STATE OF NORTH CAROLINA IN THE OFFICE OF

ADMINISTRATIVE HEARINGS

COUNTY OF HOKE 07 DHR 1664

Carrieing Home Healthcare
Petitioner
vs.
N. C. Department of Health and Human
Services, Division of Mental Health,
Developmental Disabilities and Substance
Abuse Services
Respondent / )
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)
)
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)))) / DECISION

THIS CAUSE COMING ON TO BE HEARD and being heard before Beecher R. Gray, Administrative Law Judge presiding during the December 10, 2007, session of court on Carrieing Home Healthcare’s (“Petitioner”) Petition for a Contested Case Hearing under N.C.G.S. § 150B-23. Counsel for Petitioner filed a proposed decision, which first was reviewed by counsel for Respondent, on May 09, 2008.

IT APPEARING TO THE COURT that Petitioner appeared through its attorneys, R.Jonathan Charleston and Jose A. Coker; and that N.C. Department of Health and Human Services, Division of Mental Health, Developmental Disabilities and Substance Abuse Services (“Respondent”) appeared through its attorneys, Diane M. Pomper and Tracy J. Hayes.

Based on the review of the court file, after reviewing the applicable policies of Respondent and law, after hearing the testimony of witnesses, and hearing the arguments of counsel, the court makes the following:

FINDINGS OF FACT

1. Petitioner is a provider of Mental Health Community Support-Children/Adolescents and Community Support-Adults Services, having its place of business at 4003 Fayetteville Road, Raeford, North Carolina (“Facility”), the subject of this dispute. Both parties received notices of hearing by certified mail more than 15 days prior to the hearing and each stipulated on the record that notice was proper.

2. On or about January 1, 2007, Sandhills Center for Mental Health, Developmental Disabilities and Substance Abuse Services (“LME”) granted Petitioner a Conditional Endorsement for the following services: (i) Community Support-Children/Adolescents; and (ii) Community Support -Adults.

3. The State of North Carolina, through its Department of Health and Human Services, Division of Mental Health, Developmental Disabilities, and Substance Abuse Services, implemented its Policy and Procedures for Endorsement of Providers of Medicaid Reimbursable MH/DD/SA Services (“Policy”), effective June 20, 2005, with which the LME is required to comply.

4. On June 19, 2007, the LME conducted a Full Endorsement Review of the Facility and identified certain deficiencies. Based on the certain deficiencies identified by the LME on June 19, 2007, the LME required Petitioner to submit a plan of correction within ten (10) calendar days, on or before June 29, 2007.

5. In conducting its Full Endorsement Review, the LME did not perform an on-site review of the Facility as required by the Policy. Accordingly, Petitioner was required by the LME to travel to and produce documentation at the office of the LME.

6. The LME did not comply with the time period required by the Policy, which allows Petitioner up to twenty (20) business days to submit a plan of correction.

7. The LME did not use the standardized checklists, as required by the Policy, in conducting its endorsement review of Petitioner.

8. On June 29, 2007, Petitioner timely submitted its plan of correction to the LME for evaluation and approval.

9 On or about July 25, 2007, the LME requested that Petitioner submit a revised plan of correction in connection with the endorsement process by August 4, 2007. Subsequently, Petitioner requested additional time to submit its revised plan of correction up to and including August 8, 2007.

10. The LME did not comply with the time period set forth in the Policy. The LME only allowed Petitioner twelve (12) calendar days to submit its revised plan of correction in violation of the Policy, which allows up to twenty (20) business days to submit a plan of correction.

11. The LME did not conduct an on-site abbreviated review, as required by the Policy, with respect to the plan of correction submitted by Petitioner on or about June 29, 2007.

12. The LME did not use the standardized checklists as required by the Policy.

13. On August 8, 2007, Petitioner timely submitted its revised plan of correction to the LME for evaluation and approval.

14. On August 29, 2007, the LME contacted Petitioner via telephone to notify Petitioner that the LME would perform its final Endorsement Review of the Facility on August 31, 2007.

15. On August 31, 2007, the LME conducted a final endorsement review of the Facility.

16. The LME did not perform an on-site final endorsement review of the Facility as required by the Policy. Accordingly, Petitioner was required to travel to and produce documentation at the office of the LME.

17. The LME did not use the standardized checklist in conducting its final endorsement review of Petitioner’s Facility as required by the Policy.

18. Respondent did not comply with the Policy in conducting the Final Endorsement Review of Petitioner’s Facility to provide Community Support-Children/Adolescents and Community Support-Adults services.

19. The LME contends that it was authorized by Jim Jarrad, Accountability Team Leader for Respondent, to deviate from the Policy. Jim Jarrad testified at the hearing that he did not authorize the LME to deviate from the Policy and further testified that he did not have authority to grant any deviation from the Policy by the LME.

20. On or about September 4, 2007, Michael Watson, Chief Executive Officer of the LME, mailed the Notification of Endorsement Action to Petitioner withdrawing its conditional endorsement to provide Community Support-Children/Adolescents Community Support-Adults services, effective October 2, 2007.

21. Petitioner timely filed an Appeal of Endorsement Action on September 10, 2007.

22. On or about September 27, 2007, Petitioner’s appeal was denied by Michael Watson, the same individual who made the initial decision to withdraw Petitioner’s conditional endorsement.

CONCLUSIONS OF LAW

1. The Office of Administrative Hearings has jurisdiction over the parties and subject matter of this litigation.

2. All parties have been correctly designated and there are no questions as to nonjoinder or misjoinder.

3. Under N.C.G.S. §§ 112C-111 and 112.1(a)(6) and (7), the activities with respect to the provision, monitoring, and management of mental health services in the State of North Carolina are regulated by Respondent. Monitoring is conducted in part through the endorsement process.

4. Respondent authorized Sandhills Center for Mental Health, Developmental Disabilities and Substance Abuse Services to conduct monitoring of mental health services on its behalf in Anson, Harnett, Hoke, Lee, Montgomery, Moore, Randolph, and Richmond Counties.

5. The endorsement process is regulated by the Policy, which is promulgated by Respondent’s Division of Mental Health, Developmental Disabilities and Substance Abuse Services.

6. Petitioner, by a preponderance of the evidence, showed that Respondent, by and through the LME, failed to comply with the applicable rules, regulations, and policies promulgated by the State of North Carolina regarding endorsement of providers of mental health services in that: (i) the LME did not conduct an on-site endorsement reviews; (ii) the LME did not allow Petitioner up to twenty (20) business days to submit its plan of correction; and (iii) the LME did not use the standardized checklists in conducting the endorsement review. In so doing, Respondent substantially prejudiced Petitioner’s rights.

7. Petitioner has met its burden of proof and has shown by the preponderance of the evidence that Respondent deprived Petitioner of property; substantially prejudiced Petitioner’s rights; acted erroneously; failed to use proper procedure; acted arbitrary or capriciously; and failed to act as required by law or rule.

8. Without endorsement, consumers’ placement at the Facility will be disrupted, which will adversely affect said consumers’ continuum of care.

NOW THEREFORE, based upon the foregoing Findings of Fact and Conclusions of Law, it hereby is ORDERED, ADJUDGED, AND DECREED as follows:

1. Petitioner’s conditional endorsement to provide mental health services shall be reinstated effective October 2, 2007.

2. Petitioner’s Medicaid Participation Agreement shall be reinstated effective October 2, 2007.

3. Petitioner’s Medicaid Provider Numbers shall be reinstated effective October 2, 2007.

NOTICE

The Agency that will make the final decision in this contested case is the North Carolina Department of Health and Human Services.

The Agency is required to give each party an opportunity to file exceptions to the decision and to present written arguments to those in the Agency who will make the final decision. N.C. Gen. Stat. § 150-36(a). The Agency is required by N.C. Gen. Stat. § 150B-36(b) to serve a copy of the final decision on all parties and to furnish a copy to the parties' attorneys of record and to the Office of Administrative Hearings.

In accordance with N.C. Gen. Stat. § 150B-36 the Agency shall adopt each finding of fact contained in the Administrative Law Judge's decision unless the finding is clearly contrary to the preponderance of the admissible evidence. For each finding of fact not adopted by the agency, the agency shall set forth separately and in detail the reasons for not adopting the finding of fact and the evidence in the record relied upon by the agency in not adopting the finding of fact. For each new finding of fact made by the agency that is not contained in the Administrative Law Judge's decision, the agency shall set forth separately and in detail the evidence in the record relied upon by the agency in making the finding of fact.

This the 14th day of May, 2008.

______

Beecher R. Gray

Administrative Law Judge

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