GENESIS HEALTHCARE d/b/a SEAFORD CENTER, Authorized Medicaid Representative of RUTH JONES, Appellant,
THE DELAWARE DEPARTMENT OF HEALTH AND SOCIAL SERVICES - DIVISION OF SOCIAL SERVICES, Appellee.
Submitted: March 1, 2018
Appellant's Appeal from the Department of Health and
Social Services Division of Medicaid and Medical Assistance
Hearing Officer: AFFIRMED
Margaret F. England, Esquire, of GELLERT SCALI BUSENKELL
& BROWN, LLC, Wilmington, Delaware, Attorney for
Woolfolk, Esquire, of the STATE OF DELAWARE DEPARTMENT OF
JUSTICE, Wilmington, Delaware, Attorney for Appellee.
appeal from the Department of Health and Social Services
("DHSS") Hearing Officer's decision concerning
Appellant's denial of long term care Medicaid benefits
due to her statutorily-excessive income. The appeal presents
four primary questions, namely whether: (i) this Court has
jurisdiction to hear the appeal; (ii) DHSS properly closed
Appellant's application due to excessive income; (iii)
the application denial and Fair Hearing violated
Appellant's due process rights; and (iv) DHSS violated
the Americans with Disabilities Act ("ADA") when it
denied Appellant's application.
issues in this appeal turn upon the eligibility requirements
under Delaware's Medicaid program, specifically when
income is considered "available" to an allegedly
incapacitated applicant and whether Delaware's
requirements comply with the requirements under Section 1396a
of the federal Medicaid statute. Because I find DHSS properly
denied Appellant's Medicaid application, I affirm the
Hearing Officer's decision. My reasoning follows.
AND PROCEDURAL BACKGROUND
March 9, 2016, Appellant Ruth Jones was admitted to the
Seaford Genesis Healthcare Center ("Genesis").
Genesis diagnosed Jones with Alzheimer's disease,
hypertension, pulmonary disease, and dementia. Based on her
diagnosis, Genesis determined Jones was incompetent and could
not make financial decisions for herself. Although Jones
first was admitted as a short-term patient, it quickly became
apparent that she would need extended 24-hour care.
2, 2016, Genesis applied for Long Term Care Medicaid (the
"LTC application") on Jones' behalf. That same
day, Jones, along with her daughter Rosemarie Tell, attended
an application interview with the Division of Medicaid and
Medical Assistance ("DMMA"). Because DMMA had
reason to believe, based on the LTC application, that
Jones' gross income exceeded the statutory limit for LTC
eligibility, DMMA explained Jones would need to establish a
Miller Trust in order to become Medicaid eligible. During the
interview and in the application, Tell presented herself
inaccurately as Jones' legal guardian. Although Tell
filed shortly before or after the interview a petition with
the Court of Chancery to be appointed Jones' legal
guardian, that petition remained pending and Tell was not
appointed guardian until October 14, 2016. During the
interview, DMMA provided Genesis and Tell with the first
"We Need" letter. This letter explained that Jones,
or Tell, would need to provide verification of the Miller
Trust's establishment and proof of legal guardianship by
June 17, 2016, in order to keep Jones' LTC application
5, 2016, DMMA sent a second "We Need" letter to
Tell because DMMA had not received the requested information.
Tell's guardianship application, however, was
"delayed," preventing her from establishing a
Miller Trust on Jones' behalf. There is no indication in
the record that Appellant advised DHSS of these delays. On
July 26, 2016, having received no response to its two letters
requesting documentation, DHSS denied Jones' LTC
application because her income exceeded the statutory limit
and she failed to establish a Miller Trust.
reapplied for LTC benefits, and on November 29, 2016, DHSS
received confirmation that Jones established a Miller Trust
during the month of November 2016. DHSS then notified Jones
that she was approved for benefits effective November 1,
2016. Because Jones' LTC application initially was
denied, Genesis incurred over $43, 000 in costs caring for
Jones between March and November 2016.
March 1, 2017, Jones, by and through Genesis, filed a request
for a Fair Hearing to review DHSS's application denial
from July 26, 2016. After several extensions and delays, the
Fair Hearing took place on August 9, 2017. At the Fair
Hearing, Genesis argued an incapacitated individual's
income cannot be counted toward the statutory Medicaid
eligibility limit because an incapacitated individual's
income is not "available" to the individual under
federal law. Genesis also argued that denying an
incapacitated individual's LTC application violated the
applicant's due process rights and constituted disability
discrimination in violation of the ADA.
written decision, the Hearing Officer ruled federal law did
not prohibit counting an incapacitated individual's
income, and that DMMA properly determined Jones' income
legally was available to her. The Hearing Officer also held
the July 26, 2016, application denial did not violate
Jones' due process rights because, under the United
States Supreme Court's decision in Goldberg v.
Kelly,  due process only applies when an
individual's public assistance benefits erroneously are
discontinued. Because Jones never received LTC benefits, the
Hearing Officer reasoned Jones' due process rights were
Hearing Officer further ruled DHSS properly closed Jones'
application because state agencies are obligated under
federal law to determine an applicant's LTC eligibility
within 90 days of receiving the LTC application. The Hearing
Officer concluded that DMMA provided Jones with all the
required notifications and requests for verification and
processed her LTC application in a timely manner under
applicable law. The Hearing Officer's decision did not
address Genesis's ADA claim. On November 11, 2017,
Genesis appealed the Hearing Officer's decision to this
appeal, Genesis argues the Hearing Officer erred in finding
Jones' income legally was available, contending DHSS
should have held Jones' LTC application open until the
Court of Chancery appointed a guardian. Genesis also asserts
the Hearing Officer erred in holding Jones' due process
rights were not violated by DHSS's denial of her LTC
application. Additionally, Genesis renews its argument that
DHSS's denial constituted disability discrimination in
violation of the ADA.
first argues this Court lacks jurisdiction to hear the appeal
because Genesis's request for a Fair Hearing was untimely
even though Genesis's appeal from the Hearing
Officer's decision below was timely. Alternatively, DHSS
contends it properly counted Jones' income as
"available" in determining her LTC eligibility.
DHSS also maintains due process was satisfied during the
application denial and the Fair Hearing processes. Finally,
DHSS argues Genesis's ADA argument is overly broad and
unsupported by law.
appellate court's review of a Board decision is limited.
The Court merely determines whether the decision was
supported by substantial evidence and free of legal
error. Upon review of an administrative
agency's findings, the Court "will not substitute
its judgment for that of an administrative body where there
is substantial evidence to support the decision and
subordinate findings of the agency." "Substantial
evidence is that which 'a reasonable mind might accept as
adequate to support a conclusion.' It is more than a
scintilla, but less than a preponderance of the evidence. It
is a low standard to affirm and a high standard to overturn.
If the record contains substantial evidence, then the Court
is prohibited from re weighing the evidence or substituting
its judgment for that of the agency." When
reviewing the Board's conclusions of law, the Court's
review is de novo.
DHSS waived its timeliness argument.
argues Jones' March 1, 2017, request for a Fair Hearing
was untimely and therefore the appeal before this Court is
time-barred. DHSS argues the 90-day time limitation to
request a Fair Hearing began to run when DHSS denied
Jones' LTC application on July 26, 2016. DHSS contends
the request for a Fair Hearing was filed approximately eight
months after Jones's LTC application was denied, the
request therefore was untimely, and this appeal by extension
also is untimely. DHSS argues the appellate authority of this
Court is jurisdictional and therefore cannot be waived by the
Delaware's Medicaid program, an LTC applicant may request
a Fair Hearing within 90 days of the application's
denial. Applicants seeking review of a Hearing
Officer's decision may file an appeal to the Superior
Court within 30 days of the Hearing Officer's
Under the waiver rule, issues or arguments that are not
raised to an administrative agency cannot be considered by a
reviewing court.... [T]he waiver rule "furthers the goal
of permitting agencies to apply their specialized expertise,
correct their own errors, and discourage litigants from
preserving issues for appeal."
DHSS did not argue to the Hearing Officer that Jones'
Fair Hearing request was untimely,  and that issue
was not addressed in the Hearing Officer's decision.
Because the timeliness issue was not raised to the Hearing
Officer, DHSS has waived that argument on appeal. Although
DHSS correctly argues that the Court's appellate
jurisdiction cannot be waived, DHSS is not contesting the
timeliness of Genesis's appeal to this Court. Rather,
DHSS disputes the timeliness of the request for a Fair
Hearing. That argument does not implicate this Court's
appellate jurisdiction because there is no question
Jones' appeal to this Court was timely. Accordingly,
because DHSS waived the issue of timeliness during the
hearing stage, it may not raise it on an appeal before this
DHSS properly closed Jones' LTC application because
Jones' income exceeded the statutory limit and she failed
to establish a Miller Trust.
argues it was improper for DHSS to close Jones' LTC
application when DHSS knew Jones was incapacitated and had no
legal guardian. Genesis argues this denial violated federal
mandates protecting incapacitated LTC applicants.
Additionally, Genesis argues DHSS erred by counting
Jones' income toward the statutory limits because
Jones' income legally was "unavailable" to her
due to her incapacity.
Substantial evidence shows DHSS reasonably believed Tell
served as Jones' legal guardian when her LTC application
was denied on July 26, 2016.
argues the record shows DHSS knew Jones had no guardian
because DHSS requested copies of Jones' guardianship
verification documents in both the June 2, 2016, and July 5,
2016, "We Need" letters. In other words, Genesis
argues DHSS's request for guardianship verification is an
admission that DHSS knew Jones had no legal guardian.
June 2, 2016, LTC application asks the applicant "[h]as
anyone been appointed as applicant's Legal Guardian/Power
of Attorney?" Jones' LTC application contains
a check-mark next to "Yes___" and lists
"Rosemarie Tell" as the name of Jones' legal
guardian. In the same text box, the application notes
"You will need to provide copies of Guardianship and/or
Power of Attorney papers.
June 2, 2016, and July 5, 2016, "We Need" letters,
DHSS directed Tell to provide guardianship verification
documents. At the Fair Hearing, DHSS testified
that Tell represented herself as Jones' legal guardian
and, by her representation, assumed responsibility for
completing the "We Need" letters.
Additionally, the Hearing Officer found Tell signed
Jones' LTC application as Jones' legal
the record supports the Hearing Officer's finding that
DHSS believed Jones had a guardian based on Genesis's and
Tell's representations in the LTC application. In view of
Tell's representation, DHSS sent Tell two "We
Need" letters requesting documents verifying her
appointment as guardian. Genesis argues the "We
Need" letters show DHSS knew Jones had no legal guardian
because the letters were asking for guardianship
verification. The request for verification, however, was made
after Tell presented herself to DHSS as Jones' legal
guardian. Jones' LTC application notes that a person
presenting herself as the applicant's legal guardian must
provide supporting documentation. In other words, checking
the box and signing the application was not sufficient proof
that Tell had authority to act on Jones' behalf. Sending
requests for guardianship verification, therefore, is
consistent with DHSS's alleged belief that Tell was
Jones' legal guardian.
substantial evidence shows DHSS had reason to believe Tell
already had been appointed Jones' legal guardian at the
time she filed the LTC application. This finding largely
makes no difference, however, because even if DHSS knew Jones
was incapacitated with no legal guardian, it properly applied
federal and state regulations regarding Jones' Medicaid
Section 1396a does not prohibit a state from counting an
allegedly incapacitated individual's income when
determining her eligibility for Medicaid.
argues DHSS erred by counting Jones' income in
determining her LTC eligibility. Genesis argues federal law
requires state Medicaid programs only to count income that
legally is available to an applicant. Genesis cites 42 U.S.C.
§ l396a(a)(l7), which provides, in relevant part,
"A State plan for medical assistance must . . . include
reasonable standards ... for determining eligibility for and
the extent of medical assistance under the plan which . ..
provide for taking into account only such income and
resources as are, as determined in accordance with standards
prescribed by the Secretary, available to the
applicant or recipient... ."
then argues federal law prohibits treating an incapacitated
applicant's income as available to the applicant because
the income cannot be liquidated. In support of this
assertion, Genesis cites 20 C.F.R. § 416.1201(a)(1),
which provides, in relevant part, "If a property right
cannot be liquidated, the property will not be considered a
resource of the individual . . . ." Genesis contends
the cited provisions create a federal mandate that prohibits
states from taking into account an incapacitated
applicant's income when determining the applicant's
eligibility for Medicaid.
however, misconstrues the meaning of "available
income" under Section l396a(a)(l7). Under that section,
a state's standard for determining eligibility only must
consider "available income" "in accordance
with standards prescribed by the Secretary [of
DHHS]." Genesis cites no standard
promulgated by the Secretary to define "available
income." Instead, Genesis reaches to an unrelated
provision of the federal register to suggest "available
income" means liquid resources under 20 C.F.R. §
416.1201, however, defines resources for the purpose of
determining eligibility for supplemental security income
("SSI") for the aged, blind, and
disabled. Genesis's attempt to conflate
"available income" for LTC benefits with a liquid
"resource" under the SSI program fails for two
reasons. First, Medicaid distinguishes between
"income" and "resources" and has separate
eligibility rules for each. The reference to a "liquid
resource" is wholly distinct from income.
there is nothing in Section 1396a from which this Court may
conclude Congress intended to incorporate a definition from
the regulations defining the SSI program. Although Section
1396a does incorporate definitions from other titles of the
federal code, such incorporation is done explicitly with
references to the precise provision supplying the
definition. This Court is not at liberty to
mix-and-match definitions from across the entire body of
federal law when the statute explicitly grants the DHHS
Secretary the interpretive power.
no provision in Section 1396a supports the assertion that
income is not available to incapacitated individuals.
Accordingly, neither Section 1396a nor Section 416.1202
prohibit states from taking into account the income of an
incapacitated individual in determining their eligibility for
DHSS properly counted Jones' income as legally
"available" under ...