RECORD IMPOUNDED

SUPERIOR COURT OF NEW JERSEY

APPELLATE DIVISION

DOCKET NO. A-3411-17T4

J.D., o/b/o K.D.,

Petitioner-Appellant,

v.

DEPARTMENT OF CHILDREN

AND FAMILIES, DIVISION OF

CHILDREN'S SYSTEM OF CARE,

Respondent-Respondent.

_____________________________

Submitted January 28, 2020 – Decided

Before Judges Accurso and Gilson.

On appeal from the New Jersey Department of 

Children and Families, Division of Children's System 

of Care, AHU No. 17-0056.

Disability Rights New Jersey, attorneys for appellant 

(Mary A. Ciccone and Susan Saidel, on the briefs).

Gurbir S. Grewal, Attorney General, attorney for 

respondent (Melissa H. Raksa, Assistant Attorney 

General, of counsel; Mark D. McNally, Deputy 

Attorney General, on the brief).

NOT FOR PUBLICATION WITHOUT THE

APPROVAL OF THE APPELLATE DIVISION

This opinion shall not "constitute precedent or be binding upon any court." Although it is posted on the 

internet, this opinion is binding only on the parties in the case and its use in other cases is limited. R. 1:36-3.

August 19, 2020
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A-3411-17T4

PER CURIAM

Petitioner J.D. appeals from a final agency decision upholding the plan 

of the Department of Children and Families, Division of Children's System of 

Care to reduce the behavioral services it provides to her minor son, K.D., to 

address his severe autism. She argues that she was inappropriately assigned 

the burden of proof in the hearing before the Office of Administrative Law as 

to the reasonableness of the plan and that, in any event, the Division's decision 

was contrary to federal Medicaid law and the Americans with Disabilities Act 

under Olmstead v. L.C. ex rel. Zimring, 527 U.S. 581, 587, 597 (1999). 

The Division counters that J.D. was appropriately assigned the burden of 

proof on the case she brought at the OAL, a challenge to the Division's 

decision regarding her son's eligibility for services, see N.J.A.C. 3A:40-5.1(b),

and that we should not consider the other issues J.D. raises regarding Medicaid 

law and Olmstead because J.D. never addressed those issues during the 

hearing, raising them only in her written summation to the Administrative Law 

Judge. The Division asserts it was thus deprived the opportunity to create a 

record on those issues, contrary to N.J.S.A. 52:14B-9(c), and, indeed, that it is 

not even clear the OAL has jurisdiction to address ADA claims, see Hirsch v. 

N.J. State Bd. of Med. Exam'rs, 128 N.J. 160, 161-62 (1992).
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J.D. does not dispute that she did not raise the principal issues she 

addresses on appeal — that the Division's "hard cap" of seventeen hours of inhome behavioral services per week fails to comply with federal Medicaid 

requirements and also violates the ADA and Olmstead because it exposes her 

son to the risk of unnecessary institutionalization — until written summations, 

weeks after both parties had rested their cases. She contends, however, that, as 

to the Medicaid issue, her delay was caused by the State's failure to mention 

that the Division's services to her son are funded through Medicaid. She does 

not explain her delay in raising her claims under the ADA and Olmstead.

We have considered whether we can or should address the issues J.D. 

raises as to the Division's compliance with federal Medicaid requirements and 

the ADA under Olmstead. Appellate review, as the Supreme Court has again 

recently reminded, is "not unbounded." S.C. v. Dep't of Children & Families, 

___ N.J. ___, ___ (May 27, 2020) slip op. at 59 n.10. We ordinarily will not 

consider an issue never explicitly advanced as a claim until after the OAL 

hearing concluded. In re Stream Encroachment Permit, Permit No. 0200-04-

0002.1 FHA, 402 N.J. Super. 587, 602 (App. Div. 2008).

Critically, J.D.'s failure to raise the principal issues she asserts on appeal 

until after the parties' had put on their proofs has left the record insufficient 
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even to determine the plan's precise connection to Medicaid in the first 

instance, let alone whether it complied with federal law in challenged respects. 

We, nevertheless, deem the issues of significant public interest to warrant

review. See Nieder v. Royal Indem. Ins. Co., 62 N.J. 229, 234 (1973). 

Accordingly, we remand the matter to the Division for the development of an 

appropriate record sufficient to permit review of the issues raised on appeal. 

Given our disposition, we limit our discussion of the facts and the issues. 

By way of brief background, petitioner and her husband became resource 

parents for their son K.D. when he was a year old. He suffered from fetal 

alcohol syndrome and had related minor developmental delays and some 

hyperactivity for which he received early intervention services. With those 

caveats, he seemed to be developing normally enough until four months after 

his third birthday, when, in the space of a week, he lost all language and 

communication skills, all self-help skills and the ability to interact or play. 

Doctors diagnosed him with Childhood Disintegrative Disorder, a condition 

falling at the most severe end of the autism spectrum.

K.D.'s dangerous behavior in the time that followed, including running 

away, self-injury, physical aggression, and pica — the ingestion of inedible 

matter — resulted in his hospitalization for six months. On his discharge in 
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February 2011, the Division of Developmental Disabilities (DDD) of the 

Department of Human Services afforded him access to in-home support 

services with a board-certified behavioral analyst as part of its Children's 

Placement Enhancement Pilot (CPEP) program. The Division maintains CPEP 

was a small program in DDD meant to fund services necessary to maintain 

stability in the home while a child awaited out-of-home placement. Since 

2011, when K.D. was six years old, DDD began providing K.D. fifty-two 

hours a week of in-home behavior support services during those weeks the boy 

was in school and up to eighty-seven and one-half hours a week during school 

breaks and summer vacation. 

The CPEP program ended in 2013 when the State moved all DDD 

services for children under twenty-one to the Division of Children and 

Families. The thirty-two children receiving services under the program were 

transferred to the Division's Children's System of Care (CSOC) in DCF. Over 

the next three years, the Division developed its own network of providers and 

programs, as well as a treatment model meant to be more clinically sound, 

efficient, and "sustainable" than that under CPEP, but in the interim 

maintained services for all children from the program, including K.D., at their 

existing levels.
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For children on the autism spectrum, the Division developed its program 

using applied behavioral analysis methods for intervention, assigning higher 

need children such as K.D. to between fifteen and seventeen hours per week of 

in-home applied behavioral services and three hours per week with a boardcertified behavior analyst. The Division presented testimony at the hearing 

that the support services it provided were limited and meant only to 

supplement those already supplied by a child's school district. Moreover, the 

Division maintained it was tasked with allocating finite resources among 

thousands of children with developmental disabilities in a fair and sustainable 

manner. Although it endeavored to provide a level of support responsive to 

each child's needs, it could not offer more than what its treatment program 

permitted. Nonetheless, the Division contended that families of children 

whose needs exceeded availability could still work with their care management 

organizations, private insurance, or Medicaid to obtain additional support 

services.

The Division advised the care management organizations responsible for 

administering the children's support services in spring 2015 that they would 

eventually need to "titrate" — that is, reduce — the children's support services 

to fit within the Division's program. In spring 2016, the care management 
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organizations were instructed to begin discussions with the children's families 

to negotiate titration plans to that end. The Division, however, imposed no 

specific deadlines or timeframes in order to allow the families flexibility. A 

representative of K.D.'s care management organization attempted to work out a

gradual reduction in services in May or June 2016, but the family would not 

negotiate any change. In September 2016, the Division implemented a 

titration plan reducing K.D.'s services from fifty-two to thirty-seven hours per 

week.

The behavior analyst who had worked with K.D. since his release from 

the hospital in 2011, testified he benefited from the level of services 

previously afforded through DDD and required continuation of services at that 

level to effectively manage his behavior. Among his problematic behaviors 

she addressed during that time, with varying frequency, were self-injury, 

including hitting himself in the head with a closed fist; physical aggression 

toward others, including hitting, kicking, and biting; pica; breaking and 

throwing items; running away; climbing on furniture, windows, or railings; 

crying and throwing tantrums; and touching or attempting to climb into the 

oven.
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The analyst acknowledged that K.D. continued to engage in those 

behaviors in the family home and that, given his diagnosis of Childhood 

Disintegrative Disorder, his prognosis was poor. She maintained, however, 

that the services helped him manage those behaviors, and, that under CPEP, 

K.D. had slowly reacquired some skills, including learning to nod his head, 

engage in communication by "pecking symbols," and sometimes use the toilet. 

Based on data collected by the analyst and K.D.'s parents, however, K.D. had 

seen a significant increase in problematic behaviors since the Division

imposed the titration plan with month-over-month increases of as much as 385 

percent. The analyst testified that increasing K.D.'s services back to CPEP 

levels would allow him to continue to live safely at home with his family. She 

acknowledged, however, that, as K.D. got older — and stronger — his needs 

could become so great as to render home placement unfeasible.

J.D. filed an administrative appeal in 2016, challenging the reduced 

services reflected by the titration plan as insufficient to meet her son's needs. 

The matter was transferred to the OAL, which conducted a fair hearing over

two days in 2017. Assignment of the burden of proof was a matter of dispute 

from the outset, but the parties agreed the Division would present its evidence 
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first, with the expectation the ALJ would ultimately assign the appropriate 

burden.

The parties submitted their written summations more than two months 

after the last hearing date, with J.D. raising for the first time the notion that 

K.D.'s treatment plan failed to comply with the Medicaid program and the 

ADA, 42 U.S.C.A. §§ 12101-12213 and Olmstead. The ALJ made no formal 

assignment of the burden of proof in his recommended decision, but generally 

accorded J.D.'s evidence greater attention and scrutiny and ultimately found, 

with little elaboration, that K.D.'s condition was extraordinarily severe to the 

point of perhaps not being amenable to adequate treatment with the resources 

respondent could make available. He concluded that K.D. should comply with 

respondent's titration program and explicitly contemplated, if titration proved 

unfeasible, that K.D. might not qualify for further benefits and may need to be 

considered for out-of-home placement. The ALJ did not address J.D.'s 

arguments as to Medicaid or the ADA, even to reject them as untimely raised.

J.D. timely filed exceptions, again raising an issue as to the appropriate 

assignment of the burden of proof and arguing the initial decision was contrary 

both to the record and to Medicaid requirements and the ADA. The 

Commissioner Designate of DCF issued a final agency decision in February 
10 A-3411-17T4

2018, adopting the ALJ's initial decision and affirming the Division's 

implementation of the titration plan, without any explicit acknowledgement of 

J.D.'s arguments as to the burden of proof, Medicaid, or the ADA.

On appeal, J.D. argues, in addition to maintaining the decision was not 

supported by the record, that the agency's decision was unreasonable because 

the titration plan violated federal Medicaid requirements because it imposed a 

hard limit on behavioral services, rather than tailoring the plan to his 

individual needs, and that the plan violated the ADA by exposing her son to 

the risk of unnecessary institutionalization. As already noted, the record is 

inadequate to permit us to resolve either claim.

Medicaid is a federally established but state-run program, Estate of F.K. 

v. Div. of Med. Assistance & Health Servs., 374 N.J. Super. 126, 134 (App. 

Div. 2005), that "provide[s] medical assistance" at public expense "to 

individuals 'whose income and resources are insufficient to meet the cost of 

necessary medical services,'" N.M. v. Div. of Med. Assistance & Health 

Servs., 405 N.J. Super. 353, 359 (App. Div. 2009) (quoting 42 U.S.C.A. 

§ 1396). Participation is voluntary, but each participating state must comply 

with all federal statutory and regulatory requirements, Mistrick v. Div. of Med. 

Assistance & Health Servs., 154 N.J. 158, 166 (1998), and must adopt and 
11 A-3411-17T4

adhere to a plan establishing the scope of its program and setting forth 

reasonable standards for administration, Wilder v. Va. Hosp. Ass'n, 496 U.S. 

498, 502 (1990). Federal approval of such a plan permits the state to receive 

matching federal funds for applicable medical services reimbursed through the 

program. 42 U.S.C.A. § 1396b.

As pertinent here, each participating state must provide "early and 

periodic screening, diagnostic, and treatment services" (EPSDT) for all eligible 

minors under the age of twenty-one, 42 U.S.C.A. § 1396d(a)(4)(B), along with 

"[s]uch other . . . health care, diagnostic services, treatment, and other 

measures" that are "necessary . . . to correct or ameliorate defects and physical 

and mental illnesses and conditions discovered by the screening services, 

whether or not such services are covered under the State" plan for adults, 

§ 1396d(r)(5). Each covered service "must be sufficient in amount, duration, 

and scope to reasonably achieve its purpose," although the state agency 

responsible for the Medicaid program "may place appropriate limits on a 

service based on such criteria as medical necessity or on utilization control 

procedures." 42 C.F.R. § 440.230.

In that connection, federal guidance explains that EPSDT services must 

be provided only if "medically necessary," elaborating:
12 A-3411-17T4

The determination of whether a service is medically 

necessary for an individual child must be made on a 

case-by-case basis, taking into account the particular 

needs of the child. The state (or the managed care 

entity as delegated by the state) should consider the 

child’s long-term needs, not just what is required to 

address the immediate situation. The state should also 

consider all aspects of a child’s needs, including 

nutritional, social development, and mental health and 

substance use disorders. . . .

[U.S. Dep't of Health & Human Servs., EPSDT – A 

Guide for States, at 23 (June 2014) (emphasis added), 

https://www.medicaid.gov/sites/default/files/2019-

12/epsdt_coverage_guide.pdf.]

However, to the extent such services qualify as medically necessary for a 

particular child, they must be covered irrespective of budgetary constraints:

Because medical necessity decisions are 

individualized, flat limits or hard limits based on a 

monetary cap or budgetary constraints are not 

consistent with EPSDT requirements. States may 

adopt a definition of medical necessity that places 

tentative limits on services pending an individualized 

determination by the state, or that limits a treating 

provider's discretion, as a utilization control, but 

additional services must be provided if determined to 

be medically necessary for an individual child. For 

example, while a state may place in its State Plan a 

limit of a certain number of physical therapy visits per 

year for individuals age 21 and older, such a "hard" 

limit could not be applied to children. A state could 

impose a "soft" limit of a certain number of physical 

therapy visits annually for children, but if it were to be 

determined in an individual child's case, upon review, 

that additional physical therapy services were 
13 A-3411-17T4

medically necessary to correct or ameliorate a 

diagnosed condition, those services would have to be 

covered.

[Id. at 23-24.]

J.D.'s position is that the behavioral services the Division affords to K.D. 

qualify as mandatory EPSDT services, which the State is "or should be" 

funding through Medicaid under the terms of New Jersey's Medicaid waiver 

plan (emphasis added). The Division, she argues, must therefore adhere to 

federal requirements prohibiting imposition of any hard limits on those 

services. It would thus follow that the reduction of care in K.D.'s titration plan 

was improper, because it was made pursuant to a hard limit of fifteen to 

seventeen hours per week, rather an individualized determination of his 

medical needs.

The problem is that J.D. cannot assert with confidence that the State 

funds the services it provides her son through Medicaid. The Division's 

regulations contemplate its funding may come from Medicaid, but not 

necessarily so:

An applicant who is deemed eligible to receive 

functional services from the CSOC shall, as a 

condition of continuing eligibility, apply for all 

benefits, including, but not limited to, Medicaid, NJ 

Family Care and any other State or Federal benefits 

for which he or she may be eligible and comply with 
14 A-3411-17T4

the requirements for continuing eligibility if found 

eligible. The CSOC does not provide services that are 

available through other sources.

1. Notwithstanding the requirement to apply for 

benefits as set forth in this subsection, denial of an 

application for benefits does not constitute grounds for 

finding an individual ineligible for functional services 

from the CSOC.

[N.J.A.C. 3A:40-2.1(b).]

Further, although J.D. is correct that the behavioral services the Division 

makes available to children with "serious emotional disturbance" such as K.D. 

are listed in New Jersey's Medicaid waiver, the federal Centers for Medicare & 

Medicaid Services, as the Division points out, have approved that waiver 

through June 2022 with the Division's existing program limits, the implication 

being that those limits are not inherently problematic. NJ FamilyCare (NJFC) 

Comprehensive Demonstration before Ctrs. for Medicare & Medicaid Servs., 

Special Terms and Conditions at 1, 30-31 (Aug. 2017) (amended July 25, 

2019), https://www.medicaid.gov/Medicaid-CHIP-Program-Information/ByTopics/Waivers/1115/downloads/nj/nj-1115-request-ca.pdf. Indeed, the very 

statute establishing the agency and its implementing regulations explicitly 

contemplates a limitation of services based on availability:

Notwithstanding any law, rule, or regulation to the 

contrary, . . . the Division of Children's System of 
15 A-3411-17T4

Care in the Department of Children and Families shall 

determine eligibility and provide support and services, 

deemed clinically and functionally appropriate by the 

Department of Children and Families, as limited by 

service availability and appropriations and other 

monies available, and to become available, for persons 

with developmental disabilities . . . under 21 years of 

age. . . .

[N.J.S.A. 30:4C-4.4(a); see also N.J.A.C. 3A:40-

1.1(b) (providing that "[t]he availability of services 

shall be limited to the CSOC's funding in a given 

fiscal year").]

Moreover, even assuming the sort of services K.D. receives nonetheless 

qualify as EPSDT services, it does not follow that they also qualify as 

"medically necessary" for K.D. Pursuant to the above legal framework and our 

Department of Human Services' regulations, determinations of medical 

necessity are fact-specific to each individual and, particularly in the case of a 

minor, are sensitive to the individual's long-term needs and functional 

capacity:

"Medically necessary services" means services . . . 

necessary to prevent, diagnose, correct, prevent the 

worsening of, alleviate, ameliorate, or cure a physical 

or mental illness or condition; . . . to promote the 

development or maintenance of maximal functioning 

capacity in performing daily activities, taking into 

account both the functional capacity of the individual 

and those functional capacities that are appropriate to 

individuals of the same age; to prevent or treat a 

condition that threatens to cause or aggravate a 
16 A-3411-17T4

handicap or cause physical deformity or malfunction, 

and there is no other equally effective, more 

conservative or substantially less costly course of 

treatment available or suitable for the enrollee. The 

services provided, as well as the treatment, the type of 

provider and the setting, are reflective of the level of 

services that can be safely provided, are consistent 

with the diagnosis of the condition and appropriate to 

the specific medical needs of the enrollee and not 

solely for the convenience of the enrollee or provider 

of service and in accordance with standards of good 

medical practice and generally recognized by the 

medical scientific community as effective.

In the case of pediatric enrollees, this definition 

applies, with the additional criteria that the services, 

including those found to be needed by a child as a 

result of a comprehensive screening visit or an interperiodic encounter, whether or not they are ordinarily 

covered services for all other Medicaid/NJ FamilyCare 

enrollees, are appropriate for the age and health status 

of the individual and that the service will aid the 

overall physical and mental growth and development 

of the individual and the service will assist in 

achieving or maintaining functional capacity.

[N.J.A.C. 10:74-1.4.]

Because it is not clear on this record whether the services provided to K.D. by 

the Division are funded by Medicaid, whether they are implicated by the 

State's most recent Comprehensive Medicaid Waiver, and, if subject to federal 

Medicaid requirements, whether they are "medically necessary," in light of his 
17 A-3411-17T4

long-term needs and functional capacity, we cannot resolve the issue of 

whether the Division's titration plan complies with law.

We are similarly unable to resolve J.D.'s claim that the Division's 

decision was unreasonable on the ground that its titration plan failed to comply 

with the ADA, specifically by exposing her son to the risk of unnecessary 

institutionalization. As with her Medicaid argument, J.D. undisputedly failed 

to raise any issue as to the ADA in a timely manner. She offers no excuse for 

the delay. 

J.D. relies for her position that respondent's plan conflicts with the ADA 

on Olmstead, 527 U.S. at 587, 597, where the Court concluded that placement 

of a person with mental disabilities in institutional care could constitute illegal 

"discrimination based on disability," if community placement was feasible and 

appropriate. Yet the Court concomitantly recognized "the States' need to 

maintain a range of facilities for the care and treatment of persons with diverse 

mental disabilities" and their "obligation to administer services with an even 

hand." Id. at 597. In light of those obligations, it held that community-based 

treatment would be required only "when the State's treatment professionals 

determine that such placement is appropriate, the affected persons do not 

oppose such treatment, and the placement can be reasonably accommodated, 
18 A-3411-17T4

taking into account the resources available to the State and the needs of others 

with mental disabilities." Id. at 607 (emphasis added).

J.D. argues on appeal that implementation of the Division's titration plan 

put K.D. at serious risk of institutionalization, pointing to the ALJ's conclusion 

that, if the plan proved unsuccessful, alternative services such as out-of-home 

placement might be required. She maintains the only evidence in the record as 

to the adequacy of K.D.'s treatment showed that the level of services 

previously afforded to him through DDD were sufficient to manage his 

behavior. J.D. acknowledges the "integration mandate under Olmstead [wa]s 

not absolute," but faults the Division for failing to present any evidence at the 

hearing to show that this limitation of benefits did not run afoul of that 

mandate.

The problem, of course, is that J.D. never raised the issue in time to put 

the Division on notice it would have to present any such evidence. As such, 

the record is inadequate to permit review of her claim under the ADA.

Because we have determined a remand is necessary for the development

of the record, we do not address J.D.'s remaining arguments as to the 

allocation of the burden of proof or the sufficiency of the evidence to support 

the Commissioner's decision. We note this case was not argued. The hearing 
19 A-3411-17T4

before the ALJ took place three years ago. K.D. is now fifteen years old. His 

situation may well be different than what is was then. We do not presume the 

issues or arguments the parties will address at a new hearing.

Because the record developed before the ALJ is inadequate to determine

whether the Division's plan is even subject to federal Medicaid law, and, if so, 

whether the services the Division provides K.D. are "medically necessary," in 

light of his long-term needs and functional capacity, as well as whether the 

Division's titration plan put K.D. at serious risk of institutionalization, in 

violation of the ADA, and whether that claim is even cognizable in the OAL,

and because we think the issues of sufficient public interest, we remand the 

matter to the Division for the development of an appropriate record sufficient 

to permit resolution of the issues raised on appeal. We do not retain 

jurisdiction.

Vacated and remanded.