Matarazzo v. Rowe

• Decision Date: 06 April 1993
• Docket Number: No. 14593,14593
• Citation: 623 A.2d 470,225 Conn. 314
• Court: Connecticut Supreme Court
• Parties: , 41 Soc.Sec.Rep.Ser. 67, Medicare & Medicaid Guide P 41,393 Giuseppina MATARAZZO v. Audrey ROWE, Commissioner of Income Maintenance.

Page 470

623 A.2d 470

225 Conn. 314, 41 Soc.Sec.Rep.Ser. 67,

Medicare & Medicaid Guide P 41,393

Giuseppina MATARAZZO v. Audrey ROWE, Commissioner of Income Maintenance.

No. 14593.

Supreme Court of Connecticut.

Argued Jan. 6, 1993.

Decided April 6, 1993.

Judith I. Solomon, Hartford, for appellant (plaintiff).

Judith A. Merrill, Asst. Atty. Gen., with whom, on the brief, were Richard Blumenthal, Atty. Gen., and Richard J. Lynch and Hugh Barber, Asst. Attys. Gen., for appellee (defendant).

Before PETERS, C.J., and CALLAHAN, BORDEN, NORCOTT and KATZ, JJ.

BORDEN, Associate Justice.

The dispositive issue in this appeal is whether the department of income maintenance, by virtue of Connecticut's status as a § 209(b) state under federal medicaid law, is required to grant medicaid coverage to the plaintiff for her outstanding medical bills retroactive to the time the plaintiff, having later spent her resources down to medicaid eligibility requirements, filed her application for such benefits. The plaintiff, Giuseppina Matarazzo, appeals from the judgment of the trial court dismissing her appeal from the decision of a fair hearing officer of the department of income maintenance (department), partially denying her medicaid benefits. We reverse the judgment of the trial court and remand the case for further proceedings consistent with this opinion.

The trial court found the following facts. In February, 1990, the plaintiff, who was sixty-two years old, was hospitalized because of a serious illness. Having no health care insurance, she filed an application for medicaid benefits with the department. In that application, the plaintiff, who was being assisted by her daughter, disclosed that she and her husband had a joint savings account of $9000, which represented their life savings.

Federal medicaid regulations require that, in order to be eligible for benefits, a married applicant have less than $2400 in assets. On the basis of information provided to them by an intake worker of the department, the plaintiff and her daughter reasonably believed that once the savings account had been reduced to less than $2400, the plaintiff's application would be approved retroactive to the filing date of the application. Consequently, the plaintiff and her daughter expected that medicaid would cover the medical and hospital bills incurred by the plaintiff after the filing of her application.

When the plaintiff's application was finally approved on June 27, 1990, however, the department informed her that she would receive medicaid benefits only for medical expenses incurred after June 1, 1990. ¹ Consequently, the plaintiff remained responsible for the substantial medical and hospital expenses, totalling approximately $150,000, that were incurred in the preceding three months even though the amount of those expenses far exceeded her available assets at any given time during that period.

The plaintiff requested a fair hearing to contest the department's refusal to employ a "resource spend down" policy to determine eligibility for medicaid benefits for persons whose incurred medical expenses exceed their total assets. ² If the plaintiff had been entitled to a resource spend down, she would have become retroactively eligible for benefits for her medical expenses incurred from the time she was hospitalized in February and filed her application for benefits. The fair hearing officer refused to address the plaintiff's argument that she was entitled to resource spend down. Instead, the officer concluded that the plaintiff was not eligible for benefits for any time prior to June 1, 1990, because her marital assets had exceeded $2400 until that time.

The plaintiff appealed the department's partial denial of benefits to the trial court. The plaintiff claimed that both federal and state law require the department to utilize a resource spend down policy. The trial court rejected the plaintiff's claims and dismissed the appeal. The plaintiff appealed from the judgment of the trial court to the Appellate Court, and we transferred the appeal to this court pursuant to Practice Book § 4023 and General Statutes § 51-199(c).

I

The plaintiff first claims that the department improperly denied her medicaid benefits for her hospital and medical expenses incurred prior to June 1, 1990, because federal law obligates the department to utilize a resource spend down policy in order to determine her eligibility for medicaid benefits. To understand and address the question of whether federal law so obligates the defendant, however, requires us to wade into the "Serbonian bog" ³ of federal and state laws regarding the medicaid system. See Feld v. Berger, 424 F.Supp. 1356, 1357 (S.D.N.Y.1976). ⁴

A

The medicaid program, established in 1965 as Title XIX of the Social Security Act, and codified at 42 U.S.C. § 1396 et seq., " 'provid[es] federal financial assistance to States that choose to reimburse certain costs of medical treatment for needy persons.' Harris v. McRae, 448 U.S. 297, 301, 100 S.Ct. 2671 [, 2680], 65 L.Ed.2d 784, reh. denied, 448 U.S. 917, 101 S.Ct. 39, 65 L.Ed.2d 1180 (1980); 42 U.S.C. § 1396 et seq. Although states participate voluntarily, a state electing to participate must develop a plan, approved by the secretary of health and human services, containing 'reasonable standards ... for determining eligibility for and the extent of medical assistance....' 42 U.S.C. § 1396a(a)(17)." Clark v. Commissioner of Income Maintenance, 209 Conn. 390, 394, 551 A.2d 729 (1988). Connecticut has elected to participate in the medicaid program and has assigned to the department the task of administering the program. General Statutes § 17-134 et seq.

"As originally enacted, [the] Medicaid [Act] required participating States to provide medical assistance to 'categorically needy' individuals who received cash payments under one of four welfare programs established elsewhere in the Act.... The categorically needy were persons whom Congress considered especially deserving of public assistance because of family circumstances, age, or disability. States, if they wished, were permitted to offer assistance also to the 'medically needy'--persons lacking the ability to pay for medical expenses, but with incomes [or resources] too large to qualify for categorical assistance." Schweiker v. Gray Panthers, 453 U.S. 34, 37, 101 S.Ct. 2633, 2636-37, 69 L.Ed.2d 460 (1981).

Since its enactment, the Social Security Act has undergone substantial revisions. "In 1972, Congress replaced three of the four categorical assistance programs with a new program called Supplemental Security Income for the Aged, Blind and Disabled (SSI), 42 U.S.C. § 1381 et seq.... Under SSI, the Federal Government displaced the States by assuming responsibility for both funding payments and setting standards of need. In some States the number of individuals eligible for SSI assistance was significantly larger than the number eligible under the earlier, state-run categorical need programs.

"The expansion of general welfare accomplished by SSI portended increased Medicaid obligations for some States because Congress retained the requirement that all recipients of categorical welfare assistance--now SSI--were entitled to Medicaid. Congress feared that these States would withdraw from the cooperative Medicaid program rather than expand their Medicaid coverage in a manner commensurate with the expansion of categorical assistance. [I]n order not to impose a substantial fiscal burden on these States or discourage them from participating ... Congress offered what has become known as the 's 209(b) option.' ⁵ Under [§ 209(b) ], States could elect to provide Medicaid assistance only to those individuals who would have been eligible under the state Medicaid plan in effect on January 1, 1972. States thus became either 'SSI States' or 's 209(b) States' depending on the coverage that they afforded." (Internal quotation marks omitted.) Schweiker v. Gray Panthers, supra, at 38-39, 101 S.Ct. at 2637-38.

States selecting the § 209(b) option, therefore, have the right to impose more restrictive eligibility requirements than those mandated by the federal SSI program but, as a limitation on that right, may not adopt eligibility requirements that are more restrictive than the eligibility requirements that the state applied on January 1, 1972. See Clark v. Commissioner of Income Maintenance, supra, 209 Conn. at 395, 551 A.2d 729. Because Connecticut has elected the § 209(b) option; id., at 395 n. 4, 551 A.2d 729; Gnutti v. Heintz, 206 Conn. 628, 633, 539 A.2d 118 (1988); it may impose more restrictive eligibility requirements than those set by the SSI program, but may not impose stricter eligibility requirements than those applied pursuant to its January 1, 1972 plan.

In order to prevail on her federal law claim that Connecticut, as a § 209(b) state, is obligated to apply a resource spend down rule, the plaintiff must necessarily establish that: (1) Connecticut utilized a resource spend down rule on January 1, 1972; and (2) federal law does not prohibit the use of resource spend down. See footnote 11.

As noted above, the fair hearing officer did not address the plaintiff's claim that she was entitled to retroactive benefits by virtue of a resource spend down rule. The trial court, however, found that the plaintiff had presented "both documentary and oral evidence tending to prove that both immediately before and after January 1, 1972, [the department] had a policy and practice of utilizing a resource spend down with respect to applicants whose assets exceeded the Medicaid limit. The testimony of case workers familiar with [the] defendant's practices, as well as [the] defendant's Uniform Policy Manual strongly suggest that had [the] plaintiff's application been considered under the practice in effect as of January 1, 1972, a resource spend down would have been utilized with respect to [the] plaintiff's excess...