Johnson v. Ahccs ( 2019 )

NOTICE: NOT FOR OFFICIAL PUBLICATION.
UNDER ARIZONA RULE OF THE SUPREME COURT 111(c), THIS DECISION IS NOT PRECEDENTIAL
AND MAY BE CITED ONLY AS AUTHORIZED BY RULE.
IN THE
ARIZONA COURT OF APPEALS
DIVISION ONE
JESSE JAMES JOHNSON, Plaintiff/Appellant,
v.
ARIZONA HEALTH CARE COST CONTAINMENT SYSTEM, et al.,
Defendants/Appellees.
No. 1 CA-CV 18-0612
FILED 7-11-2019
Appeal from the Superior Court in Yavapai County
No. P1300CV201600849
The Honorable Don C. Stevens II, Judge Pro Tempore
VACATED AND REMANDED
COUNSEL
Jesse James Johnson, Prescott Valley
Plaintiff/Appellant
Johnston Law Offices, PLC, Phoenix
By Logan T. Johnston
Counsel for Defendant/Appellee
JOHNSON v. AHCCCS
Decision of the Court
MEMORANDUM DECISION
Presiding Judge Paul J. McMurdie delivered the decision of the Court, in
which Chief Judge Peter B. Swann and Judge Samuel A. Thumma joined.
M c M U R D I E, Judge:
¶1 Jesse James Johnson appeals the superior court’s order
affirming the Arizona Health Care Cost Containment System’s
(“AHCCCS”) denial of long-term-care benefits. For the following reasons,
we vacate the agency’s denial and remand for further review of Johnson’s
request for benefits.
FACTS AND PROCEDURAL BACKGROUND
¶2 Johnson, a 39-year-old male, has suffered from medical and
behavioral problems for much of his life. When Johnson was approximately
16 years old, he began experiencing several behavioral changes, including
social withdrawal, memory loss, confusion, depression, and disorganized
thinking. Johnson was potentially exposed to mold and possibly suffered a
psychotic break around that time. At age 20, Johnson underwent a
neuropsychological evaluation with Dr. James Youngjohn. Johnson’s
full-scale IQ was measured at 59, and the neuropsychologist stated that
“Mr. Johnson’s performances across the [given] battery of
neuropsychological tests were generally severely to profoundly impaired.”
Dr. Youngjohn opined Johnson most likely suffered from schizophrenia,
but that “[a]nother possibility would be some form of neurologic disease.”
¶3 Two years later, psychologist Dr. Robert Crago evaluated
Johnson and noted he “present[ed] with a significant and disabling
symptom pattern” and that his reported symptoms included “difficulties
with calculations, ability to express oneself in words, concentration and
memory difficulties, difficulties with written or oral instructions, poor
judgment, and difficulty with integrating new information.” Dr. Crago
opined that Johnson’s history suggested a mixed etiology, including
possible schizophrenia and possible toxic mold exposure. Over the next
several years, numerous doctors examined Johnson and reported diagnoses
of schizophrenia, neurocognitive disorder, or both.
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JOHNSON v. AHCCCS
Decision of the Court
¶4 At the time he sought eligibility for long-term-care benefits,
Johnson continued to experience similar disabling symptoms that impacted
his ability to function independently. In March 2016, psychologist Dr.
Karen Sullivan examined Johnson and diagnosed him with neurocognitive
disorder due to multiple etiologies and with schizoaffective versus
schizophrenic disorder. Dr. Sullivan reported: “it does appear that Mr.
Johnson is unable to take care of his daily and essential activities without
the help of family and that he will need ongoing support and care.”
Similarly, one year earlier, psychologist Dr. Raymond Lemberg reported
Johnson’s daily activities were “very limited” and that he “needs a great
deal of help managing activities of daily living.” Dr. Lemberg diagnosed
Johnson with: (1) mild neurocognitive disorder, with behavioral
disturbance, due to traumatic brain injury; (2) mild neurocognitive
disorder, due to another medical condition, i.e., mold exposure; and
(3) schizoaffective disorder, by history.
¶5 Johnson applied for long-term-care benefits through
AHCCCS, which conducted a preadmission screening (“PAS”) assessment
for the elderly and physically disabled in March 2016. See Ariz. Admin.
Code (“A.A.C.”) R9-28-303(A)(1). Johnson received a PAS score of 35, which
is below the threshold score for eligibility for long-term-care benefits for the
elderly and physically disabled. See A.A.C. R9-28-304(B)(3). AHCCCS then
referred Johnson’s file to Dr. Allison Perrin for physician review, who
declined to find Johnson eligible for long-term-care benefits.
¶6 After reviewing Johnson’s PAS assessment and available
medical records, Dr. Perrin noted that Johnson needs assistance with
bathing, dressing, grooming, and eating, and “has resistive and disruptive
behaviors (refuses medications, showers, hygiene, and putting on clean
clothes; uses abuse language; calls his mother repeatedly).” She concluded,
however, that “Johnson’s cognitive and functional impairments can all be
explained by his psychiatric illness” and “[b]ecause he does not have a
medical diagnosis that puts him at risk of immediate institutionalization in
a nursing facility, he is ineligible for the [long-term-care] program [for the
elderly and physically disabled] at this time.” AHCCCS then issued a notice
of denial in May 2016.
¶7 Johnson requested a hearing to review the denial of eligibility.
A prehearing discussion was held, and Johnson’s attorney argued that the
PAS assessment Johnson was given did not appropriately evaluate his
cognitive abilities, explaining: “[Johnson’s] cognitive dysfunctions are so
profound that they are affecting everything he does throughout the day.”
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JOHNSON v. AHCCCS
Decision of the Court
¶8 A second physician’s review was then conducted by Dr.
Janine Roumain one day before the scheduled hearing. Dr. Roumain also
concluded that Johnson was not at immediate risk of institutionalization in
a nursing facility and that he was ineligible for long-term-care benefits
through the elderly and physically disabled program. She concluded his
“primary debility is his long-standing serious mental illness. He may also
have some unspecified mild cognitive disorder. But his [resistiveness] to
some [activities of daily living], his psychosis, and adverse behaviors are
better explained by behavioral-health-associated cognitive difficulties.” She
did note, however, that Johnson “cannot live independently [and] requires
supervision that may include personal care assist and supervision with
medications.”
¶9 After a two-day hearing, an Administrative Law Judge
(“ALJ”) recommended Johnson’s appeal from the denial of eligibility for
long-term-care benefits be denied. The ALJ detailed the results of Johnson’s
PAS assessment, the physicians’ reviews, and the testimony offered,
including from Johnson’s mother. Johnson’s mother “disputed the
diagnosis of schizophrenia and argued that [Johnson] suffers from a major
neurocognitive disorder.” Johnson’s mother also argued Johnson should
have received a higher PAS score. The ALJ concluded that even if Johnson’s
score was increased, he failed to offer sufficient evidence to establish that
he required the level of care provided in a nursing facility. The director of
AHCCCS then reviewed the ALJ’s decision, found it was supported by
substantial evidence, accepted it, and denied Johnson’s appeal.
¶10 Johnson then appealed the director’s decision to the superior
court under Arizona Revised Statutes (“A.R.S.”) section 12-905. The
superior court stated it:
[A]cknowledges the heroic efforts that have been made on
behalf of Jesse Johnson to demonstrate that he met all
necessary criteria [to] qualify for [long-term-care] services.
However, this Court is not required or allowed to reverse the
decision of the Administrative Law Judge simply because it
might have reached a different decision based on the same
evidence.
The court found substantial evidence supported the administrative
decision and that it was not arbitrary, capricious, or an abuse of discretion,
and affirmed the ALJ’s decision upholding AHCCCS’s denial of eligibility
for long-term-care benefits. Johnson then timely appealed to this court, and
we have jurisdiction under A.R.S. §§ 12-913 and -120.21(A)(1).
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DISCUSSION
¶11 When reviewing an administrative agency’s decision, the
superior court “examines whether the agency’s action was arbitrary,
capricious, or an abuse of discretion.” Gaveck v. Ariz. State Bd. of Podiatry
Exam’rs, 222 Ariz. 433, 436, ¶ 11 (App. 2009); see also A.R.S. § 12-910(E). The
court “must defer to the agency’s factual findings and affirm them if
supported by substantial evidence.” Gaveck, 222 Ariz. at 436, ¶ 11. This
court engages in the same process as the superior court when it reviews a
ruling affirming an agency’s decision. Id. at ¶ 12. “Whether substantial
evidence exists is a question of law for our independent
determination. . . . [and] [w]e are not bound by an agency’s or the superior
court’s legal conclusions.” Id. (citations omitted). We review questions of
law, including the interpretation of statutes and regulations, de novo. Pima
County v. Pima County Law Enf’t Merit Sys. Council, 211 Ariz. 224, 227, ¶ 13
(2005).
¶12 Johnson raises several issues on appeal. Because it is
dispositive, however, this decision focuses on the PAS assessment
AHCCCS used to determine Johnson’s eligibility for benefits.
¶13 “To be eligible for institutional services or home and
community based services” under the long-term-care system, “a person
shall have a nonpsychiatric medical condition or have a developmental
disability as defined in § 36-551 that, by itself or in combination with other
medical conditions, necessitates the level of care that is provided in a
nursing facility or intermediate care facility.” A.R.S. § 36-2936(A) (emphasis
added); A.R.S. § 36-2939(A)–(C) (describing the services available to
members of the long-term-care system). AHCCCS conducts a PAS
assessment to determine if an applicant is eligible for services. A.R.S.
§ 36-2933(B). 1 The PAS assessment “assesses the functional, medical,
nursing, social and developmental needs of the applicant,” A.R.S.
§ 36-2936(A), and is used by AHCCCS to determine whether an applicant
is “at immediate risk of institutionalization,” A.A.C. R9-29-303(A). After
completing the PAS assessment, the assessor calculates a PAS score. That
score is then compared to “an established threshold score,” which is
1 An applicant must also meet certain residency and financial criteria
to be eligible. A.R.S. §§ 36-2931(5), -2934; A.A.C. R9-28-302. Johnson’s
eligibility under both criterion is not in dispute in this appeal.
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JOHNSON v. AHCCCS
Decision of the Court
generally “the point at which an applicant or member is determined to be
at immediate risk of institutionalization.” A.A.C. R9-28-303(E).
¶14 The PAS assessment utilized by AHCCCS differs based on
whether the applicant is elderly and physically disabled or whether he or
she is developmentally disabled. A.A.C. R9-28-303(A)(1–5). In this case,
AHCCCS evaluated Johnson using the PAS assessment for individuals who
are elderly and physically disabled. However, Johnson argues AHCCCS
erred because it should have administered the PAS assessment for
individuals with a developmental disability.
¶15 Johnson asserts he has a cognitive disability and is
developmentally disabled as defined by A.R.S. § 36-551(19). AHCCCS
responded that the Department of Economic Security (“DES”) had already
determined Johnson did not have a developmental disability and denied
his application for developmental disability services (“DDD services”).
However, in a recently issued opinion, this court vacated DES’s
determination of ineligibility and held Johnson has a developmental
disability and is eligible for DDD services. See Johnson v. ADES, 1 CA-UB
18-0105, 2019 WL 2950041 (Ariz. App. July 9, 2019) (Johnson I).
¶16 Given our decision in Johnson I that he has a developmental
disability as defined by A.R.S. § 36-551(19), we vacate and remand for
AHCCCS to evaluate Johnson using the PAS assessment for the
developmentally disabled. Both the assessment for the elderly and
physically disabled and the assessment for the developmentally disabled
determine the individual’s PAS score based on a functional score and a
medical score. See A.A.C. R9-28-304(B), -305(C). But the functional and
medical scores are assessed differently in the two assessments and consider
different categories. Compare A.A.C. R9-28-304(C) (describing the scored
categories for the PAS assessment for the elderly and physically disabled),
with A.A.C. R9-28-305(D) (detailing the scored categories for the PAS
assessment for the developmentally disabled). And the threshold score,
indicating that the applicant is “at immediate risk of institutionalization,”
is different based on whether the applicant is developmentally disabled or
elderly and physically disabled. For a developmentally disabled individual,
the threshold score is 40. A.A.C. R9-28-305(C)(3)(b). For an elderly and
physically disabled individual, it is 60. A.A.C. R9-28-304(B)(3)(b).
¶17 Johnson received a total score of 35 on the PAS assessment for
the elderly and physically disabled. AHCCCS thus denied his request for
long-term-care benefits because the “preadmission screening . . . process
has determined [he] [did] not currently need” care equal to that provided
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JOHNSON v. AHCCCS
Decision of the Court
in a nursing facility or intermediate care facility. But because the PAS
assessment is different for a developmentally disabled individual and an
elderly and physically disabled individual, Johnson’s total score could be
different when properly treated as a developmentally disabled individual,
and the outcome could be different. Accordingly, we hold AHCCCS must
reassess Johnson’s eligibility for long-term-care benefits using the PAS
assessment for the developmentally disabled.
¶18 We recognize the physicians’ reviews, the ALJ, and the
director concluded that Johnson had not demonstrated he was at immediate
risk for institutionalization. But each review was premised on the initial
PAS assessment for the elderly and physically disabled. Drs. Perrin and
Roumaine, and the ALJ stated that DES had determined Johnson was
ineligible for DDD services. And the director’s decision thoroughly detailed
the PAS assessment for the elderly and physically disabled before
concluding that the denial of his appeal was proper. Thus, given our
conclusion that AHCCCS must reassess Johnson using the PAS assessment
for the developmentally disabled, the physicians’ findings cannot be a basis
for upholding the agency’s denial of benefits. 2
ATTORNEY’S FEES AND COSTS
¶19 Johnson requests his attorney’s fees and costs. We decline to
award him his attorney’s and expert witness fees incurred in the
administrative proceeding below under A.R.S. § 12-348. See A.R.S. § 12-348
(authorizing an award of attorney’s and expert witness fees incurred on
appeal and in an administrative hearing to a party who prevails on the
merits in a proceeding reviewing a state agency decision). Because we are
remanding for further administrative proceedings and do not resolve
whether Johnson is entitled to long-term-care benefits, he has not prevailed
on the merits. See Columbia Parcar Corp. v. Ariz. Dep’t of Transp., 193 Ariz.
181, 185, ¶ 20 (App. 1999) (the party did not “prevail on the merits” in action
2 We also note that because Johnson has been found eligible for the
DDD services, DES must also conduct a PAS assessment and may refer
Johnson to AHCCCS for an eligibility determination. See A.R.S. § 36-559(B)
(“After [DES] conducts preadmission screening pursuant to § 36-2936 and
determines that a person with a developmental disability may be
potentially eligible for the Arizona long-term care system pursuant to
chapter 29, article 2 of this title, the person shall be referred to [AHCCCS]
for an eligibility determination pursuant to § 36-2933 . . . .” (footnote
omitted)).
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JOHNSON v. AHCCCS
Decision of the Court
that was remanded for rehearing and was not entitled to attorney’s fees
under A.R.S. § 12-348(A)(2)); State ex rel. Corbin v. Challenge, Inc., 151 Ariz.
20, 28 (App. 1986) (reversing superior court’s grant of summary judgment,
but declining to award attorney’s fees under A.R.S. § 12-348(A)(2)’s
prevailing party standard); see also 4501 Northpoint LP v. Maricopa County,
212 Ariz. 98, 102, ¶ 22 (2006) (“The Columbia Parcar and Challenge,
Inc. opinions illustrate that fees should not be allowed under [A.R.S.
§ 12-348] based on an interim decision because either party could still
ultimately prevail on the merits.”).
¶20 Johnson is entitled to his costs on appeal. Under A.R.S.
§ 12-341, the “successful party to a civil action shall recover from his
adversary all costs expended or incurred therein unless otherwise provided
by law.” Unlike under A.R.S. § 12-348, the successful party under A.R.S.
§ 12-341 need not necessarily prevail “on the merits” to be awarded costs.
See Wagenseller v. Scottsdale Mem’l Hosp., 147 Ariz. 370, 393–94 (1985)
(interpreting A.R.S. § 12-341.01, which provides attorney’s fees to the
“successful party”) (“We believe that under A.R.S. § 12–341.01 ‘successful
party’ on appeal is not limited to those who have a favorable final judgment
at the conclusion of the appeal process. It may include those who achieve
reversal of an unfavorable interim order if that order is central to the case
and if the appeal process finally determines an issue of law sufficiently
significant that the appeal may be considered as a separate unit.”),
superseded by statute on other grounds as recognized by Chaboya v. Am. Nat’l Red
Cross, 72 F. Supp. 2d 1081, 1092 (D. Ariz. 1999); Douglas v. Governing Bd. of
Window Rock Consol. Sch. Dist. No. 8, 206 Ariz. 344, 349, ¶ 19 (App. 2003)
(although case was remanded for further proceedings, parties that secured
reversal of dismissal by superior court were “the successful parties” under
A.R.S. § 12-341 and entitled to costs on appeal); see also Columbia Parcar, 193
Ariz. at 184, ¶¶ 17–18 (citing Wagenseller, 147 Ariz. at 391–94) (noting the
contrast between A.R.S. § 12-341.01’s “successful party” language and
A.R.S. § 12-348’s requirement that a party “prevail[] by an adjudication on
the merits” to be awarded fees). Because we are vacating and remanding
for a redetermination of Johnson’s eligibility for services, Johnson is the
successful party, and he is entitled to costs upon compliance with Arizona
Rule of Civil Appellate Procedure 21.
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JOHNSON v. AHCCCS
Decision of the Court
CONCLUSION
¶21 For the foregoing reasons, we vacate AHCCCS’s decision
denying Johnson’s eligibility for long-term-care benefits and remand for
proceedings consistent with this decision.
AMY M. WOOD • Clerk of the Court
FILED: AA
9