Gnutti v. Heintz

• Decision Date: 22 March 1988
• Docket Number: 13173,Nos. 13146,s. 13146
• Citation: 206 Conn. 628,539 A.2d 118
• Court: Connecticut Supreme Court
• Parties: , 21 Soc.Sec.Rep.Ser. 264, Medicare & Medicaid Guide P 37,059 David GNUTTI v. Stephen HEINTZ, Commissioner of Income Maintenance. Wilfred SMALLEY v. Stephen HEINTZ, Commissioner of Income Maintenance.

Page 118

539 A.2d 118

206 Conn. 628, 21 Soc.Sec.Rep.Ser. 264,

Medicare & Medicaid Guide P 37,059

David GNUTTI v. Stephen HEINTZ, Commissioner of Income Maintenance.

Wilfred SMALLEY v. Stephen HEINTZ, Commissioner of Income Maintenance.

Nos. 13146, 13173.

Supreme Court of Connecticut.

Argued Jan. 14, 1988.

Decided March 22, 1988.

John P. Spilka and Joanne Lewis, New Britain, for appellants (plaintiff in each case).

Hugh Barber, Asst. Atty. Gen., with whom, on the brief, was Joseph I. Lieberman, Atty. Gen., for appellee (defendant in both cases).

Before ARTHUR H. HEALEY, SHEA, CALLAHAN, GLASS and HULL, JJ.

SHEA, Associate Justice.

These cases are consolidated administrative appeals from the denial of applications for Title XIX medical assistance benefits (Medicaid). Title XIX is a medical program administered by the department of income maintenance (DIM) pursuant to federal statutes and regulations. General Statutes § 17-134a et seq.; 42 U.S.C. § 1396 et seq. (1982); 42 C.F.R. § 430.0 et seq. ¹

The plaintiffs David Gnutti and Wilfred Smalley applied separately for disability benefits from the federal Social Security Administration under the Supplemental Security Income (SSI) program. 42 U.S.C. § 1381 et seq. (1982). Each claimed that he was an alcoholic, and was disabled from working as a result of his alcoholism. The Social Security Administration denied each plaintiff's application. Both determinations are presently in various stages of review in accordance with the federal administrative and judicial process. ²

After having initially been denied federal social security disability benefits, each plaintiff filed a separate application with the DIM for Medicaid disability benefits on the basis that his alcoholism had rendered him unable to work. The standard used for determining disability for the purpose of eligibility for SSI benefits is the same as that used by the DIM in deciding whether an applicant qualifies for Medicaid disability benefits. ³ Neither plaintiff had exhausted his federal administrative or judicial remedies for obtaining federal SSI disability benefits. There was no claim by either plaintiff when he applied to the DIM that his medical condition had changed since the time he applied for SSI disability benefits. A medical review team (team) employed by the DIM examined each plaintiff. The team found each plaintiff to be ineligible for disability benefits. The plaintiffs requested hearings before a fair hearing officer (FHO). The FHO who conducted the hearing concerning Gnutti found that he was able to work despite his alcoholism, and, as a result, determined that he was ineligible for Medicaid disability benefits. Gnutti appealed to the Superior Court, R. O'Connell, J., which upheld the decision of the FHO. The FHO who conducted the hearing in the case of Smalley found that he too was able to work despite his alcoholism, and, as a result, determined that he was ineligible for Medicaid disability benefits. Smalley appealed to the Superior Court, Purtill, J., which upheld the decision of the FHO.

In these consolidated appeals from the two judgments, each plaintiff claims that the trial court in his case erred: (1) in finding that the DIM was not bound by federal law; (2) in failing to conclude that the standards applied in determining disability are arbitrary and illegal; and (3) in concluding that there was substantial evidence to support the decision of the FHO that he was not disabled. Gnutti claims further that the trial court in his case erred in not vacating the decision of the FHO when there was evidence that the FHO had improperly consulted medical vocational guidelines in determining that he was not disabled. Smalley raises an additional claim that the trial court erred in determining that the findings of fact made by the FHO in his case were sufficient to support the conclusion that he was not disabled.

The defendant maintains that there is an alternative ground for affirming the judgments below that renders it unnecessary for this court to review the plaintiffs' claims. This contention is that under federal law the DIM may not grant medicaid disability benefits to persons who have been denied SSI disability benefits by the Social Security Administration. ⁴

We conclude that our courts should abstain from considering Medicaid disability claims until a person who has applied for SSI disability benefits has exhausted all federal administrative or judicial avenues for obtaining such relief. In view of our determination, we shall not review the plaintiffs' claims. We shall, however, briefly examine the defendant's alternative ground for affirmance in reaching our conclusion that these appeals should be remanded to the trial court to be stayed until the ongoing federal administrative and judicial proceedings for the determination of whether each plaintiff is disabled have been completed.

I

The defendant argues that the DIM may not grant Medicaid disability benefits to those who have been found ineligible for SSI disability benefits because the United States Department of Health and Human Services (HHS) has imposed that policy upon it. In Rousseau v. Bordeleau, 624 F.Sup. 355 (D.R.I.1985), however, the federal district court rejected a similar argument and held that the state of Rhode Island could not automatically deny Medicaid disability benefits to those who had been found ineligible for SSI disability benefits, because the HHS policy statement did not have the force of a federal regulation binding upon state agencies administering the Medicaid program. The Rousseau court noted that "[a] policy statement appears to be an internal determination of the [HHS], not subject to public comment as are regulations. Thus, an action twice removed from the statement of Congressional policy is at issue. As a policy statement, there is no basis to afford particular weight to the [HHS's] statement." Id., at 358. The Rousseau court held: "The statute and regulations require that applications for Medical Assistance be reviewed independently of any denial action made by the Social Security Administration. A fair hearing process requires not only an independent review of an applicant's claim of disability but also the possibility of a result different from the federal determination." Id., at 361.

Rousseau is the only case directly on point in this area. One federal court has cited the Rousseau case with approval. Mullins v. Kenley, 639 F.Supp. 1252, 1260 n. 10 (W.D.Va.1986), aff'd in part, rev'd in part on other grounds, 816 F.2d 672 (4th Cir.1987). On December 14, 1987, HHS issued proposed federal regulations that would forbid states from granting Medicaid disability benefits to persons who had been found ineligible for SSI disability benefits. 52 Fed.Reg. 47,414-47,718 (1987). HHS in these proposed regulations expressed strong disagreement with the Rousseau decision. Id., 47,416. The defendant has conceded that these proposed regulations, if adopted after the comment period expires, would have only a prospective effect, and would not render this appeal moot.

The defendant has sought to distinguish this case from Rousseau. Rhode Island is an "SSI" state that employs the same financial eligibility standards in its Medicaid programs that the Social Security Administration uses in its SSI program. On the other hand, Connecticut is a "Section 209(b)" state, and is somewhat more restrictive ⁵ than SSI in terms of financial eligibility. 42 U.S.C. § 1396a(f); 42 C.F.R. § 435.121; Schweiker v. Gray Panthers, 453 U.S. 34, 38, 101 S.Ct. 2633, 2637, 69 L.Ed.2d 460 (1981). The defendant concedes, however, that the DIM employs the same definition of disability as does the SSI. There is no difference between Connecticut and Rhode Island in their definition of disability requirements for receiving Medicaid benefits. There are no meaningful distinctions that would allow us to distinguish this case from Rousseau. If this court were to agree with the defendant's alternative ground for affirmance, we must disagree with the reasoning in Rousseau.

We agree with the defendant, however, that it makes little sense to have the DIM duplicate the work of the Social Security Administration in evaluating a person's disability claim when both agencies employ the same definition of disability. This court does not believe that due process requires duplicative review merely because two different agencies applying the same standards may reach different results.

This court, however, has had little experience in interpreting Social Security statutes and regulations, and, therefore, it would be somewhat presumptuous for us to reject Rousseau. According to the United States Supreme Court, "[t]he Social Security Act is among the most intricate ever drafted by Congress. Its Byzantine construction, as Judge Friendly has observed, makes the Act 'almost unintelligible to the uninitiated.' Friedman v. Berger, 547 F.2d 724, 727 n. 7 ( [2d Cir.] 1976), cert. denied, 430 U.S. 984 [97 S.Ct. 1681, 52 L.Ed.2d 378] (1977)." Schweiker v. Gray Panthers, supra, at 43, 101 S.Ct. at 2640. "[T]he Medicaid program is a morass of bureaucratic complexity...." Herweg v. Ray, 455 U.S. 265, 279, 102 S.Ct. 1059, 1068, 71 L.Ed.2d 137 (1982) (Burger, C.J., dissenting). We decline at this time to determine whether the extraordinarily complex Social Security and Medicaid statutes and regulations require the defendant to deny Medicaid disability benefits to persons who are ineligible for SSI disability benefits.

II

We conclude that our courts should abstain...