[Cite as State ex rel. Peregrine Health Servs. of Columbus, L.L.C. v. Sears, Dir., Ohio Dept. of Medicaid, 2020-

Ohio-3426.]

IN THE COURT OF APPEALS OF OHIO

TENTH APPELLATE DISTRICT

State ex rel. Peregrine Health Services :

of Columbus, LLC dba Summit's Trace

Healthcare Center et al., :

Appellants/ :

Cross-Appellees,

: No. 18AP-16

v. (C.P.C. No. 17CV-1284)

:

Barbara Sears, Director, (REGULAR CALENDAR)

Ohio Department of Medicaid, :



Appellee/ :

Cross-Appellant.

:



D E C I S I O N

Rendered on June 23, 2020



On brief: Carlile Patchen & Murphy LLP, Maria Mariano

Guthrie, and Jeffrey J. Patter, for appellants/cross-appellees.

Argued: Maria Mariano Guthrie.

On brief: Dave Yost, Attorney General, Rebecca L. Thomas,

and Justin T. Radic, for appellee/cross-appellant. Argued:

Rebecca L. Thomas.



APPEAL from the Franklin County Court of Common Pleas

KLATT, J.

{¶ 1} Appellants/cross-appellees, Peregrine Health Services of Columbus, LLC dba

Summit's Trace Healthcare Center and Peregrine Health Services of Cincinnati, LLC dba

Oak Pavilion Nursing Center (hereinafter collectively referred to as "Peregrine"), appeal

from a December 11, 2017 judgment of the Franklin County Court of Common Pleas

denying their petition for a writ of mandamus ordering appellee/cross-appellant, Barbara

No. 18AP-16 2

Sears, Director of the Ohio Department of Medicaid (hereinafter referred to as "ODM") to

distribute critical access incentive payments to them for state fiscal year 2017. Following a

bench trial, the trial court entered judgment denying the writ of mandamus, finding

Peregrine was not entitled to the writ. For the following reasons, we affirm the trial court's

decision denying the requested writ.

{¶ 2} ODM filed a conditional cross-appeal from a November 1, 2017 decision of

the Franklin County Court of Common Pleas denying ODM's March 7, 2017 motion to

dismiss Peregrine's complaint for failure to state a claim upon which relief may be granted

pursuant to Civ.R. 12(B)(6). For the following reasons, we decline to address ODM's crossappeal, finding it moot.

I. FACTS AND PROCEDURAL BACKGROUND

A. Overview

{¶ 3} This mandamus action arose out of Peregrine's claim that ODM had denied

them critical access incentive payments for which they were eligible under R.C. 5165.15 and

5165.23 for state fiscal year 2017. Peregrine claims the denial was based on ODM's

incorrect and unreasonable interpretation of the term "occupancy rate" as described in R.C.

5165.23(A)(2) to determine whether a nursing facility qualifies for such payments.

{¶ 4} ODM is responsible for determining and issuing critical access incentive

payments to qualified nursing facilities according to R.C. 5165.15 and 5165.23. Pursuant to

R.C. 5165.15, ODM determines how much a Medicaid-funded nursing facility receives and

then distributes the funds as a "total per Medicaid day payment rate." This "total per

Medicaid day payment rate" is computed by determining the sum of six components, one

of which is a critical access incentive payment for qualifying nursing facilities. R.C.

5165.15(A)(5). If a nursing facility qualifies for a critical access incentive payment, then

ODM totals the facility's other components under R.C. 5165.15(A)(1) through (4) and (6)

and increases the total by five percent. R.C. 5165.23(B). The five percent increase

constitutes the critical access incentive payment. R.C. 5165.23(A) provides criteria a facility

must meet to receive a critical access incentive payment, one of which is to have an

occupancy rate of at least eighty-five percent as of the last day of the calendar year

immediately preceding the fiscal year.

No. 18AP-16 3

{¶ 5} ODM's decision regarding whether a nursing facility qualifies for a critical

access incentive payment is subject to reconsideration when sought by the facility "on the

basis of a possible error in the calculation of the rate." Ohio Adm.Code 5160-3-24. ODM

then issues a written reconsideration decision. ODM's reconsideration decision is not

subject to any administrative remedy under R.C. Chapter 119 or any other provision of the

Revised Code; therefore, a mandamus action is Peregrine's only legal remedy. Mandamus

is an appropriate remedy where no statutory right of appeal is available to correct an abuse

of discretion by an administrative body. State ex rel. Cydrus v. Ohio Public Emps.

Retirement Sys., 127 Ohio St.3d 257, 2010-Ohio-5770, ¶ 12.

B. Facts

{¶ 6} The facts of the underlying matter are undisputed. Peregrine Health Services

of Columbus, LLC operates Summit's Trace Healthcare Center, while Peregrine Health

Services of Cincinnati, LLC operates Oak Pavilion Nursing Center. (Feb. 3, 2017 Petition at

¶ 1-2.) ODM denied critical access incentive payments to Peregrine and Peregrine

requested reconsideration. ODM denied such reconsideration. Subsequently, on

February 3, 2017, Peregrine filed a verified petition for a writ of mandamus seeking a writ

to compel ODM to distribute critical access incentive payments to them under R.C.

5165.15(A)(5) and 5165.23 for state fiscal year 2017.

{¶ 7} The parties agree that the sole issue is the meaning of the term "occupancy

rate" as used in R.C. 5165.23(A)(2) to calculate the critical access incentive payment.

{¶ 8} "Occupancy rate" is a percentage of occupied days divided by available days.

(Petition at ¶ 28.) However, Peregrine argues that the calculation of an "occupancy rate"

for purposes of R.C. 5165.23(A)(2) should be calculated by using the number of beds

actually in use at the nursing facility that have been certified for Medicaid care and

reimbursement (hereinafter referred to as "certified beds") as the denominator in the

equation. ODM argues the determination is the maximum number of beds that the facility

was authorized by the Ohio Department of Health to make available or the maximum

number of beds that the facility has licenses for and, therefore, could be made available for

occupancy in the denominator of the equation (hereinafter referred to as "licensed beds").

(Nov. 16, 2017 Moore Aff. at ¶ 7.) Peregrine claims that ODM "wrongfully and arbitrarily"

denied them the critical access incentive payments based on ODM's incorrect

No. 18AP-16 4

interpretation of the term "occupancy rate" by using licensed beds rather than certified beds

in the calculation. (Petition at ¶ 32, 34.)

{¶ 9} It is not uncommon for nursing facilities to have a different number of

licenses for beds than the number of actual Medicaid-certified beds. For example,

Summit's Trace had licenses for 201 beds but only had 177 to 180 beds that existed in the

facility and could be occupied by a patient. (Heaphy Feb. 1, 2017 Aff. at ¶ 12, 20.) Oak

Pavilion had licenses for 150 beds but only 130 beds existed and were available to be

occupied by patients. Id. at ¶ 32.

{¶ 10} On March 7, 2017, ODM filed a motion to dismiss the complaint for failure to

state a claim upon which relief may be granted pursuant to Civ.R. 12(B)(6). ODM argued

its interpretation of occupancy rate was not unreasonable, irrational, or inconsistent with

the statutory purpose and, consequently, Peregrine had failed to state a claim for which

relief could be granted.

{¶ 11} On April 4, 2017, Peregrine filed a memorandum in opposition to ODM's

motion to dismiss, attaching an affidavit and supporting documents. On April 17, 2017,

ODM filed a reply in support of its motion to dismiss. On May 3, 2017, Peregrine requested

leave to file a sur-reply, which was opposed by ODM by memorandum filed the same day.

{¶ 12} By journal entry dated November 1, 2017, the trial court denied ODM's

motion to dismiss, denied Peregrine's motion for leave to file sur-reply, and set the matter

for supplemental briefing and hearing.

{¶ 13} On November 22, 2017, the trial court conducted a bench trial and, in

addition to live testimony, it admitted documentary evidence including the verified petition

for a writ of mandamus and the affidavits that had previously been filed. The trial court

qualified as experts all three witnesses that testified during the trial.

{¶ 14} On December 11, 2017, the trial court issued its decision denying the

requested writ. The trial court noted that the term "occupancy rate" is not defined in R.C.

Chapter 5165 and that "[t]he statute does not specifically address whether to use 'licensed'

or 'certified' beds to calculate critical access payments under 5165.23(A)(2)." (Dec. 11, 2017

Decision at 5.) The trial court found R.C. 5165.23(A)(2) ambiguous. The trial court stated:

A nursing facility occupancy rate could be calculated using all

of its licensed beds, or using only Medicaid certified beds.

There are pro's [sic] and con's [sic] to each approach. If a

No. 18AP-16 5

facility is remodeling – in order to better serve residents – and

takes licensed beds temporarily out of service the occupancy

rate will go down if licensed beds are the basis for the

computation, perhaps eliminating the critical access incentive

payment for a year or more. But, the record suggests a facility

that does not meet the 85% occupancy rate may simply be

"sitting-on" excess licensed beds, or may even have quality of

care issues that keep its population relatively low. Figuring out

what approach is best for the public in conducting critical

access incentive payment calculations is, therefore, a matter of

judgment. The General Assembly did not settle that issue with

this statutory language. The Department charged with

implementation of the language is left to apply the statutory

concept in a sensible manner.

(Decision at 6.)

{¶ 15} The trial court found that it was appropriate to defer to ODM's interpretation

of "occupancy rate" for purposes of determining whether a nursing facility qualified for a

critical access incentive payment. The trial court found the evidence showed ODM "was

acting in a reasonable and good faith manner in implementing the modest legislative

guidance on computing an 'occupancy rate' pursuant to R.C. 5165.23(A)(2)." (Decision at

7.) Relying on the holding of In re Champaign Wind, L.L.C., 146 Ohio St.3d 489, 2016-

Ohio-1513, ¶ 36 ("when a statute does not prescribe a particular formula or methodology,

the appropriate administrative agency has broad discretion in deciding how to implement

its duties"), the trial court concluded that ODM "must be allowed" broad discretion in

deciding how to implement R.C. 5165.23(A)(2). (Decision at 7.) The trial court concluded

that Peregrine had not demonstrated entitlement to a writ of mandamus.

{¶ 16} On January 5, 2018, Peregrine timely appealed from the December 11, 2017

judgment. On January 12, 2018, ODM conditionally cross-appealed from the trial court's

entry journalized on November 1, 2017 that denied ODM's motion to dismiss the

mandamus action.

II. ASSIGNMENTS OF ERROR

{¶ 17} Peregrine presents three assignments of error for review:

[1.] The trial court erred in dismissing [Peregrine's] Writ of

Mandamus when the trial court gave improper deference to the

Ohio Department of Medicaid's interpretation of R.C. 5165.23.

No. 18AP-16 6

[2.] The trial court erred when it found that the Ohio

Department of Medicaid's interpretation of R.C. 5165.23 was

reasonable.

[3.] The trial court abused its discretion when it failed to find

that the Ohio Department of Medicaid's denial of the critical

access incentive payments was unreasonable, arbitrary and/or

unconscionable.

III. CONDITIONAL CROSS-APPEAL

{¶ 18} ODM filed a conditional cross-appeal, requesting that the trial court's

decision denying ODM's Civ.R. 12(B)(6) motion to dismiss be reversed in the event this

court grants the relief sought by Peregrine:

The lower court incorrectly denied the Department's motion to

dismiss based on failure to state a claim upon which relief could

be granted. (See Comm. Pl. 11/1/2017 Journal Entry at 3.)

IV. LAW AND DISCUSSION – APPEAL

A. Mandamus

{¶ 19} To be entitled to relief in mandamus, a relator must demonstrate that

(1) relator has a clear legal right to the relief prayed for, (2) respondent is under a clear legal

duty to perform the act prayed for, and (3) relator has no plain and adequate remedy in the

ordinary course of law. State ex rel. Berger v. McMonagle, 6 Ohio St.3d 28, 29 (1983);

PBP, Inc. v. Ohio Dept. of Job & Family Servs., 10th Dist. No. 13AP-36, 2013-Ohio-4344.

"Mandamus is an extraordinary remedy which is to be exercised with caution and issued

only when the right is clear." Id. at ¶ 13, citing State ex rel. Rittner v. Bumb, 6th Dist. No.

F-07-017, 2007-Ohio-5319, ¶ 6. Therefore, in order for this court to issue a writ of

mandamus in this matter, Peregrine must establish a clear legal right to critical access

incentive payments for state fiscal year 2017, a clear legal duty on the part of ODM to issue

such payments to them, and the lack of an adequate remedy in the ordinary course of law.

{¶ 20} There is no dispute that ODM had a clear legal duty to determine and pay

critical access incentive payments to qualified nursing facilities for state fiscal year 2017.

Nor is there any dispute that, because Ohio Adm.Code 5160-3-24 bars any administrative

remedy of ODM's reconsideration decision, this mandamus action is Peregrine's only

remedy. Consequently, the remedy of a writ of mandamus is appropriate in this matter if

No. 18AP-16 7

Peregrine can demonstrate that ODM improperly and unreasonably calculated the critical

access incentive payments at issue here.

B. Standard of Review

{¶ 21} The parties disagree on the standard of review that applies in determining

whether the trial court erred in entering judgment in favor of ODM. ODM cites this court's

holding in State ex rel. BDFM Co. v. Ohio Dept. of Transp., 10th Dist. No. 11AP-1094, 2013-

Ohio-107, which supports the proposition that a trial court's decision in a mandamus action

is generally reviewed for abuse of discretion. ODM also asserts that this court should defer

to ODM's reasonable construction of its statutes and rules, regardless of the standard of

review applied.

{¶ 22} Peregrine challenges ODM's argument that our standard of review is an

abuse of discretion review and instead argues that a de novo review should be employed.

Peregrine acknowledges that, generally, the standard of review is an abuse of discretion.

ODM has conceded, however, that "[t]he question presented here is purely legal; there are

no disputed material facts." See ODM Combined Brief at 1. Peregrine relies on this court's

holding in State ex rel. V&A Risk Servs. v. State Bur. of Workers' Comp., 10th Dist. No.

11AP-742, 2012-Ohio-3583, ¶ 19 (where a "stipulated record presents a question of law,

appellate courts review a writ of mandamus issued by a trial court de novo"), to support

their position that de novo is the appropriate standard of review here.

{¶ 23} Having independently reviewed the record and the law regarding the

standard of review in a case such as this, we find de novo review appropriate. The parties

and trial court agree there are no material disputed facts, and the only issue for review is

whether ODM's interpretation of R.C. 5165.23(A)(2) was proper and reasonable, which is

purely a question of law. "Statutory interpretation is a question of law subject to de novo

review." Silver Lining Group EIC Morrow Co. v. Ohio Dept. of Edn. Autism Scholarship

Program, 10th Dist. No. 16AP-398, 2017-Ohio-7834, ¶ 33.

C. Assignments of Error

{¶ 24} Because they are interrelated, we address Peregrine's assignments of error

together. Peregrine asserts the trial court erred by affording improper deference to ODM's

interpretation of R.C. 5165.23, which resulted in its finding that ODM's interpretation of

R.C. 5165.23 was reasonable. Peregrine asserts that ODM's interpretation of R.C. 5165.23

No. 18AP-16 8

is unreasonable and resulted in an improper denial of critical access incentive payments to

Peregrine for fiscal year 2017.

{¶ 25} As recognized, there are no disputed facts. Both Peregrine and ODM agree

Peregrine satisfied three of the four criteria of R.C 5165.23 in order to receive incentive

payments. The parties do not dispute the data submitted by Peregrine that established the

number of licensed beds and the number of certified beds. Therefore, the sole issue

presented to the trial court was whether the calculation of the occupancy rate is determined

by using the number of licensed beds, as argued by ODM, or by using the number of

certified beds, as argued by Peregrine.

{¶ 26} The parties agree that, in 2012,1 the Ohio General Assembly enacted critical

access incentive payments that could be awarded to nursing facilities located in highly

distressed urban and rural communities to encourage the nursing facilities to remain in

those communities, thereby keeping "vital and needed senior health services in place" in

those communities. (Petition at ¶ 11-12; ODM Mar. 7, 2017 Mot. to Dismiss at 2.) The

parties likewise agree the critical access incentive payments "were put in place to address

the potential for a lack of access to healthcare by both rural and inner-city residents, a high

proportion of whom are poor and chronically ill and—thus—more likely to be Medicaid

recipients," and the critical access incentive payments make it economically feasible for the

nursing facilities to remain in their communities, where they also help by providing

significant local employment. (Mar. 7, 2017 ODM Mot. to Dismiss at 2, citing Petition at

¶ 11-12.)

{¶ 27} R.C. 5165.15 establishes the total per Medicaid day payment rate, including

the critical access incentive payment, that ODM shall pay a nursing facility during a state

fiscal year. Calculation of the Medicaid day payment rate for fiscal year 2017 required ODM

to determine the sum of all the following in accordance with R.C. 5165.15(A):

(1) The per medicaid day payment rate for ancillary and

support costs determined for the nursing facility under

section 5165.16 of the Revised Code;



1 The statute, previously codified as R.C. 5111.246 but now codified as R.C. 5165.23, became effective on

September 10, 2012.

No. 18AP-16 9

(2) The per medicaid day payment rate for capital costs

determined for the nursing facility under section 5165.17 of the

Revised Code;

(3) The per medicaid day payment rate for direct care costs

determined for the nursing facility under section 5165.19 of the

Revised Code;

(4) The per medicaid day payment rate for direct care costs

determined for the nursing facility under section 5165.19 of the

Revised Code;

(5) If the nursing facility qualifies as a critical access nursing

facility, the nursing facility's critical access incentive payment

paid under section 5165.23 of the Revised Code.

{¶ 28} In order for a nursing facility to qualify for the critical access incentive

payment provided for in R.C. 5165.15(A)(5), ODM must determine that the nursing facility

satisfies the requirements of R.C. 5165.23(A), which provided for state fiscal year 2017, as

follows:

(A) Each state fiscal year, the department of medicaid shall

determine the critical access incentive payment for each

nursing facility that qualifies as a critical access nursing facility.

To qualify as a critical access nursing facility for a state fiscal

year, a nursing facility must meet all of the following

requirements:

(1) The nursing facility must be located in an area that, on

December 31, 2011, was designated an empowerment zone

under the "Internal Revenue Code of 1986," section 1391, 26

U.S.C. 1391.

(2) The nursing facility must have an occupancy rate of at

least eighty-five per cent as of the last day of the calendar year

immediately preceding the state fiscal year.

(3) The nursing facility must have a medicaid utilization rate of

at least sixty-five per cent as of the last day of the calendar year

immediately preceding the state fiscal year.

(4) The nursing facility must have been awarded at least five

points for meeting accountability measures under section

5165.25 of the Revised Code for the fiscal year and at least one

of the five points must have been awarded for meeting the

accountability measures identified in divisions (C)(9), (10),

(11), (12), and (14) of section 5165.25 of the Revised Code.

No. 18AP-16 10

(Emphasis added.) H.B. No. 483, as enacted by the 130th General Assembly, effective

Sept. 15, 2014.

{¶ 29} "The primary goal of statutory construction is to ascertain and give effect to

the legislature's intent in enacting the statute. The court must first look to the plain

language of the statute itself to determine the legislative intent." (Citations omitted.) State

v. Bundy, 4th Dist. No. 11CA818, 2012-Ohio-3934, ¶ 46. We must consider the statutory

language in context, construing words and phrases according to the rules of grammar and

common usage. Bartchy v. State Bd. of Edn., 120 Ohio St.3d 205, 2008-Ohio-4826, ¶ 16,

citing State ex rel. Stoll v. Logan Cty. Bd. of Elections, 117 Ohio St.3d 76, 2008-Ohio-333,

¶ 34.

{¶ 30} A court may only interpret a statute when " 'the words of a statute are

ambiguous, uncertain in meaning, or conflicting.' " In re Brooks, 136 Ohio App.3d 824,

829 (10th Dist.2000), quoting State ex rel. Burrows v. Indus. Comm., 78 Ohio St.3d 78, 81

(1997). Ambiguity exists when the language of a statute is susceptible to more than one

interpretation. Silver Lining Group, 2017-Ohio-7834, at ¶ 35, citing Columbus v. Mitchell,

10th Dist. No. 16AP-322, 2016-Ohio-7873, ¶ 6. R.C. 1.49 provides that when a statute is

ambiguous, a court may consider "other matters," such as the object sought to be attained,

the legislative history, the consequence of a particular construction, and the administrative

construction of the statute.

{¶ 31} ODM asserts that R.C. 5165.23(A)(2) is ambiguous because it does not define

"occupancy rate," while that term is defined in other sections in R.C. Chapter 5165,

including R.C. 5165.16 and 5165.17. ODM argues that its interpretation is uniform within

the chapter. We find that R.C. 5165.23(A)(2) is ambiguous because it does not specify how

that rate is to be determined, and it is susceptible to more than one reasonable

interpretation by using either licensed beds or certified beds. Here, the trial court expressly

noted the lack of legislative guidance on the formula or methodology to be applied in

calculating occupancy rate for purposes of determining critical access incentive payments.

{¶ 32} " 'If a statute provides an administrative agency authority to perform a

specified act but does not provide the details by which the act should be performed, the

agency is to perform the act in a reasonable manner based upon a reasonable construction

of the statutory scheme.' " Silver Lining Group at ¶ 49, quoting Cosby v. Franklin Cty.

No. 18AP-16 11

Dept. of Job & Family Servs., 10th Dist. No. 07AP-41, 2007-Ohio-6641, ¶ 38. If the agency

interprets the statute in a way that " 'fills a gap or defines a term in a reasonable way in light

of the Legislature's design [, such construction] controls, even if it is not the answer the

court would have reached in the first instance.' " Id. at ¶ 49, citing Cosby at ¶ 38, quoting

Regions Hosp. v. Shalala, 522 U.S. 448, 450 (1998).

{¶ 33} "[A] 'legislative gap' is not 'equivalent to a lack of authority for the agency to

act.' " Silver Lining Group at ¶ 50, quoting Northwestern Ohio Bldg. & Constr. Trades

Council v. Conrad, 92 Ohio St.3d 282, 289 (2001). Moreover, " 'the power of an

administrative agency to administer a * * * program necessarily requires the formulation of

policy and the making of rules to fill any gap left, implicitly or explicitly,' by the legislature."

(Emphasis omitted.) Northwestern Ohio Bldg. & Constr. Trades Council at 289, quoting

Morton v. Ruiz, 415 U.S. 199, 231 (1974).

{¶ 34} R.C. 5165.23 does not specify whether ODM should use licensed beds or

certified beds when calculating occupancy rate. ODM reasonably filled the gap and

determined it should use licensed beds to determine the occupancy rate. The General

Assembly delegated the determination of which nursing facilities were eligible for the

critical access incentive payments and required ODM to create the standards for that

determination.

{¶ 35} ODM argues that using licensed beds prevents facilities from manipulating

the numbers in order to meet the occupancy requirement. By using certified beds, it could

provide an incentive to facilities to choose to remove Medicaid-certified beds out of service,

thereby decreasing the number of beds used in the denominator of the occupancy-rate

fraction in order to artificially inflate the occupancy rate above 85 percent. It could

encourage facilities in empowerment zones to lower the number of available beds and

thereby result in a decrease, rather than an increase, in the local access to nursing facilities

in those empowerment zones. (Appellee Combined Brief at 4-5; Tr. 88-95.)

{¶ 36} Peregrine argues that using licensed beds to determine occupancy rate is

contrary to ODM's prior administrative practices. Under R.C. 5165.34, if a facility has a

patient who is temporarily absent due to a hospital stay or other reasons, Medicaid can pay

that facility 50 percent of the Medicaid day rate if the facility has an occupancy rate

exceeding 95 percent. Occupancy rate is not defined in that section. In determining

No. 18AP-16 12

occupancy rate for temporary absences under R.C. 5165.34, ODM initially used certified

beds for a few years (approximately 2011 to 2016). However, both ODM employees who

testified stated that using certified beds was an error, and ODM corrected the error and

began using licensed beds under R.C. 5165.34. (Moore Tr. at 59; Dickerson Tr. at 88-89.)

However, since 2012 when R.C. 5165.23 became effective, ODM has consistently

interpreted occupancy rate using licensed beds for the critical access incentive payments.

(Dickerson Tr. at 88.) Moreover, Peregrine conceded at trial that ODM had always used

licensed beds to determine occupancy rate under R.C. 5165.23. (Tr. at 13-15.)

{¶ 37} Further, ODM argues occupancy rate is now interpreted consistently

throughout R.C. Chapter 5165 because ODM also uses licensed beds in the formula for

occupancy rate in both R.C. 5165.16 and 5165.17. The term "occupancy rate" is defined in

R.C. 5165.16 and 5165.17, and R.C. 5165.16 provides, as follows:

(D)(2) For the purpose of determining a nursing facility's

occupancy rate under division (D)(1)(a) of this section, the

department shall include any beds that the nursing facility

removes from its medicaid-certified capacity unless the

nursing facility also removes the beds from its licensed bed

capacity.2

{¶ 38} One of ODM's experts, Roger Allan Dickerson, Deputy Director of the Rate

Setting and Cost-Setting Section of ODM, testified that if the General Assembly intended

ODM to use certified beds to calculate the occupancy rate for the critical access incentive

payments, the General Assembly would have used such language in R.C. 5165.23. (Tr. at

87-88.) Dickerson testified Medicaid-certified beds is a subset of licensed beds (all

Medicaid-certified beds must first be licensed beds), and if the General Assembly had

wanted "occupancy rate" to mean Medicaid-certified beds, they would have used

"Medicaid-certified" as the subset. (Tr. at 87-88.)

{¶ 39} Further, ODM argues that applying the same definition to R.C. 5165.23 as in

R.C. 5165.16 and 5165.17 furthers the purposes that the General Assembly intended which

was to ensure access to nursing facility healthcare for residents of underserved rural and

inner-city areas. ODM contends that providing incentive payments only to nursing



2 R.C. 5165.17 uses similar language as R.C. 5165.16, as follows: "(D)(3) For the purpose of determining a

nursing facility's occupancy rate under division (D)(2)(a) of this section, the department shall include any

beds that the nursing facility removes from its Medicaid-certified capacity after June 30, 2005, unless the

nursing facility also removes the beds from its licensed bed capacity."

No. 18AP-16 13

facilities with high occupancy rates provides that the facilities that are used will be retained,

and access to such facilities will be assured. (ODM Combined Brief at 4.)

{¶ 40} Peregrine argues that R.C. 5165.16 and 5165.17 are rate-setting statutory

provisions and thus not closely related statutes to R.C. 5165.23, an add-on incentive

provision; therefore, we should not consider these statutes in pari materia. "It is a basic

rule of statutory construction that where sections of a statute are in pari materia, they shall

be construed together so as to give full force and effect to the legislative intent." State v.

Parks, 13 Ohio App.3d 85, 86 (10th Dist.1983). All statutes relating to the same subject

matter must be read in pari materia, and construed together, so as to give the proper force

and effect to each and all such statutes." State v. Cook, 128 Ohio St.3d 120, 2010-Ohio6305, ¶ 45. R.C. Chapter 5165 is titled Nursing Facility Services, and all three of these

sections are found in this same chapter of the Revised Code and involve components of

Medicaid rates paid to nursing facilities. They involve the same general subject matter and

address similar subjects. The sections are not so unrelated as to make in pari materia

review inappropriate.

{¶ 41} Generally, where there is ambiguity, " '[a] reviewing court, in interpreting a

statute, "must give due deference to an administrative interpretation formulated by an

agency which has accumulated substantial expertise, and to which the legislature has

delegated the responsibility of implementing the legislative command." ' " Northside

Amateur Boxing School Bingo Club v. Hamilton Cty. Gen. Health Dist., 184 Ohio App.3d

596, 2009-Ohio-5122, ¶ 17 (10th Dist.), quoting In re 138 Mazal Health Care, Ltd., 117 Ohio

App.3d 679, 685 (10th Dist.1997), quoting State ex rel. McLean v. Indus. Comm., 25 Ohio

St.3d 90 (1986). Furthermore, "in order to sustain an agency's application of a statutory

term, a reviewing court ' "need not find that its construction is the only reasonable one." ' "

Id., quoting 138 Mazal Health Care at 685, quoting Udall v. Tallman, 380 U.S. 1, 16 (1965),

superseded by statute on other grounds, quoting Unemp. Comp. Comm. of Territory of

Alaska v. Aragon, 329 U.S. 143 (1946). In the administrative law context, unless an

administrative agency's interpretation of a statute that it has a duty to enforce is

unreasonable, it will not be reversed. Warren v. Morrison, 10th Dist. No. 16AP-372, 2017-

Ohio-660, ¶ 10, citing State ex rel. Clark v. Great Lakes Constr. Co., 99 Ohio St.3d 320,

2003-Ohio-3802, ¶ 10, citing Northwestern Ohio Bldg. & Constr. Trades Council, 92 Ohio

No. 18AP-16 14

St.3d at 287. Thus, if the administrative agency's interpretation is reasonable and

consistent with the underlying legislative intent, this court must defer to the agency's

interpretation and uphold it. Id., citing Oyortey v. State Med. Bd. of Ohio, 10th Dist. No.

12AP-431, 2012-Ohio-6204, ¶ 17.

{¶ 42} Based on the foregoing reasons, we find that ODM's interpretation of

occupancy rate under R.C. 5165.23(A)(2) that resulted in denying critical access incentive

payments to Peregrine for state fiscal year 2017 was not unreasonable and not contrary to

law. We find, therefore, that the trial court did not err in deferring to ODM's interpretation

and denying Peregrine the writ of mandamus. Peregrine's three assignments of error are

overruled.

V. LAW AND DISCUSSION – ODM'S CONDITIONAL CROSS-APPEAL

{¶ 43} ODM argues that the trial court improperly denied its Civ.R. 12(B)(6) motion

to dismiss Peregrine's petition for a writ of mandamus for failure to state a claim upon

which relief could be granted. ODM posits that Peregrine is barred from stating a valid

claim for writs of mandamus compelling ODM to pay Peregrine critical access incentive

payments because Peregrine did not meet the statutory criteria for such payments, based

on ODM's interpretation of the term occupancy rate as it is used in R.C. 5165.23. (ODM's

Combined Brief in passim.) However, ODM raised this assignment of error only

conditionally upon our granting Peregrine's requested relief. Since we have not done so,

we decline to address ODM's conditional assignment of error as it is moot.

Based on the foregoing, we overrule Peregrine's three assignments of error

and affirm the judgment of the Franklin County Court of Common Pleas denying the

requested writ of mandamus. Additionally, we decline to address ODM's conditional

assignment of error on cross-appeal as it is moot.