Tex. Health & Hum. Serv. Comm'n v. Burt

• Court: Texas Supreme Court
• Writing for the Court: Justice Bland delivered the opinion of the Court
• Citation: Tex. Health & Hum. Serv. Comm'n v. Burt, 689 S.W.3d 274 (Tex. 2024)
• Docket Number: 22-0437
• Decision Date: 03 May 2024
• Parties: TEXAS HEALTH AND HUMAN SERVICES COMMISSION, Petitioner, v. ESTATE OF Clyde L. BURT, Linda S. Wallace, Executor, and Linda S. Wallace, Respondents
• topic: Administrative Law,Health Law,Public Sector Law,Wills, Trusts and Estates

689 S.W.3d 274

TEXAS HEALTH AND HUMAN SERVICES COMMISSION, Petitioner,

v.ESTATE OF Clyde L. BURT, Linda S. Wallace, Executor, and Linda S. Wallace, Respondents

No. 22-0437

Supreme Court of Texas.

Argued October 4, 2023

OPINION DELIVERED: May 3, 2024

On Petition for Review from the Court of Appeals for the Third District of Texas

Brent Webster, Houston, Kara D. Holsinger, Bill Davis, Elizabeth J. Brown Fore, Austin, Atty. Gen. W. Kenneth Paxton Jr., Shawn Cowles, Judd E. Stone II, Laura Diller, Ryan Baasch, for Petitioner.

Jacob Hale, Waxahachie, for Respondents.

Justice Bland delivered the opinion of the Court, in which Justice Lehrmann, Justice Blacklock, Justice Busby, Justice Huddle, and Justice Young joined.

To qualify for Medicaid assistance, an applicant’s resources, like cash and assets, must fall below a threshold level. The calculation of resources for this purpose excludes the applicant’s home. The issue presented in this case is whether an interest in property purchased with cash after a Medicaid applicant enters a skilled-nursing facility qualifies as a "home" under federal law, excluding it from the calculation that determines Medicaid eligibility.

The Texas Health and Human Services Commission concluded that the property interest is not excluded, and thus it denied the claim for assistance. The trial court reversed the agency’s determination, and the court of appeals affirmed. The court of appeals held that a property interest created after admission to a skilled-nursing facility can be excluded from the resources used to determine Medicaid eligibility if the applicant states an intent to live at the property in the future. In its view, this is so even though the purchase took place after the Medicaid claim arose, using funds that otherwise qualified as resources for calculating Medicaid eligibility.¹

We hold that a "home" is the applicant’s principal place of residence before the claim for Medicaid assistance arises, coupled with the intent to reside there in the future. A property interest purchased with qualifying resources after the applicant moves to a skilled-nursing facility is an available resource for determining Medicaid eligibility under federal eligibility rules, as the property was not the applicant’s principal place of residence at the time the claim for benefits arose. We reverse and render judgment in favor of the Commission.

I

Clyde and Dorothy Burt purchased a house in Cleburne, Texas, and lived there many years. In 2010, however, they sold the house to their daughter and son-in-law, Linda and Robby Wallace. The Burts moved to a rental property the Wallaces owned.

About seven years later, in August 2017, the Burts moved to a skilled-nursing facility. At the time, the Burts had cash assets and cash value in a life insurance policy; both count as available resources for Medicaid eligibility.² After moving into the facility, the Burts used these assets to buy an undivided one-half interest in the Cleburne house from the Wallaces.³ The Burts then executed a Lady Bird deed in favor of the Wallaces.⁴ By executing the deed, the Burts granted their newly acquired one-half interest back to the Wallaces, reserving an enhanced life estate. As a result, the Burts’ undivided one-half interest in the Cleburne house reverted to the Wallaces upon the Burts’ deaths. After these transactions, the Burts were left with qualifying resources of $2,016.10, which is under the $3,000 maximum resource threshold for couples to be eligible for Medicaid assistance.⁵

On the day of the sale, Clyde Burt executed a Form H1245, informing the Commission that he considered the Cleburne house to be his home and principal place of residence, to which he intended to return. Shortly thereafter, he submitted the form along with his and his wife’s joint application for Medicaid nursing-facility assistance. While their application was pending, the Burts died, having never left the skilled-nursing facility. They incurred $23,479.35 in costs for their care.

The Commission denied the estate’s claim for Medicaid assistance. It determined that the Burts’ interest in the Cleburne house was not excludable as a resource for determining Medicaid eligibility. A Commission hearing officer and reviewing attorney upheld the decision. They reasoned that the property interest was not excludable as the Burts’ home because the home had not been the Burts’ residence in the years before they entered the nursing facility.⁶

Linda Wallace, as executor and beneficiary of her father’s estate, petitioned for review in the district court, arguing that the Commission should have excluded the Burts’ interest in the Cleburne house from the Burts’ available resources.⁷ Agreeing, the trial court reversed the Commission’s decision.

The court of appeals affirmed, holding that an applicant’s principal place of residence and home for Medicaid eligibility purposes turns on the applicant’s subjective intent.⁸ The court of appeals reasoned that "the purposes of Medicaid are better served by allowing an applicant to claim the home exemption for a home he buys while in a nursing facility," because renters and homeowners "will be in the same need of a home upon … discharge from the institution."⁹

The Commission petitioned this Court for review, arguing that the court of appeals’ expansive interpretation of "home" fails to comport with "home" under state and federal law. We granted review.

II

[1–4] We review the Commission’s denial of Medicaid assistance under the substantial evidence rule.¹⁰ Under that standard, courts first "determine whether the agency’s construction contradicts the statute’s plain language."¹¹ Statutory interpretation is a question of law we consider de novo.¹² If the Commission’s construction comports with the statute, then a reviewing court should uphold the Commission’s decision "if the evidence is such that reasonable minds could have reached the conclusion that the agency must have reached in order to justify its action."¹³

A

[5–7] Medicaid is a federal and state assistance program that provides medical and skilled-nursing care for qualifying persons.¹⁴ Federal law sets Medicaid’s parameters, and the states enact legislation to Implement the program.¹⁵ In Texas, the Health and Human Services Commission administers Medicaid.¹⁶

Texas’s methodology for determining income and resource eligibility must be "no more restrictive[ ] than the methodology … under the [federal] supplemental security income program."¹⁷ Under that standard, an applicant’s resources must not exceed $2,000 for an individual or $3,000 for a couple.¹⁸ "Resources" includes "cash or other liquid assets or any real or personal property that an individual (or spouse, if any) owns and could convert to cash to be used for his or her support and maintenance."¹⁹ Under the statute, the Commission must exclude an applicant’s "home (including the land that appertains thereto)" from the applicant’s available resources.²⁰

The Commission argues that the Burts’ interest does not qualify as their "home" for Medicaid eligibility. Under the federal statute and federal and state regulations, "home" must be understood as an "actual, lived-in residence"; otherwise, an applicant could exclude any interest acquired after the claim for assistance arises based on the applicant’s declared intent to make it a future home. Because the Burts neither lived in the Cleburne house when they applied for Medicaid assistance, nor lived in it during the period before their entry into the skilled-nursing facility, the value of their interest, acquired using Medicaid-available resources after their admission to the skilled-nursing facility, is not excluded.

Ms. Wallace responds that federal law permits an applicant to use resources to purchase a property interest and designate it as a future "home," if the applicant states an intent to live there in the future. This construction converts funds that qualify as "resources" at the time of the claim into assets that do not, but Ms. Wallace argues that the definition of "home" as a place of residence of the applicant at the time the claim arose makes Texas’s Medicaid program more restrictive than the federal supplemental security income program.

B

[8, 9] We begin by examining the applicable federal law. "In determining the resources of an individual (and his eligible spouse, if any) there shall be excluded … the home (including the land that appertains thereto)."²¹ The federal law does not define "the home." "When a term is left undefined in a statute, ‘we will use the plain and ordinary meaning of the term and interpret it within the context of the statute.’ "²² "To determine a statutory term’s common, ordinary meaning, we typ- ically look first to [its] dictionary definitions …."²³

[10] "[H]ome" is "one’s principal place of residence: domicile,"²⁴ and "[a] place where one lives; a residence."²⁵ Accordingly, a home is the principal place in which one lives and resides, not merely a structure in which one possesses a partial ownership stake. At the time the Burts applied for Medicaid, they did not reside in the Cleburne house. Nor was the Cleburne house their principal residence or domicile during the preceding seven years. Under the plain language of the statute, the Cleburne house was not their "home." The Commission’s interpretation is consistent with the plain meaning of the federal statute and no more restrictive than the federal supplemental security income program.

In urging the contrary, Ms. Wallace first observes that the statute does not explicitly require occupancy. To reside and live in a place, however, one must occupy it. The statute does not provide an exclusion for real property or homes generally, but "the home."²⁶ The home connotes a singular location commonly understood to be the place one lives.

Ms. Wallace also counters that it is common for one to consider a property to be a "home" despite being unable to immediately move into it, as for...