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HCR ManorCare v. Department of Public Welfare

March 2, 2009


The opinion of the court was delivered by: Judge Leavitt

Submitted: December 10, 2008



HCR ManorCare, Old Orchard Health Care Center (ManorCare), petitions for review of a final order of the Department of Public Welfare's (Department) Bureau of Hearings and Appeals (Bureau), which affirmed the decision of an administrative law judge (ALJ) to dismiss ManorCare's appeal. At issue is a decision of the Northampton County Assistance Office (CAO) to deny long-term care medical assistance benefits to Alma Kenney (Mrs. Kenney). The Bureau denied ManorCare's appeal of this adverse determination because it concluded that ManorCare's appeal was barred by the doctrine of res judicata. Because factual findings are necessary to determine whether ManorCare has authority to appeal the adverse determination on Mrs. Kenney's application, we vacate and remand for further proceedings.

In October 2005, Mrs. Kenney was admitted to ManorCare's Old Orchard Health Care Center. In May 2006, Mrs. Kenney executed a power of attorney that named her daughter, Kathleen Kenney (Daughter), as her authorized agent. In May 2007, Daughter submitted an application for Medical Assistance -- Long-Term Care benefits on behalf of her mother to the CAO. At an interview with the CAO, Daughter provided some, but not all, of the information necessary to verify Mrs. Kenney's financial eligibility for long-term care benefits. Daughter agreed to provide the additional information by July 6, 2007, but she failed to do so. On August 3, 2007, the CAO issued a Denial Notice rejecting Mrs. Kenney's application for benefits.

On August 13, 2007, ManorCare appealed the Denial Notice by fax to the CAO; Daughter also appealed on August 27, 2007. The CAO forwarded Daughter's appeal to the Bureau, but it did not forward ManorCare's appeal.*fn2 On November 13, 2007, the CAO contacted ManorCare and explained that ManorCare's appeal had not been forwarded to the Bureau. However, the CAO informed ManorCare that Daughter's appeal had been forwarded to the Bureau and that a hearing was scheduled for the next day, November 14, 2007, in Harrisburg.*fn3

The ALJ conducted the hearing by telephone on November 14, 2007. At the hearing, Daughter entered into a settlement with the CAO in which she agreed to provide the necessary information on her mother's assets by December 21, 2007. Daughter further agreed that the August 3, 2007, Denial Notice would stand if she failed to provide the requested information by the agreed upon deadline. The ALJ approved the settlement and adopted it by order of November 15, 2007. The ALJ also instructed the CAO to forward ManorCare's appeal to the Bureau, which the CAO did on November 20, 2007.

The Bureau issued a final administrative action order in Daughter's case on November 16, 2007, affirming the ALJ's decision. Daughter failed to provide the requested financial information by the December 21, 2007, deadline, and, pursuant to the settlement agreement, the August 3, 2007, Denial Notice became final.

On December 31, 2007, the Bureau issued a final administrative action order dismissing ManorCare's appeal for lack of jurisdiction, holding that ManorCare's action was barred by the doctrine of res judicata. Reproduced Record at 8a. ManorCare now petitions for review of the Bureau's order.*fn4

On appeal,*fn5 ManorCare contends that it was denied due process as well as those rights established by regulation at 55 Pa. Code §275.4(a)(3)(v).*fn6 It asserts that the CAO was obligated to forward its August 13, 2007, appeal to the Bureau within three working days of receiving it. The CAO did not do so. The CAO's untimely submission of its appeal deprived ManorCare of the opportunity to litigate the CAO's denial of Mrs. Kenney's application for long-term care benefits. ManorCare also argues that its appeal should not have been dismissed as res judicata since it was not a party to Daughter's appeal.

The Department counters that the Bureau properly dismissed ManorCare's appeal because Mrs. Kenney had only one authorized agent in this matter: Daughter. The Department maintains that ManorCare had no legal authority to appeal the denial of Mrs. Kenney's long-term care benefits or to represent her interests in a hearing before the Bureau. The Department asserts that two documents relied upon by ManorCare for its authority -- an Admission Agreement allegedly signed by Mrs. Kenney and an Authorization Statement allegedly signed by Daughter -- are ineffectual.

We begin with the threshold issue of ManorCare's authority to appeal on Mrs. Kenney's behalf. An individual applying for long-term care benefits may either apply on her own behalf or choose to have someone represent her during the application process. 55 Pa. Code §125.84(a).*fn7 Under the applicable Department regulation, an "appellant" is the applicant, or recipient of benefits, who has requested the hearing and signed the appeal; a "hearing request" is "[a]n expression, oral or written, by the client or the person acting for him, such as his legal representative, relative or friend." 55 Pa. Code §275.2. In short, appeals and hearings are only authorized for "applicants or recipients of public assistance, or their authorized representatives." Chichester Kinderschool v. Department of Public Welfare, 862 A.2d 119, 122 (Pa. Cmwlth. 2004) (emphasis added).

In this case, Daughter is her mother's authorized representative by virtue of the power of attorney executed by Mrs. Kenney. However, ManorCare asserts that it has a separate authorization by virtue of the Admission Agreement signed by Mrs. Kenney and an Authorization Statement signed on Mrs. Kenney's behalf by Daughter.*fn8 The Department contends that the Admission Agreement does not authorize ManorCare to represent Mrs. Kenney in these proceedings and that Daughter's Authorization Statement is not dated. Neither document is in the record and to date there have been no findings on the question of whether these documents confer authority upon ManorCare to appeal the denial of Mrs. Kenney's benefit application. This preliminary determination is crucial because, as ManorCare correctly points out, if its appeal had been forwarded by the CAO to the Bureau in a timely manner, a hearing would have been held on ManorCare's appeal.

Because there have been no findings on whether ManorCare was authorized to appeal on behalf of Mrs. Kenney, we vacate and remand for ...

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