O'Callaghan v. Commissioner of Social Services

• Decision Date: 11 May 1999
• Citation: 53 Conn. App. 191,729 A.2d 800
• Court: Connecticut Court of Appeals
• Parties: (Conn.App. 1999) ANN O'CALLAGHAN v. COMMISSIONER OF SOCIAL SERVICES 16870

729 A.2d 800 (Conn.App. 1999)

ANN O'CALLAGHAN v. COMMISSIONER OF SOCIAL SERVICES

16870

Connecticut Court of Appeals

Argued December 3, 1998

May 11, 1999

Maite Barainca, assistant attorney general, with whom, on the brief, were Richard Blumenthal, attorney general, and Richard J. Lynch, assistant attorney general, for the appellant (defendant).

George B. Bickford,, with whom was Neil W. Kraner, for the appellee (plaintiff).

O'Connell, C. J., and Lavery and Landau, Js.

Lavery, J.

OPINION

The defendant commissioner of social services appeals from the judgment of the trial court rendered in favor of the plaintiff, Ann O'Callaghan. ¹ As a threshold matter, we conclude that the plaintiff's death during the pendency of this administrative appeal did not render the appeal moot because there is practical relief that we can grant to the parties. The dispositive issue on appeal is whether, pursuant to 42 U.S.C. §§ 1396r-5 (e) (2) (C), ² the defendant should have allocated to the plaintiff's community spouse resource allowance (resource allowance) certain spousal resources that generated only capital gains at the time that the plaintiff's husband was institutionalized. Such allocation would allow the plaintiff to generate her minimum monthly maintenance needs allowance (minimum needs allowance). ³ The defendant claims that the trial court improperly determined that the resources in question were income producing within the meaning of §§ 1396r-5 (e) (2) (C). We conclude that the trial court improperly determined that those resources generated income. As an alternative ground for affirming the decision of the trial court, the plaintiff claims that the defendant should have authorized the conversion of the resources into income producing resources and allocated to her resource allowance an amount of the converted resources sufficient to enable her to generate her minimum needs allowance. We agree with the plaintiff and conclude that, pursuant to §§ 1396r-5 (e) (2) (C), the defendant should have authorized a conversion of the resources and allocated to the resource allowance an amount of the converted resources sufficient to enable the plaintiff to generate her minimum needs allowance.

Prior to a recitation of the facts and procedural history of this appeal, it is necessary to provide a brief overview of the relevant federal medicaid laws and corresponding state regulations. Our Supreme Court has referred to this statutory scheme as a "Serbonian bog." ⁴ Ross v. Giardi, 237 Conn. 550, 554, 680 A.2d 113 (1996); see Friedman v. Berger, 409 F. Sup. 1225, 1225-26 (S.D.N.Y. 1976) (describing statutory scheme as "aggravated assault on the English language, resistant to attempts to understand it"). "The medicaid program, established in 1965 as Title XIX of the Social Security Act, and codified at 42 U.S.C. §§ 1396 et seq., is a joint federal-state venture providing financial assistance to persons whose income and resources are inadequate to meet the costs of necessary medical care. . . . States participate voluntarily in the medicaid program, but participating states must develop a plan, approved by the secretary of health and human services, containing reasonable standards . . . for determining eligibility for and the extent of medical assistance . . . . Connecticut has elected to participate in the medicaid program and has assigned to the department [of social services] the task of administering the program. General Statutes [§§ 17b-260]. . . . The department, as part of its uniform policy manual, has promulgated regulations governing the administration of Connecticut's medicaid system. See General Statutes §§ 17b-260." (Citations omitted; internal quotation marks omitted.) Burinskas v. Dept. of Social Services, 240 Conn. 141, 148, 691 A.2d 586 (1997).

In 1988, Congress enacted the Medicare Catastrophic Coverage Act of 1988 (MCCA). Pub. L. No. 100-360, 102 Stat. 683 (1988), codified at 42 U.S.C. §§ 1396r-5. "The objective of the MCCA was to protect married couples when one spouse is institutionalized in a nursing home, so that the spouse who continues to reside in the community is not impoverished and has sufficient income and resources to live independently. See H.R. Rep. No. 100-105 (II), 100th Cong., 2d Sess. at 65 (1988), reprinted in 1988 U.S.C.C.A.N. 857, 888. Prior to 1988, the medicaid eligibility rules required couples to deplete their combined resources before the institutionalized spouse ⁵ was eligible for benefits, often leaving the community spouse ⁶ financially vulnerable. The MCCA attempted to strike a balance between preventing impoverishment of the community spouse by excluding minimum amounts of resources and income for that spouse from eligibility considerations, and preventing a financially solvent institutionalized spouse from receiving Medicaid benefits by ensuring that income was not completely transferred to the community spouse." Chambers v. Ohio Dept. of Human Services, 145 F.3d 793, 798 (6th Cir.), cert. denied, ___ U.S. ___, 119 S. Ct. 408, 142 L. Ed 2d 331 (1998); see Burinskas v. Dept. of Social Services, supra, 240 Conn. 148-49.

For purposes of determining if a married applicant is eligible to receive medicaid benefits, the defendant will calculate the total value of the couple's resources ⁷ as of the date of the applicant's institutionalization and allocate a share of the resources to each spouse. 42 U.S.C. §§ 1396r-5 (c) (1); Department of Income Maintenance, Uniform Policy Manual (1989) §§ 1507.05 (Uniform Policy Manual); Thomas v. Commissioner of the Division of Medical Assistance, 425 Mass. 738, 740, 682 N.E.2d 874 (1997). "For purposes of determining eligibility, the amount [of resources] allocated to the community spouse is called the community spouse resource allowance . . . . ⁸ 42 U.S.C. §§ 1396r-5 (c) (2) (B)." Thomas v. Commissioner of the Division of Medical Assistance, supra, 425 Mass. 740. The resource allowance is the greatest of (1) $12,000 (adjusted annually), (2) the lesser of one half of total joint resources or $60,000 (adjusted annually), (3) an amount established pursuant to a fair hearing under §§ 1396r-5 (e) (2), or (4) an amount transferred under court order. 42 U.S.C. §§ 1396r-5 (f) (2) (A); Thomas v. Commissioner of the Division of Medical Assistance, supra, 425 Mass. 740-41. "The resource allowance is protected from the institutionalized applicant's health care obligations and does not count against the applicant's financial eligibility. In addition, under the [MCCA], a community spouse is entitled to a `minimum monthly maintenance needs allowance' . . . . ⁹ 42 U.S.C. §§ 1396r-5 (d) (3); Uniform Policy Manual (1992) §§ 5035.30 (B) (2)." Burinskas v. Dept. of Social Services, supra, 240 Conn. 149. The minimum needs allowance "is an amount that ensures that the community spouse has income significantly above the poverty level." Chambers v. Ohio Dept. of Human Services, supra, 145 F.3d 798. Effective July 1, 1992, the minimum needs allowance is equal to 150 percent of the official poverty line, plus an additional shelter allowance. 42 U.S.C. §§ 1396r-5 (d) (3) (B); Burinskas v. Dept. of Social Services, supra, 240 Conn. 149 n.9.

If either spouse is dissatisfied with the defendant's determination of the resource allowance, that spouse is entitled to a fair hearing. 42 U.S.C. §§ 1396r-5 (e) (2) (A) (v). "The statutory provision for revising the community spouse resource allowance is set out in 42 U.S.C. §§ 1396r-5 (e) (2) (C)." Chambers v. Ohio Dept. of Human Services, supra, 145 F.3d 798; see also Uniform Policy Manual (1989) §§ P-1570.30 (outlining procedure for hearing officer to adjust resource allowance).

The following facts and procedural history are relevant to a resolution of this appeal. On November 17, 1994, the plaintiff's husband began a period of continuous institutionalization at Hill Haven Nursing Home in Windsor. The plaintiff remained in the couple's home. On December 30, 1994, the plaintiff filed an application on behalf of her husband for medicaid benefits. The defendant determined that, as of November 17, 1994, the date of institutionalization, the couple's resources totaled $188,032.11. The defendant allocated $74,820 in resources to the plaintiff's resource allowance and transferred the remainder to the plaintiff's husband. The defendant denied the plaintiff's husband's medicaid application because his resources exceeded the eligibility limit of $1600. See Uniform Policy Manual (1993) §§ 4005.10 (A) (2) (a).

The plaintiff timely requested an administrative hearing because she was dissatisfied with the defendant's assessment of the spousal resources and the denial of her husband's application. After an administrative hearing, the hearing officer determined that the plaintiff's minimum needs allowance was $1809.75 and that the plaintiff received gross monthly income of $418.25. The hearing officer found that the plaintiff's monthly income of $418.25 was insufficient to provide her minimum needs allowance of $1809.75. In an effort to help the plaintiff reach her minimum needs allowance, the hearing officer transferred to the plaintiff's resource allowance $28,363.26 in income producing resources from her husband's resources of $113,212.11. As a result, the plaintiff's adjusted resource allowance totaled $103,183.26 and her husband retained resources of $84,848.85.

Relying on Department of Health and Human Services, Health Care Financing Administration, State Medicaid Agency Regional Bulletin No. 93-21, dated March 17, 1993 (Medicaid Bulletin No. 93-21), the hearing officer concluded that she could not allocate any portion of the $84,848.85 in resources to the plaintiff's resource allowance because those resources did not generate income at the time the plaintiff's husband was institutionalized. "The statutory provision for revising the community spouse resource allowance is set out in 42 U.S.C. §§ 1396r-5 (e) (2) (C)"; Chambers v. Ohio...