Post v. Cass County Social Services

• Decision Date: 04 December 1996
• Docket Number: No. 960164,960164
• Citation: 556 N.W.2d 661
• Parties: Medicare & Medicaid Guide P 44,931 Lois POST, Applicant and Appellee, v. CASS COUNTY SOCIAL SERVICES, Cass County Social Service Board, and North Dakota Department of Human Services, Respondents and Appellants. Civil
• Court: North Dakota Supreme Court

Page 661

556 N.W.2d 661

Medicare & Medicaid Guide P 44,931

Lois POST, Applicant and Appellee, v. CASS COUNTY SOCIAL SERVICES, Cass County Social Service

Board, and North Dakota Department of Human

Services, Respondents and Appellants.

Civil No. 960164.

Supreme Court of North Dakota.

Dec. 4, 1996.

Duane Houdek (argued), Legal Assistance of North Dakota, Bismarck, for applicant and appellee.

Jean R. Mullen (argued), Assistant Attorney General, Attorney General's Office, Bismarck, for respondents and appellants.

MESCHKE, Justice.

Cass County Social Services, Cass County Social Service Board, and the Department of Human Services (collectively "Department") appeal from a judgment reversing an order denying medical assistance benefits to Lois Post. Because a preponderance of the evidence supports the Department's finding that Lois had "actually available" assets in excess of a $3,000 asset limitation, we reverse the judgment and reinstate the Department's order.

On February 13, 1984, Lois Post was divorced from her husband, John Post, a veterinarian and Minnesota resident. The decree ordered John to pay Lois $500 per month as part of a marital property settlement. The decree also required John to furnish Lois with a Medicare supplemental insurance policy. John did not make timely payments on these obligations.

In 1989, a Minnesota court found John in contempt for failure to comply with the divorce decree, but allowed him to apportion a lump sum payment of $43,500 he had made earlier to Lois as a prepayment of the property settlement through June 1, 1993. The court ordered John's $500 monthly payments to continue beginning July 1, 1993.

Lois is currently 69 years old and suffers from multiple sclerosis. She was admitted to the Good Samaritan Center in Arthur in March 1991. John did not make the ordered $500 monthly payments beginning July 1, 1993, nor did he pay Lois's Medicare supplemental insurance premiums.

Lois applied for medical assistance in June 1994. Her application was denied because her assets exceeded the $3,000 asset limitation under NDAC 75-02-02.1-26(1). The eligibility worker treated John's outstanding debts for past due Medicare supplemental insurance premiums and $500 monthly property settlement payments as assets available to her. The eligibility worker assigned no value to the past-due insurance premiums, but she determined Lois's "countable assets," including checking and money market accounts, were $6,125 because her property settlement arrearages totaled $5,500.

Lois appealed. An administrative hearing officer recommended that the $5,500 John owed Lois in past-due property settlement payments and the past-due insurance premiums were "available assets" under NDAC 75-02-02.1-25(2) for purposes of determining medical assistance eligibility, and that the Department had properly treated John's debts as assets that placed Lois over the asset limitation. The Department adopted the hearing officer's recommendation, and Lois appealed to the district court.

The district court reversed, concluding that a preponderance of the evidence did not support the Department's finding that the $5,500 arrearage was an asset actually available to Lois. According to the court, Lois's "long history" of "inability to collect the proceeds of the divorce decree," and the "uncertain[ty]" whether further court action against John would "be of any avail or value," demonstrated the $5,500 was not an available asset. The Department appealed.

Our standard of review on appeal from a district court judgment on an administrative agency decision is well settled. We review the Department's decision, not the decision of the district court, and we affirm the Department's decision unless its findings of fact are not supported by a preponderance of the evidence, its conclusions of law are not supported by its findings of fact, its decision is not supported by its conclusions of law, or its decision is not in accordance with the law. Lucier v. North Dakota Workers Comp. Bureau, 556 N.W.2d 56, 59 (N.D.1996). As we said in Ohlson v. Dept. of Human Services, 552 N.W.2d 73, 75 (N.D.1996), in evaluating the Department's findings of fact, we do not make independent findings or substitute our judgment for that of the Department, but we determine only whether the Department reasonably reached its factual conclusions from the weight of the evidence on the entire record.

The Medicaid program is a cooperative federal-state venture designed to afford medical assistance to persons whose income and resources are insufficient to meet the financial demands of necessary care and services. Krueger Estate v. Richland County Soc. Serv., 526 N.W.2d 456, 457 (N.D.1994). The program is governed by an interplay of federal and state law. See Hecker v. Stark County Social Service Bd., 527 N.W.2d 226, 232 (N.D.1994). Because Medicaid is intended to be the payer of last resort, other available resources must be used before Medicaid pays for the care of an individual enrolled in the program. Allen v. Wessman, 542 N.W.2d 748, 752 (N.D.1996). As we noted in In Interest of McMullen, 470 N.W.2d 196, 200 (N.D.1991), eligibility standards for medical assistance are similar to the eligibility standards for the Aid to Families with Dependent Children (AFDC) program.

For medical assistance eligibility, the Department has defined an asset as "any kind of property or property interest, whether real, personal, or mixed, whether liquid or illiquid, and whether or not presently vested with possessory rights." NDAC 75-02-02.1-01(3). Under both federal and state law, an asset must be "actually available" to an applicant to be considered a countable asset for determining medical assistance eligibility. Hecker, 527 N.W.2d at 237 (On Petition for Rehearing); Hinschberger v. Griggs County Social Serv., 499 N.W.2d 876, 882 (N.D.1993); 42 U.S.C. § 1396a(a)(17)(B); 1 J. Krauskopf, R. Brown, K. Tokarz, and A. Bogutz, Elderlaw: Advocacy for the Aging § 11.25 (2d ed. 1993). Yet, "actually available" resources "are different from those in hand." Schweiker v. Gray Panthers, 453 U.S. 34, 48, 101 S.Ct. 2633, 2642, 69 L.Ed.2d 460 (1981) (emphasis in original). NDAC 75-02-02.1-25(2) explains:

Only such assets as are actually available will be considered. Assets are actually available when at the disposal of an applicant, recipient, or responsible relative; when the applicant, recipient, or responsible relative has a legal interest in a liquidated sum and has the legal ability to make the sum available for support, maintenance, or medical care; or when the applicant, recipient, or responsible relative has the lawful power to make the asset available, or to cause the asset to be made available. Assets will be reasonably evaluated....

See also 45 C.F.R. § 233.20(a)(3)(ii)(D). As we noted in Hecker, if an applicant has a legal ability to obtain an asset, it is considered an "actually available" resource.

The actual-availability principle primarily serves "to prevent the States from conjuring fictional sources of income and resources by imputing financial support from persons who have no obligation to furnish it or by overvaluing assets in a manner that attributes non-existent resources to recipients." Heckler v. Turner, 470 U.S. 184, 200, 105 S.Ct. 1138, 1147, 84 L.Ed.2d 138 (1985). The focus is on an applicant's actual and practical ability to make an asset available as a matter of fact, not legal fiction. See Schrader v. Idaho Dept. of Health and Welfare, 768 F.2d 1107, 1112 (9th Cir.1985). See also Lewis v. Martin, 397 U.S. 552, 90 S.Ct. 1282, 25 L.Ed.2d 561 (1970) (invalidating California state regulation that presumed contribution of non-AFDC resources by a non-legally responsible and nonadoptive stepfather or common law husband of an AFDC recipient's mother).

Determining whether an asset is "actually available" for purposes of medical assistance eligibility is largely a fact-specific inquiry depending on the circumstances of each case. See, e.g., Intermountain Health Care v. Bd. of Cty. Com'rs, 107 Idaho 248, 688 P.2d 260, 264 (Ct.App.1984); Radano v. Blum, 89 A.D.2d 858, 453 N.Y.S.2d 38, 39 (1982); Haynes v. Dept. of Human Resources, 121 N.C.App. 513, 470 S.E.2d 56, 58 (1996). Interpretation of the "actually available" requirement must be "reasonable and humane in accordance with its manifest intent and purpose...." Moffett v. Blum, 74 A.D.2d 625, 424 N.Y.S.2d 923, 925 (1980). That an applicant must sue to collect an asset the applicant has a legal entitlement to usually does not mean the asset is actually unavailable. See, e.g., Wagner v. Sheridan County S.S. Bd., 518 N.W.2d 724, 728 (N.D.1994); Frerks v. Shalala, 52 F.3d 412, 414 (2d Cir.1995); Probate of Marcus, 199 Conn. 524, 509 A.2d 1, 5 (1986); Herman v. Ramsey Cty. Community Human Serv., 373 N.W.2d 345, 348 (Minn.Ct.App.1985). See also Ziegler v. Dept. of Health & Rehab. Serv., 601 So.2d 1280, 1284 (Fla.Ct.App.1992) ("Funds which might be available only after a lengthy wait for authorization by a judge, who then may or may not grant authorization, simply are not 'available' resources...."). However, showing an inability to collect a...