Jeffrey Pape v. Gregg Pane, Director VDMAS

Decision Date13 May 2011
Docket NumberFairfax County Circuit Court Case No. CL-2011-1627
PartiesJeffrey Pape v. Gregg Pane, Director VDMAS
CourtCircuit Court of Virginia

DENNIS J. SMITH. CHIEF JUDGE

MARCUS D. WILLIAMS

JANE MARUM ROUSH

LESLIE M. ALDEN

JONATHAN C.THACHER

R. TERRENCE NEY

RANDY I. BELLOWS

CHARLES J. MAXFIELD

BRUCE DWHITE

ROBERT J. SMITH

DAVID S. SCHELL

JAN L BRCDIE

LORRAINE NORDLUND

BRETT A KASSASIAN

MICHAEL F. DEVINE

JUDGES

BARNARD F. JENNINGS

THOMAS J. MIDDLETON

THOMAS A. FORTKDRT

RICHARD J, JAMBORSKY

JACK B. STEVENS

J. HOWE BROWN

F BRUCE BACH

M. LANGHORNE KEITH

ARTHUR B. VIEREGG

KATHLEEN H. MACKAY

ROBERT W. WOOLDRIDGE, JR.

MICHAEL P. McWEENY

GAYLORD L FINCH. JR

STANLEY P. KLEIN

RETIRED JUDGES

May 13, 2011

Dear Counsel:

This administrative appeal arises out of the decision by the Virginia Department of Medical Assistance Services ("DMAS") finding the Appellant,

Jeffrey Pape, ineligible for Medicaid coverage under the Mental Retardation / Intellectual Disability ("MR/ID") Waiver services. Pape claims that the decision by DMAS's hearing officer does not comply with DMAS's regulations governing eligibility for MR/ID Waiver services, or represents an arbitrary and capricious interpretation of those regulations. Pape also claims that the factual record does not support DMAS's conclusion that Pape does not meet the diagnostic criteria for MR/ID. The Court agrees that the decision by the hearing officer is an arbitrary and capricious interpretation. Because the Court remands the matter to DMAS for further proceedings in light of this Opinion, the Court does not reach Pape's remaining claim.

FACTUAL BACKGROUND

The facts of this case, which are well known to the parties, are set forth in great detail in the written decision of the Hearing Officer. The Court will recite only those facts necessary to this appeal. Pape is twenty-five years old and develop mentally delayed. In 1996, when Pape was ten years and four months old, it was determined that Pape was autistic and had developmental delays in all areas of development. Testing indicated that be had an IQ composite score of seventy-one, placing his overall cognitive ability within the borderline range of intellectual functioning. A diagnosis of mental retardation was not made at that time. In 2003, when Pape was eighteen years and one month old, he was again evaluated. Pape presented as significantly below normal in all aspects of communication and behavior. His IQ composite score was fifty-four. The evaluation concluded that Pape was within the mild to medium level of mental retardation.

Through bis parents, Pape applied for MR/ID Waiver services in 2003 and 2008. Both applications were denied. Pape applied again in 2010. On August 13, 2010, the Fairfax-Falls Church Community Services Board ("CSB") evaluated Pape to determine his eligibility for services.1 That same day, the CSB concluded that Pape did not meet the diagnostic criteria for MR/ID Waiver services because he did not have an MR/ID diagnosis before his eighteenth birthday. Pape timely appealed the CSB's decision, and a hearing was held before Hearing Officer Beverly H. Ewers on November 19, 2010. On December 14, 2010, Hearing Officer Ewers issued her decision sustaining the CSB's denial of services, stating: "the Hearing Officer finds that the CSB was correct in denying the Appellant's MRID Waiver services based on not meeting the diagnostic criteria because be was not diagnosed as MR/ID before age 18 years." Appeal Decision at 6.

Pape timely filed his appeal to the Circuit Court. Both parties submitted written briefs to the Court and oral argument was heard on May 6, 2011.

DISCUSSION
A. Standard of Review

"The Virginia Administrative Process Act authorises judicial review of agency decisions." Avante at Roanoke v. Finnerty, 56 Va. App. 190, 692 S.E.2d 277, 280 (2010) (citing Code § 2.2-4027). Under the Act, "the circuit court's role in an appeal from an agency decision is equivalent to an appellate court's role in an appeal from a trial court." School Bd. v. Nicely, 12 Va. App. 1051, 1062, 408 S.E.2d 545, 551 (1991). "Where a regulation or case decision is found by the court not to be in accordance with law under Code § 2.2-4027, the court shall suspend or set it aside and remand the matter to the agency for further proceedings, if any, as the court may permit or direct in accordance with law." Code § 2.2-4029.

An agency's interpretations of its regulations are subject to the arbitrary and capricious standard of review. Fralin v. Kozlowski, 18 Va. App. 697, 701, 447 S.E.2d 238, 240 (1-994). The statutory basis for this standard is Code § 2.2-4027, which states in relevant part:

The burden shall be upon the party complaining of agency action to designate and demonstrate an error of law subject to review by the court. Such issues of law include: (i) accordance with constitutional right, power, privilege, or immunity, (ii) compliance with statutory authority, jurisdiction limitations, or right as provided in the basic laws as to subject matter, the stated objectives for which regulations may be made, and the factual showing respecting violations or entitlement in connection with case decisions, (hi) observance of required procedure where any failure therein is not mere harmless error, and (iv) the substantiality of the evidentiary support for findings of fact.. . .

. . . [T]he court shall take due account of the presumption of official regularity, the experience and specialized competence of the agency, and the purposes of the basic law under which the agency has acted.

Code § 2.2-4027. Regarding interpretation of agency regulations, the Court of Appeals has explained:

[W]e are to give great deference to an agency's interpretation of its own regulations. This deference stems from Code § 2.2-4027, which requires that reviewing courts take due account of the experience and

specialized competence of the agency promulgating the regulation. However, deference is not abdication, and it requires us to accept only those principles of agency interpretations that are reasonable in light of the principles of construction courts normally employ.

Avante at Roanoke, 56 Va. App. at 197, 692 S.E.2d at 280 (quoting Bd. of Supervisors v. State Bldg. Code Tech. Review Bd., 52 Va. App. 460, 466, 663 S.E.2d 571, 574 (2008); Real Estate Bd. v. Clay, 9 Va. App. 152, 160-61, 384 S.E.2d 622, 627 (1989)) (citations and quotation marks omitted). See also Leach v. Commonwealth ex rel. Dep't of Med. Assistance Servs., No. 1925-94-2, 1995 Va. App. LEXIS 646, at *4 (Aug. 22, 1995) ("The [Agency] possesses the requisite experience and competence necessary to determine who is eligible for the programs it administers under the Virginia Medicaid State Plan. As such, its interpretations of the statutes and regulations governing who qualifies for the Waiver Program 'are entitled to deference by a reviewing court and should only be overturned when found to be arbitrary and capricious.'" (quoting Fralin, 18 Va. App. at 701, 447 S.E.2d at 240)).

B. The Regulations

In order to provide an alternative to institutionalization, Virginia provides a wide range of home and community-based services to individuals "with mental retardation." 12 Va. Admin. Code 30-120-213. Individuals six years of age or older must have a diagnosis of MR/ID from a licensed professional. 12 Va. Admin. Code 30-120-215(B)(2). The Medicaid Manual created by DMAS to guide the administration of the Waiver Program adopts the definition of MR/ID used by the American Association on Intellectual and Developmental Disabilities ("AAIDD"), as follows:

Mental retardation / intellectual disability is a disability characterized by significant limitations in both intellectual functioning and in adaptive behavior as expressed in conceptual, social and practical adaptive skills. This disability originates before age 18.

This definition is expressly incorporated into DMAS regulations. See 12 Va. Admin. Code 30-120-211 ("'Mental retardation means a disability as defined by the American Association on Intellectual and Developmental Disabilities"). Additionally, the psychological evaluation must assess the individual's adaptive level of functioning and support the diagnosis of MR/ID. 12 Va. Admin. Code 30-120-215(B)(2).

C. DMAS's Interpretation and Application of the Regulations

The Hearing Officer sustained the CSB's denial of services to the Petitioner, finding that "the [CSB] was correct in denying the Appellant's MRID Waiver services based on not meeting the diagnostic criteria because he was not diagnosed as MR/ID before age 18 years." Appeal Decision at 6. As Pape correctly points out, this analysis equates the time of diagnosis of the disability with the time of origination.

In its brief to this Court, the Appellee concedes, as it must, that the definition of MR/ID in the governing regulations requires only that "[t]he disability originates before age 18." Appellee's Br. 4 (emphasis added). The Appellee states, however, that DMAS "interprets the regulation to require that testing is performed prior to the individual's 18th birthday." Id. (emphasis added). DMAS applies this interpretation "in order to objectively determine the disabihty originated before age 18." Id. Appellee argues that "[t]here must be a deadline by which testing and diagnosis for intellectually [sic] functioning must occur." Id.

This interpretation is arbitrary and capricious. DMAS's interpretation is not based upon its unique experience or any specialized competence necessary to determine who is eligible for the programs it administers. To the contrary, the interpretation substituting the date of diagnosis of MR/ID for the date of origination is designed to avoid the need for any specialized experience or competence in evaluating the date of origination. Moreover, the effect of DMAS's interpretation is to substantively alter the AAIDD definition of MR/ID adopted by DMAS in the Medicaid Manual and 12 Virginia Administrative Code 30-120-211.

The Virginia General...

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