Prunckun v. Delaware Dept. of Health & Social Services; Oldham v. Delaware Dept. of Health & Social Services

93, 2018 & 94, 2018

2019 | Cited 0 times | Supreme Court of Delaware | January 3, 2019

IN THE SUPREME COURT OF THE STATE OF DELAWARE

EDWARD and PAMELA PRUNCKUN, as § parents and legal guardians of ROBERT § PRUNCKUN, § No. 93, 2018C § Plaintiffs-Below, § On appeal from the Superior Court Appellants, § of the State of Delaware § v. § § C.A. No. N16A-05-010 DELAWARE DEPARTMENT OF HEALTH § AND SOCIAL SERVICES, § § Defendant-Below, § Appellee. §

________________________________________________________________________

MALCOLM and DOMINICA OLDHAM, as § parents and legal guardians of ASHLEE § OLDHAM, § No. 94, 2018C § Plaintiffs-Below, § On appeal from the Superior Court Appellants, § of the State of Delaware § v. § § C.A. No. N16A-05-009 DELAWARE DEPARTMENT OF HEALTH § AND SOCIAL SERVICES § § Defendant-Below, § Appellee. §

Submitted: November 28, 2018 Decided: January 3, 2019

Before STRINE, Chief Justice; VALIHURA, VAUGHN, SEITZ, and TRAYNOR, Justices, constituting the Court en Banc.

Upon appeal from the Superior Court. AFFIRMED. Francis G.X. Pileggi, Esquire, Brian D. Ahern, Esquire, Eckert Seamans Cherin & Mellott, LLC, Wilmington, Delaware. Of Counsel: Michael P. Flammia, Esquire, Eckert Seamans Cherin & Mellott, LLC, Boston, Massachusetts; Christopher E. Torkelson, Esquire (Argued), Eckert Seamans Cherin & Mellott, LLC, Princeton, New Jersey, for Appellant.

Lauren E. Maguire, Esquire (Argued), Adria B. Martinelli, Esquire, Delaware Department of Justice, Wilmington, Delaware, for Appellee. VALIHURA, Justice:

I. Overview

Ashlee Oldham and Robert Prunckun wo Delaware Medicaid recipients housed at Judge Rotenberg

to use a skin-

residents. 1

66v through the skin. Side effects, aside from the shock, include reddening of the skin,

potentially lasting for days, blisters, and anxiety. For years since the mid-2000s, while at

JRC, Recipients comprehensive behavioral treatment plans included GED and these

services were covered by Medicaid with the knowledge and approval .

But in 2012, the Center for Med

agency charged with promulgation and enforcement of Medicaid regulations and the

approval of certain waivers relevant here, advised the Massachusetts state agency

responsible for Medicaid administration that continued use of GED by JRC would place

that That waiver is part of a

program Congress has authorized in order for certain persons with developmental

disabilities to receive Medicaid services in a community setting, rather than in an

1 Although these are two separate appeals, the legal arguments prese opening briefs are identical. The State has filed nearly identical briefs in the two appeals. This

Court, sua sponte, consolidated the appeals. institutional facility. It is known as t waiver program and it has provided such services to Recipients at issue here. Before a

state can participate in the HCBS waiver program, it must first apply for a waiver from

CMS. Thus, the use of GED by JRC waiver program.

Following s letter to Massachusetts, Delaware took measures to avoid placing

its own HCBS waiver program at risk. In October 2013, Delaware, through DHSS,

instructed JRC to cease using GED on the Recipients. It sought and received clarification

CMS region that the use of GED was prohibited. DHSS finally

terminated JRC as a qualified provider after JRC refused to cease using GED. According

to DHSS, both federal and state entities charged with enforcing Medicaid laws have

deemed the use of GED unacceptable in the HCBS community-based context and generally

unacceptable in modern day society.

Although the procedural history is complex, as explained below, the gist of

Appellants challenge on appeal is that they were denied due process because

administrative hearing officer bifurcated proceedings to address what she concluded was a

threshold issue, namely, whether GED is a covered Medicaid service under the Medicaid

Home and program. Instead, Recipients

contend that they should have been allowed to introduce evidence that GED is medically

necessary, and that by removing GED services, DHSS has threatened Recipients to remain in a community-based setting a conclusion they desired to prove through

evidence and expert testimony. Accordingly, Recipients, by and through their parents and

guard in

bifurcating the Fair Hearing and in concluding that aversive treatment was no longer a

Pending this appeal, as a result of transition agreements entered into by the parties,

Recipients continue to receive community-based services, including the availability of

GED, at JRC to this day. 2 CMS has prohibited the use of federal funding to JRC, and

although the State of Delaware thereafter picked up the tab, it ceased making payments to

JRC in 2014 . 3 But the State of Delaware agreed

to pay JRC in full once the Recipients out of JRC is complete.

II. Facts and Procedural Background

Recipients are adult Medicaid beneficiaries and Delaware citizens with uniquely

severe, behavioral, developmental, and emotional disorders, disabilities, and autism. They

both require intensive behavioral health services in order to treat their violent, self-

injurious, and potentially life-threatening conditions. Both received medical assistance

benefits pursuant to the Delaware Home and Community Based Services Medicaid Waiver

2 See App. to Opening Br. at A782 83 (No. 93). Appellants state that Ashlee no longer receives GED applications. See Reply Br. at 18, n. 4 (No. 93). 3 The any federal funding as long as GED is in effect, DDDS is using state funds until the transition to a

qualified D . Social Security Act . 4 HCBS waivers allow states to offer services to

individuals who are elderly or have disabilities and live in a community setting in lieu of

institutionalization. In Delaware, the Division of Developmental Disabilities Services

ealth and Human Services

program.

The Recipients are adult males and both have extensively documented histories of

self-injurious, aggressive, and destructive behavior. For example, included throwing chairs, destroying property, kicking and biting others, smearing his

feces, urinating on the floor and in electrical outlets, banging his head on objects, refusing

medical care, and jumping out of a second story window twice, which caused severe

orthopedic injuries, including a broken pelvis. He has been diagnosed with intermittent

explosive disorder, impulse control disorder, pervasive developmental disorder, and

personality change secondary to brain injury.

head, causing severe head injury, self-

induced vomiting, dangerous weight loss, biting others, kicking and spitting, scratching

and biting himself, inappropriate urination and defecation, refusing medical care, and

violently attacking staff. When he was enrolled in the Delaware Autism Program, twenty

unpredictable lunging and biting all within a fifteen-month period.

4 42 U.S.C. § 1396n(c) (2018). After a long history of unsuccessful treatment and institutionalization for their

severe behaviors and disabilities, both Ashlee and Robert, in 2004 and 2005, respectively,

entered the JRC in Massachusetts where they remain. It is one of the few facilities in the

country to employ aversive treatment procedures. JRC is the only facility in the United

States that utilizes a graduated electronic decelerator device.

Medical Behavior Modification Treatment Plan dated June 11, 2013, explained that JRC

- , which is manufactured by

JRC. That device the JRC staff, a battery-operated

receiver/stimulator worn by the JRC client and an electrode that is connected to the

5 The receiver/stimulator delivers a two- -level

6 The GED- a current of 41 mA RMS, with a voltage of 66v when

7 to the client after

he engages in a tar 8 The side effects include reddening of the skin, blisters,

between the point in time when the teacher or

5 App. to Opening Br. at A188 (No. 93). 6 Id. 7 Id. 8 Id. aide announces that the client has engaged in a targeted inappropriate behavior and the

9

Appellants maintain that as a result of their ongoing treatment at JRC, the Recipients

no longer require any restraint, and have avoided highly restrictive institutional or isolated

settings and debilitatingly high dosages of psychotropic drugs that once were the norm for

them. They point out that the use of GED is part of their individualized treatment plans

approved by a Massachusetts Probate and Family Court judge who issued orders on their

plans following an evidentiary process. They also point out that until 2013, DHSS assented

treatment plans at JRC. Although Appellants claim the aversive

treatment has been the most successful thus far, it is, by far, the most controversial. As the

State aptly observed, this case is largely about the use of GED, and changes to the federal

and state rules that have impacted the issue of whether GED is an acceptable and

appropriate treatment modality. That leads us to explaining the relevant regulatory and

legal backdrop, and the evolving views of GED and aversive treatment as reflected in the

Medicaid regulatory system.

Overview of the Medicaid Waiver Program

Both sides appear to acknowledge that federal and state standards have evolved over

time in response to clinical practice and societal norms. But they disagree as to whether

certain of these regulatory changes actually prohibited GED, whether those various

regulatory changes and pronouncements have the force and effect of law, what deference

9 Id. at Massachusetts Probate and Family Court. Id. at A42 43 (Sept. 13, 2013 Order). they deserve by hearing officers and courts, and whether Appellants were given proper

notice of them. One of the issues we have to unravel concerns tion that

when the State of Delaware sent letters to JRC in October 2013 demanding discontinuation

of certain aversive treatments, including GED, that demand was based upon

correspondence from the federal government sent to Massachusetts, which is Region I, not

Region III, which encompasses Delaware. Appellants contend that correspondence did not

prohibit GED in that it did not have the force of law, was not sent to the Guardians, and

that by the time Delaware explicitly did prohibit GED, Appellants had already asserted

their right to a Fair Hearing. Accordingly, Appellants contend the regulatory changes were

a post hoc manufactured litigation maneuver targeting them, as opposed to a generalized

prohibition, and as such, violated their due process rights.

DHSS responds that the 2013 CMS correspondence did prohibit GED, and in any

event, Appellants are not prejudiced because Recipients presently continue to have the

controversial GED treatment available to them eventual expense by virtue

of transition agreements entered into between DDDS and the Guardians on April 28, 2015.

DHSS further contends that by the time of the Fair Hearing, the prohibition at both the

federal and state levels had become clear if it was not before, and so it made sense to

determine, as a threshold matter, whether GED is now a covered Medicaid service.

By way of regulatory background, under the Medicaid regime, states and CMS enter

a contract called the State Medicaid Plan. CMS is the federal agency charged with

promulgation and enforcement of Medicaid regulations. Region I of CMS included state must provide all federally mandated Medicaid services, as well as any optional

services it elects to cover at its discretion. Both the mandatory and optional components

In return for

federal funds, the state must comply with requirements imposed by Title XIX of the Act. 10

CMS will not fund or reimburse a state for prohibited services. In Delaware, the Medicaid

program is generally overseen by DHSS. DHSS contends GED is now a prohibited service.

CMS has the authority to waive certain provisions of the Medicaid laws. 11 The

HCBS Waiver is a Medicaid option available to states under Section 1915(c) of the Act. 12

Nearly all states, including Delaware, offer services to persons with intellectual and

developmental disabilities through a Section 1915(c) HCBS Waiver. This allows such

persons to live in a community setting in lieu of institutionalization. The DDDS

The HCB Setting Rule sets forth requirements governing the criteria and

characteristics of settings eligible for reimbursement for home and community-based

services provided under Sections 1915(c), 1915(i), and 1915(k) of the Medicaid statute.

The HCB Setting Rule defines person-centered planning requirements for individuals in

Medicaid-funded community settings under HCBS Waivers. The rule seeks to ensure

10 See 42 U.S.C. § 1396 (2014); 42 U.S.C. § 1396r (2011). 11 Specifically, under § 1915(c) of the Act, the Secretary of the Department of Health and Human Services is authorized to waive § 1902(a)(10)(B) of the Act, allowing States to target an HCBS waiver program to a specified Medicaid-eligible group of individuals who would otherwise require institutional care. 12 See 42 U.S.C. § 1396n (c). individual rights of privacy, dignity, respect, and freedom from coercion and restraint in

home and community-based settings. The State has argued that the move to eliminate

electric shock as a covered Medicaid service began in 2010 with the passage of the

Affordable Care Act 13 and the Setting Rules proposed and promulgated thereunder. 14 On

April 15, 2011, CMS published proposed HCB Setting Regulations. 15 CMS published the

proposed HCB Setting Regulations again on May 3, 2012. 16

The HCB Setting Rule was published as a final regulation on January 16, 2014. 17 It

became effective on March 17, 2014 and, consistent with the May 2012 proposed version,

it bans the use of coercion and restraint in community settings. The final HCB Setting

Rule provides in relevant part:

Home and community based settings must have all of the following qualities, and such other qualities as the Secretary determines to be appropriate, based on the needs of the individuals indicated in their person-centered service plan: . . .

13 Affordable Care Act: Patients Protection and Affordable Care Act of 2010, Pub. L. No. 111-148 (codified as amended by the Health Care and Education Reconciliation Act of 2010, Pub. L. No. 111-152). 14 App. to Opening Br. at A1035 (No. 93). 15 Medicaid Program; Home and Community-Based Services (HCBS) Waivers, 76 Fed. Reg. 21311 (proposed Apr. 15, 2011) (to be codified at 42 C.F.R. pt. 441). 16 Medicaid Program; State Plan Home and Community-Based Services, 5-Year Period for Waivers, Provider Payment Reassignment, and Setting Requirements for Community First Choice, 77 Fed. Reg. 26362 (proposed May 3, 2012) (to be codified at 42 C.F.R. pts. 430, 431, 435, 436, 440, 441, 447). 17 Medicaid Program; State Plan Home and Community-Based Services, 5-Year Period for Waivers; Provider Payment Reassignment, and Home and Community-Based Setting Requirements for Community First Choice and Home and Community-Based Services (HCBS) Waivers, 79 Fed. Reg. 2948, 3032 (Jan. 16, 2014); 42 C.F.R. § 441.530(a)(1)(iii) (2014). from coercion and restraint. 18

The adoption of the HCBS Setting Rule was preceded by a lengthy public comment

process. 19

The DDDS waiver was set for renewal in 2014 in Delaware. In its revised waiver

application submitted to CMS in March 2014, DHSS inserted a provision in its Waiver

application explicitly stating that [t]he use of averse conditioning defined as the

contingent application of startling, painful or noxious stimuli is prohibited 20 On April 1,

Registry as a proposed regulation. 21

A public comment period of thirty days followed.

S Waiver was published in the June 2014 Delaware Registry as a final

regulation. 22

18 42 C.F.R. § 441.530(a)(1)(iii) (emphasis added). This provision appeared in the May 3, 2012 version of the proposed rule. Medicaid Program; State Plan Home and Community-Based Services, 5-Year Period for Waivers, Provider Payment Reassignment, and Setting Requirement for Community First Choice, 77 Fed. Reg. 26362, 26378-79 (proposed May 3, 2012) (to be codified at 42 C.F.R. pts. 430, 431, 435, 436, 440, 441, 447). 19 Medicaid Program, 77 Fed. Reg. at 26382-83 (describing the public comment process up to and including the 2012 proposed rule). The summary of the 2014 final HCBS Setting Rule states that 1,653 comments were received in response to publication of the April 15, 2011 proposed rule, and employers, health insurers, health care assoc in response to the May

3, 2012 proposed rule. Medicaid Program; State Plan Home and Community-Based Services, 5- Year Period for Waivers, Provider Payment Reassignment, and Home and Community-Based Setting Requirements for Community First Choice and Home and Community-Based Services (HCBS) Waivers, 79 Fed. Reg. 2948, 2949, 2952, 3003 (Jan. 16, 2014) (to be codified at 42 C.F.R. pts. 430, 431, 435, 436, 440, 441, 447). 20 App. to Opening Br. at A670 (No. 93) (emphasis added). 21 17 Del. Reg. 950 (Apr. 2014). 22 17 Del. Reg. 1179 (June 2014). DDDS also published notice of the Delaware HCBS Waiver renewal application on

its website. 23 Public meetings were held on March 4, 5, and 6, 2014 in each of the three

counties. A written summary of the proposed changes (the same document available on

the DDDS website) was provided to the public at the meetings, and the complete waiver

application was available for public view. The Delaware HCBS Waiver was approved by

CMS and became effective July 1, 2014. 24

On October 7, 2015, DDDS amended its policies to incorporate the definition of

This revised Delaware Behavior and

Support Plan prohibits a number of practices, including Averse Interventions. 25 The

Interventions intended to inflict pain, discomfort and/or social humiliation or any intervention as perceived by the person to inflict pain, discomfort, or social humiliation in order to reduce behavior. Examples of aversive interventions include, but are not limited to, electric skin shock, liquid spray -preferred tastes applied in the mouth. 26

DHSS contends that there is also a contract-based prohibition on the use of GED.

By contract with DDDS, all Delaware-qualified Medicaid providers who serve individuals

23 App. to Opening Br. at A402 (No. 93). 24 See State of Delaware: Statewide Transition Plan for Compliance with Home and Community- Based Setting Rule at 14, 39 (last updated Mar. 30, 2016), http:/dhss.delaware.gov/dhss/dmma/files/statewidetransitionplan.pdf. 25 App. to Answering Br. at B2 (No. 93) punishment. See App. to Opening Br. at A499 (No. 93) Health support policy prohibits the use of mechanical restraints; corporal punishment or threat of

corporal punishment . . . 26 App. to Answering Br. at B4 (No. 93) (emphasis added). through DDDS programming agree to comply with all statutes, regulations, policies and

procedures of DDDS. 27 s

State and Federal licensing standards and all other applicable standards as required to

28 s contract with JRC expired on September

30, 2014, when JRC refused to cease use of GED on Recipients. 29

Overview of the Procedural Backdrop

It is against the evolving regulatory framework that we consider the issues raised

here. Although Appellants largely base their due process challenge on alleged flaws in the

administrative process, in the end, both the Hearing Officer and the Superior Court viewed

the principal and threshold issue as an issue of Medicaid coverage, and specifically,

whether GED aversive treatment is a covered Medicaid service.

The most direct leading to the

prohibition on GED treatment appears to stem from correspondence sent to Massachusetts

by the federal government in 2012. On December 14, 2012, Richard McGreal, a CMS

. The Region I Letter stated in relevant part:

Residential and service settings operated by the Judge Rotenberg Educational Center (JRC) are of particular concern. The State indicated that JRC is the only provider currently using Level III interventions, described in the September 14 th painful, aversive stimuli and deprivation

27 App. to Opening Br. at A121 (No. 93). 28 Id. at A109. 29 DDDS last renewed the contract with JRC on July 1, 2013. Level III interventions include use of an electronic shock device known as a graduated electronic decelerator, or GED, in use solely by JRC. . . .

Residential facilities and the use of aversive interventions including GED and the use of food deprivation procedures are regulated by the State. The State has described its movement toward positive behavioral reinforcement processes. However, as reasonable people will agree that electronic shock and withholding of meals have no place in their homes or communities, we therefore request that the State provide immediate assurance that the use of Level III aversive interventions have been eliminated for any and all individuals enrolled in the HCBS waiver. . . . At a minimum, the settings in which waiver participants are served must not include any in which State regulation authorizes the use of Level III interventions. This condition must be met no later than the effective date of the waiver renewal. In the interim the State should cease all billing for FFP for HCBS services provided to individuals residing in residences practicing these procedures. 30

In light of the CMS directive to Massachusetts, and in preparation for its application

to CMS for its own HCBS Waiver set for renewal in 2014, DDDS met with the Guardians

to explain that JRC would no longer be permitted to use GED on the Recipients. 31

30 App. to Opening Br. at A812 13 (No. 93). See

App. to Opening Br. at A499 500; see also Judge Rotenberg Educ. Ctr. v. Office of Admin. Hearings, 2009 WL 162066, at *5 (Cal. Ct. App. Jan. 26, 2009) (affirming decision by administrative hearing officer that GED used by JRC constitutes corporal punishment). Notably, appeal the Id. at *3 n.3. 31 See App. to Opening Br. at A291 (No. 93). The following exchange occurred during the March 12, 2014 Clarification Conference: Ms. Woolfolk: I want the record to be clear that DDDS met with both sets of parents in Delaware and explained to them exactly the next steps in the process that was going on. Hearing Officer: When was this approximately? Was this before or after the October 2013 letters? Ms. Woolfolk: I believe it was just about at the same time. In letters dated October 8 and 13, 2013 to the JRC, DHSS advised JRC that it was

aware of the Region I Letter. The

Waiver

Supports which prohibited mechanical restraints, corporal punishment or

threat of corporal punishment . . . physical interventions which cause pain . . . . 32 It

[s], nd

stated that of all aversive[s] must be completed within 60 days from

33

In response, on November 27, 2013, Appellants filed a Request for a Fair Hearing

with DHSS, arguing that GED treatment services should continue uninterrupted. 34 In

response to this request, on December 16, 2013, DHSS filed a Fair Hearing Summary

[n] 35

Hearing Officer: Just about the same, okay go ahead. Ms. Woolfolk: We met with them in Delaware each of them did . . . . There was certainly no blindsiding here of parents. And I want the record to be clear on that. Id. Ms. Woolfolk represents DHSS in her capacity as Deputy Attorney General for the State of

32 Id. at A14 (emphasis added). 33 Id. 34 Id. at A18. 35 Id. at A46 47. The Fair Hearing Summary (id. at A46 95) attached the Delaware HCBS § 1915(c) waiver; 42 C.F.R. §§ 441.302, 441.303; and the DDDS Policy: Behavior and/or Mental DDDS filed a Motion to Dismiss this request on March 6, 2014. A clarification conference was thereafter conducted to discuss procedural and substantive issues and DDDS filed a

supplemental Motion to Dismiss. The hearing was set for July 15, 2014. The

administrative proceedings were stayed while Appellants pursued an appeal in the Superior

determination that the reasonableness and necessity of using Level III interventions was

not at issue. 36 The appeal was dismissed on February 10, 2015 as an improper interlocutory

appeal and remanded. The hearing was reset for June 30, 2015. Again, the parties

requested clarification on the scope of the hearing and DHSS renewed its Motion to

Dismiss. Appellants expressed concern that they were not given the opportunity to fully

brief the issues raised by DHSS in its Motion in Dismiss and that they were entitled to an

evidentiary hearing, including evidence of medical necessity of the GED, prior to oral

s Motion to Dismiss. 37

In the midst of the procedural wrangling over the scope of the continued Fair

Hearing, Id. at A47. It also identified who was expected to testify

for the State, including of the Center of Medic Id. at A47. 36 Id. at A358 59; see also id. at A350 . . . (1) letters of [DDDS] sent in October 2013 to [JRC] . . . ss Fair Hearing Request for [Recipients] dated March 6, 2014, and (3) the clarification conference, reasonableness and necessity of using aversive behavioral interventions . . . including [GED], on [Recipients] is not an issue in this fair hearing

37 See id. at A593. III on the use of the GED on December 23, 2014 since Delaware is in Region III, not

Region I. CMS responded on March 10, 2015 to Mr. Groff . In

that letter from Ralph Lollar, Director, Division of Long Term Services and Support of

CMS, Lollar confirmed to DDDS that electric shock treatment is inconsistent with HCBS

settings. He wrote:

Residential facilities and the use of aversive interventions including electrical shock using a graduated electronics decelerator (GED) are regulated by the State. The State asserts that the use of aversive interventions is prohibited in ted clarification from [CMS] regarding the use of GED devices and denial of nutritionally adequate diets in home and community-based settings. Electric shock therapies and withholding of meals are not characteristic of HCBS settings; we therefore request that the State provide immediate assurance that the use of these aversive interventions has been eliminated for any and all settings in which individuals enrolled in Medicaid live or receive services.

interventions which cause pain are considered aversive interventions prohibited by the State. Therefore, this condition must be met immediately and these practices must cease and desist. The State should cease all billing for FFP [federal financial participation] for individuals receiving Medicaid services through providers practicing any of the above referenced procedures. 38

Following

Fair Hearing request, the Hearing Officer issued an order on November 30, 2015 (the

Bifurcation The Hearing Officer determined that

and even more n 39 She

38 Id. at A576 (emphasis in original). 39 Id. at A853. In support of her determination, the Hearing Officer cited to 42 C.F.R. § 431.200(b), 42 C.F.R. § 431.201 and 16 Del. Admin. C. § 5100(1). further ruled that ervices are medically

necessary, the first issue that must be decided is whether these services are indeed

covered . . . . 40 proceed as a bifurcated process considering the issue of Medicaid coverage first, followed

41

Appellants thereafter filed a Motion in Limine arguing that they should be able to

present evidence related to the reasonableness and necessity of aversive services at the Fair

Hearing. That issue, along with the primary coverage issue, was considered at the Fair

Hearing which occurred on January 13, 2016. The Hearing Officer admitted 209 exhibits

into evidence without objection from either party.

Following the Fair Hearing, on April 21, 2016, the Hearing Officer issued a final

decision . 42 The Hearing Officer first explained her decision to deny

in Limine wherein Appellants had sought to present evidence that GED

was a medically necessary treatment for Appellants. Appellants also had contended that

the issue of coverage was, in part, dependent upon the issue of medical necessity. DHSS

had countered that while all covered services must be medically necessary, not all

medically necessary treatments are covered.

The Hearing Officer ruled that

prohibited serv

40 App. to Opening Br. at A853 (No. 93). 41 Id. 42 Id. at A952 82. 43

Delaware Medicaid, then arguably, the state erred in instructing JRC to discontinue the

services and m 44 Accordingly, the Hearing Officer

ruled that

45

The Hearing Officer next considered whether electric shock treatment was a covered

service under Medicaid and concluded that it was not. The Hearing Officer summarized

the arguments on both sides that had been presented at the January 13, 2016 Fair Hearing.

DHSS contended that GED was prohibited by both state and federal law. As for

state law, DHSS pointed to the HCBS Waiver which was duly enacted and approved by

CMS on July 1, 2014 and it had the force of law.

As for the federal level, DHSS pointed out that the 2015 CMS Letter had been

signed by the head of the CMS Division of Long Term Care Services the CMS branch

that oversees the implementation of the HCBS Rule in all Medicaid funded community

services nationwide. Thus, DHSS contended that it applied not solely to Regions I or III,

but rather, it applied nationwide. According to DHSS, this letter meant that federal law

prohibited the use of electric shock in all community settings nationwide. 46 Thus, DHSS

43 Id. at A955. 44 Id. 45 Id. In support of this proposition, she cited Beal v. Doe, 432 U.S. 438, 4 But nothing in [Title XIX] suggests that participating States are required to fund every medical procedure that falls within the delineated categories of medical care 46 App. to Opening Br. at A957 (No. 93). argued that the prohibition on GED aversive treatment represented a considered judgment

by state officials, through the HCBS Waiver, and by federal officials, through the CMS

letters, that the GED treatment services, though formerly covered, would no longer be a

covered Medicaid service.

Appellants, on the other hand, contended that the CMS letters are neither policy nor

regulations, but rather, are guidance only. They argued that the controlling regulation is

the HCBS Setting Rule (which became effective March 17, 2014) which refers to the use

coercion or restraint ecifically refer to aversives, let alone GED

in particular. In addition, Appellants argued that in the renewed HCBS Waiver, DDDS, by

eliminating GED as a treatment modality, has undermined the goals of the waiver program

to remain in a community-based setting.

After considering the arguments, along with 209 exhibits submitted by the parties,

the Hearing Officer ruled that 2013 to JRC to cease using GED treatment services was correct and well within its

47 Further, she held that duly promulgated Delaware HCBS Waiver carries the force and effect of law cannot be

48

47 Id. at A966. 48 Id. The Hearing Officer constitute regulatory authority. Rather, she concluded that its

49 She explained her reasoning as follows:

[T]he CMS letter to Delaware dated March 10, 2015 was authored by the Director of the CMS Division of Long Term Care Services, which is the CMS branch responsible for overseeing the implementation of the HBCS Rule in all Medicaid funded community services nationwide. Certainly, a response from the national Director of the CMS branch responsible for the HCBS waivers that is directly on point should be given substantial deference. Moreover, review of the CMS letter to Delaware finds that the text specifically references GED as a prohibited aversive not covered under the HCBS Waiver. Further, the CMS letter to Delaware clearly mandates the cease all billing for FFP [federal financial participation] for individuals receiving Medicaid services t

remain covered under Medicaid as a behavioral intervention is simply not supported. 50

Finally, the Hearing Officer

somehow limited on the coverage issue because they could not present evidence as to

medical necessity to support their coverage position and that the Hearing Officer had

restricted the Fair Hearing to argument only. She emphasized that [Bifurcation Order] ability to present evidence and/or testimony to prove Medicaid coverage in the first part of

51 She explained:

[M]edical necessity does not automatically guarantee Medicaid coverage. At the onset of this Fair Hearing, this Fair Hearing Officer asked both sides if there would be any witnesses presented. Apparently, as stated on the record,

49 Id. 50 Id. 51 Id. Appellants asked DHSS, without clarification from this Fair Hearing Officer, if witnesses were permitted during the first part of this Fair Hearing. DHSS advised that it understood the first part of the Fair Hearing was limited to

ability to present witnesses and/or testimony to provide Medical coverage in the first part of this Fair Hearing. Although Appellants argued that they had to present witnesses and testimony on medical necessity to prove Medicaid coverage, this argument is also unsupported. Consequently, denying

testimony to support the Medicaid coverage. 52

Decision in the Delaware Superior Court pursuant to 31 Del. C. § 520. The Guardians

provided an inadequate Fair Hearing summary with shifting legal justifications for its

actions, and that DHSS engaged in coercive and prejudicial conduct resulting in a denial

of due process. They argued further that the Hearing Officer ted

by substantial evidence and that it was incorrect because electronic shock treatment was

and remains a covered service.

Following briefing and oral argument, the Superior Court rejected each of these

contentions in an opinion dated January 30, 2018. First, it concluded that bifurcating the

in their ability to allow evidence regarding Medicaid coverage, including by witness

53 Thus, it ruled that 52

Id. at A967. 53 Oldham , 2018 WL 776580, at *5 (Del. Super. Jan. 30, 2018). covered service, no doubt the Guardians would have had a full opportunity to present their

54

Next, the Superior Court concluded that both state and federal law support the

state level, it conditioning, defined as the contingent application of startling, painful, or noxious stimuli

55

was validly promulgated pursuant to legislative authority. The Superior Court explained:

Here, DHSS amended its waiver through the formal rulemaking process by gathering input from providers and advocates, convening public hearings and comment, and publishing notice of the waiver as a proposed final regulation. Delawar substantiates the aversives are not Medicaid

covered services. 56

support HCBS Waiver. It reasoned that

right by the waiver, but also as the Guardians

propose 57

54 Id. 55 Id. 56 Id. 57 Id. at *6. As to the prohibition on GED at the federal level, the Superior Court concluded that

s

mandatory 58 Further, the

to freedom from coercion and

restraint, was interpreted by CMS as prohibiting the use of aversives such as GED.

A mandatory judicial

59 te law, and the federal agency tasked

60

As to the various procedural due process challenges, the Superior Court rejected

them and observed evidence that notice was not received, or that the hearing was held without them, and

nothing to the effect that they did not understand the issues or the bases for the decision in

qu 61 engaged in a full evidentiary Fair Hearing in which they were prepared to argue the issues

raised, permitted to produce any evidence on the issue of Medicaid coverage, and to raise

58 Id. at *5. 59 Id. at *6. 60 Id. 61 Id. 62 Accordingly, the

Superior Court concluded that granting reversal would be elevating form over substance.

e II of the

had not been fairly raised in the proceedings

below.

III. Issues on Appeal

Appellants raised three issues on appeal. First, they argue that the administrative

ision violated their due process rights. Second,

they contend that aversive treatments (and specifically GED) Medicaid waiver program and that their rights were violated by DHSS through post hoc

rule- medical needs are integral to the issue of whether or not a particular service might be

r

constitutes prohibited discrimination by DHSS against Appellants in violation of Title II

IV. Standard of Review

The Final Decision of the Hearing Officer was subject to review by the Superior

Court pursuant to 31 Del. C. § 520. 63 The Superior Court was required to determine

62 Id. 63 Section 520 provides in relevant part: free from legal error. 64 65

appellate court and the intermediate court received no evidence other than that presented

to the administrative agency, the higher court does not review the decision of the

intermediate court, but, instead, directly examines the decision of the agency. 66 Further,

th 67

Substantial evidence is that which a reasonable mind might accept as adequate to support

a conclusion. 68 Questions of law are reviewed de novo. 69

Any . . . recipient of public assistance benefits . . . against whom an administrative hearing decision has been decided may appeal such decision to the Superior Court . . . . The appeal shall be on the record without a trial de novo. The Court shall decide all relevant questions and all other matters involved, and shall sustain any factual findings of the administrative hearing decision that are supported by substantial evidence on the record as a whole. 31 Del. C. § 520. 64 See Lawson ex rel. Lawson v. , 2004 WL 440405, at *2 (Del. Super. Feb. 25, 2004). 65 Stoltz Mgmt. Co. v. Consumer Affairs Bd., 616 A.2d 1205, 1208 (Del. 1992). 66 Id. (internal citations omitted). 67 Id. (internal citations omitted). 68 See Lehto v. Bd. of Educ., 962 A.2d 222, 225 26 (Del. 2008). 69 Res. & Envtl. Control v. Sussex Cnty., 34 A.3d 1087, 1090 (Del. 2011). V. Analysis

A. The Procedural Due Process Challenges

Although framed primarily as a series of due process challenges challenge raises a question of Medicaid coverage, namely, whether aversive treatment,

including the use of a GED, is covered. They consider that threshold question first, and argue that the procedure employed by the

Hearing Officer deprived them of their right to a meaningful, pre-deprivation process and

hearing. The foundation for this right, according to them, is constitutional, statutory, and

regulatory in nature.

DHSS contends deem an intolerable practice is a regulatory determination, which Appellants have no legal

right

s against coercion and the use of aversives are not adjudications,

but rather, are duly promulgated regulatory and policy decisions that apply to all Medicaid-

qualified providers and recipients. Thus, DHSS contends that no hearing was required

because the decision to ban GED was not based on individualized findings. Rather, CMS

directed, and DHSS determined, as a matter of public policy, that using such intolerable

and coercive methods to enforce behavioral compliance was unacceptable for all Medicaid

recipients receiving home and community-based services. DHSS relies on Bi-Metallic

Investment Co. v. State Board of Equalization 70 for the proposition that regulatory acts that

apply broadly, unlike adjudications, do not trigger individual rights to challenge such

policy decisions. In Bi-Metallic, the Supreme Court held that procedural due process rights

did not apply to the enactment of legislation when the Colorado Tax Commission and the

State Board of Equalization had ordered a 40% increase in the valuation of all taxable

property in Denver. The plaintiff sought to enjoin enforcement of the order arguing that it

had been denied a right to a hearing. The Supreme Court held that a hearing was not

required for each affected property owner prior to the enactment of the generally applicable

tax increase, reasoning that:

Where a rule of conduct applies to more than a few people, it is impractical that everyone should have a direct voice in its adoption. The Constitution does not require all public acts to be done in a town meeting or an assembly of the whole. General statutes within the state power are passed that affect the person or property of individuals, sometimes to the point of ruin, without giving them a chance to be heard. Their rights are protected in the only way that they can be in a complex society, by their power, immediate or remote, over those who make the rule. 71

A number of cases since Bi-Metallic have held that in altering substantive rights of

people through the enactment of rules of general applicability, a legislature generally

provides all of the constitutionally required process that is due simply by enacting the

70 239 U.S. 441 (1915). 71 Id. at 445. statute, publishing it, and to the extent it regulates private conduct, affording those affected

a reasonable opportunity to familiarize themselves with the requirements and to comply. 72

Applying this principle in the Medicaid context, a number of cases have held that a

hearing need not be granted when either state or federal law requires automatic grant

adjustments for classes of Medicaid recipients unless the reason for an individual appeal is

an incorrect grant computation. 73 Relying on these authorities, DHSS maintains that both

coercion in home and community-based settings reflected

broad policy determinations at the federal and state levels, did not involve individual

findings regarding the Recipients, is governed by the Bi-Metallic line of cases, and thus,

no hearing was required at all. They also cite to Medicaid regulations which state that no

72 See, e.g., United States v. Locke, 471 U.S. 84, 108 (1985) (holding that no individualized notice was required where the statute was generally applicable, published, and afforded the affected landowners a reasonable opportunity to understand and comply with the requirements); Logan v. Zimmerman Brush Co., 455 U.S. 422, 433 (1982) ( legislative determination [terminating a welfare program or granting defenses and immunities to state officials] provides all the process that is due. 73 Rosen v. Goetz, 410 F.3d 919, 926 (6th Cir. 2005) terminating benefits, § 431.220(a)(2)) and impose a broad limitation on that right (when the sole

is even when the termination of benefits arises solely from a change in state or federal law,

impermissible challenges challenges to the relevant facts or application of law to a given beneficiary respects both

see also, e.g., Benton v. Rhodes te decides to terminate optional benefits on the basis of lack of appropriated funds, or for any other state reason, this is a matter of state law or policy whi hearing is required requiring an automatic change

74

seminal decision in

Goldberg v. Kelly, 75 which involved the question of what process was due to recipients

who faced termination of welfare benefits. Appellants argue that they were entitled to

procedural due process before the proposed termination of GED treatment in October 2013,

including timely and adequate notice detailing the reasons for termination and a

meaningful, pre-deprivation evidentiary hearing. They claim that these rights, though

derived from Goldberg, are also embedded in federal and state laws and regulations.

In particular, Appellants cite to a number of federal regulations within the Medicaid

regulatory scheme that they contend apply in the context of a threatened termination of

Medicaid benefits. 76 They contend that Delaware regulations either mirror or expand the

procedural due process rights of Medicaid beneficiaries beyond the federal requirements. 77

even when changes in federal or state law require automatic adjustments for benefits

rendered to certain classes of individuals, and even if no hearing is required. 78

74 42 C.F.R. § 431.220(b) (2017). 75 397 U.S. 254 (1970). 76 See, e.g., 42 C.F.R. §§ 431.200(a) (b), 431.220(a)(1) (2), 431.242(c) (d), 431.241(a) (b), 431.221(b) (2017). 77 They cite to 16 Del. Admin. C. §§ 5000 et seq. 78 See DSSM § 5302(K) (requiring such mass change notices [to] include sta Here, Appellants face the termination of GED treatment (including the termination of federal funding) that had, for many years, been a covered Medicaid service. But,

Appellants have continued to have these services available through the present, and the

State has committed to pay for all of their services at JRC transition out of JRC is complete. 79

Under federal law, states choosing to participate in Medicaid must provide a core

set of mandatory services to qualified beneficiaries. 80 States may also cover other optional

As such, they are subject to the requirements of federal law. 81 Factored into this mix is our

recognition that both the federal and state governments are entitled to make policy

decisions as to which services are no longer consistent with community-based settings. 82

Given this unique factual scenario, the question here is: what process was due?

79 The Agreements to Participate in Transition, signed by ]

supports [sic] during the transition, and that [JRC] will receive payment for the services it provides to [Ashlee and Robert] during the transition at the conclusion of the transition, as stated in the App. to Opening Br. at A782 83 (No. 93). 80 See 42 U.S.C. §§ 1396a (a)(10)(A), 1396d (a) (2018); see also Lawson, 2004 WL 440405, at *3 (

81 Doe 1-13 ex rel Doe, Sr. 1-13 v. Chiles, elects to provide an optional service, that service becomes part of the state Medicaid plan and is

r. v. Cook, 109 F.3d 693, 698 (11 th Cir. 1997))). 82 See, e.g., Atkins v. Parker he procedural component of the Due Process Clause does not impose a constitutional limitation on the power of Congress to make substantive changes in the law of entitlement to public benefits. (quoting Richardson v. Belcher, We first consider the issue of constitutional due process and contention that in

sending letters to JRC in 2013 demanding termination of GED. They rely heavily on

Goldberg, where the United States Supreme Court held that before a state can terminate a

hearing. 83 The Supreme Court said, in that context, that due process requires: (i) timely

and adequate notice detailing the reasons for a proposed termination; (ii) an effective

opportunity for the recipient to defend by confronting any adverse witnesses and by

presenting arguments and evidence orally; (iii) retained counsel, if desired; (iv) an impartial

decision-maker; (v) a decision resting solely on the legal rules and evidence addressed at

the hearing; and (vi) a statement of the reasons for the decision and the evidence relied

upon. 84

satisfies the Goldberg requirements. 85

These requirements are imputed to the states via the

404 U.S. 78, 81 (1971))); Benton, 586 F.2d at 3 4 (distinguishing Goldberg on the grounds that he present case involves only the termination of optional benefits which the state was never required to provide in the first place, Constitutions giving prospective recipients of optional benefits a constitutional right to their

tters of law and policy are not subject to any hearing requirements under the applicable regulations, whether the hearing be pre- or post- 83 Goldberg, 397 U.S. at 261. 84 Id. at 267 68, 270 71. 85 See, e.g. ust provide that the requirements of §§ 431.205

must meet the due process standards set forth in Goldberg v. Kelly, 397 U.S. 254 (1970), and any additional when adverse actions, such as the denial

of benefits, are implemented by state action. 86

Notably, the Supreme Court in Goldberg focused on welfare benefits needed for

basic subsistence. In addition, the Supreme Court ther

due process requires only an opportunity for written submission, or an opportunity both for

written submission and oral argument, where there are no factual issues in dispute or where

the application of the rule of law is not intertwined with factual issues. 87

Several years after Goldberg, in Mathews v Eldridge, 88 the Supreme Court rejected

the contention that a pre-termination evidentiary hearing (as opposed to a post-termination

hearing) was required before termination of social security disability benefits. It observed

that Goldberg has the Court held that due process requires an evidentiary hearing

89 In Goldberg assistance is given to persons on the very margin of

90 The Court observed in

Mathews that eligibility for disability benefits, by contrast, is not based upon financial

need. 91

86 Lawson, 2004 WL 440405, at *4 (citing Perry v. Chen, 985 F. Supp. 1197, 1201 (D. Ariz. 1996)). 87 Goldberg, 397 U.S. at 268 n.15. 88 424 U.S. 319 (1976). 89 Id. at 340. 90 Id. 91 Id. at 340 41. In Mathews, the Supreme Court observed further [d]ue process is flexible and

calls for such procedural protections as the particular situation demands. 92 Reflecting the

flexibility inherent in the due process analysis, the Supreme Court stated that time and in a meanin 93

Further, it held that the administrative procedures provided here are constitutionally sufficient requires analysis

of the governmental and private interests that are affected. 94

Many cases suggest that Ma pragmatic approach takes into account the

fact/law dichotomy. 95 For example in the context of a reduction of termination in AFDC

92 Id. at 334 (quoting Morrissey v. Brewer, 408 U.S. 471, 481 (1972)); see also Mullane v. Cent. Hanover Bank & Trust Co., 339 U.S. 306, 314 n elementary and fundamental requirement of due process in any proceeding which is to be accorded finality is notice reasonably calculated, under all the circumstances, to apprise interested parties of the pendency of the action and afford them an opportunity to present their objections. The notice must be of such nature as reasonably to convey the required information and it must afford a reasonable time for those interested to make their appearance. But if with due regard for the practicalities and peculiarities of the case these conditions are reasonably met the constitutional requirements are satisfied. (internal citations omitted)). 93 Mathews, 424 U.S. at 333 (quoting Armstrong v. Manzo, 380 U.S. 545, 552 (1965)). 94 Id. at 334 35 (noting that due process requires consideration of three distinct factors, namely, ficial action; second, the risk of an erroneous deprivation of such interest through the procedures used, and the probable value, if any,

the function involved and the fiscal and administration burdens that the additional or substitute procedural requirement would entail (internal citations omitted)). 95 See, e.g., Codd v. Velger, 429 U.S. 624, 627 (1977) ( f the hearing mandated by the Due Process Clause is to serve any useful purpose, there must be some factual dispute between an employer and a discharged employee which has some significant bearing on the employee's reputation. ); Rosen, 410 F.3d at 928 Goldberg, the [United States Supreme] Court has explained that the due process requirement that the government provide a hearing before the termination of benefits turns on the sensible fact/law dichotomy that CMS, the State and Benton have ; Ortiz v. Eichler, 794 F.2d 889, 893 94 (3d Cir. 1986) (distinguishing cases where less detailed pre-hearing notice was required in denying or terminating Aid to Families with benefits, the Court of Appeals for the First Circuit distinguished between across-the-board

reductions in welfare benefits mandated by a statutory change, and reductions based upon

individualized determinations. It stated that for across-the- has recognized that due process may set a lower standard for determining a notice to be

adequate than w 96

Four years after Mathews, the United States Supreme Court, in Court Nursing Center, 97

held that nursing home residents had no constitutional right to a

hearing before a nursing care

an immediate, 98

Nevertheless, it held that Dependent Children, Food Stamps, and Medicaid benefits where those cases did not concern

vidual eligibility determinations, change in the scope of the entire program (quoting Atkins, 472 U.S. at 129)); Washington v.

DeBeaugrine s have agreed further that there is no right to a hearing when there is no factual issue attending a denial or reduction of benefits that is, when there is no factual issue to be heard. The governing regulation confirms not grant a hearing if the sole issue is a Federal or State law fits,

no hearing is required. The right to a hearing when the recipient believes the agency has acted . 96 LeBeau v. Spirito, 703 F.2d 639, 644 45 (1st Cir. 1983) (citing Velazco v. Minter, 481 F.2d 573, 577 (1st Cir. 1973)). 97 447 U.S. 773 (1980). 98 Id. at 787. impact, which is an indirect and incidental result of the does not amount to a deprivation of any interest in life, liberty or property. 99

In view of the unique facts presented here, we believe that as a matter of federal due

process, no pre-termination hearing was required. In other words, even assuming,

arguendo,

federal regulations discussed below, Appellants had no constitutional right to a hearing

prior to these letters being sent. Further, even though only two Delaware citizens are

impacted by the ban on aversives, those regulatory pronouncements are more credibly

viewed as broad-based policy decisions and not discriminatory decisions based on facts

unique to these individuals. The agency decisions to terminate GED here are broad-based

prohibitions against the use of coercion and restraint, including GED. The record before

-making (the

Setting Rule and HCBS Waiver) designed to safeguard all potentially impacted Medicaid

recipients. We do not think the record supports Appellants contention that these changes

were a manufactured litigation tactic directed to them. 100 Having determined that no pre-

99 Id. ect restraint on his liberty, and action that is directed against a third party and affects the citizen only indirectly or incidentally, Id. at 788. decision to cut funding to JRC resulted from its noncompliance with the Setting Rule and HCBS

Waiver rules. 100 Persons with disabilities have faced societal, attitudinal, and institutional barriers over time. Consider Buck v. Bell, 274 U.S. 200 (1927). In Buck, Justice Holmes upheld a - woman c to execute degenerate offspring for crime, or to let them starve for their imbecility, society can termination hearing was required as a matter of constitutional due process, there remains

the question of whether DHSS complied with applicable federal and state statutory and

regulatory requirements. Here, Appellants did receive a hearing eventually, but they raise

challenges as to its adequacy and to the notice they received. We address these points

below.

1. The Adequacy of the Fair Hearing

Although a pre-termination hearing was not required as a matter of constitutional

due process, the Hearing Officer, relying on 42 C.F.R.§ 431.200(b), 42 C.F.R. 431.201 and

16 Del. Admin. C. § 5100(1), ruled that a Fair Hearing was required under the applicable

regulations.

Section 431.200(b) [p]rescribes procedures for an opportunity for a hearing if the

State agency or non-emergency transportation [Prepaid Ambulatory Health Plan] . . . takes

action, as stated in this subpart, to suspend, terminate, or reduce services, or of an adverse

benefit determination by [a Managed Care Organization], [Prepaid Inpatient Health Plan]

or PAHP under subpart F of part 438 of this chapter . . . . 101 Section 431.201 defines

102 Further

prevent those who are manifestly unfit from continuing thei Id. at 205, 207. He noted Id. at 207. Fortunately, states have fragile populations.

101 42 C.F.R.§ 431.200(b) (2017). 102 431.220(a)(a) for which an individual request

amount or type of benefits or services . . . § 431.220(a)(1)(iv) (2017). Federal 5001(1), entitled, Providing the Opportunity for a Fair Hearing, states:

This policy applies to all applicants and recipients of DSS and DMMA for services provided directly by the Agencies or through agreements with other State or contracted entities where the applicant or recipient claims that he/she has been adversely impacted by a specific action taken by DSS or DMMA. An opportunity for a fair hearing will be provided, subject to the provisions of this section, to any individual requesting a hearing who is dissatisfied with a decision of the [DSS] or the [DMMA].

There is some tension in the rules as 42 C.F. R. § 431.220(b) states that need not grant a hearing if the sole issue is a Federal or State law requiring an automatic

change adversely affecting some or all beneficiaries Also, Section 5307(B) of the DSSM

provides that dismiss or deny a request for a fair

hearing where the sole issue is one of state or federal law requiring automatic benefit

adjustments. . . . was taken and whether a hearing was required. 103

We think there are strong arguments that

what Appellants are really challenging here is the broad-based policy decision to ban GED,

and that the public notice and comment process by which those regulations were enacted

claim, it must provide notice to the individual of the action in accord with 42 C.F.R. § 431.210 (2017) or reduction in Medicaid eligibility . . . C.F.R. § 431.201 (2017) under §§ 431 ).

103 proposing a reduction in services the state certainly agrees that would give rise that is an action

Id. remain fully

JRC. . . . The only difference is the state is prohibiting this provider from using an aversive that provided sufficient notice and opportunity to be heard. But under the circumstances

presented here, we find no error with the Hearing Officer determination to conduct a

hearing, especially given that GED had been a covered service for years, given that the

Setting and HCBS Waiver regulations were in the process of being revised during the

period of time leading up to the Fair Hearing, and given that the parties disputed the legal

effect of the CMS letters.

Recognizing that a Fair Hearing was held, the real focus here is on App challenges to its adequacy. We first consider their challenge to the Bifurcation ruling.

Appellants contend that bifurcation of their hearing deprived them of their due process

rights. They assert that bifurcation of the issues prevented evidence of medical necessity,

which they insist is critical in determining whether GED is considered a covered service

under Medicaid.

The Hearing Officer determined if Appellants could demonstrate that GED is a

covered service, then the Hearing Officer would provide a second evidentiary hearing on

the medical necessity issue. GED treatment services are medically necessary, the first issue that must be decided is

whether these services are indeed covered services under Medicaid and/or whether the state

104

104

See id. at A853. issue of Medicaid coverage first, followed by the medical necessity of GED treatment

105

A hearing officer has the authority to bifurcate evidentiary hearings and restrict the

issues raised at the hearings pursuant to 16 Del. Admin. C. § 5304.3. 106 This is not disputed.

The Hearing Officer ultimately determined that a claim that GED treatment is medically

necessary does not mean that it is covered under the HCBS Waiver program. 107 In her

ole, consideration of whether the GED

treatment services at issue are medically reasonable and necessary is a moot issue if

108 We find no error in

handling of the Fair Hearing. Appellants were afforded the full

opportunity to present evidence as to Medicaid coverage of GED. 109 Appellants would

have been able to present evidence on medical necessity had they prevailed on the threshold

105 Id. 106 It provides in relevant part: The Hearing Officer has the authority to restrict the issues raised at the hearing. The following issues may be raised at the hearing. A. Issues described in the notice of action sent to the appellant B. Issues fairly present

16 Del. Admin. C. § 5304.3. 107 See App. to Opening Br. at A955, A966 67 (No. 93). 108 Id. at A955. 109 Id.

at A967. coverage issue. Accordingly, we reject

Hearing.

2. Adequacy of Notice

Appellants contend that their due process rights were violated because DHSS failed

to provide adequate notice of the legal and factual basis for the prohibition of GED

treatment. Citing to State regulations, they argue that adequate notice is required even

when the change of federal or state law terminates Medicaid services for a class of persons.

s

termination of GED services. 110 They assert that DHSS failed to provide (1) any factual

s treatments; (2) any clinical reason for the termination; and (3) any factual basis for the

alleged risk of harm to Recipients. Additionally, Appellants contend that DHSS provided

no legal or expert support for its actions.

In support of their notice arguments, Appellants rely upon state regulations and

Goldberg. As to their state law contentions, both parties cite to 16 Del. Admin. C.

§ 5302(K) but interpret it differently. Section 5302 provides, in relevant part, that [DHSS]

may dispense with timely notice but will send adequate notice not later than the date of

action

(K) When changes in either state or federal laws (e.g., Social Security increases) require automatic adjustments for classes of recipients.

110 Id. at A290. These mass change notices will be timely and adequate. An adequate notice must include a statement of the: 1. Intended action 2. Reasons for such intended action 3. Specific change in law 4. Circumstances under which a hearing may be obtained and assistance continued

The notices will also include:

2. A name and telephone number of a person to call for additional information. . .. 111

Section 5302(K) applies to every recipient under any public assistance program

administered under DHSS. 112

DHSS asserts that by letters to JRC and its attorneys, meetings with Appellants, and

the Fair Hearing Summary, Appellants received more than adequate notice. DHSS further

asserts that Section 5302(K) does not require DHSS to provide detailed reasoning and

evidentiary proof to support its policy decisions (i.e., that GED treatment undermines the

well-being of Recipients in home and community-based settings).

We first address the factual record relating to notice. DHSS sent notice to JRC on

October 8 and 11, 2013. 113 These letters were not addressed to Appellants. But, Appellants

have acknowledged that DHSS did provide them with these letters and did meet with

Appellants around that same time. 114 Two months later, DHSS filed the Fair Hearing

111 16 Del. Admin. C. § 5302(K) (emphasis added). 112 Id. 113 App. to Opening Br. at A14 17 (No. 93). 114 GED would no longer be covered as p Br. at 31. Appellants Summary while, at the same time, contesting that a Fair Hearing was required (which it

was entitled to do pursuant to DSSM § 5307). The HCBS Waiver was amended through

formal rulemaking and a public comment process that included public meetings in all three

Delaware counties with stakeholders. Further, Appellants did not disagr statement at argument that there had been significant interaction between the State and

Appellants throughout this process as to the CMS polices and HCBS Waiver and their

potential impact on Ashlee and Robert. Although Appellants did not have notice in

advance of the October 2013 letters to JRC, by the time of the Fair Hearing, Appellants

had, in substance, all of the information DHSS was required to provide.

By citing to Goldberg, Appellants appear to assert that the notice they received was

constitutionally deficient. As stated in Mathews, procedural due process requires a

balancing of interests. 115 And in Mullane v. Central Hanover Bank & Trust Co., the

convey the

required information . . . and it must afford a reasonable time for those interested to make

their appearance . . . 116 Reply Br. at 14.

During the July 8, 2014 Clarification Conference, DHSS represented that it met with the parents

Br. at A291 (No. 93). 115 Mathews, 424 U.S. at 334 35 (weighing three factors, including the private and government interests affected). 116 Mullane, 339 U.S. at 314 (internal citations omitted). peculiarities of the case these conditions are reasonably met the constitutional requirements

117

Here, the interests of the parents of Ashlee and Robert is to have electric shock

treatment available to be used as a method to control the behavior of their sons. Balanced

against their interests regulations prohibiting the use

of electric shock in order to safeguard its citizens from what it has deemed to be

unacceptable coercive behavior modification practice. If we are also to consider, as

Mathews suggests, the probable value of additional procedural safeguards to correct what

is arguably a defect in the initial notice, we do not think there is any value to reversing and

starting over. Appellants, earlier in the proceedings, were asked by the Hearing Officer if

they wished to withdraw their hearing request and pursue an appeal of the notice issue and

they declined . 118

They did not raise it in their Motion in Limine prior to the Fair Hearing or during the Fair

117 Id. at 314 15. 118 Appellants Opening Br. at 16 (citing App. to Opening Br. at A290 (No. 93)). During this same

counsel whether if DDDS withdrew its fair hearing request to pursue an internal appeal on the notice issue. Counsel declined and responded: I think at this stage I think it would be prejudicial to hit the reset button and go through a different

summary from the State, engaged in some preparation work and started getting witnesses lined up for a fair hearing, I think that would be prejudicial to my clients to do that. . . . I mean and, again, I think it ends up putting us right back where we were or where we are now anyway just further down the line.

App. to Opening Br. at A289 (No. 93). Hearing. 119 Any prejudice to Appellants has been further mitigated by the fact that there

still has been no termination of services, although federal funding has been impacted and

the State and Appellants have entered into transition agreements whereby the State has

. Although

e agree with the Superior Court that in

these highly unique circumstances, it would exalt form over substance to say that

B. GED Is Not a Covered Service

contend that the Hearing Officer erred in her determination that GED is not a covered

service. They contend that GED aversive interventions are part of a category of covered

stated goals of Medicaid. The

determination that GED was not a covered service was supported by substantial evidence

and free from legal error. We agree.

1. GED Is Not Covered Under Federal Law

reatment services were no longer

120 The Hearing Officer

119 Consequently, the Hearing Officer did not address the issue of notice in her Final Decision. 120 Id. at A965. determined that the CMS Letters and the Regional I Lette

deference. 121 She concluded that agency interpretation of its own regulation is

authoritative the use of

electric shock in all community settings 122 The Superior Court concluded that the CMS

123

Appellants argue that the CMS letters and Regional I letter should not be afforded

any deference. 124 They argue that the CMS Letters and Regional I Letter are merely

121 Id. at A966. 122 Id. 123 Oldham, 2018 WL 776580, at *5 (internal citations omitted). 124 Appellants contend that the CMS Letters should not be afforded deference because . . . post hoc rationalization advanced by an agency seeking to defend past agency action ag Opening

Br. at 40 n.57 (quoting Massachusetts v. Sebelius, 638 F.3d 24, 30 (1st Cir. 2011)). Additionally, Appellants argue that the CMS Letters and Regional I Letter should be given only respectful consideration, language of the r [ed] little cla Aplin v. McGrossen, 2014 WL

4245985, at *13, *15 (W.D.N.Y. Aug. 26, 2014). Appellants also assert that the Regional I Letter quoting Kai v. Ross,

336 F.3d 650, 655 (8th Cir. 2003)). They argue that the Regional I Letter is not an official interpretation and construction of the federal Medicaid statute so it is only entitled to Skidmore thoroughness evident in its consideration, the validity of its reasoning, its consistency with earlier

and later pronouncements, and all those factors which give it power to persuade, if lacking power Skidmore v. Swift & Co., 323 U.S. 134, 140 (1944). The Hearing Officer disagreed App. to Opening Br. at A966 (No. 93). Therefore, the Hearing Officer concluded that the Skidmore

as CMS, the agency authorized to specifically

reference[d] mandate[d] Id. at A966. The guidance letters, not official statements of CMS or the Secretary of HHS, that do not have

the force and effect of law. 125

Federal Medicaid regulations explicitly require assurances from participating states

that home and community- and respect, and freedom from coercion and restraint. 126

freedom from coercion and restraint as prohibiting GED treatment in community settings.

Although this Court has stated that

construction of a regulation enacted by an agency which is also charged with its

enforcement, 127 we need not today define with precision the level of deference (on the

128

Instead, it suffices that we find no the 2015

Hearing Officer concluded that by and through the CMS Letters and Regional I Letter, CMS

125 Id. at A700 (citing Skidmore, 323 U.S. at 140); see Opening Br. at 37 (citing Aplin, 2014 WL 4245985, at *13 14). Notably, the First Circuit held in Sebelius Sebelius, 638 F.3d at 33. It ruled

on a CMS guidance letter to Medicaid directors. Id. at 33 34. 126 42 C.F.R. § 441.530(a)(1)(iii). 127 State Farm Mut. Auto. Ins. Co. v. Mundorf, 659 A.2d 215, 220 (Del. 1995) (internal citations omitted). 128 See, e.g., Decker v. Northwest Envtl. Def. Ctr., 568 U.S. 597,

Chase Bank USA, N.A. v. McCoy, 562 U.S. 195, 208 (2011) (further quoting Auer v. Robbins, 519 U.S. 452, 461 (1997)))). fective is

the purpose of rulemaking Id. at 618 (Scalia, J., dissenting in part) (quoting Marbury v. Madison, 1 Cranch 137,

177 (1803)). CMS Letter and Regional I Letter substantial deference. 129 The Hearing Officer

determination that GED is not a covered service under federal law is supported by

substantial evidence and is free from legal error.

In arguing that the medical necessity of their receipt of GED triggers a mandatory

duty of DHSS to cover that service explicit disapproval of GED Appellants overlook the critical role of CMS in approving

the services provided under HCBS waivers. The statutory basis for -

necessity theory is the so- State plan for medical assistance

must . . . include reasonable standards . . . for determining . . . the extent of medical

assistance under the plan which . . . 130

1905 of the Social Security

Act to include twenty-nine different categories of care. 131 HCBS, however, are not listed

129 See Davis v. Shah y

Community Health Ctr. v. Wilson-Coker, 311 F.3d 132, 138 (2d Cir. 2002))); for Medicare and Medicaid Servs., 576 F.3d 885, 888 (8th Cir. 2009) (holding that unless it is

be entitled to deference, particularly in a complex and highly technical regulatory program); Skandalis v. Rowe, 14 F.3d 173, the agency administers is entitled to considerable deference. . . . When an agency construes its

own regulations, such deference is particularly ations omitted)). 130 42 U.S.C. § 1396a(a)(17). 131 See 42 U.S.C. § 1396d(a). among those twenty-nine different categories, but instead come into play under an entirely

different section of the Act: section 1915(c).

the extent that the services are approved by CMS. 132

waiver provide that a State plan . . . an

payment for part or all of the cost of home and community-based services . . . approved by

[CMS] 133 iver shall not be granted . . . unless the

State provides assurances satisfactory to [CMS] that . . . necessary safeguards . . . have

been taken to protect the health and welfare of individuals provided services under the

134 In other words, CMS approval which CMS cannot grant unless the State

provides adequate assurances that it has put in place the necessary safeguards to protect

is needed before the State can provide coverage under an

HCBS waiver.

indeed it specifically requested that both Massachusetts and Delaware stop covering GED.

That decision had a reasonable basis in the HCB Settings Rule, which requires that each

. . . 135 Given that

the purpose of GED is to coerce the recipient into ceasing undesirable behavior by applying

132 CMS.

133 Id. § 1396n(c)(1) (emphasis added). 134 Id. § 1396n(c)(2) (emphasis added). 135 42 C.F.R. § 441.301(c)(4)(iii). At bottom, Appellants medical-necessity argument is premised on the notion that

the State s plan lacks reasonable standards. But we cannot fault the State s decision to stop

covering GED as unreasonable when that is what the federal authorities were telling them

to do. If anything, disobeying CMS which had issued not only letters, but also a binding,

notice-and-comment regulation would be the unreasonable thing to do. This is not a case

where the State made its decision based on arbitrary criteria such as the cause of the

136 Instead, the State based its decision on the uncontroversial

principle that it must follow federal law. Indeed, it is clear that Delaware has sought to

provide coverage to help the Appellants, and only stopped covering the GED treatments

when the federal government said that was impermissible. This is a far cry from the federal

136 We acknowledge that there is federal case law faulting states for denying medically necessary treatment to Medicaid patients based on the reasonable standards requirement. But the animating concern of those cases is to ensure that states do not deny needed treatments to some patients based

empty distinctions between different types of equipment. See, e.g., White v. Beal, 555 F.2d 1146, 1151 on etiology rather than medical necessity violated the reasonable standards requirement, even Lankford v. Sherman, 451 F.3d 496, 506 (8th Cir. Medicaid service, it cannot arbitrarily choose which [durable medical equipment] items to

reimburse under its Medicaid poli Weaver v. Reagan, 886 F.2d 194, 197-200 (8th Cir. 1989) (holding that Missouri could not limit coverage of AZT to patients who had specific diagnostic criteria, at a time when AZT was the only AIDS medication available and was medically necessary for some patients who did not meet those diagnostic criteria). cases cited by Appellants, which have generally involved the denial of services for

seemingly arbitrary reasons. 137

In sum, the State did not violate the reasonable standards requirement in deciding

.

2. GED Is Not Covered Under State Law

Appellants contend that the HCBS Waiver is

Hearing request because the language in the 2014 amendment is (1) a manufactured

litigation position taken by DHSS after Appellants filed the Fair Hearing request; and (2)

eneral

rulemaking that DHSS has attempted to make it in form. We reject these contentions.

T supported by substantial evidence and free from legal error. In its HCBS Waiver, Delaware

conditioning, defined as the contingent application of startling, painful or noxious stimuli

138 With the approval of CMS, DHSS enacted this provision into the HCBS

Waiver program.

Moreover, at the DHSS level, the incorporation of the HCBS Waiver language

satisfied its procedural requirements by process of notice, comment, and public hearing.

The HCBS Waiver was duly enacted. The Hearing Officer properly concluded that

137 See, e.g., Lankford, 451 F.3d at 506. 138 App. to Opening Br. at A503 (No. 93). because the HCBS Waiver was duly enacted and approved by CMS on July 1, 2014, it

carries the force and effect of law. Appellants did not challenge the lawfulness of that

waiver. 139 The waiver unquestionably bans GED and has the force of law. In sum, the

law was supported by substantial evidence and free from legal error.

C. Americans with Disabilities Act Claim Was Not Properly Raised

below. 140

VI. Conclusion

For the reasons set forth above, we AFFIRM.

139 Del. C. § 14141 but did not.

140 Supr. Ct. R. 8.

IN THE SUPREME COURT OF THE STATE OF DELAWARE

EDWARD and PAMELA PRUNCKUN, as § parents and legal guardians of ROBERT § PRUNCKUN, § No. 93, 2018C § Plaintiffs-Below, § On appeal from the Superior Court Appellants, § of the State of Delaware § v. § § C.A. No. N16A-05-010 DELAWARE DEPARTMENT OF HEALTH § AND SOCIAL SERVICES, § § Defendant-Below, § Appellee. §

________________________________________________________________________

MALCOLM and DOMINICA OLDHAM, as § parents and legal guardians of ASHLEE § OLDHAM, § No. 94, 2018C § Plaintiffs-Below, § On appeal from the Superior Court Appellants, § of the State of Delaware § v. § § C.A. No. N16A-05-009 DELAWARE DEPARTMENT OF HEALTH § AND SOCIAL SERVICES § § Defendant-Below, § Appellee. §

Submitted: November 28, 2018 Decided: January 3, 2019

Before STRINE, Chief Justice; VALIHURA, VAUGHN, SEITZ, and TRAYNOR, Justices, constituting the Court en Banc.

Upon appeal from the Superior Court. AFFIRMED. Francis G.X. Pileggi, Esquire, Brian D. Ahern, Esquire, Eckert Seamans Cherin & Mellott, LLC, Wilmington, Delaware. Of Counsel: Michael P. Flammia, Esquire, Eckert Seamans Cherin & Mellott, LLC, Boston, Massachusetts; Christopher E. Torkelson, Esquire (Argued), Eckert Seamans Cherin & Mellott, LLC, Princeton, New Jersey, for Appellant.

Lauren E. Maguire, Esquire (Argued), Adria B. Martinelli, Esquire, Delaware Department of Justice, Wilmington, Delaware, for Appellee. VALIHURA, Justice:

I. Overview

Ashlee Oldham and Robert Prunckun wo Delaware Medicaid recipients housed at Judge Rotenberg

to use a skin-

residents. 1

66v through the skin. Side effects, aside from the shock, include reddening of the skin,

potentially lasting for days, blisters, and anxiety. For years since the mid-2000s, while at

JRC, Recipients comprehensive behavioral treatment plans included GED and these

services were covered by Medicaid with the knowledge and approval .

But in 2012, the Center for Med

agency charged with promulgation and enforcement of Medicaid regulations and the

approval of certain waivers relevant here, advised the Massachusetts state agency

responsible for Medicaid administration that continued use of GED by JRC would place

that That waiver is part of a

program Congress has authorized in order for certain persons with developmental

disabilities to receive Medicaid services in a community setting, rather than in an

1 Although these are two separate appeals, the legal arguments prese opening briefs are identical. The State has filed nearly identical briefs in the two appeals. This

Court, sua sponte, consolidated the appeals. institutional facility. It is known as t waiver program and it has provided such services to Recipients at issue here. Before a

state can participate in the HCBS waiver program, it must first apply for a waiver from

CMS. Thus, the use of GED by JRC waiver program.

Following s letter to Massachusetts, Delaware took measures to avoid placing

its own HCBS waiver program at risk. In October 2013, Delaware, through DHSS,

instructed JRC to cease using GED on the Recipients. It sought and received clarification

CMS region that the use of GED was prohibited. DHSS finally

terminated JRC as a qualified provider after JRC refused to cease using GED. According

to DHSS, both federal and state entities charged with enforcing Medicaid laws have

deemed the use of GED unacceptable in the HCBS community-based context and generally

unacceptable in modern day society.

Although the procedural history is complex, as explained below, the gist of

Appellants challenge on appeal is that they were denied due process because

administrative hearing officer bifurcated proceedings to address what she concluded was a

threshold issue, namely, whether GED is a covered Medicaid service under the Medicaid

Home and program. Instead, Recipients

contend that they should have been allowed to introduce evidence that GED is medically

necessary, and that by removing GED services, DHSS has threatened Recipients to remain in a community-based setting a conclusion they desired to prove through

evidence and expert testimony. Accordingly, Recipients, by and through their parents and

guard in

bifurcating the Fair Hearing and in concluding that aversive treatment was no longer a

Pending this appeal, as a result of transition agreements entered into by the parties,

Recipients continue to receive community-based services, including the availability of

GED, at JRC to this day. 2 CMS has prohibited the use of federal funding to JRC, and

although the State of Delaware thereafter picked up the tab, it ceased making payments to

JRC in 2014 . 3 But the State of Delaware agreed

to pay JRC in full once the Recipients out of JRC is complete.

II. Facts and Procedural Background

Recipients are adult Medicaid beneficiaries and Delaware citizens with uniquely

severe, behavioral, developmental, and emotional disorders, disabilities, and autism. They

both require intensive behavioral health services in order to treat their violent, self-

injurious, and potentially life-threatening conditions. Both received medical assistance

benefits pursuant to the Delaware Home and Community Based Services Medicaid Waiver

2 See App. to Opening Br. at A782 83 (No. 93). Appellants state that Ashlee no longer receives GED applications. See Reply Br. at 18, n. 4 (No. 93). 3 The any federal funding as long as GED is in effect, DDDS is using state funds until the transition to a

qualified D . Social Security Act . 4 HCBS waivers allow states to offer services to

individuals who are elderly or have disabilities and live in a community setting in lieu of

institutionalization. In Delaware, the Division of Developmental Disabilities Services

ealth and Human Services

program.

The Recipients are adult males and both have extensively documented histories of

self-injurious, aggressive, and destructive behavior. For example, included throwing chairs, destroying property, kicking and biting others, smearing his

feces, urinating on the floor and in electrical outlets, banging his head on objects, refusing

medical care, and jumping out of a second story window twice, which caused severe

orthopedic injuries, including a broken pelvis. He has been diagnosed with intermittent

explosive disorder, impulse control disorder, pervasive developmental disorder, and

personality change secondary to brain injury.

head, causing severe head injury, self-

induced vomiting, dangerous weight loss, biting others, kicking and spitting, scratching

and biting himself, inappropriate urination and defecation, refusing medical care, and

violently attacking staff. When he was enrolled in the Delaware Autism Program, twenty

unpredictable lunging and biting all within a fifteen-month period.

4 42 U.S.C. § 1396n(c) (2018). After a long history of unsuccessful treatment and institutionalization for their

severe behaviors and disabilities, both Ashlee and Robert, in 2004 and 2005, respectively,

entered the JRC in Massachusetts where they remain. It is one of the few facilities in the

country to employ aversive treatment procedures. JRC is the only facility in the United

States that utilizes a graduated electronic decelerator device.

Medical Behavior Modification Treatment Plan dated June 11, 2013, explained that JRC

- , which is manufactured by

JRC. That device the JRC staff, a battery-operated

receiver/stimulator worn by the JRC client and an electrode that is connected to the

5 The receiver/stimulator delivers a two- -level

6 The GED- a current of 41 mA RMS, with a voltage of 66v when

7 to the client after

he engages in a tar 8 The side effects include reddening of the skin, blisters,

between the point in time when the teacher or

5 App. to Opening Br. at A188 (No. 93). 6 Id. 7 Id. 8 Id. aide announces that the client has engaged in a targeted inappropriate behavior and the

9

Appellants maintain that as a result of their ongoing treatment at JRC, the Recipients

no longer require any restraint, and have avoided highly restrictive institutional or isolated

settings and debilitatingly high dosages of psychotropic drugs that once were the norm for

them. They point out that the use of GED is part of their individualized treatment plans

approved by a Massachusetts Probate and Family Court judge who issued orders on their

plans following an evidentiary process. They also point out that until 2013, DHSS assented

treatment plans at JRC. Although Appellants claim the aversive

treatment has been the most successful thus far, it is, by far, the most controversial. As the

State aptly observed, this case is largely about the use of GED, and changes to the federal

and state rules that have impacted the issue of whether GED is an acceptable and

appropriate treatment modality. That leads us to explaining the relevant regulatory and

legal backdrop, and the evolving views of GED and aversive treatment as reflected in the

Medicaid regulatory system.

Overview of the Medicaid Waiver Program

Both sides appear to acknowledge that federal and state standards have evolved over

time in response to clinical practice and societal norms. But they disagree as to whether

certain of these regulatory changes actually prohibited GED, whether those various

regulatory changes and pronouncements have the force and effect of law, what deference

9 Id. at Massachusetts Probate and Family Court. Id. at A42 43 (Sept. 13, 2013 Order). they deserve by hearing officers and courts, and whether Appellants were given proper

notice of them. One of the issues we have to unravel concerns tion that

when the State of Delaware sent letters to JRC in October 2013 demanding discontinuation

of certain aversive treatments, including GED, that demand was based upon

correspondence from the federal government sent to Massachusetts, which is Region I, not

Region III, which encompasses Delaware. Appellants contend that correspondence did not

prohibit GED in that it did not have the force of law, was not sent to the Guardians, and

that by the time Delaware explicitly did prohibit GED, Appellants had already asserted

their right to a Fair Hearing. Accordingly, Appellants contend the regulatory changes were

a post hoc manufactured litigation maneuver targeting them, as opposed to a generalized

prohibition, and as such, violated their due process rights.

DHSS responds that the 2013 CMS correspondence did prohibit GED, and in any

event, Appellants are not prejudiced because Recipients presently continue to have the

controversial GED treatment available to them eventual expense by virtue

of transition agreements entered into between DDDS and the Guardians on April 28, 2015.

DHSS further contends that by the time of the Fair Hearing, the prohibition at both the

federal and state levels had become clear if it was not before, and so it made sense to

determine, as a threshold matter, whether GED is now a covered Medicaid service.

By way of regulatory background, under the Medicaid regime, states and CMS enter

a contract called the State Medicaid Plan. CMS is the federal agency charged with

promulgation and enforcement of Medicaid regulations. Region I of CMS included state must provide all federally mandated Medicaid services, as well as any optional

services it elects to cover at its discretion. Both the mandatory and optional components

In return for

federal funds, the state must comply with requirements imposed by Title XIX of the Act. 10

CMS will not fund or reimburse a state for prohibited services. In Delaware, the Medicaid

program is generally overseen by DHSS. DHSS contends GED is now a prohibited service.

CMS has the authority to waive certain provisions of the Medicaid laws. 11 The

HCBS Waiver is a Medicaid option available to states under Section 1915(c) of the Act. 12

Nearly all states, including Delaware, offer services to persons with intellectual and

developmental disabilities through a Section 1915(c) HCBS Waiver. This allows such

persons to live in a community setting in lieu of institutionalization. The DDDS

The HCB Setting Rule sets forth requirements governing the criteria and

characteristics of settings eligible for reimbursement for home and community-based

services provided under Sections 1915(c), 1915(i), and 1915(k) of the Medicaid statute.

The HCB Setting Rule defines person-centered planning requirements for individuals in

Medicaid-funded community settings under HCBS Waivers. The rule seeks to ensure

10 See 42 U.S.C. § 1396 (2014); 42 U.S.C. § 1396r (2011). 11 Specifically, under § 1915(c) of the Act, the Secretary of the Department of Health and Human Services is authorized to waive § 1902(a)(10)(B) of the Act, allowing States to target an HCBS waiver program to a specified Medicaid-eligible group of individuals who would otherwise require institutional care. 12 See 42 U.S.C. § 1396n (c). individual rights of privacy, dignity, respect, and freedom from coercion and restraint in

home and community-based settings. The State has argued that the move to eliminate

electric shock as a covered Medicaid service began in 2010 with the passage of the

Affordable Care Act 13 and the Setting Rules proposed and promulgated thereunder. 14 On

April 15, 2011, CMS published proposed HCB Setting Regulations. 15 CMS published the

proposed HCB Setting Regulations again on May 3, 2012. 16

The HCB Setting Rule was published as a final regulation on January 16, 2014. 17 It

became effective on March 17, 2014 and, consistent with the May 2012 proposed version,

it bans the use of coercion and restraint in community settings. The final HCB Setting

Rule provides in relevant part:

Home and community based settings must have all of the following qualities, and such other qualities as the Secretary determines to be appropriate, based on the needs of the individuals indicated in their person-centered service plan: . . .

13 Affordable Care Act: Patients Protection and Affordable Care Act of 2010, Pub. L. No. 111-148 (codified as amended by the Health Care and Education Reconciliation Act of 2010, Pub. L. No. 111-152). 14 App. to Opening Br. at A1035 (No. 93). 15 Medicaid Program; Home and Community-Based Services (HCBS) Waivers, 76 Fed. Reg. 21311 (proposed Apr. 15, 2011) (to be codified at 42 C.F.R. pt. 441). 16 Medicaid Program; State Plan Home and Community-Based Services, 5-Year Period for Waivers, Provider Payment Reassignment, and Setting Requirements for Community First Choice, 77 Fed. Reg. 26362 (proposed May 3, 2012) (to be codified at 42 C.F.R. pts. 430, 431, 435, 436, 440, 441, 447). 17 Medicaid Program; State Plan Home and Community-Based Services, 5-Year Period for Waivers; Provider Payment Reassignment, and Home and Community-Based Setting Requirements for Community First Choice and Home and Community-Based Services (HCBS) Waivers, 79 Fed. Reg. 2948, 3032 (Jan. 16, 2014); 42 C.F.R. § 441.530(a)(1)(iii) (2014). from coercion and restraint. 18

The adoption of the HCBS Setting Rule was preceded by a lengthy public comment

process. 19

The DDDS waiver was set for renewal in 2014 in Delaware. In its revised waiver

application submitted to CMS in March 2014, DHSS inserted a provision in its Waiver

application explicitly stating that [t]he use of averse conditioning defined as the

contingent application of startling, painful or noxious stimuli is prohibited 20 On April 1,

Registry as a proposed regulation. 21

A public comment period of thirty days followed.

S Waiver was published in the June 2014 Delaware Registry as a final

regulation. 22

18 42 C.F.R. § 441.530(a)(1)(iii) (emphasis added). This provision appeared in the May 3, 2012 version of the proposed rule. Medicaid Program; State Plan Home and Community-Based Services, 5-Year Period for Waivers, Provider Payment Reassignment, and Setting Requirement for Community First Choice, 77 Fed. Reg. 26362, 26378-79 (proposed May 3, 2012) (to be codified at 42 C.F.R. pts. 430, 431, 435, 436, 440, 441, 447). 19 Medicaid Program, 77 Fed. Reg. at 26382-83 (describing the public comment process up to and including the 2012 proposed rule). The summary of the 2014 final HCBS Setting Rule states that 1,653 comments were received in response to publication of the April 15, 2011 proposed rule, and employers, health insurers, health care assoc in response to the May

3, 2012 proposed rule. Medicaid Program; State Plan Home and Community-Based Services, 5- Year Period for Waivers, Provider Payment Reassignment, and Home and Community-Based Setting Requirements for Community First Choice and Home and Community-Based Services (HCBS) Waivers, 79 Fed. Reg. 2948, 2949, 2952, 3003 (Jan. 16, 2014) (to be codified at 42 C.F.R. pts. 430, 431, 435, 436, 440, 441, 447). 20 App. to Opening Br. at A670 (No. 93) (emphasis added). 21 17 Del. Reg. 950 (Apr. 2014). 22 17 Del. Reg. 1179 (June 2014). DDDS also published notice of the Delaware HCBS Waiver renewal application on

its website. 23 Public meetings were held on March 4, 5, and 6, 2014 in each of the three

counties. A written summary of the proposed changes (the same document available on

the DDDS website) was provided to the public at the meetings, and the complete waiver

application was available for public view. The Delaware HCBS Waiver was approved by

CMS and became effective July 1, 2014. 24

On October 7, 2015, DDDS amended its policies to incorporate the definition of

This revised Delaware Behavior and

Support Plan prohibits a number of practices, including Averse Interventions. 25 The

Interventions intended to inflict pain, discomfort and/or social humiliation or any intervention as perceived by the person to inflict pain, discomfort, or social humiliation in order to reduce behavior. Examples of aversive interventions include, but are not limited to, electric skin shock, liquid spray -preferred tastes applied in the mouth. 26

DHSS contends that there is also a contract-based prohibition on the use of GED.

By contract with DDDS, all Delaware-qualified Medicaid providers who serve individuals

23 App. to Opening Br. at A402 (No. 93). 24 See State of Delaware: Statewide Transition Plan for Compliance with Home and Community- Based Setting Rule at 14, 39 (last updated Mar. 30, 2016), http:/dhss.delaware.gov/dhss/dmma/files/statewidetransitionplan.pdf. 25 App. to Answering Br. at B2 (No. 93) punishment. See App. to Opening Br. at A499 (No. 93) Health support policy prohibits the use of mechanical restraints; corporal punishment or threat of

corporal punishment . . . 26 App. to Answering Br. at B4 (No. 93) (emphasis added). through DDDS programming agree to comply with all statutes, regulations, policies and

procedures of DDDS. 27 s

State and Federal licensing standards and all other applicable standards as required to

28 s contract with JRC expired on September

30, 2014, when JRC refused to cease use of GED on Recipients. 29

Overview of the Procedural Backdrop

It is against the evolving regulatory framework that we consider the issues raised

here. Although Appellants largely base their due process challenge on alleged flaws in the

administrative process, in the end, both the Hearing Officer and the Superior Court viewed

the principal and threshold issue as an issue of Medicaid coverage, and specifically,

whether GED aversive treatment is a covered Medicaid service.

The most direct leading to the

prohibition on GED treatment appears to stem from correspondence sent to Massachusetts

by the federal government in 2012. On December 14, 2012, Richard McGreal, a CMS

. The Region I Letter stated in relevant part:

Residential and service settings operated by the Judge Rotenberg Educational Center (JRC) are of particular concern. The State indicated that JRC is the only provider currently using Level III interventions, described in the September 14 th painful, aversive stimuli and deprivation

27 App. to Opening Br. at A121 (No. 93). 28 Id. at A109. 29 DDDS last renewed the contract with JRC on July 1, 2013. Level III interventions include use of an electronic shock device known as a graduated electronic decelerator, or GED, in use solely by JRC. . . .

Residential facilities and the use of aversive interventions including GED and the use of food deprivation procedures are regulated by the State. The State has described its movement toward positive behavioral reinforcement processes. However, as reasonable people will agree that electronic shock and withholding of meals have no place in their homes or communities, we therefore request that the State provide immediate assurance that the use of Level III aversive interventions have been eliminated for any and all individuals enrolled in the HCBS waiver. . . . At a minimum, the settings in which waiver participants are served must not include any in which State regulation authorizes the use of Level III interventions. This condition must be met no later than the effective date of the waiver renewal. In the interim the State should cease all billing for FFP for HCBS services provided to individuals residing in residences practicing these procedures. 30

In light of the CMS directive to Massachusetts, and in preparation for its application

to CMS for its own HCBS Waiver set for renewal in 2014, DDDS met with the Guardians

to explain that JRC would no longer be permitted to use GED on the Recipients. 31

30 App. to Opening Br. at A812 13 (No. 93). See

App. to Opening Br. at A499 500; see also Judge Rotenberg Educ. Ctr. v. Office of Admin. Hearings, 2009 WL 162066, at *5 (Cal. Ct. App. Jan. 26, 2009) (affirming decision by administrative hearing officer that GED used by JRC constitutes corporal punishment). Notably, appeal the Id. at *3 n.3. 31 See App. to Opening Br. at A291 (No. 93). The following exchange occurred during the March 12, 2014 Clarification Conference: Ms. Woolfolk: I want the record to be clear that DDDS met with both sets of parents in Delaware and explained to them exactly the next steps in the process that was going on. Hearing Officer: When was this approximately? Was this before or after the October 2013 letters? Ms. Woolfolk: I believe it was just about at the same time. In letters dated October 8 and 13, 2013 to the JRC, DHSS advised JRC that it was

aware of the Region I Letter. The

Waiver

Supports which prohibited mechanical restraints, corporal punishment or

threat of corporal punishment . . . physical interventions which cause pain . . . . 32 It

[s], nd

stated that of all aversive[s] must be completed within 60 days from

33

In response, on November 27, 2013, Appellants filed a Request for a Fair Hearing

with DHSS, arguing that GED treatment services should continue uninterrupted. 34 In

response to this request, on December 16, 2013, DHSS filed a Fair Hearing Summary

[n] 35

Hearing Officer: Just about the same, okay go ahead. Ms. Woolfolk: We met with them in Delaware each of them did . . . . There was certainly no blindsiding here of parents. And I want the record to be clear on that. Id. Ms. Woolfolk represents DHSS in her capacity as Deputy Attorney General for the State of

32 Id. at A14 (emphasis added). 33 Id. 34 Id. at A18. 35 Id. at A46 47. The Fair Hearing Summary (id. at A46 95) attached the Delaware HCBS § 1915(c) waiver; 42 C.F.R. §§ 441.302, 441.303; and the DDDS Policy: Behavior and/or Mental DDDS filed a Motion to Dismiss this request on March 6, 2014. A clarification conference was thereafter conducted to discuss procedural and substantive issues and DDDS filed a

supplemental Motion to Dismiss. The hearing was set for July 15, 2014. The

administrative proceedings were stayed while Appellants pursued an appeal in the Superior

determination that the reasonableness and necessity of using Level III interventions was

not at issue. 36 The appeal was dismissed on February 10, 2015 as an improper interlocutory

appeal and remanded. The hearing was reset for June 30, 2015. Again, the parties

requested clarification on the scope of the hearing and DHSS renewed its Motion to

Dismiss. Appellants expressed concern that they were not given the opportunity to fully

brief the issues raised by DHSS in its Motion in Dismiss and that they were entitled to an

evidentiary hearing, including evidence of medical necessity of the GED, prior to oral

s Motion to Dismiss. 37

In the midst of the procedural wrangling over the scope of the continued Fair

Hearing, Id. at A47. It also identified who was expected to testify

for the State, including of the Center of Medic Id. at A47. 36 Id. at A358 59; see also id. at A350 . . . (1) letters of [DDDS] sent in October 2013 to [JRC] . . . ss Fair Hearing Request for [Recipients] dated March 6, 2014, and (3) the clarification conference, reasonableness and necessity of using aversive behavioral interventions . . . including [GED], on [Recipients] is not an issue in this fair hearing

37 See id. at A593. III on the use of the GED on December 23, 2014 since Delaware is in Region III, not

Region I. CMS responded on March 10, 2015 to Mr. Groff . In

that letter from Ralph Lollar, Director, Division of Long Term Services and Support of

CMS, Lollar confirmed to DDDS that electric shock treatment is inconsistent with HCBS

settings. He wrote:

Residential facilities and the use of aversive interventions including electrical shock using a graduated electronics decelerator (GED) are regulated by the State. The State asserts that the use of aversive interventions is prohibited in ted clarification from [CMS] regarding the use of GED devices and denial of nutritionally adequate diets in home and community-based settings. Electric shock therapies and withholding of meals are not characteristic of HCBS settings; we therefore request that the State provide immediate assurance that the use of these aversive interventions has been eliminated for any and all settings in which individuals enrolled in Medicaid live or receive services.

interventions which cause pain are considered aversive interventions prohibited by the State. Therefore, this condition must be met immediately and these practices must cease and desist. The State should cease all billing for FFP [federal financial participation] for individuals receiving Medicaid services through providers practicing any of the above referenced procedures. 38

Following

Fair Hearing request, the Hearing Officer issued an order on November 30, 2015 (the

Bifurcation The Hearing Officer determined that

and even more n 39 She

38 Id. at A576 (emphasis in original). 39 Id. at A853. In support of her determination, the Hearing Officer cited to 42 C.F.R. § 431.200(b), 42 C.F.R. § 431.201 and 16 Del. Admin. C. § 5100(1). further ruled that ervices are medically

necessary, the first issue that must be decided is whether these services are indeed

covered . . . . 40 proceed as a bifurcated process considering the issue of Medicaid coverage first, followed

41

Appellants thereafter filed a Motion in Limine arguing that they should be able to

present evidence related to the reasonableness and necessity of aversive services at the Fair

Hearing. That issue, along with the primary coverage issue, was considered at the Fair

Hearing which occurred on January 13, 2016. The Hearing Officer admitted 209 exhibits

into evidence without objection from either party.

Following the Fair Hearing, on April 21, 2016, the Hearing Officer issued a final

decision . 42 The Hearing Officer first explained her decision to deny

in Limine wherein Appellants had sought to present evidence that GED

was a medically necessary treatment for Appellants. Appellants also had contended that

the issue of coverage was, in part, dependent upon the issue of medical necessity. DHSS

had countered that while all covered services must be medically necessary, not all

medically necessary treatments are covered.

The Hearing Officer ruled that

prohibited serv

40 App. to Opening Br. at A853 (No. 93). 41 Id. 42 Id. at A952 82. 43

Delaware Medicaid, then arguably, the state erred in instructing JRC to discontinue the

services and m 44 Accordingly, the Hearing Officer

ruled that

45

The Hearing Officer next considered whether electric shock treatment was a covered

service under Medicaid and concluded that it was not. The Hearing Officer summarized

the arguments on both sides that had been presented at the January 13, 2016 Fair Hearing.

DHSS contended that GED was prohibited by both state and federal law. As for

state law, DHSS pointed to the HCBS Waiver which was duly enacted and approved by

CMS on July 1, 2014 and it had the force of law.

As for the federal level, DHSS pointed out that the 2015 CMS Letter had been

signed by the head of the CMS Division of Long Term Care Services the CMS branch

that oversees the implementation of the HCBS Rule in all Medicaid funded community

services nationwide. Thus, DHSS contended that it applied not solely to Regions I or III,

but rather, it applied nationwide. According to DHSS, this letter meant that federal law

prohibited the use of electric shock in all community settings nationwide. 46 Thus, DHSS

43 Id. at A955. 44 Id. 45 Id. In support of this proposition, she cited Beal v. Doe, 432 U.S. 438, 4 But nothing in [Title XIX] suggests that participating States are required to fund every medical procedure that falls within the delineated categories of medical care 46 App. to Opening Br. at A957 (No. 93). argued that the prohibition on GED aversive treatment represented a considered judgment

by state officials, through the HCBS Waiver, and by federal officials, through the CMS

letters, that the GED treatment services, though formerly covered, would no longer be a

covered Medicaid service.

Appellants, on the other hand, contended that the CMS letters are neither policy nor

regulations, but rather, are guidance only. They argued that the controlling regulation is

the HCBS Setting Rule (which became effective March 17, 2014) which refers to the use

coercion or restraint ecifically refer to aversives, let alone GED

in particular. In addition, Appellants argued that in the renewed HCBS Waiver, DDDS, by

eliminating GED as a treatment modality, has undermined the goals of the waiver program

to remain in a community-based setting.

After considering the arguments, along with 209 exhibits submitted by the parties,

the Hearing Officer ruled that 2013 to JRC to cease using GED treatment services was correct and well within its

47 Further, she held that duly promulgated Delaware HCBS Waiver carries the force and effect of law cannot be

48

47 Id. at A966. 48 Id. The Hearing Officer constitute regulatory authority. Rather, she concluded that its

49 She explained her reasoning as follows:

[T]he CMS letter to Delaware dated March 10, 2015 was authored by the Director of the CMS Division of Long Term Care Services, which is the CMS branch responsible for overseeing the implementation of the HBCS Rule in all Medicaid funded community services nationwide. Certainly, a response from the national Director of the CMS branch responsible for the HCBS waivers that is directly on point should be given substantial deference. Moreover, review of the CMS letter to Delaware finds that the text specifically references GED as a prohibited aversive not covered under the HCBS Waiver. Further, the CMS letter to Delaware clearly mandates the cease all billing for FFP [federal financial participation] for individuals receiving Medicaid services t

remain covered under Medicaid as a behavioral intervention is simply not supported. 50

Finally, the Hearing Officer

somehow limited on the coverage issue because they could not present evidence as to

medical necessity to support their coverage position and that the Hearing Officer had

restricted the Fair Hearing to argument only. She emphasized that [Bifurcation Order] ability to present evidence and/or testimony to prove Medicaid coverage in the first part of

51 She explained:

[M]edical necessity does not automatically guarantee Medicaid coverage. At the onset of this Fair Hearing, this Fair Hearing Officer asked both sides if there would be any witnesses presented. Apparently, as stated on the record,

49 Id. 50 Id. 51 Id. Appellants asked DHSS, without clarification from this Fair Hearing Officer, if witnesses were permitted during the first part of this Fair Hearing. DHSS advised that it understood the first part of the Fair Hearing was limited to

ability to present witnesses and/or testimony to provide Medical coverage in the first part of this Fair Hearing. Although Appellants argued that they had to present witnesses and testimony on medical necessity to prove Medicaid coverage, this argument is also unsupported. Consequently, denying

testimony to support the Medicaid coverage. 52

Decision in the Delaware Superior Court pursuant to 31 Del. C. § 520. The Guardians

provided an inadequate Fair Hearing summary with shifting legal justifications for its

actions, and that DHSS engaged in coercive and prejudicial conduct resulting in a denial

of due process. They argued further that the Hearing Officer ted

by substantial evidence and that it was incorrect because electronic shock treatment was

and remains a covered service.

Following briefing and oral argument, the Superior Court rejected each of these

contentions in an opinion dated January 30, 2018. First, it concluded that bifurcating the

in their ability to allow evidence regarding Medicaid coverage, including by witness

53 Thus, it ruled that 52

Id. at A967. 53 Oldham , 2018 WL 776580, at *5 (Del. Super. Jan. 30, 2018). covered service, no doubt the Guardians would have had a full opportunity to present their

54

Next, the Superior Court concluded that both state and federal law support the

state level, it conditioning, defined as the contingent application of startling, painful, or noxious stimuli

55

was validly promulgated pursuant to legislative authority. The Superior Court explained:

Here, DHSS amended its waiver through the formal rulemaking process by gathering input from providers and advocates, convening public hearings and comment, and publishing notice of the waiver as a proposed final regulation. Delawar substantiates the aversives are not Medicaid

covered services. 56

support HCBS Waiver. It reasoned that

right by the waiver, but also as the Guardians

propose 57

54 Id. 55 Id. 56 Id. 57 Id. at *6. As to the prohibition on GED at the federal level, the Superior Court concluded that

s

mandatory 58 Further, the

to freedom from coercion and

restraint, was interpreted by CMS as prohibiting the use of aversives such as GED.

A mandatory judicial

59 te law, and the federal agency tasked

60

As to the various procedural due process challenges, the Superior Court rejected

them and observed evidence that notice was not received, or that the hearing was held without them, and

nothing to the effect that they did not understand the issues or the bases for the decision in

qu 61 engaged in a full evidentiary Fair Hearing in which they were prepared to argue the issues

raised, permitted to produce any evidence on the issue of Medicaid coverage, and to raise

58 Id. at *5. 59 Id. at *6. 60 Id. 61 Id. 62 Accordingly, the

Superior Court concluded that granting reversal would be elevating form over substance.

e II of the

had not been fairly raised in the proceedings

below.

III. Issues on Appeal

Appellants raised three issues on appeal. First, they argue that the administrative

ision violated their due process rights. Second,

they contend that aversive treatments (and specifically GED) Medicaid waiver program and that their rights were violated by DHSS through post hoc

rule- medical needs are integral to the issue of whether or not a particular service might be

r

constitutes prohibited discrimination by DHSS against Appellants in violation of Title II

IV. Standard of Review

The Final Decision of the Hearing Officer was subject to review by the Superior

Court pursuant to 31 Del. C. § 520. 63 The Superior Court was required to determine

62 Id. 63 Section 520 provides in relevant part: free from legal error. 64 65

appellate court and the intermediate court received no evidence other than that presented

to the administrative agency, the higher court does not review the decision of the

intermediate court, but, instead, directly examines the decision of the agency. 66 Further,

th 67

Substantial evidence is that which a reasonable mind might accept as adequate to support

a conclusion. 68 Questions of law are reviewed de novo. 69

Any . . . recipient of public assistance benefits . . . against whom an administrative hearing decision has been decided may appeal such decision to the Superior Court . . . . The appeal shall be on the record without a trial de novo. The Court shall decide all relevant questions and all other matters involved, and shall sustain any factual findings of the administrative hearing decision that are supported by substantial evidence on the record as a whole. 31 Del. C. § 520. 64 See Lawson ex rel. Lawson v. , 2004 WL 440405, at *2 (Del. Super. Feb. 25, 2004). 65 Stoltz Mgmt. Co. v. Consumer Affairs Bd., 616 A.2d 1205, 1208 (Del. 1992). 66 Id. (internal citations omitted). 67 Id. (internal citations omitted). 68 See Lehto v. Bd. of Educ., 962 A.2d 222, 225 26 (Del. 2008). 69 Res. & Envtl. Control v. Sussex Cnty., 34 A.3d 1087, 1090 (Del. 2011). V. Analysis

A. The Procedural Due Process Challenges

Although framed primarily as a series of due process challenges challenge raises a question of Medicaid coverage, namely, whether aversive treatment,

including the use of a GED, is covered. They consider that threshold question first, and argue that the procedure employed by the

Hearing Officer deprived them of their right to a meaningful, pre-deprivation process and

hearing. The foundation for this right, according to them, is constitutional, statutory, and

regulatory in nature.

DHSS contends deem an intolerable practice is a regulatory determination, which Appellants have no legal

right

s against coercion and the use of aversives are not adjudications,

but rather, are duly promulgated regulatory and policy decisions that apply to all Medicaid-

qualified providers and recipients. Thus, DHSS contends that no hearing was required

because the decision to ban GED was not based on individualized findings. Rather, CMS

directed, and DHSS determined, as a matter of public policy, that using such intolerable

and coercive methods to enforce behavioral compliance was unacceptable for all Medicaid

recipients receiving home and community-based services. DHSS relies on Bi-Metallic

Investment Co. v. State Board of Equalization 70 for the proposition that regulatory acts that

apply broadly, unlike adjudications, do not trigger individual rights to challenge such

policy decisions. In Bi-Metallic, the Supreme Court held that procedural due process rights

did not apply to the enactment of legislation when the Colorado Tax Commission and the

State Board of Equalization had ordered a 40% increase in the valuation of all taxable

property in Denver. The plaintiff sought to enjoin enforcement of the order arguing that it

had been denied a right to a hearing. The Supreme Court held that a hearing was not

required for each affected property owner prior to the enactment of the generally applicable

tax increase, reasoning that:

Where a rule of conduct applies to more than a few people, it is impractical that everyone should have a direct voice in its adoption. The Constitution does not require all public acts to be done in a town meeting or an assembly of the whole. General statutes within the state power are passed that affect the person or property of individuals, sometimes to the point of ruin, without giving them a chance to be heard. Their rights are protected in the only way that they can be in a complex society, by their power, immediate or remote, over those who make the rule. 71

A number of cases since Bi-Metallic have held that in altering substantive rights of

people through the enactment of rules of general applicability, a legislature generally

provides all of the constitutionally required process that is due simply by enacting the

70 239 U.S. 441 (1915). 71 Id. at 445. statute, publishing it, and to the extent it regulates private conduct, affording those affected

a reasonable opportunity to familiarize themselves with the requirements and to comply. 72

Applying this principle in the Medicaid context, a number of cases have held that a

hearing need not be granted when either state or federal law requires automatic grant

adjustments for classes of Medicaid recipients unless the reason for an individual appeal is

an incorrect grant computation. 73 Relying on these authorities, DHSS maintains that both

coercion in home and community-based settings reflected

broad policy determinations at the federal and state levels, did not involve individual

findings regarding the Recipients, is governed by the Bi-Metallic line of cases, and thus,

no hearing was required at all. They also cite to Medicaid regulations which state that no

72 See, e.g., United States v. Locke, 471 U.S. 84, 108 (1985) (holding that no individualized notice was required where the statute was generally applicable, published, and afforded the affected landowners a reasonable opportunity to understand and comply with the requirements); Logan v. Zimmerman Brush Co., 455 U.S. 422, 433 (1982) ( legislative determination [terminating a welfare program or granting defenses and immunities to state officials] provides all the process that is due. 73 Rosen v. Goetz, 410 F.3d 919, 926 (6th Cir. 2005) terminating benefits, § 431.220(a)(2)) and impose a broad limitation on that right (when the sole

is even when the termination of benefits arises solely from a change in state or federal law,

impermissible challenges challenges to the relevant facts or application of law to a given beneficiary respects both

see also, e.g., Benton v. Rhodes te decides to terminate optional benefits on the basis of lack of appropriated funds, or for any other state reason, this is a matter of state law or policy whi hearing is required requiring an automatic change

74

seminal decision in

Goldberg v. Kelly, 75 which involved the question of what process was due to recipients

who faced termination of welfare benefits. Appellants argue that they were entitled to

procedural due process before the proposed termination of GED treatment in October 2013,

including timely and adequate notice detailing the reasons for termination and a

meaningful, pre-deprivation evidentiary hearing. They claim that these rights, though

derived from Goldberg, are also embedded in federal and state laws and regulations.

In particular, Appellants cite to a number of federal regulations within the Medicaid

regulatory scheme that they contend apply in the context of a threatened termination of

Medicaid benefits. 76 They contend that Delaware regulations either mirror or expand the

procedural due process rights of Medicaid beneficiaries beyond the federal requirements. 77

even when changes in federal or state law require automatic adjustments for benefits

rendered to certain classes of individuals, and even if no hearing is required. 78

74 42 C.F.R. § 431.220(b) (2017). 75 397 U.S. 254 (1970). 76 See, e.g., 42 C.F.R. §§ 431.200(a) (b), 431.220(a)(1) (2), 431.242(c) (d), 431.241(a) (b), 431.221(b) (2017). 77 They cite to 16 Del. Admin. C. §§ 5000 et seq. 78 See DSSM § 5302(K) (requiring such mass change notices [to] include sta Here, Appellants face the termination of GED treatment (including the termination of federal funding) that had, for many years, been a covered Medicaid service. But,

Appellants have continued to have these services available through the present, and the

State has committed to pay for all of their services at JRC transition out of JRC is complete. 79

Under federal law, states choosing to participate in Medicaid must provide a core

set of mandatory services to qualified beneficiaries. 80 States may also cover other optional

As such, they are subject to the requirements of federal law. 81 Factored into this mix is our

recognition that both the federal and state governments are entitled to make policy

decisions as to which services are no longer consistent with community-based settings. 82

Given this unique factual scenario, the question here is: what process was due?

79 The Agreements to Participate in Transition, signed by ]

supports [sic] during the transition, and that [JRC] will receive payment for the services it provides to [Ashlee and Robert] during the transition at the conclusion of the transition, as stated in the App. to Opening Br. at A782 83 (No. 93). 80 See 42 U.S.C. §§ 1396a (a)(10)(A), 1396d (a) (2018); see also Lawson, 2004 WL 440405, at *3 (

81 Doe 1-13 ex rel Doe, Sr. 1-13 v. Chiles, elects to provide an optional service, that service becomes part of the state Medicaid plan and is

r. v. Cook, 109 F.3d 693, 698 (11 th Cir. 1997))). 82 See, e.g., Atkins v. Parker he procedural component of the Due Process Clause does not impose a constitutional limitation on the power of Congress to make substantive changes in the law of entitlement to public benefits. (quoting Richardson v. Belcher, We first consider the issue of constitutional due process and contention that in

sending letters to JRC in 2013 demanding termination of GED. They rely heavily on

Goldberg, where the United States Supreme Court held that before a state can terminate a

hearing. 83 The Supreme Court said, in that context, that due process requires: (i) timely

and adequate notice detailing the reasons for a proposed termination; (ii) an effective

opportunity for the recipient to defend by confronting any adverse witnesses and by

presenting arguments and evidence orally; (iii) retained counsel, if desired; (iv) an impartial

decision-maker; (v) a decision resting solely on the legal rules and evidence addressed at

the hearing; and (vi) a statement of the reasons for the decision and the evidence relied

upon. 84

satisfies the Goldberg requirements. 85

These requirements are imputed to the states via the

404 U.S. 78, 81 (1971))); Benton, 586 F.2d at 3 4 (distinguishing Goldberg on the grounds that he present case involves only the termination of optional benefits which the state was never required to provide in the first place, Constitutions giving prospective recipients of optional benefits a constitutional right to their

tters of law and policy are not subject to any hearing requirements under the applicable regulations, whether the hearing be pre- or post- 83 Goldberg, 397 U.S. at 261. 84 Id. at 267 68, 270 71. 85 See, e.g. ust provide that the requirements of §§ 431.205

must meet the due process standards set forth in Goldberg v. Kelly, 397 U.S. 254 (1970), and any additional when adverse actions, such as the denial

of benefits, are implemented by state action. 86

Notably, the Supreme Court in Goldberg focused on welfare benefits needed for

basic subsistence. In addition, the Supreme Court ther

due process requires only an opportunity for written submission, or an opportunity both for

written submission and oral argument, where there are no factual issues in dispute or where

the application of the rule of law is not intertwined with factual issues. 87

Several years after Goldberg, in Mathews v Eldridge, 88 the Supreme Court rejected

the contention that a pre-termination evidentiary hearing (as opposed to a post-termination

hearing) was required before termination of social security disability benefits. It observed

that Goldberg has the Court held that due process requires an evidentiary hearing

89 In Goldberg assistance is given to persons on the very margin of

90 The Court observed in

Mathews that eligibility for disability benefits, by contrast, is not based upon financial

need. 91

86 Lawson, 2004 WL 440405, at *4 (citing Perry v. Chen, 985 F. Supp. 1197, 1201 (D. Ariz. 1996)). 87 Goldberg, 397 U.S. at 268 n.15. 88 424 U.S. 319 (1976). 89 Id. at 340. 90 Id. 91 Id. at 340 41. In Mathews, the Supreme Court observed further [d]ue process is flexible and

calls for such procedural protections as the particular situation demands. 92 Reflecting the

flexibility inherent in the due process analysis, the Supreme Court stated that time and in a meanin 93

Further, it held that the administrative procedures provided here are constitutionally sufficient requires analysis

of the governmental and private interests that are affected. 94

Many cases suggest that Ma pragmatic approach takes into account the

fact/law dichotomy. 95 For example in the context of a reduction of termination in AFDC

92 Id. at 334 (quoting Morrissey v. Brewer, 408 U.S. 471, 481 (1972)); see also Mullane v. Cent. Hanover Bank & Trust Co., 339 U.S. 306, 314 n elementary and fundamental requirement of due process in any proceeding which is to be accorded finality is notice reasonably calculated, under all the circumstances, to apprise interested parties of the pendency of the action and afford them an opportunity to present their objections. The notice must be of such nature as reasonably to convey the required information and it must afford a reasonable time for those interested to make their appearance. But if with due regard for the practicalities and peculiarities of the case these conditions are reasonably met the constitutional requirements are satisfied. (internal citations omitted)). 93 Mathews, 424 U.S. at 333 (quoting Armstrong v. Manzo, 380 U.S. 545, 552 (1965)). 94 Id. at 334 35 (noting that due process requires consideration of three distinct factors, namely, ficial action; second, the risk of an erroneous deprivation of such interest through the procedures used, and the probable value, if any,

the function involved and the fiscal and administration burdens that the additional or substitute procedural requirement would entail (internal citations omitted)). 95 See, e.g., Codd v. Velger, 429 U.S. 624, 627 (1977) ( f the hearing mandated by the Due Process Clause is to serve any useful purpose, there must be some factual dispute between an employer and a discharged employee which has some significant bearing on the employee's reputation. ); Rosen, 410 F.3d at 928 Goldberg, the [United States Supreme] Court has explained that the due process requirement that the government provide a hearing before the termination of benefits turns on the sensible fact/law dichotomy that CMS, the State and Benton have ; Ortiz v. Eichler, 794 F.2d 889, 893 94 (3d Cir. 1986) (distinguishing cases where less detailed pre-hearing notice was required in denying or terminating Aid to Families with benefits, the Court of Appeals for the First Circuit distinguished between across-the-board

reductions in welfare benefits mandated by a statutory change, and reductions based upon

individualized determinations. It stated that for across-the- has recognized that due process may set a lower standard for determining a notice to be

adequate than w 96

Four years after Mathews, the United States Supreme Court, in Court Nursing Center, 97

held that nursing home residents had no constitutional right to a

hearing before a nursing care

an immediate, 98

Nevertheless, it held that Dependent Children, Food Stamps, and Medicaid benefits where those cases did not concern

vidual eligibility determinations, change in the scope of the entire program (quoting Atkins, 472 U.S. at 129)); Washington v.

DeBeaugrine s have agreed further that there is no right to a hearing when there is no factual issue attending a denial or reduction of benefits that is, when there is no factual issue to be heard. The governing regulation confirms not grant a hearing if the sole issue is a Federal or State law fits,

no hearing is required. The right to a hearing when the recipient believes the agency has acted . 96 LeBeau v. Spirito, 703 F.2d 639, 644 45 (1st Cir. 1983) (citing Velazco v. Minter, 481 F.2d 573, 577 (1st Cir. 1973)). 97 447 U.S. 773 (1980). 98 Id. at 787. impact, which is an indirect and incidental result of the does not amount to a deprivation of any interest in life, liberty or property. 99

In view of the unique facts presented here, we believe that as a matter of federal due

process, no pre-termination hearing was required. In other words, even assuming,

arguendo,

federal regulations discussed below, Appellants had no constitutional right to a hearing

prior to these letters being sent. Further, even though only two Delaware citizens are

impacted by the ban on aversives, those regulatory pronouncements are more credibly

viewed as broad-based policy decisions and not discriminatory decisions based on facts

unique to these individuals. The agency decisions to terminate GED here are broad-based

prohibitions against the use of coercion and restraint, including GED. The record before

-making (the

Setting Rule and HCBS Waiver) designed to safeguard all potentially impacted Medicaid

recipients. We do not think the record supports Appellants contention that these changes

were a manufactured litigation tactic directed to them. 100 Having determined that no pre-

99 Id. ect restraint on his liberty, and action that is directed against a third party and affects the citizen only indirectly or incidentally, Id. at 788. decision to cut funding to JRC resulted from its noncompliance with the Setting Rule and HCBS

Waiver rules. 100 Persons with disabilities have faced societal, attitudinal, and institutional barriers over time. Consider Buck v. Bell, 274 U.S. 200 (1927). In Buck, Justice Holmes upheld a - woman c to execute degenerate offspring for crime, or to let them starve for their imbecility, society can termination hearing was required as a matter of constitutional due process, there remains

the question of whether DHSS complied with applicable federal and state statutory and

regulatory requirements. Here, Appellants did receive a hearing eventually, but they raise

challenges as to its adequacy and to the notice they received. We address these points

below.

1. The Adequacy of the Fair Hearing

Although a pre-termination hearing was not required as a matter of constitutional

due process, the Hearing Officer, relying on 42 C.F.R.§ 431.200(b), 42 C.F.R. 431.201 and

16 Del. Admin. C. § 5100(1), ruled that a Fair Hearing was required under the applicable

regulations.

Section 431.200(b) [p]rescribes procedures for an opportunity for a hearing if the

State agency or non-emergency transportation [Prepaid Ambulatory Health Plan] . . . takes

action, as stated in this subpart, to suspend, terminate, or reduce services, or of an adverse

benefit determination by [a Managed Care Organization], [Prepaid Inpatient Health Plan]

or PAHP under subpart F of part 438 of this chapter . . . . 101 Section 431.201 defines

102 Further

prevent those who are manifestly unfit from continuing thei Id. at 205, 207. He noted Id. at 207. Fortunately, states have fragile populations.

101 42 C.F.R.§ 431.200(b) (2017). 102 431.220(a)(a) for which an individual request

amount or type of benefits or services . . . § 431.220(a)(1)(iv) (2017). Federal 5001(1), entitled, Providing the Opportunity for a Fair Hearing, states:

This policy applies to all applicants and recipients of DSS and DMMA for services provided directly by the Agencies or through agreements with other State or contracted entities where the applicant or recipient claims that he/she has been adversely impacted by a specific action taken by DSS or DMMA. An opportunity for a fair hearing will be provided, subject to the provisions of this section, to any individual requesting a hearing who is dissatisfied with a decision of the [DSS] or the [DMMA].

There is some tension in the rules as 42 C.F. R. § 431.220(b) states that need not grant a hearing if the sole issue is a Federal or State law requiring an automatic

change adversely affecting some or all beneficiaries Also, Section 5307(B) of the DSSM

provides that dismiss or deny a request for a fair

hearing where the sole issue is one of state or federal law requiring automatic benefit

adjustments. . . . was taken and whether a hearing was required. 103

We think there are strong arguments that

what Appellants are really challenging here is the broad-based policy decision to ban GED,

and that the public notice and comment process by which those regulations were enacted

claim, it must provide notice to the individual of the action in accord with 42 C.F.R. § 431.210 (2017) or reduction in Medicaid eligibility . . . C.F.R. § 431.201 (2017) under §§ 431 ).

103 proposing a reduction in services the state certainly agrees that would give rise that is an action

Id. remain fully

JRC. . . . The only difference is the state is prohibiting this provider from using an aversive that provided sufficient notice and opportunity to be heard. But under the circumstances

presented here, we find no error with the Hearing Officer determination to conduct a

hearing, especially given that GED had been a covered service for years, given that the

Setting and HCBS Waiver regulations were in the process of being revised during the

period of time leading up to the Fair Hearing, and given that the parties disputed the legal

effect of the CMS letters.

Recognizing that a Fair Hearing was held, the real focus here is on App challenges to its adequacy. We first consider their challenge to the Bifurcation ruling.

Appellants contend that bifurcation of their hearing deprived them of their due process

rights. They assert that bifurcation of the issues prevented evidence of medical necessity,

which they insist is critical in determining whether GED is considered a covered service

under Medicaid.

The Hearing Officer determined if Appellants could demonstrate that GED is a

covered service, then the Hearing Officer would provide a second evidentiary hearing on

the medical necessity issue. GED treatment services are medically necessary, the first issue that must be decided is

whether these services are indeed covered services under Medicaid and/or whether the state

104

104

See id. at A853. issue of Medicaid coverage first, followed by the medical necessity of GED treatment

105

A hearing officer has the authority to bifurcate evidentiary hearings and restrict the

issues raised at the hearings pursuant to 16 Del. Admin. C. § 5304.3. 106 This is not disputed.

The Hearing Officer ultimately determined that a claim that GED treatment is medically

necessary does not mean that it is covered under the HCBS Waiver program. 107 In her

ole, consideration of whether the GED

treatment services at issue are medically reasonable and necessary is a moot issue if

108 We find no error in

handling of the Fair Hearing. Appellants were afforded the full

opportunity to present evidence as to Medicaid coverage of GED. 109 Appellants would

have been able to present evidence on medical necessity had they prevailed on the threshold

105 Id. 106 It provides in relevant part: The Hearing Officer has the authority to restrict the issues raised at the hearing. The following issues may be raised at the hearing. A. Issues described in the notice of action sent to the appellant B. Issues fairly present

16 Del. Admin. C. § 5304.3. 107 See App. to Opening Br. at A955, A966 67 (No. 93). 108 Id. at A955. 109 Id.

at A967. coverage issue. Accordingly, we reject

Hearing.

2. Adequacy of Notice

Appellants contend that their due process rights were violated because DHSS failed

to provide adequate notice of the legal and factual basis for the prohibition of GED

treatment. Citing to State regulations, they argue that adequate notice is required even

when the change of federal or state law terminates Medicaid services for a class of persons.

s

termination of GED services. 110 They assert that DHSS failed to provide (1) any factual

s treatments; (2) any clinical reason for the termination; and (3) any factual basis for the

alleged risk of harm to Recipients. Additionally, Appellants contend that DHSS provided

no legal or expert support for its actions.

In support of their notice arguments, Appellants rely upon state regulations and

Goldberg. As to their state law contentions, both parties cite to 16 Del. Admin. C.

§ 5302(K) but interpret it differently. Section 5302 provides, in relevant part, that [DHSS]

may dispense with timely notice but will send adequate notice not later than the date of

action

(K) When changes in either state or federal laws (e.g., Social Security increases) require automatic adjustments for classes of recipients.

110 Id. at A290. These mass change notices will be timely and adequate. An adequate notice must include a statement of the: 1. Intended action 2. Reasons for such intended action 3. Specific change in law 4. Circumstances under which a hearing may be obtained and assistance continued

The notices will also include:

2. A name and telephone number of a person to call for additional information. . .. 111

Section 5302(K) applies to every recipient under any public assistance program

administered under DHSS. 112

DHSS asserts that by letters to JRC and its attorneys, meetings with Appellants, and

the Fair Hearing Summary, Appellants received more than adequate notice. DHSS further

asserts that Section 5302(K) does not require DHSS to provide detailed reasoning and

evidentiary proof to support its policy decisions (i.e., that GED treatment undermines the

well-being of Recipients in home and community-based settings).

We first address the factual record relating to notice. DHSS sent notice to JRC on

October 8 and 11, 2013. 113 These letters were not addressed to Appellants. But, Appellants

have acknowledged that DHSS did provide them with these letters and did meet with

Appellants around that same time. 114 Two months later, DHSS filed the Fair Hearing

111 16 Del. Admin. C. § 5302(K) (emphasis added). 112 Id. 113 App. to Opening Br. at A14 17 (No. 93). 114 GED would no longer be covered as p Br. at 31. Appellants Summary while, at the same time, contesting that a Fair Hearing was required (which it

was entitled to do pursuant to DSSM § 5307). The HCBS Waiver was amended through

formal rulemaking and a public comment process that included public meetings in all three

Delaware counties with stakeholders. Further, Appellants did not disagr statement at argument that there had been significant interaction between the State and

Appellants throughout this process as to the CMS polices and HCBS Waiver and their

potential impact on Ashlee and Robert. Although Appellants did not have notice in

advance of the October 2013 letters to JRC, by the time of the Fair Hearing, Appellants

had, in substance, all of the information DHSS was required to provide.

By citing to Goldberg, Appellants appear to assert that the notice they received was

constitutionally deficient. As stated in Mathews, procedural due process requires a

balancing of interests. 115 And in Mullane v. Central Hanover Bank & Trust Co., the

convey the

required information . . . and it must afford a reasonable time for those interested to make

their appearance . . . 116 Reply Br. at 14.

During the July 8, 2014 Clarification Conference, DHSS represented that it met with the parents

Br. at A291 (No. 93). 115 Mathews, 424 U.S. at 334 35 (weighing three factors, including the private and government interests affected). 116 Mullane, 339 U.S. at 314 (internal citations omitted). peculiarities of the case these conditions are reasonably met the constitutional requirements

117

Here, the interests of the parents of Ashlee and Robert is to have electric shock

treatment available to be used as a method to control the behavior of their sons. Balanced

against their interests regulations prohibiting the use

of electric shock in order to safeguard its citizens from what it has deemed to be

unacceptable coercive behavior modification practice. If we are also to consider, as

Mathews suggests, the probable value of additional procedural safeguards to correct what

is arguably a defect in the initial notice, we do not think there is any value to reversing and

starting over. Appellants, earlier in the proceedings, were asked by the Hearing Officer if

they wished to withdraw their hearing request and pursue an appeal of the notice issue and

they declined . 118

They did not raise it in their Motion in Limine prior to the Fair Hearing or during the Fair

117 Id. at 314 15. 118 Appellants Opening Br. at 16 (citing App. to Opening Br. at A290 (No. 93)). During this same

counsel whether if DDDS withdrew its fair hearing request to pursue an internal appeal on the notice issue. Counsel declined and responded: I think at this stage I think it would be prejudicial to hit the reset button and go through a different

summary from the State, engaged in some preparation work and started getting witnesses lined up for a fair hearing, I think that would be prejudicial to my clients to do that. . . . I mean and, again, I think it ends up putting us right back where we were or where we are now anyway just further down the line.

App. to Opening Br. at A289 (No. 93). Hearing. 119 Any prejudice to Appellants has been further mitigated by the fact that there

still has been no termination of services, although federal funding has been impacted and

the State and Appellants have entered into transition agreements whereby the State has

. Although

e agree with the Superior Court that in

these highly unique circumstances, it would exalt form over substance to say that

B. GED Is Not a Covered Service

contend that the Hearing Officer erred in her determination that GED is not a covered

service. They contend that GED aversive interventions are part of a category of covered

stated goals of Medicaid. The

determination that GED was not a covered service was supported by substantial evidence

and free from legal error. We agree.

1. GED Is Not Covered Under Federal Law

reatment services were no longer

120 The Hearing Officer

119 Consequently, the Hearing Officer did not address the issue of notice in her Final Decision. 120 Id. at A965. determined that the CMS Letters and the Regional I Lette

deference. 121 She concluded that agency interpretation of its own regulation is

authoritative the use of

electric shock in all community settings 122 The Superior Court concluded that the CMS

123

Appellants argue that the CMS letters and Regional I letter should not be afforded

any deference. 124 They argue that the CMS Letters and Regional I Letter are merely

121 Id. at A966. 122 Id. 123 Oldham, 2018 WL 776580, at *5 (internal citations omitted). 124 Appellants contend that the CMS Letters should not be afforded deference because . . . post hoc rationalization advanced by an agency seeking to defend past agency action ag Opening

Br. at 40 n.57 (quoting Massachusetts v. Sebelius, 638 F.3d 24, 30 (1st Cir. 2011)). Additionally, Appellants argue that the CMS Letters and Regional I Letter should be given only respectful consideration, language of the r [ed] little cla Aplin v. McGrossen, 2014 WL

4245985, at *13, *15 (W.D.N.Y. Aug. 26, 2014). Appellants also assert that the Regional I Letter quoting Kai v. Ross,

336 F.3d 650, 655 (8th Cir. 2003)). They argue that the Regional I Letter is not an official interpretation and construction of the federal Medicaid statute so it is only entitled to Skidmore thoroughness evident in its consideration, the validity of its reasoning, its consistency with earlier

and later pronouncements, and all those factors which give it power to persuade, if lacking power Skidmore v. Swift & Co., 323 U.S. 134, 140 (1944). The Hearing Officer disagreed App. to Opening Br. at A966 (No. 93). Therefore, the Hearing Officer concluded that the Skidmore

as CMS, the agency authorized to specifically

reference[d] mandate[d] Id. at A966. The guidance letters, not official statements of CMS or the Secretary of HHS, that do not have

the force and effect of law. 125

Federal Medicaid regulations explicitly require assurances from participating states

that home and community- and respect, and freedom from coercion and restraint. 126

freedom from coercion and restraint as prohibiting GED treatment in community settings.

Although this Court has stated that

construction of a regulation enacted by an agency which is also charged with its

enforcement, 127 we need not today define with precision the level of deference (on the

128

Instead, it suffices that we find no the 2015

Hearing Officer concluded that by and through the CMS Letters and Regional I Letter, CMS

125 Id. at A700 (citing Skidmore, 323 U.S. at 140); see Opening Br. at 37 (citing Aplin, 2014 WL 4245985, at *13 14). Notably, the First Circuit held in Sebelius Sebelius, 638 F.3d at 33. It ruled

on a CMS guidance letter to Medicaid directors. Id. at 33 34. 126 42 C.F.R. § 441.530(a)(1)(iii). 127 State Farm Mut. Auto. Ins. Co. v. Mundorf, 659 A.2d 215, 220 (Del. 1995) (internal citations omitted). 128 See, e.g., Decker v. Northwest Envtl. Def. Ctr., 568 U.S. 597,

Chase Bank USA, N.A. v. McCoy, 562 U.S. 195, 208 (2011) (further quoting Auer v. Robbins, 519 U.S. 452, 461 (1997)))). fective is

the purpose of rulemaking Id. at 618 (Scalia, J., dissenting in part) (quoting Marbury v. Madison, 1 Cranch 137,

177 (1803)). CMS Letter and Regional I Letter substantial deference. 129 The Hearing Officer

determination that GED is not a covered service under federal law is supported by

substantial evidence and is free from legal error.

In arguing that the medical necessity of their receipt of GED triggers a mandatory

duty of DHSS to cover that service explicit disapproval of GED Appellants overlook the critical role of CMS in approving

the services provided under HCBS waivers. The statutory basis for -

necessity theory is the so- State plan for medical assistance

must . . . include reasonable standards . . . for determining . . . the extent of medical

assistance under the plan which . . . 130

1905 of the Social Security

Act to include twenty-nine different categories of care. 131 HCBS, however, are not listed

129 See Davis v. Shah y

Community Health Ctr. v. Wilson-Coker, 311 F.3d 132, 138 (2d Cir. 2002))); for Medicare and Medicaid Servs., 576 F.3d 885, 888 (8th Cir. 2009) (holding that unless it is

be entitled to deference, particularly in a complex and highly technical regulatory program); Skandalis v. Rowe, 14 F.3d 173, the agency administers is entitled to considerable deference. . . . When an agency construes its

own regulations, such deference is particularly ations omitted)). 130 42 U.S.C. § 1396a(a)(17). 131 See 42 U.S.C. § 1396d(a). among those twenty-nine different categories, but instead come into play under an entirely

different section of the Act: section 1915(c).

the extent that the services are approved by CMS. 132

waiver provide that a State plan . . . an

payment for part or all of the cost of home and community-based services . . . approved by

[CMS] 133 iver shall not be granted . . . unless the

State provides assurances satisfactory to [CMS] that . . . necessary safeguards . . . have

been taken to protect the health and welfare of individuals provided services under the

134 In other words, CMS approval which CMS cannot grant unless the State

provides adequate assurances that it has put in place the necessary safeguards to protect

is needed before the State can provide coverage under an

HCBS waiver.

indeed it specifically requested that both Massachusetts and Delaware stop covering GED.

That decision had a reasonable basis in the HCB Settings Rule, which requires that each

. . . 135 Given that

the purpose of GED is to coerce the recipient into ceasing undesirable behavior by applying

132 CMS.

133 Id. § 1396n(c)(1) (emphasis added). 134 Id. § 1396n(c)(2) (emphasis added). 135 42 C.F.R. § 441.301(c)(4)(iii). At bottom, Appellants medical-necessity argument is premised on the notion that

the State s plan lacks reasonable standards. But we cannot fault the State s decision to stop

covering GED as unreasonable when that is what the federal authorities were telling them

to do. If anything, disobeying CMS which had issued not only letters, but also a binding,

notice-and-comment regulation would be the unreasonable thing to do. This is not a case

where the State made its decision based on arbitrary criteria such as the cause of the

136 Instead, the State based its decision on the uncontroversial

principle that it must follow federal law. Indeed, it is clear that Delaware has sought to

provide coverage to help the Appellants, and only stopped covering the GED treatments

when the federal government said that was impermissible. This is a far cry from the federal

136 We acknowledge that there is federal case law faulting states for denying medically necessary treatment to Medicaid patients based on the reasonable standards requirement. But the animating concern of those cases is to ensure that states do not deny needed treatments to some patients based

empty distinctions between different types of equipment. See, e.g., White v. Beal, 555 F.2d 1146, 1151 on etiology rather than medical necessity violated the reasonable standards requirement, even Lankford v. Sherman, 451 F.3d 496, 506 (8th Cir. Medicaid service, it cannot arbitrarily choose which [durable medical equipment] items to

reimburse under its Medicaid poli Weaver v. Reagan, 886 F.2d 194, 197-200 (8th Cir. 1989) (holding that Missouri could not limit coverage of AZT to patients who had specific diagnostic criteria, at a time when AZT was the only AIDS medication available and was medically necessary for some patients who did not meet those diagnostic criteria). cases cited by Appellants, which have generally involved the denial of services for

seemingly arbitrary reasons. 137

In sum, the State did not violate the reasonable standards requirement in deciding

.

2. GED Is Not Covered Under State Law

Appellants contend that the HCBS Waiver is

Hearing request because the language in the 2014 amendment is (1) a manufactured

litigation position taken by DHSS after Appellants filed the Fair Hearing request; and (2)

eneral

rulemaking that DHSS has attempted to make it in form. We reject these contentions.

T supported by substantial evidence and free from legal error. In its HCBS Waiver, Delaware

conditioning, defined as the contingent application of startling, painful or noxious stimuli

138 With the approval of CMS, DHSS enacted this provision into the HCBS

Waiver program.

Moreover, at the DHSS level, the incorporation of the HCBS Waiver language

satisfied its procedural requirements by process of notice, comment, and public hearing.

The HCBS Waiver was duly enacted. The Hearing Officer properly concluded that

137 See, e.g., Lankford, 451 F.3d at 506. 138 App. to Opening Br. at A503 (No. 93). because the HCBS Waiver was duly enacted and approved by CMS on July 1, 2014, it

carries the force and effect of law. Appellants did not challenge the lawfulness of that

waiver. 139 The waiver unquestionably bans GED and has the force of law. In sum, the

law was supported by substantial evidence and free from legal error.

C. Americans with Disabilities Act Claim Was Not Properly Raised

below. 140

VI. Conclusion

For the reasons set forth above, we AFFIRM.

139 Del. C. § 14141 but did not.

140 Supr. Ct. R. 8.

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