Administrative Hearing Decisions

CASE NAME: Zachary Lee Ryan Reisner

CASE NUMBER: AAP­76­28653

ISSUE: Denial of Application for Adoption Assistance

FINDINGS OF FACT

The Administrative Law Judge, having reviewed the evidence presented by the parties, now makes the following FINDINGS OF FACT:

1. On March 28, 1999 Mr. & Mrs. Timothy Reisner filed an Application for Adoption Assistance with the St. Joseph County Office of Family and,Children.

2. The County sent written notice to the Reisners on April 16, 1999 apprising them of the denial of this application for the reason:

"Federal regulations require that the child's AAP application & agreement be signed & in effect prior to the Final Decree of Adoption." [Supporting regulations: 470 IAC 3­10­1 through 470 IAC 3­10­4].

3. The Reisners filed a timely appeal in this matter on April 20, l999.

4. A hearing in this matter was scheduled on June 4, 1999 under the provisions of 470 IAC 1­4 et seq. (IC 12­17.4­3­18, IC 17.2­4­10 and IC 12­17.2­5­9 were incorrectly cited.)

5.Zachary was born on April 17, 1991. His natural mother signed a Request to Terminate Parental Rights on April 24, 1991 in the office of Catholic Charities of South Bend, Indiana,hereon referred to as Catholic Charities.

6.Testimony established Catholic Charities gave physical custody of Zachary to Mr. & Mrs. Reisner of Crystal, Minnesota on April 25, 1991. Zachary was placed in their home in Minnesota for the purpose of adoption. The Reisners and Zachary continue to reside in Crystal, Minnesota.

7. According to the Petition for Adoption, the Reisners acquired physical custody of Zachary from Catholic Charities on June 25, 1991.

8. The foregoing almost two (2) month discrepancy between the testimony given at the hearing and the information in the Petition for Adoption was not explained at the hearing.

9. Zachary is of African­American/Caucasian heritage. Catholic Charities' efforts to find an appropriate adoptive family of similar minority heritage through several agencies were not successful despite its requests for approved home studies made to agencies within Indiana and as distant as California.

10. Zachary's birthmother and birthfather requested that Zachary be placed with a family living far from their locale. In accordance with their wishes, Catholic Charities, in conjunction with Crossroads, a licensed, non­profit adoption service in Minneapolis, Minnesota, placed Zachary with the Reisners in Minnesota.

11. The Reisners signed an Agreement for Non­recurring Adoption Expense Reimbursement for Zachary on August 15, 1991. The Commissioner of Human Services of Minnesota signed this agreement on October 2, 1991, certifying their eligibility for such assistance.

12. The Reisners filed a Petition for Adoption in the State of Minnesota on October 18, 1991.

13. The Reisners' Petition for Adoption was granted by the State of Minnesota, District Court ­ Juvenile Division, Fourth Judicial District, Court File No. AD­175469 on March 19, 1992. The Findings Order and Decree of Adoption reads: "It is in the best interests of said Child that it be adopted by Petitioners and that it be given the name as it appears below."

14. Medical documentation from Dr. Diane M. Meier, as well as a medical chronology compiled by the Reisners, shows Zachary's medical history since infancy includes the following disorders:

a) Left inguinal hernia ­ diagnosed May 28, 1991 and corrected by herniorrhaphy on June 17, l9gl.

b) Chest mass, a left anterior axillary mass ­ discovered on October 22, 1991 with excision on November 5, 1991. Tumor was a fibrous hamartoma of infancy.

c) RSV bronchiolitis documented beginning February 11, 1992, requiring hospitalization at eight (8) months old.

d) Underwent bilateral myringotomy with ventilation tube insertion on March 25, 1992.

e) Diagnosed with moderately severe asthma, also called "reactive airway disease", on March 27, 1992.

f) Diagnosed with IgG deficiency ­ immune system deficiency on May 20, 1992. Received gamma globulin injections on this date plus June 5, 1992 and June 29, 1992.

g) Underwent a repeat bilateral myringotomy with ventilation tube insertion on December 10, 1993.

h) Flexible laryngoscopy performed on November 7, 1994 found decrease in motion of left vocal cord and signs of allergies.

i) Environmental allergens diagnosed on November 14, 1994.

j) Decreased lung function detected on pulmonary function testing on January 19, 1995.

k) Diagnosed with gastroesophageal reflux disease (GERD) with aspiration into the lungs on December 14, 1995. Also diagnosed Type 1A cleft and vocal cord nodules.

l) Diagnosed with vitiligo on August 26, 1996.

m) Underwent Nissen fundoplication surgery for GERD on July 20, 1998.

15. The medical chronology prepared by the Reisners shows that, from infancy, Zachary has a history of recurrent upper respiratory infections, bronchitis, bilateral otitis media requiring PET's twice as an infant, as well as a history of recurrent sinusitis and allergic rhinitis.

16. According to Dr. Meier, the disorders asthma, gastroesophageal reflux disease and vitiligo are congenital conditions while allergic rhinitis is "congenital in pre­disposition".

17. Dr. Meier writes Zachary also had tracheomalacia from birth, a disorder of the trachea which causes it to be abnormally collapsible due to the loss of structural integrity. It is a softening of the trachea so that the tracheal rings are no longer able to prevent the airway from collapsing in on itself, especially during expiration. In children, it commonly leads to respiratory distress.

18. According to Dr. Meier, Zachary's tracheomalacia was confirmed at intubation at six (6) weeks of age at Children's Hospital, while hospitalized for surgical repair of his hernia in June 1991, and then again at ten (10) months of age at North Memorial Hospital, apparently while hospitalized for removal of the left anterior axillary mass in November 1991.

19. A letter written by Dr. David G. Rustad on June 17, 1991 after Zachary underwent surgery for the hernia repair, two months after his placement with the Reisners, specifically alludes to tracheomalacia by stating Zachary "may indeed have some congenital narrowing of his upper airway", as he had some strid2er during induction of anesthesia, and the endotracheal tube inserted at the time was smaller than what would have been considered normal for Zachary's age.

20. Social workers from Crossroads visited the Reisners between the time of Zachary's placement in their home and finalization of his adoption. An undated Placement Dictation completed by Crossroads states "There have been some medical problems since placement. ... He has also undergone surgery for hernia. ..." Progress Reports dated May 30, 1991 and June 22, 1991 mention the surgical repair of the hernia. Another Progress Report of December 13, 1991 mentions surgical removal of the hamartoma from Zachary's left arm.

21. A letter from Catholic Charities to the Reisners, dated June 26, 1992 and another letter from Catholic Charities to Crossroads, dated August 5, 1992 reference a "congenital trachea defect" in Zachary. These letters, however, were written after finalization of the adoption on March 27, 1992.

22. Catholic Charities explains in a letter it addressed to the Reisners on April 29, 1999 that "At the time of Zachary's birth and discharge from the hospital, he was thought by all persons to be a normal, healthy newborn. Therefore, the agency had no reason to consider any adoption subsidy programs that might have been in effect."

23. The Reisners learned of the Adoption Assistance Program in December 1998 after adopting another child, who with fewer special medical needs, qualified for Adoption Assistance. Based on these circumstances, they began to question why Zachary, who has more special needs, was not eligible for Adoption Assistance.

24. It is the Reisners' assertion that extenuating circumstances prevented them from applying for adoption assistance or completing an adoption assistance agreement prior to legalization because they were not informed of ongoing adoption subsidies through the Adoption Assistance Program prior to finalization of Zachary's adoption; thus, the Reisners did not have a reasonable opportunity to apply for such program prior to finalization of their adoption of Zachary.

25. The Reisners further assert Zachary would have met the AFDC criteria prior to legalization of the adoption if his condition had been diagnosed prior to such action.

26. According to testimony by the County, Zachary's birthmother and his sibling were receiving AFDC at the time of Zachary's birth up through the finalization of his adoption.

27. Catholic Charities writes in a letter of April 29, 1999 that Zachary's birthmother would have been eligible for AFDC with a second child (Zachary) because:

a) She was on Medicaid.

b) She was over 18 and living on her own.

c) She was already parenting a needy child.

d) She worked only part time for minimum wages early in the pregnancy.

28. Besides ongoing adoption subsidies, the Reisners want an adoption subsidy, based upon the highest therapeutic foster rate available in St. Joseph County, and an "adoption subsidy rate at 100% of the therapeutic foster care rate due to his extensive medical needs and the impact those needs have on his life, as well as our entire family."

29. Children in St. Joseph County, the county where Catholic Charities, the placing agency, is located, do receive special needs per diems in addition to the regular per diem; however, the County does not have guidelines or written standards to determine therapeutic foster care rates.

30. In addition, the Reisners want retroactive payment of the adoptive subsidy dating to Zachary's placement in their home. In support of this request, the Reisners cited 45 CFR 205.10(a)(18) and their advocate, Timothy P. O'Hanlon, cited the appeal decision by a tribunal in the Arizona Department of Economic Security, Appeal No. 29205, December 3, 1998 in which retroactive payment was ordered dating to the date the children were placed with the family.

31. Moreover, the Reisners want Medicaid for Zachary.

32. The Reisners referenced that the Indiana Code cites on the notice of hearing are incorrect and that such misinformation greatly hindered their efforts to research and prepare for the hearing.

LEGAL BASIS

Section 801 of the Indiana Children and Family Services Manual:

"The Adoption Assistance and Child Welfare Act of 1980 (PL 96­272) became law on June 17, 1980. This Act amended Title IV­B of the Social Security Act to provide states with child welfare services funds and created a new Title IV­E to provide assistance entitlement programs for children. Adoption Assistance benefits are provided on behalf of children whose adoptions must be subsidized in order to obtain adoption finalization. Children placed by the CDPW or a non­profit, private licensed child placing agency (LCPA) may be considered for the program. Benefits include monthly money payments and/or Medicaid as well as payment of non­recurring adoption expenses."

According to Policy Interpretation Questionnaires (PIQ's) from the U.S. Department of Health and Human Services, dated December 2, 1988 and June 25, 1992, the State may reverse an earlier decision to deny Adoption Assistance benefits, for a reason such as failure to file a timely application, if it is determined via a fair hearing that there are "extenuating circumstances."

Policy Interpretation Questionnaire (PIQ) dated June 25, 1992 provides that the following situations constitute grounds for a fair hearing:

"(1) relevant facts regarding the child, the biological family or child's background are known and not presented to the adoptive parents prior to the legalization of the adoption; ...

(2) failure by the State agency to advise adoptive parents of the availability of adoption assistance."

Section 804 of the Indiana Children and Family Services Manual:

"Each child considered for the IV­E Adoption Assistance Program (IVE­AAP) must meet the requirements of two (2) general areas of eligibility: (1) special needs; and (2) categorical requirements."

Section 804.1 of the Indiana Children and Family Services Manual:

"A child meets the special needs requirements when each of the following conditions are met:

(1) determination is made that the child cannot or should not be returned to the home of the child's birth parents;

(2) determination is made that the child cannot be placed adoptively without IVE­AAP benefits because of a specific factor or condition: and

(3) reasonable effort has been made to place the child for adoption without using IVE­AAP and Medicaid benefits."

470 IAC 3­10­2 specifies:

"A child shall be considered to be a special needs child, under the Indiana adoption assistance program, if the child meets the following criteria:

(1) ... the parent or parents have signed or will sign a consent to adoption regarding the child or that parental rights have been or will be terminated by a court in accordance with IC 31­6­5.

(2) One (1) of the following: ...

(E) The child has a medical condition or physical, mental, or emotional handicap as determined by a physician licensed to practice in Indiana or another state or territory. This problem or handicap must exist at the time of the interlocutory decree or when the adoption petition is filed. ..."

Section 804.11 of the Indiana Children and Family Services Manual:

"A judicial determination must be made to the effect that a child's continuation in the child's own home would be contrary to the welfare of the child. This finding must be documented in a written court order. If an otherwise eligible child is voluntarily relinquished to a non­profit, private, licensed child placing agency, a judicial determination that the child cannot or should not be returned to the child's parents must be made in a court proceeding. Such proceeding must be initiated within six (6) months of the removal of the child from the home of the parent(s) relinquishing the child. The 'reasonable efforts' determination concerning placement prevention is not required in this specific situation."

Section 804.13 of the Indiana Children and Family Services Manual:

"Reasonable but unsuccessful efforts must be made to place the child in an appropriate adoptive home without providing IVE­AAP.

Policy Interpretation Questionnaire (PIQ) dated May 23, 1989:

"A child cannot be considered a child with special needs unless the State has first determined that the child cannot or should not be returned to the home of his parents (section 473(c)(1). ... The State agency may verify this condition through a court­ordered termination of parental rights, the existence of a petition for termination of parental rights, a signed relinquishment by the parents ..."

Section 804.12 of the Indiana Children and Family Services Manual:

"The child must have one (1) or more specific factors or conditions which preclude placement in an appropriate adoptive home without the use of IV-E­AAP payments, Medicaid, or non­recurring adoption expense reimbursement. The specific factors and conditions include needs related to ethnic background, age, membership in a minority or sibling group, or the presence of medical conditions or physical, mental, or emotional handicaps."

Section 810.2 of the Indiana Children and Family Services Manual:

"Under Title IV-E of the Social Security Act, AAP payments are permitted on behalf of a child who meets the AFDC, SSI, or IV-E­FC eligibility requirements and is a special needs child. ..."

Section 804.2 of the Indiana Children and Family Services Manual provides that to be eligible for IV-E­AAP, a child must be eligible for Assistance to Families with Dependent Children (AFDC)/IV-E­FC initially when the child is removed from the home of the parent or relative and also at the time the adoption petition is filed, or the child must meet the requirements of the SSI program prior to finalization of the child's adoption.

Section 804.21 of the Indiana Children and Family Services Manual: "AFDC Eligibility"

At the time of the initiation of adoption proceedings:, when the adoption petition is filed, AFDC eligibility must be determined at two (2) points. Those are:

(1) initially when the child was removed from the child's home; and

(2) currently when the adoption petition is filed.

If the child was not an AFDC recipient, it must be determined if the child would have been eligible in or for the month when the child was removed from the home had application been made. The AFDC policies in place at the time of removal must be applied. ...

In the instance of a child for whom AFDC or IV-E­FC eligibility has never been determined, ... It will be necessary to base such a determination upon the situation which existed in the child's home at the time of removal. ..."

Policy Interpretation Questionnaire (PIQ) dated December 17, 1987:

"If the State does not have the responsibility for the placement and care of the otherwise child, the child may be eligible for title IV­E adoption assistance under any of the following circumstances:

(1) At the time the adoption petition is filed, the child is eligible for AFDC while living with a specified relative (section 473(a)(2)(A)(i);

(2) The child meets the eligibility requirements for the SSI program prior to the finalization of the adoption (section 473(a)(2)(A)(ii); or

(3) The AFDC­eligible child is placed in foster care through a voluntary placement agreement (or relinquishment) with a private, non-profit agency (no title IV-E payment is made) and a judicial determination is subsequently made (following an initiation of court proceedings within six months of removal of the child from the home of a relative) to the effect that continuation in the home would be contrary to the welfare of the child. This action would satisfy the requirements in sections 473(a)(2)(A)(i) and 473(a)(2)(B)(ii)(II) and the child would be considered judicially removed.

In any of the­above circumstances, the adoption assistance agreement must be negotiated between the prospective adoptive parents and the State Title IV­E agency, with the involvement of other relevant agencies, as appropriate (section 475(3)).

Policy Interpretation Questionnaire (PIQ) dated December 17, 1987:

"Sections 473(a)(1), (2) and (3) of the Act (Social Security Act) clearly indicate that eligibility for adoption assistance is related­to the child and not the parent; therefore, the negotiation shall focus on the needs of the child."

Policy Interpretation Questionnaire (PIQ) dated August 6, 1991:

"... If the State's foster care rate structure includes level of care supplements for certain foster children in its care, and such a child is placed in an adoptive home, the adoption assistance agreement may be negotiated up to the maximum amount the child would have received in the foster home."

470 IAC 3­10­3 (c):

"If the child is placed out­of­state in an adoptive home by a licensed child placing agency, the foster home care per diem established by the county where the placing agency is located shall be used."

Pursuant to 42 U.S.C 673 and 470 IAC 3­10­1, the State, through the County Office of Family and Children, and the adoptive parents must enter into an Adoption Assistance agreement for the adoptive parents to receive benefits under the Adoption Assistance Program.

45 CFR 205.10­(a) State plan requirements. A State plan under title I, IV­A, X, XIV, or XVI(AABD) of the Social Security Act shall provide for a system of hearings under which ...

(18) When the hearing decision is favorable to the claimant, or when the agency decides in favor of the claimant prior to the hearing, the agency shall promptly make corrective payments retroactively to the date the incorrect action was taken."

Policy Interpretation Questionnaire (PIQ) dated June 25, 1992:

"If a State chooses to pay adoption assistance retroactively from the earliest date of the child's eligibility in accordance with Federal and State statutes, regulations and policies, the State may claim Federal financial participation for this expenditure."

Title IV­E of the Social Security Act Sec. 471. r 42 U.S.C. 671] stipulates states shall provide health insurance coverage for any child who has been determined to be a child with special needs.

CONCLUSIONS OF LAW

The Administrative Law Judge has carefully reviewed the testimony presented at the hearing, all evidence, Federal/State regulations, and policy transmittals in regard to this matter and, based upon the additional evidence presented at the reconvened hearing, hereby concludes:

1) The evidence is not clear that Catholic Charities learned of Zachary's medical disorders prior to the finalization of his adoption as its aforementioned letters referencing his congenital tracheal disorder were written three (3) and five (5) months after the finalization of adoption; however, the evidence is clear that Crossroads knew of Zachary's medical problems long before finalization of his adoption.

2) Nevertheless, the evidence from Catholic Charities conclusively establishes it failed to inform the Reisners of ongoing adoption subsidies through the Adoption Assistance Program. Thus, the Reisners, being unaware of the Adoption Assistance Program, were prevented from applying for ongoing adoption subsidies.

3) The fact Zachary's medical disorders were existent at the time of adoptive placement with the Reisners, but the Reisners, being unaware of ongoing adoption subsidies through the Adoption Assistance Program, were prevented from applying for such subsidies, constitutes a case of extenuating circumstances.

4) Based on the following factors, Zachary would have met each of the IV­E­AAP "special needs" eligibility criteria had his medical problems been recognized prior to adoption:

a) Zachary, who was voluntarily relinquished to a non­profit, private, licensed child placing agency, would have met the "special needs" requirement that he should not have been returned to the home of his birth parents by virtue of the statement in the Petition for Adoption that: "It is in the best interests of said Child that it be adopted by Petitioners."

b) The additional "special needs" requirement, that a judicial determination must be initiated within six (6) months of a child's removal from the home of the parent(s) relinquishing the child, would have been met as Zachary was placed with the Reisners on April 25, 199l.

d) In consideration of his multiple congenital medical problems requiring extensive medical intervention and home care, it is reasonable to conclude Zachary could not have been placed adoptively without IV­E­AAP benefits. Thus, he would have met the "special needs" requirement of a determination that he could not be placed adoptively without IV­E­AAP benefits because of a specific factor or condition.

e) Since Zachary was voluntarily relinquished to a non­profit, private, licensed child placing agency, the "reasonable efforts" determination concerning placement prevention is not required in this situation.

5) Zachary would have been categorically eligible for IV-E­AAP by meeting the AFDC eligibility requirements at the two (2) relevant points, initially when he was removed from his mother and when the adoption petition was filed, as the documentary evidence and testimony establish his birthmother and his sibling were receiving AFDC at the time of his birth through finalization of his adoption.

6) Thus, Zachary would have met the IV-E­AAP criteria in the two (2) general areas of eligibility, special needs and categorical requirements, had the Reisners been timely apprised of the availability of ongoing adoption subsidies and had made application for such benefits, and had an adoption assistance agreement been made between them and the County, and signed, prior to the finalization of Zachary's adoption.

7) Since Catholic Charities, the placing agency, is located in St. Joseph County, Indiana, the foster care per diem used by such county must be used to determine Zachary's ongoing adoption­subsidy. ­

8) Given Zachary's multiple disorders, a special needs per diem is justified in his situation.

9) In accordance with 42 USC 673 and 470 IAC 3­lO­l, the County and the Reisners must negotiate between themselves the specific amount of Zachary's ongoing adoption subsidy, which amount shall also include a special needs per diem.

10) Zachary, however, is not entitled to the highest therapeutic adoption subsidy available in St. Joseph County, as requested by the Reisners. While it is recognized he has multiple medical needs, his situation is clearly not analogous to a child who is ventilator dependent or quadriplegic, which cases would qualify for the highest therapeutic adoption subsidy in the County.

11) Thus, Zachary's adoption subsidy should be set at a rate commensurate with the foster care rate of other children in St. Joseph County requiring a similar level of care.

12) 45 CFR 205.10 (a) cited by the Reisners as a basis upon which to award an adoption subsidy retroactively to the date of Zachary's placement in their home does not apply in this case because the provisions of such Federal Regulation do not pertain to Title IV­E which governs the Adoption Assistance Program.

13) The decision in the Arizona appeal case cited by the Reisners' advocate relied on the Arizona Administrative Code which allows for the implementation of decisions favorable to the appellant to be made retroactively to the date of the action being appealed; however, 470 IAC 3­10­1 and 470 IAC 1­4­3 et seq of the Indiana Administrative Code, which rules govern Adoption Assistance Program appeal hearings in Indiana, do not contain any provision for such retroactive payments.

14) Policy Interpretation Questionnaire (PIQ) dated June 25, 1992 stipulates States have the option to choose to pay adoption assistance retroactively to the earliest date of the child's eligibility.

15) Based on the above described extenuating circumstances which occurred in this case, payment of a retroactive adoption subsidy is justified in Zachary's case. Again, in accordance with 42 USC 673 and 470 IAC 3­10­1, the County and the Reisners must negotiate between themselves the specific amount of the retroactive adoption subsidy payment.

16) Pursuant to Title IV­E of the Social Security Act Sec. 471.[42 U.S.C. 67l], Zachary qualifies for Medicaid benefits because he is a child with special needs who, without medical assistance, would not have been placed with adoptive parents.

17) Based on the above described extenuating circumstances, retroactive payment of Zachary's allowable medical expenses under the Medicaid Program is warranted. Such payment, however, shall not include the cost of any insurance premiums, as such item is not covered under the Medicaid Program.

18)The correct cites under which the hearing was scheduled and heard are 470 IAC 3­10­1 et seq. and 470 IAC 1­4­3 et seq. In view of the plethora of documentary evidence and testimony given, plus the fact the Reisners obtained the assistance and services of two (2) adoption advocates in preparation for, and for the purpose of the actual hearing, the Administrative Law Judge finds they were not harmed by the incorrect legal cites referenced in the notice of hearing.

DECISION

Based upon the Findings of Fact, the Administrative Law Judge does not sustain the St. Joseph County Office of Family and Children in the denial of the Application for Adoption Assistance filed by Mr. & Mrs. Reisner on March 28, l999 and remands this matter to the County for further action consistent with this decision.

Tina Assimo

Administrative Law Judge