 (2005). HHSC-OIG may apply monies

withheld in a payment hold action “to satisfy any portion of an unpaid assessment

3 Medicaid is a government program providing health care to qualified impoverished people. It is jointly funded by state and federal tax dollars. 42 U.S.C. § 1396. While jointly funded, Medicaid is administered by the states. Defendant HHSC has responsibility to administer the Texas Medicaid program. Tex. Hum. Res. Code § 32.021(a).

4 of overpayments.” 1 Tex. Admin. Code § 371.1617(e)(1), copy at CR 68-69.

Failure to Appeal Final Notice of Overpayment

HHSC-OIG conducted an investigation of Dr. Simmons’ claims submitted to

Texas Medicaid and determined that HHSC had overpaid Dr. Simmons. See Final

Notice of Overpayment, dated Nov. 13, 2013, at CR 21-25. As a result of its

investigation, HHSC-OIG determined that HHSC had overpaid Dr. Simmons in the

amount of $2,609,436.00 and that, between 2007 and 2012, Dr. Simmons had

violated 1 Tex. Admin. Code § 371.1617 (2005). See Final Notice of Overpayment,

at CR 21-22. The overpayment amount arose out of claims Dr. Simmons submitted

to HHSC “for payment under Medicaid or other HHS programs.” CR 21. The Final

Notice of Overpayment lists several violations, all of which are based on requests

for prior authorization or claims for reimbursement that Dr. Simmons submitted to

HHSC. Id.

When a provider receives a final notice of overpayment, the provider has

fifteen days to request an appeal. Tex. Gov’t Code Ann. § 531.1201(a), copy at CR

88-89. 4 Dr. Simmons received the Final Notice of Overpayment. See Certified Mail

4 See also 1 Tex. Admin. Code § 371.1711(d)(2) (Recoupment of Overpayment and Debt) (“A person may request an administrative appeal hearing after receipt of a final notice of potential recoupment in accordance with § 371.1615 of this subchapter (relating to Appeals). [HHSC-] OIG must receive the written request for an appeal no later than 15 days after the date the person receives final notice.”) (emphasis added).

5 Receipt, signed by C. Sampson of Willie & Associates, Nov. 15, 2013, at CR 25.

Subsequent to his receipt of the Final Notice, Dr. Simmons had until November 30,

2013 to send HHSC-OIG a written request for an appeal. Dr. Simmons failed,

however, to provide HHSC with a request to appeal the Final Notice, as required by

Tex. Gov’t Code Ann. § 531.1201(a) and 1 Tex. Admin. Code § 371.1711(d)(2). As

a result of Dr. Simmons’ failure to appeal the Final Notice of Overpayment, HHSC-

OIG never docketed the overpayment proceeding. 5 The recoupment sanction

became a final debt on December 1, 2013. See Tex. Gov’t Code Ann. § 531.1201(a);

1 Tex. Admin. Code § 371.1617(b) (2012), copy at CR 68-69.6

Thus, Dr. Simmons’ failure to request an overpayment appeal hearing within

the fifteen-day period precluded him from seeking judicial review of HHSC-OIG’s

final decision to recoup the overpayment and resulted in the “creat[ion] of a final

debt in favor of the State of Texas.” See 1 Tex. Admin. Code § 371.1617(b) (2012),

copy at CR 68-69.

5 Also pursuant to Government Code section 531.1201(a), a provider has the right to elect the venue where the appeal is to be docketed. A provider may have the appeal heard at either HHSC Appeals Division or at the State Office of Administrative Hearings (“SOAH”). Tex. Gov't Code § 531.1201(a). 6 Dr. Simmons’ brief contains a misstatement of fact. The overpayment matter was not, as he erroneously claims, docketed before SOAH, nor did the overpayment proceeding ever receive a docket number. See Appellant’s Brief at p. 1; Tex. R. App. P. 38.2(a)(1)(B). The docket number referred to, 529134981, was, rather, the docket number for the payment hold proceeding, a case entirely independent and separate from the overpayment proceeding.

6 Separate Payment Hold Proceeding against Dr. Simmons

Prior to the overpayment investigation and final determination, HHSC-OIG

had initiated a payment hold proceeding against Dr. Simmons. HHSC-OIG is

required by law to institute a payment hold if it has reason to believe the provider

has engaged in fraud against the Medicaid program. 7

The payment hold contested case, docketed at SOAH in Travis County, was

distinct from the overpayment proceeding. The SOAH payment hold proceeding was

styled Troy Simmons, D.D.S. v. Tex. Health & Human Servs. Comm’n, SOAH

Docket No. 529134981. See, e.g., Respondent’s Mot. to Dismiss, at CR 27 (bearing

docket number 529134981). The lifting of the payment hold by HHSC mooted the

contested case, and Order No. 10 cancelled the hearing. See Notice of Lift of

Payment Hold, dated Feb. 5, 2014, a true and correct copy is attached as Appendix

7 The Texas Legislature empowered, and requires, HHSC-OIG to combat unlawful conduct by providers who fraudulently take money from Medicaid. See, e.g., 1 Tex. Admin. Code § 371.11 (Purpose and Scope) (Inspector General “administers program integrity and enforces program violations” and is responsible for “pursuing Medicaid . . . fraud, abuse, overpayment, and waste”). A payment hold (suspension of payments) is defined as: An administrative sanction that withholds all or any portion of payments due a provider until the matter in dispute, including all investigation and legal proceedings, between the provider and the Commission or an operating agency or its agent(s) are resolved. This is a temporary denial of reimbursement under the Medicaid or other HHS program for items or services furnished by a specified provider. 1 Tex. Admin. Code § 371.1607(50) (Definitions) (emphasis added).

7 2; Order No. 10, copy at CR 116-19. This lifting of the payment hold disposed of

SOAH case number 529134981.

Applying Payment Hold Monies to Satisfy Final Overpayment Debt

After a recoupment sanction becomes a final debt, HHSC-OIG is authorized

to apply monies from a payment hold to satisfy the amount the State overpaid a

provider. 1 Tex. Admin. Code § 371.1617(e)(1), copy at CR 68-69. Here, after Dr.

Simmons failed to appeal the Final Notice by the deadline of November 30, 2013, a

final debt was created. See id. HHSC-OIG then did as it was authorized to do by

statute: HHSC-OIG used money it had withheld from Dr. Simmons in the payment

hold proceeding to satisfy a portion of the final overpayment debt. 8

HHSC-OIG then moved to enforce the collection of the overpayment against

Dr. Simmons. HHSC submitted a State Action Request (“SAR”) to set up a

repayment receivable to collect on the overpayment amount, and HHSC-OIG then

filed the Notice of Lift of Payment Hold. App. 2 (noting the SAR attached as Exhibit

A to the Notice). See also letter to J. Willie, counsel for Dr. Simmons, from J. Day,

counsel for HHSC-OIG, dated Mar. 4, 2014 (explaining that HHSC intended to refer

8 In order to apply the money from the payment hold to satisfy the overpayment balance, HHSC-OIG filed a motion to dismiss. See Mot. to Dismiss without Prejudice, dated Dec. 16, 2013, at ¶¶ 4 – 9 and Certificate of Service, showing service upon Plaintiffs’ counsel. CR 27-36. This motion also gave Dr. Simmons further notice of the consequences of failing to timely appeal the Final Notice of Overpayment.

8 to the Office of Attorney General the collection of the overpayment amount owed

by Plaintiffs), copy at CR 38-40. On February 29, 2014, the SOAH ALJ disposed of

the payment hold case. See Order No. 10, copy at CR 116-19.

Attack on Agency’s Final Determination

Subsequent to HHSC’s decision to apply the payment hold monies to satisfy

a portion of the final debt, Dr. Simons filed the Trial Court Petition on May 8, 2014.

CR 4-11. In response, HHSC filed a Plea to the Jurisdiction (“HHSC’s Plea”),

arguing that the County Court lacked jurisdiction to hear the merits of Dr. Simmons’

suit because the doctrines of sovereign immunity and failure to exhaust

administrative remedies precluded the County Court from considering the merits of

Dr. Simmons’ Trial Court Petition. CR 12-40, 45-109.

After a hearing on HHSC’s Plea, the County Court of Gregg County, the Hon.

Vincent Dulweber, presiding, issued a final order, granting HHSC’s Plea and

dismissing Dr. Simmons’ lawsuit. See Order, dated Aug. 25, 2014, at CR 124.

Dr. Simmons subsequently filed the instant appeal of the County Court’s final

order. See Notice of Appeal, at CR 130-31.

9 SUMMARY OF THE ARGUMENT

The trial court properly granted HHSC’s Plea to the Jurisdiction because Dr.

Simmons’ lawsuit is barred by the doctrine of sovereign immunity. Dr. Simmons

failed to plead a valid waiver of sovereign immunity. Moreover, he failed to exhaust

his administrative remedies when he failed to appeal the final notice of overpayment.

Where a court lacks jurisdiction, a UDJA claim, even if a valid claim, cannot

independently confer jurisdiction.

A court has subject-matter jurisdiction over a matter only if a plaintiff pleads

a valid waiver of sovereign immunity. Tex. Natural Res. Conservation Comm’n v.

IT-Davy, 74 S.W.3d 849, 853 (Tex. 2002) (“Immunity from suit bars a suit against

the State unless the Legislature expressly consents to the suit.”). Here, Dr. Simmons

has failed to plead a valid waiver of sovereign immunity; and, the Court, therefore,

lacks jurisdiction over the claim.

Dr. Simmons brings this action under the Uniform Declaratory Judgment Act

(“UDJA”), Tex. Civ. Prac. & Rem. Code ch. 37, but the UDJA does not waive

sovereign immunity. Tex. Dep’t of Transp. v. Sefzik, 355 S.W.3d 618, 621 (Tex.

2011) (“we conclude that, under Heinrich, sovereign immunity bars UDJA actions

against the state and its political subdivisions absent a legislative waiver”) (citing

City of El Paso v. Heinrich, 284 S.W.3d 366, 371-72 (Tex. 2009)); see also Prairie

View A&M v. Chatha, 381 S.W.3d 500, 511 (Tex. 2012) (waiver must be clear and

10 unambiguous). Therefore, the Court has no jurisdiction over this case based only on

Dr. Simmons’ UDJA claim.

Dr. Simmons asserted that the trial court had jurisdiction on the premise that

HHSC is acting unlawfully in not returning money retained in the payment hold.

Thus, this claim is nothing more than an ultra vires claim against HHSC. The Texas

Supreme Court, however, has repeatedly held that agencies do not act ultra vires;

only agency officials can act ultra vires. Tex. Dep’t of Ins. v. Reconveyance Servs.,

Inc., 306 S.W.3d 256, 258-59 (Tex. 2010) (holding that court lacked jurisdiction in

ultra vires claim where plaintiff only named agency and failed to name “Department

officials acting in their official capacities”) (citing Heinrich, 284 S.W.3d 366)).

Therefore, the head of a state agency must be named in an ultra vires suit. Id.

Even if Dr. Simmons had named the proper party, the Executive

Commissioner of HHSC, his jurisdictional defect could still not be cured because

Dr. Simmons has failed to plead a valid ultra vires claim. Here, HHSC officials acted

within their sound discretion and, as allowed by HHSC Rules, applied payment hold

monies to satisfy a portion of a final debt. See 1 Tex. Admin. Code § 371.1617(e)(1),

copy at CR 68-69. See also letter to J. Willie, counsel for Plaintiffs, from J. Day,

counsel for HHSC-OIG, dated Mar. 4, 2014 (explaining that HHSC intended to refer

11 to the Office of Attorney General the collection of the overpayment amount owed

by Plaintiffs), at CR 116-19.

Moreover, because Dr. Simmons failed to exhaust his administrative

remedies, a court lacks jurisdiction to review HHSC’s decision to create a final

overpayment determination. See Friends of Canyon Lake, Inc. v. Guadalupe-Blanco

River Auth., 96 S.W.3d 519, 525 (Tex. App.—Austin 2002, pet. denied) (“It is well

settled that a party must exhaust its administrative remedies before seeking judicial

review of an agency decision.”).

Even if Dr. Simmons had brought a viable UDJA claim, that UDJA cause of

action cannot independently confer jurisdiction. The UDJA is a procedural

mechanism only and provides a remedy only when a court already has jurisdiction.

Jackson v. State Office of Admin. Hearings, 351 S.W.3d 290, 301 (Tex. 2011).

Because the trial court had no jurisdiction to entertain Dr. Simmons’ request for

relief in the first place, his request for declaratory judgment, assuming in the

alternative it was a proper UDJA claim, would not provide jurisdiction.

The Court should, therefore, affirm the trial court’s granting of HHSC’s Plea

to the Jurisdiction.

12 STANDARD OF REVIEW

Whether or not a trial court has subject-matter jurisdiction is a question of law

and is subject to de novo review by the appellate court. IT-Davy, 74 S.W.3d at 855

(rulings on jurisdictional pleas are reviewed de novo); Mayhew v. Town of

Sunnyvale, 964 S.W.2d 922, 928 (Tex. 1998); Tex. Ass’n of Bus. v. Tex. Air Control

Bd., 852 S.W.2d 440, 444 (Tex. 1993); City of Athens v. MacAvoy, 260 S.W.3d 676,

678 (Tex. App.—Tyler 2008, no pet.).

ARGUMENT

I. The trial court properly granted HHSC’s Plea to the Jurisdiction.

A. Sovereign immunity bars suit, and Dr. Simmons fails to argue waiver.

A plaintiff bears the burden of alleging facts that affirmatively demonstrate

the trial court’s subject-matter jurisdiction. Tex. Air Control Bd., 852 S.W.2d at 446;

City of Longview v. Head, 33 S.W.3d 47, 51 (Tex. App.—Tyler 2000, no pet.). And

when the defendant is a state entity or official, sovereign immunity generally

deprives the trial court of jurisdiction. Tex. A&M Unìv. Sys. v. Koseoglu, 233 S.W.3d

835, 844 (Tex. 2007); Wilson v. Tex. Workers’ Comp. Comm’n, No. 12-01-00337-

CV, 2003 WL 22681793, at *3 (Tex. App.—Tyler Nov. 13, 2003, no pet.) (mem.

op.). See also City of Tyler v. Smith, No. 12-08-00159-CV, 2009 WL 4757576, at *4

(Tex. App.—Tyler Dec. 14, 2009, no pet.) (mem. op.) (“it has long been recognized

13 that no State can be sued in her own courts without her consent, and then only in the

manner indicated by that consent”) (citing Hosner v. DeYoung, 1 Tex. 764, 769

(1847)).

A person who is aggrieved by a final agency decision cannot seek judicial

review of that decision unless there is statutory authorization; otherwise, the suit is

barred by the doctrine of sovereign immunity. See Tex. Dep’t of Protective &

Regulatory Servs. v. Mega Child Care, l45 S.W.3d 170, 198 (Tex. 2004); Bacon v.

Tex. Historical Comm’n, 411 S.W.3d 161, 173 (Tex. App.—Austin 2013, no pet.)

(“state agency decisions generally cannot be challenged in court unless the

Legislature has enacted a statute expressly authorizing such review”); see also

Chatha, 381 S.W.3d at 511 (waiver must be clear and unambiguous); Tex. Parks &

Wildlife Dep’t v. Garland, 313 S.W.3d 920, 925 (Tex. App.—Tyler 2010, no pet.)

(same).

Accordingly, Simmons’ suit fails for two reasons. First, no statutory

authorization allows for Simmons’ suit because Simmons failed to preserve his right

to obtain judicial review of HHSC’s final decision when he failed to timely appeal

HHSC-OIG’s Final Notice of Overpayment by November 30, 2013. Second, Dr.

Simmons’ request for relief is nothing more than an impermissible attempt to control

state action.

14 Lastly, the UDJA does not “waive the state's sovereign immunity.” Sefzik, 355

S.W.3d at 621.

1. Improper Suit for Judicial Review

Simmons asks this Court to declare that his liability to the State has been

“released and extinguished.” Petition at ¶ VII.I, at CR 7. The relief Simmons

requests is nothing more than a request for judicial review of HHSC’s final

determination that Simmons owed over $2 million to Texas Medicaid and HHSC’s

decision to apply payment hold money to satisfy a portion of that final debt. A

provider who is subject to a final agency decision or determination in an

administrative action may appeal by filing a petition for judicial review. Tex. Gov’t

Code Ann. § 2001.171. The petition, however, may only be filed after the provider

first exhausts his administrative remedies and must be filed in Travis County. Id.;

Tex. Gov’t Code Ann. § 2001.176(b)(1) (“Unless otherwise provided by statute . . .

the petition must be filed in a Travis County district court.”), copy at CR 91-92.

Because Dr. Simmons had failed to timely request an appeal of the Final

Notice of Overpayment, he failed to exhaust his administrative remedies and was

thus precluded from filing a petition for judicial review. See Tex. Gov't Code Ann.

§ 2001.171 (West 2013) (requiring party to “exhaust all administrative remedies

available within a state agency” before being “entitled to judicial review”) (emphasis

added). See also Reed v. Prince, 194 S.W.3d 101, 107 (Tex. App.—Texarkana 2006,

15 pet. denied) (holding that where plaintiff failed to exhaust administrative remedies,

compliance with statutory provisions was “a jurisdictional prerequisite to suit”).

2. Improper Attempt to Control State Action

Simmons’ second request, that all retained funds be “released and

immediately forwarded” to Simmons, is an effort to control state action. See Trial

Court Petition at CR 7. Under the doctrine of sovereign immunity, this Court has no

jurisdiction over a suit to control state action. Absent a clear legislative waiver of

immunity, HHSC is not subject to suit.9 IT-Davy, 74 S.W.3d at 853; Tex. Dep’t of

Transp. v. Jones, 8 S.W.3d 636, 638 (Tex. 1999) (per curiam); Dir. of Dep’t of Agric.

& Env’t v. Printing Indus. Ass’n of Tex., 600 S.W.2d 264, 265 (Tex. 1980); Griffin

v. Hawn, 341 S.W.2d 151, 152-53 (Tex. 1960). Here, Simmons has not pled a valid

waiver of sovereign immunity; nor does one exist.

3. HHSC’s discretionary authority to turn overpayment sanction into a final debt

Although Simmons does not use the exact phrase “ultra vires,” he claims that

HHSC has “acted outside its statutory authority in continuing to withhold payment

from [Dr. Simmons] after it dismissed its administrative cause of action.” (emphasis

9 If properly pled, and the HHSC executive commissioner had been named as a defendant, he would have been protected by official immunity. A suit against a state official in his official capacity “actually seeks to impose liability against the governmental unit rather than on the individual specifically named and ‘is, in all respects other than the name, . . . a suit against the entity.’” Koseoglu, 233 S.W.3d at 844 (quoting Kentucky v. Graham, 473 U.S. 159, 166 (1985)).

16 added). Appellant Brief, at p. 3.

a. Simmons’ suit is actually a petition for writ of mandamus.

Courts look to the substance of pleadings to determine the nature of a suit, not

what the suit is titled. See State Bar of Tex. v. Heard, 603 S.W.2d 829, 833 (Tex.

1980) (“We look to the substance of a plea for relief to determine the nature of the

pleading, not merely at the form of title given to it.”). Although styled a suit for

declaratory relief, this suit is actually a petition for writ of mandamus. Dr. Simmons

seeks from this Court the following relief:

A declaration that the Plaintiffs’ alleged liability to the Defendant has been released and extinguished and that all funds that have been retained by the Defendant as a consequence of the payment hold be released and immediately forwarded to the Plaintiff[s].

Plaintiffs’ Petition at ¶ VII (emphasis added), at CR 7. See Reconveyance Servs., 306

S.W.3d at 258 (noting that although “Reconveyance’s pleading did not include the

term “ultra vires” . . . Reconveyance’s allegations and requested declarations are, in

substance ultra vires claims”). Thus, if a court were to grant Dr. Simmons’ relief—

that the balance of the payment hold funds be reimbursed to Simmons, that court

would first have to find that Dr. Janek or the Inspector General were acting either

outside their statutory authority or failing to perform a ministerial act. See Heinrich,

284 S.W.3d at 372; cf. McAllen Hosps. v. Suehs, 426 S.W.3d 304, 316 (Tex. App.—

17 Amarillo 2014, no pet.) (noting that district court may “issue writs of mandamus to

compel public officials to perform ministerial acts”).

b. The Inspector General acted within his legal authority when he decided to apply payment hold monies to satisfy the overpayment final debt.

To establish an ultra vires exception, Simmons must prove that an agency

official “acted without legal authority or failed to perform a purely ministerial act.”

Heinrich, 284 S.W.3d at 372. First, the Inspector General acted within his legal

authority to apply the monies from the payment hold proceeding to satisfy part of

the overpayment debt. See 1 Tex. Admin. Code § 371.1617(e)(1) (2012) (providing

for HHSC-OIG to apply monies withheld in a payment hold action toward the

balance of overpayment that became a final debt), copy at CR 68-69. Simmons fails

to cite any statutory authority that contravenes the Inspector General’s authority to

apply payment hold monies to satisfy a final debt.

Second, an act is ministerial only when “the law clearly spells out the duty to

be performed by the official with sufficient certainty that nothing is left to the

exercise of discretion.” Anderson v. City of Seven Points, 806 S.W.2d 791, 793 (Tex.

1991). Here, the Inspector General, acted within his sound discretion when he

decided, after the overpayment sanction became a final debt, to apply monies

collected via payment hold to satisfy the final overpayment debt.

18 Moreover, a court lacks jurisdiction over ultra vires claims when a plaintiff

sues only the agency and not the agency official. Tex. Dep’t of Insurance v.

Reconveyance Servs., 306 S.W.3d at 258-59 (citing Heinrich, 284 S.W.3d at 371-

73). Here, Dr. Simmons only named HHSC as defendant, and the Court, therefore,

lacks jurisdiction over this suit. 10

Lastly, because Dr. Simmons failed to avail himself of an adequate remedy

by appeal—here a timely appeal of the final notice of overpayment—mandamus is

not available to him. See Tex. Comm’n on Envtl. Quality v. Kelsoe, 286 S.W.3d 91,

94-95 (Tex. App.—Austin 2009, pet. denied) (where a party “had an adequate

remedy by appeal” complaints of an agency decision “were not proper subjects for

common-law mandamus relief”). Kelsoe is particularly instructive in the instant

matter. Similar to Dr. Simmons, Kelsoe missed a deadline to appeal a final agency

decision. See id. at 96 (missing deadline for filing petition for judicial review of

10 Assuming Dr. Simmons could bring a viable ultra vires action, Dr. Simmons needed to have named Dr. Kyle Janek, Executive Commissioner of HHSC (“Dr. Janek”) as a defendant. Otherwise, a court lacks jurisdiction to mandamus HHSC, a state agency. Id. After adding Dr. Janek as a party, Travis County would then be the mandatory venue. See Tex. Civ. Prac. & Rem. Code § 15.014 (requiring that suit for mandamus action “against the head of a department of state government” be brought in Travis County). Defendant HHSC also argued to the trial court, in its motion to transfer venue, at CR 16, in the alternative, to the extent Dr. Simmons asks for injunctive relief, venue would be mandatory in Travis County – the domicile of HHSC. See Tex. Civ. Prac. & Rem. Code § 65.023(a) (“writ of injunction against a party who is a resident of this state shall be tried in a district or county court in the county in which the party is domiciled”).

19 denial of application). The Kelsoe court held that the trial court lacked jurisdiction

over a mandamus action because Kelsoe missed a deadline to challenge a final

agency decision. Id. at 97-98.

B. Simmons failed to exhaust his administrative remedies and now seeks a collateral attack on a final agency decision.

An agency has exclusive jurisdiction over a dispute “when a pervasive

regulatory scheme indicates that [the Legislature] intended for the regulatory process

to be the exclusive means of remedying the problem to which the regulation is

addressed.” Subaru of Am., Inc. v. David McDavid Nissan, Inc., 84 S.W.3d 212, 221

(Tex. 2002). The Inspector General initiated the administrative enforcement case to

seek recoupment in the only forum in which he has the authority: an administrative

forum. The underlying administrative enforcement case was an action to recover

administrative remedies for statutory (chapters 36 and 32 of the Human Resources

Code) and regulatory (chapter 371 of the Administrative Code) violations. The

administrative remedies that the Inspector General sought against Dr. Simmons –

recoupment of overpayments and collection of administrative penalties – are

remedies only HHSC can award. See 1 Tex. Admin. Code § 371.1723 (2005)Error!

Bookmark not defined..

HHSC, acting by and through Dr. Janek, its Executive Commissioner, has the

exclusive authority to make final decisions in cases brought by HHSC-OIG.

20 Therefore, HHSC and Dr. Janek have exclusive jurisdiction over HHSC-OIG’s

administrative claims, and Dr. Simmons was required to exhaust his administrative

remedies before subject-matter jurisdiction was conferred on a trial court. Subaru v.

McDavid, 84 S.W.3d at 221; see also Cash Am. Int'l Inc. v. Bennett, 35 S.W.3d 12,

15 (Tex. 2000) (“An agency has exclusive jurisdiction when the Legislature gives

the agency alone the authority to make the initial determination in a dispute.”). In

Cash, the Texas Supreme Court noted: “When the Legislature vests exclusive

jurisdiction in an agency, exhaustion of administrative remedies is required.” Id.; see

also Lueck v. State, 325 S.W.3d 752, 765-66 (Tex. App.—Austin 2010, pet. denied)

(affirming trial court’s order granting Department’s plea where Lueck failed to

exhaust administrative remedies).

Where there is exclusive jurisdiction, “courts may review the administrative

action only at the time and in the manner designated by statute.” Cash, 35 S.W.3d at

15; see also Twenty Wings Ltd. v. Tex. Alcoholic Beverage Comm’n, No. 2-05-355-

CV, 2006 WL 1791707, at *1 (Tex. App.—Fort Worth June 29, 2006, no pet.) (mem.

op.) (“If an administrative body has exclusive jurisdiction, a party must exhaust all

administrative remedies before seeking judicial review of the decision.”); Tex. Gov’t

Code Ann. § 2001.171 (providing that person aggrieved by agency order may only

seek judicial review if he first exhausted administrative remedies).

21 Exclusive jurisdiction bars a court from ruling in a proceeding where a party

failed to exhaust its administrative remedies. Hill v. Bd. of Trs. of the Ret. Sys. of

Tex., 40 S.W.3d 676, 678 (Tex. App.—Austin 2001, no pet.) (“It is well-settled that

a party must exhaust its administrative remedies before seeking judicial review of

an agency order.”); see also Lueck, 325 S.W.3d at 765-66 (affirming trial court’s

order granting Department’s plea where Lueck failed to exhaust administrative

remedies).

Dr. Simmons failed to exhaust his administrative remedies because he failed

to timely appeal the Final Notice of Overpayment. His failure to appeal precluded

his ability to file a suit for judicial review. See Tex. Gov't Code Ann. § 2001.171

(“A person who has exhausted all administrative remedies available within a state

agency and who is aggrieved by a final decision in a contested case is entitled to

judicial review . . .”) (emphasis added); see also Chatha, 381 S.W.3d at FN21

(noting that in “suits against governmental entities, a timely filed petition for judicial

review is a statutory prerequisite to suit, so that failure to comply deprives the trial

court of jurisdiction”); Reed v. Prince, 194 S.W.3d at 107Error! Bookmark not

defined.. See also Vickery v. Stanley, 2010 WL 4638714, at *4 (Tex. App.—Tyler

Nov. 17, 2010, no pet.) (“The UDJA cannot be invoked when it would interfere with

some other entity’s exclusive jurisdiction.”) (citing MBM Fin. Corp. v. Woodlands

22 Operating Co., 292 S.W.3d 660, 669 (Tex. 2009)).

Therefore, a district court is barred from determining whether “Plaintiffs’

alleged liability to the Defendant has been released and extinguished.” See Trial

Court Petition, at CR 7. Simmons should have brought this claim in a suit for judicial

review, an avenue that he made impossible when he failed to timely appeal the final

notice of overpayment.

Related to the failure to exhaust administrative remedies, this suit is an

impermissible collateral attack on a final agency decision. Here, Dr. Simmons is

attempting to cure his failure to timely appeal the Final Notice of Overpayment. To

the extent Plaintiffs seek a collateral attack on a final agency determination, the trial

court also lacked jurisdiction over Simmons’ suit.

Courts have repeatedly rejected attempts to use the UDJA to attack final

agency orders. See, e.g., Creedmoor-Maha Water Supply Corp. v. Tex. Comm’n on

Envtl. Quality, 307 S.W.3d 505, 526 (Tex. App.—Austin 2010, no pet.); Kelsoe, 286

S.W.3d at 96-97 (court lacks jurisdiction to consider appeal where party failed to

timely file petition for judicial review). See also TFJA v. Tex. Comm’n on Envtl.

Quality, 368 S.W.3d 727, 735-36 (Tex. App.—Austin 2012, pet. denied) (“failure to

timely file a petition for judicial review . . . entirely deprives a trial court of

jurisdiction to consider an appeal of [an agency’s] decision”); Friends of Canyon

23 Lake, 96 S.W.3d at 524.

C. Dr. Simmons’ UDJA claim, even if valid, could not confer jurisdiction on a trial court and would result only in an advisory opinion.

1. Independent Jurisdiction Not Conferred

The trial court also lacked jurisdiction because Dr. Simmons’ UDJA claim is

not a waiver of sovereign immunity sufficient to confer jurisdiction on the court. The

UDJA does not enlarge the existing jurisdiction of a court or create new jurisdiction.

IT-Davy, 74 S.W.3d at 855.

Rather, a court must have an independent basis for jurisdiction to hear an

action for declaratory relief against the State. Tex. Civ. Prac. & Rem. Code §

37.003(a); Wilson v. Wilson, 378 S.W.2d 156, 160 (Tex. App.—Tyler 1964, no writ).

The UDJA, ch. 37 of the Civil Practice & Remedies Code, is “merely a procedural

device for deciding cases already within a court's jurisdiction rather than a legislative

enlargement of a court’s power.” In re O'Quinn, 355 S.W.3d 857, 862 (Tex. App.—

Houston [1st Dist.] 2011, orig. proceeding [mand. denied]) (quoting Tex. Air Control

Bd., 852 S.W.2d at 444). The UDJA “cannot be invoked as an affirmative ground of

recovery to revise or alter existing rights or legal relations.” AVCO Corp. v.

Interstate Sw., Ltd., 251 S.W.3d 632, 663 (Tex. App.—Houston [14th Dist.] 2007,

pet. denied) (quoting Republic Ins. Co. v. Davis, 856 S.W.2d 158, 164 (Tex. 1993)).

24 See also Tex. Civ. Prac. & Rem. Code § 37.002(b) (“This chapter is remedial; its

purpose is to settle and to afford relief from uncertainty and insecurity with respect

to rights, status, and other legal relations”).

Because Dr. Simmons UDJA claim is incidental to a mandamus claim or

request for injunctive relief, the trial court properly granted HHSC’s plea to the

jurisdiction. 11

2. Advisory Opinion

Dr. Simmons’ suit is also barred to the extent he asked the trial court to issue

an advisory opinion. See Appellate Brief at p. 5 (“the trial court was requested to

construe the validity and to make a declaration of the relative rights of the parties

concerning Order No. 5 and Order No. 10”). Dr. Simmons’ request that his liability

be “release and extinguished” relies in his interpretation of Orders No. 5 and 10.

The SOAH ALJ’s Order No. 5 in the payment hold proceeding did nothing

other than deny the Inspector General’s motion to dismiss the payment hold

contested case. CR at 9-11. 12 Therefore, any declaration or ruling regarding the

11 This suit is also an invalid UDJA claim because if Simmons had timely filed a suit for judicial review, he would not have needed to file a UDJA claim. The relief he seeks is redundant of the relief he could have pursued in an appeal of HHSC-OIG’s overpayment determination. See Tex. Air Control Bd., 852 S.W.2d at 444 (a declaratory judgment action is merely a procedural device for deciding matters already within a court's subject matter jurisdiction). 12 Order No. 5, other than denying HHSC-OIG’s request to dismiss the payment hold case, only otherwise purported to answer the following question: “Did Dr. Simmons fail to timely provide OIG with a written request for an appeal?” CR 10-11. The only relief that Dr. Simmons could have sought would have been an order from a Travis County district court to compel the

25 overpayment proceeding is tantamount to an advisory opinion, which Texas courts

are not allowed to issue. See Tex. Air Control Bd., 852 S.W.2d at 444. And because

the overpayment proceeding was not docketed at SOAH, the administrative body

that issued Order Nos. 5 and 10, SOAH did not have jurisdiction over the

overpayment proceeding.

Also, the orders did not somehow result in the complete extinguishing of Dr.

Simmons’ liability in the overpayment proceeding. A declaration as to the specific

orders and pleadings in the payment hold proceeding would thus have no effect on

whether HHSC-OIG had the authority to apply the payment hold monies to satisfy

the overpayment amount. See Billings v. Concordia Heritage Assoc., 960 S.W.2d

688, 693 (Tex. App.—El Paso 1997, writ denied) (“declaratory judgment is

Executive Commissioner to docket the overpayment case, either at HHSC Appeals or at SOAH. If such a suit had been brought, HHSC would have argued that the SOAH ALJ in the payment hold case lacked jurisdiction in the overpayment proceeding. And even if the AJL did have jurisdiction in the overpayment case, the SOAH ALJ’s reasoning in Order No. 5 conflicted with holdings from the Third Court of Appeals. See Desi Driving Sch. v. Tex. Educ. Agency, 2014 WL 1018086, at *1 (Tex. App.—Austin Mar. 14, 2014, no pet.) (where party prematurely filed suit for judicial review, district court lacked jurisdiction) (citing Marble Falls Indep. Sch. Dist. v. Scott, 275 S.W.3d 558, 566-67 (Tex. App.—Austin 2008, pet. denied)). Here, any request made prior to the issuance of the final notice of overpayment would have failed to invoke the jurisdiction of a court, including SOAH. See id. Order No. 10 only cancelled the payment hold hearing. CR 116. The order also purports to “remand” the payment hold matter to HHSC. If Dr. Simmons’ suit were ever heard on the merits, HHSC would argue that after the Notice of Lift of Payment Hold, filed before the issuance of Order No. 10, the payment hold proceeding was disposed of in its entirety and there was nothing, therefore, to remand to HHSC. And neither Order somehow cured Dr. Simmons’ failure to exhaust his administrative remedies after he failed to appeal the Final Notice of Overpayment by November 30, 2014.

26 appropriate when a real controversy exists between parties, and the entire

controversy may be determined by judicial declaration”).

II. Dr. Simmons’ Purported Issue No. 2 is not properly before the Court.

Dr. Simmons states as his second issue that HHSC failed to exhaust its

administrative remedies. This assertion was part of Dr. Simmons’ briefing in the trial

court and goes to the merits of his argument, an argument that the trial court in

granting HHSC’s Plea, did not consider. See, e.g., Dr. Simmons’ Post-Submission

Brief, at CR 6 (claiming that HHSC “did not seek judicial review of [Order Nos. 5

and 10]”). The Court would have to first deny HHSC’s plea and remand for an

opportunity for the trial court to consider the merits of Dr. Simmons’ claims.

Therefore, because issue number two is not properly before the Court, for all the

reasons stated in section I, supra, issue two should be overruled.13

CONCLUSION AND PRAYER

The trial court correctly ruled that it was without jurisdiction to hear

Simmons’ complaints because sovereign immunity barred him from bringing suit

13 HHSC does note that despite Dr. Simmons’ assertion, HHSC could not, nor need not, have availed itself of Tex. Gov’t Code Ann. § 2001.176 and have sought a suit for judicial review for either Order No. 5 or Order No. 10. As explained in FN 12 supra, Order No. 5 was neither final nor appealable. Order No. 5 merely denied HHSC-OIG’s motion to dismiss the payment hold case. And Order No. 10 cancelled the payment hold hearing, precisely the action HHSC-OIG wished the ALJ to take. And, in any event, HHSC-OIG’s Notice of Lift of Payment Hold, filed Feb. 5, 2014, disposed entirely of the payment hold proceeding and made moot any effect Orders No. 5 and 10 may have had on any parties.

27 and because Simmons had failed to exhaust his administrative remedies. The

jurisdictional defects cannot be cured. See Harris Cnty. v. Sykes, 136 S.W.3d 635,

639 (Tex. 2003).

Appellee HHSC prays the Court will affirm the trial court’s granting of

HHSC’s Plea to the Jurisdiction.

Respectfully submitted,

/s/ Jennifer L. Hopgood____________ JENNIFER L. HOPGOOD State Bar No. 21791950 (512) 936-1660 direct line jennifer.hopgood@texasattorneygeneral.gov RAYMOND C. WINTER Chief, Civil Medicaid Fraud Division Assistant Attorneys General P. O. Box 12548 Austin, Texas 78711-2548 (512) 499-0712 facsimile

28 CERTIFICATE OF COMPLIANCE

I certify that this Appellee’s Brief has 6,723 words.

/s/ Jennifer L. Hopgood____________ Jennifer L. Hopgood

CERTIFICATE OF SERVICE

I certify that I have on this 12th day of January 2015, served copies of this Appellee’s Brief to the following:

Via e-file

Joseph R. Willie Willie & Associates, P.C. 4151 Southwest Freeway, Suite 490 Houston, Texas 77027

COUNSEL FOR TROY W. SIMMONS, D.D.S., P.C. AND TROY W. SIMMONS, D.D.S.

29 APPENDIX

30 SOAH DOCKET NO. XXX-XX-XXXX HHSC-OIG CASE NO.: P20121327937016421

TROY W. SIMMONS, D.D.S., P.C., § BEFORE THE STATE OFFICE Petitioner, § § vs. § § OF TEXAS HEALTH AND HUMAN § SERVICES COMMISSION, OFFICE § OF INSPECTOR GENERAL, § Respondent. § ADMINISTRATIVE HEARINGS

NOTICE OF LIFT OF PAYMENT HOLD

NOW COMES the Texas Health and Human Services Commission, Office of Inspector

General (“HHSC-OIG” or “Respondent”) and respectfully files this Notice of Lift of Payment

Hold. Respondent hereby gives notice that the hold imposed, in accordance with 1 Tex. Admin.

Code § 371.1709(a), 371.1709 (b)(3) (2012) and 42 C.F.R. § 455.23 (2011), on payments of

future claims for reimbursement submitted by Troy W. Simmons, D.D.S, P.C. (Petitioner) is

no longer in effect. Respondent would respectfully show the Court as follows:

1. On November 13, 2013, HHSC-OIG served Petitioner, by and through his counsel of

record, with a Final Notice of Overpayment in accordance with the mandates of Tex. Gov’t Code

§531.1201 (2013).

2. On November 15, 3013, Petitioner, by and through his counsel of record, received the

Final Notice of Overpayment.

3. Petitioner failed to make a written request for appeal of the Final Notice of Overpayment

by the 15th calendar day after receipt in accordance with Tex. Govt Code § 531.1201 (2013),

which supersedes and controls any administrative rule in place prior to September 1, 2013. Tex.

Govt Code § 53 1.1201(a) (2013) specifically states:

SOAR Docket No. XXX-XX-XXXX Page 1 of 4 A provider must request an appeal not later than the 15 th day after the date the provider is notified that the commission or the commissions office of inspector general will seek to recover an overpayment or debt from the provider. On receipt of a timely written request by a provider who is the subject of a recoupment of overpayment or recoupment of debt arising out of a fraud or abuse investigation, the office of inspector general shall file a docketing request with the State Office of Administrative Hearings or the Health and Human Services Commission appeals division, as requested by the provider, for an administrative hearing regarding the proposed recoupment amount and any associated damages or penalties. (emphasis added).

4. Because Petitioner did not make a timely request for appeal of imposition of the final

sanction, HHSC-OIG has not and cannot file a docketing request with regard to the overpayment.

The sanction identified in the Final Notice of Overpayment became final as a matter of law on

December 15, 2013 (thirty (30) calendar days after receipt of the notice of final sanction). 1 Tex.

Admin. Code. § 371.1617(a)(1) (2012).

5. According to HHSC-OIG agency rules, HHSC-OIG lifted the payment hold and applied

the held funds to the established overpayment. See Exhibit A, the 01/30/2014 SAR from HHSC

OIG to TMHP, and Exhibit B, the 02/04/2014 SAR from TMHP to HHSC-OIG confirming

termination of the payment hold and application of the funds.

6. On February 4, 2014, HHSC-OIG received confirmation from the Texas Medicaid &

Healthcare Partnership (TMHP) that the payment hold had been lifted and is no longer in effect.

See Exhibit B.

7. HHSC-OIG previously moved for a dismissal of this payment hold proceeding on the

ground of mootness.

8. HHSC-OIG wishes to advise the Court that the hold previously imposed on payments of

future claims for reimbursements submitted by Petitioner, Troy W. Simmons, D.D.S, P.C., is no

longer in effect.

SOAH Docket No. 529-13-498 1 Page 2 of 4 th 5 Filed this day of February, 2014.

Douglas C. Wilson Inspector General

Joy Sparks Chief Counsel De ty Inspector General

James . Day II ssoc te Counsel te ar No. 24029507 11101 Metric Blvd., Building I Austin, Texas 78758 (512) 491-2052 Phone (512)491-2009 Fax James.day@hhsc.state.tx.us

ATTORNEY FOR TEXAS HEALTH AND HUMAN SERVICES COMMISSION OFFICE OF INSPECTOR GENERAL

SOAH Docket No. XXX-XX-XXXX Page 3 of 4 CERTIFICATE OF SERVICE th 5 By my signature below, I certify that on this day of February, 2014, I caused to be served a true and correct copy of the foregoing document Via Facsimile upon the State Office of Administrative Hearings and upon Petitioner as follows:

Via Facsimile: (512) 322-2061 State Office of Administrative Hearings 300 West 15th Street, Room 504 P.O. Box 13025 Austin, Texas 78711-3025

Via Facsimile: (713) 599-1659 Troy W. Simmons, D.D.S., P.C. do Joseph R. Willie, II, D.D.S., J.D. Willie & Associates, P.C. Attorneys and Counselors At law 4151 Southwest Freeway, Suite 490 Houston, Texas 77027-7307

ames Day II .

ATONEY HHOIG

SOAH Docket No. XXX-XX-XXXX Page 4 of 4