Full Opinion

IN THE SUPREME COURT OF MISSISSIPPI NO. 2024-SA-00253-SCT HATTIESBURG MEDICAL PARK MANAGEMENT CORP., BEDFORD CARE CENTER OF MENDENHALL, LLC, BEDFORD CARE CENTER MONROE HALL, LLC, BEDFORD ALZHEIMER’S CARE CENTER, LLC, BEDFORD CARE CENTER OF NEWTON, LLC, BEDFORD CARE CENTER OF PETAL, LLC, BEDFORD CARE CENTER OF HATTIESBURG, LLC AND BEDFORD CARE CENTER OF MARION, LLC v. MISSISSIPPI DIVISION OF MEDICAID AND CINDY BRADSHAW, IN HER OFFICIAL CAPACITY AS EXECUTIVE DIRECTOR OF MISSISSIPPI DIVISION OF MEDICAID ON MOTION FOR REHEARING DATE OF JUDGMENT: 02/21/2024 TRIAL JUDGE: HON. TIFFANY PIAZZA GROVE TRIAL COURT ATTORNEYS: S. MARK WANN JANET McMURTRAY KRISTEN SHEPPARD JONES MAUREEN BURKE SPEYERER ELLIOTT VAUN HALLER ABBIE EASON KOONCE COURT FROM WHICH APPEALED: HINDS COUNTY CHANCERY COURT ATTORNEYS FOR APPELLANTS: S. MARK WANN CHARLES HENRY BEST, III ATTORNEYS FOR APPELLEES: JANET McMURTRAY BRANT JAMES RYAN MAUREEN BURKE SPEYERER NATURE OF THE CASE: CIVIL - STATE BOARDS AND AGENCIES DISPOSITION: AFFIRMED - 10/15/2026 MOTION FOR REHEARING FILED: 12/04/2025 EN BANC. BRANNING, JUSTICE, FOR THE COURT: ¶1. The motion for rehearing is granted. The prior opinions of this Court are withdrawn and these opinions are substituted. ¶2. A group of long-term-care providers that serve Medicaid recipients appeal the Hinds County Chancery Court’s decision to affirm the Mississippi Division of Medicaid’s (DOM) adjustments to certain cost reports, thereby reducing the providers’ reimbursement rates. On rehearing, we finding no error and affirm the decisions of the DOM and the chancery court. FACTS AND PROCEDURAL HISTORY ¶3. The DOM operates to provide medical assistance to low-income Mississippians through a combination of state and federal funding, all as provided for in 42 U.S.C. §§ 1396- 1396w-9, -1397aa-1397mm (Supp. 2022) and Miss. Code Ann. §§ 43-13-1, -607 (Rev. 2023). Each participating state administers its own version of Medicaid through its state plan. The federal government, through the Center for Medicare and Medicaid Services (CMS), reimburses participating states for a potion of the Medicaid program administrative costs. ¶4. Nursing facilities, in particular, receive reimbursements from the DOM based on the cost of care and services provided to Medicaid beneficiaries. The DOM uses these reported costs, in conjunction with criteria established in the Mississippi Medicaid State Plan (State Plan), to establish the providers’ payment rates. Because the State Plan is silent on how 2 providers should account for insurance dividends or rebates received by nursing homes, the State Plan defaults to CMS Provider Reimbursement Manual (PRM) which requires that “income returned from insurer to insured, no matter how it is termed, [should be used] to offset costs.” ¶5. In the present case, the DOM conducted an audit of the 2015 cost report (the 2015 Cost Report) of a group of providers, namely Hattiesburg Medical Park Management Corp., Bedford Care Center of Mendenhall, LLC, Bedford Care Center Monroe Hall, LLC, Bedford Care Alzheimer’s Care Center, LLC, Bedford Care Center of Newton, LLC, Bedford Care Center of Petal, LLC, Bedford Care Center of Hattiesburg, LLC, and Bedford Care Center of Marion, LLC (the Providers). The DOM’s audit revealed that the Providers had listed rebates or dividend income received from certain insurance companies as “Other Income” instead of offsetting the payments against their actual cost of care. ¶6. As a result of the audit, the DOM made adjustments to the 2015 Cost Report, which lowered the Providers’ prospective payments from several insurance companies (the Adjustments). The Providers argue that, because the DOM had a long-standing unwritten internal policy of approving the treatment of the rebates or dividend payments as Other Income, the “significant change in its methods and standards for setting payment rates for services without providing public notice pursuant to 42 C.F.R § 447.205(a)” was arbitrary and capricious. We disagree. 3 ¶7. The Adjustments at issue are related to payments received by the Providers from three different insurers. The Mississippi Health Care Insurance Services Corporation (MHCISC) is a private company that provides insurance products to nursing homes and is a parent company to Mississippi Health Care Association Self-Insurers’ Fund (MHCASIF), Caregivers United Liability Insurance Company (CULIC), and Long Term Care Employers Insurance Company (LTCEIC). The MHCASIF provides workers’ compensation coverage to the Providers upon payment of the established premiums. The CULIC provides professional-liability and general-liability coverage to the Providers, and the Providers purchase shares and pay premiums to receive coverage. The LTCEIC provides aggregate excess coverage for the other two companies but does not insure any of the Providers directly. Five of the Providers are shareholders of the LTCEIC. ¶8. All three insurance companies pay the Providers insurance dividends. The DOM refers to these payments as rebates. More specifically, the MHCASIF’s distribution of surplus premiums is based on the Providers’ favorable workers’ compensation ratings. The MHCASIF refers to these distributions as dividends. CULIC distributes payments to its members for unused premiums, which it denotes as dividends. The LTCEIC likewise pays dividends to its shareholders. We will refer to these payments generally and collectively as “Insurance Income.” ¶9. For years, the Providers listed the Insurance Income as “Other Income” on Schedule 1 of their annual cost reports with a notation that the payments were not offsettable due to 4 being from a prior year. And, for years, the DOM approved this practice. In fact, the Providers state this practice “was consistent with how the Providers had accounted for the insurance income since the time the insurers were created, with full knowledge of DOM.” ¶10. On July 16, 2022, however, the DOM determined that this years-long practice was incorrect and issued the adjustments to the 2015 Cost Report accordingly. In response, the Providers’ submitted a Request for Reconsideration, which the DOM denied. The Providers then requested an administrative hearing. ¶11. At the administrative hearing, the Providers argued (1) that the DOM had a long-standing, unwritten internal policy not to offset the insurance income and should be held to that policy, (2) that public notice was required to change the policy, and (3) that offsetting the insurance income from multiple years in one year is poor policy for a prospective-payment system that does not support the goals of the State Plan. ¶12. The DOM, on the other hand, argued that because the State Plan does not specifically address the treatment of insurance income, the DOM was required to follow the mandatory language set forth under the applicable federal law. More specifically, PRM 15-1 requires that the dividends be offset against the insurance costs in the year the dividends were received by the Providers. As such, the DOM argued that the adjustments were a necessary step for compliance with the State Plan and PRM 15-1’s standards. ¶13. The hearing officer found that the adjustments were supported by substantial evidence, were not arbitrary or capricious, and were within the DOM’s power to make and 5 that the DOM did not violate a statutory or constitutional right of the Providers. The hearing officer recommended that the adjustments be affirmed. ¶14. The DOM’s executive director adopted the hearing officer’s recommendation and upheld the adjustments. The Providers timely appealed to the chancery court. ¶15. The chancery court affirmed the DOM’s decision, finding that the Providers “did not meet their burden of proof that the [DOM’s] Final Decision was unsupported by substantial evidence, arbitrary or capricious, in excess of the statutory authority or jurisdiction of the DOM, or in violation of any vested constitutional rights of any party involved.” ¶16. On appeal to this Court, the Providers argue (1) the DOM’s actions were arbitrary and capricious, (2) the DOM must provide public notice of its policy change, (3) the DOM is equitably estopped from reversing its long-standing policy, and (4) the DOM’s offset of the LTCEIC dividends is unfounded. STANDARD OF REVIEW ¶17. This Court has stated: In reviewing a chancellor’s opinion regarding a DOM decision, this Court reviews the agency’s order to determine whether it 1) was supported by substantial evidence, 2) was arbitrary or capricious, 3) was beyond the power of the agency to make, or 4) violated some statutory or constitutional right of the complaining party. Acts are arbitrary or capricious when done without reason or judgment. This Court does not defer to an agency’s interpretation of a statute because interpreting statutes is the province of the courts. Miss. Methodist Hosp. & Rehab. Ctr., Inc. v. Miss. Div. of Medicaid, 319 So. 3d 1049, 1054 (Miss. 2021) (citation modified). 6 ¶18. Further, the burden of proving that an agency’s decision should be reversed lies with the party challenging the decision. Methodist Specialty Care Ctr. v. Miss. Div. of Medicaid, 305 So. 3d 1088, 1096 (Miss. 2020) (citing Ray v. Miss. Dep’t of Pub. Safety, 172 So. 3d 182, 187 (Miss. 2015)). ¶19. And, finally, “[t]his Court reviews agency interpretations of statutes, rules, and regulations de novo.” Wilkinson Cnty. Senior Care, LLC v. Miss. Div. of Medicaid, 341 So. 3d 932, 938 (Miss. 2022) (citing Miss. Methodist Hosp. & Rehab. Ctr., 319 So. 3d at 1054- 55). DISCUSSION I. Whether the DOM’s decision to adjust the Providers’ 2015 Cost Report was arbitrary and capricious. ¶20. The Providers argue that the DOM’s decision “to offset dividend payments to the Providers from MHCA-SIF, CULIC, and LTCEIC after decades of not offsetting the same payments was arbitrary and capricious” and that the “DOM’s abrupt change in course without notice to the Providers was done without a reasonable explanation.” To support their assertions regarding the internal policy, the Providers primarily rely on the testimony of Jamie Collier. 7 ¶21. Collier worked at the DOM from 1983-2001, first as DOM’s Medicaid financial program coordinator and then as the director of reimbursement until she left in 2001.1 At the administrative hearing, Collier testified, in relevant part, as follows: [Providers’ Counsel]: And what did you do with the payments on the cost reports? [Collier]: Well, I remember having a meeting with my staff first to determine what we were going to do because during cost report season we had weekly meetings to talk about issues that anybody had come across because different people did desk reviews. As part of the desk review procedure, . . . one thing we looked at was miscellaneous income to see if offsets were made for things that should have been offset. And so we—when we noticed the refunds from the [MHCA-]SIF—that’s all that was there when I worked there—we talked about if it should be offset or not. And we made the decision that it should not be offset for a couple of reasons. .... And it became like an internal policy. I regret that we didn’t put it in the State Plan or in the cost report instructions. But we continued with that policy until I left in 2001, and it continued after that because I prepared cost reports for long after that, and it was never offset on any cost report I ever did. 1 After Collier left the DOM in 2001, she went to work in private practice preparing cost reports for nursing-home companies. 8 [Providers’ Counsel]: And you spoke about meeting with DOM staff about this issue. Would . . . this have ever come up in training, or anything like that, with the facilities themselves? [Collier]: Well, we did cost report training periodically. . . . We would . . . have a workshop and go over the cost report and how to do it. I don’t remember specifically what was in our training. But another thing is that, when a provider receives their desk review, they’re supposed to share it with their preparer, and they can learn from it to see what adjustments were made on the cost report so they can do it correctly the next year. So that’s our way of training, in two ways. .... [Providers’ Counsel]: In your opinion, did the treatment of those payments set precedent? [Collier]: Yes. [Providers’ Counsel]: And if there were such precedent, would that require any kind of notice to change the precedent? [Collier]: I think so. (Emphasis added.) ¶22. But when the DOM questioned Collier about this internal policy, she testified as follows: [DOM’s Counsel]: Now, when you talked to your staff, you made a policy decision that you thought that you shouldn’t make an offset. That’s what you testified to? [Collier]: Yes. 9 [DOM’s Counsel]: Policy decisions have to be written down, don’t they? [Collier]: Well, in retrospect I should have written it down. . . . But, apparently, the policy continued if they didn’t start making offsets until now. .... [DOM’s Counsel]: Medicaid speaks through its State Plan, doesn’t it? [Collier]: Yes, it does. [DOM’s Counsel]: And CMS approves policy through its State Plan, doesn’t it? [Collier]: Yes, it does. But we also had the cost report instructions, which were not part of the State Plan. That was a policy. So there are other policies that Medicaid has that aren’t necessarily part of the State Plan. .... [DOM’s Counsel]: Well, the PRMs are specific, aren’t they? [Collier]: Yes. [DOM’s Counsel]: And they say [the dividends] should be offset? [Collier]: Well, if Medicaid policy is different, it’s not [offset]. [DOM’s Counsel]: [B]ut Medicaid policy doesn’t say . . . that you should not offset these, does it? [Collier]: Our internal policy said that. [DOM’s Counsel]: Your internal policy isn’t the State Plan, is it? [Collier]: And when we trained providers and preparers, they were instructed that it would not be offset. 10 [DOM’s Counsel]: You may have done that. I don’t know. But that’s the point. An oral conversation can’t make policy, can it? ¶23. In addition to Collier’s testimony that this alleged internal policy was never written, the record reflects that the Providers offered no written evidence of any such policy. The record reflects that the Providers did not offer the State Plan or PRM 15-1 in effect in 1993 into evidence at the hearing, to compare with the State Plan and PRM 15-1 in effect in 2015. ¶24. The Providers argued that “this is a matter of DOM deciding to change course in its interpretation of the State Plan without any prior notice to the Providers so that the Providers could adjust their accounting accordingly.” We disagree that the DOM changed its course in the State Plan as the State Plan is silent on the issue. ¶25. The DOM has consistently argued that (1) the DOM did not have an internal policy, and (2) the DOM, as a result of the 2018 audit, was correcting a mistake made in the previous years. ¶26. Manuel Pilgrim testified as the DOM’s witness at the administrative hearing, and his testimony supports the DOM’s arguments. Pilgrim testified that he began working at the DOM in September 2015 and currently served as the DOM Director of Financial and Performance Review Department, which includes the unit that performs cost audits on nursing facilities. Pilgrim testified, in relevant part, as follows: [DOM’s Counsel]: What is the State Plan for nursing facilities? [Pilgrim]: It is the Mississippi State Plan, Attachment 4.19-D. 11 [DOM’s Counsel]: And as part of your job duties, have you ever drafted a State Plan or portions of the State Plan? [Pilgrim]: I’ve helped to revise it, yes, or make clarifications in it, for sure. [DOM’s Counsel]: Have you had any experience in applying the State Plan? [Pilgrim]: On a regular basis. [DOM’s Counsel]: Have you had any experience in applying the State Plan provisions related to home office costs or allocations to healthcare facilities? [Pilgrim]: I have. [DOM’s Counsel]: And have you had any experience in applying the State Plan to nursing homes? [Pilgrim]: I have. [DOM’s Counsel]: Are you familiar with CMS PRM 15-1? [Pilgrim]: Yes. [DOM’s Counsel]: Tell us what it is, please. [Pilgrim]: It is the provider reimbursement manual that has been put forth by CMS as the guidelines for determining allowable cost for any type provider of services that’s going to be billed to Medicare or Medicaid. [DOM’s Counsel]: Do you ever use it in conducting audits? [Pilgrim]: Occasionally when the State Plan does not specifically address certain issues, because it is incorporated in the State Plan, we have to refer to it for maybe a more detailed description of what is to be looked at. 12 [DOM’s Counsel]: Can you explain the relationship between the Division of Medicaid and CMS? [Pilgrim]: The easiest way to address that is that the Mississippi Division of Medicaid is a contractor with the [federal] Health and Human Services CMS, Center for Medicare and Medicaid Services, to provide Medicaid coverage to beneficiaries in the State of Mississippi. The state pays a portion of all the payments related to beneficiary services, and then the federal government picks up the bulk of the tab on those services. [DOM’s Counsel]: Is Medicaid required to follow federal law or CMS rulings? [Pilgrim]: Oh, yes. If we fail to follow CMS’s rules and regulations, [the federal government] basically withhold[s] their share of the payments for the beneficiaries, and we would then theoretically have to pay for those same services using only state money. And that would be prohibitive and basically cause the Medicaid program to almost have to collapse. .... [DOM’s Counsel]: All right. Mr. Pilgrim, we are here today regarding the cost reports for fiscal year 2015 for Hattiesburg Medical Park Management Corporation, which is the home office, and its nursing homes, Bedford Care Center Nursing Homes for Mendenhall, Monroe, Newton, Petal, Hattiesburg, Marion, and the Bedford Alzheimer’s Care Center. What kind of facilities are these? [Pilgrim]: The ones that you named, Mendenhall, Monroe, Alzheimer’s Care Center, Newton, Petal, Hattiesburg, and Marion, they’re all nursing facilities. And, of course, 13 the Hattiesburg Medical Park Management Company is just the home office for those seven facilities. [DOM’s Counsel]: And are you familiar with the issue involved in this appeal? [Pilgrim]: I am. [DOM’s Counsel]: And can you briefly describe it for us? [Pilgrim]: As we were doing the audit [of the 2015 cost reports], there was – part of our audit process is to look at other income that has been identified by the provider to make a determination should it be offset or should there be some form of calculation of cost that should be offset in its place. As we looked at the dividends that they reported on Schedule 1 [of their cost reports], it was just acronyms, but we found out from conversations with the providers more in-depth [information] of that. One of them was for Workers’ Compensation and that one of them was for professional and general liability, and the third one was a reinsurance dividend. So, based on that information, because those type dividends are refunds that we looked at or distributions are not addressed in the State Plan, we were – had to refer then back to the Provider Reimbursement Manual [(PRM)]. In doing so, we found Chapter 2162 – or Section 2162 of Chapter 21 [of the PRM] that specifically addresses insurance companies. And within that, it also addresses captive insurance companies and self insurance companies and the allowance of premiums and also what to do if there have been refunds back to the facilities for previous amounts paid. 14 Okay. In doing that, we also looked at Chapter 8, which is related to just the accounting for expenses, and identified that it also explains the methodology to be used as to if you receive a refund in a year, you’re supposed to offset it against that year’s expenses if you haven’t already accrued for it in a prior year. And in the instance we identified here, there had been no accruals in prior years. So that meant that those dividends should be offset against current period expenses. And the definitions of what was required to be offset was distributions, in some cases dividends, and it would always throw in an et cetera, which basically indicated that that meant anything you go back you should be offsetting. [DOM’s Counsel]: Before we get too deep into all of this, did all of the adjustments in these facilities result from an audit conducted by the Division of Medicaid, rather than a desk review? [Pilgrim]: Yes. It was an audit of the January 1st, 2015 through December 31st, 2015 cost reports for all of these facilities. .... [DOM’s Counsel]: So look at your next document, which is going to be Exhibit 11. [Pilgrim]: Ok. [DOM’s Counsel]: And it should be your State Plan? [Pilgrim]: Yes. It is the State of Mississippi Office of the Governor Division of Medicaid State Plan Guidelines for the Reimbursement for Medical Assistance Beneficiaries of Long-Term Care Facilities. [DOM’s Counsel]: And is this the State Plan that was applicable for the cost report that we’re here today about? 15 [Pilgrim]: Yes. [DOM’s Counsel]: And we know that why? [Pilgrim]: At the very bottom of the page, you see the date effective of 1/1/2015. .... [DOM’s Counsel]: Based on what you read [from the State Plan], does the Division of Medicaid adopt PRM 15-1 unless there is an actual contrary rule? [Pilgrim]: Yes. I mean, it basically puts forth as the standard with the exception of something being specifically already addressed in the State Plan. (Emphasis added.) ¶27. Later in the hearing, Pilgrim was asked about why the DOM had not been offsetting the dividend payments from 1993 until the 2018 audit. Pilgrim testified that, after he began working at the DOM in 2015, his 2018 audit of the 2015 Cost Report was the first time he became aware of the issue. He testified: [Providers’ Counsel]: Okay. Were you aware of any desk reviews where Medicaid had flagged this issue? [Pilgrim]: I was not because that was one of the things that we found, when we identified as part of our audit and we addressed it with reimbursement, it was not something they had been reviewing or possibly making a front end adjustment at the desk review period for at that time. [Providers’ Counsel]: Okay. So I think I – I just want to make sure I understood your testimony. Do you consider — 16 Medicaid’s position beginning with this audit as the offset of these dividends, do you consider that a significant change in Medicaid’s methods and standards for setting payment rates for services? [Pilgrim]: No. .... [Providers’ Counsel]: If this had been a significant change in Medicaid’s methods and standards for setting payment rates for services, you would have been required under [42 CFR Section 447.205] to issue public notice, correct? [Pilgrim]: If it had become a significant change in the State Plan, yes, a new State Plan would have had to been put out for public notice, and CMS would have had to approve that revised State Plan. [Providers’ Counsel]: Okay. Well, the regulation doesn’t use the term “State Plan.” It says, “significant change in the methods and standards for setting payment rates for services.” [Pilgrim]: Well, see the problem with that is you’re trying to infer this is a change in the methods and standards. The standards were there. They were just overlooked and not applied. .... It’s not the first thing that we found that wasn’t applied, but it was just not being applied. Because the rules and regulations have been there for a long time. .... [Providers’ Counsel]: So I just want to understand. 17 Are you saying that Medicaid did not have any institutional knowledge [in previous years] about what MHCA-SIF, CULIC, and LTCEIC were? [Pilgrim]: I don’t know what the desk reviewers did or did not know. But because there’s only acronyms [listed in the Providers’ cost reports], unless they had knowledge of what those insurance companies were, they would not have known that those were insurance companies. .... [DOM’s Counsel]: Mr. Pilgrim, Medicaid has two different ways of looking at cost reports, correct, a desk review and an audit? [Pilgrim]: Yes. Desk reviews are done initially on every facility, but audits are only done on a random grouping of facilities. [DOM’s Counsel]: Do you expect that an audit will find things that a desk review does not? [Pilgrim]: Yes. We’ve identified that several times. [DOM’s Counsel]: And is that one of the reasons that you do audits in addition to desk reviews? [Pilgrim]: Yes. [DOM’s Counsel]: And was this found on a desk review or an audit? [Pilgrim]: It was found during an audit because we get more in-depth in our audit and more clearly identify expenses and revenues. [DOM’s Counsel]: And so when this was found in an audit what – did Medicaid look at the PRMs and determine how to apply them? 18 [Pilgrim]: Yes, we did. [DOM’s Counsel]: And was – was the PRM in the State Plan already? [Pilgrim]: Yes, it was. [DOM’s Counsel]: And was there anything that Medicaid had to do to look – or change the State Plan? [Pilgrim]: No. [DOM’s Counsel]: Are the providers required to read the State Plan and properly file their cost reports without Medicaid telling them how to do it each time? [Pilgrim]: Yes. ¶28. When asked about Collier’s testimony regarding the unwritten, internal policy, Pilgrim testified as follows: [DOM’s Counsel]: Now, Ms. Collier said that she had an internal policy that she did not write down or put in the State Plan that she believes overrides Medicaid’s written policy. Does Medicaid operate that way? [Pilgrim]: No. Everything has to be in writing. . . . So an internal memorandum, a verbal memorandum, discussions, if its not actually put into the policy, it can’t override what is written policy. (Emphasis added.) 19 ¶29. And finally, when asked about the Providers’ assertions that there had been a reversal of the DOM’s policy, Pilgrim testified that it was “not a reversal of policy. It is an identification of something that hasn’t been noticed.” ¶30. Both the administrative hearing officer and the chancery court found that the Providers failed to offer any evidence of a written internal policy to support their accounting methods used in the 2015 Cost Report. And, as such, it was determined that the DOM acted within its statutory authority in making the adjustments in an effort to comply with the State Plan and the PRM 15. We agree. ¶31. The DOM is authorized by law to administer the state’s Medicaid program. Miss. Code Ann. §§ 43-13-103, -107, -121 (Rev. 2023). But this administrative authority is subject to federal standards and regulations, which includes the DOM submitting and obtaining CMS approval of the State Plan. 42 U.S.C. § 1396 (Supp. 2022). Once CMS approves the State Plan “[t]he DOM ‘is bound to follow the plan and cannot deviate from it.’” Miss. Div. of Medicaid v. Windsor Place Nursing Ctr., Inc., 296 So. 3d 68, 72 (Miss. 2020) (quoting Cent. Miss. Med. Ctr. v. Miss. Div. of Medicaid, 294 So. 3d 1121, 1123 (Miss. 2020), overruled on other grounds by Miss. Methodist Hosp. & Rehab, 319 So. 3d 1049. ¶32. With regard to the authority and power, this Court has held that and administrative agency has “only such powers as are expressly granted to them, or necessarily implied in their grant of authority.” State ex rel. Pitttman v. Miss. Pub. Serv. Comm’n, 538 So. 2d 367, 373 (Miss. 1989) (citing State ex rel. Pittman v. Miss. Pub. Serv. Comm’n, 520 So. 2d 20 1355, 1358 (Miss. 1987)). “If an administrative agency exercises power that is not expressly granted or necessarily implied, then the agency’s decision is void.” Wilkerson v. Miss. Emp. Sec. Comm’n, 630 So. 2d 1000, 1001-02 (Miss. 1994) (citing State ex rel. Pittman, 538 So. 2d at 373). And any exercise of authority must be carried out through a “published rule and not . . . an unwritten practice subject to ad hoc and sporadic application.” Id. at 1002. ¶33. Because the State Plan is silent on the treatment of insurance income for cost-of-care reporting purposes, we must look to the PRM. For funds returned from self-insurers (like MHCASIF) “[a]ny rebates, dividends, etc., to the provider from the fund will be used to reduce allowable cost.” PRM 15-1, § 2162.7. And for funds returned from captive insurance companies (like LTCEIC and CULIC), “[a]ny funds returned to the insured by the insurer (rebates, distributions, etc.) must be offset against the costs in the year you receive them.” PRM 15-2, § 2162.2. ¶34. This Court has found that when the DOM fails to catch mistaken accounting in cost reports, it is not arbitrary and capricious for the DOM to correct the mistake once it becomes aware. Miss. Methodist Hosp. & Rehab. Ctr., 319 So. 3d at 1059. “[A]gencies may correct mistakes of law, even when a party relied to its detriment on the mistake.” Id. ¶35. “No where in the controlling statutes, the state plan, or Medicaid’s policy do we see language that lends itself to a construction taken by the providers” that insurance income does not offset insurance costs. Windsor Place Nursing Ctr., Inc., 296 So. 3d at 74. “While the DOM may have failed to catch this in the past,” insurance income must offset allowable 21 costs and “any action taken to the contrary by Medicaid is a violation of its rules and regulations.” Id. ¶36. While the Providers argue that the DOM’s actions in making the adjustments to the 2015 Cost Report without notice were arbitrary and capricious, in fact, the opposite is true. This Court has found that the DOM’s actions are arbitrary and capricious when such actions clearly violate or are inconsistent with the State Plan and its underlying regulations. See Crossgates River Oaks Hosp. v. Miss. Div. of Medicaid, 240 So. 3d 385, 388-89 (Miss. 2018) (finding that the DOM’s actions were inconsistent with the State Plan and its underlying regulations and were, therefore, arbitrary and capricious). ¶37. The Providers also argue that this is arbitrary and capricious because offsetting income that accounts for multiple years against one year’s costs is inconsistent with Mississippi’s prospective payment system. The DOM suggests, however, that this is a policy argument more appropriately addressed by a change in the rules. Again, this Court has stated that the “DOM ‘is bound to follow the plan and cannot deviate from it.’” Windsor Place Nursing Ctr., Inc., 296 So. 3d at 72 (quoting Cent. Miss. Med. Ctr, 294 So. 3d at 1123). As such, for this Court to adopt the Providers’ position would be outside our prescribed constitutional bounds. ¶38. The DOM speaks through the State Plan. Because the State Plan provides no specific guidance regarding the treatment of Insurance Income, we agree with the chancery court that because the DOM “properly utilized the PRM 15-1 to determine the appropriate manner of 22 treatment,” the DOM’s actions were within its statutory authority and were, therefore, not arbitrary or capricious. ¶39. In addition, the Providers argue that the DOM’s use of the LTCEIC dividends to offset insurance costs was arbitrary and capricious due to their status as stockholders. Because the PRM requires that insurance income—including dividend payments—be booked to offset insurance costs, this Court finds that substantial evidence supported the DOM’s actions with regard to its treatment of the LTCEIC dividends. II. Whether the doctrine equitable estoppel precludes DOM from offsetting the insurance dividend payments. ¶40. The Providers argue that the doctrine of equitable estoppel precludes the DOM from reversing its long-standing policy of not offsetting the Insurance Income. “An estoppel claim requires: ‘(1) Belief and reliance on some representation; (2) Change of position, as a result thereof; (3) Detriment or prejudice caused by the change of position.’” Miss. Div. of Medicaid v. Yalobusha Cnty. Nursing Home, 346 So. 3d 413, 426 (Miss. 2022) (quoting Suggs v. Town of Caledonia, 470 So. 2d 1055, 1057 (Miss. 1985)). ¶41. The Providers assert that they “were made aware of this [unwritten] policy and relied upon the policy to their detriment” and that they would suffer prejudice if the policy were reversed. But the Providers concede that the chancellor was correct in stating that the Providers “are charged with knowledge of and compliance with the regulations contained in the PRM.” And absent any specific guidance in the State