The opinion
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I
STATE OF MAINE SUPERJOR COURT
CUMBERLAND, SS. CIVIL ACTION
DOCKET NO. CUMSC-AP-15-21
CEDARS NURSING CARE CENTER )
d/b/a THE CEDARS, )
)
Petitioner, )
)
V. ) ORDER ON RULE 80C APPEAL
)
MAINE DEPARTMENT OF HEAL TH )
AND HUMAN SERVICES, )
)
STATE OF MAINE
Respondent, ) Cumberland ss Clerk's Office
)
and ) JUL\ 1 2016
)
THE AROOSTOOK MEDICAL CENTER/ )
AROOSTOOK HEAL TH CENTER, )
RECEi\/EO
)
Intervenor. )
Before the court is Cedars Nursing Care Center d/b/a The Cedars' ("Cedars") petition for
review of final agency action by the Maine Department of Health and Human Services ("DHHS"
or the "Department") pursuant to the Maine Administrative Procedures Act (the "APA"), 5
M.R.S. § 11001 et seq., and Maine Rule of Civil Procedure 80C. Based on the following,
DHHS's decision denying Cedars' request for informal review is reversed and remanded for
further consideration.
I. Background
DHHS is a state agency responsible for implementing Maine's Medicaid program, known
as MaineCare. 10-144 C.M.R. ch. 101 §§ 1.01-1.02, 10 (2014). Pursuant to its duty, DHHS
reimburses nursing facilities for services provided to MaineCare members based on a rate
established by DHHS. 10-144 C.M.R. ch. 101 § 37 (2014). DHHS classifies nursing facility
providers into one of three Peer Groups for purposes of MaineCare reimbursement. 10-144
C.M.R. ch. 101 § 86 (2014); (R. Vol. 1, 204-207.) Cedars operates a nursing facility in Portland,
Maine. (R. Vol. 1, 155.) Cedars is classified as a Peer Group II facility. (Id. at 207.) Aroostook
Health Center ("AHC") operates a nursing facility in Mars Hill, Maine. (Id. at 8.) Before 2015,
AHC was also classified as a Peer Group II facility. (Id. at 207.)
In April 2013, AHC requested a change in its status from a free standing nursing facility
(Peer Group II) to a hospital-based nursing facility (Peer Group III). (Id. at 1, 144); 10-144
C.M.R. ch. 101 § 86. On January 8, 2015, DHHS issued a Final Informal Review Decision
informing AHC that it would be reclassified as a hospital-affiliated nursing facility (Peer Group
III) and reimbursed at a higher rate (the "AHC Decision"). (R. Vol. 1, 137-39, 144.) Cedars did
not receive notice of the AHC Decision. (Id. at 139.) Sometime thereafter, Cedars made a
Freedom of Access request to DHHS regarding the AHC Decision. (Id. at 143.) DHHS
provided Cedars with a copy of the AHC Decision on May 8, 2015. (Id.)
On June 12, 2015, Cedars submitted written request for informal review and/or
administrative hearing to DHHS regarding the AHC Decision. (Id. at 143-44.) In its June 12,
2015 request, Cedars asserted that AHC did not meet the definition of a "hospital-affiliated
nursing facility" to be included in Peer Group III and should remain classified as a free standing
nursing facility as part of Peer Group II. (Id. at 144.) Cedars asserted that it intended to put
forth evidence showing how AHC's classification as a Peer Group III facility violated DHHS's
rules and would "directly and adversely" impact Cedars' MaineCare reimbursement. (Id.)
On June 24, 2015, DHHS issued a letter to Cedars denying its request for informal
review. (Id. at 159-60.) In its letter, DHHS concluded the following: (1) Cedars' request for
informal review was untimely under both § 140 .1 and § 1.21-1 of the Maine Care Benefits
2
Manual; (2) Cedars was not entitled to an informal review under § 140.1 of the MaineCare
Benefits Manual because Cedars was not the nursing facility to which the AHC Decision was
issued; and (3) Cedars was not a entitled to an informal review under§ 1.21-1 of the MaineCare
Benefits Manual because it was not aggrieved by the ABC Decision. (Id.)
Cedars filed a Rule 80C petition appealing the AHC Decision on June 16, 2015.
Following DHHS's denial of its request for informal review, Cedars moved to amend its petition
on July 14, 2015, to address both the ABC Decision and the June 24, 2015 denial. DHBS moved
to dismiss Cedars' petition an July 17, 2015. The court granted Cedars' motion to amend its
petition and denied DHHS motion to dismiss on August 24, 2015. On September 3, 2015, AHC
moved to intervene in this action, which the court granted.
The administrative record was filed with the court on September 25, 2015. DHBS further
supplemented the record on October 13, 2015. Cedars filed a motion to take additional evidence
on October 5, 2015, which DBBS and ABC both opposed. The court denied Cedars motion to
take additional evidence on February 29, 2016. In its order, the court ruled that the only issue
properly before the court was whether DHHS erred in denying Cedars' June 12, 2015 request for
informal review. The court stated that the AHC Decision was not a final agency action
appealable by Cedars under the AP A, because further agency review was available to Cedars.
See 5 M.R.S. §§ 8002(4), 11001(1). Indeed, Cedars' June 12, 2015 request sought further
agency review of the AHC Decision.
Cedars field its Rule 80C brief on April 6, 2016. AHC and DHBS filed their responses
on May 6, 2016. Cedars filed a reply on May 20, 2016.
3
II. Standard of Review
\,Vhen acting in an appellate capacity pursuant to Rule 80C and the AP A, the court
reviews the agency ' s decision for abuse of discretion, error of law, or findings not supported by
the evidence. Guar. Tr. Life Ins. Co. v. Superintendent ofIns., 2013 ME 102,, 16, 82 A.3d 121.
The standard for review of final agency action is provided by § 11007 of the AP A. M.R. Civ. P.
80C(c). The court may reverse or modify any agency determination if the agency's findings,
inferences, conclusions, or decisions: (1) violate constitutional or statutory provisions, (2) exceed
the agency's statutory authority, (3) are made upon unlawful procedure, (4) are affected by bias
or error of law, (5) are unsupported by substantial evidence in the record, or (6) are arbitrary,
capricious, or an abuse of discretion. 5 M.R.S. § 11007(4)(C). The court may also remand the
case for further proceedings, findings of fact or conclusions of law, or direct the agency to hold
such proceedings or take such action as the court deems necessary. Id. § 11007(4)(B).
An agency's interpretations of its own rules are given "considerable deference." Friends
of the Boundary Mts. v. Land Use Regulation Comm 'n, 2012 ME 53, , 6, 40 A.3d 947. The
court will not set aside an agency's interpretation of its own rules "unless the rule plainly
compels a contrary result, or the rule interpretation is contrary to the governing statute." Id.
An agency's findings of fact must be supported by substantial evidence in the record and
cannot be based on unsupported speculation. Hannum v. Ed. ofEnvtl. Prat., 2003 ME 123, , 15
n.6, 832 A.2d 765. To be supported by substantial evidence, the agency's findings of fact must
be supported by "such relevant evidence as a reasonable mind might accept as adequate to
support the resultant conclusion." Sinclair Builders, Inc. v. Unemployment Ins. Comm 'n, 2013
ME 76, , 9, 73 A.3d 1061 (internal quotation marks omitted). The court will not substitute its
own judgment for that of the agency merely because the record could support more than one
4
conclusion. Abrahamson v. Sec'y of State, 584 A.2d 668, 670 (Me. 1991 ). Similarly, an
agency's decision is arbitrary and capricicus if it is "unreasonable, has no rational factual basis
justifying the conclusion or lacks substantial support in the evidence." Cent. Me. Power Co. v.
Waterville Urban Renewal Auth., 281 A.2d 233,242 (Me. 1971).
III. Analysis
Cedars asserts that DHHS erred in denying its June 12, 2015 request for informal review
pursuant to § 1.21-1 of the Maine Care Benefits Manual. 1 (Pet. Br. 1.) Section 1.21-1 of the
MaineCare Benefits Manual provides, in relevant part:
Any provider who is aggrieved by a Departmental action made pursuant to this
Manual ... has sixty ( 60) calendar days from the date of receipt of that decision,
to request an informal review. The request for an informal review must be in
writing, to the Director of MaineCare Services or other specified Departmental
official. This review will be conducted by the Director of MaineCare Services, or
other designated Department representative who was not involved in the decision
under review. The informal review will consist solely of a review of documents
in the Department's possession including submitted materials/documentation and,
if deemed necessary by the Department, it may include a personal meeting with
the provider to obtain clarification of the materials. Issues that are not raised by
the provider, individual, or entity through the written request for an informal
review or the submission of additional materials for consideration prior to the
informal review are waived in subsequent appeal proceedings. The request for
informal review may not be amended to add further issues.
10-144 C.M.K ch. 101 § 1.21-1 (2014).
Cedars argues that DHHS erred in fmding ( 1) that its June 12, 2015 request was untimely
and (2) that Cedars was not an aggrieved party under § 1.21-1. (Pet. Br. 5.) Cedars also argues
that DHHS erred in adopting the definition of "aggrieved" used by the courts for the purposes of
the APA as its definition of"aggrieved" for purposes of§ 1-21.1. (Id. at 8-9.)
1
Cedars does not contest DHHS' s determination that Cedars was not entitled to an informal review
pursuant to§ 140.1 of the MaineCare Benefits Manual. (Pet. Br. 5 n.4.) Cedars only contests DHHS's
decisions regarding § 1.21-1 . (Id.)
5
A. Timeliness of Cedars' June 12, 2015 Reguestfo:r Informal Review
In its June 24, 2015 letter, DHHS asserts that Cedars' June 12, 2015 request was filed
after the sixty-day deadline for seeking informal review of the AHC Decision issued on January
8, 2015. (R. Vol. 1, 159.) Cedars argues that it did not receive the AHC Decision until its
Freedom of Access request was fulfilled on May 8, 2015. (Pet. Br. 6); see (R. Vol. 1, 143.)
Cedars argues that its June 12, 2015 letter requesting informal review of the AHC Decision was
timely under § 1.21-1 because the request was sent to DHHS within sixty days "from the date of
receipt of that decision." (Pet. Br. 6.) In its brief, DHHS concedes that Cedars' June,12, 2015
request for informal review was timely under § 1.21-1. (Resp. Br. 6.) Thus, DHHS concedes
2
that its June 24, 2015 determination that Cedars request was untimely was an error oflaw.
B. DHHS's Adoption of the APA Definition of"Aggrieved"
DHHS concedes in its response brief that nursing facilities have the right under § 1.21-1
to challenge decisions issued to other nursing facilities if they are aggrieved by the decision. (Id.
at 7.) In its June 24, 2015 letter, DHHS stated that Cedars had no legal standing to seek informal
review under § 1.21-1 because it was not aggrieved by the AHC Decision. (R. Vol. 1, 160.)
DHHS's June 24, 2015 letter further states:
The MaineCare Benefits Manual does not define "aggrieved." However, [the
APA] uses the same standard of "aggrieved" to grant legal standing to "any
person aggrieved by final agency action shall be entitled to judicial review ... "
Title 5, § 11001(1). Although the APA does not define "aggrieved", the Maine
Supreme Court has had the opportunity to define "aggrieved" for purposes of the
APA.
The Maine Supreme Court has ruled that to be "aggrieved" in order to challenge
final agency action, a litigant must demonstrate a particularized injury as a result
of the action. Great Hill Fill & Gravel, Inc. v. Board of Environmental
2
Intervenor AHC still argues that it was within DHHS 's discretion to measure the sixty-day period from
the date AHC received its decision on January 8, 2015, and that Cedars' request for informal review,
though within sixty-days from when it obtained a copy of the decision, was still untimely. (Intervenor Br.
4.) Because DHHS concedes its determination was in error, the court does not address ABC's argument.
6
Protection, 641 A.2d 184 (Me. 1994). The agency decision must "adversely and
directly" affect the litigant's "property, pecuniary or personal rights. " ld.
Further, a litigant "who suffers only an abstract irrjmy does not thereby gain
standing to sue." Nichols v. City ofRockland, 324 A.2d 295 , 297 (Me. 1974).
(Id.) Cedars argues that the term "aggrieved" should be given a more expansive definition for
purposes of§ 1.21-1 of the MaineCare Benefits Manual than for the APA. (Pet. Br. 9.)
As previously discussed, an agency's interpretation of its own rules is given
"considerable deference" and "will not be set aside unless the rule plainly compels a contrary
result, or the rule interpretation is contrary to the governing statute." Friends of the Boundary
Mts., 2012 ME 53, 16, 40 A.3d 947. Section 1.21-1 of the MaineCare Benefits Manual does not
define the term "aggrieved" and nothing in the rule plainly compels DHHS to adopt another
definition. See l 0-144 C .M.R. ch. 101 § 1.21-1. Furthermore, Cedars has not cited, and the
court is not aware of, any provision in the governing statute that would compel DHHS to adopt a
different definition. Therefore, the court defers to DHHS interpretation of its rules and its
adoption of the AP A definition of "aggrieved" for purposes of § 1.21-1.
C. Df-IH S' s Determination Cedars was not an "Aggrieved" Provider
To be an "aggrieved" party for purposes the APA, and therefore under § 1.21-1, a
provider must show a "particularized injury," meaning DHHS's decision must "adversely and
directly affect" the provider's "property, pecuniary or personal rights." (R. Vol. 1, 160) (internal
quotation marks omitted); see also Lindemann v. Comm 'n on Governmental Ethics & Election
Practices, 2008 ME 187, ,i 14,961 A.2d 538 (defining "aggrieved" for purposes of the APA).
Cedars argues that its June 12, 2015 request for informal review sufficiently set forth a
particularized injury in order to obtain an informal review. (Pet. Br. 9-11.) Cedars' June 12,
2015 request for informal review stated:
7
Although The Cedars was not a pruiicipant in the proceedings initiated by The
Aroostook Merucal Center/Aroostook Health Center, The Cedars is an aggrieved
person. Reclassifying ABC from a free standing facility to a hospital-affiliated
nursing facility, and thus reimbursing ABC as part of Peer Group III, will directly
and adversely impact MaineCare reimbursement to The Cedars.
For purposes of an informal review, we intend to rely on the MaineCare definition
of hospital-affiliated nursing facility, the changes to the MaineCare Manual over
time, legislative history, and related documents. We also intend to rely on our
understanding of MaineCare reimbursement, and discussion with Division of
Audit Staff, to show how changing AHC's designation from a free standing
nmsing facility to a hospital-affiliated nursing facility will violate the letter and
spirit of the Principles of Reimbtu-sement for Nursing Facilities (especially
Chapter JU, Section 67, Principle 13), and directly and adversely impact
reirnbw·sement for the State of Maine and The Cedars itself.
(R. Vol. 1, 144.)
In its June 24, 2015 letter denying informal review, DHHS stated:
Finally, based on information and belief, it is my W1dersta11ding that MaineCare
_reimbursement to Cedars has not been reduced - or changed at all - as a result of
the AHC Decision.
(Id at 159.) DHHS's June 24, 2015 letter concluded:
Cedars has not demonstrated any injury. Cedars' MaineCare reimbursement has
not been impacted at all from the Department's AHC decision. Accord:ingly,
Cedars is not "aggrieved" by the ABC Decision, and therefore, Cedars has no
legal standing to appeal that decision.
(Id. at 160.)
DHHS's determination that Cedars was not aggrieved was the result of an error o f law,
arbitrary and capricious, and unsupported by record evidence. First, DHHS's determination that
Cedars did not affirmatively demonstrate an injury in its request for informal review constitutes
an error of law. Cedars' June 12, 2015 request set forth a prima facie case for how it will s uffer
a particularized injury and was aggrieved by the AHC Decision. (R. Vol. 1, 144.) Cedars made
an offer of proof as to how it would demonstrate its injury for the informal review. (Id.) D HHS
concluded that Cedars had not put forth evidence demonstrating an injury. (Id at 160.)
8
Although the court generally must defer to an agency's interpretation of its own rules, the court
will set aside an agency's interpretation if "the rule plainly compels a contrary result." Friends
ofthe Boundary Mts., 2012 ME 53, ~ 6, 40 A.3d 947. Nothing in the plain language of§ 1-21.1
required Cedars to submit evidence proving it is an aggrieved party as part of its request for
informal review. Section 1.21-1 simply states:
The request for an informal review must be in writing, to the Director of
MaineCare Services or other specified Departmental official.
10-144 C.M.R. ch. 101 § 1.21-1. The plain language of § 1-21.1 contemplates that the provider
may submit evidence after the request for informal review is granted. Section 1.21-1 states:
This review will be conducted by the Director of MaineCare Services, or other
designated Department representative who was not involved in the decision under
review. The informal review will consist solely of a review of documents in the
Department's possession including submitted materials/documentation and, if
deemed necessary by the Department, it may include a personal meeting with the
provider to obtain clarification of the materials. Issues that are not raised by the
provider, individual, or entity through the written request for an informal review
or the submission of additional materials for consideration prior to the informal
review are waived in subsequent appeal proceedings.
Id. (emphasis supplied). In contrast, other provisions of the Maine Care Benefits Manual
expressly require that a party to include all of its evidence in its request for informal review. For
instance, § 140. l of the MaineCare Benefits Manual explicitly stated:
Within thirty (30) days of receipt of an audit or other appealable determination,
the facility must request, in writing, an informal review before the Director of the
Office of Audit or his/her designee. The facility must forward, with the request,
any and all specific information it has relative to the issues in dispute, ...
10-144 C.M.R. ch. 101 § 140.1.2(1) (2014). Thus, unlike other provisions of MaineCare
Benefits Manual,§ 1.21-1 did not expressly require Cedars to submit all of its evidence as part of
its request for informal review. Therefore, because § 1.21-1 did not expressly require Cedars to
submit its evidence as part of its request, and because § 1.21-1 contemplates that a provider may
9
submit evidence before the informal review occurs, DHHS's determination that Cedar did not
demonstrate an injury in its written request constitutes an error of law.
Second, DHHS's reliance on "information and belief' in making its findings does not
meet the substantial evidence standard and is arbitrary and capricious. In its June 24, 2015 letter,
DHHS explicitly stated that it based its determination that Cedars' MaineCare reimbursements
had not been reduced or changed as a result of the AHC Decision on "information and belief."
(R. Vol. 1, 159.) As previously discussed, an agency's findings of fact must be supported by
substantial evidence in the record and cannot be based on unsupported speculation. Hannum,
2003 ME 123, , 15 n.6, 832 A.2d 765. Substantial evidence is "such relevant evidence as a
reasonable mind might accept as adequate to support the resultant conclusion." Sinclair
Builders, Inc., 2013 ME 76, , 9, 73 A.3d 1061 (internal quotation marks omitted). DHHS's
"information and belief' is not substantial evidence and is effectively akin to speculation.
Additionally, an agency's determination is arbitrary and capricious if it is unreasonable, has no
rational factual basis justifying the conclusion, or lacks substantial support in the evidence.
Cent. Me. Power Co., 281 A.2d at 242. DHHS's determination based on "information and
belief' is both unreasonable and lacks a rational factual basis. Therefore, DHHS's finding of
fact based on "information and belief' is unsupported by substantial evidence and arbitrary and
capnc10us.
Third, DHHS's ultimate determination that Cedars' MaineCare reimbursements were not
impacted by the AHC Decision is not supported by substantial evidence in the record. Again,
substantial evidence is "such relevant evidence as a reasonable mind might accept as adequate to
support the resultant conclusion." Sinclair Builders, Inc., 2013 ME 76, , 9, 73 A.3d 1061
(internal quotation marks omitted). The only evidence in the record regarding Cedars'
10
MaineCare reimbursements are two MaineCare Rate Letters issued to Cedars. (R. Vol. 1, 155
58.) The first MaineCare Rate letter, dated July 21, 2014, states Cedars' reimbursement rates
from July 1, 2014 through June 30, 2015. (Id. at 155-56.) In other words, the first MaineCare
Rate letter sets forth Cedar's MaineCare reimbursement rates prior to the January 8, 2015 ARC
Decision. The second MaineCare Rate letter sets forth Cedars' reimbursement rates from July 1,
2015 through June 30, 2016, after the ABC Decision. (Id. at 157-58.) However, the second
MaineCare Rate letter is dated July 16, 2015. (Id at 157.) Thus, the second MaineCare Rate
letter was not part of the record before that date, and DHHS could not have considered it in
making its d~termination in the June 24, 2015 letter. There is no other evidence in the record
regarding Cedars' MaineCare reimbursement rates. Therefore, DHHS's determination that
Cedars' MaineCare reimbursement rates were not impacted by the ABC Decision, and therefore
Cedars' was not an aggrieved party, was not supported by substantial evidence in the record.
Because DHHS' s determination that Cedars' was not an aggrieved party was the result of
an error of law, arbitrary and capricious, and not supported by substantial evidence in the record,
DHHS ' s June 24, 2015 denial of Cedars' request for informal review pursuant to § 1.21-1 must
be rever~;ed and remanded to DHHS for reconsideration. The court expresses no opinion on
whether or not Cedars is, in fact, an aggrieved party under § 1.21-1.
IV. Conclusion
Based on the foregoing, the Maine Department of Health and Human Services' decision
denying Cedars Nursing Care Center d/b/a The Cedars' request for informal review is reversed
and remanded to the Department of Health and Human Services for further. consideration.
11
The Clerk is directed to enter this Order on the civil docket by reference pursuant to
Maine Rule of Civil Procedure 79(a).
Date 7/11 f 1e La
12
I
~tJ1)
STATE OF MAINE SUPERIOR COURT
CUMBERLAND, ss CIVIL ACTION
Docket No. AP-15-21
CEDARS NURSING CARE CENTER
d/b/a THE CEDARS,
STATE OF MAINE
Cumberland ss Clerk's Office
Petitioner
V.
FEB 2 9 2016
MAINE DEPARTMENT oF ~~~clVED
1
ORDER
AND HUMAN SERVICES,
Respondent
and
THE AROOSTOOK MEDICAL CENTER/
AROOSTOOK HEAL TH CENTER,
Intervenor
Before the court is petitioner's motion to take additional evidence and supplement the
record and its motion to stay the notice and briefing schedule. For the following reasons, the
court denies the motion to take additional evidence and grants the motion to stay.
I. FACTS
Respondent is the state agency responsible for implementing Maine's Medicaid program,
known as MaineCare. Pursuant to this duty, respondent classifies nursing facilities into one of
three Peer Groups for purposes of reimbursement. Petitioner operates a nursing facility m
Portland, and intervenor Aroostook Health Center (AHC) operates a nursing facility m
Aroostook County. Both facilities participate in MaineCare.
Respondent has classified petitioner's facility as Peer Group II. On January 8, 2015,
respondent issued a decision changing AHC's classification from Peer Group II to Peer Group
III. Petitioner received a copy of respondent's decision on May 8, 2015 in response to a Freedom
of Access Act request. By letter dated June 12, 2015, counsel for petitioner requested from
respondent review of its January 8 decision. Respondent denied petitioner's request on June 24,
2015 on the grounds that the request was untimely and petitioner lacked standing.
Petitioner filed a Rule SOC petition on June 16, 2015 and an amended petition on July 14,
2015. Petitioner seeks (I) a declaratory judgment that respondent erred in changing AHC's
classification to Peer Group III and (2) a permanent injunction preventing respondent from
changing AHC's classification to Peer Group III and directing respondent to continue
reimbursing AHC as a member of Peer Group II. Petitioner contends that respondent's January 8
decision will reduce the median costs used for calculating reimbursement of Peer Group II
nursing facilities and will likely decrease the overall amount of MaineCare reimbursement
available for nucsing facilities that are not in Peer Group Ill.
On August 24, 2015, the court denied respondent's motion to dismiss and ordered
respondent to file the administrative record within 30 days. Respondent filed the record on
September 25, 2015. The court issued a briefing schedule on September 28, 2015. Petitioner filed
its motion to take additional evidence and supplement the record and its motion to stay the
briefing schedule on October 5, 2015. Respondent filed a motion in opposition on October 23,
2015, and AHC filed a motion in opposition on October 26, 2015.
II. D1SCUSSION
A. Motion to Take Additional Evidence
"Except in limited circumstances, judicial review of an agency decision 'shall be
confined to the record upon which the agency decision was based."' },,!arlin v. Unemployment
Ins. Comm'n, 1998 ME 271, ~ 8 n.6, 723 A.2d 412 (quoting 5 M.R.S. § 11006(1)) (citation to
footnote only). A party may, however, request that the reviewing court take additional evidence
or order the taking of additional evidence as provided by 5 M.R.S. § 11006(1). M.R. Civ. P.
2
SOC(e). Under section 11006(1), the court may order the taking of additional evidence before the
agency if it finds that the additional evidence is necessary to deciding the petition for review, or
it may allow leave to present additional evidence if the evidence is material to the issues
presented and could not have been presented or was erroneously disallowed in the proceedings
before the agency. 5 M.R.S. § I 1006(1)(B) (2015). "The Administrative Procedure Act leaves it
to the discretion of the trial court to detennine whether additional evidence is necessary to
complete the record." ,\,furphy v. Bd. ofRnvtl. Prof., 615 A.2d 255, 260 (Me. 1992).
Petitioner argues that the record contains mostly respondent's "rules, licenses, and other
generic material" and is missing " testimony, analysis, or other evaluation" of the impact of
respondent's decision on other nursing facilities, including petitioner. (Pl.'s Mot. Addt' l Evid. 2
3.) Specifically, petitioner wishes to supplement the record with the following additional
evidence: ( t) transcripts of testimony explaining the MaineCare reimbursement and rate setting
process to he provided by, at a minimum, petitioner's CFO, the director of respondent's Division
of Audit, and a financial analyst in respondent's Rate Setting Unit; (2) respondent' s. internal
emails and memoranda relating to its January 8 decision and any impact on nursing facilities
other than AHC; and (3) any documentation showing the assignment of nursing facilities to each
of the Peer Groups and any changes of those assigmnents. (Id. at 4-5.)
Petitioner's proffered evidence is not necessary or material because the only issue
property before the cou1t is whether respondent erred in denying petitioner's June 12 request for
administrative review. The Administrative Procedure Act (APA) entitles any person who is
aggrieved by fmal agency action to judicial review in Superior Court. 5 M.R.S. § 1100 I (I)
(2015 ). "Final agency action" means a "decision by an agency which affects the legal rights,
duties or privileges of specific persons, which is dispositive of all issues, legal and factual, and
3
for which no further recourse, appeal or review is provided within the agency." 5 M.R.S . §
8002(4) (2015). Respondent's January 8 decision cannot be final agency action because further
review of that decision was available within the agency. See l 0-144 C.M.R. ch. 101 , § 140.1.2(1 )
(2014) (providing administrative review of agency decisions); 10-144 C.M.R. ch. 101, § 1.21-1
(2014) (same). Indeed, petitioner's June 12 letter requested administrative review of the January
8 decision. Respondent's denial of that request on June 24 left petitioner with no further review
within the agency, and it is from that decision that petitioner appeals to this court. See l 0-144
C.M.R. ch. 101, § 140.1.2(4) (2014) (authorizing judicial review of administrative review); 10
144 C.M.R. ch. 101, § 1.21-l(A) (2014) (same).
In its June 24 decision, respondent denied petitioner's request for review on the following
grounds: (1) the request was untimely under both section 140.1.2(1) and section 1.21-1 because
it was filed beyond the respective 30 and 60 day appeal periods; (2) petitioner lacked standing
under section 140 .1 because it was not the facility to which the January 8 decision issued; and (3)
petitioner lacked standing under section 1.21-1 because it was not aggrieved by the decision. The
court's review is confined to these issues. See 5 M.R.S. § 11001(1) (allowing judicial review of
final agency action); M.R. Civ. P. 80C(a) (same). Petitioner' s proffered evidence, which
challenges the merits of respondent's January 8 decision, is not necessary or material to
determining whether petitioner's June 12 request was timely or whether petitioner had standing
to make that request. The court therefore denies the motion to take additional evidence.
B. Motion to Stay
The briefing schedule has been stayed pending this order. See M.R. Civ. P. 80C(e)
("Upon the filing of a motion for the taking of additional evidence, the time limits contained in
this rule shall cease to run pending the issuance of an appropriate order of court specifying the
4
)
future course of proceedings with that motion.") . The court orders the following revised briefing
schedule pursuant to M.R. Civ. P. 80C(g):
1. Petitioner's brief is due within 40 days of the date of this order.
2. Respondent's brief and AHC ' s brief are due within 30 days after the service of
petitioner's brief.
3. Petitioner's reply brief, if any, is due within 14 days after last service of the brief
of any other party.
III. CONCLUSION
The court hereby ORDERS that petitioner's motion to take additional evidence and
supplement the record is DENIED and its motion to stay the briefing schedule is GRANTED.
Pursuant to M.R. Civ. P. 79(a), the clerk is directed to incorporate this Order by reference
in the docket.
Dated: U,-.. Z4 J tJ I(,
0
5
STATE OF MAINE SUPERJOR COURT
CUMBERLAND, SS. CIVIL ACTION
DOCKET NO. AP-15-21
CEDARS NURSING CASE CENTER
d/b/a/ THE CEDARS,
Petitioner,
V. ORDER
STATE OF
MAINE DEPARTMENT OF HEALTH Cumber/and MAINE
. ss, Clerk's Office
AND HUMAN SERVICES,
AUG 2 4 2015
Respondent.
RECEIVED
I. Background
Petitioner the Cedars appeals from two related decisions. The first is a January 8,
2015 decision by the Department of Health and Human Services (DHHS) that re
classified the Aroostook Health Center (AHC) from Peer Group II to Peer Group III ("the
AHC decision"). The Cedars contends the AHC decision will affect its MaineCare
reimbursement rates. The second decision is one dated June 24, 2015, in which DHHS
denied the Cedars's request for an informal review or administrative hearing of the AHC
decision.
DHHS moves for an extension of time to file the administrative record and also
moves to dismiss the complaint under Rule 12(b)(6).
II. Discussion
A. The Administrative Record
Under Rule 80C(f), "The agency shall file the complete record of the proceedings
under review as provided by 5 M.R.S. § 11005." Under 5 M.R.S. § 11005, "The agency
shall file in the reviewing court within 30 days after the petition for review is filed." If the
the petitioner believes the record is incomplete or over-inclusive, Rule 80C(f) sets forth a
procedure whereby the agency and petitioner work to modify the record. If unable to
agree, the petitioner can file a motion with the court to modify the contents of the record.
DHHS requested an extension to file the administrative record on the grounds that
if the motion to dismiss is granted, the record need not be filed. If however the motion is
denied, the court's decision will help DHHS determine the scope of materials to include.
DHHS takes the position that the decision to reclassify AHC from Peer Group II to Peer
Group III is not appealable by the Cedars and have moved to extend the deadline until
after a ruling on the motion to dismiss in order to avoid filing materials related to that
proceeding.
B. Motion to Dismiss: Standing
'When considering a motion to dismiss, the court considers the allegations
contained in the complaint as true and admitted by the defendant. Annable v. Bd ofEnvtl.
Prat., 507 A.2d 592,593 (Me. 1986). On a 12(b)(6) motion, the court determines whether
the complaint states a claim "upon which relief can be granted." M.R. Civ. P. 12(b)(6).
DHHS chiefly argues that the Cedars is not "aggrieved" and cannot appeal the
AHC decision. 1 See 5 M.R.S. § 11001 ("[A]ny person who is aggrieved by final agency
action shall be entitled to judicial review thereof in the Superior Court.") "A person is
aggrieved within the meaning of the APA if that person has suffered particularized
injury-that is, if the agency action operated prejudicially and directly upon the party's
1
DHHS also argues there has been no "final agency action" because the Cedars is not an
aggrieved party. Because the argument hinges on the Cedars's status as an aggrieved party, the
court considers the final agency action as part of the standing analysis.
2
property, pecuniary or personal rights." Nelson v. Bayroot, LLC, 2008 ME 91, , 10, 953
A.2d 378.
The amended complaint2 alleges that the Cedars is aggrieved in two respects.
First, the change in designation from Peer Group II to Peer Group III "will reduce median
costs used for calculating reimbursement of Peer Group II facilities, which will in turn
reduce MaineCare reimbursement to the Cedars." Second, "using the 'higher hospital
affiliated rate' to reimburse AHC will also likely mean a decrease in overall MaineCare
reimbursement available to reimburse nursing facilities not in Peer Group III, such as the
Cedars." (Pet. Compl. ,, 23-24.)
DHHS argues the Cedars is not "aggrieved" because as a factual matter, the
Cedars's MaineCare reimbursement remains unaffected by the AHC decision. In other
words, because any potential consequences flowing from the AHC decision have not yet
materialized, any injury or aggrieved status the Cedars could claim remains too
speculative to support standing.
Taking the facts alleged in the complaint as true and admitted by the Defendant,
the Cedars will suffer a decrease in MaineCare reimbursement that will be proximately
caused by the AHC decision. If true, this is a sufficiently particularized injury to support
standing at the motion to dismiss stage, especially where the agency has failed to timely
file the administratiye record. Without the record, the court has a limited context to
evaluate the rights affected by the AHC decision. Nelson, 2008 ME 91, ~ 10, 953 A.2d
378 ("We examine the issue of standing in context to determine whether the asserted
effect on the party's rights genuinely flows from the challenged agency action.") The
2
DHHS does not oppose the motion to amend. The court grants the motion to amend and
considers the amended complaint for the purposes of this order.
3
complaint states a sufficiently particularized injury to support standing. The motion is
therefore denied.
UL Conclusion
As set forth above, the scope of the record is to be determined by reference to
scope of proceedings challenged at the agency level in the 80C petition. The agency is
responsible for filing the record, but lacks the prerogative to strategically withhold the
record in an effort to preemptively limit the issues fairly raised by the appeal. M.R. Civ.
P. 80C(f). Rule 80C(f) requires DHHS file a "complete record," including materials
related to the AHC classification decision that the Cedars appeals.
The clerk shall enter the following:
The Respondent's motion to dismiss is DENIED. The Respondent is
hereby ordered to file the administrative record within 30 days.
SO ORDERED.
DATED: August£, 2015
4
JUSTICE COLE
Date Filed: 06/16/2015 CUMBERLAND Docket No. AP15-0021
COUNTY
"
Action: BOC APPEAL
• CEDARS NURSING CARE CENTER MAINE DEPARTMENT OF HEALTH AND
D/B/A THE CEDARS HUMAN SERVICES
vs.
Plaintiff's Attorney Defendant's Attorney
MICHAEL A. DUDDY, ESQ JANE B. GREGORY, MG
KELLY, REMMEL, & ZIMMERMAN OFFICE OF THE ATTORNEY GENERAL
52 EXCHANGE STREET, P.O. BOX 597 6 STATE HOUSE STATION
PORTLAND, ME. 04112 AUGUSTA, ME. 04333
-- CJ