Golf v. New York State Dept. of Social Services

• Decision Date: 02 April 1998
• Citation: Golf v. New York State Dept. of Social Services, 91 N.Y.2d 656, 674 N.Y.S.2d 600, 697 N.E.2d 555 (N.Y. 1998)
• Parties: , 697 N.E.2d 555, 1998 N.Y. Slip Op. 3020 In the Matter of Eileen GOLF, as Administratrix of the Estate of Floyd Golf, Deceased, Respondent, v. NEW YORK STATE DEPARTMENT OF SOCIAL SERVICES et al., Appellants.
• Court: New York Court of Appeals Court of Appeals

Page 600

674 N.Y.S.2d 600

91 N.Y.2d 656, 697 N.E.2d 555, 1998

N.Y. Slip Op. 3020

In the Matter of Eileen GOLF, as Administratrix of the Estate of Floyd Golf, Deceased, Respondent, v. NEW YORK STATE DEPARTMENT OF SOCIAL SERVICES et al., Appellants.

Court of Appeals of New York.

April 2, 1998.

Dennis C. Vacco, Attorney General, Albany (Victor Paladino, Barbara G. Billet and Peter H. Schiff, of counsel), for New York State Department of Social Services, appellant.

Charles S. Turner, County Attorney of Monroe County, Rochester (James A. Robinson, of counsel), for Monroe County Department of Social Services, appellant.

Helm, Koldin & Levine, P.C., East Syracuse (Benjamin D. Levine, of counsel), for respondent.

MacKrell, Rowlands, Premo & Pierro, P.C., Albany (Louis W. Pierro and Edward V. Wilcenski, of counsel), and Robert, Lerner & Robert, Rockville Centre (Charles Robert and Joan L. Robert, of counsel), for Long Island Alzheimer's Foundation, amicus curiae.

OPINION OF THE COURT

SMITH, Judge.

The question presented by this appeal concerns the construction of State and Federal statutory provisions relating to Medicaid and the reasonableness of the method utilized by the Monroe County Department of Social Services (DSS) to determine the eligibility for Medicaid of an institutionalized spouse. Specifically at issue is the decision to utilize the "income first" method rather than the "resource first" method to determine eligibility for Medicaid. Because we conclude that the statutes are ambiguous and do not resolve the issue presented; that the income first method is premised upon a reasonable interpretation of the relevant statutory provisions and is consistent with the underlying policy of the Medicaid statute, there should be a reversal.

I.

Medicaid is a medical assistance program established by title XIX of the Social Security Act (42 U.S.C. § 1396 et seq.), implemented in New York by article 5, title 11 of the Social Services Law, and jointly funded by this State and the Federal Government. The program's purpose is to pay for necessary medical care for those eligible individuals whose income and resources do not allow them to meet the costs of their medical needs. New York's Medicaid plan, like those of all States, must conform with the Federal statutory standards in order for the State to receive Federal program funding. The Medicaid program is administered by the United States Department of Health and Human Services under the auspices of the Health Care Financing Administration and, locally, by the New York State Department of Social Services. ¹

In 1988, Congress enacted the Medicare Catastrophic Coverage Act (MCCA) (42 U.S.C. § 1396r-5, as added by Pub L 100-360, 102 U.S. Stat. 754) to address a perceived flaw in the Medicaid program which compelled a couple to liquidate virtually all of their joint resources before an institutionalized spouse could become eligible for Medicaid. In doing so, the noninstitutionalized spouse, referred to as the community spouse, was left with little or no income to meet his or her daily needs (see, Matter of Schachner v. Perales, 85 N.Y.2d 316, 319, 624 N.Y.S.2d 558, 648 N.E.2d 1321). The MCCA sought " 'to end th[e] pauperization [of the community spouse] by assuring that [he or she] has a sufficient--but not excessive--amount of income and resources' " to live comfortably when the other spouse was institutionalized (see, id., at 323, 624 N.Y.S.2d 558, 648 N.E.2d 1321 [quoting H.R. Rep. No. 100-105(II), 100th Cong., 2d Sess. 65] ). At the State level, Social Services Law § 366-c implements this goal and serves also "to protect the community spouse from financial disaster when the primary income-providing spouse becomes institutionalized" (see, Matter of Schachner v. Perales, supra, at 323, 624 N.Y.S.2d 558, 648 N.E.2d 1321).

Consequently, the Act requires that the community spouse be allotted a minimum level of monthly income referred to as the "minimum monthly maintenance needs allowance" or "monthly need" (see, 42 U.S.C. § 1396r-5 [d][3]; Social Services Law § 366-c[2][h] ). The community spouse is also granted a "community spouse resource allowance" to protect him or her from being forced to spend down owned assets to qualify the institutionalized spouse for Medicaid (see, 42 U.S.C. 1396r-5[f][2]; Social Services Law § 366-c[2][d] ). Only resources of the couple in excess of the community spouse resource allowance are taken into account in determining the institutionalized spouse's eligibility (42 U.S.C. 1396r-5[c][2] ). ² The statute also allows transfers from the institutionalized spouse to the community spouse to raise the community spouse's income up to the level of the minimum monthly maintenance needs allowance (Social Security Act [42 U.S.C.] § 1396r-5[d][1][B]; Social Services Law § 366-c[4][b] ). If either spouse is dissatisfied with the community spouse resource allowance determination, he or she may request a "fair hearing" (42 U.S.C. § 1396r-5[e]; Social Services Law § 366-c[8][a] ).

In the instant case, petitioner's husband, Floyd Golf, was admitted to a nursing home in January 1993. After his death in August 1993, Mrs. Golf petitioned the Monroe County Department of Social Services for Medicaid benefits for payment of nursing home expenses incurred by her husband for two of the months he resided at the nursing home. Applying the aforementioned statutory rules, the agency established that the couple had combined resources of $105,763.60. Of that amount, $86,855.25 was attributed by the agency to Mrs. Golf and $18,908.35 was attributed by the agency to her husband. Mrs. Golf, as the community spouse, was entitled to retain a community spouse resource allowance of $70,740 and required a minimum monthly maintenance needs allowance of $1,769. However, she actually received a monthly income of only $1,379.06. The local agency determined that Mr. Golf had actual excess resources, after standard deductions, totaling $13,100 and had a monthly income of $1,319.58. Given these calculations, it was evident that Mrs. Golf's actual monthly income was less than her established monthly need (minimum monthly maintenance needs allowance) of $1,769.

Because of this shortfall between Mrs. Golf's actual income and her monthly need, the agency determined that Mr. Golf could transfer income and resources to his wife in order to raise her income to the monthly need level. Monroe County DSS first deducted $389.94 from Mr. Golf's income and transferred that amount to Mrs. Golf, and in so doing, raised her monthly income to the required monthly need level of $1,769. After doing so, however, the local agency deemed Mr. Golf ineligible for Medicaid for the two months for which he sought coverage because he had $13,100 in excess resources. It denied Mrs. Golf's petition for Medicaid assistance.

At the fair hearing to review the local agency's determination, Mrs. Golf argued that the agency's decision to utilize the income first method--i.e., its decision to first transfer some of Mr. Golf's (the institutionalized spouse) income to her (the community spouse) to meet a shortfall in her monthly income need and then to determine his eligibility--was error. Instead, she asserts, the agency should have utilized the resource first method. Specifically, if applying the resource first method, the agency first should have allocated all or a portion of her husband's excess resources (the $13,100) to her and allowed her to retain any income generated by those excess resources in an effort to increase her monthly income to the appropriate level. Petitioner further asserted that if a community spouse's resource level is increased by the inclusion of all of the institutionalized spouse's excess resources and the community spouse's income level remains below the minimum monthly maintenance needs allowance then, posteligibility, the community spouse is to be allocated a sufficient amount of the institutionalized spouse's income. This, argues Mrs. Golf, is what should have occurred in her case. ³

Thus, the crux of petitioner's argument--and the fundamental distinction between the two methods--is that once a shortfall in Mrs. Golf's monthly need was evident, the agency should have transferred to Mrs. Golf all of her husband's excess resources as a way of raising her income to close the shortfall. Next, the agency should have examined Mr. Golf's eligibility status. Because he would then be resourceless, he should have been deemed eligible for Medicaid assistance. Finally, after being deemed eligible, the agency could have, and should have, transferred a portion of Mr. Golf's income to Mrs. Golf to close the shortfall in her monthly need. However, in this case, the Monroe County DSS left untouched Mr. Golf's resources and instead first transferred a portion of his income to his wife to meet the shortfall in her monthly need. Once this transfer was complete, and Mrs. Golf's monthly need was met, the agency next examined Mr. Golf's eligibility for Medicaid. It deemed him ineligible because of the excess amount of resources--totaling $13,100--in his possession.

Petitioner's arguments were rejected by the New York State Department of Social Services and the agency's application of the income first method was sustained on the ground that the pertinent laws and regulations did not require a contrary result. Petitioner then commenced thisCPLR article 78 proceeding seeking to annul the State's determination. Supreme Court denied the application, holding that the State's determination was not arbitrary and capricious since the statutes in question did not definitively require the utilization of either the "resource first" or "income first" method. The Appellate Division unanimously reversed. It held that the State DSS erred in not employing a "resource first" method in determining eligibility. On remittal, Supreme Court awarded judgment to the petitioner. Respondents sought leave to appeal...