Janette Forman 1 v. Dir. of The Office of Medicaid.

• Decision Date: 06 April 2011
• Docket Number: No. 10–P–728.,10–P–728.
• Citation: 944 N.E.2d 1081,79 Mass.App.Ct. 218
• Parties: Janette FORMAN 1v.DIRECTOR OF THE OFFICE OF MEDICAID.
• Court: Appeals Court of Massachusetts

79 Mass.App.Ct. 218

944 N.E.2d 1081

Janette FORMAN 1

v.DIRECTOR OF THE OFFICE OF MEDICAID.

No. 10–P–728.

Appeals Court of Massachusetts, Bristol.

Argued Jan. 13, 2011.Decided April 6, 2011.

Eric D. Correira for the plaintiff.David R. Marks, Assistant Attorney General, for the defendant.Present: KAFKER, COHEN, & RUBIN, JJ.KAFKER, J.

At issue is whether a particular lump-sum caregiver contract for future services between a mother and daughter was a disqualifying transfer of resources for Medicaid purposes, pursuant to 130 Code Mass. Regs. § 520.007(J)(4) (2006). The mother, plaintiff Janette Forman (mother), was a nursing home resident who applied to the defendant, the Director of the Office of Medicaid, for MassHealth ² benefits to cover the cost of her long-term nursing care. MassHealth denied the mother's application for nursing home benefits from October 28, 2008, to January 9, 2009, due to a disqualifying transfer of $20,000 from the mother to her daughter, Fran Rachlin (daughter). The mother appealed to the Office of Medicaid Board of Hearings (board), which also denied the application. A judge of the Superior Court affirmed that decision, and the plaintiff appealed. We affirm.

Facts. On July 9, 2007, the mother entered into a personal services contract with her daughter. The daughter, who had previously provided certain services to the mother without compensation,³ was also the mother's attorney-in-fact pursuant to a durable power of attorney. At the time that the contract was executed, the mother was eighty-three years old and her health had started to deteriorate to the point that it was “increasingly difficult for her to complete everyday tasks alone.” Under the terms of the contract, the daughter agreed to provide the mother with room, board, and certain personal care services, including preparation of all meals, housekeeping, household laundry, and transportation to doctors' appointments.

In exchange for these services, the mother transferred $20,000 to the daughter in a lump-sum payment upon execution of the contract. As part of the contract, the daughter could terminate the contract if the mother “engage[d] in behavior that [wa]s a threat to the mental and/or physical health or safety of herself or others living on the premises” or was “no longer able to ‘assist’ ⁴ ... with her own personal hygiene needs such as bathing, dressing, eating, toileting.” If the daughter terminated the contract for either of these reasons, or if the mother died, the daughter was entitled to “retain the full amount of all payments” made by the mother to the daughter, regardless of when termination of the contract or the mother's death occurred.

The contract did not expressly contain any language quantifying the amount of hours to be worked by the daughter per week or any other measurable period. Additionally, the contract had no specific duration. Rather, it was to “continue in effect until the services and/or level of care assessed [as of the date of the contract] vary or until terminated.” There was also no provision about the quality of the services to be provided to the mother.

The daughter, who was a full-time teacher, testified that she slept at her mother's home and prepared lunch and dinner for her. She also ordered and picked up her mother's prescriptions, bathed her, and performed housekeeping chores.

On August 6, 2008, a little more than a year after the contract between the mother and the daughter was executed, the mother was admitted into a nursing home. The mother applied to MassHealth on November 10, 2008, requesting MassHealth nursing home benefits retroactive to October 28, 2008. MassHealth declared the mother ineligible for benefits between October 28, 2008, and January 9, 2009, based upon the mother's $20,000 lump-sum payment to the daughter. MassHealth determined this ineligibility period by dividing the amount of the disqualifying transfer, $20,000, by the average daily private nursing home rate, $267.

The mother appealed MassHealth's denial of nursing home benefits before January 10, 2009, to the board. On June 30, 2009, the board denied the mother's appeal, affirming MassHealth's determination that the mother's $20,000 lump-sum payment to the daughter was a disqualifying transfer under 130 Code Mass. Regs. § 520.007(J)(4). The board concluded that “while the [c]ontract may be a legal one, it is not for fair market [value] as it is not both ‘legally and reasonably enforceable by the applicant.’ ” The hearing officer concluded that the contract between the mother and the daughter was “merely a device to preserve the [mother's] assets for her family while she prepare[d] to apply for public assistance.”

The mother subsequently appealed the board's decision to the Superior Court pursuant to G.L. c. 30A, § 14, and moved for judgment on the pleadings. On April 7, 2010, a Superior Court judge affirmed the board's decision, holding that “substantial evidence supports the hearing officer's conclusion that [the mother's] payment of $20,000.00 to [the daughter] was a disqualifying transfer because the [c]ontract was not reasonably enforceable, and would support the same conclusion because the [c]ontract had no ascertainable fair-market value.” The mother now appeals to this court, contending that the board's decision was not supported by substantial evidence.

Standard of review. The mother, as appellant, has the burden of proof “to demonstrate the invalidity of the administrative determination.” Andrews v. Division of Med. Assistance, 68 Mass.App.Ct. 228, 231, 861 N.E.2d 483 (2007). In evaluating the administrative determination, the court is also to “give ‘due weight to the experience, technical competence, and specialized knowledge of the agency, as well as to the discretionary authority conferred upon it.’ ” Springfield v. Department of Telecommunications & Cable, 457 Mass. 562, 567, 931 N.E.2d 942 (2010), quoting from G.L. c. 30A, § 14(7). This means that “[a] court may not displace an administrative board's choice between two fairly conflicting views, even though the court would justifiably have made a different choice had the matter been before it de novo.” Embers of Salisbury, Inc. v. Alcoholic Bevs. Control Commn., 401 Mass. 526, 529, 517 N.E.2d 830 (1988), quoting from School Comm. of Wellesley v. Labor Relations Commn., 376 Mass. 112, 120, 379 N.E.2d 1077 (1978).

The agency's decision must, however, be supported by “substantial evidence,” which is defined as “such evidence as a reasonable mind might accept as adequate to support a conclusion.” G.L. c. 30A, § 14(7), § 1(6). In reviewing an agency's decision for substantial evidence, “[t]he court shall make the foregoing determinations upon consideration of the entire record, or such portions of the record as may be cited by the parties.” Fortier v. Department of Pub. Utils., 342 Mass. 728, 734, 175 N.E.2d 495 (1961), quoting from G.L. c. 30A, § 14. In sum, reasonable interpretations by an agency of its governing law, which are supported by substantial evidence must be respected.

Overview of Medicaid program. Medicaid “is a cooperative Federal and State program which provides payment for medical services to eligible individuals and families.” Haley v. Commissioner of Pub. Welfare, 394 Mass. 466, 467, 476 N.E.2d 572 (1985). The Medicaid program is specifically designed to meet the medical needs of individuals “whose income and resources are insufficient to meet the costs of necessary medical services[.]” 42 U.S.C. § 1396(1) (2006). As previously noted in the margin, MassHealth is the agency within the Commonwealth “responsible for the administration and delivery of health-care services to low- and moderate-income individuals.” 130 Code Mass. Regs. § 515.002(A). To receive Federal funding, MassHealth regulations and practices must comply with all requirements imposed by Federal Medicaid law. Haley, supra at 467, 476 N.E.2d 572, citing 42 U.S.C. § 1396. See Cohen v. Commissioner of Div. of Med. Assistance, 423 Mass. 399, 402, 668 N.E.2d 769 (1996); 130 Code Mass. Regs. § 515.002(B).

MassHealth provides nursing home benefits for individuals who meet certain criteria. “Understandably, an elder would prefer to pass along accumulated wealth to the next generation rather than use it to provide her own nursing home expenses, especially if a State program is available to help pick up the cost. Consequently, strict rules have been promulgated which have the effect of limiting the amount of assets that applicants can dispose of without affecting their eligibility for assistance.” Andrews, 68 Mass.App.Ct. at 229, 861 N.E.2d 483. Among other requirements for eligibility, applicants must have no more than $2,000 in “countable assets.” 130 Code Mass. Regs. § 520.003(A) (2004). See Shelales v. Director of the Office of Medicaid, 75 Mass.App.Ct. 636, 637, 915 N.E.2d 1092 (2009).

“As part of its determination of eligibility for long-term care benefits, the department enumerates certain disqualifying transfers of resources.” Id. at 638, 915 N.E.2d 1092, citing 130 Code Mass. Regs. § 520.019(C) (2006). MassHealth reviews an applicant's transfers of resources during a statutorily-created “look-back period” prior to the individual's application. “Under 42 U.S.C. § 1396p(c) (2006), G.L. c. 118E, § 28, and the implementing State regulations, 130 Code Mass. Regs. §§ 520.018 (2006) and 520.019 (2006), the department will deny an application for nursing home benefits when the applicant has transferred an asset for less than fair market value ... [within] sixty months preceding the date when the applicant is both a nursing facility resident and has applied for or is receiving MassHealth standard medical assistance.” Shelales, supra at 638, 915 N.E.2d 1092. MassHealth regulations stipulate that a transfer stemming from a contract for future services to an applicant is a “disqualifying transfer of assets to the extent that the transaction does not...