Opinion
NO. 03-19-00368-CV
11-18-2020
TEXAS HEALTH AND HUMAN SERVICES COMMISSION, Appellant v. Dimitria POPE and Shannon Pickett, Appellees
Emily Ardolino, Austin, Drew L. Harris, for Appellant. Manuel Quinto-Pozos, Austin, for Appellees.
Emily Ardolino, Austin, Drew L. Harris, for Appellant.
Manuel Quinto-Pozos, Austin, for Appellees.
Before Chief Justice Rose, Justices Triana and Smith
MEMORANDUM OPINION
Gisela D. Triana, Justice
Appellees Dimitria Pope and Shannon Pickett filed suit against appellant Texas Health and Human Services Commission (HHSC) under the Texas Whistleblower Act. HHSC filed a plea to the jurisdiction and motion for summary judgment, which the district court denied. HHSC appeals from the district court's order. We will affirm the order.
BACKGROUND
Pope and Pickett were employed by HHSC as the Director and Associate Director, respectively, of HHSC's Medical Transportation Program (MTP), which is responsible for ensuring that low-income Texans have access to non-emergency medical transportation (NEMT) for Medicaid-eligible health services. Third-party transportation-service providers, also known as Managed Transportation Organizations (MTOs), contract with HHSC to provide those transportation services in exchange for payment from HHSC.
Prior to 2014, HHSC paid MTOs using a "fee-for-service" model, in which the MTOs would submit documentation of each "ride" they provided and HHSC would pay MTOs based on the number of eligible rides. Beginning in 2014, HHSC switched to a managed-care payment model, in which MTOS are paid capitation rates. Capitation rates are prospective payments to providers, paid on a per-member, per-month basis, regardless of the number of "encounters," or rides, that MTOs provide during a particular month.
The federal government partially reimburses HHSC for its payments to MTOs based on claims submitted by HHSC to the federal government. To be eligible for reimbursement, the transportation services must comply with state and federal rules and regulations, including state law requiring that a child younger than 15 years of age be accompanied to the medical appointment by a parent, guardian, or another adult authorized by a parent or guardian, see Tex. Hum. Res. Code § 32.024(s) ; 1 Tex. Admin. Code § 380.207 (Tex. Health & Human Servs. Comm'n, Program Limitations), and that "[a]n adult authorized to accompany a child cannot be the provider of a service for which reimbursement is sought or an affiliate," 1 Tex. Admin. Code § 354.1133(c)(2) (Tex. Health & Human Servs. Comm'n, Parental Accompaniment Requirement).
The Office of Inspector General (OIG), a division of HHSC, monitors compliance with this and other legal requirements, as it is "responsible for the prevention, detection, audit, inspection, review, and investigation of fraud, waste, and abuse in the provision and delivery of all health and human services in the state." Tex. Gov't Code § 531.102(a). The MTP is subject to additional oversight by the Office of the Attorney General of the State of Texas (OAG) and the United States Department of Health and Human Services (DHHS).
Pope and Pickett became Director and Associate Director of MTP in 2012 and 2013, respectively. At the time of her firing in 2017, Pope had worked in Texas state government for approximately 40 years. Before working for HHSC, she had been employed with the Texas Adult Probation Commission, the Texas Department of Criminal Justice (TDCJ), and the Texas Youth Commission (TYC). She had worked for TDCJ for nearly 23 years and reached the position of Director of the Community Justice Assistance Division. In 2007, Pope was appointed Acting Executive Director of TYC, and in 2008, she began working as a Program Specialist for HHSC. In 2012, she was promoted to the position of Director. During her time at HHSC, Pope served under five Executive Commissioners and reported to several executives. Her performance reviews were largely positive, and she received three promotions and six pay raises over the years, including three pay raises of 20% or higher.
Pickett is a lawyer admitted to practice law in Texas and Virginia. Before working for HHSC, Pickett worked in the private legal sector and then as Deputy Parliamentarian for the Texas House of Representatives. In 2009, HHSC hired Pickett as an "Attorney IV" and assigned her to MTP. In 2013, she was promoted to Associate Director. Pope evaluated Pickett on two occasions and rated her performance "distinguished" in 2015 and "exceeds expectations" in 2017.
As Director and Associate Director, Pope and Pickett were responsible for overseeing all operations of MTP, including monitoring and administering HHSC's contracts with MTOs. After Pope became Director, she received questions and complaints regarding the apparent noncompliance with the eligibility requirements for the transportation of minors by one of the MTOs, LeFleur Transportation of Texas. In response to this information, Pope conducted area visits and "ride-alongs" to observe LeFleur and its subcontractors’ provision of transportation services. Pope's observations led her to believe that LeFleur was violating the legal requirements for transporting minors to medical appointments. In various emails, telephone calls, and in-person meetings from 2012 to 2017, Pope reported LeFleur's violations to the OIG, her HHSC supervisors, the OAG, and the FBI. Pickett, acting under Pope's direction, also was involved in making some of these reports.
In 2016, Pope and Pickett encountered another issue with LeFleur. Under the managed-care model of payment adopted by HHSC in 2014, MTOs were subject to a "cap" on how much profit they could make, and any amount of profit beyond that "cap" had to be repaid to HHSC in the form of "experience rebate" payments. See id. §§ 533.00257(b), .014; 1 Tex. Admin. Code § 353.3 (Tex. Health & Human Servs. Comm'n, Experience Rebate in the Managed Care Program). LeFleur had exceeded the cap and was defaulting on its payments. MTP calculated that LeFleur owed HHSC approximately $5.6 million, which Pope and Pickett attempted to collect. According to Pope, under pressure from LeFleur, HHSC executives blocked Pope and Pickett's efforts to collect the money and allowed LeFleur to postpone its payments.
In 2017, HHSC opted not to renew its contract with LeFleur. In response, LeFleur executives complained to HHSC's executive leadership that Pope and Pickett had treated the company unfairly. Based on these complaints, HHSC initiated an investigation into Pope and Pickett for "official oppression." The investigation included an interview of Pope by OIG. Pope notified her supervisor, State Medicaid Director Jami Snyder, of this interview in an email, telling Snyder that she had a meeting with OIG's Internal Affairs regarding LeFleur.
During the interview, which occurred in August 2017, Pope complained of HHSC's failure to collect the experience-rebate payments that LeFleur owed to HHSC. After the interview, Pope attempted to meet with HHSC's Executive Commissioner but instead met with his Chief of Staff, Chief Deputy Executive Commissioner Cecile Young, and Pope's supervisor, Snyder. At this meeting, which also occurred in August 2017, Pope informed the HHSC executives that she had reported the experience-rebate issue to OIG. She also handed them a copy of notes that she had prepared in anticipation of the meeting.
In her notes, Pope listed the "purpose" of her meeting with HHSC executives as "[t]o seek guidance and direction that [HHSC] intends to pursue with respect to the handling of LeFleur Transportation of Texas." "Specific issues of concern" identified by Pope included: "[l]imited conversations with MTP staff regarding strategies being pursued by [HHSC] regarding the MTO contract and other business arrangements that the agency has with LeFleur"; "[o]pen investigations with Office of Inspector General and/or Office of the Attorney General" regarding LeFleur; and the concerns of HHSC's leadership "regarding litigation initiated by LeFleur ... beyond LeFleur's monies owed to the state." Pope also noted that she had been contacted by OIG's Internal Affairs regarding LeFleur's claim that she had engaged in "official oppression" and that "full disclosure of documentation related to this matter may potentially disclose not so favorable actions and interactions between HHSC and LeFleur."
Also in 2017, HHSC was continuing to address a federal audit that DHHS had conducted on MTP for fiscal year 2011. The report of the audit's findings was titled, "Texas Did Not Always Comply with Federal and State Requirements for Claims Submitted for the Nonemergency Medical Transportation Program." The report found that HHSC had "claimed Federal Medicaid reimbursement for some NEMT services claims submitted by transportation providers that did not comply with certain Federal and State requirements," including the parental-accompaniment requirement. The report estimated that HHSC "improperly claimed at least $30,385,925 in Federal Medicaid reimbursement" and recommended that HHSC reimburse that amount to the federal government. According to Pope, approximately $13 million of that amount was attributable to transportation services that had violated the parental-accompaniment requirements.
The parties refer to this reimbursement as a "deferral," which is a sanction requiring HHSC to refund the federal government for the services found to be ineligible.
Pope and Pickett had worked with OIG's audit-resolution team to resolve the issues that had been identified in the report and to provide documentation to DHHS showing that certain claims that had been flagged by the audit as non-compliant were in fact compliant. According to Michael Garner, OIG's Federal Audit Coordination Manager, the team was successful in resolving many of the audit issues, but as of 2017, they were still working to resolve the claims that involved the parental-accompaniment requirements. In a May 2017 email to Snyder, Pope notified her of the financial consequences of HHSC's inability to provide documentation that the transportation services had been lawfully provided:
Although staff is reviewing the availability of the historical data, you should be aware that the potential liability for LeFleur's mishandling of the transportation of minors as computed by [the federal government] for this audit stands at $12,850,646. Should MTP not be able to provide the additional documentation that CMS seeks, LeFleur could be liable for the full deferral amount and at a minimum, 50% of the deferral.
Snyder replied to the email, thanking Pope for the update and telling her that she would "ensure that members of leadership are aware of the status of the OIG audit and the potential implications." Snyder also asked Pope if she "had a sense of when the audit will be finalized." Pope responded that the "audit [was] complete" and that they "successfully contested a number of the audit findings." Pope added, however, that "the finding associated with parental accompaniment was more of a challenge considering the lack of evidence required to get the proposed deferral dismissed." Pope added, "The remaining documentation hinges on HHSC's ability to retrieve any other documentation to demonstrate LeFleur's compliance with the rules at the time of the audit. We are currently conducting one last review and will keep you updated."
Pope and Pickett were unable to find any documentation proving that the reimbursement of the claims identified in the audit relating to the transportation of minors had complied with the law. In the absence of such documentation, the Center for Medicare and Medicaid Services (CMS) requested that MTP provide an "attestation" letter from Snyder indicating that the transportation services provided to minors had complied with the law. On September 15, 2017, Pickett sent an email to Snyder informing her of this request:
Jami,
CMS is requesting a letter signed by you the State Medicaid Director confirming and attesting that parental consent for another adult to accompany a child was implied when a caller (parent social worker, advocate) would call MTP to schedule a trip.
....
MTP has been unable to find any written documentation with respect to how the call center agents determined who was calling to schedule the trip and their relationship to the child.
....
MTP has found no documentation that supports that a parent gave a social worker or advocate the right to designate an adult on their behalf to accompany their child for services scheduled back in 2011. Nor can MTP explain why LeFleur did not transport the adult identified on the trip manifest provided to them. Based on what MTP has provided to CMS they have requested a signed letter and attestation from you on the parental accompaniment issue. MTP briefed Charles Smith then Chief Deputy Executive Director on the status of the audit findings back in 2015.
....
Are you willing to sign a letter and attest that parental consent was implied back in 2011 that any caller could designate an adult to ride with a child? You may want to speak to Cecile [Young] since she ran the program back then, maybe she can recall what direction she provided to the program.
Snyder forwarded Pickett's email to Young and asked Young when she would be available to discuss the matter.
One week later, on Friday, September 22, 2017, Pope sent a follow-up email to Snyder and other HHSC employees regarding Pickett's email and asked Snyder to "advise what position the agency intends to take on this issue." That same day, Karen Ray, Chief Counsel for HHSC, called Michael Garner, OIG's Federal Audit Coordination Manager, who was responsible for drafting Snyder's letter. The following Monday, September 25, 2017, Garner emailed a copy of the draft letter to Ray, Snyder, Pope, Pickett, and other HHSC employees for review. The letter included the following statements:
Medical Transportation Program processes in place during the audit period required that a parent or legal guardian of a client under the age of 18 designate an attendant for that client. Medical Transportation Program call center staff were required to (1) ask a caller to identify their relationship to the client and (2) further establish a caller's identity by obtaining certain information such as the client's name, social security number, and address. The information was then verified against the information contained in the client's eligibility record.
(emphasis added). Pickett "replied all" to the email, informing Garner and the recipients of his email that the statements in the letter emphasized above were not provided by "current MTP management," which had been "unable to find any documentation to support the assertions." Pickett also asked Garner to "please provide legal with the source of the statements made in the letter as drafted." Garner emailed the following in response:
Shannon,
I sincerely appreciate your reviewing the draft example letter to CMS as it is misleading as you stated. Although it was taken from a response to CMS is
was taken from the criteria portion and not the HHSC MTP response portion.... To avoid unnecessary confusion, we have removed this section from the attached revised draft example letter.... We appreciate your assistance and please let us know of other questions or if we can provide additional information. Thanks!
On October 2, 2017, Pickett sent another email to Garner and the others who had been included in the previous email exchange:
Mike,
There are two other statements in the letter you drafted that are not accurate, were not reported to CMS by the program, and cannot be supported by documentation in the program's possession. If you have documentation to support the statements deleted in the attached letter please provide to all parties on the distribution of this email.
Garner provided the following reply:
Shannon,
We appreciate your review and identified corrections. Federal Audit Coordination has accepted these corrections as identified in the attached draft 2nd revision. Please let us know of any additional corrections or recommended revisions. Thanks!
Two days later, on October 4, 2017, HHSC terminated Pope's and Pickett's employment. Pope and Pickett filed suit against HHSC under the Texas Whistleblower Act. HHSC filed a plea to the jurisdiction and motion for summary judgment, which the district court denied. This interlocutory appeal followed.
STANDARD OF REVIEW
"A plea to the jurisdiction is a dilatory plea, the purpose of which is generally to defeat an action ‘without regard to whether the claims asserted have merit.’ " Mission Consol. Indep. Sch. Dist. v. Garcia , 372 S.W.3d 629, 635 (Tex. 2012) (quoting Bland Indep. Sch. Dist. v. Blue , 34 S.W.3d 547, 554 (Tex. 2000) ). "Typically, the plea challenges whether the plaintiff has alleged facts that affirmatively demonstrate the court's jurisdiction to hear the case." Id. (citing Texas Ass'n of Bus. v. Texas Air Control Bd. , 852 S.W.2d 440, 446 (Tex. 1993) ). "However, a plea to the jurisdiction can also properly challenge the existence of those very jurisdictional facts." Id. "In those cases, the court can consider evidence as necessary to resolve any dispute over those facts, even if that evidence ‘implicates both the subject-matter jurisdiction of the court and the merits of the case.’ " Id. (quoting Texas Dep't of Parks & Wildlife v. Miranda , 133 S.W.3d 217, 226 (Tex. 2004) ).
"In those situations, a trial court's review of a plea to the jurisdiction mirrors that of a traditional summary judgment motion." Id. (citing Miranda , 133 S.W.3d at 228 ). "Initially, the defendant carries the burden to meet the summary judgment proof standard for its assertion that the trial court lacks jurisdiction." Id. "If it does, the plaintiff is then required to show that a disputed material fact exists regarding the jurisdictional issue." Id. "If a fact issue exists, the trial court should deny the plea." Id. "But if the relevant evidence is undisputed or the plaintiff fails to raise a fact question on the jurisdictional issue, the trial court rules on the plea as a matter of law." Id. "In determining whether a material fact issue exists, we must take as true all evidence favorable to the plaintiff, indulging every reasonable inference and resolving any doubts in the plaintiff's favor." Alamo Heights Indep. Sch. Dist. v. Clark , 544 S.W.3d 755, 771 (Tex. 2018). "In doing so, however, we cannot disregard evidence necessary to show context, and we cannot disregard evidence and inferences unfavorable to the plaintiff if reasonable jurors could not." Id.
"In a suit against a governmental employer, the prima facie case implicates both the merits of the claim and the court's jurisdiction because of the doctrine of sovereign immunity." Id. at 635-36 (citing Miranda , 133 S.W.3d at 226 ). "Sovereign immunity deprives a trial court of jurisdiction over lawsuits in which the state or certain governmental units have been sued, unless the state consents to suit." Id. (citing State v. Lueck , 290 S.W.3d 876, 880 (Tex. 2009) ). Thus, sovereign immunity is properly asserted in a plea to the jurisdiction. Id.
The immunity provision in the Whistleblower Act provides that "[a] public employee who alleges a violation of this chapter may sue the employing state ... entity for the relief provided by this chapter. Sovereign immunity is waived and abolished to the extent of liability for the relief allowed under this chapter for a violation of this chapter." Tex. Gov't Code § 554.0035. "The standard for a ‘violation of this chapter’ appears in section 554.002(a), which provides that the governmental entity ‘may not suspend or terminate the employment of, or take other adverse personnel action against, a public employee who in good faith reports a violation of law by the employing governmental entity or another public employee to an appropriate law enforcement authority.’ " Lueck , 290 S.W.3d at 881 (citing Tex. Gov't Code § 554.002(a) ). "Therefore, the elements under section 554.002(a) must be considered in order to ascertain what constitutes a violation, and whether that violation has actually been alleged." Id.
However, this "does not mean that [the plaintiffs] must prove [their] claim in order to satisfy the jurisdictional hurdle." Id. at 884. "The purpose of a dilatory plea is not to force the plaintiffs to preview their case on the merits but to establish a reason why the merits of the plaintiffs’ claims should never be reached." Bland , 34 S.W.3d at 554. In other words, a plea to the jurisdiction "does not authorize an inquiry so far into the substance of the claims presented that plaintiffs are required to put on their case simply to establish jurisdiction." Id. "[I]n a case in which the jurisdictional challenge implicates the merits of the plaintiffs’ cause of action and the plea to the jurisdiction includes evidence, the trial court reviews the relevant evidence to determine if a fact issue exists." Miranda , 133 S.W.3d at 227. "[W]e simply require the plaintiffs, when the facts underlying the merits and subject matter jurisdiction are intertwined, to show that there is a disputed material fact regarding the jurisdictional issue." Id. at 228. "If the evidence creates a fact question regarding the jurisdictional issue, then the trial court cannot grant the plea to the jurisdiction, and the fact issue will be resolved by the fact finder." Id. at 227-28.
ANALYSIS
The elements of a prima facie case under the Whistleblower Act are: (1) the plaintiffs are public employees; (2) who made a good-faith report of a violation of law by their employing governmental entity or another public employee; (3) they made the report to an appropriate law enforcement authority; and (4) they suffered retaliation as a result of making the report. See Tex. Gov't Code § 554.002(a) ; Lueck , 290 S.W.3d at 878 ; Hunt Cmty. Supervision and Corrs. Dep't v. Gaston , 451 S.W.3d 410, 417 (Tex. App.—Austin 2014, pet. denied). HHSC does not dispute that Pope and Pickett were public employees or that they made their reports to an appropriate law enforcement authority. Instead, HHSC asserts that (1) Pope and Pickett did not make good-faith reports of violations of law by HHSC, and (2) Pope and Pickett were not fired because of those reports.
Good-faith reports of violations of law by HHSC
HHSC argues that Pope and Pickett reported suspected violations of parental-accompaniment laws by LeFleur, not HHSC, and that Pope and Pickett "cannot establish a Whistleblower report by implication" against HHSC. HHSC further contends that even if this Court were to conclude that the reports made against LeFleur were "impliedly" made against HHSC, those reports were not made in good faith because HHSC does not reimburse MTOs under the current managed-care model of payment and because compliance with parental-accompaniment laws is a matter of "contract oversight" for which Pope and Pickett were responsible. Finally, HHSC asserts that its alleged failure to collect the experience-rebate payments from LeFleur was not a violation of law.
The Whistleblower Act defines "law" as "(A) a state or federal statute; (B) an ordinance of a local governmental entity; or (C) a rule adopted under a statute or ordinance." Tex. Gov't Code § 554.001(1). When making a report, there is no requirement that an employee identify a specific law, Texas Dep't of Crim. Justice v. McElyea , 239 S.W.3d 842, 850 (Tex. App.—Austin 2007, pet. denied), or use "specific phrasing," Texas Dep't of Assistive & Rehab. Servs. v. Howard , 182 S.W.3d 393, 400 (Tex. App.—Austin 2005, pet. denied), so long as there is "some law prohibiting the complained-of conduct to give rise to a whistleblower claim," McElyea , 239 S.W.3d at 850. Moreover, "an actual violation of law is not required by the Whistleblower Act." City of Elsa v. Gonzalez , 325 S.W.3d 622, 627 n.3 (Tex. 2010). "The Act requires only a good-faith belief that a violation of law has occurred." Id. " ‘Good faith’ means that (1) the employee believed that the conduct reported was a violation of law and (2) the employee's belief was reasonable in light of the employee's training and experience." Wichita County v. Hart , 917 S.W.2d 779, 784 (Tex. 1996).
By all accounts, Pope and Pickett were highly experienced and knowledgeable administrators of the Medicaid Transportation Program. Charles Smith, the Executive Commissioner of HHSC, described Pope as "very knowledgeable of her subject matter, and the nuts and bolts of doing her job were—appeared to be very good." Pope's supervisor, Jami Snyder, the State Medicaid Director, described Pope as "an experienced administrator, knowledgeable in terms of the benefit that was offered to Medicaid enrollees, the nonemergency medical transportation benefit, and had—and had a long history of administering that program." HHSC Deputy Executive Commissioner Cecile Young described Pickett as being "really good" as a lawyer for MTP and characterized Pickett's promotion to Associate Director as being "good for the program."
In light of Pope's and Pickett's extensive experience and knowledge regarding MTP, there is at least a fact issue as to whether they had a good-faith belief that HHSC had violated the law. First, regarding the parental-accompaniment requirement, HHSC had contracted with LeFleur to provide transportation services and had sought reimbursement from the federal government based on payments that it had made to LeFleur. Thus, HHSC had a legal obligation to ensure that LeFleur was providing transportation services that complied with the law and were eligible for reimbursement. See Tex. Hum. Res. Code § 32.024(s) (providing that executive commissioner of HHSC shall "require, as a condition for eligibility for reimbursement ... that a child younger than 15 years of age be accompanied at the visit or screening by: (A) the child's parent or guardian; or (B) another adult, including an adult related to the child, authorized by the child's parent or guardian to accompany the child"). If HHSC received reimbursement for services that were not eligible for reimbursement, then that would be a violation of law by HHSC. And Pope and Pickett, as experienced administrators of MTP, would be aware that by reporting LeFleur's violation of law, they would necessarily be reporting HHSC's violation of law.
We also observe that in at least one of Pope's email reports, she informed OIG that an MTP employee at a call center was allowing transportation services to be arranged in violation of the parental-accompaniment requirements.
This view is supported by the federal audit that was performed on HHSC for fiscal year 2011. The audit report, released in 2014, was titled, "Texas Did Not Always Comply with Federal and State Requirements for Claims Submitted for the Nonemergency Medical Transportation Program." The report found that HHSC had "claimed Federal Medicaid reimbursement for some NEMT services claims submitted by transportation providers that did not comply with certain Federal and State requirements," including the parental-accompaniment requirement, and that HHSC had "improperly claimed at least $30,385,925 in Federal Medicaid reimbursement."
HHSC attempts to minimize the significance of this audit by observing that it applied only to fiscal year 2011 and that the audit "did not reflect that any rides provided actually violated parental accompaniment laws." Again, however, the Whistleblower Act does not require an actual violation of law but a good-faith belief that a violation of law has occurred. Because the audit found that HHSC claimed reimbursement for transportation services that did not comply with state and federal requirements, Pope and Pickett could have reasonably believed in good faith that they were reporting violations of law by HHSC.
Moreover, although the audit applied only to fiscal year 2011, HHSC continued to contract with and pay LeFleur until 2017. Even though the payment model changed in 2014, this did not change the law regarding parental accompaniment. Transporting a minor without the legally required adult violates the law regardless of how the service provider is compensated, and even under the managed-care model of payment, the number of eligible transportation services provided during one fiscal year affects the per-member, per-month capitation rate for the subsequent fiscal year. Thus, as Pope and Pickett observe, "an artificially inflated number of transportation services would have an impact on the following fiscal year's capitation rate," meaning that "the financial benefit or impact of the violation of law was delayed, not eliminated."
Additionally, the 2011 audit was an ongoing concern for HHSC in 2017, and HHSC was attempting to obtain documentation from MTP that would prove compliance with the parental-accompaniment requirement to avoid owing the federal government approximately $13 million. However, as Pope and Pickett reported on multiple occasions, no such documentation existed, meaning that the remaining claims identified in the audit were not compliant with state and federal requirements. The lack of documentation would be another reason why Pope and Pickett could have reasonably believed in good faith that HHSC had violated the law.
As for HHSC's contention that MTO compliance with parental-accompaniment laws is a matter of "contract oversight" for which Pope and Pickett were responsible, Pope and Pickett arguably exercised that oversight by reporting, on numerous occasions over a period of years, LeFleur's failure to comply with the law. HHSC executives, not Pope and Pickett, had the ultimate responsibility to act on those reports. See id. § 32.024(s); see also Tex. Gov't Code §§ 321.022(a) (requiring administrative head of department who has reasonable cause to believe that state funds have been misused or "other fraudulent or unlawful conduct has occurred in relation to the operation of the department" to "report the reason and basis for the belief to the state auditor"), 531.005(a) (providing that HHSC is governed by Executive Commissioner), .0055(e) (outlining responsibilities of Executive Commissioner, including to manage, direct, and supervise operations of agency).
Finally, regarding HHSC's alleged failure to collect the experience-rebate payments from LeFleur, HHSC asserts that although the law imposes a duty on the MTO to pay experience rebates, see 1 Tex. Admin. Code § 353.3 ("Each [MTO] participating in Medicaid managed care must pay to the state an experience rebate calculated according to the graduated rebate method described in the [MTO's] contract with the Health and Human Services Commission"), the law "does not impose a mandatory duty on HHSC to collect" those payments, "nor does the law prescribe any timetable for doing so." However, HHSC is responsible for enforcing state laws related to the Medicaid program, see Tex. Gov't Code § 531.102(a) ; 1 Tex. Admin. Code § 371.11 (Tex. Health & Human Serv. Comm'n, Scope), and that includes the law requiring MTOs to pay the experience rebates. Pope and Pickett reported that HHSC was failing to enforce LeFleur's legal obligation to make those payments. Although HHSC filed suit against LeFleur to collect the full amount owed after Pope and Pickett were terminated, at the time Pope and Pickett made their report, LeFleur had not paid the amount owed and no suit had been filed. Thus, Pope and Pickett could have reasonably believed in good faith that HHSC was violating the law by allowing LeFleur to avoid payment.
Causation
HHSC next argues that there is no evidence that Pope and Pickett were fired as a result of making their reports. According to HHSC, Pope and Pickett were fired because of unprofessional behavior that was unrelated to their reports. Moreover, HHSC claims that Pope's and Pickett's first-line supervisor Jami Snyder, the State Medicaid Director, and second-line supervisor Enrique Martinez, the Deputy Executive Commissioner for the Medical and Social Services Division of HHSC, had no knowledge of the reports prior to their decision to terminate Pope's and Pickett's employment.
"The Whistleblower Act prohibits a government employer from taking an adverse personnel action against a public employee who in good faith reports a violation of law to an appropriate law-enforcement authority." Office of Atty. Gen. v. Rodriguez , 605 S.W.3d 183, 191 (Tex. 2020). "To recover against a government employer, the employee must establish that the employer imposed the personnel action ‘because the employee made the report.’ " Id. (quoting Texas Dep't of Human Servs. v. Hinds , 904 S.W.2d 629, 633 (Tex. 1995) ). "The Act imposes liability if an employee's report causes an adverse employment action, but it preserves an employer's right to fire an employee when it has ‘sufficient sound reasons’ or even ‘harbor[s] bad motives never acted upon.’ " Id. at 192 (quoting Hinds , 904 S.W.2d at 635-36 ). "The Act thus does not afford unlimited protection from adverse personnel actions based on legitimate reasons." Id. "And while the Act protects making a report, it does not protect an employee from personnel actions based on the employee's unprotected conduct after the report is made." Id.
"A government employee need not prove that the report was the ‘sole’ or the ‘substantial’ reason for the adverse personnel action, but the employee must prove that the adverse action ‘would not have occurred when it did’ if the employee had not reported the violation." Id. (quoting Hinds , 904 S.W.2d at 634–36 ). "An adverse employment action ‘based solely’ on reasons unrelated to a good-faith report of a legal violation destroys the causal link." Id. (citing City of Fort Worth v. Zimlich , 29 S.W.3d 62, 67 (Tex. 2000) ).
"Circumstantial evidence may be sufficient to establish a causal link between the adverse employment action and the reporting of illegal conduct." Zimlich , 29 S.W.3d at 69. "In evaluating but-for causation evidence in retaliation cases, we examine all of the circumstances, including temporal proximity between the protected activity and the adverse action, knowledge of the protected activity, expression of a negative attitude toward the employee's protected activity, failure to adhere to relevant established company policies, discriminatory treatment in comparison to similarly situated employees, and evidence the employer's stated reason is false." Clark , 544 S.W.3d at 790.
We begin with the temporal proximity between Pope's and Pickett's reports and their termination. Although it is true that the reports began in 2012, the reports continued through 2017, the year that Pope and Pickett were fired. In August 2017, two months before her termination, Pope had a meeting with OIG in which she once again reported HHSC's failure to collect the experience-rebate payments that LeFleur owed to the agency. That same month, Pope had a meeting with HHSC executives in which she told them that she had reported the experience-rebate issue to OIG. Pope also handed the executives a copy of notes that she had prepared in anticipation of the meeting. The notes identified additional legal concerns that Pope had, including: "[l]imited conversations with MTP staff regarding strategies being pursued by [HHSC] regarding the MTO contract and other business arrangements that the agency has with LeFleur"; "[o]pen investigations with Office of Inspector General and/or Office of the Attorney General" regarding LeFleur; and the concerns of HHSC's leadership "regarding litigation initiated by LeFleur ... beyond LeFleur's monies owed to the state." Pope also noted that she had been contacted by OIG's Internal Affairs regarding LeFleur's claim that she had engaged in "official oppression" and that "full disclosure of documentation related to this matter may potentially disclose not so favorable actions and interactions between HHSC and LeFleur."
Also in 2017, Pope and Pickett reported that MTP did not have documentation to prove to federal auditors that certain transportation services to minors, paid for by HHSC, had complied with the law, which meant that HHSC owed the federal government approximately $13 million. In late September and early October 2017, when OIG drafted and circulated by email a letter attesting that the transportation services had complied with the law, Pickett reported to everyone in the email, including her supervisor, Snyder, that there was no documentation to support the claims in the letter. Two days after Pickett's final email pointing out deficiencies in the letter, Snyder fired Pope and Pickett.
HHSC claims that the reason Snyder terminated Pope and Pickett was because of their unprofessional behavior, not because of their reports. There is some evidence in the record to support this claim, including evidence that several of Pope's and Pickett's co-workers and subordinates had raised complaints regarding their behavior in the years prior to their termination and evidence that Snyder had initially planned to terminate Pope's employment in January 2017 because of those complaints. However, there is also evidence in the record to create a genuine issue of material fact as to whether Snyder's purported reason for firing Pope and Pickett was false. Specifically, both Pope and Pickett had received favorable performance reviews prior to their termination, and Snyder had approved a merit increase to Pickett's salary in September 2017. Moreover, Snyder never disciplined or reprimanded Pope or Pickett prior to their termination. Also, Snyder completed a performance evaluation for Pope in August 2017 in which Snyder indicated that Pope had "met expectations" for professionalism, policy and rules compliance, and teamwork, and that Pope had "exceeded expectations" for essential job functions such as "provid[ing] effective direction and leadership to staff" and "establishing and maintaining effective working relationships." In two categories, personal conduct and communication, Snyder indicated that Pope "does not meet expectations." However, contrary to HHSC policy, Snyder provided no comments in the evaluation to justify the "does not meet expectations" ratings.
HHSC further asserts that Pope and Pickett were fired not because of their reports but because of complaints made against Pope and Pickett by LeFleur and OIG auditors and because Pope had violated an HHSC directive in September 2017 not to communicate with LeFleur employees. Again, however, the employee "need not prove that the report was the ‘sole’ or the ‘substantial’ reason for the adverse personnel action," only that "the adverse action ‘would not have occurred when it did’ if the employee had not reported the violation." Rodriguez , 605 S.W.3d at 191. Even if there may have been other reasons that factored into Snyder's decision to fire Pope and Pickett in addition to their reports, there is at least a genuine issue of material fact as to whether Snyder would have fired them when she did in the absence of those reports.
Pope's unauthorized communication consisted of her answering a call from an unknown phone number that was revealed to be a LeFleur employee, calling the employee back, and informing the employee that she could speak to him only with HHSC lawyers on the call.
HHSC also argues that Snyder and Snyder's supervisor, Enrique Marquez, did not know of Pope's and Pickett's reports prior to the decision to fire them. However, Snyder attended the August 2017 meeting with Pope and HHSC executives in which Pope disclosed that she had reported the experience-rebate issue to OIG, and Snyder also participated in email exchanges relating to the audit that concerned the parental-accompaniment requirement, including Pickett's emails stating that there was no documentation to support claims in the attestation letter that the transportation services had complied with the law. Moreover, in an affidavit, Snyder made the following declarations:
During my tenure at HHSC, I became generally aware of historical challenges the MTP program faced in regard to providers adhering to requirements related to the transport of minors. It is my understanding that shortly after Ms. Pope became the Director of MTP in 2012, she raised concerns regarding MTP-contracted providers’ compliance with Texas's parental accompaniment laws and that she spearheaded HHSC's initiative to revise the rules and regulations to ensure provider compliance. It was my understanding that the parental accompaniment issues raised by Ms. Pope were issues related to provider compliance, not HHSC's compliance, and that these issues had long-since been resolved through legislation, rule changes and better enforcement initiatives by MTP.
At some point during a one-on-one meeting with Ms. Pope, I learned of continuing efforts by MTP to provide information in response to an ongoing federal HHS-OIG audit for Fiscal Year 2011. My recollection is that one of the issues in the audit was a lack of documentation to support whether a parent had given consent for another adult to accompany their minor child during a ride. According to an email I received from Ms. Pickett, MTP had documentation showing a parent could call the MTP call center staff and designate an adult to ride with the child and Ms. Pickett wanted to know if I would be willing to sign a letter and attest that this was the process in 2011.
This evidence creates at least a fact issue as to whether Snyder had knowledge of Pope's and Pickett's reports.
As for Marquez, he did not become the Deputy Executive Commissioner for the Medical and Social Services Division of HHSC until September 1, 2017. Thus, he was Pope's and Pickett's second-line supervisor and Snyder's first-line supervisor for approximately one month before Pope and Pickett were fired. According to Marquez, at some point in September 2017, Snyder conferred with him regarding her decision to terminate Pope's and Pickett's employment, and Marquez agreed with her recommendation and approved of the termination. Based on statements in his affidavit, Marquez did not appear to have any knowledge of Pope's and Pickett's reports at the time he approved of their firing, and Pope and Pickett do not contend otherwise. However, Marquez also stated that he made his decision "based solely on the information provided during this discussion" with Snyder. Thus, Marquez did not conduct his own "independent investigation" into Pope and Pickett and merely "rubber-stamped" Snyder's decision. Under these facts, Marquez's lack of knowledge regarding the reports does not break "the causal link" between Pope's and Pickett's reports and their termination. See Long v. Eastfield Coll. , 88 F.3d 300, 307 (5th Cir. 1996) ; see also Senior Living Properties, L.L.C. v. Cole , No. 10-06-00227-CV, 2007 WL 2729567, at *3 (Tex. App.—Waco Sept. 19, 2007, pet. denied) (mem. op.) (" ‘[T]he degree to which [the final decisionmaker's] decisions were based on his own independent investigation is a question of fact.’ " (quoting Rios v. Rossotti , 252 F.3d 375, 382 (5th Cir. 2001) )).
CONCLUSION
On this record, Pope and Pickett carried their burden to establish a genuine issue of material fact on each of the elements of their Whistleblower claim. Accordingly, we overrule HHSC's issues on appeal and conclude that the district court did not err in denying HHSC's plea to the jurisdiction and motion for summary judgment.