State of North Carolina s110

IN THE OFFICE OF STATE OF NORTH CAROLINA ADMINISTRATIVE HEARINGS 10 DHR 3717 COUNTY OF CUMBERLAND

Carolyn Rucker, ) ) Petitioner, ) ) v. ) ) DECISION N.C. Department of Health and Human Services, ) Division of Medical Assistance, ) ) Respondent. ) ) ) ______)

This matter came on to be heard before the undersigned on December 3, 2010 in Fayetteville, North Carolina. Petitioner, Carolyn Rucker, appeared pro se and Respondent, the North Carolina Department of Health and Human Services, Division of Medical Assistance, Third Party Recovery Section, appeared represented by Joel L. Johnson, Assistant Attorney General. Respondent’s proposed decision was received on May 13, 2011. Having considered the evidence presented by the parties, including documentation and testimony, and having reviewed all other matters of record appearing in this action, this Court makes the following:

FINDINGS OF FACT

1. The parties received notice of hearing by certified mail more than 15 days prior to the hearing and each stipulated on the record that notice is proper. Petitioner Carolyn Rucker is an heir of Shirley Sadler, who was a Medicaid recipient prior to and upon her death.

2. Shirley Sadler, upon her death, owned assets including real property which, upon her death, became available for the payment of debts owed by her estate.

3. As a Medicaid recipient, Ms. Sadler received services which subjected her estate to North Carolina’s estate recovery program. The estate recovery program allows the Division of Medical Assistance, under certain circumstances, to recover expenses paid for medical assistance. 4. Ms. Sadler’s estate is one such estate which qualified for estate recovery and Respondent has made a claim against the estate.

5. The primary asset of Ms. Sadler’s estate is a piece of real property, in which Petitioner resides.

6. There are times when Respondent waives estate recovery, including those times when the sale of the estate’s real property would result in undue hardship.

7. Undue hardship is defined by the North Carolina Administrative Code, 10A NCAC 21D .0502, as follows:

(b) Undue or substantial hardship shall include the following: (1) Real or personal property included in the estate is the sole source of income for a survivor and the net income derived is below 75 percent of the federal poverty level for the dependents of the survivor(s) claiming hardship, or (2) Recovery would result in forced sale of the residence of a survivor who lived in the residence for at least 12 months immediately prior to and on the date of the decedent's death and who would be unable to obtain an alternate residence because the net income available to the survivor and his spouse is below 75 percent of the federal poverty level and assets in which the survivor or his spouse have an interest are valued below twelve thousand dollars ($12,000).

8. Although the administrative code threshold is 75 percent of the poverty level, Respondent defines hardship under the more lenient criteria of 200 percent of the poverty level based upon an update to the North Carolina Medicaid State Plan, pursuant to 42 U.S.C. § 1396a, et. seq., which is not yet reflected in the promulgated rules.

9. In order to qualify under the definition of undue hardship, the individual claiming hardship must 1) have income less than 200 percent of the poverty level AND the real property is the sole source of income, OR 2) have lived in the residence for the 12 months immediately prior to the death of the Medicaid recipient, have income less than 200 percent of the poverty level AND have assets valued less than $12,000.

10. Petitioner requested a waiver under the “undue hardship” exemption and submitted substantial documentation to Respondent, including information about the income of Petitioner’s household.

11. Respondent reviewed the information, and in conjunction with other public records resources, discovered that Petitioner’s household exceeded the allowable income required to qualify for a hardship waiver.

12. Petitioner’s submissions to Respondent indicate that her household income for calendar year 2009 was $48,738.08. The federal poverty level for a family of four in 2009 was

2 $22,050; thus, 200% of the poverty level for 2009 is $44,100. Accordingly, Petitioner exceeds 200% of the poverty level for the most recent year available by $4,638.08.

13. Even if past calendar years were relevant to the determination, Petitioner’s income exceeded 200% of the poverty level in calendar years 2007 and 2008, even when using the increased 2009 poverty guideline.

14. By all reasonable determinations and calculations, Petitioner exceeds the maximum income allowable for qualifying for an undue hardship waiver.

CONCLUSIONS OF LAW

1. The North Carolina Office of Administrative Hearings has jurisdiction over the parties and subject matter of this contested case under N.C. Gen. Stat. § 150B-23 et seq. All necessary parties have been joined. The parties received proper notice of the hearing in this matter.

2. Petitioner has the burden of proof in showing that Respondent has acted erroneously, improperly, or somehow outside of its authority.

3. Respondent’s evidence shows that its decision to deny Petitioner’s hardship request was based on full consideration of the information available to it and that Petitioner could not qualify under the definition of undue hardship found in the North Carolina Administrative Code or North Carolina Medicaid State Plan.

4. Petitioner admitted that the information used by the agency in denying hardship was accurate information. Petitioner did not present evidence that the agency acted in a way that exceeds its authority or acted improperly given the information available to it.

5. Petitioner did not meet her burden in showing that the agency exceeded its authority or jurisdiction, acted erroneously, failed to use proper procedure, acted arbitrarily or capriciously, or failed to act as required by law or rule.

6. Petitioner does not meet the criteria for “undue hardship,” as defined in the North Carolina Administrative Code, based on all of the information presented to the court; therefore, Respondent did not act improperly in denying the hardship request.

DECISION

Based upon the foregoing Findings of Fact and Conclusions of Law, I find that the evidence supports Respondent’s decision that Petitioner cannot meet the requirements for a hardship exemption under the facts of this case and that Respondent’s decision should be, and the same hereby is, AFFIRMED.

3 NOTICE

The Agency that will make the final decision in this contested case is the North Carolina Department of Health and Human Services, Division of Medical Assistance.

The Agency is required to give each party an opportunity to file exceptions to the recommended decision and to present written arguments to those in the Agency who will make the final decision. N.C. Gen. Stat. §150B-36(a). The Agency is required by N.C. Gen. Stat. §150B-36(b) to serve a copy of the final decision on all parties and to furnish a copy to the parties’ attorney of record and to the Office of Administrative Hearings.

In accordance with N.C. Gen. Stat. §150B-36 the Agency shall adopt each finding of fact contained in the Administrative Law Judge’s decision unless the finding is clearly contrary to the preponderance of the admissible evidence. For each finding of fact not adopted by the Agency, the Agency shall set forth separately and in detail the reasons for not adopting the finding of fact and the evidence in the record relied upon by the Agency in not adopting the finding of fact. For each new finding of fact made by the Agency that is not contained in the Administrative Law Judge’s decision, the agency shall set forth separately and in detail the evidence in the record relied upon by the agency in making the finding of fact.

This the 19th day of May, 2011.

Beecher R. Gray Administrative Law Judge