Court Opinion

ID: 4556733
Source: CourtListenerOpinion
Date Created: 2020-08-19 14:08:00.616696+00
Date Added: 2024-06-11T09:27:02.452963
License: Public Domain

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                                NOT FOR PUBLICATION WITHOUT THE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.

                                                        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 August 19, 2020

                   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).
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 in-

home 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 issue s.

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 thei r

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 board-

certified 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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                                       6
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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                                         8
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

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                                         9
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

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                                       10
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:

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                                        11
            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

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                                       12
            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

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                                       13
            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/By-

Topics/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

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                                       14
            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

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                                       15
            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 inter-
            periodic 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

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                                      16
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,

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                                       17
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

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                                       18
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.

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