Open-Ended Remands in Medicaid-Related Fair Hearing Decisions Violate Federal Law
30 Jan, 2018
On January 26, 2018, Judge Leonard D. Wexler granted statewide class certification and concluded that Medicaid-related Fair Hearing Decisions, which contain open-ended remands to a local agency, violate an appellant's right to a timely decision. Judgment, which was finally entered on February 1, 2019, is effective March 3, 2019.
New York's Open-Ended Medicaid Remand Policy Violates Federal Law
In his post-trial finding of fact and conclusions of law in Lisnitzer v Zucker, 306 F.Supp.3d 522 (E.D.N.Y. 2018), Judge Wexler ruled
"that the 90-day requirement for 'final administrative action,' a permissible construction of 42 U.S.C. § 1396a(a)(3), means that the state was required to provide a final determination of his eligibility for benefits within that time period, not simply any disposition, including a 'remand,' of the appeal. As the First Department observed in Konstantinov, 'any remand should specify the time in which the agency must act and report back so that the ALJ can render a final determination within that 90-day period.' Konstantinov, 101 A.D.3d at 520-22, 956 N.Y.S.2d at 39-40. The open-ended remand of Lisnitzer’s appeal, allowed under defendants’ policies and practices, led to a violation of Lisnitzer’s right to a final determination of his eligibility for benefits, i.e., 'final administrative action,' within 90 days of his fair hearing request."1
1 Given this determination, the Court need not reach Lisnitzer’s claim that defendants also violated his constitutional rights.
Lisnitzer, 306 F.Supp.3d 522, 531.
Judge Wexler found that
"19. At a fair hearing, the OTDA hearing officer is charged to develop a complete fair hearing record, review and evaluate evidence, make findings of fact and conclusions of law, prepare an official report containing the substance of what transpired at the hearing and render a recommended decision to the DOH Commissioner or the DOH Commissioner’s designee. See 18 N.Y.C.R.R. § 358-5.6(a), (b).
"20. In developing a complete fair hearing record, a hearing officer is empowered to, inter alia, administer oaths, elicit testimony, require document production, issue subpoenas, direct the attendance of witnesses, and adjourn the hearing. See 18 N.Y.C.R.R. §§ 358-5.3, 358-5.6(b).
Lisnitzer, 306 F.Supp.3d at 525-526.
Despite this duty to develop a complete record, Judge Wexler also found that
"23. A fair hearing decision which reverses the local agency’s reason for the contested action and remands the matter back to the local agency does not determine the appellant’s eligibility for the contested Medicaid benefit. Tr. 60-61.
"24. If a fair hearing decision reverses the denial of Medicaid benefits and remands the matter to the local agency for further consideration, DOH prohibits the local agency from denying the application upon the reason set forth in the local agency’s denial that was reversed. See JPTO Exh. 4.
"25. When a fair hearing decision reverses the denial of Medicaid benefits and remands the matter to the local agency for further consideration, DOH requires the local agency to continue to process the application if one or more eligibility factors need to be considered and issue a new decision as soon as possible, while preserving the applicant’s original application date. See id.
"26. Upon remand, DOH and OTDA do not monitor the outcome of the Medicaid adverse action which was sent back to the local agency unless the appellant complains about the local agency’s non-compliance with the hearing decision. See Deposition of Nigel A. Marks, at 79 line 24-80 line 7, JPTO Exh. 3; Deposition of James Ryan III, at 91 line 4-92 line 3, JPTO Exh. 2; Tr. 84.
"27. If a fair hearing decision remands the contested Medicaid issue back to the local agency, the hearing officer who presided at that fair hearing is finished with that administrative appeal and it is removed from that hearing officer’s calendar. Tr. 56, 61.
"28. If a fair hearing decision reverses the reason for the local agency’s action and remands the matter back to the local agency, the hearing officer who presided at the hearing is not informed about the local agency’s further action upon remand. See Tr. 65.
"29. DOH considers a fair hearing decision which reverses the local agency’s reason for the contested action and remands the matter back to the local agency under any of the remand codes to be final administrative action which terminates the Medicaid appeal. See Tr. 73, 80.
"30. A fair hearing decision which remands the contested Medicaid issue back to the local agency is considered by OAH to satisfy the 90-day deadline by which to take definitive and final administrative action. Tr. 60.
"31. If on remand the local agency’s next determination adheres to its denial on the same issue, the Medicaid applicant must request a new fair hearing to contest the subsequent denial. See Tr. 73, 79-80.
"32. If on remand another fair hearing is requested to contest the subsequent denial by the local agency, the hearing officer who presided at the previous fair hearing is not assigned to hear the subsequent fair hearing. Tr. 61, 65."
Lisnitzer, 306 F.Supp.3d at 526-527.
The Court Grants Plaintiff's Motion for Certification of a Statewide Class of Medicaid Appellants
Noting that "the claims of unnamed members of the class are not moot, as a continuing class of similarly situated persons would suffer the claimed harm," Judge Wexler held that
"Subject to further proceedings, the Court finds that Lisnitzer sufficiently demonstrates (1) that the prerequisites for a class action are met, namely, numerosity, typicality, commonality, and adequacy of representation, see FRCP 23(a); and (2) that defendants, have acted on grounds that apply generally to the class as defined by Lisnitzer, see Plaintiff’s Reply Mem. of Law in Further Support of Motion for Class Cert., at 2 (DE 13), so that final injunctive or corresponding declaratory relief is appropriate respecting the class as a whole, see FRCP 23(b)(2). Individualized issues among Lisnitzer and class members seem unlikely to impair the Court’s ability to issue effective and appropriate injunctive and declaratory relief."
Lisnitzer, 306 F.Supp.3d at 529-530.
The Judgment, at ¶ 1, defines the Liszitner class as:
All past, present and future Medicaid appellants in New York State who since September 23, 2008:
(a) requested or will request a fair hearing to contest the denial or adequacy of Medicaid benefits, and
(b) participated or will participate directly or by representative in a fair hearing during which the hearing officer failed to develop a complete record upon which to base a final and definitive administrative decision, and
(c) received or will receive a fair hearing decision which
(i) remands the contested action to the local social services district for further consideration, and
(ii) fails to direct final and definitive corrective action when the contested action is reversed.
Declaratory and Injunctive Relief
2. Defendants' challenged policy and practice of terminating fair hearing appeals of local social service district determinations denying Medicaid benefits by reversing and remanding those matters back to the local social services districts rather than rendering final determinations of Medicaid eligibility based upon the development of complete fair hearing records within 90 days of the hearing requests violates 42 U.S.C. § 1396a(a)(3) and implementing federal regulations and policy issuances.
Judgment, at ¶¶ 2 and 3.
Implementation Plan for Retroactive Relief
4. Within 90 days of the date hereof, Defendants, in collaboration with counsel for the plaintiff and the plaintiff class ("Plaintiffs' Counsel"), shall submit for approval to the Court, or any Magistrate so designated by the Court, an implementation plan which ensures that
(a) hearing officers and Commissioner's Designees are timely notified of this Court's Judgment and the requisite changes in policy which are mandated by the Judgment; and
(b) class members whose remanded fair hearings took place on or after November 1, 2010, within 30 days of the approval of the implementation plan, are identified and notified of their rights pursuant to this Judgment by means of a written notice in English and Spanish versions; and
(c) class members whose remanded fair hearings took place between September 23, 2008 and October 31, 2010, within 90 days of the approval of the implementation plan, are identified and notified of their rights pursuant to this Judgment by means of a written notice in English and Spanish versions; and
(d) Defendants shall not be held in violation of this Judgment for the over or under inclusion of class members based upon their good faith implementation of the methodology agreed upon by Defendants and Plaintiffs' Counsel for the identification of such class members; and
(e) Plaintiffs' Counsel shall sign and be bound by a confidentiality agreement regarding any information related to class members as well as individuals who may be incorrectly identified as class members; and
(f) Should the Defendants determine that issues pertaining to implementation are likely to cause a violation of the time lines imposed by the Court, they will advise Plaintiffs' Counsel and the Court of those issues and seek additional time accordingly.
Judgment, at ¶ 4.
Leslie Lisnitzer and the plaintiff class are represented by private practitioner Peter Vollmer, John Castellano of the Mercy Advocacy Program of Mercy Haven, Inc. and Donnalynn Darling of Meyer, Suozzi, English & Klein. Susan M. Connolly, Kimberly Ann Kinirons and Patricia M. Hingerton of the New York State Attorney General's office represent the New York State Department of Health (DOH) and Office of Temporary and Disability Assistance (OTDA).
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Author: Gene Doyle, LMSW.