I read an interesting decision in a litigated case involving a denial of Medicaid benefits. Medicaid is a health payment plan for needy individuals.

In order to qualify for Medicaid, an applicant’s assets must have a value less than $2,000 and his income must be insufficient to pay for his care.  Once qualified for Medicaid benefits, Medicaid will pay for many of the costs associated with long-term care, such as care in a nursing home or assisted living residence.

When a person files an application for Medicaid benefits, he files his application with the county board of social services for the county in which he resides.  The County will request a significant amount of financial information from the applicant.  A nurse from the state will come out to assess the applicant’s clinical eligibility for the Medicaid program; the nurse will determine whether or not the applicant requires sufficient assistance with his basic activities of daily living so as to warrant Medicaid paying for the costs of his care.

After all of this is completed, the County will issue a determination letter.  The County’s determination letter will accept the applicant into the Medicaid program or deny the applicant eligibility into the program.

If an applicant receives a denial notice, the notice is supposed to fully apprise him as to the reason he was denied benefits.  The problem is, the notices frequently fail to fully apprise the applicant of the reason for the denial.

It’s a basic litigation tactic—tell your adversary as little as possible.  The hope when employing this tactic is that your adversary will sputter out some reason they believe they were denied when you might not have even been thinking about that reason.

But fair is fair, so the federal law governing Medicaid denials says that the denial notice must give factual reasons for the denial and must cite to the laws governing the Medicaid program that form the basis of the denial.  In this way, the applicant can prepare his defenses to the denial should he choose to appeal.

Once an applicant is denied, he is given the opportunity to file for what is called a “fair hearing.”  (In many cases, the applicant could sue in federal court, as well, since an extensive array of federal laws govern the Medicaid program.)  At the fair hearing, an administrative law judge will review the facts and the law and render a decision.  Administrative law judges work for the Office of Administrative Law, which is a separate state agency that adjudicates appeals of administrative decisions.

If the applicant is properly apprised of the reason his Medicaid application was denied, then he can properly prepare for the fair hearing.  If the applicant is not properly apprised of the reason for the denial, then he has no way to prepare for the hearing.

But what is the recourse if the applicant is not properly apprised of the reason his Medicaid benefits were denied?  In such a case, the Medicaid agency would be forced to issue a new denial notice with a proper reason for the denial.  A new date will be set for a fair hearing.

Notice is really a question of due process.  Without proper notice, a litigant cannot prepare to defend himself, and without preparation, there is no “fair hearing.”

Proper notice also serves to narrow the scope of the issues at the hearing.  Once the Medicaid agency has been forced to commit to the reason for the denial, the agency cannot then throw out other reasons at the hearing for the denial.  It’s a “speak now or forever hold your peace” sort of thing.