[Cite as Clovernook Health Care Pavilion v. Dept. of Medicaid, 2021-Ohio-337.]

IN THE COURT OF APPEALS OF OHIO 

TENTH APPELLATE DISTRICT 

Clovernook Health Care Pavilion et al., : 

 Appellants-Appellants, : 

 No. 20AP-87 

v. : (C.P.C. No. 19CV-3402) 

Ohio Department of Medicaid, : (REGULAR CALENDAR) 

 Appellee-Appellee. : 

 

D E C I S I O N 

Rendered on February 5, 2021 

 

On brief: Rolf Goffman Martin Lang LLP, Joseph F. Petros,

III, and W. Cory Phillips, for appellants. Argued: Joseph F. 

Petros, III.

On brief: Dave Yost, Attorney General, and Cheryl R. 

Hawkinson, for appellee. Argued: Cheryl R. Hawkinson.

 

APPEAL from the Franklin County Court of Common Pleas 

DORRIAN, P.J. 

{¶ 1} Appellants Clovernook Health Care Pavilion and OVM Investment Group, 

LLC dba Ohio Valley Manor Nursing and Rehabilitation (collectively "Clovernook") appeal 

the judgment of the Franklin County Court of Common Pleas affirming an adjudication 

order issued by appellee, the Ohio Department of Medicaid ("ODM"), that seeks to recover 

certain alleged overpayments. For the following reasons, we reverse the trial court. 

I. Facts and Procedural History 

{¶ 2} Clovernook is a nursing and long-term care facility that participated in, and 

allegedly received overpayments from, the Ohio Medicaid program. ODM, as administrator 

of the Medicaid program, notified Clovernook in a letter dated March 12, 2019 of its intent 

to adjudicate certain asserted overpayments. The "Notice of Intent to Adjudicate" cites to 

No. 20AP-87 2 

R.C. Chapter 119 and R.C. 5165.525 and includes a "Final Debt Summary Report" that 

reflects, in relevant part, that Clovernook was overpaid $12,392.15 for the 2006 fiscal year 

and $2,006.00 for the 2013 fiscal year. (Certified Record at 1.) The notice also includes 

information about how to timely request a hearing "regarding a finding in the Final Debt 

Summary Report" within 30 days of the mailing date of the notice and warns that failure to 

request a hearing would lead to ODM adopting and ratifying the findings of the final debt 

summary report. (Certified Record at 1.) 

{¶ 3} Clovernook did not request a hearing and on April 12, 2019 the director of 

ODM issued an adjudication order pursuant to R.C. Chapters 5165 and 119 that adopted 

and ratified the findings in the final debt summary report and sought repayment of the debt 

owed. Clovernook filed a timely notice of appeal of the adjudication order to the Franklin 

County Court of Common Pleas. In support of its appeal, Clovernook argued that, before 

ODM can commence an action to recover the alleged overpayment, R.C. 5164.57(A)(1)1

requires ODM to notify a provider of an alleged overpayment within five years immediately 

following the end of the fiscal year in which the overpayment allegedly occurred. According 

to Clovernook, if this notice requirement is not satisfied, ODM is without authority or 

jurisdiction to recover the debt. Clovernook asserted that the notice in this case did not 

comply with R.C. 5164.57(A)(1) and therefore ODM did not have subject-matter 

jurisdiction to enter the April 12, 2019 Adjudication Order and the order is void. 

{¶ 4} ODM responded that Clovernook failed to exhaust its administrative 

remedies and waived this issue since, despite receiving proper notice, Clovernook failed to 

request an administrative hearing where it could have raised this argument. ODM further 

argued that Clovernook referred to facts outside of the record and that ODM had subjectmatter jurisdiction to issue the notice letter because R.C. 5164.57 reflects a directory, rather 

than a mandatory and jurisdictional, timeframe. 

{¶ 5} The court of common pleas issued a decision and judgment on January 9, 

2020 affirming the April 12, 2019 adjudication order. The court of common pleas first 

found that, after consideration of the record, ODM was authorized by R.C. 5164.39 to issue 

the adjudication order since ODM "properly served Clovernook with the [n]otice and [d]ebt 

[s]ummary by certified mail, as required by R.C. 119.07," the notice set forth the proper 

 

1 Formerly R.C. 5111.061(A). 
No. 20AP-87 3 

information, and Clovernook did not request a hearing within 30 days of ODM mailing the 

notice. (Decision at 5.) Then, considering the parties' "[a]rguments on [a]ppeal," the court 

of common pleas found that R.C. 5164.57(A)(1) is expressly "directory" not "mandatory." 

(Decision at 5.) The court reasoned that "[a]s an initial matter, R.C. 5164.57 does not use 

the word 'shall' " and noted that in AmCare, Inc. v. Ohio Dept. of Job & Family Servs., 161 

Ohio App.3d 350, 2005-Ohio-2714 (10th Dist.), this court found that even the legislature's 

use of the word "shall" in another statute did not lead to the conclusion that the statute was 

mandatory. (Decision at 7.) The court of common pleas also concluded that reading the 

instant statute as including a mandatory condition precedent to ODM's right to recover 

overpayments "is at odds with R.C. 5164.57(C)." (Decision at 7.) Based on the foregoing 

analysis, the court of common pleas concluded that the adjudication order at issue in this 

case was supported by reliable, probative, and substantial evidence and was in accordance 

with law. 

{¶ 6} Clovernook filed a timely appeal. 

II. Assignment of Error 

{¶ 7} Clovernook asks this court to review the following sole assignment of error: 

THE LOWER COURT ERRED IN FINDING THAT R.C. 

5164.57(A)(1)'s FIVE-YEAR NOTICE REQUIREMENT IS 

MERELY DIRECTORY AND NOT MANDATORY AND 

JURISDICTIONAL. 

III. Standard of Review 

{¶ 8} "Review of an adjudication order issued by ODM is governed by R.C. 119.12." 

Physician's Ambulance Serv., Inc. v. Ohio Dept. of Medicaid, 10th Dist. No. 20AP-32, 

2020-Ohio-6842, ¶ 19, citing Meadowwood Nursing Facility v. Ohio Dept. of Job & Family 

Servs., 10th Dist. No. 04AP-732, 2005-Ohio-1263, ¶ 8. "Pursuant to R.C. 119.12, a court of 

common pleas must determine whether an agency's decision is supported by reliable, 

probative, and substantial evidence and is in accordance with law." Id., citing R.C. 

119.12(M) and Pons v. Ohio State Med. Bd., 66 Ohio St.3d 619, 621 (1993). Ohio Historical 

Soc. v. State Emp. Relations Bd., 66 Ohio St.3d 466, 471 (1993) (explaining that "[a]n 

agency adjudication is like a trial, and while the reviewing court must defer to the lower 

tribunal's findings of fact, it must construe the law on its own. To the extent that an agency's 

decision is based on construction of the state or federal Constitution, a statute, or case law, 
No. 20AP-87 4 

the common pleas court must undertake its R.C. 119.12 reviewing task completely 

independently"). 

{¶ 9} "The standard of review for a court of appeals in an administrative appeal is 

even more limited." Melnyk v. Ohio Dept. of Medicaid, 10th Dist. No. 18AP-693, 2019-

Ohio-5134, ¶ 16. The trial court's determination as to whether an agency's decision is 

supported by reliable, probative, and substantial evidence is reviewed on appeal for an 

abuse of discretion. Bryant Health Care Ctr., Inc. v. Ohio Dept. of Job & Family Servs. 

[Ohio Dept. of Medicaid], 10th Dist. No. 13AP-263, 2014-Ohio-92, ¶ 23, citing Fletcher v. 

Ohio Dept. of Transp., 10th Dist. No. 12AP-46, 2012-Ohio-3920, ¶ 8, citing Univ. Hosp., 

Univ. of Cincinnati College of Medicine v. State Emp. Relations Bd., 63 Ohio St.3d 339, 

343 (1992). "On questions of law, however, the common pleas court does not exercise 

discretion and the court of appeals review is plenary." Black v. State Bd. of Psychology, 

160 Ohio App.3d 91, 2005-Ohio-1449, ¶ 5 (10th Dist.), citing Univ. Hosp., Univ. of 

Cincinnati College of Medicine at paragraph one of the syllabus. "[W]hether a trial court 

correctly interpreted and applied a statute is a question of law" reviewed de novo on appeal. 

Myers v. Wade, 10th Dist. No. 16AP-667, 2017-Ohio-8833, ¶ 8. 2200 Carnegie, L.L.C. v. 

Cuyahoga Cty. Bd. of Revision, 135 Ohio St.3d 284, 2012-Ohio-5691, ¶ 10 ("In the area of 

administrative procedure, jurisdictional issues that call for construction of the statutes 

present questions of law that we review de novo on appeal."). 

IV. Analysis

{¶ 10} Resolution of this appeal centers on the narrow question Clovernook 

assigned for our review: whether the notice requirement in R.C. 5164.57(A)(1) is "directory" 

as opposed to "mandatory" and jurisdictional. (Clovernook's Brief at 1.) We conclude that 

because R.C. 5164.57(A)(1) conditions ODM's authority to recover Medicaid overpayments 

on ODM's provision of notice to the provider within the requisite five-year period, 

compliance with the R.C. 5164.57(A)(1) notice provision is mandatory. 

{¶ 11} The difference between a mandatory and a directory statutory requirement 

"depends on its effect." Miller v. Lakewood Hous. Co., 125 Ohio St. 152, 161 (1932). " 'A 

statute is mandatory where noncompliance with its provisions will render illegal and void 

the steps or acts to which it relates or for which it provides, and is directory where 

noncompliance will not invalidate such steps or acts.' " AmCare, Inc. at ¶ 18, quoting State 

ex rel. Jones v. Farrar, 146 Ohio St. 467 (1946), paragraph one of the syllabus. The 
No. 20AP-87 5 

determination of whether the legislature intended a statutory provision to be mandatory or 

directory requires review of the specific language employed viewed in context of "the entire 

act, its nature, its effect and the consequences which would result from construing it one 

way or another." Jones at 472; Internatl. Paper Co. v. Testa, Tax Commr., 150 Ohio St.3d 

348, 2016-Ohio-7454, ¶ 19. 

{¶ 12} As a general rule, " 'a statute which provides a time for the performance of an 

official duty will be construed as directory so far as time for performance is concerned, 

especially where the statute fixes the time simply for convenience or orderly procedure.' " 

State ex rel. Martin v. Mannen, 113 Ohio St.3d 373, 2007-Ohio-2078, ¶ 6, quoting Jones at 

472; In re Davis, 84 Ohio St.3d 520, 522 (1999). However, the Supreme Court of Ohio has 

recognized an exception to this general rule where " 'the nature of the act to be performed 

or the phraseology of the statute or of other statutes relating to the same subject-matter is 

such that the designation of time must be considered a limitation upon the power of the 

officer.' " AmCare, Inc. at ¶ 19, 21-22, quoting State ex rel. Smith v. Barnell, 109 Ohio St. 

246, 255 (1924). Statutory time for performance provisions that "manifestly strike 'to the 

core of procedural efficiency' and are 'essential to the proceeding' " also provide an 

exception to the general rule and are mandatory. State ex rel. Ragozine v. Shaker, 96 Ohio 

St.3d 201, 2002-Ohio-3992, ¶ 14, quoting Nibert v. Ohio Dept. of Rehab. & Corr., 84 Ohio 

St.3d 100, 103 (1998), and In re Removal of Osuna, 116 Ohio App.3d 339, 341 (12th 

Dist.1996). 

{¶ 13} The parties in this case debate whether the notice requirement in R.C. 

5164.57(A)(1) is a mandatory provision, in other words a gatekeeping function to ODM's 

authority to recover Medicaid overpayments under R.C. 5164.57, or a directory provision 

essentially allowing ODM to issue an adjudication order to recover Medicaid overpayments 

despite failing to comply with the notice requirement within the statutorily specified 

timeframe. R.C. 5164.57, entitled "Recovery of medicaid overpayments," states in its 

entirety: 

(A) 

(1) Except as provided in division (A)(2) of this section, the 

department of medicaid may recover a medicaid payment or 

portion of a payment made to a medicaid provider to which 

the provider is not entitled if the department notifies the 

provider of the overpayment during the five-year period 
No. 20AP-87 6 

immediately following the end of the state fiscal year in which 

the overpayment was made. 

(2) In the case of a hospital medicaid provider, if the 

department determines as a result of a medicare or medicaid 

cost report settlement that the provider received an amount 

under the medicaid program to which the provider is not 

entitled, the department may recover the overpayment if the 

department notifies the provider of the overpayment during 

the later of the following: 

(a) The five-year period immediately following the end of the 

state fiscal year in which the overpayment was made; 

(b) The one-year period immediately following the date the 

department receives from the United States centers for 

medicare and medicaid services a completed, audited, 

medicare cost report for the provider that applies to the state 

fiscal year in which the overpayment was made. 

(B) Among the overpayments that may be recovered under this 

section are the following: 

(1) Payment for a medicaid service, or a day of service, not 

rendered; 

(2) Payment for a day of service at a full per diem rate that 

should have been paid at a percentage of the full per diem rate; 

(3) Payment for a medicaid service, or day of service, that was 

paid by, or partially paid by, a third party, as defined in section 

5160.35 of the Revised Code, and the third party's payment or 

partial payment was not offset against the amount paid by the 

medicaid program to reduce or eliminate the amount that was 

paid by the medicaid program; 

(4) Payment when a medicaid recipient's responsibility for 

payment was understated and resulted in an overpayment to 

the provider. 

(C) The department may recover an overpayment under this 

section prior to or after any of the following: 

(1) Adjudication of a final fiscal audit that section 5164.38 of 

the Revised Code requires to be conducted in accordance with 

Chapter 119. of the Revised Code; 
No. 20AP-87 7 

(2) Adjudication of a finding under any other provision of state 

statutes governing the medicaid program or the rules adopted 

under those statutes; 

(3) Expiration of the time to issue a final fiscal audit that 

section 5164.38 of the Revised Code requires to be conducted 

in accordance with Chapter 119. of the Revised Code; 

(4) Expiration of the time to issue a finding under any other 

provision of state statutes governing the medicaid program or 

the rules adopted under those statutes. 

(D) 

(1) Subject to division (D)(2) of this section, the recovery of an 

overpayment under this section does not preclude the 

department from subsequently doing the following: 

(a) Issuing a final fiscal audit in accordance with Chapter 119. 

of the Revised Code, as required under section 5164.38 of the 

Revised Code; 

(b) Issuing a finding under any other provision of state statutes 

governing the medicaid program or the rules adopted under 

those statutes. 

(2) A final fiscal audit or finding issued subsequent to the 

recovery of an overpayment under this section shall be reduced 

by the amount of the prior recovery, as appropriate. 

(E) Nothing in this section limits the department's authority to 

recover overpayments pursuant to any other provision of the 

Revised Code. 

(Emphasis added.) 

{¶ 14} Clovernook asserts that the notice requirement in R.C. 5164.57(A)(1) is 

mandatory because it expressly conditions ODM's authority to recover a Medicaid 

overpayment on ODM giving notice to the provider within five years of the end of the state 

fiscal year in which the overpayment was made. Clovernook emphasizes that ODM's failure 

to comply with this notice requirement presents an obstacle to its ability to defend itself: 

the alleged overpayments from the 2006 and 2013 fiscal years occurred over the five-year 

timeframe in R.C. 5164.57(A)(1) and they "did not (and could not have been expected to) 
No. 20AP-87 8 

remain in possession of documents or records necessary to contest the findings in the Final 

Debt Summary Report" in 2019. (Clovernook's Brief at 12.) 

{¶ 15} ODM counters that the court of common pleas was correct in finding that 

R.C. 5164.57(A)(1) was directory and not mandatory since, in line with the reasoning and 

legal principles outlined in AmCare, Inc., the statute here does not use the word "shall" and 

also because reading the notice requirement as mandatory is "at odds with R.C. 

5164.57(C)." (ODM's Brief at 8.) Overall, ODM contends that R.C. 5164.57(A)(1) merely 

states a "time for the performance of an official duty" and not a limit on ODM's authority 

to act. (ODM's Brief at 1.)2 

{¶ 16} We agree with Clovernook's assessment of R.C. 5164.57(A)(1). First, the 

AmCare, Inc. case supports Clovernook's—rather than the court of common pleas and 

ODM's—position. AmCare, Inc. considered the issue of "whether R.C. 5111.27(B)3 placed a 

mandatory duty upon [the Ohio Department of Job and Family Services] to issue audit 

reports within three years after the first six-month cost reports were filed, thereby voiding 

any determination associated with audit reports not issued within three years of the first 

six-month cost reports." Id. at ¶ 12. The statute at issue, R.C. 5111.27(B), stated: "The 

department shall issue the audit report no later than three years after the cost report is 

filed, or upon the completion of a desk or field audit on the report or a report for a 

subsequent cost reporting period, whichever is earlier." (Emphasis sic.) Id. at ¶ 13. This 

court determined that "notwithstanding the use of the word 'shall' regarding the issuance 

of an audit report, R.C. 5111.27(B) does not express an intent that appellee is precluded 

from recovering overpayments if an audit report is not issued within three years of a cost 

report." Id. at ¶ 21. We therefore declined to apply the exception for " 'designation of time 

[that] must be considered a limitation upon the power of the officer' " and instead applied 

the general rule that statutory provisions expressing " 'time for the performance of * * * 

official duti[es]' " are directory. (Emphasis sic.) Id. at ¶ 19, quoting Smith at 255; id. at ¶ 18, 

quoting Jones at paragraph three of the syllabus. As a result, we concluded "it is clear that 

the three-year time provision in R.C. 5111.27(B), relating to the issuance of audit reports, is 

 

2 We note ODM does not argue, pursuant to R.C. 5167.57(E), that the notice requirement in R.C. 5164.57(A)(1) 

does not limit its authority to recover overpayments pursuant to another provision of the Revised Code. 

3 This section was renumbered as R.C. 5165.108 by 2013 H.B. No. 59, effective September 29, 2013. 
No. 20AP-87 9 

a directory provision, and not a statutory limitation on appellee's ability to recover 

overpayments." Id. at ¶ 21. 

{¶ 17} While AmCare, Inc. discussed the general rule that "the word 'shall' shall be 

construed as mandatory unless there appears a clear and unequivocal legislative intent that 

[it] receive a construction other than [its] ordinary usage," the case did not involve the issue 

of, or otherwise determine, that the lack of the word "shall" conclusively shows a legislative 

intent to state a directory provision. (Internal quotations and citations omitted.) Id. at ¶ 16. 

To the contrary, a review of relevant case law shows the legislature may express its intent 

for a statutory provision to be mandatory without using the word shall. See, e.g., State ex 

rel. Webb v. Bd. of Edn., 10 Ohio St.3d 27, 29-30 (1984) (discussing that the provision in 

R.C. 3319.11 that states: "If the board of education does not give such teacher written notice 

of its action on the superintendent's recommendation of a limited contract for not to exceed 

two years before the thirtieth day of April, such teacher is deemed reemployed under a 

continuing contract at the same salary plus any increment provided by the salary schedule" 

means "that the failure by a school board to timely serve the teacher with notice of nonrenewal deprives the board of its authority to bar renewal"); Internatl. Paper at ¶ 11 (finding 

the time deadline stated in R.C. 5751.53(D)—"Unless extended by mutual consent, the tax 

commissioner may, until June 30, 2010, audit the accuracy of the amortizable amount 

available to each taxpayer that will claim the credit, and adjust the amortizable amount or, 

if appropriate, issue any assessment or final determination, as applicable, necessary to 

correct any errors found upon audit"—to be mandatory). See also AmCare, Inc. at ¶ 18-19 

(stating general rules and exceptions in determining whether a statute is mandatory or 

directory), quoting Jones at paragraphs one, two, and three of the syllabus, and Smith at 

255. 

{¶ 18} Moreover, the statutory requirement in AmCare, Inc. was untethered to 

language limiting ODM's ability to recover overpayments. In this case, the operative 

language in R.C. 5164.57(A)(1) states that ODM may recover a Medicaid payment to which 

the provider is not entitled "if" the department notifies the provider of the overpayment 

during the five-year period immediately following the end of the state fiscal year in which 

the overpayment was made. The provision specifically addresses ODM's ability to recover 

Medicaid overpayments and in the same sentence limits that ability based on ODM's timely 

provision of notice to the provider. Unlike in AmCare, Inc., the plain language of R.C. 
No. 20AP-87 10 

5164.57(A)(1) demonstrates legislative intent to make the five-year period notice 

requirement in R.C. 5164.57(A)(1) a condition precedent to ODM's statutory authority to 

act rather than a mechanism to " 'fix[] the time simply for convenience or orderly 

procedure.' " AmCare, Inc. at ¶ 18, quoting Jones at paragraph three of the syllabus. See 

State ex rel. Figueroa v. Ohio Dept. of Commerce, 10th Dist. No. 18AP-698, 2019-Ohio5200 (determining the use of the word "if" in a statutory time provision expressed a 

condition precedent); Moody v. Ohio Rehab. Servs. Comm., 10th Dist. No. 02AP-596, 

2002-Ohio-6965, ¶ 2, 10 (finding intent to create condition precedent in an agreement that 

used an "if" clause as a precursor to the commission's duty to reimburse a party); Webb. 

{¶ 19} While both the court of common pleas and ODM asserted, without further 

explanation, that reading R.C. 5164.57(A)(1) as mandatory is "at odds" with R.C. 

5164.57(C), we do not sense the same friction between the provisions. R.C. 5164.57(C) 

states only that ODM may recover an overpayment "under this section prior to or after" 

adjudication of, or expiration of the time to issue, a final fiscal audit that R.C. 5164.38 

requires to be conducted in accordance with R.C. Chapter 119; or, adjudication of, or 

expiration of the time to issue, a finding "under any other provision of state statutes 

governing the medicaid program or the rules adopted under those statutes." (Emphasis 

added.) R.C. 5164.57(C) does not address notice to the provider and is not listed as an 

exception in R.C. 5164.57(A)(1). R.C. 5164.57(A)(1) does expressly state an exception to the 

"five-year period" notice requirement—R.C. 5164.57(A)(2)—a provision which provides a 

different timeline for ODM to provide notice when the provider is a hospital. We decline to 

add words to R.C. 5164.57(A)(1) to create another exception to R.C. 5164.57(A)(1)'s notice 

requirement. 

{¶ 20} Moreover, construing R.C. 5164.57(A)(1) as mandatory "inflicts the adverse 

consequence on the state itself and on no other party" and protects a provider's ability to 

defend itself. Internatl. Paper at ¶ 19-21 (finding, as a persuasive consideration in favor of 

a mandatory statutory time provision, that the outcome of finding the statute to be 

mandatory would only penalize the state for failing to comply with a stated timeline rather 

than deprive both parties of the benefit of the statute). 

{¶ 21} Considering all the above, we find R.C. 5164.57(A)(1) conditions ODM's 

authority to recover, under R.C. 5164.57, a Medicaid payment to which the provider is not 

entitled on ODM's provision of notice within the five-year period immediately following the 
No. 20AP-87 11 

end of the state fiscal year in which the alleged overpayment was made. Because R.C. 

5164.57(A)(1) places a "limitation upon [ODM's] power," it is a mandatory provision and 

the court of common pleas erred in finding the notice requirement in R.C. 5164.57(A)(1) to 

be "expressly directory." Smith at 255. (Decision at 8.) 

{¶ 22} We acknowledge that ODM argued, in the alternative, that Clovernook 

"waived" its right to appeal this issue "by not requesting an administrative hearing." 

(ODM's Brief at vii.) ODM raised this issue to the court of common pleas. While the court 

of common pleas cited case law with the general rules related to waiver in its decision, it did 

not analyze this issue or hold Clovernook waived any issues, and instead proceeded to 

address the substance of Clovernook's R.C. 5164.57(A)(1) argument. (Decision at 4, quoting 

Crosby-Edwards v. Ohio Bd. of Embalmers & Funeral Dirs., 175 Ohio App.3d 213, 2008-

Ohio-762, ¶ 38 (10th Dist.), and Jain v. Ohio State Med. Bd., 10th Dist. No. 09AP-1180, 

2010-Ohio-2855, ¶ 10.) Because our conclusion that R.C. 5164.57(A)(1) conditions ODM's 

authority to recover Medicaid overpayments on ODM's provision of notice to the provider 

within the requisite five-year period may inform the issue of waiver, and the court of 

common pleas has not yet addressed this issue, we remand the matter for the court of 

common pleas to address it, and other issues it deems appropriate, in the first instance now 

that the governing statute is appropriately elucidated. 

{¶ 23} Accordingly, Clovernook's assignment of error is sustained. 

V. Conclusion 

{¶ 24} Having sustained Clovernook's sole assignment of error, we reverse the 

judgment of the Franklin County Court of Common Pleas and remand this case to that court 

for further proceedings in accordance with law and consistent with this decision. 

Judgment reversed and cause remanded. 

NELSON, J, concurs. 

SADLER, J., dissents. 

NELSON, J., concurring. 

{¶ 25} I join in the majority opinion in full. The language adopted by the General 

Assembly in R.C. 5164.57 establishing and cabining the department's authority to recover 

Medicaid payments as made to a provider seems quite straightforward. To the extent 

relevant here, it recites requirements of law, not mere suggestions. And on administrative 

appeal in such cases, a common pleas court is charged with determining whether the record 
No. 20AP-87 12 

(as proffered by the department alone and uncontested where the provider elects not to 

participate at the administrative level) reflects sufficient evidence showing that the agency 

acted in accordance with law. See R.C. 119.12(M). Whether the department here on an 

appropriately considered record had authority to act as it did is in the first instance a 

determination for the common pleas court to make in light of a correct understanding of 

the controlling statute. 

 

SADLER, J., dissenting. 

{¶ 26} Because Clovernook failed to request a hearing before ODM, Clovernook 

forfeited its right to raise the failure of R.C. 5164.57(A)(1) notice in the court of common 

pleas. Accordingly, I would affirm the adjudicatory order without reaching the issue of 

statutory interpretation. Because the majority does not, I respectfully dissent. 

{¶ 27} "While the failure to request an administrative hearing does not deprive a 

party of the right to appeal, it is not without consequence." Edmands v. State Med. Bd. of 

Ohio, 10th Dist. No. 14AP-778, 2015-Ohio-2658, ¶ 18. An administrative hearing typically 

"provides a forum for a party to raise legal and factual arguments propounding why an 

agency should not take the proposed action against the party." Id. By not requesting a 

hearing, the party forfeits its opportunity to raise arguments that it could have made to the 

agency; such forfeiture then " 'usually constitutes waiver of that argument' on appeal." Id. 

at ¶ 18, quoting In re Application of Columbus S. Power Co., 129 Ohio St.3d 271, 2011-Ohio2638, ¶ 19. In addition to invoking general concepts of forfeiture and waiver, the failure to 

request an administrative hearing may implicate the doctrine of exhaustion, which 

"requires a person to exhaust administrative remedies before seeking redress from the 

judicial system." Jain v. Ohio State Med. Bd., 10th Dist. No. 09AP-1180, 2010-Ohio-2855, 

¶ 10. "The purpose of the doctrine is to allow an administrative agency to apply its expertise 

in developing a factual record without premature judicial intervention in administrative 

processes." Id. 

{¶ 28} In this R.C. 119.12 appeal, Clovernook argued for the first time in the court of 

common pleas that R.C. 5164.57(A)(1) precluded ODM from commencing an action to 

recover certain Medicaid overpayments because ODM did not notify Clovernook of these 

overpayments within five years immediately following the end of the fiscal year in which 

the overpayment allegedly occurred. When Clovernook raised the issue of statutory 
No. 20AP-87 13 

construction for the first time in the court of common pleas, one of the arguments made by 

ODM was that a resolution of that issue depended on consideration of facts outside of the 

administrative record. My review reveals that the certified administrative record is silent 

as to whether ODM issued any notice of overpayments to Clovernook other than the 

March 12, 2019 Notice of Intent to Adjudicate. 

{¶ 29} Had Clovernook raised the absence of statutory notice as a defense to the 

alleged overpayments in a hearing before ODM, ODM would have had the opportunity to 

submit evidence to support a finding that statutory notice had been given, if such evidence 

existed, while also preserving the argument that the giving of notice is discretionary. 

Furthermore, had ODM had the opportunity to submit evidence to support a finding that 

statutory notice had been given, legal and factual issues regarding the sufficiency of any 

notice given could have been resolved at the administrative hearing and a record of those 

proceedings made. 

{¶ 30} In the context of an R.C. 119.12 appeal, this court has consistently stated that 

"[a]llowing a claimant to raise an issue for the first time in an appeal to the court of common 

pleas would frustrate the statutory system for having issues raised and decided through the 

administrative process." Edmands at ¶ 18; Jain at ¶ 10. In this instance, rather than facing 

the consequences of its failure to exhaust an available administrative remedy, Clovernook 

is now being rewarded with a favorable ruling on an issue of statutory construction under 

circumstances where it failed to seek an administrative review to develop the factual record 

necessary for the common pleas court to determine the merits of its R.C. 119.12 appeal. I 

find this result particularly troubling given the fact that the issue of statutory construction 

raised by Clovernook is one of first impression.4

{¶ 31} Furthermore, in taking up the issue of statutory construction raised by 

Clovernook for the first time in this R.C. 119.12 appeal, the majority assumes that ODM did 

not provide Clovernook with notice of any of the overpayments within five years 

 

4 Effective March 30, 2006, the General Assembly substituted "if the department notifies the provider of the 

overpayment" in R.C. 5164.57(A) for "[t]he recovery may occur at any time." My research reveals that the issue 

of statutory interpretation raised in this case was previously raised by a group of providers in a declaratory 

judgment action. See OMB MSTR LSCO, LLC v. Ohio Dept. of Medicaid, 10th Dist. No. 18AP-223, 2018-Ohio4843. The trial court dismissed the action due to the providers' failure to seek administrative review or file an 

R.C. 119.12 appeal. Without reaching the issue of statutory interpretation, this court affirmed the trial court 

on concluding the providers failed to exhaust administrative remedies and failed to meet their burden to 

demonstrate that prosecuting an administrative action would be more expensive than the instant action. Id.

at ¶ 10, 19. 
No. 20AP-87 14 

immediately following the end of the fiscal year in which the overpayment allegedly 

occurred. ODM, however, has never admitted that notice was not provided to Clovernook 

for the overpayments at issue. Rather, as the majority has acknowledged, ODM has argued, 

among other things, that the evidence necessary to make that factual determination is not 

in the administrative record. Had Clovernook challenged ODM's right to collect the 

overpayments at an administrative hearing, it is possible that ODM would have admitted it 

did not provide timely notice to Clovernook of its intention to collect some or all of the 

overpayments. Had that been the case, the administrative record would support a 

judgment in Clovernook's favor given interpretation of R.C. 5164.57(A)(1) adopted by the 

majority. Absent an admission by ODM or a finding by an administrative hearing officer 

that statutory notice was lacking, the adjudication order must be affirmed whether the 

giving of notice under the statute is discretionary or mandatory. 

{¶ 32} Moreover, R.C. 119.12(K) provides that "the court may grant a request for the 

admission of additional evidence when satisfied that the additional evidence is newly 

discovered and could not with reasonable diligence have been ascertained prior to the 

hearing before the agency." Because evidence to support a finding that ODM provided 

notice to Clovernook would likely have been ascertainable by ODM had Clovernook 

requested a hearing, Clovernook's election to forego an administrative hearing effectively 

precluded ODM from supplementing the administrative record with any such evidence in 

this R.C. 119.12 appeal. In other words, Clovernook's decision to sidestep an administrative 

hearing left ODM in the dark as to the basis of Clovernook's opposition to the proposed 

adjudication order until it was too late for ODM to make a record. In my view, a remand to 

the court of common pleas will serve no purpose. 

{¶ 33} For the foregoing reasons, I would hold that Clovernook forfeited the issue of 

statutory construction raised for the first time in Clovernook's R.C. 119.12 appeal to the 

court of common pleas when it failed to request administrative review of ODM's proposed 

adjudication order. Accordingly, I would overrule Clovernook's sole assignment of error 

and affirm the judgment of the court of common pleas, albeit for different reasons than 

those expressed therein. Because the majority does otherwise, I respectfully dissent. 

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