Pottgieser v. Kizer, s. 88-15762

• Citation: 906 F.2d 1319
• Decision Date: 25 June 1990
• Docket Number: Nos. 88-15762,89-15052,s. 88-15762
• Parties: , 30 Soc.Sec.Rep.Ser. 331, Medicare&Medicaid Gu 38,575 Joseph D. POTTGIESER, as Administrator of the Estate of Cecilia Pottgieser, deceased, and others similarly situated, Plaintiff-Appellee, v. Kenneth KIZER, Director of the California Department of Health Services, Defendant-Appellant. Joseph D. POTTGIESER, as Administrator of the Estate of Cecilia Pottgieser, deceased, and others similarly situated, Plaintiff-Appellee, v. Kenneth KIZER, Director of the California Department of Health Services, Defendant, and Louis W. Sullivan, * Secretary of Health and Human Services, Defendant-Appellant.
• Court: U.S. Court of Appeals — Ninth Circuit

Page 1319

906 F.2d 1319

59 USLW 2019, 30 Soc.Sec.Rep.Ser. 331,

Medicare&Medicaid Gu 38,575

Joseph D. POTTGIESER, as Administrator of the Estate of

Cecilia Pottgieser, deceased, and others similarly

situated, Plaintiff-Appellee, v. Kenneth KIZER, Director of the California Department of

Health Services, Defendant-Appellant.

Joseph D. POTTGIESER, as Administrator of the Estate of

Cecilia Pottgieser, deceased, and others similarly

situated, Plaintiff-Appellee, v. Kenneth KIZER, Director of the California Department of

Health Services, Defendant,

and

Louis W. Sullivan, ^* Secretary of Health and

Human Services, Defendant-Appellant.

Nos. 88-15762, 89-15052.

United States Court of Appeals Ninth Circuit.

Argued and Submitted March 12, 1990.

Decided June 25, 1990.

Edward R. Cohen, Civil Div., U.S. Dept. of Justice, Washington, D.C., and Stephanie Wald and Winifred Y. Smith, Deputy Attys. Gen., San Francisco, Cal., for defendants-appellants.

Brenton Rogozen, Legal Aid Society, San Jose, Cal., for plaintiff-appellee.

Appeal from the United States District Court for the Northern District of California.

Before TANG and BEEZER, Circuit Judges, and STEPHENS, ^** District Judge.

BEEZER, Circuit Judge:

Officials of the state of California and the federal government appeal a grant of summary judgment in favor of plaintiff in this class action, declaring that the state may not collect from an estate the cost of Medicaid insurance premiums paid on behalf of a decedent. We affirm.

I

Cecilia Pottgieser was a recipient of Social Security retirement benefits, Supplemental Security Income, hospital insurance benefits, supplemental medical insurance, and Medicaid during her lifetime. Her estate is in probate and Joseph Pottgieser is the administrator.

Under Medicaid, a state may pay providers directly or enroll beneficiaries in the federal supplemental insurance program, paying premiums on their behalf to the federal government. California has chosen to pay premiums, and when Cecilia died in 1986 at age 82, the state had paid $1,104.70 in premiums on her behalf.

Under Medicaid, a state may also recover from the estates of certain deceased recipients the costs it has paid for "medical assistance." Accordingly, after Cecilia died, California filed a creditor's claim for $1,104.70 against her estate.

Pottgieser argues that the recovery statute does not authorize recovery of premiums because they are not "medical assistance." "Medical assistance" is defined as "payment of part or all of the cost of the following care and services," followed by 21 enumerated services. 42 U.S.C. Sec. 1396d(a). Since premiums are not listed, Pottgieser argues, they should not be included in the amount recoverable against an estate.

The state responds that since "medical assistance" is defined as "payment of part or all of the cost" of those services, any form of payment may be recovered. In support, it cites the definition of "Federal medical assistance" (the amount the federal government will reimburse the state). That amount is defined as a percentage of "the total amount expended ... as medical assistance ... (including ... expenditures for premiums....)". 42 U.S.C. Sec. 1396b(a)(1).

The district court agreed with Pottgieser that the definition of "medical assistance" was unambiguous and did not include premiums, since only specific services are listed. We find the statute to be less straightforward, but its structure, the legislative history and the regulations support the district court's reading.

We have jurisdiction over this timely appeal under 28 U.S.C. Sec. 1291. We review a district court's grant of summary judgment de novo. Kruso v. International Telephone & Telegraph Corp., 872 F.2d 1416, 1421 (9th Cir.1989).

II

A. Statutory Scheme

The Social Security Act (the Act) is a comprehensive social welfare program first enacted by Congress in 1935. It is administered by the Secretary of Health and Human Services (the Secretary).

Title II of the Act, codified at 42 U.S.C. Secs. 401-433 ("Old Age, Survivors and Disability Insurance"), establishes basic social security retirement benefits. Title XVI of the Act, codified at 42 U.S.C. Secs. 1381-1383d, establishes Supplemental Security Income, to which aged, blind or disabled persons are entitled on a means tested basis. See Lynch v. Rank, 747 F.2d 528, 529-30 (9th Cir.1984). Cecilia Pottgieser was eligible for both these benefits.

Title XVIII of the Act, 42 U.S.C. Sec. 1395, et seq. ("Health Insurance for the Aged and Disabled"), establishes Medicare, which is federally subsidized health insurance. Part A of Title XVIII, codified at 42 U.S.C. Sec. 1395c-i-4 ("Hospital Insurance Benefits"), provides insurance for certain hospital and post-hospital services. See Heckler v. Ringer, 466 U.S. 602, 605-06, 104 S.Ct. 2013, 2016-17, 80 L.Ed.2d 622 (1984). Part B of Title XVIII, codified at 42 U.S.C. Sec. 1395j-w-4 ("Supplementary Medical Insurance"), provides additional insurance for physician and outpatient services. See Schweiker v. McClure, 456 U.S. 188, 189-90, 102 S.Ct. 1665, 1666-67, 72 L.Ed.2d 1 (1982). Part B insurance is optional, does not depend on financial need and is funded by both the federal government and individual premiums. ¹ 42 U.S.C. Sec. 1395; see McClure, 456 U.S. at 190, 102 S.Ct. at 1667. A state may choose to enroll needy individuals in the program and pay the Part B premiums on their behalf. ² Cecilia was a beneficiary of both these programs.

Title XIX of the Act, codified at 42 U.S.C. Sec. 1396, et seq. ("Grants to States for Medical Assistance Programs"), establishes Medicaid. See Schweiker v. Hogan, 457 U.S. 569, 571-72, 102 S.Ct. 2597, 2600, 73 L.Ed.2d 227 (1982). Medicaid is a "cooperative federal-state health benefits assistance program," Citizens Action League v. Kizer, 887 F.2d 1003, 1005 (9th Cir.1989), under which the federal government reimburses states at least half the cost of providing health care. The program is optional, but once a state decides to participate it must comply with the federal government's requirements, listed at 42 U.S.C. Sec. 1396a. Harris v. McRae, 448 U.S. 297, 301, 100 S.Ct. 2671, 2680, 65 L.Ed.2d 784 (1980). Under the statute, states may again choose whether to pay providers directly or pay Part B premiums; if they choose the latter, the federal government pays part of the cost of the Part B premiums. 42 U.S.C. Sec. 1396b(a)(1).

California participates in Medicaid and its program is known as Medi-Cal. ³ The state program is administered by the Director of the Department of Health Services (the Director). California has entered into an agreement with the Secretary to pay Part B premiums on behalf of Medi-Cal beneficiaries.

B. Lien Provision

Besides reimbursement from the federal government, states may recover their costs from the estates of deceased recipients, with certain restrictions. ⁴ The statute provides:

No adjustment or recovery of any medical assistance correctly paid on behalf of an individual under the State plan may be made, except ...

(B) in the case of an[ ] individual who was 65 years of age or older when he received such assistance, from his estate.

42 U.S.C. Sec. 1396p(b)(1) (emphasis added). The statute further provides:

The term "medical assistance" means payment of part or all of the cost of the following care and services ... for ... individuals ... whose incomes and resources are insufficient to meet all of such cost--(1) inpatient hospital services [etc.].

42 U.S.C. Sec. 1396d(a) (emphasis added). In the case of persons below a certain income level ("Qualified Medical Beneficiaries" or QMB's), ⁵ medical assistance includes "medicare cost-sharing," defined to include Part B premiums. ⁶

The statute also sets forth a formula for calculating the federal government's share (the "Federal medical assistance percentage"). ⁷ Once the percentage is calculated, the Secretary is instructed to pay from federal appropriations:

an amount equal to the Federal medical assistance percentage ... of the total amount expended ... as medical assistance under the State plan (including expenditures for Medicare cost-sharing and including expenditures for premiums under Part B ...)

42 U.S.C. Sec. 1396b(a)(1) (emphasis added).

III

A. Plain Meaning of the Statute

We must determine whether the phrase "payment of all or part of the cost" of services, which is found in the definition of "medical assistance," includes premiums. We start with the plain meaning of the statute. Citizens Action League, 887 F.2d at 1006 (citations omitted).

The district court reasoned that the reach of the phrase turned on the types of services listed as "medical assistance." The court held the phrase excluded payment for premiums because they were "not payments for service" nor "similar in kind to the services listed."

The Director and the Secretary argue that premiums are a form of payment and therefore would not logically be included in a list of services. Furthermore, they argue, Congress considered premiums a form of payment, as shown by the provision for reimbursement by the federal government, and the federal payment provisions must control the definition of "medical assistance."

We disagree. A "definition which declares what a term 'means' ... excludes any other meaning that is not stated." Colautti v. Franklin, 439 U.S. 379, 392 n. 10, 99 S.Ct. 675, 684, n. 10, 58 L.Ed.2d 596 (1979) (quoting 2A C. Sands, Statutes and Statutory Construction Sec. 47.07 (4th ed. Supp.1978)). In drafting Sec. 1396d(a), Congress stated only that medical assistance consisted of payment of the cost of certain services. Medicare insurance premiums are unrelated to the cost of services rendered to an individual because they are set according to the aggregate amount expended by the entire program. Premiums are part of the "total amount expended" by a state, but this is not the phrase Congress chose to use in drafting Sec. 1396d(a).

Congress has chosen to specify...