729 F.2d 966 (4th Cir. 1984), 82-1773, Randall v. Lukhard

Docket Nº:82-1773, 82-1774.
Citation:729 F.2d 966
Party Name:Evelyn RANDALL; Emma Matthews; Archie Morse; Minnie Miller, by her next friend, Viola Liskey, on behalf of themselves and all others similarly situated, and Maggie Lamb; Pompey Wingo; Rachel Wingo and William E. Smith, Appellees, v. William L. LUKHARD, Comm. of the Commonwealth of VA Dept. of Welfare; Dr. James B. Kenley, Comm. of Health for the Co
Case Date:March 12, 1984
Court:United States Courts of Appeals, Court of Appeals for the Fourth Circuit

Page 966

729 F.2d 966 (4th Cir. 1984)

Evelyn RANDALL; Emma Matthews; Archie Morse; Minnie

Miller, by her next friend, Viola Liskey, on behalf of

themselves and all others similarly situated, and Maggie

Lamb; Pompey Wingo; Rachel Wingo and William E. Smith, Appellees,

v.

William L. LUKHARD, Comm. of the Commonwealth of VA Dept. of

Welfare; Dr. James B. Kenley, Comm. of Health for the

Commonwealth of VA, and Dr. Freeman C. Hays, Dir. of VA

Medical Assistance Program, Appellants,

and

Richard Schweiker, Sec. H & H Services, Amicus Curiae.

Gray Panthers, Amicus Curiae.

Evelyn RANDALL; Emma Matthews; Archie Morse; Minnie

Miller, by her next friend, Viola Liskey, on behalf of

themselves and all others similarly situated, and Maggie

Lamb; Pompey Wingo; Rachel Wingo and William E. Smith, Appellants,

v.

William L. LUKHARD, Comm. of the Commonwealth of VA Dept. of

Welfare; Dr. James B. Kenley, Comm. of Health for the

Commonwealth of VA and Dr. Freeman C. Hays, Dir. of VA

Medical Assistance Program, Appellees,

and

Richard Schweiker, Sec. H & H Services, Defendant.

Gray Panthers, Amicus Curiae.

Nos. 82-1773, 82-1774.

United States Court of Appeals, Fourth Circuit

March 12, 1984

Argued Dec. 5, 1983.

Herbert L. Beskin, Charlottesville-Albemarle Legal Aid Soc., Charlottesville, Va. (V. Anne Edenfield, Legal Aid Soc. of Roanoke Valley, Roanoke, Va., on brief), for appellants in 82-1774 and for appellees in 82-1773.

Page 967

Robert T. Adams, Asst. Atty. Gen., Richmond, Va. (Gerald L. Baliles, Atty. Gen., John A. Rupp, Sr. Asst. Atty. Gen., Richmond, Va., on brief), for appellants in 82-1773 and for appellees in 82-1774.

Gill Deford, Nat. Senior Citizens Law Center, Los Angeles, Cal., on brief, for amicus curiae, Gray Panthers.

Before WINTER, Chief Judge, and RUSSELL, WIDENER, HALL, PHILLIPS, MURNAGHAN, SPROUSE, ERVIN, and CHAPMAN, Circuit Judges, Sitting In Banc.

HARRISON L. WINTER, Chief Judge.

Before us on rehearing in banc are the issues decided by a divided panel in Randall v. Lukhard, 709 F.2d 257 (1983). 1 The majority ruled that:

  1. Virginia's former "transfer of assets" eligibility rules for entitlement to medicaid benefits was invalid from January 1, 1972 until June 30, 1981 because it conflicted with federal law;

  2. The burden of proof provisions to overcome presumptive ineligibility for medicaid benefits arising from a transfer of property of Virginia's new "transfer of assets" eligibility rule were invalid because they conflicted with federal law;

  3. Virginia's new "transfer of assets" eligibility rule, aside from the invalid burden of proof provisions, could be applied to persons whose applications for medicaid were filed before July 1, 1981 and processed on or after July 1, 1981 and to all redeterminations of eligibility made on or after July 1, 1981; and

  4. With a modification of the notice approved by the district court, Virginia was obliged to give notice to medicaid claimants who applied for benefits from April 24, 1978 through June 30, 1981 and who were denied benefits because of transfers made before July 1, 1979, of their possible right to state administrative or state judicial remedies.

Accordingly, we affirmed in part and reversed in part the judgment of the district court, 536 F.Supp. 723, and remanded the case for further proceedings.

I.

On rehearing we adopt holdings numbers 1, 3 and 4 (as summarized above) for the reasons expressed in the majority panel opinion. As to those issues, we adopt the majority panel opinion as the opinion of the in banc court.

We conclude, however, that the burden of proof provisions to overcome presumptive ineligibility for medicaid benefits arising from a transfer of property under Virginia's new "transfer of assets" eligibility rule do not conflict with federal law and are not therefore invalid. Our reasons are set forth in the following section of this opinion.

II.

As pointed out in the majority panel opinion, Id. 261-62, in December 1980 the Boren-Long Amendment was signed into law. Pub.L. No. 96-611, 94 Stat. 3567 (1980). The Amendment, inter alia, created a transfer of assets eligibility rule for the Supplementary Security Income (SSI) program and authorized the states to adopt a similar transfer of assets eligibility rule for their medicaid programs. 42 U.S.C. Secs. 1382b(c) and 1396a(j). The language with which we are concerned is that contained in Sec. 1382b(c)(2), which in pertinent part reads:

Any transaction ... shall be presumed to have been for the purpose of establishing eligibility for benefits or assistance under this chapter unless such individual or eligible spouse furnishes convincing evidence to establish that the transaction was exclusively for some other purpose. [emphasis added]

Section 1396a(j)(1) authorized the states to incorporate similar transfer of assets

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rules in their medicaid programs but that section provided: 2

If the State plan provides for the denial of such assistance by reason of such disposal of resources, the State plan shall specify a procedure for implementing such denial which, except as provided in paragraph (2) [length of disqualification], is not more restrictive than the procedure specified in section 1382b(c) of this title.

Acting upon the authorization contained in the 1980 amendment, Virginia rewrote its manual with respect to the measure of proof necessary to overcome the disqualifying statutory presumption:

It will be the responsibility of the client to establish that such a transfer was not made in an effort to qualify for Medicaid or SSI. The client must provide objective evidence that the transfer was exclusively for another purpose. A subjective statement of intent or ignorance of the property transfer provision is not sufficient. The client must provide evidence that other resources were available, at the time of transfer, to meet current and expected needs of that client, including cost of nursing home care. Virginia Manual sections 301.1 D.3.a. and 402.1 B.3.a.

The state rule requires that: a presumptively ineligible claimant must provide "objective" evidence that he transferred assets exclusively for a purpose other than to establish medicaid eligibility; he cannot rely solely on a subjective statement of intent or ignorance of the law; and he must show that at the time of the transfer there were other assets available to meet his current and expected medical needs. The precise issue before us is whether those requirements conflict with the federal standard of "convincing evidence" to establish that the transfer was not exclusively to create eligibility. The district court ruled that there was no conflict and we agree.

The standard prescribed by Sec. 1382b(c)(2) has been administratively construed by the Department of Health and Human Services in A12505.S of the SSI Claims Manual (revised as of October, 1983). The criteria identified seem to indicate that something more than merely the claimant's unsupported statement is required. To like effect is the proposed regulation to be codified as 20 C.F.R. Sec. 416.1246(e). See 46 Fed.Reg. No. 204 51779 (October 22, 1981).

The contention of Evelyn Randall and the other plaintiffs that the Virginia standard conflicts with the federal standard...

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