Dahly v. Anderson

Decision Date30 August 2012
Docket NumberNo. 20120013.,20120013.
PartiesWilfred DAHLY, Appellant v. Maggie ANDERSON, Interim Executive Director, North Dakota Department of Human Services, Appellee.
CourtNorth Dakota Supreme Court

OPINION TEXT STARTS HERE

Richard R. LeMay (argued), Minot, N.D., and Meredith L. Vukelic (appeared), Bismarck, N.D., for appellant.

Jeanne M. Steiner, Assistant Attorney General, Bismarck, N.D., for appellee.

KAPSNER, Justice.

[¶ 1] Wilfred Dahly appeals from a district court judgment affirming a final order of the North Dakota Department of Human Services (Department) which determined he was ineligible for Medicaid benefits. We reverse and remand, concluding the Department erred when it concluded the proceeds of the sale of Wilfred Dahly's home were an available asset which exceeded the asset limit for Medicaid eligibility.

I

[¶ 2] In 2004, Wilfred and Geraldine Dahly each executed a power of attorney naming their son, Rick Dahly, as their attorney-in-fact. Geraldine Dahly developed Alzheimer's disease and by January 2006 required 24–hour care. Wilfred Dahly initially provided care for Geraldine Dahly, but he also began experiencing progressively worsening dementia. In January 2007, when Wilfred Dahly could no longer provide the required care for Geraldine Dahly, their daughter, LeAnn Greenwell, moved with her husband from their home in Kentucky to live with, and provide care for, Wilfred and Geraldine Dahly. In February 2007, Rick Dahly, on behalf of Wilfred and Geraldine Dahly, signed an agreement to pay Greenwell $2,250 each month for their care. Wilfred Dahly's doctor indicated that, by August 2007, Wilfred Dahly required 24–hour care.

[¶ 3] Geraldine Dahly's condition continued to worsen until Greenwell could no longer care for her at home, and Geraldine Dahly entered a nursing home in January 2008. Geraldine Dahly applied for and began receiving Medicaid benefits. In April 2008, Rick Dahly, on behalf of Wilfred Dahly, signed a new care agreement, agreeing to pay Greenwell $1,500 per month to provide care for Wilfred Dahly in his home.

[¶ 4] In April 2009, Rick Dahly, as Geraldine Dahly's attorney-in-fact, signed a quit claim deed transferring her interest in the home to Wilfred Dahly. In May 2010, Rick Dahly, as Wilfred Dahly's attorney-in-fact, deeded the house to Greenwell. Wilfred Dahly entered a nursing home in July 2010. Greenwell sold the house for $180,000 in August 2010, and split the net proceeds of approximately $160,000 with Rick Dahly.

[¶ 5] Wilfred Dahly applied for Medicaid benefits in November 2010. Ward County Social Services (“County”) denied Wilfred Dahly's application, determining the proceeds from the sale of the house were an available asset putting him over the $3,000 Medicaid asset limit. Wilfred Dahly appealed to the Department. After an administrative hearing, the Department issued a final order concluding the proceeds from the sale of the house were an available asset and affirming the denial of benefits. Wilfred Dahly appealed to the district court, which affirmed the Department's final order.

II

[¶ 6] When a final decision of an administrative agency is appealed from the district court to this Court, we review the agency's decision and the record compiled before the agency. Kaspari v. Olson, 2011 ND 124, ¶ 5, 799 N.W.2d 348. Under the Administrative Agencies Practice Act, N.D.C.C. ch. 28–32, courts exercise a limited review in appeals from an administrative agency's decision. Simons v. State, 2011 ND 190, ¶ 8, 803 N.W.2d 587;Kaspari, at ¶ 5. The district court under N.D.C.C. § 28–32–46, and this Court under N.D.C.C. § 28–32–49, must affirm a final order of an administrative agency unless:

1. The order is not in accordance with the law.

2. The order is in violation of the constitutional rights of the appellant.

3. The provisions of this chapter have not been complied with in the proceedings before the agency.

4. The rules or procedure of the agency have not afforded the appellant a fair hearing.

5. The findings of fact made by the agency are not supported by a preponderance of the evidence.

6. The conclusions of law and order of the agency are not supported by its findings of fact.

7. The findings of fact made by the agency do not sufficiently address the evidence presented to the agency by the appellant[, or]

8. The conclusions of law and order of the agency do not sufficiently explain the agency's rationale for not adopting any contrary recommendations by a hearing officer or an administrative law judge.

N.D.C.C. § 28–32–46.

[¶ 7] In determining whether an agency's findings of fact are supported by a preponderance of the evidence, we do not make independent findings of fact or substitute our judgment for that of the agency; rather, we determine only whether a reasoning mind reasonably could have determined the agency's factual findings were proven by the weight of the evidence from the entire record. Simons, 2011 ND 190, ¶ 8, 803 N.W.2d 587;Kaspari, 2011 ND 124, ¶ 6, 799 N.W.2d 348. Questions of law are fully reviewable on appeal from an agency's decision. Kaspari, at ¶ 6.

III

[¶ 8] Wilfred Dahly contends the Department erred in concluding he was not entitled to claim the caregiver child exemption under 42 U.S.C. § 1396p(c)(2)(A)(iv) and N.D. Admin. Code § 75–02–02.1–33.2(7)(a)(4) for the transfer of the family home to his daughter.

[¶ 9] We summarized the fundamentals of the Medicaid program in Kaspari, 2011 ND 124, ¶ 7, 799 N.W.2d 348 (citations omitted):

In 1965, Congress enacted the Medicaid program in Title XIX of the Social Security Act, 42 U.S.C. § 1396 et seq., as a cooperative federal-state program designed to provide financial assistance to qualified needy persons for their necessary medical care. The Medicaid program is governed by the interplay of federal and state statutes and regulations. The Department administers the Medicaid program in North Dakota and is authorized to promulgate rules and regulations to determine eligibility for benefits. To be eligible for Medicaid benefits, an applicant must have insufficient income or assets to pay the costs for their necessary medical care and services. Medicaid is intended to be a payor of last resort, and an applicant's other available resources must be exhausted before the applicant is eligible to have Medicaid pay for care. An applicant for Medicaid benefits bears the burden of proving eligibility.

[¶ 10] In determining whether an individual qualifies for Medicaid benefits, assets which are “actually available” to the individual will generally be considered when determining if the asset eligibility requirements are met:

A one-person unit is eligible for Medicaid benefits if the value of that person's available assets does not exceed $3,000. An “asset” is defined as “any kind of property or property interest, whether real, personal, or mixed, whether liquid or illiquid, and whether or not presently vested with possessory rights.” N.D. Admin. Code § 75–02–02.1–01(2). Any asset which is “actually available” must be considered when determining eligibility for Medicaid benefits. Section 75–02–02.1–25(1), N.D. Admin. Code, specifies when an asset is considered actually available:

Assets are actually available when at the disposal of an applicant, recipient, or responsible relative; when the applicant, recipient, or responsible relative has a legal interest in a liquidated sum and has the legal ability to make the sum available for support, maintenance, or medical care; or when the applicant, recipient, or responsible relative has the lawful power to make the asset available, or to cause the asset to be made available.

The determination whether an asset is actually available for purposes of Medicaid eligibility is largely a fact-specific inquiry depending on the circumstances of each individual case. The “actually available” requirement must be interpreted reasonably, and the focus is on the applicant's actual and practical ability to make an asset available as a matter of fact, not legal fiction.

Christensen v. North Dakota Dep't of Human Servs., 2011 ND 77, ¶ 9, 796 N.W.2d 390 (citations omitted).

[¶ 11] In calculating whether an applicant meets the asset eligibility requirements, federal law mandates that, if an individual has transferred or disposed of assets for less than full market value during a “look-back” period, the individual will be ineligible for Medicaid benefits for a prescribed period of time. 42 U.S.C. § 1396p(c)(1)(A); see alsoN.D. Admin. Code § 75–02–02.1–33.2(2). Federal law further provides for an exemption to the disqualifying transfer rule if the individual's house is transferred to a caregiver child under certain conditions:

(2) An individual shall not be ineligible for medical assistance by reason of paragraph (1) to the extent that—

(A) the assets transferred were a home and title to the home was transferred to—

....

(iv) a son or daughter of such individual ... who was residing in such individual's home for a period of at least two years immediately before the date the individual becomes an institutionalized individual, and who (as determined by the State) provided care to such individual which permitted such individual to reside at home rather than in such an institution or facility....

42 U.S.C. § 1396p(c)(2)(A)(iv); see alsoN.D. Admin. Code § 75–02–02.1–33.2(7)(a)(4). The statute expresses a clear federal policy to encourage the child of an elderly disabled parent to provide live-in care to allow the parent to remain at home rather than in a nursing care facility, and to allow transfer of the family home to that child under certain conditions without affecting the parent's eligibility for Medicaid benefits.

[¶ 12] There is no question that Greenwell lived in the home and provided necessary care to Wilfred Dahly for a period of more than two years after it was determined by his treating physician that he could no longer live alone in the home and required 24–hour care. The Department...

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