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PNP Inc. v. Ohio Department of Job & Family Services

Court of Appeals of Ohio, Tenth District

September 30, 2013

PNP, Inc., dba Calcutta Health Care Center et al., Relators-Appellants/ Cross-Appellees,
v.
Ohio Department of Job & Family Services et al., Respondents-Appellees/ Cross-Appellants.

APPEAL from the Franklin County Court of Common Pleas. (C.P.C. No. 04CVH-03-2441).

Webster & Associates Co., LPA, and Geoffrey E. Webster, for appellants/cross-appellees.

Michael DeWine, Attorney General, and Rebecca L. Thomas, for appellees/cross-appellants.

DECISION

SADLER, J.

(¶ 1} Relators-appellants/cross-appellees, PNP, Inc., dba Calcutta Health Care Center ("PNP"), BLCC, Inc. ("BLCC"), and Crestview Nursing and Rehabilitation Center, Inc. ("Crestview"), appeal from a Franklin County Court of Common Pleas entry of summary judgment in favor of respondents-appellees/cross-appellants, Ohio Department of Job & Family Services and Thomas Hayes, Director (collectively "ODJFS"). For the following reasons, we affirm the judgment of the trial court.

I. FACTUAL AND PROCEDURAL BACKGROUND[1]

(¶ 2} Each of the appellants is an operator of a nursing home that participates in the federal Medicaid program as administered by ODJFS. In Ohio, Medicaid-funded nursing homes are reimbursed for the reasonable costs of their services on a prospective basis. In other words, ODJFS uses the amount of a prior period's allowable costs to calculate the reimbursement rate for a future period. Due to the prospective nature of the reimbursement system, when ODJFS calculates the rates for a particular year, it cannot account for extraordinary or unexpected costs nursing homes incur during that year. PNP, Inc. v. Ohio Dept. of Job & Family Servs., 10th Dist. No. 04AP-1294, 2006-Ohio-1159, ¶ 2.

(¶ 3} Starting October 22, 2001, the Ohio Department of Health increased the minimum nurse-to-patient staffing ratio that each appellant is required to maintain. In order to comply with the new regulation, each appellant hired additional nursing staff. However, as explained above, the prospectively-calculated reimbursement rates for fiscal years 2002 and 2003 did not account for the increased employment costs incurred. Seeking to recoup these costs, appellants used the statutory remedy available to them-the rate reconsideration process. On October 30, 2002, appellants filed rate reconsideration requests with ODJFS seeking additional reimbursement pursuant to R.C. 5111.27(F) and Ohio Adm.Code 5101:3-3-24.1 ("government mandate provisions"), as well as R.C. 5111.29 and Ohio Adm.Code 5101:3-3-24(C) ("extreme circumstances provisions"). R.C. 5111.27(F) and its corresponding rule, Ohio Adm.Code 5101:3-3-24.1, permit a Medicaid provider to request a rate adjustment to account for the reasonable additional costs the provider incurs in complying with the requirements of a government mandate. R.C. 5111.29(A)(2) and its corresponding rule, Ohio Adm.Code 5101:3-3-24(C), permit a Medicaid provider to request a rate reconsideration to compensate it for actual, allowable costs that have increased because of extreme circumstances.

(¶ 4} In compliance with the process set forth in Ohio Adm.Code 5101:3-3-24.1 and 5101:3-3-24(C), each appellant provided ODJFS with documentation of the cost increases that resulted from their employment of additional nurses. PNP claimed it incurred a cost increase of $14.49 per patient per day, BLCC an increase of $14.69, and Crestview an increase of $12.77.

(¶ 5} ODJFS denied appellants' requests for a rate increase, pursuant to the government mandate provisions, because it found that the requests were untimely. ODJFS granted appellants' requests for a rate increase, pursuant to the extreme circumstances provision, but awarded only $2.75 more per patient per day to PNP, $2.12 to BLCC, and $5.43 to Crestview. None of the appellants were satisfied with their rate increase because, as they allege in their complaint, the increases did not adequately reimburse them for the reasonable costs they incurred in employing additional nurses. Thus, on March 30, 2004, appellants filed suit against ODJFS, alleging that ODJFS violated both state and federal laws by refusing to adequately reimburse them. Further, appellants asserted a breach of contract claim and a claim under Section 1983, Title 42, U.S.Code. Appellants requested that the trial court issue a declaratory judgment, provide them injunctive relief, and award them the reimbursement money they claimed ODJFS wrongfully withheld.

(¶ 6} On November 19, 2004, the trial court issued a decision and entry granting ODJFS' Civ.R. 12(B)(1) motion to dismiss for lack of subject-matter jurisdiction. Relying upon Morning View Care Ctr.-Fulton v. Ohio Dept. of Job & Family Servs., 158 Ohio App.3d 689, 2004-Ohio-5436 (10th Dist.), and Morning View Care Ctr.-Fulton v. Ohio Dept. of Job & Family Servs., 10th Dist. No. 04AP-57, 2004-Ohio-6073, the trial court held that appellants' requests for declaratory judgment, injunctive relief, mandamus, and monetary damages were inextricably intertwined. Because the Court of Claims of Ohio is the sole forum available for actions seeking monetary damages against the state, even when such actions also include requests for equitable relief, the trial court held that the Court of Claims had jurisdiction over appellants' actions.

(¶ 7} In reversing the judgment of the trial court, this court held, "neither a declaratory judgment nor an injunction is available to review an agency's non-appealable discretionary decision. Rather, only mandamus will issue to correct an abuse of discretion in administrative decisions not subject to appeal. Because writs of mandamus may be granted by a court of common pleas, but not the Court of Claims, jurisdiction is proper in the court of common pleas." PNP at ¶ 20. Therefore, the trial court's judgment was affirmed in part and reversed in part, and the matter was remanded for further proceedings.

(¶ 8} On remand, appellants amended their petition for a writ of mandamus several times. At issue before us, at this juncture, is the third amended petition ("petition") filed on March 29, 2008. Following this filing, appellants filed a motion for partial summary judgment, and appellees filed a motion to dismiss. Via decision rendered on December 20, 2012, the trial court denied appellees' motion to dismiss, denied appellants' motion for partial summary judgment, and granted summary judgment to appellees, thereby denying the requested writ of mandamus.

II. ASSIGNMENTS OF ERROR

(¶ 9} This appeal followed, and appellants bring the following two assignments of error for our review:

[I.] The trial court erred in denying appellants' petition in mandamus.
[II.] The trial court erred in granting summary judgment to a non-moving party.

III. CROSS-APPEAL

(¶ 10} Appellees filed a conditional cross-appeal, requesting that the following assignment of error be reviewed if this court reverses or vacates all or ...


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