2006-510, Petition of NH Division for Children, Youth and Families

The New Hampshire Division for Children, Youth and

for the respondents. Orr and Reno, P.A., of Concord (Lisa Snow Wade on the brief and orally), to press. Errors may be reported by E-mail at the following address: attorney general, on the brief and orally), for the petitioner. Kelly A. Ayotte, attorney general (Suzan M. Lehmann, senior assistant

(New Hampshire Department of Health and Human Services)

PETITION OF NEW HAMPSHIRE DIVISION FOR

editorial errors in order that corrections may be made before the opinion goes No. 2006-510 Hampshire, One Charles Doe Drive, Concord, New Hampshire 03301, of any Department of Health and Human Services Readers are requested to notify the Reporter, Supreme Court of New ___________________________

THE SUPREME COURT OF NEW HAMPSHIRE

page is: http://www.courts.state.nh.us/supreme. a.m. on the morning of their release. The direct address of the court's home reporter@courts.state.nh.us. Opinions are available on the Internet by 9:00

well as formal revision before publication in the New Hampshire Reports. NOTICE: This opinion is subject to motions for rehearing under Rule 22 as be enforced. p. 2 reimburse the respondents at the new rate for the entire fiscal year, should not to show cause why the order for “retroactive” payments, requiring DCYF to

rates it actually paid in 2005 (2005 paid rates). payments. The hearing panel stayed its decision for thirty days to allow DCYF result of the 2005 rate appeal (2005 calculated rates), rather than upon the

ruling, the hearing panel acknowledged that it was ordering “retroactive” required DCYF to base the five percent increase upon the rates determined as a calculated rates took effect on July 1, 2005, the start of SFY 2006. In so appeal process.” Additionally, the hearing panel determined that the newly

accordance with Rule 6422, or, alternatively, that the Budget and Trailer Bills 2 appealed, arguing that DCYF was required to pay the rate calculated in were the subject of the 2005 appeal, [would] essentially nullif[y] the entire 2005 percent, regardless of the rates called for by Rule 6422. The respondents

panel stated that “basing the 2006 paid rates on the 2005 paid rates, which requiring it simply to increase the provider rates it actually paid in 2005 by five applied to the 2005 calculated rates, not the 2005 paid rates. The hearing agreed with the respondents, however, that the increase should have been

2005, 177:117 (Trailer Bill). DCYF construed the Budget and Trailer Bills as budget restrictions imposed by Laws 2005, chapter 176 (Budget Bill) and Laws required a five percent increase in reimbursement rates. The hearing panel DCYF, however, determined that it would not pay those rates because of The hearing panel agreed with DCYF that the Budget and Trailer Bills

panel, DCYF calculated the rates for SFY 2006 in accordance with Rule 6422. While the case relative to the 2005 rates was pending before the hearing state fiscal year, and remain in effect for twelve months.

Petition of Chase Home for Children, 155 N.H. __ (decided June 8, 2007). court for a writ of certiorari to challenge the hearing panels’ decisions. See Following the decisions of the hearing panels, the providers petitioned this were improperly calculated or that the amounts actually paid were too low. various providers, including the respondents, appealed, arguing that the rates After DCYF set the residential rates for fiscal years 2004 and 2005,

See RSA 170-G:4-a (2002); N.H. Admin. Rules, He-C 6422.25. Providers may challenge the rates by filing an appeal with the hearing panel.

After DCYF computes the rates, they take effect at the beginning of the next pursuant to the rate setting rules. See N.H. Admin. Rules, He-C 6422.04. Rules, He-C 6422 (Rule 6422). DCYF is responsible for setting the rates determine how the rates are calculated. See RSA 170-G:5 (2002); N.H. Admin. Residential Child Care Facilities Rate Setting Rules (rate setting rules), which services. See RSA 170-G:4, XVII, XVII-a (2002). DHHS has adopted p. 3 3

respect to jurisdiction, authority or observance of the law or unsustainably that our review is limited to whether the hearing panel acted illegally with rate for providers, we now consider whether it properly did so. We are mindful Having made clear that the hearing panel had authority to establish the DCYF then sought a writ of certiorari here. do not address that issue. determination that the effective date should be July 1, 2005. Accordingly, we effective. On certiorari, no party challenges the 2006 hearing panel’s that DCYF’s other arguments are not preserved for our review. respondents would be paid and the date upon which such rates would become that the hearing panel correctly interpreted the Budget and Trailer Bills and case the hearing panel had the authority to establish the rates at which the DHHS to make . . . payments at the recalculated rate levels.” Id. Thus, in this when the rates become effective . . . [they do not] have the authority to order hearing panels have the authority to establish residential rates and determine Chase Home, 155 N.H. at __. Moreover, we concluded that although “the fall within the jurisdiction the legislature conferred upon the hearing panels.” rate for a childcare provider and determining when the rate becomes effective year, and ordered DCYF to make such payments prior to the end of SFY 2006. of the hearing panel. We recently held that “establishing the actual residential Before addressing DCYF’s first argument, we briefly review the authority

certiorari is the proper vehicle for obtaining review. panel’s decision on the respondents’ rate appeal, a petition for a writ of sufficiency of funds appropriated by the legislature. The respondents counter of powers; and ( p. 3 3) the hearing panel lacked authority to adjudicate the 2005 calculated rates; (2) the hearing panel violated the doctrine of separation DHHS to pay five percent rate increases over the 2005 paid rates and not the In its petition, DCYF argues that: (1) the Budget and Trailer Bills require

of State of N.H., 152 N.H. at 517. DCYF had sufficient funds to pay the newly calculated rates for the entire fiscal and only where to do otherwise would result in substantial injustice. Petition upon the evidence submitted by DCYF, the hearing panel determined that N.H. 652, 65 p. 3 3-54 (2002). We exercise our power to grant such writs sparingly reconsider, and DCYF’s motion for a stay. As to the show cause order, based Petition of Perkins, 147

Because there is no statutory provision for appellate review of the hearing Petition of State of N.H. (State v. Campbell), 152 N.H. 515, 517 (2005). the absence of a right to appeal, and only at the discretion of the court. Review on certiorari is an extraordinary remedy, usually available only in

moved for reconsideration. The hearing panel denied both motions to DCYF moved for either reconsideration or a stay; the respondents also and the rates established by the department. p. 4 concerning the status of appropriations for payments to providers

house of representatives, and the president of the senate

in Fiscal Year 2007. increase in fiscal year 2006 and $2,421,798 for a 3% rate increase non-residential providers include $1,433,032 for a 5% rate committee of the general court, the governor, the speaker of the 4 5% provider rate increase in FY 2007. The appropriations for the budget. The commissioner shall report quarterly to the fiscal provide specific rate increases as footnoted in the operating because the SFY 2006 rates were capped at the amount appropriated, and the

a 5% provider rate increase in fiscal year 2006 and $1,137,016 for year by August 1. Such rates shall reflect legislative decisions to percent will cause it to exceed those appropriations. Therefore, DCYF argues, establish rates that reflect appropriations for the current fiscal that requiring it to pay the respondents the 2005 to RSA 541-A, concerning rate setting, the commissioner shall calculated rate plus five at the limit imposed by appropriations from the legislature, and DCYF argues law to the contrary or the provisions of any rule adopted pursuant According to DCYF, the Trailer Bill caps the respondents’ SFY 2006 rates

The appropriation in Class 093 “Residential” includes $417,351 for

states: The footnote referenced in the Trailer Bill is contained in the Budget Bill and increases provided in the operating budget. Notwithstanding any allotted to pay providers in each program including any rate providers consistent with the operating budget appropriations department of health and human services shall set rates paid to

hearing panel’s interpretation of those bills. the hearing panel, we address only the parties’ arguments relative to the contends that the Budget and Trailer Bills limit the authority or jurisdiction of that determination, we accept that it was proper. Moreover, because no party

For the biennium beginning July 1, 2005, the commissioner of the

bills required an increase over the 2005 calculated rate. The Trailer Bill states: increase over the 2005 paid rate, while the hearing panel determined that the DCYF argues that the Budget and Trailer Bills require a five percent

were superseded by the Budget and Trailer Bills. Because no party challenges The hearing panel accepted DCYF’s argument that the rate setting rules

Petition of Perkins, 147 N.H. at 653-54. exercised its discretion or acted arbitrarily, unreasonably or capriciously. plus five percent without exceeding its appropriations.

p. 5 hearing panel’s determination that DCYF could pay the 2005 calculated rate

proposed by DCYF without exceeding appropriations, we find no error in the because there was evidence demonstrating that rates could be set higher than limitation on rates, other than that set by the amount of appropriations, and at the higher rates. Because the Trailer Bill did not provide any particular higher rates in SFY 2006. DCYF’s claim that it lacks the funding needed to pay [respondents]

higher rate, DCYF, who stated that paying all of the providers, or even some of them, at the

doubt DCYF’s claim that it would exceed the budget by paying the respondents underspent its appropriations in previous years and, therefore, it had reason to Furthermore, the hearing panel noted that there was evidence that DCYF had 2004 and SFY 2005, raising a question about the accuracy of value” in determining whether the appropriations were, in fact, sufficient. appropriation [the appropriation covering the respondents] in SFY information provided by Clark was incomplete and therefore was “of little suggests that DCYF under spent the Class 93 residential DCYF to exceed its appropriations. The hearing panel noted that the Bill] as exceeding the appropriation. The evidence in this case and under spending the account is just as contrary to [the Trailer i.e., at five percent above the 2005 calculated rate, would cause

panel took testimony from Dague Clark, the administrator of the Fiscal Unit of The hearing panel’s factual findings are supported by the record. The hearing

Bill, and is not legally erroneous. appropriations.” This interpretation is consistent with the terms of the Trailer language of the Trailer Bill “makes it clear that rates must be set to reflect the confines of the appropriations. The hearing panel determined that the the Trailer Bill provide any particular method for establishing rates within the appropriations as required by [the Trailer Bill], setting rates low It is the panel’s position that if the rates are to reflect the

Bill created a responsibility to set a low rate: The hearing panel rejected DCYF’s argument that the cap in the Trailer

that the hearing panel’s decision was legally erroneous or otherwise improper. greater amount. The respondents counter that DCYF has not demonstrated

Bill did not set a new, lower limit on expenditures. Nor does the language of appropriated by the legislature is codified in RSA 9:19 (2003). Thus, the Trailer appropriations. The requirement that an agency not spend funds beyond those does so by stating that expenditures are to reflect and be consistent with While we agree that the Trailer Bill fixes a limit upon rate increases, it

hearing panel erred in interpreting the Budget and Trailer Bills to require a hearing panel’s interpretation would require DCYF to exceed that amount, the appropriation. p. 6 determination that DCYF could pay the higher rate without exceeding its advanced by DCYF. Thus, we find no error in the hearing panel’s was within its authority to give that evidence more weight than the evidence

rates.” The commissioner’s report indicating an intent to provide an increase

evidence that DCYF would not exceed its appropriations and the hearing panel

limit its authority, granted by statute and rule, to render decisions “relative to

Therefore, it does not matter what the rate might have been under the rules.

amount appropriated in the PAU. Furthermore, the hearing panel had other

Requiring the hearing panel to defer to the commissioner’s report would

agreed, that the rate setting rules were superseded by the Trailer Bill. hearing panel ought to have deferred to it. statement is accurate, it is irrelevant. DCYF argued, and the hearing panel person or entity objected to the commissioner’s report and, therefore, the demonstrate that paying the rate set by the hearing panel would exceed the been calculated according to the rate setting rules. Regardless of whether this increase over the rates established and paid in 2005. DCYF contends that no dollars.” The evidence relied upon by DCYF, however, does not necessarily payments exceeding those the respondents would have received if the rates had for SFY 2006 indicated that most providers would receive a five percent available appropriations for Residential Providers in the PAU by over a million payments to providers. According to DCYF, the commissioner’s initial report for the 5% increases would have required the Department to exceed its legislature and the Governor about the status of the appropriations for Under the Trailer Bill, the commissioner is required to report quarterly to the Trailer Bill was entitled to deference that the hearing panel failed to give. Further, DCYF contends that its interpretation and application of the

DCYF to pay the 2005 calculated rate plus five percent would result in DCYF next contends that the hearing panel erred because requiring Residential Providers in SFY 2006 using the [2005 calculated rates] as a basis amount appropriated in the PAU. DCYF contends that: “Payment to the respondents – would require a certain allotment of funds out of the total request upon an expectation that Class 93 expenditures – those covering the

According to DCYF, when making its budget request for the PAU, it based its The PAU at issue relates to the respondents and other service providers.

would cause it to exceed the available appropriation. respondents demonstrates that paying the rate ordered by the hearing panel contends that a review of the Program Appropriation Unit (PAU) relating to the was insufficient to pay the rate ordered. In support of this argument, DCYF DCYF contends that the hearing panel disregarded evidence that funding jurisdiction in determining whether DCYF had sufficient funding.

p. 7 properly set. Thus, we conclude that the hearing panel did not act outside its

and the allocations made thereunder to determine whether those rates were budget by the legislature, the hearing panel appropriately reviewed the budget DCYF’s justification for the rates it set was the limitation placed upon its

and to set the effective date of the rate at July 1, 2005, were proper and are hearing panel had the authority to review decisions relative to rates. Because decisions to establish the rate at the 2005 calculated rate plus five percent, into an auditor of the Department’s budget . . . .” As noted above, however, the

of whether that payment would exceed appropriations.

within its authority. the exercise of our limited review on certiorari, that the hearing panel’s we conclude that the rate established by the hearing panel was proper and sufficiency of available funding, the hearing panel, “in effect, transformed itself a civil action in superior court. Chase Home, 155 N.H. at __. We conclude, in the hearing panel did not err in not deferring to DHHS. For the above reasons, appropriation set by the legislature. According to DCYF, by reviewing the any, are available to the respondents, such as whether they can obtain relief in DCYF, as is necessary for their efficient management, within the limits of the As we said in Chase Home, we need not decide what further remedies, if commissioner of DHHS has authority to administer the budgets of DHHS and

it violated the doctrine of separation of powers by ordering payment, regardless portion of the hearing panel’s order is vacated, we need not determine whether to order payment, that portion of its decision must be vacated. Because that

newly established rate without exceeding its appropriation, we conclude that

adjudicate the sufficiency of appropriated funds. DCYF argues that the DCYF’s final argument is that the hearing panel lacked the authority to

hearing panel’s authority is limited by statute and does not include the power not extend to requiring DCYF to render payment. Id. at __. Because the become effective. Chase Home, 155 N.H. at ___. Their statutory authority does interpretation of the Trailer Bill, and properly found that DCYF could pay the authority only to establish the relevant rates and to determine when the rates the relevant law and facts. Because the hearing panel did not err in its issue. In Chase Home, we determined that DHHS hearing panels have limit of its authority, to defer to DHHS’ determination based upon its review of legislature’s authority to appropriate those funds. We need not decide this order required payment in excess of available funds, and thereby usurped the doctrine of separation of powers. DCYF contends that the hearing panel’s DCYF next contends that the hearing panel’s decision violated the

“relative to rates.” The hearing panel could choose whether or not, within the over the 2005 paid rate, as opposed to the 2005 calculated rate, is a decision p. 8 8

BRODERICK, C.J., and DALIANIS, DUGGAN and HICKS, JJ., concurred.

scope of its authority and is vacated. affirmed, but that its order requiring DCYF to render payment was beyond the