Houlton Regional Hospital v. Lambrew

STATE OF MAINE SUPERIOR COURT
AROOSTOOK, ss. CIVIL ACTION
DOCKET NO. HOUSC-AP-19-01

HOULTON REGIONAL HOSPITAL )
)
Petitioner )
)
v. ) DECISION AND ORDER
)
JEANNE LAMBREW, COMMISSIONER ,)
MAINE DEPARTMENT OF HUMAN )
SERVICES, )
)
)
And )
)
MAINE DEPARMENT of HEALTH )
AND HUMAN SERVICES )
)
Respondent )

Pending before the Court is Houlton Regional Hospital's (the "Petitioner", and also

referred to as "HRH") appeal from the Final Decision issued on February 7, 2019 by the

Commissioner of the Maine Department of Human Services (the "Department"). More

specifically, HRH appeals the Commissioner's acceptance in toto the Hearing Officer's

Administrative Hearing Recommended Decision ("AHRD") and findings that (i) the Department

was permitted to rely upon the Centers for Medicare and Medicaid Services' ("CMS") Medicare

unit to determine whether HRH qualified for Electronic Health Record ("ERH") incentive

payments under the MaineCare HIT Incentive Payment Program; (ii) that HRH is not entitled

under the MaineCare Benefits Manual ("MBM") to an independent review by the Department as

to whether HRH complied with the specific MaineCare EHR/HIT Incentive Payment Program

requirements that were subject to CMS's audit; and (iii) that the Department correctly established

a recoupment claim in the amount of $344,644 against HRH based on the audit finding by CMS

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that HRH did not meet the Medicare HRH Incentive Program's requirements for the Program Year

2013. In this appeal HRH requests the court order the Department to conduct its own independent

review of CMS's audit based on its assertion that such an independent review is required under

the applicable regulations and the MaineCare Benefits Manual (MBM). The Department asserts

that the Department was entitled to rely upon the determination by CMS of HRH's failure to

comply with Meaningful Use Requirements, and that HRH, having appealed the issue through

CMS, is collaterally estopped from re-litigating the issue. The Department asks the

Commissioner's Final Decision be affirmed.

Oral argument was held telephonicaHy on August 28, 2019. Based upon the filings and

arguments, the court makes the following findings and decision.

STATEMENT OF FACTS•

1. HRH is an enrolled Medicare provider and participated as an "eligible hospital" in the
Medicare Electronic Health Record ("EHR") Technology Incentive Program (the "CMS
EHR Program") administered by the Centers for Medicare and Medicaid Services ("CMS"),
for Program Year 2013, i.e., for the attestation period March 15, 2013 through June 15, 2013
(the "2013 Attestation Period").

2. HRH is an enrolled MaineCare provider (see Exhibit J-2) and also participated as an
"eligible hospital" in the State Medicaid Health Information Technology Program
administered by the Department (the "MaineCare HIT Program") in accordance with
administrative rules set forth in the MaineCare Benefits Manual at 10-144 C.M.R. Chapter
10 I, Chapter I, Section 2, for Program Year 2013.

3. In connection with HRH's patiicipation in the CMS EHR Program and MaineCare HIT
Program, HRH attested that it had adopted certified EHR technology ("CEHRT") that met all
applicable regulatory requirements for such CERHT for Program Yeat· 2013.

, This Statement of Facts is from the Statement of Agreed-Upon Material Facts submitted by the parties in the appeal
by HRH of the Depmtment's Final Informal Review Decision dated January 22, 2018. See H0-6 in Vol. I of the
Certified Record; references to Exhibits has been edited to correlate with Joint Exhibits, which are in Vol. 2 of the
Certified Record.

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4. The Department developed a final "State Medicaid Health Information Technology Plan,"
dated May 12, 2011 (the "2011 SMHP") (Exhibit J-3), conditionally approved by CMS on
April 28, 2011 (Exhibit J-4) and finally approved on June 23, 2011 (Exhibit J-5).

5. The Department's 2011 SMHP was subsequently revised by the Department in December
2015, Final v. 2.0 (the "2015 SMHP").

6. The Department promulgated administrative rules (the "MaineCare HIT Program Rules")
under the Maine Administrative Procedures Act (the "APA") to implement the MaineCare
HIT Program that became effective October 4, 2011, which rules were incorporated into the
MaineCare Benefits Manual at 10-144 C.M.R. Chapter IOI, Section 2, "State Medicaid
Health Information Technology Program" (the "October 2011 MaineCare HIT Program
Rules"). See Exhibit J-6.

7. The October 2011 MaineCare HIT Program Rules were subsequently amended by the
Department pursuant to rule-making under the APA in November 2014, and these amended
Rules became effective on November 23, 2014.

8. The October 2011 HIT Program Rules were the rules in effect for HRH's Program Year 2013
and 2013 Attestation Period.

9. The version of 10-144 C.M.R. Chapter 101, Chapter I, Section I, of the MaineCare Benefits
Manual that was in effect at the beginning of HRH Program Year 2013 and 2013 Attestation
Period is identified in the record as Exhibit J-7, which also reflects amended rules that were
incorporated under the APA on June 24, 2013.

10. HRH received a total of$307,168.84 in incentive payments from CMS for HRH's
participation in the CMS EHR Program in Program Year 2013.

11. HRH received a total of $344,644 in incentive payments for HRH's participation in the
Maine Care HIT Program in Program Year 2013. The incentive payments were transmitted
by the Department but were comprised of I 00% federal funds.

12. In or around August 2014, CMS's auditor, Figliozzi & Company ("CMS's Auditor"),
conducted an audit (the "CMS Audit") of HRH to determine "how HOULTON REGIONAL
HOSPITAL demonstrated meaningful use of certified Electronic Health Record (EHR)
technology in accordance with Section 13411 of the Health Information Technology for
Economic and Clinical Health Act (HITECH Act)" for Program Year 2013.

13. On August 18, 2014, CMS's Auditor issued to HRH a "HITECH EHR Meaningful Use Audit
Determination Letter" in which the Auditor determined that HRH did not meet the
meaningful use criteria for Program Year 2013 based on the Auditor's finding that HRH
"[flailed to demonstrate access to a CEHRT system." See Exhibit J-8.

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14. On August 29, 2014, HRH requested that CMS's Auditor specify what, in the Auditor's
determination, HRH's EHR system lacked or was missing that prevented HRH from
demonstrating access to a CEHRT system. See Exhibit J-9.

15. On the same date, August 29, 2014, CMS's Auditor responded to HRH by stating that
"[a]dditional documentation was supplied [by HRH] confirming that the interfaces for Menu
Measures #8, #9, and #10 were not in place at any point during the attestation period." See
Exhibit J-10.

16. On September 16, 2014, HRH submitted to CMS (i) additional documentation in support of
HRH's position that it had demonstrated access to a CEHRT system, and (ii) an "Eligible
Hospital Appeal Filing Request" appealing the CMS Auditor's HITECH EHR Meaningful
Use Audit Determination Letter decision. See Exhibit J-11.

17. In a letter from CMS to HRH dated September 26, 2014, CMS denied HRH's Appeal, a
decision that was "final and not subject to further appeal." See Exhibit J-12.

18. On March 31, 2016, the Department issued to HRH a Recoupment Notice letter notifying
HRH of the Department's intent, based on the audit findings of the CMS Auditor, to recoup
the $344,644 in incentive payments the Department had paid to HRH for HRH's
participation in the MaineCare HIT Program for Program Year 2013. See Exhibit J-13.

19. On May 27, 2016, HRH submitted to the Department a Request for Informal Review of the
Department's EHR Incentive Payment Recoupment Decision (see Exhibit J-14), after being
encouraged by the Department to do so on April 26, 2016.

20. On January 22, 2018, the Department issued a Final Informal Review Decision to HRH,
finding that the "Department was correct in issuing a recoupment notice for Medicaid
incentive payments made to Houlton Regional Hospital for the 2013 program year." See
Exhibit J-1.

21. On March 21, 2018, HRH, through its counsel, requested an administrative hearing on the
Department's Final Informal Review Decision. See Exhibit J-15.

22. On April 4, 2018, the Department's Chief Administrative Hearing Officer, James D. Bivins,
Esq., invited HRH and the Depaitment to submit arguments on the issue of whether HRH has
a right to an appeal of the findings made by the CMS Auditor and relied upon by the
Department to issue its Final Informal Review Decision, and whether HRH has a right to a
hearing on that issue with the Department. See Exhibit J-16.

23. On April 20, 2018, HRH submitted to Mr. Bivins a "Request for Administrative Hearing"
that included a brief of its arguments in response to Mr. Bivins' invitation. See Exhibit J-17.

24. On April 23, 2018, the Department submitted to Mr. Bivins the "Department's Position on
Houlton Regional Hospital's Right to an Administrative Hearing." See Exhibit J-18.

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25. On May 2, 2018, per Mr. Bivins' invitation, HRH submitted to Mr. Bivins "Houlton
Regional Hospital's Reply to the Department's Position on Right to Administrative Hearing."
See Exhibit J-19.

26. On May 2, 2018, the Department submitted to Mr. Bivins the "Department's Reply to
Houlton Regional Hospital's Arguments."

27. On May 17, 2018, Mr. Bivins' granted HRH's request for a hearing on the Department's
Final Informal Review Decision, but limited the hearing to the first two issues identified in
the Department's Final Review Decision, namely:

(i) Whether the Department was permitted to rely upon the Centers for Medicare
and Medicaid Services' ("CMS") Medicare audit to determine whether HRH
qualified for EHR incentive payments under [the J Maine Medicaid Incentive
Program; and

(ii) Whether HRH is entitled under the MaineCare Benefits Manual to an
independent review by the Department as to whether HRH complied with the
specific MaineCare EHR Incentive Payment Program requirements that were
the subject of CMS' audit.

In addition, there are certain findings made in the Administrative Hearing Recommended

Decision, which was adopted in its entirety by the Commissioner in the Final Decision, that

must be included in this analysis. (See Ex. A and C of Certified Record; "CR_" being

reference to page numbers of the Certified Record). Those findings include the following:

1. It cannot be said that the MaineCare HIT Program rules have incorporated by

reference all terms and provisions published in the Maine's State Medicaid HIT Plan,

where the HIT Plan has not been formally promulgated by the Department. Without

adoption after an opportunity for notice andpublic comment, it cannot be said that

the terms ofthe HIT Plan has the force of/aw enforceable by or against the

Department by any party other than CMS. Recommended Decision, p.12 (CR 884)

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2. The MaineCare regulations in effect for Program Year 2013 did not specify whether

the Department would retain audit and appeals authority or delegate CMS to perform

those functions on its behalf Id.

STANDARD OF REVIEW

In an appeal of an administrative action, the Court's review is limited to whether the

governmental agency's decision is(]) in violation of constitutional or statutory provisions; (2) in

excess of the agency's statutory authority; (3) made upon unlawful procedure; (4) affected by

bias or error of law; (5) unsupported by substantial evidence on the whole record; or (6) arbitrary

or capricious or characterized by abuse of discretion. 5 M.R.S. § l 1007(4)(C). The review is

limited to whether the governmental agency abused its discretion, committed an error of law, or

made findings not supported by substantial evidence in the record. Seider v. Board ofExaminers

of Psychologists, 2000 ME 206, l/8. The challenger has the burden of showing that the

Department's action is arbitrary or based on an error of law. Fryeburg Health Care Ctr. V.

Department of Human Services, 1999 ME 122, lJ 7. And the court gives considerable deference

to an agency's interpretation of its own internal rules, regulations, and procedures and will not

set it aside, unless the rule or regulation plainly compels a contrary result. Id.

DISCUSSION

The dispute in this case can be boiled down to a single question- is HRH entitled to an

independent review pursuant to the MaineCare Benefits Manual (MBM), or is review of HRH's

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compliance with Meaningful Use limited to review by Centers for Medicare and Medicaid

Services (CMS) pursuant to the State Medicaid Health Information Technology Plan (SMHP)?

The Department relies on the SMHP, which states Dually-eligible hospitals cannot appeal MU

(meaningful use), which must be done through CMS. (CR 657) and Dually-eligible hospital

appeals of Meaningful Use are under the purview of CMS, not states. (CR 468; see also CR

498).'

To receive federal grant funds, HRH voluntarily participated in the State Medicaid Health

Information Technology Program (the MaineCare HIT Program"). The Department's program

required federal approval. As part of the approval process the Department developed the State

Medicaid Health Information Technology Plan (the "SMHP"). The SMHP is a health

information technology plan developed by the Department in May, 2011, and approved finally

by CMS in June, 2011. (Exhibits J-3, J-4, and J-5). From reviewing the plan, there is no doubt its

objective, in part, is to set eligibility and compliance requirements for providers, such as HRH,

and audit procedures, including audits of "meaningful use". But HRH was not a direct party to

the SMHP. Indeed, in the Administrative Hearing Recommended Decision, the Hearing Officer

wrote " ..it cannot be said the terms of the HIT plan has the force of law by or against the

Department by any party other than CMS." Recommended Decision, p. 12 (CR 884). At the

same time, consistent with the SMHP, the Department did, in practice, delegate "meaningful

use" oversight and audits to CMS. But that does not necessarily mean HRH is not entitled to a

review of CMS's findings and appeal rights pursuant to the MBM.

, There appears to be no dispute HRH is a dually-eligible hospital.

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After the Department developed the SMHP, it promulgated administrative rules (the MaineCare

HIT Program Rules) under the Maine Administrative Procedures Act (the "APA") to implement

the MaineCare HIT Program. Exhibit J-6. The HIT Program Rules became effective October 4,

2011, and were incorporated into the MaineCare Benefits Manual (MBM) at 10-144 C.M.R.

Chapter 101, Section 2. And the HIT Program Rules specifically reference Chapter I, Section I,

§ 1.21-1 of the MaineCare Benefits Manual (MBM), version 10-144 C.M.R. Chapter 101.

The HIT Program rules set forth eligibility requirements, implementation and upgrade standards

of electronic health records, and meaningful use requirements for incentive payments. In Section

2.02 DEFINITIONS, "Meaningful Use" is defined as- .. the requirements that an .. .Eligible

Hospital ( EH) must meet to receive payment as required by CMS under applicable Stage 1,

Stage 2, and Stage 3 rules to be issued and implemented by CMS. Although this definition does

not explicitly state CMS will conduct oversight and audits, it is clear that the meaningful use is

measured by rules and standards set forth by CMS.

The HIT Program rules also provide a process for hearings and appeals. Section 2.05-2

HEARING AND APPEALS provides in pertinent part:

A. An EH may appeal the following issues:

3. An overpayment amount or recoupment as determined by the Department or

CMS; (emphasis added);

5. Audit findings of the above.

B. Appeal rights and processes are governed by the MaineCare Benefits Manual, Chapter

I,Sectionl, §1.21-1.

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It is worth repeating that the HIT Program rules were promulgated and implemented pursuant to

the Administrative Procedures Act. For the 2013 year under consideration, the SMHP had not yet

been duly promulgated, incorporated into the MBM, or made law.'

The HIT Program Rules referenced above clearly apply to "meaningful use" standards and

requirements, as required by CMS rules, as "meaningful use" is a defined term therein. See

Definition of "Meaningful Use". A plain language interpretation of Section 2.05-2 HEARING

AND APPEALS would lead an Eligible Hospital (EH) to believe it had appeal and hearing rights

per the MaineCare Benefits Manual for audit findings of .. an overpayment amount or

recoupment as determined by ... CMS.

Specifically, the HIT Program rules state appeal rights and processes are governed by the

MaineCare Benefits Manual, Chapter 1, Section 1, § 1.21-1. Section 1.21 PROVIDER

APPEALS states in pertinent part:

1.21-1 General Principles

Any provider who is aggrieved by a Department action made pursuant to this

Manual has sixty (60) calendar days from the date of receipt of that decision, to

request an informal review. The request must be in writing .... The informal

review will consist solely of a review of documents in the Department's

possession including submitted materials/documentation and, if necessary by the

Department, it may include a personal meeting with the provider to obtain

clarification of the materials.

, In November, 2014 the Department promulgated additional rules, expressly incorporating the SMHP into the
MBM, which purportedly states:
To be eligible for an incentive payment and/or be deemed as having fully implemented HER, a professional
or hospital must: ... C. Meet all the requirements of this rule and Maine's SMHP and IAPDU.

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Requests for informal reviews shall be submitted to MaineCare Services or other

designated Department representatives unless otherwise directed by the governing

sections of Chapter II or Chapter III of this Manual. A written report of the

decision resulting from that review will be issued to the provider.

A. Administrative Hearing

A provider must properly request an informal review and obtain a decision

before requesting an administrative hearing. If the provider is dissatisfied

with the informal review decision, he or she may write the Commissioner

of the Department of Health and Human Services to request a hearing

provided he/she does so within sixty (60) days calendar days of the date of

receipt of the informal review report on the Department's action ...

. . .The hearing shall be held in conformity with the Maine Administrative

Procedures Act, 5 M.R.S.A. § 8001 et seq. and the Administrative

Hearings Regulations.

The presiding officer shall issue a written decision and findings of fact to

the provider or, ... .issue a written recommendation to the Commissioner

of Health and Human Services. The Commissioner will then make the

final decision ...... .If the provider is dissatisfied with the final decision, an

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appeal may be taken to the Superior Court pursuant to the Administrative

Procedure Act.

On March 31, 2016 the Department issued to HRH a Recoupment Notice letter notifying HRH of

the Department's intent to recoup $344,644 based on the audit pe1formed by CMS.' See Exhibit

J-13. In its Recoupment Notice the Department indicated the recoupment was pursuant to an

audit by CMS. The Department further advised HRH that appeal of the CMS audit is conducted

pursuant to CMS rules and regulations, and since HRH had already appealed to CMS, it implied

the appeal was final. See Exhibit J-1.

On May 27, 2016, HRH submitted to the Department a Request for Informal Review. See

Exhibit J-14. In its request, HRH objected to the assertion the CMS audit was final and indicated

it was entitled to informal review and other appeal rights pursuant to the MaineCare Benefits

Manual as well as statutory and contractual rights. See Exhibit J-14 (CR 791-793). And HRH

raised several issues for review, including that it qualified for exclusion to meaningful use

requirements in several subject areas. (CR 794).

On January 22, 2018 the Department issued to HRH a Final Informal Review Decision. Exhibit

J-1 (CR 353-356). In its decision the Department indicated the Department was permitted to rely

on the CMS audit, and that HRH was not entitled to an independent review. (CR 354-355).

Regarding whether HRH was excluded from meaningful use requirements in several subject

, The Department argues that since Section 1.21-1 provides Provider Appeal rights to providers aggrieved by
"Department" action, HRH has no appeal rights because the action it was aggrieved by was taken by CMS. That
argument is unavailing, as clearly it was the Department who issued to HRH the Recoupment Notice and was
attempting to collect those funds.

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areas, the Department denied review on the basis CMS had already addressed the exclusion

requests through its audit and appeal process. (CR 355).

On March 21, 2018, HRH requested an administrative hearing pursuant to the MaineCare

Benefits Manual. See Exhibit J-15 (CR 805-828). On April 14, 2018, the Department's Chief

Administrative Hearing Officer raised the issue that the Department maintained that HRH did

not have the right to appeal the findings made by the CMS audit, but invited the parties to submit

arguments to the issue. See Exhibit J-16 (CR 829).' HRH and the Department submitted

arguments outlining their opposing positions. See Exhibits J-17, J-18 and J-19. Ultimately, the

Department's Chief Administrative Hearing Officer granted HRH's request for a hearing, but

limited it to the two issues identified in the Department's Final Informal Review Decision,

namely whether the Department was permitted to rely on the CMS audit and whether HRH was

entitled to an independent review. See Letter of James D. Bivins, Chief Administrative Hearing

Officer, H0-4, Vol. 1 (CR 77). HRH was not permitted to argue on appeal whether it qualified

for exclusion to meaningful use requirements.

Boiled down to its simplest form, it is the Department's position, which was accepted by the

Hearing Officer in issuing the Administrative Hearing Recommended Decision, that the State

Medicaid Health Information Technology Plan (SMHP) trumps the MaineCare HIT Program

Rules and MaineCare Benefits Manual. The Hearing Officer viewed the SMHP as "signed

agreement" between the Department and CMS that CMS's audit and appeal process for dual­

eligible hospitals would be binding upon if. with respect to MaineCare HER/HIT Program

· The court notes that when the Department issued the Final Informal Review Decision on January 22, 2018, it
advised HRH of its right to request an administrative hearing. See Exhibit J-1 (CR 356).

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incentive payments made.' See Exhibit A, p.13 (CR 885)(emphasis added). The Hearing Officer

made this finding after acknowledging the HIT Plan (SMHP) had not been formally promulgated

and was not enforceable by or against the Department by any pa1ty other than CMS. (CR 884).

As previously discussed, the SMHP states that Dually-eligible hospitals cannot appeal MU

(meaningful use), which must be done through CMS. (CR 657) and Dually-eligible hospital

appeals of Meaningful Use are under the purview of CMS, not states. (CR 468; see also CR 498).

So, the court does not disagree with the Hearing Officers finding that an agreement existed

between the Department and CMS. But that does not mean HRH is stripped of its appeal rights

when it is not a direct party to the SMHP, and the SMHP has not been subject to rule

promulgation pursuant to the APA for the 2013 year in dispute.

As part of the EHR Program, the Department promulgated administrative rules, the HIT Program

Rules, which were incorporated into the MaineCare Benefits Manual. See Exhibit J-6. As

previously discussed, those rules specifically provided an appeal process, including appeals of

recoupments by either the Department or CMS, and of audits by either. See Section 2.05-2,

Exhibit J-6 (CR 747-748). Although "meaningful use" is a defined term in the HIT Program

Rules, nothing in the rules indicate audits of meaningful use and appeals thereof are delegated to

CMS. On the other hand, the HIT Program Rules, when setting forth the Hearings and Appeals

process, do specifically reference the MBM and states Appeal rights and processes are governed

by the MaineCare Benefits Manual, Chapter I, Section 1, §1.21-1. As discussed, that section of

the MBM sets forth the right to informal reviews, administrative hearings, and appeals to the

• It is not entirely clear whether it refers to the Department or dual-eligible hospitals; the court concurs the
Depmtment would be bound by the SMHP.

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Superior Court. Without the SHMP being subject to the rule promulgation process pursuant to

the APA, and HRH not being a party to the SMHP, the court finds that the administrative hearing

process failed and denied HRH's rights to a full and complete review of its appeal at both the

informal review and administrative hearing. At both the informal review and administrative

hearing, despite its requests, HRH was denied review of its challenges that it was exempt from

"meaningful use" requirements in several subject areas: At both review levels the Department

prevailed that it could rely solely on the CMS audit, and that it was not entitled to review. This

review is contrary to the review afforded by the IDT Program Rules and MaineCare Benefits

Manual, and likewise lacks conformity with the Administrative Procedures Act.

The Department suggests providers were informed of the SMHP through rule as the governing

plan for the Department's health technology plan. See Respondent's Brief, p. 3. The court

disagrees with that as a blanket assertion. All that is stated in the HIT Program Rules is States

are required to submit a State Medicaid Health Plan (SMHP) and receive Center for Medicare

and Medicaid Services (CMS) approval of the SMHP prior to implementing the incentive

payment program. See Exhibit J-6, Section 2.01 Introduction and Statutory Authority (CR 740).

The rules do not inform providers that appeal rights provided in the HIT Program Rules and

MaineCare Benefits Manual are superseded or altered by the SMHP. As previously stated in

Footnote 3, not until November, 2014 was the SMHP promulgated as a rule, and then made rule

that to be eligible for payments, a provider must" C. Meet all requirements of this Rule and

Maine's SMHP .."

, Although not necessarily relevant to the grounds of the decision herein, at oral arguments made August 28, 2019, it
was made more clear that HRH believed it was exempt from meaningful use requirements for transmission of
syndromic surveillance, immunizations, or lab data.

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In the Administrative Hearing Recommended Decision, the Hearing Officer also indicated an

ambiguity was created in the HIT Program Rules by use of the term "or" when referring to

recoupments as determined by the Department or CMS, and because the rules did not indicate

whether the Department was retaining or delegating meaningful use audit and appeals.

Recommended Decision, Exhibit A, p. 13 (CR 885). Finding an ambiguity, the Hearing Officer

proceeded to attempt to reconcile it by considering other sources. Id. The Department argues that

Maine case law on statutory construction allows looking at both the SHMP, which has not been

promulgated as rule, and the HIT Program Rules and MaineCare Benefits Manual, which have

been promulgated, to discern the Department's intent.

First, the only documents having the effect of law as to the 2013 year are the HIT Program Rules

and MaineCare Benefits Manual. As the Hearing Officer noted, the SMHP, which for the 2013

year was not yet promulgated, is only binding between the Department and CMS. It is only when

the HIT Program Rules and SMHP are read together that an ambiguity exists, as only the SMHP

sets forth a distinct CMS audit and appeal process for dual-eligible hospitals. This is an

ambiguity created only when looking at the SMHP and HIT Program rules together.

When reviewing a statute, the court first looks to the statutory language to discern the

Legislature's intent. State v. Legassie, 2017 ME 202, lf 13. The court looks to the plain meaning

of the statute, interpreting its language to avoid absurd, illogical or inconsistent results. Carrier

v. Sec'y of State, 2012 ME 142, lfl2. A statute is ambiguous if it is reasonably susceptible to

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different interpretations. Id. When a statute is unambiguous, the statute is interpreted directly,

without applying statutory construction. Id.

In this case, when looking solely at the only legally promulgated rules, the HIT Program Rules

and the MaineCare Benefits Manual, there is no ambiguity whatsoever. Those rules clearly

afford aggrieved providers hearing and appeal rights for audit findings and recoupment efforts by

either the Department or CMS. The court does not share the Hearing Officers view that use of

the term or creates an ambiguity. An ambiguity or question arises only when the SMHP is read

in conjunction with the HIT Program Rules, but again, the SMHP is not a rule binding upon

HRH for the 2013 year. The HIT Program rules and MaineCare Benefits Manual entitle

aggrieved providers to appeal rights and a hearing for audits and recoupment actions by either

the Department or CMS.

Finally, the court does not accept that HRH is collaterally estopped from presenting its appeal. In

all prior reviews, the audit findings of CMS were accepted, without any meaningful review of

HRH' s argument that it was exempt from meaningful use requirements." As referenced by the

Department in its brief, application of collateral estoppel requires an adjudication that had the

elements of (I) adequate notice, (2) the right to present evidence and legal argument, (3) a

formulation of issues of law or fact, (4) the rendition of a final decision, and (5) any other

procedural elements as may be necessary to constitute the proceeding a sufficient means of

• The court appreciates that the position of HRH is it was exempt from meaningful use compliance for submission of
syndromic surveillance, immunizations, and lab data, while the position of the Department (or CMS) is that HRH
was perhaps exempt from submitting the data but not exempt from acquiring the necessary system requirements.
The court takes no position as to the validity or strength of either position, other than noting that the appeals and
review process did not fully litigate the issue and differing positions of the litigants.

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conclusively determining the matter in question. North Berwick v. Jones, 534 A.2d 667,670

(Me. 1987). Based upon the review of this record, the court does not agree that HRH was

afforded an opportunity to present evidence and argument at any of the levels of review afforded

by the MBM regarding its exemption from meaningful use. At the Informal Review the

Department denied HRH's request that it review the findings made by the CMS audit. (CR 355).

Similarly, the Department's Chief Administrative Hearing Officer denied HRH's request to

argue on appeal that it qualified for exemption from the meaningful use requirements. (CR 77).

Accordingly, the Petitioner Houlton Regional Hospital's appeal is granted. The Final Decision

issued February 7, 2019 accepting in toto the Hearing Officer's Administrative Hearing

Recommended Decision is vacated and the matter is remanded for the Department to conduct an

independent review of CMS's audit, including an administrative hearing, pursuant to the HIT

Program Rules and MaineCare Benefits Manual, and that such review include HRH's claims for

exemption from "meaningful use" compliance in the subject areas identified.

Pursuant to Rule 79(a) this order shall be incorporated by reference.~-<:::+vilp,ocket. ,/

~ f;}::;:~k:/
Dated: September ;;3, 2019 / / ·-c:~\_- · ~
Harold L. Stewart, II
Justice, Superior Court

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