2006-070, 2006-0219, PETITION OF CHASE HOME FOR CHILDREN & a.

in part and reverse in part. pertaining to their state fiscal year (FY) 2004 and 2005 rate appeals. We affirm Human Services Administrative Appeals Unit Hearing Panels (hearing panels)

11, challenging decisions by two New Hampshire Department of Health and Pine Haven Boys Center, filed two petitions for writ of certiorari, see Sup. Ct. R. Family Services, Hannah House, NFI North, Odyssey House, Orion House and DUGGAN, J. The petitioners, Chase Home for Children, Child and

Health and Human Services. attorney general, on the brief and orally), for the New Hampshire Department of Kelly A. Ayotte, attorney general (Suzan M. Lehmann, senior assistant

for the petitioners. to press. Errors may be reported by E-mail at the following address: Orr and Reno, P.A., of Concord (Lisa Snow Wade on the brief and orally),

(New Hampshire Department of Health and Human Services) PETITION OF CHASE HOME FOR CHILDREN & a.

2006-219 Nos. 2006-070 Department of Health and Human Services editorial errors in order that corrections may be made before the opinion goes Hampshire, One Charles Doe Drive, Concord, New Hampshire 03301, of any Readers are requested to notify the Reporter, Supreme Court of New ___________________________

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 supplemental hearing to challenge DCYF’s recalculated rates. p. 2 February 4, 2005, and provided the petitioners with a deadline for requesting a

The panel directed DCYF to recalculate the FY 2004 rate for each petitioner by

instead of calculating new rates in accordance with newly enacted Rule 6422. concluded that DCYF erred by simply carrying forward the FY 2003 rates to comply with various provisions of Rule 6422. In particular, the panel

because: (1) they disagreed with DCYF’s recalculation of the rates; and (2) properly set the rates for the petitioners. On February 18, 2005, the petitioners requested a supplemental hearing

the petitioners had proved by a preponderance of the evidence that DCYF failed On December 15, 2004, the panel issued a decision and determined that

year, and remain in effect for twelve months. Id 2004, the panel held an evidentiary hearing to determine whether DCYF set forth in Rule 6422.22. See panel was convened to hear the petitioners’ rate appeal. On August 30 and 31, accordance with Rule 6422.22. Pursuant to RSA 170-G:4-a, a three-person their FY 2004 rates, arguing that DCYF did not calculate the rates in After DCYF set the FY 2004 residential rates, the petitioners appealed

A. The FY 2004 Rate Appeals

Rules, He-C 6422.25. challenge the rates by filing an appeal. See RSA 170-G:4-a (2002); N.H. Admin. compensated by the State for the services they provide. See. 6422.22(b)-(c). Providers may set annual rates at which such residential childcare providers will be rates are computed, they take effect at the beginning of the next state fiscal

computes the residential childcare facility rates pursuant to the methodology The New Hampshire Division for Children, Youth & Families (DCYF) for children who are delinquents, see start of FY 2004. rate setting rules were adopted in 2002, they did not become effective until the rules). See RSA 170-G:5 (2002); N.H. Admin. Rules, He-C 6422. Although the DHHS adopted Residential Child Care Facilities Rate Setting Rules (rate setting XVII, XVII-a (2002). In order to meet this obligation, the commissioner of

Hampshire Department of Health and Human Services (DHHS) is obligated to children in need of services, see RSA ch. 169-D (2002 & Supp. 2006). The New children who have been abused, see RSA ch. 169-C (2002 & Supp. 2006); and

Hampshire residential childcare providers who furnish residential placements The following facts are contained in the record. The petitioners are New

I. Factual Background p. 3 3

ordering DCYF to recalculate them for each petitioner by March 24, 2005.

rates for the petitioners. comply with certain provisions of Rule 6422 when it established the FY 2005

2005 rates set by DCYF were not calculated in accordance with Rule 6422, and On March 9, 2005, the panel issued a written decision ruling that the FY

January 2005. At the hearing, the parties stipulated that DCYF did not fully with the FY 2004 rate appeal, a three-person panel conducted a hearing in 2004 rates without analyzing the petitioners’ FY 2005 budget requests. As methodology required by Rule 6422, but instead simply carried over the FY their FY 2005 rates, arguing that DCYF did not set the rates using the DCYF set the FY 2005 residential rates. Thereafter, the petitioners appealed While the petitioners were pursuing the appeal of their FY 2004 rates, Hampshire courts or legislature. relief must be sought by [the petitioners] through the New B. The FY 2005 Rate Appeals ordering retroactive relief in these consolidated appeals. Any such Supreme Court. Consequently, the Panel is constrained from financial resources. The panel denied the motion. authority have not yet been interpreted by the [New Hampshire] and that the failure to do so amounted to an unconstitutional taking of their the panel should have ordered retroactive application of the recalculated rates, rates the panel had determined for each of them, the petitioners argued that payments at the recalculated rate levels. The panel stated: 2005. Although the petitioners did not challenge the amount of the FY 2004 The petitioners filed a joint motion for reconsideration on September 14,

170-G:4-a), the He-C 6422 Rules, and the scope of this panel’s and 6, and May 2 p. 3 3, 2005. The relevant statutes (RSA 170-G:4, XVII and XVII-a, and RSA by the legislature.” Accordingly, a supplemental hearing was held on April 4 ability and authority to expend funds in excess of those that were appropriated that it did not have the legal authority to order DCYF to make retroactive become effective at the beginning of FY 2004. However, the panel determined The panel further concluded that the revised FY 2004 rates should have rate, in accordance with Rule 6422. For each petitioner the rate was increased. petitioner, the panel reviewed the evidence and determined the correct FY 2004 decision on the petitioners’ FY 2004 rate appeals. With respect to each On August 17, 2005, the panel issued its supplemental and final

recalculated rates due to “fiscal and legal constraints on the Department’s DCYF indicated that it would not actually pay the petitioners based upon the distribution of available funds to the petitioners.

p. 4 nor established a “reasonable priority or classification system” to facilitate the attorney’s fees. paid the petitioners for services provided in June 2005 at the recalculated rate, deprived of financial resources. The petitioners also seek costs and reasonable on December 28, 2005. In spite of the hearing panel’s decision, DCYF neither sufficient appropriations available; and (3) they were unconstitutionally motion for reconsideration on June 24, 2005, which the hearing panel denied distribution of available funds among the petitioners. The petitioners filed a

2005 rate levels for one month only, contingent upon whether there were

to establish a “reasonable priority or classification system” to facilitate the

that the petitioners’ remedy was limited to reimbursement at the revised FY retroactive rate payments; (2) the 2005 hearing panel erred when it determined petitioners at the revised FY 2005 rate levels for June, the panel directed DCYF they determined that they were not authorized to order DHHS to make If, however, the available funds were insufficient to fully reimburse the sufficient funds appropriated to DCYF for residential services were available. during June 2005, which was the final month of FY 2005, provided that

petitioner. consolidated. The petitioners argue that: (1) the hearing panels erred when The petitioners then filed the two petitions here at issue, which were

to reimburse the petitioners at the revised rate levels for services performed rate levels. However, it concluded that it did have the authority to order DCYF the legal authority to order DCYF to make retroactive payments at the revised calculated in accordance with Rule 6422. Further, it ruled that it did not have

proof and testimony regarding calculation of “units of service” for each to introduce the agreed-upon rate revisions into evidence and to hear offers of upon rates. On April 11, 2005, a brief hearing was held to permit the parties pertaining to its ability or authority to reimburse the petitioners at the agreed-

FY 2005 rate appeals. It determined that the agreed-upon FY 2005 rates were On May 26, 2005, the panel issued its final decision on the petitioners’

parties failed to reach an agreement by April 1, 2005. that supplemental hearings would be held on April 11 and 18, 2005, if the

informed the panel that it had no intention of waiving any arguments DCYF fully complied with Rule 6422. In spite of this agreement, DCYF reached an agreement regarding what the FY 2005 rates would have been had rates by April 1. However, on April 7 they informed the panel that they had The parties were not able to reach an agreement regarding the FY 2005

differences – if any – in their rate proposals could be resolved. The panel stated Thereafter, the panel ordered the parties to meet to determine whether the p. 5 5

meanings to words used. Appeal of Town of Nottingham interpreting agency rules, where possible, we ascribe the plain and ordinary

whether it gives hearing panels the authority to duty to establish the actual rate and to determine when it becomes effective. (quotation omitted). regulation and with the purpose which the regulation is intended to serve.” Id. agency’s interpretation to determine if it is consistent with the language of the of its own regulations, “that deference is not total. We still must examine the rates in excess of available appropriations, citing Petition of Strandell segments. Id. Finally, while we accord deference to an agency’s interpretation further argues that the hearing panels lack the authority to require it to pay (2006). We also look at the rule we are construing as a whole rather than in hearing panels lack the executive power to administer DHHS’ budget. DHHS, 1 p. 5 53 N.H. 539, 555

effective from the beginning of each of the respective fiscal years. When

language of Rule 6422, in conjunction with the relevant statutes, to ascertain for the following twelve months, and that the hearing panels are under a clear To address the petitioners’ principal argument, we must examine the rate for a state fiscal year be effective from the beginning of the fiscal year and decisions pertaining to the sufficiency and administration of DHHS’ budget. this position, they assert that Rule 6422 mandates that a residential provider’s 110 (1989). Finally, DHHS contends that we should abstain from rendering

retroactive payments at the recalculated FY 2004 and 200 p. 5 5 rates because the DHHS counters that the hearing panels properly declined to order

certiorari is the proper vehicle for obtaining review. Petition of Perkins authority to order retroactive payment of the recalculated rates. In support of panels’ decisions on the petitioners’ rate appeals, a petition for a writ of The petitioners’ primary argument is that the hearing panels had the

result in substantial injustice. Petition of State of N.H., 1 p. 5 52 N.H. at 517. our power to grant such writs sparingly and only where to do otherwise would (explaining the “unsustainable exercise of discretion” standard). We exercise capriciously. Id. at 654; cf. State v. Lambert, 147 N.H. 295, 296 (2001) unsustainably exercised its discretion or acted arbitrarily, unreasonably or illegally with respect to jurisdiction, authority or observance of the law or has a petition for certiorari is limited to determining whether the agency has acted N.H. 652, 653-54 (2002). Our review of an administrative agency’s decision on

Because there is no statutory provision for appellate review of the hearing Petition of State of N.H. (State v. Campbell), 1 p. 5 52 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

II. Discussion the advisory board shall appoint its 2 members. No person

p. 6 advisory board established by RSA 170-G:6. The chairman of

the commissioner regarding rates or certification.

commissioner of health and human services. commissioner or his designee and 2 members from the 170-G:4, XVII or XVIII by filing an appeal with the

written notification sent to the applicant, stating the decision of

shall state the specific reasons for the appeal.

IV. The appeal shall be heard under RSA 541-A:31-36 by the department relative to rates or certifications pursuant to RSA

G:4-a, which states, in pertinent part: III. The appeal shall be filed within 14 working days of the date of

authorized by the service provider to submit the appeal, and II. The appeal shall be in writing, signed by a person duly budget proposal. Id

appeal and state the reasons for the appeal.” Id with the commissioner that is signed by a person duly authorized to submit the I. Any service provider may appeal decisions made by the application of these rules and notify the [provider].” Id

hearing panel’s composition, procedures and authority are defined by RSA 170- to the director of DCYF. Id Public Serv. Co. of N.H., 130 N.H. 285, 291 (1988) (quotation omitted). The determination of the tentative rate.” Id authority that is “expressly granted or fairly implied by statute.” Appeal of Administrative tribunals – such as the hearing panels – have only the

first establishes a “tentative rate” after it has reviewed a childcare provider’s three-person panel is appointed to hear the appeal.

state fiscal year and remains in effect for the entire year. provider wishes to appeal the director’s decision, it must “file a written appeal

receipt of the request, the director “shall make a decision based upon

“shall become effective at the beginning of the next state fiscal year.” N.H. dispute the tentative rate, it can submit a written request for rate consideration

the tentative rate, along with “any schedule of adjustments used for the

The process of rate setting is described in detail in Rule 6422.24. DCYF

of this rule is that once established, a rate takes effect at the beginning of the “shall remain in effect for the following 12 months.” Id. 6422.04(c). The import Admin. Rules, He-C 6422.04(a)-(b). The rule further provides that the rate

residential rates “shall be computed by DCYF pursuant to He-C 6422.22” and Turning first to the administrative rules, Rule 6422.04 plainly states that p. 7 6422.04.

hearing panels the power to order DHHS to make such expenditures. See 7 language indicates that the legislature did not see fit to confer upon the

beginning of the respective state fiscal years, which is consistent with Rule

construed as granting the panels such authority. The absence of such 6422 nor the provisions of RSA ch. 170-G contain any language that could be to make retroactive payments at the recalculated rate levels. Neither Rule effective, we disagree that the hearing panels have the authority to order DHHS petitioners at the recalculated rates. the hearing panels. lacked the authority to order DHHS to make retroactive payments to the effect at the beginning of the respective fiscal years, and recognized that they rates for the petitioners for FY 2004 and 2005, concluded that the rates took hearing panels’ decisions in so far as they determined the correct residential Appeal of Public Serv. Co. of N.H., 130 N.H. at 291. Accordingly, we affirm the panels concluded that the newly calculated rates were effective starting at the and then calculating the rate in accordance with Rule 6422.22. Further, the considering evidence and arguments presented by the petitioners and DCYF,

authority to establish residential rates and determine when the rates become rate becomes effective fall within the jurisdiction the legislature conferred upon Although we agree with the petitioners that the hearing panels have the

legislature did not include. Id residential rate applicable to each petitioner in this case. They did so by will not consider what the legislature might have said or add words that the Both the 2004 and 2005 hearing panels did, in fact, determine the actual

the actual residential rate for a childcare provider and determining when the text of Rule 6422, we conclude that it can be fairly inferred that establishing relative to rates.” RSA 170-G:4-a, I. In light of this broad language and the their jurisdiction the authority to review “decisions made by the department appellant. In creating the hearing panels, the legislature explicitly placed within subject of the appeal, or be affiliated in any way with the

314, 319 (2006). We interpret legislative intent from the statute as written and ordinary meaning to the words used. Appeal of Town of Bethlehem, 154 N.H. When examining the language of a statute, we ascribe the plain and

See also N.H. Admin. Rules, He-C 6422.25.

establishing the rate or deciding on the certification that is the hearing the appeal shall have had any involvement in p. 8 8

distribution of available funds among the petitioners. a prospectively. Consequently, it was error for the panel to order DCYF to devise to instruct DHHS as to how it must spend its appropriated monies

Strandell

is reversed. available funds to the petitioners, and this portion of the 2005 panel’s decision fashion a “reasonable priority or classification system” to facilitate the reasonable priority or classification system to facilitate distribution of

order DHHS to make retroactive payments, the panels also lack the authority

decision, because just as the hearing panels have no authority to

We need not consider whether the hearing panel misconstrued the

comply with RSA 9:19.” the cost of services it purchases onto . . . private providers in order for it to that Strandell “does not support giving agencies unfettered discretion to shift

argument and DHHS’ separation of powers and sovereign immunity arguments reimburse the petitioners at the revised FY 2005 rate levels, DCYF must available. It further ordered that if the available funds were insufficient to fully sufficient FY 2005 funds appropriated to DCYF for residential services were rates for services performed for June, the final month of FY 2005, provided that ordered DCYF to reimburse the petitioners at the agreed-upon revised FY 2005 petitioners at the recalculated FY 2005 rates. As described above, the panel misinterpreted Strandell when ordering payment for June 2005 to the Next, we address the petitioners’ argument that the 2005 hearing panel

122 (2004) (Duggan, J., dissenting).

petitioners cannot receive retroactive payments. Thus, the petitioners’ takings funds to the petitioners. Similarly, no order has been issued ruling that the before the hearing panels, and no order has been issued requiring payment of these financial resources. powers doctrine or sovereign immunity, because neither issue was raised the respective fiscal years, they will have been unconstitutionally deprived of We also decline to address any arguments pertaining to the separation of rates determined by the hearing panels are not retroactive to the beginning of the petitioners could obtain relief in a civil action in superior court. decide what further remedies are available to the petitioners, such as whether is restricted to determining the hearing panels’ authority. Thus, we need not 6422 and the statutory scheme. However, the scope of our review on certiorari from the record that DHHS failed to make such payments as required by Rule entitled to retroactive payments at the newly calculated rates. It is also clear It is apparent from the hearing panels’ decisions that the petitioners are

million, and by approximately $1.6 million in FY 2005. They argue that if the The petitioners assert that they were underpaid in FY 2004 by over $1.3 p. 9 9

.

BRODERICK, C.J.