Martin v. North Carolina Dhhs

Decision Date06 January 2009
Docket NumberNo. COA08-259.,COA08-259.
Citation670 S.E.2d 629
PartiesBrenda B. MARTIN, Petitioner, v. NORTH CAROLINA DEPARTMENT OF HEALTH AND HUMAN SERVICES, Respondent.
CourtNorth Carolina Court of Appeals

Roy Cooper, Attorney General, by Belinda A. Smith, Special Deputy Attorney General, for respondent-appellant Department of Health and Human Services.

MARTIN, Chief Judge.

The North Carolina Department of Health and Human Services ("DHHS") appeals from the 21 November 2007 order reversing the final agency decision to terminate Medicaid for the Qualified Beneficiary Part B ("MQB-B") benefits of petitioner-appellee Brenda Martin ("petitioner"). We affirm.

On 1 March 2006, petitioner applied for MQB-B for herself and Medicaid for the Disabled ("MA-D") for herself and her husband at the Buncombe County Department of Social Services ("DSS"). Petitioner is a Medicare beneficiary and MQB-B is a Medicaid eligibility category for Medicare beneficiaries who need help paying their Medicare Part B premiums. At the time of her application, petitioner's Medicare premiums were $88.50 per month and her only income was a monthly Social Security Disability check for $1,216. Petitioner's husband, a veteran who receives no pension, is not a Medicare beneficiary, is not eligible for Social Security Disability because he did not work enough quarters in the private sector, and has no income. Additionally, petitioner's husband is not eligible for benefits from the Veteran's Administration ("VA") or for Supplemental Security Income ("SSI"), an indigent disability program of the Social Security Administration ("SSA"), due to his wife's disability income. However, the VA does pay for most of his medical care. Otherwise, petitioner supports herself and her husband, the only members of their household, with her monthly $1,216 Social Security check.

While the MA-D applications were pending, petitioner received a notice from DHHS approving her MQB-B application and indicating that her Medicare Part B premiums for the period 1 December 2005 through 28 February 2007 would be paid. As part of the application process for the MA-D Medicaid assistance, petitioner's husband was determined disabled by the Disability Determination Service, the state agency charged with making disability determinations in North Carolina for the state Medicaid and the federal SSA programs. However, on 23 May 2006, DSS notified petitioner and her husband that their applications for full MA-D were denied because, given petitioner's income, their medical expenses did not indicate they would meet the deductible of $5,274 within the six month certification period. Buncombe County DSS also informed petitioner that her MQB-B benefits would terminate on 30 June 2006 because her monthly income of $1,216 was over the MQB-B income limit of $980 per month for a single individual.

In terminating petitioner's MQB-B benefits, Buncombe County DSS acted pursuant to administrative rules promulgated by DHHS. Under these rules, "income counted in the determination of financial eligibility is based on standards and methodologies in Title XVI of the Social Security Act[, the SSI program]." N.C. Admin. Code 10A 21B.0312(c) (June 2004). Pursuant to these SSI methodologies, the rules provide that "[t]he income level to be applied for Qualified Medicare Beneficiaries described in 42 U.S.C. 1396d ... is based on the income level for one; or two for a married couple who live together and both receive Medicare." N.C. Admin. Code 10A 21B.0312(e)(4) (June 2004). DHHS's State Adult Medicaid Manual incorporates these rules, acting as a functional guide to DHHS employees for the administration of the MQB-B program. According to the manual, a "Medicaid couple" consists of Medicaid applicants or recipients who are married and living together. If the total combined income of the spouses exceeds $1,320, they will be ineligible for MQB-B benefits. However, if only one spouse is eligible for Medicare, the manual provides that the spouse is considered a "Medicaid individual with an Ineligible Spouse." In this case, the income of the ineligible spouse will be "deemed," or imputed, to the eligible spouse. If the total combined income of the eligible spouse and ineligible spouse exceeds $980, the eligible spouse will receive no MQB-B benefits. Because petitioner's husband's MA-D application was denied, Buncombe County DSS reassessed petitioner's MQB-B eligibility utilizing the income limit for an individual with an ineligible spouse, and consequently denied petitioner MQB-B benefits.

Petitioner subsequently appealed the termination of benefits at the local and state agency levels. Both local and state hearing officers affirmed Buncombe County DSS's decision. Petitioner then appealed to DHHS's chief hearing officer, and the final agency decision, issued 8 December 2006, also affirmed the termination of benefits. Pursuant to N.C.G.S. § 108A-79(k), petitioner appealed the final agency decision to the Buncombe County Superior Court. In her petition for judicial review, petitioner argued that DHHS erred by incorrectly calculating petitioner's income and resources as an individual rather than by her actual family size as established by 42 U.S.C. § 1396d. The appeal was heard by the superior court on 5 September 2007. On 21 November 2007, the court issued an order reversing DHHS's final decision. The superior court's order included the following conclusions of law:

2. The federal Medicaid statute applicable to a qualified medicare beneficiary directs the state to measure an applicant's income against the official poverty level for the number of family members. 42 U.S.C. 1396d(p).

3. A "family of the size involved" as found at 42 U.S.C. 1396d(p) includes an MQB-B applicant and the applicant's spouse living in the same household who is dependent on the applicant for financial support.

4. Substantial evidence of the record established that Petitioner and her spouse were both disabled, married to each other, and dependent on her social security disability income within the meaning of 42 U.S.C. § 1396d(p) and 20 C.F.R. § 416.120.

5. [DHHS]'s policy of determining income and resource eligibility for married individuals applying for the MQB-B program violates federal Medicaid statutes and regulations found at 42 U.S.C. § 1396d and 20 C.F.R. § 416.120.

6. Based on the foregoing, [DHHS] acted erroneously when it terminated Petitioner's MQB-B benefits.

Subsequent to the superior court's order, DHHS filed notice of appeal.

On appeal, DHHS assigns error to the superior court's conclusion that DHHS's policy for determining income and resource eligibility violates federal statutes and regulations. Specifically, DHHS argues that, as found in 42 U.S.C. § 1396d, "family size" is a term of art and thus petitioner's income level should be based on a family size of one. We disagree.

"Questions of statutory interpretation are questions of law, which are reviewed de novo by an appellate court." In re Proposed Assessments v. Jefferson-Pilot Life Ins. Co., 161 N.C.App. 558, 559, 589 S.E.2d 179, 180 (2003). "The primary rule of construction of a statute is to ascertain the intent of the legislature and to carry out such intention to the fullest extent." Burgess v. Your House of Raleigh, Inc., 326 N.C. 205, 209, 388 S.E.2d 134, 137 (1990). Where the language of a statute is clear, the courts must give the statute its plain meaning; however, where the statute is ambiguous or unclear as to its meaning, the courts must interpret the statute to give effect to the legislative intent. See id. Moreover, we must be guided by the "fundamental rule of statutory construction that statutes in pari materia, and all parts thereof, should be construed together and compared with each other." Redevelopment Comm'n v. Sec. Nat'l Bank, 252 N.C. 595, 610, 114 S.E.2d 688, 698 (1960). Such statutes should be reconciled with each other when possible and any irreconcilable ambiguity should be resolved in a manner which most fully effectuates the true legislative intent. See Duncan v. Carpenter & Phillips, 233 N.C. 422, 426, 64 S.E.2d 410, 413 (1951), overruled on other grounds by Taylor v. J.P. Stevens & Co., 300 N.C. 94, 265 S.E.2d 144 (1980).

"Although the interpretation of a statute by an agency created to administer that statute is traditionally accorded some deference by appellate courts, those interpretations are not binding." Total Renal Care of N.C., LLC v. N.C. Dep't. of Health & Hum. Servs., 171 N.C.App. 734, 740, 615 S.E.2d 81, 85 (2005). "The weight of such an interpretation in a particular case will depend upon the thoroughness evident in its consideration, the validity of its reasoning, its consistency with earlier and later pronouncements, and all those factors which give it power to persuade, if lacking power to control." Id. A "state agency's interpretation of federal statutes is not entitled to the deference afforded a federal agency's interpretation of its own statutes." GTE South, Inc. v. Morrison, 199 F.3d 733, 745 (4th Cir.1999); Three Lower Counties Cmty. Health Servs., Inc. v. Maryland, 498 F.3d 294, 302 n. 2 (4th Cir.2007). However, where terms of a statute have been interpreted by the governing federal agency in a published regulation, that interpretation is entitled to great deference. See Chevron U.S.A. v. Nat. Res. Def. Council, 467 U.S. 837, 844, 104 S.Ct. 2778, 2782, 81 L.Ed.2d 694, 703 (1984).

Medicaid is a federal program designed to provide health care funding for the needy. See Luna v. Div. of Soc. Servs., 162 N.C.App. 1, 4, 589 S.E.2d 917, 919 (2004). Medicaid is a joint program administered by...

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