Appealed from the 19th Judicial District Court, in and for the Parish of East Baton Rouge, Louisiana. Trial Court No. C625888. Honorable Janice Clark, Judge.
LESTER J. GAUTHIER, JR., LAFAYETTE, LA, ATTORNEY FOR JOHN FORD D/B/A THE CLINIC AT VILLAS AT ANGEL POINT.
DOUGLAS L. CADE, BATON ROUGE, LA, ATTORNEY FOR DEFENDANT-APPELLANT, STATE OF LOUISIANA, DEPARTMENT OF HEALTH AND HOSPITALS.
BEFORE: PETTIGREW, WELCH, AND CHUTZ, JJ. Welch J. dissents and assigns reasons.
[2014 1262 La.App. 1 Cir. 2]
This is an appeal by the Louisiana Department of Health and Hospitals (DHH) of an administrative adjudication that was adopted by the district court by judgment dated July 24, 2014, which reversed DHH's denial of the application of John Ford d/b/a The Clinic at Villas at Angel Point (the Clinic) to participate in the Medicaid program, and ordered DHH to grant that application and allow the Clinic to participate in the Medicaid program as a physician provider. After a thorough review of the record, we find the decision of DHH was not arbitrary and capricious and reverse the judgment of the district court.
FACTUAL BACKGROUND AND PROCEDURAL HISTORY
Several years prior to the application at issue in this matter, John Ford and his wife were the owners of Angel Manor, L.L.C. (Angel Manor), which was enrolled in the Medicaid program under three separate
provider numbers: (1) No. 00045, which provided personal care attendant services; (2) No. 17817, which provided long term-personal care services; and (3) No. 13449, which provided adult day health care services. Beginning in 2006 and continuing through 2011, DHH, through its Program Integrity Unit, issued numerous notices to Angel Manor concerning billing discrepancies (billing for undocumented services, overlapping billings, and over-billing) that occurred during the period ranging from June 2003 through July 2009. Angel Manor was informed that the results of informal hearings, concerning these alleged violations, affirmed recovery amounts from Angel Manor, totaling $204,798.02 and a proposed exclusion from Medicaid participation for a period of five years. In the last notice, dated April 18, 2011, DHH indicated that Angel Manor contested the proposed exclusion as well as the recovery amount (which by that time had been reduced by modification to a total of $126,838.90).
Thereafter, the Fords d/b/a Angel Manor filed an administrative appeal of DHH's findings. However, prior to a hearing on Angel Manor's appeal, the parties reached a settlement agreement, effective September 15, 2011. In that agreement, the parties agreed that the sum of $126,838.90 had been recouped and constituted full settlement of all of the monetary recovery at issue. Additionally, the Fords (Angel Manor) agreed to [2014 1262 La.App. 1 Cir. 3] voluntarily relinquish two of its provider numbers (00045 and 17817) and retain only their adult day health care service provider number, 13449. The Fords also agreed to dismiss their appeal of the proposed sanctions. In return, DHH agreed to grant the Fords and Angel Manor a " full and final release of all administrative and/or civil claims, demands, actions, rights of action and/or causes of action brought or that could have been brought by DHH in relation to services billed by Angel Manor for the period of 06/01/04 through 12/31/09."
In February 2013, John Ford, as principal owner of the Clinic, submitted an application (the one at issue in this appeal) with DHH to enroll in the Louisiana Medicaid Program (Medicaid) as a physician group provider. In that application, John Ford properly disclosed his ownership of Angel Manor, the previous proposed sanctions, and attached a copy of the settlement agreement.
Because of the prior sanctions and the proposed five-year exclusion of Angel Manor from Medicaid, the application was routed to DHH's Program Integrity staff for review and determination. By letter dated May 21, 2013, DHH denied the application, stating that the decision was made " in the best interest of the Medicaid Program" and citing La. R.S. 46:437(9) as its authority for the denial. Specifically, DHH noted that its decision to deny the application was based on the sanctions that had been proposed against other entities (i.e., Angel Manor) owned by John Ford and his wife during previous enrollments with Medicaid.
John Ford, as principal owner of the Clinic, appealed the denial of its application by filing a request for administrative review of that denial, urging that the settlement agreement reached between them
and DHH fully resolved all claims concerning the complaints and proposed sanctions for alleged billing discrepancies involving Angel Manor. [2014 1262 La.App. 1 Cir. 4] After a full evidentiary hearing, Administrative Law Judge Gregory Toney (AD) issued a Recommended Decision and Order on September 27, 2013, reversing DHH's denial of the Clinic's application, finding that the settlement agreement expressly constituted a " full and final release" of all claims and/or rights or causes of action against Angel Manor by DHH " in relation to the services billed by Angel Manor."
The ALJ's Recommended Decision and Order was sent to the Secretary for DHH for a final administrative decision, pursuant to La. R.S. 49:992(D)(2)(b)(iii)(aa). In a fourteen-page detailed decision, dated October 14, 2013, DHH declined to adopt the ALJ's recommended decision, and instead ruled, " [t]he denial of the application for enrollment as a MEDICAID physician group provider was an appropriate decision within the discretionary authority of the Secretary of [DHH]." On November 5, 2013, John Ford d/b/a the Clinic, filed a petition for judicial review of that decision.
On July 7, 2014, a hearing was held in the district court, following which a judgment was rendered on July 24, 2014, reversing DHH's decision on the basis that its denial of the Clinic's application was arbitrary and capricious, and ordering DHH to grant said application and allow the Clinic to ...