No. 03-15-00325-CV

_______________________________________________________________

IN THE COURT OF APPEALS 

FOR THE THIRD DISTRICT OF TEXAS 

AT AUSTIN 

_______________________________________________________________ 

TEXAS HEALTH AND HUMAN SERVICES COMMISSION

Appellant, 

v.

JESSICA LUKEFAHR 

Appellee. 

________________________________________________________________ 

On Appeal from the 345th Judicial District Court 

of Travis County, Texas 

Cause No. D-1-GN-14-002158 

The Honorable Stephen Yelenosky Presiding 

__________________________________________________________________ 

APPELLANT’S RESPONSE TO APPELLEE’S SUR-REPLY 

__________________________________________________________________ 

KEN PAXTON 

Attorney General of Texas 

CHARLES E. ROY 

First Assistant Attorney General 

JAMES E. DAVIS 

Deputy Attorney General for Civil 

Litigation 

DAVID A. TALBOT, JR. 

Chief, Administrative Law Division 

KARA HOLSINGER 

Assistant Attorney General 

State Bar No. 24065444 

OFFICE OF THE ATTORNEY GENERAL 

OF TEXAS

Administrative Law Division 

P.O. Box 12548, Capitol Station 

Austin, Texas 78711-2548 

Telephone: (512) 475-4203 

Facsimile: (512) 320-0167 

kara.holsinger@texasattorneygeneral.gov 

COUNSEL FOR APPELLANT

ORAL ARGUMENT REQUESTED

ACCEPTED

03-15-00325-CV

8123327

THIRD COURT OF APPEALS

AUSTIN, TEXAS

12/7/2015 4:08:36 PM

JEFFREY D. KYLE

CLERK

 FILED IN 3rd COURT OF APPEALS AUSTIN, TEXAS 12/7/2015 4:08:36 PM JEFFREY D. KYLE Clerk
ii

TABLE OF CONTENTS

TABLE OF CONTENTS.............................................................................................ii

INDEX OF AUTHORITIES........................................................................................iii

ARGUMENT AND AUTHORITIES..........................................................................2

I. Ms. Lukefahr Failed to Provide Evidence-Based Medical Peer-Reviewed 

Literature in Support of the Exceptional Circumstances Request as Required 

by HHSC’s Exceptional Circumstances Policy.................................................2

II. There is no set Clinical Criteria for Exceptional Circumstances Review 

because these Requests are Considered on a Case-by-Case Basis....................3

III. Requesting Prior Authorization of Alternative Durable Medical Equipment is

not an Exceptional Circumstances Review Requirement..................................4

IV. Ms. Lukefahr has a Medical Need to Stand, but she does not have a Medical 

Need for an Integrated Stander..........................................................................5

V. HHSC’s Denial Letter Provides the Legal Basis for the Denial as Required by 

Federal Medicaid Regulations...........................................................................6

PRAYER......................................................................................................................7

CERTIFICATE OF COMPLIANCE...........................................................................8

CERTIFICATE OF SERVICE ....................................................................................9
iii

TABLE OF AUTHORITIES

FEDERAL STATUTE

42 C.F.R. § 431.210(c)...............................................................................................6

RULES

1 Tex. Admin. Code 354.1039(a)(4)(D)........................................................... 2, 3, 5
No. 03-15-00325-CV

_______________________________________________________________

IN THE COURT OF APPEALS

FOR THE THIRD DISTRICT OF TEXAS

AT AUSTIN

_______________________________________________________________

TEXAS HEALTH AND HUMAN SERVICES COMMISSION

Appellant,

v.

JESSICA LUKEFAHR

Appellee.

________________________________________________________________

On Appeal from the 345th Judicial District Court

of Travis County, Texas

Cause No. D-1-GN-14-002158

The Honorable Stephen Yelenosky Presiding

__________________________________________________________________

APPELLANT’S RESPONSE TO APPELLEE’S SUR-REPLY

__________________________________________________________________

TO THE HONORABLE JUDGE OF SAID COURT:

NOW COMES the Texas Health and Human Services Commission

(“HHSC”) and files this reply to Appellee’s Sur-Reply. The matters raised in 

Appellee’s Sur-Reply have largely been addressed in Appellant’s Brief and Reply 

Brief. But Appellant files this response to Appellee’s Sur-Reply to address factual 

and legal matters not addressed in previous briefing. 
2

ARGUMENT AND AUTHORITIES

I. Ms. Lukefahr Failed to Provide Evidence-Based Medical PeerReviewed Literature in Support of the Exceptional Circumstances 

Request as Required by HHSC’s Exceptional Circumstances 

Policy.

Appellee states that the exceptional circumstances rule does not require the 

submission of evidence-based medical peer-reviewed literature in support of an 

exceptional circumstances request, but omits the fact that the exceptional 

circumstances policy does so require. Sur-Reply at 5; compare 1 Tex. Admin. 

Code 354.1039(a)(4)(D) with Administrative Record (A.R.) 428-31 (2013 Texas 

Medicaid Program Policy Manual—Exceptional Circumstances Policy). As 

discussed extensively in Appellant’s Brief, HHSC’s exceptional circumstances 

policy sets out the documentation that must be provided in support of an 

exceptional circumstances request. Appellant’s Br. 6-10, 14-25. Ms. Lukefahr 

complied with this policy and does not challenge the policy on appeal. A.R. 208-

241; see also A.R. 71-115, 129-207. According to the exceptional circumstances 

policy, Ms. Lukefahr was required to submit “[a] minimum of two articles from 

evidence-based medical peer-reviewed literature that demonstrate validated,

uncontested data for use of the requested equipment to treat the client’s specific 

medical condition, and that the requested equipment has been found to be safe and 

effective.” A.R. 429. Although Ms. Lukefahr submitted two articles, the articles 
3

did not rise to the level of evidence-based medical peer-reviewed literature 

supporting medical necessity for the mobile stander, as discussed in Appellant’s 

Brief. A.R. 147-61; Appellant’s Br. 9-11. As such, Ms. Lukefahr failed to meet the 

requirements for an exceptional circumstances request, and HHSC’s denial of the 

integrated stander should have been affirmed. A.R. 428-29. 

II. There is no set Clinical Criteria for Exceptional Circumstances 

Review because these Requests are Considered on a Case-by-Case 

Basis. 

Appellee claims that HHSC witnesses could not identify criteria used to 

deny Ms. Lukefahr’s exceptional circumstances request and could not name a 

medical purpose that could justify approval of an integrated stander. Sur-Reply at 9 

n. 8. This is because each exceptional circumstances request must be considered on 

a case-by-case basis: “Medical equipment or appliances not listed in subparagraph 

(C) of this paragraph [related to covered appliances and equipment] may, in 

exceptional circumstances, be considered for payment when it can be medically 

substantiated as a part of the treatment plan that such service would serve a 

specific medical purpose on an individual case basis.” 1 Tex. Admin. Code 

§ 354.1039(a)(4)(D) (emphasis added). The exceptional circumstances policy 

further clarifies that enrollment criteria and adjudication guidelines to not apply to 

exceptional circumstances. A.R. 429-30. Thus, HHSC witnesses testified that there 

is no set clinical criteria for review of an exceptional circumstances request, as the 
4

exceptional circumstances rule and policy requires that each request be considered 

on an individual case basis. Fair Hearing Audio Recording (“H.R.”) 1:15.40, 

1:20.50, 1:24, 2:49. As Ms. Lukefahr’s request was considered based on her 

individual medical needs in compliance with law and policy, HHSC’s decision 

should have been affirmed. A.R. 58-60 (Exceptional circumstances denial letter 

stating, in part: “After reviewing and studying the clinical points of your request 

and your special medical needs it was found you may have a medical need for a 

power wheelchair without a standing feature and a static standing system to meet 

both your medical and mobility needs.”). 

III. Requesting Prior Authorization of Alternative Durable Medical 

Equipment is not an Exceptional Circumstances Review 

Requirement.

Appellee asserts that HHSC denied the exceptional circumstances request 

because Ms. Lukefahr did not submit a prior authorization request for a static 

stander, thereby creating a new requirement that alternative Durable Medical 

Equipment (“DME”) be requested for prior authorization prior to submitting an 

exceptional circumstances request. Sur-Reply at 6. This claim is not supported by 

the record. Rather, the exceptional circumstances request was denied, in part, 

because Ms. Lukefahr failed to show that alternative DME had been tried or ruled 

out, and why, as required by the exceptional circumstances policy. A.R. 429 

(Exceptional Circumstances request must include “[l]etters of Medical Necessity 
5

(LOMN) from the client’s clinical professionals documenting alternative measures 

and alternative DME that have been tried and that have failed to meet the client’s 

medical need(s), or have been ruled out, and an explanation of why it failed or was 

ruled out.”); Appellant’s Br. 22-25. The evidence showed that Ms. Lukefahr did 

not have a static stander and that a static stander had never been prior authorized 

for her. A.R. 588 (Finding of Fact No. 5). This did not create a requirement that 

alternative DME must be requested for prior authorization prior to submitting an 

exceptional circumstances request, and no such requirement exists in law or policy. 

1 Tex. Admin. Code § 354.1039(a)(4)(D); A.R. 429-30. Rather, it was evidence 

that alternative DME had not been tried or ruled out as required by the exceptional 

circumstances policy. A.R. 429-30.

IV. Ms. Lukefahr has a Medical Need to Stand, but she does not have 

a Medical Need for an Integrated Stander. 

Appellee conflates evidence regarding Ms. Lukefahr’s need to stand with 

evidence regarding the need for an integrated stander. Sur-Reply at 10 n. 9. Ms. 

Lukefahr points out that Ms. Clayes, a nurse employed by HHSC, testified that Ms. 

Lukefahr has a medical need to stand, asserting that this disproves that the 

integrated stander was requested to help Ms. Lukefahr progress at work. Id. But 

Ms. Lukefahr ignores that Ms. Clayes further testified that no medical need for an 

integrated stander was expressed in the exceptional circumstances request. H.R. 
6

1:28 (“All of that documentation justifies standing. None of that justifies why that 

stander needs to be part of a wheelchair. . . It looks like convenience.”). As noted 

in the denial letter, the integrated stander was requested primarily to help Ms. 

Lukefahr progress at work, which is not a medical need. A.R. 59 (“The review of 

the papers sent in show the main reason for requesting a standing power 

wheelchair was to help you progress at work. The main reason was not for the 

treatment of your medical condition.); H.R. 1:27 (Ms. Clayes testifying that the 

integrated stander seemed to have been requested for work reasons, not due to 

medical need.). Instead, Ms. Lukefahr’s medical need to stand may be met through 

use of a static stander, as discussed in Appellant’s Brief. Appellant’s Br. 18-21; 

Appellant’s Reply Br. 8-13. Thus, the Court should disregard Ms. Lukefahr’s 

attempts to conflate a medical need to stand with a medical need for an integrated 

stander. 

V. HHSC’s Denial Letter Provides the Legal Basis for the Denial as 

Required by Federal Medicaid Regulations.

Finally, Ms. Lukefahr notes that that HHSC, in its Reply Brief, failed to cite to part 

of a Federal Medicaid regulation requiring that a denial letter provide the legal 

basis for the denial. Sur-Reply at 4 n. 3; 42 C.F.R. § 431.210(c) (the notice must 

contain “[t]he specific regulations that support, or the change in Federal or State 

law that requires, the action.”). This is true, since the portion of HHSC’s Reply 
7

Brief cited by Ms. Lukefahr refers to the level of detail required in a denial letter, 

not the legal basis for the denial. See Reply Br. at 8 n. 2. Regardless, HHSC’s 

denial letter provided the legal basis for denial in compliance with federal 

regulations, stating: “Because the standing feature on the power wheelchair would 

not serve a specific medical purpose for you, it could not be approved under the 

exceptional circumstances provision of 1 Texas Administrative Code 

§ 354.1039(a)(4)(D) as requested by your provider.” A.R. 59. 

PRAYER

HHSC asks this Court to reverse the district court’s judgment because 

HHSC’s order denying Ms. Lukefahr’s request for a custom power wheelchair 

with an integrated stander is supported by substantial evidence and is not arbitrary 

and capricious or in violation of Ms. Lukefahr’s due process rights. 

Respectfully submitted,

KEN PAXTON

Attorney General of Texas

CHARLES E. ROY

First Assistant Attorney General

JAMES E. DAVIS

Deputy Attorney General for Civil

Litigation

DAVID A. TALBOT, JR.

Chief, Administrative Law Division
8

/s/ Kara Holsinger

KARA HOLSINGER

Assistant Attorney General

State Bar No. 24065444

Office of the Attorney General of Texas

Administrative Law Division

P.O. Box 12548, Capitol Station

Austin, Texas 78711-2548

Telephone: (512) 475-4203

Facsimile: (512) 320-0167

kara.holsinger@texasattorneygeneral.gov

Attorneys for Appellant

CERTIFICATE OF COMPLIANCE

In compliance with Travis County Local Rule 10.5 and relying on the word 

count function in the word processing software used to produce this document, I 

certify that the number of words in this document is 1,854 including the portions 

that would otherwise be exempted by TRAP Rule 9.4(i)(1).

/s/ Kara Holsinger 

KARA HOLSINGER
9

CERTIFICATE OF SERVICE

A true and correct copy of the foregoing Appellant’s Response to Appellee’s 

Sur-Reply was served via e-serve and e-mail on this the 7

th day of December, 

2015, to the following: 

Maureen O’Connell

Texas Bar No. 00795949

Southern Disability Law Center

1307 Payne Avenue

Austin, Texas 78757

Telephone: 512-458-5800

Facsimile: 512-458-5850

moconnell458@gmail.com

Attorney for Appellee

/s/ Kara Holsinger

KARA HOLSINGER

Assistant Attorney General