Medicaid applications review policy doesn't violate federal law

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An administrative law judge’s refusal to consider evidence of conditions that aren’t disclosed on a Medicaid disability application doesn’t violate federal law and the Due Process Clause, a majority on the Indiana Court of Appeals ruled today.

The judges disagreed in Anne Walterman Murphy, et al. v. William Curtis, et al.  No. 49A04-0909-CV-503, about whether the trial court was correct in granting summary judgment for a class of Medicaid applicants who were denied benefits. The applicants had originally applied for benefits citing one condition and were denied. They then reapplied based on other conditions and at their hearing before an administrative law judge, tried to present evidence on the conditions in the denied applications.

Judges Paul Mathias and Cale Bradford reversed summary judgment in favor of the class and ordered summary judgment entered for the state. They didn’t find the Family and Social Services Administration’s interpretation of the applicable statutes and regulations to be unreasonable, violative of any of the cited statutes or regulations, or constitute denial of due process.

The majority noted that the de novo hearing by the ALJ provided for under Indiana Code Section 12-15-28-4 doesn’t allow for the applicant or county office to introduce additional evidence at the hearing that is unrelated to the conditions in the application being reviewed.

“Furthermore, simply because due process and the applicable regulations require a de novo hearing does not mean that the scope of the hearing must be expanded to include every possible condition that the applicant claims could result in benefits,” wrote Judge Mathias. “A de novo hearing does not require the consideration of materials unrelated to the issue appealed. Otherwise, the need for an initial application and review by the (Medicaid Medical Review Team) would be essentially superfluous.”

Judge Patricia Riley dissented because she believes the current policy used by the ALJ excluding any evidence not alleged in the original application, but that which could establish the applicant is entitled to benefits, violates the basic notions of due process and also an ALJ’s duty in inquire.

“…I conclude that the ALJ’s duty of inquiry is not suspended when the applicant fails to list a particular disability in his or her application or raises it for the first time during the administrative hearing; rather, an ALJ is obligated to investigate the disabling effects of each possible impairment suggested by the record and which may be relevant in order to reach an informative conclusion as to whether the applicant is eligible to receive assistance,” she wrote. “Today’s majority decision falls well short of this goal.”


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