Stogsdill v. South Carolina Department of Health & Human Services
763 S.E.2d 638
S.C. Ct. App.2014Background
- Richard Stogsdill, a Medicaid-eligible Waiver (ID/RD) beneficiary with significant physical disabilities, received extensive PCA, Companion Care, and Respite services pre-2010 Waiver renewal.
- The 2010 Waiver renewal capped combined PCA/Companion Care at 28 hours/week and set standard respite at 68 hours/month (with exceptions available); Stogsdill’s services were reduced accordingly, though respite was later increased to 172 hours/month and some therapies were discontinued.
- Stogsdill appealed the reduction administratively; the Administrative Law Court (ALC) affirmed DHHS’s decision. Stogsdill appealed to the court of appeals.
- Key legal questions: whether the Waiver caps required state regulatory promulgation to be binding, whether notice met due process, whether the reductions place Stogsdill at risk of institutionalization under Olmstead/ADA, and whether accommodating his needs would fundamentally alter the program.
- The record included uncontradicted clinician declarations (treating physician and DDSN psychologist) and family testimony that reduced services would risk institutionalization; DHHS offered no probative contrary evidence.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the 2010 Waiver caps needed to be promulgated as state regulations to be binding | Stogsdill: caps lack force of law because DDSN did not enact them as regulations under the APA | DHHS: caps are binding because they are part of the CMS‑approved federal/state Waiver and thus carry legal effect without separate state regulation | Held: Caps lawful without separate state regulation; CMS approval and statutory/federal scheme give the Waiver provisions force and effect of law (affirmed) |
| Whether DHHS gave adequate notice and violated due process | Stogsdill: notice was inadequate under 42 C.F.R. §431.210 and denied due process | DHHS: general notice and opportunity to work with service coordinators sufficed; plaintiff suffered no prejudice | Held: Although specific notice may have been inadequate, Stogsdill suffered no prejudicial denial of process; due process claim not sustained (affirmed) |
| Whether reduction places plaintiff at risk of institutionalization in violation of Olmstead/ADA | Stogsdill: treating physician, DDSN psychologist, and family testified reductions create a risk of institutionalization | DHHS: ALC found risk speculative; argued reductions did not show sufficient risk | Held: The record contains substantial uncontradicted evidence of risk; ALC’s finding of speculative risk reversed (reversed in part) |
| Whether accommodating plaintiff would fundamentally alter the Waiver program (Olmstead defense) | Stogsdill: DHHS cannot show fundamental alteration; budgetary concerns alone insufficient | DHHS: continuing higher levels of services would fundamentally alter/strain program finances | Held: DHHS offered only general budgetary arguments; financial concerns alone do not sustain a fundamental alteration defense — reversal and remand for assessment without applying caps |
Key Cases Cited
- Olmstead v. L.C., 527 U.S. 581 (U.S. 1999) (ADA requires services in most integrated setting; states may assert fundamental-alteration defense)
- Pashby v. Delia, 709 F.3d 307 (4th Cir. 2013) (budgetary concerns alone cannot sustain fundamental-alteration defense; plaintiffs can show risk of institutionalization)
- Doe v. S.C. Dep’t of Health & Human Servs., 398 S.C. 62 (S.C. 2011) (state may change Waiver program via federal waiver process; DDSN interpretation conflicts with regulation not controlling)
- M.R. v. Dreyfus, 697 F.3d 706 (9th Cir. 2012) (reductions that eliminate services enabling community living can violate ADA even if institutionalization is not immediate)
- Arrowood v. N.C. Dep’t of Health & Hum. Servs., 543 S.E.2d 481 (N.C. 2001) (state waiver approval by federal agency can have legal effect that obviates duplicative state regulation)