Andrews v. Division of Medical Assistance

• Decision Date: 14 February 2007
• Docket Number: No. 06-P-221.,06-P-221.
• Citation: 861 N.E.2d 483,68 Mass. App. Ct. 228
• Parties: Marion ANDREWS v. DIVISION OF MEDICAL ASSISTANCE & another.<SMALL><SUP>1</SUP></SMALL>
• Court: Appeals Court of Massachusetts

861 N.E.2d 483

68 Mass. App. Ct. 228

Marion ANDREWS v. DIVISION OF MEDICAL ASSISTANCE & another.¹

No. 06-P-221.

Appeals Court of Massachusetts, Suffolk.

Argued November 17, 2006.

Decided February 14, 2007.

Jeffrey A. Bloom, Boston, for the plaintiff.

Neil P. Olson, Assistant Attorney General, for the defendants.

Present: DOERFER, KATZMANN, & VUONO, JJ.

DOERFER, J.

Under a Federal program, administered through the State by the division of medical assistance (DMA),² elders who are impoverished can receive assistance for nursing home care. See 42 U.S.C. §§ 1396 et seq. (2000); G.L. c. 118E, §§ 1, 9A; 130 Code Mass. Regs. §§ 501 et seq. (2002); 130 Code Mass. Regs. §§ 520 et seq. (2003). See also Tarin v. Commissioner of the Div. of Med. Assistance, 424 Mass. 743, 746-750, 678 N.E.2d 146 (1997) (describing general statutory scheme); Centennial Healthcare Inv. Corp. v. Commissioner of the Div. of Med Assistance, 61 Mass.App.Ct. 320, 321 n. 3, 810 N.E.2d 1231 (2004) (same). One of the important issues in administering this program is determining how much of an elder's income and assets is available to pay for her care. See 130 Code Mass. Regs. § 520.007 (2002). See also Tarin v. Commissioner of the Div. of Med. Assistance, supra at 747-750, 678 N.E.2d 146 (assets and income considered for the purposes of Medicaid eligibility and benefits determination). In general, assets held by an individual must be applied to the cost of nursing home care before the State begins to subsidize such costs.

Many elders have accumulated substantial equity in their homes, not only because their mortgages have been paid off but also because of generally rising values of real estate in modern times. That equity must be counted as available for their care and applied to the cost of nursing home services before the State will begin subsidizing such services. See 130 Code Mass. Regs. § 520.007(G) (1999).

Understandably, an elder would prefer to pass along accumulated wealth to the next generation rather than use it to provide her own nursing home expenses, especially if a State program is available to help pick up the cost. Consequently, strict rules have been promulgated which have the effect of limiting the amount of assets that applicants can dispose of without affecting their eligibility for assistance.

Money that leaves the estate of an elder as payment for goods or services is regarded as legitimately reducing the estate for the purpose of determining eligibility for assistance. But where the services in question are rendered by a family member, naturally a question arises whether such services would have been rendered gratuitously as a family accommodation, based on love and affection, or whether a genuine transaction occurred with expectation of payment for value given and received. In order to remove the temptation to transfer money to a relative gratuitously, under the guise of a monetary transaction for services rendered, the DMA requires reliable proof that the transfer genuinely was in payment for value received and that it was intended as such at or before the time the services were rendered. See 42 U.S.C. § 1396p(c); G.L. c. 118E, § 28; 130 Code Mass. Regs. § 520.018 (2000); 130 Code Mass. Regs. § 520.019 (1999).

At issue in this case is whether money that was paid by Marion Andrews (plaintiff) to her daughter and son-in-law (Tekulas) on account of labor they performed to renovate her house properly could be deducted from her estate to determine her eligibility for assistance. We conclude that valid agency rules reasonably were applied to deny the deduction, and eligibility for assistance properly was determined.

Facts. In 1995, due to declining health, the plaintiff moved from her old Victorian house in Swampscott to the home of the Tekulas. For six years, the plaintiff lived with the Tekulas. In December, 2000, Mrs. Tekula, on the plaintiff's behalf, obtained a $95,000 mortgage on the Swampscott house. In December, 2001, the plaintiff moved to a nursing home as a private pay resident.

Mrs. Tekula needed additional funds to provide for her mother's nursing home care, and so, in the summer of 2001, she began to look into the possibility of selling the Swampscott house. She learned that, due to the dilapidated condition of the house, it would sell significantly below the fair market value. As they wanted to maximize the value of the house in order to maximize the amount of money available to provide for the plaintiff, the Tekulas decided to renovate it in order to restore the home to its former Victorian glory and to obtain the best possible price for it. They spent the next fourteen to eighteen months working on the renovations (mainly painting, tiling, clean-up, and minor repairs), spending approximately $2,600 in paint and materials to accomplish the renovation.

In October, 2002, the house sold for $429,000, substantially more than either a prerenovation offer ($150,000 to $175,000) or a real estate appraiser's estimation of its value, prerenovation ($225,000). At the time of the closing, the Tekulas became aware of the availability of a MassHealth (Medicaid) subsidy if the value of the plaintiff's assets was low enough after the sale. While the sale generated a pool of money to pay for a portion of the plaintiff's nursing home care, the Tekulas claimed $100,000 as payment for their services and materials.

In July, 2003, the plaintiff applied for MassHealth coverage. In determining her eligibility, the DMA determined that the amount paid from her estate to the Tekulas had to be disregarded and considered still to be part of her estate in calculating the extent to which she was entitled to benefits.

Discussion. We first note that the plaintiff had the burden of proof to persuade the hearing officer that she intended, at the time the services were rendered, to pay for the work. See 130 Code Mass. Regs. § 520.019(C), (F). Moreover, the burden is on the appealing party to demonstrate the invalidity of the administrative determination. See Fisch v. Board of Registration in Med., 437 Mass. 128, 131, 769 N.E.2d 1221 (2002); Faith Assembly of God of S. Dennis & Hyannis, Inc. v. State Bldg.Code Commn., 11 Mass.App.Ct. 333, 334, 416 N.E.2d 228 (1981); Haverhill Mun. Hosp. v. Commissioner of the Div. of Med. Assistance, 45 Mass.App.Ct. 386, 390, 699 N.E.2d 1 (1998). It is rare that a party with the burden of proof successfully can claim that she had met the burden as a matter of law. Thus we look at the record to determine if, considering the evidence as a whole, the decision of the hearing officer was arbitrary or capricious and whether the decision took into account all of the facts that fairly supported the plaintiff's claim as well as those that fairly detracted from them. See G.L. c. 30A, § 14. See also Lisbon v. Contributory Retirement Appeal Bd., 41 Mass.App.Ct. 246, 252 n. 6, 257, 670 N.E.2d 392 (1996) (judicial review of an agency decision is highly deferential); Foxboro Harness, Inc. v. State Racing Commn., 42 Mass.App.Ct 82, 86, 674 N.E.2d 1322 (1997) ("[t]he reviewing court, after considering the entire record, must sustain the commission's decision unless it is unsupported by substantial evidence"); Conroy's Case, 61 Mass. App.Ct. 268, 273, 809 N.E.2d 1069 (2004) (agency's interpretation of its own rule is entitled to great weight).

In evaluating this claim, the DMA utilized a Health Care Financing Administration (HCFA)³ interpretive communication which states that services rendered to an elder by a family member are presumed to be gratuitous and without expectation of compensation unless the applicant can prove...