Final agency decisions

"If you call a dog's tail a leg, how many legs does a dog have? Four—just because you call something a leg doesn't make it a leg." Attributed to Abraham Lincoln.

The following is from Ariz. Physicians IPA, Inc., v. W. Ariz. Reg. Med. Ctr., 1 CA-CV 10-0579 (Sep. 27, 2011). Defendant health care provider made claims against Plaintiff intermediate contractor that the defendant was underpaid for some Medicaid services. The parties agreed to an administrative hearing on the issue of whether the claims were timely filed, postponing the issue of whether the appropriate reimbursement rates were applied. The ALJ found that 1354 claims were timely filed, but 27 were not. Arizona's Medicaid agency sustained the ALJ's findings. The plaintiff asked for an agency review of its decision, which the agency "substantively affirmed in a "Final Decision" stating it was "subject to judicial review" in accordance with the [Arizona Administrative Procedure] Act." So the plaintiff filed a complaint for judicial review. The defendant moved to dismiss, contending the court lacked subject matter jurisdiction because the so-called "Final Decision" was not in fact a final administrative decision. The trial court granted defendant’s motion to dismiss. I've omitted the quotation marks and citations below; see the slip opinion.

¶10 The right to appeal from an administrative decision exists only by force of statute and is limited by the terms of the statute. [Ed. note: Arizona provides for other modes of judicial review on constitutional grounds.] The [Administrative Procedure] Act permits appeals to the superior court from “final” decisions of administrative agencies. The Act defines decisions subject to judicial review as follows:

“Administrative decision” or “decision” means any decision, order or determination of an administrative agency that is rendered in a case, that affects the legal rights, duties or privileges of persons and that terminates the proceeding before the administrative agency.

¶11 The decision at issue did not terminate the proceedings before the administrative agency. [defendant]’s grievances over reimbursement rates initiated the administrative process and those grievances have not yet been resolved. [The agency] has become substantively involved. Indeed, it has ordered the next step in the proceedings, directing [plaintiff] to consider [defendant]’s grievances on the merits and “issue a written Notice of Decision as to each of the 1354 claim dispute [sic] that were filed.” [Plaintiff] itself has characterized [the agency]’s decision as a “remand” of the claims dispute. A remand order is not a final agency decision. [I]t has been firmly established that agency action is not final merely because it has the effect of requiring a party to participate in an agency proceeding.

¶12 The situation before us is analogous to the denial of a motion to dismiss on statute of limitations grounds. Although a defendant might seek special action review of such a decision, there is no right of appeal from that interlocutory ruling. [A]n appealable administrative decision must “mark the ‘consummation’ of the agency’s decisionmaking process” and may not be interlocutory in nature. [A]n agency’s action is not necessarily final merely because it is binding. ...

¶15 [The agency]’s characterization of its interlocutory order as a “Final Decision” is immaterial to the question of jurisdiction. It is a well-settled rule of law that subject matter jurisdiction cannot be conferred by consent, waiver, or estoppel. It is incumbent upon the party [sic] and counsel, themselves, to determine from the provisions of the statutes and the rules when the [administrative] decision has become ‘final.’ An agency’s incorrect explanation of a litigant’s appeal rights cannot create jurisdiction in the superior court.

Ooops! The opinion includes citations from federal and other state courts. EMM