Family Paid Caregiver Program Eligibility Cutoffs Must Be Promulgated as Administrative Rules

I. Introduction

Ferderer v. NDDHHS, 2026 ND 81, addresses whether the North Dakota Department of Health and Human Services (“Department”) may deny participation in the Family Paid Caregiver Program using an “Extraordinary Care Assessment” and scoring rubric that were not adopted through formal rulemaking under the Administrative Agencies Practice Act (“AAPA”), N.D.C.C. ch. 28-32.

The appellant, Matthew Ferderer, sought approval for payments under the Family Paid Caregiver Service Pilot Project (the “Project”) to support care he and his family provide to his child, E.F., who has complex medical needs. The Department denied the application because E.F.’s assessment score fell below an internally-set eligibility threshold (a “50% of maximum points” cutoff by age).

The key issues were:

  • Whether Ferderer’s challenge was timely in an adjudicative appeal.
  • Whether the assessment and its scoring rubric functioned as binding eligibility criteria of general applicability (i.e., “rules”) requiring formal promulgation.
  • Whether statutory/rule references to “extraordinary care” and “use an assessment” sufficiently prescribed the substantive requirements so the assessment could be treated as a non-rule “form” or internal guideline.

II. Summary of the Opinion

The Supreme Court of North Dakota reversed and remanded, holding that the Department improperly relied on eligibility criteria that should have been formally promulgated as an administrative rule. Although the Department had adopted N.D. Admin. Code ch. 75-02-13, the Court concluded that the assessment and scoring rubric—particularly the pass/fail scoring cutoff—were the operative eligibility standards and were not validly established through AAPA rulemaking.

The Court directed the district court to remand to the Department for further action consistent with the opinion.

A dissent would have affirmed, reasoning that eligibility criteria were already set out in duly promulgated rules and that the assessment was merely an implementation tool, with any concern best focused on the 50% cutoff rather than the instrument as a whole.

III. Analysis

A. Precedents Cited

1. Standards of review and issue preservation

  • Zent v. N.D. Dep't of Health & Hum. Servs., 2025 ND 50, and Jahner v. N.D. Dep't of Health & Hum. Servs., 2023 ND 71: The Court used these decisions to restate the limited posture of administrative appeals—deference on factfinding (“reasoning mind” standard) and de novo review of legal questions.
  • Allery v. Whitebull, 2022 ND 140, and Grove v. Dep't of Transp., 2020 ND 146: These supported the Court’s conclusion that only issues raised in the district court were preserved for appeal.

2. Timeliness and claim accrual in the administrative setting

  • Nw. Landowners Ass'n v. State, 2025 ND 147: Cited for the principle that a claim may accrue when the government acts under legal authority (and causes injury), not necessarily when the law or rule takes effect.
  • Corner Post, Inc. v. Bd. of Governors of Fed. Rsrv. Sys., 603 U.S. 799 (2024): Used by analogy to reinforce accrual-at-injury logic in administrative law; the Court applied this to reject the Department’s apparent “90-day after publication” argument as inapposite to an adjudicative appeal.

3. The core rulemaking principle: agencies cannot enforce unpromulgated eligibility standards

  • Mullins v. N.D. Dep't of Hum. Servs., 454 N.W.2d 732 (N.D. 1990): The centerpiece precedent. There, the Department relied on internal manual provisions (not adopted under the AAPA) to determine eligibility. The Ferderer majority treated the assessment and rubric as analogous: if an agency statement determines “the inclusion or exclusion” of applicants, it is a rule of general applicability requiring promulgation.
  • Morton v. Ruiz, 415 U.S. 199 (1974): Cited to underscore a foundational administrative-law value: benefits cannot be denied based on unpublished eligibility limitations. The case supported the majority’s emphasis on notice, transparency, and non-arbitrariness.
  • Emergency Med. Care Facilities, P.C. v. Div. of Tenncare, 671 S.W.3d 507 (Tenn. 2023); Webb v. D.C. Dep't of Hum. Servs., 618 A.2d 148 (D.C. 1992); Palozolo v. Dep't of Soc. Servs., 189 Mich. App. 530, 473 N.W.2d 765 (1991); Clark v. Pub. Welfare Div., 27 Or. App. 473, 556 P.2d 722 (1976): These out-of-state authorities reinforced the majority’s classification of eligibility-determining instruments as generally applicable policy statements that must be promulgated when they affect public rights.

4. When implementing instruments need not be promulgated: eligibility already fixed by statute/regulation

  • Brunner v. Ward County Social Services Board, 520 N.W.2d 228 (N.D. 1994): Used to illustrate that internal manual details are not rules when eligibility criteria are mandated elsewhere (in Brunner, federal statute/regulation drove the “lump-sum rule”).
  • Rennich ex rel. Rennich v. North Dakota Department of Human Services, 2008 ND 171: Similar principle in a Medicaid waiver context: where eligibility criteria are “amply set out” in federal regulations, the state need not promulgate interpretive instruments as rules.

The majority distinguished both Brunner and Rennich on the ground that, unlike those regimes, the Department could not identify any statute or rule that actually prescribed the substantive eligibility cutoff embedded in the assessment/rubric.

5. Prior North Dakota “unpromulgated standards are invalid” cases

  • Huber v. Jahner, 460 N.W.2d 717 (N.D. Ct. App. 1990), and Illies v. Illies, 462 N.W.2d 878 (N.D. 1990): Cited as examples where guidelines with binding public effect (child support schedules) constituted substantive rules requiring promulgation.
  • Johnson v. N.D. Workers Comp. Bureau, 428 N.W.2d 514 (N.D. 1988), and Little v. Spaeth, 394 N.W.2d 700 (N.D. 1986): Reinforced the remedy: agency “substantive” directives and personnel policies lacking AAPA compliance are ineffective and not binding.
  • Amerada Hess Corp. v. Conrad, 410 N.W.2d 124 (N.D. 1987): Used (and invoked by the dissent) for the limiting idea that agencies need not promulgate detailed rules for every conceivable situation. The majority accepted the general principle but held it does not excuse failure to promulgate the decisive eligibility criteria used to include or exclude applicants.

B. Legal Reasoning

1. Timeliness: adjudicative appeal vs. rulemaking appeal

The Department suggested the challenge was untimely because rules became effective April 1, 2024 and more than 90 days had passed—implicitly invoking N.D.C.C. § 28-32-42(2). The Court rejected this framing because Ferderer appealed an order in an adjudicative proceeding, governed by N.D.C.C. § 28-32-42(1) (30 days after notice of the order), and his appeal was timely.

Crucially, the Court treated Ferderer’s complaint as arising when the Department applied the assessment/rubric to deny benefits—an injury-based accrual principle supported by Nw. Landowners Ass'n v. State and analogized to Corner Post, Inc. v. Bd. of Governors of Fed. Rsrv. Sys..

2. Classification: the assessment and rubric as “rules” of general applicability

The Court’s classification turned on function, not label:

  • The Department considered no “additional information” beyond the assessment.
  • The ALJ found the extraordinary-care determination was “solely based” on the calculated score.
  • A fixed, age-adjusted maximum-point scheme and a 50% threshold produced a pass/fail eligibility outcome.

Because these standards determined eligibility for a class of applicants, they were “statements of general applicability” that “implement or prescribe law or policy,” fitting the AAPA definition of “rule,” N.D.C.C. § 28-32-01(12). Under Mullins v. N.D. Dep't of Hum. Servs., the Court held they could not be enforced unless promulgated in substantial compliance with the AAPA.

3. Rejection of the Department’s claimed exemptions

a. “Form” exemption (N.D.C.C. § 28-32-01(12)(g))

The Department argued the assessment is exempt as a form whose substantive requirements are prescribed by statute/rule. The Court rejected this because (i) the assessment and rubric were not treated as mere “forms” and (ii) neither N.D.C.C. § 50-24.1-47 nor N.D. Admin. Code § 75-02-13-03 actually prescribed the substantive requirements—especially the scoring and 50% threshold.

The majority’s distinction from Rennich ex rel. Rennich v. North Dakota Department of Human Services and Brunner v. Ward County Social Services Board is central: those cases involved implementing tools where eligibility criteria were already fixed by higher-order law (federal statutes/regulations). Here, the decisive criterion (the score cutoff) was not.

b. Internal management exemption (N.D.C.C. § 28-32-01(12)(a))

The Court held the assessment was not “only the internal management” of the Department because it directly affected substantive rights—i.e., participation and payment eligibility.

c. Investigatory guideline exemption (N.D.C.C. § 28-32-01(12)(b))

The Court rejected the claim that the assessment was merely a staff guideline for investigations whose disclosure would facilitate law evasion. The record showed there was no discretionary investigation; eligibility turned on the applicant-completed assessment and a mechanical scoring comparison. Because the assessment functioned as a binding eligibility determinant, it did not qualify for the investigatory-guideline carveout.

4. The remedy and the line the Court attempted to draw

The Court emphasized it was not necessarily requiring promulgation of the literal questionnaire and rubric as a document; rather, the Department must adopt the “contents or substantive requirements” of the eligibility criteria evaluated and applied. But the practical force of the decision is that where an agency uses a scoring instrument and cutoff as the dispositive eligibility standard, the underlying criteria and cutoff must be placed into properly promulgated rules (or otherwise prescribed by statute/rule).

C. Impact

1. Immediate impact on the Family Paid Caregiver Program

  • The Department may not deny applications based solely on the unpromulgated scoring rubric/cutoff used here; on remand, it must proceed consistently with the opinion.
  • The decision pressures the Department to convert the operative eligibility cutoff (including any scoring thresholds and how “extraordinary care” is operationalized) into promulgated rules or otherwise anchor them in statute/rule.

2. Broader administrative-law consequences in North Dakota

  • Operationalized eligibility standards are rules. The case strengthens a functional test: if an instrument’s output determines eligibility for a benefit program, the standards embedded in that instrument are likely “rules” unless clearly prescribed by statute/rule.
  • Notice and anti-arbitrariness values. Echoing Morton v. Ruiz, the Court reaffirmed that rulemaking safeguards (public comment, publication, review) are integral when agencies define who receives benefits.
  • Pilot programs are not exempt from the AAPA. The majority rejected the notion that a “pilot” character authorizes the Department to change eligibility cutoffs unilaterally without rulemaking, especially where the legislature required administration “in accordance with the adopted rules.”

3. Litigation and compliance ripple effects

  • Agencies using internally developed scoring models (even if “department-approved”) should expect challenges if those models create binding eligibility thresholds not found in published rules.
  • The dissent’s concern signals future disputes: whether courts will treat standardized instruments as mere implementations (especially where statutory/rule criteria are broad), or as de facto rulemaking when they embed a dispositive quantitative cutoff.

IV. Complex Concepts Simplified

  • Administrative rule (AAPA “rule”). A generally applicable agency policy statement that implements law and affects the public. If it governs who qualifies for a program, it usually must be adopted through formal procedures (notice, comment, publication).
  • Promulgation. The formal process for adopting rules—public notice, opportunity to comment, legal review, and publication in the Administrative Code—so people can know the binding standards.
  • Adjudicative proceeding vs. rulemaking appeal deadlines. Challenging an individual denial order generally follows adjudicative-appeal deadlines (here, 30 days after notice of the order), not the separate deadline for appealing an agency’s rulemaking action.
  • “General applicability.” A standard applies across a category of cases (all program applicants), not just to one person.
  • Substantive vs. internal guidance. If a document merely helps staff administer already-fixed eligibility rules, it may be guidance. If it effectively creates the eligibility cutoff, it is substantive and must be promulgated.

V. Conclusion

Ferderer v. NDDHHS establishes a clear administrative-law constraint: when an agency’s assessment tool and scoring rubric function as the determinative eligibility criteria for a public benefits program, those criteria must be formally adopted through AAPA rulemaking (unless their substantive requirements are already prescribed by statute or duly promulgated rule).

The decision reinforces transparency and accountability in benefits administration, limits agencies’ ability to embed dispositive cutoffs in unpublished instruments, and signals that “pilot program” flexibility does not displace North Dakota’s rulemaking safeguards where eligibility for public payments is at stake.