E. Oversight and Judicial Enforcement of the Medicaid Program

• Library: A Practical Guide to Elder and Special Needs Law in South Carolina (SCBar) (2014 Ed.)

E. Oversight and Judicial Enforcement of the Medicaid Program

Many clients of the elder law attorney will one day need to rely upon Medicaid. For clients whose lives will literally depend upon this program, it is important for the attorney to know how to ensure that the client is successful in becoming eligible, is able to receive necessary and appropriate services, and is not inappropriately discharged or transferred from a nursing home. Oversight and judicial enforcement of the Medicaid Program are essential to ensure the Medicaid program operates both efficiently and provides the medical care necessary to keep recipients healthy and safe. DHHS anticipates a significant increase in the numbers of people who will be enrolled in Medicaid as individuals apply for insurance on the federal exchange only to learn that they are currently qualified for Medicaid. Even though South Carolina is not expanding its Medicaid program, DHHS anticipates that the number of individuals found eligible will increase during the period the ACA is being implemented.²³ Given these pressures, attorneys will not only need to advocate for the program to be properly funded and operated, but will also need to know the rights of Medicaid beneficiaries and how to enforce those rights.

1. Oversight from the Centers for Medicare and Medicaid Services (CMS)

The federal Centers for Medicare and Medicaid Services (CMS) is the federal agency responsible for the Medicaid program. The Medicaid program is contained in Title XIX of the Social Security Act, 42 U.S.C. § 1396 et seq. CMS promulgates regulations interpreting the Medicaid statute at 42 C.F.R. Parts 430-456. It also issues guidance including, letters to State Medicaid Directors, letters to State Health Officials, Informational Bulletins, Frequently Asked Questions, as well as sub-regulatory policy and guidance. CMS has an Online Manual System, which "offers day-to-day operating instructions, policies, and procedures based upon statutes and regulations, guidelines, models, and directives." The Online Manual System is divided into "Internet-Only Manuals (IOMs)" and "Paper-Based Manuals."²⁴ The State Medicaid Manual is a paper-based manual and is a valuable tool in understanding eligibility and other requirements for the Medicaid program. The CMS website contains all of the published guidance.

2. Enforcement of the Medicaid Program through Agency Appeals and Hearings

The Fourteenth Amendment prohibits the State from depriving any person of life, liberty, or property without due process of law. U.S. Const. amend. XIV. The South Carolina Constitution contains a similar requirement under Section 3. S.C. Const. art. I, § 3. In 1970, legislators and judges noticed the "increasing prevalence and influence of administrative agencies in daily life." Garris v. Governing Bd. of the S.C. Reinsurance Agency, 333 S.C. 432, 444, 511 S.E.2d 48, 54 (1999). To ensure that there is check on an administrative agency's power to implement policy, Article 1, Section 22 was added to the S.C. Constitution.

No person shall be finally bound by a judicial or quasi-judicial decision of an administrative agency affecting private rights except on due notice and an opportunity to be heard; nor shall he be subject to the same person for both prosecution and adjudication; nor shall he be deprived of liberty or property unless by a mode of procedure prescribed by the General Assembly, and he shall have in all such instances the right to judicial review.

S.C. Const. Art. I, § 22. The procedure prescribed by the General Assembly is the Administrative Procedures Act (APA), which places checks on an agency's power. S.C. Code Ann. § 1-23-10 (2005) et seq. Medicaid benefits are a property interest that cannot be taken without due process of law. The APA sets out the standard of review in Administrative appeals, including Medicaid appeals. S.C. Code Ann. § 1-23-380. Jurisdiction in appeals regarding Medicaid services is determined by federal and state regulations. Brown v. S.C. Dep't of Health and Human Servs., 393 S.C. 11, 16, 709 S.E.2d 701, 704 (Ct. App. 2011).

a. Federal Regulations Relating to Fair Hearings

The Secretary of Health and Human Services has promulgated regulations to implement the Medicaid section of the Social Security Act. See 42 C.F.R. § 431.200(a). The regulations contain mandatory language. "The State agency must grant an opportunity for a hearing to . . . [a]ny recipient who requests it because he or she believes the agency has taken an action erroneously."²⁵ 42 C.F.R. § 431.220(a)(2) (emphasis added). "Action means a termination, suspension, or reduction of Medicaid eligibility or covered services." 42 C.F.R. § 431.201.

Some highlights of the federal regulations relating to Medicaid fair hearings are as follows:

• The regulations require that applicants and recipients be informed of their right to a hearing, the method by which they may obtain a hearing, and their ability to represent themselves or have another represent them, including an attorney. 42 C.F.R. § 431.206.
• The Medicaid agency is required to give advance notice of any action. 42 C.F.R. § 431.211.
• The agency does not have to grant a hearing if the sole issue is a change in federal or state law. 42 C.F.R. § 431.220 (b).
• The agency must give the recipient a reasonable time from the date of notice to request a hearing. 42 C.F.R. § 431.221.
• "The agency may deny or dismiss a request for a hearing if—(a) The applicant or recipient withdraws the request in writing; or (b) The applicant or recipient fails to appear at a scheduled hearing without good cause." 42 C.F.R. § 431.223
• The agency must maintain the individuals' services pending the hearing, under certain circumstances. 42 C.F.R. § 431.230. To qualify for a stay of benefits in South Carolina, the individual must look to the notice and follow the instructions contained in the notice in order to be able to maintain a stay. Generally, in order to receive a stay, an individual has ten (10) days from the date of the written notice of the agency action from which the individual intends to appeal.
• The applicant or recipient or the representative must be given an opportunity to examine the case file and all documents or records to be used by the State. Also, the applicant/recipient can bring witnesses, establish facts, present argument without interference, and question or refute any evidence brought by the agency, including cross-examination of witnesses. 42 C.F.R. § 431.242.
• The agency must take final administrative action within 90 days from the appeal. 42 C.F.R. § 431.242.
• "The agency must promptly make corrective payments." 42 C.F.R. § 431.246.

b. State Regulations Relating to Fair Hearings

DHHS appeals procedures are promulgated pursuant to the authority granted by the South Carolina General Assembly and are published in the S.C. Code of Regulations. The S.C. Code of Laws provides that the "department may promulgate regulations pursuant to the [APA]," and that "[a]ppeals from decisions by the department are heard pursuant to the [APA]." S.C. Code Ann. § 44-6-190 (2002). DHHS regulations define an appeal as "[t]he formal process of review and adjudication of Agency determinations, which shall be afforded to any person possessing a right to appeal pursuant to statutory, regulatory and/or contractual law." 27 S.C. Code Ann. Regs. § 126-150(B) (1976). When an individual's Medicaid benefits are "denied, discontinued or changed," she is to receive notice that is to include her "right to a fair hearing." 27 S.C. Code Ann. Regs. § 126-380 (1976).

Some highlights of the State regulations are as follows:

• "An appeal shall be initiated by the filing of a notice of appeal within thirty (30) days of written notice of the Agency action or decision which forms the basis of the appeal. The failure to file the requisite notice of appeal within the thirty (30) day period specified above shall render the Agency action or decision final . . . ." 27 S.C. Code Ann. Reg. § 126-152 (A). Again, carefully read the notice received to make sure the appeal is timely.
• "The notice of appeal shall be in writing and shall be directed to Appeals and Hearings, Department of Health and Human Services, Post Office Box 8206, Columbia, South Carolina 29202-8206." Id. at 126-152 (B).
• "A Hearing Officer has the authority, among other things to: direct all procedures; issue interlocutory orders; schedule hearings and conferences; preside at formal proceedings; rule on procedural and evidentiary issues; require the submission of briefs and/or proposed findings of fact and conclusions of law; call witnesses and cross examine any witnesses; recess, continue, and conclude any proceedings; dismiss any appeal for failure to comply with requirements under this Subarticle." Id. at 126-154.
• "All parties to an appeal shall have the right to be represented by counsel, call witnesses, submit documentary evidence, cross examine the witnesses of an adverse party, and make opening and closing statements." Id. at 126-158 (A).

c. The Nuts and Bolts of Fair Hearing Appeals

Medicaid Fair Hearings are intended to be an informal process. To comply with the due process standards of Goldberg v. Kelly, 397 U.S. 254 (1970), an individual with limited means, limited education, and limited English proficiency should be able to navigate the process. However, many complicated legal issues can arise in this setting, and many Medicaid applicants and recipients are grateful for legal help and advice.²⁶ Whether an attorney is bringing an appeal or simply giving some advice to an applicant or recipient bringing their own appeal, below are a few critical matters.

• The attorney or the applicant/recipient must file the appeal on time. The time frame is usually 30 days from the date on the notice. If an individual has had a service terminated and they want to maintain the service pending the appeal, then they only have ten (10) days to file the

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