Opinion
A22-1688
07-24-2023
In the MATTER OF the SIRS APPEAL BY BEST CARE, LLC.
Samuel D. Orbovich, Pari I. McGarraugh, Fredrikson & Byron, P.A., Minneapolis, Minnesota (for relator Best Care, LLC) Keith Ellison, Attorney General, Benjamin Johnson, Assistant Attorney General, St. Paul, Minnesota (for respondent Minnesota Department of Human Services)
Samuel D. Orbovich, Pari I. McGarraugh, Fredrikson & Byron, P.A., Minneapolis, Minnesota (for relator Best Care, LLC)
Keith Ellison, Attorney General, Benjamin Johnson, Assistant Attorney General, St. Paul, Minnesota (for respondent Minnesota Department of Human Services)
Considered and decided by Worke, Presiding Judge; Connolly, Judge; and Reilly, Judge.
REILLY, Judge
In this certiorari appeal, relator challenges a decision by the commissioner of human services determining that relator is responsible for overpayments of Minnesota Health Care Programs funds. Because Minnesota Statutes section 256B.064, subdivision 1c, authorizes monetary recovery only when a vendor of medical care is improperly paid as a result of "abuse," and because the commissioner made no determination that relator was improperly paid, we reverse in part and remand.
FACTS
Minnesota's Medicaid program funds medical assistance, which is part of the Minnesota Health Care Programs (MHCP) and administered by respondent Department of Human Services (DHS). Minn. Stat. §§ 256B.01 -.851 (2022). Medical assistance provides funding for individuals unable to afford medical care. Minn. Stat. § 256B.01. Personal care assistance (PCA) is a service available to some medical-assistance recipients. Personal care assistants (PCAs) support and aid recipients with activities of daily living, health-related procedures and tasks, observation and redirection of behaviors, and instrumental activities such as meal preparation and shopping. Minn. Stat. § 256B.0659, subds. 1(i), 2(a).
Relator Best Care LLC (Best Care) is a vendor of medical care and a PCA provider agency. Minn. R. 9505.0175, subp. 38, .2165, subp. 16a (2021) (defining provider and vendor). Best Care participates in the MHCP by (1) employing PCAs to provide services to recipients and (2) receiving reimbursement of MHCP funds from DHS. Along with providing traditional PCA services, Best Care also operates as a fiscal intermediary in the PCA Choice program. Minn. Stat. § 256B.0659, subd. 18(a).
Under the traditional PCA program, provider agencies enroll as Medicaid providers and hire, train, supervise, and pay PCAs for their services to recipients. Minn. Stat. § 256B.659, subd. 24. The PCA Choice program "is an option of the [PCA] program that allows the recipient ... to be responsible for the hiring, training, scheduling, and firing of [PCAs]" and "offers greater control and choice for the recipient" about who provides services and when they are scheduled. Id. , subd. 18(b). Under the PCA Choice program, fiscal intermediaries "assist the recipient in paying and accounting for medically necessary covered [PCA] services." Id. , subd. 18(a).
To oversee the MHCP and its funds, DHS created the Surveillance and Integrity Review Section (SIRS) to conduct audits and monitor reimbursements to vendors, to ensure statutory and regulatory compliance. Minn. R. 9505.2160, .2200 (2021). SIRS is responsible for "identifying and investigating fraud, theft, abuse, or error by vendors or recipients of health services" through the MHCP and "for the imposition of sanctions against vendors and recipients of health services." Minn. R. 9505.2160, subp. 1.
In 2020, SIRS received four complaints about Best Care and decided to investigate. SIRS requested that Best Care electronically provide care plans, time sheets, records of qualified professional visits, and other documents for select recipients from September 2018 to December 2018. Based on the SIRS investigation, DHS ultimately issued a notice to Best Care to recover $428,393.13 in MHCP funds, identifying nine reasons for overpayment, including missing and deficient care plans and PCA time sheets. DHS also required Best Care to enter into a stipulated provider agreement as a condition of future participation in the MHCP.
Best Care administratively appealed the overpayment notice, contesting six of the nine reasons for overpayment. An administrative-law judge (ALJ) held a contested-case hearing and issued findings of fact, conclusions of law, and a recommendation that the commissioner (1) affirm in part and rescind in part the notice of overpayment and (2) rescind the requirement for Best Care to enter into a stipulated-provider agreement. During the hearing, DHS argued that Best Care's conduct met the definitions of three presumptively abusive practices. See Minn. R. 9505.2165, subps. 2A(1), 2A(7), 2A(9).
Best Care conceded that DHS was entitled to collect an overpayment of $5,046 based on documentation showing that DHS reimbursed Best Care for PCA services that overlapped with nonreimbursable homemaking time, services to the same recipient by another PCA, and services by the same PCA to other recipients.
Addressing alleged deficiencies in Best Care's time sheets and care plans, the ALJ observed that DHS contended it was entitled to "total monetary recovery based on the rules defining ‘abuse’ " for "typographical or inadvertent errors occur[ing] on care plans or time sheets." The ALJ observed that the commissioner may impose sanctions in certain circumstances, such as imposing a fine or suspending and terminating vendors from the program or obtain monetary recovery. The ALJ reasoned that DHS's reading of the statute permitting monetary recovery, Minn. Stat. § 256B.064, subd. 1c, "ignores the entirety of the statutory scheme, which requires an improper payment for monetary recovery based on abuse and explicitly authorizes the imposition of fines if specific required components of documentation are missing." The ALJ concluded that the legislature did not intend for providers to not be paid for services actually provided when documentation errors or omissions occur because "the statutes and rules provide for sanctions, including fines, [commensurate] with the documentation mistakes." Because DHS failed to meet its burden to show that the missing elements of care plans and time sheets led Best Care to improper and undeserved payments, the ALJ determined that DHS was not entitled to monetary recovery solely because of such errors and deficiencies.
On the remaining contested reasons for overpayment, the ALJ concluded DHS was not entitled to monetary recovery for missing care plans for Best Care's PCA Choice recipients because "the law does not require [Best Care] to include a layperson's care plan in its health service records ... because there are different documentation requirements for care plans under PCA Choice and PCA traditional." But the ALJ concluded DHS could properly recover for missing traditional care plans. Finally, the ALJ determined DHS could not recover for missing time sheets. DHS argued the missing time sheets constituted "abuse" pursuant to Minn. R. 9505.2165, subp. 2A(9). But because Best Care produced the time sheets with their appeal documents and DHS had not given notice to Best Care that it was claiming the time sheets were not timely produced rather than missing, the ALJ concluded that monetary recovery was improper.
The commissioner's final agency decision rejected and modified many of the ALJ's findings of fact and conclusions of law. The commissioner concluded that she had authority to impose fines or seek monetary recovery and that a fine was not appropriate because the case "resulted from the absence of certain key documentation such as timesheets and care plans," which constituted "abuse" under Minn. R. 9505.2165, subps. 2A(1), 2A(7), 2A(9). The commissioner also concluded that Best Care was required to maintain PCA Choice care plans and DHS could seek monetary recovery of all payments related to these missing care plans and time sheets. Because she determined the "pattern and practices of [Best Care] are deemed abuse," the commissioner concluded DHS "ha[d] the discretion to seek an overpayment." The commissioner therefore determined that Best Care was responsible for an overpayment of $428,393.13 and required Best Care to enter into a stipulated-provider agreement to keep participating in the MHCP.
Best Care appeals.
ISSUE
Did the commissioner act in excess of her statutory authority?
ANALYSIS
The commissioner's final decision imposing monetary recovery and sanctions is subject to certiorari review under the judicial-review provisions of the Minnesota Administrative Procedure Act, Minn. Stat. §§ 14.63 -.69 (2022). See Minn. Stat. §§ 256B.064, subd. 2 (providing for a hearing under chapter 14 on the commissioner's proposed action); 14.63 (providing for judicial review of final decisions in contested cases under chapter 14). We may reverse or modify the commissioner's decision if the substantial rights of the petitioners may have been prejudiced because the administrative finding, inferences, conclusion, or decisions are:
(a) in violation of constitutional provisions; or
(b) in excess of the statutory authority or jurisdiction of the agency; or
(c) made upon unlawful procedure; or
(d) affected by other error of law; or
(e) unsupported by substantial evidence in view of the entire record as submitted; or
(f) arbitrary or capricious.
Minn. Stat. § 14.69. Relators have the burden of demonstrating a basis for reversal. In re Excelsior Energy, Inc. , 782 N.W.2d 282, 289 (Minn. App. 2010).
We first address Best Care's argument that the commissioner exceeded her statutory authority when she ordered monetary recovery under Minnesota Statutes section 256B.064, subdivision 1c, because DHS failed to prove that the abuse identified caused Best Care to be "improperly paid" for providing PCA services to recipients. Second, we address Best Care's alternative arguments to reverse the commissioner's final decision. Finally, we consider Best Care's argument about the stipulated-provider agreement.
Best Care does not challenge the portion of the decision that determined DHS had a right to recover $5,046 based on the three reasons for overpayment that Best Care conceded led to improper payment.
We review de novo whether the commissioner exceeded her authority and "resolve any doubt about the existence of [her] authority against the exercise of such authority." GH Holdings, LLC v. Minn. Dep't of Com. , 840 N.W.2d 838, 841-42 (Minn. App. 2013) (quoting In re Minn. Power , 838 N.W.2d 747, 753 (Minn. 2013) ). Best Care's argument about the commissioner's authority requires us to interpret the statutes and rules governing the PCA program. We begin by summarizing this regulatory scheme, before turning to the arguments of the parties.
I.
Minnesota Statutes chapter 256B governs the medical-assistance program and includes section 256B.0659, which governs and describes the PCA program. As a condition for payment by DHS, vendors like Best Care are required to document "each occurrence of a health service provided to a recipient." Minn. R. 9505.2175, subp. 1 (2021). These documents are stored in a recipient's health-service record and kept by vendors. Id. , subp. 2 (2021).
Health-service records must include documents such as a physician's order for PCA services, a care plan for the recipient, DHS's service authorization identifying the amount of service authorized for a recipient, and time sheets completed by the PCA documenting the care administered. Id. , subp. 7 (2021); see also Minn. Stat. § 256B.0659, subd. 28(a)(2) (noting required contents of recipient files maintained by vendors). Care plans are written descriptions of PCA services and memorialize the needs of the recipient. Minn. Stat. § 256B.0659, subds. 1(n), 7(b)(5). And time sheets are daily records of services to recipients documented by PCAs. Id. , subd. 12(a). A recipient's health-service record is important as "evidence of the medical necessity of a health service provided by a vendor and billed to a program." Minn. R. 9505.2165, subp. 6 (2021).
Minnesota law requires care plans to include the
(1) start and end date of the care plan;
(2) recipient demographic information, including name and telephone number;
(3) emergency numbers, procedures, and a description of measures to address identified safety and vulnerability issues, including a backup staffing plan;
(4) name of responsible party and instructions for contact;
(5) descriptions of the recipient's individualized needs for assistance with activities of daily living, instrumental activities of daily living, health-related tasks, and behaviors; and
(6) dated signatures of recipient or responsible party and qualified professional.
Minn. Stat. § 256B.0659, subd. 7(b).
Time sheets must include the
(1) full name of [PCA] and [Unique Minnesota Provider Identification];
(2) provider name and telephone numbers;
(3) full name of recipient and either the recipient's medical assistance identification number or date of birth;
(4) consecutive dates ... and arrival and departure times with a.m. or p.m. notations;
(5) signatures of recipient or the responsible party;
(6) personal signature of the [PCA];
(7) any shared care provided, if applicable;
(8) a statement that it is a federal crime to provide false information on personal care service billings for medical assistance payments; and
(9) dates and location of recipient stays in a hospital, care facility or incarceration.
Minn. Stat. § 256B.0659, subd. 12(c).
To enforce the regulatory requirements of the MHCP, the commissioner can impose sanctions when, as relevant here, a vendor engages in "fraud, theft, or abuse in connection with the provision of medical care to recipients of public assistance." Minn. Stat. § 256B.064, subd. 1a(a) ; see also Minn. Stat. § 256B.064, subd. 1b (describing sanctions the commissioner may impose). "Abuse" is defined by DHS's administrative rules as "a pattern of practices that are inconsistent with sound fiscal, business, or health service practices, and result in unnecessary costs to the programs or in reimbursements for services that are not medically necessary or that fail to meet professionally recognized standards for health service." Minn. R. 9505.2165, subp. 2. Certain conduct is "deemed to be abuse" under the rules, including "submitting repeated claims, or causing claims to be submitted, from which required information is missing or incorrect," "failing to develop and maintain health service records," and "failing to disclose or make available to the department the recipient's health service records." Id. , subps. 2A(1), 2A(7), 2A(9).
In nonprecedential decisions we have addressed what conduct constitutes abuse under Minn. R. 9505.2165. See, e.g. , In re SIRS Appeal by Trinity Home Health Care Servs. , No. A22-0183, 2022 WL 6272045, at *7-8 (Minn. App. Oct. 10, 2022) (determining substantial evidence supported the commissioner's factual findings of abuse), rev. granted (Minn. Dec. 28, 2022); In re SIRS Appeal by Smart Choice Health Care , No. A22-0367, 2022 WL 4295330, at *3-4 (Minn. App. Sept. 19, 2022) (determining the commissioner did not err in concluding a PCA provider's conduct constituted abuse); In re SIRS Appeal by Nobility Home Health Care, Inc. , No. A21-1477, 2022 WL 3711485, at *5 (Minn. App. Aug. 29, 2022) (determining substantial evidence supported the commissioner's decision that a PCA provider's conduct amounted to abuse), rev. granted (Minn. Nov. 23, 2022). We were not asked in those cases to address the issue that Best Care raises here: whether the commissioner must determine that the identified abuse led to a vendor being "improperly paid" before ordering monetary recovery.
If DHS establishes "abuse" by a preponderance of the evidence, the commissioner may impose sanctions. Minn. Stat. § 256B.064, subds. 1a, 1b. The commissioner also has authority to seek monetary recovery under the statute if DHS establishes, again by a preponderance of the evidence, that funds were "improperly paid" because of abuse. Id. , subd. 1c. By statute, sanctions and monetary recovery are distinct mechanisms with separate prerequisites. Id. , subds. 1b, 1c.
The statute does not define sanctions or monetary recovery, but we generally understand a sanction to be "the penalty for noncompliance with a law or legal order." The American Heritage Dictionary of the English Language 1551 (5th ed. 2018). In contrast, "recovery" means "[t]he regaining or restoration of something lost or taken away." Black's Law Dictionary 1528 (11th ed. 2019).
The commissioner can impose several sanctions after determining that the vendor engaged in abuse. Id. , subd. 1b (listing the sanctions available to the commissioner). One enumerated sanction focuses on fines for record and document-based deficiencies, permitting the commissioner to
order a vendor to forfeit a fine for failure to fully document services according to standards in [chapter 256B] and Minnesota Rules, chapter 9505. The commissioner may assess fines if specific required components of documentation are missing. The fine for incomplete documentation shall equal 20 percent of the amount paid on the claims for reimbursement submitted by the vendor, or up to $5,000, whichever is less.
Id. , subd. 2(f). Similarly, Minnesota Statutes section 256B.0659, subdivision 28(b), permits the commissioner to assess a fine of up to $500 on vendors that do not consistently comply with the subdivision's requirements for completing and maintaining required documentation. Other sanctions available to the commissioner include " suspen [ding] or withholding [ ] payments to a vendor and suspending or terminating [a vendor's] participation in the program." Minn. Stat. § 256B.064, subd. 1b.
The statute permitting monetary recovery of funds paid by DHS specifies that
[t]he commissioner may obtain monetary recovery from a vendor who has been improperly paid either as a result of conduct described in subdivision 1a or as a result of a vendor or department error, regardless of whether the error was intentional.
Id. , subd. 1c (emphasis added). The "conduct described in subdivision 1a" includes abuse. Id. , subd. 1a. Thus, "[t]he commissioner may obtain monetary recovery from vendors improperly paid" as a result of abuse. Id. , subds. 1a, 1c.
II.
In this appeal, Best Care argues that the commissioner exceeded her statutory authority by ordering monetary recovery because DHS failed to prove "that [Best Care's] alleged minor documentation flaws constituted abuse that caused DHS to make any improper or unnecessary payment." Best Care contends that "improperly paid" constitutes an element of proof and, without showing that improper payment occurred, the commissioner exceeds her statutory authority by obtaining monetary recovery. In contrast, DHS contends that it must only show that Best Care engaged in "abuse" to be entitled to monetary recovery. Thus, the issue is whether, under the statutory language and the circumstances here, a determination that abuse occurred, by itself, establishes that a vendor was improperly paid MHCP funds such that the commissioner may obtain monetary recovery.
The interpretation of statutes and administrative rules are questions of law this court reviews de novo. J.D. Donovan, Inc. v. Minn. Dep't of Transp. , 878 N.W.2d 1, 4-5 (Minn. 2016). We are "not bound by an agency's interpretation of a statute." Indep. Sch. Dist. No. 709 v. Bonney , 705 N.W.2d 209, 214 (Minn. App. 2005). Though agency decisions are ordinarily presumed correct and afforded deference, "deference does not extend to an agency's interpretation of a statute." In re N. State Power Co. for Approval of its 1998 Resource Plan , 604 N.W.2d 386, 390 (Minn. App. 2000) (quotation omitted), rev. denied (Minn. Mar. 28, 2000).
The goal of statutory interpretation is to "ascertain and effectuate the intention of the legislature." Minn. Stat. § 645.16 (2022). We do not read statutory words and phrases in isolation. Moore v. Robinson Env't , 954 N.W.2d 277, 280-81 (Minn. 2021). Rather, we examine words and sentences in the light of their context. State v. Gaiovnik , 794 N.W.2d 643, 647 (Minn. 2011). We "read and construe a statute as a whole and must interpret each section in light of the surrounding sections to avoid conflicting interpretations." Am. Fam. Ins. Grp. v. Schroedl , 616 N.W.2d 273, 277 (Minn. 2000). The first step of statutory interpretation is to determine whether the statute is ambiguous on its face. Moore , 954 N.W.2d at 281. "A statute is ambiguous if it is subject to more than one reasonable interpretation." Id. If the legislature's intent is clear from the plain and unambiguous language of the statute, our analysis ends. Id.
Neither party contends Minn. Stat. § 256B.064 is ambiguous as it applies here. We agree. The statute provides "[t]he commissioner may obtain monetary recovery from a vendor who has been improperly paid ... as a result of [abuse]." Minn. Stat. § 256B.064, subd. 1c. "Improperly paid" is not defined by statute or rule. But when we read subdivision 1c, while considering section 256B.064 as a whole and in the context of related statutes and rules, we agree with Best Care and the ALJ: a determination that abuse has occurred alone does not establish that funds were improperly paid.
As we explain above, the commissioner's authority to obtain monetary recovery stems from a comprehensive statutory scheme governing her authority to regulate the MHCP. Minn. Stat. §§ 256B.01 -.851. When "abuse" is shown, the commissioner can impose sanctions, and when funds were "improperly paid" as a result of abuse, she can obtain monetary recovery. Minn. Stat. § 256B.064, subds. 1a-1c. "[F]ailing to develop and maintain health service records" such as care plans and time sheets constitutes "abuse." Minn. R. 9505.2165, subp. 2A(7). Section 256B.064 expressly authorizes imposing fines upon vendors for failure to fully document services and for incomplete documents. Minn. Stat. § 256B.064, subd. 2(f). The fines for these recordkeeping deficiencies are limited to "20 percent of the amount paid on the claims for reimbursement submitted by the vendor, or up to $5,000, whichever is less." Id. Another statutory provision also expressly authorizes imposing limited fines of up to $500 for vendors who fail to maintain records of required documents. Minn. Stat. § 256B.0659, subd. 28(b).
Under DHS's interpretation of the monetary recovery statute, the commissioner could recover all funds paid on a claim involving the same recordkeeping abuses that could lead to a fine. But that interpretation is inconsistent with the fine statutes, which would be almost entirely superseded if the commissioner could recoup the full amount paid to the vendor rather than collect limited fines for the same conduct. See Minn. Stat. §§ 256B.064, .0659, subd. 28(b). Further, DHS's interpretation that it can recover all payments resulting from abusive conduct renders the word "improperly" of "improperly paid" superfluous. 328 Barry Ave., LLC v. Nolan Props. Grp., LLC , 871 N.W.2d 745, 749 (Minn. 2015) ("We interpret a statute as a whole so as to harmonize and give effect to all its parts, and where possible, no word, phrase, or sentence will be held superfluous, void, or insignificant." (quotation omitted)).
DHS's interpretation matches its promulgated rule stating that "[t]he commissioner shall seek monetary recovery ... from a vendor, if payment for a recipient's health service under a program was the result ... of abuse." Minn. R. 9505.2215, subp. 1A (2021). But the language of the rule differs from that of the monetary recovery statute by omitting "improperly paid." See Minn. Stat. § 256B.064, subd. 1c ("The commissioner may obtain monetary recovery from a vendor who has been improperly paid either as a result of [abuse] or as a result of a vendor or department error ...."). Here, the statute controls because an agency's rule cannot grant authority greater than what the statute allows. See Billion v. Comm'r of Revenue , 827 N.W.2d 773, 781 (Minn. 2013) (holding an agency's administrative rule cannot conflict with the corresponding statute); Hirsch v. Bartley-Lindsay Co. , 537 N.W.2d 480, 486 (Minn. 1995) (stating an applicable statute "prevails" to the extent that it conflicts with an administrative rule).
We are also persuaded that "improperly paid" is a separate element from "abuse" that requires an additional showing when we consider that the commissioner can pursue monetary recovery for conduct enumerated in Minnesota Statutes section 256B.064, subdivision 1a, other than "abuse." Minn. Stat. § 256B.064, subds. 1a, 1c. For example, subdivision 1a indicates that "any reason for which a vendor could be excluded from participation in the Medicare program under section 1128 ... of the Social Security Act" is sanctionable conduct. Id. , subd. 1a. Section 1128(a)(4) of the Social Security Act excludes individuals or entities convicted of "a [felony] criminal offense ... relating to the unlawful manufacture, distribution, prescription, or dispensing of a controlled substance" from participating in the Medicare program. 42 U.S.C. § 1320a-7(a)(4) (2018). Read together, "[t]he commissioner may obtain monetary recovery from a vendor who has been improperly paid ... as a result of [a felony conviction for the unlawful manufacture, distribution, prescription, or dispensing of a controlled substance]." Minn. Stat. § 256B.064, subd. 1c. If the statute requires DHS to show nothing beyond the occurrence of conduct under subdivision 1a, a felony conviction in this example, DHS could seek monetary recovery from a vendor even if they never received funds in excess of which they were entitled.
Turning to this case, DHS alleged that Best Care received an overpayment based on (1) "[c]are plans missing required elements," (2) "[n]o care plan," (3) "[n]o time sheet," (4) "[t]ime sheets missing required elements," (5) "1:3 time documented on time sheet but billed 1:1," and (6) "[t]ime sheet PCA signature photocopied and PCA provider ID altered from previous time sheet ‘no [Unique Minnesota Provider Identification (UMPI)] yet’ whited out and changed to provider ID." A SIRS investigator testified that Best Care failed to maintain care plans for many of the recipient records she reviewed and failed to provide 69 time sheets requested by DHS for the investigation. The SIRS investigator also testified that some of Best Care's care plans were incomplete because they were impermissibly missing recipients’ phone numbers, signed and dated by the recipient after services were started, or missing signatures from responsible parties. And various time sheets also were missing required elements because they did not have a.m. or p.m. designations marked, were missing UMPI numbers, or missing the agency's name or phone number. Such documentary and recordkeeping deficiencies constitute "abuse" for "failing to develop and maintain health service records" and "causing claims to be submitted, from which required information is missing or incorrect." Minn. R. 9505.2165, subps. 2A(1), 2A(7).
The SIRS investigator testified that all PCAs are assigned an UMPI by DHS. The UMPIs are important because they specify which PCA provided services to recipients and are used by vendors to submit claims for reimbursement to DHS. Best Care's payroll processor testified that it sometimes takes several months for DHS to issue an UMPI and PCAs are not prohibited from providing services to recipients in the interim.
But as the ALJ reasoned, the statute also required DHS to prove that the "abuse" led to Best Care being improperly paid and DHS "failed to prove that [the] deficiencies led to improper payment or unnecessary costs to the program." See Minn. Stat. § 256B.064, subd. 1c. Indeed, DHS provided no evidence that missing care plans or incomplete care plans lacking required phone numbers or signatures led to Best Care, for example, billing for non-medically necessary services. Similarly, DHS presented no evidence that missing a.m. or p.m. designations on time sheets caused Best Care to be reimbursed at a greater amount than the value of the PCA services actually delivered to recipients. And the testimony shows that the lack of an UMPI number on a time sheet had little effect on billing practices. Best Care's payroll processor testified that Best Care cannot submit a claim for reimbursement to DHS without an UMPI number. In seeking payment from DHS, Best Care relied on the UMPI numbers in their billing software, rather than on individual time sheets. The SIRS investigator conceded that just because a time sheet lacked an UMPI number, that did not mean that Best Care provided unnecessary services to a recipient.
As for the overpayment reason that involved a time sheet and billing discrepancy, "1:3 time documented on time sheet but billed 1:1," we also conclude DHS failed to show Best Care was improperly paid. Some time sheets reflected that a PCA provided care to three recipients at the same time, which is reimbursed at a lower monetary rate than individual care. Without more information, this might appear to be an occasion when Best Care received funds in excess of what they were entitled to receive because they billed for a higher rate than the value of the services the PCA showed on the time sheet. But Best Care's payroll processor testified that Best Care did not bill for more than the appropriate amount because these time sheets also showed the recipient was not authorized to receive "shared care." Put another way, the PCA was not authorized or able to serve three recipients there. The payroll processor testified that Best Care determined the PCAs erroneously indicated they provided "1:3 time" and ultimately billed DHS at the appropriate "1:1" rate. DHS presented no evidence that the PCAs provided shared care to the recipients or that payments were made for services to three recipients.
We note that our conclusion that "improperly paid" is a distinct element that must be shown in addition to "abuse" does not impose an arduous evidentiary burden on DHS. See Minn. Stat. § 256B.064, subd. 1c. We do not foreclose the possibility that cases involving missing or deficient documents could warrant an inference and finding of fact that, for example, recipients were not receiving the PCA services that a vendor billed for, resulting in improper payment. But here, the commissioner made no such determination or finding that Best Care was "improperly paid." Instead, DHS contends that it must only show a vendor's "abuse" to obtain monetary recovery. For the reasons we have discussed, this position is contrary to statute.
In sum, DHS failed to meet its statutory burden to show by a preponderance of the evidence that Best Care was "improperly paid" as a result of the six abusive practices and reasons for overpayment identified by DHS. We conclude that the commissioner exceeded her authority by ordering monetary recovery without determining Best Care was "improperly paid" and accordingly reverse the commissioner's decision in part. We remand for the commissioner to enter a revised overpayment order reducing the monetary recovery in a manner consistent with this decision. III.
Because we reverse on this basis, we need not reach Best Care's three other arguments that provide an alternative basis to reverse the final agency decision. But in the interest of completeness, we briefly address each argument here.
First, Best Care argues that the commissioner misapplied the law when she found that provider agencies must maintain PCA Choice care plans in their records and exceeded her authority by ordering monetary recovery on this basis. Under the traditional PCA program, care plans are developed by a "qualified professional with the recipient and responsible party." Minn. Stat. § 256B.0659, subd. 7(a). These care plans are "required to be in the recipient's home and in the recipient's file at the provider agency." Id. The PCA Choice program, set forth in Minnesota Statutes section 256B.0659, subdivisions 18 through 20, is governed by the same statutory provisions as the traditional PCA program unless otherwise provided. Id. , subd. 18(a). Best Care argues that because recipients in the PCA Choice program are responsible for developing their own care plans with help from a qualified professional "as needed," vendors are exempt from being required to keep a copy of the care plan in the recipient's file at the provider agency. See id. , subd. 19(a)(2). We disagree.
We considered and rejected a similar argument in In re SIRS Appeal by 1 Best Care, Inc. , No. A20-0904, 2021 WL 1245294, at *4 (Minn. App. Apr. 5, 2021). Although not precedential, we find the reasoning persuasive and adopt its conclusion that "PCA [C]hoice care plans are bound by the same requirements as traditional care plans" set forth in Minn. Stat. § 256B.0659, subd. 7. Id. As a result, provider agencies are required to maintain PCA Choice care plans in their service records, and the commissioner did not misapply the law when finding abuse on this basis. But given our holding here and DHS's failure to show Best Care's lack of care plans for PCA Choice recipients led to improper payment, the commissioner exceeded her authority by ordering monetary recovery on this basis.
Second, Best Care argues the commissioner arbitrarily and capriciously refused to consider 69 time sheets that were inadvertently not disclosed upon DHS's initial request for records. Best Care provided the missing time sheets well before the contested case hearing. DHS maintained it could obtain monetary recovery based on the overpayment reason "no time sheets" because they were not timely disclosed for the investigation, thus constituting abuse. See Minn. R. 9505.2165, subp. 2A(9) (noting that "failing to disclose or make available to the department the recipient's health service records" constitutes "abuse" by a vendor). The commissioner determined Best Care's "failure to make its [69 time sheet] record[s] available ... is abuse and ... grounds for an overpayment."
An agency's decision is arbitrary and capricious only if it, in relevant part, "offered an explanation that runs counter to the evidence." Citizens Advocating Responsible Dev. v. Kandiyohi Cnty. Bd. of Comm'rs , 713 N.W.2d 817, 832 (Minn. 2006). In this case, there is "no rational connection between the facts found and the choice made" because DHS's stated reason for overpayment was based on 69 time sheets that were missing from the portion of requested records rather than untimely disclosure of records. See In re Excess Surplus Status of Blue Cross & Blue Shield of Minn. , 624 N.W.2d 264, 277 (Minn. 2001) (quotation omitted). DHS never contested the authenticity of the later supplied time sheets. But on the ground of "no time sheets," the commissioner concluded that DHS was entitled to monetary recovery because it proved an unalleged abuse and separate reason for overpayment—the untimely disclosure of records. Thus, the commissioner's decision about the time sheets was arbitrary and capricious.
Last, Best Care contends the commissioner impermissibly delegated her authority to author the final agency decision in this matter to her designee, the director of DHS's appeals office. Best Care cites no authority compelling reversal on this basis. By statute, the commissioner may "delegate to any subordinate employee the exercise of specified statutory powers or duties as the commissioner may deem advisable" when not otherwise expressly provided by law. See Minn. Stat. § 15.06, subd. 6(1) (2022). DHS points to the commissioner's order delegating her authority, which delegates to the designee "[f]ull power and authority to execute any documents related to the resolution of contested case proceedings which [the commissioner has] authority to sign." Best Care has not established a basis for reversal on this ground.
IV.
We turn finally to the stipulated-provider agreement. Best Care asserts that the commissioner's requirement of a stipulated-provider agreement should be reversed for the same reasons as the monetary recovery. We disagree. Requiring provider agencies to enter into a stipulated-provider agreement as a condition of continued participation in the MHCP is a sanction. Minn. Stat. § 256B.064, subd. 1b ; see also Minn. R. 9505.2210, subp. 2B(2) (2021). As discussed, the imposition of sanctions for abuse is governed by a separate standard than monetary recovery and does not require proof that a vendor was improperly paid as a result of abuse. Minn. Stat. § 256B.064, subd. 1b (requiring the commissioner to also consider "the nature, chronicity, or severity of the conduct and the effect of the conduct on the health and safety of persons served by the vendor" when imposing sanctions). We note, however, that the commissioner's decision to require a stipulated-provider agreement was based in part on the size of the monetary recovery. We therefore conclude that it is appropriate for the commissioner to reconsider the propriety of the stipulated-provider agreement, under the statutory standards governing sanctions, given the reduction in monetary recovery.
DECISION
Minnesota Statutes section 256B.064, subdivision 1c, authorizes the Minnesota Commissioner of Human Services to obtain monetary recovery of funds paid to a vendor of medical care from the MHCP when the funds were "improperly paid ... as a result of" conduct constituting "abuse" as defined by Minnesota Rule 9505.2165, subpart 2. We hold that a determination that abuse has occurred alone does not allow recovery because the statute also requires a determination that a vendor was improperly paid the funds sought to be recovered.
The commissioner exceeded her statutory authority by ordering monetary recovery when DHS failed to show, by a preponderance of the evidence, that Best Care was "improperly paid" as a result of its abuse. We therefore reverse in part and remand for the commissioner to enter a revised order reducing the monetary recovery in a manner consistent with this decision. The commissioner shall reconsider on remand whether the sanction of requiring a stipulated-provider agreement is warranted, considering the reduced monetary recovery. The commissioner may also consider whether other sanctions are appropriate in this case.