Lamore v. Ives, s. 91-1939

• Decision Date: 07 April 1992
• Docket Number: 91-1998,Nos. 91-1939,s. 91-1939
• Citation: 977 F.2d 713
• Parties: , Medicare & Medicaid Guide P 40,867 Athalie LAMORE, et al., Plaintiffs, Appellants, v. H. Rollin IVES, Commissioner, Maine Department of Human Services, Defendant, Third-Party Plaintiff, Appellee. H. Rollin IVES, Commissioner, Maine Department of Human Services, Defendant, Third-Party Plaintiff, Cross-Appellant, v. Louis W. SULLIVAN, M.D., Secretary, Department of Health and Human Services, Third-Party Defendant, Cross-Appellee. . Heard
• Court: U.S. Court of Appeals — First Circuit

Page 713

977 F.2d 713

39 Soc.Sec.Rep.Ser. 153, Medicare & Medicaid Guide

P 40,867

Athalie LAMORE, et al., Plaintiffs, Appellants, v. H. Rollin IVES, Commissioner, Maine Department of Human

Services, Defendant, Third-Party Plaintiff, Appellee.

H. Rollin IVES, Commissioner, Maine Department of Human

Services, Defendant, Third-Party Plaintiff, Cross-Appellant, v. Louis W. SULLIVAN, M.D., Secretary, Department of Health and Human Services, Third-Party Defendant, Cross-Appellee.

Nos. 91-1939, 91-1998.

United States Court of Appeals First Circuit.

Heard April 7, 1992.

Decided Oct. 20, 1992.

Martha A. Grant, Legal Services for the Elderly, Inc., Presque Isle, Me., with whom Jeanne Finberg, Nat. Senior Citizens Law Center, Washington, D.C., was on brief for Athalie Lamore, et al.

George Eng, Asst. Regional Counsel, Dept. of Health and Human Services, Washington, D.C., for Louis W. Sullivan, M.D., Secretary, Dept. of Health and Human Services.

Marina E. Thibeau, Asst. Atty. Gen., Dept. of Human Services, Michael E. Carpenter, Atty. Gen., and Christopher C. Leighton, Deputy Atty. Gen., Augusta Me., on brief for H. Rollin Ives, Com'r, Maine Dept. of Human Services.

Before SELYA, Circuit Judge, CAMPBELL, Senior Circuit Judge, and BOYLE, ^* U.S. District Judge.

LEVIN H. CAMPBELL, Senior Circuit Judge.

This appeal raises the question whether Veterans Administration Aid and Attendance benefits should be treated as income for purposes of determining the extent of Medicaid allowances an eligible veteran or veteran's survivor can receive under the Home and Community-Based Medicaid Waiver Program.

Plaintiffs-appellants are disabled veterans or dependents of deceased veterans who receive Aid and Attendance benefits from the Veterans Administration pursuant to 38 U.S.C. § 1502(b), and who also receive Medicaid allowances pursuant to the Home and Community-Based Medicaid Waiver Program, 42 U.S.C. 1396n(c) & (d). Plaintiffs sued the Maine Department of Human Services (the "state defendant") in state court after the State initiated a policy of treating Aid and Attendance benefits as income for purposes of determining the amount plaintiffs must contribute toward their own care under the Medicaid Waiver Program. ¹ See HCFA State Medicaid Manual § 3701. ² According to plaintiffs, this action violated federal law. The state defendant removed the case to the United States District Court for the District of Maine and filed a third party complaint against the Secretary of the United States Department of Health and Human Services (the "federal defendant"). The third party complaint alleged that the federal defendant expressly directed the State to use Aid and Attendance benefits in determining a Medicaid recipient's cost of care. ³ Based on a stipulated record, the district court entered judgment for the state defendant finding that no federal law had been violated. The court then dismissed the State's third party complaint. Plaintiffs appeal and the state defendant cross-appeals. ⁴ We affirm.

I.

As mentioned, plaintiffs received Aid and Attendance Benefits from the United States Department of Veterans' Affairs pursuant to 38 U.S.C. § 1502(b). ⁵ In addition, plaintiffs are recipients of Medicaid under the Home and Community-Based Medicaid Waiver provisions of the Medicaid Program. 42 U.S.C. § 1396 et seq. These provisions authorize the Secretary to grant a waiver to a state under which approved costs of home and community based services are reimbursed for eligible individuals who would otherwise require care in a nursing home facility, but who elect to remain in their homes. 42 U.S.C. § 1396n(d); 42 C.F.R. § 435.217. ⁶

As a state that has elected to participate in the Medicaid program, Maine has assumed a procedural obligation to include, in its State plan for medical assistance, "reasonable standards ... for determining eligibility for and the extent of medical assistance...." 42 U.S.C. § 1396a(a)(17); see also 42 U.S.C. § 1396a(a)(10)(A)(ii)(VI) (describing generally the category of individuals eligible for medical assistance under a State plan providing home and community based services). ⁷ Under Maine's state plan, the Department of Human Services (DHS) determines an applicant's participation in the home and community based services in two phases. First, DHS establishes the applicant's financial and medical eligibility to participate in the program (the "eligibility" phase). Second, the agency determines the extent of assistance to which an applicant is eligible; specifically, the amount the applicant will have to contribute towards his or her own care (the "post-eligibility" phase). Both the eligibility and the post-eligibility phases require a determination of the applicant's income and resources.

All the parties agree that for purposes of determining eligibility for home and community based services, income does not include Aid and Attendance benefits. Such payments are specifically excluded under the relevant federal regulation:

Social Services are not income if they are any of the following:

(1) Assistance provided in cash or in kind (but not received in return for a service you perform) under any Federal, State, or local government program whose purpose is to provide social services including vocational rehabilitation (Example: Cash given you by the Veterans Administration to purchase aid and attendance); ....

20 C.F.R. § 416.1103 (emphasis supplied). ⁸ The parties disagree, however, as to whether Aid and Attendance benefits should be counted as income for purposes of the post-eligibility determination. The state and federal defendants contend that the Secretary has the authority to allow Aid and Attendance benefits to be considered in assessing income for purposes of the post-eligibility determination even though the same benefits are not counted as income when determining eligibility for the home and community-based Medicaid waiver program. Plaintiffs, on the other hand, contend that including Aid and Attendance benefits in income in the post-eligibility stage violates explicit statutory mandates and is contrary to congressional intent.

II.

Plaintiffs rely on 42 U.S.C. § 1396a(a)(17) in support of their position that Aid and Attendance benefits may not be counted as income in determining the amount an eligible applicant must contribute to his or her own care under the Medicaid waiver program. Section 1396a(a)(17) provides that:

A State plan for medical assistance must--

(17) ... include reasonable standards (which shall be comparable for all groups ...) for determining eligibility for and the extent of medical assistance under the plan which (A) are consistent with the objectives of this subchapter, (B) provide for taking into account only such income and resources as are, as determined in accordance with standards prescribed by the Secretary, available to the applicant or recipient and (in the case of any applicant or recipient who would, except for income and resources, be eligible for aid or assistance in the form of money payments under any plan of the State approved under subchapter I, X, XIV, or XVI or part A of subchapter IV, or to have paid with respect to him supplemental security income benefits under subchapter XVI of this chapter) as would not be disregarded (or set aside for future needs) in determining eligibility for such aid assistance, or benefits,....

The plaintiffs would have us parse out the second parenthetical, which they contend is neither "relevant" nor "essential to analyzing the meaning of the statute at all." Lacking the parenthetical, the statute would provide that state Medicaid plans must "include reasonable standards ... for determining ... the extent of medical assistance, ... which ... provide for taking into account only such income ... as would not be disregarded in determining eligibility." So simplified, the statute is unambiguous, say plaintiffs, in requiring that the criteria for assessing income must be the same for purposes of determining eligibility as for determining post-eligibility.

While the statute is indeed complex--the district court aptly described it as "a virtually impenetrable thicket of legalese and gobbledygook"--we can see little justification for reading the cited parenthetical out of it. See United States v. Ven-Fuel, 758 F.2d 741, 751 (1st Cir.1985) ("[a]ll words and provisions of statutes are intended to have meaning and are to be given effect, and no construction should be adopted which would render statutory words or phrases meaningless, redundant or superfluous"); see also Laracuente v. Chase Manhattan Bank, 891 F.2d 17, 23 (1st Cir.1989) ("absent ambiguity in the statutory language, our inquiry is complete and ends with the plain language of the statute"); Securities Indus. Ass'n v. Connolly, 883 F.2d 1114, 1118 (1st Cir.1989) (statutory language must be accorded its ordinary meaning), cert. denied, 495 U.S. 956, 110 S.Ct. 2559, 109 L.Ed.2d 742 (1990). The statute should be read as a whole, with due consideration to both the content of the parenthetical which plaintiffs urge us to ignore and to its position in the text. Like the district court, we believe the parenthetical modifies the phrase "as would not be disregarded ..." which follows it. See Lamore v. Ives, Civil No. 90-0092-B, slip op. at 3-4, 1991 WL 193601 (D.Me. July 19, 1991); see also Sherman v. Griepentrog, 775 F.Supp. 1383, 1391 (D.Nev.1991) (agreeing with the reasoning expressed in Lamore ). The parenthetical makes no sense standing alone nor is it explained or modified by the language which precedes it. Meaning can be found, however, if it is understood as modifying the phrase that follows it. If so, the restriction on the characterization of income inherent in the "as would not be disregarded ..." phrase applies "in the case of" all such individuals as the parenthetical describes.

If plaintiffs are among those described in the parenthetical, then section 1396a(a)(17)...