CARLOS PACHAS, by his attorney in fact, JULISSA PACHAS, Petitioner,
NORTH CAROLINA DEPARTMENT OF HEALTH AND HUMAN SERVICES, Respondent.
in the Court of Appeals 10 January 2018.
by petitioner from order entered 21 April 2017 by Judge W.
Robert Bell in Mecklenburg County No. 15 CVS 19217 Superior
Services of Southern Piedmont, by Madison Hardee and Douglas
Stuart Sea, for petitioner-appellant.
Attorney General Joshua H. Stein, by Assistant Attorney
General Lee J. Miller, for respondent-appellee.
Pachas was a Medicaid recipient. In 2016, he challenged the
deductible applied to his Medicaid coverage. After losing
throughout the administrative process, Pachas ultimately
prevailed on judicial review in the trial court. The court
held that the applicable Medicaid statute required the State
to use the federal poverty level for a family, not an
individual, to calculate Pachas's income limit.
Pachas qualified for an alternative Medicaid program subject
to at least some different rules than traditional Medicaid.
After the State again imposed a deductible based on the
federal poverty level for individuals, Pachas skipped the
administrative review process and returned directly to the
trial court with a motion to enforce the court's previous
order and petition for writ of mandamus. The trial court
dismissed the motion for lack of jurisdiction.
explained below, we affirm. Although a trial court, sitting
as an appellate court to review an agency decision, has
jurisdiction to enforce an existing order, it lacks
jurisdiction to apply a previous order to new facts and legal
arguments not at issue in the previous ruling. Here, the new
Medicaid program in which Pachas enrolled permits the State
to request, and the federal government to grant, waivers from
various Medicaid provisions. The State contends that the
federal government waived the income limit rules for this
alternative Medicaid program. This argument involves
questions of law and fact not addressed in the first judicial
review proceeding, which concerned standard Medicaid
holding today does not mean we agree with the State on the
underlying Medicaid issue. We hold only that Pachas cannot
bypass the agency review process and take this new issue
directly to the trial court. Accordingly, we affirm the trial
court's dismissal of Pachas's motion and petition for
lack of jurisdiction.
Facts and Procedural History
2014, Petitioner Carlos Pachas began receiving Medicaid
coverage after a stroke and a brain tumor left him confined
to a wheelchair and in need of nursing care. Pachas was the
primary provider for his wife, his two minor children, and
his wife's elderly parents.
early 2015, Pachas began receiving Social Security disability
benefits. The Mecklenburg County Department of Social
Services determined that, based on his Social Security
disability payment of $1, 369 per month, Pachas's income
was above the federal poverty level and thus required him to
pay a deductible on his Medicaid benefits. DSS informed
Pachas that it would not provide further Medicaid coverage
until Pachas paid a 6-month deductible of $6, 642.
calculated this deductible based on the federal poverty level
for an individual, rather than the poverty level for a
family. Had DSS applied the federal poverty level for a
family, Pachas would have been eligible for Medicaid benefits
without having to pay a deductible.
appealed DSS's decision through the administrative
process but did not prevail. He then petitioned for judicial
review in superior court. Pachas argued that the applicable
federal statute, 42 U.S.C. § 1396a(m), required the
agency to determine his Medicaid eligibility based on the
federal poverty level for a "family of the size
involved." Because Pachas was the primary provider for
his wife, children, and elderly in-laws, he contended that
the agency should have used the federal poverty level for a
family of either four or six people.
prevailed in superior court. The court reversed the agency
decision and ordered the agency to reinstate Pachas's
Medicaid benefits. The court held that the agency improperly
applied the income limit because "[t]he plain language
of the controlling federal statutory provision, 42 U.S.C.
§ 1396a(m), states that the applicable Medicaid income
limit . . . must be based on a 'family of the size
February 2017, Pachas left the nursing facility that had been
caring for him and returned home under a special Medicaid
program known as the Community Alternative Program for
Disabled Adults, or CAP/DA. The CAP/DA program offers the
State the option of providing Medicaid coverage to adults who
wish to receive support services at their own homes, rather
than in a nursing home.
State has discretion to define the scope of its CAP/DA
program by requesting a waiver of various Medicaid provisions
from the federal government. See 42 U.S.C. §
1396n(c). The State contends that it requested, and received,
a waiver from the requirement that it calculate CAP/DA income
limits using a "family of the size involved" under
42 U.S.C. § 1396a(m).
on this purported waiver, when Pachas enrolled in the CAP/DA
program and began receiving in-home support services, the
State calculated his income limit for CAP/DA coverage using
the individual federal poverty level, not the family poverty
level. As a result, the State required him to pay a
deductible before receiving CAP/DA coverage.
trial court, in its initial order on judicial review, did not
address the CAP/DA program or the factual and legal issues
concerning the State's request for a waiver of various
Medicaid provisions through CAP/DA. Indeed, the CAP/DA
program was not even at issue in the initial administrative
challenge because, at the time, Pachas was receiving only
standard Medicaid coverage. As a result, the administrative
record from the initial proceeding does not include any
documents addressing either CAP/DA coverage generally or
whether the federal government approved the State's
purported request to waive the requirements of 42 U.S.C.
learning that the State would require a deductible for CAP/DA
coverage, Pachas bypassed the administrative review process
and filed in superior court a motion to enforce the
court's previous order and a petition for a writ of
mandamus. Following a hearing, the trial court dismissed the
motion and petition for lack of jurisdiction.
trial court ruled that its initial order "does not apply
to Petitioner's Medicaid eligibility under the CAP/DA
waiver" because the CAP/DA program is "governed by
[a] separate federal statute, 42 U.S.C. § 1396n(c)"
which permits the federal government "to waive the State
Plan requirements for income and resource rules . . . that
the Court considered in the March 17, 2016 Order." The
trial court therefore held that "Petitioner must resort
to the administrative process governed by N.C. G.S. §
108A-79 to appeal" the State's decision to require a
deductible for CAP/DA coverage. Pachas appealed the trial
court's ruling to this Court.
Pachas passed away during this litigation. His wife, Julissa
Pachas, was substituted as petitioner in her capacity as
administrator of Pachas's estate.
challenges the trial court's dismissal of his motion to
enforce the court's previous order, and the corresponding
petition for a writ of mandamus. We begin our analysis by
discussing the trial court's authority to consider these
trial courts lack jurisdiction to directly review a decision
by a county department of social services with respect to
Medicaid coverage. The General Assembly created an
administrative review process for these claims, and courts
have jurisdiction to hear these disputes only when they
arrive through a petition for judicial review after
exhaustion of this administrative review. See N.C.
Gen. Stat. §§ 108A-79, 150B-43.
in other legal proceedings, trial courts reviewing
administrative decisions have jurisdiction to enforce their
own orders. See N.C. R. Civ. P. 70; Bryan v.
BellSouth Commc'ns, Inc., 492 F.3d 231, 236 (4th
Cir. 2007). Thus, when a trial court on judicial review
orders an agency to take action, the court retains
jurisdiction to ensure its order is carried out.
Consequently, when a trial court interprets a statute and
orders the agency to apply that interpretation-as happened
here-the agency must do so. If the agency ignores the trial
court's instructions, the court retains the power to take
further action to ensure compliance.
are limits to this supervisory authority, however. The trial
court's authority to supervise the agency's actions
extends only to issues "actually presented and
necessarily involved in determining the case."
Tennessee-Carolina Transp., Inc. v. Strick Corp.,
286 N.C. 235, 239, 210 S.E.2d 181, 183 (1974). In other
words, the trial court's continuing jurisdiction applies
to issues involving "the same facts and the same
questions, which were determined in the previous
the trial court properly concluded that the agency's
determination of Pachas's CAP/DA program eligibility
involved different facts and legal issues than the
traditional Medicaid benefits at issue in its first order. As
the trial court observed, its first order instructed the
State "to reinstate Petitioner's Medicaid
eligibility through the North Carolina Medicaid State Plan
pursuant to the controlling federal statutory provision, 42
U.S.C. § 1396a(m)."
court then observed that Pachas later "voluntarily
applied for Medicaid eligibility through the Community
Alternative Program for Disabled Adults . . . which is
governed by [a] separate federal statute, 42 U.S.C. §
1396n(c)." Unlike the traditional Medicaid program at
issue in the court's first order, the CAP/DA program
permits the State to seek waivers from various provisions of
the Medicaid statutes. 42 U.S.C. § 1396n(c). The State
contends that it requested, and received, a waiver from the
requirement that it calculate CAP/DA income limits based on a
"family of the size involved" under 42 U.S.C.
scope of this waiver provision, and whether the State in fact
applied for and received a waiver of the income limits
provision, involve facts and legal questions that were
not "actually presented and necessarily
involved" in the trial court's order addressing
traditional Medicaid coverage. Tennessee-Carolina
Transp., Inc., 286 N.C. at 239, 210 S.E.2d at 183.
Indeed, these issues could not have been addressed
in the court's first order because, as the parties
concede, with respect to traditional Medicaid coverage, the
statutory income limit requirements cannot be waived.
result, the trial court correctly held that "the Order
signed on March 17, 2016 does not apply to Petitioner's
Medicaid eligibility under the CAP/DA waiver" and that
"Petitioner must resort to the administrative process
governed by N.C. G.S. § 108A-79 to appeal the February
14, 2017 decision issued by the Mecklenburg County DSS."
The trial court lacks jurisdiction to review the legal and
factual issues raised in this appeal until they reach the
court through exhaustion of the administrative review process
and a petition for judicial review.
recognize that this is a frustrating result for the Pachas
family, who already fought one lengthy administrative battle
with the agency and must now do so again. And we agree with
our dissenting colleague that requiring a "dying
indigent" to slog through this pointless bureaucracy
before presenting his legal arguments to a court of law feels
"unjust and wrong." But it is what the law
requires. Although the agency seems convinced of its legal
position, that does not make the administrative review
process "futile" or "inadequate" as those
terms are defined by law. See Huang v. North Carolina
State Univ., 107 N.C.App. 710, 715, 421 S.E.2d 812,
815-16 (1992). ...