Pennsylvania Code & Bulletin
COMMONWEALTH OF PENNSYLVANIA

• No statutes or acts will be found at this website.

The Pennsylvania Bulletin website includes the following: Rulemakings by State agencies; Proposed Rulemakings by State agencies; State agency notices; the Governor’s Proclamations and Executive Orders; Actions by the General Assembly; and Statewide and local court rules.

PA Bulletin, Doc. No. 06-2326

RULES AND REGULATIONS

Title 55--PUBLIC WELFARE

DEPARTMENT OF PUBLIC WELFARE

[55 PA. CODE CH. 41]

Medical Assistance Provider Appeal Procedures

[36 Pa.B. 7195]
[Saturday, November 25, 2006]

   The Department of Public Welfare (Department) adopts Chapter 41 (relating to Medical Assistance provider appeal procedures) to read as set forth in Annex A. This final-form rulemaking is adopted under the authority of 67 Pa.C.S. § 1106 (relating to regulations). The act of December 3, 2002 (P. L. 1147, No. 142) (Act 142) created 67 Pa.C.S. Chapter 11 (relating to Medical Assistance hearings and appeals). The proposed rulemaking was published at 34 Pa.B. 4447 (August 14, 2004).

Purpose of the Final-Form Rulemaking

   The purpose of this final-form rulemaking is to ensure the just and speedy determination of Medical Assistance (MA) provider appeals.

Affected Organizations and Individuals

   The final-form rulemaking affects the Department, the Bureau of Hearings and Appeals (Bureau), MA providers, private law firms and government attorneys who practice before the Bureau.

Accomplishments/Benefits

   Parties who appear before the Bureau will be better informed of their rights, responsibilities and expectations in MA provider appeals and proceedings that are litigated before the Bureau.

Fiscal Impact

Public Sector

   The final-form rulemaking will not impose additional costs on State and local governments.

Private Sector

   The final-form rulemaking will not impose additional costs on the public sector.

General Public

   The final-form rulemaking will not impose additional costs on the general public.

Paperwork Requirements

   The final-form rulemaking will not require the completion of additional forms, reports and other paperwork.

Cross References

   Part II of 1 Pa. Code (relating to the General Rules of Administrative Practice and Procedure) (GRAPP) and other applicable Departmental regulations apply to the practice and procedures in MA provider appeals, except as specifically superceded in relevant sections of the final-form rulemaking.

Effective Date

   This final-form rulemaking will be effective upon publication in the Pennsylvania Bulletin.

Discussion of Comments and Major Changes

   Following is a summary of the major comments received following publication of the proposed rulemaking and the Bureau's response to those comments. A summary of major changes from the proposed rulemaking is also included.

   General--Regulations

   A commentator suggested that the regulations do not achieve the intended statutory purpose, and that the regulations unreasonably and unnecessarily favors the Department's interest over those of providers.

Response

   Consistent with 67 Pa.C.S. § 1106, Chapter 41 expressly guarantees the independence and impartiality of the Bureau hearing officers in deciding appeals. In considering the comments and drafting Chapter 41, the Bureau balanced the complexity of the adjudicative process against the time and expense associated with adjudicating appeals. Several changes, which are addressed as follows, were made in furtherance of balancing the interests and equities of the parties. For instance, proposed § 41.153(a) (relating to burden of proof and production) would have assigned the burden of proof to providers in all instances. However, after considering the comments, the Bureau has concluded that it is appropriate in some instances that the Department should bear the burden of proof, and § 41.153(a) has been amended to reflect that determination.

General--Regulations

   A commentator suggested that Chapter 41 should require the Bureau to resolve provider payment and reimbursement decisions within a specific time period.

Response

   Act 142 requires the Bureau to promptly adjudicate timely filed requests for hearing and to establish deadlines for interim and final actions by the Bureau and parties to any proceeding before the Bureau. Although Chapter 41 places no specific time limit for hearings, it does establish deadlines for pleadings, discovery and briefs, and for the Bureau to rule on dispositive motions and issue its determinations. Specific or numeric time limits for hearings do not take into account the unique or the complex nature of each appeal. In certain classes of appeals, § 41.92 (relating to expedited disposition procedure for certain appeals) provides for expedited appeal procedures. As written, the regulation contemplates that, unless the time frame is expanded due to joint case management motions, adjudications resolving the ordinary appeals generally will be adjudicated by the Bureau within 2 to 3 years of the time that the appeals are filed.

General--Regulations

   One commentator requested clarification of the jurisdiction of the Bureau to resolve disputes.

Response

   A Department action or decision is appealable only if the provider is ''aggrieved'' under 67 Pa.C.S. § 1102(a). For a provider to be aggrieved, the underlying adverse action must be adjudicative in character under 67 Pa.C.S. § 1101 (relating to definitions). ''Adjudicative agency actions are those that affect one individual or a few individuals, and apply existing laws or regulations to facts that occurred prior to the adjudication.'' Small v. Horn, 585 Pa. 600, 722 A.2d 664 (1998). Act 142 specifies that hearings under the act only involve ''adjudications of the Department relating to the administration of the [MA] Program'' and that encompass ''action[s] relating to a provider's enrollment in, participation in, claims for payment or damages under or penalties imposed under the program.''

   When the Department undertakes an adjudicative action, Act 142 and this regulation apply and the aggrieved provider must file a timely and proper request for hearing to contest the action. Because an adjudicative agency action may be undertaken by a subordinate official, Act 142 and this regulation supersede 1 Pa. Code § 35.20 (relating to appeals from actions of the staff), which would otherwise permit a provider to appeal the action of a subordinate officer directly to the Secretary of the Department (Secretary). Under Act 142 and this regulation, an appeal must be filed with the Bureau.

   Adjudicative actions do not include agency actions that are legislative in character--that is, actions that result in rules of prospective effect and bind all, or at least a broad class of, citizens. Small v. Horn. Under existing Pennsylvania law, the issuance of regulations is a legislative act, not an ''adjudication.'' Laurel Lake Ass'n v. Pennsylvania Fish and Boat Comm'n, 710 A.2d 129, 132 (Pa. Cmwlth. 1998); Insurance Co. of North America v. Insurance Dept., 15 Pa.Cmwlth. 462, 327 A.2d 411 (1974). Consequently, a petition requesting the issuance, amendment or repeal of regulations does not involve an appealable adjudicative action and, therefore, would not fall within the scope of Act 142. Thus, the Bureau has no jurisdiction to consider these petitions, which should be filed under 1 Pa. Code § 35.18 (relating to petitions for issuance, amendment, waiver or deletion of regulations) and the GRAPP would apply in these matters.

   The Bureau recognizes that a provider may request a waiver of a regulation or request declaratory relief without an underlying appealable action having been taken by the Department. As discussed as follows, these requests fall outside the scope of the jurisdiction conferred by Act 142. Instead, these requests must be made by petition under 1 Pa. Code § 35.18 and the GRAPP, which would apply in these matters.

   So long as there is no underlying appealable ''agency action,'' the procedures governing petitions for relief are those in the GRAPP. When an appealable action is taken, however, Act 142 and the regulation will apply. Thus, the regulation requires that all issues and requests for relief relating to an appealable agency action, including requests for waiver of a regulation or a dispute over the applicability or meaning of a regulation or policy, must be set forth in a proper and timely request for hearing.

General--Regulations

   Various commentators suggested that the Bureau possesses the power to waive the application of the Department's regulations. In addition, the Independent Regulatory Review Commission (IRRC) suggested that 67 Pa.C.S. § 1105(a) (relating to determinations, review, appeal and enforcement) could be construed to grants these powers to the Bureau and stated that ''the Department should clarify its rationale'' for limiting the power to waive program requirements to the Secretary. Similarly, in commenting on § 41.191(b) (relating to determinations and recommendations by the Bureau), IRRC stated that the Department should either ''delete language which restricts the Bureau's authority to adjudicate waiver requests presented in a request for hearing, or explain its rationale for this restriction in the final-form regulation.''

Response

   The Secretary is specifically vested under 67 Pa.C.S. § 1105(b)(3) with the discretionary authority to ''waive compliance with program requirements, [in order] to promote fairness and the proper administration of the program.'' While Act 142 grants various powers to the Bureau, it does not confer the power to waive regulations on Bureau. Since Act 142 expressly empowers the Secretary, but not the Bureau, with waiver authority, it demonstrates the General Assembly's determination that the Bureau should not possess this authority. Moreover, that Act 142 mentions the Secretary's waiver power as part of the appeal process that occurs only after the Bureau has concluded its work underscores the legislative intent that the waiver power should not be exercised by the Bureau in prior stages of the appeal proceedings.

   The Department disagrees with IRRC's view that the Bureau's general authority to ''adjudicate[e] . . . contested issues of fact and law,'' and to issue ''any appropriate order, decree or decision'' implicitly and necessarily includes the power to waive compliance with the Department's regulations. Regulations are rules of general applicability, adopted by an agency under its policymaking discretion and have the force and effect of law. They are binding on all providers and ''substantial'' but less-than-complete compliance with them is generally inadequate. Ashton Hall, Inc. v. Department of Public Welfare, 743 A.2d 529 (Pa. Cmwlth 1999). Thus, a waiver effectively excuses a provider from complying with a regulations with which all other providers are bound to comply.

   The legislature's decision to repose the exclusive authority to grant extraordinary relief in the Secretary is entirely reasonable and consistent with the preeminent role the legislature has assigned to the Secretary in administering the Commonwealth's public health and welfare programs. Specifically, under section 403(a) of the Public Welfare Code (62 P. S. § 403(a)), the General Assembly has designated the Secretary as ''the only person authorized to . . . interpret, or make specific the law administered by the department,'' and has charged the Department which the Secretary manages with the duty to ''maintain[   ] uniformity in the administration of public welfare . . . throughout the Commonwealth.'' See also Pelton v. Department of Public Welfare, 514 Pa. 323, 330, 523 A.2d 1104, 1107 (1987) (''[I]t is the secretary alone who is authorized to establish and interpret rules, regulations and standards for eligibility [under the Public Welfare Code]'').

   Further, the decision to grant or deny a waiver arises only after a determination is made that a provider is subject to the requirements of a regulation. Thus, it does not involve the determination of contested issues or fact or law. Rather, it is an issue involving the discretion and judgment of the policymaker. Conceptually, it is a post-hoc version of ''prosecutorial discretion,'' a power not possessed by adjudicative tribunals. See, for example, Commonwealth v. Kratsas, 564 Pa. 36, 764 A.2d 20 (1999). Unlike the Bureau, whose role is limited to serving as a quasi-judicial adjudicative tribunal, the Secretary has a multiplicity of roles and powers. Acting under quasi-judicial powers, the Secretary possesses the power to ''affirm, reverse or modify the determination of the bureau'' under 67 Pa.C.S. § 1105(b)(3). However, the Secretary's power to ''waive compliance with program requirements'' is a discretionary power granted to the Secretary in the position as policymaker and, although Act 142 grants the Bureau the power to adjudicate disputed issues of fact and law, it does not grant the Bureau the power to overrule the discretionary policy judgments of the Secretary.

   Similarly, the Department disagrees with IRRC's interpretation the Bureau's authority to enter ''any appropriate order, decree or decision'' includes the power to waiver regulations. Preliminarily, the word ''appropriate'' is a term of limitation, not authorization. Moreover, this provision must be read in the context of the rest of the sentence, including the reference to ''contested issues of fact and law.'' Because the question whether to grant a waiver is not a ''disputed issue[   ] of fact [or] law,'' and because the Bureau has no jurisdiction to grant or deny a waiver request, an order that purported to do so would not be ''appropriate.''

General--Disparity of Sanctions

   A commentator expressed concern that the sanctions that could be applied to providers were more severe than those that may be applied to the Department.

Response

   The regulation is consistent with the allocation of the burden of proof in provider appeals, with Snyder Memorial Health Center v. Department of Public Welfare, 898 A.2d 1227 (Pa. Cmwlth 2006) and the rules of the Federal Provider Reimbursement Review Board. If the party that bears that burden is sanctioned and cannot present evidence, it follows that that party cannot carry its burden, in which case judgment must be entered for the other side. On the other hand, if the party that does not bear the burden of proof is sanctioned, the party with the burden of proof still bears that burden. Therefore, judgment can only be entered on behalf of the latter party if that party satisfies its burden. As discussed elsewhere, § 41.153(a) now establishes a limited exception to the general rule that the provider bears the burden of proof. In that limited exception, the sanction of dismissal applies to the Department, rather than to the provider, but only as to those issues on which the Department bears the burden of proof.

General--1 Pa. Code § 35.19. Petitions for declaratory orders.

   A commentator has suggested that the preclusion of requests for declaratory relief, which would correct and prevent misinterpretation or misapplication of law, regulations, policies or other guidance or instructions by a program office, prevents the Bureau from making ''any appropriate order, decree or decision'' or to determine contested issues of facts and law and make a decision. The same commentator suggests that declaratory relief is often appropriate for the resolution of provider appeals, as contemplated by Act 142.

Response

   Declaratory relief involves a determination of a justifiable controversy when the plaintiff is in doubt as to its legal rights and duties and is not (yet) aggrieved. If a provider is aggrieved by an adverse agency action, substantive relief on the merits is available, the order to resolve the issue is not declaratory, and declaratory relief is unnecessary and unavailable. If a nonaggrieved provider seeks declaratory relief, the provider must seek it through a petition for relief.

   Declaratory relief is unavailable when an action is filed in anticipation of another proceedings. Department of General Services v. Frank Briscoe Co., Inc., 502 Pa. 449, 466 A.2d 1336 (1983). Therefore, if the provider has already been cited for a violation of the regulation, § 41.42(b) (relating to request for declaratory relief) requires that the issue raised in the petition must be set forth in the context of a request for hearing, and the petition for relief cannot be used to avoid or disrupt the Department's enforcement of the regulation.

   Section 403(b) of the Public Welfare Code designates the Secretary as the sole person authorized to adopt orders that interpret or make specific the laws administered by the Department. Department of Public Welfare v. Presbyterian Medical Center of Oakmont, 877 A.2d 419 (Pa. 2005). The Department interprets this provision to mean that the power to grant declaratory relief is vested with the Secretary and not with the Bureau.

§ 41.1.  Scope.

   Several commentators and IRRC raised several concerns including that the effective date of the final-form rulemaking is contrary to law and inconsistent with the Secretary's expressed effective date and must be changed. They asserted that the regulation cannot be effective unless, and until, the Department amends the rulemaking to invoke its authority under 2 Pa.C.S. §§ 501--508 and 701--704 (relating to Administrative Agency Law) to adopt rules of procedure inconsistent with the GRAPP. They also asserted that the regulation does not result in an independent forum designed to hear other kinds of provider matters de novo.

Response

   Chapter 41 is not exclusive and does not override current Departmental practice or regulations when Chapter 41 is silent. The Bureau is the statutorily mandated forum for hearing provider appeals under Act 142 and is charged by the same statute with the de novo hearing and adjudication of appeals in a fair and impartial manner. Chapter 41 has specifically been designed to advance the speedy and efficient adjudication of disputes. For due process reasons, Chapter 41 has been revised to be effective from the date of publication. Appeals filed prior to that date will be governed by the Bureau's standing practice order (SPO), published at 33 Pa.B 3053 (June 28, 2003) or by earlier rules of procedure in the GRAPP.

   Act 142 grants to the Bureau the power to adopt these procedural regulations. The regulations are designed to address all types of provider appeals, including, but not limited to, the numerous appeals that are typically filed by nursing facility providers. The regulations strike an appropriate balance. Sections 501--508 and 701--704 of 2 Pa.C.S. do not limit or affect the authority granted by Act 142 and, to the extent that the regulations enacted under that authority expressly or implicitly supersede provisions in the GRAPP, these regulations necessarily prevail.

§ 41.1(b).  Scope.

   One commentator raised the concern that this provision is too vague and unfairly incorporates by reference unspecified Departmental regulations and this reference should be stricken.

Response

   The individual sections of the regulation identify the provisions of the GRAPP and the Department's other regulations that are superseded. In the event that another regulation appears to conflict with provisions of Chapter 41, the Bureau will resolve these issues on a case by case basis.

§ 41.1(c).  Scope.

   One commentator raised the concern that this section may confuse providers or be used to preclude appeals brought by recipients of MA. The commentator further suggested the section be changed to show that appeals under Chapter 275 (relating to appeal and fair hearing and administrative disqualification hearings) remain unaffected by § 41.1(c). Another commentator suggested that § 41.1(c) conflicts with Act 142.

Response

   Section 41.1(c) differentiates between the two classes of appeals: recipient appeals and provider appeals. Recipient appeals are filed under Chapter 275. Act 142 only pertains to provider appeals.

§ 41.2.  Construction and application.

   Two commentators stated that § 41.2 does not provide for conflicts between Act 142, the regulations and ''other applicable Department regulations.'' Another commentator found this section incomplete in that it fails to provide the Bureau with authority to waive strict compliance with procedures.

Response

   Chapter 41 does not conflict with Act 142 but, if it were to conflict, the statutory provision in Act 142 would necessarily prevail. Chapter 41 governs practice and procedure in MA provider appeals. To the extent that other regulations of the Department also affect practice and procedure in those appeals, the Bureau will seek to harmonize those regulations with Chapter 41. In the event that a particular provision cannot be harmonized with Chapter 41 and does conflict, the provision of Chapter 41 will control, but only to the extent that it affects practice and procedure in provider appeals before the Bureau.

§ 41.3.  Definitions.

   One commentator suggested § 41.3 redefines ''hearing'' as something different than Act 142. Another commentator and IRRC suggested that ''senior Department official'' is defined too broadly. A third commentator felt that the definitions excluded audit appeals from audits by the Attorney General.

Response

   Act 142 uses ''hearing'' in a variety of ways. The definition of that term in § 41.3 reflects those uses.

   Act 142 defines ''hearing'' to be a ''proceeding'' started by a provider under 67 Pa.C.S. § 1102(a). When used in this manner, the term is synonymous with terms such as ''action,'' ''appeal'' and ''matter'' used in 2 Pa.C.S. § 101 (relating to definitions). Subparagraph (i) of the definition of ''hearing'' in § 41.3 is consistent with that usage.

   In some instances, Act 142 uses ''hearing'' to refer to parts of an action at which evidence is presented and interlocutory disputes are considered and resolved. For example, see 67 Pa.C.S. § 1102(e)(1) and (2) and 67 Pa.C.S. § 1104 (relating to subpoenas). Subparagraphs (ii) and (iii) of the definition of ''hearing'' reflect these uses. In addition, to improve the clarity of the regulation, the Bureau has retained the term ''provider appeal'' as a synonym for ''hearing'' as defined by 67 Pa.C.S. § 1101. As retained, the term does not encompass actions started by ''petitions for relief.''

   The term ''senior Department official'' has been amended to exclude clerical staff who work for the Secretary. To the extent that the Department uses an audit issued by the Auditor General to set rates or to take some other agency action from which a provider is aggrieved, the provider would be required to file a request for hearing with the Bureau contesting the findings in the audit. See Temple University v. Auditor General, 403 A.2d 1048 (Pa. Cmwlth 1979). Act 142 and Chapter 41 apply to these appeals.

§ 41.5.  Jurisdiction of the Bureau.

   Various commentators and IRRC expressed concerns about the apparent limitation of the Bureau's jurisdiction in § 41.5(b) and (c). One commentator viewed § 41.5(e) as unnecessary and suggested the subsection should be deleted to avoid confusion and potential litigation with Medicaid providers over actions taken by Federal agencies.

Response

   As previously discussed, the Bureau only has jurisdiction to hear a provider appeal if the provider aggrieved by an adjudicative act of the Department. Also as previously discussed, if an aggrieved provider files a request for hearing and, therein, asks that the application of a regulation or other program requirement be waived, 67 Pa.C.S. § 1105(b)(3) specifies that the relief may only be granted by the Secretary. Therefore, in a provider appeal, the role of the Bureau is limited in the manner in § 41.5(b). The process on waiver requests fulfills the requirements placed upon the Bureau by Act 142 to review independently, to make a record and to present a recommendation to the Secretary for final administrative action. Section 41.5(d) necessarily limits the jurisdiction of the Bureau to exclude proceedings which, although a Departmental action, require appeal to the Department of Health and Human Services under the Code of Federal Regulations.

§ 41.12(e).  Form.

   IRRC questioned why a legal document could not be electronically submitted.

Response

   The Bureau currently does not have the capacity to accept or to log large scale electronic filings. The Bureau will continually review technology and funding to see if and when electronic filings may be feasible.

§ 41.14.  Verification.

   One commentator suggested the verification requirement is unduly burdensome and overly broad and consequentially should be eliminated.

Response

   Courts routinely require litigants to verify facts in the documents that they file. See, for example, Pennsylvania Rule of Civil Procedure (Pa.R.C.P.) 1024 (relating to verification). The Bureau has determined that verification should likewise be required in MA provider appeals. A fact contained in a pleading or legal document that has not been previously verified or stipulated by the parties must be verified in the specified form or in a form that substantially complies with this section. Therefore, § 41.15 imposes no more burden than would be required if 1 Pa. Code § 33.12 (relating to verifications) were applicable.

§ 41.15(c).  Copies of documents.

   One commentator suggested § 41.15(c) should be amended to provide a process by which protected information will be identified and redacted.

Response

   Section 41.134 (relating to discovery motions) addresses the commentator's concern. Section 41.134 allows for Motions in Limine to be entertained at any time, before, with or after filing if needed to protect information protected by law.

§ 41.21.  Notice of agency actions.

   Various commentators raised concerns of sufficiency of notice in § 41.21(a)(3), which permits notice in the Pennsylvania Bulletin of an agency action affecting a general class of providers.

Response

   Generally, the Department notifies providers of agency action by first class mail. In some limited instances, however, the Department's regulations specify that the Department will notify providers of an appealable agency action by publication in the Pennsylvania Bulletin. For example, the Department annually publishes a public notice announcing the ''peer group prices'' for the nursing facilities enrolled in the MA Program and § 1187.141(a)(1) (relating to nursing facility's right to appeal and to a hearing) expressly permits the individual nursing facility providers to contest the peer group prices by filing appeals with the Bureau.. In addition, this section permits the Department to provide notice by publication when other forms of notice are unavailable or impracticable.

§ 41.22. Service of pleadings and legal documents.

   IRRC suggested changing the term ''General Counsel'' in § 41.22(1)(ii) and (2)(ii) to ''Chief Counsel'' to maintain consistency with § 41.112(b) (relating to filing of position paper).

Response

   The subparagraphs were changed to correspond with IRRC's suggestion.

§ 41.25. Amendment or withdrawal of legal documents.

   One commentator noted concern that § 41.25 may be interpreted as interfering with the right of a provider to withdraw its appeal and will generate unnecessary motion practice before the Bureau. Another commentator is concerned that § 41.25 incorrectly supersedes 1 Pa. Code §§ 33.41, 33.42 and 33.51 (relating to amendments; withdrawal or termination; and docket). The same commentator noted the Bureau has not followed the practice of other Commonwealth agencies in either adopting 1 Pa. Code § 33.51 or another, separate regulation with the same language which permits public access to docketing information.

Response

   Section 41.25 does not concern the withdrawal of provider appeals. A separate section, § 41.83 (relating to withdrawal of provider appeals), provides a specific appeal procedure and does not generate motion practice. The Bureau is currently reviewing various methods of installing computers and software in the Bureau's main regional offices for the public to review docket information. Under 67 Pa.C.S. § 1102(E)(2)(viii), the Bureau has created a researchable electronic index of Act 142 decisions, which is accessible at www.dpw.state.pa.us/oa/bha/searchdecisions.asp.

§ 41.31(a). Request for hearing.

   Two commentators raised a concern that, as presently worded, the section is too subjective as to what constitutes an appeal and that the section excludes the acts of Departmental subordinates as being appealable.

Response

   Under 67 Pa.C.S. §§  1101 and 1102(a) and (b)(2), the Department must have undertaken some affirmative action of an adjudicative nature for a right to a hearing to arise.. Moreover, 67 Pa.C.S. § 1102(b)(2) requires that, for a provider's right to appeal to arise, the provider must have received a written notice ''notice of departmental action'' from the Department. An MA provider's right to appeal an agency action is not dependent on the management level at which the action was taken, but on whether the action was an ''adjudication'' and whether it has caused the provider to be ''aggrieved.''

§ 41.31(b). Request for hearing.

   Several commentators asserted that the detail in pleading an appeal creates an onerous burden on a provider and suggested this subsection be amended to require that the Department answer hearing requests. One commentator indicated this subsection improperly restricts a provider's ability to seek declaratory relief before the Bureau.

Response

   The Department's written notices of agency actions are required to and generally contain sufficient information for providers to determine if and why they disagree with an agency action. For example, when the Department issues a notice of termination under § 1101.77 (relating to enforcement actions by the Department), the notice states the basis for the action, the effective date of the action and whether and when the Department will consider re-enrolling the provider. See § 1101.77(d). Thus, providers are routinely provided with sufficient information to determine whether they are aggrieved and what issues they wish to pursue. The requirement for detailed pleadings and identification of specific issues arises from the technical nature of the subject matter and the need to narrow factual and legal issues for a quicker decision during the appeal process.

   The requirement of detailed pleading by providers is not new. Department regulations have long required that all MA providers ''explain in detail the reasons for [their] appeal'' in their notices of appeal (§ 1101.84(a)(4) (relating to provider right of appeal)), and, since January 1996, have required that appeals by MA nursing facility providers ''state in detail the reasons why the facility believes the [Department's] decision is factually or legally erroneous and the specific issues that the facility will raise in its appeal'' (§ 1187.141(d)(2)).

   Most providers know why they disagree with a Department determination when they file an appeal. In the relatively few instances when the reasons for the Department's actions may be unclear, the statute and the regulation allow providers an additional 90 days to evaluate the Department's determination. This additional period permits providers a sufficient amount of time to identify the bases for their appeals in the majority of cases.

   The Department is not required to plead an answer to the appeal. This requirement would extend the adjudicatory timeline and is unnecessary, as the Department's answer would be duplicative of the notice of department determination, which announces the agency action being appealed. The unavailability of declaratory relief before the Bureau is previously explained.

§ 41.31(d)(4)(iii). Request for hearing.

   IRRC suggested the subparagraph should include a reference to 1 Pa. Code § 35.19 (relating to petitions for declaratory orders).

Response

   The Bureau changed § 41.31(d)(4)(iii) as suggested.

§ 41.31(e). Request for hearing.

   Two commentators suggested it is unduly burdensome to require a provider to attach a copy of the entire written notice when there is no transmittal letter, the elimination of this requirement would reduce the amount of paperwork required of providers and that the Bureau should only require the attachment of those pages which indicate the rejection of the invoices.

Response

   For the Bureau to determine whether it has jurisdiction to hear an appeal, the Bureau must examine the notice of departmental determination and, to facilitate the review, access to the entire notice is necessary. There is very little burden on providers to attach the adverse action notice. Since the SPO was promulgated in 2003, this requirement has not proven burdensome to providers. In most cases, the adverse action letter is one to three pages. In the limited cases of appeals that fall under § 41.92, the provider may provide the Remittance Advice Notice, the invoices and adverse action letter that indicates the rejection of the invoices.

§ 41.32. Timeliness and perfection of requests for hearing.

   One commentator suggested the language should be revised to clarify that issues presented with sufficient specificity will not be dismissed.

Response

   The provision is already sufficiently clear. Section 41.32(d) and (e) requires providers to identify the facts, issues and requested relief with specificity. By doing so, the Bureau and the opposing parties will understand why the appeal has been filed. If the provider meets the requirements of § 41.32(d) and (e), then the appeal will not be dismissed.

§ 41.32(a)(2). Timeliness and perfection of requests for hearing.

   IRRC suggested the Department explain when and in what other manner would the Department give notice to the provider and when the Department would not contact a provider by mailing notice.

Response

   The explanation of the Department's use of the Pennsylvania Bulletin to provide notice is set forth in the response to questions on § 41.21 (relating to notice of agency actions).

§ 41.32(c)(2)(ii). Timeliness and perfection of requests for hearing.

   Two commentators suggested § 41.32(c)(2)(ii) should be deleted because there is no justification for precluding an amendment when the Department failed to provide a full and accurate disclosure and later discovered information contradicts the previously disclosed information.

Response

   The statutory requirement that appeals be timely filed, and the limitation on amendments to those appeals as of right, is a jurisdictional requirement. J. C. v. Department of Public Welfare, 720 A.2d 193 (Pa. Cmwlth 1998); Divine Providence Hospital v. Department of Public Welfare, 463 A.2d 118 (Pa. Cmwlth 1983). When the Bureau published the proposed SPO, the 90-day amendment period would have made no allowance for amendments nunc pro tunc. Requiring the same nunc pro tunc showing for an amendment is consistent with Act 142 and adequately addresses the concerns of the commentators. By providing this exception, § 41.32(c)(2)(ii) reduces the likelihood of a need to reopen the record as provided for in § 41.201 (relating to reopening of record prior to adjudication).

§ 41.32(d). Timeliness and perfection of requests for hearing.

   One commentator suggested this section is overly broad, divests the Bureau of its inherent discretion and should be revised to replace ''shall'' with ''may.''

Response

   According to Act 142, the Bureau's jurisdiction is limited to appeals that are ''timely filed'' or appeals that satisfy the standard for being heard nunc pro tunc. In addition, the Bureau will only adjudicate the ''factual and legal issues raised by a provider in the request for hearing . . . .'' See 67 Pa.C.S. § 1102(e)(2)(iii) and (vii). Under 67 Pa.C.S. § 1102(d), a provider can only amend its request for hearing as of right within 90 days of the date that it was originally filed. Section 41.33(d) (relating to appeals nunc pro tunc) reflects these limitations. The same limitations routinely appear in similar rules of court.

§ 41.32(e). Timeliness and perfection of requests for hearing.

   One commentator and IRRC stated concerns that this section limits the inherent authority of the Bureau and compels the Bureau to dismiss an appeal without consideration of the relevant facts and circumstances.

Response

   The Bureau's jurisdiction to hear providers' appeals exists under Act 142. Section 1102(e)(2)(iii) of 67 Pa.C.S. grants the Bureau the authority to ''adjudicate timely filed requests for hearing.'' In addition, 67 Pa.C.S. § 1102(c) grants the Bureau the authority to hear appeals nunc pro tunc, but only if certain requirements are met. Read together, these provisions mean that, unless a provider makes a ''written request . . . for a hearing nunc pro tunc,'' and satisfies the burden off ''good cause shown,'' the Bureau has no jurisdiction to hear the untimely appeal. Therefore, it is the responsibility of the provider to present the Bureau with the ''relevant facts and circumstances.''

§ 41.32(f). Timeliness and perfection of requests for hearing.

   One commentator suggested this section should be subject to the requirements of § 41.32(g), which requires the Bureau to issue a rule to show cause if the dismissal is based upon the Bureau's own motion. Another commentator and IRRC suggested this section limits the Bureau's inherent authority because it compels the Bureau to dismiss an appeal without consideration of the relevant facts and circumstances. One commentator suggested this section creates a potential for abuse by the Bureau because it does not require the Bureau to include a reason for the dismissal in its order.

Response

   As previously discussed, the timeliness of an appeal is a jurisdictional requirement. Consequently, timeliness can be addressed by the Bureau sua sponte. Because a program office is required to serve its motions on the provider, after which the provider has the opportunity to file an appropriate response with the Bureau, § 41.32(f) and (g) only applies to a dismissal made by the Bureau on its own motion. If the Bureau believes the conditions of § 41.32(f) are met, the Bureau will issue a rule to show cause and allow the provider an opportunity to respond. Section 41.32(d) and (e) requires providers to identify the facts, issues and requested relief with specificity. By doing so, the Bureau and the opposing parties will understand why the appeal has been filed with the Bureau. If the provider meets the requirements of § 41.32(d) and (e), its appeal will not be dismissed. The Bureau's practice has always been to notify parties of the reasons for its orders.

§ 41.33. Appeals nunc pro tunc.

   One commentator suggested § 41.33 should include granting a hearing or an amendment nunc pro tunc when an intervening natural disaster or action of third parties make timely compliance impossible or unsafe. The commentator also suggested the Secretary may grant leave to a party to file a request for review of the Bureau when an intervening natural disaster or action of third parties makes timely compliance impossible or unsafe. The commentator also suggest that the section supersede §§ 1187.1(d) and 6210.14(b) (relating to policy; and time extensions).

Response

   When considering the issue of appeals nunc pro tunc, the Bureau will apply the standards in Bass v. Commonwealth, 485 Pa. 256, 401 A.2d 113 (1979), and its progeny. These common law standards establish specific criteria to determine whether or not a delay in the filing of the appeal was caused by extraordinary circumstances involving fraud or some breakdown in the administrative process or non-negligent circumstances related to the appellant, his counsel or a third party. H.D. v. Pennsylvania Department of Public Welfare, 751 A.2d 1216 (Pa. Cmwlth. 2000). The Bureau amended § 41.33 to supersede §§ 1187.1(d) and 6210.14, but only insofar as these sections affect the time for filing a provider appeal or for amending a provider appeal.

§ 41.41. Waiver request.

   One commentator suggested this section precludes the beneficial effects of waiver requests. The commentator believes this section is inconsistent with the limitations on the Bureau's jurisdiction conceded in § 41.5(c) (relating to jurisdiction of the Bureau). Two other commentators suggested this section is beyond the scope of the rulemaking authority granted by Act 142 and this section improperly restricts the ability of a provider to obtain consideration of waivers. A fourth commentator suggested the Bureau should be required to provide notice to a provider of a nonconforming petition or request with the opportunity for revision rather than outright dismissal. IRRC suggested § 41.41(c) be clarified to specify the dismissal for failure to include the waiver petition will only occur in a given case.

Response

   The Bureau's lack of jurisdiction to grant a waiver request and the process for addressing requests in the context of a request for hearing are previously discussed.

§ 41.42. Request for declaratory relief.

   One commentator suggested this section fails to achieve a just, speedy and inexpensive resolution of issues and disputes, and it requires unnecessary procedures for the preservation of rights. The commentator proposed a change that sets up procedures when a request for declaratory order has been included in a request for hearing and the same request is also filed in a petition for relief. Another commentator suggested the section alters the nature of proceedings based on petitions for relief and declaratory relief that exceed the scope of Act 142.

Response

   Declaratory relief involves a determination of a justifiable controversy when the plaintiff is in doubt as to its legal rights and duties and is not (yet) aggrieved. If a provider is aggrieved by an adverse agency action, substantive relief on the merits is available and declaratory relief is unnecessary and unavailable. If a nonaggrieved provider seeks declaratory relief, the provider must seek it through a petition for relief.

   Declaratory relief is unavailable when an action is filed in anticipation of another proceeding. Department of General Services v. Frank Briscoe Co., Inc., 502 Pa. 449, 466 A.2d 1336 (1983). Therefore, if the provider has already been cited for a violation of the regulation, § 41.42(b) requires that the issue raised in the petition must be set forth in the context of a request for hearing and the petition for relief cannot be used to avoid or disrupt the Department's enforcement of the regulation.

§ 41.43. Request for issuance, amendment or deletion of regulations.

   One commentator suggested this section conflicts with Act 142 by attempting to limit the Bureau's authority to conduct de novo review. IRRC suggested that clarity might be achieved if the section was amended to include citations to the GRAPP or other related regulations concerning procedures to filing for this type of relief.

Response

   The decision to issue, amend or delete a regulation is a nonadjudicative policy decision and is not appealable. Laurel Lake Association, Inc. v. Pennsylvania Fish and Boat Commission, 710 A.2d 129 (Pa. Cmwlth 1998). This section merely declares a provider who seeks the issuance, amendment or deletion of a regulation needs to do so by filing a petition for relief. The section was changed to include reference citations to GRAPP.

§ 41.51. General.

   IRRC commented that § 41.51(f) should include a list of examples from the Department as to what appropriate sanctions, other than costs, would be imposed on a party who files a petition for supercedeas in bad faith or on frivolous grounds.

Response

   Other appropriate sanctions will be based on case law for similar sanctions within the judicial system and case law. One example is barring the attorney, who knowingly filed a bad faith or frivolous petition, from practicing before the Bureau. Several factors will be reviewed on a case-by-case basis such as the severity of the violation and the history of violations.

§ 41.53. Circumstances affecting grant or denial.

   Three commentators suggested this section established an irrebuttable presumption that injury to the public health, safety or welfare ''shall be deemed to exist'' whenever State or Federal law or regulation requires that an action take effect prior to the final determination of an appeal. They also assert that this section unduly limits the authority of the Bureau to consider all relevant circumstances when determining whether a supersedeas should be issued. IRRC suggested the Department should clarify whether the elements in § 41.53(a) will always be considered or if a combination will be considered. IRRC also suggested the Department should include examples of or specific citations to State and Federal law that would be used as a basis for denying supersedeas.

Response

   Except to the extent that case law indicates that less than all of the elements must be satisfied, a provider will be required to satisfy all of the elements in § 41.53(a) to obtain an order of supersedeas.

   The second sentence of subsection (b) does not set forth a presumption. Rather, it encapsulates the well-established rule of law that a violation of law constitutes per se irreparable harm and that no further proof of harm is needed. Pennsylvania Public Utility Commission v. Israel, 356 Pa. 400, 52 A.2d 317 (1947). Likewise, if State or Federal law mandates a particular act, Act 142 does not grant the Bureau the power to bar or delay that act.

§ 41.61. Filing of petitions to intervene.

   One commentator suggested this section should be revised to be consistent with 1 Pa. Code § 35.30 (relating to filing of petitions to intervene).

Response

   To promote judicial economy, time constraints are necessary to provide a fair and expeditious hearing. Without a time constraint, a case could become delayed due to a last-minute intervention. This section allows the Bureau to extend the time period for an intervening party if good cause is shown and is similar to the process used in 1 Pa. Code § 35.30. Section 41.61 allows for filing of petitions to intervene after the deadline upon a showing of extraordinary circumstances and for good cause.

§ 41.71. Answers generally.

   One commentator suggested the Department should be required to file answers to hearing requests in the same way a defendant answers a complaint. Several legislators noted the section should be amended because providers are required to file a detailed complaint, but the Department does not have to file an answer until discovery is complete.

Response

   The Department previously will have notified the provider with an adverse action notice detailing the reasons for the Department's action. Requiring an answer by the Department to the request for a hearing would be unnecessary and redundant and would unnecessarily extend the timeline of the appeal process.

§ 41.81. Consolidation of provider appeals.

   One commentator suggested this section should be revised to limit the discovery to both parties upon consolidation. Another commentator suggested this section should be amended to permit providers to consolidate requests for a hearing from the outset to ensure efficiency.

Response

   This section does not limit the discovery available to providers under the regulation. This section compels the providers to comply with § 41.120 (relating to limitations on scope of discovery), which limits discovery for all of the parties involved in a particular case. If a provider is aggrieved by an action of the Department, the provider will be willing to file a request for a hearing by his own volition. Otherwise, one provider, who is truly aggrieved, may solicit other providers to join in the request for a hearing when the other providers are not truly injured by the action of the Department. This section ensures that providers will file appeals only when they are truly aggrieved by the actions of the Department. This section will prohibit providers from frivolously joining in hearing requests of other providers.

§ 41.83. Withdrawal of provider appeals.

   Two commentators suggested a voluntary withdrawal of an appeal should be without prejudice because this section is contrary to Federal Rule of Civil Procedure 41(a) (relating to voluntary dismissal; effect thereof). IRRC requested the Department explain why withdrawn appeals are with prejudice.

Response

   A provider's power to withdraw an appeal is not the power to unilaterally suspend the matter until some later time of the provider's choosing. When a provider withdraws an appeal, the provider unilaterally terminates that appeal. Having abandoned the pursuit of its right to obtain quasi-judicial review of the Department's adverse action, the general rule is that the withdrawal is deemed to be with prejudice. Nonetheless, the Bureau has amended § 41.83(b) to allow for the possibility that, in certain instances, a withdrawn appeal might be reopened.

§ 41.92. Expedited disposition procedure for certain appeals.

   One commentator suggested revising this section to allow parties to opt into rather than opt out of the expedited procedures upon stipulation by the parties or upon motion with good cause shown. According to the commentator, good cause exists in utilization review cases when the payments were improper for either lack of medical necessity or lack of documentation demonstrating medical necessity or the recovery is based on provider misconduct. IRRC believes parties should be allowed to opt in rather than opt out with respect to expedited disposition.

Response

   The section provides for an expedited procedure for provider appeals in these instances: the denial of claims for payment through the prior authorization process; the denial of requests for precertification; the recovery of overpayments or improper payments through the utilization review process; the denial of claims upon prepayment review; and the denial of claims for payment under § 1101.68 (relating to invoicing for services). This section facilitates the prompt resolution of disputes and permits an impartial hearing official from the Bureau to assess whether a case warrants a protracted proceeding. Otherwise, the provider would have too much authority to control the appeal process while the Department would not. The regulations do not preclude the Department or the provider from filing an appropriate motion with the Bureau if the facts of the case warrant. Forcing small providers to opt into the expedited proceeding would compel them to expend additional funds for the advice of legal counsel to make this judgment.

§ 41.111. Disclosures.

   One commentator asserted that the disclosure process is not designed to assure a just, speedy and inexpensive determination of provider appeals and could be ''subject to abuse'' by the program office staff. The commentator also asserted that the burden rests upon the provider to find relevant information while not requiring the agency to produce it. IRRC suggests that both the Department and the provider must comply with § 41.111(f). One legislator noted that the section should be amended because the Department is not required to make the same specific disclosures as is required for the providers.

Response

   To facilitate the expeditious disposition of cases, the section should equally apply to both the provider and to the Department. Otherwise, one party could obstruct the discovery process for its tactical advantage. Also, it protects the integrity and the fairness of the process. A party may file a motion with the Bureau if it perceives that the opposing party is in noncompliance and the Bureau will review each motion on a case-by-case basis. A party may file a motion under §§ 41.131--136 (relating to motions).

§ 41.112. Filing of position paper.

   One commentator notes standards should be equal for both parties when filing prehearing position papers. Also, another commentator advised that both the Department and the provider should receive equivalent sanctions for failing to file position papers within a certain period (§ 41.112(a) and § 41.113(b) (relating to content of provider position paper)). IRRC believes equal penalties should be imposed for both providers and the program office for failing to file position papers timely.

Response

   As set forth in § 41.153(a), the general rule is that the provider bears the burden of proving that the contested agency action is in error. Because the provider bears the burden of proof, if it fails to file its position paper without good cause within the time limits in the section, the Bureau will enter an order against that party. If the program office does not carry the burden of proof, its failure to file its position paper timely and without good cause does not create a situation when the provider is entitled to judgment in its favor as a matter of law. Therefore, in an instance such as this, the Bureau will bar the program office from presenting evidence and witnesses at the hearing.

   In those situations when the Department bears the burden of proof, the effect of this rule is reversed and it is the Department that bears the risk of dismissal (but only as to those issues on which it bears the burden of proof). The section is revised to reflect the greater burden on the party carrying the burden of proof. Nothing in § 41.112 should be construed to disallow properly submitted impeachment evidence.

§ 41.113. Content of provider position paper.

   One commentator noted position papers cannot always quantify the amount in dispute because the Department has not published its database information. There was a suggestion the provider only be required to identify regulations that, if continued in effect, are applicable to determining amounts in the future.

Response

   The position paper must state the relevant facts and present arguments setting forth the position of the party with the burden of proof. The section was amended to require the party carrying the burden of proof (as opposed to always being the provider) to state the relevant facts and present the appropriate arguments to set forth the party's position. That party must include the monetary amount in dispute. There are situations when the party carrying the burden of proof cannot specify the exact monetary amount in dispute but can identify regulations, which apply to ascertaining this amount at a future time. The section was amended to address situations when the failure to disclose is not the party's fault and must rely upon the opposing party or a third party to obtain this information.

§ 41.114. Content of program office position paper.

   One commentator noted §§ 41.113 and 41.114 fail to supersede the inconsistent requirements of 1 Pa. Code §§ 35.164 and 35.165 (relating to documents on file with agency; and public documents).

Response

   Section 41.114 is amended to require the party that does not carry the burden of proof to present to the opposing party (that is, the party carrying the burden of proof) a copy of every document it will offer into evidence to support its position on each issue identified in its position paper. This section conflicts with 1 Pa. Code §§ 35.164 and 35.165, which do not require the party to produce and to copy documents which it will use at the hearing. Sections 41.113 and 41.114 were amended to supersede 1 Pa. Code §§ 35.164 and 35.165. This section was also amended to show it applies to the party that does not carry the burden of proof, referred to as the opposing party.

§ 41.115. Statement regarding expert opinions.

   IRRC noted subsection (c) lists the requirements for expert opinion statements. This subsection should also include the expert's qualifications.

Response

   The section delineates the requirements for expert opinion statements which include: an identification of the substance; the facts and the opinions to which the expert is expected to testify; the subject matter on which the expert is expected to testify; an identification of the substance of the facts and opinions to which the expert is expected to testify; summary of the grounds of the expert's opinion; and the signature of the expert. However, the section does not include the expert's qualifications. The section was revised to require the position paper to include a brief synopsis of the expert's qualifications or a current curriculum vitae. The expert's qualifications are essential in assessing whether one should consider the witness to be an expert or not.

§ 41.116. Amendments to position papers.

   One commentator noted parties should have the right to amend their witness lists for ''good cause shown.''

Response

   As proposed, the section permitted the party to amend its position paper upon good cause shown, but the party would not have been allowed to amend less than 30 days before the hearing. The section was revised to permit amendments less than 30 days before the hearing if the party demonstrates good cause.

§ 41.117. Penalties for noncompliance.

   One commentator suggested good cause to permit the testimony of a witness not identified in a party's position paper should include instances such as the death of an identified witness or when an identified witness is no longer employed by the party and another individual functions in that capacity. Another commentator suggested § 41.117(b) should not apply if the party only uses the document solely for impeachment purposes. IRRC recommended there should be a good cause exception to offer testimony as well as documents and § 41.117(a) and (b) should not apply to documents and testimony solely used for impeachment purposes.

Response

   The section was revised so that the parties do not need to identify documents or testimony which they are using for impeachment purposes or for rebuttal testimony. These documents are being used only to challenge or rebut the testimony of a witness and not as part of the party's substantive case.

[Continued on next Web Page]



No part of the information on this site may be reproduced for profit or sold for profit.

This material has been drawn directly from the official Pennsylvania Bulletin full text database. Due to the limitations of HTML or differences in display capabilities of different browsers, this version may differ slightly from the official printed version.