IN COURT OF APPEALS
State of Minnesota,
Department of Human Services,
Hennepin County District Court
File No. WA 04-011812
Corey L. Gordon, Shapiro Gordon LLC, 1660 Highway 100 South,
Mike Hatch, Attorney General, Robin Christopher Vue-Benson,
Erika Schneller Sullivan, Assistant Attorneys General, 900 Bremer Tower,
Considered and decided by Minge, Presiding Judge; Lansing, Judge; and Klaphake, Judge.
2. A person’s right to religious freedom
under the United States Constitution and the Minnesota Constitution does not
require that the Minnesota Medical Assistance program pay for habilitation
services outside the
3. The state’s refusal to pay for
habilitation services for a
challenges the decision of respondent Minnesota Department of Human Services (DHS)
denying Medical Assistance coverage for habilitation services in
Appellant Shaina Shagalow is a young Jewish Orthodox woman who has been diagnosed with mild mental retardation. She also has a developmental cognitive disorder and attention deficit hyperactivity disorder. Appellant reads at a sixth-grade level and requires assistance with grooming and similar everyday tasks. Appellant is dependent on others to make legal and medical decisions, and her parents are her court-appointed legal guardians.
attended a private Jewish Orthodox school for girls from the fourth grade
through high school. She lived at home
while she attended school. As high
school graduation approached, her family began searching for habilitation
programs for young adults that were also compatible with her Jewish Orthodox
faith. Habilitation services assist
persons to develop skills to live in society.
Minn. R. 9525.1800, subp. 13a (2006).
Appellant’s family knew that no day program consistent with appellant’s
Orthodox faith is available in
requested that the Hennepin County Children, Family, and Adult Services
Department (county) provide financial support for habilitation services at
Darkaynu as a part of
I. Did DHS err in refusing to pay for habilitation services at Darkaynu for appellant?
II. Does DHS’s refusal to pay for habilitation services for appellant at Darkaynu violate her right to religious freedom secured by the United States Constitution and the Minnesota Constitution?
III. Does DHS’s refusal to pay for habilitation services for appellant at Darkaynu violate the Americans with Disabilities Act?
appeal from the district court’s appellate review of an administrative agency’s
decision, this court does not defer to the district court’s review, but instead
independently examines the agency’s record and determines the propriety of the
agency’s decision.” Johnson v.
(a) in violation of constitutional provisions; or
(b) in excess of the statutory authority or jurisdiction of the agency; or
(c) made upon unlawful procedure; or
(d) affected by other error of law; or
(e) unsupported by substantial evidence in view of the entire record as submitted; or
(f) arbitrary or capricious.
MEDICAL ASSISTANCE COVERAGE
first issue is whether DHS’s decision was improper. Appellant challenges the conclusion of law
that Medical Assistance funds may not be used to pay for services provided
outside of the
parties concede from the outset that there is no federal or state statute or
regulation that explicitly prohibits Medical Assistance from paying for services
provided outside of the country. Likewise,
A. Medical Assistance Habilitation Services and the Waiver
requests benefits through the Consumer-Directed Community Support (CDCS)
Appellant points out that
Recipients or their representative hire, fire, manage and direct their support workers. . . .
Recipients or their representatives have control over the goods and services to be provided through developing the community support plan, selecting vendors, verifying that the service was provided, evaluating the provision of the service, and managing the CDCS budget. . . .
. . . .
The recipient or their representative will direct the development and revision of their community support plan and delivery of the CDCS services.
. . . .
The support plan will also specify provider qualification and training requirements, who is responsible to assure that the qualification and training requirements are met, and whether or not a criminal background study will be required for each service.
State of Minnesota, Renewal of the Home and Community-Based Service Waiver for People With Mental Retardation or Related Conditions (MR/RC), Appendix B-1, 37-39 (Jan. 1, 2003) [hereinafter MR/RC Waiver].
Appellant asserts that the control granted to recipients under the waiver gives the recipient broad discretion to select service providers and that the primary monitor of quality assurance, as well as the health and safety of the services provided, is the recipient, not DHS or the county. We acknowledge that the flexibility of the waiver supports appellant’s claim that the county has the discretion to design a program to accommodate her legitimate religious claims. Appellant in effect asserts that in her situation, failure to accommodate her claims is an abuse of discretion or arbitrary and capricious.
flexible, the CDCS waiver program includes several safeguards to ensure service
providers meet health and safety requirements and comply with applicable licensing
statutes. In its administration of the Medical Assistance
waiver, the state must demonstrate that it will employ necessary safeguards to
protect the health and safety of the beneficiaries, as well as the financial
integrity of the program. 42 C.F.R. § 441.302(a), (b) (2005).
licensing and monitoring responsibilities are not limited to services provided
B. Out-of-State Services
nature of DHS’s authority to pay for services in other states is also relevant
to our analysis of appellant’s claims for coverage of services outside the
(b) Payment for services. A State plan must provide that the State will pay for services furnished in another State to the same extent that it would pay for services furnished within its boundaries if the services are furnished to a recipient who is a resident of the State, and any of the following conditions is met:
(1) Medical services are needed because of a medical emergency;
(2) Medical services are needed and the recipient’s health would be endangered if he were required to travel to his State of residence;
(3) The State determines, on the basis of medical advice, that the needed medical services, or necessary supplementary resources, are more readily available in the other State;
(4) It is general practice for recipients in a particular locality to use medical resources in another State.
42 C.F.R. § 431.52(b) (2005). Thus, the federal regulation expressly
requires Medicaid payments to out-of-state providers in limited
circumstances. Arguably, the
interpretive canon expressio unius est
exclusio alterius applies; by expressly providing for out-of-state payments
the regulation thereby impliedly excludes payment to out-of-country service
providers. See, e.g., Cairl v. City of St. Paul, 268 N.W.2d 908, 912-13 (
C. Olmstead Amendments
Also relevant to our decision are the so-called Olmstead Amendments. These are policy changes implemented by CMS that affect the way in which states use Medicaid funds for disabled persons. CMS communicated these changes through a series of letters. The language addressing out-of-state services provides:
[A]ny standards applicable to the provision of the service in the State in which the service is furnished must be met, as well as those standards set forth in the approved waiver. If one State were to pay for a service furnished in another, the provider must be qualified under the standards in the waiver, and the service must also meet any applicable requirements in the State in which it is provided.
Letter from CMS to State Medicaid
Directors, Olmstead Update No: 3,
Attachment 3-e (July 25, 2000), available
at http://www.cms.hhs.gov/smdl/downloads/smd072500b.pdf. The same directive continues, “[t]he State
operating the waiver remains responsible for the assurance of the health and
welfare of the beneficiary . . . .”
CMS policy changes are relevant to appellant’s request for two reasons. First, by only addressing services furnished
in other states, the Olmstead Amendments imply that the waiver program was not
intended to fund out-of-country services.
Second, the policy reflects the host state’s (
is the federal insurance based health care program that is also administered by
CMS and is a companion program to Medicaid.
Although federal law governing Medicare does not bind
of federal requirements,
previously noted, the flexibility allowed under the Medical Assistance waiver
agreement gives DHS discretion to approve appellant’s provider. However, DHS’s discretion is not without
limit. The waiver does not vest
appellant with the authority to approve her own service plan. That is the role of the county and ultimately,
DHS. Furthermore, when one views the
waiver in the context of the Medicaid program and the various federal and state
laws, regulations, and policy directives, it is questionable whether DHS is
authorized to pay for services at a distant facility in
next issue is whether refusal by DHS to pay for habilitation services for
appellant at Darkaynu violates appellant’s right to religious freedom under the
United States Constitution. The First
Amendment provides, in part, that “Congress shall make no law respecting an
establishment of religion, or prohibiting the free exercise thereof . . . .”
U.S. Const. amend. I. The
religion clauses apply to the states by incorporation into the Due Process
Clause of the Fourteenth Amendment. Cantwell v.
cases interpreting the religion clauses establish that neutral laws of general
applicability do not run afoul of the First Amendment, even if they
incidentally burden an individual’s religious conduct. Employment
Div., Dep’t of Human Res. of
challenges DHS’s refusal to pay for a specific habilitation program. Because of the discretion inherent in DHS’s
decision, appellant argues that we should analyze this case under the framework
established in the unemployment compensation line of cases represented by Sherbert v. Verner, 374 U.S. 398, 83 S.
Ct. 1790 (1963). In those cases,
“developed in a context that lent itself to individualized governmental
assessment of the reasons for the relevant conduct,” the Court applied strict
scrutiny and struck down neutral and generally applicable unemployment
compensation rules that conditioned benefits on an applicant’s willingness to
work on Saturdays. Smith, 494
recognize that the strict scrutiny analysis in the unemployment line of cases
was not expressly overruled by Smith,
and that federal circuit courts have used an individualized assessment approach
as an exception to Smith. See,
e.g., Axson-Flynn v. Johnson, 356 F.3d 1277, 1297-99 (10th Cir. 2004); Swanson v. Guthrie Indep. Sch. Dist. No. 1-L,
135 F.3d 694 (10th Cir. 1998). We do not
disagree with such applications of an individual assessment, but we decline
appellant’s invitation to extend it to her situation. See Smith,
Here, in accordance with Smith, DHS’s decision was religiously neutral. DHS’s action was not motivated by a desire to harm, restrict, or burden appellant’s exercise of her religious faith. The decision was neither related to nor did it proscribe appellant’s practice of her Orthodox Jewish faith. Rather, the basis for DHS’s decision was to permit effective monitoring of the quality, health, and financial integrity of waiver services, irrespective of appellant’s exercise of religion. This rationale is not a pretext to conceal religious discrimination or religious animus. In fact, appellant’s alternative CDCS budget was fully approved.
The record on appeal is not developed with respect to the general applicability of DHS’s decision. Appellant does not claim that the county or DHS has approved similar out-of-country requests for members of any other religious group or for anyone regardless of religion. Without more evidence, we cannot conclude that DHS’s decision was either an under- or over-inclusive means to advance its interest in effectively monitoring the provision of waiver services.
We conclude that DHS’s decision was neutral and generally applicable and does not violate the United States Constitution.
B. Minnesota Constitution
The next issue is whether DHS’s decision violated appellant’s right to religious freedom guaranteed by the Minnesota Constitution. The Freedom of Conscience Clause of the Minnesota Constitution states:
The right of every man to worship God according to the dictates of his own conscience shall never be infringed; nor shall any man be compelled to attend, erect or support any place of worship, or to maintain any religious or ecclesiastical ministry, against his consent; nor shall any control of or interference with the rights of conscience be permitted, or any preference be given by law to any religious establishment or mode of worship; but the liberty of conscience hereby secured shall not be so construed as to excuse acts of licentiousness or justify practices inconsistent with the peace or safety of the state . . . .
have said that “[t]he language of the Minnesota Constitution regarding religion
is of a distinctively stronger character than the federal counterpart and
precludes even an infringement on or an interference with religious
freedom.” Olson v. First Church of Nazarene, 661 N.W.2d 254, 260-61 (Minn.
App. 2003) (quotation omitted). To
determine whether government action violates an individual’s right to religious
freedom we ask: (1) whether the belief
is sincerely held; (2) whether the state action burdens the exercise of
religious beliefs; (3) whether the state interest is overriding or compelling;
and (4) whether the state uses the least restrictive means. Hill-Murray
Fed’n of Teachers v. Hill-Murray High Sch., 487 N.W.2d 857, 865 (1992); State v. Hershberger, 444 N.W.2d 282,
285, 289 (
In this case, the sincerity of appellant’s religious belief is not disputed. But the second and fourth prongs of the test are disputed. Accordingly, we begin by determining whether DHS’s refusal to fund appellant’s request sufficiently burdens appellant’s free exercise of her religion. Several cases applying the test guide our determination.
Hershberger, the Minnesota Supreme
Court determined whether a state traffic law “requir[ing] slow-moving vehicles
to display a fluorescent . . . triangular sign” when moving on public highways
violated Amish petitioners’ rights to religious freedom. 444 N.W.2d at 284. The law at issue in Hershberger directly proscribed the petitioners’ protected religious
conduct. The court held that “[w]ithout
question,” application of the statute burdened the petitioners’ free exercise
by forcing them to choose between criminal sanctions and violating their
sincerely held religious beliefs.
Murphy v. Murphy, this court
evaluated a state child support policy that imputed income to a father who, as
part of his sincerely held religious belief, lived and worked exclusively in a
religious community. 574 N.W.2d 77, 79 (
in Hill-Murray, the supreme court
held that application of the Minnesota Labor Relations Act (MLRA) to
Hill-Murray, a parochial high school, did not violate the Minnesota
Constitution. 487 N.W.2d at 864-67. The court found no constitutional infirmity,
in part, because the “minimal interference” caused by application of the
statute did not “excessively burden [Hill-Murray’s] religious beliefs.”
In contrast to cases in which we have found a burden on free exercise, DHS’s action here does not force appellant to choose between criminal sanctions and her free exercise of religion. DHS’s decision does not penalize her by reducing her CDCS benefits; appellant has been approved for full CDCS benefits under her alternative plan. The decision does not prohibit her exercise of religion. DHS’s refusal to authorize funding for services provided in Israel does make appellant’s attendance at Darkaynu more expensive, but does not directly infringe on her religious autonomy or require conduct inconsistent with her religious beliefs. The indirect effect on religion is not motivated by an intent to affect religious practices and is not unique to religion.
To the extent DHS’s action is a burden on appellant’s free exercise of religion, DHS claims that its action is justified by a compelling government interest and is narrowly tailored to meet that interest. The state has a legitimate and substantial interest in monitoring social service programs to ensure the health and safety of vulnerable program recipients. In other Minnesota cases we have recognized that the government has a compelling interest in ensuring safety on public roadways, State v. Hershberger, 462 N.W.2d 393, 398 (Minn. 1990), “assuring parents provide primary support for their children,” Murphy, 574 N.W.2d at 82, “ensur[ing] the peace and safety of labor relations,” and safeguarding employees’ rights to collectively organize, Hill-Murray, 487 N.W.2d at 866-67. The state’s interest in protecting mentally or physically vulnerable persons is no less important and no less compelling. See Minn. Stat. § 626.557, subd. 1 (2004) (“The legislature declares that the public policy of this state is to protect adults who, because of physical or mental disability or dependency on institutional services, are particularly vulnerable to maltreatment . . . .”).
we consider the fourth prong of the test: whether the state is using the least
restrictive means to accomplish its objective.
DHS’s decision not to fund services in
judicial determination that as a matter of constitutional law DHS is required
to undertake the individualized program appellant urges would create untold
complexities. Others seeking benefits at
remote locations would claim discrimination if their requests were rejected. Of necessity, DHS would become involved with
evaluating the character of the parents, programs in distant parts of the
world, and ad hoc monitoring arrangements.
Stating appellant’s dramatic demand reveals its weakness: unless DHS
pays for enrollment in a faith-based program in
AMERICANS WITH DISABILITIES ACT
final issue is whether DHS’s decision violated Title II of the Americans with
Disabilities Act (ADA). Title II of the
Under Olmstead, this situation presents no
affirm the decision of the district court and hold that DHS did not err or
abuse its discretion and did not violate the
 The state’s recent addendum to its federally approved waiver program, which expressly prohibits funding for waiver services out-of-country and binds the agency’s future operation for all beneficiaries irrespective of religious practice, is further evidence of the decision’s neutrality. Amendment to MR/RC Waiver, 3 (effective Apr. 1, 2005).
 While appellant asserts the plan is inadequate, appellant developed an alternative plan for Medical Assistance support for services for the 2004-2005 year. The alternative plan includes payment for day and evening staff, an eight-week summer camp, music lessons, and adaptive sports lessons. The cost of the requested services is $27,623.20 and was approved by the county.
 See also Minn. Stat. § 363A.12, subd. 1 (2004).