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Shaffer v. Neb. HHS

Supreme Court of Nebraska

December 19, 2014

DELORES SHAFFER, AS GUARDIAN AND NEXT FRIEND OF BRIAN SHAFFER, AN INCAPACITATED PERSON, APPELLEE,
v.
NEBRASKA DEPARTMENT OF HEALTH AND HUMAN SERVICES AND VIVIANNE M. CHAUMONT, DIRECTOR, DIVISION OF MEDICAID AND LONG-TERM CARE, APPELLEES, AND COVENTRY HEALTH CARE OF NEBRASKA, INC., APPELLANT

Page 314

[Copyrighted Material Omitted]

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Appeal from the District Court for Lancaster County: PAUL D. MERRITT, JR., Judge.

VACATED AND DISMISSED.

Thomas J. Kenny, Kathryn E. Jones, and Edward M. Fox II, of Kutak Rock, L.L.P., for appellant.

Alan E. Peterson and Thomas J. O'Neill for appellee Delores Shaffer.

On brief, Douglas J. Peterson, of Keating, O'Gara, Nedved & Peter, L.L.O., for appellee Delores Shaffer.

HEAVICAN, C.J., WRIGHT, CONNOLLY, STEPHAN, MCCORMACK, and CASSEL, JJ., MILLER-LERMAN, J., not participating.

OPINION

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[289 Neb. 741] Stephan, J.

This is an appeal from an order of the district court for Lancaster County which reversed a determination by the [289 Neb. 742] Nebraska Department of Health and Human Services (the Department) that Brian Shaffer was ineligible for certain Medicaid benefits. The appellant, Coventry Health Care of Nebraska, Inc. (Coventry), participated in the administrative proceedings

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and advocated the determination eventually reached by the Department, but it was not named as a party in the appeal to the district court. Coventry contends that it was a necessary party to the district court appeal and that because it was not joined, the district court was without jurisdiction to reverse the Department's determination in its favor. We conclude that Coventry has standing to appeal and was a necessary party in the appeal to the district court.

I. BACKGROUND

Shaffer is a 33-year-old man with severe autism and chemical sensitivities. He has many environmental, food, and drug allergies. He resides with his mother, Delores Shaffer, who is a licensed practical nurse.

Coventry is a managed care organization (MCO) which contracts with the Department to provide Medicaid services.[1] Coventry receives a capitation payment, which is a fee " paid by Medicaid to an MCO on a monthly basis for each client enrolled with the physical health or behavioral health plan. The fee covers all services required to be provided by the MCO to the client, regardless of whether the client receives services or not." [2] This type of care program is different from a fee-for-service program in that Coventry receives from the Department a set rate for each person enrolled in its program.[3] Coventry then provides the requested services.[4]

Until October 2011, Delores was paid to provide 18 hours a day of private duty nursing (PDN) care to Shaffer. This payment came from a Medicaid provider other than Coventry. In October 2011, Shaffer's Medicaid coverage was then transferred to Coventry. In April 2012, Delores asked Coventry [289 Neb. 743] to approve her to continue to provide PDN to Shaffer for 18 hours each day. Coventry denied this request after determining the nursing services were not medically necessary. Shaffer filed a first-level appeal with Coventry, which was denied. Shaffer then filed a second-level appeal with Coventry, which was also denied. Shaffer then requested a State fair hearing with the Department pursuant to 482 Neb. Admin. Code, ch. 7, § 003 (2010).

The fair hearing was held on January 22, 2013, before a hearing officer. Shaffer was represented by legal counsel. Teresa Engel, Coventry's supervisor of the appeals department, appeared for Coventry. At the commencement of the hearing, the hearing officer asked the " parties" to enter into a stipulation regarding the redaction of certain information from the exhibits which were to be offered. Engel and Shaffer's counsel agreed to the stipulation, which was made a part of the record. Engel also acknowledged that Coventry had received copies of all exhibits " from the State."

The hearing officer noted it was customary to " have the Department or its representative or contractor in this case, Coventry, put on [its] testimonial evidence first." Shaffer's counsel indicated he had no objection to this procedure, and both Engel and Shaffer's counsel declined the hearing officer's invitation to make opening statements. Engel was then sworn as Coventry's first witness. Engel presented narrative testimony explaining Coventry's reasons for ...


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