Austin v. Ind. Family

• Decision Date: 26 April 2011
• Docket Number: No. 64A04–1008–MI–514.,64A04–1008–MI–514.
• Parties: Lola AUSTIN, Appellant,v.INDIANA FAMILY AND SOCIAL SERVICES ADMINISTRATION, Appellee.
• Court: Indiana Appellate Court

947 N.E.2d 979

Lola AUSTIN, Appellant,
v.
INDIANA FAMILY AND SOCIAL SERVICES ADMINISTRATION, Appellee.

No. 64A04–1008–MI–514.

Court of Appeals of Indiana.

April 26, 2011.

[947 N.E.2d 980]

Donald J. Evans, Valparaiso, IN, Attorney for Appellant.Gregory F. Zoeller, Attorney General of Indiana, Kathy Bradley, Deputy Attorney General, Indianapolis, IN, Attorneys for Appellee.

OPINION BARNES, Judge.Case Summary

Lola Austin appeals the trial court's affirmance of Family and Social Services Administration's (“FSSA's”) imposition of a transfer penalty upon her application for Medicaid nursing home benefits, which resulted in her being ineligible for such benefits for seven months. We affirm.

Issue

The restated issue before is whether FSSA erred in imposing a transfer penalty based upon Austin's payment of $35,500 to her nephew, James Mack, and James's wife, Julianne Mack, prior to applying for Medicaid nursing home benefits.

Facts

Austin, born in 1916, is the sister of James's father, who died in 1995. Austin has no children of her own. After James's father's death, the Macks took a more active role in looking after Austin's affairs and visiting her frequently at her home in Illinois. In 2002, after a series of events happened to Austin, including an investment broker stealing Austin's savings, two burglaries, and a battery, the Macks moved Austin into a home in Wanatah, near their own home. The Macks also took care of her personal needs while she lived there. Austin paid nothing to the Macks for these services, aside from paying $1000 per year to the Macks' children for their help. For the most part, Austin paid no rent to the Macks, with the exception of one payment of $6500 in October 2007, which was intended to cover the entire previous year Austin had lived in the house.

At some point in 2007, Austin was hospitalized, and it was determined she could no longer live on her own. She entered the Alzheimer's Unit of the Whispering Pines Health Care Center, a nursing home facility in Valparaiso, on September 2, 2007, and has resided there ever since. Meanwhile, however, the Macks began construction on an addition to their home in September 2007; James has contended that he built the addition for the purpose of Austin hopefully being able to live there, rather than either by herself or in a nursing home. On September 21, 2007, Austin signed a form naming the Macks her attorneys-in-fact.¹

Austin's Medicare benefits for residing at Whispering Pines ran through November 2007. On November 29, 2007, the Macks, signing both on their own behalf and as Austin's attorneys-in-fact, executed a “Lifetime Care Agreement” (“the Agreement”). The Agreement stated that the

[947 N.E.2d 981]

Macks were “agreeing to provide, monitor, arrange, complement and/or coordinate services designed to facilitate [Austin] being cared for during the remainder of her life in the least restrictive and least institutional environment....” App. p. 5. The Agreement further stated that the Macks would provide a number of services to Austin for the remainder of her life, including but not limited to: preparation of food; assisting with grooming, laundry, and personal shopping (using Austin's funds); monitoring Austin's health care needs, including attendance at care plan meetings at Whispering Pines; frequently visiting Austin and arranging for outings for her as she was able; and interacting with health professionals, social service providers, insurance companies, and government agencies on her behalf. As for compensation, the Agreement provided, based on Austin's actuarial life expectancy and an average cost of $12 per hour for the services and an estimated fifteen hours per week to provide them, that the total value of the services to be provided by the Macks was $41,236. However, the Macks agreed to accept only $35,500 from Austin, as that was the full extent of her savings at the time. The Macks immediately used the $35,500 to help pay for the addition to their house.

On December 12, 2007, James filed an application for Medicaid nursing home benefits with FSSA on behalf of Austin. FSSA denied this application on January 24, 2008, on the basis that Austin's resources exceeded the Medicaid eligibility limit.

On April 18, 2008, James filed another application for Medicaid benefits with FSSA, retroactive to December 2007. James believed the first denial was erroneous because it failed to take into consideration that several checks from Austin's checking account had been outstanding at the time of the first application, and that the cashing of those checks would have lowered her resources below the Medicaid eligibility limit. On May 19, 2008, FSSA generally approved the application. However, FSSA stated that it was imposing a transfer penalty based on the November 2007 payment of $35,500 to the Macks, which resulted in Austin being denied coverage for nursing home benefits from December 2007 through July 2008. Whispering Pines has never been paid for Austin's residence there during those months.

Austin and the Macks appealed the imposition of the transfer penalty. An administrative law judge (“ALJ”) held a hearing in the matter on August 6, 2008, and affirmed the imposition of the transfer penalty on September 9, 2008. On September 30, 2008, FSSA affirmed the ALJ's ruling, and Austin and the Macks sought judicial review of that ruling. On July 23, 2010, after conducting a hearing, the trial court affirmed FSSA's ruling. Austin now appeals.

Analysis

In an appeal from a decision of an administrative agency, our standard of review is governed by the Administrative Orders and Procedures Act (“AOPA”). Development Servs. Alternatives, Inc. v. Indiana Family & Soc. Servs. Admin., 915 N.E.2d 169, 176 (Ind.Ct.App.2009) trans. denied. When reviewing an administrative agency decision, a court may neither try the case de novo nor substitute its judgment for that of the agency. Id. (citing Ind.Code § 4–21.5–5–11). Judicial review of disputed issues of fact must be confined to the agency record for the challenged action, and we will not reweigh the evidence. Id. We defer to the expertise of the administrative body, and will reverse the agency's decision only if it is:

[947 N.E.2d 982]

(1) arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law;

(2) contrary to a constitutional right, power, privilege, or immunity;

(3) in excess of statutory jurisdiction, authority, or limitations, or short of statutory right;

(4) without observance of procedure required by law; or

(5) unsupported by substantial evidence.

I.C. § 4–21.5–5–14(d). A decision is arbitrary and capricious only if it is made without any consideration of the facts and lacks any basis that could lead a reasonable person to make the same decision made by the administrative agency. Id. The burden of demonstrating the invalidity of an agency action is on the party asserting its invalidity. Id. (citing I.C. § 4–21.5–5–14(a)).

Generally, although we defer to an agency's findings of fact, we do not defer to its conclusions of law. Indiana Dep't of Envtl. Mgmt. v. Steel Dynamics, Inc., 894 N.E.2d 271, 274 (Ind.Ct.App.2008), trans. denied. However, with respect to an agency's interpretation of statutes and regulations that is charged with enforcing, such interpretation is entitled to great weight, and we should accept the agency's reasonable interpretation of such statutes and regulations, unless the agency's interpretation would be inconsistent with the law itself. Id. We further observe that FSSA, in addition to promulgating official regulations with respect to Medicaid administration, also has compiled an Indiana Client Eligibility System Manual (“ICES manual”) to guide caseworkers in making eligibility determinations. It has been held that similar guidelines, although neither statutes nor regulations, are entitled to deference by courts so long as they are consistent with the plain language and purposes of the appropriate statutes and prior administrative views. See Gillmore v. Illinois Dep't of Human Servs., 354 Ill.App.3d 497, 291 Ill.Dec. 7, 822 N.E.2d 882, 886 (2004), aff'd, 218 Ill.2d 302, 300 Ill.Dec. 78, 843 N.E.2d 336 (2006). Austin does not take issue with the validity of the ICES manual's guidelines.

The Medicaid Act states that, with respect to coverage for nursing facility services, if an institutionalized person or that person's spouse disposes of assets for less than fair market value on or after a specific “look-back date,” within either thirty-six or sixty months before a person applies for Medicaid, depending on the circumstances, then the person is...