in the court of appeals of the state of mississippi clc … · clc of biloxi must, at the outset...
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IN THE COURT OF APPEALS OF THE STATE OF MISSISSIPPI
CLC OF BILOXI, LLC D/B/A BILOXI COMMUNITY APPELLANTLIVING CENTER
VS. NO. 2016-CC-01034-COA
MISSISSIPPI DIVISION OF MEDICAID APPELLEESDAVID J. DZIELAK, in his Official Capacityas Executive Director of Mississippi Division of Medicaid
APPEAL FROM THE CHANCERY COURT OF HINDS COUNTY, MISSISSIPPITHE HONORABLE PATRICIA D. WISE, CHANCELLOR
ORAL ARGUMENT REQUESTED
REBUTTAL BRIEF OF APPELLANT
COUNSEL FOR APPELLANT:
JAMES R. MOZINGO (MSB No. 3638) Post Office Box 4587LYDIA M. QUARLES (MSB No. 4582) Jackson, Mississippi 39296-4587H. HUNTER TWIFORD, IV (MSB No. 103874) Telephone: 601-812-5885MOZINGO|QUARLES, PLLC Telecopier: 601-852-1142Highland Village, Suite 278 Email:[email protected] Interstate 55 North Email: [email protected], Mississippi 39211 Email: [email protected]
E-Filed Document Jun 26 2017 15:36:47 2016-CC-01034-COA Pages: 24
TABLE OF CONTENTS
Page
TABLE OF CONTENTS i
TABLE OF AUTHORITIES ii
REBUTTAL ARGUMENT 1
I. The State Plan, Attachment 4.19-D, is plain and unambiguous in itsmandate that providers be reimbursed for their reasonable andnecessary medical expenses when incurred in an economically andefficiently run nursing facility. 2
II. CLC of Biloxi’s appeal is not limited merely to the issue of whetherindirect reimbursement is appropriate; this appeal is ripe fordetermination of whether a respiratory therapist’s salary may bedirectly reimbursed or indirectly reimbursed. 6
III. DOM’s adoption of PPM § 50.02 is a clear infringement on apatient’s right to choose its respiratory care provider in contraventionof Mississippi Code Ann. § 43-13-5. 8
IV. Despite DOM’s stipulation at the administrative hearing that CLC’stracheostomy patients could only be cared for by a licensed physicianor licensed respiratory therapist, the chancellor erred in finding thatthe particular respiratory care at issue could have been provided by aregistered nurse or licensed practical nurse. 11
V. It is entirely arbitrary and capricious to refuse to reimburse CLC’srespiratory therapist’s salary entirely, especially where DOMcontends that it will pay salaries for nursing staff to provide thosesame services. 16
CONCLUSION 17
CERTIFICATE OF SERVICE 20
i
TABLE OF AUTHORITIES
Page
Cases
Beverly Enterprises v. Mississippi Division of Medicaid, 808 So. 2d 939 (Miss. 2002). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9, 11
CLC of Biloxi v. Miss. Div. of Medicaid, 189 So.3d 726 (Miss. Ct. App. 2016).. . . . . . . . . . . . . . 1
Division of Medicaid v. Mississippi Independent Pharmacies, 20 So.3d 1236 (Miss. 2009). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2, 3
Miss. Comm’n on Envtl. Quality v. Chicaksaw County Bd. of Supervisors, 621 So. 2d 1211, 1215 (Miss. 1993). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Mississippi Methodist Hospital & Rehabilitation Center v. Mississippi Division of Medicaid, 21So.3d 600 (Miss. 2009). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Sandefur v. Cherry, 718 F.2d 682, 1983 U.S. App. LEXIS 16084 (5th Cir. 1983).. . . . . . . . . . . 10
Sandefur v. Cherry, 744 F.2d 1157, 1984 U.S. App. LEXIS 17255 (5th Cir. 1984).. . . . . . . . . . 10
Sierra Club v. Miss. Envtl. Quality Permit Board, 943 So.2d 673, 678 (Miss. 2006). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
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TABLE OF AUTHORITIES Page 2
Page
Statutes
Miss. Code Ann. § 43-13-5 (1972, as amended). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8, 10, 18
Miss. Code Ann. § 43-13-121 (1972, as amended). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Miss. Code Ann. § 73-57-1, et seq. (1972, as amended). . . . . . . . . . . . . . . . . . . . . . . . 9, 11, 14, 17
Miss. Code Ann. § 73-57-3 (1972, as amended). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Miss. Code Ann. § 73-57-5(e) (1972, as amended). . . . . . . . . . . . . . . . . . . . . . . . . . . . 5, 12, 16, 17
Miss. Code Ann. § 73-57-5(f) (1972, as amended). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12, 13, 17
Miss. Code Ann. § 73-57-5(g) (1972, as amended). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13, 17
Manuals
Mississippi State Medicaid Plan, Attachment 4.19-D Introduction.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 Chapter 2, Section A(15). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4, 5, 6, 7, 18 Chapter 2, Section A(18). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3, 4, 5, 7, 18 Chapter 2, Section B. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 Chapter 8.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Mississippi Medicaid Provider Policy Manual, § 50.02. . . . . . . . . . . . . . . . . . . . . . . 6, 8, 9, 10, 18
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REBUTTAL ARGUMENT
CLC of Biloxi must, at the outset here, correct a factual falsehood represented by the
Mississippi Division of Medicaid (“DOM”) which directly impacts the procedural grounds upon
which the parties find themselves. DOM claims that CES has already been improperly reimbursed
its respiratory therapist’s salary in the amount of $82,000.00 and CES’s claim for reimbursement
is actually a DOM recoupment action for funds improperly paid to CLC of Biloxi. (Appellee’s
Br. 9-10) CLC of Biloxi has not been paid its 2008 respiratory therapist’s salary because the DOM
froze CLC of Biloxi’s reimbursement to CLC’s 2007 Cost Report level due to a separate
administrative appeal CLC instituted and which is currently pending before the Hinds Chancery
Court. To date, CLC of Biloxi has yet been reimbursed in full its for its 2008 Cost Report costs,1
including the respiratory therapist’s salary at issue here.
The instant appeal is part of protracted litigation between CLC of Biloxi, its corporate1
management company Community Eldercare Services, LLC, and its twelve (12) sister CLC facilitiesand the Division of Medicaid. This litigation began when DOM previously litigated claimsagainst Community Eldercare Services, LLC and CLC of Biloxi in its Chapter 11 proceeding, styledIn re CLC of Dahlonega, United States Bankruptcy Court for the Northern District of Georgia,Gainesville Division, No. 04-21769 through 04-21773 and 04-21796 through 04-21817 and04-22478. There are also three (3) additional administrative appeals pending currently inHinds Chancery Court, including for the Division of Medicaid’s refusal to pay in excess of$7,000,000 not in dispute which DOM is withholding from the CLCs and Community EdlercareServices, LLC, as a result of the freeze of the CLCs’ 2008 Cost Report rate to 2007 levels. See e.g.,CLC of Biloxi v. Miss. Div. of Medicaid, 189 So. 3d 726 (Miss. Ct. App. 2016). The underlying factsof all these pending matters impact each of these cases in a number of ways due to the protractednature of the litigation, thus DOM’s brief writer in the instant matter – whose involvement in theseactions is limited solely to the instant matter– has misunderstood the facts regarding whether DOMhas actually already paid CLC of Biloxi’s respiratory therapist’s salary inadvertently. DOM has notdone so and the money is still outstanding and owing to CLC of Biloxi. CLC of Biloxi expendedthe money in providing necessary tracheostomy maintenance services (i.e., the respiratory therapy)and Mississippi’s Medicaid beneficiaries received the benefit of those performed services.
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I. The State Plan, Attachment 4.19-D, is plain and unambiguous in itsmandate that providers be reimbursed for their reasonable andnecessary medical expenses when incurred in an economically andefficiently run nursing facility.
The DOM’s ultimate argument can be boiled down to the notion that a provider, such as CLC
of Biloxi, takes on the risk of not getting reimbursed for reasonable and necessary healthcare services
because it has been warned by the State Plan to expect such. DOM suggests that CLC of Biloxi must
send its patients to other healthcare facilities to receive respiratory therapy services that CLC of
Biloxi was and is perfectly capable of safely providing via its own respiratory therapist. DOM
admits that it will pay other healthcare providers to provide Biloxi’s patients with those services.
DOM argues that CLC took a risk in providing those services and now CLC of Biloxi should have
to “eat” those necessary costs.
As regards this issue, statutory and regulatory construction are issues of law which are
reviewed de novo. Further, an agency’s interpretation of a rule or statute governing the agency’s
operation is a matter of law that is reviewed de novo, but with deference to the agency’s
interpretation. Miss. Methodist Hosp. & Rehab. Cntr. v. Miss. Div. of Medicaid, 21 So. 3d 600, 606
(Miss. 2009)(citing Sierra Club v. Miss. Envtl. Quality Permit Bd., 943 So.2d 673, 678 (Miss. 2006);
Div. of Medicaid v. Miss. Ind. Pharmacies Assoc., 20 So. 3d 1236, 1238 (Miss. 2009)(internal
citations omitted). However, if an agency’s interpretation is contrary to the unambiguous terms or
best reading of a statute, no deference is due. Miss. Methodist, at 607. An agency’s interpretation
will not be upheld if “it is so plainly erroneous or so inconsistent with either the underlying
regulation or statute as to be arbitrary, capricious, an abuse of discretion or otherwise not in
accordance with law.” Id. “Although we afford ‘great deference’ to an agency’s interpretation of
its governing statute, we will not permit an agency to adopt rules and regulations which are contrary
2
to statutory provisions or which exceed or conflict with the authority granted by statute.” Miss. Ind.
Pharmacies Assoc., at 1238.
DOM’s position is inherently flawed. DOM misconstrues the plain language of the State
Plan, Attachment 4.19-D. The Plan clearly states that DOM will pay all reasonable and necessary
costs and services, including therapy costs. Att. 4.19-D, Section A(18), p.66. DOM’s own expert
testified “[n]owhere [in the State Plan] does it say that respiratory therapy expenses will not
be reimbursed for a large nursing facility. It does not say it in the State Plan” and admits that
“therapy expenses will be directly reimbursed”; that “respiratory therapy is a therapy”
(Hrg. Tr. 51:5-14). And, he admits certain costs are allowable even if not specifically enumerated
in the Plan. (Hrg. Tr. 56:9-57:1)
Despite the plain language and its own expert’s testimony, DOM suggests that a vague
provision in Attachment 4.19-D provides it authority to refuse to reimburse CLC’s respiratory
therapist’s salary:
While it is recognized that some providers will incur costs in excessof the reimbursement rate, the objective of this plan is to reimburseproviders at a rate that is reasonable and adequate to meet the coststhat must be incurred by efficiently and economically operatednursing facilities that comply with all requirements of participationin the Medicaid program.
Att. 4.19-D at p.12. DOM emphasizes the first section of this sentence (Appellee’s Br. 6) and
neglects to even cite the remainder of this sentence. This allows DOM to adopt a skewed
interpretation which suits only DOM’s own whim and caprice. DOM ignores that the remainder of
this line ensures that providers be reimbursed “at a rate that is reasonable and adequate to meet the
costs that must be incurred”. There is simply no dispute that CLC’s patients had a medical need for
trach cleaning and attendant respiratory care that comes with maintenance of a trach or an artificial
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airway; DOM already stipulated that the services were reasonable and medically necessary. (Hr’g
Tr. 99:5-20)
When read together with the rest of Attachment 4.19-D, it becomes obvious that this
introductory paragraph is not a license to DOM to pick and choose which services it will cover and
under what circumstances it will cover them. When read together with Chapter 2, Section A(15)
which allows for salaries for employees providing services in the normal operations of patient care
and Section A(18) which states that therapy expenses are reimbursable, and when read together with
Chapter 2, Section B’s specifically enumerated list of “non-allowable costs”, Att. 4.19-D at
pp. 67-72, the intent of the State Plan becomes clear: facilities are expected to incur costs which are
specifically not reimbursable because they are not related to patient care, such as vending machines,
income taxes, and political contributions or religious donations. But reasonable and necessary
medical costs, such as tracheostomy and natural and artificial airway maintenance and
bronchopulmonary hygiene such as suctioning fluid from the airway and the salary of the individual
providing such direct care are clearly contemplated as reimbursable items and the State Plan
specifically states that it intends to compensate a facility adequately for incurring such costs when
they are related to patient care.
CLC’s respiratory therapist’s salary is most reasonably interpreted as allowable under
Attachment 4.19-D, Chapter 2, Section A(15) which provides:
15. Salaries and Fringe Benefits. Allowable costs include paymentsfor salaries and fringe benefits for those employees who provideservices in the normal conduct of operations related to patient care. These employees include, but are not limited to, registered nurses,licensed practical nurses, nurses aides, other salaried direct care staff,maintenance staff, laundry employees, activities staff, pharmacyemployees, social workers, medical records staff, non-owneradministrator, non-owner assistant administrator, accountants andbookkeepers and other clerical and secretarial staff. . . .
4
Att. 4.19-D, Ch. 2 § A(15), p. 63. (emphasis added) DOM cannot seriously contend that trach
and airway maintenance and trach tube cleaning is not a “service in the normal conduct of
operations related to patient care”. Id. These services are obviously routine and normal, as
evidenced by the fact that DOM will pay hospitals and PNFSDs to perform them. The salary of
CLC’s respiratory therapist is allowable; this reasonable interpretation is bolstered by the fact that
DOM now pays for a respiratory therapist’s salary as part of a Ventilator Unit to a large nursing
facility indirectly via the per diem. (Appellee’s Br. 24) She provides “direct respiratory care”.
Miss. Code Ann. § 73-57-5(e).
DOM’s interpretation is against the overwhelming evidence here. It is at best a poor reading
of the plain language of Attachment 4.19-D and certainly is not the best reading of the State Plan or
even a reasonable interpretation. This reading contradicts its own expert’s testimony, supra. This
interpretation also ignores the fact that DOM admits it pays the same costs to other providers: it pays
hospitals and Private Nursing Facilities for the Severely Disabled (PNFSDs).2
The best reading of the State Plan is that CLC’s respiratory therapist’s salary is reimbursable
as CLC’s respiratory therapist was an employee who provided reasonable and medically necessary
direct care in the normal conduct of operations related to patient care.
The administrative record is devoid of any express indication of how a hospital is actually2
reimbursed for providing respiratory care, however, DOM makes much ado of the fact that it doesnot pay hospitals on a “fee-for-service” basis. (Appellee’s Br. 26) DOM neglects to enlighten theCourt as how a hospital is paid or deny that the hospital is paid.
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II. CLC of Biloxi’s appeal is not limited merely to the issue of whetherindirect reimbursement is appropriate; this appeal is ripe fordetermination of whether a respiratory therapist’s salary may bedirectly reimbursed or indirectly reimbursed.
CLC is in a ripe position to argue that it is entitled to direct or indirect payment of its
respiratory therapist’s salary.
DOM expends much effort to distinguish CLC’s challenge to a limited question only of
whether CLC’s respiratory therapist’s salary may be paid indirectly through the per diem.
(Appellee’s Br. 25-28) DOM’s attempt to narrow the scope of this appeal fails, as DOM itself
moved CLC of Biloxi’s cost back to a cost reporting line (Form 6, line 2-04) where CLC of Biloxi
asserts that line itself expressly instructs that it is directly reimbursable. CLC argued at its
administrative hearing that it was entitled to be reimbursed either directly or indirectly. The Hearing
Officer had no trouble understanding that this was the scope of the appeal, and even requested
briefing on the subject of whether CLC could be directly reimbursed:
Hearing Officer: . . . But I do see that – I pointed out [CLC’s]argument is that the policy provider manual, at least 50.02, seems tobe in conflict with the State Plan wherein it says that therapy will bedirectly reimbursed . . . and that an exception for that has been carvedout by the policy provider manual for respiratory therapists. And soI just want to – I want [DOM] to [brief] how the – the Division ofMedicaid’s authority to do that. And I’d like for you, Mr. Mozingo,to [brief] that they don’t have authority to do that because that’sreally, as I see it, the issue. This PPM 50.02.
(Hr’g Tr. 102:1-103:1)
That DOM now argues that CLC has never sought “direct fee-for-service” reimbursement
is a non-starter for two reasons: first, is that DOM readily argues that it cannot pay a respiratory
therapist on a fee-for-service basis because PPM § 50.02 prohibits direct enrollment of a respiratory
therapist as a provider; second, is that CLC seeks a salary – and not the individual costs associated
6
with the providing of respiratory therapy services – which is properly interpreted as an allowable
salary under Attachment 4.19-D, Chapter 2, Section A(15) which provides:
15. Salaries and Fringe Benefits. Allowable costs include paymentsfor salaries and fringe benefits for those employees who provideservices in the normal conduct of operations related to patient care. These employees include, but are not limited to, registered nurses,licensed practical nurses, nurses aides, other salaried direct care staff,maintenance staff, laundry employees, activities staff, pharmacyemployees, social workers, medical records staff, non-owneradministrator, non-owner assistant administrator, accountants andbookkeepers and other clerical and secretarial staff. . . .
Att. 4.19-D, Ch. 2 § A(15), p. 63. (emphasis added)
At the heart of this dispute is perhaps DOM’s misconstruction of the State Plan and its
authority under Mississippi Code Ann. § 43-13-121 (“to adopt reasonable rules and regulations”) to
allow DOM to interpret what is obviously a salary of an employee who provides direct care in the
normal conduct of operations related to patient care as a Section A(18) “therapy expense” which it
then instructs should be reported on a cost-report line (Form 6, Line 2-04) which is reimbursable if
you are a PNFSD but not reimbursable if you are a large nursing facility. There is nothing in the
State Plan itself which specifically states that a respiratory therapist’s salary is a Section A(18)
“therapy expense” and not a Section A(15) “salary”. In fact, the only definition provided anywhere
in Attachment 4.19-D which is potentially instructive is found in Chapter 8, titled “Definitions”:
Care Related Costs - These costs include salaries and fringe benefitsfor activities, Director of Nurses, pharmacy, social services; food;Medical Director; consultants for activities, nursing, pharmacy, socialservices and therapies; related supplies; and personal hygienesupplies, other than linens and incontinence supplies.
Att. 4.19-D, Ch. 8, p. 173.
The bottom line is that whether this item is reported on Form 6, Line 1 as a direct care staff
member’s salary or if it is reported on Form 6, Line 2-04 which is where DOM’s desk reviewer
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moved the expense back to, the issue of whether it is directly or indirectly reimbursable is ripe for
review. This fervent attempt to limit the scope of the issues raised by CLC tells just how
unreasonable DOM realizes its interpretation of Attachment 4.19-D really is and how desperately
it needs to keep this Court from reviewing the issue of whether CLC may be reimbursed directly for
its respiratory therapist’s salary.
III. DOM’s adoption of PPM § 50.02 is a clear infringement on a patient’sright to choose its respiratory care provider in contravention ofMississippi Code Ann. § 43-13-5.
CLC correctly interprets DOM’s exclusion of its respiratory therapist as an impermissible
limitation or abridgment on CLC’s freedom to choose their health care provider in contravention of
Mississippi Code Ann. § 43-13-5 (1972, as amended) which provides:
The State Department of Public Welfare, after having made adetermination with respect to eligibility with due regard to theresources and income of the applicant, may make vendor paymentson behalf of eligible individuals for such care as may be authorizedwithin the limits of available funds, provided that such medical orremedial care is rendered by or under the supervision of a licensedpractitioner, and provided further that no regulation shall bepromulgated which limits or abridges the recipient’s free choice ofthe provider of medical and remedial care or service....
Id. (emphasis added)
DOM offers a variety of reasons why it has not abridged or limited a patient’s freedom of
choice, however, each of these arguments are invalid, infra.
First, DOM argues that § 43-13-5 does not provide a private cause of action. DOM is likely
incorrect, however this is a moot point, as CLC has not sought to claim this as a stand alone cause
of action. CLC raises this issue as support for its assertion that DOM has exceeded its statutory
authority in adopting and implementing PPM § 50.02. CLC clearly has a right to prove that DOM
has exceeded its statutory authority, which is one of the four factors CLC may prove to support
8
a mandatory injunction preventing DOM from adopting its current position. See e.g., Beverly
Enterprises v. Miss. Div. of Medicaid, 808 So.2d 939 (Miss. 2002)(citing Miss. Comm’n on Envtl.
Quality v. Chicaksaw County Bd. of Supervisors, 621 So.2d 1211, 1215 (Miss. 1993)(“We will
entertain the appeal to determine whether the order of the administrative agency . . . was beyond the
power of the administrative agency to make....” ). DOM makes this crystal clear in the jurisprudence
cited all throughout DOM’s Brief regarding the standard of review that CLC may raise this issue to
support its contention that the agency has exceeded its authority.
DOM suggests that it has not limited the patient’s freedom of choice “since a nursing
home’s [sic] patient’s freedom of choice is adequately served when those services are available at
other readily accessible healthcare facilities”. (Appellee’s Br. 30) DOM readily admits it pays for
those services to be provided at a hospital or at a Private Nursing Facility for the Severely Disabled
(PNFSD) and refuses to pay for them when provided by CLC of Biloxi. There is no rational way to
reconcile this denial to some providers and not to others as anything other than a limitation of which
provider DOM will reimburse. This unreasonable interpretation falls into line with DOM’s
unreasonable notion that some providers will be reimbursed for providing respiratory care and others
can provide the service but are expected to “eat the cost” and not be reimbursed even though the
service was medically necessary for a patient’s survival.
No doubt, if CLC of Biloxi’s respiratory therapist worked at a hospital or a PNFSD and CLC
sent its patients for treatment from her there, DOM would reimburse the hospital or the PNFSD her
salary. Conversely, DOM has elected to deny respiratory therapists, as a class, direct enrollment as
providers to perform services directly within the purview of their license from the State of
Mississippi and pursuant to the Mississippi Respiratory Care Practice Act. This denial of eligibility
by DOM in its PPM §50.02 is an obvious limitation and abridgment of a patient’s freedom to choose
9
their healthcare provider. It is not precisely the same kind of denial held impermissible in Sandefur
v. Cherry, however the Sandefur case is highly instructive on the issue of impermissible abridgment
of a patient’s freedom to choose their healthcare provider. In Sandefur, the point was that a3
patient’s right to choose an optometrist over an ophtalmologist was improperly limited by the
Louisiana State Plan, and the Court ordered the State’s Medicaid agency to modify the State Plan
to allow for reimbursement of optometrists.
Here, it is not the State Plan, but PPM § 50.02 which impermissibly limits a patient’s
freedom to choose a respiratory therapist, such as CLC’s, over a hospital’s physician or the
hospital’s respiratory care provider. As CLC points out in its initial Brief, Medicaid patients on the
Mississippi Gulf Coast do not have reasonable access to a PNFSD in their geographical locale; it is
entirely impractical and not in their best interest to force them to relocate to a PNFSD such as
Methodist in Jackson. CLC suggests that it is reasonable to presume this is the one of the main
public policy reasons behind the prohibition on limitation or abridgment of a patient’s freedom of
choice of healthcare provider. CLC specifically has requested that this Court order DOM to modify
the PPM and, if necessary, the State Plan and the Cost Report Form or Instructions in order to allow
for the proper reimbursement of a large nursing facility’s respiratory therapist’s salary. This could
be quite simply accomplished by removing the words “including respiratory therapist’s salaries”
from the Cost Report Form 6, Line 2-04 and the Cost Report Instructions instructing that respiratory
therapist’s salaries be reported on that line. This is a simple fix that would properly allow CLC of
Biloxi to report its respiratory therapist’s salary under Form 6, Line 1-01 as a salaried direct care
DOM expends much effort trying to distinguish Miss. Code Ann. § 43-13-5 from3
the statutes at issue in Sandefur, however, this is vain and useless because the Section of theMississippi Code is plain and unambiguous.
10
employee, which is more in line with the reasonable reading of the State Plan espoused by CLC,
supra.
DOM’s argument ignores any number of obvious facts and issues. It is as arbitrary and
capricious as a governmental act may be. The denial of the respiratory therapist’s salary is
unconstitutional, and withholding reimbursement without justification is a deprivation of CLC’s
property in the absence of due process of law and has already been defined against DOM as arbitrary
and capricious. See Beverly Enterprises v. Miss. Division of Medicaid, 808 So. 2d 939, 942
(Miss. 2002)(“. . . no person shall be deprived of life, liberty or property except by due process of
law. The failure to reimburse Beverly was clearly a violation of due process and the decision of
[DOM] was arbitrary and capricious.”)
IV. Despite DOM’s stipulation at the administrative hearing that CLC’stracheostomy patients could only be cared for by a licensed physician orlicensed respiratory therapist, the chancellor erred in finding that theparticular respiratory care at issue could have been provided by aregistered nurse or licensed practical nurse.
First, DOM incorrectly contends that the respiratory therapy services provided by CLC’s
respiratory therapist could have been performed by a registered nurse (RN) or a licensed practical
nurse (LPN) for which CLC is already indirectly reimbursed via its per diem reimbursement rate.
As was explained to the lower court and in CLC’s initial Brief, the particular patients that CLC was
treating were tracheostomy patients who require much more care than mere “nebulizer breathing
treatments” as DOM represented to the lower court. (Trial Tr. 22:23-28) As CLC of Biloxi has
previously explained, the trach patient requires maintenance of the airway and trach tube, including
such specialized treatment as suctioning of fluid from the lungs and removal and cleaning of trach
tubes. The Mississippi Legislature has regulated this type of service in the Mississippi Respiratory
Care Practice Act, Mississippi Code Ann. §§ 73-57-1 et seq. (1972, as amended).
11
The Mississippi Respiratory Care Practice Act’s purpose is provided in Section 73-57-3:
In order to safeguard the public health, safety and welfare; to insurethe highest degree of professional conduct on the part of respiratorycare practitioners; and to insure the availability of high qualityrespiratory care services, it is the purpose of this chapter to providefor the regulation of persons offering respiratory care services to thepublic.
Miss. Code Ann. §§ 73-57-3 (1972, as amended)(emphasis added).
The Mississippi Respiratory Care Practice Act provides that “[t]he following terms shall
have the meaning ascribed herein unless the context otherwise requires...”:
(e) “Practice of respiratory care” shall include, but not be limited to:direct and indirect respiratory care services, including, but not limitedto, the administration of pharmacological, diagnostic and therapeuticagents related to respiratory care procedures necessary to implementa treatment, disease prevention, pulmonary rehabilitative ordiagnostic regimen prescribed by a physician; transcription andimplementation of the written or verbal orders of a physicianpertaining to the practice of respiratory care; observing andmonitoring signs and symptoms, general behavior, general physicalresponse to respiratory care treatment and diagnostic testing,including determination of whether such signs, symptoms, reactions,behavior or general response exhibit abnormal characteristics; andimplementation based on observed abnormalities, of appropriatereporting, referral, respiratory care protocols or changes in treatment,pursuant to a prescription by a person authorized to practice medicineunder the laws of the State of Mississippi; or the initiation ofemergency procedures under the regulations of the board or asotherwise permitted in this chapter. The practice of respiratory caremay be performed in any clinic, hospital, skilled nursing facility, andprivate dwelling, or other place deemed appropriate or necessary bythe board, in accordance with the prescription or verbal order of aphysician.
(f) “Performance of respiratory care” means respiratory care inaccordance with the prescription of a licensed physician and includes,but is not limited to, the diagnostic and therapeutic use of thefollowing: administration of medical gases (except for the purpose ofanesthesia), aerosols and humidification; environmental controlmechanisms and hyperbaric therapy; pharmacologic agents related torespiratory care procedures; mechanical or physiological ventilatory
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support; bronchopulmonary hygiene; cardiopulmonary resuscitation;maintenance of the natural airway; insertion and maintenance ofartificial airways; specific diagnostic and testing techniques employedin the medical management of patients to assist in diagnosis,monitoring, treatment and research of pulmonary abnormalities,including measurements of ventilatory volumes, pressures, flows,collection of specimens of blood and blood gases, expired andinspired gas samples, respiratory secretions, and pulmonary functiontesting; and hemodynamic and other related physiologistmeasurements of the cardiopulmonary system.
(g) “Respiratory care practitioner” means:(i) A person employed in the practice of respiratory care whohas the knowledge and skill necessary to administerrespiratory care as defined in subsections (e) and (f) of thissection;(ii) A person who is capable of serving as a resource to thephysician in relation to the technical aspects of respiratorycare as to safe and effective methods for administeringrespiratory care modalities;(iii) A person who is able to function in situations ofunsupervised patient contact requiring great individualjudgment; and(iv) A person capable of supervising, directing and teachingless skilled personnel in the provision of respiratory careservices.
Miss. Code Ann. §§ 73-57-5(e), (f), and (g) (1972, as amended)(emphasis added).
DOM’s Reply Brief fails to address the Mississippi Respiratory Care Practice Act, and
the reason for such is simple: a review of this Act destroys DOM’s argument that a registered nurse
or licensed practical nurse may legally perform the respiratory care functions required by CLC
of Biloxi’s patients. A review of the Act directly contradicts and supercedes DOM’s own
characterizations and definitions of the terms “respiratory therapy” or “respiratory care”, at least as
DOM attempts to characterize the services provided by CLC of Biloxi’s respiratory therapist. CLC
does not deny that LPNs potentially can undergo additional intensive training and certification to
become a respiratory therapist’s assistant, in which case they may perform some of the functions of
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respiratory care or therapy under the supervision of a licensed respiratory therapist or a physician.
However, there is little or no information contained in the administrative record or the Act which
supports what specific services or functions an RN or LPN may perform; DOM has never offered
anything other than counsel opposite’s unsupported assertion before the chancery court that a RN
or LPN could have provided the same services.
This is an attempt at circumventing DOM’s stipulation at the administrative hearing that
CLC’s respiratory therapist “provides direct patient care for people who absolutely need it where
[only she can] provide those services because she is a registered licensed respiratory therapist”
(Hr’g Tr. 100:9-18) and DOM’s stipulation that “[DOM is] not contending that you didn’t provide
it or that it wasn’t necessary”. (Hr’g Tr. 99:18-20) CLC proffered and DOM stipulated that “Biloxi
center has . . . [met] a need . . . particularly for patients who have tracheotomies, which takes very
specialized care and takes either a regular doctor’s care in a hospital or it takes a licensed respiratory
therapist to, in fact, provide those services”. (Hr’g Tr. 10:15-25) DOM attempts to insert a factual
dispute regarding who could perform those services, i.e. respiratory therapist versus RN or LPN,
where DOM had already stipulated that the services could only be performed by a respiratory
therapist. CLC’s interpretation is consistent with the Mississippi Respiratory Care Practice Act, and
for good reason.
Additionally, DOM attempts to downplay the CLC facility’s need for its respiratory therapist
in 2008, when it had a number of tracheostomy patients. DOM argues that to adopt CLC’s4
As explained in its initial Brief, if there is no respiratory therapist on staff, CLC of Biloxi’s4
patients have no other readily available means for trach and trach tube cleaning and maintenanceother than a hospital; all of south Mississippi lacks any long-term care facilities for the highly acute,such as Mississippi Methodist Hospital in Jackson. CLC of Biloxi was quite literally fulfilling ahighly needed medical service for its patients which they could not reasonably get within theirgeographical location, unless they were transported to a hospital every other day by ambulance to
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argument that DOM must pay for respiratory therapists’ salaries would be to open a floodgate
whereby all long-term care nursing facilities would hire a respiratory therapist and cost the DOM “an
additional $16 million per year”.
This throwaway argument ignores the controlling facts: DOM already pays hospitals and
other classes of nursing homes for these same services. To argue that DOM would incur additional
costs is misleading; the costs of providing respiratory care to Medicaid beneficiaries who have to
have it merely shifts from one type of provider to another, i.e., from a hospital to a large nursing
facility such as CLC of Biloxi. The patients already exist and their need for this type of care exists.
The only difference is who gets paid for providing the service. To the extent that any excess costs
arise from large nursing facilities having respiratory therapists on staff, those costs would be
significantly offset by the DOM’s saving the ambulance rides it has to pay for to send a nursing
home trach patient to and from the hospital every other day for trach maintenance and cleaning. 5
DOM also ignores the additional offset created by the fact that there will be days that CLC’s
patients will be hospitalized overnight for their respiratory care at DOM’s expense and DOM still
must pay CLC a per diem rate on that patient’s Medicaid bed for the same day. Allowing CLC to
treat the patient in CLC’s facility cuts outs the doubled-cost of paying for that same patient to have
a hospital bed and a nursing facility bed on the same day.
(cont’d) have the same services provided them that they were conveniently, safely, and4
comfortably choosing to receive in their long-term care facility.
As CLC proffered and DOM stipulated at the administrative hearing “[DOM] also paid for5
respiratory care services every time a patient has got to be transported to a hospital and taken careof medically at a hospital with respiratory therapy services there...”. (Hr’g Tr. 10:4-9)
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Additionally, as CLC of Biloxi stipulated at the administrative hearing, its respiratory
therapist was also providing “direct patient care” in her capacity a registered nurse. (Hr’g6
Tr. 100:12-13) She provides “direct respiratory care”. Miss. Code Ann. § 73-57-5(e).
DOM also enjoys a safeguard against large or small nursing facilities hiring a respiratory
therapist where to do so would not be practical. If a large or small nursing facility hires a respiratory
therapist where there is no real need, e.g., they do not have any trach patients (and large or small
nursing facilities often do not accept them in geographical areas where higher acuity facilities are
available and may accept them), or so few that hiring a full-time respiratory therapist is not
economical or efficient then DOM has the governing latitude to deny reimbursement to those
facilities based off the lack of reasonableness or necessity. If DOM so denies them, those providers
can then submit justification for the reasonableness or necessity. But that is simply not the case here,
where DOM has already stipulated that the services were reasonable and necessary in CLC’s case.
V. It is entirely arbitrary and capricious to refuse to reimburse CLC’srespiratory therapist’s salary entirely, especially where DOM contendsthat it will pay salaries for nursing staff to provide those same services.
DOM readily admits that it reimburses a facility’s RNs and LPNs as salaried direct care staff,
and that it reimburses those salaries indirectly as part of a facility’s per diem. DOM also took the
position (for the first time) before the chancery court that a RN or LPN could provide the same
respiratory care as CLC’s respiratory therapist. Certainly, there is ample evidence contrary, such 7
“Direct patient care” is a term of art contained within the State Plan in any number of6
places, and it is under the line item for “direct care” that registered nurses salaries are reimbursedindirectly as part of the facility’s per diem.
The administrative record is entirely devoid of any testimony on this point and while CLC7
concedes that there may be at least a moderate basis in truth here in that some of the more basicservices may be administered by a RN or LPN, DOM’s representation that an LPN or RN canperform all of these services ignores that they must be done so under the constraints of the
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as DOM’s previous stipulations and the controlling language of the Mississippi Respiratory Care
Practice Act. However, even if the Court were to presume DOM is correct that a RN or LPN could
provide the same services, then it is indisputable that their salary is reimbursable.
At the very minimum, it is arbitrary and capricious for DOM to deny reimbursement for
CLC’s respiratory therapist’s salary in its entirety. The barest analysis of this problem reveals that
CLC of Biloxi should at least be entitled to reimbursement for the portion of the respiratory
therapist’s salary which is equivalent to what DOM regularly reimburses CLC of Biloxi for its RNs
or LPNs. After all, CLC of Biloxi’s respiratory therapist was also a licensed registered nurse and
provided additional care to CLC’s patients in that capacity in addition to the respiratory care she was
providing.
CONCLUSION
CLC of Biloxi offers the best reading of Attachment 4.19-D: that 4.19-D when read as a
whole clearly contemplates that medically necessary services and the salary of the staff employee
who provides those services are allowable, reimbursable costs. CLC offers two (2) reasonable
interpretations of Attachment 4.19-D: one where CLC’s respiratory therapist’s salary is properly
indirectly reimbursable as a staff employee providing direct care in the normal conduct of providing
patient care; and, alternatively where CLC’s respiratory therapist’s salary is properly directly
reimbursable as a “therapy expense”. Either of these interpretations are reasonable and implement
the directive of the State Plan that it reimburse CLC for providing a reasonable and necessary service
efficiently and economically.
(cont’d) Mississippi Respiratory Care Practice Act which requires the direct supervision7
of a licensed respiratory therapist. See Miss. Code Ann. §§ 73-57-5(e), (f) and (g)(iv), supra.
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The DOM offers an unreasonable interpretation of the State Plan which denies
reimbursement of medically necessary care, despite the fact that DOM stipulated that the service was
reasonable and medically necessary. DOM adopts an unreasonable interpretation of the State Plan
in its Provider Policy Manual § 50.02, which directly contracts the unambiguous terms of
Attachment 4.19-D and which impermissibly prohibits a patient’s freedom to choose a respiratory
therapist to provide medically necessary respiratory care.
The final decision by DOM to deny reimbursement, either directly or indirectly – i.e., entirely
– is an arbitrary and capricious act. DOM’s interpretation is unsupported by any evidence, much less
any substantial evidence; the agency adopts its interpretation in defiance of common sense. The
agency’s decision to limit a patient’s freedom of choice to choose their healthcare provider is beyond
the statutory authority of the agency and directly violates the prohibition against such contained in
Mississippi Code Ann. § 43-13-5. DOM’s withholding of reimbursement to CLC to which CLC is
properly entitled pursuant to the State Plan is a taking of CLC’s property without due process of law.
CLC of Biloxi prays this Court reverse the judgment of the Hinds County Chancery Court
and enter a mandatory injunction prohibiting DOM from implementing its final decision
to deny reimbursement of CLC’s respiratory therapist’s salary. CLC requests this Court order
DOM to reimburse CLC its respiratory therapist’s salary, either indirectly under Section A(15) or
directly under Section A(18). CLC of Biloxi further requests this Court order DOM to modify
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Attachment 4.19-D, the Cost Report Form, and the Cost Report Instructions as may be necessary to
allow for reimbursement of CLC’s respiratory therapist’s salary. CLC of Biloxi prays for any other
further or different relief which this Court may find appropriate in the premises.
Respectfully submitted,
CLC OF BILOXI, LLC D/B/A BILOXI COMMUNITY LIVING CENTER
By: /s/H. Hunter Twiford, IV H. HUNTER TWIFORD, IVCounsel for Appellant
OF COUNSEL FOR APPELLANT:
JAMES R. MOZINGO, MS BAR #3638LYDIA M. QUARLES, MS BAR #4582H. HUNTER TWIFORD, IV, MS BAR #103874MOZINGO|QUARLES, PLLCHighland Village Suite 2784500 Interstate 55 NorthJackson, Mississippi 39211; orPost Office Box 4587Jackson, Mississippi 39296-4587Telephone: 601/812-5885Telecopier: 601/852-1142Email: [email protected]: [email protected]: [email protected]
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CERTIFICATE OF SERVICE
I, H. HUNTER TWIFORD, IV, do hereby certify that on June 26, 2017 I electronically filed
the foregoing with the Clerk of the Court using the MEC system which sent notification of such
filing to the following:
Janet D. McMurtray, Esq. [email protected] L. Gibbes, Esq. [email protected] & Metz, PLLC
ATTORNEYS FOR APPELLEES; and
via United States Postal Service to:
The Honorable Patricia D. Wise, Chancellor
Hinds County Circuit CourtPost Office Box 686Jackson, Mississippi 39205-0686.
/s/H. Hunter Twiford, IV H. HUNTER TWIFORD, IV
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