orthopedic shoe attached to a brace to which the recipient has a right. In summary, recipients who maintained that because of the facts of their situation they are unaffected by or exempt from the proposed change in state law must be afforded an opportunity to challenge any denial of MA services.
On the other hand, MA recipients who challenge the reduction in the orthopedic shoe program on the basis that the change is invalid because of federal or state law or policy, do not fall into the category of recipients raising a claim of incorrect grant computation and thus they do not have a statutory right to a hearing under § 205.10(a)(5).
B. Due Process Challenge
Plaintiffs also assert that the denial of individual notice and hearing for all MA recipients violates the Due Process Clause of the Fourteenth Amendment. Since I have ruled that plaintiffs have a statutory right to notice, it is necessary to consider only the constitutional claim concerning plaintiffs' right to a hearing.
As defendants concede, the reduction in the orthopedic shoe program affects a property interest of plaintiffs sufficiently to invoke the proscriptions of the Due Process Clause. Goldberg v. Kelly, 397 U.S. at 262-63. The issue, therefore, is what process by the state is due plaintiffs in order to accomplish this program reduction. Defendants argue that no administrative hearing is necessary for any MA recipients, while plaintiffs assert that each individual is entitled to a pre-termination hearing. I conclude that some, but not necessarily all, MA recipients have a right to a pre-termination hearing.
Goldberg is the touchstone for analyzing the constitutional requirement of a hearing before termination or reduction of a state funded program. However, Goldberg addressed only the issue of whether such a process is required "where recipients have challenged proposed terminations as resting on incorrect or misleading factual premises or on misapplication of rules or policies to the facts of particular cases." 397 U.S. at 268 (emphasis added). The Court explicitly declined to rule upon the process necessary when "there are no factual issues in dispute or where the application of the rule of law is not intertwined with factual issues." Id. at 268 n.15. To determine whether a hearing is required for MA recipients it is necessary to decide: (1) if some MA recipients requesting a hearing could raise factual questions or the misapplication of regulation 9435.431 to their individual situation and if so, what process is necessary for such recipients and (2) if some recipients can challenge the termination solely on the grounds of state or federal law and if so, what process is due them.
Defendants assert that any challenge to this across-the-board alteration of the MA program would involve solely a question of state or federal law for all recipients and that any evidentiary hearing for an individual recipient would be superfluous. I reject this assertion.
I conclude there may be MA recipients who could claim that shoes requested by them are not excluded by regulation 9435.431 (e.g., they request molded shoes or orthopedic shoes attached to a brace) and who thus could raise a factual question which is not applicable to all MA recipients. Additionally, there may be MA recipients who could assert that the state is required to supply them orthopedic shoes under another provision of the MA program and thus that their request for medical supplies does not fall within an optional service in the MA program. These recipients in effect would be raising the misapplication of the regulation to their situation and thus would satisfy the second Goldberg criterion for requiring pre-termination hearings. I agree with those courts which have found that an individual hearing is necessary even when there is an across-the-board change in a state program as a result of state or federal law so long as a program recipient might have individual questions to raise. See, e.g., Mothers' & Children's Rights Organization v. Sterrett, 467 F.2d 797 (7th Cir. 1972); Hurley v. Toia, 432 F. Supp. 1170 (S.D.N.Y. 1977); Viverito v. Smith, 421 F. Supp. 1305 (S.D.N.Y. 1976); Cardinale v. Mathews, 399 F. Supp. 1163 (D.D.C. 1975).
Defendants argue, however, that Goldberg has been severely restricted by Mathews v. Eldridge, 424 U.S. 319, 47 L. Ed. 2d 18, 96 S. Ct. 893 (1976). There the Court held that a pre-termination hearing was not necessary before Social Security disability benefits were halted and that the administrative procedures provided by the state were constitutionally sufficient. This decision was arrived at after balancing three factors: (1) the private interest of the recipient; (2) the risk of erroneous deprivation of such interest and the probable value, if any, of additional procedural safeguards; and (3) the government's interests. Id. at 335. I conclude that the Mathews analysis supports my decision to require a pre-termination hearing in this case because the state provides no administrative procedure to review a decision to deny these medical services, and because the state asserts that no hearing is required either before or after the program alteration is effectuated. Obviously the current state procedures are inadequate to correct any error which would result from the misapplication of regulation 9435.431 to a particular recipient; the constitutional requirement of an opportunity to be heard cannot be avoided by nonexistent alternative state procedures.
However, most MA recipients who may desire to challenge the reduction in the orthopedic shoe program could not raise factual questions or claim the misapplication of the regulation to their individual situation. Their request for a hearing could raise only questions of state or federal law or policy. I must determine whether the state must provide these individuals with evidentiary hearings before the reduction is effectuated, an issue not decided by the Goldberg decision.
Several courts have discussed whether the existence vel non of a due process right to a hearing turns on a determination that the issues to be resolved at that hearing will involve factual questions or solely questions of law or policy. This "fact/law" distinction in due process consequences is analogous to the differentiation made in due process rights between acts by government agencies in their rulemaking as opposed to their adjudicatory function. As Professor Davis has explained, when agencies are required to determine adjudicative facts, i.e., "facts about the parties and their activities, businesses, and properties," a trial-type hearing is required. K. Davis, Administrative Law Treatise § 7.02 at 413 (1958). In contrast, when agency action involves only consideration of legislative facts, i.e., "general facts which help the tribunal decide questions of law and policy and discretion," an individual evidentiary hearing is not necessary. Id. at 413. This distinction has been held to be consistent with the Due Process Clause of the Fourteenth Amendment, United States v. Florida East Coast R. Co., 410 U.S. 224, 244-45, 35 L. Ed. 2d 223, 93 S. Ct. 810 (1973), and has been applied in several cases involving public assistance programs in which a hearing request was rejected. See, e.g., Russo v. Kirby, 453 F.2d 548, 551-52 (2d Cir. 1971); Kimble v. Solomon, supra at 13-14; Whitfield v. King, 364 F. Supp. 1296, 1301-02 (M.D. Ala. 1973) aff'd mem., 431 U.S. 910, 97 S. Ct. 2166, 53 L. Ed. 2d 221 (1977); Rochester v. Ingram, 337 F. Supp. 350, 355-57 (D.Del. 1972), rev'd on other grounds sub nom. Rochester v. Baganz, 479 F.2d 603 (3d Cir. 1973); Provost v. Betit, 326 F. Supp. 920, 922-24 (D. Vt. 1971).
Other courts have found that the "fact/law" distinction should not justify a denial of a pre-termination hearing. See, e.g., Mothers' & Children's Rights Organization v. Sterrett, 467 F.2d at 800; Schneider v. Whaley, 417 F. Supp. 750, 757-58 (S.D.N.Y.), modified, 541 F.2d 916 (2d Cir. 1976); Cardinale v. Mathews, 399 F. Supp. at 1172; Burlingame v. Schmidt, 368 F. Supp. 429, 433 (E.D.Wis. 1973); Yee-Litt v. Richardson, 353 F. Supp. 996, 1000 (N.D. Cal.), aff'd sub nom. Carleson v. Yee-Litt, 412 U.S. 924, 37 L. Ed. 2d 152, 93 S. Ct. 2753 (1973). A careful review of these decisions discloses, however, that the courts required a pre-termination hearing because either (1) the recipients demonstrated that there were factual questions involved in the resolution of the question of law or (2) the court concluded that a general regulation which exempted the hearing requirement when only policy questions arose was unworkable since there were inevitable mistakes made by the hearing officer in deciding when questions of fact or only policy would be involved in a recipient's request for a hearing. These decisions do not reject the validity of the "fact/law" distinction if correctly applied.
Applying this doctrine to the reduction in the orthopedic shoe program, I conclude that for those recipients who cannot challenge the reduction on the basis of some factual question or the misapplication of the regulation to their particular situation, only legislative facts would be involved in any hearing request. Consequently, I find that there would be no benefit derived from individualized evidentiary hearings and therefore conclude that the state is not constitutionally required to provide hearings for these recipients.
C. Failure to Consult Medical Assistance Advisory Council.
Plaintiffs challenge the manner in which regulation 9435.431 was adopted and implemented on the ground that MA officials failed to consult with the Medical Assistance Advisory Council as required by the Social Security Act, 42 U.S.C. § 1396a(a)(33)(A) and the federal regulations, 45 C.F.R. § 246.10(a)(1)-(3). I agree that a failure adequately to consult with the Council would necessitate the voiding of a promulgated regulation. See, e.g., Becker v. Toia, 429 F. Supp. at 331-33; Benton v. Rhodes, supra at 8. However, the discussion by the Council at its January 19, 1978, meeting demonstrates that Council adequately was notified and given an opportunity to discuss the reduction in the orthopedic shoe program, and therefore this requirement has been satisfied.
D. Failure to Administer The Program in the "Best Interests of the Recipients".
The last challenge of plaintiffs to the reduction in the orthopedic shoe program goes beyond an attack on the termination procedure and is concerned with the substantive decision to halt supplying some orthopedic shoes. Section 1396a(a)(19) provides that a state plan for medical assistance must include:
"[Such] safeguards as may be necessary to assure that eligibility for care and services under the plan will be determined, and such care and services will be provided in a manner consistent with simplicity of administration and the best interests of the recipients." (Emphasis added).