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No. 105,366 IN THE COURT OF APPEALS OF THE STATE OF KANSAS MARY D. STINEMETZ, Appellant, v. KANSAS HEALTH POLICY AUTHORITY, Appellee.

SYLLABUS BY THE COURT 1. In an appeal from a decision by an administrative agency, generally a party is limited to the issues raised at the administrative hearing. But because administrative agencies cannot rule on constitutional questions, the issue of constitutionality can be raised for the first time before a court of law.

2. The scope of judicial review of a state administrative agency action is defined by the Kansas Judicial Review Act, K.S.A. 77-601 et seq. An appellate court exercises the same limited review of the agency's action as does the district court; it is as though the appeal had been made directly to the appellate court.

3. Whether a statute or regulation is constitutional as applied is a question of law over which an appellate court has unlimited review.

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4. In analyzing a claim under the Free Exercise Clause of the First Amendment to the United States Constitution, a law that is neutral and of general applicability need not be justified by a compelling governmental interest even if the law has the incidental effect of burdening a particular religious practice or belief.

5. In analyzing a claim under the Free Exercise Clause of the First Amendment to the United States Constitution, where the State has in place a system of individual exemptions to a statute or regulation, it may not refuse to extend that system to cases of religious hardship without a compelling reason.

6. Section 7 of the Kansas Constitution Bill of Rights provides greater protections concerning the free exercise of religious beliefs than does the First Amendment to the United States Constitution.

7. To determine whether government action violates an individual's right to the free exercise of religious beliefs under the Kansas Constitution, a court must determine: (1) whether the individual's religious beliefs are sincerely held; (2) whether the state action burdens the individual's free exercise of religious beliefs; (3) whether the state interest is overriding or compelling; and (4) whether the State uses the least restrictive means of achieving its interest. The individual bears the burden of proof to show that the first two steps have been satisfied, and then the burden shifts to the State to prove that the last two steps are met.

Appeal from Graham District Court; WILLIAM B. ELLIOTT, judge. Opinion filed May 4, 2011. Reversed and remanded with directions.

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Corinne Petrik, of Kansas Legal Services, of Hays, and Lowell C. Paul, of Kansas Legal Services, of Topeka, for appellant.

Brian M. Vazquez, of Kansas Health Policy Authority, for appellee.

Keturah A. Dunne, associate general counsel, of Watchtower Bible and Tract Society of New York, Inc., of Patterson, New York, and Tony A. Potter, of Potter Law Office, P.A., of Hill City, for amicus curiae Watchtower Bible and Tract Society of New York, Inc.

Before HILL, P.J., MALONE and BUSER, JJ.

MALONE, J.: Mary D. Stinemetz, a Kansas citizen and a practicing Jehovah's Witness, needs a liver transplant, yet her religious beliefs prohibit blood transfusions. There is a medically accepted technique, known as a bloodless liver transplant, in which liver transplant surgery can be performed without a blood transfusion, although many medical facilities do not consider this technique to be the safest procedure. Cost is not the issue. The available evidence indicates that the bloodless technique is less expensive than a procedure involving blood transfusions. There is no medical facility in Kansas that performs bloodless liver transplants, but the Nebraska Medical Center in Omaha is willing to perform the surgery.

Because Stinemetz is a beneficiary of the Kansas Medical Assistance Program (Medicaid), she requested prior authorization from the Kansas Health Policy Authority (KHPA) for an out-of-state liver transplant. There is no question that the KHPA would authorize a liver transplant for Stinemetz in Kansas, including a bloodless liver transplant if a medical facility was available in Kansas to perform the technique. However, the KHPA denied Stinemetz' request for prior authorization for out-of-state services on the ground that her religious preference did not constitute a medical necessity. The district court affirmed the KHPA's denial of prior authorization. Stinemetz appeals, asserting that the denial violated her rights under the Free Exercise Clause of the First Amendment to 3

the United States Constitution and

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