Superior Court of Delaware
Green Valley SNF, LLC d/b/a Pinnacle Rehabilitation and Health Center, Appellant,
v.
Delaware Department of Health and Social Services, Division of Medicaid and Medical Assistance, Appellee.

C.A. No: 13A-02-002 (RBY)
Submitted: October 23, 2013
Decided: December 31, 2013

Upon Consideration of Appellant's Appeal from the Department of Health and Social Services REVERSED and REMANDED
Margaret F. England, Esquire, The Darby Law Firm, LLC, Wilmington, Delaware for Appellant.

Peter S. Feliceangeli, Esquire, Deputy Attorney General, Department of Justice, Wilmington, Delaware for Appellee.

ORDER

Young, J.

SUMMARY
*1 Green Valley SNF, LLC d/b/a Pinnacle Rehabilitation and Health Center (“Pinnacle”) applied for long-term care Medicaid Benefits for Pauline Bryner (“Claimant”), a resident of the facility. The Department of Health and Social Services (“DHSS”), Division of Medicaid and Medical Assistance (“DMMA”) denied the application, because Pinnacle did not provide the required information for DMMA to make a decision on the Claimant's eligibility for benefits. In an administrative “Fair Hearing” to challenge the decision, a DHSS Fair Hearing Officer affirmed the DMMA's decision to deny the application for benefits. Pinnacle has appealed this decision of the Hearing Officer. The primary issue on appeal is whether the DMMA correctly denied an application for long-term care Medicaid benefits, based upon a finding that Pinnacle failed to submit the information that the DMMA requested, in order to determine if the applicant met the financial eligibility requirements for benefits. As a result of the DHSS decision, a matter that could bring about dire consequences to Claimant was determined by what appears to be a reliance upon a non jurisdictional timing concern, when facts on the merits were either known, but ignored, or else not pursued. For example, the DHSS reviewing caseworker failed to establish why the Claimant's real property was not being sold, though knowledge that the Claimant's Guardianship existed. Therefore, the decision of the DHSS Hearing Officer is REVERSED and REMANDED for a complete hearing on the merits of the claim for benefits.

FACTS AND PROCEDURAL POSTURE
On February 19, 2010, Claimant was admitted into Pinnacle, with diagnoses of Alzheimer's disease and dementia. Soon thereafter, Pinnacle sought to obtain a public guardian for the Claimant, but at the time the Office of the Public Guardian only took emergency cases. Pinnacle filed an application for Medicaid benefits for Claimant in July 2010, which was denied in September 2010, due to missing documentation.

Pinnacle was directed to file a second application on October 29, 2010, which was eventually denied on February 23, 2011. The second application was denied, because of the lack of verification regarding the resources of the Claimant, specifically regarding a piece of real property. The information that Pinnacle provided in the Medicaid application filed on October 29, 2010, listed 407 North New Street, Dover, as the Claimant's most recent address, but gave no indication about whether the Claimant owned or rented the property. Then, the DMMA sent Pinnacle a “We Need” letter on January 27, 2011, listing the information the agency needed before it could complete its determination of Claimant's financial eligibility. The DMMA requested the documents by February 11, 2011. The January 27, “We Need” letter cautioned that, if the DMMA did not receive the requested information by February 11, 2011, the DMMA would assume that the Claimant was no longer interested in the Medicaid program, and the application would be denied.

*2 The DMMA asked for the following items to complete an eligibility determination related to Claimant's property: a copy of the deed, a completed and signed agreement to sell form, market analysis for the value of the property, and proof that the property was listed for sale. Pinnacle sent tax assessment records and liens of record as evidence of the fair market value, and submitted notice of a tax sale of the property as evidence that it was for sale. The DMMA did not consider notice of a forced sale to mean the property was on the market. The agency also informed Pinnacle that showing the assessed value was insufficient. Rather, Pinnacle needed to demonstrate the fair market value of the property.

The DMMA did not receive the requested information regarding the real property that it desired to make a decision on Claimant's eligibility for long-term Medicaid benefits by the due date, February 11, 2011. Pinnacle admitted that it did not check the public records, even for a copy of the deed, until after the application had been denied. In addition, Pinnacle did not request an extension of the time to submit the requested information about Claimant's property.

A caseworker for the DMMA was aware that the Claimant was incapacitated, and that a Guardianship action was pending in the Court of Chancery during the time the caseworker was reviewing the Claimant's Medicaid application. However, the application was still denied even though no party had authority to obtain the requested information that the DMMA requested. Subsequent to the denial on February 23, 2011, a Guardian was appointed for the Claimant on March 18, 2011. Thereafter, on April 28, 2011, a request for a Fair Hearing on said denial with the DHSS was made. The Fair Hearing was held on September 26, 2011. On October 20, 2011, the DHSS dismissed the action on the grounds that Pinnacle lacked standing to challenge the denial. That decision was appealed to this Court on May 1, 2012. On August 29, 2012, the Superior Court reversed the dismissal and remanded the matter for further proceedings. On January 16, 2013, the DHSS affirmed the DMMA's denial of Claimant's October 29, 2010 Medicaid application. Now, Pinnacle appeals that decision.

STANDARD OF REVIEW
For administrative board appeals, this Court is limited to reviewing whether the Board's decision is supported by substantial evidence and free from legal errors.FN1 Substantial evidence is that which “a reasonable mind might accept as adequate to support a conclusion.” FN2 It is “more than a scintilla, but less than preponderance of the evidence.” FN3 An abuse of discretion will be found if the board “acts arbitrarily or capaciously ... exceeds the bounds of reason in view of the circumstances and has ignored recognized rules of law or practice so as to produce injustice.” FN4 Where an agency has interpreted and applied a statute, the Court's review is de novo.FN5 In the absence of an error of law, lack of substantial evidence or abuse of discretion, the Court will not disturb the decision of the board. FN6

    FN1. 29 Del C. § 10142(d); Avon Prods. v. Lamparski, 203 A.2d 559, 560 (Del.1972).

    FN2. Olney v. Cooch, 425 A.2d 610, 614 (Del.Super.1981) (citing Consolo v. Fed. Mar. Comm'n, 383 U.S. 607, 620 (1966)).

    FN3. Id. (quoting Cross v. Calfano, 475 F.Supp. 896, 898 (D.Fla.1979).

    FN4. Delaware Transit Corp. v. Roane, 2011 WL 3793450, at *5 (Del.Super.Aug. 24, 2011) (quoting Straley v. Advanced Staffing, Inc., 2009 WL 1228572, at *2 (Del.Super. April 30, 2009).

    FN5. Lehman Brothers Bank v. State Bank Commissioner, 937 A.2d 95, 102 (Del.2007).

    FN6. Anchor Motor Freight v. Ciabattoni, 716 A.2d 154, 156 (Del.1998).

DISCUSSION
First, the Appellant argues that the DHSS improperly considered the Claimant's property as a resource. Appellant alleges that the DHSS incorrectly interpreted Sections 20300.1 Liquid Resources, 20300.2 Non–Liquid Resources, 20300.3 Resource Ownership, and 20300.3.1 Resource Access to conclude that the Claimant had free access to, and unrestricted use of, her real property. The DHSS relied upon Section 20300.3.1 of the Division of Social Services Manual (“DSSM”), which Appellant contends is specific only to liquid resources, such as bank accounts and not to real property. Section 20300.3.1 states that “an account will be considered a countable resource while access to the account is pending guardianship.” Appellant argues that there are various other sections of the DSSM FN7 that recognize that real property cannot be liquidated while a resident is incapacitated and without a Guardian, which the DHSS failed to consider.

    FN7. See DSSM Sections 20360.4 Documentation of Efforts to Sell and 20360.4.4 Illustrations of Good Cause.

*3 Furthermore, Appellant claims that since the Claimant was incapacitated during the pendency of the Medicaid application and did not have a fiduciary with legal authority until March 18, 2011 to sell her real property, there was a legal bar to selling the property. Therefore, the real property should not have been considered a countable asset by the DSSM.

Second, Appellant argues that conditional Medicaid coverage should have been approved when the Agreement to sell property was signed on March 23, 2011. Appellant relies on Section 20360.1 of the DSSM, which permits conditional medicaid coverage upon execution of Form 412, agreeing to sell the property. Therefore, Appellant contends that Claimant was entitled to coverage for a period of at least nine months from the date of the signing of the agreement to sell the property on March 23, 2011.

Third, Appellant contends that the Claimant's real property should not be a countable resource since good-faith efforts were being made to have the property listed for sale. Section 20360.4 in the DSSM directs caseworkers to: “verify allegations with third parties,” and “to use the telephone whenever possible.” The Appellant asserts that this language places the burden upon the caseworker to establish why a piece of real property is not being sold.

The parties disagree on which party had the burden to obtain the evidence regarding the good-faith efforts to sell the property. It is clear that the burden is on the applicant to prove eligibility for Medicaid benefits. There is no fundamental constitutional right to receive Medicaid benefits.FN8 It is also true that, this Court has recognized that the applicant is responsible for supplying the required information in Schmidt v. Meconi, 2007 WL 3105750 (Del.Super.).FN9

    FN8. Sanders v. Kansas Department of Social and Rehabilitation Services, 317 F.Supp.2d 1233, 1251 (D.Kan.2004).

    FN9. In Schmidt v. Meconi, it was the State's responsibility to obtain evidence regarding the alleged good faith efforts to sell Claimant's property, and to contact third parties on the applicant's behalf. In that case, the applicant owned stock, but the applicant argued that his failure to find the stock certificates made them unavailable, so they should not be counted as a resource. This Court rejected that argument on the basis that applicants are responsible for supplying the required detailed financial information that Medicaid applications routinely seek.

However, language in the DSSM places the burden upon the reviewing caseworker to establish why a piece of real property is not being sold. Section 20360.4.3 of the DSSM directs the DHSS caseworker to record an individual's allegations as to why good faith efforts to sell resources are not being made. If the allegations indicate circumstances beyond the individual's control, the caseworker should obtain any evidence the individual has to support the allegations. The second Section of 20360.4.3 states further that the caseworker should terminate the disposal period unless evidence establishes both that the individual cannot pursue good faith efforts to sell resources on her own, and cannot make arrangements for someone else to sell the resources on her behalf.

The DHSS caseworker knew that the Claimant suffered from Alzheimer's disease, an incapacitating illness that would constitute good cause for the Claimant's inability to take necessary steps to sell her real property. Moreover, the caseworker knew that the Claimant's Guardianship was pending, but the caseworker did not contact third parties to see whether the pending Guardianship precluded offering the property for sale. Those various steps were, presumably, considered to have been academic, because of the timing constraints placed by the DHSS on the Pinnacle submissions. The result was a denial of benefits, which decision was not on the merits of all of known or accessible information. The Claimant should not be penalized for the confusion or shortcomings of other entities, without a hearing on the complete record.

CONCLUSION
*4 For the foregoing reasons, the Hearing Officer's decision to sustain denial of Medicaid benefits for Claimant is REVERSED and REMANDED for further consideration of the full factual record.

IT IS SO ORDERED.