2008-051, BEL AIR ASSOCIATES v. NH DEPT. OF HEALTH AND HUMAN SERVICES

The petitioner, Bel Air Associates, appeals an order of

attorney general, on the brief and orally), for the respondent. Kelly A. Ayotte, attorney general (Laura E. B. Lombardi, assistant

Shelagh C.N. Michaud on the brief, and Mr. Quarles orally), for the petitioner. to press. Errors may be reported by E-mail at the following address: Devine, Millimet & Branch, P.A., of Manchester (Thomas Quarles and

NEW HAMPSHIRE DEPARTMENT OF HEALTH AND HUMAN SERVICES

page is: http://www.courts.state.nh.us/supreme. v.

editorial errors in order that corrections may be made before the opinion goes No. 2008-051 Hampshire, One Charles Doe Drive, Concord, New Hampshire 03301, of any Merrimack Readers are requested to notify the Reporter, Supreme Court of New ___________________________

THE SUPREME COURT OF NEW HAMPSHIRE

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 p. 2 22 as accordance with the Administrative Procedure Act; and (2) failing to comply

currently in force. (1) failing to adopt the capital cost cap and budget neutrality factor in

instituted a cap on capital cost recoveries at the 85

building. against Bel Air. the New Hampshire Administrative Procedure Act and therefore not valid

reimbursement amounts.

its rate-setting methodology, specifically the 85 that agreement. The 199 p. 2 2 agreement has been indefinitely extended and is the basis that DHHS breached the implied terms of the provider agreement by: Medicaid provider agreement. Bel Air moved for partial summary judgment on allowed nursing homes to recover most capital costs. In 2002, however, DHHS breach of contract against DHHS based upon the provisions of the 1992 program. In 2006, relying upon RSA 491:8 (1997), Bel Air brought a claim for

addition to replace the nursing home beds lost due to the closure of the original Id. at p. 2 235. each state’s rate-setting methodology complies with federal law. budget neutrality factor were rules that were not adopted in accordance with

recovery, and DHHS’ use of a budget neutrality factor in calculating

Bel Air entered into such agreements. We note that although Bel Air argues time Bel Air undertook its new construction, the Medicaid rate-setting process services to Medicaid-eligible persons through the state medical assistance Id. The renovations cost Bel Air approximately $ p. 2 2 million. At the

New Hampshire Health Services Planning and Review Board to build an establishing the payment methodologies to reimburse providers, provided that Human Servs., 154 N.H. p. 2 228, 229 (2006). Bel Air received approval from the closed due to safety issues. See Bel Air Assocs. v. N.H. Dep’t of Health & In the mid-1990s, the State ordered that one of Bel Air’s buildings be

reimbursed on the basis of per diem, per resident rates which are determined

See RSA 161:4, VI ( p. 2 2002). Under the program, nursing homes are enter into a Medicaid provider agreement with the State. In 1985 and 1992,

§ 1396a(a)(13). DHHS establishes rates of reimbursement for providers of

States participating in the Medicaid program have flexibility in

In order to participate in the Medicaid program, a nursing home must

and Medicaid Services, an agency within the United States Department of The program is administered on the federal level by the Centers for Medicare statute, rather than by the terms of the provider enrollment agreement.”

p. 3 to the facts

maintains that “[a]ny reimbursement liability on the State is imposed by

the moving party is entitled to judgment as a matter of law.”

by the parties. summary judgment is proper. We review the trial court’s application of the law reimbursement. The court did not address any of the remaining issues raised and if the moving party is entitled to judgment as a matter of law, the grant of from DHHS and did not establish an express contractual right to order to be eligible to participate in the Medicaid program.” Accordingly, DHHS favorable to the non-moving party. If there is no genuine issue of material fact, 3 agreement by the provider to abide by statutory and regulatory requirements in contract. Rather, DHHS argues, the provider agreement is simply “an

formation.” non-moving party, it finds that there is no genuine issue of material fact and

agreement was limited to establishing Bel Air’s eligibility to receive payment evidence, and all inferences properly drawn from them, in the light most

offer may propose the exchange of a promise for a performance. An offer may the provider, with no reciprocal duties on [DHHS],” it does not constitute a

Behrens v. S.P. Constr. Co., 153 N.H. 498, 501 (2006). “A valid

“Offer, acceptance, and consideration are essential to contract 491:8-a if, after considering all the evidence in the light most favorable to the (citations omitted). breached it. de novo.” Broom v. Continental Cas. Co., 152 N.H. 749, 752 (2005)

placed any reciprocal obligation on DHHS to perform. The court found that the court’s initial grant of summary judgment, we consider the affidavits and other because it neither contained any substantive reimbursement provisions, nor & Game Club v. Cormier, 133 N.H. 648, 653 (1990). “In reviewing the trial provider agreement could not provide the basis for a breach of contract claim DHHS argues that because the provider agreement “only place[s] obligations on Horse Pond Fish refers to the New Hampshire Medicaid program and the rates set therein. provider agreement contains “all of the indicia of a contract” and specifically “The court shall grant a motion for summary judgment pursuant to RSA

not a contract; and (3) if the provider agreement is a contract, the State has not

Bel Air’s motion for partial summary judgment, ruling that the 1992 Medicaid

On appeal Bel Air argues that the trial court erred because the Medicaid

immunity; (2) Bel Air’s claims fail because the Medicaid provider agreement is judicata, the statute of limitations, laches and the doctrine of sovereign summary judgment on the grounds that: (1) Bel Air’s claims are barred by res

The trial court granted DHHS’ motion for summary judgment and denied

reimbursement system fulfill an efficiency requirement. DHHS moved for with RSA 151-E:6, II, which requires that the State’s nursing home p. 4 [DHHS].” personal, financial, or medical records where such disclosure is made by of the Federal Privacy Act for any disclosure, public or otherwise, of patient’s

to terminate” and requires that DHHS hold Bel Air harmless for “any violation

either party at any time following at least 30 days written notice of such intent agreement is “binding upon [Bel Air] and p. 4 [DHHS].” It “may be terminated by that Bel Air will “accept payments by [DHHS] as payment in full.” The

under Title XIX of the Social Security Act as are prescribed by [DHHS]” and

participation as a Skilled Nursing Facility . . . and the making of payments

Security Act, specifically incorporated by reference in the agreement. 4

and specific provisions are reasonably clear.”

by reference in contract); further states that Bel Air agrees “[t]o comply with such standards for payment under the New Hampshire Title XIX Medical Assistance Program.” It Air and DHHS, and states that its purpose is “establishing eligibility for reimbursement by DHHS as required by the provisions of Title XIX of the Social

to recover overpayments to Medicaid provider “sounds in contract”); Green v. States v. Upper Valley Clinic Hospital, 615 F.2d 302, 306 (5 Cir. 1980) (action th reimbursement claims are contracts), cert. denied, 503 U.S. 940 (1992); United document is a paradigm of draftsmanship, but whether its general structure Ohio Hosp. Ass’n v. Ohio D.H.S., 579 N.E.2d 695, 700 (Ohio 1991) (Medicaid 241 S.W.3d 371, 380 (Mo. Ct. App. 2007) (provider agreements are contracts);

right to reimbursement no different from statutory right if statute incorporated Caritas Services v. State, DSHS, 869 P.2d 28, 36 (Wash. 1994) (contractual

nursing home services to Medicaid-eligible individuals in exchange for 1992 provider agreement, Bel Air and DHHS agreed that Bel Air would provide (quotations omitted). We hold that it is reasonably clear that pursuant to the

meeting of the minds. “[T]he important consideration is not whether the essential elements of a contract – offer, acceptance, consideration and a We agree with Bel Air that the 1992 provider agreement contains the

Nursing and Intermediate Care Homes Participating Under New Hampshire

by the contract.” must manifest an intention, supported by adequate consideration, to be bound parties must have the same understanding of the terms of the contract and

contract.” addition, there must be a meeting of the minds in order to form a valid

The 1992 Medicaid provider agreement is titled “Agreement with Skilled

(2006) (citation, quotation, and brackets omitted).

Durgin v. Pillsbury Lake Water Dist., 153 N.H. 818, 821

to occur, the parties must assent to the same contractual terms. That is, the (2003) (citations, quotation, and ellipsis omitted). “For a meeting of the minds

Chisholm v. Ultima Nashua Indus. Corp., 150 N.H. 141, 144-45

there is either a benefit to the promisor or a detriment to the promisee. In be accepted by commencement of performance. Consideration is present if p. 5 5

The trial court may consider these issues on remand.

DALIANIS, DUGGAN, GALWAY and HICKS, JJ., concurred.

Bel Air’s contract claim is barred by res judicata and the statute of limitations.” the correct result in granting summary judgment in favor of [DHHS] because opinion. We do not address the State’s argument that the trial court “reached We reverse and remand for further proceedings consistent with this

is best construed as business contract between state and Medicaid provider). Hum. Res. GA., 403 F. Supp. 13 p. 5 55, 1358 (N.D. Ga. 1975) (provider agreement purposes of determining provider rights); Briarcliff Haven, Inc. v. Department of Cashman, 605 F.2d 945, 946 (6 Cir. 1979) (provider agreement is contract for th