Shamrock Psychiatric Clinic, P.A. v. Texas Health and Human Services Commission Charles Smith, Executive Commissioner of the Texas Health and Human Services Commission And Stuart W. Bowen Jr., Inspector General for the Texas Health and Human Services Commission Office of Inspector General ( 2016 )

TEXAS COURT OF APPEALS, THIRD DISTRICT, AT AUSTIN
NO. 03-15-00349-CV
Shamrock Psychiatric Clinic, P.A., Appellant
v.
Texas Health and Human Services Commission; Charles Smith, Executive Commissioner
of the Texas Health and Human Services Commission; and Stuart W. Bowen, Jr.,
Inspector General for the Texas Health and Human Services Commission Office of
Inspector General, Appellees1
FROM THE DISTRICT COURT OF TRAVIS COUNTY, 126TH JUDICIAL DISTRICT
NO. D-1-GN-14-001833, HONORABLE ORLINDA NARANJO, JUDGE PRESIDING
MEMORANDUM OPINION
Shamrock Psychiatric Clinic, P.A., a Medicaid provider, sued the Texas Health and
Human Services Commission (HHSC); its Executive Commissioner, Charles Smith; and Stuart W.
Bowen, Jr., Inspector General for the HHSC Office of Inspector General (OIG), (collectively, the
State) in Travis County district court seeking, among other relief, a writ of mandamus to compel
an administrative hearing on the OIG’s decision to recoup an alleged overpayment of Medicaid
reimbursements. See Tex. Gov’t Code § 531.1201(a) (governing appeal of HHSC’s or OIG’s
1
This appeal was originally filed in the names of the predecessors to the present Executive
Commissioner of HHSC and Inspector General for the OIG. The current holders of those offices
have been automatically substituted as appellees pursuant to Rule 7.2 of the Texas Rules of
Appellate Procedure.
determination to recoup overpayment or debt from Medicaid Provider).2 The State filed a plea to
the jurisdiction asserting that all of Shamrock’s claims were barred by sovereign immunity. After
a hearing, the trial court granted the plea and dismissed Shamrock’s case for lack of subject-matter
jurisdiction. In one issue, Shamrock asserts that the trial court erred by dismissing its request for a
writ of mandamus ordering the State to provide Shamrock with an administrative hearing on the
overpayment issue. We will affirm.
BACKGROUND
Statutory Framework for Payment Holds and Recoupment of Overpayment
HHSC is the state agency designated to administer the Texas Medicaid Program. See
Tex. Gov’t Code § 531.021(a). Through its OIG, HHSC is responsible for investigating fraud and
abuse and enforcing state laws related to the Medicaid program. Id. Texas law commands OIG to
impose, without prior notice, a “payment hold” on Medicaid reimbursements to a Medicaid provider
upon the determination of the existence of a credible allegation of fraud by the provider under the
state Medicaid program. Id. § 531.102(g). A Medicaid provider subject to such a hold may request
an expedited administrative hearing before the State Office of Administrative Hearings (SOAH)
regarding the hold. Id. § 531.102(g)(3). The provider must request an expedited administrative
hearing not later than the 30th day after the date the provider receives notice from the OIG. Id.
2
Certain relevant provisions of Texas Government Code chapter 531, subchapter C, have
been amended with an effective date of September 1, 2015. See Act of May 30, 2015, 84th Leg.,
R.S., ch. 945, 2015 Tex. Gen. Laws 3304-16. All citations in this opinion are to the version of the
statute in effect at the relevant time period.
2
Texas law also provides that the OIG may seek to recover from a Medicaid provider
an overpayment identified in a fraud or abuse investigation. Id. § 531.120. Upon receipt of written
notice of the OIG’s determination to recover an overpayment, a provider must request an appeal of
that determination not later than the 15th day after receipt of such written notice. Id. § 531.1201(a)
(“A provider must request an appeal under this section not later than the 15th day after the provider
is notified that the commission or the commission’s office of inspector general will seek to recover
an overpayment or debt from the provider.”). Section 531.1201 further provides:
On receipt of a timely written request by a provider who is the subject of a
recoupment of overpayment or recoupment of debt arising out of a fraud or abuse
investigation, the [OIG] shall file a docketing request with [SOAH] or [the HHSC]
appeals division, as requested by the provider, for an administrative hearing regarding
the proposed recoupment amount and any associated damages or penalties. The
[OIG] shall file the docketing request under this section not later than the 60th day
after the date of the provider’s request for an administrative hearing or not later than
the 60th day after the completion of the informal resolution process, if applicable.
Id. The HHSC promulgated administrative rules setting forth the required contents of both the OIG’s
notice that it will seek an overpayment and the provider’s request for a hearing. See 1 Tex. Admin.
Code § 371.1711 (Tex. Health & Human Servs. Comm’n, Recoupment of Overpayments and
Debts).3 At the time period relevant to the events described in this appeal, section 371.1711(c)
provided that the OIG’s “final notice” of overpayment and notice of recoupment of debt include:
(A) a description of the recoupment, including the amount of the identified final
overpayment or debt;
3
Citations to administrative rules in this opinion are to the version in effect at the relevant
time period.
3
(B) the basis of the recoupment;
(C) the duration of the recoupment;
(D) the requirements of the person for repayment of the overpayment or debt; and
(E) a statement of the person’s right to request a formal administrative appeal hearing
regarding the recoupment.
Id. § 371.1711(c). With regard to the provider’s request for an administrative appeal, the rule stated
that “OIG must receive the written request for an appeal no later than the 15th calendar day after
the date the person receives final notice.” Id. The rule also provided that “a person may request
an administrative appeal hearing after receipt of a final notice of recoupment in accordance
with § 371.1615 of this subchapter (relating to Appeals).” Id. § 371.1711(d). At the relevant time
period, Rule 371.1615 required that the OIG “must receive a written request for an administrative
contested case no later than the 15th day after the date the person receives the final notice . . . .”
Id. § 371.1615(a). The rule further required that a written request for an administrative contested
hearing must:
(1) be sent by certified mail to the address specified in the notice letter;
(2) arrive at the address specified in the final notice of exclusion no later than 15 days
after receipt by the person of the notice;
(3) include a statement as to the specific issues, finding, and/or legal authority in the
notice letter with which the person disagrees;
(4) state the basis for the person’s contention that the specific issues or findings and
conclusions of OIG are incorrect; and
4
(5) be signed by the person or an attorney for the person. No other person or party
may request an administrative contested case hearing for or on behalf of the subject
of the sanction.
Id. § 371.1615(b). Thus, the administrative rules in effect at the relevant time period reflected the
HHSC’s interpretation of the statutory scheme to contemplate that the required “request” include
certain specific information, be sent to the OIG by certified mail, and be made in response to the
contents of the “final notice” sent by the OIG informing the provider of, among other things, the
amount of the “identified final overpayment” and the basis for seeking to recoup that amount.4
Background Facts
On January 20, 2013, Shamrock received notice from OIG of a payment hold on its
Medicaid reimbursements.5 Shamrock made a written request for “an expedited informal review
and an expedited administrative contested case hearing” on the payment hold. The payment hold
contested case was docketed at SOAH on February 19, 2013. On September 17, 2013, counsel for
OIG sent an email to Shamrock’s counsel stating: “Here is what I propose. We send you the final
notice of overpayment and we set the overpayment case at SOAH, which won’t have a hearing date
until Spring 2014, then we now [sic] can consolidate both case[s].”6 Shamrock’s counsel replied by
4
Shamrock has not challenged the validity of any of the referenced rules.
5
This chronology is derived from SOAH Order No. 11 in the docketed payment hold case.
In its brief, Shamrock states that this order “sets out the undisputed factual and procedural history
of this case,” and that it “believes the SOAH Order contains all of the facts necessary to dispose of
this appeal.”
6
The OIG had sent Shamrock a letter titled “Notice of Potential Overpayment” in February
2013. Thus, Shamrock was aware that the OIG was investigating whether it would seek to recover
an overpayment.
5
email on October 4, informing OIG that he had discussed OIG’s proposal to consolidate the payment
hold and overpayment issues for a single hearing and stating: “Let’s go ahead with the notice of
overpayment, set it at SOAH, and consolidate both cases. Let me know when you receive this email
and if I need to do anything.” Counsel for OIG replied by email on October 7 and stated: “I will
check with SOAH to see whether they want us to docket a separate case then consolidate or just file
the overpayment case in the same case number as the payment hold (my preference). I believe we
could be ready for a hearing on the overpayment issue in about 90 days.” That day counsel for
Shamrock responded with an email stating that he “may need more than 90 days for the hearing.”
On October 9, counsel for OIG filed a status report in the payment hold contested
case at SOAH stating:
In addition to the payment hold, [OIG] is seeking recoupment of payments, which
HHSC-OIG alleges [Shamrock] was not entitled to receive. [OIG’s] authority to
recoup those overpayments is codified under . . . Texas Government Code Chapter 531;
Chapters 32 and 36 of the Texas Human Resources Code; and Texas Administrative
Code Chapter 371, Subchapter G.
Counsels for [OIG and Shamrock] have agreed to consolidate both the payment hold
and the overpayment into one proceeding in the interest of judicial economy. Starting
September 1, 2013, Petitioners have the option to have their overpayment hearing
adjudicated in either Health and Human Services Commission Appeals Division or
the State Office of Administrative hearings. Shamrock has opted to proceed to the
overpayment hearing there at SOAH. At this point, without the court’s objection,
HHSC-OIG would like to simply file an amended pleading reflecting the
consolidated issues.
At the parties’ request, SOAH set a prehearing conference for October 28, 2013 to consider how
to proceed with discovery pertaining to “the overpayment issues in light of the fact that the parties
have agreed to consolidate the payment hold and overpayment issues into one proceeding.” At the
6
prehearing conference the parties represented to SOAH that because the payment hold and
overpayment issues were based on the same facts, consolidation would save time and expense. The
parties then agreed to continue the contested case hearing from November 5-7, 2013 to five days in
March 2014.
Shamrock received a “Final Notice of Overpayment” from OIG on December 2, 2013.
The notice stated that OIG had determined that Shamrock had received an overpayment in the
amount of $1,611,709.00 for the time period from February 1, 2007 through November 30, 2011.
The notice stated: “To appeal this final sanction, you must file a written request for appeal which
must be received by HHSC-OIG at the following address, no later than the 15th day after the date
of receipt of this notice.” The notice also included the following:
The letter requesting an appeal hearing must contain a statement as to the specific
issues, findings, and/or legal authority in the notice letter with which you disagree,
and the basis for your contention that the specific issues or findings and conclusions
are incorrect. The request for a formal administrative appeal must be signed by you
or your attorney.
THIS SANCTION WILL BECOME FINAL AND UNAPPEALABLE UPON
THE EXPIRATION OF 15 CALENDAR DAYS AFTER RECEIPT OF THE
NOTICE OF FINAL SANCTION IF NO TIMELY REQUEST FOR APPEAL
HAS BEEN RECEIVED BY HHSC-OIG.
Shamrock filed a request for an administrative appeal of the “Final Notice of Overpayment” on
January 2, 2014, well outside the 15-day time period for requesting an appeal under Texas Government
Code section 531.1201(a). The next day, OIG filed a motion to dismiss the payment hold case that
it had docketed at SOAH in February 2013. The motion stated: “HHSC-OIG is withdrawing its
February 26, 2013, Complaint and Notice of Hearing filed with the State Office of Administrative
7
Hearings.” OIG explained that because Shamrock did not timely appeal the “Final Notice of
Overpayment,” the payment hold issue was moot. In its response to the motion to dismiss, Shamrock
asserted that the parties had agreed that the payment hold hearing would be consolidated with the
overpayment hearing and that their agreement was verified by the parties at the October 28
prehearing conference. OIG responded that Shamrock had failed to timely make a written request
for an appeal of the “Final Notice of Overpayment” as required by statute in order to have a right to
an administrative appeal hearing. OIG argued that while the parties had agreed that consolidating
the payment hold and overpayment issues in one hearing was practical, any such agreement did not
relieve Shamrock of its obligation under section 531.1201(a) to make a timely written request for
an appeal. OIG maintained that, because Shamrock did not timely request an appeal, the “Final
Notice of Overpayment” had become final and unappealable.
After originally denying the motion to dismiss, the ALJ ultimately granted it, stating
in its order:
Based on the facts listed in the chronology, the ALJ recognizes that OIG asked
Shamrock to consolidate the payment hold and recoupment issues, represented to
SOAH that the parties had agreed to consolidate both issues into one proceeding in
the interest of judicial economy, represented that it preferred to amend its payment
hold pleading without getting another docket number, and asked for a continuance
so that both issues could be heard together. Some months later, OIG sent formal
notice of the recoupment to Shamrock. Shamrock did not file an appeal because it
had relied on OIG’s commitment to amend its pleadings and the ALJ had already
set the hearing on both issues.
However, even though Shamrock relied on OIG’s representations to its detriment, the
ALJ cannot proceed to a hearing. OIG has withdrawn the payment hold issue, and
it has neither separately referred an overpayment claim to SOAH regarding Shamrock
nor amended its pleadings to assert an overpayment claim. The ALJ does not have
authority to require OIG to amend its pleading to assert an overpayment claim in this
8
cause. As a result, there is no pending case for which the ALJ could receive evidence
and issue a Proposal for Decision. Therefore, the ALJ dismisses this case from
SOAH’s docket pursuant to 1 TAC § 155.503(c)(1).
Shamrock later filed the proceedings underlying this appeal in which it sought various declarations
under the Uniform Declaratory Judgments Act, challenged the constitutionality of certain statutes
and agency rules, and sought mandamus relief. The State filed a plea to the jurisdiction, which the
trial court granted after a hearing. Shamrock then perfected this appeal arguing in one issue that the
trial court erred by dismissing its request for a writ of mandamus ordering the OIG to docket the
overpayment issue at SOAH and go forward with a contested case hearing on that issue.7
DISCUSSION
“A writ of mandamus will issue to compel a public official to perform a ministerial
act. An act is ministerial when the law clearly spells out the duty to be performed by the official with
sufficient certainty that nothing is left to the exercise of discretion.” Anderson v. City of Seven
7
The specific mandamus relief Shamrock requested in its petition in the trial court was that
the court order the Administrative Law Judge (ALJ) to hold a hearing on the overpayment issue.
Shamrock alleged that “[b]ecause there is a valid ‘Rule 11’ agreement, the ALJ was duty-bound
to enforce its provisions. A writ of mandamus should issue if she fails to do so.” In this Court,
however, Shamrock asserts that the trial court should have issued a writ of mandamus ordering the
OIG to docket the overpayment claim at the State Office of Administrative Hearings (SOAH). At
the hearing on the plea to the jurisdiction, Shamrock argued principally that the OIG was bound to
comply with an alleged “Rule 11” agreement in which, Shamrock contends, the OIG agreed to
amend its petition in the docketed payment hold case to include its claim to recover an overpayment
of Medicaid reimbursements. Shamrock stated: “Shamrock seeks, Your Honor, a mandamus to
enforce its Rule 11 Agreement to consolidate the payment hold and overpayment cases between the
OIG and Shamrock, and for the OIG to docket the case it wrongfully dismissed.” We will address
the appellate issue as framed by Shamrock in its brief to this Court; that is, whether the trial court
erred by not issuing a writ of mandamus directing that the OIG docket the overpayment case at
SOAH and thereby provide Shamrock with a hearing on the overpayment issue.
9
Points, 806 S.W.2d 791, 793 (Tex. 1991); see also Community Health Choice, Inc. v. Hawkins,
328 S.W.3d 10, 13 (Tex. App.—Austin 2010, pet. denied). If an action involves personal deliberation,
decision, and judgment, it is discretionary; actions that require obedience to orders or the performance
of a duty to which the actor has no choice are ministerial. City of Lancaster v. Chambers,
883 S.W.2d 650, 654 (Tex. 1994).
Suits to require state officials to comply with statutory or constitutional provisions
are not prohibited by sovereign immunity, even if a declaration to that effect
compels the payment of money. To fall within this ultra vires exception, a suit must
not complain of a government officer’s exercise of discretion, but rather must allege,
and ultimately prove, that the officer acted without legal authority or failed to
perform a purely ministerial act.
City of El Paso v. Heinrich, 284 S.W.3d 366, 372 (Tex. 2009).
The dispositive issue in this appeal is whether the OIG had a ministerial duty to
docket the overpayment case at issue at SOAH and proceed to a contested case hearing. The parties
agree that such a ministerial duty arises, under certain conditions, from Texas Government Code
section 531.1201(a), which provides:
On receipt of a timely written request by a provider who is the subject of a recoupment
of overpayment or recoupment of debt arising out of a fraud or abuse investigation,
the office of inspector general shall file a docketing request with the State Office of
Administrative Hearings or the Health and Human Services Commission appeals
division, as requested by the provider, for an administrative hearing regarding the
proposed recoupment amount and any associated damages or penalties.
Tex. Gov’t Code § 531.1201(a) (emphasis added); see also 1 Tex. Admin. Code §§ 371.1711 (appeal
of determination to recoup overpayment or debt), 371.1615 (contents of written notice of appeal).
10
The State argues that because Shamrock failed to make a timely written request for an appeal, a
ministerial duty to file a docketing request with either SOAH or the HHSC appeals division did not
arise. We agree. Shamrock did not file a written request including the content required by Rule
371.1615 until January 2, 2014, thirty-one days after receiving the “Final Notice of Overpayment.”
On appeal, Shamrock argues that the emails it sent counsel for OIG on October 4 and
October 7, along with the October 9 status report filed at SOAH by the OIG, constituted the written
request for an appeal required by section 531.1201(a) and Rules 371.1711 and 371.1615. According
to Shamrock, this email exchange occurred within 15 days of “the OIG’s 10/2/13 e-mailed notice
of an intent to seek recovery of an overpayment.” The only email sent by OIG on October 2 was an
email to Shamrock’s counsel that stated:
Good morning [counsel], I wanted to reach out to you and see if you were able to
determine whether your client would prefer to go directly to the overpayment
hearing. I also wanted to let you know that I am leaving OIG on the [sic] October 11,
2013. Steve Johnson, who I have cc’d here, is the litigation team leader here and will
be assigning this case to another attorney asap. Thank you and I enjoyed working
with you on this case.
This email cannot be read to constitute the OIG’s statutory “final notice” of intent to seek recovery
of an overpayment that triggered the 15-day time period for requesting an appeal under section
531.1201(a). This email wholly fails to comply with Rule 371.1711(c)(2), which requires that the
“final notice” include both the amount of the recoupment and the basis for the recoupment. 1 Tex.
Admin. Code § 371.1711(c). Additionally, Shamrock’s responsive October 7 and October 9 emails
fail to comply with the Rule 371.1615 content requirements of a written request for an administrative
contested case hearing at SOAH. Id. § 371.1615. Instead, this email exchange is more reasonably
11
interpreted as an informal discussion of, and agreement regarding, the appropriate way to handle an
appeal provided Shamrock invoked its right to one by timely providing written notice that it desired
to appeal the final overpayment amount once OIG had sent Shamrock its final notice. In any event,
these comments from OIG and Shamrock are not of the nature contemplated by Rule 371.1615.
Shamrock next argues that if the 15-day period for requesting a hearing did not begin
until Shamrock received the “Final Notice of Overpayment” on December 2, Texas Rule of Civil
Procedure 306c and Texas Rule of Appellate Procedure 27.2 apply to render its premature requests
for a hearing timely. See Tex. R. App. P. 27.2 (“In a civil case, a prematurely filed notice of appeal
is effective and deemed filed on the day of, but after, the event that begins the period for perfecting
the appeal.”); Tex. R. Civ. P. 306c (every motion for new trial shall be deemed to have been filed
on date of but subsequent to signing of judgment motion assails). As an initial matter, we have held
that the emails Shamrock relies on, even if timely, do not constitute a request for a hearing meeting
the requirements of Rule 371.1615. Moreover, the statutory scheme and administrative rules
contemplate that the request for an administrative hearing be in response to a “final notice” that
informs the provider of the final amount of the overpayment and the basis for recouping the
overpayment. The administrative rules evidence an intent that the request for an administrative
hearing not precede, but rather follow, receipt of the OIG’s “final notice.”8
8
We are also unpersuaded by Shamrock’s attempt to analogize this case to El Paso Electric
Company v. Public Utility Commission, 715 S.W.2d 734 (Tex. App.—Austin 1986, writ ref’d
n.r.e.). In that case we held that, under “the specific facts and circumstances” of the case, a second
motion for rehearing filed after the Public Utility Commission orally pronounced its decision on
the first motion for rehearing but before it issued its written order, though prematurely filed, should
be deemed filed on the date of the agency’s order. El Paso Electric, 715 S.W.2d at 738. The facts
of the present case are not analogous to those in El Paso Electric. In El Paso Electric the Court
12
In the alternative, Shamrock contends that the trial court should have granted
mandamus relief and ordered the OIG to docket the overpayment case because the parties had a
“Rule 11 Agreement” or “Rule 155.415 Agreement” that created a ministerial duty to do so. See
Tex. R. Civ. P. 11 (“Unless otherwise provided by these rules, no agreement between attorneys or
parties touching any suit pending will be enforced unless it be in writing, signed and filed with the
papers as part of the record, or unless it be made in open court and entered of record.”); 1 Tex.
Admin. Code § 155.415 (State Office of Admin. Hearings, Party Agreements). Administrative rule
155.415 provides that:
Unless otherwise provided in this chapter, no agreement between attorneys or parties
regarding a contested case pending before SOAH will be enforced unless it is in
analogized a motion for rehearing of a final agency order to a motion for new trial after a trial
court has rendered judgment. At issue here, however, is the notice required to trigger the right to a
contested-case hearing before an ALJ. Also, unlike in El Paso Electric, there is no indication here
that the Legislature borrowed from the Texas Rules of Civil Procedure when establishing the
requirement that a Medicaid provider request an appeal of the OIG’s proposed recoupment of an
overpayment. Moreover, in El Paso Electric, the Court relied heavily on the fact that El Paso
Electric Company had filed a motion for rehearing that completely apprised the agency of its alleged
error such that the motion accomplished its intended effect, which was to allow the agency an
opportunity to correct the alleged error or defend it. Consequently, the essential purpose of the motion
for rehearing had been satisfied.
In the present case, the emails, which preceded the “Final Notice of Overpayment,”
do not purport to be, and as a practical matter could not constitute, a request for an appeal responsive
to the contents of a “final notice” of overpayment. In fact, the record reflects that Shamrock itself
did not, until after SOAH dismissed the docketed payment hold case, consider the referenced
emails to be the written notice required by section 531.1201(a). Rather, on January 4, 2014,
Shamrock’s counsel sent SOAH and HHSC-OIG a letter, which stated: “Pursuant to 1 Tex. Admin.
Code § 371.1615(d), please let this letter serve as our second formal written request for an appeal
of this matter.” (Emphasis in original.). Only after the docketed payment hold case was dismissed
did Shamrock assert that the October 4 and October 7 emails and the October 9 status report filed
by the OIG constituted the notice required by section 531.1201(a).
13
writing, signed, and filed with SOAH or entered on the record at the hearing or
prehearing conference.
1 Tex. Admin. Code § 155.415. According to Shamrock, the parties had an agreement that the OIG
would amend its pleadings to add the overpayment issue, and the ALJ had a ministerial duty to
enforce that agreement. Shamrock argues that the OIG had the same ministerial duty because “SOAH
judges operate only at the request of the agency that invokes them.” Citing no authority, Shamrock
contends that “the OIG has a ministerial duty to abide by the promises made to Shamrock and the
SOAH judge.”
Assuming that the parties in fact had an agreement that met the requirements of
Rule 155.415, the existence of such an agreement does not create a ministerial duty that the agency
perform the agreed upon action. Rather, Rule 155.415 simply states that no agreement between the
parties “will be enforced” unless it is in writing, signed by the parties, and filed with SOAH. Id.
While such an agreement might create a contractual obligation, the agency does not have a
ministerial duty to perform the action agreed to. The only ministerial duty the OIG had with respect
to the overpayment case was to docket a contested case at SOAH upon timely receipt of a written
request by Shamrock. As previously discussed, Shamrock failed to make such a timely written request.
Finally, Shamrock asserts that mandamus was an appropriate remedy because the OIG
could not deprive Shamrock of its right to an overpayment hearing by simply withdrawing its
payment hold claim. Relying on an analogy to a non-suit under the Texas Rules of Civil Procedure,
Shamrock asserts that the OIG’s withdrawal of its payment hold could not affect Shamrock’s
“pending claims for affirmative relief.” See Texas Mut. Ins. v. Ledbetter, 251 S.W.3d 31, 37 (Tex.
14
2008) (Texas Rule of Civil Procedure 162 prohibits dismissal by nonsuit if effect would be to
prejudice any pending claim for affirmative relief). Assuming this analogy is apt, the affirmative
relief Shamrock claims to be entitled to was the return of the money subject to the payment hold.
Any entitlement to that relief disappeared, however, when Shamrock failed to make a timely written
request for a hearing once it received notice that OIG intended to recoup an overpayment. At that
time the claim for recoupment became final and created a debt in favor of the State of Texas. See
1 Tex. Admin. Code § 371.1617(b) (Tex. Health & Human Servs. Comm’n, Finality & Collections)
(effect of final sanction resulting in recoupment is to create final debt in favor of State). The OIG
was then permitted to use the funds accumulated during the payment hold to offset the overpayment.
See id. § 371.1709(e)(2) (after payment hold is terminated for any reason OIG may retain funds
accumulated during payment hold to offset any overpayment).9 Although Shamrock complains that
“[b]y withdrawing its payment hold claim but keeping the money, the OIG prevented Shamrock from
getting any relief,” the reason Shamrock did not receive a hearing on the overpayment case is
because it failed to comply with its statutory obligation to make a timely written request for an
appeal once it received the OIG’s written notice that it would seek to recover an overpayment.
9
Citing this Court’s opinion in Janek v. Harlingen Family Dentistry, P.C., Shamrock also
asserts that the relief it was entitled to in the payment hold case was the return of the retained funds,
and that the OIG had an obligation to do so. 451 S.W.3d 97, 99 (Tex. App.—Austin 2014, no pet.).
In Janek, however, we concluded that the funds were required to be returned because, after a hearing
on the merits, the ALJ found that the OIG failed to make a prima facie showing that there was
relevant, credible, or reliable evidence of fraud authorizing it to impose a payment hold in the first
place. See id. at 103 (“[U]nder both the Texas statute and the applicable federal regulation, any
payment hold was temporary and had to end if credible evidence of fraud was found to be lacking.”).
Here, the OIG withdrew the payment hold once the overpayment claim became final. The Janek
holding has no application to the facts and circumstances of this case.
15
Shamrock has not established that the HHSC or OIG had a ministerial duty to docket
the overpayment case at SOAH, nor has it demonstrated the failure of a state official to perform
any other ministerial duty. Shamrock’s petition for a writ of mandamus was therefore barred by
sovereign immunity, and the trial court properly granted the State’s plea to the jurisdiction. We
overrule Shamrock’s sole appellate issue.
CONCLUSION
Having overruled Shamrock’s appellate issue, we affirm the trial court’s order
granting the plea to the jurisdiction.
__________________________________________
Scott K. Field, Justice
Before Chief Justice Rose, Justices Pemberton and Field
Affirmed
Filed: August 10, 2016
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