PROVIDENCE – A missed appeal from a lawyer for the R.I. Executive Office of Health and Human Services for a case concerning the interpretation of nursing facility Medicaid reimbursement rates has led counsel for the EOHHS to file a motion to extend its filing deadline due to lawyer “malfeasance,” according to court documents filed Friday.
The result of the decision could cost the state approximately $8 million per year in retroactive payments.
The appeal specifically concerns whether an amendment, known as the 98% Provision, enacted by the General Assembly in 2015 that reduced reimbursement rates by 2 percent was ongoing, or a one-time action limited to a specific fiscal year.
According to the amendment, “Notwithstanding any law to the contrary, for the 12-month period beginning July 1, 2015, Medicaid payment rates for nursing facilities established pursuant to this section shall not exceed 98 percent of the rates in effect on April 1, 2015.”
In a letter dated Aug. 26, 2015, EOHHS imposed the 98% Provision’s 2 percent rate deduction, with an effective date of Aug. 1, 2015, but it did not discontinue or adjust the rate on June 30, 2016, the end of the one-year period identified in the 98% Provision.
The rate reduction remained in effect until Sept. 26, 2016, when EOHHS issued a new rate. However, the new rate was adjusted using the rate in effect on Aug. 1, 2015, which included the 2 percent reduction, as the base rate. Subsequently, plaintiffs appealed the rate notice, arguing the base rate should have been the April 1, 2015, rate, prior to implementation of the 98% Provision, but the appeal was denied by EOHHS.
In its April 9, 2018, decision, however, the R.I. Superior Court ruled in favor of the plaintiffs.
The continued rate reduction would therefore be unlawful, and could potentially cost the state $8 million per year since fiscal 2017 in additional reimbursements.
Counsel for the EOHHS filed that lawyer Gregory Hazian, who was overseeing the nursing-home-related case, had been removed Jan. 3, 2018, from the R.I. Supreme Court Master Rolls for failure to comply with mandatory continuing legal education but did not inform his employers, and subsequently did not inform EOHHS of his removal or update the department about the status of the appeal.
The department’s counsel said it did not know of the appeal’s due date until the day it was due, May 23, and therefore sought a weeklong extension for filing due to negligence from Hazian. The counsel also said it believes it will “prevail on the merits of its appeal.”
“I am deeply disappointed and frustrated by this development,” said Gov. Gina M. Raimondo in a statement. “It is unacceptable. I will make sure that OHHS takes every step possible to hold the people who put us in this position accountable.”
The statement did not elaborate on what holding those responsible meant. The governor’s office deferred questions on reactions and responses to the appeal mishap to EOHHS.
In a press conference Monday afternoon, Health and Human Services Secretary Eric J. Beane said Hazian had resigned but the EOHHS has already set a hearing to terminate him, scheduled for Monday afternoon before his resignation.
Hazian’s supervisor, Deborah George, has been placed on administrative leave.
Beane called the missed appeal a major lapse that should never happen but insisted he did not know about the deadline for appeal, or even that the case was still pending.
When Beane was asked who’s fault the problem was, he said he relies on his team to keep him updated and he was not updated in this situation. He also said EOHHS will be reviewing its legal staff and designating two attorneys for each case going forward.
Beane would not speak at the conference on the issue of those calling for his resignation, calling them “political calls.”
Raimondo’s opponents in the upcoming gubernatorial election took shots at the incumbent, alleging incompetence and mismanagement.
“Yesterday we learned that the R.I. Department of Health and Human Services has failed to appeal a court ruling,” said House Minority Leader Patricia L. Morgan in a statement. “This ‘mistake’ has the potential of costing state taxpayers $24 million. Clearly, this is an unjustified error. The attorney and his supervisors, extending to Director Eric Beane, must pay a real penalty that goes beyond staying home on paid leave. They should all be fired.”
Cranston Mayor Allan Fung also called for the firing of Hazian and Beane in a statement, saying, “Leadership needs to be held accountable. A lawyer that deletes email and doesn’t even bother to file an appeal should be fired. A cabinet secretary who isn’t paying attention to a case worth tens of millions of dollars needs to be fired. And this governor and her reckless incompetence must go.”
The lawsuit may affect the fiscal 2019 budget, which is currently being formed by the R.I. House, according to a spokesman for House Speaker Nicholas A. Mattiello.
This story has been updated to include comments from Health and Human Services Secretary Eric J. Beane, who spoke during a press conference Monday afternoon.
Chris Bergenheim is the PBN web editor.
