Background
The North Dakota legislature created the Family Paid Caregiver Service Pilot Project through 2023 Senate Bill 2276, authorizing state-funded payments to legally responsible individuals providing “extraordinary care” to participants in Medicaid 1915(c) waivers. Matthew Ferderer applied in April 2024 on behalf of his three-year-old daughter E.F., who has complex chronic medical needs requiring a feeding tube, ongoing therapies, and full caregiver assistance for mobility, communication, and daily living activities.
The Department denied the application because E.F. scored only 17 points on the Department’s internal “Extraordinary Care Assessment,” falling below the 33-point threshold representing 50% of the maximum applicable points for a child her age. That assessment and its scoring rubric were developed by an internal committee of four Department employees and had never been formally promulgated as administrative rules. Department policy was to consider no information beyond the completed assessment — a fact acknowledged by the Department’s own family services administrator and confirmed by the administrative law judge, who found eligibility was determined “solely” by the score.
Ferderer appealed through the administrative process, but both the ALJ and the district court upheld the denial. He then appealed to the Supreme Court, arguing that the assessment and scoring rubric constituted “rules” under the Administrative Agencies Practice Act (AAPA), N.D.C.C. ch. 28-32, and were therefore invalid because they had not been formally promulgated.
The Court’s Holding
The North Dakota Supreme Court reversed and remanded, holding that the Department’s Extraordinary Care Assessment and scoring rubric are “rules” under N.D.C.C. § 28-32-01(12) — statements of general applicability implementing the Program — and were required to be formally promulgated through the AAPA’s rulemaking process. Because the Department failed to do so, the assessment and scoring rubric are ineffective and cannot support denial of Ferderer’s application. The Court relied heavily on its 1990 precedent in Mullins v. North Dakota Department of Human Services, which held that internal policies resulting in the inclusion or exclusion of program applicants must be adopted in accordance with the AAPA.
The Court rejected each statutory exemption the Department invoked. The assessment is not an exempt “form” under § 28-32-01(12)(g) because neither the enabling statute (N.D.C.C. § 50-24.1-47) nor the administrative code (§ 75-02-13-03) prescribes its substantive requirements — those statutes merely direct the Department to establish eligibility criteria, they do not establish them. The assessment is not an exempt internal management rule under § 28-32-01(12)(a) because it directly determines applicants’ eligibility and affects their substantive rights. And it is not an exempt investigative guideline under § 28-32-01(12)(b) because the Department conducts no actual investigation; eligibility is decided solely by the numerical score with no additional information considered.
The Court also rejected the Department’s argument that Ferderer’s challenge was untimely. His claim accrued when the Department applied the unpromulgated criteria to deny his application — not when the administrative code chapter first took effect. Importantly, the Court made clear that its holding does not require the Department to promulgate the assessment instrument itself, but it must formally adopt the substantive eligibility criteria — the “contents or substantive requirements” — evaluated in the assessment and applied through the scoring rubric.
Key Takeaways
- An agency assessment tool that serves as the sole determinant of program eligibility is a “rule” of general applicability under N.D.C.C. § 28-32-01(12) and must be formally promulgated through the AAPA — it cannot be developed and applied internally without public notice, comment, and legislative committee review.
- The form exemption under § 28-32-01(12)(g) requires that the form’s substantive requirements actually be prescribed by an existing statute or rule; a general legislative directive to “establish eligibility requirements” does not satisfy that standard.
- A challenge to unpromulgated eligibility criteria accrues when the agency applies those criteria adversely to the claimant, not when the underlying administrative code chapter took effect — aligning with the U.S. Supreme Court’s reasoning in Corner Post, Inc. v. Board of Governors (2024).
- Pilot programs are not exempt from AAPA rulemaking requirements; the legislature’s directive to manage the Program “in accordance with the adopted rules” and its silence on any AAPA exemption in 2023 SB 2276 confirm that standard rulemaking obligations apply.
- Agencies must ensure the substantive standards determining program eligibility — not merely the procedural mechanics of applying them — are codified in formally promulgated rules accessible to the public through the North Dakota Administrative Code.
Why It Matters
This decision reinforces that North Dakota agencies cannot shortcut the rulemaking process by embedding substantive eligibility requirements in internal assessment tools or scoring rubrics. The ruling exposes a vulnerability common across public-benefit administration: when agencies develop scoring instruments outside the formal rulemaking process, those instruments are vulnerable to invalidation upon challenge. Agencies that rely on unpromulgated criteria — even criteria applied consistently and in good faith — risk having benefit denials reversed and must restart the eligibility determination process under properly promulgated standards.
The decision also carries significant practical implications for benefit applicants. The Court emphasized that unpromulgated eligibility criteria deprive the public of notice, deny stakeholders the opportunity to comment during rulemaking, and allow agencies to alter eligibility standards arbitrarily and without accountability. By requiring that the substantive contents of eligibility assessments be formally adopted, the Court ensures that individuals seeking family caregiver benefits — and claimants in analogous programs — can rely on publicly available, legally binding standards rather than opaque internal scoring rubrics that may shift without warning or recourse.