STATE OF NORTH CAROLINA IN THE OFFICE OF ADMINISTRATIVE HEARINGS 06 OSP 1282 COUNTY OF WAKE Febby Manuel Petitioner vs. Division of Medical Assistance N. C. Dept of Health and Human Services Respondent ) ) ) ) ) ) ) ) DECISION This matter came before Administrative Law Judge Donald W. Overby, on November 27, 2006 in Raleigh, North Carolina. APPEARANCES For Petitioner: Febby Manuel, Pro Se For Respondent: Amy L. Funderburk Assistant Attorney General N.C. Department of Justice P.O. Box 629 Raleigh, NC 27602 Dorothy Powers Special Deputy Attorney General N.C. Department of Justice P.O. Box 629 Raleigh, NC 27602 STATEMENT OF THE CASE Petitioner, a career state employee, applied for the position of Health Standards Officer I, salary grade 68, but was not selected for the position. Petitioner filed a petition with the Office of Administrative Hearings, alleging failure to receive priority consideration for a promotion to the position of Health Standards Officer I. ISSUE Was the Petitioner entitled to receive priority consideration, pursuant to G.S. 126-7.1(c), over the non-state employee applicant who was selected for the position in question, and if so, has Petitioner met her burden of establishing that Respondent wrongfully denied her a promotion to the position of Health Standards Officer I? APPLICABLE STATUTES AND RULES N.C. Gen. Stat. §126-7.1 25 N.C.A.C. 1H.0801 WITNESSES For Petitioner Gloria Osborne Gail D. Covington Marilyn R. Vail Febby Manuel, Petitioner For Respondent: Marilyn Vail Beverly Todd EXHIBITS Petitioner offered no exhibits. Respondent offered the following Exhibits into evidence: 1. 2. 3. 4. 5. 6. 8. 9. Petition Job Posting Job Description Beverly Todd’s PD 107 Febby Manuel’s PD 107 Febby Manuel’s cover letter, dated 2-21-06 N.C. Gen. Stat. §127-7.1 25 N.C.A.C 1H.0801 FINDINGS OF FACT BASED UPON careful consideration of the sworn testimony of the witnesses presented at the hearing, the documents, and Exhibits received and admitted into evidence, and the entire record in this proceeding, the undersigned Administrative Law Judge (“ALJ") makes the following Findings of Fact. In making these Findings of Fact, the ALJ has weighed all the evidence and has assessed the credibility of the witnesses by taking into account the appropriate factors for judging credibility, including, but not limited to the demeanor of the witnesses, any interests, bias, or prejudice the witness may have, the opportunity of the witness to see, hear, know or remember the facts or occurrences about which the witness testified, whether the testimony of the witness is reasonable and whether the testimony is consistent with all other believable evidence in the case. 2 Background Information 1. The parties waived the requirement that they receive notice of the scheduled hearing at least 15 days in advance of the hearing. (T p 6) 2. At all times material, Petitioner Febby Manuel (“Petitioner”) was a career state employee (T pp 9, 35, 124), and the position of Health Standards Officer I would have been a promotion for her (T pp 9, 35, 127). 3. Petitioner was subject to the provisions of the State Personnel Act. 4. On July 17, 2006, Petitioner filed a Petition for Contested Case Hearing with the Office of Administrative Hearings (OAH) claiming she failed to receive priority consideration when applying for a position that would have constituted a promotion for her. (Respondent’s Exhibit 1, T p 40) 5. The position for which the Petitioner applied, Health Standards Officer I, is located within the Third Party Recovery (“TPR”) Section of the Division of Medical Assistance (“DMA”). (Respondent’s Exhibit 2, T pp 29, 42) 6. The mission of DMA is to seek recovery of Medicaid monies that have been paid out to providers. More specifically, the TPR unit seeks recovery for sums paid out by Medicaid when a provider has a credit on their books and that credit is due to be refunded to Medicaid. (T p 74 – 75) 7. Marilyn Vail (“Vail”) is employed as the Assistant Chief of Third Party Recovery in the TPR unit within DMA and supervises the casualty unit, the accounts receivable unit and the support group. Vail has a Master of Science degree and has worked in almost all areas within TPR including working with credit balances, Medicare recoveries, the Health Insurance Premium Payment Program, and state recovery in addition to her current position. Vail has been employed by the Department of Health and Human Services (“DHHS”) for ten years and has served as Assistant Chief for the past four years. Vail’s duties include handling personnel matters including hiring, developing work plans, coaching and counseling, ensuring that work is done correctly, and ensuring that monies collected are disbursed according to state mandate. In her current position, Ms. Vail supervises 15 – 25 employees. (T p 73-78) 8. Vail posted a vacancy for a Health Standards Officer I position with a closing date of February 24, 2006. (Respondent’s Exhibit 2, T p 77) 9. The Petitioner and Beverly Todd, as well as others, applied for the posted position and Todd was ultimately offered the position. (Respondent’s Exhibits 4 and 5, T p 77) 10. Petitioner was an employee of the N.C. Department of Health and Human Services as a Processing Assistant V with the Comptroller’s Office when she applied for the available Health Standards Officer I position. (Respondent’s Exhibit 5, T p 31) 3 11. Beverly Todd was not a state employee at the time she applied for the Health Standards Officer I position (Respondent’s Exhibit 4, T p 8); however, she had worked as a contract employee in a temporary position doing essentially the exact same duties as the position for which she was hired and at issue herein. (T. pps85 -86, 109 -110) 12. Gail Covington and Gloria Osborne testified on behalf of the Petitioner but neither was involved in the selection process for the Health Standards Officer I position in any way and had no knowledge as to the selected applicant’s qualifications. (T pp 17-18, 25-26). Details of the Posted Position 13. The Health Standards I Officer Position is located in the Casualty Unit of the Third Party Recovery Section of the North Carolina Division of Medical Assistance. (T p 78) 14. The position posting specifically stated the purpose of the position was to investigate and recover third party monies where there was Medicaid involvement in a casualty or tort liability case. This could include a motor vehicle accident, wrongful death action, medical negligence case, or a workers compensation case. The posting stated that investigators would be required to communicate with attorneys and insurance adjusters. (Respondent Exhibit 2, T p 51-52, 78 - 79) 15. Vail’s perception of a “casualty case” is one where there has been an injury or accident, and a “tort claim” would involve a wrong that could be remedied by a court. (T p 79) 16. To recover monies where there is a Medicaid involvement, the Health Standards Officer I determines what expenditures in the case were accident related based on diagnosis and procedure codes by looking through the paid history of the Medicaid recipient. The information in the paid history is then sent to the attorney or adjuster involved. (T p 79) 17. The Health Standards Officer I is expected to develop and review cases and to communicate with attorneys, insurance adjusters, medical providers, recipients of Medicaid and DSS. Such communication could be orally or in writing. (T p 78) 18. The Health Standards Officer I position required that the selected applicant have a working knowledge of the insurance industry, particularly liability insurance and subrogation or the claims processing system in the Medicaid program. (Respondent’s Exhibit 2, T p 87) 19. The Health Standards Officer I could be called to testify in a court hearing or be deposed in regards to a case. (T p 81) 20. The Health Standards Officer I could be required to review diagnosis and procedure codes of a Medicaid recipient, determine whether or not an expenditure was accident related and then communicate that information to an insurance adjuster or attorney while processing a case. (T p 81) 21. Although specifically referenced in the posting for the position at issue, the Petitioner did not refer to or use specifically the terms “third-party recovery,” “investigation,” “wrongful 4 death,” “medical negligence,” “Workers’ Comp,” “communicate with attorneys and insurance adjusters” or “tort liability” in her cover letter when applying for the Health Standards Officer I position. (T p 53-54) 22. Although specifically referenced in the posting for the position at issue, the Petitioner did not indicate on her application that she had previously dealt with motor vehicle accidents, wrongful death, medical negligence and workers’ compensation or that she communicated with attorneys and insurance adjusters. (T p 48, 50). 23. The Petitioner erroneously believed that those reviewing her application would have knowledge of or infer from her application the various duties she had performed which might be relevant to the position which she sought. (T pp 48 – 50, 54) 24. Petitioner had not worked previously on casualty matters. (T p 46) The Hiring Decision and Process 25. Petitioner was previously employed by the Department Health and Human Services, Division of Medical Assistance, Third Party Recovery as a Processing Assistant V from August 2001 until May 2003. Petitioner’s duties were largely clerical. (Respondent’s Exhibit 5, T pp 29, 92). 26. Petitioner had been employed by Dorothea Dix Hospital as a Patient Claims Rep. V from October 2000 through August 2001. Petitioner’s duties at Dix included communicating with social workers, Medicare, the Social Security Administration and the Employment Security Commission. Petitioner was also responsible for gathering patient information to determine if a patient qualified for state assistance. (Respondent’s Exhibits 5, T p 31-32). 27. Petitioner had been employed by Rex Healthcare, as a Patient Account Specialist from November 1997 through October 2000. The Petitioner did not indicate on her application whether or not she reviewed cases to determine if Medicaid was due a refund while in this position. The Petitioner did not communicate with attorneys or insurance adjusters in this position. (Respondent’s Exhibit 5, T pp 29, 49-51). 28. Petitioner had been employed by Healthsource of North Carolina as a Provider Service Benefit Representative from May 1995 until October 1997. While at Healthsource, the Petitioner processed claims for payment and reviewed claims to determine if the claims were paid correctly. (Respondent’s Exhibit 5, T p 30). 29. Petitioner had been employed by Wake Medical Center as Patient Account Rep from May 1987 until May 1995. Petitioner’s duties at Wake Medical Center included processing Medicaid claims. (Respondent’s Exhibit 5, T p 30-31). 30. Petitioner claims to have had twenty-five years of relevant work experience but listed ten years of work experience on her application. (T pp 37-38, 54, Respondent’s Exhibit 5) 5 31. In her cover letter, the Petitioner listed the following items: Several years processing medical claims, researched Medicaid claims with credit balances to determine refunds, several years working with Medicaid guidelines in some capacity, public contact with patients and family members, phone contact with providers and clients, heavy caseload, proficient Microsoft Word and Excel, Independent worker. (Respondent’s Exhibit 6, T p 93-94) 32. Todd had been employed by Metropolitan Insurance as a claims investigator from February 1984 until February 1987. In this position, Todd’s duties included traveling statewide to investigate accidents, reviewing damage from accidents for documentation, and direct contact with the insured member, medical professionals, and attorneys. (Respondent’s Exhibit 4, T p 104) 33. Todd had been employed by Connecticut Transit as a Claims Representative from December 1987 until December 1999. In this position, Todd handled telephone contacts with claimants, defendants, medical professionals and attorneys, adjudicated claims in accordance with state laws, took reports of claims, initiated surveillance, made determinations of fact based upon physical evidence, witness statements and reports. As a Claims Representative, Todd dealt with insurance adjusters and attorneys daily and was sometimes called to small claims court. (Respondent’s Exhibit, T pp 86-87, 107) 34. Todd had been employed by Connecticut Transit as a Claims Manager from December 1999 until July 2004. In this position, Todd was responsible for assignment and delegation of 3rd party bodily injury and property damage claims, collection of subrogation of 3rd party property damages and bodily injury claims, the claims department checking account, claims administration, establishing work flow and schedules, preparing and analyzing monthly and quarterly reports, having a knowledge of jurisdictional regulations governing claims handling, balancing heavy work loads, customer service, handling a heavy call volume, monitoring cost containment, administering performance reviews and developing a claims management tracking system. (Respondent’s Exhibit 4, T pp 86-87) 35. Todd had been employed by Public Consulting Group in a temporary position as a Claims Processor from February 2005 until November 2005. In this position, Todd processed NC State Employees and Teacher health insurance liens and recovered approximately ten to fifty thousand dollars daily on accident related medical expenditures incurred by the Plan where a third party was liable. She pursued subrogation as mandated by statute by direct contact with plan members, medical professionals and attorneys; determined total lien amounts after research and review of the case including the review of diagnostic codes and associated costs, and compilation of statistical data from an electronic data base. She negotiated lien amounts with the plan member or the member’s attorneys. She queried the system for overpayment and processed incoming and outgoing mail. While with Public Consulting Group, Todd performed the same functions as a Health Standards Officer I. Public Consulting group was a vendor for the State of North Carolina and was working for the State of North Carolina. (Respondent’s Exhibit 4, T p 85-86, 109-110) 36. Todd is a licensed insurance adjuster in both North Carolina and Connecticut. Todd has experience in investigative tracking, subrogation, negotiation, basic litigation, and investigating 6 and interpreting medical and legal reports. The fact that Todd is a licensed insurance adjuster in North Carolina and Connecticut shows she has a working knowledge of the insurance industry as requested in the job posting. (Respondent’s Exhibits 2, 4, T pp 66-67) 37. In the five years prior to applying for the Health Standards Officer I position, Todd attended training programs in leadership, customer service, presentation skills, effective communication, civil treatment for managers, investigation tracking, subrogation, positive negotiation, basic litigation tips, and interpretation of medical and legal reports and doctrines. (Respondent’s Exhibit 4, T p 84) 38. On or about February 21, 2006, Petitioner applied for the position of Health Standards Officer I, salary grade 68, as set out in the Posting. (Respondent’s Exhibits 2, 5, T p 42). 39. On or about February 24, 2006, Todd applied for the position of Health Standards Officer I, salary grade 68, as set out in the Posting. (Respondent’s Exhibits 2, 4, T p 42). 40. There were ten applications for the position, four of whom received priority consideration. (T pp 59 – 61) 41. Vail conducted interviews for the position and discussed her hiring choice with Geoff Elting who concurred in her decision to hire Beverly Todd. Geoff Elting is the Chief of the Third Party Recovery Unit (T p 89) 42. Deborah Crouch, who was a state employee at the time, also applied for the position in question and was interviewed. Crouch would have been Vail’s second choice to fill the position. (T p 95). 43. The Petitioner would not have been Vail’s third choice to fill the Health Standards Officer I position. (T p 96) 44. At the time the hiring decision was made, Vail took into account priority consideration for state employees pursuant to the State Personnel Act. Vail made the determination that Petitioner did not have equal qualifications to Todd. 45. Todd’s background and experiences appealed to Vail since it included the background and experiences specifically requested in the job posting. Todd’s background and experiences matched well to the job posting. Todd presented herself professionally in the interview. (T pp 86, 88, 91) 46. Vail determined that Todd had substantially higher qualifications, background, and experience for this position than did the Petitioner. The job-related qualifications held by Todd that Vail felt made her significantly better suited for the position include the training programs she had attended in the five years prior to her application, her licensure as an insurance adjuster, her experience in casualty, the fact that she had essentially done the job of a Health Standards Officer I with a previous employer in NC, that she had previously pursued subrogation claims and reviewed accident related medical expenditures and determined lien amounts after reviewing 7 diagnostic codes and compiling costs, that she had seventeen years of experience with Connecticut Transit working in claims which included liability claims where she worked with bodily injury and property damage claims, that she had dealt with attorneys, that she had balanced a heavy workload, that she had adjudicated claims in context with state laws, and that she had a long period of stability with one employer. (T pp 84 – 86, 95). 47. Petitioner does not have substantially equal qualifications as those of Todd based upon past work experience and the requirements of the position. (T p 127) CONCLUSIONS OF LAW 1. The Office of Administrative Hearings has jurisdiction over the parties and the subject matter pursuant to Chapter 126 and Chapters 150B of the North Carolina General Statutes and has the authority to issue a decision to the State Personnel Commission (“SPC”) which will make a final decision. 2. The Petitioner has the burden of proof. 3. North Carolina General Statute Section 126-7.1 states that a current State employee who applies for a position shall receive priority consideration over the applicant who is not a State employee if the position would constitute a promotion and if the State employee has substantially equal qualification as the applicant who is not a State employee. “Qualifications” consist of training or experience, years of experience and other skills, knowledge, and abilities that bear a reasonable and functional relationship to the abilities and skills required in the job vacancy applied for. N.C.G.S. Section 127.1(d). 4. The position of Health Standards Officer I which is at issue herein is superior to that of Petitioner’s current position and, therefore, would have been a promotion. 5. Petitioner is a career State employee as defined by G.S. Section 126-1.1. 6. Petitioner is entitled to State employee preference in the hiring decision pursuant to G. S. Section 126-7.1; however, Petitioner must show by the greater weight of the evidence that the Petitioner’s qualifications were substantially equal to the applicant who was selected. 7. The Petitioner has failed to prove by the greater weight of the evidence that she has substantially equal qualifications as Todd for the position. 8. Petitioner was not entitled to receive priority consideration pursuant to G.S. 126-7 in that the greater weight of the evidence presented shows that the Petitioner’s overall qualifications were not substantially equal to the non-State employee applicant chosen for the Health Standards Officer I position. 8 DECISION It is recommended that the State Personnel Commission affirm the Department of Health and Human Service’s hiring decision in this matter and dismiss Petitioner’s claim. ORDER It is hereby ordered that the agency serve a copy of the Final Decision on the Office of Administrative Hearings, 6714 Mail Service Center, Raleigh, North Carolina 27699-6714 in accordance with N.C. Gen. Stat. § 150B-36(b). NOTICE The Decision of the Administrative Law Judge is this Contested Case will be reviewed by the agency making the final decision according to standards found in N.C. G.S. 150B-36(b)(b1) and (b2). The agency making the Final Decision in this contested case is required to give each party an opportunity to file exceptions to this Decision and to present written arguments to those in the agency who will make the final decision, in accordance with N.C.G.S. § 150B-36(a). The agency is required by N.C. Gen. Stat. 150B-36(b) to serve a copy of the final decision on all parties and to furnish a copy to the parties’ attorney of record and to the Office of Administrative Hearings. The agency that will make the final decision in this contested case is the North Carolina State Personnel Commission. IT IS SO ORDERED. This the 29th day of January, 2007. _____________________________________ Donald W. Overby Administrative Law Judge 9