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Medicaid applicants facing 'tremendous hurdles'?

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When filing a claim for Medicaid disability benefits, the process sounds straightforward: Complete an application that includes all disabilities that would make the case that you deserve the benefits. If your application is deemed sufficient by a Medicaid Medical Review Team, you get the benefits. If not, you receive a one- or two-page letter that includes information about how you can appeal.

But it’s what the applicant is allowed to present at the appeal that is at issue in an ongoing case that was decided by the Indiana Court of Appeals July 21 and is currently on petition for transfer to the Indiana Supreme Court. The most recent brief was filed Sept. 23.
 

medicaid Gavin Rose is lead counsel in a case involving appeals of denials of Medicaid benefits. Jacquelyn Bowie Suess assisted him. They’ve petitioned for transfer. (IL Photo/ Perry Reichanadter)

In its decision in the case Anne Waltermann Murphy, et al. v. William Curtis, et al., No. 49A04-0909-CV-503, the Court of Appeals found in favor of Anne Waltermann Murphy in her official capacity as secretary of Indiana Family and Social Services Administration, and Patricia Casanova in her official capacity as director of the Office of Medicaid Policy and Planning of the Indiana Family and Social Services Administration.

Murphy and Casanova, represented by Indiana Attorney General Gregory F. Zoeller and deputy attorney general Frances Barrow, have maintained their position that an administrative law judge who hears an appeal of a denied application for Medicaid benefits does not need to consider any information that was not included in the initial application.

“Under the facts and circumstances before us, we cannot say that the FSSA’s interpretation of the applicable statutes and regulations is unreasonable, violative of any of the cited statutes or regulations, or otherwise constitutes a denial of due process. We therefore reverse the trial court’s entry of summary judgment in favor of the Class and remand with instructions to enter judgment in favor of the State,” wrote Indiana Court of Appeals Judge Paul D. Mathias. Judge Cale J. Bradford concurred, but the third member of the panel, Judge Patricia A. Riley, dissented with a separate opinion.

In her dissent, Judge Riley wrote, “I part ways with the majority’s conclusion that an ALJ’s refusal to consider evidence of conditions not disclosed on a Medicaid disability application does not violate federal Medicaid law and the Due Process Clause of the Fourteenth Amendment.”

“I believe that the current policy used by the ALJ to exclude any evidence not alleged in the original application but which could establish that the applicant is nevertheless entitled to benefits not only violates our basic notions of due process but also an ALJ’s duty to inquire,” she continued. “The very purpose of the Medicaid administrative hearing is to determine an applicant’s eligibility to receive assistance.”

In their petition for transfer filed Aug. 19, attorneys Gavin Rose and Jacquelyn Bowie Suess of the American Civil Liberties Union of Indiana made a similar argument.

Rose said these particular three plaintiffs – William Curtis, Gary Stewart, and Walter Raines – were named because they had similar ALJ decisions for different reasons after appealing their denials for Medicaid benefits. He said the ACLU included them in the lawsuit based on their particular ALJ decisions because “three cases over a short time span can convert to more in reality.”

In Curtis’ case, Rose said, his caseworker advised him only to report his mental health issues and not include his orthopedic problems. Stewart, who applied so he could receive medical attention, wasn’t diagnosed with his pre-existing condition of congestive heart failure until after his application because he didn’t know what was wrong at the time he filled out his application.

And Raines “either had trouble identifying his illness or he didn’t consider it disabling,” Rose said.

These issues are fairly common, said Adam Mueller, who has handled appeals of denials of Medicaid benefits as a staff attorney for Indiana Legal Services in Indianapolis. While ILS can’t get involved with this case because it is a class action lawsuit, he would speak about what he sees in Medicaid benefit appeals.

Most of the clients who’ve come through his door wanting to appeal filed their initial applications pro se, while some had help from a caseworker, social worker, or family member if they were unable to fill out the application on their own, such as in a case where the person has little educational background, a low IQ, or doesn’t know how best to explain how his or her disabilities would make them eligible for benefits.

“We start by gathering evidence, talking to the client, and determining if we think their case has merit,” Mueller said.

This includes evidence related to the person’s vocational history and medical history.

While he said ILS doesn’t represent every appeal, he did say ILS’ contact information is on the notice applicants receive when they are denied Medicaid benefits and many people find them that way.

If the person who calls them has “any evidence of a disability, we’ll take a look at it. And at least in the Indianapolis office, we end up representing the majority of the ones that come through,” he added.

He referred to an amicus brief filed by Mental Health America of Greater Indianapolis in support of the plaintiffs-appellees, which explains why the issues are misreported in the first place.

The brief’s first point is “… persons with mental illness can be subject to an unwelcome Catch-22 when applying for Medicaid Benefits: the very disorders that cause the Medicaid applicants to be impaired can prevent them from accurately identifying the full extent of their impairments.”

The brief goes on to explain that those who have mental illness may lack the insight to be aware of their own mental illness, and therefore may not consider it something that ought to be reported in an application.

When it comes to not knowing a diagnosis or being misdiagnosed, Mueller said he has seen clients who listed depression because they were given that diagnosis at one point in time, but the person’s psychiatric records may include evidence of bipolar disorder or “a host of other conditions,” he said.

The amicus brief also mentions stigma is not only a challenge in the application process, but “a key challenge in delivering mental health care to persons in need is having the person with the mental disorder overcome the perceived disincentives to seeking treatment.”

“And that could be the one debilitating condition that could prove they are disabled,” Mueller added.

Mueller said that he is aware of some cases where ALJs are willing to accept information not on the application “if they find a nexus between the condition listed and what the evidence is presenting at the hearing.”

In their response to the petition to transfer filed Sept. 13, attorneys for the state wrote “The Court of Appeals correctly held that limiting evidence at Medicaid disability hearings to conditions disclosed in the application does not violate Medicaid statutes or regulations, and is not a denial of due process. … The state reasonably expects applications for assistance to be complete, meaning all disabling conditions or impairments must be reported in the application. Who is in a better position than the applicant to know his or her impairments?”

Attorneys for the state also wrote that the briefs presented by the ACLU attorneys, the amicus brief by Mental Health America of Greater Indianapolis, and an amicus brief by Indiana Chapter of the National Academy of Elder Law Attorneys has “painted an extremely exaggerated picture of ‘the tremendous hurdles that a Medicaid applicant acting innocently will have in accurately reporting all disabling conditions at the time of application.’ … The regulations set out detailed provisions regarding initial investigations of applications for benefits. … Applicants may use authorized representatives to apply for benefits, and the agency will pay for the costs of medical examinations to determine an applicant’s eligibility,” the state wrote.

In their reply to the state’s response, filed Sept. 23, the ACLU attorneys reiterated their position that people with mental illness or physical disabilities are not necessarily in the best position to diagnose themselves, and that they have not overstated the difficulties some applicants face when completing an application for Medicaid benefits.•

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