ORDER ON RULE 80C APPEAL
E. Walker Justice.
the court is Cedars Nursing Care Center d/b/a The Cedars'
("Cedars") petition for review of final agency
action by the Maine Department of Health and Human Services
("DHHS" or the "Department") pursuant to
the Maine Administrative Procedures Act (the
"APA"), 5 M.R.S. § 11001 et seq., and
Maine Rule of Civil Procedure 80C. Based on the following,
DHHS's decision denying Cedars' request for informal
review is reversed and remanded for further consideration.
a state agency responsible for implementing Maine's
Medicaid program, known as MaineCare. 10-144 C.M.R. ch. 101
§§ 1.01-1.02, 10 (2014). Pursuant to its duty, DHHS
reimburses nursing facilities for services provided to
MaineCare members based on a rate established by DHHS. 10-144
C.M.R. ch. 101 § 37 (2014). DHHS classifies nursing
facility providers into one of three Peer Groups for purposes
of MaineCare reimbursement. 10-144 C.M.R. ch. 101 § 86
(2014); (R. Vol. 1, 204-207.) Cedars operates a nursing
facility in Portland, Maine. (R. Vol. 1, 155.) Cedars is
classified as a Peer Group II facility. (Id. at
207.) Aroostook Health Center ("AHC") operates a
nursing facility in Mars Hill, Maine. (Id. at 8.)
Before 2015, AHC was also classified as a Peer Group II
facility. (Id. at 207.)
April 2013, AHC requested a change in its status from a free
standing nursing facility (Peer Group II) to a hospital-based
nursing facility (Peer Group III). (Id. at 1, 144);
10-144 C.M.R. ch. 101 § 86. On January 8, 2015, DHHS
issued a Final Informal Review Decision informing AHC that it
would be reclassified as a hospital-affiliated nursing
facility (Peer Group III) and reimbursed at a higher rate
(the "AHC Decision"). (R. Vol. 1, 137-39, 144.)
Cedars did not receive notice of the AHC Decision.
(Id. at 139.) Sometime thereafter, Cedars made a
Freedom of Access request to DHHS regarding the AHC Decision.
(Id. at 143.) DHHS provided Cedars with a copy of
the AHC Decision on May 8, 2015. (Id.)
12, 2015, Cedars submitted written request for informal
review and/or administrative hearing to DHHS regarding the
AHC Decision. (Id. at 143-44.) In its June 12, 2015
request, Cedars asserted that AHC did not meet the definition
of a "hospital-affiliated nursing facility" to be
included in Peer Group III and should remain classified as a
free standing nursing facility as part of Peer Group II.
(Id. at 144.) Cedars asserted that it intended to
put forth evidence showing how AHC's classification as a
Peer Group III facility violated DHHS's rules and would
"directly and adversely" impact Cedars'
MaineCare reimbursement. (Id.)
24, 2015, DHHS issued a letter to Cedars denying its request
for informal review. (Id. at 159-60.) In its letter,
DHHS concluded the following: (1) Cedars' request for
informal review was untimely under both § 140.1 and
§ 1.21-1 of the MaineCare Benefits Manual; (2) Cedars
was not entitled to an informal review under § 140.1 of
the MaineCare Benefits Manual because Cedars was not the
nursing facility to which the AHC Decision was issued; and
(3) Cedars was not a entitled to an informal review under
§ 1.21-1 of the MaineCare Benefits Manual because it was
not aggrieved by the AHC Decision. (Id.)
filed a Rule 80C petition appealing the AHC Decision on June
16, 2015. Following DHHS's denial of its request for
informal review, Cedars moved to amend its petition on July
14, 2015, to address both the AHC Decision and the June 24,
2015 denial. DHHS moved to dismiss Cedars' petition on
July 17, 2015. The court granted Cedars' motion to amend
its petition and denied DHHS motion to dismiss on August 24,
2015. On September 3, 2015, AHC moved to intervene in this
action, which the court granted.
administrative record was filed with the court on September
25, 2015. DHHS further supplemented the record on October 13,
2015. Cedars filed a motion to take additional evidence on
October 5, 2015, which DHHS and AHC both opposed. The court
denied Cedars motion to take additional evidence on February
29, 2016. In its order, the court ruled that the only issue
properly before the court was whether DHHS erred in denying
Cedars' June 12, 2015 request for informal review. The
court stated that the AHC Decision was not a final agency
action appealable by Cedars under the APA, because further
agency review was available to Cedars. See 5 M.R.S.
§§ 8002(4), 11001(1). Indeed, Cedars' June 12,
2015 request sought further agency review of the AHC
field its Rule 80C brief on April 6, 2016. AHC and DHHS filed
their responses on May 6, 2016. Cedars filed a reply on May
II. Standard of Review
acting in an appellate capacity pursuant to Rule 80C and the
APA, the court reviews the agency's decision for abuse of
discretion, error of law, or findings not supported by the
evidence. Guar. Tr. Life Ins. Co. v. Superintendent of
Ins., 2013 ME 102, ¶ 16, 82 A.3d 121. The standard
for review of final agency action is provided by § 11007
of the APA. M.R. Civ. P. 80C(c). The court may reverse or
modify any agency determination if the agency's findings,
inferences, conclusions, or decisions: (1) violate
constitutional or statutory provisions, (2) exceed the
agency's statutory authority, (3) are made upon unlawful
procedure, (4) are affected by bias or error of law, (5) are
unsupported by substantial evidence in the record, or (6) are
arbitrary, capricious, or an abuse of discretion. 5 M.R.S.
§ 11007(4)(C). The court may also remand the case for
further proceedings, findings of fact or conclusions of law,
or direct the agency to hold such proceedings or take such
action as the court deems necessary. Id. §
agency's interpretations of its own rules are given
"considerable deference." Friends of the
Boundary Mts. v. Land Use Regulation Comm'n, 2012 ME
53, ¶ 6, 40 A.3d 947. The court will not set aside an
agency's interpretation of its own rules "unless the
rule plainly compels a contrary result, or the rule
interpretation is contrary to the governing statute."
agency's findings of fact must be supported by
substantial evidence in the record and cannot be based on
unsupported speculation. Hannum v. Bd. of Envtt.
Prot, 2003 ME 123, ¶ 15 n.6, 832 A.2d 765. To be
supported by substantial evidence, the agency's findings
of fact must be supported by "such relevant evidence as
a reasonable mind might accept as adequate to support the
resultant conclusion." Sinclair Builders, Inc. v.
Unemployment Ins. Comm'n, 2013 ME 76, ¶ 9, 73
A.3d 1061 (internal quotation marks omitted). The court will
not substitute its own judgment for that of the agency merely
because the record could support more than one conclusion.
Abrahamson v. Sec'y of State, 584 A.2d 668, 670
(Me. 1991). Similarly, an agency's decision is arbitrary
and capricious if it is "unreasonable, has no rational
factual basis justifying the conclusion or lacks substantial
support in the evidence." Cent. Me. Power Co.
v. Waterville Urban Renewal Autk, 281 A.2d 233,
242 (Me. 1971).
asserts that DHHS erred in denying its June 12, 2015 request
for informal review pursuant to § 1.21-1 of the
MaineCare Benefits Manual. (Pet. Br. 1.) Section 1.21-1 of ...