Robinson v. Pratt, Civ. A. No. 79-1278-S.

• Decision Date: 24 June 1980
• Docket Number: Civ. A. No. 79-1278-S.
• Citation: 497 F. Supp. 116
• Parties: Sadie ROBINSON, Plaintiff, v. John PRATT et al., Defendants.
• Court: U.S. District Court — District of Massachusetts

497 F. Supp. 116

Sadie ROBINSON, Plaintiff, v. John PRATT et al., Defendants.

Civ. A. No. 79-1278-S.

United States District Court, D. Massachusetts.

June 24, 1980.

Mark Coven, Greater Boston Elderly Legal Services, Boston, Mass., for plaintiff.

Thomas Miller, Asst. Atty. Gen., Boston, Mass., Marianne Bowler, Asst. U. S. Atty., Boston, Mass., for defendants.

MEMORANDUM AND ORDER

SKINNER, District Judge.

The original plaintiff, an eighty-three year old woman, sought to enjoin the application of the Massachusetts medical assistance program's "transfer of assets" provision, M.G.L.A. c. 118E § 13, 106 C.M.R. 325.060(C) (1979),¹ to her and other persons similarly situated, alleging that to the extent that it operates to deny her medical assistance benefits (Medicaid) it violates the Equal Protection Clause of the Fourteenth Amendment and is in conflict with Title XIX of the Social Security Act, 42 U.S.C. § 1396 et seq. On July 10, 1979, I issued a temporary restraining order which prevented defendant Pratt from denying Medicaid benefits to the plaintiff on the basis of this provision. Plaintiff amended her complaint to add the Secretary of Health and Human Services and seeks to compel her to enforce her Department's regulations with respect to the Massachusetts provision. 42 U.S.C. §§ 1396a(b), 1396a(c) (1976). Jurisdiction is predicated on 28 U.S. §§ 1331, 2201-2202 (1976), and the case is currently before me on plaintiff's motions for summary judgment, Fed.R.Civ.P. 56, and class certification, Fed.R.Civ.P. 23(b)(2). The Secretary has moved to dismiss pursuant to Fed.R. Civ.P. 12(b)(6).

The case of the original plaintiff is now moot. The transfer of assets which disqualified her under the Massachusetts rule occurred on April 20, 1979. The disqualification expired on April 20, 1980. Accordingly, the case as to Sadie Robinson is DISMISSED as moot. Similarly, the intervenors John N. Brown and Jane Brown were denied eligibility because of a purchase of an automobile (an exempt item) on May 22, 1979. Their claim must also be DISMISSED as moot. 106 C.M.R. 325.060(C) (1979).

The transfer said to disqualify the intervenor George Sweeney, however, occurred on December 3, 1979, and he is still disqualified from receiving Medicaid. Mr. Sweeney's case not only represents a harsh application of the rule, but also dramatically demonstrates the unequal treatment of which the plaintiff complains. The disqualifying payment was made from their joint account by plaintiff's wife, without the knowledge of the plaintiff, who is suffering from senile dementia. It disqualifies the plaintiff from receiving Medicaid but does not disqualify Mrs. Sweeney from receiving Supplementary Security Income (SSI). He seeks a temporary restraining order preventing the defendant from withholding Medicaid because of his alleged "transfer of assets".

Title XIX of the Social Security Act, 42 U.S.C. § 1396 et seq. (1976), provides the framework for a comprehensive cooperative federal-state medical assistance program. A state initially becomes eligible for federal funds upon submission of a medical assistance benefits plan which fulfills the requirements of the statute, 42 U.S.C. § 1396a(a) (1976), and receives the approval of the Secretary. 42 U.S.C. § 1396a(b) (1976).

Once a state decides to participate in the Medicaid program it may tailor its particular plan to its own resources and needs within federally defined limits. For example, the Title XIX state plan must make Medicaid benefits available to all individuals who are aged, blind, or disabled, the so-called "categorically needy", 42 U.S.C. § 1396a(a)(10)(A) (1976); 42 C.F.R. § 435.4 (1979). The state may, however, define the categorically needy to include all persons who receive SSI, 42 U.S.C. § 1396a(a)(10)(A) (1976), or it may use more restrictive eligibility conditions. 42 C.F.R. § 435.121 (1979). If the state elects this latter option, its requirements may be no more restrictive than those in effect under the state's Medicaid plan on January 1, 1972 and, in determining an individual's financial eligibility, the state must deduct any SSI payments received by that individual. 42 C.F.R. § 435.121(b)(1)(2) (1979).

In addition to the mandatory coverage of the categorically needy individuals, states may extend Medicaid to other groups of individuals who would otherwise be eligible for Medicaid benefits but whose income and resources are above the limits for the categorically needy; within the context of this case, these individuals comprise the "medically needy" group. 42 U.S.C. § 1396a(a)(10)(C) (1976); 42 C.F.R. § 435.4 (1979). If the state desires to extend benefits to "medically needy" individuals its administering agency "must not use requirements for determining medically needy groups that are ... for the aged, blind, and disabled individuals, more restrictive than those used under SSI, except for individuals receiving an optional state supplement ... or individuals subject to the more restrictive requirements as allowed by 42 C.F.R. § 435.121."²

Massachusetts has elected to participate in the Medicaid program and to extend coverage to the medically needy as well as categorically needy groups. M.G.L.A. c. 118E § 1 (1979). In providing Medicaid coverage for the aged, blind, and disabled, Massachusetts has chosen to make all SSI recipients automatically eligible for benefits (the "categorically needy"), and to extend benefits to others who would otherwise be eligible for benefits "but for income and resources, provided they meet the requirements of financial eligibility ..." as set forth in the statute. One such requirement is the "transfer of assets" provision. M.G.L.A. c. 118E § 13 (1973); 106 C.M.R. 325.060(C) (1979).

Plaintiff contends, inter alia, that the Massachusetts transfer of assets rule is in conflict with Title XIX and the applicable HHS regulations in that it creates additional eligibility requirements not authorized by the Medicaid statutory scheme. The Act requires states which have chosen to include groups other than categorically needy groups, to make benefits available to individuals who would, except for their income and resources be eligible for SSI benefits and who have insufficient income and resources for covered medical care. Insufficiency of income must be determined in accordance with standards which are "comparable" to the standards used in determining eligibility for SSI. 42 U.S.C. § 1396a(a)(10)(C)(i) (1976).

Plaintiff argues that a transfer of assets would not preclude him from SSI benefits, Social Security Administration's Claims Manual § 12507(a), and that Massachusetts' use of it to render him ineligible for Medicaid is in violation of the statute. Defendant argues that the transfer of assets provision serves the justifiable state purpose of preventing individuals from fraudulently obtaining Medicaid benefits and guarding the scarce welfare resources of the Commonwealth. Alternately, defendant argues that the provision be treated as a collateral restriction designed to police fraud.

I may not consider plaintiff's claim under the statute and regulations in the absence of a non-frivolous constitutional claim under the Equal Protection Clause of the Fourteenth Amendment. Chapman v. Houston Welfare Rights Organization, 441 U.S. 600, 99 S.Ct. 1905, 60 L.Ed.2d 508 (1979). While I am not now as sanguine as I was on July 10, 1979 about the plaintiff's likelihood of success on the merits, I conclude that his constitutional claim is genuine, colorable, and not frivolous. I must proceed to consideration of the statutory claims before reaching the constitutional one. Rosado v. Wyman, 397 U.S. 397, 90 S.Ct. 1207, 25 L.Ed.2d 442 (1970).

The Courts of Appeal of the Second and Fourth Circuits have held that disqualification from Medicaid by reason of a prior transfer of assets is in conflict with the federal statutes and regulations referred to above. Caldwell v. Blum, 621 F.2d 491, (2d Cir. 1980); Fabula v. Buck, 598 F.2d 869 (4th Cir. 1979). Accord, Buckner v. Maher, 424 F.Supp. 366 (D.Conn. 1976), aff'd 434 U.S. 898, 98 S.Ct. 290, 54 L.Ed.2d 184 (1977).

The Court of Appeals for the Ninth Circuit has taken a contrary view, holding that imposing the transfer of assets disqualification on Medicaid applicants does not violate the statutes, because the mandate to employ "comparable" standards of income does not mean "the same" standards. Dawson v. Myers, 622 F.2d 1304 (9th Cir. 1980).³

I adopt the reasoning of Judge Mansfield in Caldwell v. Blum, supra, and hold that the disqualification from Medicaid by reason of a prior transfer of assets violates the comparability provision of 42 U.S.C. § 1396a(a)(10)(C) (1976) and the attendant regulation, 42 C.F.R. § 435.401(c) (1979).

The next question concerns the function of the courts in administering and enforcing these provisions, a problem not addressed by any of the courts cited above. 42 U.S.C. § 1396c grants enforcement powers to the Secretary of HHS:

§ 1396c. Operation of State plans

If the Secretary, after reasonable notice and opportunity for hearing to the State agency administering or supervising the administration of the State plan approved under this subchapter, finds—

(1) that the plan has been so changed that it no longer complies with the provisions of section 1396a of this title; or

(2) that in the administration of the plan there is a failure to comply substantially with any such provision;

the Secretary shall notify such State agency that further payments will not be made to the State (or, in his discretion, that payments will be limited to categories under or parts of the State plan not affected by such failure), until the Secretary is satisfied that there will no longer be any such failure to comply. Until he is so satisfied he shall make no further payments to such State (or shall limit payments to categories under or parts of the State plan not affected by such failure). Emphasis supplied.

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