August 21, 2013
DIVISION OF MEDICAL ASSISTANCE AND HEALTH SERVICES and DIVISION OF DISABILITY SERVICES, Respondents-Respondents.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Submitted March 4, 2013
On appeal from the Department of Human Services, Division of Medical Assistance & Health Services and Division of Disability Services.
Slovak, Baron and Empey, attorneys for appellant (Valerie A. Powers Smith, on the briefs).
Jeffrey S. Chiesa, Attorney General, attorney for respondents (Melissa H. Raksa, Assistant Attorney General, of counsel; Molly Moynihan, Deputy Attorney General, on the brief).
Before Judges Sabatino and Maven.
M.F. appeals the November 3, 2011 final agency decision of the Director of the New Jersey Division of Medical Assistance and Health Services (DMAHS) limiting the amount of Private Duty Nursing (PDN) services to sixteen hours, inclusive of the services provided by and during school hours. We affirm.
M.F. is a boy who has been diagnosed with anoxic encelopathy, spastic quadriplegia, cerebral palsy (quadriparetic), refractory partial complex seizures, dysphasia, reactive airway disease, gastroesophageal reflux disease (GERD), epilepsy, cortical blindness, and visual impairments. He is non-verbal. He is not ambulatory and uses a wheelchair. He has a gastrostomy tube (G-tube) through which he receives all his feedings. He is completely dependent upon others for all aspects of his daily care. Due to the complexity and life-threatening nature of his medical conditions, he must be supervised twenty-four hours per day.
Since six months of age, M.F. has received services administered through the Division of Disability Services (DDS), namely, the Community Resources for People with Disabilities (CRPD) Waiver program, for which he has a $16, 000 monthly nursing budget for his sixteen hours of daily PDN services. M.F. is also on the premium plus program, which provides Medicaid State funding for his private insurance premiums.
In April 2010, M.F.'s nursing agency informed his mother that Medicaid considers PDN service hours "provided by schools, medical day care or private insurance" in determining the balance of PDN hours to be funded by Medicaid. M.F., through his mother, sought a Medicaid fair hearing to address the concerns about a possible reduction in PDN hours for M.F.
On May 4, 2011, the Medicaid fair hearing was held before administrative law judge Ronald W. Reba (ALJ). The sole issue before the ALJ was the interpretation of the CRPD waiver and its governing regulations regarding what "other sources" DDS may consider in accounting for the sixteen hours per day of PDN services received by M.F. DDS maintained that the regulations cover PDN services provided by the school district, while M.F. argues that DDS may only consider service hours provided by private insurance. The ALJ issued a thorough and comprehensive Initial Decision, which included a comparative analysis of the relevant regulations and their legislative histories. The ALJ concluded that the PDN services provided by the school district should be included in the sixteen-hour limitation, and reasoned that "other sources" should include all sources, not just insurance.
On administrative appeal to the DMAHS, the Director reviewed the record, including the ALJ Initial Decision and the exceptions to the Initial Decision, and adopted the findings, conclusions and recommended decision of the ALJ in their entirety.
This appeal follows, in which M.F. raises the following issues:
I. THE POSITION OF DDS AND DMAHS THAT HOURS PROVIDED BY THE SCHOOL DISTRICT MAY BE CONSIDERED, AND THUS REDUCE [M.F.]'S DAILY [PDN] HOURS UNDER THE CRPD WAIVER, IS NEITHER SUPPORTED IN THE GOVERNING REGULATIONS NOR CRPD WAIVER DOCUMENT APPROVED BY THE FEDERAL GOVERNMENT.
II. THE POSITION OF DDS AND DMAHS THAT HOURS PROVIDED BY THE SCHOOL DISTRICT MAY BE CONSIDERED, AND THUS REDUCE [M.F.]'S DAILY [PDN] HOURS UNDER THE CRPD WAIVER, IS NEITHER SUPPORTED BY THE TESTIMONIAL OR DOCUMENTARY EVIDENCE PRESENTED AT THE MAY 4, 2011 MEDICAID FAIR HEARING.
III. THE POSITION OF DDS AND DMAHS THAT A PARENT MUST PROVIDE [EIGHT] HOURS OF HANDS[-]ON CARE UNDER THE CRPD WAIVER PROGRAM IS NOT SUPPORTED BY THE CRPD WAIVER DOCUMENT APPROVED BY THE FEDERAL GOVERNMENT; AND THE STATE'S IMPLEMENTING REGULATIONS FOR THE CRPD WAIVER PROGRAM MANDATING THE SAME VIOLATES FEDERAL SUPREMACY RULES.
As a threshold matter, review of an agency decision by an appellate tribunal is limited. We review the record to determine whether the administrative action was arbitrary, capricious or unreasonable. Univ. Cottage Club of Princeton v. N.J. Dep't of Envtl. Prot., 191 N.J. 38, 48 (2007). The decision must be supported by substantial credible evidence in the record as a whole. In re Taylor, 158 N.J. 644, 656-57 (1999).
We defer to the interpretation and application of regulations by agency personnel within the specialized concern of the agency. Estate of F.K. v. Div. of Med. Assistance & Health Servs., 374 N.J.Super. 126, 138 (App. Div.), certif. denied, 184 N.J. 209 (2005). An agency decision-maker may "reject or modify findings of fact, conclusions of law or interpretations of agency policy in the decision, but shall state clearly the reasons for doing so." N.J.S.A. 52:14B-10(c). The agency decision-maker may not modify or reject credibility findings of an ALJ, unless the agency decision-maker determines that those findings are "arbitrary, capricious or unreasonable or are not supported by sufficient, competent and credible evidence in the record." Ibid. If the agency decision-maker rejects or modifies findings based on the credibility of any witness, the agency decision-maker must specifically inform the parties the reasons for the disagreement and make new or modified findings supported by the record. Ibid.; Cavalieri v. Bd. of Trs., Pub. Employees Ret. Sys., 368 N.J.Super. 527, 533-34 (App. Div. 2004).
We begin with a review of pertinent aspects of the Medicaid program. "The federal Medicaid Act, Title XIX of the Social Security Act, 42 U.S.C.A. §§ 1396 to 1396w-5, mandates a joint federal-state program to provide medical assistance to individuals 'whose income and resources are insufficient to meet the costs of necessary medical services.'" E.B. v. Div. of Med. Assistance & Health Servs., 431 N.J.Super. 183, 191 (App. Div. 2013) (quoting 42 U.S.C.A. § 1396-1). "Once a state joins the program, it must comply with the Medicaid statute and federal regulations." Ibid. (citations omitted). The state must also adopt "'reasonable standards . . . for determining eligibility for . . . medical assistance [that are] consistent with the objectives' of the Medicaid program, " Mistrick v. Div. of Med. Assistance & Health Servs., 154 N.J. 158, 166 (1998) (quoting L.M. v. Div. of Med. Assistance & Health Servs., 140 N.J. 480, 484 (1995)), and "provide for taking into account only such income and resources as are . . . available to the applicant, " N.M. v. Div. of Med. Assistance & Health Servs., 405 N.J.Super. 353, 359 (App. Div.), certif. denied, 199 N.J. 517 (2009); see 42 U.S.C.A. § 1396a(a)(17)(B).
"The New Jersey Medical Assistance and Health Services Act, N.J.S.A. 30:4D-1 to -19.5, authorizes New Jersey's participation in the federal Medicaid program." E.B., supra, 421 N.J.Super. at 192. The DMAHS is the agency within the State Department of Human Services (DHS) that administers the Medicaid program. N.J.S.A. 30:4D-7. Accordingly, this agency is responsible for protecting the interests of the New Jersey Medicaid program and its beneficiaries. N.J.A.C. 10:49-11.1(b); see E.B., supra, 421 N.J.Super. at 192.
At issue in this case is the Medicaid-funded CRPD waiver program. Through the federal Home and Community-Based Services waiver program, 42 U.S.C.A. § 1396n, the State applied for and received approval for New Jersey's Medicaid CRPD waiver program, N.J.A.C. 10:60-6.1. The DMAHS is the designated state agency overseeing the State's Medicaid program, and DDS, a division within DHS, administers the CRPD waiver program.
Services available under the CRPD waiver program include PDN. Here, the ALJ's decision holding that the sixteen hours of PDN services per day includes services provided by M.F.'s school was based on his reasonable interpretation of the regulations, particularly N.J.A.C. 10:60-5.9, and -6.3, which contain the limitations, duration and location of home services waiver/PDN services. Sections (b) and (c) of N.J.A.C. 10:60-5.9 provide, in relevant part, that:
[W]hen payment for [PDN] services is being provided or paid for by another source (that is, insurance), DDS or DMAHS shall supplement payment up to a maximum of [sixteen] hours per day, including services provided or paid for by the other sources . . . .
[PDN] services shall be limited to a maximum of [sixteen] hours, including services provided or paid for by other sources, in a 24-hour period, per person in CRPD . . . .
N.J.A.C. 10:60-6.3(b)(2) also states that "[PDN] is a waiver service provided under the [CRPD] Waiver . . . . A maximum of [sixteen] hours of [PDN], from all payment sources, may be provided in any [twenty-four]-hour period." (Emphasis added).
The parties acknowledge that the sections do not specifically define "other sources" and that none of the CRPD regulations state that PDN hours provided by a school are to be included. The ALJ likewise recognized the ambiguity in the regulations as to what other sources are included in the sixteen-hour limitation. In consideration of the conflicting contentions, the ALJ undertook an analysis of the regulations including a review of the legislative history and intent. The ALJ noted that in 2006, N.J.A.C. 10:60-5.9(c) and N.J.A.C. 10:60-6.3(b)(2) were amended, without comment, specifically to include the phrases "including services provided or paid for by other sources, " and "all payment sources, " respectively. 38 N.J.R. 2810(a) (May 24, 2006). By adding these phrases, the ALJ reasoned that:
The regulation clarifies that "when payment for [PDN] is being provided or paid for by another source (that is, insurance), DDS or DMAHS will supplement payment up to a maximum of [sixteen] hours per day, including services provided or paid for by the other sources . . . ." N.J.A.C. 10:60-5.9(b) (emphasis added). Because insurance pays for services but does not provide services, it is reasonable to consider the term "insurance" in the regulation as only a source of payment. . . . The second part of N.J.A.C. 10:60-5.9(b) further indicates that the provision of or payment for PDN services can be supplemented by considering "other sources." To conclude that "insurance" is the only definition of "source" throughout the relevant regulations would contravene the intent of the agency evidenced by reading the regulations in pari materia and the rule proposal summary . . . that explains that all sources are included in the calculation, including PDN services provided by the school district.
[(Alteration in original).]
Thus, the ALJ interpreted the regulations in favor of DDS to find that "the PDN services provided by the school district are appropriately included in the sixteen-hour allowable PDN services per twenty-four hours because by reading the regulations in pari materia, it is reasonable to count all sources that provide PDN, not just insurance payments for such services."
As to the claim that the caregiver is not required to provide eight hours of care per day, the ALJ relied on the regulations that require a live-in primary caregiver who resides with the beneficiary, accepts ongoing twenty-four-hour responsibility for the health and welfare of the beneficiary, and provides a minimum of eight hours of hands-on care. See N.J.A.C. 10:60-5.9(c); N.J.A.C. 10:60-6.3(b)(2); see also N.J.A.C. 10:60-1.2. The ALJ sensibly deduced therefrom that "[i]f the beneficiary receives the sixteen-hour maximum of PDN services, the primary caretaker is plainly responsible for the remaining eight hours of the beneficiary's twenty-four-hour day."
The Director concurred with the ALJ's conclusion, stating that
while insurance is included as a source of payment, sources that provide PDN services, such as school or medical day care, should also be included.
If the beneficiary receives the maximum [sixteen] hours of PDN, it follows that the remaining [eight] hours are provided by the primary caregiver. N.J.A.C. 10:6[.]3(b)(2). This ensures the provision of [twenty-four]-hour care.
In Points I and II, M.F. argues that DDS and DMAHS relied on inapplicable regulations, N.J.A.C. 10:60-5.4 and -5.6, in support of its claim that the PDN services provided by the school district should be included. Those regulations govern a different program, the EPSDT/PDN Program in which M.F. is not a beneficiary. M.F. argues that DDS and DMAHS utilized the definition of "other payment sources" from the EPSDT Program, which states that "[t]he determination of the total EPSDT/PDN hours approved, up to the maximum [sixteen] hours per [twenty- four]-hour period, shall take into account alternative sources of PDN care available to the caregiver, such as medical day care or a school program." N.J.A.C. 10:60-5.4(a)(3).
The ALJ soundly rejected that contention, stating in its decision that "[t]he regulations governing EPSDT/PDN services do not apply here because petitioner receives PDN services under the CRPD Waiver program." As noted, the ALJ reached its conclusions following a reasonable exercise of rule construction and interpretation of different sections of the regulations. We are satisfied that the ALJ did not misapply or misinterpret the regulations. Accordingly, we defer to the agency's decision. I.L. v. Div. of Med. Assistance & Health Servs., 389 N.J.Super. 354, 364 (App. Div. 2006) ("Deference to an agency decision is particularly appropriate where interpretation of the [a]gency's own regulation is in issue.")
In Point III, M.F. claims that the language in the State's CRPD Waiver document defining "primary caregiver" makes the eight hours of hands-on care to be provided by a primary caregiver mandatory rather than discretionary, and is thereby at odds with the federal definition. This claim has no merit.
N.J.A.C. 10:60-1.2 defines "primary caregiver" as an adult relative or significant other adult who accepts [twenty-four-]hour responsibility for the health and welfare of the beneficiary. For the beneficiary to receive [PDN] services under . . . [CRPD], the primary caregiver must reside with the beneficiary and provide a minimum of eight hours of hands-on care to the beneficiary in any [twenty-four-]hour period.
M.F. argues that the State cannot create more restrictive eligibility criteria than the federal government. There is no merit to this preemption claim. The State follows Section 1915(c) of the Social Security Act, which authorizes the Medicaid Home and Community-Based Services Waiver program. 42 U.S.C.A. § 1396n(c). The program permits the State to receive reimbursement from the federal Medicaid program for the cost of providing services to certain individuals who would require institutionalization without such services. Ibid. The State has broad authority to ensure that its Medicaid plans "provide such safeguards as may be necessary to assure that eligibility for care and services under the plan will be determined, and such care and services will be provided, in a manner consistent with simplicity of administration and the best interests of the recipients." 42 U.S.C.A. § 1396a(a)(19);
see E.B., supra , 421 N.J.Super. at 192. However, the State may not apply a more restrictive methodology for evaluating eligibility than is provided in federal law, 42 U.S.C.A. § 1396a(r)(2)(A), or take any actions regarding Medicaid that are inconsistent with the federal law and regulations. See, e.g., F.K., supra, 374 N.J.Super. at 133.
In this instance, the New Jersey "Application for a §1915(c) Home and Community-Based Services Waiver" specifically provides that "[i]f the potential participant requires [PDN] services, he/she must also have a primary live-in caregiver that can provide a minimum of [eight] hours of care." (Emphasis added). While M.F. posits the Black's Law Dictionary definition of "can" and "shall, " he fails to cite any particular authority to support his claim that the conflict in this language rises to a level of federal preemption. Federal preemption arises where it would not be possible to comply with both federal and state laws at the same time, "or when the state law 'stands as an obstacle to the accomplishment and execution of the full purposes and objective[s] of Congress.'" Pac. Cap. Bank, N.A. v. Conn., 542 F.3d 341, 351 (2d Cir. 2008) (alteration in original) (quoting United States v. Locke, 529 U.S. 89, 109, 120 S.Ct. 1135, 1148, 146 L.Ed.2d 69, 89 (2000)). M.F. fails to show any impediment to the State in providing services to him. In fact, M.F.'s mother indicates that she "satisfies the CRPD Waiver requirements – that she is a live-in caregiver who accepts [twenty-four]-hour responsibility for the health and welfare of her son and can provide [eight] hours of hands-on care." Inasmuch as she conceded that she meets the State's requirement, the requirements of the law have been met, rendering this claim baseless.
"[A] court may not substitute its judgment as to the wisdom of an administrative action so long as it is statutorily authorized and not otherwise defective." K.P. v. Albanese, 204 N.J.Super. 166, 176 (App. Div.), certif. denied, 102 N.J. 355 (1985). Ultimately, the party challenging an agency's action bears the burden of demonstrating that the decision is arbitrary, capricious or unreasonable. In re Arenas, 385 N.J.Super. 440, 443-44 (App. Div.), certif. denied, 188 N.J. 219 (2006); see also Barone v. Dep't of Human Servs., 210 N.J.Super. 276, 285 (App. Div. 1986), aff'd, 107 N.J. 355 (1987). M.F. has not made any such showing here.