Bell ex rel. Bell v. Tennessee Department of Human Services, No. M2004-00526-COA-R3-CV (TN 1/12/2006)
| Decision Date | 12 January 2006 |
| Docket Number | No. M2004-00526-COA-R3-CV.,M2004-00526-COA-R3-CV. |
| Parties | MILEY HOYT BELL EX REL. ROBERTA L. BELL v. TENNESSEE DEPARTMENT OF HUMAN SERVICES. |
| Court | Tennessee Supreme Court |
Appeal from the Chancery Court for Robertson County; No. 17505; Carol A. Catalano, Chancellor.
Judgment of the Chancery Court Affirmed.
Timothy L. Takacs, Hendersonville, Tennessee, for the appellant, Roberta L. Bell.
Paul G. Summers, Attorney General and Reporter, and Pamela A. Hayden-Wood, Senior Counsel, for the appellee, Tennessee Department of Human Services.
OPINION
This appeal involves a dispute between a widow and the Tennessee Department of Human Services regarding the Department's denial of her deceased husband's application for Medicaid nursing home benefits. The widow filed a petition for review in the Chancery Court for Robertson County asserting that the Department erred by classifying as available resources four tax deeds for real property in Georgia being held in her revocable trust. The trial court found that the Department's classification of the four tax deeds as available resources was supported by substantial and material evidence. The widow asserts on this appeal that the tax deeds should not have been classified as available resources because they were "unavailable" and because they were income-producing property. Like the trial court, we have determined that the Department's classification of the four tax deeds for real property in Georgia was correct.
Roberta L. Bell and Miley Hoyt Bell lived in Robertson County. On March 26, 1993, Ms. Bell established a revocable trust under Nevada law called the "Roberta L. Bell Revocable Trust." She named her son, Ronnie Bell, then residing in Dayton Beach, Florida, as trustee. While Ms. Bell cannot recall her specific reasons for setting up the trust, she remembers that she did so on the advice of her son who owns an investment company.
Mr. Bell became ill, and on December 17, 1999, he was admitted to a nursing home in Springfield, Tennessee operated by Beverly Healthcare. The Bells used their own resources to pay for his care. Most of these funds were apparently drawn from the corpus of Ms. Bell's revocable trust. As their assets were depleted by Mr. Bell's healthcare expenses, the Bells, with the assistance of their son, set out to find a way to shift the burden of paying Mr. Bell's nursing home expenses to Medicaid. Their primary challenge was to find a way to comply with Medicaid's $2,000 resource limit for Mr. Bell.
In January 2002, Ronnie Bell used funds in his mother's revocable trust to purchase tax deeds to four separate properties in Georgia for $276,927.35.1 On February 26, 2002, Ms. Bell filed an application with the Tennessee Department of Human Services (Department) seeking Medicaid nursing home benefits on Mr. Bell's behalf. She supported the application with a resource assessment dated January 31, 2002 stating that she and Mr. Bell had assets worth $370,145.63.2 This assessment did not mention Ms. Bell's revocable trust or the Georgia tax deeds. However, at the qualification interview, Ms. Bell told the Department about her revocable trust and agreed to provide additional specific information.
Approximately two weeks later, an employee of the Bells' lawyer provided the Department with a copy of the trust, as well as documentation regarding the four Georgia tax deeds the trust had purchased. After being advised to classify the corpus of Ms. Bell's revocable trust as an available resource, the Department performed its own calculation of the Bells' available resources. The Department counted the four tax deeds for the real property in Georgia as available resources and determined that the Bells had $358,118.26 available to them. On May 7, 2002, the Department denied Mr. Bell's application for Medicaid nursing home benefits because the resources available to Mr. Bell exceeded Medicaid's $2,000 resource limit.
Mr. Bell died on May 17, 2002. Thereafter, Ms. Bell requested an administrative review of the denial of Mr. Bell's application for Medicaid benefits. One of the Department's hearing officers conducted a hearing on July 10, 2002 and took the matter under advisement. On March 20, 2003, the hearing officer filed an initial order upholding the denial of Mr. Bell's application. A final order adopting the initial order was entered on April 7, 2003.
On May 13, 2003, Ms. Bell filed a petition for review in the Chancery Court for Robertson County, asserting that the Department's decision that Mr. Bell was "over-resourced" was not supported by substantial and material evidence. The Department filed the entire record of Mr. Bell's application for Medicaid nursing home benefits. Following its review of this record, the trial court concluded that the Georgia tax deeds in Ms. Bell's revocable trust were not "exempt resources as income producing property under Medicaid rules" and, therefore, that the Department's decision that Mr. Bell was not entitled to Medicaid nursing home benefits because of the Bells' excess resources was supported by substantial and material evidence. Ms. Bell has perfected this appeal.
The pivotal issue in this case is whether the Department properly classified the four Georgia tax deeds as available resources when it determined Mr. Bell's eligibility for Medicaid nursing home benefits. Ms. Bell insists that the Department erred because (1) the tax deeds were unavailable due to circumstances beyond the Bells' control and (2) the tax deeds qualified as income producing property. We have determined that the record does not support either of these claims.
Title XIX of the Social Security Act of 1965 established the Medicaid program, a joint federal-state program to provide medical services to low-income persons sixty-five years of age or older, blind persons, disabled persons, and others unable to afford these services. Roberts v. Sanders, No. M1998-00957-COA-R3-CV, 2002 WL 256740, at *5 (Tenn. Ct. App. Feb. 22, 2002) (No Tenn. R. App. P. 11 application filed). The program is jointly funded by the federal government and the state governments, and each state operates its own program in accordance with federal requirements. 42 C.F.R. § 430.0 (2005).
Tennessee began participating in the Medicaid program when the Tennessee General Assembly enacted the Medical Assistance Act of 1968.3 While the Tennessee Department of Health administers the program at the state level, it is assisted with regard to financial matters by the Tennessee Department of Finance and Administration. The Tennessee Department of Human Services likewise assists by making eligibility determinations. Tennessee's program must follow the federal guidelines and must comply with the requirements of Title XIX and the Secretary of Health and Human Services. 42 U.S.C.A. § 1396a (West Supp. 2005); Schweiker v. Gray Panthers, 453 U.S. 34, 36-37, 101 S. Ct. 2633, 2636 (1981).
Prior to 1988, the Medicaid eligibility rules required married couples to deplete their combined resources before a spouse residing in a nursing home would be eligible for benefits. In 1988, the Congress enacted the Medicare Catastrophic Coverage Act. See 42 U.S.C.A. § 1396r-5. The purpose of this Act was to provide some protection to married persons when one spouse enters a nursing home by enabling the non-institutionalized spouse to continue to reside independently in the community without becoming impoverished.4 The Act attempted to strike a balance between impoverishing the non-institutionalized spouse and preventing financially solvent institutionalized spouses from receiving Medicaid benefits. Chambers v. Ohio Dep't of Human Servs., 145 F.3d 793, 798 (6th Cir. 1998).
The process for determining Medicaid eligibility is commonly referred to as a "resource assessment." When an institutionalized spouse applies for Medicaid benefits, the total value of the couple's resources is calculated based on the couple's "countable" or non-exempt assets on the date that the institutionalized spouse becomes institutionalized for thirty days or more. Based on this assessment, the non-institutionalized spouse receives a "community spouse resource allowance" (CSRA) equal to one-half of the couple's "countable" or non-exempt assets. However, this allowance cannot exceed the yearly maximum allowance established by law.5 The remaining "countable" assets must be spent down to the $2,000 Medicaid resource limit before the institutionalized spouse can qualify for Medicaid nursing home benefits.6
Not all of a married couple's assets factor into the calculation of the non-institutionalized spouse's CSRA. For the purposes of the resource assessment, the marital home, household goods, personal belongings, the value of a burial space, and limited amounts for the value of an automobile and for burial expenses are excluded from the calculation.7 Two other exclusions are of particular relevance to this case. The first exclusion pertains to "[o]ther resources determined to be unavailable to the applicant/recipient due to circumstance beyond his/her control." Tenn. Comp. R. & Regs. 1240-3-3-.03(2)(a)(1)(viii). The second involves "income-producing property." Tenn. Comp. R. & Regs. 1240-3-3-.03(2)(a)(1)(v).
Ms. Bell's primary argument is that both the Department and the trial court erred by concluding that the four tax deeds for the real property in Georgia were not "unavailable" property for the purposes of the exclusion in Tenn. Comp. R. & Regs. 1240-3-3-.03(2)(a)(1)(viii). She insists that Mr. Bell would have qualified for Medicaid nursing home benefits had the Department classified the tax deeds as unavailable property. We have determined that the record contains substantial and material evidence...
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