Fischer v. Kansas Dept. of SRS, 84,681.
| Decision Date | 20 April 2001 |
| Docket Number | No. 84,681.,84,681. |
| Citation | 21 P.3d 509,271 Kan. 167 |
| Parties | DONALD F. FISCHER, Appellant, v. STATE DEPARTMENT OF SOCIAL AND REHABILITATION SERVICES, Appellee. |
| Court | Kansas Supreme Court |
Michael W. Ryan, of Ryan, Condray & Wenger, of Clay Center, argued the cause, and Dustin W. Mullin, of the same firm, was with him on the brief for appellant.
Matthew W. Boddington, of Kansas Department of Social and Rehabilitation Services, argued the cause and appeared on the brief for appellee.
The opinion of the court was delivered by
Plaintiff appeals the district court's affirmance of the order of the Kansas Department of Social and Rehabilitation Services (SRS) classifying resources as countable in determining that the plaintiff was not eligible for Medicaid.
Medicaid is a joint federal-state program, providing medical assistance to eligible persons. The purpose of the Medicaid program is to provide medical and rehabilitation assistance to the qualifying poor, aged, blind, and disabled persons. See 42 U.S.C. § 1396 (1994). Kansas has elected to participate in the Medicaid program. K.S.A. 39-708c gives the Secretary of SRS (Secretary) the power and duty to determine general policies relating to social welfare and to adopt rules and regulations therefor. K.S.A. 39-708c(s) requires the Secretary to develop plans financed by federal funds and/or state funds to provide medical care for needy persons. The Secretary adopted regulations, which are found at K.A.R. 30-6-34 et seq.
When an application for Medicaid assistance is made, SRS is required to make an eligibility determination. K.A.R. 30-6-106 sets out the general regulations for consideration of resources. All resources owned by the applicant are considered in determining eligibility, and for a person entering long-term care, the combined resources of the applicant and the applicant's spouse are considered available to the applicant for an eligibility determination. The resources must have a measurable value and must be real and available. K.A.R. 30-6-106 also sets out the formula for the resource allowance for the community spouse. If the countable resources of the applicant exceed $2,000, the application must be denied. K.A.R. 30-6-107. Conversely, if the countable resources of the applicant spouse are below $2,000, the applicant is eligible for Medicaid assistance.
K.A.R. 30-6-108 provides for the treatment of real property:
It is important in this case to note that if the other real property is not producing income consistent with its fair market value, that property is not exempt. Personal property, unless exempted, is considered a resource. K.A.R. 30-6-109(b). The criteria for classifying personal property is set out in K.A.R. 30-6-109(d), which provides, in part:
K.A.R. 30-6-111 defines applicable income. That regulation provides:
The treatment of income is set out in K.A.R. 30-6-110. Income is classified as either "earned income" or "unearned income." Earned income is income that an applicant earns through the receipt of wages, salary, or profit from activities in which the individual engages as an employer or as an employee with responsibilities that necessitate continuing activity on the individual's part. K.A.R. 30-6-110(a). All income received or reasonably expected to be received shall be considered in determining the applicable income for the eligibility base period. K.A.R. 30-6-110(b)(2). This includes income produced by real property exempt under K.A.R. 30-6-108(c)(3).
Prior to the deterioration of Donald Fischer's health, Donald owned and managed the family farm. Donald's wife, Betty Fischer, did not participate in the active management of the farm. Donald entered long-term nursing home care in June 1996. At the time he entered the nursing home, Donald and Betty owned the following assets:
240 acres of farm land $123,300.00
Building site, 8.8 acres 36,000.00 32 acre farm, Betty (not Donald) owned 40 percent 8,201.00 Grain and hay 2,800.00 Loader 2,400.00 Feed wagon 400.00 Cattle 7,846.00 Stock trailer 3,700.00 Checking at Tri-County National Bank 6,082.91 Checking at Community State Bank 576.98 Second checking at Tri-County National Bank 3,810.55
Donald began selling off his real estate after his admission to the nursing home in 1996. On October 6, 1998, after the Fischers had sold their farm resources, Betty filed an application on behalf of Donald for SRS Medicaid assistance. The application asked for a description of two sets of assets: assets owned at the date the applicant entered long-term care (1996) and assets owned at the date of application (1998). There are two application forms in the record because, after the applicant fills out an application and turns it into SRS, SRS fills out an identical application for the applicant where it determines and classifies the assets (countable or exempt).
The 1998 application required the Fischers to list their nonexempt countable assets owned at the time Donald entered long-term care (1996). The application stated: "Do not list items that are exempt." The application also required the Fischers to provide the "equity value" of those countable assets. The Fischers listed the farm property as nonexempt, countable property and included the equity value of the property. The application required the listing of countable real property, liquid assets, nonexempt countable motor vehicles, life insurance polices, and all other assets. The application did not specifically require income to be listed as another asset.
After the listing of countable assets at the time the applicant entered long-term care, the application provided a formula for computing the "spouse resource allowance." The formula was one-half of the total equity value of the nonexempt countable resources owned at the time the client entered long-term care. If the value is $15,384, then $15,384 shall be the amount of the community spouse resource allowance. If the value is over $76,740, then the $76,740 figure is used. Because the Fischers calculated that half of the countable assets was $97,558.72, the spousal allowance was $76,740.
The next section of the application required the applicant to list the resources owned at the date of the application. Here, the Fischers no longer owned what they considered to be countable real estate, so they did not list any nonexempt countable real estate. All the Fischers' nonexempt countable assets at the date of the application were liquid assets, totaling $54,387.45. The final section of the application took the total equity value of currently owned (date of application) nonexempt countable assets (which the Fischers had calculated at $54,387.45) and subtracted from that amount the spousal allowance, which had been calculated at $76,740. The result was less than zero, so, according to the Fischers' application, Donald was eligible for Medicaid.
SRS took the figures provided by the Fischers in their application and "re-classified" the assets. SRS determined that the real farm property and farm implements owned by Donald at the time he entered long-term care (1996) were exempt property. The reason given was: "Income Producing." How SRS arrived at the determination that the farm land was "income producing" is not shown on the document. Because the property, according to SRS, is classified as exempt, it was excluded from the resource assessment determination.
The result of classifying the...
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