Stogsdill v. S.C. Dep't of Health & Human Servs.

• Decision Date: 10 September 2014
• Docket Number: No. 5271.,5271.
• Citation: Stogsdill v. S.C. Dep't of Health & Human Servs., 410 S.C. 273, 763 S.E.2d 638 (S.C. App. 2014)
• Court: South Carolina Court of Appeals
• Parties: Richard STOGSDILL, Appellant, v. SOUTH CAROLINA DEPARTMENT OF HEALTH AND HUMAN SERVICES, Respondent. Appellate Case No. 2013–000762.

410 S.C. 273

763 S.E.2d 638

Richard STOGSDILL, Appellant

v.SOUTH CAROLINA DEPARTMENT OF HEALTH AND HUMAN SERVICES, Respondent.

Appellate Case No. 2013–000762.

No. 5271.

Court of Appeals of South Carolina.

Heard March 12, 2014.

Decided Sept. 10, 2014.

Rehearing Denied Oct. 23, 2014.

Certiorari Granted April 9, 2015.

Patricia Logan Harrison, of Columbia, for Appellant.

Richard G. Hepfer, of South Carolina Department of Health and Human Services, of Columbia, for Respondent.

Anna Maria Darwin and Sarah Garland St. Onge, of Columbia, for Amicus Curiae, Protection and Advocacy for People With Disabilities, Inc., Amy Landers May, of Columbia, for Amicus Curiae, the South Carolina Chapter of the National Academy of Elder Law Attorneys, Kirby Mitchell, of Greenville, for Amicus Curiae, South Carolina Legal Services, of Greenville, and Stephen Suggs, of Columbia, for Amicus Curiae, the South Carolina Appleseed Legal Justice Center.

Opinion

KONDUROS, J.

Richard Stogsdill appeals the Administrative Law Court's (ALC's) order affirming the South Carolina Department of Health and Human Services' (DHHS's) decision approving the reduction in services to him. We affirm in part, reverse in part, and remand.

FACTS/PROCEDURAL HISTORY

Stogsdill is a Medicaid-eligible man receiving services under the South Carolina Intellectual Disabilities/Related Disabilities (ID/RD) Waiver (Waiver).¹ His mental capacity is normal, but because of premature birth, he suffers from significant physical disabilities that require aid in nearly every activity of daily living. Under the Waiver, the South Carolina Department of Disabilities and Special Needs (DDSN) beneficiaries can be provided a mix of services. Waivers permit eligible recipients to receive these services without the requirement of institutionalization. On January 1, 2010, the five-year renewal of the Waiver went into effect. The renewed Waiver included a cap or limit on some services and excluded others. DHHS administers the state Medicaid program and is responsible for the overall administration of the Waiver. DDSN is responsible for the day-today operation of the Waiver.

Prior to the Waiver changes, Stogsdill was receiving a combined sixty-nine hours of Personal Care Aide (PCA) and Companion Care services per week and approximately thirty-six hours of Respite Care per week. PCA services consist of hands-on personal care that the person needs to accomplish his or her activities of daily living such as bathing, toileting, dressing, and eating. Companion Care services are similar to PCA services but include an aspect of community integration. Respite Care can be a range of services, including personal care but is designed to provide services when the normal caregiver is absent or needs relief.

The Waiver capped any combination of PCA and Companion Care services at twenty-eight hours per week. The normal cap for Respite Services is sixty-eight hours per month, approximately sixteen hours per week, but exceptions can be granted for up to 240 hours per month, approximately fifty-six hours per week. Under these new limits, Stogsdill's services were reduced to twenty-eight hours per week of all PCA services, including Companion Care services, and sixty-eight monthly hours of Respite Care. After an application by his Service Coordinator, Stogsdill's Respite Care hours were increased to 172 hours per month. His occupational therapy and speech therapy were discontinued. Stogsdill appealed the reduction in services through the administrative process finally ending with the ALC affirming the reduction in services. This appeal followed.

STANDARD OF REVIEW

“The Administrative Procedures Act (APA) establishes the standard of review for appeals from the ALC.” Greeneagle, Inc. v. S.C. Dep't of Health & Envtl. Control, 399 S.C. 91, 95, 730 S.E.2d 869, 871 (Ct.App.2012), cert. pending.

The court of appeals may affirm the decision or remand the case for further proceedings; or, it may reverse or modify the decision if the substantive rights of the petitioner have been prejudiced because the finding, conclusion, or decision is:

(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. § 1–23–610(B) (Supp.2013).

“Substantial evidence is such relevant evidence as a reasonable mind might accept as adequate to support a conclusion. When determining whether the record contains substantial evidence to support an administrative agency's findings [the appellate court] cannot substitute its judgment on the weight of the evidence for that of the agency.” S.C. Dep't of Mental Health v. Moore, 295 S.C. 42, 45, 367 S.E.2d 27, 28 (1988) (citations and internal quotation marks omitted). “Substantial evidence is not a mere scintilla of evidence, nor the evidence viewed blindly from one side of the case, but is evidence that, considering the record as a whole, would allow reasonable minds to reach the conclusion the administrative agency reached in order to justify its action.” Fragosa v. Kade Constr., LLC, 407 S.C. 424, 428, 755 S.E.2d 462, 465 (Ct.App.2013) (internal quotation marks omitted).

LAW/ANALYSIS

I. Lawfulness of Reduction in Waiver Services

Stogsdill maintains the ALC and DHHS erred as a matter of law in concluding the 2010 caps were “lawful” based solely on the federal agency, Center for Medicare and Medicaid Services (CMS), approving them. Stogsdill contends the changes do not carry the force and effect of law because they were not passed as regulations pursuant to the APA. We disagree.

“ ‘Regulation’ means each agency statement of general public applicability that implements or prescribes law or policy or practice requirements of any agency. Policy or guidance issued by an agency other than in a regulation does not have the force or effect of law.” S.C.Code Ann. § 1–23–10(4) (2005).

[W]hether an agency's action or statement amounts to a rule—which must be formally enacted as a regulation—or a general policy statement—which does not have to be enacted as a regulation—depends on whether the action or statement establishes a binding norm. When the action or statement so fills out the statutory scheme that upon application one need only determine whether a given case is within the rule's criterion, then it is a binding norm which should be enacted as a regulation. But if the agency remains free to follow or not follow the policy in an individual case, the agency has not established a binding norm.

Sloan v. S.C. Bd. of Physical Therapy Exam'rs, 370 S.C. 452, 475–76, 636 S.E.2d 598, 610 (2006) (citations and internal quotation marks omitted).

We agree with Stogsdill that DDSN has established a binding norm by reducing the types and amount of services offered under the Waiver. The record presents no explanation for the reduction in services to Stogsdill other than the cap put in place by the 2010 Waiver renewal. However, based on the relevant statutory scheme and federal/state nature of Medicaid and the Waiver, DDSN was not required to pass a regulation to enact the cap as an enforceable provision.

South Carolina elected to participate in the Waiver Medicaid program in 1991. Pursuant thereto, the legislature created DDSN and designated it as the “state's intellectual disability, related disabilities, head injuries, and spinal cord injuries authority for the purpose of administering federal funds allocation to South Carolina.” S.C.Code Ann. § 44–20–240,–270 (Supp.2013). Federal regulations set forth the manner in which Waiver requests and renewals are made and approved. The governor, the head of the state Medicaid agency, or an authorized designee may submit the Waiver request. 42 C.F.R. § 430.25(e) (2013). The request is then reviewed by CMS regional and central office staff who submit a recommendation to the CMS Administrator. 42 C.F.R. § 430.25(f)(2) (2013). The Administrator may approve or deny waiver requests, and a request is considered approved unless, within ninety days after the request is received by CMS, the Administrator denies the request or sends the State a written request for additional information needed to reach a final decision. 42 C.F.R. § 430.25(f)(2)(i), (3) (2013). No one disputes the 2010 Waiver was so approved.

In Doe v. South Carolina Department of Health and Human Services, 398 S.C. 62, 70, 727 S.E.2d 605, 609 (2011), the Supreme Court of South Carolina considered whether Doe could be denied Waiver services because DDSN had concluded her mental retardation did not onset prior to her eighteenth birthday. The court concluded DDSN could not terminate Doe's services because the pertinent regulation required the onset of disability prior to age twenty-two. Id. at 72–74, 727 S.E.2d at 610–11. In discussing the ways DDSN may control the target population for Waiver services, the court concluded:

In sum, it is clear that South Carolina could have listed additional criteria in the waiver application for the purpose of defining the population to whom it would provide waiver services. Likewise, DDSN could have promulgated regulations incorporating those additional criteria as part of the definition of mental retardation. But no such steps were taken. Rather, South Carolina adopted a broad definition of mental retardation in section 44–20–30, using language that parallels the [Supplemental Security Income] definition, and in Regulation 88–210, DDSN interpreted that definition in a manner consistent with the [Social Security Administration]. DDSN's interpretation of section 44–20–30 in its policy guidelines directly conflicts with Regulation 88–210 and should be disregarded.

Id. at 74, 727 S.E.2d at 611.

Additionally, in the dissent, Justice Hearn indicated “South Carolina can...