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Prunckun v. Delaware Department of Health and Social Services

Supreme Court of Delaware

January 3, 2019

EDWARD and PAMELA PRUNCKUN, as parents and legal guardians of ROBERT PRUNCKUN, Plaintiffs-Below, Appellants,
DELAWARE DEPARTMENT OF HEALTH AND SOCIAL SERVICES, Defendant-Below, Appellee. MALCOLM and DOMINICA OLDHAM, as parents and legal guardians of ASHLEE OLDHAM, Plaintiffs-Below, Appellants,

          Submitted: November 28, 2018

          On appeal from the Superior Court of the State of Delaware C.A. Nos. N16A-05-010, N16A-05-009

         Upon appeal from the Superior Court. AFFIRMED.

          Francis G.X. Pileggi, Esquire, Brian D. Ahern, Esquire, Eckert Seamans Cherin & Mellott, LLC, Wilmington, Delaware. Of Counsel: Michael P. Flammia, Esquire, Eckert Seamans Cherin & Mellott, LLC, Boston, Massachusetts; Christopher E. Torkelson, Esquire (Argued), Eckert Seamans Cherin & Mellott, LLC, Princeton, New Jersey, for Appellant.

          Lauren E. Maguire, Esquire (Argued), Adria B. Martinelli, Esquire, Delaware Department of Justice, Wilmington, Delaware, for Appellee.

          Before STRINE, Chief Justice; VALIHURA, VAUGHN, SEITZ, and TRAYNOR, Justices, constituting the Court en Banc.


         I. Overview

         Ashlee Oldham ("Ashlee") and Robert Prunckun ("Robert") (collectively, "Recipients") are the only two Delaware Medicaid recipients housed at Judge Rotenberg Center ("JRC"), a facility in Massachusetts and the only facility in the United States known to use a skin-shocking device, namely a graduated electronic decelerator ("GED"), on its residents.[1] GED delivers an electric current to an individual's skin, producing a voltage of 66v through the skin. Side effects, aside from the shock, include reddening of the skin, potentially lasting for days, blisters, and anxiety. For years since the mid-2000s, while at JRC, Recipients' comprehensive behavioral treatment plans included GED and these services were covered by Medicaid with the knowledge and approval of Delaware's Department of Health and Social Services ("DHSS").

         But in 2012, the Center for Medicare and Medicaid Services ("CMS"), the federal agency charged with promulgation and enforcement of Medicaid regulations and the approval of certain waivers relevant here, advised the Massachusetts state agency responsible for Medicaid administration that continued use of GED by JRC would place that state's waiver program in jeopardy of losing federal funding. That waiver is part of a program Congress has authorized in order for certain persons with developmental disabilities to receive Medicaid services in a community setting, rather than in an institutional facility. It is known as the Home and Community Based Services ("HCBS") waiver program and it has provided such services to Recipients at issue here. Before a state can participate in the HCBS waiver program, it must first apply for a waiver from CMS. Thus, the use of GED by JRC threatened Massachusetts' waiver program.

         Following CMS's letter to Massachusetts, Delaware took measures to avoid placing its own HCBS waiver program at risk. In October 2013, Delaware, through DHSS, instructed JRC to cease using GED on the Recipients. It sought and received clarification from Delaware's own CMS region that the use of GED was prohibited. DHSS finally terminated JRC as a qualified provider after JRC refused to cease using GED. According to DHSS, both federal and state entities charged with enforcing Medicaid laws have deemed the use of GED unacceptable in the HCBS community-based context and generally unacceptable in modern day society.

         Although the procedural history is complex, as explained below, the gist of Appellants' challenge on appeal is that they were denied due process because Delaware's administrative hearing officer bifurcated proceedings to address what she concluded was a threshold issue, namely, whether GED is a covered Medicaid service under the Medicaid Home and Community Based Waiver ("HCBS Waiver") program. Instead, Recipients contend that they should have been allowed to introduce evidence that GED is medically necessary, and that by removing GED services, DHSS has threatened Recipients' ability to remain in a community-based setting-a conclusion they desired to prove through evidence and expert testimony. Accordingly, Recipients, by and through their parents and guardians ("Guardians") (collectively, "Appellants"), appeal from a January 15, 2016 decision (the "Final Decision") of Delaware's Medicaid Fair Hearing Officer ("Hearing Officer"). Appellants contend that the Hearing Officer violated their due process rights in bifurcating the Fair Hearing and in concluding that aversive treatment was no longer a "covered" service under Delaware's Medicaid waiver program.

         Pending this appeal, as a result of transition agreements entered into by the parties, Recipients continue to receive community-based services, including the availability of GED, at JRC to this day.[2] CMS has prohibited the use of federal funding to JRC, and although the State of Delaware thereafter picked up the tab, it ceased making payments to JRC in 2014 after Delaware's contract with JRC expired.[3] But the State of Delaware agreed to pay JRC in full once the Recipients' transition out of JRC is complete.

         II. Facts and Procedural Background

         Recipients are adult Medicaid beneficiaries and Delaware citizens with uniquely severe, behavioral, developmental, and emotional disorders, disabilities, and autism. They both require intensive behavioral health services in order to treat their violent, self-injurious, and potentially life-threatening conditions. Both received medical assistance benefits pursuant to the Delaware Home and Community Based Services Medicaid Waiver ("HCBS Waiver"), a Medicaid option available to states under Section 1915(c) of the Social Security Act (the "Act").[4] HCBS waivers allow states to offer services to individuals who are elderly or have disabilities and live in a community setting in lieu of institutionalization. In Delaware, the Division of Developmental Disabilities Services ("DDDS"), a division within Delaware's Department of Health and Human Services ("DHSS"), administers Delaware's HCBS Waiver program.

         The Recipients are adult males and both have extensively documented histories of self-injurious, aggressive, and destructive behavior. For example, Robert's behavior included throwing chairs, destroying property, kicking and biting others, smearing his feces, urinating on the floor and in electrical outlets, banging his head on objects, refusing medical care, and jumping out of a second story window twice, which caused severe orthopedic injuries, including a broken pelvis. He has been diagnosed with intermittent explosive disorder, impulse control disorder, pervasive developmental disorder, and personality change secondary to brain injury.

         Ashlee's behavior included banging his head, causing severe head injury, self-induced vomiting, dangerous weight loss, biting others, kicking and spitting, scratching and biting himself, inappropriate urination and defecation, refusing medical care, and violently attacking staff. When he was enrolled in the Delaware's Autism Program, twenty workers' compensation claims were filed by staff members injured by Ashlee's unpredictable lunging and biting-all within a fifteen-month period.

          After a long history of unsuccessful treatment and institutionalization for their severe behaviors and disabilities, both Ashlee and Robert, in 2004 and 2005, respectively, entered the JRC in Massachusetts where they remain. It is one of the few facilities in the country to employ aversive treatment procedures. JRC is the only facility in the United States that utilizes a graduated electronic decelerator device.

         A Probate and Family Court in Massachusetts, in considering Robert's Proposed Medical Behavior Modification Treatment Plan dated June 11, 2013, explained that JRC uses the Graduated Electronic Decelerator 4 device ("GED-4"), which is manufactured by JRC. That device "consists of a transmitter operated by the JRC staff, a battery-operated receiver/stimulator worn by the JRC client and an electrode that is connected to the receiver/stimulator by a cable."[5] The receiver/stimulator delivers a two-second "low-level surface application of electrical current to the client's skin upon command from the transmitter."[6] The GED-4 "produces a current of 41 mA RMS, with a voltage of 66v when applied to typical skin resistance of 1.6 kilohms."[7] "One or more electrical stimulations, (depending on the client's particular treatment program) are administered to the client after he engages in a targeted behavior."[8] The side effects include reddening of the skin, blisters, and anxiety "during the brief period of time between the point in time when the teacher or aide announces that the client has engaged in a targeted inappropriate behavior and the point at which the skin shock is administered."[9]

         Appellants maintain that as a result of their ongoing treatment at JRC, the Recipients no longer require any restraint, and have avoided highly restrictive institutional or isolated settings and debilitatingly high dosages of psychotropic drugs that once were the norm for them. They point out that the use of GED is part of their individualized treatment plans approved by a Massachusetts Probate and Family Court judge who issued orders on their plans following an evidentiary process. They also point out that until 2013, DHSS assented to the Recipients' treatment plans at JRC. Although Appellants claim the aversive treatment has been the most successful thus far, it is, by far, the most controversial. As the State aptly observed, this case is largely about the use of GED, and changes to the federal and state rules that have impacted the issue of whether GED is an acceptable and appropriate treatment modality. That leads us to explaining the relevant regulatory and legal backdrop, and the evolving views of GED and aversive treatment as reflected in the Medicaid regulatory system.

         Overview of the Medicaid Waiver Program

         Both sides appear to acknowledge that federal and state standards have evolved over time in response to clinical practice and societal norms. But they disagree as to whether certain of these regulatory changes actually prohibited GED, whether those various regulatory changes and pronouncements have the force and effect of law, what deference they deserve by hearing officers and courts, and whether Appellants were given proper notice of them. One of the issues we have to unravel concerns Appellants' contention that when the State of Delaware sent letters to JRC in October 2013 demanding discontinuation of certain aversive treatments, including GED, that demand was based upon correspondence from the federal government sent to Massachusetts, which is Region I, not Region III, which encompasses Delaware. Appellants contend that correspondence did not prohibit GED in that it did not have the force of law, was not sent to the Guardians, and that by the time Delaware explicitly did prohibit GED, Appellants had already asserted their right to a Fair Hearing. Accordingly, Appellants contend the regulatory changes were a post hoc manufactured litigation maneuver targeting them, as opposed to a generalized prohibition, and as such, violated their due process rights.

         DHSS responds that the 2013 CMS correspondence did prohibit GED, and in any event, Appellants are not prejudiced because Recipients presently continue to have the controversial GED treatment available to them at Delaware's eventual expense by virtue of transition agreements entered into between DDDS and the Guardians on April 28, 2015. DHSS further contends that by the time of the Fair Hearing, the prohibition at both the federal and state levels had become clear if it was not before, and so it made sense to determine, as a threshold matter, whether GED is now a covered Medicaid service.

         By way of regulatory background, under the Medicaid regime, states and CMS enter a contract called the State Medicaid Plan. CMS is the federal agency charged with promulgation and enforcement of Medicaid regulations. Region I of CMS included Massachusetts and the JRC. Delaware is in Region III. Under a state's Medicaid Plan, the state must provide all federally mandated Medicaid services, as well as any optional services it elects to cover at its discretion. Both the mandatory and optional components comprise the state's Medicaid Plan. CMS funds a percentage of the costs. In return for federal funds, the state must comply with requirements imposed by Title XIX of the Act.[10]CMS will not fund or reimburse a state for prohibited services. In Delaware, the Medicaid program is generally overseen by DHSS. DHSS contends GED is now a prohibited service.

         CMS has the authority to waive certain provisions of the Medicaid laws.[11] The HCBS Waiver is a Medicaid option available to states under Section 1915(c) of the Act.[12]Nearly all states, including Delaware, offer services to persons with intellectual and developmental disabilities through a Section 1915(c) HCBS Waiver. This allows such persons to live in a community setting in lieu of institutionalization. The DDDS administers Delaware's HCBS Waiver.

         The HCB Setting Rule sets forth requirements governing the criteria and characteristics of settings eligible for reimbursement for home and community-based services provided under Sections 1915(c), 1915(i), and 1915(k) of the Medicaid statute. The HCB Setting Rule defines person-centered planning requirements for individuals in Medicaid-funded community settings under HCBS Waivers. The rule seeks to ensure individual rights of privacy, dignity, respect, and freedom from coercion and restraint in home and community-based settings. The State has argued that the move to eliminate electric shock as a covered Medicaid service began in 2010 with the passage of the Affordable Care Act[13] and the Setting Rules proposed and promulgated thereunder.[14] On April 15, 2011, CMS published proposed HCB Setting Regulations.[15] CMS published the proposed HCB Setting Regulations again on May 3, 2012.[16]

         The HCB Setting Rule was published as a final regulation on January 16, 2014.[17] It became effective on March 17, 2014 and, consistent with the May 2012 proposed version, it bans the use of coercion and restraint in community settings. The final HCB Setting Rule provides in relevant part:

Home and community based settings must have all of the following qualities, and such other qualities as the Secretary determines to be appropriate, based on the needs of the individuals indicated in their person-centered service plan:
Ensures an individual's rights of privacy, dignity and respect, and freedom from coercion and restraint.[18]

         The adoption of the HCBS Setting Rule was preceded by a lengthy public comment process.[19]

         The DDDS waiver was set for renewal in 2014 in Delaware. In its revised waiver application submitted to CMS in March 2014, DHSS inserted a provision in its Waiver application explicitly stating that "[t]he use of averse conditioning defined as the contingent application of startling, painful or noxious stimuli is prohibited."[20] On April 1, 2014, Delaware's Medicaid division published notice of the waiver in the Delaware Registry as a proposed regulation.[21] A public comment period of thirty days followed. Delaware's HCBS Waiver was published in the June 2014 Delaware Registry as a final regulation.[22]

         DDDS also published notice of the Delaware HCBS Waiver renewal application on its website.[23] Public meetings were held on March 4, 5, and 6, 2014 in each of the three counties. A written summary of the proposed changes (the same document available on the DDDS website) was provided to the public at the meetings, and the complete waiver application was available for public view. The Delaware HCBS Waiver was approved by CMS and became effective July 1, 2014.[24]

         On October 7, 2015, DDDS amended its policies to incorporate the definition of "aversive" developed and adopted by the National Association of State Directors of Developmental Disabilities Services ("NASDDDS"). This revised Delaware Behavior and Support Plan prohibits a number of practices, including Averse Interventions.[25] The definition of "Averse Interventions" is:

Interventions intended to inflict pain, discomfort and/or social humiliation or any intervention as perceived by the person to inflict pain, discomfort, or social humiliation in order to reduce behavior. Examples of aversive interventions include, but are not limited to, electric skin shock, liquid spray to one's face and strong, non-preferred tastes applied in the mouth.[26]

DHSS contends that there is also a contract-based prohibition on the use of GED. By contract with DDDS, all Delaware-qualified Medicaid providers who serve individuals through DDDS programming agree to comply with all statutes, regulations, policies and procedures of DDDS.[27] In DDDS's contract with JRC, JRC agreed to comply with "all State and Federal licensing standards and all other applicable standards as required to provide services under this Contract."[28] DDDS's contract with JRC expired on September 30, 2014, when JRC refused to cease use of GED on Recipients.[29]

         Overview of the Procedural Backdrop

         It is against the evolving regulatory framework that we consider the issues raised here. Although Appellants largely base their due process challenge on alleged flaws in the administrative process, in the end, both the Hearing Officer and the Superior Court viewed the principal and threshold issue as an issue of Medicaid coverage, and specifically, whether GED aversive treatment is a covered Medicaid service.

         The most direct impetus for changes in Delaware's HCBS Waiver leading to the prohibition on GED treatment appears to stem from correspondence sent to Massachusetts by the federal government in 2012. On December 14, 2012, Richard McGreal, a CMS Associate Regional I Administrator, issued a letter to the Secretary of Massachusetts' Office of Health and Human Services ("Region I Letter") enclosing a draft report assessing Massachusetts' HCBS Waiver. The Region I Letter stated in relevant part:

Residential and service settings operated by the Judge Rotenberg Educational Center (JRC) are of particular concern. The State indicated that JRC is the only provider currently using Level III interventions, described in the September 14th response letter as, "painful, aversive stimuli and deprivation procedures." Level III interventions include use of an electronic shock device known as a graduated electronic decelerator, or GED, in use solely by JRC. . . .
Residential facilities and the use of aversive interventions including GED and the use of food deprivation procedures are regulated by the State. The State has described its movement toward positive behavioral reinforcement processes. However, as reasonable people will agree that electronic shock and withholding of meals have no place in their homes or communities, we therefore request that the State provide immediate assurance that the use of Level III aversive interventions have been eliminated for any and all individuals enrolled in the HCBS waiver. . . . At a minimum, the settings in which waiver participants are served must not include any in which State regulation authorizes the use of Level III interventions. This condition must be met no later than the effective date of the waiver renewal. In the interim the State should cease all billing for FFP for HCBS services provided to individuals residing in residences practicing these procedures.[30]

In light of the CMS directive to Massachusetts, and in preparation for its application to CMS for its own HCBS Waiver set for renewal in 2014, DDDS met with the Guardians to explain that JRC would no longer be permitted to use GED on the Recipients.[31]

         In letters dated October 8 and 13, 2013 to the JRC, DHSS advised JRC that it was aware of the Region I Letter. The DDDS also cited to language of Delaware's HCBS Waiver and attached a copy of Delaware's Policy on Behavior and/or Mental Health Supports which prohibited "the use of mechanical restraints, corporal punishment or threat of corporal punishment . . . physical interventions which cause pain . . . ."[32] It warned JRC that services provided to Delaware's two residents at JRC must comply with Delaware's HCBS Waiver standards. Accordingly, it directed JRC to submit a plan to DDDS "outlining a timeframe for the discontinuance of the use of all aversive[s]," and stated that "discontinuation of all aversive[s] must be completed within 60 days from receipt of this letter."[33]

         In response, on November 27, 2013, Appellants filed a Request for a Fair Hearing with DHSS, arguing that GED treatment services should continue uninterrupted.[34] In response to this request, on December 16, 2013, DHSS filed a Fair Hearing Summary which stated that "[n]o action was taken," and that assistance was being continued.[35] DDDS filed a Motion to Dismiss this request on March 6, 2014. A clarification conference was thereafter conducted to discuss procedural and substantive issues and DDDS filed a supplemental Motion to Dismiss. The hearing was set for July 15, 2014. The administrative proceedings were stayed while Appellants pursued an appeal in the Superior Court of the Hearing Officer's disposition of April 25, 2014, and specifically, her determination that the reasonableness and necessity of using Level III interventions was not at issue.[36] The appeal was dismissed on February 10, 2015 as an improper interlocutory appeal and remanded. The hearing was reset for June 30, 2015. Again, the parties requested clarification on the scope of the hearing and DHSS renewed its Motion to Dismiss. Appellants expressed concern that they were not given the opportunity to fully brief the issues raised by DHSS in its Motion in Dismiss and that they were entitled to an evidentiary hearing, including evidence of medical necessity of the GED, prior to oral argument on DHSS's Motion to Dismiss.[37]

         In the midst of the procedural wrangling over the scope of the continued Fair Hearing, Delaware's Medicaid director, Stephen Groff, sought clarification from Region III on the use of the GED on December 23, 2014 since Delaware is in Region III, not Region I. CMS responded on March 10, 2015 to Mr. Groff (the "2015 CMS Letter"). In that letter from Ralph Lollar, Director, Division of Long Term Services and Support of CMS, Lollar confirmed to DDDS that electric shock treatment is inconsistent with HCBS settings. He wrote:

Residential facilities and the use of aversive interventions including electrical shock using a graduated electronics decelerator (GED) are regulated by the State. The State asserts that the use of aversive interventions is prohibited in the state's HCBS programs. The State has requested clarification from [CMS] regarding the use of GED devices and denial of nutritionally adequate diets in home and community-based settings. Electric shock therapies and withholding of meals are not characteristic of HCBS settings; we therefore request that the State provide immediate assurance that the use of these aversive interventions has been eliminated for any and all settings in which individuals enrolled in Medicaid live or receive services.
Additionally, per the State's letter, procedures that include physical interventions which cause pain are considered aversive interventions prohibited by the State. Therefore, this condition must be met immediately and these practices must cease and desist. The State should cease all billing for FFP [federal financial participation] for individuals receiving Medicaid services through providers practicing any of the above referenced procedures.[38]

         Following briefing and oral argument on DHSS's Motion to Dismiss Appellants' Fair Hearing request, the Hearing Officer issued an order on November 30, 2015 (the "Bifurcation Order"). The Hearing Officer determined that "both the federal regulations and even more narrowly, DHSS's own policy require a Fair Hearing to go forward."[39] She further ruled that "before considering whether the GED treatment services are medically necessary, the first issue that must be decided is whether these services are indeed covered . . . ."[40] Accordingly, the Hearing Officer ruled that "the Fair Hearing shall proceed as a bifurcated process considering the issue of Medicaid coverage first, followed by the medical necessity of GED treatment services, if Medicaid coverage is sustained."[41]

         Appellants thereafter filed a Motion in Limine arguing that they should be able to present evidence related to the reasonableness and necessity of aversive services at the Fair Hearing. That issue, along with the primary coverage issue, was considered at the Fair Hearing which occurred on January 13, 2016. The Hearing Officer admitted 209 exhibits into evidence without objection from either party.

         Following the Fair Hearing, on April 21, 2016, the Hearing Officer issued a final decision (the "Final Decision").[42] The Hearing Officer first explained her decision to deny Appellants' Motion in Limine wherein Appellants had sought to present evidence that GED was a medically necessary treatment for Appellants. Appellants also had contended that the issue of coverage was, in part, dependent upon the issue of medical necessity. DHSS had countered that while all covered services must be medically necessary, not all medically necessary treatments are covered.

         The Hearing Officer ruled that "[i]f the GED treatment services at issue are indeed prohibited services under Delaware's Medicaid program, medical necessity simply cannot be reached."[43] However, "if the GED treatment services are covered services under Delaware Medicaid, then arguably, the state erred in instructing JRC to discontinue the services and medical necessity should be considered."[44] Accordingly, the Hearing Officer ruled that "contrary to Appellants' assertions, a medically necessary treatment does not automatically equate to Medicaid coverage."[45]

         The Hearing Officer next considered whether electric shock treatment was a covered service under Medicaid and concluded that it was not. The Hearing Officer summarized the arguments on both sides that had been presented at the January 13, 2016 Fair Hearing.

         DHSS contended that GED was prohibited by both state and federal law. As for state law, DHSS pointed to the HCBS Waiver which was duly enacted and approved by CMS on July 1, 2014 and it had the force of law.

         As for the federal level, DHSS pointed out that the 2015 CMS Letter had been signed by the head of the CMS Division of Long Term Care Services-the CMS branch that oversees the implementation of the HCBS Rule in all Medicaid funded community services nationwide. Thus, DHSS contended that it applied not solely to Regions I or III, but rather, it applied nationwide. According to DHSS, this letter meant that federal law prohibited the use of electric shock in all community settings nationwide.[46] Thus, DHSS argued that the prohibition on GED aversive treatment represented a considered judgment by state officials, through the HCBS Waiver, and by federal officials, through the CMS letters, that the GED treatment services, though formerly covered, would no longer be a covered Medicaid service.

         Appellants, on the other hand, contended that the CMS letters are neither policy nor regulations, but rather, are guidance only. They argued that the controlling regulation is the HCBS Setting Rule (which became effective March 17, 2014) which refers to the use of "coercion or restraint," but which does not specifically refer to aversives, let alone GED in particular. In addition, Appellants argued that in the renewed HCBS Waiver, DDDS, by eliminating GED as a treatment modality, has undermined the goals of the waiver program by eliminating Appellants' ability to remain in a community-based setting.

         After considering the arguments, along with 209 exhibits submitted by the parties, the Hearing Officer ruled that "the evidence supports that the DDDS instruction in October 2013 to JRC to cease using GED treatment services was correct and well within its authority under the Delaware HCBS Waiver."[47] Further, she held that "[t]he fact that the duly promulgated Delaware HCBS Waiver carries the force and effect of law cannot be seriously disputed."[48]

         The Hearing Officer then rejected Appellants' argument that the CMS letters do not constitute regulatory authority. Rather, she concluded that "an agency interpretation of its own regulation is authoritative."[49] She explained her reasoning as follows:

[T]he CMS letter to Delaware dated March 10, 2015 was authored by the Director of the CMS Division of Long Term Care Services, which is the CMS branch responsible for overseeing the implementation of the HBCS Rule in all Medicaid funded community services nationwide. Certainly, a response from the national Director of the CMS branch responsible for the HCBS waivers that is directly on point should be given substantial deference. Moreover, review of the CMS letter to Delaware finds that the text specifically references GED as a prohibited aversive not covered under the HCBS Waiver. Further, the CMS letter to Delaware clearly mandates the state should "cease all billing for FFP [federal financial participation] for individuals receiving Medicaid services through providers practicing any" aversive interventions. Appellants' argument that GED treatment services remain covered under Medicaid as a behavioral intervention is simply not supported.[50]

         Finally, the Hearing Officer rejected Appellants' contention that they were somehow limited on the coverage issue because they could not present evidence as to medical necessity to support their coverage position and that the Hearing Officer had restricted the Fair Hearing to argument only. She emphasized that, "[t]o be clear, this Fair Hearing Officer's [Bifurcation Order] in no way limited either the Appellants' or DHSS's ability to present evidence and/or testimony to prove Medicaid coverage in the first part of this Fair Hearing."[51] She explained:

[M]edical necessity does not automatically guarantee Medicaid coverage. At the onset of this Fair Hearing, this Fair Hearing Officer asked both sides if there would be any witnesses presented. Apparently, as stated on the record, Appellants asked DHSS, without clarification from this Fair Hearing Officer, if witnesses were permitted during the first part of this Fair Hearing. DHSS advised that it understood the first part of the Fair Hearing was limited to argument only. Again, this Fair Hearing Officer did not limit either sides' ability to present witnesses and/or testimony to provide Medical coverage in the first part of this Fair Hearing. Although Appellants argued that they had to present witnesses and testimony on medical necessity to prove Medicaid coverage, this argument is also unsupported. Consequently, denying Appellants' Motion in Limine did not limit Appellants' ability to provide testimony to support the Medicaid coverage.[52]

         The Guardians filed an administrative appeal of the Hearing Officer's Final Decision in the Delaware Superior Court pursuant to 31 Del. C. § 520. The Guardians argued that they had received inadequate notice of DHSS's treatment mandates, that DHSS provided an inadequate Fair Hearing summary with shifting legal justifications for its actions, and that DHSS engaged in coercive and prejudicial conduct resulting in a denial of due process. They argued further that the Hearing Officer's decision was not supported by substantial evidence and that it was incorrect because electronic shock treatment was and remains a covered service.

         Following briefing and oral argument, the Superior Court rejected each of these contentions in an opinion dated January 30, 2018. First, it concluded that bifurcating the Fair Hearing did not result in a denial of due process. Further, "the parties were not limited in their ability to allow evidence regarding Medicaid coverage, including by witness testimony."[53] Thus, it ruled that "[h]ad the Hearing Officer determined that GED was a covered service, no doubt the Guardians would have had a full opportunity to present their case in support of medical necessity."[54]

         Next, the Superior Court concluded that both state and federal law support the Hearing Officer's conclusion that aversives are not a Medicaid covered service. On the state level, it held that the HCBS Waiver, in providing that "[t]he use of averse conditioning, defined as the contingent application of startling, painful, or noxious stimuli is prohibited," "undoubtedly prohibits the use of GED and terminates its coverage as a Medicaid service."[55] Moreover, the HCBS Waiver has "the force and effect of law" as it was validly promulgated pursuant to legislative authority. The Superior Court explained:

Here, DHSS amended its waiver through the formal rulemaking process by gathering input from providers and advocates, convening public hearings and comment, and publishing notice of the waiver as a proposed final regulation. Delaware's HCBS waiver therefore carries the force and effect of law and substantiates the Hearing Officer's conclusion-aversives are not Medicaid covered services.[56]

         The Superior Court also rejected Appellants' argument that GED was a necessary behavior support service and thus was covered under Delaware's HCBS Waiver. It reasoned that "[a]versives cannot be prohibited outright by the waiver, but also-as the Guardians propose-covered by the waiver."[57]

         As to the prohibition on GED at the federal level, the Superior Court concluded that the 2012 Region I Letter and the 2015 CMS Letter are agency interpretations of CMS's own regulation "and are therefore entitled to mandatory judicial deference."[58] Further, the HCBS Setting Rule, which assures an individual's right to freedom from coercion and restraint, was interpreted by CMS as prohibiting the use of aversives such as GED. According to the Superior Court, "[s]uch an interpretation is entitled to mandatory judicial deference."[59] Thus, "according to federal law, state law, and the federal agency tasked with interpreting the HCBS Rule, the Hearing Officer's conclusion that GED is not a Medicaid covered service is correct."[60]

         As to the various procedural due process challenges, the Superior Court rejected them and observed that the "Guardians offer no evidence that they were unprepared, no evidence that notice was not received, or that the hearing was held without them, and nothing to the effect that they did not understand the issues or the bases for the decision in question."[61] In fact, "the Guardians received exactly what they sought"-namely, "[t]hey engaged in a full evidentiary Fair Hearing in which they were prepared to argue the issues raised, permitted to produce any evidence on the issue of Medicaid coverage, and to raise arguments as to why aversives were still Medicaid Covered Services."[62] Accordingly, the Superior Court concluded that granting reversal would be elevating form over substance.

         Finally, the Superior Court rejected Appellants' claim based on Title II of the Americans with Disabilities Act ("ADA") as it had not been fairly raised in the proceedings below.

         III. Issues on Appeal

         Appellants raised three issues on appeal. First, they argue that the administrative process preceding the Hearing Officer's decision violated their due process rights. Second, they contend that aversive treatments (and specifically GED) are covered under Delaware's Medicaid waiver program and that their rights were violated by DHSS through post hoc rule-making and interpretations. They contend that because an individual's specific medical needs are integral to the issue of whether or not a particular service might be "covered" under the HCBS Waiver, the Hearing Officer erred in precluding evidence regarding Appellants' medical needs. Finally, they contend that the Final Decision constitutes prohibited discrimination by DHSS against Appellants in violation of Title II of the Americans with Disabilities Act ("ADA").

         IV. Standard of Review

         The Final Decision of the Hearing Officer was subject to review by the Superior Court pursuant to 31 Del. C. § 520.[63] The Superior Court was required to determine whether the Hearing Officer's Final Decision was supported by substantial evidence and free from legal error.[64] Our standard of review "mirrors that of the Superior Court."[65]"Where there is a review of an administrative decision by both an intermediate and a higher appellate court and the intermediate court received no evidence other than that presented to the administrative agency, the higher court does not review the decision of the intermediate court, but, instead, directly examines the decision of the agency."[66] Further, "[o]n appeal from an administrative agency the reviewing court must determine whether the agency ruling is supported by substantial evidence and free from legal error."[67]Substantial evidence is that which a reasonable mind might accept as adequate to support a conclusion.[68] Questions of law are reviewed de novo.[69]

         V. Analysis

         A. The Procedural Due Process Challenges

         Although framed primarily as a series of due process challenges, Appellants' main challenge raises a question of Medicaid coverage, namely, whether aversive treatment, including the use of a GED, is covered. They challenge the Hearing Officer's decision to consider that threshold question first, and argue that the procedure employed by the Hearing Officer deprived them of their right to a meaningful, pre-deprivation process and hearing. The foundation for this right, according to them, is constitutional, statutory, and regulatory in nature.

         DHSS contends that CMS's and DHSS's determination to no longer fund what they deem an intolerable practice is a regulatory determination, which Appellants have no legal right to challenge. Rather than being targeted discrimination, DHSS contends that CMS's and DHSS's prohibitions against coercion and the use of aversives are not adjudications, but rather, are duly promulgated regulatory and policy decisions that apply to all Medicaid-qualified providers and recipients. Thus, DHSS contends that no hearing was required because the decision to ban GED was not based on individualized findings. Rather, CMS directed, and DHSS determined, as a matter of public policy, that using such intolerable and coercive methods to enforce behavioral compliance was unacceptable for all Medicaid recipients receiving home and community-based services.

         DHSS relies on the United States Supreme Court's 1915 decision in Bi-Metallic Investment Co. v. State Board of Equalization[70] for the proposition that regulatory acts that apply broadly, unlike adjudications, do not trigger individual rights to challenge such policy decisions. In Bi-Metallic, the Supreme Court held that procedural due process rights did not apply to the enactment of legislation when the Colorado Tax Commission and the State Board of Equalization had ordered a 40% increase in the valuation of all taxable property in Denver. The plaintiff sought to enjoin enforcement of the order arguing that it had been denied a right to a hearing. The Supreme Court held that a hearing was not required for each affected property owner prior to the enactment of the generally applicable tax increase, reasoning that:

Where a rule of conduct applies to more than a few people, it is impractical that everyone should have a direct voice in its adoption. The Constitution does not require all public acts to be done in a town meeting or an assembly of the whole. General statutes within the state power are passed that affect the person or property of individuals, sometimes to the point of ruin, without giving them a chance to be heard. Their rights are protected in the only way that they can be in a complex society, by their power, immediate or remote, over those who make the rule.[71]

         A number of cases since Bi-Metallic have held that in altering substantive rights of people through the enactment of rules of general applicability, a legislature generally provides all of the constitutionally required process that is due simply by enacting the statute, publishing it, and to the extent it regulates private conduct, affording those affected a reasonable opportunity to familiarize themselves with the requirements and to comply.[72]

         Applying this principle in the Medicaid context, a number of cases have held that a hearing need not be granted when either state or federal law requires automatic grant adjustments for classes of Medicaid recipients unless the reason for an individual appeal is an incorrect grant computation.[73] Relying on these authorities, DHSS maintains that both the federal and State's ban on coercion in home and community-based settings reflected broad policy determinations at the federal and state levels, did not involve individual findings regarding the Recipients, is governed by the Bi-Metallic line of cases, and thus, no hearing was required at all. They also cite to Medicaid regulations which state that no hearing is required "if the sole issue is a federal or state law requiring an automatic change adversely affecting some or all beneficiaries."[74]

         Appellants, on the other hand, rely on the Supreme Court's seminal decision in Goldberg v. Kelly, [75] which involved the question of what process was due to recipients who faced termination of welfare benefits. Appellants argue that they were entitled to procedural due process before the proposed termination of GED treatment in October 2013, including timely and adequate notice detailing the reasons for termination and a meaningful, pre-deprivation evidentiary hearing. They claim that these rights, though derived from Goldberg, are also embedded in federal and state laws and regulations.

         In particular, Appellants cite to a number of federal regulations within the Medicaid regulatory scheme that they contend apply in the context of a threatened termination of Medicaid benefits.[76] They contend that Delaware regulations either mirror or expand the procedural due process rights of Medicaid beneficiaries beyond the federal requirements.[77]Further, they argue that the Delaware Social Security Manual requires "adequate notice" even when changes in federal or state law require automatic adjustments for benefits rendered to certain classes of individuals, and even if no hearing is required.[78]

         Here, Appellants face the termination of GED treatment (including the termination of federal funding) that had, for many years, been a covered Medicaid service. But, Appellants have continued to have these services available through the present, and the State has committed to pay for all of their services at JRC until Ashlee's and Robert's transition out of JRC is complete.[79]

         Under federal law, states choosing to participate in Medicaid must provide a core set of mandatory services to qualified beneficiaries.[80] States may also cover other optional categories of services. These optional services are then part of the state's Medicaid plan. As such, they are subject to the requirements of federal law.[81] Factored into this mix is our recognition that both the federal and state governments are entitled to make policy decisions as to which services are no longer consistent with community-based settings.[82]Given this unique factual scenario, the question here is: what process was due?

         We first consider the issue of constitutional due process and address Appellants' contention that they were entitled to an evidentiary hearing prior to the State's "action" in sending letters to JRC in 2013 demanding termination of GED. They rely heavily on Goldberg, where the United States Supreme Court held that before a state can terminate a recipient's welfare benefits, due process requires that the recipient be afforded an adequate hearing.[83] The Supreme Court said, in that context, that due process requires: (i) timely and adequate notice detailing the reasons for a proposed termination; (ii) an effective opportunity for the recipient to defend by confronting any adverse witnesses and by presenting arguments and evidence orally; (iii) retained counsel, if desired; (iv) an impartial decision-maker; (v) a decision resting solely on the legal rules and evidence addressed at the hearing; and (vi) a statement of the reasons for the decision and the evidence relied upon.[84]

         Federal regulations require that a state agency must provide a "fair hearing" which satisfies the Goldberg requirements.[85] These requirements are imputed to the states via the Fourteenth Amendment and "are only triggered when adverse actions, such as the denial of benefits, are implemented by state action."[86]

         Notably, the Supreme Court in Goldberg focused on welfare benefits needed for basic subsistence. In addition, the Supreme Court declined to reach the issue of "whether due process requires only an opportunity for written submission, or an opportunity both for written submission and oral argument, where there are no factual issues in dispute or where the application of the rule of law is not intertwined with factual issues."[87]

         Several years after Goldberg, in Mathews v Eldridge, [88] the Supreme Court rejected the contention that a pre-termination evidentiary hearing (as opposed to a post-termination hearing) was required before termination of social security disability benefits. It observed that "[o]nly in Goldberg has the Court held that due process requires an evidentiary hearing prior to a temporary deprivation."[89] In Goldberg, "it was emphasized there that welfare assistance is given to persons on the very margin of subsistence."[90] The Court observed in Mathews that eligibility for disability benefits, by contrast, is not based upon financial need.[91]

         In Mathews, the Supreme Court observed further that "'[d]ue process is flexible and calls for such procedural protections as the particular situation demands.'"[92] Reflecting the flexibility inherent in the due process analysis, the Supreme Court stated that "[t]he fundamental requirement of due process is the opportunity to be heard 'at a meaningful time and in a meaningful manner.'"[93] Further, it held that "resolution of the issue whether the administrative procedures provided here are ...

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