Buettner v. DHFS

• Decision Date: 17 April 2003
• Docket Number: No. 01-0981.,01-0981.
• Citation: 663 N.W.2d 282,2003 WI App 90,264 Wis.2d 700
• Court: Wisconsin Court of Appeals
• Parties: No. 99-CV-1351 Ann BUETTNER, Plaintiff-Appellant, v. WISCONSIN DEPARTMENT OF HEALTH & FAMILY SERVICES and Department of Workforce Development, Defendants-Respondents. No. 00-CV-305 Ann BUETTNER, Plaintiff-Appellant, v. WISCONSIN DEPARTMENT OF HEALTH AND FAMILY SERVICES, Defendant-Respondent.

264 Wis.2d 700

2003 WI App 90

663 N.W.2d 282

No. 99-CV-1351 Ann BUETTNER, Plaintiff-Appellant, v. WISCONSIN DEPARTMENT OF HEALTH & FAMILY SERVICES and Department of Workforce Development, Defendants-Respondents.

No. 00-CV-305 Ann BUETTNER, Plaintiff-Appellant, v. WISCONSIN DEPARTMENT OF HEALTH AND FAMILY SERVICES, Defendant-Respondent.

No. 01-0981.

Court of Appeals of Wisconsin.

Submitted on briefs March 14, 2002.

Decided April 17, 2003.

On behalf of the plaintiff-appellant, the cause was submitted on the briefs of Carol J. Wessels and Donna Thompson-Schneider of Senior LAW of Milwaukee.

On behalf of the defendants-respondents, the cause was submitted on the brief of James E. Doyle, attorney general, and Robert M. Hunter, assistant attorney general.

Before Dykman, Roggensack and Lundsten, JJ.

¶ 1. ROGGENSACK, J.

Ann Buettner appeals a circuit court order affirming the determination of the Division of Hearings and Appeals (DHA) to terminate Ann's medical assistance due to the divestment of assets. Ann argues that her husband Richard's purchase of two "balloon annuities" did not constitute a prohibited divestment under WIS. STAT. § 49.453 (1997-98).¹ We conclude that § 49.453 required DHFS to examine whether Richard's cash transfer lacked economic substance by determining whether the asset transfer was made for less than fair market value. Because Richard's transfer of $200,000 was for less than its fair market value, DHA properly determined that the purchase of the annuities constituted a divestment of assets. Accordingly, we affirm DHA's decision to terminate Ann's medical assistance.

BACKGROUND

¶ 2. In March 1998, Richard Buettner purchased two "irrevocable annuities" for $100,000 each from Richard and Ann's adult children, Ronald Buettner and Kathleen Buettner. The "annuities" were nonassignable, unsecured financial instruments that required Ronald and Kathleen to each pay Richard fifty dollars per month for seventy-one months followed by a lump sum or "balloon" payment of $100,000 on March 1, 2004. The payment schedule was within the life expectancy of Richard. In April, Ann applied for medical assistance and DHFS, with knowledge of Richard's financial transactions, certified Ann as eligible for medical assistance effective April 1, 1998. Ann received payments for approximately one year.

¶ 3. In April 1999, Ann received notice terminating her medical assistance benefits effective May 1, 1999. DHFS determined that Richard's purchase of the two "balloon annuities" constituted a divestment of assets under WIS. STAT. § 49.453 subjecting Ann to divestment penalties. DHFS's decision was based in part on an operations memo prepared by the Department of Workforce Development in 1999 (Ops Memo 99-19)² and two fair hearing decisions, MDV 30/35331 and MDV 30/35213, which considered "balloon annuities" similar to Richard's financial transactions and concluded that the annuities were prohibited divestments because (1) the annuitant did not receive fair market value for the assets transferred and (2) they did not require fixed periodic payments.³ Ann requested a fair hearing to contest DHFS's determination and the DHA affirmed the decision to terminate Ann's benefits.

¶ 4. Ann filed a petition for judicial review of the DHA's decision in Milwaukee County Circuit Court and an action for declaratory judgment in Dane County Circuit Court that Ops Memo 99-19 was void as an improperly promulgated administrative rule under WIS. STAT. § 227.01(13). Additionally, Ann alleged that DHFS's "retroactive application" of Ops Memo 99-19 violated her right to due process under the Fourteenth Amendment.

¶ 5. The circuit court consolidated the two actions for purpose of review. In August 2000, the court granted summary judgment to DHFS declaring that Ops Memo 99-19 was not an administrative rule and therefore compliance with Wisconsin ch. 227 rulemaking procedures was not required. In a separate order, the circuit court affirmed DHA's determination that under WIS. STAT. § 49.453, Richard's purchase of the two "balloon annuities" constituted a divestment of assets. The court declined to address Ann's claim that DHFS's decision to terminate her benefits based on Ops Memo 99-19 violated her right to due process. Buettner appeals.

DISCUSSION

Standard of Review.

[1-5]

¶ 6. The construction of WIS. STAT. § 49.453 and its application to undisputed facts is a question of law that we review de novo. See Tannler v. DHSS, 211 Wis. 2d 179, 183, 564 N.W.2d 735, 738 (1997)

. However, we generally accord an administrative agency's statutory interpretation one of three levels of deference: great weight, due weight or no deference. Id. at 184, 564 N.W.2d at 738; Artac v. DHFS, 2000 WI App 88, ¶ 9, 234 Wis. 2d 480, 610 N.W.2d 115. Great weight deference is warranted where:

1) the agency was charged by the legislature with the duty of administering the statute; 2) the interpretation of the agency is one of long-standing; 3) the agency employed its specialized knowledge or expertise in forming the interpretation; and 4) the agency's interpretation will provide consistency and uniformity in the application of the statute.

Tannler, 211 Wis. 2d at 184, 564 N.W.2d at 738. Due weight deference is appropriate "if the agency decision is very nearly one of first impression." Id. (citation omitted). Finally, we review the agency's decision de novo "if the case is one of first impression for the agency and the agency lacks any special expertise." Id.

[6]

¶ 7. Ann contends that the proper standard of review is de novo because the final decision to terminate her medical assistance benefits was made by DHA, rather than DHFS. Ann relies on Roehl Transport Inc. v. DHA, 213 Wis. 2d 452, 570 N.W.2d 864 (Ct. App. 1997), and its progeny for the proposition that we grant no deference to a decision by DHA because DHA is not "a line agency charged with the administration and enforcement of the statutes involved." Roehl, 213 Wis. 2d at 460,570 N.W.2d at 868. In Artac, we followed Roehl and reviewed de novo a decision by DHA to deny medical assistance benefits because DHA was not a "line agency" and "[did] not have experience administering the [medical assistance] program." Artac, 2000 WI App 88 at ¶ 13. Buettner asserts that under Artac, the appropriate level of deference in this case is de novo.

¶ 8. DHFS, in contrast, argues that "at least due weight" deference must be accorded DHA's decision to terminate Ann's medical assistance because the decision was based on DHFS's long-standing interpretation of WIS. STAT. § 49.453 as detailed in Ops Memo 99-19 and the attached decisions MDV-30/35213 and MDV30/35331. Stated differently, DHFS contends that Artac does not apply because we are in effect reviewing DHFS's interpretation of § 49.453. DHFS relates this case to Sea View Estates Beach Club, Inc. v. DNR, 223 Wis. 2d 138, 588 N.W.2d 667 (Ct. App. 1998). In Sea View, we granted great weight deference to a decision by the DHA to issue Sea View a pier permit. We concluded that because the Department of Natural Resources (DNR) expressly adopted the hearing examiner's decision as its own pursuant to WIS. STAT. § 227.46(3)(a), great weight deference was warranted because the DNR had expertise in regulating piers and had been charged by the legislature with the duty to enforce the laws regulating piers in navigable waters. Sea View, 223 Wis. 2d at 149,588 N.W.2d at 672. Thus, we distinguished Roehl on the basis that the DNR adopted the hearing examiner's decision as its own. That is not the case here. As the circuit court noted, DHFS did not adopt DHA's decision to terminate Ann's medical assistance benefits; this remains an administrative review of a DHA decision interpreting the "extremely complex" medical assistance statutes. See Tannler, 211 Wis. 2d at 191,

564 N.W.2d at 741 (Abrahamson, C.J., concurring). Accordingly, we apply Artac and conclude that the proper standard of review is de novo.

[7]

¶ 9. The parties agree that whether Ops Memo 99-19 is void as an improperly promulgated administrative rule is a question of law that we review de novo. See Schoolway Transp. Co. v. DOT, 72 Wis. 2d 223, 232, 240 N.W.2d 403, 408 (1976)

.

WISCONSIN STAT. § 49.453.

¶ 10. Medical assistance is a joint federal and state program aimed at ensuring medical care for those who cannot pay for their own care. Tannler, 211 Wis. 2d at 190, 564 N.W.2d at 741. Accordingly, to be eligible for medical assistance in Wisconsin, certain financial requirements must be met. See WIS. STAT. ch. 49. Because individuals are generally not eligible unless they have limited assets, those seeking medical assistance may need to spend down assets before they can qualify. Tannler, 211 Wis. 2d at 191-92, 564 N.W.2d at 741 (Abrahamson, C.J., concurring). However, under WIS. STAT. § 49.453, individuals become ineligible for certain medical assistance benefits if they transfer assets in a manner prohibited by the statute. The purpose of prohibiting certain types of asset transfers is to prevent those who could afford to pay for their own medical needs from receiving medical assistance. Id. at 190, 564 N.W.2d at 741.

¶ 11. The relevant Wisconsin statutory provisions pertaining to Richard's asset transfer are WIS. STAT. § 49.453(2)(a) and (4). Section 49.453(2)(a), the general divestment provision, provides:

(2) INELIGIBILITY FOR MEDICAL ASSISTANCE FOR CERTAIN SERVICES. (a) Institutionalized individuals. Except as provided in sub. (8), if an institutionalized individual or his or her spouse, or another person acting on behalf of the institutionalized individual or his or her spouse, transfers assets for less than fair market value on or after the institutionalized individual's look-back date, the institutionalized individual is ineligible for medical assistance for the following services for the period specified under sub. (3):

1. For nursing facility services.

2. For a level of care in a medical

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