Medicaid Litigation Strategies: Appealing Elder Law Decisions

NJ INSTITUTE FOR CONTINUING LEGAL EDUCATIONSOPHISTICATED ELDER LAWAUGUST 10, 2017Presented by Donald D. Vanarelli, Esq.___________________Certified Elder Law AttorneyAccredited VA AttorneyRecipient, Lifetime Achievement AwardBy New Jersey State Bar Ass’n, Elder and Disability Law SectionNamed to the NJ “Super Lawyer” list, 2007 - Present

MEDICAID LITIGATION STRATEGIES Donald D. Vanarelli, Esq.

APPEALING AN UNFAVORABLE ELIGIBILITY DETERMINATION • Applicant has a right to an administrative appeal: “fair hearing.” • Applicant must appeal in writing within 20 days of receipt of denial notice. N.J.A.C. 10:49-10.3.

APPEALING AN UNFAVORABLE ELIGIBILITY DETERMINATION (CONT’D) • No required format for fair hearing request: • “any clear expression ... [of] desire to present their case to higher authority.” N.J.A.C. 10:49-10.3(b)(1). • If timely appeal filed, State must grant a fair hearing.

CONTINUING BENEFITS PENDING APPEAL • If appeal involves reduction/termination in benefits, claimant may request that services continue until appeal is decided, unless sole issue is question of federal/state law or policy. • If claimant does not prevail at hearing, Medicaid may recover the costs of services provided.

PREPARATION FORFAIR HEARING N.J.A.C. 1:10B–10.1: (a) ... Agency ... shall provide ... Opportunity to review the entire case file and all documents and records to be used in the hearing.... (b) If a party wants information other than what is provided in (a) above, the party must request permission from the judge... [for] good cause.

PREPARATION FOR HEARING: INTERROGATORIES Interrogatories should request: • identity of the person(s) answering/assisting with interrogatories; • person(s) who reviewed the interrogatory answers prior the service; • person(s) with knowledge of the facts; • experts/witnesses that agency intends to call at hearing; ...

PREPARATION FOR HEARING: INTERROGATORIES (CONT’D) • identification of communications & relevant documents; • detailed narrative of each factual basis for denial; • if denial based on excess resources/asset transfer, identification of those resource(s) or transfer(s);

PREPARATION FOR HEARING: INTERROGATORIES (CONT’D) • if denial based on excess income, identify categories/amounts thereof; • citation of relevant statute/law/ regulation/ordinance/code/MedComm.

PREHEARING INITIAL CONFERENCE • Telephonic (generally). • Helps streamline discovery, address discovery disputes, discuss timetables for motion practice, and/or explore settlement.

MOTION PRACTICE • Summary Judgment: when facts are not in dispute • If successful, no need for hearing. • Agency must admit/dispute issues of fact & narrow issues for hearing. • Prehearing Brief: • Provide ALJ with the facts/issues/law. • Complex area of practice; helps to educate ALJ.

THE FAIR HEARING • Informal: hearsay and leading questions permitted. • Procedures governing hearing set forth in N.J.A.C. 1-:49-10.8. • Agency may be represented by non-lawyer (supervisor or case worker). • Opportunity to discuss the case and negotiate settlement.

THE FAIR HEARING (CONT’D) • Applicant/family member(s) may testify. • Other witnesses may be presented/cross-examined. • Documentary evidence may be introduced.

HEARING PREPARATION • Meet with the client/family member(s) to prepare for testimony. • Organize the file! • Bring paralegal/assistant familiar with the file. • Prepare hearing outline (testimony, exhibits, cross-exam).

OUTLINE EXAMPLE: TRANSFER TO “CAREGIVER CHILD” • Caregiver child’s testimony about applicant: medical issues, functional limitations. • Caregiver child’s activities: meals, dietary, medication, safety, shopping, transportation, personal support, laundry, assistance with dressing, bathing, toileting, transfer, eating, medical appointments.

OUTLINE EXAMPLE: TRANSFER TO “CAREGIVER CHILD” (CONT’D) GCM: review applicant’s limitations, opine that the caregiver child’s actions allowed applicant to remain at home rather than nursing home.

FAIR HEARING: BURDEN OF PROOF • The Medicaid agency has burden of proving its decision was proper. • ALJ decision: whether Medicaid complied with federal/state rules and regulations.

FOLLOWING ALJ’S INITIAL DECISION • Any party may file written exceptions, and respond to those of adversary. N.J.A.C. 1:1-18.4. • Final Agency Decision: Medicaid Director approves or rejects ALJ’s initial decision. • Director often sympathetic to its agency (initial decisions favoring claimant often rejected by Director; decisions favoring Medicaid usually adopted).

APPEALING UNFAVORABLE FINAL AGENCY DECISION Unsuccessful Medicaid applicant must appeal to Superior Court, Appellate Division, then to the NJ Supreme Court.

APPEALS TO SUPERIOR COURT, APPELLATE DIVISION • Guided by the New Jersey Rules of Court. • Time to appeal: 45 days from service of final agency decision. • How to appeal: file Notice of Appeal, CIS, filing fee with Appellate Division; copy to Medicaid agency, AG, interested parties. • Form Notice of Appeal and Case Information Statement online at www.judiciary.state.nj.us.

APPEALS TO SUPERIOR COURT, APPELLATE DIVISION • Transcripts: Request transcript from OAL on/before filing Notice of Appeal. R. 2:5-3. • Brief/Appendix: File within 45 days of transcript receipt. R. 2:6-11(a). • Timeframes may be adjusted by court via scheduling order. R. 2:6-11(c).

APPELLATE DIVISON STANDARD OF REVIEW Final agency decision will not be reversed “unless there is a clear showing that it is arbitrary, capricious, or unreasonable, or that it lacks fair support in the record.” Russo v. Bd. of Trs., PFRS, 206 N.J. 14 (2011).

APPELLATE DIVISION STANDARD OF REVIEW (CONT’D) Three inquiries: (1) whether the agency action violates the enabling act's express or implied legislative policies; (2) whether there is substantial evidence in the record to support the findings upon which the agency based application of legislative policies; and (3) whether, in applying the legislative policies to the facts, the agency clearly erred by reaching a conclusion that could not reasonably have been made upon a showing of the relevant factors. H.K. v. DMAHS, 379 N.J. Super. 321 (App. Div.), certif. denied, 185 N.J. 393 (2005).

APPELLATE DIVISION STANDARD OF REVIEW (CONT’D) Because of complexity of Medicaid laws, Appellate Division gives “significant deference … [to] agency decisions in the Medicaid context.” R.S. v. DMAHS, 434 N.J. Super. 250 (App. Div. 2014).

CHALLENGING DMAHS IN FEDERAL DISTRICT COURT There are pros and cons to challenging a decision by DMAHS in federal district court rather than through a state administrative appeal process such as a Fair Hearing

CHALLENGING DMAHS IN FEDERAL DISTRICT COURT (Con’t) PROS: • Federal courts are less deferential than state courts to the Medicaid agency. • Allows preliminary injunctive relief under D.N.J. Local Rule 65.1. (“If you win a preliminary injunction, you generally have won the case, at least in the district court…”) • Permits class actions. • Plaintiff under Civil Rights Act may be awarded legal fees. • Summary judgment motion practice is available. Fed. R. Civ. P. 56(a). Reixach, R., Medicaid Eligibility Litigation: Federal Courts.

CHALLENGING DMAHS IN FEDERAL DISTRICT COURT (Con’t) CONS: • The 11th Amendment sets an important limit on the relief available in federal court: Federal law does not permit an award of retroactive benefits. • Federal court litigation is a lot of work, and much more expensive than an administrative appeal.

FEDERAL COURT JURISDICTION • Federal Question (29 U.S.C. §1331): District court has original jurisdiction over civil actions arising under U.S. Constitution, laws, treaties. • Enforceable under the federal Civil Rights Act (42 U.S.C. §1983): Private civil cause of action allowed to enforce federal rights. • Some (not all) sections of Medicaid statute held to meet §1983 enforceability test.

§1983 ENFORCEABILITY “The test for determining [§1983 enforceability] is set forth in Blessing v. Freestone: (1) Congress must have intended the statutory provision to benefit the plaintiff; (2) the asserted right is not so vague and amorphous that its enforcement would strain judicial competence; and (3) the provision clearly imposes a mandatory obligation on the states. Reixach, R., Medicaid Eligibility Litigation: Federal Courts.

FILE FOR A FAIR HEARING AND IN FEDERAL COURT Is it permissible / advisable to file for an administrative appeal / Fair Hearing AND then file in federal court seeking a preliminary injunction, asking the ALJ to hold the administrative appeal in abeyance until the federal court renders a decision on the preliminary injunction application?

APPELLATE DIVISION OR FEDERAL COURT? • State courts tend to be more deferential toward the Medicaid agency • Retroactive relief is generally available in state court but not federal court

THANK YOU FOR ATTENDING Questions/Comments?

Medicaid Litigation Strategies: Appealing Elder Law Decisions