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    Practice Tips: A Primer on Administrative Hearings

    Disputes with state agencies often require an administrative hearing before the disputes can be appealed to court. Because the hearing result can be critical to the final outcome of a case, this primer informs Wisconsin attorneys about the division of hearings and appeals and the administrative hearing process.

    Sean Maloney

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    Wisconsin Lawyer
    Vol. 76, No. 7, July 2003

    A Primer on Administrative Hearings

    Disputes with state agencies often require an administrative hearing before the disputes can be appealed to court. Because the hearing result can be critical to the final outcome of a case, this primer informs Wisconsin attorneys about the division of hearings and appeals and the administrative hearing process.

    by Sean P. Maloney

    When informal methods fail to resolve a dispute with a state government agency, the public, and probably most attorneys, think to turn to the courts. However, many disputes with state agencies cannot be brought to court unless a decision first is rendered through an administrative hearing.1 The Wisconsin Division of Hearings and Appeals (DHA or "the division") conducts administrative hearings for many state agencies,2 but the DHA is not well known to most attorneys. This article provides a general overview of the DHA and administrative hearings. It also addresses DHFS chapter 227 administrative hearings conducted by the division's Work and Family Services (WFS) unit.

    Administrative Hearings

    The executive branch of state government, not the judicial branch, conducts administrative hearings and makes the hearing decisions. Administrative hearings may concern government licensing or permits, government payments of various sorts, or government action or inaction that injures or threatens to injure a "substantial interest" of a person when certain other criteria are satisfied.3 Specific examples are hearings concerning the recovery from medical providers of overpaid Medical Assistance benefits;4 orders suspending or revoking certificates, licenses, or permits for motor vehicle carriers;5 probation and parole revocation hearings;6 worker's compensation hearings;7 and unemployment compensation hearings.8 Wisconsin Statutes chapter 227 is the Administrative Procedure Act for the state of Wisconsin and governs many, but not all, administrative hearings. Specific types of hearings that chapter 227 does not govern include probation and parole revocation hearings, worker's compensation hearings, and unemployment compensation hearings.9

    The chapter 227 administrative hearing process is designed and intended to be accessible, inexpensive, and much less formal and time consuming than court proceedings. For instance, there is no filing fee for chapter 227 administrative hearings, no particular form or manner of pleading is required, most formal rules of evidence do not apply, and the conduct of the hearing itself is not bound by rigid rules of procedure.10

    Although chapter 227 administrative hearing decisions can be appealed to circuit court,11 the administrative hearing process itself is extremely important to the final outcome of a case for at least four reasons.

    1) As a practical matter, the administrative hearing decision is most often the de facto end of the case, because most administrative hearing decisions are not appealed to court.

    2) Even if the hearing decision is appealed to court, under chapter 227 the court's review of the matter is without a jury and is, with one exception, confined to the record created in the administrative hearing.12 An application may be made to the court for leave to present additional evidence, but it must be shown that the additional evidence is material and that there was good reason for failure to present the evidence in the administrative hearing. Even then, the court's remedy is limited to remanding the matter to the administrative hearing process for further fact finding.13

    3) The court cannot substitute its judgment for that of the government agency as to the weight of the evidence on any disputed finding of fact.14

    4) When reviewing an administrative hearing decision under chapter 227, the court will accord a certain level of deference to conclusions of law contained in the hearing decision. The court will first determine what agency the administrative decision belongs to. The level of deference granted will depend upon the agency's experience, technical competence, and specialized knowledge.15

    The Division of Hearings and Appeals

    Administrative hearings are conducted by, or for, numerous government agencies. Some agencies, such as the Public Service Commission,16 conduct their own hearings. In many instances, however, the DHA conducts the hearings for the agency. The DHA is neutral and independent. It is "attached" to the Department of Administration (DOA).17 This means that the DHA is a distinct unit of the DOA and that the DHA exercises its powers, duties, and functions, including rule making, regulation, and operational planning, independently of the head of the DOA. However, budgeting, program coordination, and related management functions are performed under the direction and supervision of the head of the DOA.18 DHA administrative hearings are conducted by, and written decisions are made by, administrative law judges (ALJs) employed by the division.19 ALJs perform their functions in an impartial manner.20 The division administrator, as well as all division ALJs, enjoy civil service protection.21 All division ALJs are members of the State Bar of Wisconsin and most, but not all, work full-time for the DHA. The DHA has three offices, in Madison, Milwaukee, and Eau Claire. Most of the division's ALJs are located in the Madison office.

    The DHA conducts many different types of administrative hearings for numerous agencies. In 2002, agencies referred more than 13,000 cases to the division for hearing. The vast majority were referred by just three agencies: the Department of Corrections (DOC), the Department of Health and Family Services (DHFS), and the Department of Workforce Development (DWD). Other agencies for which DHA conducts hearings include: the DOA itself, the Department of Public Instruction (DPI),22 the Department of Transportation (DOT), the Department of Natural Resources (DNR),23 Employee Trust Funds (ETF), the Department of Justice (DOJ), and the State Historical Society (SHS).24 The reorganization of state government prompted by the recent budget deficit may result in the division assuming responsibility for additional hearings from other state agencies. However, the division does not conduct worker's compensation hearings or unemployment compensation hearings.

    The DHA is divided into three units: Corrections; Work and Family Services (WFS); and General Government (Gen Gov). The Corrections unit conducts probation and parole revocation hearings for the DOC. The WFS unit conducts hearings for the DHFS, DWD, and DOA. The Gen Gov unit conducts hearings for the DOA, DPI, DOT, ETF, DNR, DOJ, and SHS. The accompanying chart shows the agencies that refer cases to the DHA, the number of cases referred, the types of hearings involved, and the DHA unit responsible for each hearing type. The division's Web site provides general DHA procedural and other information.

    Although chapter 227 does not govern hearings conducted by the DHA for the DOC,25 it does govern most other hearings conducted by the division, including hearings for the DHFS, DWD, DOA, DOT, and DNR.26 The second part of this article concerns only hearings conducted by the division's WFS unit. These hearings are governed by chapter 227 and are of two types: categorical hearings and miscellaneous hearings.

    WFS Unit Categorical Hearings

    The vast majority of the chapter 227 administrative hearings conducted each year by the DHA concern eligibility and other issues relating to specific Medical Assistance (MA) or Food Stamp (FS) recipients. The division's WFS unit conducts these hearings for the DHFS and DWD. The issue typically is the correctness of a reduction, discontinuance, or denial of MA or FS benefits for a particular person.27 These are known as "categorical hearings," because they involve categorical entitlement public benefit programs; that is, public benefits to which persons are legally entitled if they fall into certain categories based on criteria such as income and assets. Categorical hearings also are referred to as "fair hearings."28 In addition, the WFS unit provides a quasi-appellate type of review for fact-finding decisions in the Wisconsin Works (W2) program.29 Wisconsin Administrative Code chapter HA 3 and Wis. Stat. chapter 227 govern the proceedings in categorical hearings. Categorical hearings also are subject to the procedural requirements of federal law.30

    Each WFS unit ALJ typically schedules scores of categorical hearings every month (although some of the hearings will be cancelled or rescheduled).31 In most of these hearings neither party (the government agency or the public benefit recipient) is represented by an attorney. Typically, the only persons attending the hearing are the public aid recipient, a nonattorney representative of the local county human or social services department that administers the program for the state, and the ALJ. These hearings are held at the local county human or social service agency - usually located in the county seat of the county in which the person who requests the hearing lives.32 The hearings usually are brief - 20 to 60 minutes - and almost never include any prehearing or posthearing activities. Most categorical hearing decisions are issued as final decisions. Some are issued as proposed decisions.33

    WFS Unit Miscellaneous Hearings

    If categorical hearings are excluded, most DHA chapter 227 administrative hearings are conducted for the DHFS. These hearings are known within the division as "miscellaneous" hearings. The WFS unit is responsible for conducting DHFS miscellaneous hearings (with the exception of some nursing home issues, which go to the Gen Gov unit). Miscellaneous cases make up only a small part of the caseload of each WFS unit ALJ - most of their time is spent on categorical hearings.

    Miscellaneous hearings often involve attorneys and prehearing and posthearing activities (such as telephone conferences and motions). Prehearing or posthearing legal briefs may be filed. Miscellaneous hearings can last from one hour to several days. Examples of miscellaneous hearings conducted for the DHFS include the recovery from medical providers of allegedly overpaid MA benefits;34 MA payment withholding;35 actions such as license denials, license revocations, statements of deficiency, and forfeitures affecting various types of facilities, including day care centers,36 community- based residential facilities,37 and hospices;38 Wisconsin Caregiver Misconduct Registry appeals;39 and Women, Infants, and Children (WIC) program appeals.40 Wisconsin Administrative Code chapter HA 1 and Wis. Stat. chapter 227 govern DHFS miscellaneous hearings.41 DHFS miscellaneous hearings will be addressed in detail in a future Wisconsin Lawyer article.

    Conclusion

    Many disputes with state government agencies are subject to the administrative hearing process before they can be appealed to court. The DHA conducts the administrative hearing process for many state agencies. The result of the administrative hearing is extremely important to the final outcome of a case for many reasons. Thus, Wisconsin attorneys should have at least a general familiarity with the DHA and the administrative hearing process.

    Sean P. Maloney, Stanford 1987, has been an administrative law judge for the State of Wisconsin since 1995. He is admitted to practice law in California, Hawaii, Washington, D.C., Wisconsin, and various federal courts. He holds an MA in philosophy from U.W.-Madison.

    Endnotes

    1Wis. Stat. § 227.52 (2001-02). All citations to the Wisconsin Statutes are to the 2001-02 edition. All citations to chapter HA 1 of the Wisconsin Administrative Code are to the version published December 2002. All citations to chapter HA 2 and chapter HA 3 of the Wisconsin Administrative Code are to the versions published September 2001.

    2Wis. Stat. §§ 227.43, 302.335, 973.10; Wis. Admin. Code chapters HA 1, 2, 3.

    3Wis. Stat. §§ 227.01(3), .42.

    4Wis. Stat. § 49.45(2)(a)10a; Wis. Admin. Code § HFS 108.02(9)(e) (February 2002). MA is the Medicaid program, funded partly by federal money, as it has been implemented in Wisconsin. See Wis. Stat. §§ 49.43(8), .45(1); Wis. Admin. Code § HFS 101.03(95) (February 2002).

    5Wis. Stat. § 194.46.

    6Wis. Stat. §§ 302.335, 973.10.

    7Wis. Stat. § 102.17.

    8Wis. Stat. § 108.09.

    9Wis. Stat. § 227.03.

    10Wis. Stat. §§ 227.44, .45, .46; Wis. Admin. Code §§ HA 1.12, 1.13.

    11Wis. Stat. § 227.52.

    12Wis. Stat. §§ 227.55, .57(1). The one exception is "in cases of alleged irregularities" in the administrative hearing. Wis. Stat. § 227.57(1).

    13Wis. Stat. § 227.56(1); State Public Intervenor v. DNR, 171 Wis. 2d 243, 490 N.W.2d 770 (Ct. App. 1992).

    14Wis. Stat. § 227.57(6).

    15Wis. Stat. § 227.57(10); Artac v. DHFS, 2000 WI App 88, 234 Wis. 2d 480, 610 N.W.2d 115; Roehl Transport v. Division of Hearings & Appeals, 231 Wis. 2d 452, 570 N.W.2d 864 (Ct. App. 1997).

    16Only certain sections of chapter 227 apply to administrative hearings conducted by the PSC. See Wis. Stat. ch. 196; Wis. Admin. Code ch. PSC 1, 2 (June 2002).

    17Wis. Stat. § 15.103.

    18Wis. Stat. § 15.03.

    19Wis. Stat. § 227.43(1), (2); Wis. Admin. Code §§ HA 1.02(1), 2.02(1), 3.02(1).

    20Wis. Stat. § 227.46(6).

    21Wis. Stat. § 15.103(1).

    22Wis. Stat. § 115.80(10). DHA conducts DPI hearings pursuant to a contract between DHA and DPI. Wis. Stat. § 227.43(1m).

    23For an article specifically concerning administrative hearings conducted by DHA for DNR, see Jeffrey D. Boldt, Administrative Review of DNR Decisions: A Guide to Hearings Before the Division of Hearings and Appeals, 66 Wis. Law. 22 (July 1993).

    24Wis. Stat. § 227.43; Wis. Admin. Code § HA 1.01(2).

    25DHA DOC hearings are subject to Wis. Admin. Code ch. HA 2.

    26For the most part, DPI hearings also are not governed by chapter 227. Wis. Stat. § 115.80(10).

    27Wis. Admin. Code § HA 3.03.

    28Wis. Admin. Code §§ HA 1.01(3), 3.02(8); 42 C.F.R. § 431.200 et. seq. (2002); 7 C.F.R. § 273.15 (2002).

    29Wis. Stat. § 49.152(2)(b), (c); Wis. Admin. Code § DWD 12.22(2)(b), (c) (January 2003); Wis. Admin. Code § HA 3.12.

    3042 C.F.R. § 431.200 et. seq. (2002); 7 C.F.R. § 273.15 (2002).

    31Wis. Admin. Code § HA 3.05(4)(b), (d); 7 C.F.R. § 273.15(c)(4), (j) (2002); 42 C.F.R. § 431.223 (2002).

    32Wis. Admin. Code § HA 3.06(1); 42 C.F.R. § 431.240(a)(1) (2002); 7 C.F.R. § 273.15(l) (2002).

    33Wis. Admin. Code § HA 3.09(9).

    3442 C.F.R. §§ 433.300-.322 (2002); Wis. Stat. § 49.45(2)(a)10.; Wis. Admin. Code § 108.02(9)(e) (February 2002).

    3542 C.F.R. § 455.23 (2002); Wis. Stat. § 49.45(2)(a)14.; Wis. Admin. Code §§ HFS 106.12, 108.09(d)1. (February 2002).

    36Wis. Stat. § 48.72; Wis. Admin. Code § HFS 45.08(6) (February 1999).

    37Wis. Stat. § 50.03(5g)(f); Wis. Admin. Code § HFS 83.07(13) (July 2001).

    38Wis. Stat. §§ 50.93(4), .98(4); Wis. Admin. Code § HFS 131.14(11) (August 2000).

    39Wis. Stat. § 146.40(4r); Wis. Admin. Code § HFS 13.05(7) (August 1999).

    407 C.F.R. § 246.18 (2002); Wis. Admin. Code § HFS 149.08 (July 1998).

    41Wis. Admin. Code § HA 1.01(2), (3).




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