People whose applications have been denied for Medicaid disability benefits do not have a constitutional right to an in-person administrative hearing, the Indiana Court of Appeals has ruled.

Paul Terrell, on behalf of himself and a class of those similarly situated, sued Anne Murphy as secretary of Indiana Family and Social Services Administration, and Patricia Casanova, as director of the Office of Medicaid Policy and Planning of the FSSA, seeking declaratory and injunctive relief.

The class challenges the use of telephonic hearings regarding Medicaid disability appeals. As of Oct. 1, 2009, the FSSA conducts hybrid hearings in which the unsuccessful applicant and ALJ are in the same room but the state’s representative appears telephonically. In the past, the FSSA may have scheduled in-person or telephonic hearings, in which all participants call into a virtual hearing room.

The trial court granted the class’ motion for summary judgment and denied the state’s motion for summary judgment.

This was an error, the Court of Appeals concluded in Anne W. Murphy, et al. v. Paul Terrell, et al., No. 49A04-1003-PL-198, holding that unsuccessful applicants who appeal the denial of their eligibility to receive Medicaid benefits don’t have a constitutional right to an in-person administrative hearing. The appellate court used Mathews v. Eldridge, 424 U.S. 319 (1975), Casey v. O’Bannon, 536 F. Supp. 350 (E.D. Pa. 1982), and State ex rel Human Servs. Dept. v. Gomez, 657 P.2d 117 (N.M. 1982), to find that a telephonic hearing affords the rejected applicants with the opportunity to be heard in a meaningful manner. The judges used the balancing test set forth in Mathews to reach this conclusion.

Although the rejected applicants have a substantial private interest in the decisions regarding the status of their application for disability benefits, the other two factors weigh in favor of the state. The evidence shows the use of telephonic hearings lets the state better manage public funds and utilize decreasing resources efficiently. There is also no risk a person would suffer an erroneous deprivation of his or her private interest through the procedures used, and the probable value, if any, of additional or substitute procedural safeguards. The class failed to provide any empirical evidence to approximate the risk of deprivation or to what extent the individuals would erroneously be deprived by the hearings held over the phone, wrote Judge Cale Bradford.

The appellate court remanded for entry of summary judgment in favor of the state.