Shamrock Psychiatric Clinic, P.A. v. Texas Department of Health & Human Services

Shamrock Psychiatric Clinic, P.A., a Medicaid provider, was entitled to a contested-case hearing on the merits of the State’s claim to recoup alleged overpayments.Texas law directs the Inspector General to recover from a Medicaid provider any “overpayment” identified in a fraud or abuse investigation. Here, Shamrock received a “Notice of Payment Hold." Shamrock requested an expedited administrative hearing. Shamrock later received a “Final Notice of Overpayment.” The parties agreed to consolidate the payment hold and overpayment issues into one proceeding. The administrative law judge (ALJ) dismissed the overpayment and payment-hold cases due to Shamrock’s failure to submit a timely written request for an appeal. Shamrock filed suit. The trial court granted the Inspector General’s plea to the jurisdiction on sovereign immunity grounds. Shamrock appealed, arguing that the ALJ and Inspector General had a ministerial duty to abide by a Rule 11 agreement created by the parties’ communications and the Inspector General’s written representations. The court of appeals affirmed. The Supreme Court reversed, holding (1) the parties agreed that Shamrock would defend itself against the overpayment claims in a contested-cse hearing; (2) the ALJ failed to perform the purely ministerial act of enforcing the Rule 11 agreement; and (3) therefore, the ultra vires exception to sovereign immunity applied to Shamrock’s suit. View "Shamrock Psychiatric Clinic, P.A. v. Texas Department of Health & Human Services" on Justia Law