Rennich v. Dept. of Human Services

756 N.W.2d 182

2008 ND 171

Jesse RENNICH, through his guardians, Mary and Dave RENNICH, Petitioner and Appellant v. NORTH DAKOTA DEPARTMENT OF HUMAN SERVICES and the State of North Dakota, Respondents and Appellees.

No. 20070335.

Supreme Court of North Dakota.

September 23, 2008.

David Boeck, Bismarck, N.D. for petitioner and appellant.

Jean R. Mullen, Assistant Attorney General, and Douglas Alan Bahr (on brief), Solicitor General, Office of Attorney General, Bismarck, N.D., for respondents and appellees.

CROTHERS, Justice.

[¶ 1] Jesse Rennich appeals from a district court judgment affirming the decision of the North Dakota Department of Human Services ("Department") that he was not eligible for community-based services under the Medicaid program. We affirm, concluding the Department did not improperly rely upon eligibility criteria that should have been formally promulgated as an administrative rule.

I

[¶ 2] Rennich has been diagnosed with Asperger's Disorder. Asperger's Disorder is defined as:

"a developmental disorder resembling autism that is characterized by impaired social interaction, by restricted and repetitive behaviors and activities, and by normal language and cognitive development."

Merriam-Webster's Collegiate Dictionary 73 (11th ed.2005).

[¶ 3] Rennich spent a significant part of his teen years at Dakota Boys and Girls Ranch, a residential treatment facility. At age 17 he returned to live with his parents in Bismarck and applied for services through the Department. The Developmental Disabilities Division of the Department provides services to disabled individuals under two separate and distinct programs. Under N.D.C.C. ch. 25-01.2 and N.D. Admin. Code ch. 75-04-06, the State provides case management services through a state-funded program. The Department found that Rennich was eligible for case management services under N.D.C.C. ch. 25-01.2 and N.D. Admin. Code ch. 75-04-06.

[¶ 4] Rennich also requested services under the Medicaid program. Medicaid is a cooperative federal-state program designed to provide medically necessary care to needy individuals and is administered by the Department at the state level and by the United States Department of Health and Human Services at the federal level. E.g., Oyloe v. North Dakota Dep't of Human Servs., 2008 ND 67, ¶ 8, 747 N.W.2d 106; St. Benedict's Health Ctr. v. North Dakota Dep't of Human Servs., 2004 ND 63, ¶ 2, 677 N.W.2d 202. Rennich contends he is eligible for community-based services through Medicaid's Intermediate Care Facility for the Mentally Retarded ("ICF/MR") developmental disability waiver program. Under the waiver program, an individual who meets the criteria for residing in an ICF/MR may be eligible to receive community-based services. The eligibility requirements for this program are different than the criteria for state-funded developmental disability case management services under N.D.C.C. ch. 25-01.2 and N.D. Admin. Code ch. 75-04-06. Compare N.D.C.C. § 25-01.2-01(1) and N.D. Admin. Code § 75-04-06-02.1 with 42 C.F.R. § 435.1010 (2007).

[¶ 5] In assessing eligibility for community-based services under the Medicaid waiver program, the Department initially employs a Progress Assessment Review ("PAR"). The PAR is a series of questions designed to assess the individual's need for support in various areas, to be completed by people who know the disabled individual. The responses are "scored" and weighted by specialized computer software, which produces one of three possible results: (1) the individual is eligible for ICF/MR services; (2) the individual is ineligible for ICF/MR services; or (3) the data is not conclusive and professional judgment is required to determine eligibility. If the computer program determines the individual is eligible or ineligible, the PAR is determinative and no further assessment is required. If the computer determines the individual falls within the "grey area" of professional judgment required, the case will be individually reviewed by a professional staff member within the Department to determine whether the individual meets the eligibility criteria for the Medicaid waiver program.

[¶ 6] In Rennich's case, the PAR was initially completed by Rennich's case manager, with input from another staff member who had worked with Rennich in the past. Based upon their responses, the computer program determined professional judgment was required to assess Rennich's required level of care. Harry Miller, the Regional Developmental Disabilities Program Administrator at West Central Human Services, conducted an individual assessment applying the eligibility criteria identified in the federal Medicaid regulations. Miller determined Rennich did not meet the eligibility criteria for the Medicaid waiver program and therefore was not eligible to receive community-based services under the program.

[¶ 7] Rennich's parents appealed Miller's determination, requesting a hearing and that a second PAR be completed, this time with input from Rennich, his parents, representatives of the Protection and Advocacy Project, and staff at Dakota Boys and Girls Ranch. The Department conducted a second PAR with the additional input, and the result again was that Rennich was not automatically eligible or ineligible, but that professional judgment was required.

[¶ 8] An administrative hearing was held before an administrative law judge ("ALJ"). The ALJ submitted proposed findings and an order in which the ALJ recommended reversing the Department's decision to deny Rennich community-based Medicaid services. The Executive Director of the Department rejected the ALJ's proposed order, issued revised findings and an amended order explaining her reasons for rejecting the ALJ's findings and proposed order, and concluded Rennich was not eligible for community-based services under the Medicaid waiver program.

[¶ 9] Rennich appealed to the district court, which affirmed the Department's final order. Rennich has appealed to this Court.

II

[¶ 10] "When a decision of an administrative agency is appealed from the district court to this Court, we review the decision of the agency." J.P. v. Stark County Soc. Servs. Bd., 2007 ND 140, ¶ 9, 737 N.W.2d 627 (quoting Martin v. Stutsman County Soc. Servs., 2005 ND 117, ¶ 8, 698 N.W.2d 278). "Courts exercise [] a limited review in appeals from administrative agency decisions under the Administrative Agencies Practice Act, N.D.C.C. ch. 28-32." Olson v. Workforce Safety & Ins., 2008 ND 59, ¶ 8, 747 N.W.2d 71. "Under N.D.C.C. § 28-32-49, we review an administrative agency's decision in the same manner as the district court, and [] we must affirm the agency's decision unless:

1. The order is not in accordance with the law.

2. The order is in violation of the constitutional rights of the appellant.

3. The provisions of [Chapter 28-32] have not been complied with in the proceedings before the agency.

4. The rules or procedure of the agency have not afforded the appellant a fair hearing.

5. The findings of fact made by the agency are not supported by a preponderance of the evidence.

6. The conclusions of law and order of the agency are not supported by its findings of fact.

7. The findings of fact made by the agency do not sufficiently address the evidence presented to the agency by the appellant.

8. The conclusions of law and order of the agency do not sufficiently explain the agency's rationale for not adopting any contrary recommendations by a hearing officer or an administrative law judge."

J.P., at ¶ 9; N.D.C.C. § 28-32-46.

[¶ 11] In reviewing an administrative agency's resolution of factual disputes, "we [do] not make independent findings of fact or substitute our judgment for that of the agency." J.P., 2007 ND 140, ¶ 9, 737 N.W.2d 627; Gustafson v. North Dakota Dep't of Human Servs., 2006 ND 75, ¶ 6, 712 N.W.2d 599. We "will only reverse if the agency's findings are not supported by a preponderance of the evidence" and must affirm if "a reasoning mind reasonably could have determined that the factual conclusions reached were proved by the weight of the evidence from the entire record." J.P., at ¶ 9; Gustafson, at ¶ 6; Power Fuels, Inc. v. Elkin, 283 N.W.2d 214, 220 (N.D.1979). "Questions of law are fully reviewable on an appeal from an administrative decision." Oyloe, 2008 ND 67, ¶ 7, 747 N.W.2d 106; J.P., at ¶ 9.

III

[¶ 12] Resolution of the issues raised on appeal requires that we consider the "Byzantine" labyrinth of federal law governing the Medicaid program. See Schweiker v. Gray Panthers, 453 U.S. 34, 43, 101 S.Ct. 2633, 69 L.Ed.2d 460 (1981). We begin with the recognition that the applicant for Medicaid benefits bears the burden of proving eligibility. E.g., Oyloe, 2008 ND 67, ¶ 8, 747 N.W.2d 106; Estate of Pladson, 2005 ND 213, ¶ 10, 707 N.W.2d 473.

[¶ 13] Rennich claims he is eligible for community-based services under the Medicaid waiver program, which is outlined in 42 C.F.R. §§ 441.300-441.310 (2007). The waiver program allows states to provide "home and community-based services that an individual needs to avoid institutionalization." 42 C.F.R. § 441.300 (2007). The waiver program requires that such benefits may only be provided to individuals who, in the absence of such services, would require Medicaid-covered care in a hospital, nursing facility, or ICF/MR. 42 C.F.R. § 441.301(b)(iii) (2007). Rennich claims he would be eligible for services in an ICF/MR.

[¶ 14] An ICF/MR provides services "to persons with mental retardation or persons with related conditions." 42 C.F.R. § 440.150(a)(2) (2007). The parties agree Rennich does not have mental retardation. "Persons with related conditions" is defined in 42 C.F.R. § 435.1010 (2007):

"Persons with related conditions means individuals who have a severe, chronic disability that meets all of the following conditions:

(a) It is attributable to—

(1) Cerebral palsy or epilepsy; or

(2) Any other condition, other than mental...