Issue Alert

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1 Issue Alert Program Area: Issue Summary: Persons Affected: Food Assistance Program (FAP), Family Independence Program (FIP), State Disability Assistance (SDA), Refugee Cash Assistance (RCA), Medicaid (MA), Child Development and Care (CDC), and State Emergency Relief (SER) Department of Human Services (DHS) is beginning a two-tiered hearings process as a pilot program in Genesee County, to be followed by Jackson and Washtenaw Counties People requesting DHS administrative hearings on most issues related to the programs listed above Date: 04/08/13 For More Information: BACKGROUND Center for Civil Justice 320 S. Washington, 2nd Floor Saginaw, MI (989) , (800) Fax: (989) Michigan Poverty Law Program 611 Church Street, Suite 4A Ann Arbor, MI (734) Fax: (734) DHS must provide an opportunity for an administrative hearing by an independent hearing officer to people who are affected by DHS decisions to deny, reduce, or terminate assistance or benefits, or who suffer an unlawful delay in getting benefits. The basic right to a hearing comes from the due process clause of the fourteenth amendment to the United States Constitution. There are a number of other state and federal laws, and implementing rules and regulations, which define the individual s right to a hearing in benefits programs administered by DHS. WHAT'S HAPPENING? DHS issued a Bridges Hearing Pilot Policy in Bridges Policy Bulletin , available online at (This bulletin is in the Future Policy section of DHS manuals.) Under the pilot, applicants and recipients will have to go through BOTH a local hearing with a Department of Human Services (DHS) hearing official AND a state level hearing with a Michigan Administrative Hearings System (MAHS) administrative law judge before being able to request judicial review, as discussed in more detail below. The pilot policy appears to eliminate the authority of the Administrative Law Judge (or, at the local level, the Hearing Official ) to issue recommended decisions when the policy being applied in a particular case is unlawful. The timeframes for some actions by DHS or MAHS are unclear, but it

2 appears that Food Assistance recipients may have to wait longer for a final hearing decision that can be appealed to Circuit Court. The bulletin that contains the pilot policy is poorly written, poorly organized, and ambiguous in many places. The summary below is an effort to highlight areas where the policy is different from the current hearings policy in Bridges Administrative Manual (BAM) 600, which will continue to apply in counties that are not covered by the pilot policy. CCJ has a number of concerns about the legality of the pilot policy that were shared with both DHS and the Department of Community Health (which is responsible for administration of the Medicaid program in Michigan). Some of the legal problems with the policy are summarized at the end of this Alert. One of the general concerns is that this pilot implements an unnecessary, more cumbersome and duplicative hearing process. It sets up a process that is different than the hearing process used by other state agencies. In the pilot, decisions by the Department of Human Services are reviewed by DHS s own employees. A new level of appeal is built into the system. In other state agencies, hearings are heard by outside administrative law judges from MAHS. WHAT HEARING REQUESTS ARE SUBJECT TO THE PILOT? The pilot policy will go into effect in Genesee County on May 1, 2013, Washtenaw County on July 1, 2013, and Jackson County on September 1, The bulletin does not specifically say, but it appears the policy will be used for hearings REQUESTED on or after the effective date(s) in those counties. The pilot policy does NOT apply to hearings on Intentional Program Violations (IPVs), debt collections, community spouse resource allocations, or Medical Review Team (MRT) disability decisions regarding Medicaid or SDA eligibility based on disability. The pilot policy only applies to DHS hearings; it does not apply to Department of Community Health (DCH) hearings. The policy states that it applies to the programs listed at the top of this Alert. It later includes sections that refer to hearings on SSI state Supplement payments. It is not clear if the sections were included by mistake, or if the mistake was in not including the SSI State Supplement in the list of programs covered by the pilot. THE PILOT HEARING PROCESS: 1. DATA ENTRY/CLERICAL WORK, SCHEDULING, & NOTICING THE PREHEARING CONFERENCE Within 1 business day (from the date DHS receives the hearing request), the local office must date stamp the hearing request and forward it to the local office Hearing Coordinator.

3 Within 2 business days from the date the hearing request is received, the Hearing Coordinator must enter the request into the administrative management tribunal system (ADMTS); log it on the hearings record kept by the local office; schedule a prehearing conference; mail a notice of the prehearing conference to the client (and representative, if any); notify appropriate DHS personnel about the prehearing conference; and request verification of representative s authority, if needed. It is not clear whose receipt of the hearing request starts the 2 business day time limit. (The local office? The Hearing Coordinator?) For cases involving decisions by the DHS Office of Child Support (OCS) or prosecuting attorney (such as child support or paternity non-cooperation cases), the Hearing Coordinator must fax the hearing request, contact information for the local office Hearing Coordinator and Family Independence Manager (FIM) involved in the case, and the date and time of prehearing conference to the OCS or Prosecutor s office. This must be done within 24 hours of receipt. The bulletin does not say receipt of WHAT, or by WHOM, or what happens if the 24 hours is on a weekend or a holiday. 2. PREHEARING CONFERENCE On the 11 th calendar day from local office receipt of the hearing request, the local office must hold a prehearing conference. The conference will be scheduled for the next business day if the 11 th falls on a weekend or holiday, but not later than the 14 th day from local office receipt of the hearing request. DHS must make all attempts to accommodate requests by the client or representative that the conference be held prior to the 11 th day. The bulletin states that all appropriate staff must participate in the prehearing conference. Unlike current BAM 600, the pilot policy does not specify that the local office manager must evaluate the advisability of a hearing in relation to such factors as intent of policy, type of issue(s) raised, strength of the department s case, and administrative alternative. It also removes the requirement that the manager consider requesting an exception to policy when appropriate. However, the manager must certify the date the notice of prehearing conference was sent to the client and the representative, the reason why the case could not be resolved, that eligibility was determined correctly, and that the hearing request cannot be resolved except through a hearing. 3. SCHEDULING AND HOLDING THE LOCAL EVIDENTIARY HEARING If the client does not attend the prehearing conference, the local evidentiary hearing must be scheduled for the 11 th calendar day from the date of the prehearing conference, or the next business day (but not later than the 14 th calendar day from the date of the prehearing conference). For any case that proceeds to hearing after the prehearing conference, DHS must hold the local evidentiary hearing and mail the decision to the local office and the client within 15 days from the scheduled prehearing conference (not specified as either business days or calendar days in the

4 bulletin). The Hearing Coordinator must send advance notice of the local evidentiary hearing. For FAP, the Notice must be sent at least 10 days in advance, unless the 10 days is waived by the client or representative in order to expedite the hearing. The bulletin states that the Notice of the local evidentiary hearing must be faxed to OCS or the prosecutor s office when the case involves their decision within 24 hours of receipt. It does not say receipt of WHAT or by WHOM, or who is actually responsible for faxing the Notice. It appears that the Hearing Coordinator schedules the local hearings and the Hearing Official conducts and decides them. The bulletin does not state where the Hearing Official is housed, what powers are delegated to the Official, etc. An earlier, draft version of the pilot policy indicated that the Hearing Official would be part of the Office of Legal Services staff in DHS s Central Office. The bulletin states that the local hearings are scheduled as in-person hearings, and telephone hearings may only be granted for circumstances beyond the control of the client or the representative, such as: documented hospitalization, inclement weather, or documented incapacitating illness. The policy does not say whether lack of transportation or child care is considered a circumstance beyond the control of the client, although the bulletin states that DHS must discuss transportation and childcare and obtaining assistance with them, at the prehearing conference. Adjournments of local hearings must be requested by the individual or representative in writing, at least 48 hours before the scheduled hearing, and the request must be sent to the Hearing Coordinator. The requirement that the request be submitted in writing at least 48 hours in advance of the hearing does not apply to requests for adjournment made by the local office. The bulletin does not contain any exception for situations in which the reason for requesting adjournment occurs within 48 hours of the scheduled hearing. The bulletin indicates that some requests for adjournment may be denied, but does not say what standard or criteria will be used to decide whether to approve or deny the request. The bulletin states that if the adjournment is requested by the individual or their representative, the number of days the hearing is postponed will not count toward the standard of promptness. The bulletin does not say WHICH standards of promptness are extended. For FAP only, the Hearing Coordinator is required to grant one adjournment requested by the individual or representative, but the adjournment cannot be for more than 30 days unless there is good cause for a longer delay. The bulletin does not indicate what good cause is in this situation. 4. LOCAL EVIDENTIARY HEARING DECISIONS, IMPLEMENTATION, AND APPEALS It appears that the Hearing Official does not have authority to issue Recommended Hearing Decisions if he or she believes that DHS policy is unlawful. Local evidentiary hearing decisions are final unless they are appealed within 15 days of the date the local evidentiary hearing decision notice was mailed. That Notice must include a statement of the right to rehearing or reconsideration, the right to a state level review (appeal to the Michigan Administrative Hearing System (MAHS)), and the right to judicial review. However, under the

5 pilot policy bulletin it appears the right to reconsideration or a rehearing, as well as the right to judicial review, are not available unless and until there is a MAHS (state level) decision. The bulletin states that local evidentiary hearing decisions must be implemented within 10 calendar days of the date the decision is mailed. This means that negative decisions may be implemented before the time to appeal to MAHS has ended. This could result in illegal termination of benefits to those receiving continued benefits pending the outcome of the hearing process based on a hearing request submitted within 11 days of the original notice of case action. 5. APPEALS TO MAHS Appeals from the local evidentiary hearing decision must be mailed or faxed directly to MAHS within 15 days of the mailing date of the local evidentiary hearing decision. A person who appeals a local hearing decision can request that the appeal be EITHER an administrative review of the record only OR a de novo (new) hearing. The bulletin does not say whether these two options will be explained in a notice to the individual. If the individual does not designate which type of appeal is requested, MAHS will automatically treat a FAP appeal as a request for de novo hearing. For all other benefits programs, DHS will automatically treat the appeal as a request for administrative record review. (The bulletin does not say what happens when a person appeals a case involving both FAP and another program.) An administrative record review consists of review of the recording of the hearing, the exhibits/evidence admitted, and the applicable law. The bulletin states that MAHS reaches an independent decision based on the evidence. The bulletin states that in FAP cases, MAHS must complete the record review or de novo hearing and issue a decision on the appeal within 45 days from the date the request for hearing was received. It appears this is an error and that DHS may have meant to say 45 days from the request for record review or de novo hearing. Under the bulletin, MAHS is given no authority to issue a Recommended Hearing Decision if DHS policy is determined to be unlawful. The local DHS office must implement the MAHS decision within 10 days. LEGAL PROBLEMS AND CONCERNS: 1. THE PILOT VIOLATES STATE LAW Under MCL g, the department is authorized to operate pilot projects to achieve more efficient and effective use of funds for public assistance, to reduce dependency, or to improve the living conditions and increase the incomes of individuals receiving public assistance. There is no indication that the proposed pilot will achieve any of these goals. In addition, although section 14g of the Social Welfare Act authorizes the department to apply policies that are not statewide in order to operate pilot projects, it does not authorize the department to violate state statutes and administrative rules that have the force of law. Under

6 MCL 400.9, DHS is required to promulgate administrative rules for the conduct of hearings, which it has done in MAC Rule et seq. These rules, which have the force and effect of law, do not provide for a two-hearing process. In addition, they require a hearing before an Administrative Law Judge, not a Hearing Official with unknown/unspecified training and credentials. Therefore, the proposed pilot is unlawful and unauthorized. 2. THE PILOT VIOLATES FEDERAL LAW Federal regulations allow the department to conduct hearings at the local level with a local decision that can then be appealed to the State agency for a State level review or hearing, see 7 CFR (b) and (c); 42 CFR ,.232. and.233; 45 CFR (a). Such a system allows states that have county-operated or county-controlled assistance program offices to have those truly local agencies conduct their own hearing first. In Michigan, however, we have a state-based, state-controlled system for virtually all programs administered by DHS. The pilot proposed by the department would create a system of two state level hearings by the State department: one with a state level, apparently DHS Office of Legal Services Hearing Official presiding, and another with a MAHS Administrative Law Judge (acting on behalf of the DHS Director under a Delegation of Hearing Authority and an interdepartmental agreement). The initial hearing is physically held at the local office but is conducted by state level employees. Accordingly, the system Michigan proposed to use in this pilot is not authorized by federal law and should not be implemented. WHAT SHOULD ADVOCATES DO? 1. Educate clients and community organizations in affected counties about the pilot policy. 2. Make sure the clients know the importance of attending prehearings and hearings, and of requesting alternate dates in advance. 3. Encourage affected individuals in Genesee County to contact the CCJ s Family Economic Security project at (810) Help clients request and present information at administrative hearings when appropriate and seek legal help when necessary. WHAT SHOULD CLIENTS DO? 1. Contact CCJ s Family Economic Security project at (810) if you want to appeal a DHS decision and you live in Genesee County. 2. Seek legal help if you receive notice that you have been denied benefits, or your

7 benefits are terminated or reduced by DHS, and you disagree with the decision. 3. Contact CCJ s Food Assistance Program Helpline if you are denied Food Assistance, your Food Assistance is reduced or stopped, or you think you are not getting the correct amount of Food Assistance. 4. Read your notices carefully. If some or all of your benefits are ending, you have the right to request a hearing. If DHS receives your hearing request within the deadline given in your notice, you will continue to receive benefits at the current level (but if you lose, will owe DHS any assistance you were not entitled to). Seek legal help if you request a hearing. 5. Be sure to attend all conferences and hearings. If you need an alternative date, arrange for it as soon as possible, and before the day of the conference or hearing. FINDING HELP Most legal aid and legal services offices handle these types of cases, and they do not charge a fee. You can locate the free legal services or legal aid office that serves your county on the Michigan Legal Aid Web Site by looking in the yellow pages under attorneys, or by calling the toll-free lawyer referral number, (800)

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