September 2, Enclosed is a copy of the decision resulting from the hearing held in the above-referenced matter. Sincerely,

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1 STATE OF WEST VIRGINIA DEPARTMENT OF HEALTH AND HUMAN RESOURCES OFFICE OF INSPECTOR GENERAL Earl Ray Tomblin BOARD OF REVIEW Karen L. Bowling Governor 4190 Washington Street, West Cabinet Secretary Charleston, West Virginia (304) , ext Benita Whitman, Esquire Legal Aid of West Virginia 922 Quarrier Street, Fourth Floor Charleston, West Virginia September 2, 2014 RE: RIDDLE v. WVDHHR ACTION NO.: 14-BOR-2527 Dear Ms. Whitman: Enclosed is a copy of the decision resulting from the hearing held in the above-referenced matter. In arriving at a decision, the State Hearing Officer is governed by the Public Welfare Laws of West Virginia and the rules and regulations established by the Department of Health and Human Resources. These same laws and regulations are used in all cases to assure that all persons are treated alike. You will find attached an explanation of possible actions you may take if you disagree with the decision reached in this matter. Sincerely, Donna L. Toler State Hearing Officer Member, State Board of Review Encl: Claimant s Recourse to Hearing Decision Form IG-BR-29 cc: Darlene Smith, Economic Service Supervisor

2 WEST VIRGINIA DEPARTMENT OF HEALTH AND HUMAN RESOURCES BOARD OF REVIEW KATHLEEN RIDDLE, Claimant, v. Action Number: 14-BOR-2527 WEST VIRGINIA DEPARTMENT OF HEALTH AND HUMAN RESOURCES, Respondent. DECISION OF STATE HEARING OFFICER INTRODUCTION This is the decision of the State Hearing Officer resulting from a fair hearing for Kathleen Riddle. This hearing was held in accordance with the provisions found in Chapter 700 of the West Virginia Department of Health and Human Resources Common Chapters Manual. This fair hearing was convened on August 28, 2014, on an appeal filed July 8, The matter before the Hearing Officer arises from the March 18, 2104 decision by the Respondent to terminate Claimant s eligibility for Medicaid. At the hearing, the Respondent appeared by Darlene Smith, Economic Service Supervisor. The Claimant appeared in person and by counsel, Benita Whitman, Esquire. Appearing as a witness for the Claimant was Pamela Richards, Claimant s caregiver and neighbor. All witnesses were sworn and the following documents were admitted into evidence. Department s Exhibits: D Tax Assessment of A. Knotts Lease D-2 Correspondence from Keith Crihfield to WV Department of Health and Human Resources, dated March 5, 2014 D-3 Correspondence from DHHR Calhoun County to Kathleen Riddle, dated March 18, 2014, pages 1 3 of 4 D-4 Correspondence from DHHR Calhoun County to Kathleen Riddle, dated March 17, 2014 D-5 Medicaid Eligibility Confirmation correspondence, dated March 17, 2014 D-6 Electronic Mail ( ) correspondence, dated February 28, 2014 and March 7, BOR-2527 Page 1

3 D-7 West Virginia Income Maintenance Manual 11.4 (excerpt) D-8 West Virginia Income Maintenance Manual 11.3 (excerpt) D-9 Correspondence from DHHR Calhoun County to Kathleen Riddle, dated March 4, 2014 D-10 Correspondence from Keith Crihfield to Kathleen Richards, dated July 7, 2014 Claimant's Exhibits: C-1 West Virginia Income Maintenance Manual 11.1 (excerpt) After a review of the record, including testimony, exhibits, and stipulations admitted into evidence at the hearing, and after assessing the credibility of all witnesses and weighing the evidence in consideration of the same, the Hearing Officer sets forth the following Findings of Fact. FINDINGS OF FACT 1) On or about March 18, 2014, the Claimant was notified that her Medicaid benefits were being terminated effective April 1, 2014, because her assets were in excess of the allowable limit. (Exhibit D-3) 2) The Department contended that the termination of the Claimant s Medicaid and Aged and Disabled Waiver (ADW) benefits was appropriate because, based upon the information available to the Department at the time of denial, the Claimant s assets were in excess of the maximum allowable limit of $2000. (Exhibits D- 1, D-7 and D-8) 3) Among the Claimant s assets are the mineral rights to two tracts of land. Although the value of the mineral rights assessed by the Calhoun County tax assessor was in excess of the $2000 asset limit for Medicaid eligibility, policy permits the exclusion of the asset if it meets the income-producing asset guidelines. (Exhibits D-7 and D-8) 4) On or about March 4, 2014, the Department mailed the Claimant a letter requesting that she provide a copy of the for royalty income to verify the amount of income produced by the Claimant s interest in the mineral rights. (Exhibit D-9) 5) On or about March 5, 2014, a letter was received from Keith Crihfield indicating that no Form 1099 was issued to the Claimant for (Exhibit D-2) 6) The Department representative testified that both she and the Claimant attempted to obtain tax form 1099 from the lease holder, but were unable to do so. The Department representative testified that without the 1099 the Department was unable to determine if the Claimant met the policy exemption for her assets. 7) The Department representative reported that the Claimant told her that she received two checks from the lessee of the mineral rights, but that she returned the checks to the lessee after they were received. The Claimant added that she had done so because at that 14-BOR-2527 Page 2

4 time there was a sale of the property pending and she did not think she was entitled to the profits. 8) Counsel for the Claimant was able to obtain the amount of income produced in calendar year of 2013, via correspondence dated July 7, 2014 (Exhibit D-10). There was no dispute that the amount of income produced by the leases met the income-producing asset exemption guidelines at the time of denial. 9) The Department contended that because the information was not made available to it by the verification checklist deadline of March 14, 2014 (Exhibit D-9), they were correct in denying the Claimant s Medicaid services effective April 1, APPLICABLE POLICY West Virginia Income Maintenance Manual 1.2.E establishes that it is the client's responsibility is to provide information about his/her circumstances so the Worker is able to make a correct decision about his/her eligibility. When the client is not able to provide the required verification, the Worker must assist him/her. The client must be instructed that his/her failure to fulfill his/her obligation may result in the denial of the application, closure of the active Assistance Group (AG), removal from the AG, a repayment of benefits and/or a reduction in benefits. The action taken by the Worker depends on the specific requirement. Prior to taking any of the actions described above, the Worker must determine whether or not the client is able to cooperate. If he/she is able, but has not complied, the appropriate action described above is taken. If not, the Worker must assist the client in obtaining the required information. West Virginia Income Maintenance Manual 4.2.B.1 instructs the Worker to use the best source of verification available. When there is absolutely no other source of verification, the client s statement must be used. West Virginia Income Maintenance Manual 10 establishes that monies from royalties are countable unearned income for SSI-Related Medicaid West Virginia Income Maintenance Manual 11.3 outlines maximum allowable assets for SSI- Related Medicaid. The maximum allowable asset limit for an Assistance Group of one (1) is $2000. West Virginia Income Maintenance Manual 11.4.LL.3.a(2)(b) outlines the method used in determining whether real or personal property, not used in business or trade, should be counted as an asset and reads, as follows: Up to $6,000 of an individual's equity in real or personal income-producing property is excluded, if it produces a net annual income of at least 6% of the excluded equity. The maximum amount of net annual income the property must produce is $ BOR-2527 Page 3

5 If the individual's equity is greater than $6,000, only the amount that exceeds $6,000 is counted toward the allowable asset limit, when the net annual income requirement of 6% is met. Net annual income is the gross income from the enterprise, less the cost of doing business for a one-year period. If the activity produces less than a 6% return, due to circumstances beyond the individual's control, such as crop failure or illness, and there is a reasonable expectation that the individual's activity will again produce a 6% return, the property is excluded. If the individual owns more than one piece of property and each produces income, each has the 6% rule applied. Then the amounts of the individual's equity in all of the properties producing 6% are totaled to determine if the total equity is $6,000 or less. The equity in those properties that do not meet the 6% rule is counted as an asset. If the individual's total equity in the properties producing 6% income is over the $6,000 equity limit, the amount of equity exceeding $6,000 is an asset. Step-by-step procedures for completing the calculations are outlined in subsequent paragraphs in the manual. West Virginia Income Maintenance Manual establishes that the determination for countable assets for the ADW Program is the same as for SSI-Related Medicaid. DISCUSSION Policy requires the Department to assist an individual with obtaining information when they are unable to do so. The Department representative reported that both she and the Claimant attempted to obtain the verification of the amount of income produced in 2013 through the mineral rights leases owned by the Claimant, but were unable to do so. While the Department made an attempt to obtain information from the holder of the leases, when the request was issued, it only requested a copy of the 1099, which was not available. Counsel for the Claimant made a valid point when she indicated that the verification checklist was too limited when it only requested the 1099, which was just one source of information from which the total royalties could have been obtained. It was not a 1099 which was needed to verify the amount of royalties earned, simply an accounting of royalties earned for The Department acknowledged they were unable to obtain the income verification from the lease holders. Policy also requires that the Department use the best information available to verify income. If no other source of information is available, the client s statement is taken. While testimony was provided that the Claimant returned the 2013 royalty checks when they were received, it is unknown if the Department asked the Claimant if she could recall the amount of the royalty checks or if she knew how much income was produced by the mineral rights in year The Department erred in not providing the Claimant the opportunity to verify the requested income through her statement. 14-BOR-2527 Page 4

6 CONCLUSION OF LAW 1) Policy requires the Department to assist an applicant in obtaining information necessary to establish eligibility when the applicant is unable to do so. While the Department did attempt to verify information from the lessee of the mineral rights, they issued a verification checklist which was narrow in scope and did not actually request the information required to determine eligibility. Furthermore, the Department provided no evidence that they attempted to obtain the requested information through the Claimant s statement, which is required by policy when the information can be obtained through no other source. DECISION It is the decision of the State Hearing Officer to reverse the Department s decision to terminate Claimant s Medicaid benefits. Additionally, any benefits lost as a result of the termination effective April 1, 2014, shall be restored to the Claimant. ENTERED this Day of September Donna L. Toler State Hearing Officer 14-BOR-2527 Page 5