Wahl v. Morton County Social Services

• Citation: 574 N.W.2d 859,1998 ND 48
• Decision Date: 05 March 1998
• Docket Number: No. 970248,970248
• Parties: Medicare & Medicaid Guide P 46,114, 1998 ND 48 Lois WAHL, surviving spouse of Harold Wahl, deceased, and Dennis Wahl, Personal Representative of the Estate of Harold Wahl, deceased, Plaintiffs and Appellants, v. MORTON COUNTY SOCIAL SERVICES and North Dakota Department of Human Services, Defendants and Appellees. Civil
• Court: United States State Supreme Court of North Dakota

Page 859

574 N.W.2d 859

Medicare & Medicaid Guide P 46,114, 1998 ND 48

Lois WAHL, surviving spouse of Harold Wahl, deceased, and Dennis Wahl, Personal Representative of the Estate of Harold Wahl, deceased, Plaintiffs and Appellants, v. MORTON COUNTY SOCIAL SERVICES and North Dakota Department of Human Services, Defendants and Appellees.

Civil No. 970248.

Supreme Court of North Dakota.

March 5, 1998.

Rehearing Denied March 30, 1998.

Gregory C. Larson, of Wheeler Wolf, Bismarck, for plaintiffs and appellants. Appearance by Melissa Hauer.

Jean R. Mullen, Assistant Attorney General, Attorney General's Office, Bismarck, for defendants and appellees.

SANDSTROM, Justice.

¶1 Lois Wahl and her son, Dennis Wahl, personal representative of the estate of Harold Wahl (the Estate), appealed from a judgment affirming the Department of Human Services' denial of Harold Wahl's request for medicaid benefits. We hold the Department properly determined Lois Wahl's assets exceed the spousal allowance, making Harold Wahl ineligible for benefits, and we affirm.

I

¶2 Harold and Lois Wahl were married and owned a farm near Tuttle. Harold Wahl suffered a heart attack and stroke and entered a nursing home in December 1994. He applied to Morton County Social Services for medicaid benefits in May 1995, but his application was denied. He again applied for benefits in August 1995. His application was again denied, because Lois Wahl's assets exceeded the amount allowable for Harold Wahl to receive medicaid benefits. On November 1, 1995, the Wahls appealed the denial of benefits and requested a fair hearing. An administrative hearing was held on January 4, 1996, with additional proceedings held on January 25, 1996, and March 25, 1996. Upon completion of the hearing, the administrative law judge recommended denial of benefits. The Department adopted the recommendation and denied benefits. The Wahls appealed from the Department's order to the district court. Harold Wahl died pending the appeal, and the Estate was substituted as a party plaintiff. After a hearing, the district court entered a judgment upholding the Department's denial of benefits. Lois Wahl and the Estate appealed.

¶3 The district court had jurisdiction under N.D. Const. Art. VI, § 8, and N.D.C.C. § 28-32-15(3). The appeal to this Court was timely filed under N.D.C.C. § 28-32-21 and N.D.R.App.P. 4(a). This Court has jurisdiction under N.D. Const. Art. VI, § 6, and N.D.C.C. § 28-32-21.

II

¶4 When an administrative agency decision is appealed from the district court to this Court, we review the decision of the agency, not the decision of the district court. Walton v. N.D. Dept. of Human Services, 552 N.W.2d 336, 338 (N.D.1996). Under N.D.C.C. §§ 28-32-19 and 28-32-21, we determine whether the agency's findings of fact are supported by a preponderance of the evidence, whether its conclusions of law are supported by its findings of fact, and whether its decision is in accordance with the law. Walton. In determining whether the agency's findings of fact are supported by a preponderance of the evidence, we do not make independent findings of fact or substitute our judgment for that of the agency, but determine whether a reasoning mind could have reasonably determined the factual conclusions were supported by the weight of the evidence. Walton; Power Fuels, Inc. v. Elkin, 283 N.W.2d 214, 220 (N.D.1979). The agency's decisions on questions of law are fully reviewable by this court. Walton at 338.

III

¶5 Lois Wahl and the Estate assert Lois and Harold Wahl were denied due process, because the Department did not hold the "fair hearing" within 30 days after the request for a hearing. Under both the federal and state medicaid provisions, the agency must provide a hearing within 30 days of the request. 42 U.S.C. § 1396r-5(e)(2); N.D. Admin. Code § 75-02-02.1-24(7)(c). The hearing in this case was begun 64 days after the Wahls requested a hearing. The hearing officer found Wahls' attorney agreed to the scheduled hearing date and waived the timeliness issue. There is no record evidence either verifying or refuting the hearing officer's finding on this issue. Neither is there, however, any showing the Wahls objected to the delay or complained of prejudice resulting from the delay. The continuance of the hearing from January 4, 1996, to two later dates was, at least in part, to accommodate the Wahls in presenting their case.

¶6 We certainly do not condone the Department's failure to provide a hearing within the statutory timeframe. Due process generally requires a person be given notice and an opportunity to be heard before the government deprives the person of property. State v. One Black 1989 Cadillac, 522 N.W.2d 457, 463 (N.D.1994). However, due process is flexible and must be analyzed on a case-by-case basis, balancing the competing interests and assessing whether the basic due process requirement of fairness has been satisfied. One Black 1989 Cadillac. Sanctions for delay in administrative proceedings are generally warranted only when a party has shown substantial prejudice by the delay. See, e.g., Hickey v. N.D. Dept. of Health, 536 N.W.2d 370, 372 (N.D.1995). The Wahls have not demonstrated substantial prejudice, and we conclude, therefore, they were not denied due process by the Department's failure to hold the hearing within 30 days after the request for hearing.

IV

¶7 Lois Wahl and the Estate also assert Lois and Harold Wahl were denied due process because the notice of denial of benefits was defective. The Department concedes the initial notice did not include the required notice to the Wahls of their right to address at the hearing the Department's computed community spouse monthly income and accountable asset allowances. See 42 U.S.C. § 1396r-5(e)(1); N.D. Admin. Code § 75-02-02.1-24(7)(a). However, the Department contends the notice was supplemented ¹ at the beginning of the hearing to include all required information and the Wahls were not prejudiced by the defective notice because they had full opportunity at the hearing to address all relevant issues.

¶8 Issues regarding the community spouse income and asset allowances were fully addressed at the hearing. Due process prescribes a participant in an administrative proceeding be given notice of the general nature of the questions to be heard and an opportunity to prepare and be heard on those questions, and notice is adequate if it apprises the party of the nature of the proceedings so there is no unfair surprise. Estate of Robertson v. Cass Co. Social Services, 492 N.W.2d 599, 602 (N.D.1992). If a party cannot demonstrate prejudice resulting from an allegedly defective notice, there is generally no right to redress. See Lind v. Wells Co. Social Service Bd., 311 N.W.2d 547, 550 (N.D.1981). The Wahls have failed to demonstrate harm resulting from the initial defective notice, and we, therefore, conclude they did not suffer a violation of their due process rights. See State v. Hass, 264 N.W.2d 464, 467 (N.D.1978).

V

¶9 Lois Wahl and the Estate assert the Department wrongly determined the value of Lois Wahl's assets exceed the maximum allowed for Harold Wahl to qualify for medicaid benefits. They claim the Department should have used net, rather than gross, unearned income for determining Lois Wahl's monthly income needs which, in turn, would have entitled her to retain additional assets while qualifying Harold Wahl for medicaid benefits. To fully explain this issue, we briefly summarize the Medicaid program and the rules for qualifying for medicaid benefits.

¶10 The Medicaid program was enacted in 1965 as Title XIX of the Social Security Act, 42 U.S.C. § 1396 et seq., as a jointly financed federal and state program designed to provide health care to needy individuals. A state is not required to participate in the Medicaid program, but if a state elects to participate, the federal government shares the cost if the state's plan complies with the requirements of the Act and the related regulations of the Secretary of Health and Human Services. 42 U.S.C. § 1396a.

¶11 Estate of Krueger v. Richland Co. Social Services, 526 N.W.2d 456, 458-459 (N.D.1994), cogently explained the coverage and qualification requirements of the program:

"Determining an applicant's participation in the program involves a two-phase process: first, determining medical eligibility and financial eligibility based on the applicant's income and resources; and second, determining the extent of assistance to which the applicant is eligible based on another calculation of income....

"In 1988, Congress enacted the Medicare Catastrophic Coverage Act, 42 U.S.C. § 1396r-5, which was in part designed 'to ameliorate the financial hardship suffered by aging couples faced with the high cost of nursing home care.' ... The legislation defines an 'institutionalized spouse' as an individual who 'is in a medical institution or nursing facility' and 'is married to a spouse who is not in a medical institution or nursing facility....' 42 U.S.C. § 1396r-5(h)(1). A 'community spouse' is 'the spouse of an institutionalized spouse.' 42 U.S.C. § 1396r-5(h)(2). Under prior law, nearly all of a couple's assets had to be depleted before either one could satisfy Medicaid eligibility requirements, leaving inadequate resources and income to support the community spouse.... To avoid impoverishing the community spouse, the Act clarifies Medicaid income eligibility guidelines and provides a greater community spousal allowance, thus permitting 'the community spouse (usually the wife) to retain sufficient income and assets to live in the community without disqualifying the institutionalized spouse from eligibility for Medicaid.' ...

"A community spouse is permitted a 'resource allowance,' generally defined as one-half of the couple's countable total resources, or $60,000, a sum adjusted annually according to the consumer price index, whichever is less. 42 U.S.C. § 1396r-5(c) a...