SC Administrative Law Court Decisions

This matter is before me upon Quality Drug, Inc.'s ("Quality Drug") appeal of a determination that it dispensed brand-named medications without the proper physician certification under the South Carolina Medicaid Program. Respondent South Carolina Department of Health and Human Services ("DHHS") has moved to dismiss this appeal on the grounds that Quality Drug failed to state the grounds for appeal in its notice of appeal, as required under the Administrative Procedures Act ("APA"). Quality Drug has filed a "Motion to Dismiss," requesting a ruling in its favor on the ground that DHHS unlawfully recouped Medicaid funds prior to the expiration of the appeals process. Quality Drug has also filed a "Petitioner's Brief" addressing the merits of the appeal. For the following reasons, DHHS's Motion to Dismiss is granted and Quality Drug's request for relief is denied.

This case involves a post-payment review and recoupment of money by the South Carolina Medicaid Program, which is administered by DHHS. A DHHS representative visited Quality Drug, examined its documents, and determined that brand-named medications, instead of the less costly generic drugs, were dispensed without the proper physician certification of medical necessity.

Quality Drug availed itself of DHHS's internal appeals process pursuant to 27 S.C. Code Ann. Regs. 126-152 (1992 and Supp. 1997). A DHHS hearing officer conducted an administrative hearing on March 19, 1998, and issued an Administrative Decision on April 23, 1998, affirming the finding that brand-named medications were dispensed without the proper physician certification.

By letter dated May 19, 1998, Quality Drug requested an appeal before the Administrative Law Judge Division. The entire text of the notice of appeal reads, "We are appealing your recent Administrative Law Judges [sic] decision." The notice of appeal makes no allegations regarding any factual or legal errors by DHHS, nor does it contain any details regarding Quality Drug's grounds for this appeal.

On June 15, 1998, DHHS filed a motion to dismiss this appeal due to Quality Drug's failure to specify the grounds for appeal in its notice of appeal. On June 16, 1998, Quality Drug filed a "Petitioner's Brief," stating the alleged errors of the DHHS hearing officer, and a "Motion to Dismiss" requesting a ruling in its favor on the ground that DHHS unlawfully recouped Medicaid funds on May 8, 1998, prior to the expiration of the appeals process.

DISCUSSION

To invoke the jurisdiction of the Administrative Law Judge Division in an appeal of an agency decision, a notice of appeal including a general statement of the grounds for appeal as provided in S.C. Code Ann. § 1-23-380(A)(6) (Supp. 1997) must be filed within thirty days of the receipt of the decision being appealed. See ALJD Rule 33; see also S.C. Code Ann. § 1-23-380(B) (Supp. 1997)(in cases involving appellate jurisdiction of the Administrative Law Judge Division, petition for review must be filed within thirty days after the final decision of the agency).⁽¹⁾

The failure to do so is fatal to the appeal, since the APA does not allow jurisdiction to vest in the absence of a sufficient notice of appeal. See Pringle v. Builders Transport, 298 S.C. 494, 381 S.E.2d 731, 732 (1989), citing Smith v. South Carolina Dept. of Social Services, 284 S.C. 469, 327 S.E.2d 348 (1985).

A petition for ... review pursuant to the Administrative Procedures Act must direct the court's attention to the abuse allegedly committed below, including a distinct and specific statement of the rulings of which the appellant complains. . . . [The reviewing court] lacks jurisdiction of the appeal if the notice is insufficient.

Pringle, 381 S.E.2d at 732 (1989).

Quality Drug's notice of appeal contains no allegations of legal or factual error in DHHS's Administrative Decision, nor any other grounds for appeal. Further, the Supreme Court has held that the liberal policy of allowing the amendment of pleadings does not apply to the amendment of a petition for appeal filed under the APA after the expiration of the thirty-day statutory period for filing the appeal. Pringle, 381 S.E.2d at 732 (1989); Smith, 327 S.E.2d at 349 (1985). In this case, DHHS's Administrative Decision was sent to Quality Drugs by certified mail with return receipt requested. The signed receipt indicates that Quality Drug received the Administrative Decision on April 24, 1998.⁽²⁾ The thirty-day period for filing the appeal expired on May 22, 1998. Therefore, Quality Drug's June 16, 1998 filing cannot be considered as a timely amendment to its notice of appeal. Quality Drug is now procedurally barred from amending his petition to state a basis for appeal.

Because this appeal has not been perfected as required by Rule 33, ALJD and the APA, it is dismissed for lack of jurisdiction. Due to lack of jurisdiction, this tribunal is unable to rule on Quality Drug's request for relief from DHHS's May 8, 1998 recoupment of Medicaid funds.

AND IT IS SO ORDERED.

______________________________

ALISON RENEE LEE

Administrative Law Judge

August 26, 1998

Columbia, South Carolina

1. The Administrative Law Judge Division has authority to hear appeals from DHHS under the Medically Indigent Assistance Act pursuant to S.C. Code Ann. § 44-6-190 (Supp. 1997).

2. It is noted that the cover sheet attached to the DHHS Administrative Decision informed the party of the right to petition for review. Although the notice makes reference to ALJD Rule 33, it simply indicates that "the petition should be directed to the Administrative Law Judge Division". This notice fails to inform the party that the petition must contain certain information in conformity with ALJD Rule 33. This failure to inform or direct the aggrieved party to the rule has resulted in the filing of requests for review that have also been found to be insufficient to confer jurisdiction. See Madison v. South Carolina Department of Health and Human Services, Docket No. 97-ALJ-08-0141-AP (June 11, 1997) and Powell v. South Carolina Department of Health and Human Services, Docket No. 97-ALJ-08-0396 (Sept. 23, 1997). This incomplete information is unfortunate because the case law leaves no room to resolve any confusion in appellant's favor.