Opinion ID: 2449619
Heading Depth: 1
Heading Rank: 4

Heading: Whether WAC 388-106-0213 violates federal Medicaid comparability requirements.

Text: ¶ 13 MPC is a Medicaid state plan program authorized under 42 U.S.C. § 1396d(a)(24) and RCW 74.09.520(2). As a voluntary participant in the federal Medicaid program, Washington State must comply with Medicaid statutes and related regulations. S.A.H. ex rel. S.J.H. v. Dep't of Soc. & Health Servs., 136 Wash.App. 342, 348, 149 P.3d 410 (2006). DSHS administers Medicaid medical assistance programs in Washington State. RCW 74.04.050; RCW 74.09.500. ¶ 14 The federal Medicaid comparability provision mandates that a state Medicaid plan must provide that the medical assistance made available to any individual ... shall not be less in amount, duration, or scope than the medical assistance made available to any other such individual. 42 U.S.C. § 1396a(a)(10)(B)(i); see also 42 C.F.R. § 440.240(b). As with all Medicaid services, states 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(d). ¶ 15 WAC 388-106-0130(3)(b) mandates DSHS to reduce MPC service hours for children under the age of 18 pursuant to the framework established in WAC 388-106-0213. Under WAC 388-106-0213(2), DSHS provides automatic cuts to MPC hours based upon a child's age. Also, under WAC 388-106-0213(3), DSHS reduces MPC hours based upon a presumption that a child's needs are met or partially met when that child lives with a legally responsible natural parent, stepparent, or adoptive parent. ¶ 16 DSHS argues that WAC 388-106-0213(2) properly withholds payment for assistance with needs that are based upon age, not disability. DSHS reasons that all children below certain ages are presumed to have the same personal care needs. Put another way, DSHS argues that assisting a four-year-old with bathing fulfills a developmental need, not a medical need; therefore, DSHS will withhold providing paid assistance regarding bathing needs for all four-year-old children. DSHS also argues that the age- and parent-based reductions in WAC 388-106-0213 create a global benchmark in order to avoid paying for a service that is unrelated to a child's disability. Thus, the question posed to us here is whether DSHS violates federal Medicaid comparability requirements by promulgating a rule that creates across-the-board coverage reductions based solely upon a child's age and whether the child lives with a parent. ¶ 17 This court addressed a similar issue in Jenkins v. Department of Social & Health Services, 160 Wash.2d 287, 157 P.3d 388 (2007). In Jenkins, we invalidated a DSHS regulation, known as the shared living rule, that automatically reduced a recipient's benefits by 15 percent because they lived with their paid caregiver. Like the reductions imposed under WAC 388-106-0213 in this case, the shared living rule operated to reduce the base number of hours determined to be appropriate after DSHS's initial CARE assessment. In holding the shared living rule invalid, we specifically instructed that DSHS may use the CARE assessment program to initially classify, rate, and determine a recipient's level of need because this process is consistent with the Medicaid program's purpose. DSHS violates the comparability requirement when it reduces a recipient's benefits based on a consideration other than the recipient's actual need. Jenkins, 160 Wash.2d at 299, 157 P.3d 388. We further clarified by stating, Once a person is assessed to require and receive a certain number of care hours, the assessment cannot be reduced absent a specific showing that fewer hours are required. To `presume' some recipients need fewer hours of care without individualized determination violates the comparability requirement. Jenkins, 160 Wash.2d at 300, 157 P.3d 388. ¶ 18 Our holding in Jenkins controls the resolution of this case. Subsections (2) and (3) of WAC 388-106-0213 establish irrebutable presumptions in the CARE formula that diminish a recipient's care hours without an individualized determination of need. Because the regulation fails to account for an individual recipient's actual needs and because the regulation treats similarly situated recipients differently, WAC 388-106-0213 is invalid under federal comparability requirements. ¶ 19 DSHS argues that WAC 388-106-0213(2) properly withholds payment for care or services related to a child's developmental care. But this ignores what the regulation actually does. The regulation reduces MPC benefits based upon a consideration other than a recipient's actual need. Although routine assistance with daily bathing fulfills a developmental care requirement for a healthy four-year-old child, a disabled four-year-old may need significantly greater assistance with bathing or may even need multiple daily baths. While one disabled child may only require 30 minutes a day to meet her individualized bathing needs, another similarly disabled child may require two or three times more assistance. But instead of addressing the actual needs of an individual recipient, WAC 388-106-0213(2) operates to deny coverage based solely upon age and not upon the existence or extent of disability. ¶ 20 WAC 388-106-0213(3) is equally flawed. On its face, the rule treats similarly situated individuals differently because children with comparable disabilities are treated differently based not upon need, but upon whom the child lives with. Under the presumptions contained in WAC 388-106-0213(3), a child living with a legally responsible parent has her MPC hours reduced while a child living with a caregiver, or any other person exercising custodial responsibility, retains more payable MPC hours because the reductions imposed by WAC 388-106-0213(3) would not apply. In other words, two categorically needy recipients who are individually assessed as requiring the same needs will ultimately be treated differently simply because one recipient lives with a legally responsible parent and the other lives with someone other than a parent. ¶ 21 Subsections (2) and (3) of WAC 388-106-0213 rely on DSHS's presumptions regarding what needs are developmental in nature and what needs should be provided by a legally responsible parent. However, in Jenkins we specifically noted that DSHS's presumptions cannot be used to avoid an individualized determination of a recipient's actual need. Jenkins, 160 Wash.2d at 300, 157 P.3d 388 (To `presume' some recipients need fewer hours of care without individualized determination violates the comparability requirement.). ¶ 22 DSHS essentially argues that the presumptions in WAC 388-106-0213 create valid utilization control measures necessary to ensure that DSHS pays only for care-related needs and not for developmental needs. While, as a general matter, DSHS may establish utilization control criteria, DSHS's argument is unavailing in the present case because WAC 388-106-0213 functionally ignores the particular needs of any disabled child. DSHS's power to place limits on eligibility and assistance requirements is not unfettered, but is limited by federal comparability requirements that any individual's medical assistance ... shall not be less in amount, duration, or scope than the medical assistance made available to any other such individual. 42 U.S.C. § 1396a(a)(10)(B)(i). Federal Medicaid law further mandates that utilization control measures shall provide such methods and procedures relating to the utilization of, and the payment for, care and services available under the plan ... as may be necessary to safeguard against unnecessary utilization of such care and services. 42 U.S.C. § 1396a(a)(30)(A) (emphasis added). ¶ 23 Despite DSHS's assertion that WAC 388-106-0213 essentially establishes utilization control parameters, there is no mechanism within WAC 388-106-0213 targeting the regulation at the unnecessary utilization of care and services. Determining whether care or services are unnecessary impliedly involves determining whether a particular recipient requires such care or services. This is what occurs during the initial CARE evaluation when the recipient is placed into 1 of 17 classification groups. This is also what occurs when the recipient's base MPC hours are later reduced by an assessor's individualized findings regarding the recipient's self-performance and the amount of informal supports for ADL and IADL. ¶ 24 Unlike these reductions applied earlier in the CARE formula, the reductions contained in WAC 388-106-0213 are not based on the actual needs of any individual recipient. To the contrary, WAC 388-106-0213 relies upon DSHS's presumptions about what care is already being provided to children of certain ages and to children living with a parent. But DSHS's presumptions are problematic for several reasons. First, DSHS's age- and parent-based presumptions cannot be refuted by showing that a child's actual needs are still not being met following the reduction. While DSHS's regulations provide for an ETR proceeding to contest the reduction, the challenging party has no fair hearing rights regarding ETR proceedings. See WAC 388-106-0140; WAC 388-440-0001. In this case, Samantha was denied an ETR despite having a medical provider recommendation indicating that Samantha required roughly the same amount of MPC hours as the initial CARE assessment provided her. Second, DSHS fails to show the basis or process that the department relied upon to arrive at its presumptions regarding the age- and parent-based needs of a child. Neither the rule-making file nor the administrative record contains any time-study, evaluation, or any other evidence to support DSHS's presumptions. Clerk's Papers at 253. In this case, Samantha's MPC hours were reduced from 90 to 39, approximately a 56 percent decrease in hours. DSHS does not produce any evidence showing how it arrived at a 56 percent reduction. Nor does DSHS produce any evidence showing why the reduction cannot be 40 percent, 30 percent, or even 5 percent. In short, DSHS's age- and parent-based reductions represent arbitrary amounts applied without any supporting evidence and without regard to an individual recipient's actual needs. ¶ 25 DSHS argues that the initial CARE assessment provides a sufficiently individualized determination of a disabled child's needs. As support, DSHS points to the extensive criteria embodied in the regulations governing the CARE assessment process. But this argument is contradicted by our holding in Jenkins in which we stated that, following the initial CARE assessment, the base level of MPC hours cannot be reduced absent a specific showing that fewer hours are necessary. Jenkins, 160 Wash.2d at 300, 157 P.3d 388. In this case, Samantha's base MPC hours were mechanically reduced from 90 to 39 hours without any personalized determination that Samantha's needs would continue to be met. There is nothing in the record before this court to show that DSHS made any determination that Samantha's needs would be met. [5] ¶ 26 DSHS also presents an additional justification specific to WAC 388-106-0213(3), which reduces MPC hours when a child lives with a legally responsible natural/step/adoptive parent. DSHS argues that parents have statutory obligations to provide care for their children. Since Medicaid is a payor of last resort, DSHS reasons that they must identify third parties that may be responsible for a portion of the services otherwise provided by Medicaid. Br. of Appellant at 30. In response, Samantha persuasively argues that DSHS incorrectly equates MPC services with the care provided by all parents to their children. ¶ 27 The statutes that DSHS relies upon to justify its parent-based reductions are not instructive in this case. DSHS first points to RCW 26.09.002 (Parents have the responsibility to make decisions and perform other parental functions necessary for the care and growth of their minor children.). But this statute applies to domestic relations, and more specifically, to provide guidance for creating parenting plans following a dissolution of marriage. DSHS fails to indicate how this statute controls when determining the amount of in-home medical assistance available for a disabled child. Second, DSHS cites RCW 74.13.350 (It is the intent of the legislature that parents are responsible for the care and support of children with developmental disabilities.). Although this statute pertains to children with developmental disabilities, this statute specifically addresses voluntary placement agreements when placing foster children in out-of-home care facilities. [6] Again, DSHS fails to show how this statute applies under the facts of this case. Furthermore, if we were to apply RCW 74.13.350 in the manner that DSHS asserts we should, the statute would presumably allow DSHS to reduce a developmentally disabled child's MPC hours to zero. We decline to do so. [7] ¶ 28 MPC services are unlike the care parents typically provide to their children because MPC services are medical assistance administered by DSHS in compliance with federal requirements. RCW 74.09.500,.520. Furthermore, MPC providers are statutorily required to obtain specialized training before [8] caring for the disabled and there is nothing in the statutes cited by DSHS to suggest that parents must acquire specialized medical training simply to parent a disabled child. [9] ¶ 29 Consistent with our holding in Jenkins, we affirm the superior court and hold that the reductions embodied in WAC 388-106-0213(2) and (3) violate federal Medicaid comparability requirements because the reductions are imposed without any consideration of a child's individualized circumstances or whether a child's needs will continue to be met after the reduction. [10]