SC Administrative Law Court Decisions

This case is before the Administrative Law Judge Division (ALJD) as an appeal of a decision rendered by a Hearing Officer of the Department of Health and Human Services (DHHS). Mrs. Basil was previously a resident of the Brian Center of Columbia, where the South Carolina Medicaid Program was sponsoring her nursing home care. In late August of 1997, Mrs. Basil underwent a quarterly reassessment by the facility's interdisciplinary Resident Assessment Team. Based on the information gathered during that reassessment, Mrs. Basil was found to no longer meet the South Carolina Medicaid Program's Level of Care criteria. These criteria are essentially the "medical necessity" component of an individual's eligibility to receive Medicaid-sponsored nursing home services. As a result, Mrs. Basil was notified that Medicaid would no longer fund her nursing home care. She appealed the Level of Care finding, and a hearing was conducted by an agency Hearing Officer on October 14, 1997.

The Hearing Officer issued a decision dated November 20, 1997 affirming the finding that Mrs. Basil did not meet the Level of Care criteria at the time of the August 1997 reassessment. Mrs. Basil appealed that decision to the ALJD and a hearing was held in Columbia, South Carolina on April 9, 1998.

In her appeal to the ALJD, Mrs. Basil raises two issues: (1) she contends that the DHHS Hearing Officer erred by not independently investigating and developing information potentially available from Dr. V. A. Hirth, a gerontologist; and (2) she argues that DHHS was obligated to continue funding her nursing home care at the Brian Center of Columbia until her discharge on November 28, 1997. In response, DHHS contends that the Hearing Officer's decision was supported by "substantial evidence," and that the termination of payments on behalf of Mrs. Basil was appropriate. Mrs. Basil also raised a third issue concerning the appropriateness of efforts by DHHS to recover from her a portion of the nursing home expenses incurred on her behalf by DHHS during the pendency of the appeal at the agency level. However, this issue was rendered moot by DHHS' agreement to forego those collection efforts and to write off as uncollectable the account receivable that had been established in Mrs. Basil's name. [See Letter dated May 13, 1998 from Charles M. Black, Jr. to John D. Basil.]

This court has carefully considered the briefs and oral arguments of the parties, including the materials submitted after the hearing and the discussions in the several conference calls between the court and the parties. The record and the applicable law have also been thoroughly reviewed. Upon this consideration, the ruling of the Hearing Officer is hereby affirmed and the challenges raised by Mrs. Basil are resolved in favor of DHHS.

CONCLUSIONS OF LAW AND DISCUSSION

Standard of Review

This case is before the ALJD as an appeal of an agency action. As such, the ALJD sits in an appellate capacity under the Administrative Procedures Act (APA), rather than as an independent finder of fact. In South Carolina, the provisions of the Administrative Procedures Act -- specifically S.C. Code Ann. §1-23-380(A)(6) -- govern the reasons an appellate body may reverse or modify an agency decision. This 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) (Supp. 1997).

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); Grant v. South Carolina Coastal Council, 319 S.C. 348, 461 S.E.2d 388 (1995); Palmetto Alliance, Inc. v. South Carolina Public Service Comm'n, 282 S.C. 430, 319 S.E.2d 695 (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, 312 S.C. 219, 467 S.E.2d 913 (1996), citing Hamm v. AT&T, 302 S.C. 210, 394 S.E.2d 842 (1994).

Level of Care

Medicaid is a medical assistance program that is funded jointly by the states and the federal government. In South Carolina, the Medicaid Program is administered by DHHS. In order to establish eligibility for nursing home assistance, an individual must meet financial criteria and must meet the requirements of the "South Carolina Level of Care Criteria for Medicaid-Sponsored Long Term Care"⁽¹⁾ developed by DHHS. S.C. Code Regs. § 126-375 B (3) and C (Supp. 1997). These Level of Care criteria address an individual's medical needs and functional abilities.

The Level of Care criteria specify two levels of care: skilled and intermediate. The intermediate level of care is defined as follows:

A person can meet the intermediate level of care criteria in either of two ways:

1. by requiring at least one of the four numbered intermediate services listed below and having one of the numbered functional deficits listed below;

OR

2. By having at least two of the numbered functional deficits listed below.

Intermediate Services

1. Daily monitoring of a significant medical condition requiring overall care planning in order to maintain optimum health status. The individual should manifest a documented need which warrants such monitoring.

2. Supervision of moderate/severe memory, either long or short term, manifested by disorientation, bewilderment, and forgetfulness which requires significant intervention in overall care planning.

3. Supervision of moderately impaired cognitive skills manifested by decisions which may reasonably be expected to affect an individual's own safety;

4. Supervision of moderate problem behavior manifested by verbal abusiveness, physical abusiveness, or socially inappropriate/disruptive behavior.

Functional Deficits

1. Requires extensive assistance (hands-on) with dressing and toileting and eating and physical help in bathing. (All four must be present and, together, they constitute one deficit.)

2. Requires extensive (hands-on) assistance with locomotion.

3. Requires extensive (hands-on) assistance to transfer.

4. Requires frequent (hands-on) with bladder or bowel incontinent care; or with daily ostomy care.

South Carolina Assessment & Level of Care Manual for Medicaid-Sponsored Long Term Care Services (as revised December 1, 1994)(emphasis in original).

The initial assessment of whether an individual meets these care criteria is made by the DHHS Division of Community Long Term Care. After initial eligibility is established and Medicaid begins making payment for the nursing home care, periodic reassessments are conducted by an interdisciplinary Resident Assessment Team composed of various members of the nursing home staff. These reassessments are used by the facility in developing and maintaining the individual's plan of care [see 42 C.F.R. §483.20], and are also used by DHHS to ensure that individuals continue to meet the Level of Care criteria in order to qualify for continued Medicaid funding of nursing home care. If a individual's condition is found to have changed to the point that he or she no longer meets the Level of Care criteria, the facility notifies DHHS and Medicaid stops paying for the individual's nursing home care.

The Hearing Officer agreed that Mrs. Basil was in need of at least one intermediate service as described in the Level of Care criteria. Thus, she could qualify under the terms of the criteria with only a single functional deficit. However, because the Hearing Officer found that Mrs. Basil did not have any of the four functional deficits defined by the Level of Care criteria, he concluded that she no longer qualified for continued Medicaid sponsorship of her long term care.

The record on appeal does contain sufficient evidence to support the Hearing Officer's factual determination that Mrs. Basil did not have a functional deficit at the time of the re-assessment. Several representatives of the facility testified about the re-assessment findings, including individuals directly involved with Mrs. Basil's care. Documentary evidence associated with the re-assessment also supports this finding. Respondent's Exhibit #1 -- the reporting form for the information collected in the assessment process -- directly addresses each of the possible functional deficits at Sections G and H. The evidence contained in this record shows that Mrs. Basil was specifically found to be independent in the activities of locomotion, transfer, eating, dressing, toilet use, and bathing. She was also found to be continent of both bowel and bladder.

In order to have a functional deficit under the Level of Care criteria, an individual must need extensive, hands-on assistance with the specific activities of daily living. No evidence submitted on behalf of Mrs. Basil supports a conclusion that she needed this high degree of assistance. In fact, Mr. Basil did not establish which functional deficit(s) applied to his mother at the time of the re-assessment. At oral argument, he propounded that potentially his mother may not have met the requirements of the Level of Care criteria. Nevertheless, he contended that the Hearing Officer should have investigated this case further to confirm that there was not a functional deficit.

In reviewing the evidence submitted by Mr. Basil to the Hearing Officer, the record of Mrs. Basil's September 24, 1997 examination by Dr. Hirth [Petitioner's Exhibit #4] does not address the impact that Mrs. Basil's condition has upon her ability to engage in the activities of daily living reflected in the Level of Care criteria's functional deficits. However, Dr. Hirth specifically referred Mrs. Basil to the Rehabilitation Center of Columbia for a PT (physical therapy) and OT (occupational therapy) evaluation. The Center's report of this evaluation supports the findings that Mrs. Basil does not need extensive (hands-on) assistance. In evaluating Mrs. Basil's mobility, the Center consistently ranked her functional level as "modified independence" or "minimal assistance." In fact, the Center did not rate her as needing even "moderate assistance." [Petitioner's Exhibit #1]

Under the circumstances, the Hearing Officer's finding that Mrs. Basil did not meet the Level of Care criteria meets the requirements of the "substantial evidence rule." Even if the record could be read as evidencing some need for "extensive assistance" at the time of the assessment, the most that can be said is that such evidence -- when considered in conjunction with the specific information contained in the assessment report at Sections G and H and the accompanying testimony -- might allow reasonable minds to reach differing conclusions. However, the "substantial evidence rule" would still require that the Hearing Officer's decision be upheld under these circumstances. Therefore, the Hearing Officer's decision that Mrs. Basil did not meet the Level of Care criteria at the time of her re-assessment is affirmed because it is supported by substantial evidence in the record.

Hearing Officer's Consideration of Evidence

In his written materials and oral argument, Mr. Basil contends that the Hearing Officer erred in not fully developing the evidence potentially available from Dr. Hirth. In cases involving parties unrepresented by attorneys, tribunals should strive to ensure that hearings are conducted in a fair manner and that unrepresented parties are afforded a sufficient opportunity to present their cases. However, the hearing officer should not assume the role of counsel for an unrepresented party or advocate on behalf of such a party. In the present case, the Petitioner was entitled to call Dr. Hirth as a witness in order to present whatever evidence the doctor may have had to offer.⁽²⁾ The Petitioner's determination not to present that evidence did not create an obligation upon the Hearing Officer to conduct an independent investigation or to personally undertake the responsibility to contact Dr. Hirth.

Furthermore, based upon the evidence that was submitted at the hearing, it is questionable as to whether Dr. Hirth had information to offer that was relevant to the issue of whether Mrs. Basil had a functional deficit. As previously noted, the documentation of Dr. Hirth's examination does not address the functional deficit issue. Instead, he appears to have relied upon the Rehabilitation Center of Columbia for an assessment of determining Mrs. Basil's functional capabilities. The report of this assessment by the Center was submitted by the Petitioner and was accepted as evidence by the Hearing Officer.

Under the circumstances, I find that the Hearing Officer committed no reversible error in the manner in which he conducted the hearing.

Termination Date of Medicaid Payments

Although Medicaid continued to pay for Mrs. Basil's nursing home care during the pendency of her appeal before the agency, payment was terminated on the date the Hearing Officer's decision was issued -- November 20, 1997. Mrs. Basil remained in the facility until November 28, 1997.The Petitioner argues that DHHS should have continued to fund his mother's care through her discharge on November 28. DHHS contends that because the Hearing Officer affirmed the determination that Mrs. Basil no longer met the criteria for Medicaid-sponsorship of her nursing home care, she was not entitled to continued benefits through the date of her discharge from the facility.

Because this payment issue arose after the issuance of the Hearing Officer's decision, it is not addressed in that decision, nor does the record from the hearing appear to contain evidence bearing directly on this point. However, because this issue is related to the matter before me on appeal, and because neither party has objected to my consideration of it, I have elected to address it in this Order. Mr. Basil averred during oral argument that he and his family were informed "by DHHS" that Medicaid would continue to make payment for several days following receipt of the Hearing Officer's decision. However, Mr. Basil later explained that these representations were actually made by Mr. Jim Ringer, an employee of the Brian Center of Columbia. The information available to the ALJD contains no indication that Mr. Ringer was authorized to speak on behalf of DHHS with respect to matters of the South Carolina Medicaid Program's payment policies. Although it is unfortunate that Mr. Ringer's statements to the Basils appear to have misinformed them, those statements are not binding upon DHHS. Likewise, no contractual or other obligation has been presented that would require DHHS to continue to fund Mrs. Basil's care beyond the point at which she had been found ineligible by the Hearing Officer.

As previously noted, DHHS did pursue such a recovery from Mrs. Basil, but agreed to suspend those efforts and to write off the amount due as uncollectible. That recovery effort was consistent with the agency's stated position against continuing to incur expenses on behalf of individuals who have been deemed to be ineligible. Because the agency's policy of limiting expenditures for individuals who are no longer eligible for benefits is a rational exercise of its authority that is intended to promote a legitimate government interest, and because there is no evidence that DHHS was otherwise obligated to continue Mrs. Basil's benefits, I find that the termination of payments effective November 20, 1997 was appropriate.

ORDER

For the foregoing reasons, the November 20, 1997 Administrative Decision of the Department of Health and Human Services in this matter is affirmed, and all additional issues raised by the Petitioner are resolved in favor of the Respondent.

AND IT IS SO ORDERED.

_____________________________________

Ralph King Anderson, III

Administrative Law Judge

June 30, 1998

Columbia, South Carolina

1. Hereinafter referred to simply as "the Level of Care criteria."

2. The Petitioner could also have explored the possibility of submitting a written opinion from Dr. Hirth.