Wojchowski v. Daines

• Decision Date: 02 August 2007
• Docket Number: Docket No. 06-3373-cv.
• Citation: 498 F.3d 99
• Parties: Michael WOJCHOWSKI, Sr., by his attorney-in-fact, Lucy Wojchowski, and Lucy Wojchowski, Plaintiffs-Appellants, v. Richard F. DAINES, Commissioner, New York State Department of Health, and Kelly A. Reed, Commissioner, Monroe County Department of Human and Health Services,<SMALL><SUP>*</SUP></SMALL> Defendants-Appellees.
• Court: U.S. Court of Appeals — Second Circuit

498 F.3d 99

Michael WOJCHOWSKI, Sr., by his attorney-in-fact, Lucy Wojchowski, and Lucy Wojchowski, Plaintiffs-Appellants, v. Richard F. DAINES, Commissioner, New York State Department of Health, and Kelly A. Reed, Commissioner, Monroe County Department of Human and Health Services,^* Defendants-Appellees.

Docket No. 06-3373-cv.

United States Court of Appeals, Second Circuit.

Argued: June 28, 2007.

Decided: August 2, 2007.

René H. Reixach, Woods Oviatt Gilman LLP, Rochester, NY, for Plaintiffs-Appellants.

Victor Paladino, Assistant Solicitor General (Eliot Spitzer, Attorney General, Daniel Smirlock, Deputy Solicitor General, on the brief), Office of the Attorney General of the State of New York, Albany, NY, for Defendants-Appellees.

Before: CABRANES and RAGGI, Circuit Judges, and BERMAN,^** District Judge.

JOSÉ A. CABRANES, Circuit Judge.

This appeal concerns the scope of the "antiattachment provision" of the Social Security Act (the "Act"), 42 U.S.C. § 407(a). See Wash. State Dep't of Soc. & Health Servs. v. Guardianship Estate of Keffeler, 537 U.S. 371, 379, 123 S.Ct. 1017, 154 L.Ed.2d 972 (2003) (describing § 407(a) as the Act's "antiattachment provision"). Section 407(a) states in relevant part that "none of the moneys paid or payable or rights existing under this subchapter shall be subject to execution, levy, attachment, garnishment, or other legal process."¹ In Robbins v. DeBuono, 218 F.3d 197 (2d Cir.2000), our Court held that it was a violation of § 407(a) for New York State, when making certain Medicaid eligibility determinations, to attribute the Social Security benefits of an "institutionalized spouse" to his or her "community spouse," because this attribution effectively coerces the couple into using the benefits on behalf of the community spouse.² Id. at 198-99. In our Court's view, such attribution subjected the institutionalized spouse's Social Security benefits to "other legal process" within the meaning of § 407(a). See id. at 200-01. After our decision in Robbins, New York stopped attributing the Social Security benefits of institutionalized spouses to community spouses. However, New York reverted to its prior practice after the Supreme Court issued an opinion in Keffeler, which discussed at length the meaning of the term "other legal process" in § 407(a).

Plaintiffs-appellants Michael and Lucy Wojchowski contend that Keffeler does not undermine our conclusion in Robbins that the attribution of an institutionalized spouse's Social Security benefits to a community spouse violates the Act's antiattachment provision. Defendants-appellees the Commissioner of the New York State Department of Health and the Commissioner of the Monroe County Department of Health and Human Services argue that the analysis and outcome in Robbins are inconsistent with Keffeler's interpretation of the antiattachment provision. We conclude that Robbins's holding cannot survive Keffeler³ and that New York's attribution of an institutionalized spouse's Social Security benefits to a community spouse does not violate § 407(a).

BACKGROUND

A. Medicaid Budgeting and New York's "Income-First Policy"

Medicaid, which is jointly funded by the federal and state governments, "is a medical assistance program authorized `to pay for necessary medical care for those eligible individuals whose income and resources do not allow them to meet the costs of their medical needs.'" Robbins, 218 F.3d at 199 (quoting Golf v. N.Y. State Dep't of Soc. Servs., 91 N.Y.2d 656, 659, 674 N.Y.S.2d 600, 697 N.E.2d 555 (1998)). The New York State Department of Health ("DOH"), in conjunction with local social services agencies, administers Medicaid in New York.⁴ Id.

Medicaid covers, inter alia, "nursing home care for medically needy older people who become eligible by incurring medical expenses that reduce their monthly income and assets below prescribed levels." In re Estate of Tomeck, 8 N.Y.3d 724, 728, 840 N.Y.S.2d 550, 872 N.E.2d 236 (2007). As part of the Medicaid Catastrophic Coverage Act of 1988 ("MCCA"), Congress established "a complex set of standards governing the allocation of resources between the spouse residing in a nursing home (the institutionalized spouse) and the spouse residing in the community (the community spouse)." Id. at 728, 840 N.Y.S.2d 550, 872 N.E.2d 236; see Wis. Dep't of Health & Family Servs. v. Blumer, 534 U.S. 473, 477-78, 122 S.Ct. 962, 151 L.Ed.2d 935 (2002); Robbins, 218 F.3d at 199. The purpose of these "spousal impoverishment provisions" was "to protect community spouses from `pauperization' while preventing financially secure couples from obtaining Medicaid assistance." Blumer, 534 U.S. at 480, 122 S.Ct. 962 (quoting H.R.Rep. No. 100-105, pt. 2, at 65 (1987), as reprinted in 1988 U.S.C.C.A.N. 857, 888); see also Robbins, 218 F.3d at 199; Tomeck, 8 N.Y.3d at 728, 840 N.Y.S.2d 550, 872 N.E.2d 236.

To that end, Congress directed the states to "establish a minimum monthly maintenance needs allowance for each community spouse." 42 U.S.C. § 1396r-5(d)(3); see Blumer, 534 U.S. at 481, 122 S.Ct. 962; Robbins, 218 F.3d at 199; see also N.Y. Soc. Serv. Law § 366-c(2)(h) (establishing New York's allowance formula). This "minimum monthly maintenance needs allowance" ("MMMNA") is "an amount deemed sufficient for the community spouse to live at a modest level after the institutionalized spouse becomes eligible for Medicaid, subject to a statutory floor and ceiling." Tomeck, 8 N.Y.3d at 728, 840 N.Y.S.2d 550, 872 N.E.2d 236. Congress also mandated that "[f]or purposes of establishing the institutionalized spouse's Medicaid eligibility, a portion of the couple's assets is reserved for the benefit of the community spouse." Blumer, 534 U.S. at 482, 122 S.Ct. 962 (footnote omitted) (citing 42 U.S.C. § 1396r-5(c)(2)). This reserved share is known as the "community spouse resource allowance" ("CSRA"). 42 U.S.C. § 1396r-5(f)(2); see also N.Y. Soc. Serv. Law § 366-c(2)(d) (defining New York's CSRA formula). "All of the institutionalized spouse's countable resources and the community spouse's countable resources exceeding the CSRA may be used to pay for nursing home care, and must be spent down in order for the institutionalized spouse to qualify for Medicaid." Tomeck, 8 N.Y.3d at 729, 840 N.Y.S.2d 550, 872 N.E.2d 236.

"The MCCA provides for a `fair hearing' mechanism through which a couple may challenge the State's determination of a number of elements that affect eligibility for, or the extent of assistance provided under, Medicaid."⁵ Blumer, 534 U.S. at 483, 122 S.Ct. 962 (citing 42 U.S.C. § 1396r-5(e)); see also N.Y. Soc. Serv. Law § 366-c(8) (setting forth New York's "fair hearing" procedure). As relevant to the instant case, 42 U.S.C. § 1396r-5(e)(2)(C) specifically provides that

[i]f either [the institutionalized or community] spouse establishes that the [CSRA] (in relation to the amount of income generated by such allowance) is inadequate to raise the community spouse's income to the [MMMNA], there shall be substituted for the [CSRA] under subsection (f)(2) of this section, an amount adequate to provide [the MMMNA].

Thus, in New York, either spouse "can request a `fair hearing' at which a[DOH] hearing officer may set a [CSRA] above the statutory amount to enable the assets to generate enough income to raise the community spouse's income to the level of the [MMMNA]." Robbins, 218 F.3d at 198; see N.Y. Soc. Serv. Law § 366-c(8)(C).

"Medicaid benefits may not be withheld from the institutionalized spouse in the event the community spouse declines to make spousal resources available to pay for medical expenses." Tomeck, 8 N.Y.3d at 729, 840 N.Y.S.2d 550, 872 N.E.2d 236 (citing 42 U.S.C. § 1396r-5(c)(3) and N.Y. Soc. Serv. Law §§ 366(3)(a), 366-c(5)(b)). Under New York law, the State may recover from the community spouse the cost of Medicaid assistance provided to the institutionalized spouse, if the community spouse has "sufficient income and resources to provide medical assistance" but such "income and resources ... are not available ... because of ... the refusal or failure of [the community spouse] to provide the necessary care and assistance." N.Y. Soc. Serv. Law § 366(3)(a) (discussing the creation of "an implied contract" between "a responsible relative" and the State in such circumstances). In the support recovery action contemplated by these statutes, the State may "recover the cost of Medicaid benefits paid for the care of the institutionalized spouse to the extent that the community spouse has available resources" above the CSRA. Comm'r of Dep't of Soc. Servs. of the City of N.Y. v. Spellman, 243 A.D.2d 45, 672 N.Y.S.2d 298, 300 (App. Div., 1st Dept.1998); see also Tomeck, 8 N.Y.3d at 729, 840 N.Y.S.2d 550, 872 N.E.2d 236 (noting that "the community spouse's countable resources exceeding the CSRA may be used to pay for nursing home care" (emphasis added)). Thus, the higher the CSRA, the less the State can subsequently recover from a community spouse in a support recovery action.

New York "applies an `income first' policy in determining whether a community spouse is entitled to an increase in her [CSRA]." Robbins, 218 F.3d at 199. See generally Blumer, 534 U.S. at 484, 122 S.Ct. 962 (explaining the difference between "income-first" and "resource-first" policies). "This approach . . . deems or attributes income from the institutionalized spouse to the community spouse. Thus, the CSRA goes up only if the community spouse's monthly income, including any sums that the institutionalized spouse is allowed to provide, still falls short of the MMMNA." Tomeck, 8 N.Y.3d at 730, 840 N.Y.S.2d 550, 872 N.E.2d 236; see Robbins, 218 F.3d at 199. "Whether or not the institutionalized spouse contributes his excess income to his spouse, [the State] may sue [the community spouse] to recover the `excess' assets that [the community spouse] would otherwise use to generate income." Robbins, 218 F.3d at 199.

The question presented...