Court Opinion

ID: 5137487
Source: CourtListenerOpinion
Date Created: 2021-12-21 14:39:55.06912+00
Date Added: 2024-06-11T08:24:02.674511
License: Public Domain

2013 UT App 156
_________________________________________________________

               THE UTAH COURT OF APPEALS

             PENTSKIFF INTERPRETING SERVICES,
                        Petitioner,
                             v.
       DEPARTMENT OF HEALTH, DIVISION OF MEDICAID
     AND HEALTH FINANCING OFFICE OF FORMAL HEARINGS,
                       Respondent.

                     Memorandum Decision
                       No. 20120064‐CA
                      Filed June 20, 2013

                Original Proceeding in this Court

             Lonnie Eliason, Attorney for Petitioner
        John E. Swallow and Brent A. Burnett, Attorneys
                        for Respondent

 JUDGE MICHELE M. CHRISTIANSEN authored this Memorandum
       Decision, in which JUDGES GREGORY K. ORME and
               J. FREDERIC VOROS JR. concurred.

CHRISTIANSEN, Judge:

¶1     Pentskiff Interpreting Services (Pentskiff) seeks judicial
review of a decision by the Utah Department of Health, Division of
Medicaid and Health Financing Office of Formal Hearings (the
Division) denying Pentskiff’s request for a hearing due to a lack of
jurisdiction. We decline to disturb the Division’s decision.

¶2     Pentskiff subcontracted with Healthy U Managed Health
Plan (Healthy U) to provide interpretation services for Healthy U’s
non‐English speaking Medicaid clients. Healthy U is a Utah
Medicaid managed care organization, which is defined as “a health
maintenance organization or prepaid mental health plan that
contracts with [the Division] to provide medical or mental health
        Pentskiff Interpreting Servs. v. Department of Health

services to medical assistance recipients.” See Utah Admin. Code
R410‐14‐2(2)(e). Pentskiff alleged that Healthy U has not paid, or
has not paid in full, eighty‐three claims for interpretation services
provided by Pentskiff. To resolve this dispute, Pentskiff filed a
hearing request with the Division on December 21, 2011. On
January 5, 2012, the Division, on the recommendation of an
administrative law judge, denied Pentskiff’s hearing request for
lack of jurisdiction. Pentskiff petitioned for judicial review without
seeking reconsideration from the Division as permitted under Utah
Code section 63G‐4‐302(1)(b).

¶3      Pentskiff challenges the Division’s decision, claiming it
misapplied the relevant law and the Division’s own administrative
rules in determining that it lacked jurisdiction to hear Pentskiff’s
claims. “The issue of whether an agency has jurisdiction is a
question of law, which we review for correctness.” Darvish v. Labor
Comm’n Appeals Bd., 2012 UT App 68, ¶ 16, 273 P.3d 953 (citation
and internal quotation marks omitted). Pentskiff also argues that
the Division inconsistently interpreted and applied its amended
rules in a way that substantially prejudiced Pentskiff. “Claims that
an agency decision is contrary to the agency’s prior practice are . . .
reviewed to determine if an inconsistency is justified by a fair and
rational basis.” Benson v. Peace Officer Standards & Training Council,
2011 UT App 220, ¶ 11, 261 P.3d 643 (omission in original) (citation
and internal quotation marks omitted).

¶4     Federal law and regulations require that a state fair‐hearing
process be available for Medicaid enrollees whose claims for
assistance are denied or not promptly acted upon. See 42 U.S.C.
§ 1396a(a) (2006) (“A State plan for medical assistance must . . .
provide for granting an opportunity for a fair hearing before the
State agency to any individual whose claim for medical assistance
under the plan is denied or is not acted upon with reasonable
promptness . . . .”); see also 42 C.F.R. § 438.400(a)(1) (2012)
(requiring “that a State plan provide an opportunity for a fair
hearing to any person whose claim for assistance is denied or not
acted upon promptly”). Additionally, federal regulation requires

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        Pentskiff Interpreting Servs. v. Department of Health

“Medicaid managed care organizations to establish internal
grievance procedures under which Medicaid enrollees, or
providers acting on their behalf, may challenge the denial of
coverage of, or payment for, medical assistance.” 42 C.F.R.
§ 438.400(a)(3). In order for providers and their subcontractors to
access the fair hearing process and grievance procedures, they
must be “acting on behalf of the enrollee and with the enrollee’s
written consent.” Id. § 438.402(b)(1)(ii).

¶5     The Division is responsible for “implementing, organizing,
and maintaining [Utah’s] Medicaid program.” Utah Code Ann.
§ 26‐18‐2.1 (LexisNexis 2007). Consistent with the federal laws and
regulations cited above, the Utah Administrative Code provides a
fair‐hearing process to Medicaid enrollees and their providers. See
Utah Admin. Code R410‐14‐3, ‐4 (LexisNexis 2012).1 In order for a
managed care provider to access the fair‐hearing process, it must
be “acting solely on behalf of the client [or Medicaid enrollee].” Id.
R410‐14‐3(2)(i).2 Otherwise, the provider “has no right to a hearing
with [the Division].” Id. Also, the Division “may not grant a

1. Where it differs from the version currently in effect, we cite the
version of the administrative code in effect at the time Pentskiff
filed its hearing request with the Division on December 21, 2011.
This version went into effect on April 25, 2011. See Utah Admin.
Code R410‐14‐2 to ‐4 (LexisNexis 2012). On April 27, 2012, and
again on September 27, 2012, these rules were amended in part. See
id. R410‐14‐2 to ‐4 (2013). Even though the subsequent amendments
do not apply to this case, the variation in the rules are noted when
relevant.

2. Though in effect at the time of the Division’s decision on January
5, 2012, this provision was deleted from the rule with subsequent
amendments. See Utah Admin. Code R410‐14‐3(2)(i) (LexisNexis
2013). The current rule still requires providers who wish to access
the fair‐hearing process to “act[] on [an] enrollee’s behalf” and
allows access only for a “challenge [to] the denial of payment for
medical assistance.” See id. R410‐14‐3(2)(d).

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        Pentskiff Interpreting Servs. v. Department of Health

hearing to a managed care provider to dispute the terms of a
contract or the payment of a claim.” Id. R410‐14‐4(5).3

¶6      The Division construed these federal and state laws and
regulations to mean that “providers [like Pentskiff] under contract
with managed care organizations who are not acting solely on
behalf of the client and [who] do not have written consent from the
client to act on their behalf,” are not entitled to a hearing before the
Division. The Division also noted, “This dispute is about payment,
or non‐payment, of Pentskiff’s claims by Healthy U. It falls directly
within the language of the rule, and [the Division] is therefore
prohibited from granting [Pentskiff] a hearing.” Accordingly, the
Division ruled that Pentskiff “is not entitled to a hearing from [the
Division] to dispute the non‐payment or under payment of its
claims against Healthy U.”

¶7     We determine the Division’s interpretation of the relevant
law and rules with respect to its jurisdiction is correct. See Darvish,
2012 UT App 68, ¶ 16. In requesting a hearing before the Division,
Pentskiff was not acting solely on behalf of a Medicaid enrollee and
with that enrollee’s written consent. Rather, Pentskiff was seeking
payment for interpretation services it provided to Healthy U. The
fair‐hearing process is open to enrollees who are “adversely
affected by any action or inaction” of the Division, see Utah Admin.
Code R410‐14‐2(2)(b) (LexisNexis 2012), resulting in a “denial of
payment for medical assistance,” see id. R410‐14‐3(2)(d). Here, there
is no claim by Pentskiff that the Division denied payment for an
enrollee’s medical assistance. Pentskiff’s intent in requesting a
hearing before the Division was to resolve its own dispute with

3. The current version of the rule reads, “[The Division] may not
grant a hearing to a managed care provider to dispute the terms of
a contract. This provision also applies to terms in a contract for
rates of reimbursement.” See Utah Admin. Code R410‐14‐4(5)
(LexisNexis 2013).

20120064‐CA                        4                2013 UT App 156
        Pentskiff Interpreting Servs. v. Department of Health

Healthy U. Because Pentskiff was not acting exclusively on behalf
of an enrollee, it is not entitled to a hearing before the Division.4

¶8     Furthermore, Pentskiff’s claims against Healthy U arise from
a contractual dispute, which is subject matter outside the Division’s
jurisdiction. See id. R410‐14‐4(5) (stating that the Division “may not
grant a hearing to a managed care provider to dispute the terms of
a contract or the payment of a claim”). Even though Pentskiff
claims that Healthy U’s eighty‐three denials of payment do not
stem from problems with its contract, it nevertheless argues that
the Division “needs to look into the essence of every case with the
payment denial, and apply the contract between Healthy U and
Pentskiff.” Pentskiff alleges that Healthy U denied payment as a
result of “hidden policies of Healthy U” and that therefore “the
requirement to follow some policies which are not clearly specified
in the contract is a legal nonsense.” Thus, despite Pentskiff’s
insistence that its claims do not stem from problems with its
contract with Healthy U, the facts as alleged indicate that a
contractual dispute is exactly the problem. Pentskiff does not claim
that the Division or Healthy U committed any wrongdoing in
connection with providing services to a Medicaid enrollee.

4. Pentskiff argues that the Division’s website and the
Utah Medicaid Provider Manual conflict with the
Division’s decision in this case. Pentskiff contends that these
resources grant providers the right to a hearing before the
Division. See Managed Care Plans, Utah Department of Health,
http://www.health.utah.gov/medicaid/provhtml/managed_care.
htm (last visited June 14, 2013); Division of Medicaid and Health
Financing, Utah Medicaid Provider Manual (2012). To the extent
they are contrary to applicable law, these resources are of no force
or effect. See Utah Code Ann. § 26‐18‐3(2) (LexisNexis Supp. 2012)
(“The department shall implement the Medicaid program through
administrative rules in conformity with this chapter, Title 63G,
Chapter 3, Utah Administrative Rulemaking Act, the requirements
of Title XIX, and applicable federal regulations.”).

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        Pentskiff Interpreting Servs. v. Department of Health

Therefore, because Pentskiff was acting solely on its own behalf in
order to resolve a contract issue with Healthy U, we conclude that
the Division correctly determined that it was precluded from
exercising jurisdiction over Pentskiff’s claim.5

¶9      The Division acknowledges that it previously allowed
managed care providers and their subcontractors, including
Pentskiff, to use the fair‐hearing process to litigate contract and
payment claims. However, the Division discontinued this practice
following a change to its rules on April 25, 2011. Pentskiff argues
that it is entitled to relief because the Division’s application of its
amended rules to this case has resulted in substantial prejudice to
Pentskiff. See Utah Code Ann. § 63G‐4‐403(4)(h)(iii) (LexisNexis
2011) (providing that an appellate court may grant relief to a party
that is substantially prejudiced by an agency action which is
“contrary to the agency’s prior practice, unless the agency justifies
the inconsistency by giving facts and reasons that demonstrate a

5. Utah Administrative Code rule 410‐14‐3 grants the right to a
hearing only to “aggrieved person[s].” See Utah Admin. Code
R410‐14‐3(1) (LexisNexis 2012). “Aggrieved person” is defined as
“any recipient or provider who is adversely affected by any action
or inaction of the [Division] . . . or any managed health care plan.”
See id. R410‐14‐2(2)(b) (emphasis added). A provider is an
organization that “has entered into a written contract with the
Medicaid program.” See id. R414‐1‐2(22). The Division argues that
Pentskiff is not a provider because it has entered into a written
contract only with Healthy U and not with the Medicaid program.
Because Pentskiff is not a provider, the Division argues, it is not an
“aggrieved person” and therefore not entitled to a hearing. To the
contrary, Pentskiff claims that it does have a direct contract both
with the State of Utah and with the Medicaid program in
particular, and is therefore a provider. Regardless of how we might
resolve Pentskiff’s status as a provider, the Division would still
lack jurisdiction to hear Pentskiff’s claims for the reasons explained
above.

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        Pentskiff Interpreting Servs. v. Department of Health

fair and rational basis for the inconsistency”). The burden of
proving a prima facie case of substantial prejudice by a
preponderance of the evidence is on the party seeking judicial
review. See Benson v. Peace Officer Standards & Training Council, 2011
UT App 220, ¶ 24, 261 P.3d 643.

¶10 Other than the denial of its hearing request, Pentskiff has not
identified precisely how it was substantially prejudiced by the
Division’s departure from its prior practice. Other forums are
available to Pentskiff in which it can fully litigate its dispute with
Healthy U. Indeed, the Division even advised Pentskiff to take “its
claims to the applicable small claims or district court.”
Nevertheless, even if Pentskiff were to demonstrate substantial
prejudice, we conclude that the change in the Division’s practice
was fair and rational. The Division changed its practice to conform
to a change in its administrative rules. The rule change reflects a
policy shift in how the Division is to administer Medicaid hearings
consistent with state and federal law. The Division notes that at the
heart of this policy shift is the fact that “federal law and regulations
did not envision the use of a state’s fair hearing process to
adjudicate contractual and payment claims between a provider and
its subcontractors.” Compliance with laws and regulations
governing Medicaid is a fair and rational basis for the Division to
depart from its prior practice. Pentskiff is therefore not entitled to
relief on the basis of the Division’s rule change.

¶11 In conclusion, we decline to disturb the Division’s decision
to dismiss Pentskiff’s claims on jurisdictional grounds. Also, even
if Pentskiff were substantially prejudiced by the Division’s
departure from its prior practice, we conclude that the departure
was justified by a fair and rational basis.

20120064‐CA                        7                2013 UT App 156