J. Woodfin Jones, Chief Justice.
Harlingen Family Dentistry, P.C. (the Dental Group) sued Dr. Kyle Janek, Executive
HHSC is the state agency designated to administer the Texas Medicaid program. See Tex. Gov't Code § 531.021(a). Through its OIG, HHSC is responsible for investigating fraud and abuse and enforcing state laws related to the Medicaid program. Id. Texas law permits HHSC (and commands the OIG) to impose, without prior notice, a "payment hold" on Medicaid reimbursements to a Medicaid provider upon receiving reliable evidence of "fraud or wilful misrepresentation" by the provider under the state Medicaid program. Id. § 531.102(g)(2) ("[IOG] shall impose"); Former Tex. Human Res.Code § 32.0291(b) ("[HHSC] may impose").
The duration of such a hold is not indefinite but depends initially on the outcome of the expedited SOAH hearing. Former section 32.0291(c) provided that HHSC "shall discontinue the hold unless [HHSC] makes a prima facie showing at the hearing that the evidence relied on by [HHSC] in imposing the hold is relevant, credible, and material." Former Tex. Human Res. Code § 32.0291(c).
The Dental Group is a Texas Medicaid provider of dental and orthodontia services. In 2011 HHSC and the OIG opened a fraud investigation into the Dental Group's orthodontia billings. In conjunction with the investigation, the OIG instituted a payment hold on 100% of the Dental Group's Medicaid billings for orthodontia services (which constituted 40% of the Dental Group's total Medicaid reimbursements). Upon the Dental Group's request for an expedited hearing concerning the payment hold, SOAH conducted a hearing to determine whether there was a credible allegation of fraud to support the payment hold. At the conclusion of this hearing, the administrative law judge (ALJ) hearing the matter concluded that "Staff has not made a sufficient showing to support a payment hold against [the Dental Group] based on suspected fraud or misrepresentation." The ALJ also found, however, that the Dental Group had billed for non-reimbursable services or made other billing errors in 9% of the cases reviewed. As a result, the ALJ issued a Proposal for Decision (PFD), including findings of fact and conclusions of law, recommending that "any payment hold against [the Dental Group] be reduced to 9 percent of the 40 percent of [the Dental Group's] total Medicaid reimbursement that is related to orthodontics...." HHSC adopted the ALJ's findings and conclusions and incorporated them into a final administrative order with an effective date of January 7, 2013. HHSC's order required that the payment hold "be reduced to 9 percent of [the Dental Group's] total Medicaid reimbursement that is related to orthodontics...." By the date of this order, the total amount of funds already withheld as a result of the payment hold was approximately $1,379,195. The order became final, and neither party brought suit for judicial review. The meaning and effect of HHSC's administrative order, read in conjunction with the language of the relevant statutes and regulations, is the central issue in this appeal.
Believing that the order constituted a clear directive to HHSC and the OIG to release to the Dental Group 91% of the Medicaid reimbursements sequestered through January 7, 2013, the Dental Group demanded that the OIG pay that amount to it. The State officials refused, taking the position that the final order did not address the disposition of any reimbursements impounded before the date of the order but instead had only the prospective effect of reducing the amount that could be withheld in the future. The Dental Group then sued in district court requesting a writ of mandamus to compel Janek and Wilson to "release funds withheld in violation of" HHSC's final order. The State filed a plea to the jurisdiction asserting sovereign immunity. The district court denied the plea to the jurisdiction and issued a judgment and writ of mandamus commanding Janek and Wilson to immediately take all necessary action "to release to [the Dental Group] the sum of $1,255,195.20, which represents 91% of the $1,379,335.43 improperly sequestered as a
"A writ of mandamus will issue to compel a public official to perform a ministerial act. An act is ministerial 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); see also Community Health Choice, Inc. v. Hawkins, 328 S.W.3d 10, 13 (Tex. App.-Austin 2010, pet. denied). If an action involves personal deliberation, decision, and judgment, it is discretionary; actions that require obedience to orders or the performance of a duty to which the actor has no choice are ministerial. City of Lancaster v. Chambers, 883 S.W.2d 650, 654 (Tex.1994).
City of El Paso v. Heinrich, 284 S.W.3d 366, 372 (Tex.2009).
The dispositive issue in this appeal is whether the administrative order adopted and issued by HHSC, read in conjunction with applicable statutes and regulations, unambiguously required that funds sequestered and held pursuant to the temporary payment hold be released to the Dental Group. The ALJ's PFD included the following findings of fact and conclusions of law:
In its final order, HHSC adopted the ALJ's findings and conclusions in their entirety. Thus, HHSC's final order plainly states that no prima facie showing was made that there was relevant, credible, or reliable evidence to justify a payment hold based on the Dental Group's having committed fraud or willful misrepresentation. The order also concludes that HHSC and the OIG lacked the authority to maintain a payment hold on the Dental Group's Medicaid reimbursement funds on that basis.
Thus, while the ALJ found that HHSC and the OIG did not have authority to impose a payment hold as to 100% of the Dental Group's Medicaid reimbursements for orthodontia services based on fraud or willful misrepresentation, she did conclude that they were authorized to continue to impose a hold on 9% of such reimbursements based on its finding of billings that, though not fraudulent, were not in compliance with the terms of the Medicaid program provider agreement or program procedure manual or were for non-reimbursable services. Consequently, HHSC's final order concludes with the following:
(Emphasis added.)
The State argues that the foregoing terms in the order do not actually direct HHSC and OIG to release — i.e., pay — to the Dental Group the 91% of Medicaid reimbursements found to have been improperly withheld but that were already in HHSC's possession. Instead, the State contends the order is prospective only and simply directs HHSC and OIG, going forward, to withhold funds at the lower level of 9% of the Dental Group's Medicaid reimbursements for orthodontia services instead of the 100% payment hold initially imposed.
Regarding the duration of any payment hold, former Human Resources Code section 32.0291(c) provided as follows:
Former Tex. Human Res.Code § 32.0291(c) (emphasis added). In addition, former section 531.102(g)(2) of the Government Code required that a hold placed by the OIG would be imposed "in accordance with 42 C.F.R. Section 455.23." The referenced section of the Code of Federal Regulations provides that "[a]ll suspension of payment actions under this section will be temporary and will not continue after either of the following: (i) The agency or the prosecuting authorities determine that there is insufficient evidence of fraud by the provider, (ii) Legal proceedings related to the provider's alleged fraud are completed." 42 C.F.R. § 455.23.
Thus, under both the Texas statute and the applicable federal regulation, any payment hold was temporary and had to end if credible evidence of fraud was found to be lacking. Here, the ALJ found that HHSC failed to make a prima facie showing of any right to withhold payment based on fraud or willful misrepresentation. The ALJ concluded that HHSC therefore lacked authority to withhold funds on that basis. HHSC adopted all of the ALJ's findings and conclusions.
Read in conjunction with the statutes setting forth the grounds for imposing a payment hold and the evidentiary burden required to maintain such a hold, the necessary and logical import of the HHSC's order to "reduce" the hold to 9% of the previously designated amount is that 91% of the hold was lifted or discontinued. The State's right to temporarily possess any of these funds was based solely on the existence of credible evidence of fraud. Thus, a finding of the absence of such evidence could only mean that the State's right to temporary possession of the funds no longer existed. In the present context, the only reasonable interpretation is that the 91% "discontinuation" of the State's right to temporary possession referred not only to funds that might be subject to a hold in the future but also to funds that were on hand by reason of the earlier hold. To say that HHSC could continue to maintain possession of the previously held funds even though the temporary hold had been discontinued is not a reasonable reading of the statute.
We also disagree with the State's argument that this suit constitutes a "retrospective claim for monetary relief" and is therefore barred by sovereign immunity. See Heinrich, 284 S.W.3d at 374 (retrospective monetary claims are generally barred by immunity). The Dental Group sought only to enforce the agency's existing order that imposed on Janek and Wilson the ministerial duty to release a portion of the funds subject to the payment hold. Such relief is prospective in nature and simply requires that, going forward, and in accordance with its own order, the State may no longer continue to impound the funds it began holding when it claimed to have credible evidence of fraud or wilful misrepresentation by a Medicaid provider.
The parties do not dispute that as of the date of the final order — January 7, 2013 —
For the reasons stated above, we affirm the district court's judgment.
Act of May 28, 2011, 82d Leg., R.S., ch. 879, § 3.11, 2011 Tex. Gen. Laws 2234-35 (amended 2013) (current version at Tex. Gov't Code § 531.102). In 2013 this provision was amended to read, in part:
Tex. Gov't Code § 531.102(g)(2). Likewise, at the time period relevant to this case, former section 32.0291 of the Texas Human Resources Code permitted HHSC to impose a postpayment hold on payment of future claims submitted by a provider if HHSC had "reliable evidence that the provider has committed fraud or wilful misrepresentation regarding a claim for reimbursement under the medical assistance program." Former Tex. Human Res.Code § 32.0291(b).
