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Bridgeport Dental, LLC v. Commissioner of Social Services

Court of Appeals of Connecticut

May 24, 2016


          Argued December 7, 2015

         Appeal from Superior Court, judicial district of New Britain, Schuman, J.

          Jonathan J. Klein, for the appellant (plaintiff).

          Robert B. Teitelman, assistant attorney general, with whom, on the brief, was George Jepsen, attorney general, for the appellee (defendant).

          Jeffrey R. Babbin filed a brief for the Connecticut State Dental Association et al. as amici curiae.

          Beach, Sheldon and Harper, Js.


          BEACH, J.

         The Commissioner of Social Services is authorized to pay providers of dental services for services rendered to beneficiaries of various assistance programs; the payments are subject to audits. See General Statutes§ 17b-99 (d). This case involves the process by which a provider may contest the results of the audit, and the scope of review by the Superior Court.

         The plaintiff, Bridgeport Dental, LLC, appeals from the trial court’s dismissal of its appeal from the final decision of the defendant, the Commissioner of Social Services. The defendant’s final decision substantially upheld the conclusions of an audit that had determined that the plaintiff, a provider of dental services, had received $106, 851 in over payments from the defendant. On appeal, the plaintiff claims that the court (1) improperly found that the record contained substantial evidence to support the defendant’s finding of over payments, (2) committed plain error in determining that the plaintiff’s failure to include certain claims in its statement of aggrievement at the administrative level barred the plaintiff from raising the claims at trial, and (3) erred in determining that ‘‘the manner in which extrapolation projection methodology was applied by the [auditor] to calculate the amount of the overpayment . . . was supported by substantial evidence . . . .’’[1] We affirm the judgment of the trial court.

         In order to place the claims in context, it is useful to summarize the statutory process. Pursuant to General Statutes (Rev. to 2013) § 17b-99 (d) (1), [2] the defendant or his delegate, with some exceptions not relevant here, must notify the provider prior to conducting an audit. Findings may be based on extrapolation from samples if, inter alia, the value of claims subject to the audit exceeds $150, 000 on an annual basis. General Statutes (Rev. to 2013) § 17b-99 (d) (3). If the auditor discovers discrepancies and notifies the provider, the provider is allowed thirty days in which to provide documentation to rebut the discrepancies. General Statutes (Rev. to 2013) § 17b-99 (d) (4). The auditor is to issue a preliminary written report and provide a copy of the report to the provider not later than sixty days after the conclusion of the audit. General Statutes (Rev. to 2013) § 17b-99 (d) (5). An ‘‘exit conference’’ shall then be held.[3]General Statutes (Rev. to 2013) § 17b-99 (d) (6). Following the exit conference, the defendant shall produce a final written report, which, with some exceptions, is to be given to the provider within sixty days of the exit conference. General Statutes (Rev. to 2013) § 17b-99 (d) (7).

         Any provider aggrieved by a decision in the final written report may request a review ‘‘of all items of aggrievement’’ before an impartial designee of the defendant (review official). The request for review shall contain a ‘‘detailed written description of each specific item of aggrievement . . . .’’ General Statutes (Rev. to 2013) § 17b-99 (d) (8). The review official is then to issue a ‘‘final decision.’’ General Statutes (Rev. to 2013) § 17b-99 (d) (8). Pursuant to § 17b-99 (d) (9) the provider may appeal from the final decision to the Superior Court ‘‘in accordance with the provisions of Chapter 54, ’’ the Uniform Administrative Procedure Act (UAPA), General Statutes § 4-166 et seq.[4]

         Within this framework, the court recounted the following facts, which are relevant to our resolution of the plaintiff’s claims. ‘‘The plaintiff is a dental practice providing eligible patients services that the Department of Social Services (department) paid for pursuant to the Medicaid program.[5] On March 12, 2013, the department issued a final report on an audit it conducted. The report concluded that, for the period from July 1, 2008 through June 30, 2010, the plaintiff received $873, 744 in Medic-aid payments, of which $106, 851 constituted over payments. The department proposed that it deduct the $106, 851 from future payments to the plaintiff. . . .[6]

         ‘‘[James Caserta, a dentist employed by the plaintiff, submitted, on behalf of the plaintiff] a statement of aggrievement seeking review of the audit. . . . No hearing took place, [7] but the record contains numerous letters and e-mails that the plaintiff subsequently sent to or received from state officials concerning the audit. . . . During this time period, the [defendant] designated an attorney from [the department] to conduct a review of the audit. On March 21, 2014, the review official issued a nine page final decision with exhibits. . . . In the . . . [‘Audit Review Final Decision’], the review official noted that the department agreed to approximately $1700 of additional payments to the plaintiff. . . . In all other respects, the review official concluded that he would order no changes to the final audit.’’ (Citations omitted; footnotes added.)

         The plaintiff appealed to the Superior Court from the Audit Review Final Decision on May 5, 2014, pursuant to § 17b-99 (d) (9).[8] After oral argument was heard by the court, it determined, in a written memorandum of decision, that the review official’s conclusions were supported by substantial evidence and that the plaintiff had not established that the department acted unreasonably, arbitrarily, illegally, or in abuse of its discretion. The court declined to review two of the plaintiff’s claims because it had not raised the claims in its statement of aggrievement to the review official. This appeal followed.

         We agree with the parties that principles underlying the substantial evidence standard inform our review. General Statutes § 4-183 (j) provides in relevant part that a reviewing court ‘‘shall affirm the decision of the agency unless the court finds that substantial rights of the person appealing have been prejudiced because the administrative findings, inferences, conclusions, or decisions are: (1) In violation of constitutional or statutory provisions; (2) in excess of the statutory authority of the agency; (3) made upon unlawful procedure; (4) affected by other error of law; (5) clearly erroneous in view of the reliable, probative, and substantial evidence on the whole record; or (6) arbitrary or capricious or characterized by abuse of discretion or clearly unwarranted exercise of discretion . . . .’’

         ‘‘The substantial evidence rule[9] imposes an important limitation on the power of the courts to overturn a decision of an administrative agency . . . and . . . provide[s] a more restrictive standard of review than standards embodying review of weight of the evidence or clearly erroneous action. . . . [I]t is something less than the weight of the evidence, and the possibility of drawing two inconsistent conclusions from the evidence does not prevent an administrative agency’s finding from being supported by substantial evidence. . . . [A]s to questions of law, [t]he court’s ultimate duty is only to decide whether, in light of the evidence, the [agency] has acted unreasonably, arbitrarily, illegally, or in abuse of its discretion. . . . Conclusions of law reached by the administrative agency must stand if the court determines that they resulted from acorrect application of the law to the facts found and could reasonably and logically follow from such facts.’’ (Footnote added; internal quotation marks omitted.) Eagen v. Commission on Human Rights & Opportunities, 135 Conn.App. 563, 572–73, 42 A.3d 478 (2012).

         The substantial evidence standard requires that the plaintiff ‘‘do more than simply show that another decision maker, such as the [Superior Court], might have reached a different conclusion. Rather than asking the reviewing court to retry the case de novo . . . the plaintiff must establish that substantial evidence does not exist in the record as a whole to support the agency’s decision.’’ (Citation omitted.) Samperi v. Inland Wetlands Agency, 226 Conn. 579, 587–88, 628 A.2d 1286 (1993). With this limitation upon our review, we will consider each of the plaintiff’s claims in turn.


         The plaintiff first claims that the court improperly found that the record contained substantial evidence in support of the review official’s conclusions. The plaintiff argues that the record, as presented to the court, contained determinations of fact, but it did not include evidence itself, such as treatment or billing records. As such, the plaintiff reasons, the court had no evidence to examine in the course of concluding whether the substantial evidence rule was satisfied. We disagree.

         We begin by stressing the plaintiff’s burden when appealing an agency decision to the Superior Court.

         Our Supreme Court has stated that a plaintiff who challenges an agency decision has the ‘‘heavy burden of demonstrating that the department’s factual conclusion lacks substantial support on the whole record.’’ Office of Consumer Counsel v. Dept. of Public Utility Control, 246 Conn. 18, 36–37, 716 A.2d 78 (1998); see New England Cable Television Assn., Inc. v. Dept. of Public Utility Control, 247 Conn. 95, 118, 717 A.2d 1276 (1998). When the audit in this case occurred, § 17b-99 (d) (8), the portion of the statute that governed the review process for Medicaid audits, prescribed in relevant part that ‘‘[a]ny provider aggrieved by a decision contained in a final written report . . . may . . . request, in writing, a review on all items of aggrievement. Such request shall contain a detailed written description of each specific item of aggrievement. . . .’’

         In the statement of aggrievement, the plaintiff challenged four audit findings[10] pertaining to (1) inadequate documentation, (2) incorrect procedure codes, (3) the enrollment status of performing providers, and (4) third party coverage. The review official adjusted several disallowances such that the plaintiff obtained some relief, but ultimately concluded that the information provided in the statement of aggrievement and other materials submitted by the plaintiff did not require any significant change to the final audit report. The Superior Court’s review was ...

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