Freeman v. State

295 P.3d 294

Faith K. FREEMAN, Appellant/Cross–Respondent,

v.STATE of Washington, DEPARTMENT OF SOCIAL AND HEALTH SERVICES, Respondent/Cross–Appellant.

No. 40811–2–II.

Court of Appeals of Washington, Division 2.

Feb. 20, 2013.

Paul Anthony Neal, Attorney at Law, Olympia, WA, for Appellant/Cross–Respondent.

William Bruce Work, Jonathon Bashford, Office of the Attorney General, Olympia, WA, Christina Mach, Law Office of David Harpold, Kent, WA, for Respondent/Cross–Appellant.

JOHANSON, A.C.J.

¶ 1 The primary substantive question before us is whether general supervisory care for a disabled individual qualifies as a covered medical assistance service under the federal Medicaid Act.¹ Faith K. Freeman seeks Medicaid benefits for supervisory services her parents provided when she was 18 to 21 years old. We affirm the Department of Social and Health Services Board of Appeals (Board), and hold it did not err (1) in concluding that the Department of Social and Health Services (Department) timely invoked appellate jurisdiction, (2) in finding general supervisory care is not a Medicaid medical assistance service, and (3) in establishing Freeman's benefit eligibility date. Additionally,we hold that the superior court did not abuse its discretion in awarding Freeman attorney fees for the superior court judicial review and, finally that Freeman is not entitled to additional appellate attorney fees. We affirm.

FACTS

¶ 2 Faith Freeman lives with and is cared for by her parents, Loren and Jean Freeman.² Freeman was diagnosed with Down Syndrome shortly after birth and functions at a five-year-old level.³ Freeman also has Aphasia (an impairment of language ability). Accordingly, she requires substantial assistance on a daily basis.

¶ 3 In July 2004, when Freeman turned 18 years old, Freeman's parents applied for Supplemental Security Income (SSI) and Medicaid. The Social Security Administration determined that Freeman qualified for SSI. The Department of Social and Health Services determined she was eligible for Medicaid beginning July 1, 2004. Thereafter, Department employees completed annual Comprehensive Assessment Reporting Evaluations (CARE) to determine Freeman's eligibility for Medicaid Personal Care benefits (MPC). After each CARE assessment, the Department determined that Freeman qualified for a certain number of service hours of MPC. Until she turned 21, Freeman also qualified for the benefits provided by the Medicaid Early Periodic Screening, Diagnosis, and Treatment law (EPSDT), 42 U.S.C. § 1396d(r).

I. Initial Agency Action

¶ 4 Due to Freeman's severe disabilities, Freeman's parents sought benefits for general supervisory care through the Department's EPSDT program. They based their request on Freeman's treating physician's EPSDT screening and his opinion that Freeman requires 24–hour, 7–days–a–week assistance. The Department denied their claim because it characterized the care provided by Freeman's parents as “supervision” and thus not covered by the EPSDT program. Clerk's Papers (CP) at 150. Freeman sought review.

¶ 5 On June 27, 2008, the administrative law judge (ALJ) entered an initial order awarding Freeman compensation under EPSDT for some of the requested hours. The ALJ determined that Freeman's parents could not provide Freeman's personal care services because federal law reimburses for personal care services only non-family members provide. But the ALJ found that the services Freeman's parents provided met the definition of medically necessary rather than personal care because her doctor diagnosed her as needing “24 hour, 7 days a week” supervision. CP at 183. The ALJ concluded that Freeman's parents were entitled to compensation for 24 hours a day minus 8 sleeping hours per day and minus any time Freeman was not at home and not under her parents' care.

¶ 6 On July 2, the Department requested a corrected order due to clerical errors in the initial order. The next day, on July 3, the ALJ issued a “CORRECTED INITIAL ORDER” that was substantively the same as the June 27 initial order. CP at 160. The corrected order included the following notice: “THIS ORDER BECOMES FINAL ON THE DATE OF MAILING UNLESS WITHIN 21 DAYS OF MAILING OF THIS ORDER A PETITION FOR REVIEW IS RECEIVED BY THE DSHS BOARD OF APPEALS.” CP at 187.

II. Final Agency Action

¶ 7 On July 16, Freeman filed a petition for review of the corrected initial order with the DSHS Board of Appeals. On July 22, the Department also filed a petition for review of the corrected initial order. On December 8, the Board issued its order, finding that the ALJ erred in her legal conclusions. First, the Board denied Freeman's motion to dismiss the Department's petition for review, noting the 21–day deadline for a party to file a petition for review was calculated from July 3, not June 27, and that the Department had met the deadline. The Board also ruled that Freeman was not eligible for supervisory or personal care services under the EPSDT program but that this did not mean that she was not eligible for some personal care services under the MPC program. The Board determined that since Freeman did not have a Department-approved care provider until September 1, 2004, this was when the Department must begin paying Freeman's parents. This holding reversed the Department's initial July 1 eligibility determination.

III. Superior Court Review

¶ 8 Freeman petitioned the Thurston County Superior Court for review. On May 12, 2010, the superior court issued its order concluding that general supervisory services do not qualify as medical assistance under 42 U.S.C. § 1396d(a)(13) because such services are not remedial. The court found Freeman's requested services to be more properly characterized as personal care services. To the extent those services provide assistance with Freeman's activities of daily living, the superior court found they were covered in 42 U.S.C. § 1396d(a)(24). But to the extent the services are for supervision, it found that they were not covered under 42 U.S.C. § 1396d(a)(24).

¶ 9 Further, the superior court determined that Freeman's benefit eligibility date was July 1, 2004, and that the Department had to pay for services beginning on that date. The superior court also awarded Freeman 70 percent of her attorney fees incurred pursuing judicial review because she obtained relief on most but not all of the issues. Freeman appeals and the Department cross-appeals.

ANALYSIS

I. Standard of Review

¶ 10 In reviewing an administrative action, we sit in the same position as the superior court, applying the standards of the Administrative Procedures Act (APA), chapter 34.05 RCW, directly to the agency record, Brighton v. Dep't of Transp., 109 Wash.App. 855, 861–62, 38 P.3d 344 (2001). ⁴ The person challenging an agency's action bears the burden of demonstrating the invalidity of the decision. Brighton, 109 Wash.App. at 862, 38 P.3d 344. We review conclusions of law de novo to determine if the reviewing judge correctly applied the law. Morgan v. Dep't of Soc. & Health Servs., 99 Wash.App. 148, 151, 992 P.2d 1023,review denied,141 Wash.2d 1014, 10 P.3d 1071 (2000).

II. Timely Appeal

¶ 11 As a threshold issue, Freeman argues that the Board lacks subject matter jurisdiction because the Department failed to meet the 21–day filing deadline. Holding that the petition for review was timely filed, we disagree. Freeman argues that strict compliance with jurisdictional time limits for filing administrative appeals is required and that the 21–day filing period is calculated not from the corrected order's mailing date but from the initial order's mailing date. We disagree, because Freeman and the Department timely filed petitions for review within 21 days of the mailing of the corrected order.

¶ 12 Former WAC 388–02–0555 (2003) provides:

(1) When a party requests a corrected initial or final order, the ALJ must either:

(a) Send all parties a corrected order; or

(b) Deny the request within three business days of receiving it.

(2) If the ALJ corrects an initial order and a party does not request review, the corrected initial order becomes final twenty-one calendar days after the original initial order was mailed.

(3) If the ALJ denies a request for a corrected initial order for a case listed in WAC 388–02–0215(4) and the party still wants the hearing decision changed, the party must request review from BOA.

(4) Requesting a corrected initial order for a case listed in WAC 388–02–0215(4) does not automatically extend the deadline to request review of the initial order by BOA. A party may ask for more time to request review when needed.

(5) If the ALJ denies a request for a corrected final order and you still want the hearing decision changed, you must request judicial review.

¶ 13 The above rule does not address the situation here where an ALJ issued a corrected initial order and a party filed a request for review of the corrected order. On June 27, 2008, the ALJ issued its initial order after the administrative hearing. A few days later, the Department requested correction of clerical errors. On July 3, the ALJ issued a corrected order. And the corrected order contained the following:

NOTICE TO PARTIES: THIS ORDER BECOMES FINAL ON THE DATE OF MAILING UNLESS WITHIN 21 DAYS OF MAILING OF THIS ORDER A PETITION FOR REVIEW IS RECEIVED BY THE DSHS BOARD OF APPEALS.... A PETITION FORM AND INSTRUCTIONS ARE ENCLOSED.

CP at 550. Applying the corrected order's language, the corrected order did not become final because a petition for review was filed within 21 days of the order's mailing. Freeman filed a petition for review on July 16 and the Department filed its petition for review on July 22. Under the corrected order's terms both parties had until July 24 to petition for review.

¶ 14 Accordingly, we hold that the appeal was timely filed and subject matter jurisdiction properly conferred.

III. Supervisory Care under Medicaid

¶ 15 Freeman next argues that she is entitled to...