Fair Hearing Resources

Open-Ended Remands in Medicaid-Related Fair Hearing Decisions Violate Federal Law

30 Jan, 2018

On January 26, 2018, Judge Leonard D. Wexler granted statewide class certification and concluded that Medicaid-related Fair Hearing Decisions, which contain open-ended remands to a local agency, violate an appellant's right to a timely decision.

New York's Open-Ended Medicaid Remand Policy Violates Federal Law

In his post-trial finding of fact and conclusions of law in Lisnitzer v Zucker, 11-CV-4641 (E.D.N.Y. January 26, 2018), Judge Wexler ruled

"that the 90-day requirement for 'final administrative action,' a permissible construction of 42 U.S.C. § 1396a(a)(3), means that the state was required to provide a final determination of his eligibility for benefits within that time period, not simply any disposition, including a 'remand,' of the appeal. As the First Department observed in Konstantinov, 'any remand should specify the time in which the agency must act and report back so that the ALJ can render a final determination within that 90-day period.' Konstantinov, 101 A.D.3d at 520-22, 956 N.Y.S.2d at 39-40. The open-ended remand of Lisnitzer’s appeal, allowed under defendants’ policies and practices, led to a violation of Lisnitzer’s right to a final determination of his eligibility for benefits, i.e., 'final administrative action,' within 90 days of his fair hearing request."1

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1 Given this determination, the Court need not reach Lisnitzer’s claim that defendants also violated his constitutional rights.

Id. at p. 18.

Judge Wexler found that

     "19. At a fair hearing, the OTDA hearing officer is charged to develop a complete fair hearing record, review and evaluate evidence, make findings of fact and conclusions of law, prepare an official report containing the substance of what transpired at the hearing and render a recommended decision to the DOH Commissioner or the DOH Commissioner’s designee. See 18 N.Y.C.R.R. § 358-5.6(a), (b).

     "20. In developing a complete fair hearing record, a hearing officer is empowered to, inter alia, administer oaths, elicit testimony, require document production, issue subpoenas, direct the attendance of witnesses, and adjourn the hearing. See 18 N.Y.C.R.R. §§ 358-5.3, 358-5.6(b).

Id. at p. 5.

Despite this duty to develop a complete record, Judge Wexler also found that

     "23. A fair hearing decision which reverses the local agency’s reason for the contested action and remands the matter back to the local agency does not determine the appellant’s eligibility for the contested Medicaid benefit. Tr. 60-61.

     "24. If a fair hearing decision reverses the denial of Medicaid benefits and remands the matter to the local agency for further consideration, DOH prohibits the local agency from denying the application upon the reason set forth in the local agency’s denial that was reversed. See JPTO Exh. 4.

     "25. When a fair hearing decision reverses the denial of Medicaid benefits and remands the matter to the local agency for further consideration, DOH requires the local agency to continue to process the application if one or more eligibility factors need to be considered and issue a new decision as soon as possible, while preserving the applicant’s original application date. See id.

     "26. Upon remand, DOH and OTDA do not monitor the outcome of the Medicaid adverse action which was sent back to the local agency unless the appellant complains about the local agency’s non-compliance with the hearing decision. See Deposition of Nigel A. Marks, at 79 line 24-80 line 7, JPTO Exh. 3; Deposition of James Ryan III, at 91 line 4-92 line 3, JPTO Exh. 2; Tr. 84.

     "27. If a fair hearing decision remands the contested Medicaid issue back to the local agency, the hearing officer who presided at that fair hearing is finished with that administrative appeal and it is removed from that hearing officer’s calendar. Tr. 56, 61.

     "28. If a fair hearing decision reverses the reason for the local agency’s action and remands the matter back to the local agency, the hearing officer who presided at the hearing is not informed about the local agency’s further action upon remand. See Tr. 65.

     "29. DOH considers a fair hearing decision which reverses the local agency’s reason for the contested action and remands the matter back to the local agency under any of the remand codes to be final administrative action which terminates the Medicaid appeal. See Tr. 73, 80.

     "30. A fair hearing decision which remands the contested Medicaid issue back to the local agency is considered by OAH to satisfy the 90-day deadline by which to take definitive and final administrative action. Tr. 60.

     "31. If on remand the local agency’s next determination adheres to its denial on the same issue, the Medicaid applicant must request a new fair hearing to contest the subsequent denial. See Tr. 73, 79-80.

     "32. If on remand another fair hearing is requested to contest the subsequent denial by the local agency, the hearing officer who presided at the previous fair hearing is not assigned to hear the subsequent fair hearing. Tr. 61, 65."

Id. at pp. 6-8.

The Court Grants Plaintiff's Motion for Certification of a Statewide Class of Medicaid Appellants

Noting that "the claims of unnamed members of the class are not moot, as a continuing class of similarly situated persons would suffer the claimed harm," Judge Wexler held that

     "Subject to further proceedings, the Court finds that Lisnitzer sufficiently demonstrates (1) that the prerequisites for a class action are met, namely, numerosity, typicality, commonality, and adequacy of representation, see FRCP 23(a); and (2) that defendants, have acted on grounds that apply generally to the class as defined by Lisnitzer, see Plaintiff’s Reply Mem. of Law in Further Support of Motion for Class Cert., at 2 (DE 13), so that final injunctive or corresponding declaratory relief is appropriate respecting the class as a whole, see FRCP 23(b)(2). Individualized issues among Lisnitzer and class members seem unlikely to impair the Court’s ability to issue effective and appropriate injunctive and declaratory relief."

Id. at pp. 14-15.

Leslie Lisnitzer and the plaintiff class are represented by private practitioner Peter Vollmer, John Castellano of the Mercy Advocacy Program of Mercy Haven, Inc. and Donnalynn Darling of Meyer, Suozzi, English & Klein. Susan M. Connolly, Kimberly Ann Kinirons and Patricia M. Hingerton of the New York State Attorney General's office represent the New York State Department of Health (DOH) and Office of Temporary and Disability Assistance (OTDA).

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Author: Gene Doyle, LMSW.

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