Can agencies deny benefits based on unwritten policies? C. P. v. Utah Office of Crime Victims' Reparations Explained

The Utah Court of Appeals addressed important questions about administrative rulemaking and collateral source requirements in the context of crime victim reparations. The case arose when C.P. sought reparations for her daughter’s mental health counseling following sexual abuse.

Background and Facts
C.P.’s daughter was sexually abused by her uncle, and C.P. applied for crime victim reparations in 1989. While the daughter was initially awarded funds for mental health counseling, the Utah Office of Crime Victims’ Reparations later denied payment for treatment at Benchmark Hospital because the daughter was eligible for Medicaid during the treatment period. The agency applied an unwritten policy treating potential Medicaid coverage as an available collateral source, even though the family had chosen a non-Medicaid provider.

Key Legal Issues
The court addressed three main issues: whether the Utah savings statute applied to extend the filing deadline under UAPA, whether potential Medicaid eligibility constitutes a collateral source under the Crime Victims’ Act, and whether the agency’s unwritten Medicaid policy was validly adopted.

Court’s Analysis and Holding
The court applied a correctness standard to all legal questions. First, the court held that Utah’s savings statute applies to UAPA judicial review deadlines, allowing C.P. to refile after her initial complaint was dismissed for improper service. Second, examining the plain language of the Crime Victims’ Act, the court found that collateral sources only reduce reparations when benefits “have been recouped,” not when they are merely potentially available. Finally, applying the three-part test from Williams v. Public Service Commission, the court determined that the agency’s unwritten Medicaid policy was “generally applicable,” interpreted the agency’s statutory powers, and therefore required formal adoption under the Utah Administrative Rulemaking Act.

Practice Implications
This decision establishes that administrative agencies cannot circumvent formal rulemaking requirements by implementing informal policies that have the force of rules. Practitioners should scrutinize whether agency policies that “authorize, require, or prohibit” actions have been properly adopted through administrative rulemaking procedures. The decision also clarifies that potential eligibility for benefits differs legally from actual receipt of benefits in the collateral source context.