B.L.S. v. The S.C. Dep't of Health & Human Servs.

• Court: South Carolina Administrative Law Court Decisions
• Writing for the Court: The Honorable Crystal M. Rookard, South Carolina Administrative Law Judge
• Docket Number: 23-ALJ-08-0394-AP
• Decision Date: 05 March 2024
• Parties: B.L.S., Appellant, v. The South Carolina Department of Health and Human Services, Respondents.

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B.L.S., Appellant, v. The South Carolina Department of Health and Human Services, Respondents.

No. 23-ALJ-08-0394-AP

South Carolina Administrative Law Court Decisions

March 5, 2024

ORDER

The Honorable Crystal M. Rookard, South Carolina Administrative Law Judge

STATEMENT OF THE CASE

This matter is before the Administrative Law Court ("ALC" or "Court") pursuant to a Notice of Appeal filed by B.L.S. ("Appellant"). Appellant seeks review of the final administrative decision of the South Carolina Department of Health and Human Services ("Department") Division of Appeals and Hearings ("DAH"). The DAH dismissed Appellant's appeal of the Department's denial of his application for Medicaid benefits without conducting a de novo fair hearing^[1] for Appellant's failure to show error in the Department's decision. This Court has jurisdiction over this matter pursuant to sections 1-23-380 and -600 of the South Carolina Code (Supp. 2023) and section 44-6-190 of the South Carolina Code (2018).

BACKGROUND

This matter arises from Appellant's application to the Department for Aged, Blind, Disabled Medicaid benefits. Following its review, the Department denied Appellant's application for failure to return information necessary to make an eligibility determination.^[2] On April 12, 2023 Appellant's authorized representative, Ms. Kim Lusk appealed the Department's denial, indicating that Appellant was homeless and that he did not have a traditional bank account.

Shortly thereafter, the DAH's Hearing Officer issued a Scheduling Order, requiring that the Department and Appellant meet to identify and discuss information required for further Department's Eligibility Determination Respondent (EDR) Cynthia Wilder, engaged in a prehearing conference call. On May 16,2023, the Department submitted a Prehearing Conference Report, detailing the nature of the parties' conversation.^[3] The Department's report indicated that the denial of the application was based upon Appellant's failure to provide statements pertaining to a Direct Express Card for the period of July 1, 2022, through February 28, 2023. The report indicated that the parties discussed that Appellant was homeless and the difficulty it caused in obtaining the necessary documentation. Ms. Lusk requested that DHHS obtain the requisite information using the 943 form which was submitted as part of Appellant's application.^[4]

Over the course of the next few months,^[5] both Appellant and the Department unsuccessfully attempted to obtain the necessary information. On August 15, 2023, Ms. Lusk contacted the DAH's Hearing Officer, requesting whether the Department would accept verification by attestation of the financial information related to the Direct Express account. The Hearing Officer approved Ms. Lusk's request, indicating that an affidavit from an AnMed employee with first-hand information would be an acceptable attestation as to Petitioner's income. In response, Ms. Lusk submitted an affidavit from Brittney Collins, sworn before a notary on August 18, 2023. The affidavit stated, in relevant part:

I interviewed/screened Mr. Bobby when he was seen at an AnMed Health facility in August of 2022. At that time, in response to my question as to whether he was receiving income or had liquid resources, he indicated he did not. ... Therefore, my understanding is that he did not have any benefits or savings at the time of my discussions with him last year.

Thereafter, on August 25, 2023, the Hearing Officer issued an Order, ordering Appellant to show an error(s) of law or fact that could change the SCDHHS decision. On August 30, 2023, Ms. Lusk responded to the order, stating "[w]ith all due respect, the only reasonable way to interpret the affidavit [] [is] that there was not any such account at the time at all, or there was nothing in any such account." Notwithstanding Appellant's compliance with the Order, the Hearing Officer issued an Order of Dismissal of the Appeal for failure to comply with the requirements of Subarticle 3 of regulation 126 of the South Carolina Code of Regulations (2018).

ISSUE

Did the DAH err in dismissing Appellant's appeal without having conducted a de novo fair hearing?

STANDARD OF REVIEW

The Department is an agency under the Administrative Procedures Act (APA). See Gibson v. Florence Country Club, 282 S.C. 384, 386, 318 S.E.2d 365, 367 (1984). Pursuant to subsection l-23-600(E) of the South Carolina Code (Supp. 2023), when the ALC sits in its appellate capacity the ALC's review "must be in the same manner as prescribed in section 1-23-380." Subsection 1-23-380(5) of the South Carolina Code (Supp. 2023) sets forth the standard used by appellate bodies when reviewing agency decisions under the APA, stating that:

The [C]ourt may not substitute its judgment for the judgment of the agency as to the weight of the evidence on questions of fact. The [C]ourt may affirm the decision of the agency or remand the case for further proceedings. The [C]ourt 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.

A decision is supported by "substantial evidence" when the record as a whole allows reasonable minds to reach the same conclusion as the agency. Friends of the Earth v. Pub. Serv. Comm 'n of S.C, 387 S.C. 360, 366, 692 S.E.2d 910, 913 (2010). "[T]he possibility of drawing two inconsistent conclusions from the evidence does not prevent an administrative agency's finding from being supported by substantial evidence." Palmetto Alliance, Inc. v. South Carolina Pub. Serv. Comm'n, 282 S.C. 430, 432, 319 S.E.2d 695, 696 (1984). When applying the substantial evidence rule, the factual findings are presumed to be correct. Rodney v. Michelin Tire Co., 320 S.C. 515,519,466 S.E.2d 357,359 (1996). "[A] reviewing court will not overturn a finding of fact by an administrative agency 'unless there is no reasonable probability that the facts could be as related by a witness upon whose testimony the finding was based.'" Sea Pines Ass'n for Prot. of Wildlife, Inc. v. S.C Dep't of Natural Res., 345 S.C. 594, 603-04, 550 S.E.2d 287, 292 (2001) (quoting Lark v. Bi-Lo., Inc., 276 S.C. 130, 136, 276 S.E.2d 304, 307 (1981)). The reviewing court is also prohibited from substituting its judgement for that of the agency as to the weight of the evidence on question of fact. Grant v. S.C. Coastal Council, 319 S.C. 348, 353, 461 S.E.2d 388, 391 (1995). Finally, the party challenging an agency's action has the burden of proving convincingly that the agency's decision is unsupported by substantial evidence. Waters v. S.C. Land Res. Comm'n of S.C, 321 S.C. 219, 226, 467 S.E.2d 913, 917 (1996).

Medicaid Generally

Medicaid is an optional state program created under Title XIX of the Social Security Act. 42 U.S.C. § 1396 et seq. It enables states to receive federal financial assistance for the medical care of needy individuals. See id; see also 42 C.F.R. § 430 (Westlaw Edge through 89 FR 8988) ("Title XIX of the Social Security Act, enacted in 1965, authorizes Federal grants to States for medical assistance to low-income persons who are age 65 or over blind, disabled, or members of families with dependent children or qualified pregnant women or children."); Doe v. S. C. Dep't of Health & Hum. Servs., 398 S.C. 62, 64, 727 S.E.2d 605, 606 (2011) (""Medicaid is a program through which the federal government, through the Social Security Administration (SSA), provides financial assistance to states so that they may furnish medical care to needy individuals.").

Each state that participates in Medicaid, including South Carolina, must decide eligible groups, types and range of services, payment levels for services, and administrative and operating procedures. 42 C.F.R. § 430. Additionally, each participating state submits a State plan that describes the nature and scope of its Medicaid program and the plan must be consistent with Federal law. 42 C.F.R. § 430.10 (Westlaw Edge through 89 FR 8988) ("The State plan is a comprehensive written statement submitted by the agency describing the nature and scope of its Medicaid program and giving assurance that it will be administered in conformity with the specific requirements of title XIX, the regulations in this Chapter IV, and other applicable official issuances of the Department."); see also, 42 C.F.R. § 430.0 (Westlaw Edge through 88 FR 14869). The state plan must provide for the establishment or designation of "a single State agency to administer or to supervise the administration of the plan." 42 U.S.C.A. § 1396a(a)(5) (Westlaw Edge through P.L. 117-214); 42 C.F.R. § 431.10(b) (Westlaw Edge through 87 FR 78877) ("A State plan must- (1) Specify a single State agency established or designated to administer or supervise the administration of the plan."); Myers v. S.C. Dep't of Health & Hum. Servs., 418 S.C. 608,612,795 S.E.2d 301, 303 (Ct. App. 2016) ("Federal law mandates a single state agency administer a state's Medicaid plan.").

The Department is the designated single state agency that administers South Carolina's Medicaid program. S.C. Code Ann. § 44-6-30 (2018). As the single state agency, it is responsible for (1) proscribing rules and regulations that it follows to administer the plan (2) in charge of the initial vetting of a...