Resident v. Noot, 51342.

Decision Date01 May 1981
Docket NumberNo. 51342.,51342.
Citation305 NW 2d 311
PartiesJane RESIDENT, by her Guardian Ad Litem, Respondent, v. Arthur E. NOOT, individually and as Commissioner of the Department of Public Welfare, Appellant.
CourtMinnesota Supreme Court

Warren Spannaus, Atty. Gen., Ellen Dubuque, Sp. Asst. Atty. Gen., St. Paul, for appellant.

Laurie Davison, Legal Aid Society of Mpls, Inc., Minneapolis, for respondent.

Heard, considered and decided by the court en banc.

AMDAHL, Justice.

Defendant, Arthur E. Noot, Commissioner of the Department of Public Welfare (D.P.W.), appeals from a judgment of the Hennepin County District Court declaring invalid a D.P.W. Medical Assistance Policy. We affirm.

The facts in this case are not in dispute. Plaintiff1 is a ninety-six year old resident of a nursing home; she is currently assigned to a double room. Plaintiff is "medically needy" and therefore eligible to receive Medical Assistance (M.A.). Although plaintiff cannot live alone, she does not need the skilled nursing care that would require her to be assigned to a private room. Because plaintiff has no medical need for a private room, M.A. will not cover its cost.

Plaintiff's daughter is not financially responsible for her mother, and has no obligation under law to contribute to the cost of her mother's care. Minn.Stat. § 256B.14 (1980). Plaintiff's daughter, however, wants her mother to have a private room so that she "can live her last years in greater comfort and with more dignity". For that reason, she offered to pay the nursing home the difference between the daily charge for a private room ($40.00) and the M.A. reimbursement rate for a double room ($19.65). The nursing home refused the payments, informing her that a D.P.W. policy precludes an M.A. provider's request or receipt of any third party payments on behalf of M.A. recipients.

Plaintiff then filed a complaint in Hennepin County District Court asking for a judicial declaration that her daughter may supplement her M.A. benefits in order to pay for a private room and that the payments made by her family would not affect her status as an M.A. recipient. The trial court held that the nursing home could accept the payments from the daughter and that their receipt would not affect either the status of the nursing home as an M.A. provider or the status of the plaintiff as an M.A. recipient. The D.P.W. appeals to this court.

The threshold issue to be decided is whether D.P.W. Rule 47(F)(1) prohibits supplemental payments for items and services not provided by Medical Assistance. 12 M.C.A.R. § 2.047(F)(1) (1978). The D.P.W. argues that it should be allowed to interpret its own rule, and that this court must defer to its reading of Rule 47 because it is the agency charged with the rule's execution. See Red Lion Broadcasting v. F.C.C., 395 U.S. 367, 89 S.Ct. 1794, 23 L.Ed.2d 371 (1969). We do not agree.

As a general rule, this court defers to an agency's interpretation when the language subject to construction is so technical in nature that only a specialized agency has the experience and expertise needed to understand it, Reserve Mining Co. v. Herbst, 256 N.W.2d 808 (Minn.1977), when the language is ambiguous or when the agency interpretation is one of long standing. Estate of Abbott v. Dancer, 213 Minn. 289, 6 N.W.2d 466 (1942). We do not defer when the language employed or the standards delineated are clear and capable of understanding.

D.P.W. Rule 47(F)(1) provides as follows:

1. Payments to eligible providers. Participation in the MA program is limited to those providers of medical care, service and supplies who accept as payment in full amounts paid in accordance with DPW\'s maximum allowable charges. Providers are prohibited from requesting or receiving additional payment from the recipient, his relatives or guardian, except to meet the spend-down provision of state law. Providers will be directly paid for providing medical care and services rendered within the scope of practice recognized under federal and state law and regulations.

12 M.C.A.R. § 2.047(F)(1) (1978). On our examination, we find the rule is expressed in clear and common terms; the language is not overly technical or ambiguous. In addition, the D.P.W. has made conclusory statements, but has not demonstrated its interpretation to be one of long standing.2 Therefore, we find no reason to defer to the agency construction of Rule 47(F)(1).

Our analysis of this rule requires consideration of the comprehensive federal and state schemes for the administration and regulation of medical care to the aged. The state scheme, the Minnesota Medical Assistance program, is a part of the federal scheme, the federal Medicaid program. Together they form a cooperative venture through which the federal government supplies funds to state programs run in accord with federal requirements. White v. Beal, 555 F.2d 1146, 1149 (3rd Cir. 1977). Rule 47(F)(1) represents this state's compliance with one of those requirements, a mandatory phase out of supplementation.

When the Medicaid program was first established, many states were unable to bear the entire cost of providing medical care to the needy, notwithstanding the states' receipt of federal funds. The charges imposed by the nursing homes were, therefore, met by a combination of government funds and forced payments from an M.A. recipient, her relatives or friends, called supplementation. Prior to 1971, the Secretary of Health, Education, and Welfare approved state Medicaid Plans including supplementation, so long as a state could show that it had existing supplemental arrangements with nursing homes and that in the absence of such arrangements it would be unable to attract a sufficient number of nursing homes into the program.

In 1969, the Secretary promulgated a regulation giving those states that included supplementation in their Medicaid plans a limited amount of time to phase out the supplementation portion of their plans. 45 C.F.R. § 250.30(a)(6) (1972). The regulation was a response to the Congressional concern with supplementation.

There are wide variations among the States in the manner of financing the cost of nursing home care provided to the needy. In some States, the full cost of care is paid. In others, a negotiated rate is developed which may or may not approximate the reasonable cost or reasonable charges for the services provided. Some States, however, depend upon the supplementation of the State agency\'s below-cost allowances for care with contributions from relatives or the needy individual himself. As a matter of public policy, it would be best for all concerned: the needy individual, his relatives, the State agency, and the nursing home if the reimbursement made by the State represented the reasonable cost or reasonable charges for comparable services. Until such time as proper and adequate payments are made, a problem exists for those States which have been using the supplementation system as a means of providing the additional funds necessary as a result of the State\'s payment of less than the full costs of nursing home care. The committee has considered this matter carefully and has determined not to include any legislation dealing with this situation upon the assurance of the Department of Health, Education, and Welfare that existing supplementation programs will be permitted to continue until January 1, 1971, where a State determines and advises the Secretary that its payments for nursing home care are less than the reasonable cost of the care and services provided. Such States are expected to provide the Secretary, prior to 1971, with a plan for phasing out such supplementation during a reasonable period of time subsequent to January 1, 1971.

S.Rep.No.744, 90th Cong., 1st Sess. 187-188, reprinted in 1967 U.S.Code Cong. & Ad. News 2834, 3026.

The current supplementation regulation provides that "a State plan must provide that the Medicaid agency must limit participation in the Medicaid program to providers who accept as payment in full, the amounts paid by the agency." 42 C.F.R. § 447.15 (1980). D.P.W. Rule 47(F)(1) is substantially similar to the federal regulation and has been interpreted by the D.P.W. to prohibit a nursing home from receiving any payments from an M.A. recipient, her relatives or friends. We do not read Rule 47(F)(1) so expansively.

The practical effect of the agency interpretation would be to bar voluntary contributions for the care and comfort of M.A. recipients by their relatives and friends. The bar would not apply to payments for private rooms alone. Rather, the D.P.W. interpretation would prohibit payments for such items as electric wheelchairs, mechanical beds, telephone service, and the like. All indications are that these items were not intended to be included within this proscription.

It is clear from the federal legislative history that Congress was concerned with only a nursing home's receipt of payments by an M.A. recipient, her relatives or friends for items or services provided by Medicaid. The legislative history above quoted continues as follows:

Any limitations in supplementation are not intended to preclude additional payments for the reasonable costs or charges for non-standard nursing home services such as private room, telephone, television, et cetera, nor would they in any way affect the payment toward the reasonable costs of care by a patient who has income in excess of the amount the State determines is needed for his personal expenses other than nursing home care.

Id. at 3026. (emphasis added). H.E.W. Mem., PIQ. — MMB-77-15, (Dec. 19, 1977) referred to the above legislative history when it set forth the following question and answer:

Q. Can a relative pay an additional amount to have a Title XIX recipient placed in a private room?
A. Yes * * * based upon this Senate Finance Committee report, our interpretation is that States cannot prohibit a payment by a relative or other party to obtain a private
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