from the District Court of Burleigh County, South Central
Judicial District, the Honorable David E. Reich, Judge.
L. Rogneby (argued) and Justin J. Hagel (appeared), Bismarck,
ND, for appellee.
E. Nicolai (argued) and Elizabeth Fischer (appeared),
Bismarck, ND, for appellants.
VandeWalle, Chief Justice.
1] The North Dakota Department of Human Services appealed
from a district court judgment reversing the Department's
order deciding Sanford HealthCare Accessories received
overpayments for medical equipment supplied to Medicaid
recipients and ordering recoupment. We reverse and remand,
concluding the district court erred in deciding the
Department's failure to comply with the statutory time
requirement for issuing its final order precluded the
Department from acting.
2] Sanford is enrolled as a Medicaid Durable Medical
Equipment and Supply Provider, providing medical equipment
and services to North Dakota Medicaid recipients. Sanford
bills the Department for the equipment, supplies, and
services by submitting Medicaid claims to the Department. The
Department pays Sanford under the Medicaid program. The
Department has published its documentation requirements and
procedures for billing Medicaid claims in a Manual for
Durable Medical Equipment, Orthotics, Prosthetics and
3] The Patient Protection and Affordable Care Act, 42 U.S.C.
§ 18001 et seq. (2010), and related federal regulations
require states to establish a Medicaid Recovery Audit
Contractor Program to audit past payments to ensure the
state's Medicaid billing procedures and policies were
followed by providers who requested payment of Medicaid
claims. The Department contracted with an audit contractor,
Cognosante, to review provider submitted Medicaid claims to
evaluate whether the claims satisfied the state's
Medicaid billing procedures.
4] Cognosante audited Sanford's claims for services
provided between January 1, 2011, through December 31, 2013,
and identified various claims that had been paid but did not
meet billing procedures. Cognosante determined those claims
were overpayments and the Department was entitled to seek
recoupment. It determined the Department was entitled to
recoup $251, 916.26 from Sanford for various billing errors,
omissions, and irregularities.
5] On September 15, 2015, Sanford appealed to the Department
numerous claims worth $164, 809.96 under N.D.C.C. §
50-24.1-24, requesting reversal of the audit findings.
Sanford did not appeal 111 claims worth $85, 164.00. Sanford
provided documents and other information supporting its
request for review.
6] On April 27, 2016, the Department issued an order, finding
Sanford did not comply with billing procedures, overpayment
was made in the amount of $109, 747.89 on the claims Sanford
appealed, and recoupment was proper. The Department also
ordered Sanford to remit payment of $85, 164.00 for the
claims Cognosante found were overpaid but Sanford did not
appeal to the Department. The Department ordered Sanford pay
a total of $194, 911.89.
7] Sanford appealed to the district court. Sanford argued the
Department's decision was not in accordance with the law
because the Department did not comply with statutory
8] The district court reversed the Department's decision,
concluding the decision was not in accordance with the law
because the Department failed to comply with the statutory
time requirement for issuing its decision under N.D.C.C.
§ 50-24.1-24(5). The court ruled the statute requires
the Department to issue its final decision within
seventy-five days of receipt of the notice of request for
review, the legislature intended the Department issue its
decision within a reasonable time frame, and the seventy-five
day time limit may be extended for a reasonable amount of
time upon a showing of good cause. The court explained the
Department far exceeded the seventy-five days allowed by
statute and it was not persuaded by the Department's
arguments that the decision was delayed because the documents
Sanford submitted were a "disorganized mess" and
that Sanford was not prejudiced by the delay.
9] We exercise limited appellate review of an administrative
agency's decision under the standards set out in N.D.C.C.
§ 28-32-46. Coon v. N.D. Dep't of Health,
2017 ND 215, ¶ 7, 901 N.W.2d 718. The agency's
decision will be affirmed unless:
1. The order is not in accordance with the law.
2. The order is in violation of the constitutional rights of