#26350-a-SLZ

2013 S.D. 18

                           IN THE SUPREME COURT
                                   OF THE
                          STATE OF SOUTH DAKOTA

                                     ****
MICKEY NELSON,                               Appellant,

      v.

SOUTH DAKOTA DEPARTMENT
OF SOCIAL SERVICES, SOUTH DAKOTA
DEPARTMENT OF HUMAN SERVICES,                Appellees.


                                     ****

                   APPEAL FROM THE CIRCUIT COURT OF
                      THE SECOND JUDICIAL CIRCUIT
                   MINNEHAHA COUNTY, SOUTH DAKOTA

                                     ****

                     THE HONORABLE STUART L. TIEDE
                                Judge

                                     ****

ELIZABETH OVERMOE of
South Dakota Advocacy Services
Sioux Falls, South Dakota                    Attorneys for appellant.


MARTY JACKLEY
Attorney General

CHRIS MCCLURE
Special Assistant Attorney General
Pierre, South Dakota                         Attorneys for appellees.

                                     ****

                                             CONSIDERED ON BRIEFS
                                             ON JANUARY 8, 2013

                                             OPINION FILED 02/13/13
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ZINTER, Justice

[¶1.]         The South Dakota Department of Human Services (the Department)

denied Mickey Nelson’s application for Home and Community Based Services

(HCBS), a federal-state Medicaid Waiver program that provides assistance to

individuals with developmental disabilities. 1 After a hearing, an administrative

law judge affirmed the Department’s denial. Nelson appealed to circuit court,

which also affirmed the Department’s denial. We affirm.

                             Facts and Procedural History

[¶2.]         Mickey Nelson is a 48-year-old who lives without institutional care in

Sioux Falls. Nelson has “borderline intellectual functioning,” having a performance

IQ of 97, a verbal IQ of 73, and a full scale IQ of 82. 2 He also has an expressive

language disorder and a learning disorder. Because his IQs are over 70, Nelson is

not considered “mentally retarded.” 3

[¶3.]         Nelson attended school through the ninth grade and then received

employment training from South Dakota Achieve. South Dakota Achieve is a non-

profit organization that assists individuals with intellectual and developmental



1.      HCBS applications are submitted to the Department of Human Services.
        The Department of Human Services administers the HCBS program, but the
        program is a part of the Department of Social Services’ Medical Assistance
        program. Therefore, both departments are named in this appeal.

2.      Dr. Ted Williams testified that when there is a significant difference between
        an individual’s performance IQ and verbal IQ, it is standard practice to use
        the higher IQ. Dr. Williams also testified that the mean IQ of the general
        population is 100.

3.      We use the phrase “mentally retarded” because that is the language used in
        South Dakota’s administrative rules. See, e.g., ARSD 67:54:04:05(1).

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disabilities. Nelson was employed at a restaurant for fourteen years, and then

worked at a Pizza Hut for ten years. His job at Pizza Hut was eliminated in 2009

because of economic conditions. He had not become reemployed at the time of

hearing. In September 2010, Nelson began receiving Social Security disability

benefits.

[¶4.]         Nelson met his wife while they were both clients of South Dakota

Achieve. They have been married for over twenty years and have lived in their

current apartment throughout the marriage.

[¶5.]         Nelson’s wife was receiving HCBS through South Dakota Achieve for

her individual needs and areas in which she shared joint responsibility with Nelson.

Nelson, however, could not receive HCBS for his individual needs unless he also

qualified. In September 2010, Nelson submitted an HCBS application to the

Department’s Division of Developmental Disabilities (the Division).

[¶6.]         Two reports were submitted with Nelson’s application. The first was

an Inventory for Client and Agency Planning (ICAP), 4 which was completed by

Melanie DeBates, the admissions director for South Dakota Achieve. The second

report was a psychological evaluation completed by Dr. Elwin Unruh. After

considering Dr. Unruh’s evaluation and Nelson’s ICAP, the Department made a

preliminary determination that Nelson was ineligible for HCBS. However, the

Department asked the Division’s eligibility review team to consider Nelson’s


4.      ARSD 67:54:04:06 requires completion of an ICAP before HCBS may be
        approved. See also ARSD 67:54:04:04(2). An ICAP measures an individual’s
        abilities in self-care, language, learning/cognition, mobility, self-direction,
        independent living, and economic self-sufficiency. See ARSD 67:54:04:06.


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application and assess his adaptive behaviors. Nelson’s adaptive behaviors were

evaluated using a “Vineland II” assessment completed by DeBates. 5 After

reviewing the psychological evaluation, the ICAP, and the Vineland II assessment,

the eligibility review team agreed with the Department’s conclusion that Nelson

was ineligible for HCBS.

[¶7.]         Nelson requested administrative review. Darryl Millner, the

Department’s HCBS program manager, and Dr. Ted Williams, a member of the

Division’s eligibility review team, testified on behalf of the Department. Two

employees of South Dakota Achieve testified for Nelson. DeBates testified that

Nelson’s ICAP showed he had “weaknesses in all the areas of social and

communication[,] personal living and community living skills.” DeBates testified

that, based on the Vineland II assessment, Nelson “demonstrate[d] deficits in all

areas of communication, daily living, socialization, and motor skills.” Tammy Nolle,

a supportive living worker who provided HCBS to Nelson’s wife, testified to the

Nelsons’ living situation. Nolle indicated that Nelson had difficulty completing

household chores and was struggling to live independently. Nolle also testified that

Nelson had health and nutrition issues.

[¶8.]         After considering the testimony, the ICAP, the Vineland II assessment,

and Dr. Unruh’s psychological evaluation, the administrative law judge affirmed

the Department’s denial of benefits. The administrative law judge found that


5.      The Vineland II assessment measures an individual’s adaptive behaviors in
        the following categories: communication, daily living, social skills and
        relationships, physical activity, and problem behaviors. The assessment is
        based on a parent’s or proposed caregiver’s rating of the individual’s
        behaviors in each category.

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“Nelson has been employed, married, and living independently for two decades, he

has not shown that this condition has changed, . . . and he is not eligible for

[HCBS].” The circuit court affirmed. 6

                                         Decision

[¶9.]         The Medicaid HCBS Waiver program is a federally-funded program

that “is limited to individuals in need of and eligible for institutionalized services in

an Intermediate Care Facility for People with Mental Retardation (ICF/MR) . . . ,

but who could remain in their homes or in the community if services were

available.” See Snelling v. S.D. Dep’t of Soc. Servs., 2010 S.D. 24, ¶ 5, 780 N.W.2d

472, 474-75. See also Weisenborn ex rel. Shoemaker v. Mo. Dep’t of Mental Health,

332 S.W.3d 288, 294 (Mo. Ct. App. 2011) (quoting Hyde v. Dep’t of Mental Health,

200 S.W.3d 73, 74 (Mo. Ct. App. 2006)) (“The Medicaid Waiver program is one

through which individuals ‘receive services funded by the federal program normally

available only at an institution.’”). The federal eligibility requirements for “services

and institutionalization in an ICF/MR . . . determine whether an individual may

also qualify for the Medicaid [ ] Waiver program.” Snelling, 2010 S.D. 24, ¶ 6, 780

N.W.2d at 475. If an applicant is qualified, the program “permits [s]tates to offer . .


6.      The circuit court affirmed for a different reason. The court concluded that
        Nelson was not eligible because he was not mentally retarded and did not
        have a condition closely related to mental retardation. See ARSD
        67:54:04:04(1); 67:54:04:05(1). We do not address the court’s reasoning
        because we conclude that the administrative law judge’s reasoning is
        dispositive. See Caldwell v. John Morrell & Co., 489 N.W.2d 353, 357 (S.D.
        1992) (“When an appeal of an administrative agency’s decision in a contested
        matter is taken to circuit court and the final judgment of that court is
        appealed to this court, we must make the same review of the agency’s actions
        as did the circuit court.”).


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. an array of home and community-based services that an individual needs to avoid

institutionalization.” 42 C.F.R. § 441.300.

[¶10.]         To be eligible for South Dakota’s HCBS, an individual must satisfy

ARSD 67:54:04:04, which has three requirements:

               In addition to [financial eligibility], an individual must meet the
               following requirements:

                      (1)   Be developmentally disabled according to §
                            67:54:04:05;
                      (2)   Be appropriate for HCBS placement according to §
                            67:54:04:06; and
                      (3)   Be in need of and eligible for placement in an
                            intermediate care facility for the mentally retarded
                            or the developmentally disabled according to §
                            67:54:03:04. . . . 7

[¶11.]         To satisfy subsection (1), Nelson must have been “developmentally

disabled according to [ARSD] 67:54:04:05[.]” See ARSD 67:54:04:04(1). To be



7.       Nelson argues that his ICAP, revealing the requisite limitations, conclusively
         establishes that he is eligible for placement in an ICF/MR. See ARSD
         67:54:04:04(3); 67:54:03:04. Although Nelson’s ICAP indicated that he had
         the limitations necessary to satisfy ARSD 67:54:04:04(3), Nelson overlooks
         the requirement of ARSD 67:54:04:04(1), which incorporates ARSD
         67:54:04:05. ARSD 67:54:04:05(1) provides that an individual must require
         “treatment or services similar to those required for the mentally retarded.”
         See also ARSD 67:54:03:02(2)-(3) and 67:54:03:03(1) (indicating that, to be
         eligible for ICF/MR placement, an individual must satisfy both the requisite
         number of ICAP limitations and require “treatment or services similar to
         those required for the mentally retarded”). This additional requirement is
         consistent with 42 C.F.R. § 435.1010 (defining a “[p]erson[] with related
         conditions” as a person who “requires treatment or services similar to those
         required for [the mentally retarded]” and shows “substantial functional
         limitations in three or more . . . areas of major life activity”). The areas of
         major life activity identified in 42 C.F.R. § 435.1010 are nearly identical to
         the areas identified in South Dakota’s ICAP requirement. See ARSD
         67:54:03:04.



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considered developmentally disabled, Nelson must, among other things, “require[ ]

treatment or services similar to those required for the mentally retarded.” ARSD

67:54:04:05. The South Dakota rules do not define the treatments or services that

are similar to those required by the mentally retarded. However, the federal rules

describe the treatment and services that individuals must require in order to be

admitted to an intermediate care facility for the mentally retarded. See 42 C.F.R. §

483.440(a)-(b)(1). The federal rules require “active treatment,” which must be an

aggressive program of “specialized and generic training, treatment, health services

and related services[.]” 8 See 42 C.F.R. § 483.440(a)(1). But, “[a]ctive treatment

does not include services to maintain generally independent clients who are able to

function with little supervision or in the absence of a continuous active treatment

program.” 42 C.F.R. § 483.440(a)(2).

[¶12.]         Nelson argues that he has not been generally independent. Nelson

points out that, although he has lived on his own for over twenty years, he is

receiving some HCBS services through his wife’s service provider. Nelson also

points out that after his last employment, he was deemed eligible for Social Security


8.       Active treatment includes the:

               (1)    . . . aggressive, consistent implementation of a program of
                      specialized and generic training, treatment, health
                      services and related services . . . that is directed toward--
               (i)    The acquisition of the behaviors necessary for the client to
                      function with as much self determination and
                      independence as possible; and
               (ii)   The prevention or deceleration of regression or loss of
                      current optimal functional status.

         42 C.F.R. § 483.440(a)(1).


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disability benefits. Nelson argues that he is “no longer able to be employed at a

productive wage level without long-term supervision or support.” 9 Nelson also

argues that the administrative law judge failed to account for the testimony of

Melanie DeBates and Tamara Nolle, who identified Nelson’s deficits and struggles

with living independently.

[¶13.]         On the other hand, Dr. Unruh’s psychological evaluation indicated that

Nelson had been living independently. Cognitively, Nelson was not diagnosed as

mentally retarded. He was found to be “lower average to below average . . . with

average performance scores.” Additionally, with early training, Nelson had a

lengthy employment history. Dr. Unruh indicated that Nelson had hobbies

including watching football, watching movies, and shopping with his wife. Nelson

also owned a vehicle and drove independently. Dr. Unruh concluded that Nelson

could manage his personal affairs and function independently:

               [Nelson] presents as an individual who is able to maintain [a]
               relatively appropriate understanding of choices that are
               available to him within his level of functioning. He indicates
               being capable of managing his own personal affairs and
               finances, and generally has been able to function without any
               significant social dysfunction. He perhaps lacks to some degree
               in understanding fully what choices he might have to improve
               his interaction with peers or fellow employees, but as he was
               able to maintain employment for over fourteen years in his
               employment record, he apparently has learned to work through
               some of these difficulties as well. Viewing his overall
               presentation, he appears capable of managing his own benefits
               at this time.

[¶14.]         In weighing the conflicting evidence, the administrative law judge

found that Nelson was ambulatory and able to drive. The administrative law judge


9.       Nelson introduced no expert testimony to support this assertion.

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also found that Nelson had lived in the same apartment for over twenty years, he

had been employed for a total of twenty-four years, and he was able to maintain

employment. The administrative law judge further found that Nelson was

“motivated to find work and maintain his independence.” The administrative law

judge ultimately found that “Nelson has been employed, married, and living

independently for two decades [and] he has not shown that this condition has

changed . . . .”

[¶15.]          In reviewing these findings of fact, we do not reverse merely because

there is conflicting evidence, and we do not “substitute our judgment for that of the

[agency fact finder], unless we are left with a definite and firm conviction a mistake

has been made.” Abild v. Gateway 2000, Inc., 1996 S.D. 50, ¶ 11, 547 N.W.2d 556,

559. Here, there was evidence supporting the finding that Nelson had lived

independently for two decades and that his situation had not changed. This

evidence indicated that Nelson was “a generally independent client[ ] who [was]

able to function with little supervision or in the absence of a continuous active

treatment program.” See 42 C.F.R. § 483.440(a)(2). We conclude that the

administrative law judge did not clearly err in finding that Nelson did not qualify

for benefits.

[¶16.]          GILBERTSON, Chief Justice, and KONENKAMP, SEVERSON, and

WILBUR, Justices, concur.




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