Muir v. Kan. Health Policy Auth.
| Citation | 334 P.3d 876,50 Kan.App.2d 854 |
| Decision Date | 05 September 2014 |
| Docket Number | 109,573. |
| Parties | Patrick J. MUIR, Appellant, v. KANSAS HEALTH POLICY AUTHORITY, Appellee. |
| Court | Court of Appeals of Kansas |
Timothy J. Muir, Kent M. Dryer, and Matthew Dykstra, of Muir Law Firm, LLC, of Overland Park, for appellant.
Brian M. Vazquez, of Kansas Department of Health and Environment, for appellee.
Before LEBEN, P.J., GREEN and HILL, JJ.
Patrick Muir is an adult resident of a long-term-care facility, and he qualifies for Kansas Medicaid assistance. Under state and federal Medicaid law, a certain amount of his monthly income from disability payments is protected income that he can keep, but the rest of his income is deemed “available income” that he must pay toward his care before Medicaid will pay the rest of the costs. See 42 U.S.C. § 1396a(a)(17) (2006) ; K.A.R. 30–6–53(3) (2009).
Muir challenges a state agency ruling that he may not take part of his disability income and use it to pay child support for his two children and maintenance to his former spouse. Instead, the agency determined that his child support and maintenance obligations did not make some funds exempt from the otherwise “available income” that he must pay toward his care. He argues that the agency wrongly interpreted the law and acted arbitrarily.
But closely related federal regulations specifically provide that amounts owed for child support or maintenance aren't excluded when calculating a person's available income in the form of Social Security Supplemental Security Income (SSI) payments. The federal government provided a rationale for that rule: otherwise, the SSI payments made by the government would “ subsidize child support obligations or other debts, which is not its purpose as a program designed to meet the subsistence needs of its claimants only.” 56 Fed.Reg. 3209–11 (January 29, 1991).
The State of Kansas may apply the same rationale to its Medicaid program, making sure that it provides only the required assistance to the Medicaid beneficiary rather than also subsidizing—directly or indirectly—the beneficiary's child-support or maintenance payments. The state agency in Muir's case did not misinterpret any statute or regulation; nor did it act arbitrarily. We therefore affirm the district court, which upheld the agency's ruling.
We begin our review with the background facts necessary to our decision. Muir became a quadriplegic with no feeling below his chest after a surgery in 2002 that attempted to correct a serious malformation in his spine. At the time, Muir was in his late 30's and lived with his wife and two children.
He continued to live at home with his family until August 2009, when he moved into a long-term-care facility. He receives $2,244 per month in Social Security disability payments and $2,323.17 from a private disability-insurance policy, giving him a total income of $4,567.17 per month.
Two additional events set the stage for the legal dispute now before us. First, Muir's wife filed for divorce in March 2010. The parties settled the case in May 2010, agreeing that Muir would pay $598 per month in maintenance for 121 months and that he would pay $1,430 per month in child support (the children were then 12 and 10). At the time of the divorce, Muir's ex-wife was also receiving $1,120 per month in Social Security disability payments for the children.
Second, Muir filed an application in May 2010 for Medicaid assistance for the expense of his long-term care. The Kansas Health Policy Authority, which administered the state's Medicaid program at that time, approved Muir's application in July 2010. But it concluded that virtually all of his monthly income would be considered “available income” that had to be paid toward his care expenses before Medicaid would cover the remaining costs. No adjustment was made based on Muir's child-support or maintenance obligations.
Muir appealed that agency determination—first to an administrative hearing officer and then to the Kansas Health Policy Authority State Appeals Committee. Muir contended that he should be able to use part of his disability-income payments to pay his child-support and maintenance obligations, rather than having that money considered “available income” that had to be spent on his long-term care. Both the hearing officer and the appeals committee rejected Muir's argument.
Muir then filed a petition for review in the Johnson County District Court. That court also ruled against Muir, concluding that the final agency determination (by the appeals committee) was neither contrary to law nor arbitrary and capricious. The court noted that Muir had also challenged the state agency's position on the constitutional basis that it denied unmarried disabled people equal protection when compared to those who were married. But the court concluded that Muir had not provided an adequate legal argument to support his equal-protection challenge, so the court concluded that he had waived that claim.
Muir has appealed to this court. We review the decisions of an administrative agency under the Kansas Judicial Review Act, K.S.A.2013 Supp. 77–601 et seq. The party challenging the agency's ruling has the burden to show that the agency's action was wrong, K.S.A.2013 Supp. 77–621(a)(1), but courts may grant relief on either of two reasons argued here by Muir: if the agency has made an error in interpreting or applying the law, K.S.A.2013 Supp. 77–621(c)(4), or if the agency's decision is arbitrary, capricious, or “otherwise unreasonable.” K.S.A.2013 Supp. 77–621(c)(8). In a case like this one, in which no evidence was independently heard by the district court, we must review these issues without any required deference to the district court's decision. See Kansas Dept. of Revenue v. Powell, 290 Kan. 564, 567, 232 P.3d 856 (2010).
Before we proceed with our discussion of Muir's appeal, we should note some matters that do not affect our decision but are worthy of mention.
First, we are determining whether the Kansas Health Policy Authority acted properly when it denied Muir's claim in April 2011. Since that time, the agency with authority over Medicaid matters has changed to the Kansas Department of Health and Environment. Neither party has filed a motion to substitute the Kansas Department of Health and Environment as the proper party on appeal, and we simply refer to the agency or the agency decision in the remainder of our opinion. We also note that a manual we will refer to later in this opinion was originally developed by the Kansas Department of Social and Rehabilitation Services, which had authority over Medicaid before the Kansas Health Policy Authority. The changes in the agency handling Medicaid matters have no impact on the merits of either party's position.
Second, neither party included the manual in our record on appeal. While the current manual is available on a state website, we have relied primarily on the excerpts that were contained in the parties' briefs and in the agency's decision. The parties agreed at oral argument that these materials accurately reflected the manual provisions in effect at the time of the agency decision.
Third, we conclude that we need not decide whether a Kansas court should give deference to the provisions of the manual. Normally, a guidance document adopted by a Kansas agency without formal rulemaking procedures isn't given special recognition. L.E.H. v. Kansas Dept. of SRS, 44 Kan.App.2d 798, 805–06, 241 P.3d 167 (2010). A state Medicaid manual, however, usually must be approved by the federal Department of Health and Human Services. See 42 C.F.R. 430.10 ; National Federation of Independent Business v. Sebelius, 567 U.S. ––––, 132 S.Ct. 2566, 2581, 183 L.Ed.2d 450 (2012). Accordingly, some level of deference is generally given to a state agency's interpretation of federal Medicaid laws as contained in a federally approved manual or guidance document. E.g., Perry v. Dowling, 95 F.3d 231, 236–37 (2d Cir.1996) ; Ritter v. Cecil Cty. Office of Hous. & Cmty. Dev., 33 F.3d 323, 327–28 (4th Cir.1994). For matters relating only to the interpretation of state laws, however, Kansas courts generally give no deference to state agency interpretations. See Douglas v. Ad Astra Information Systems, 296 Kan. 552, 559, 293 P.3d 723 (2013). We need not determine what amount of deference, if any, should be given here to the agency manual at issue. Both sides have cited to it and contended its provisions should be followed, but as we explain below, Muir has not pointed to any provision in the manual that actually provides that amounts a Medicaid recipient is ordered to pay in child support or maintenance should be deducted from the income the person must apply to payment for medical care.
Last, the Kansas Medicaid regulations, which have the force and effect of law, were recently revoked and replaced. See K.S.A. 77–425 ; Village Villa v. Kansas Health Policy Authority, 296 Kan. 315, 320, 291 P.3d 1056 (2013) ; 32 Kan. Reg. 1376–1415 (November 21, 2013). The parties in our case have not suggested that any laws apply to Muir's case other than those in effect when the Kansas Health Policy Authority made its decision. We have limited our consideration to the laws in effect at that time.
The underlying facts to the legal dispute before us are straightforward, as is the ultimate question we must answer. Muir is a quadriplegic in a long-term-care facility, and he receives $4,567.17 per month in disability payments. He owes $2,028 in maintenance and child support, but since Medicaid is paying any costs of his long-term care that he cannot, he must spend all of his “available income” on his care. The ultimate question—as a practical matter—is whether he can use some of his disability income to pay maintenance and child support or whether virtually all of his disability income must be treated as available income and paid toward the cost of his care.
To answer that question, we must consider the...
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