In the Matter of the SIRS Appeal by Best Care, LLC.

STATE OF MINNESOTA
IN COURT OF APPEALS
A22-1688

In the Matter of the SIRS Appeal by Best Care, LLC.

Filed July 24, 2023
Reversed in part and remanded
Reilly, Judge

Office of Administrative Hearings
File No. OAH 60-1880-37291

Samuel D. Orbovich, Pari I. McGarraugh, Fredrikson & Byron, P.A., Minneapolis,
Minnesota (for relator Best Care, LLC)

Keith Ellison, Attorney General, Benjamin Johnson, Assistant Attorney General, St. Paul,
Minnesota (for respondent Minnesota Department of Human Services)

Considered and decided by Worke , Presiding Judge; Connolly, Judge; and Reilly ,
Judge.
SYLLABUS
Minnesota Statutes section 256B.064, subdivision 1c (2022), authorizes the
Minnesota Commissioner of Human Services to recover funds paid to a Minnesota Health
Care Programs vendor when the funds were “improperly paid ” as a result of conduct
constituting “abuse” as defined by Minnesota Rule 9505.2165, subpart 2 ( 2021). A
determination that abuse has occurred alone does not allow recovery. The statute also
requires a determination that the vendor was improperly paid the funds sought to be
recovered.
2

OPINION
REILLY, Judge
In this certiorari appeal, relator challenges a decision by the commissioner of human
services determining that relator is responsible for overpayments of Minnesota Health Care
Programs funds. Because Minnesota Statutes section 256B.064, subdivision 1c, authorizes
monetary recovery only when a vendor of medical care is improperly paid as a result of
“abuse,” and because the commissioner made no determination that relator was improperly
paid, we reverse in part and remand.
FACTS
Minnesota’s Medicaid program funds medical assistance , which is part of the
Minnesota Health Care Programs (MHCP) and administered by respondent Department of
Human Services (DHS). Minn. Stat. §§ 256B.01-.851 (2022). Medical assistance provides
funding for individuals unable to afford medical care. Minn. Stat. § 256B.01. Personal
care assistance (PCA) is a service available to some medical -assistance recipients.
Personal care assistants (PCAs) support and aid recipients with activiti es of daily living,
health-related procedures and tasks, observation and redirection of behaviors, and
instrumental activities such as meal preparation and shopping. Minn. Stat. § 256B.0659,
subds. 1(i), 2(a).
Relator Best Care LLC (Best Care) is a vendor of medical care and a PCA provider
agency. Minn. R. 9505.0175, subp. 38, .2165, subp. 16a (2021) (defining provider and
vendor). Best Care participates in the MHCP by (1) employing PCAs to provide services
to recipients and (2) receiving reimbursement of MHCP funds from DHS. Along with
3

providing traditional PCA services, Best Care also operates as a fiscal intermediary in the
PCA Choice program.1 Minn. Stat. § 256B.0659, subd. 18(a).
To oversee the MHCP and its funds, DHS created the Surveillance and Integrity
Review Section (SIRS) to conduct audits and monitor reimbursements to vendors, to ensure
statutory and regulatory compliance. Minn. R. 9505.2160, .2200 (2021). SIRS is
responsible for “identifying and investigating fraud, theft, abuse, or error by vendors or
recipients of health services” through the MHCP and “for the imposition of sanctions
against vendors and recipients of health services.” Minn. R. 9505.2160, subp. 1.
In 2020, SIRS received four complaints about Best Care and decided to investigate.
SIRS requested that Best Care electronically provide care plans, time sheets , records of
qualified professional visits, and other documents for select recipients from September
2018 to December 2018. Based on the SIRS investigation, DHS ultimately issued a notice
to Best Care to recover $ 428,393.13 in MHCP funds , identifying nine reasons for
overpayment, including missing and deficient care plans and PCA time sheets. DHS also
required Best Care to enter into a stipulated provider agreement as a condition of future
participation in the MHCP.

1 Under the traditional PCA program, provider agencies enroll as Medicaid providers and
hire, train, supervise, and pay PCAs for their services to recipients. Minn. Stat. § 256B.659,
subd. 24. The PCA Choice program “is an option of the [PCA] program that allows the
recipient . . . to be responsible for the hiring, training, scheduling, and firing of [PCAs]”
and “offers greater control and choice for the recipient” about who provides servic es and
when they are scheduled. Id. , subd. 18(b). Under the PCA Choice program, fiscal
intermediaries “assist the recipient in paying and accounting for medically necessary
covered [PCA] services.” Id., subd. 18(a).
4

Best Care administratively appealed the overpayment notice, contesting six of the
nine reasons for overpayment. 2 An administrative-law judge (ALJ) held a contested -case
hearing and issued findings of fact, conclusions of law, and a recommendation that the
commissioner (1) affirm in part and rescind in par t the notice of overpayment and
(2) rescind the requirement for Best Care to enter into a stipulated-provider agreement.
During the hearing, DHS argued that Best Care’s conduct met the definitions of three
presumptively abusive practices. See Minn. R. 9505.2165, subps. 2A(1), 2A(7), 2A(9).
Addressing alleged deficiencies in Best Care’s time sheets and care plans, the ALJ
observed that DHS contended it was entitled to “total monetary recovery based on the rules
defining ‘abuse’” for “typographical or inadvertent errors occur[ing] on care plans or time
sheets.” The ALJ observed that the commissioner may impose sanctions in certain
circumstances, such as imposing a fine or suspending and terminating vendors from the
program or obtain monetary recovery. The ALJ reasoned that DHS’s reading of the statute
permitting monetary recovery, Minn. Stat. § 256B.064, subd. 1c, “ignores the entirety of
the statutory scheme, which requires an improper payment for monetary recovery based on
abuse and explicitly authorizes the imposition of fines if specific required components of
documentation are missing.” The ALJ concluded that the legislature did not intend for
providers to not be paid for services actually provided when documentation errors or
omissions occur because “the statutes and rules provide for sanctions, including fines,

2 Best Care conceded that DHS was ent itled to collect an overpayment of $5,046 based on
documentation showing that DHS reimbursed Best Care for PCA services that overlapped
with nonreimbursable homemaking time, services to the same recipient by another PCA,
and services by the same PCA to oth er recipients.
5

[commensurate] with the documentation mistakes.” Because DHS failed to meet its burden
to show that the missing elements of care plans and time sheets led Best Care to improper
and undeserved payments , the ALJ determined that DHS was not entitled to monetary
recovery solely because of such errors and deficiencies.
On the remaining contested reasons for overpayment, the ALJ concluded DHS was
not entitled to monetary recovery for missing care plans for Best Care’s PCA Choice
recipients because “the law does not require [Best Care] to include a layperson’s care plan
in its health service records . . . because there are different documen tation requirements for
care plans under PCA Choice and PCA traditional.” But the ALJ concluded DHS could
properly recover for missing traditional care plans. Finally, the ALJ determined DHS could
not recover for missing time sheets . DHS argued the miss ing time sheets constituted
“abuse” pursuant to Minn. R. 9505.2165, subp. 2A(9). But because Best Care produced
the time sheets with their appeal documents and DHS had not given notice to Best Care
that it was claiming the time sheets were not timely prod uced rather than missing, the ALJ
concluded that monetary recovery was improper.
The commissioner’s final agency decision rejected and modified many of the ALJ’s
findings of fact and conclusions of law. The commissioner concluded that she had
authority to impose fines or seek monetary recovery and that a fine was not appropriate
because the case “resulted from the absence of certain key documentation such as
timesheets and care plans ,” which constituted “abuse” under Minn. R. 9505.2165, subps.
2A(1), 2A(7), 2A(9). The commissioner also concluded that Best Care was required to
maintain PCA Choice care plans and DHS could seek monetary recovery of all payments
6

related to these missing care plans and time sheets. Because she determined the “pattern
and practices of [Best Care] are deemed abuse,” the commissioner concluded DHS “ha [d]
the discretion to seek an overpayment.” The commissioner therefore determined that Best
Care was responsible for an overpayment of $428,393.13 and required Best Care to enter
into a stipulated-provider agreement to keep participating in the MHCP.
Best Care appeals.
ISSUE
Did the commissioner act in excess of her statutory authority?
ANALYSIS
The commissioner’s final decision imposing monetary recovery and sanctions is
subject to certiorari review under the judicial -review provisions of the Minnesota
Administrative Procedure Act, Minn. Stat. §§ 14.63- .69 (2022). See Minn. Stat.
§§ 256B.064, subd. 2 (providing for a hearing under chapter 14 on the commissioner’s
proposed action); 14.63 (providing for judicial review of final decision s in contested cases
under chapter 14). We may reverse or modify the commissioner’s decision if the
substantial rights of the petitioners may have been prejudiced because the administrative
finding, inferences, conclusion, or decisions are :
(a) in violation of constitutional provisions; or
(b) in excess of the statutory authority or jurisdiction of the
agency; or
(c) made upon unlawful procedure; or
(d) affected by other error of law; or
(e) unsupported by substantial evidence in vie w of the entire
record as submitted; or
(f) arbitrary or capricious.

7

Minn. Stat. § 14.69. Relators have the burden of demonstrating a basis for reversal. In re
Excelsior Energy, Inc., 782 N.W.2d 282, 289 (Minn. App. 2010).
We first address Best Care’s argument that the commissioner exceeded her statutory
authority when she ordered monetary recovery under Minnesota Statutes section 256B.064,
subdivision 1c, because DHS failed to prove that the abuse identified caused Best Car e to
be “improperly paid” for providing PCA services to recipients. 3 Second, we address Best
Care’s alternative arguments to reverse the commissioner’s final decision. Finally, we
consider Best Care’s argument about the stipulated-provider agreement.
We review de novo whether the commissioner exceeded her authority and “re solve
any doubt about the existence of [her] authority against the exercise of such authority.”
GH Holdings, LLC v. Minn. Dep’t of Com., 840 N.W.2d 838, 841- 42 (Minn. App. 2013)
(quoting In re Minn. Power , 838 N.W.2d 747, 753 (Minn. 2013)). Best Care’s argument
about the commissioner’s authority requires us to interpret the statutes and rules governing
the PCA program. We begin by summarizing this regulatory scheme, before turning to the
arguments of the parties.
I.
Minnesota Statutes chapter 256B governs the medical -assistance program and
includes section 256B.0659, which governs and describes the PCA program. As a
condition for payment by DHS, vendors like Best Care are required to document “ each

3 Best Care does not challenge the portion of the decision that determined DHS had a right
to recover $5,046 based on the three reasons for overpayment that Best Care conceded led
to improper payment.
8

occurrence of a health service provided to a recipient.” Minn. R. 9505.2175, subp. 1
(2021). These documents are stored in a recipient’s health -service record and kept by
vendors. Id., subp. 2 (2021).
Health-service records must include documents such as a physician’s order for PCA
services, a care plan for the recipient, DHS’s service authorization identifying the amount
of service authorized for a recipient, and time sheets completed by the PCA documenting
the care administered. Id., subp. 7 (2021); see also Minn. Stat. § 256B.0659, subd. 28(a)(2)
(noting required contents of recipient files maintained by vendors). Care plans are written
descriptions of PCA services and memorialize the needs of the recipient. 4 Minn. Stat.
§ 256B.0659, subds. 1(n), 7(b)(5). And time sheets are daily records o f services to
recipients documented by PCAs .5 Id., subd. 12(a). A recipient’s health-service record is

4 Minnesota law requires care plans to i nclude the
(1) start and end date of the care plan;
(2) recipient demographic information, including name and
telephone number;
(3) emergency numbers, procedures, and a description of
measures to address identified safety and vulnerability issues,
including a backup staffing plan;
(4) name of responsible party and instructions for contact;
(5) descriptions of the recipient’s individualized needs for
assistance with activities of daily living, instrumental activities
of daily living, health-related tasks, an d behaviors; and
(6) dated signatures of recipient or responsible party and
qualified professional.
Minn. Stat. § 256B.0659, subd. 7(b).

5 Time sheets must include the
(1) full name of [PCA] and [Unique Minnesota Provider
Identification];
(2) provider name and telephone numbers;
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important as “evidence of the medical necessity of a health service provided by a vendor
and billed to a program.” Minn. R. 9505.2165, subp. 6 (2021).
To enforce the regulatory requirements of the MHCP, the commissioner can impose
sanctions when, as relevant here, a vendor engages in “fraud, theft, or abuse in connection
with the provision of medical care to recipients of public assistance.” Minn. Sta t.
§ 256B.064, subd. 1a(a); see also Minn. Stat. § 256B.064, subd. 1b (describing sanctions
the commissioner may impose) . “Abuse” is defined by DHS’s administrative rules as “a
pattern of practices that are inconsistent with sound fiscal, business, or hea lth service
practices, and result in unnecessary costs to the programs or in reimbursements for services
that are not medically necessary or that fail to meet professionally recognized standards for
health service.” Minn. R. 9505.2165, subp. 2. Certain c onduct is “deemed to be abuse”
under the rules, including “submitting repeated claims, or causing claims to be submitted,
from which required information is missing or incorrect,” “failing to develop and maintain

(3) full name of recipient and either the recipient’s medical
assistance identification number or date of birth;
(4) consecutive dates . . . and arrival and departure times with
a.m. or p.m. notations;
(5) signatures of recipient or the responsible party;
(6) personal signature of the [PCA];
(7) any shared care provided, if applicable;
(8) a statement that it is a federal crime to provide false
information on personal care service billings for medical
assistance payments; and
(9) dates and location of recipient stays in a hospital, care
facility or incarceration.
Minn. Stat. § 256B.0659, subd. 12(c).
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health service records ,” and “failing to di sclose or make available to the department the
recipient’s health service records.” 6 Id., subps. 2A(1), 2A(7), 2A(9).
If DHS establishes “abuse” by a preponderance of the evidence, the commissioner
may impose sanctions. Minn. Stat. § 256B.064, subds. 1a, 1b. The commissioner also has
authority to seek monetary recovery under the statute if DHS establishes, again by a
preponderance of the evidence, that funds were “improperly paid” because of abuse. Id.,
subd. 1c. By statute, sanctions and monetary recovery are distinct mechanisms with
separate prerequisites.7 Id., subds. 1b, 1c.
The commissioner can impose several sanctions after determining that the vendor
engaged in abuse. Id., subd. 1b (listing the sanctions available to the commissioner). One

6 In nonprecedential decisions we have addressed what conduct constitutes abuse under
Minn. R. 9505.2165. See, e.g., In re SIRS Appeal by Trinity Home Health Care Servs., No.
A22-0183, 2022 WL 6272045, at *7-8 (Minn. App. Oct. 10, 2022) (determining substantial
evidence supported the commissioner’s factual findings of abuse), rev. granted (Minn.
Dec. 28, 2022); In re SIRS Appeal by Smart Choice Health Care, No. A22-0367, 2022 WL
4295330, at *3-4 (Minn. App. Sept. 19, 2022) (determining the commissioner did not err
in concluding a PCA provider’s conduct constituted abuse); In re SIRS Appeal by Nobility
Home Health Care, Inc., No. A21- 1477, 2022 WL 3711485, at *5 (Minn. App. Aug. 29,
2022) (determining substantial evidence supported the commissioner’s decision that a PCA
provider’s conduct amounted to abuse), rev. granted (Minn. Nov. 23, 2022). We were not
asked in those case s to address the issue that Best Care raises here: whether the
commissioner must determine that the identified abuse led to a vendor being “improperly
paid” before ordering monetary recovery.

7 The statute does not define sanctions or monetary recovery, but we generally understand
a sanction to be “the penalty for noncompliance with a law or legal order.” The American
Heritage Dictionary of the English Language 1551 (5th ed. 2018). In contrast, “recovery”
means “[t]he regaining or restoration of something lost or taken away.” Black’s Law
Dictionary 1528 (11th ed. 2019).
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enumerated sanction focuses on fines for record and document -based deficiencies,
permitting the commissioner to
order a vendor to forfeit a fine for failure to fully document
services according to standards in [chapter 256B] and
Minnesota Rules, chapter 9505. The commissioner may assess
fines if specific required components of documentation are
missing. The fine for incomplete documentation shall equal 20
percent of the amount paid on the claims for reimbursement
submitted by the vendor, or up to $5,000, whichever is less.

Id., subd. 2(f). Similarly, Minnesota Statutes section 256B.0659, subdivision 28(b),
permits the commissioner to assess a fine of up to $500 on vendors that do not consistently
comply with the subdivision’s requirements for completing and maintaining required
documentation. Other sanctions available to the commissioner include “suspen[ding] or
withholding [] payments to a vendor and suspending or terminating [a vendor’s]
participation in the program.” Minn. Stat. § 256B.064, subd. 1b.
The statute permitting monetary recovery of funds paid by DHS specifies that
[t]he commissioner may obtain monetary recovery from a
vendor who has been improperly paid either as a result of
conduct described in subdivision 1a or as a result of a vendor
or department error, regardless of whether the error was
intentional.

Id., subd. 1c (emphasis added). The “conduct described in subdivision 1a” includes abuse.
Id., subd. 1a. Thus, “ [t]he commissioner may obtain monetary recovery from vendors
improperly paid” as a result of abuse. Id., subds. 1a, 1c.
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II.
In this appeal, Best Care argues that the commissioner exceeded her statutory
authority by ordering monetary recovery because DHS failed to prove “that [Best Care’s]
alleged minor documentation flaws constituted abuse that caused DHS to make any
improper or unnecessary payment.” Best Care contends that “improperly paid” constitutes
an element of proof and , without showing that improper payment occurred, the
commissioner exceeds her statutory authority by obtaining monetary recovery. In contrast,
DHS contends that it must only show that Best Care engaged in “abuse” to be entitled to
monetary recovery. Thus, the issue is whether, under the statutory language and the
circumstances here, a determination that abuse occurred, by itself, establishes that a vendor
was improperly paid MHCP funds such that the commissioner may obtain monetary
recovery.
The interpretation of statutes and administrative rules are questions of law this court
reviews de novo. J.D. Donovan, Inc. v. Minn. Dep’t of Transp., 878 N.W.2d 1, 4-5 (Minn.
2016). We are “not bound by an agency’s interpretation of a statute.” Indep. Sch. Dist.
No. 709 v. Bonney , 705 N.W.2d 209, 214 (Minn. App. 2005). Though agency decisions
are ordinarily presumed correct and afforded deference , “deference does not extend to an
agency’s interpretation of a statute. ” In re N . State Power Co. for Appr oval of its 1998
Resource Plan, 604 N.W.2d 386, 390 (Minn. App. 2000) (quotation omitted), rev. denied
(Minn. Mar. 28, 2000).
The goal of statutory interpretation is to “ascertain and effectuate the intention of
the legislature.” Minn. Stat. § 645.16 (2022). We do not read statutory words and phrases
13

in isolation. Moore v. Robinson Env’t, 954 N.W.2d 277, 280-81 (Minn. 2021). Rather, we
examine words and sentences in the light of their context. State v. Gaiovnik, 794 N.W.2d
643, 647 (Minn. 2011). We “read and construe a statute as a whole and must interpret each
section in light of the surrounding sections to avoid conflicting interpretations.” Am. Fam.
Ins. Grp. v. Schroedl , 616 N.W.2d 273, 277 (Minn. 2000). The first step of statutory
interpretation is to determine whether the statute is ambiguous on its face. Moore , 954
N.W.2d at 281. “A statute is ambiguous if it is subject to more than one reasonable
interpretation.” Id. If the legislature’s intent is clear from the plain and unambiguous
language of the statute, our analysis ends. Id.
Neither party contends Minn. Stat. § 256B.064 is ambiguous as it applies here. We
agree. The statute provides “[t]he commissioner may obt ain monetary recovery from a
vendor who has been improperly paid . . . as a result of [abuse].” Minn. Stat. § 256B.064,
subd. 1c. “Improperly paid” is not defined by statute or rule. But when we read
subdivision 1c, while considering section 256B.064 as a whole and in the context of related
statutes and rules, we agree with Best Care and the ALJ: a determination that abuse has
occurred alone does not establish that funds were improperly paid.
As we explain above, the commissioner’s authority to obtain monetary recovery
stems from a comprehensive statutory scheme governing her authority to regulate the
MHCP. Minn. Stat. §§ 256B.01- .851. When “abuse” is shown, the commissioner can
impose sanctions, and when funds were “improperly paid” as a result of abus e, she can
obtain monetary recovery. Minn. Stat. § 256B.064, subds. 1a-1c. “[F]ailing to develop
and maintain health service records” such as care plans and time sheets constitutes “abuse.”
14

Minn. R. 9505.2165, subp. 2A(7). Section 256B.064 expressly authorizes imposing fines
upon vendors for failure to fully document services and for incomplete documents. Minn.
Stat. § 256B.064, subd. 2(f). The fines for these recordkeeping deficiencies are limited to
“20 percent of the amount paid on the claims for reimbursement submitted by the vendor,
or up to $5,000, whichever is less.” Id. Another statutory provision also expressly
authorizes imposing limited fines of up to $500 for vendors who fail to maintain records
of required documents. Minn. Stat. § 256B.0659, subd. 28(b).
Under DHS’s interpretation of the monetary recovery statute, the commissioner
could recover all funds paid on a claim involving the same recordkeeping abuses that could
lead to a fine. But that interpretation is inconsistent with the fine statutes, which would be
almost entirely superseded if the commissioner could recoup the full amount paid to the
vendor rather than collect limited fines for the same conduct . See Minn. Stat.
§§ 256B.064, .0659, subd. 28(b). Further, DHS’s interpretation that it can recover all
payments resulting from abusive conduct renders the word “improperly” of “improperly
paid” superfluous.8 328 Barry Ave., LLC v. Nolan Props. Grp., LLC, 871 N.W.2d 745,

8 DHS’s interpretation matches its promulgated rule stating that “[t]he commissioner shall
seek monetary recovery . . . from a vendor, if payment for a recipient’s health service under
a program was the result . . . of abuse.” Minn. R. 9505.2215, subp. 1A (2021). But the
language of the rule differs from that of the monetary recovery statute by omitting
“improperly paid.” See Minn. Stat. § 256B.064, subd. 1c (“The commissioner may obtain
monetary recovery from a vendor who has been improperly paid either as a result of [abuse]
or as a result of a vendor or department error . . . .”). Here, the statute controls because an
agency’s rule cannot grant authority grea ter than what the statute allows. See Billion v.
Comm’r of Revenue , 827 N.W.2d 773, 781 (Minn. 2013) (holding an agency’s
administrative rule cannot conflict with the corresponding statute); Hirsch v. Bartley -
Lindsay Co., 537 N.W.2d 480, 486 (Minn. 1995) (stating an applicable statute “prevails”
to the extent that it conflicts with an administrative rule).
15

749 (Minn. 2015) (“We interpret a statute as a whole so as to harmonize and give effect to
all its parts, and where possible, no word, phrase, or sentence will be held superfluous,
void, or insignificant.” (quotation omitted) ).
We are als o persuaded that “improperly paid” is a separate element from “abuse”
that requires an additional showing when we consider that the commissioner can pursue
monetary recovery for conduct enumerated in Minnesota Statutes section 256B.064,
subdivision 1a, other than “abuse.” Minn. Stat. § 256B.064, subds. 1a, 1c. For example,
subdivision 1a indicates that “any reason for which a vendor could be excluded from
participation in the Medicare program under section 1128 . . . of the Social Security Act”
is sanctionable conduct. Id., subd. 1a. Section 1128(a)(4) of the Social Security Act
excludes individuals or entities convicted of “a [felony] criminal offense . . . relating to the
unlawful manufacture, distribution, prescription, or dispensing of a controlled s ubstance”
from participating in the Medicare program. 42 U.S.C. § 1320a-7(a)(4) (2018). Read
together, “[t]he commissioner may obtain monetary recovery from a vendor who has been
improperly paid . . . as a result of [a felony conviction for the unlawful manufacture,
distribution, prescription, or dispensing of a controlled substance] .” Minn. Stat.
§ 256B.064, subd. 1c. If the statute requires DHS to show nothing beyond the occurrence
of conduct under subdivision 1a, a felony conviction in this example, DHS could seek
monetary recovery from a vendor even if they never received funds in excess of which they
were entitled.
Turning to this case, DHS alleged that Best Care received an overpayment based on
(1) “[c]are plans missing required elements,” (2) “[n]o care plan,” (3) “[n]o time sheet,”
16

(4) “[t]ime sheets missing required elements,” (5) “1:3 time documented on time sheet but
billed 1:1,” and (6) “[t]ime sheet PCA signature photocopied and PCA provider ID altered
from previous time sheet ‘no [Unique Minnesota Provider Identification (UMPI)] yet’
whited out and changed to provider ID.” A SIRS investigator testified that Best Care failed
to maintain care plans for many of the recipient records she reviewed and failed to provide
69 time sheets requested by DHS for the investigation. The SIRS investigator also testified
that some of Best Care’s care plans were incomplete because they were imper missibly
missing recipients’ phone numbers, signed and dated by the recipient after services were
started, or missing signatures from responsible parties. And various time sheets also were
missing required elements because they did not have a.m. or p.m. d esignations marked,
were missing UMPI
9 numbers, or missing the agency’s name or phone number. Such
documentary and recordkeeping deficiencies constitute “abuse” for “failing to develop and
maintain health service records” and “causing claims to be submitted, from which required
information is missing or incorrect.” Minn. R. 9505.2165, subps. 2A(1), 2A(7).
But as the ALJ reasoned, the statute also required DHS to prove that the “abuse” led
to Best Care being improperly paid and DHS “failed to prove that [the] deficiencies led to
improper payment or unnecessary costs to the program.” See Minn. Stat. § 256B.064,
subd. 1c. Indeed, DHS provided no evidence that missing care plans or incom plete care

9 The SIRS investigator testified that all PCAs are assigned an UMPI by DHS. The UMPIs
are important because they specify which PCA provided services to recipients and are used
by vendors to submit claims for reimbursement to DHS. Best Care’s payroll processor
testified that it sometimes takes several months for DHS to issue a n UMPI and PCAs are
not prohibited from providing services to recipients in the interim.
17

plans lacking required phone numbers or signatures led to Best Care , for example, billing
for non-medically necessary services. Similarly, DHS presented no evidence that missing
a.m. or p.m. designations on time sheets caused Best Care to be re imbursed at a greater
amount than the value of the PCA services actually delivered to recipients. And the
testimony shows that the lack of an UMPI number on a time sheet had little effect on billing
practices. Best Care’s payroll processor testified that Best Care cannot submit a claim for
reimbursement to DHS without a n UMPI number. In seeking payment from DHS, Best
Care relied on the UMPI numbers in their billing software , rather than on individual time
sheets. The SIRS investigator conceded that just because a time sheet lacked an UMPI
number, that did not mean that Best Care provided unnecessary services to a recipient.
As for the overpayment reason that involved a time sheet and billing discrepancy,
“1:3 time documented on time sheet but billed 1:1,” we also conclude DHS failed to show
Best Care was improperly paid. Some time sheets reflected that a PCA provided care to
three recipients at the same time, which is reimbursed at a lower monetary rate than
individual care. Without more information, this might appear to be an occasion when Best
Care received funds in excess of what they were entitled to receive because they billed for
a higher rate than the value of the services the PCA showed on the time sheet. But Best
Care’s payroll processor testified that Best Care did not bill for more than the appropriate
amount because these time sheets also showed the recipient was not authorized to receive
“shared care.” Put another way, the PCA was not authorized or able to serve three
recipients there. The payroll processor testified that Best Care determined the PCAs
erroneously indicated they provided “1:3 time” and ultimately billed DHS at the
18

appropriate “1:1” rate. DHS presented no evidence that the PCAs provided shared care to
the recipients or that payments were made for services to three recipients .
We note that our conclusion that “improperly paid” is a distinct element that must
be shown in addition to “abuse” does not impose an arduous evidentiary burden on DHS.
See Minn. Stat . § 256B.064, subd. 1c. We do not foreclose the possibility that cases
involving missing or deficient documents could warrant an inference and finding of fact
that, for example, recipients were not receiving the PCA services that a vendor billed for,
resulting in improper payment. But here, the commissioner made no such determination
or finding that Best Care was “improperly paid.” Instead, DHS contends that it must only
show a vendor’s “abuse” to obtain monetary recovery. For the reasons we have discussed,
this position is contrary to statu te.
In sum, DHS failed to meet its statutory burden to show by a preponderance of the
evidence that Best Care was “improperly paid” as a result of the six abusive practices and
reasons for overpayment identified by DHS. We conclude that the commissioner exceeded
her authority by ordering monetary recovery without determining Best Care was
“improperly paid” and accordingly reverse the commissioner’s decision in part. We
remand for the commissioner to enter a revised o verpayment order reducing the monetary
recovery in a manner consistent with this decision.
19

III.
Because we reverse on this basis, we need not reach Best Care ’s three other
arguments that provide an alternative basis to reverse the final agency decision. But in the
interest of completeness, we briefly address each argument here.
First, Best Care argues that the commissioner misapplied the law when she found
that provider agencies must maintain PCA Choice care plans in their records and exceeded
her authori ty by ordering monetary recovery on this basis. Under the traditional PCA
program, care plans are developed by a “qualified professional with the recipient and
responsible party.” Minn. Stat. § 256B.0659, subd. 7(a). These care plans are “ required
to be in the recipient’s home and in the recipient’s file at the provider agency.” Id. The
PCA Choice program, set forth in Minnesota Statutes section 256B.0659, subdivisions 18
through 20, is governed by the same statutory provisions as the tra ditional PCA program
unless otherwise provided. Id., subd. 18(a). Best Care argues that because recipients in
the PCA Choice program are responsible for developing their own care plans with help
from a qualified professional “as needed,” vendors are exempt from being required to keep
a copy of the care plan in the recipient’s file at the provider agency. See id., subd. 19(a)(2).
We disagree.
We considered and rejected a similar argument in In re SIRS Appeal by 1 Best Care,
Inc., No. A20- 0904, 2021 WL 1245294, at *4 (Minn. App. Apr. 5, 2021). Although not
precedential, we find the reasoning persuasive and adopt its conclusion that “PCA [C]hoice
care plans are bound by the same requirements as traditional care plans” set forth in Minn.
Stat. § 256B.0659, subd. 7. Id. As a result, provider agencies are required to maintain
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PCA Choice care plans in their service records, and the commissioner did not misapply the
law when finding abuse on this basis . But given our holding here and DHS’s failure to
show Best Care’s lack of care plans for PCA Choice recipients led to improper payment,
the commissioner exceeded her authority by ordering monetary recovery on this basis.
Second, Best Care argues the commissioner arbitrarily and capriciously refused to
consider 69 time sheets that were inadvertently not disclosed upon DHS’s initial request
for records. Best Care provided the missing time sheets well before the contested case
hearing. DHS maintained it could obtain monetary recovery based on the overpayment
reason “no time sheets” because they were not timely disclosed for the investigation, thus
constituting abuse. See Minn. R. 9505.2165, subp. 2A(9) (noting that “failing to disclose
or make available to the department the recipient’s health service records” constitutes
“abuse” by a vendor). The commissioner determined Best Care’s “failure to make its [69
time sheet] record[s] available . . . is abuse and . . . grounds for an overpayment.”
An agency’s decision is arbitrary and capricious only if it, in relevant part, “offered
an explanation that runs counter to the evidence.” Citizens Advocating Responsible Dev .
v. Kandiyohi Cnty. Bd. of Comm’rs, 713 N.W.2d 817, 832 (Minn. 2006). In this case, there
is “no rational connection between the facts found and the choice made ” because DHS’s
stated reason for overpayment was based on 69 time sheets that were missing from the
portion of requested records rather than untimely disclosure of records. See In re Excess
Surplus Status of Blue Cross & Blue Shield of Minn., 624 N.W.2d 264, 277 (Minn. 2001)
(quotation omitted). DHS never contested the authenticity of the later supplied time sheets.
But on the ground of “no time sheets,” the commissioner concluded that DHS was entitled
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to monetary recovery be cause it proved an unalleged abuse and separate reason for
overpayment—the untimely disclosure of records. Thus, the commissioner’s decision
about the time sheets was arbitrary and capricious.
Last, Best Care contends the commissioner impermissibly delega ted her authority
to author the final agency decision in this matter to her designee, the director of DHS’s
appeals office. Best Care cites no authority compelling reversal on this basis. By statute,
the commissioner may “delegate to any subordinate empl oyee the exercise of specified
statutory powers or duties as the commissioner may deem advisable” when not otherwise
expressly provided by law. See Minn. Stat. § 15.06, subd. 6(1) (2022). DHS points to the
commissioner’s order delegating her authority, w hich delegates to the designee “[f]ull
power and authority to execute any documents related to the resolution of contested case
proceedings which [the commissioner has] authority to sign.” Best Care has not
established a basis for reversal on this ground.
IV.

We turn finally to the stipulated -provider agreement. Best Care asserts that the
commissioner’s requirement of a stipulated-provider agreement should be reversed for the
same reasons as the monetary recovery. We disagree. Requiring provider agencies to enter
into a stipulated-provider agreement as a condition of continued participation in the MHCP
is a sanction. Minn. Stat. § 256B.064, subd. 1b; see also Minn. R. 9505.2210, subp. 2B(2)
(2021). As discussed, the imposition of sanctions for abuse is governed by a separate
standard than monetary recovery and does not require proof that a vendor was improperly
paid as a result of abuse. Minn. Stat. § 256B.064, subd. 1b (requiring the commissioner to
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also consider “the nature, chronicity, or severity of the conduct and the effect of the conduct
on the health and safety of persons served by the vendor” when imposing sanctions). We
note, however, that the commissioner’s decision to require a stipulated-provider agreement
was based in part on the size of the monetary recovery. We therefore conclude that it is
appropriate for the commissioner to reconsider the propriety of the stipulated -provider
agreement, under the statutory standards governing sanctions, given the reduction in
monetary recovery.
DECISION
Minnesota Statutes section 256B.064, subdivision 1c, authorizes the Minnesota
Commissioner of Human Services to obtain monetary recovery of funds paid to a vendor
of medical care from the MHCP when the funds were “improperly paid . . . as a result of”
conduct constituting “abuse” as defined by Minnesota Rule 9505.2165, subpart 2. We hold
that a determination that abuse has occurred alone does not allow recovery because the
statute also requires a determination that a vendor was improperly paid the funds sought to
be recovered.
The commissioner exceeded her statutory authority by ordering monetary recovery
when DHS failed to show, by a preponderance of the evidence, that Best Care was
“improperly paid” as a result of its abuse. We therefore reverse in part and remand for the
commissioner to enter a revised order reducing the monetary recovery in a manner
consistent with this decision. The commissioner shall reconsider on remand whether the
sanction of requiring a stipulated-provider agreement is warranted, considering the reduced
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monetary recovery. The commissioner may also consider whether other sanctions are
appropriate in this case.
Reversed in part and remanded.