Tex. Health & Human Servs. Comm'n v. Lukefahr
| Decision Date | 06 October 2016 |
| Docket Number | NO. 03-15-00325-CV,03-15-00325-CV |
| Parties | Texas Health and Human Services Commission, Appellant v. Jessica Lukefahr, Appellee |
| Court | Texas Court of Appeals |
NO. D-1-GN-14-002158, HONORABLE STEPHEN YELENOSKY, JUDGE PRESIDING
The Texas Health and Human Services Commission (HHSC) appeals from the trial court's judgment reversing the fair hearing decision that sustained HHSC's denial of Jessica Lukefahr's exceptional circumstances request for a custom power wheelchair with an integrated standing feature and remanding the matter to HHSC. For the reasons that follow, we affirm the judgment of the trial court.
BACKGROUND
Lukefahr was born with cerebral palsy and has spastic quadriplegia with dystonia. She lives independently, requires a custom power wheelchair for mobility, and receives assistance with activities of daily living (ADLs) from care providers several hours per day. In January 2013, she was evaluated for a new custom power wheelchair, and, based on the results of that evaluation, David Russell of Russell Medical, Inc., a Medicaid-enrolled provider of durable medical equipment (DME), submitted to HHSC a prior authorization request for a custom power wheelchair with an integrated standing feature known as the Permobil C500 VS.1 See 1 Tex. Admin. Code §§ 357.1(31) (2016) (Texas Health and Human Servs. Comm'n, Definitions)2 (defining "prior authorization request" as request for services that is reimbursable only if authorization is obtained before services are rendered), 354.1031(b)(12) (General) (defining "durable medical equipment" as equipment for which projected term of use is more than one year or for which reimbursement is made at cost of more than $1,000). Lukefahr's physician attested to the medical necessity of the recommended wheelchair. The Texas Medicaid and Healthcare Partnership (TMHP), which administers Texas Medicaid on behalf of HHSC, denied prior authorization on the basis that, under section 2.2.14.26 of HHSC's 2013 Texas Medicaid Provider Procedures Manual, "mobile standers, power standing system on a wheeled mobility device" are not a benefit of Texas Medicaid.
In denying the request, TMHP informed Russell, the DME provider, that the request could be appealed for exceptional circumstances. See id. § 354.1039(a)(4)(C) (Home Health Services Benefits and Limitations) (listing items covered under home health services benefits), (D) (providing that medical equipment not listed in (C) may be considered for payment in "exceptional circumstances" when it can be "medically substantiated as a part of the treatment plan that such service would serve a specific medical purpose on an individual case basis"). TMHP further informed Russell that certain documentation had to be submitted for the exceptional circumstancesappeal to be considered, including identification of the client's specific medical needs that can only be addressed by the requested equipment; a letter of medical necessity documenting that alternative DME had been tried and failed or had been ruled out, and an explanation of why it failed or was ruled out; and "[a] minimum of two articles from evidence-based medical peer-reviewed literature that demonstrate validated, uncontested data for use of the requested equipment to treat the client's specific medical condition, and that the equipment has been found to be safe and effective."
Russell subsequently submitted a request for an exceptional circumstances review and provided the requested documentation, including a Letter of Medical Necessity Addendum signed by Lukefahr's physician and by Michelle Hays, Lukefahr's physical therapist, explaining Lukefahr's medical and functional needs. TMHP determined that the documentation Lukefahr and Russell submitted failed to support the medical necessity of the standing feature of the power wheelchair or that the standing feature would serve a medical purpose for Lukefahr and recommended denial of the request for the Permobil C500 VS. HHSC's Office of Medical Director approved the recommendation. TMHP notified Lukefahr and Russell of the denial and also informed Lukefahr that the documentation showed that she may have a medical need for a power wheelchair without a standing feature and a static stander and stated that such equipment may be considered for her through Texas Medicaid if requested.3
Lukefahr then requested a fair hearing regarding the exceptional circumstances denial. See id. §§ 357.1(19) (); .3(b)(E) (Authority and Right to Appeal) (providing that clients of Medicaid-funded services are entitled to fair hearing on denial of prior authorization). At the fair hearing, HHSC had the burden of proof by a preponderance of the evidence. See id. § 357.9 (). Two registered nurses testified on behalf of HHSC. Lukefahr, her physical therapist, Hays, and her DME provider, Russell, testified as well. Both parties offered documentary evidence. Following the hearing, the hearing officer issued an order sustaining HHSC's denial of the exceptional circumstances request and a decision with findings of fact and a single conclusion of law. See id. § 357.5(c)(3)(B) (Hearing Officer Responsibilities) (requiring hearing officer to determine if agency's or its designee's action is in compliance with statutes, polices, and procedures), (D) (requiring hearing officer to issue decision including findings of fact and conclusions of law, pertinent statutes, and final order).
Lukefahr requested an administrative review, after which an HHSC attorney upheld the hearing officer's decision and issued a final agency decision adopting the hearing officer's findings of fact and conclusion of law. See id. §§ 357.702 (Definitions) (defining "administrative review" as desk review performed by HHSC attorney), .703(b) (Process and Timeframes) (providing process and timelines for administrative review, including that in administrative review, attorney makes final decision for HHSC). Lukefahr then filed suit for judicial review. See id. § 357.703(c) (). The trial court found that HHSC violated Lukefahr's due process rights and that the decision denying her a custom wheelchair with an integrated standing feature was not supported by substantial evidence and was arbitrary and capricious. HHSC then filed this appeal.
STANDARD OF REVIEW
In its review of an agency's decision, the trial court "may not substitute its judgment for the judgment of the state agency on the weight of the evidence on questions committed to agency discretion" but must instead review the decision under the "substantial evidence" standard. See Tex. Gov't Code § 2001.174. A reviewing court should ask not whether the agency reached the correct conclusion but whether the record contains sufficient evidence to support the agency's action. Larimore v. Employees Ret. Sys., 208 S.W.3d 511, 522 (Tex. App.—Austin 2006, pet. denied). However, the agency may not act arbitrarily or capriciously. See id. An agency acts arbitrarily and capriciously if it makes a decision without regard for the facts, relies on fact findings that are not supported by any evidence, or if there is no rational connection between the decision and the facts. See City of Waco v. Texas Comm'n on Envtl. Quality, 346 S.W.3d 781, 819-20 (Tex. App.—Austin 2011), rev'd on other grounds, 413 S.W.3d 409 (Tex. 2013). An agency decision may be found arbitrary and capricious if it is based on legally irrelevant factors or if legally relevant factors were not considered. City of El Paso v. Public Util. Comm'n, 883 S.W.2d 179, 184 (Tex. 1994); CenterPoint Energy Hous. Elec., LLC v. Public Util. Comm'n, 212 S.W.3d 389, 400 (). "To determine if an agency acted arbitrarily and capriciously, even though substantial evidence supports its order or action, we look to see if the order was based on a consideration of all relevant factors." City of El Paso, 883 S.W.2d at 184; Gulf States Utils. Co. v. Public Util. Comm'n, 841 S.W.2d 459, 474 (Tex. App.—Austin 1992, writ denied). In other words, we must remand for arbitrariness if we conclude that the agency "'has not actually taken a hard look at the salient problems and has not genuinely engaged inreasoned decision-making.'" City of Waco, 346 S.W.3d at 819-20 (quoting Starr Cty. v. Starr Indus. Servs., Inc., 584 S.W.2d 352, 356 (Tex. Civ. App.—Austin 1979, writ ref'd n.r.e.)).
In reviewing fact-based determinations under this standard, we may not substitute our judgment for that of the agency but rather must determine whether, considering the reliable and probative evidence in the record as a whole, some reasonable basis exists in the record for the agency's action. See Tex. Gov't Code § 2001.174(2)(E); Texas Indus. Energy Consumers v. CenterPoint Energy Hous. Elec., LLC, 324 S.W.3d 95, 105 n.60 (Tex. 2010). "Thus, the agency's action will be sustained if the evidence is such that reasonable minds could have reached the conclusion that the agency must have reached in order to justify its action." Texas Health Facilities Comm'n v. Charter Med.-Dall., Inc., 665 S.W.2d 446, 453 (Tex. 1984). We presume that the agency's findings, inferences, conclusions, and decisions are supported by substantial evidence, and the burden is on the appellant to demonstrate otherwise. See Froemming v. Texas State Bd. of Dental Exam'rs, 380 S.W.3d 787, 791 (Tex. App.—Austin 2012, no pet.); Pierce v. Texas Racing Comm'n, 212 S.W.3d 745, 751 (Tex. App.—Austin 2006, pet. denied). We must affirm the agency's findings if they are supported by more than a scintilla of evidence. Mireles v. Texas Dep't of Pub. Safety, 9 S.W.3d 128, 131 (Tex. 1999) (per curiam).
DISCUSSION
In its first issue, HHSC argues that the trial...
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