2014 VT 20


In re Brett & In re McCool
(2012-094 & 2012-236)
 
2014 VT 20
 
[Filed 14-Feb-2014]
 
NOTICE:  This opinion is
subject to motions for reargument under V.R.A.P. 40
as well as formal revision before publication in the Vermont Reports.  Readers
are requested to notify the Reporter of Decisions by email at:
JUD.Reporter@state.vt.us or by mail at: Vermont Supreme Court, 109 State
Street, Montpelier, Vermont 05609-0801, of any errors in order that corrections
may be made before this opinion goes to press.
 
 

2014 VT 20

 
 

Nos. 2012-094 & 2012-236

 

In re Jean Brett


Supreme Court


 


 


 


On Appeal from


In re Leslie McCool


Human Services Board


 


 


 


April Term, 2013


 


 


 


 


Charles
  Gingo, Chair


 

William R. Dysart, Vermont Legal Aid,
Inc., Burlington, for Petitioners-Appellants.
 
William H. Sorrell, Attorney General, William H. Ahlers,
Assistant Attorney General,
  Montpelier, and Kristen L. Clouser,
Assistant Attorney General, Waterbury, for 
  Respondent-Appellee. 
 
 
PRESENT:  Reiber, C.J.,
Dooley, Skoglund, Burgess and Robinson, JJ.
 
 
¶ 1.            
ROBINSON, J.   Petitioners in these
consolidated appeals, both recipients of home-based long-term care benefits
through Vermont’s Medicaid-funded Choices for Care (Choices) program, appeal
decisions of the Human Services Board disallowing deductions for personal care
services from their patient-share obligation under federal and state Medicaid
laws.  We conclude that, to the extent the services in question are
medically necessary, expenses for those services must
be deducted from petitioners’ patient-share obligation even if they are of a
type generally covered by Medicaid.  We further reject the State’s claim
that the decision of the Department of Disabilities, Aging and Independent
Living (DAIL) not to provide the personal care services in question under the
Choices program constituted a conclusive finding that the services are not
medically necessary.  Accordingly, we reverse the Board’s orders and
remand the cases for determinations of medical necessity consistent with this
opinion.
I.  General Background Law
 
¶ 2.            
Choices is a state-administered program funded through a Medicaid waiver
that, in relevant part, provides home-based long-term-care services to eligible
elderly or physically disabled Vermont adults.  See Choices for Care 1115
Long-Term Care Medicaid Waiver Regulations § I(A),
4 Code of Vt. Rules 13 110 008-1, available at http://www.lexisnexis.com/hottopics/codeofvtrules
[CFC Regulations].  The Choices waiver is subject to approval by the
Centers for Medicare and Medicaid Services (CMS), the federal agency charged
with providing program oversight, and is managed in compliance with CMS terms
and conditions of participation.  Id.  
¶ 3.            
Applicants for services through the Choices program must satisfy both
clinical and financial criteria.  Id. § IV(A)(1). 
On the financial side, applicants are sometimes required to “spend down” their
available income before they are eligible to participate in the program. 
See id. § IV(D) (discussing financial
eligibility standards).  Based on various clinical criteria, eligible
individuals are classified into the highest-needs group, the high-needs group
and the moderate-needs group.  Id. § IV(B). 
The services available under the program vary based on the individual’s
classification.  Id. § VIII. 
DAIL and the Department for Children and Families (DCF) jointly administer
Choices, with DAIL determining clinical eligibility and category of clinical
needs and DCF determining financial eligibility for those in the high- and
highest-needs categories.  Id. § VI(B)-(C).
¶ 4.            
Among the personal care services covered by Choices are assistance with
activities of daily living (ADLs)—which are categorized into discrete units
such as dressing, eating, bathing, bed mobility, and toilet use—and assistance
with instrumental activities of daily living (IADLs)—which are also categorized
into discrete units such as meal preparation, medication management, household
maintenance, and transportation.  Id. § III(1),
(28), (37).  The number of hours of personal care
services available through Choices for assistance with various specified needs
are capped.  Id. § VIII. 
However, an individual may request services above the cap by seeking a
variance.  Id. § XI. 
¶ 5.            
People eligible for Medicaid programs, including Choices, are required,
depending on their income, to pay a share of the costs of their care. 
Spend-down, Patient Share, and Resource Transfer Regulations § 4400, 5 Code of
Vt. Rules 13 170-1, available at
http//www.lexisnexis.com/hottopics/codeofvtrules [Patient Share
Regulations].  The patient share is calculated by determining a person’s
gross monthly income and then subtracting federally mandated deductions,
including a personal needs allowance, home-upkeep expenses, family maintenance,
and reasonable medical expenses.  Id.
§ 4460.  In the closely related context of spend-downs in
connection with an applicant’s initial eligibility, a deduction “is allowed for
necessary medical and remedial expenses recognized by state law but not covered
by Medicaid,” id. § 4452, including “noncovered
personal care services provided in an individual’s own
home . . . when they are medically necessary in relation to
an individual’s medical condition,” id. § 4452.3, and “[c]overed medical expenses . . . that
exceed limitations on amount, duration, or scope of services covered,” id.
§ 4442(c).  Deductions for “general supervision” of a beneficiary’s
well-being may be allowed where that care is required due to a specific
diagnosis of certain debilitating diseases like Alzheimer’s disease or
dementia.  Id. § 4452.3(a).
¶ 6.            
A beneficiary claiming a deduction for the cost of personal services as
a necessary medical expense submits to DAIL a Statement of Cost for Personal
Care Services (form 288C) and a Statement of Need for Personal Care Services
(form 288B) from a treating physician.  DAIL reviews the forms and
determines whether to provide the requested services under the Choices
program.  DCF determines the amount of the patient share.  Services
that are medically necessary and not covered by Choices are deducted from the
beneficiary’s income for purposes of calculating the patient share.  See
42 C.F.R. § 435.735(c)(4)(ii) (federal regulation
governing application of patient income to the cost of care); see also Patient
Share Regulations § 4442 (listing deduction sequence for spend-down purposes).
II.  Facts and Procedural History
A.   
Jean Brett
¶ 7.            
This is Jean Brett’s second appeal to this Court concerning the denial
of her requests for a deduction for the cost of personal care services from her
patient share obligation under the Choices program.  See In re Brett,
2011 VT 28, 189 Vt. 345, 19 A.3d 154.  As we
noted in the first appeal, Brett has been eligible for home-based long-term
care through the Choices program since 2007.  Id. ¶
2.  She is in her mid-eighties, disabled, and living with her
daughter.  Brett initially sought only five days a week of third-party
personal care services through Choices because her daughter cared for her on
weekends.  From 2007 through 2009, DCF determined Brett’s patient share
for five days a week of personal care services provided by Choices to be zero
after deducting from her gross income, among other things, $1,451 in noncovered medical expenses for personal care services
provided by her daughter the other two days.  Brett’s monthly patient share
increased to $45 between April and June 2009.  In July 2009, DCF
determined Brett’s monthly patient share to be $1,155, concluding that the cost
of personal care services provided by her daughter, beyond the five days
covered by Choices, could no longer be deducted as noncovered
medical services as the result of DAIL’s decision that seven days of general
supervision was not medically necessary.
¶ 8.            
Brett appealed DCF’s patient-share determination to the Human Services Board,
which found that the evidence supported the medical necessity of covered
personal care services seven days a week.  Because Choices provided Brett
with personal care services for only the five days that she had requested, the
Board ordered DCF to deduct the cost of the additional two days of personal
care services provided by her daughter, thereby reducing her patient share to
nearly zero.  The Secretary of the Agency of Human Services reversed that
decision, concluding that the Board had granted relief beyond Brett’s appeal by
providing personal care services for seven days when she was asking only for
five days and had contravened state and federal law by deducting medical
expenses that were or could be covered by Choices.  The Secretary made no
finding as to the medical necessity of the additional two days of care.
¶ 9.            
On appeal to this Court, Brett argued that the two additional days of
personal care services provided by her daughter should be deducted because they
were medically necessary and not covered by Choices even though Choices might
have covered them if she had asked for such coverage.  We rejected this
argument, finding no compelling basis to overturn the Secretary’s determination
that DCF correctly disallowed the deduction because Brett could have asked for
and received personal care services for the additional days under the Choices
program.  See In re Brett, 2011 VT 28, ¶¶ 12-13. 
Concluding that the additional two days of personal care services were
coverable under Vermont’s Medicaid statutes given Brett’s condition, we upheld
the Secretary’s determination that costs for those services could not be
deducted from her patient share.  Id. ¶ 17. 
We noted that Brett could request seven days of personal care under the Choices
program, in which case it would be up to DAIL staff to determine whether those
services were medically necessary.  Id.
¶ 10.         We
also noted Brett’s argument that her personal care services, even if listed as
coverable under the Choices program, were in fact noncoverable
in her case because the amount of services she required exceeded the
program limits.  Id. ¶ 17 n.3. 
We stated that until Brett requested the additional days of care, the Agency
could not know how many additional hours she wanted.  Id.  We
acknowledged that the Choices regulations established maximum hours for certain
services, but noted that variances could be obtained if necessary to protect
the beneficiary’s health.  Id.  We specifically left open “the
question of whether, upon denial of a variance, those services would be
considered ‘noncovered’ for deduction
purposes.”  Id.
¶ 11.         That
question is now before us.  Following this Court’s prior ruling, DCF
notified Brett that her patient share would be set at $1,353 beginning on May
1, 2011.  Brett requested reconsideration and a fair hearing through DCF’s
variance procedure.  Meanwhile, DAIL conducted its annual assessment of
Brett’s Choices service plan.  Brett requested 115 hours of personal care
services every two weeks, a significant increase of hours from previous
requests because of her need to make up for the hours that had been provided by
her daughter but for which she no longer received a deduction from her patient
share.  After review, DAIL denied the request for increased services,
approving only 68.75 hours of personal care services for each two-week
period.  Brett did not appeal that decision but instead requested that DCF
allow a deduction for the cost of general supervision or for the cost of 3.3
hours per day for personal care services (the difference between her request to
DAIL and the services DAIL actually approved) in calculating her patient
share.  DCF denied the request.
¶ 12.         Brett
appealed to the Human Services Board, arguing in relevant part that the
additional 3.3 hours of personal care services were medically necessary “noncovered” services because DAIL had refused to grant a
variance for the additional hours.  Following a hearing, the hearing
officer recommended that the Board affirm DCF’s patient-share
calculation.  The Board adopted the proposed order, concluding that Brett
did not meet the criteria for a deduction based on general supervision and that
the additional requested hours could not be considered noncovered
services under the Medicaid plan pursuant to our decision in Brett. 
The Board also noted that Brett had failed to avail herself of her right to
appeal DAIL’s determination of her medical needs under the Choices program.
B.    
Leslie McCool
¶ 13.         Leslie
McCool has been eligible for home-based long-term care through Choices since
2004.  She is in her mid-sixties, disabled with multiple sclerosis and
diabetes, and living with her son.  In August 2011, DAIL reassessed
McCool’s Choices plan.  McCool requested 152.5 hours of personal care
services every two weeks.  DAIL declined to approve more than the 115
hours of personal care services per-two week period that she had received in
previous years.  McCool did not appeal DAIL’s determination but sought
reconsideration of DCF’s calculation of her monthly patient share.  DCF
issued a decision on December 7, 2011 confirming her patient share without
change.
¶ 14.         McCool
appealed DCF’s decision to the Human Services Board.  Following a fair
hearing, the Board approved the hearing officer’s proposed findings and order
recommending that DCF’s decision be upheld.  The Board ruled that McCool
did not meet the criteria to allow personal care services for general
supervision and that her patient share could not be reduced based on a
deduction for additional personal care services for ADLs because such services
were coverable under Medicaid.  The Board stated that McCool had the
option of asking DAIL to reassess her needs before her next annual review and
then appealing DAIL’s decision if she was not satisfied.
¶ 15.         Petitioners
Brett and McCool each appealed from the Board’s rulings, and we consolidated
the two cases for purposes of briefing and argument.  In their
consolidated brief, petitioners argue that DCF’s decision not to deduct from
their respective patient shares necessary medical expenses for personal care
services denied by DAIL conflicts with Brett and federal law.  In
response, DCF argues that: (1) DAIL determined in both cases that the requested
additional personal care services were not medically necessary; (2) those
determinations became final when petitioners failed to appeal them; and (3)
because the requested services are not medically necessary, payment for the
services may not be deducted from petitioners’ patient shares.  In a
separate argument on which DCF takes no position, McCool argues that she is
eligible for in forma pauperis status on appeal.
 
 
III. Patient Share Deduction
 
A.
¶ 16.         During
the course of this case, DCF’s position seems to have shifted.  The
position initially taken by DCF and ultimately accepted by the Board in both
cases is that our decision in Brett precluded petitioners from obtaining
deductions from their patient shares for personal care services associated with
ADLs or IADLs because those services are “coverable” under Choices, a Medicaid
waiver program.  The argument rests on our holding in Brett, in
which we did not find compelling error in the Secretary’s interpretation of the
word “noncovered” for Medicaid purposes to mean
“not-coverable.”  Id. ¶ 12.  
¶ 17.         Our
holding in Brett must be considered in the context of the circumstances
of that case.  In Brett, the petitioner sought deductions for noncovered services that she never requested—the two
additional days of personal care services rendered beyond the five days of
personal care services that she had requested and received through the Choices
program.  We noted that if a Medicaid beneficiary could request a limited
number of days of personal care services and then compel DCF to deduct from her
patient share additional personal services that were never requested, the
beneficiary, rather than the agency vested with such authority, “would become
the architect of benefit administration.”  Id.
¶ 13.
¶ 18.         That
is not the situation here.  In these cases, petitioners requested the
additional personal care services and were denied those services under Choices,
the Medicaid waiver program.  In Brett, we expressly left open the
question of whether “coverable” services that are requested but denied through
the variance procedure may be considered “noncovered”
for purposes of allowing deductions from patient shares.  Id. ¶ 17 n.3.  That unresolved question is
essentially before us here.
¶ 19.         As we noted in Brett, id. ¶ 11,
applicable federal regulations require deductions from the patient share for
necessary medical care “recognized under State law but not covered under the
State’s Medicaid plan, subject to reasonable limits the agency may establish on
amounts of these expenses.”  42 C.F.R. § 435.735(c)(4)(ii); see also
42 U.S.C. § 1396a(r)(1)(A)(ii) (providing that with respect to
post-eligibility treatment of income of individuals receiving home-based
services under waiver program, “there shall be taken into account amounts
for . . . necessary medical or remedial care recognized
under State law but not covered under the State plan under this subchapter,
subject to reasonable limits the State may establish on the amount of these
expenses”).  DCF’s regulations expressly recognize this requirement in the
context of its spend-down regulations.  See Patient Share Regulations
§ 4452.3 (“The department will allow a deduction for noncovered
personal care services provided in an individual’s own home . . . when
they are medically necessary in relation to an individual’s medical
condition.”).
¶ 20.         A
recent federal court decision supports petitioners’ position that they are
entitled to deductions for medically necessary requested personal care services
potentially coverable under the Choices program but not in fact covered under
the program.  The Fourth Circuit of the United States Court of Appeals
examined the phrase “not covered under the State plan” in the course of
reviewing the State of Maryland’s challenge to CMS’s disapproval of an
amendment to the state’s Medicaid plan that would have eliminated deductions
for medical expenses incurred by Medicaid recipients before they became
eligible for benefits.  Md. Dep’t of Health & Mental Hygiene v. Ctrs. for Medicare and Medicaid Servs., 542 F.3d 424, 426 (4th Cir.
2008).  After noting CMS’s longstanding policy of mandating consistent
medical-expense deductions in both spend-down and post-eligibility processes,
the court stated that CMS had traditionally interpreted the phrase “not covered
under the State plan” to refer to “any medical service not paid for by
Medicaid.”  Id. at 434.  Rejecting
Maryland’s argument that the phrase referred only to “services that Medicaid
never covers and for which it never pays,” id., and after reviewing the
legislative history of the applicable federal statute, the court concluded that
CMS’s more inclusive definition was reasonable and within its administrative
authority.  Id. at 434-36.  
¶ 21.         DCF’s
position before the Board is at odds with the interpretation of a federal law
embraced by the federal agency responsible for administering that law. 
See id. at 428 (noting that deference to CMS in
connection with interpretation of Medicaid statutes is “particularly warranted”
given that the Medicaid statute is “a prototypical complex and highly technical
regulatory program”) (quotation omitted).  CMS takes the position that,
for eligibility purposes, as required by 42 U.S.C. § 1396a(r)(1)(A),
“services not covered under a State’s plan are any services not paid for by
Medicaid for that particular individual, regardless of the reason for
non-payment.  These include services listed as covered services in the
State plan, as well as services the plan does not cover.”  Miller v. Morrish, No. 09-13683,
2009 WL 5201792, at *5 (E.D. Mich. 2009).  If we embraced DCF’s
initial interpretation of the post-eligibility patient share requirements,
Vermont’s program would likely be out of compliance with the applicable federal
law on the subject, as interpreted by CMS.
¶ 22.         DCF
shifts its focus, and distinguishes Miller and Maryland Department of
Health by stating that those cases involved requested deductions from
patient shares for uncovered but medically necessary services. 
According to DCF, DAIL has already made final unappealed
determinations that the additional services requested by petitioners are not
medically necessary.
¶ 23.         Herein
lies the shift in DCF’s position.  DCF now
concedes that it would allow a deduction from the patient share for medically
necessary care beyond what Medicaid provides, without regard to whether the
type of service in question is among the types of services covered by the
program.  Reinforcing this concession is DCF’s own regulation setting
forth the sequence of permissible deductions in the context of eligibility
determinations, which includes not only “[n]oncovered
medical expenses” but also “[c]overed medical expenses . . . that exceed limitations
on amount, duration, or scope of services covered.”  Patient
Share Regulations § 4442(b)-(c).
¶ 24.         Based
on the applicable federal statutes and regulations, the federal case law
interpreting them, and DCF’s own regulations implementing the federal law, we
hold that expenses for medically necessary, requested personal care services
generally covered but not paid for under an individual beneficiary’s Choices
plan are deductible from that beneficiary’s patient share, “subject to
reasonable limits the agency may establish on amounts of these expenses.” 
42 C.F.R. § 435.735(c)(4)(ii).  That is the
case irrespective of whether DCF considers the services to be noncovered, see Patient Share Regulations § 4442(b),
or covered but exceeding the limitations of the amount of the services covered
under the plan, see id. § 4442(c).  Unlike in Brett,
here petitioners requested the services for which they were denied
coverage.  Thus, under DCF’s own regulations implementing federal law, the
services are not covered under their Choices plans, and petitioners are
entitled to deductions for those services as long as the services are medically
necessary.
B.
¶ 25.         Although
DCF no longer contests the above proposition, it argues that DAIL’s decision not
to pay for the additional personal care services was tantamount to a
determination that the services were not medically necessary.  Given that
petitioners did not appeal the respective DAIL decisions declining to provide
the additional personal care services, DCF argues, they cannot now assert that
the services are medically necessary.  DCF’s position rests on the premise
that DAIL approves all covered medically necessary expenses, and that its
denial of the services in petitioners’ cases necessarily reflects a conclusion
that they were not medically necessary. 
¶ 26.         There
is no doubt that expenses for personal care services
cannot be deducted from patient shares unless they are medically
necessary.  That is a stated condition under the Medicaid laws cited
above.  See 42 U.S.C. § 1396a(r)(1)(A)(ii) (requiring to be taken
into account “necessary medical or remedial care . . . not
covered under the State plan”); 42 C.F.R. § 435.735(c)(4)(ii) (requiring
deduction for “[n]ecessary medical or remedial care
recognized under State law but not covered under the State’s Medicaid plan”);
see also Patient Share Regulations § 4452.3 (allowing deduction for noncovered personal care services provided in individual’s
home “when they are medically necessary in relation to an individual’s medical
condition”).
¶ 27.         We
are left then with DCF’s claim that, for purposes of determining deductions
from patient shares, DAIL made final unappealed
determinations that the requested additional personal care services were not
medically necessary.  In support of this argument, DCF cites three cases,
one for the general preservation rule that matters not objected to in the
proceeding below are not subject to review on appeal—Passion v. Dep’t of
Soc. & Rehab. Servs.,
166 Vt. 596, 597-98, 689 A.2d 459, 462 (1997) (mem.)—and
the other two for the general principle that administrative remedies or
procedures established by agreement or law must be exhausted before resort to
the courts—In re Petition of D.A. Assocs., 150 Vt. 18, 20, 547 A.2d
1325, 1326 (1988) and Ploof v. Village of
Enosburg Falls, 147 Vt. 196, 200, 514 A.2d 1039, 1042-43 (1986).
¶ 28.         This
case is not comparable to those cited by DCF.  Here, petitioners sought
additional deductions from their patient shares pursuant to the administrative
procedures set forth in DCF’s regulations.  They raised in those
proceedings the very same issues that they raise on appeal.  DCF denied
petitioners’ requests for the increased deductions, and petitioners were
entitled to appeal from those decisions.  There is no failure to preserve
any issues or to exhaust administrative remedies within the context of these
proceedings.  More to the point, neither the applicable regulations nor
the record in this case support DCF’s argument that DAIL’s rejection of
petitioners’ request for additional personal care services reflects a
determination that the services were not medically necessary. 
¶ 29.         DCF
does not deny that under DAIL’s regulations, the services available through the
Choices program, including the hours of personal care services available for
assisting patients with specific ADLs and IADLs, are subject to caps that are
tied to a patient’s determined category of clinical need.  CFC Regulations § VIII.  A separate provision
allows DAIL to grant variances from the caps.  Id.
§ XI.  If the variance provision required that patients be
afforded all medically necessary services within the categories of services
provided in the Choices program, DCF’s argument that DAIL was the proper venue
for litigating the medical necessity of the additional personal care services
might have force.  
¶ 30.         But
nothing in the variance regulation, nor the CFC
regulations more broadly, expressly requires DAIL to provide program
beneficiaries all medically necessary services within the categories of
services available through Choices.  The variance regulation provides:
 
The Department may grant variances to these regulations.  Variances may be
granted upon determination that:
 
1.
The variance will otherwise meet the goals of the Choices for Care waiver; and
 
2.
The variance is necessary to protect or maintain the health, safety or welfare
of the individual. The need for a variance must be documented and the
documentation presented at the time of the variance request.
 
Id.
§ XI (A).  Even assuming that the second prong of this test is
functionally equivalent to a determination of medical necessity, the fact that
the regulation, on its face, gives DAIL discretion as to whether to grant a
variance undermines DCF’s claim that a denial of services is, as a matter of
law, tantamount to a finding of no medical necessity. 
¶ 31.         Moreover,
the records in these consolidated cases do not support—and in the McCool case
actually contradict—DCF’s assertion that DAIL concluded that the additional
services were not medically necessary.  At the patient-share hearings
before the hearing officer, both petitioners attempted to demonstrate through
witness testimony and 288B forms from treating physicians that the requested
additional personal care services were medically necessary.  The hearing
officer at times limited such evidence under the assumption that our decision
in Brett precluded deductions from patient shares for services that
could be covered by Choices.  Nevertheless, Brett provided testimony from
her Choices case manager, her caregiver daughter, and her treating nurse
practitioner describing her medical condition and detailing the time necessary
to assist her in each of the ADLs.
¶ 32.         For
its part, DCF presented the testimony of DAIL’s long-term clinical coordinator
to explain the basis for denying Brett’s request for additional personal care
services.  Although she stated her opinion that Brett was receiving all
medically necessary services under the Choices program, she acknowledged that
she conducted her assessment based solely on a “paper review” of the case
manager’s submission and that her denial of the additional requested coverage
was based on the lack of any functional change in Brett’s condition since the
last annual review.  She explained that there were maximum amounts of time
set for each ADL or IADL under CFC Regulations § VIII, and that additional
time beyond those maximums is generally granted under the variance procedure
only if there has been changes in the beneficiary’s condition since the most
recent assessment.
¶ 33.         The
case manager testified that the DAIL coordinator had told her that she could
not justify the additional hours because the case manager’s comments as to each
of the ADLs did not show a change in Brett’s condition.  According to the
case manager, she concurred that Brett’s condition had not recently
deteriorated significantly, but she explained to the DAIL coordinator that
Brett was seeking coverage for additional medically necessary third-party
personal care services because her expenses for those services, which had
previously been provided by her daughter on weekends, were no longer being
deducted from Brett’s patient share obligation.  The DAIL coordinator
acknowledged having this discussion with Brett’s case manager, but nonetheless
denied the additional hours based on there being no significant change in
Brett’s medical condition.  In its decision, the Board did not address the
medical necessity of the requested additional personal care services, but
rather ruled that “noncovered” meant “non-coverable”
under Brett and that Brett had failed to appeal DAIL’s determination of
her needs.
¶ 34.         Nothing
in this record supports the assertion that DAIL concluded that the services
were not medically necessary; its determination turned on the lack of
sufficient deterioration in Brett’s condition since its prior assessment to
warrant additional personal care services without consideration of the fact
that the “additional” services had been provided all along by Brett’s
daughter.  Nor did the Board make a finding on the medical necessity of
the services initially requested by Brett from DAIL, for which she subsequently
sought a deduction in the calculation of her patient share.
¶ 35.         Similarly,
at McCool’s patient-share hearing, a DAIL representative testified that McCool
could resubmit a request for additional hours under the variance procedure if
she could show a “significant functional decline” from the last
assessment.  When McCool’s attorney attempted to pursue further the
process underlying a reassessment review and variance procedure, the hearing
officer stated that the case was really about whether McCool met the
requirements for general supervision and that this was not the forum “to have a
determination of whether the original calculation by DAIL was accurate or not
because there are separate appeal rights from that that could have been taken
at the time.”  Nevertheless, McCool was able to present the testimony of
her treating physician, her caregiver son, and her case manager.  Those
witnesses testified about the significant deterioration of McCool’s medical
condition, and the son expressed frustration at DCF’s decision to no longer
allow a deduction for additional personal care services provided by him. 
After making numerous findings regarding McCool’s significant needs, the Board
concluded that the evidence did not support a finding that McCool needed
general supervision services, but that the evidence did support “the need for
additional time for ADLs.”  The Board asserted that her “case is
compelling” and “her need for care is evident” but concluded that she was “seek[ing] redress through the wrong mechanism.”  
¶ 36.         The
record in McCool’s hearing not only fails to support DCF’s position that the
requested services were not medically necessary; it flatly contradicts that
position.  The Board made an express finding that the evidence supported
the need for additional time for ADLs.  It did not specify how many
additional hours of ADLs were medically necessary. 
¶ 37.         Accordingly,
we reverse the Board’s orders in each of the consolidated cases and remand the
cases to the Board.  In Brett’s case, the Board should determine whether
the additional personal care services for which petitioners sought a deduction
were medically necessary, and, if so, how many additional hours of personal
service care were medically necessary.  Brett is entitled to deductions
from her patient share for the reasonable additional personal care expenses to
the extent they were medically necessary.  In McCool’s case, the Board has
already found that additional services for ADLs were warranted; it should
determine the number of additional hours and calculate McCool’s patient share
accordingly.[1]
IV.  In Forma Pauperis Status
¶ 38.         McCool
asks this Court to grant her application for in forma pauperis
(IFP) status on appeal.  We initially denied this request based on the
fact that the combined income of her household, which includes her son, exceeds
150% of the federal poverty level and thus does not meet the requirements of
Vermont Rule of Civil Procedure 3.1(b)(1).  McCool sought reconsideration
of that decision, however, and we granted her conditional IFP status pending
further consideration along with our review of the merits of the case. 
Upon reconsideration, we now grant McCool’s application.
¶ 39.         Under
our rules, we will grant an application for IFP status on appeal if the
applicant satisfies the criteria set forth in V.R.C.P. 3.1(b).  See
V.R.A.P. 24(a)-(b).  Civil Rule 3.1(b) states in relevant part:
(1)
If the affidavit sets forth that the applicant is a recipient of any kind of
welfare aid which constitutes a major portion of subsistence or is a person
whose gross income is at or below 150% of the poverty income guidelines for
nonfarm families established under the Community Services Act of 1974, the
entire fee and costs of service shall be waived. For purposes of this
paragraph, income of the applicant’s cohabiting family members shall be deemed
to be income of the applicant.
 
(2)
If the clerk or designee finds that the movant is unable to pay the entry fee
without expending income or liquid resources necessary for the maintenance of
the movant and all dependents, the entire entry fee shall be waived.
 
(3)
If the clerk or designee finds that the movant is unable to pay the costs of service
without expending income or liquid resources necessary for the maintenance of
the movant and all dependents, the costs of service shall be waived.
 
¶ 40.         Our
initial denial was based on the fact that McCool’s income, when combined with that
of her son, left her above the income threshold for IFP status under Civil Rule
3.1(b)(1).[2] 
The provision including all household income in the IFP eligibility
consideration applies only to Rule 3.1(b)(1), however. 
It does not apply to the provisions in Rule 3.1(b)(2)-(3),
which permit the waiver of entry fees and the costs of service upon a finding
that the applicant is unable to pay these costs “without expending income or
liquid resources necessary for the maintenance of the movant and all
dependents.”  In this case, McCool is a long-term-care Medicaid
beneficiary who must pay all of her income toward her care except for a
maintenance allowance, medical costs, and certain other specific
deductions.  Patient Share Regulations § 4462. 
The maintenance allowance is designed to provide a reasonable amount for food,
shelter, and clothing to meet her personal needs.  Id.
§ 4462.1.  Because requiring her to pay a filing fee and for
the costs of service would compel her to spend part of her maintenance
allowance set aside for her basic needs, on the basis of V.R.C.P. 3.1(b)(2)-(3)
we grant her motion to waive the entry fee and costs of service. 
           
Petitioner Leslie McCool’s application to proceed in forma pauperis and have the filing fee waived is granted. 
The Board’s January 9, 2012 and June 11, 2012 decisions are reversed, and the
cases are remanded to the Board for it to reconsider petitioners’ requests for
deductions from their patient shares in light of this opinion.
 
 

 


 


FOR THE COURT:


 


 


 


 


 


 


 


 


 


 


 


Associate
  Justice

 







[1] 
Because we conclude that DAIL made its determination on a different basis in
these cases, we need not address the more general question of whether if DAIL
declines to provide requested services in the Choices program on the basis that
the services are not medically necessary an applicant must pursue his or her
remedies through an appeal of the DAIL determination.


[2] 
Apparently, Appellate Rule 24 was not updated in 2006 when Civil Rule 3.1 was
amended to add a sentence requiring that the income of cohabitating family
members be counted in considering the applicant’s income under the criteria set
forth in what is now Civil Rule 3.1(b)(1).  Because we resolve this
petition on different grounds, we need not address the impact of this
discrepancy between the civil and appellate rules.  We refer this matter
to the Civil Rules Committee to address the discrepancy and ensure that our
civil and appellate rules are consistent. 



