SECOND DIVISION

ANDREWS, P. J.,

MCFADDEN and RAY , JJ.

NOTICE: Motions for reconsideration must be

physically received in our clerk’s office within ten

days of the date of decision to be deemed timely filed.

http://www.gaappeals.us/rules/

March 27, 2015

In the Court of Appeals of Georgia

A14A1548, A14A1549. UNITED CEREBRAL PALSY OF

GEORGIA, INC. et al. v. GEORGIA DEPARTMENT OF

BEHAVIORAL HEALTH AND DEVELOPMENTAL

DISABILITIES et al.

MCFADDEN, Judge.

United Cerebral Palsy of Georgia, Inc. and others filed a putative class action

lawsuit against the Georgia Department of Behavioral Health and Developmental

Disabilities, the Georgia Department of Community Health, and those agencies’

commissioners, alleging that the defendants erred in administering the state Medicaid

program. The superior court granted the defendants’ motion to dismiss on the ground

that the plaintiffs had not exhausted their administrative remedies. The plaintiffs

appeal, arguing that they were excused from the exhaustion requirement because the
defendants did not give them required notice of the adverse action at issue. We agree

and therefore reverse.

1. Background.

We review a ruling on a motion to dismiss for failure to exhaust administrative

remedies under a de novo standard of review. Miller County Bd. of Ed. v. McIntosh,

326 Ga. App. 408, 411 & n. 5 (1) (756 SE2d 641) (2014). The facts regarding the

issue of exhaustion of administrative remedies are largely undisputed. The plaintiffs

are nonprofit corporations that provide services to Georgia Medicaid patients with

intellectual and developmental disabilities (“providers”), the patients who receive

those services (“recipients”), and the recipients’ family representatives. The

defendants are the state agencies that administer the Medicaid program in Georgia

and those agencies’ commissioners. OCGA § 49-4-142. 

“Medicaid is a cooperative federal-state program through which the federal

government furnishes financial assistance to the states so that the states may provide

necessary medical, rehabilitation, and other services to low-income persons.”

Prado-Steiman v. Bush, 221 F.3d 1266, 1268 (I) (a) (11th Cir. 2000). Although

participation in the program is voluntary, states that choose to participate must

develop and have approved by the federal government a state Medicaid plan that

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complies with the requirements of the Medicaid Act. Wilder v. Virginia Hosp. Assn.,

496 U. S. 498, 502 (I) (A) (110 SCt 2510, 110 LEd2d 455) (1990). With federal

approval, statesmay enact waiver programsthat exempt themfromcertain otherwisemandated federal Medicaid requirements. 42 USC § 1396n (b).

In 2007, the federal government approved the two waiver programs at issue in

this case: the New Options Waiver Program, which the parties refer to as NOW, and

the Comprehensive Supports Waiver Program, which the parties refer to as COMP.

NOW and COMP allow the defendants to permit the providers to furnish services to

recipients in home and community-based settings rather than in institutions. The

waiver programs became part of Georgia’s Medicaid plan and were incorporated into

a provision of the contracts – known as statements of participation – between the

defendants and the providers. See Pruitt Corp. v. Ga. Dept. of Community Health,

284 Ga. 158, 160 (2) (664 SE2d 223) (2008) (provider that signs a statement of

participation that incorporates by reference the Department of Community Health’s

policy manual enters into a contractual relationship with the department).

Under the provisions of the waiver programs and the statements of

participation, Medicaid service providers are entitled to be paid certain ratesfor their

services. According to the plaintiffs, since 2008, the defendants have not paid the

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providers the approved rates and have limited the amount of services recipients can

receive, sometimes to below the amount that is medically necessary. The plaintiffs

allege that the defendants made these reductions without public notice and comment

as required by federal and state law and without giving the providers or recipients

proper notice in violation of their rights to due process and contrary to the terms of

the statements of participation. 

The plaintiffs filed suit, asserting claims for breach of contract, violation of

their rightsto administrative remedies under OCGA § 49-4-153 (b) (1), and violation

of their constitutionalrights. The trial court granted the defendants’motion to dismiss

the suit for the plaintiffs’ failure to exhaust their administrative remedies. The

plaintiffs filed this appeal. 

Generally, a party aggrieved by a state agency’s decision must exhaust

available administrative remedies before seeking equitable or declaratory relief

through judicial review. Perkins v. Dept. of Medical Assistance, 252 Ga. App. 35, 36

(1) (555 SE2d 500) (2001). The plaintiffs argue that they were excused from the

exhaustion requirement because the defendants never gave them the required notice

of the adverse agency decision. The defendants counter that the plaintiffs had actual

notice, and nothing required them to give any sort of formal notice. We agree with the

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plaintiffs that under the provisions of the Georgia Medical Assistance Act of 1977,

OCGA § 49-4-140 et seq., the regulations, and the policy and procedure manuals,

they were entitled to notice before they were required to exhaust administrative

remedies.

2. Administrative review. 

OCGA § 49-4-153 of the Act concerns challenges to decisions of defendant

Department of CommunityHealth. Subsection (b) of thatstatute grants both providers

and recipientsthe right to administrative hearings when they are aggrieved by certain

decisions of the Department of Community Health. OCGA § 49-4-153 (b) (1), (b) (2)

(A). 

(a) Providers.

Certain provisions relate exclusively to providers. OCGA § 49-4-153 (b) (2)

(A) specifies that providers

may request a hearing on a decision of the Department of Community

Health with respect to a denial or nonpayment of or the determination

of the amount of reimbursement paid or payable to such provider on a

certain item of medical or remedial care of service rendered by such

provider by filing a written request for a hearing in accordance with

Code Sections 50-13-13 and 50-13-15 with the Department of

Community Health. . . . . The request for hearing shall be filed no later

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than 15 business days after the provider of medical assistance receives

the decision of the Department of Community Health which is the basis

for the appeal.

OCGA § 49-4-153 (b) (2) (A) (emphasis added). A related regulation, Ga. Comp. R.

& Regs. r. 350-4-.04 of the Rules and Regulations for the Department of Medical

Assistance (the former name of the Department of Community Health, see 2009 Ga.

L. 453 ), directs the Department of Community Health to “offer the opportunity for

Administrative Review to any provider against whom it proposes to take an adverse

action unless the Department is otherwise authorized by law to take such action

without opportunity for appeal by the provider prior to the action’simplementation.”

(The defendants do not argue that they were authorized by law to take the actions at

issue without opportunity for appeal by the providers.) The regulation further

provides that, “Administrative Review shall be completed, if not waived by the

provider, prior to implementation of the proposed action.” Ga. Comp. R. & Regs. r.

350-4-.04. It directs that “[t]he procedures and deadlines for obtaining . . .

Administrative Review and the deadlines for decisions thereon shall be published in

the Policies and Procedures Manual.” Id. 

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In accordance with the regulation, the Georgia Medicaid manual outlines the

procedures and deadlines for providers to obtain administrative review. It provides

in pertinent part:

For a provider to obtain Administrative Review, a written request must

be received at the address of the office that proposed the adverse action

or denial of payment within thirty (30) days of the date the notification

of the proposed adverse action, the denial of payment, remittance advice

or initial review determination was mailed to the provider. 

Part I, Policies and Procedures for Medicaid/Peachcare for Kids, Chapter 505

(emphasis added). The manual defines adverse action as “an instance in which the

Division denies or reduces the amount of reimbursement claimed by a provider, . . .

[or]sets or changes a provider’sreimbursement rate.” Part I, Policies and Procedures

for Medicaid/Peachcare for Kids, Definitions, § 5 (a), (c). 

(b) Recipients.

Other provisions apply exclusively to recipients. OCGA § 49-4-153 (b) (1)

grants recipients the right of administrative review, specifying that:

any recipient of medical assistance aggrieved by the action or inaction

of the Department of Community Health as to any medical or remedial

care or service which such recipient alleges should be reimbursed under

the terms of the state plan . . . shall be entitled to a hearing upon his or

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her request for such in writing and in accordance with the applicable

rules and regulations of the department and the Office of State

Administrative Hearings. . . . 

OCGA § 49-4-153 (b) (1). The Medicaid manual outlines the procedures for

recipients to obtain administrative review. It provides in pertinent part:

Should the Department’s decision be adverse to the [recipient], the

[recipient](or [recipient’s]representative) may request a hearing before

an Administrative Law Judge. A hearing must be requested in writing.

The hearing request and a copy of the adverse action letter must be

received by the Department within 30 days or less from the date of the

adverse action letter. 

Part I, Policies and Procedures for Medicaid/Peachcare for Kids, Chapter 508 (D)

(underline in original; italics added).

Like the Medicaid manual, the COMP and NOW manuals also include

provisionsregarding administrative review, at least asto the recipients. Bothmanuals

provide in pertinent part:

Reduction of [COMP/NOW] Services: The participant and/or his/her

representative (family member or legal guardian) will receive written

notice of the rights to appeal any reduction of [COMP/NOW] services

fromthe [Georgia Department of Behavioral Health and Developmental

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Disabilities] regional office. The notice will outline the process for

requesting a fair hearing. 

Part II, Policies and Procedures for Comprehensive Supports Waiver Program

(COMP), Chapter 709.1 (1); Part II, Policies and Proceduresfor New Options Waiver

Program (NOW), Chapter 709.1 (1) (emphasis added). 

3. Notice.

Although an administrative body’s interpretations of applicable statutes and

implementing administrative rules are entitled to deference, see generallyHosp.Auth.

of Gwinnett County v. State Health Planning Agency, 211 Ga. App. 407, 408 (2) (438

SE2d 912) (1993), its interpretations of its manuals are not. Pruitt Corp., supra, 284

at 159-160 (2). We decline to follow the defendants’ interpretation of the Medicaid,

COMP, and NOW manuals. And when we consider the applicable provisions of the

Medicaid manual, it is clear that the providers were entitled to written notification of

the defendants’ proposed action to deny or reduce the amount of the providers’

reimbursement. Chapter 505 of the manual conditions the provider’s entitlement to

administrative review on a timely written, request. And the timeliness of the request

is calculated from“the date the notification of the proposed adverse action, the denial

of payment, remittance advice or initial review determination was mailed to the

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provider.” Id. The plain terms of the manual contemplate the mailing of notice to the

provider. 

The regulations support this conclusion. Chapter 350-1 concerns the

administration of the Department of CommunityHealth. It defines “pleadings” as “the

notice of adverse action issued by the Department which aggrieves the provider, the

provider’s Request for hearing requesting review of the adverse action, and any

amendments to such documents.” Ga. Comp. R. & Regs. r. 350-1-.01 (16) (emphasis

added). See also Ga. Comp. R. & Regs. r. 350-4-.19 (1) (“The notice of adverse

action issued by the Department and the requestfor hearing submitted by the provider

shall constitute the pleadingsin each contested case . . . .”). And it providesthat “[a]ll

petitions, requests, notices, and decisions referred to in these Rules must be in

writing.” Ga. Comp. R. & Regs. r. 350-1-.01 (25). 

The conclusion that the plaintiffs were entitled to written notice is even clearer

regarding recipients: the NOW and COMP manuals expressly state that recipients

“will receive written notice of the rights to appeal any reduction of [COMP/NOW]

services from the [Georgia Department of Behavioral Health and Developmental

Disabilities].” Part II, Policies and Procedures for Comprehensive Supports Waiver

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Program (COMP), Chapter 709.1 (1); Part II, Policies and Procedures for New

Options Waiver Program (NOW), Chapter 709.1 (1). 

Because the defendantsfailed to give the required written notice, they were not

entitled to dismissal for the plaintiffs’ failure to exhaust administrative remedies.

Chatham County Bd. of Tax Assessors v. Emmoth, 278 Ga. 144, 146 (1) (598 SE2d

495) (2004). “The [defendants] failed to give the requisite notice and thus [they]

cannot take advantage of irregularitiesfor which [they are] responsible.” Id. (citation

omitted). See also Fulton-DeKalb Hosp. Auth. v. Metzger, 203 Ga. App. 595, 597 (4)

(417 SE2d 163) (1992) (since defendant’s “own actions” prevented aggrieved

plaintiff from seeking administrative review, defendant could not complain about

plaintiff’s failure to exhaust administrative remedies). See also Smart v. State, 237

P3d 1010, 1015 (IV) (A) (Alaska 2010) (to be adequate to trigger the obligation to

pursue administrative review, notice “must clearly identify the proposed agency

action and the party’s right to seek administrative relief”) (citation omitted).

Judgments reversed. Andrews, P. J., concur and Ray, J., concur in judgment

only.

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