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Administrative Law Court
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SC Administrative Law Court Decisions

Ruth L. House vs. SCDHHS

South Carolina Department of Health and Human Services

Ruth L. House

South Carolina Department of Health and Human Services




This case is before the Administrative Law Judge Division (ALJD or Division) as an appeal of a decision rendered by a Hearing Officer of the Department of Health and Human Services (DHHS).


Ms. House applied for Medicaid benefits on March 23, 1999, under the "Aged, Blind, and Disabled" (ABD) eligibility category. Ms. House's case was referred to the South Carolina Department of Vocational Rehabilitation (VR) for a determination of whether she is "disabled" as defined by the federal Social Security Administration (SSA) criteria applicable to the Supplemental Security Income Program (SSI). On August 11, 1999, VR automatically adopted a prior SSA decision that Ms. House was "not disabled." For this reason, Ms. House's application for Medicaid was denied on August 13, 1999.

Ms. House appealed this Medicaid denial to the DHHS Division of Appeals and Hearings. The Hearing Officer dismissed the Medicaid appeal, concluding that the Medicaid Program had no choice but to follow the SSA decision. The Order of Dismissal, which was issued on August 26, 1999, advised Ms. House to pursue an appeal of the SSA decision through the federal administrative appeals process.

By letter dated September 8, 1999, Ms. House filed an appeal with the Administrative Law Judge Division, challenging the dismissal of her Medicaid appeal.


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. 1998).

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).

House's Claim

The Medicaid Program is a joint venture between the states and the federal government to provide medical assistance to individuals meeting certain financial and other criteria. The federal government provides the majority of funding for Medicaid, although the states are required to provide "matching funds" that contribute to meeting the costs of Medicaid.

The states furnish the primary administrative oversight for Medicaid, and each state has a degree of flexibility in designing a program that can best meet the needs of its residents, given the restrictions of the state's available resources. The federal government requires that certain groups of individuals be covered by Medicaid, and a designated group of core services must be offered by the program. However, beyond these required minimums, the states can pick and choose among additional optional groups of people that may be covered and may also elect to cover additional optional services.

The eligibility category under which Ms. House applied to Medicaid -- ABD -- is an optional coverage group that the State of South Carolina has chosen to include in its Medicaid Program. In order to qualify under this category, an individual must meet financial criteria that require assets and monthly income to be below certain limits. Additionally, the applicant must also be "aged" (over 65), "blind" (according to the Social Security Administration's definition of blindness) or "disabled." Ms. House's application was made on the basis of her allegations of disability. She did not allege blindness, and she is under age 65.

Federal criteria established in regulations issued by the Social Security Administration are used to determine whether an applicant is "disabled." These criteria are the same as those used by the Social Security Administration in determining whether an individual qualifies for certain Social Security benefit programs, e.g., cash assistance payments of the Supplemental Security Income Program.

To ensure consistency, and in an effort to eliminate unnecessarily duplicative efforts, federal law requires the states to adopt a Social Security disability determination if:

(1) The Social Security determination considered the same alleged disabling factors that have been raised in the Medicaid application; and

(2) The Social Security determination was made within certain time limits.

42 CFR 435.541. Once a Social Security determination is made that meets these two requirements, that decision remains binding upon the Medicaid Program until the determination is changed by the Social Security Administration. 42 CFR 435.541(b)(1)(i).

In South Carolina, the Department of Health and Human Services, which administers the South Carolina Medicaid Program, and the federal Social Security Administration, which administers the Social Security programs, have both contracted with the South Carolina Department of Vocational Rehabilitation (VR) to perform disability determinations for their respective programs. Therefore, when an individual applies to the Medicaid Program or to the Social Security Administration for Social Security benefits that are related to disability, the case is referred to VR. VR evaluates the case based on the federal disability criteria and issues a finding as to whether a person is or is not "disabled" under those criteria.

Ms. House applied for both Social Security benefits under Title XVI and for Medicaid, so her case was referred to VR twice -- once by the Social Security Administration, and later by the Medicaid Program. On August 10, 1999, VR made a determination on behalf of SSA that Ms. House did not meet the Social Security disability requirements, and therefore did not qualify for Supplemental Security Income assistance payments.

Once VR made a decision on behalf of SSA that included the same alleged basis of disability that had been made for the Medicaid application, South Carolina was required to adopt that SSA decision and remains bound by it until it is changed by SSA. Because the August 10, 1999 determination for SSA considered the allegations presented in the Medicaid claim, the SSA decision was adopted as required by federal law.

In light of the binding nature of the SSA's disability determination, the DHHS hearing officer's decision to dismiss the appeal was proper. Ms. House has not proven convincingly that the decision of DHHS requires reversal.

As noted by the DHHS hearing officer in her order of dismissal, Ms. House should utilize the appellate process of SSA, which includes a hearing before a federal administrative law judge, to challenge the SSA disability determination. If Ms. House is successful in a federal appeal through the SSA and is able to have the SSA disability determination reversed, then that reversal would also be adopted by DHHS for purposes of Medicaid eligibility.


For the reasons stated above, the August 26, 1999 decision of the DHHS hearing officer to dismiss the Petitioner's Medicaid appeal is affirmed. Any additional grounds for appeal raised by the Petitioner that are not specifically discussed in this Order are denied.


Ralph King Anderson, III

Administrative Law Judge

February 1, 2000

Columbia, South Carolina

Brown Bldg.






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