Turner v. Md. Dep't of Health

245 Md.App. 248

226 A.3d 419

Linda TURNER

v.MARYLAND DEPARTMENT OF HEALTH

No. 2304, September Term, 2018

Court of Special Appeals of Maryland.

April 2, 2020

Argued by: Kathleen C. Morris, Harrisburg, PA, for Appellant.

Argued by: David S. Lapp (Michael L. Bouyea, Brian E. Frosh, Atty. Gen, on the brief), Baltimore, MD, for Appellee.

Panel: Graeff, Leahy, Shaw Geter, JJ.

Leahy, J.

This appeal involves a nursing facility's effort to receive payment from the Maryland Medical Assistance Program, commonly referred to as the Medicaid program,¹ for services the facility rendered to its deceased patient. We are asked to consider whether the nursing facility had standing, as the deceased's purported "Medicaid Authorized Representative," to pursue an administrative appeal and subsequent petition for judicial review from the denial of long-term care Medical Assistance ("Medicaid benefits").

Linda Turner was a resident at Ridge Leasing, LLC (the "Facility"),² a long-term care nursing facility, until her death. She required twenty-four-hour care due to various ailments and had limited assets to pay for her care. Consequently, Ms. Turner submitted an application for Medicaid benefits to the Howard County Department of Social Services (the "Local Department") to pay for her care at the Facility. After the first application was denied, she submitted another. Just before the second application was denied, she passed away. The Facility petitioned the Circuit Court for Howard County for appointment as the "Medicaid Authorized Representative" on behalf of the deceased Ms. Turner. The court granted the Facility's motion and issued an "Order Appointing Authorized Medicaid Representative" ("MAR Order").

Forearmed with the MAR Order, the Facility appealed the denial of Medicaid benefits before the Office of Administrative Hearings ("OAH"). The OAH denied the Medicaid benefits, and the Facility filed a petition for judicial review in the circuit court. The Maryland Department of Health ("MDH"), appellee, intervened and moved to dismiss the Facility's petition because the Facility had not filed to become the personal representative of Ms. Turner's estate and, correspondingly, lacked standing. The circuit court agreed with MDH and dismissed the Facility's petition. The Facility filed a timely appeal and presents one question for our review, which we have slightly rephrased: Did the circuit court err in finding that the Facility lacked standing to pursue an administrative appeal from the denial of Ms. Turner's Medicaid benefits?

After resolving that the issue of standing was not waived by failing to raise it before the OAH, we conclude that the Facility did not have authority under Maryland law to act on Ms. Turner's behalf after her death without first filing to become the personal representative of her estate. Accordingly, we affirm the circuit court's decision to dismiss the case because the Facility lacked standing to petition for judicial review of the administrative decision denying Medicaid benefits.

BACKGROUND

Sadly, Ms. Turner was admitted to the Facility on January 13, 2016 and remained there until she died 21 months later. She required twenty-four-hour care because she was suffering from a variety of mental and physical ailments, including breast cancer, memory loss, obesity, schizophrenia, and anxiety disorder. Initially, due to her memory loss, Ms. Turner was unable to access any of her assets or offer any information regarding their value. She sought assistance through the Medicaid program.

Medical Assistance Applications

Ms. Turner, with the Facility's assistance, submitted two applications for Medicaid benefits to the Local Department.³

Ms. Turner's first application was denied because she did not submit documents requested by the Local Department to verify her eligibility for Medicaid benefits.

On March 8, 2016, the Facility petitioned the Circuit Court for Howard County to appoint guardians of Ms. Turner's person and property to manage Ms. Turner's affairs and to assist her in obtaining documentation necessary to support her application for Medicaid benefits. The guardianship petition represented that Ms. Turner was widowed with one adult daughter but did not provide Ms. Turner's preadmission address or the name or contact information for her daughter. The petition further averred that, because Ms. Turner suffered from schizophrenia and cognitive impairment, she required assistance to research, secure, and manage her assets and income. The circuit court granted the petition and appointed guardians for Ms. Turner's person and property on July 7, 2016.

Ms. Turner filed a second application for Medicaid benefits on August 19, 2016 and submitted documentation reporting total assets of $5,147.00. The Local Department denied the second application on October 28, 2016 because Ms. Turner's assets exceeded the resource limit of $2,500.00 for benefit eligibility.⁴

Ms. Turner died on October 18, 2016. The circuit court entered an order terminating the guardianship of Ms. Turner's person on December 5, 2016, and another order terminating the guardianship of property on June 28, 2017.

Petition for Appointment of Medicaid Authorized Representative

Approximately ten months following Ms. Turner's death, on August 23, 2017, the Facility filed a "Petition for Appointment of Authorized Medicaid Representative" ("MAR Petition") in the Circuit Court for Howard County. The petition stated that "there are no persons acting on behalf of Ms. Turner to pursue appeal" of the "erroneous determination" by the Local Department denying Medicaid benefits, and that the Facility would be "unable to pursue an appeal for Ms. Turner unless it is appointed as the Medicaid Authorized Representative for Ms. Turner." With the exception of an "adult daughter whose identity and whereabouts remain[ed] unknown," the Facility was "unaware of any other relatives of Ms. Turner who [were] willing to provide assistance with regard[ ] to her application for Medicaid benefits."

The petition further averred that Maryland law, specifically Code of Maryland Regulations ("COMAR") 10.01.04.12, "permits an individual or organization with a direct financial interest to act in good faith as a designated Medicaid representative for incapacitated individuals if no other individual or organization is willing and able to act on the applicant or recipient's behalf." The Facility represented that it did "not anticipate any objections to the relief requested" and that there are "no known interested parties on which to serve notice." MDH was not served a copy of the MAR Petition.

The circuit court granted the MAR Petition and issued the Facility's proposed MAR Order on September 1, 2017. Notwithstanding that Ms. Turner had already passed away, the MAR Order authorized the Facility to "take such actions as are necessary to qualify [Ms. Turner] for Medicaid benefits available to her including:"

a. taking such actions as are necessary to pursue eligibility of Medicaid benefits for her through administrative or legal causes of action;

b. spending down of assets payable to [the Facility] as are necessary to qualify Linda Turner for Medicaid, and [sic]

c. obtaining financial records including, but not limited to, bank statements and records regarding any and all accounts associated with Ms. Turner or held in her name, life insurance documentation, documentation pertaining to any and all assets, income and/or resources held by Ms. Turner or for Ms. Turner's benefit as required by the Maryland Medical Assistance Program in order to process Ms. Turner's application. [sic]

d. pursue any rights on behalf of Ms. Turner that are afforded by law or statute or regulation to an individual seeking Medicaid benefits to appeal a denial(s), past or future, of Medicaid benefits, past or future, previously issued or issued in the future, or inaction by any State agency with respect to the application for Medicaid benefits on behalf of Linda Turner; and

e. retain counsel to assist in obtaining Medicaid benefits[.]

Appeal to OAH

The Facility appealed the denial of Medicaid benefits before the OAH in a letter dated October 2, 2017.⁵ A hearing was held before an administrative law judge ("ALJ") on January 9, 2018. In a written decision, dated February 23, 2018, the ALJ affirmed the decision of the Local Department and concluded "as a matter of law that the Local Department properly determined that [Ms. Turner] was ineligible for [Medicaid] benefits for the months of February 2016 through July 2016 due to being over the resource limit for benefits eligibility."

Petition for Judicial Review of Administrative Decision

Within 30 days of the ALJ's decision, the Facility, as Ms. Turner's "authorized representative" under the MAR Order, filed a petition for judicial review in the Circuit Court for Howard County on March 26, 2018.⁶ The Facility claimed the "Department of Health's decision via the [OAH]" denying Ms. Turner Medicaid benefits was "erroneous as a matter of law," because "Ms. Turner had no access to her resources due to the undisputed facts that the resources were unknown and Ms. Turner was incompetent. As such, the resources cannot be considered countable." This time, the Facility served a copy of its petition on MDH. MDH responded on April 27^th by filing its intention to participate in the action. See Maryland Rule 7-204.

The Facility filed its Maryland Rule 7-207 memorandum on June 11^th. The Facility challenged the ALJ's determination, upholding the Local Department's finding, that "funds in Ms. Turner's checking account were countable and available resources." The Facility noted that the ALJ erred by ruling on months that were specified in the first application, even though the appeal related to the second application. The Facility added a new argument: that the denial of benefits violated the federal Americans with Disabilities Act because Ms. Turner's disability rendered her unable to participate in the application...