Right to Hearing, Generally

Medicaid applicants and beneficiaries are entitled to adequate notice of state agency actions and a meaningful opportunity for a hearing to review those decisions whenever their claim for benefits is denied or not acted upon with reasonable promptness. Federal law, at 42 U.S.C. § 1396a(3); 42 C.F.R. Part 431, Subpart E, requires all state plans to provide an opportunity for a fair hearing. Specifically, 42 U.S.C. § 1396a(3) provides:

A State plan for medical assistance must— provide for granting an opportunity for a fair hearing before the State agency to any individual whose claim for medical assistance under the plan is denied or is not acted upon with reasonable promptness.

In Shakhnes v. Berlin, 689 F.3d 244 (2nd Cir. 2012), the Court held the Medicaid fair hearing statute, 42 U.S.C. § 1396a(a)(3), as construed by the time frame regulation, 42 C.F.R. § 431.244(f), creates a right, enforceable under § 1983, to receive a fair hearing and a fair hearing decision “[o]rdinarily, within 90 days” of a fair hearing request.

O.C.G.A. § 49-4-153 is the controlling Georgia statute governing Medicaid appeals. The Administrative Procedure Act applies, in part, because hearings must follow the rules and regulations of the Office of State Administrative Hearings.

O.C.G.A. § 49-4-153(b)(1) provides as follows:

(1) Any applicant for medical assistance whose application is denied or is not acted upon with reasonable promptness and any recipient of medical assistance aggrieved by the action or inaction of the Department of Community Health as to any medical or remedial care or service which such recipient alleges should be reimbursed under the terms of the state plan which was in effect on the date on which such care or service was rendered or is sought to be rendered shall be entitled to a hearing upon his or her request for such in writing and in accordance with the applicable rules and regulations of the department and the Office of State Administrative Hearings. With respect to appeals  regarding whether a treatment for a mental health or substance abuse disorder is  medically necessary, the administrative law judge shall make such determination using  the definitions provided in Code Section 33-21A-13]. As a result of the written request for hearing, a written recommendation shall be rendered in writing by the administrative law judge assigned to hear the matter.  Should a decision be adverse to a party and should a party desire to appeal that decision, the party must file a request in writing to the commissioner or the commissioner’s designated representative within 30 days of his or her receipt of the hearing decision. The commissioner, or the commissioner’s designated representative, has 30 days from the receipt of the request for appeal to affirm, modify, or reverse the decision appealed from. A final decision or order adverse to a party, other than the agency, in a contested case shall be in writing or stated in the record. A final decision shall include findings of fact and conclusions of law, separately stated, and the effective date of the decision or order. Findings of fact shall be accompanied by a concise and explicit statement of the underlying facts supporting the findings. Each agency shall maintain a properly indexed file of all decisions in contested cases, which file shall be open for public inspection except those expressly made confidential or privileged by statute. If the commissioner fails to issue a decision, the initial recommended decision shall become the final administrative decision of the commissioner.

See Ga. Dep’t Cmty. Health v. Medders, 292 Ga. App. 439 (2008) (“Following the hearing, the ALJ affirmed DCH’s decision. Medders requested further agency review, but DCH took no additional action, and the ALJ’s ruling became the final agency decision by operation of law. See OCGA § 49-4-153(b)(1). Medders then petitioned the superior court for judicial review pursuant to OCGA §§ 49-4-153(c) and 50-13-19“). As an aside, the bracketed sentence in Section 49-5-153(b)(1) was added, effective July 1, 2022. Subsection (b)(1) was replaced in its entirety by Section 1-8 of the Georgia Mental Health Parity Act, House Bill 1013, 2022 Ga. Laws 587 (April 4, 2022) (pdf version). Essentially it inserted the bracketed language and corrected a typo by eliminating an errant “(2)”. HB 1013 was signed by the Governor on April 4, 2022, with an effective date of July 1, 2022

O.C.G.A. § 49-4-153(c) limits application of the Administrative Procedures Act as follows: Judicial review of the commissioner’s decision may be obtained in the same manner and under the same standards as are applicable to those contested cases which are reviewable pursuant to Code Section 50-13-19 ;  provided, however, that no other provision of Chapter 13 of Title 50 shall be applicable to the department with the exception of Code Sections 50-13-13 and 50-13-15. Rules for the Office of State Administrative Hearings are at Ga. R. & Regs. § 616-1-2-.01 et seq.

While O.C.G.A. § 49-4-153 controls appeals when an applicant follows the rules, O.C.G.A. § 49-4-146.1 governs those situations when someone violates the rules. O.C.G.A. § 49-4-146.1(b)(1) makes it unlawful to obtain, attempt to obtain, or retain medical assistance to which the person or provider is not entitled. Section 49-4-146.1(e) provides for an administrative hearing which is conducted in the same manner as any other contested case. If no hearing is requested, then the matter is treated as an unappealed case and the Commissioner’s collection rights accrue. Collection procedures are described in Subsection (e)(3).

If the Appliation is Denied:

If Medicaid denies eligibility, the Applicant must decide whether to pursue an administrative remedy. Ordinarily, applicants must use the administrative process unless doing so would be futile. See Feminist Women’s Health Center v. Burgess, 282 Ga. 433 (2007). The intent of the legislature when the APA was enacted was to require exhaustion of administrative remedies without resort to courts in the first instance. O.C.G.A. § 50-13-19(a).

In Ga. Dep’t Cmty. Health v. Ga. Society of Ambulatory Surgery Ctrs., 290 Ga. 628 (2012) the Court stated:

The Georgia Administrative Procedure Act (APA) is applicable to this case. OCGA §§ 31-6-40(c)(2), 31-6-47(a)(18). Under the APA, a person cannot seek judicial review of an agency action unless he “has exhausted all administrative remedies available within the agency….” OCGA § 50-13-19(a). “Long-standing Georgia law requires that a party aggrieved by a state agency’s decision must raise all issues before that agency and exhaust available administrative remedies before seeking any judicial review of the agency’s decision. [Cits.]” Cerulean Cos. v. Tiller, 271 Ga. 65, 66(1), 516 S.E.2d 522 (1999). “This Court has consistently held that `”(a)s long as there is an effective and available administrative remedy, a party is required to pursue that remedy before seeking equitable relief in superior court.” (Cit.)’ [Cits.]” Fulton County Taxpayers Foundation v. Ga. Public Service Comm., 287 Ga. 876, 878(2), 700 S.E.2d 554 (2010).

The rationale for requiring exhaustion of administrative remedies is that resort to the administrative process will permit the agency to apply its expertise, protect the agency’s autonomy, allow a more efficient resolution, and result in the uniform application of matters within the agency’s jurisdiction. [Cits.]

Cerulean Cos. v. Tiller, supra at 67(1), 516 S.E.2d 522. “[O]nly in rare instances will the requirement of exhaustion be relaxed.” Moss v. Central State Hosp., 255 Ga. 403, 404, 339 S.E.2d 226 (1986).

In some cases, the pace of the administrative process may render it futile. This issue is discussed in Moore v. Medows, 2007 U.S. Dist. LEXIS 47087, *10-11 (N.D. Ga. 2007). There, the Court said: “A recent case from the Georgia Court of Appeals demonstrates the potential length of these proceedings. In Department of Community Health v. Freels, 258 Ga. App. 446 (2002), a Medicaid beneficiary suffering from cerebral palsy petitioned the Department on September 3, 1999, to reimburse him for therapy related to his condition. Almost three months later, the Department denied his petition. An ALJ subsequently ruled against him and the Department issued a final denial. It was not until October 10, 2001, over two years after the initial petition was filed, that the superior court reversed the ALJ’s decision.”

Although the citations changed when the legislature re-codified Georgia’s Code in 1981, the Court made a number of observations regarding the Administrative Procedures Act in Bd. of Dental Examiners v. Daniels, 137 Ga. App. 706 (1976).

• Appellant/defendant contends that the Civil Practice Act is not applicable to proceedings under the Georgia Administrative Procedure Act. We agree. [O.C.G.A. § 9-11-1] provides that “[t]his Title governs the procedure in all courts of record of the State of Georgia…”
• The CPA does not apply to the Georgia Administrative Procedure Act. The intent of the legislature was to provide an administrative procedure to resolve conflicts within the authority vested in administrative agencies and boards by statute without resort to courts of record in the first instance. See Howell v. Harden, 231 Ga. 594 (1) (203 SE2d 206).
• Thus, the state has consented to suit in actions alleging necessity of a declaratory judgment on validity of rules of state agencies. Dept. of Human Resources v. Williams, 130 Ga. App. 149 (1) (202 SE2d 504).
• [O.C.G.A. § 50-13-2(6)], defines “rule” as an “agency regulation, standard or statement of general applicability that implements, interprets or prescribes law or policy, or describes the organization, procedure, or practice requirements of any agency.”
• [O.C.G.A. § 50-13-3(a)(3)] requires agencies to “Make available for public inspection all rules and all other written statements of policy or interpretations formulated, adopted, or used by the agency in the discharge of its functions.” (Emphasis supplied.)
• [O.C.G.A. § 50-13-3(a)(4)] requires agencies to “Make available for public inspection all final orders, decisions, and opinions except those expressly made confidential or privileged by statute.”
• [O.C.G.A. § 50-13-4] distinguishes a “rule” from an “interpretative rule.” It states that “[p]rior to the adoption, amendment or repeal of any rule, other than interpretive rules or general statements of policy, the agency shall” follow a prescribed procedure.

William Browning, in a paper presented at the 2014 NAELA Institute (May 15, 2014), gave the following advice when considering whether to pursue an administrative or judicial remedy:

These questions are very simple, but expand rapidly depending upon the issues presented.

A. If you lose the Fair Hearing – will you appeal? If the answer is “No”, then you should proceed directly to the Fair Hearing. If the answer is “Yes” you may litigate through the Court processes, and you should consider filing a separate Court action immediately.
B. Is this a precedent setting-type case? If “Yes” you should consider filing a Court action and have it proceed briefly in conjunction with the Fair Hearing process.
C. If you win in the Court action, will the state likely appeal to the State Appellate Courts? If the answer is “Yes” then you should likely proceed with a Court filing contemporaneous with the Fair Hearing.

Spousal Cases:

In spousal cases, a separate court proceeding may be desirable. For example, 42 U.S.C. § 1396r-5(d)(5) provides: “if a court has entered an order against an institutionalized spouse for monthly income for the support of the community spouse, the community spouse monthly income allowance for the spouse shall be not less than the amount of the monthly income so ordered.” Similar relief is permitted in determining the community spouse resource allowance. 42 U.S.C. § 13965-r(f)(2)((iv) and (f)(3). See, generally, Blumberg v. Tenn. Dept. of Human Servs. (Tenn. Ct. App., No. M2000-00237-COA-R3-CV, Oct. 25, 2000), as modified by McCollum v. McCollum, (Tenn. Ct. App., No. M2011-00552-COA-R3-CV, April 12, 2012).