Emergency Medical Care Facilities, P.C. v. Division of Tenncare
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The Supreme Court held that a reimbursement cap imposed by the Tennessee Department of Finance and Administration's Division of TennCare, the state agency tasked with administering the federal Medicaid program in Tennessee, was a "rule" within the meaning of the Uniform Administrative Procedures Act that should have been promulgated through the notice-and-comment process.
Emergency Medical Care Facilities, P.C., a corporation compromised of private healthcare professionals who provide emergency-department services to TennCare enrollees, brought this action against TennCare alleging that TennCare's decision to impose a $50 cap on the amount that Emergency Medical and other healthcare professionals could recover from TennCare for certain treatment provided to TennCare enrollees was a rule and that TennCare violated the Tennessee Uniform Administrative Procedures act (UAPA) by implementing the cap without rulemaking. The chancery court granted summary judgment in favor of Emergency Medical. The court of appeals reversed, concluding that the $50 cap fell within the so-called "internal-management exception" to the UAPA. The Supreme Court reversed, holding that the $50 cap was a rule under the UAPA and should have been promulgated through notice-and-comment rulemaking.
Court Description: Authoring Judge: Justice Sarah K. Campbell
Trial Court Judge: Chancellor Anne C. Martin
Article II of Tennessee’s Constitution vests legislative authority in the General Assembly. We have held, however, that the General Assembly may grant an administrative agency the power to promulgate rules and regulations which have the effect of law in the agency’s area of operation. Bean v. McWherter, 953 S.W.2d 197, 199 (Tenn. 1997). The General Assembly frequently has done so. But it also established important guardrails for administrative agencies by enacting the Uniform Administrative Procedures Act. One of those guardrails is the requirement that agencies engage in notice-and-comment rulemaking: a process that gives the public and other affected parties an opportunity to weigh in. Here, we consider whether a reimbursement cap imposed by TennCare is a rule within the meaning of the Uniform Administrative Procedures Act that should have been promulgated through the notice-and-comment process. We hold that it is and reverse the Court of Appeals’ contrary decision.
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