South Carolina              
Administrative Law Court
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SC Administrative Law Court Decisions

Peter Brown vs. DHHS

South Carolina Department of Health and Human Services

Peter Brown

South Carolina Department of Health and Human Services


Patricia L. Harrison, Esquire, for the Appellant
Byron R. Roberts, Esquire, for the Respondent




This matter is before me pursuant to the appeal of Peter Brown (Appellant) from the final decision of Respondent, South Carolina Department of Health and Human Services (DHHS) wherein the Hearing Officer determined that he did not have subject matter jurisdiction and dismissed the appeal.  The Administrative Law Court (ALC) has jurisdiction to hear this matter pursuant to S.C. Code Ann. § 1-23-600 (Supp. 2006).



As set forth above, this case is before the Court as an appeal from a Final Order of DHHS pursuant to S.C. Code Ann. § 1-23-600(D) of the Administrative Procedures Act (APA).  As, such, the Administrative Law Judge sits in an appellate capacity under the APA rather than as an independent finder of fact.  In South Carolina, the provisions of the APA, specifically, Section 1-23-380(A)(6), govern the circumstances in which an appellate body may reverse or modify an agency decision.  That section states:

The Court may reverse or modify the decision if substantial rights of the appellant have been prejudiced because the administrative findings, inferences, conclusions or decisions are:

(a)    in violation of constitutional or statutory provisions;

(b)   in excess of the statutory authority of the agency;

(c)    made upon unlawful procedure;

(d)   affected by other error of law;

(e)    clearly erroneous in view of the reliable, probative and substantial evidence on the whole record; or

(f)    arbitrary or capricious or characterized by abuse of discretion or clearly unwarranted exercise of discretion.


S.C. Code Ann. § 1-23-380(A)(6) (2005).


 A decision is supported by “substantial evidence” when the record as a whole allows reasonable minds to reach the same conclusion reached by the agency.  Bilton v. Best Western Royal Motor Lodge, 282 S.C. 634, 321 S.E.2d 63 (Ct. App. 1984).  The well-settled case law in this state has also interpreted the rule to mean that a decision will not be set aside simply because reasonable minds may differ on the judgment.  Lark v. Bi-Lo, 276 S.C. 130, 276 S.E.2d 304 (1981).  The fact that the record, when considered as a whole, presents the possibility of drawing two inconsistent conclusions from the evidence does not prevent the agency's finding from being supported by substantial evidence.  Waters v. South Carolina Land Resources Conservation Comm'n, 321 S.C. 219, 467 S.E.2d 913 (1996) and Grant v. South Carolina Coastal Council, 319 S.C. 348, 461 S.E.2d 388 (1995), both citing Palmetto Alliance, Inc. v. South Carolina Public Service Comm'n, 282 S.C. 430, 319 S.E.2d 695 (1984).  See also, Miller v. State Roofing Co., 312 S.C. 452, 441 S.E.2d 323 (1994) and Bilton, 282 S.C. 634, 321 S.E.2d 63 (Ct. App. 1984).

In applying the substantial evidence rule, the factual findings of the administrative agency are presumed to be correct.  Rodney v. Michelin Tire Co., 320 S.C. 515, 466 S.E.2d 357 (1996), citing Kearse v. State Health and Human Services Finance Comm'n, 318 S.C. 198, 456 S.E.2d 892 (1995).  Furthermore, the reviewing court is prohibited from substituting its judgment for that of the agency as to the weight of the evidence on questions of fact.  Grant v. South Carolina Coastal Council, 319 S.C. 348, 461 S.E.2d 388 (1995), citing Gibson v. Florence Country Club, 282 S.C. 384, 318 S.E.2d 365 (1984).  Finally, the party challenging an agency action has the burden of proving convincingly that the agency's decision is unsupported by substantial evidence.  Waters v. South Carolina Land Resources Conservation Comm'n, 321 S.C. 219, 467 S.E.2d 913 (1996), citing Hamm v. AT&T, 302 S.C. 210, 394 S.E.2d 842 (1994). 

Of course, the ALC may always reverse or remand a decision, which is affected by an error of law.  Gilliam v. Woodside Mills, et al., 312 S.C 523, 435 S.E.2d 872 (Ct. App. 1993).  However, in reviewing the errors of law asserted by the Appellant, the ALC does need to give deference to the Department's interpretation of its own rules and the relevant federal rules and manual provisions applied.  Hampton Nursing Center v. State Health and Human Services Finance Commission, 303 S.C. 143, 399S.E. 2d 434 (Ct. App. 1990) and Ruocco v. S.C. Board of Registration for Professional Engineers and Land Surveyors, 314 S.C. 111, 441 S.E. 829 (Ct. App. 1994). 



DHHS is the single state agency in South Carolina responsible for administering Title XIX of the Social Security Act (SSA), the Medicaid program.  The Medicaid program is a Federal/State entitlement program that pays for medical assistance for certain individuals and families with low incomes and resources. The Medicaid program became law in 1965 as a cooperative venture jointly funded by the Federal and State governments to assist States in furnishing medical assistance to eligible needy persons.  Under Section 1902(a)(1) of the SSA, a State plan for medical assistance must be in effect throughout the State.  Within broad national guidelines established by Federal statutes, regulations, and policies, each State determines the type, amount, duration, and scope of services offered under their Medicaid program.  In general, States are required to provide comparable amounts, duration, and scope of services to all categorically needy and categorically related eligible persons across the state. [SSA Section 1902(a)(1); 42 U.S.C. 1396a(a)(1)] [SSA Section 1902(a)(10) (B)-(E); 42 U.S.C. 1396a(a)(10) (B)-(E)]

One important exception is that States may make a request to the Centers for Medicare and Medicaid Services (CMS) for a "waiver" to pay for otherwise non-covered Home and Community Based Services (HCBS) for Medicaid-eligible persons who might otherwise be institutionalized. [SSA Section 1915(c); 42 U.S.C. 1396n(c)]  As long as the services are cost effective, States have few limitations on the services that may be covered under these waivers (except that, other than as a part of respite care, States may not provide room and board for the beneficiaries). [SSA Section 1915(c)(4)(B); 42 U.S.C. 1396n(c)(4)(B)]  With certain exceptions, a State's Medicaid program must allow beneficiaries to have some informed choices among participating providers of health care and to receive quality care that is appropriate and timely.

Section 1915(c) of the Social Security Act (SSA) permits Section 1902(a)(10)(B), regarding comparability of services, to be waived.  This allows states to make waiver services available to people at risk of institutionalization, without being required to make waiver services available to the Medicaid population at large.  States use this authority to target services to particular groups, such as persons with Mental Retardation or Related Disabilities (MR/RD). This is the Section of the SSA that is waived under South Carolina’s MR/RD Waiver.

The State Medicaid Agency, DHHS, has the ultimate responsibility for a HCBS waiver program, although it may delegate the day-to-day operation of the program to another entity.  Under the CMS-approved MR/RD Waiver, DHHS identified DDSN as the day-to-day operator of the MR/RD Waiver in South Carolina.  Periodically, the CMS reviews all approved waivers to determine if they are being administered in accordance with their guidelines, regulations and the terms of the waiver as approved by them.  As in any audit, the CMS has found areas for improvement, but there has been no indication in any review that DHHS is not following and correctly applying the regulations and guidance related to the MR/RD waiver.

Appellant is a developmentally-disabled/mentally retarded person who receives services for his disability from the Department of Disabilities and Special Needs (DDSN).  He resides at a Supported Living Program II (SLP II), which is operated by the Charles Lea Center, a private contract provider to DDSN.  At that facility, Appellant receives Residential Habilitation Services (RHS) through the MR/RD Waiver from DDSN.  As a part of the RHS, Appellant has received twelve (12) hours per week of one-on-one services since 1992.  Termination of the twelve hours of one-on-one services was proposed by the Charles Lea Center on January 30, 2005 and supported by DDSN on February 28, 2005.  The Appellant appealed to DDSN on March 9, 2005.  On March 23, 2005, DDSN concurred with Charles Lea Center’s decision to no longer provide the twelve hours of one-on-one services and determined that there had not been a reduction or termination of MR/RD Waiver services to the Appellant. The Appellant appealed to DHHS on April 4, 2005. After testimony received over three (3) days between August and October 2005, the DHHS Hearing Officer issued an Order on December 29, 2006, finding that DHHS did not have subject matter jurisdiction and dismissed the appeal.  A Notice of Appeal was filed with this Court on February 6, 2007. Because various Motions were filed by the parties, briefs were not filed until January of 2008







1. One-On-One Services are not “Waiver Services.”

Appellant asserts that the hearing officer issued an order terminating Brown’s one-on-one services.  However, the Order states that the hearing officer found as a fact that he did not have subject matter jurisdiction “to intervene in matters not associated with the more general Medicaid medical service coverage of the State plan or more specifically, in matters not covered under the waiver”. Thus, the issue is whether or not the hearing officer erred in determining that he lacked subject matter jurisdiction.

 "The question of subject matter jurisdiction is a question of law for the court." Chew v. Newsome Chevrolet, Inc., 315 S.C. 102, 104, 431 s.E.2d 631 (Ct. App. 1993).  Subject matter jurisdiction is defined as "the power to hear and determine cases of the general class to which the proceedings in question belong."  See Skinner v. Westinghouse Elec. Corp., 380 S.C. 91, 93-94, 668 S.E.2d 795, 796 (2008).   Subject Matter Jurisdiction is conferred upon the DHHS hearing officer pursuant to the Medicaid regulations.  Such jurisdiction is limited to terminations, suspensions, or reductions of Medicaid covered services. 42 C.F.R. 431.200 – 250. (emphasis added).

The services covered under the MR/RD Waiver are specifically listed in the Waiver Document.  The program is called a “waiver program” because the federal government “permits states to waive the requirement that persons with mental retardation or a related disability live in an institution in order to receive certain Medicaid services.” See Doe v. Kidd,
501 F.3d 348 (4th Cir. 2007).  Waiver services are services over which the DHHS hearing officer would have subject matter jurisdiction.  The Waiver Document does not mention one-on-one services.  Moreover, there is sworn testimony in the record from Janet Priest, the Director of Adult Support at DDSN, waiver coordinator for DDSN since 1993, that one-on-one services are not MR/RD Waiver services.

  The first page of the Waiver Document states as follows:

2.                  This waiver is requested in order to provide home and community-based services to individuals who, but for the provision of such services, would require the following level(s) of care, the cost of which could be reimbursed under the approved Medicaid State plan:


b.         Intermediate care facility for mentally retarded or persons with related disabilities (ICF/MR).


The hearing officer determined that the Appellant did not meet “his burden of proof, by the preponderance of the evidence, to establish that the one on one services are necessary to keep him out of an institution for the mentally retarded (ICF/MR)”.  Therefore, one-on-one services are not Waiver Services and the Hearing Officer lacked Subject Matter Jurisdiction.

2. Even if One-On-One Services were Waiver Services identified as “Adult Companion Services,” the hearing officer still lacks Subject Matter Jurisdiction because the services are duplicative.


Appellant attempts to say that one-on-one services are waiver services because they are the same thing as “Adult Companion Services.” While it is true that Adult Companion Services are defined in the MR/RD Waiver Document, these services cannot be combined with Residential Habilitation services, which Appellant is already receiving.  

The definition of Residential Habilitation services allows for services that Adult Companion Services would provide.  Residential Habilitation services are daily services (billed per day) that include the “care, skills training and supervision provided to individuals in a non-institutional setting. . . . Services include assistance with acquisition, retention, or improvement in skills related to activities of daily living, … and the social and adaptive skills necessary to enable the individual to reside in a non-institutional setting.” Adult Companion Services are hourly services (billed per hour) defined as “Non-medical care, supervision and socialization, provided to a functionally impaired adult individual. . . . The provision of companion services . . . may entail hands on assistance or training to the recipient in performing activities of daily living and independent living skills.” 

If an individual needs improvement in skills related to activities of daily living, such as preparation of grocery lists, that need may be met through Residential Habilitation services at an SLP II.  If an individual needs improvement in socialization skills, then that need can be met through Residential Habilitation services at an SLP II.  Janet Priest testified, “… if a provider is being paid a daily rate to provide the habilitation service that the person needs during that day, then any need that could be addressed by companion would be met.”

The limitation of duplicative services is supported by 42 C.F.R. § 440.230, which provides that the agency administering a care plan “may place appropriate limits on a service based on such criteria as medical necessity or on utilization control procedures.”    DHHS interprets this statute to prohibit “duplicative services.”  The construction of a statute by the agency charged with its administration should be accorded great deference and will not be overruled without a compelling reason."  Dorman v. Dep't of Health and Envtl. Control, 350 S.C. 159, 167, 565 S.E.2d 119, 123 (Ct. App. 2002).

3.  The Hearing Officer lacked Subject Matter Jurisdiction over the refusal to cover duplicative services.


            The Appellant argues that the services are not duplicative because in an older SCDDSN manual, waiver participants could receive both services, and because neither manual was promulgated as a regulation.  In 2001, that manual provided:

For those who receive habilitation services (residential, day, prevocational) through the waiver, companion services are not prohibited.


However, in 2003, SCDDSN changed its manual to prohibit persons who are living in SCDDSN funded residential programs from receiving companion services:

Individuals receiving Residential Habilitation cannot receive Companion Services through the MR/RD Medicaid Waiver unless they reside in a SLP I.  The definition of Residential Habilitation allows for services that Adult Companion would provide.  If an individual is assessed to need Adult Companion Services while residing in a SLP I (and they also receive Residential Habilitation), then Adult Companion Services can be provided at times when Residential Habilitation is not being provided. ...

For those who receive day habilitation or prevocational services through the waiver, adult companion services are not prohibited.  While it is not prohibited, it is not recommended that adult companion services be provided in addition to habilitation services (day or prevocational). If adult companion services are provided when habilitation services are provided, there must be clear documentation that the therapeutic goals addressed by the companion cannot be addressed through habilitation.


The jurisdiction of DHHS hearing officers is addressed in the Medicaid regulations.  Such jurisdiction is limited to terminations, suspensions, or reductions of Medicaid covered services. 42 C.F.R. 431.200 – 250.  The record supports the Respondent’s position that the services at issue are duplicative; therefore, the refusal to cover both types of services under the MR/RD Waiver does not constitute a termination, suspension, or reduction of the services that the Appellant receives through the MR/RD Waiver. 

4. The one-on-one services are not “grandfathered” in as a waiver service.

Appellant alternatively argues that the coverage of Adult Companion Services or one-on-one services on his behalf was “grandfathered” by DDSN in 1998 and thus are not subject to review by DDSN or DHHS.  Respondent is required under 42 C.F.R. 441.302(c)(2) to re-evaluate each recipient at least annually to determine if there is a continued need for the level of care being provided and to determine if, but for the provision of waiver services, the recipient would require institutionalization. Even if DDSN made an attempt to “grandfather” certain services, the attempt would not override the federal regulation requiring DHHS to make annual evaluations under the waiver.  Therefore, Appellant’s reliance on the purported “grandfathering” is misplaced.

IT IS THEREFORE ORDERED that the judgment of the Hearing Officer is affirmed.



Carolyn C. Matthews

Administrative Law Judge



Brown Bldg.






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