                                          No. 04-579

               IN THE SUPREME COURT OF THE STATE OF MONTANA

                                          2005 MT 202


MARSHA KIRCHNER,

              Petitioner and Appellant,

         v.

STATE OF MONTANA, DEPARTMENT OF
PUBLIC HEALTH AND HUMAN SERVICES,
DIVISION OF QUALITY ASSURANCE,

              Respondent and Respondent.



APPEAL FROM:         District Court of the First Judicial District,
                     In and for the County of Lewis and Clark, Cause No. DV 2003-482
                     The Honorable Thomas C. Honzel, Judge presiding.



COUNSEL OF RECORD:

              For Appellant:

                     Christopher Daly, Attorney at Law, Missoula, Montana

              For Respondent:

                     Kimberly A. Kradolfer, Special Assistant Attorney General, DPHHS, Helena,
                     Montana



                                                  Submitted on Briefs: May 31, 2005

                                                             Decided: August 16, 2005
Filed:



                     __________________________________________
                                       Clerk
Justice Patricia O. Cotter delivered the Opinion of the Court.

¶1     Marsha Kirchner (Kirchner) appeals the First Judicial District Court’s decision

upholding the Decision of the Board of Public Assistance and the Fair Hearings Decision.

We affirm.

                                           ISSUE

¶2     The restated issue on appeal is whether the District Court erred in upholding a final

administrative decision which concluded that the Montana Department of Public Health and

Human Services (DPHHS or Department) was entitled to repayment of $4,593.96 in fees that

had been paid to Kirchner by the Montana Medicaid Program (Medicaid).

                  FACTUAL AND PROCEDURAL BACKGROUND

¶3     Kirchner is a licensed professional counselor who has been providing services for

Medicaid clients since 1992. After providing such services, Kirchner seeks payment from

the Montana Medicaid Program which is administered by the DPHHS. Medicaid providers

must follow specific billing procedures when submitting claims to the Department for

payment. Kirchner does not dispute that she is required to bill for her services in accordance

with the specific billing procedures.

¶4     One element of the billing process requires providers to identify each medical

procedure they perform for each patient by assigning a pre-determined “code” number to the

procedure. For example, for the type of work Kirchner performs, there is a specific code

number for individual therapy and a different code number for group therapy. Prior to July


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1, 1999, Medicaid providers were required to bill using “local codes.” Local codes were

billed in 15-minute increments, meaning a provider could bill multiple units to a single

patient in a given day depending upon the amount of time spent with the patient.

¶5     On July 1, 1999, new DPHHS rules were implemented. These rules required

Medicaid providers seeking payment for services to begin using a national coding system.

These national codes describing different kinds of medical procedures were published in a

manual entitled Current Procedure Terminology, or CPT. All Medicaid providers were

supplied with a Medicaid Provider Handbook that explained how to process a claim.

Significantly, the new CPT codes relevant to Kirchner’s practice were designated as “per

visit” as opposed to per 15-minute intervals, as before. Thus the new codes categorized

billing by the specific procedure performed, and not the amount of time spent performing it.

The Department therefore maintains that under the new codes, only one unit of service could

be billed per patient per day, regardless of the amount of time the provider spent with the

patient.

¶6     Kirchner asserts that when the system changed, she did not understand how to bill

under the CPT codes for sessions that ran more than one hour. She states that she called

Consultec (later renamed ACS), the fiscal agent for DPHHS to whom she submitted her

claims, and requested assistance. Kirchner maintains that a representative of Consultec

instructed her to bill one unit for an hour-long session, and bill a second unit if the session

lasted more than an hour, even if it did not run a full two hours. Subsequently, Kirchner


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billed the Medicaid Program in accordance with Consultec’s instructions. At times she billed

two units of service for the codes in questions, and at other times, as many as four and five

units of service per patient per day, based on the amount of time she spent with the patient.

In January 2001, Kirchner stopped billing for more than one unit of service per patient per

day because she learned that the Department considered such multiple unit billing to be

improper.

¶7     During the relevant time period, Kirchner submitted her claims and was paid by

DPHHS. DPHHS typically pays claims on an “as submitted” basis and later audits those

payments for correctness. See Juro’s United Drug v. Public Health, 2004 MT 117, ¶ 20, 321

Mont. 167, ¶ 20, 90 P.3d 388, ¶ 20. Subsequently, during the Department’s audit of

Medicaid provider claims submitted between July 1, 1999, through June 30, 2002, the

Department discovered Kirchner’s improperly billed claims and notified her that she had

erroneously overbilled the Montana Medicaid Program in the amount of $4,593.96.

¶8     Kirchner did not contest the Department’s calculations, but rather disputed the

DPHHS’s position that her billing was wrong. She requested an Administrative Review

which was held by telephone in mid-January 2003. The subsequent Administrative

Determination upheld the DPHHS’s demand for repayment. In accordance with applicable

regulations, Kirchner then sought a Fair Hearing which was held on March 18, 2003. At the

conclusion of the hearing and after reviewing the parties’ proposed Findings of Fact and

Conclusions of Law, the Hearings Officer upheld the Department’s determination that


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Kirchner had overbilled the Medicaid Program. In his Decision, the Hearings Officer failed

to make certain factual findings requested by Kirchner, leading Kirchner to request review

with the Montana Board of Public Assistance (BPA). In August 2003, the BPA adopted the

Hearings Officer’s May 5, 2003, Decision. Kirchner then sought review of the decision by

the District Court. On May 5, 2004, the District Court affirmed the BPA’s Decision.

Kirchner filed a timely notice of appeal.

                               STANDARD OF REVIEW

¶9     The relevant portion of the applicable standard of review is set forth in the Montana

Administrative Procedure Act (MAPA) at § 2-4-704, MCA:

       (2) The court may not substitute its judgment for that of the agency as to the
       weight of the evidence on questions of fact. The court may affirm the decision
       of the agency or remand the case for further proceedings. The court may
       reverse or modify the decision if substantial rights of the appellant have been
       prejudiced because:

       (a) the administrative findings, inferences, conclusions, or decisions are:
       ...
       (iv) affected by other error of law;
       (v) clearly erroneous in view of the reliable, probative, and substantial
       evidence on the whole record;
       ...
       (b) findings of fact, upon issues essential to the decision, were not made
       although requested.

¶10    This Court will review a state agency’s conclusions of law to determine whether the

agency’s interpretation of law is correct. Seven Up Pete Venture v. Mont., 2005 MT 146,

¶ 58, ___ Mont. ___, ¶ 58, ___ P.3d ___, ¶ 58 (internal citations omitted). Likewise, we



                                             5
review a district court’s conclusions of law for correctness. State v. Tichenor, 2002 MT 311,

¶ 18, 313 Mont. 95, ¶ 18, 60 P.3d 454, ¶ 18.

¶11    Kirchner argues, pursuant to § 2-4-704(2)(b), MCA, that the District Court erred by

not overturning the Hearings Officer’s Decision for his failure to adopt certain of Kirchner’s

proposed findings. Additionally, she maintains that the District Court misapplied the holding

in State v. Vainio, 2001 MT 220, 306 Mont. 439, 35 P.3d 948. Lastly, Kirchner avers that

the District Court erred in upholding the Hearings Officer’s admission of Consultec’s

telephone logs.

                                       DISCUSSION

¶12    The crux of Kirchner’s argument is that she should not be responsible for the

overbilling because: 1) there was nothing in writing from the DPHHS or Consultec notifying

her that billing more than one hour under the codes was not permitted; and 2) the Department

should be estopped from seeking repayment because an employee of Consultec orally advised

her she could bill more than one hour per patient per day and she received a letter from

Randy Poulsen, Chief of the Department’s Mental Health Services Bureau, stating that

nothing expressly prohibited a therapist from spending more than one hour with a patient

under the CPT codes.

¶13    At her Fair Hearing, Kirchner cross-examined three of the State’s witnesses: one

DPHHS employee and two Consultec employees. She elicited testimony that during the

period in question, there was nothing in writing from the Department or its agent, Consultec,


                                               6
to state that billing more than one hour under these codes was impermissible. As a result of

this testimony, Kirchner proposed the following Findings of Fact, among others, to the

Hearings Officer:

¶14           5. On cross-examination, Ms. Higgins [Compliance Specialist
              for DPHHS], testified that for the period in question from July,
              1999 through January, 2001, there was nothing in writing from
              the State or its agent, Consultec, to state that billing more than
              one hour under these codes was impermissible.

¶15           7. On cross-examination, Ms. Brandt [Registered Health
              Information Administrator for ACS] testified that for the period
              in question July, 1999 through January, 2001, there was nothing
              in writing from the State or its agent, Consultec, to state that
              billing more than one hour under these codes was impermissible.

¶16           12. On cross-examination, Ms. Hance [Deputy Accounts
              Manager for Consultec/ACS] testified that for the period in
              question July, 1999 through January, 2001, there was nothing in
              writing from the State or its agent, Consultec, to state that billing
              more than one hour under these circumstances was
              impermissible.

¶17    Kirchner maintains that because there was no evidence in the record to contradict the

above-recited testimony of witnesses Higgins, Brandt and Hance, the Hearings Officer

should have adopted these findings and failure to do so was reversible error.

¶18    The Hearings Officer, however, determined that the more relevant testimony presented

by the Department’s expert, Ms. Brandt, was the Department’s interpretation of the relevant

CPT codes. Brandt explained that, with the exception of one unrelated code, the relevant

codes were “per visit” codes and could only be properly billed for one unit of service per

patient per day. In his Decision, the Hearings Officer noted that Brandt’s interpretation was

                                               7
supported by an article in the Summer 1992 issue of “CPT Assistant,” a guide published by

the American Medical Association, that discussed and clarified coding issues and answered

provider questions regarding proper use of CPT codes. Observing that Kirchner had

provided no expert testimony to refute this interpretation, the Officer concluded that the

Department’s interpretation was a “reasonable” one.           As a result, he sustained the

Department’s ruling in accordance with State Personnel v. Investigators, 2002 MT 46, 308

Mont. 365, 43 P.3d 305. In State Personnel, we held that an agency’s interpretation of its

rule is afforded great weight, and the court should defer to that interpretation unless it is

“plainly inconsistent” with the spirit of the rule. The agency’s interpretation of the rule will

be sustained so long as it lies within the range of reasonable interpretation permitted by the

wording.

¶19    Kirchner argued to the District Court that the Department should have put its agency

interpretation in writing. She relied for this argument upon our decision in Vainio. However,

Vainio is inapposite. At issue in that case were certain informal Medicaid “policies” that the

defendant had been criminally convicted of violating. Vainio successfully argued on appeal

that a criminal conviction could not be based upon the violation of these “policies” because

they had never been formally promulgated pursuant to MAPA. Here, by contrast, the

national DPHHS billing rules under which Kirchner was assessed for reimbursement have

not been challenged. Thus, the rules themselves are presumptively valid. The question

Kirchner presents, and which the District Court rejected, is whether the Department’s


                                               8
interpretation of the CPT codes should have been in writing and adopted pursuant to MAPA.

This issue was not before us in Vainio.

¶20    As to Kirchner’s assertion that a Departmental interpretation must be in writing, the

State notes that under § 2-4-102(13)(b), MCA, an agency may adopt an interpretive rule

under MAPA but is not required to do so. Additionally, the State counters that the absence

of written instructions expressly informing Kirchner that she could not be reimbursed for

billing more than one unit of service under a particular code for a given client on a given day

is irrelevant. This is so, the State argues, because the Department is statutorily entitled to

recover overpayments “regardless of whether the incorrect payment was the result of

Department or provider error or other cause.” Section 53-6-111(2)(a)(i), MCA; Rule

37.85.406(10)(a), ARM.

¶21    Section 53-6-111(2)(a)(i), MCA, unequivocally states:

       (2) (a) The department is entitled to collect from a provider, and a provider is
       liable to the department for:
       (i) the amount of a payment under this part to which the provider was not
       entitled, regardless of whether the incorrect payment was the result of
       department or provider error or other cause; . . .

¶22    Montana Administrative Rule 37.85.406(10)(a) further provides:

       The department is entitled to recover . . . any payment to which the provider
       was not entitled, regardless of whether the payment was the result of
       department or provider error, or other cause, and without proving that the
       provider submitted an improper or erroneous claim knowingly, intentionally,
       or with intent to defraud.




                                              9
See also Juro’s United Drug, ¶ 21, quoting verbatim § 53-6-111(2)(a)(i), MCA, and holding

that Juro’s must reimburse the Department for overpaid “delivery fees.”

¶23    In Juro’s, as in the case at bar, after paying Juro’s submitted claims, the Department

subsequently conducted an audit and determined that Juro’s had improperly billed the

Program and was erroneously paid under the relevant Medicaid code. The DPHHS sought

repayment of approximately $10,000.00. The Department’s conclusion was based on

regulatory language the meaning of which was a matter of dispute between Juro’s and the

Department. The District Court affirmed the decision of the Hearings Officer and the BPA,

concluding that the Department’s interpretation of the rule was “reasonable and not

inconsistent with” the applicable rule. We affirmed the District Court.

¶24    Kirchner argues that Juro’s is inapplicable because it stands for the proposition that

an individual cannot profit from a payment to which he or she is not entitled. She maintains

that the State has not argued that she did not do the work for which she was paid, but only

that she billed incorrectly for the work performed; therefore she is “entitled” to payment.

¶25    Section 53-6-111(2)(a)(i), MCA, Rule 37.85.406(10)(a), ARM, and Juro’s all

expressly indicate that the Department may seek reimbursement from a provider who “was

not entitled” to a Medicaid payment.        Therefore, Kirchner’s argument against the

applicability of Juro’s likewise would apply to the applicability of the statute and the

regulation. “Entitled” simply means “to furnish with a right or claim to.” American Heritage

Dictionary, Fourth Edition, 2000. Under the Department’s interpretation of its rule,


                                             10
providers are authorized to bill the Medicaid Program under the medical codes relevant to

Kirchner’s claim for only one unit of service per patient per day. Therefore, such providers

are “entitled” to payment from the DPHHS for only one unit of service per patient per day.

Kirchner accurately states that there is nothing in writing to prohibit her from spending more

than one hour with a patient per day. She is, of course, free to do so. However, under the

Department’s interpretation of its rules, she may be paid by the Medicaid program for only

the amount of time considered to be “one unit” of service per patient per day. As stated

above, the District Court concluded that the DPHHS’s interpretation of the CPT codes was

“reasonable and not inconsistent.”

¶26    This Court has long held that an “agency’s interpretation of its rule is afforded great

weight, and the court should defer to that interpretation unless it is ‘plainly inconsistent’ with

the spirit of the rule. The agency’s interpretation of the rule will be sustained so long as it

lies within the range of reasonable interpretation permitted by the wording.” Easy v. Dept.

of Natural Res. & Conserv. (1988), 231 Mont. 306, 309, 752 P.2d 746, 748 (internal citations

omitted). In the case at bar, both the Hearings Officer and the District Court concluded that

the Department’s interpretation of its rule was “reasonable and not inconsistent with” the

applicable rule. Kirchner has presented nothing to convince us that a contrary conclusion

should be reached.      Because the Department’s interpretation of the CPT codes was

reasonable, Kirchner is not entitled to payment for the overbilled services under § 53-6-




                                               11
111(2)(a)(i), MCA, and Rule 37.85.406(10)(a), ARM, and is liable to the Department for

reimbursement of the overpayment.

¶27    Under these circumstances we conclude that the factual findings proposed by Kirchner

were irrelevant in light of the applicable law, and the Hearings Officer’s failure to adopt

them was not error. From the record provided us, we further conclude that the factual

findings that were adopted by the Hearings Officer were adequately supported by the

evidence, and were not clearly erroneous.

¶28    Finally, Kirchner maintains in the alternative that the Department should be estopped

from seeking reimbursement from her because she justifiably relied upon an oral instruction

from a Consultec employee that she could bill more than one unit per patient per day. In this

connection, she asserts that the Hearings Officer improperly admitted and considered

evidence, and improperly shifted the burden of proof.

¶29    At Kirchner’s Fair Hearing, the Hearings Officer analyzed the merits of Kirchner’s

estoppel claim. In doing so, the Officer admitted over Kirchner’s objection the telephone

logs of Consultec, which had been offered to refute Kirchner’s claim that a Consultec

representative had authorized her by phone to bill in the manner she did. Kirchner argues on

appeal that the admission of the telephone logs was error, as was the Hearings Officer’s and

the ensuing District Court’s conclusion that the doctrine of equitable estoppel did not apply.

We decline to disturb these conclusions because ultimately they were unnecessary to the

District Court’s determination.


                                             12
¶30    At the core of Kirchner’s estoppel claim is her contention that the Department’s

Consultec agent gave her false information, upon which she relied to her detriment.

However, the fact remains that § 53-6-111(2)(a)(i), MCA, and Rule 37.85.406(10)(a), ARM,

expressly authorize the Department to collect from a provider an unentitled payment,

regardless of whether the incorrect payment was the result of department or provider error,

or other cause. See ¶¶ 21-22 above. Even if Kirchner could establish that the information

given to her was incorrect, this amounts at best to Department error, and Department error

is not a bar to a claim for reimbursement. Because Kirchner would be unable to avoid either

the plain meaning or the consequences of the statute and administrative rule even if she

succeeded in proving she was given bad information, it was unnecessary for the Hearings

Officer or the court to reach the merits of the estoppel argument, and it is likewise

unnecessary for us to review those merits here.

                                    CONCLUSION

¶31   For the foregoing reasons, we affirm the District Court.


                                                              /S/ PATRICIA O. COTTER


We Concur:

/S/ KARLA M. GRAY
/S/ JOHN WARNER
/S/ JIM RICE
/S/ BRIAN MORRIS



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