IN THE SUPREME COURT OF OHIO
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1 QRIGINAL IN THE SUPREME COURT OF OHIO State of Ohio, ex rel. The Academy of Senior Health Sciences, Inc. Case No.: vs- Relator, Michael B. Colbert, Director Ohio Department of Job and Family Services Respondent. RELATOR'S MEMORANDUM IN OPPOSITION TO MOTION TO DISMISS OF RESPONDENT, MICHAEL B. COLBERT, DIRECTOR OF THE OHIO DEPARTMENT OF JOB AND FAMILY SERVICES GEOFFREY E. WEBSTER ( ) Webster & Associates Co., LPA 17 S. High Street, Suite 770 Columbus, Ohio (614) Telephone (614) Facsimile geweb ster(a^a geweb ster. c om AttorneY for Relator MICHAEL DEWINE ( ) Ohio Attorney General CHARITY S. ROBL ( ) Assistant Attorney General 30 E. Broad Street, 26`" Floor Columbus, Ohio (614) Telephone (877) Facsimile Charity roblkohioattornevgeneral. gov Attorney for Respondent FkED JUL CLERK OF COURT SUPREME COURT OF OHIO
2 I. INTRODUCTION Relator, The Academy of Senior Health Sciences, Inc., a trade association of, among others, Medicaid participating nursing facilities has filed a Petition for a Writ of Mandamus in this Court seeking to compel Director Michael Colbert to do that which the Ohio General Assembly has specifically mandated he do and which he has failed to do. The Petition sets forth a clear and proper claim for relief establishing there is no adequate remedy at law and that the Academy's members have a clear legal right to receive, and he a clear legal duty to perform, the requested relief. Previous decisions of this Court clearly establish that no compensatory damages are sought. The matter is a proper class action. Director Colbert's motion should be denied. II. STATEMENT OF FACTS As noted by the Respondent in his Motion to Dismiss the Court must presume all factual allegations of the Petition are true and make all reasonable inferences in favor of the Relator. Respondent's brief pg. 5. Further recitation of that standard is not felt necessary. It is thus fact in this matter that: The Respondent is required to comply with the obligations imposed by the Ohio General Assembly pursuant to the enactment of and execution into law Am. Sub. H.B. No. 1. (Petition 1,"Pet").Respondent is charged with administering the Ohio Medicaid program pursuant to R.C. Ch (Pet. 3). On July 17, 2009, the General Assembly directed that certain ancillary Medicaid services would no longer be paid by the State's Medicaid program through payments directly to those vendors by the state. Rather, participating nursing facilities would be required to pay for those 2
3 services from the nursing facilities' funds. (Pet. 4). The General Assembly required the Medicaid State Agency to pay $3.91 to nursing facilities to reimburse for these costs. Id. Included in these consolidated services to be provided to Medicaid residents was (and is) oxygen, wheelchairs, over the counter medications, therapy services and transportation services. The $3.91 is a gross per them amount intended to accommodate all of these costs. If a provider's costs are greater than this sum for all, or any part of, of these services, no additional funds may be paid. Pet. 5 and Am. Sub. H.B. No. 1, (E) p. 2876, Pet. Ex. 1-A. Respondent's brief portrays each of the consolidated services as a discrete part of the $3.91 payment, but such is not the case. If, for example, therapy cost $3.75 for a Medicaid resident and there were no other of these costs, the facility is still entitled to $3.91. Conversely, if all these costs were for a Medicaid resident $15.00, the provider will still receive only $3.91. The immediate implementation of this law by the General Assembly clearly required nursing facility providers to scramble to secure agreements to enable the timely and appropriate delivery of these services to Medicaid residents. Any contract with a nursing facility must be in writing and contain certain specified provisions to comply with federal laws; see e.g., the Subcontractors Access Clause language required and other requirements of 42 CRF Part 420, Subpart D and Part 434, Subpart A. An association of medical transportation providers, Ohio Ambulance and Medical Transportation Association, ("OAMTA"), initiated a lawsuit against the State Medicaid agency and secured on or about July 31, 2009a temporary restraining order, extended by agreement of the parties barring implementation of the contested provision of Am. Sub. H.B. No. 1. By Agreed Order, September 15, 2009, Respondent and OAMTA settled the issues regarding the OAMTA claims. Pet. 7, 8 and Pet. Ex. 2, Webster Aff. at 3 and 4. Respondent agreed to an 3
4 Order which required the Respondent to ignore the provisions of Am. Sub. H.B. No. 1 regarding the payment of the $3.91 to nursing facilities. No nursing facility was a party to that action. The Order entered by the OAMTA Trial Court September 15, 2009 specifically vacated the temporary restraining orders and the extension of the temporary restraining orders. See Pet., Webster Aff. Ex. 2A at paragraph 2.1 The actions of the Respondent, as a result of the agreement with OAMTA, were to ignore the clear and express terms of Am. Sub. H.B. No. 1, and pay less than the legislatively directed sum of $3.91. The Department calculated this resulted in an estimated reduction in nursing facility payments of $2.4 million. Pet. 16, 17, 18. III. LAW AND ARGUMENT The Respondent's motion is inadequate to deny the requested writ. Construing the evidence as required pursuant to Civ. R. 12, and applying the applicable decisional case law yields the conclusion the requested writ should issue. Tellingly Respondent makes no mention and apparently pretends it not to exist, the case most on point: State ex rel Montrie Nursing Home, Inc., et al v. Aggrey, 54 Ohio St. 2d 394, 377 N.E. 2d 497, 1978 Ohio LEXIS 587 (1978). In that mandamus action the Director failed to comply with a legislative enactment through issuance of certain "bulletins" and refused to pay an express sum directed by the Ohio General Assembly. Id, at 396 ("The director may not modify the clearly expressed legislative intent by issuing bulletins providing lesser remuneration for participating nursing homes than the General Assembly has directed." Id at 397). The Court of Appeals determination that mandamus would not lie was reversed and the writ allowed. Id. ' To vacate is "to annul; to set aside; to cancel or rescind; to render an act void; as, to vacate an entry of record or a judgment" Black's Law Dictionary, Rev. Fourth Ed. Respondent cannot rely upon a vacated temporary order as authority for anything since it is as if it never existed. 4
5 It is no less so here, be it the Department's bulletins or their negotiated settlement of an action unrelated to nursing homes, state executive agencies and their directors are required to follow the law, not as they would like it to read, but as the General Assembly has specified. Additionally, this Court has noted the availability of mandamus in Medicaid reimbursement issues, Ohio Academy ofnursing Homes v. Ohio Department ofjob and Family Services, 114 Ohio St. 3d 14, 2007 Ohio 2620, 867 N.E. 2d 400, 2007 Ohio LEXIS There is actually a long history of mandamus regarding nursing home Medicaid reimbursement ignored by the Respondent. See e.g. Three Rivers Convalescent Center, Inc. v. Bates, l" Dist. No. C , 1978 Ohio App. LEXIS A. THE PETITION STATES A PROPER CLAIM FOR RELIEF 1. The Academy of Senior Health Sciences, Inc. has no adequate remedy at law The Respondent uses circular logic to posit an adequate remedy at law existed to address the issues raised in this Mandamus action. It is apparently the Respondent's premise, in this regard, that the Relator's appeal of the denial of intervention was tantamount to an appeal of the merit issues Relator wanted to raise in the Common Pleas Court action by the filing of a request for intervention. The Relator never had an opportunity to raise merit issues and necessarily could only appeal the denial of the right to intervene in that litigation. Notably, the right to appeal the final Entry entered in the Trial Court expired while on Relator was appealing of the denial of intervention. Had the Court of Appeals granted intervention as requested and remanded the matter it would have been back to an action that was terminated and closed and for which all appeal rights had long since expired. As this Court observed more than 30 years ago, one need not follow a "suicidal course" under the "ordinary course of law doctrine" and such is not an adequate remedy of law. To hold 5
6 that appealing the denial of intervention to be an adequate remedy at law is similar to the same "suicidal course" this Court held not an adequate remedy at law in State ex rel N. Main St. Coalition v. Webb, 106 Ohio St. 3d 437, 2005 Ohio 5009, 835 N.E. 2d Even if successful, no merit issue would be addressed. On a remand from the intervention denial appeal a motion for relief from judgment under Civ. R. 60 would be the only possible source for relief, and none of that Rule's provisions appear to fit the facts (mistake, inadvertence, surprise, excusable neglect, newly discovered evidence, fraud, satisfaction of judgment, lack of equity in the judgrnent). It is clear that mandamus may not be used as a substitute for an otherwise barred appeal or to obtain a review of the same issue decided adversely in a prior appeal. See State ex rel. LTV Steel Co. v. Gwin, 64 Ohio St. 3d 245, , 1992 Ohio 20; 594 N.E.2d 616; 1992 Ohio LEXIS 1568 (1992). However the right to appeal has not in all cases been considered a bar to a special statutory proceeding such as an action in mandamus. See e.g., State ex rel. Smith v. Frost, 74 Ohio St. 3d 107, , 1995 Ohio 265; 656 N.E.2d 673; 1995 Ohio LEXIS 2303 (1995). Where a newspaper publisher attempted to intervene in a criminal trial that intervention was denied. In lieu of appealing the denial of intervention a mandamus action was commenced. The Respondent moved to dismiss arguing an adequate remedy at law existed via an appeal in the collateral criminal case. The Court of Appeals held there was no right to intervene and therefore no right to appeal. Thus, the right to appeal was held to not constitute an adequate remedy at law for it would have been a vain act. State ex rel. Vindicator Printing Co. v. Watkins, 11a' Dist. No. 91-T- 4555, 1991 Ohio App. LEXIS 6414,
7 To be an adequate remedy at law the remedy must be complete, beneficial and speedy. See e.g., State ex rel N. Main St. Coalition, supra 41. Appeal of the denial of intervention would be none of these things. Relator has no adequate remedy at law. 2. Director Coleman has a clear legal duty Respondent overlooks salient points which establish there is a clear legal right as well as a clear legal duty. As to the clear legal duty the Respondent argues that it was enjoined by court order from implementing the statutes and rules. Attached to the Petition and Complaint filed in this action (Exhibit 2A) is a copy of the Trial Court's September 15, 2009 Order. The Court states, at paragraph 2, that the temporary restraining order granted August 18, 2009 and the Order extending the temporary restraining order were "hereby vacated." Upon the nullification of those temporary orders, those Orders no longer prevent the Respondent from complying with the obligation of statute nor do the void temporary orders act to shield non-compliance with the law. In addition the Respondent over looks that the Relator's members were not parties to that action and thus there was no basis for the Department to ignore its statutory obligations to nursing facilities because it was enjoined in an action filed by OAMTA regarding that groups' member's Medicaid participation and reimbursement for transport services. The clear legal duty arises by virtue of the provisions of Am. Sub. H.B. 1 which clearly and unequivocally states: "The Deparhnent of Job and Family Services shall increase the nursing facilities fiscal year 2010 rate by the consolidated services rate per Medicaid day. The consolidated services rate shall equal the sum of the following: (1) $3.91; (2) the amount calculated under divisions (A)(1) 2(4) of Section of the Revised Code for fiscal year 2010"
8 See Exhibit 1-A attached to the Petition and Complaint filed in this action.2 The Montrie decision, supra, establishes the clear legal duty. 3. Relator's members have a clear legal right The Respondent argues that nursing facilities were somehow relieved of the obligation to pay for medical transportation services because of the issuance of a temporary restraining order in an action in which the nursing facilities were not parties. Of course no authority is or can be cited for such a position. Nor is any authority cited for the proposition that contracts executed prior to the issuance of the temporary restraining order in an action in which nursing facilities were not parties could be used as a defense in the non-payment of contractual obligations. The Respondent also argues without any support that the express language of Am. Sub. H.B. 1 directing in mandatory terms that the Department "shall pay" the sum of $3.91 to nursing facilities is neither a clear obligation to Respondent to do what the General Assembly has directed nor a clear right to the Relator's members to receive what the General Assembly has directed be paid. Respectfully, the General Assembly's passage, and the Governor's signature on Am. Sub. H.B. 1 could not have been more clear as to both right and duty. B. THE PETITION DOES NOT SEEK COMPENSATORY DAMAGES Respondent misreads the prayer for relief in this matter which under item B (Petition pg. 8) the request is: "That the Court issue a peremptory and alternative Writs of Mandamus and award ASHS damages as provided in R.C as a result of Respondent's failure to comply with a clear legal duty imposed upon H.B. 1..." (emphasis added) 2 The calculations referenced in item (2) of the quoted language relate to the franchise permit fee calculation. That is not related to the $3.91 payment which is what was reduced and not paid in the amount ordered by the Ohio General Assembly. 8
9 The "damages" that are sought are the damages which are available specifically under an action in Mandamus. To hold as Respondent argues is to hold this mandamus action can only be filed in a court which cannot grant mandamus relief. In this particular case the Relator seeks for and on behalf of its members the difference between the amount that H.B. 1 mandates be paid and the amount the Director did pay. That is clear from a reading of the Complaint. This Court long ago held that such is not an award of compensatory damages but is the sort of damages which are an in specie remedy. See Santos v. Ohio Bureau of Workers' Compensation, 101 Ohio St. 3d 74, 2004 Ohio 28, 801 N.E. 2d 441, 2004 Ohio LEXIS 59, 14. This Court relied upon the United States Supreme Court case Bowen v. Massachusetts, 487 U.S. 879, 895, 108 S. Ct. 2722, 1011 L. Ed. 2d 749. Paragraph 24 of the Petition filed in this action clearly delineates that the relief sought is the recovery of the difference of the paid amount "...less than the statutorily required consolidated services payment of $3.91 through fiscal year 2010." Similarly, Pet. paragraph 27 asks that "...a Writ of Mandamus compelling ODJFS to perform in accordance with H. B. 1" is requested. Respondent references the contract's terms in the Pet. Exhibits requiring the transporter to bill Medicaid as demonstrating no obligation to pay arose. Wrong. The contracts submitted as Exhibits clearly and specifically state, "When required or permitted by law..." patients or a government payor will be billed, but "Where required by law (e.g. trips covered under Medicare or Medicaid Consolidated Billing) EMT will bill SNF directly for services rendered to FACILITY'S patients." (Pet. Ex. 2-B, attachment A-1, Section 8) For transport trips covered by the section of Am. Sub. H. B. 1 at issue the Relator's members are and were contractually obligated to pay the EMT. 9
10 Respondent's position, aside from misreading the contract, begs the question in any event for the clear legal duty arises by act of the General Assembly. Further this "red herring" ignores that Respondent is to pay $3.91 for all consolidated services, not chose to pay less based upon some bureaucratic mathematics, first dividing out the average (or mythical) cost for each separate service, then averaging the cost for transportation service (average to the Department, not the nursing facility provider), then deciding to take from the $3.91 a part of the math calculations of what costs for transportation might have been for a discrete part of a year. All as a means to try to logically excuse compliance with the law. This Court has held: "The order to reimburse Medicaid providers for the amounts unlawfally withheld is not an award of money damages, but equitable relief. The distinction between tort damages and money claimed through specific performance of a legal duty was recently addressed by the United States Supreme Court in Bowen v. Massachusetts, (1988), 487 U.S. 879, 108 S. Ct. 2722, 1011 L. Ed. 2d 749. * * * "Damages are given to the Plaintiff to substitute for a suffered loss, whereas specific remedy's "are not substitute remedy's at all, but attempt to give the Plaintiff the very thing to which he was entitled" [Citation omitted] Thus, while in many instances an award of money is an award of damages, "[o]ccassionally a money award is also a specie remedy" Id. ***" Ohio Hospital Assn. v. Ohio Devt. of Human Services, 62 Ohio St. 3d 97, , 579 N.E. 2d 695, 1991 Ohio LEXIS 2523 (1991). C. A CLASS ACTION IS PROPER IN THIS MATTER Respondent asserts in his Motion to Dismiss that the requested class action is inappropriate. The basis of Respondent for this position is that the Relator has not moved for class certification and has thus not carried its burden regarding the requirements of Civ. R. 23. Respondent submits that it is not a reasonable or wise use of this Court's time to submit a motion detailing proof of all of the elements of a class action until after an answer is filed. S. Ct. Prac. R requires an Answer to the Complaint or Motion to Dismiss within twenty-one days. 10
11 If the Department admits some of the elements of Civ. R. 23 (e.g. typicality, adequacy of representation, adequacy of counsel) then there is no reason to consume this Court's time in determining whether those admitted elements of a class action are met. The other basis for the Respondent's position a class action is not necessary is he contends that a Writ of Mandamus, if granted, will automatically benefit others. It is ironic the Respondent now takes the position that an Order issued by this Court on behalf of a member trade association would, by Respondent, be treated for the benefit of all Ohio nursing facilities. If such were the case, Am Sub. H.B. 1 would have been complied with by the Respondent, all would have been paid at the time directed by that legislative enactment and this action unnecessary. After all, the General Assembly's laws are as entitled to the same respect by the Executive Branch as this Court's orders. Having demonstrated in other litigation the willingness to abandon compliance with the law there is no reason to not, in this action, make a clear pronouncement that all who are within the class are to benefit from the issuance of the requested Writ. IV. CONCLUSION The requested writ should issue on behalf of the class. Relator has filed contemporaneously with this brief an amended petition to make, among other things, it clear that damages are not sought in this action. 11
12 Respectfully submitted, Geoffrey ]^,Pystfr (0001 WEBSTER & A OCIATES CO., LPA 17 South High Street, Suite 770 Columbus, OH Telephone: (614) Facsimile: (614) gewebsterna gewebster.com Attorney for Relator CERTIFICATE OF SERVICE I hereby certify a true and accurate copy of the foregoing document was served via hand delivery, this 17`h day of July 2012, upon: Michael Dewine, Esq. Charity S. Robl, Esq. 30 E. Broad Street, 26`h Floor Columbus, Ohio Attorneys for Respondent , v. I 12
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