SECOND DIVISION
ANDREWS, P. J.,
MCFADDEN and RAY , JJ.
NOTICE: Motions for reconsideration must be
physically received in our clerk’s office within ten
days of the date of decision to be deemed timely filed.
http://www.gaappeals.us/rules/
March 27, 2015
In the Court of Appeals of Georgia
A14A1548, A14A1549. UNITED CEREBRAL PALSY OF
GEORGIA, INC. et al. v. GEORGIA DEPARTMENT OF
BEHAVIORAL HEALTH AND DEVELOPMENTAL
DISABILITIES et al.
MCFADDEN, Judge.
United Cerebral Palsy of Georgia, Inc. and others filed a putative class action
lawsuit against the Georgia Department of Behavioral Health and Developmental
Disabilities, the Georgia Department of Community Health, and those agencies’
commissioners, alleging that the defendants erred in administering the state Medicaid
program. The superior court granted the defendants’ motion to dismiss on the ground
that the plaintiffs had not exhausted their administrative remedies. The plaintiffs
appeal, arguing that they were excused from the exhaustion requirement because the
defendants did not give them required notice of the adverse action at issue. We agree
and therefore reverse.
1. Background.
We review a ruling on a motion to dismiss for failure to exhaust administrative
remedies under a de novo standard of review. Miller County Bd. of Ed. v. McIntosh,
326 Ga. App. 408, 411 & n. 5 (1) (756 SE2d 641) (2014). The facts regarding the
issue of exhaustion of administrative remedies are largely undisputed. The plaintiffs
are nonprofit corporations that provide services to Georgia Medicaid patients with
intellectual and developmental disabilities (“providers”), the patients who receive
those services (“recipients”), and the recipients’ family representatives. The
defendants are the state agencies that administer the Medicaid program in Georgia
and those agencies’ commissioners. OCGA § 49-4-142.
“Medicaid is a cooperative federal-state program through which the federal
government furnishes financial assistance to the states so that the states may provide
necessary medical, rehabilitation, and other services to low-income persons.”
Prado-Steiman v. Bush, 221 F.3d 1266, 1268 (I) (a) (11th Cir. 2000). Although
participation in the program is voluntary, states that choose to participate must
develop and have approved by the federal government a state Medicaid plan that
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complies with the requirements of the Medicaid Act. Wilder v. Virginia Hosp. Assn.,
496 U. S. 498, 502 (I) (A) (110 SCt 2510, 110 LEd2d 455) (1990). With federal
approval, states may enact waiver programs that exempt them from certain otherwise-
mandated federal Medicaid requirements. 42 USC § 1396n (b).
In 2007, the federal government approved the two waiver programs at issue in
this case: the New Options Waiver Program, which the parties refer to as NOW, and
the Comprehensive Supports Waiver Program, which the parties refer to as COMP.
NOW and COMP allow the defendants to permit the providers to furnish services to
recipients in home and community-based settings rather than in institutions. The
waiver programs became part of Georgia’s Medicaid plan and were incorporated into
a provision of the contracts – known as statements of participation – between the
defendants and the providers. See Pruitt Corp. v. Ga. Dept. of Community Health,
284 Ga. 158, 160 (2) (664 SE2d 223) (2008) (provider that signs a statement of
participation that incorporates by reference the Department of Community Health’s
policy manual enters into a contractual relationship with the department).
Under the provisions of the waiver programs and the statements of
participation, Medicaid service providers are entitled to be paid certain rates for their
services. According to the plaintiffs, since 2008, the defendants have not paid the
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providers the approved rates and have limited the amount of services recipients can
receive, sometimes to below the amount that is medically necessary. The plaintiffs
allege that the defendants made these reductions without public notice and comment
as required by federal and state law and without giving the providers or recipients
proper notice in violation of their rights to due process and contrary to the terms of
the statements of participation.
The plaintiffs filed suit, asserting claims for breach of contract, violation of
their rights to administrative remedies under OCGA § 49-4-153 (b) (1), and violation
of their constitutional rights. The trial court granted the defendants’ motion to dismiss
the suit for the plaintiffs’ failure to exhaust their administrative remedies. The
plaintiffs filed this appeal.
Generally, a party aggrieved by a state agency’s decision must exhaust
available administrative remedies before seeking equitable or declaratory relief
through judicial review. Perkins v. Dept. of Medical Assistance, 252 Ga. App. 35, 36
(1) (555 SE2d 500) (2001). The plaintiffs argue that they were excused from the
exhaustion requirement because the defendants never gave them the required notice
of the adverse agency decision. The defendants counter that the plaintiffs had actual
notice, and nothing required them to give any sort of formal notice. We agree with the
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plaintiffs that under the provisions of the Georgia Medical Assistance Act of 1977,
OCGA § 49-4-140 et seq., the regulations, and the policy and procedure manuals,
they were entitled to notice before they were required to exhaust administrative
remedies.
2. Administrative review.
OCGA § 49-4-153 of the Act concerns challenges to decisions of defendant
Department of Community Health. Subsection (b) of that statute grants both providers
and recipients the right to administrative hearings when they are aggrieved by certain
decisions of the Department of Community Health. OCGA § 49-4-153 (b) (1), (b) (2)
(A).
(a) Providers.
Certain provisions relate exclusively to providers. OCGA § 49-4-153 (b) (2)
(A) specifies that providers
may request a hearing on a decision of the Department of Community
Health with respect to a denial or nonpayment of or the determination
of the amount of reimbursement paid or payable to such provider on a
certain item of medical or remedial care of service rendered by such
provider by filing a written request for a hearing in accordance with
Code Sections 50-13-13 and 50-13-15 with the Department of
Community Health. . . . . The request for hearing shall be filed no later
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than 15 business days after the provider of medical assistance receives
the decision of the Department of Community Health which is the basis
for the appeal.
OCGA § 49-4-153 (b) (2) (A) (emphasis added). A related regulation, Ga. Comp. R.
& Regs. r. 350-4-.04 of the Rules and Regulations for the Department of Medical
Assistance (the former name of the Department of Community Health, see 2009 Ga.
L. 453 ), directs the Department of Community Health to “offer the opportunity for
Administrative Review to any provider against whom it proposes to take an adverse
action unless the Department is otherwise authorized by law to take such action
without opportunity for appeal by the provider prior to the action’s implementation.”
(The defendants do not argue that they were authorized by law to take the actions at
issue without opportunity for appeal by the providers.) The regulation further
provides that, “Administrative Review shall be completed, if not waived by the
provider, prior to implementation of the proposed action.” Ga. Comp. R. & Regs. r.
350-4-.04. It directs that “[t]he procedures and deadlines for obtaining . . .
Administrative Review and the deadlines for decisions thereon shall be published in
the Policies and Procedures Manual.” Id.
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In accordance with the regulation, the Georgia Medicaid manual outlines the
procedures and deadlines for providers to obtain administrative review. It provides
in pertinent part:
For a provider to obtain Administrative Review, a written request must
be received at the address of the office that proposed the adverse action
or denial of payment within thirty (30) days of the date the notification
of the proposed adverse action, the denial of payment, remittance advice
or initial review determination was mailed to the provider.
Part I, Policies and Procedures for Medicaid/Peachcare for Kids, Chapter 505
(emphasis added). The manual defines adverse action as “an instance in which the
Division denies or reduces the amount of reimbursement claimed by a provider, . . .
[or] sets or changes a provider’s reimbursement rate.” Part I, Policies and Procedures
for Medicaid/Peachcare for Kids, Definitions, § 5 (a), (c).
(b) Recipients.
Other provisions apply exclusively to recipients. OCGA § 49-4-153 (b) (1)
grants recipients the right of administrative review, specifying that:
any recipient of medical assistance aggrieved by the action or inaction
of the Department of Community Health as to any medical or remedial
care or service which such recipient alleges should be reimbursed under
the terms of the state plan . . . shall be entitled to a hearing upon his or
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her request for such in writing and in accordance with the applicable
rules and regulations of the department and the Office of State
Administrative Hearings. . . .
OCGA § 49-4-153 (b) (1). The Medicaid manual outlines the procedures for
recipients to obtain administrative review. It provides in pertinent part:
Should the Department’s decision be adverse to the [recipient], the
[recipient] (or [recipient’s] representative) may request a hearing before
an Administrative Law Judge. A hearing must be requested in writing.
The hearing request and a copy of the adverse action letter must be
received by the Department within 30 days or less from the date of the
adverse action letter.
Part I, Policies and Procedures for Medicaid/Peachcare for Kids, Chapter 508 (D)
(underline in original; italics added).
Like the Medicaid manual, the COMP and NOW manuals also include
provisions regarding administrative review, at least as to the recipients. Both manuals
provide in pertinent part:
Reduction of [COMP/NOW] Services: The participant and/or his/her
representative (family member or legal guardian) will receive written
notice of the rights to appeal any reduction of [COMP/NOW] services
from the [Georgia Department of Behavioral Health and Developmental
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Disabilities] regional office. The notice will outline the process for
requesting a fair hearing.
Part II, Policies and Procedures for Comprehensive Supports Waiver Program
(COMP), Chapter 709.1 (1); Part II, Policies and Procedures for New Options Waiver
Program (NOW), Chapter 709.1 (1) (emphasis added).
3. Notice.
Although an administrative body’s interpretations of applicable statutes and
implementing administrative rules are entitled to deference, see generally Hosp. Auth.
of Gwinnett County v. State Health Planning Agency, 211 Ga. App. 407, 408 (2) (438
SE2d 912) (1993), its interpretations of its manuals are not. Pruitt Corp., supra, 284
at 159-160 (2). We decline to follow the defendants’ interpretation of the Medicaid,
COMP, and NOW manuals. And when we consider the applicable provisions of the
Medicaid manual, it is clear that the providers were entitled to written notification of
the defendants’ proposed action to deny or reduce the amount of the providers’
reimbursement. Chapter 505 of the manual conditions the provider’s entitlement to
administrative review on a timely written, request. And the timeliness of the request
is calculated from “the date the notification of the proposed adverse action, the denial
of payment, remittance advice or initial review determination was mailed to the
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provider.” Id. The plain terms of the manual contemplate the mailing of notice to the
provider.
The regulations support this conclusion. Chapter 350-1 concerns the
administration of the Department of Community Health. It defines “pleadings” as “the
notice of adverse action issued by the Department which aggrieves the provider, the
provider’s Request for hearing requesting review of the adverse action, and any
amendments to such documents.” Ga. Comp. R. & Regs. r. 350-1-.01 (16) (emphasis
added). See also Ga. Comp. R. & Regs. r. 350-4-.19 (1) (“The notice of adverse
action issued by the Department and the request for hearing submitted by the provider
shall constitute the pleadings in each contested case . . . .”). And it provides that “[a]ll
petitions, requests, notices, and decisions referred to in these Rules must be in
writing.” Ga. Comp. R. & Regs. r. 350-1-.01 (25).
The conclusion that the plaintiffs were entitled to written notice is even clearer
regarding recipients: the NOW and COMP manuals expressly state that recipients
“will receive written notice of the rights to appeal any reduction of [COMP/NOW]
services from the [Georgia Department of Behavioral Health and Developmental
Disabilities].” Part II, Policies and Procedures for Comprehensive Supports Waiver
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Program (COMP), Chapter 709.1 (1); Part II, Policies and Procedures for New
Options Waiver Program (NOW), Chapter 709.1 (1).
Because the defendants failed to give the required written notice, they were not
entitled to dismissal for the plaintiffs’ failure to exhaust administrative remedies.
Chatham County Bd. of Tax Assessors v. Emmoth, 278 Ga. 144, 146 (1) (598 SE2d
495) (2004). “The [defendants] failed to give the requisite notice and thus [they]
cannot take advantage of irregularities for which [they are] responsible.” Id. (citation
omitted). See also Fulton-DeKalb Hosp. Auth. v. Metzger, 203 Ga. App. 595, 597 (4)
(417 SE2d 163) (1992) (since defendant’s “own actions” prevented aggrieved
plaintiff from seeking administrative review, defendant could not complain about
plaintiff’s failure to exhaust administrative remedies). See also Smart v. State, 237
P3d 1010, 1015 (IV) (A) (Alaska 2010) (to be adequate to trigger the obligation to
pursue administrative review, notice “must clearly identify the proposed agency
action and the party’s right to seek administrative relief”) (citation omitted).
Judgments reversed. Andrews, P. J., concur and Ray, J., concur in judgment
only.
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