Opinion
No. C0-02-637.
Filed December 10, 2002.
Appeal from the Minnesota Department of Human Services.
Samuel D. Orbovich, Orbovich Gartner, (for relator)
Mike Hatch, Attorney General, David A. Rowley, David P. Iverson, Assistant Attorneys General, (for respondent)
Considered and decided by Hudson, Presiding Judge, Peterson, Judge, and Anderson, Judge.
This opinion will be unpublished and may not be cited except as provided by Minn. Stat. § 480A.08, subd. 3 (2002).
UNPUBLISHED OPINION
In this certiorari appeal, relator argues that the Commissioner of Human Services erred in reclassifying the salaries paid to bed makers from the nursing-services cost category to the housekeeping-services cost category because (1) making beds is a nursing service under the agency's rules; (2) the order constitutes an unpromulgated rule, arbitrarily reducing relator's rates; and (3) the order fails to follow the Richview equal-treatment doctrine. We affirm.
FACTS
Relator Crest View Lutheran Home is a long-term care facility that participates in Minnesota's medical assistance (MA) program. The Minnesota Department of Human Services (DHS) reimburses Crest View for care it provides to qualifying residents. Statutes and rules govern payment rates. See Minn. Stat. §§ 256B.41-.51 (2000); Minn. R. 9549.0010-.0080 (2001) (establishing nursing facility payment rates).
As an MA participant, Crest View must file a report of the costs it incurred during each reporting year. Minn. R. 9549.0020, subp. 41; 9549.0041, subp. 1. Based upon the reported costs, and after any adjustments warranted by a DHS desk audit, a per-diem rate is established that governs the reimbursement that a nursing-care facility receives during the upcoming rate year. Minn. R. 9549.0020, subp. 36; 9549.0070, subp. 1. Also, the DHS conducts field audits and may retroactively change reimbursement rates if the field audit reveals that the reported costs by the nursing-care facility were incorrectly categorized. Minn. R. 9549.0041, subp. 13B.
Reporting year is defined as "the period from October 1 to September 30, immediately preceding the rate year, for which the nursing facility submits its cost report, and which is the basis for the determination of the payment rate for the following year." Minn. R. 9549.0030, subp. 41 (2001).
The DHS conducted a field audit of Crest View's reported costs for the period from October 1, 1992, through September 30, 1994, and reclassified the salaries paid to bed makers from the nursing-services cost category to the housekeeping-services cost category. The DHS reclassified $30,071 for the reporting year ending September 30, 1993, and $31,351 for the reporting year ending September 30, 1994. Because the housekeeping-services cost category has a lower limit on yearly cost increases than does the nursing-services cost category, the reclassification retroactively reduced Crest View's reimbursement rate for nursing services under the MA program for rate years 1994 and 1995. See Minn. Stat. § 256B.431, subd. 2i; Minn. R. 9549.0055, subp. 2 (establishing base year limits for various operating cost categories).
Rate year is defined as "Minnesota's fiscal year for which a payment rate is effective, from July 1 through the following June 30." Minn. R. 9549.0030, subp. 36 (2001).
Crest View appealed the rate adjustments pursuant to Minn. Stat. § 256B.50, and the DHS affirmed the reclassification. Crest View then demanded a contested case hearing before an administrative law judge (ALJ). The parties agreed that an evidentiary hearing was not necessary and submitted cross motions for summary disposition on stipulated facts, which included the following fact:
DHS auditors have no practice of allocating the reported compensation paid to a registered nursing assistant from the nursing cost category to the housekeeping cost category for the time spent making residents' beds when such activities are included as part of the registered nursing assistant's responsibilities.
The ALJ issued an order recommending that the commissioner grant the DHS' motion for summary disposition and deny Crest View's motion. On review, the commissioner accepted the ALJ's recommendation, with the exception of dicta stating that the DHS "might arguably be vulnerable" to a claim that it was enforcing an unadopted rule, and granted summary disposition to the DHS.
DECISION
When reviewing an agency decision, this court determines whether the agency violated the constitution, exceeded its authority, engaged in unlawful procedure, erred as a matter of law, issued a decision unsupported by substantial evidence, or acted arbitrarily or capriciously. Minn. Stat. § 14.69 (2002). Appellate courts defer to an agency's expertise in finding facts and will affirm the agency's decision so long as it is lawful and reasonable. In re Intra-LATA Equal Access Presubscription, 532 N.W.2d 583, 588 (Minn.App. 1995), review denied (Minn. Aug. 30, 1995). An agency decision is arbitrary and capricious if it represents the agency's will rather than its judgment. Markwardt v. State, Water Res. Bd., 254 N.W.2d 371, 374 (Minn. 1977). If an administrative agency engages in reasoned decision making, this court will affirm, even though it may have reached a different conclusion had it been the fact finder. Cable Communications Bd. v. Nor-West Communications P'ship, 356 N.W.2d 658, 669 (Minn. 1984). This court presumes the agency's decision to be correct and shows deference to the agency's conclusions within its area of expertise. Id. at 668.
"When a decision turns on the meaning of words in a statute or regulation, a legal question is presented." St. Otto's Home v. State, Dep't of Human Servs., 437 N.W.2d 35, 39 (Minn. 1989) (citations omitted). Reviewing courts are not bound by the decision of the agency and need not defer to agency expertise when considering questions of law. Id. at 39-40. However,
When the agency's construction of its own regulation is at issue, * * * considerable deference is given to the agency interpretation, especially when the relevant language is unclear or susceptible to different interpretations. If a regulation is ambiguous, agency interpretation will generally be upheld if it is reasonable. No deference is given to the agency interpretation if the language of the regulation is clear and capable of understanding.
Id. at 40 (citations omitted). Thus, this court will reverse only where
there is a combination of danger signals which suggest the agency has not taken a hard look at the salient problems and the decision lacks articulated standards and reflective findings.
Cable Communications Bd., 356 N.W.2d at 669 (quotations and citation omitted). Crest View bears the burden of proving by a preponderance of the evidence that the DHS's reclassification of bed makers' salaries is incorrect. Minn. Stat. § 256B.50, subd. 1c(d) (2002).
1. Crest View argues that the plain meaning of "bedside services" in Minn. R. 9549.0040, subp. 5B (2001), includes sanitizing beds in the manner described in the bed-maker's job duties and that the commissioner departed from the written rule when he construed "bedside services" to mean only bedside services performed by registered personnel. This argument, however, is based on the incorrect premise that the plain meaning of "bedside services" includes sanitizing beds in the manner described in the bed-maker's job duties. The commissioner concluded that the services performed by Crest View's bed makers are not "bedside services" within the meaning of Minn. R. 9549.0040, subp. 5B. The commissioner's conclusion was based on his reading of Minn. R. 9549.0040, subp. 5, which states:
Subp. 5. Nursing services. Direct costs associated with nursing services identified in items A to Y, are to be included in the nursing services cost category:
A. nursing assessment of the health status of the resident and planning of appropriate interventions to overcome identified problems and maximize resident strengths;
B. bedside care and services;
C. care and services according to the order of the attending physicians;
D. monitoring procedures such as vital signs, urine testing, weight, intake and output, and observation of the body system;
E. administration of oral, sublingual, rectal, and local medications topically applied, and appropriate recording of the resident's responses;
F. drawing blood and collecting specimens for submission to laboratories;
G. prevention of skin irritation and decubitus ulcers;
H. routine changing of dressings;
I. training, assistance, and encouragement for self-care as required for feeding, grooming, ambulation, toilet, and other activities of daily living including movement within the nursing facility;
J. supportive assistance and training in resident transfer techniques including transfer from bed to wheelchair or wheelchair to commode;
K. care of residents with casts, braces, splints, and other appliances requiring nursing care or supervision;
L. care of residents with behavior problems and severe emotional problems requiring nursing care or supervision;
M. administration of oxygen;
N. use of nebulizers;
O. maintenance care of resident's colostomy, ileostomy, and urostomy;
P. administration of parenteral medications, including intravenous solutions;
Q. administration of tube feedings;
R. nasopharyngeal aspiration required for maintenance of a clean airway;
S. care of suprapubic catheters and urethral catheters;
T. care of tracheostomy, gastrostomy, and other tubes in a body;
U. costs of equipment and supplies that are used to complement the services in the nursing services cost category, including items stocked at nursing stations or on the floor and distributed or used individually, including: alcohol, applicators, cotton balls, incontinence pads, disposable ice bags, dressings, bandages, water pitchers, tongue depressors, disposable gloves, enemas, enema equipment, soap and water, medication cups, diapers, plastic waste bags, sanitary products, thermometers, hypodermic needles and syringes, and clinical reagents or similar diagnostic agents, and drugs which are not paid on a separate fee schedule by the medical assistance program or any other payer;
V. costs for education or training including the cost of lodging and meals of nursing service personnel. Educational costs are limited to either meeting the requirements of laws or rules or keeping an employee's salary, status, or position or for maintaining or updating skills needed in performing the employee's present duties, except that training to become a nurses aid is an allowable cost;
W. the salaries and wages of persons performing nursing services including salaries of the director, and assistant director of nursing, supervising nurses, medical records personnel, registered professional nurses, licensed practical nurses, nurses aides, orderlies, and attendants;
X. the salaries or fees of medical director, physicians, or other professionals performing consulting services on medical care which are not reimbursed separately on a fee for service basis; and
Y. the costs of travel necessary for training programs for nursing personnel required to maintain licensure, certification, or professional standards.
(Emphasis added.)
Citing the ALJ's recommendation for summary disposition, the commissioner explained in his memorandum:
To be sure, "services" in item B is a word that can be read more broadly than "care." Yet, "services" must be placed in the context of the entire rule, which supports the ALJ's conclusion that item B's "bedside care and services" refers to personal care and services "provided to residents at bedside." R. at 10. Tellingly, the other functions described by items A through T of the Rule refer to medical care and services provided to residents, "and not to care or services provided to inanimate objects, such as beds or bedside equipment." Id. For example, the other items refer to monitoring of vital signs (subp. 5D), administration of medications (subp. 5E), drawing blood (subp. 5F), changing of dressings (subp. 5H) and other activities that affect residents in a medical way. Thus, the ALJ correctly concluded that Crest View's proposed interpretation of Item B to include the making of beds is inconsistent with the remainder of the rule.
We conclude that the commissioner's interpretation of the ambiguous phrase, "bedside care and services," in Minn. R. 9549.0040, subp. 5B, is reasonable. The specific services listed in subparts 5A-T all involve medical care or medical treatment provided directly to a resident. And although we acknowledge that a clean and properly made bed is an expected part of any in-patient medical care, the task of making a bed is different from providing services directly to a resident. Unlike the other services listed in the rule, bed makers can provide their services when residents are not even present. Given this distinction between the bed-maker's services and the services specifically listed in the rule, we see no danger signals that suggest that the commissioner did not take a hard look at the salient problems or that the commissioner's decision that the bed-maker's services are not nursing services lacks articulated standards or reflective findings.
2. Crest View contends that under Minn. R. 9549.0040, subp. 5W, services are within the nursing-services costs category regardless of whether they are provided by attendants or by registered personnel. Therefore, Crest View argues, by concluding that only bed-making services performed by registered personnel are classified as nursing services, the commissioner departed from Minn. R. 9549.0040, subp. 5W, and enforced an unpromulgated rule. This argument misinterprets the commissioner's decision.
The commissioner did not conclude that only bed-making services performed by registered personnel are classified as nursing services. The commissioner concluded;
The bedmakers employed by Crest View are not "attendants" under Minn. R. 9549.0040. subp. 5W. That item pertains only to those workers "performing nursing services . . . ."
This conclusion does not mean that the commissioner interpreted the terms, "nurses aides, orderlies, and attendants," in Minn. R. 9549.0040, subp. 5W, as meaning only registered personnel, and, therefore, that only services provided by registered personnel are classified as nursing services. Rather, the commissioner concluded that the term, "attendants," in Minn. R. 9549.0040. subp. 5W, does not apply to Crest View's bed makers because the bed makers are not "persons performing nursing services" as required by the first phrase in Minn. R. 9549.0040. subp. 5W.
The commissioner also concluded that when an employee who provides services that are primarily nursing services spends time making a bed, the DHS does not reallocate the employee's salary to the housekeeping-services cost category. The commissioner explained in his memorandum:
Crest View's argument that the Department acted inconsistently when it reclassified bedmakers' salaries but did not do so when nursing aides spent time making beds is unavailing. Under its policy, DHS does not reallocate salary expenses where the non-nursing services duties are merely "incidental" to the general provision of nursing services. See Stip. Ex. 5.
Stipulation exhibit 5 is a DHS office memorandum, which states, in part:
The appeals group does not generally intend to pursue cases where:
1. DHS documentation is lacking; or
2. where the existence of even clearly non-nursing duties seem incidental.
Failing to reallocate salary when an employee who primarily provides nursing services incidentally performs non-nursing services appears to have the same effect as classifying incidental non-nursing services as nursing services, but the decision to not reallocate salary under these circumstances is different from classifying non-nursing services performed by a registered nursing assistant as nursing services. The decision to not reallocate recognizes that the incidental services are still properly classified as non-nursing services, but because the services are only incidental, declines to treat them differently than the nursing services performed by the registered nursing assistant.
3. Crest View argues that failing to apportion the compensation of registered nursing assistants between the nursing-services cost category and the housekeeping-services cost category when the registered nursing assistants' duties include making beds violates the Richview equal-treatment rule. See Richview Nursing Home v. Minn. Dep't of Pub. Welfare, 354 N.W.2d 445 (Minn.App. 1984) (holding that what is permitted for one nursing home should be permitted for similarly situated nursing homes during the same period), review denied (Minn. Oct. 30, 1984).
In Richview, because changes in energy costs were difficult to project, Department of Public Welfare auditors allowed nursing homes to use a 15-percent increase in energy costs when there was no support for a higher rate. Id. at 454. When the cost reports for two nursing homes projected a 23-per-cent increase in energy costs without submitting supporting documentation, the department reduced the increase to 15 per cent. Id. The two nursing homes argued that when the department permitted a 15-per-cent increase absent documentation, it was promulgating a rule that was not adopted pursuant to the Administrative Procedures Act, and therefore, the 15-per-cent increase was invalid, and their 23-per-cent increase should have been granted. Id. The department responded that if the 15-per-cent increase were not valid, "the appropriate remedy would be to disallow the undocumented increases, not to authorize larger, unsubstantiated increases." Id.
This court held that the two nursing homes were entitled to a 15-per-cent increase for energy costs. This court explained:
We agree with the nursing homes that when [DHS] permits a fifteen percent increase without documentation they are promulgating a rule which was not adopted pursuant to the Administrative Procedures Act, but it does not follow that any increase requested by a facility absent documentation must be allowed.
In this case we will not retroactively disallow a fifteen percent increase for the nursing homes in question for such a disallowance would result in unequal treatment since all facilities during the period were allowed a fifteen percent increase.
Id. at 455.
Crest View contends that because the DHS treated bed making done by registered nursing assistants at other facilities as a nursing service, the failure to treat bed making done by bed makers at Crest View as a nursing service results in unequal treatment. But this argument ignores the significant difference that the commissioner saw between Crest View's bed makers and registered nursing assistants at other facilities; the bed makers at Crest View perform no nursing services, while the registered nursing assistants perform a combination of nursing and housekeeping services. The DHS has not treated the compensation of employees with comparable job responsibilities differently; the DHS has treated the compensation of employees with different job responsibilities differently. Treating different employees differently is not unequal treatment.
Unlike Richview, where there were nursing homes that were allowed a 15-per-cent increase for fuel costs, here there is not another nursing home that was allowed to treat bed making as a nursing service when the employees who made the beds did not also perform nursing services. Even if the DHS has improperly promulgated a rule providing that compensation of a single employee will not be apportioned among the cost categories applicable to the various duties the employee performs, Crest View cannot claim that this rule was not equally applied to it with respect to its bed makers because the duties its bed makers perform all fall within a single cost category, and therefore, there is no basis for any apportionment. Accordingly, we conclude that under these facts, the DHS did not violate the Richview equal treatment rule when it reclassified the salaries of Crest View's bed makers.
This issue is not before us, and we do not decide it. See Thiele v. Stich, 425 N.W.2d 580, 582 (Minn. 1988) (stating that appellate courts will generally not consider issues not argued and considered in the court below).