Hamilton County Dept. of Public Welfare v. Smith

• Decision Date: 07 March 1991
• Docket Number: No. 29A02-9005-CV-299,29A02-9005-CV-299
• Citation: 567 N.E.2d 165
• Parties: HAMILTON COUNTY DEPARTMENT OF PUBLIC WELFARE and Indiana Department of Public Welfare, Appellants-Respondents, v. Hoyt SMITH, Appellee-Petitioner. 1
• Court: Indiana Appellate Court

Page 165

567 N.E.2d 165

HAMILTON COUNTY DEPARTMENT OF PUBLIC WELFARE and Indiana Department of Public Welfare, Appellants-Respondents, v. Hoyt SMITH, Appellee-Petitioner.

No. 29A02-9005-CV-299. ¹

Court of Appeals of Indiana Fifth District.

March 7, 1991.

Linley E. Pearson, Atty. Gen., Sabra A. Weliever, Deputy Atty. Gen., Indianapolis, for appellants-respondents.

James D. Crum, Coots, Henke & Wheeler, Carmel, for appellee-petitioner.

SHARPNACK, Judge.

The Hamilton County Department of Public Welfare and the Indiana Department of Public Welfare (hereinafter collectively "welfare") appeal from a decision of the Hamilton Superior Court which both reversed the State Welfare Board's decision denying Smith Medicaid benefits and ordered welfare to pay Smith benefits. We reverse the trial court and direct the court to remand to the State Welfare Board for further proceedings.

ISSUES

Welfare and Smith agree that there are two questions before this court:

1. Did the trial court use the wrong statute in determining that Smith was eligible for Medicaid benefits?

2. Is Smith eligible for Medicaid benefits under the criteria set forth in IND.CODE Secs. 12-1-7-14.9(a)(4) and 12-1-7.1-1(b)?

FACTS

The facts out of which this appeal arises are related to Smith's epileptic condition and his efforts to obtain aid in purchasing the medication he needs to prevent the seizures he experiences because of the condition. Smith suffers from both grand and petit mal epileptic seizures which apparently result from a blow to the head which he suffered some years ago. Smith's grand mal seizures are quite violent, and are characterized by clonic tonic convulsions (severe muscle spasms), episodes of tongue biting, episodes of urinary incontinence, and post seizure confusion and lethargy. The seizures occur with varying frequency; Smith may go for months without having one and then may have as many as five in a period of twenty-eight hours.

Smith has been under various medications to control his seizures. Depakote, the medication he has taken most recently, controls his seizures. Because of a lack of funds, Smith has discontinued taking medication.

In addition to his epilepsy, Smith suffers from depression. Perhaps because of this depression, he is disheveled and has poor habits of personal hygiene. At least one of the physicians who treated Smith recommended that he be institutionalized for treatment of his depression.

Smith filed an application for Medicaid benefits with the Hamilton County Department of Public Welfare. After a preliminary investigation and compilation of additional information, the county department forwarded Smith's application to the State Department of Public Welfare for a determination of Smith's eligibility for benefits. The State Medical Review Team, a body which determines medical eligibility for benefits, found Smith ineligible and denied benefits. Smith appealed to the State Department, and an Administrative Law Judge (ALJ) conducted an evidentiary hearing on his appeal. The ALJ affirmed the denial in a three page order which contained twenty findings of fact. Smith appealed the ALJ's decision to the State Welfare Board, which adopted her findings and conclusions of law and again affirmed the denial of benefits. He next appealed to the Hamilton County Superior Court, which reversed the administrative actions denying Smith benefits. Welfare now appeals the order and judgment of the trial court.

DECISION

When a trial court, in the first instance, or an appellate court, on appeal, reviews the decision of an administrative agency, the court is bound by the findings of fact made by the agency if those findings are supported by substantial evidence. City of Mishawaka v. Stewart (1974), 261 Ind. 670, 677, 310 N.E.2d 65, 69; Indiana Education Employment Relations Board v. Board of School Trustees (1978), 176 Ind.App. 680, 683, 377 N.E.2d 414, 416; I.C. Sec. 4-21.5-5-14(d)(5). The reviewing court may not reweigh the evidence in the process of determining whether the findings are supported by substantial evidence, and the court may not substitute its judgment for that of the agency. Department of Financial Institutions v. State Bank of Lizton (1969), 253 Ind. 172, 177, 252 N.E.2d 248, 250-251.

The standard for review of agency conclusions of law is different. The court is not bound by the agency's interpretations of law, and the court is free to determine any legal question which arises out of an administrative action. Public Employees Retirement Fund v. Miller (1988), Ind., 519 N.E.2d 732, 733. When an agency interprets its own statute, the reviewing court should accord its interpretation great weight, but the court is not bound by the agency interpretation and should reverse if the agency incorrectly interpreted the statute. Department of Environmental Management v. AMAX, Inc. (1988), Ind.App., 529 N.E.2d 1209, 1214.

We may dispose of the first issue summarily. The parties and this court agree that the trial court looked to the wrong statute in deciding that Smith was eligible for Medicaid. In determining that welfare incorrectly denied Smith the benefits, the trial court relied on the definition of a disabled person contained in I.C. Sec. 12-1-7.1-1(a), which is a statute providing supplemental assistance for disabled persons. The Medicaid statute, I.C. Sec. 12-1-7-14.9(a)(4), provides that, in order for a person to be considered disabled for Medicaid purposes, the person must meet the criteria contained in a different subsection of the supplemental assistance act, I.C. Sec. 12-1-7.1-1(b). In applying the definition contained in subsection (a), the trial court committed error.

The remaining issue before us is the question of whether Smith qualified for benefits under Sec. 12-1-7.1-1(b), which provides that an eligible person is one who:

Has a physical or mental impairment, disease, or loss which is verifiable by a physician possessing an unlimited license to practice medicine and which appears reasonably certain to continue throughout the lifetime of the individual without significant improvement, and which substantially impairs his ability to perform labor or services or to engage in a useful occupation. Employment in a sheltered workshop or under an approved vocational rehabilitation plan shall not be considered a "useful occupation" for the purposes of this chapter.

Welfare points out that the ALJ's findings were adopted by the welfare board and that the factual determinations of an administrative agency, if supported by substantial evidence, are binding on both the trial court and this court. Welfare contends that the welfare board, in adopting the ALJ's finding that "the presented evidence does not support that [Smith's] seizure disorder will continue without improvement if he is compliant with medication prescribed ..." (Record, p. 143, Finding 20), made a finding of fact which is supported by substantial evidence showing that Depakote "controlled" Smith's seizure disorder. In addition, welfare contends that the welfare board's finding that the medical evidence does not substantiate that Smith's psychiatric disorder would not improve with treatment is a finding of fact supported on the record because Smith offered no evidence that his condition would not improve with treatment.

Smith responds that the board's finding concerning the probability that his seizure condition would improve is arbitrary, capricious, and unsupported by substantial evidence because the evidence shows only that Depakote reduces the frequency and severity of his seizures, but does not show that Depakote, or, for that matter, any other form of treatment, will alleviate or moderate the condition that causes the seizures. Smith also argues that the board's finding was not supported by substantial evidence because he produced evidence showing that he had a disabling psychiatric disorder, and that welfare failed to produce evidence showing that the disorder would improve with treatment.

In order to determine whether there was substantial evidence that Smith's seizure disorder will not continue without improvement, we must first determine the proper interpretation of I.C. Sec. 12-1-7.1-1(b). Welfare contends that improvement may be shown by evidence of control or alleviation of the symptoms of the underlying physical or mental condition. Smith contends that improvement may be shown only by evidence of alleviation or moderation of the underlying physical or mental condition itself. We conclude that Smith's interpretation is the better reasoned and adopt it.

As we noted earlier, the statute provides that, in order to qualify for Medicaid benefits, the applicant must suffer from a physical or mental "impairment", "disease", or "loss" which is likely to continue for the lifetime of the claimant "without significant improvement." Unfortunately, the statute neither defines these terms nor explains under what circumstances the welfare board would be justified in finding that the various conditions which they describe are likely to undergo significant improvement. The administrative regulation which is supposed to guide the board in determining whether an applicant qualifies for Medicaid similarly provides little guidance. It provides:

The determination of whether a condition appears reasonably certain to continue throughout the lifetime of the individual without significant improvement is made on the basis of the expected duration of the condition. A condition which is expected to continue indefinitely fulfills this requirement whereas one which is temporary or transient does not. The expected duration of the condition does not preclude the possibility of future medical advances, changed diagnosis or prognosis, unforeseen recovery or successful treatment subsequent to the initial prognosis.

470 IND.ADMINISTRATIVE CODE Sec. 9.1-2-3.

This section neither defines the term condition nor attempts to explain what constitutes...