Tarin v. Commissioner of the Div. of Medical Assistance

• Decision Date: 17 April 1997
• Citation: 678 N.E.2d 146,424 Mass. 743
• Parties: , 53 Soc.Sec.Rep.Ser. 170, Medicare & Medicaid Guide P 45,193 Alan TARIN v. COMMISSIONER OF THE DIVISION OF MEDICAL ASSISTANCE.
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court

Page 146

678 N.E.2d 146

424 Mass. 743, 53 Soc.Sec.Rep.Ser. 170,

Medicare & Medicaid Guide P 45,193

Alan TARIN v. COMMISSIONER OF THE DIVISION OF MEDICAL ASSISTANCE.

Supreme Judicial Court of Massachusetts,

Middlesex.

Argued Jan. 6, 1997.

Decided April 17, 1997.

Megan H. Christopher & Richard Pattison, Framingham, for the plaintiff.

Edward Wu, Assistant Attorney General, for the defendant.

Before WILKINS, C.J., and O'CONNOR, GREANEY, FRIED and MARSHALL, JJ.

MARSHALL, Justice.

Medicaid recipient Alan Tarin (Tarin) sought judicial review of a decision of the Division of Medical Assistance (division) that his court-ordered child support payments were income "available" to him for the purpose of calculating how much he must contribute to the cost of his nursing home care. A judge in the Superior Court affirmed the division's decision. Tarin appealed and we transferred the case to this court on our own motion. We affirm the decision of the Superior Court.

I

Tarin and Mary Jane Tarin were married on July 11, 1971, and have two children from that marriage. ¹ On June 2, 1993, the Middlesex Probate and Family Court granted the couple a divorce, which became final on August 31, 1993. Tarin is a forty-nine year old man who suffers from Parkinson's Disease. In July, 1993, while the final judgment of divorce was pending, he entered Mediplex, a nursing home in Lexington, because he had become so incapacitated that he was no longer able to be cared for at home.

To understand Tarin's Medicaid challenge, his financial status in the wake of his divorce is relevant. The Tarins negotiated a separation agreement that the Probate and Family Court incorporated without change into the divorce judgment. The parties agreed that all their assets, whether jointly owned or in his or her name, would go to Mrs. Tarin. ² Only Tarin's Social Security and other disability insurance payments totalling $2,846 each month were not transferred to Mrs. Tarin. From that amount Tarin agreed to pay his former wife $407 each week for child support from March, 1993, to June, 1994, and $160 each week thereafter. Tarin's son and daughter were also each to receive $188 a month in Social Security benefits through their father. ³ The separation agreement also required Tarin to create an education trust fund for his children using his individual retirement account of $6,234.81. ⁴ On May 18, 1993, after the parties had signed the separation agreement, but before their divorce was final, Mrs. Tarin relieved him of this obligation because "setting this money in trust would have a Medicaid ineligibility penalty that [she] was not aware of when [she] signed the original agreement."

Tarin applied for, and received, Medicaid benefits from the division. ⁵ On September 20, 1993, after he entered the nursing home and after the Tarins' divorce became final, the division informed him that the amount that he would have to contribute to his long-term care ("patient paid amount") would increase because it was disallowing his claimed deduction for child support payments from his "available" income. ⁶ The sum of the revised "patient-paid amount" and Tarin's child support payments is greater than his monthly income; Tarin is unable to pay both.

Tarin appealed from that decision, and an administrative "fair hearing" was held on November 10, 1993. On November 22, 1993, a welfare appeals referee of the Department of Public Welfare upheld the decision and Tarin sought judicial review pursuant to G.L. c. 30A, § 14. A judge in the Superior Court affirmed the decision. Tarin then filed his appeal.

II

The meaning of the term "available income" is the crux of Tarin's appeal. We must decide whether the division was correct in determining what income is "available" to Tarin for the purpose of calculating the amount that he must contribute to his long-term nursing home care. We begin by describing the statutory scheme and regulations at issue.

Medicaid, enacted in 1965 as Title XIX of the Social Security Act, often referred to as the Medicaid Act, 42 U.S.C. §§ 1396 et seq., is a cooperative State and Federal program to provide medical assistance to needy individuals. See Massachusetts Hosp. Ass'n v. Department of Pub. Welfare, 419 Mass. 644, 646, 646 N.E.2d 1044 (1995); Haley v. Commissioner of Pub. Welfare, 394 Mass. 466, 467, 476 N.E.2d 572 (1985). A State that chooses to participate in the Medicaid program must develop and submit for Federal approval a State plan that complies with the Federal Medicaid Act, and its implementing regulations, 42 C.F.R. § 447.200 (1987). Massachusetts Hosp. Ass'n, supra; Haley, supra; Sargeant v. Commissioner of Pub. Welfare, 383 Mass. 808, 815, 423 N.E.2d 755 (1981). See Schweiker v. Gray Panthers, 453 U.S. 34, 37, 101 S.Ct. 2633, 2636-37, 69 L.Ed.2d 460 (1981) (State Medicaid plans "must comply with requirements imposed by the [Social Security] Act itself and by the Secretary of Health and Human Services"). The division must follow the requirements of Federal law for the availability of Federal financial reimbursement unless State legislation explicitly directs otherwise. Youville Hosp. v. Commonwealth, 416 Mass. 142, 146, 617 N.E.2d 605 (1993). Consistent with our Legislature's intent that the State Medicaid program comply with the Federal statutory and regulatory scheme, Haley, supra at 472, 476 N.E.2d 572, the State plan was submitted for and received Federal approval, which is binding until any amendments to the plan receive Federal approval. Id. at 467, 476 N.E.2d 572.

The extensive Federal and State regulations governing the Medicaid program are intricate, and we describe the relevant regulations in broad terms. Federal law requires States participating in the Medicaid program to provide assistance to "categorically needy" or to "medically needy" individuals. ⁷ In each case, a State is required to base its assessment of financial need only on "such income and resources as are, as determined in accordance with standards prescribed by the Secretary, available to the applicant or recipient" (emphasis added). 42 U.S.C. 1396a(a)(17)(B).

In determining whether a "long-term-care" case such as Tarin ⁸ is eligible for Medicaid, and to determine the level of benefits to be provided to him, his marital status is relevant.

Eligibility for Medicaid. As required by Federal law, all applicants for and recipients of Medicaid must meet certain financial eligibility requirements. 130 Code Mass. Regs. § 505.010 (1995). For an applicant who is married, the division must first assess the "total value of the resources" owned by both the person seeking Medicaid and his spouse, 42 U.S.C. § 1396r-5(c)(1)(A), referred to as the couple's "combined countable assets." 130 Code Mass. Regs. § 505.180(A)(1) (1996). At the time the division first computes eligibility, it considers all the resources held by each spouse, to be available to the Medicaid applicant, referred to as "the couple's current total countable assets." 130 Code Mass. Regs. § 505.180(B)(1) (1996). From the couple's current total countable assets the division sets aside an "asset allowance" which the applicant's spouse may use for her own maintenance. 42 U.S.C. § 1396r-5(c)(2). 130 Code Mass. Regs. § 505.180(B). ⁹ If, after setting aside the prescribed "asset allowance" for his spouse, an applicant has "available" assets that are greater than the permitted maximum, he must "spend down" the remainder of the married couple's combined assets until he reaches the one-person asset limit of $2,000. ¹⁰ See 130 Code Mass. Regs. § 505.180(B)(3); 130 Code Mass. Regs. § 505.115 (1995) (asset reduction provision).

In contrast, in determining the eligibility for Medicaid of a divorced applicant, ¹¹ the division does not take into consideration any of the assets of his former spouse. Because Tarin transferred all his assets to his former wife in connection with his divorce, he was not required to "spend down" any of these assets to become Medicaid eligible.

As part of the initial eligibility determination, the division also scrutinizes an applicant's income to determine whether it is below statutory or regulatory limits. 42 C.F.R. § 435.831 (1996); 130 Code Mass. Regs. § 506.010 (1994). Once again, for a married applicant, the division calculates the countable income, taking into account income from all sources. ¹² It then allows certain specified deductions for the maintenance of the applicant's spouse and any dependent or minor children. 130 Code Mass. Regs. §§ 506.010 (1994). 130 Code Mass. Regs. 506.220(B)-(C) (1996). This calculation results in a net income amount. 130 Code Mass. Regs. 501.500 (1996). ¹³ If the net income is above a specified "income standard" (currently set by the division at $60 a month), 130 Code Mass. Regs. § 506.420 (1996), the applicant must "spend down" his net income until it falls below the limit. 130 Code Mass. Regs. § 506.610-506.620 (1994).

The division follows the same procedure when evaluating the income eligibility of a divorced applicant, with one exception: because spousal and family maintenance allowance deductions are available to an applicant only "for the maintenance needs of his or her spouse in the community" and for minor or dependent children who "reside with the community spouse," these deductions are not available to a divorced applicant such as Tarin. 130 Code Mass. Regs. § 506.220(B), (C) (1996). ¹⁴

Benefits paid by Medicaid. Once an applicant has demonstrated Medicaid eligibility, the division establishes the amount Medicaid will pay on his behalf. In determining how much income Tarin has "available" to pay for his nursing home care, the division first calculates his "countable income." "Countable income" is defined as "all monies, earned or unearned, that are included for eligibility determination." 130 Code Mass. Regs. § 505.200 (1996). The "patient paid amount"--the amount paid by the patient--is his "countable income" less any expressly...