Vansach v. Dep't of Health & Human Servs. (In re Estate of Vansach)
| Decision Date | 22 May 2018 |
| Docket Number | No. 336267,No. 334732,334732 |
| Citation | 922 N.W.2d 136,324 Mich.App. 371 |
| Parties | IN RE ESTATE OF Joseph VANSACH, Jr. Joseph Vansach Jr., Petitioner-Appellee, v. Department of Health and Human Services, Respondent-Appellant. In re Estate of Jerome R. Bockes. Jerome R. Bockes, a Protected Person, Petitioner-Appellee, v. Department of Health and Human Resources, Respondent-Appellant. |
| Court | Court of Appeal of Michigan — District of US |
Bill Schuette, Attorney General, Aaron D. Lindstrom, Solicitor General, Matthew Schneider and Laura Moody, Chief Legal Counsel, and Geraldine A. Brown, Assistant Attorney General, for the Michigan Department of Health and Human Services.
Barron, Rosenberg, Mayoras & Mayoras, PC (by Don L. Rosenberg, Kimberly C. Browning, and Scott M. Robbins) for Ramona Fenner-Vansach.
Chalgian & Tripp Law Offices PLLC (by David L. Shaltz ) and Grua, Tupper & Young PLC (by Carrie S. Ihrig Freeman) for Jerome R. Bockes.
James Schuster for the Elder Law and Disability Rights Section of the State Bar of Michigan. Fraser Trebilcock Davis & Dunlap, PC (by Marlaine C. Teahan ), amici curiae, for the Probate and Estate Planning Section of the State Bar of Michigan.
Before: O’Connell, P.J., and Hoekstra and K. F. Kelly, JJ.
In Docket No. 334732, respondent, the Department of Health and Human Services (DHHS), appeals as of right a protective order entered by the St. Clair County Probate Court, which ordered that all of Joseph Vansach, Jr.’s income be paid to his wife, Ramona Fenner-Vansach, for the rest of Joseph’s life. In Docket No. 336267, the DHHS appeals a similar protective order, entered by the Eaton County Probate Court, directing that all income of Jerome R. Bockes be paid to his wife, Beverly Fay Bockes.1 For the reasons explained in this opinion, we conclude that a probate court has the authority to enter a protective order providing support for a community spouse whose institutionalized spouse is receiving Medicaid benefits.2
However, we also conclude that a probate court’s authority to enter such support orders under the Estates and Protected Individuals Code (EPIC), MCL 700.1101 et seq ., does not include the power to enter an order preserving the community spouse’s standard of living without consideration of the institutionalized spouse’s needs and his or her patient-pay obligations under Medicaid. Given that the orders in these cases were entered without considering Joseph’s and Jerome’s needs and their patient-pay obligations under Medicaid, we conclude that the probate courts abused their discretion by entering the orders at issue. We therefore vacate both support orders and remand for reconsideration of Beverly’s and Ramona’s need for support under the proper framework.
Both Joseph and Jerome are institutionalized individuals who receive Medicaid benefits to cover part of the costs of their healthcare. Their respective spouses—Ramona and Beverly—sought protective support orders under EPIC, claiming that they lacked sufficient income to meet their needs and that they were entitled to financial support from Joseph and Jerome. The DHHS opposed the petitions, asserting that Ramona and Beverly actually sought a judicial determination that they were each entitled to a larger community-spouse monthly income allowance (CSMIA) under Medicaid,3 which would have the effect of decreasing the patient-pay amount that Joseph and Jerome contribute toward their care. According to the DHHS, the probate courts lacked the authority to make Medicaid determinations and to enter orders modifying the CSMIAs. Nevertheless, in each case, the probate court granted the petition and entered a support order requiring that 100% of the institutionalized spouse’s monthly income be paid to the community spouse. The DHHS now appeals as of right in each case.
Generally speaking, these consolidated appeals ask us to consider whether, and under what circumstances, a community spouse whose institutionalized spouse is receiving Medicaid benefits may obtain a support order under EPIC in light of the federal Medicaid statutes establishing CSMIAs. As a practical matter, a support order under EPIC may later be uses that order to obtain an increase in a community spouse’s CSMIA and a corresponding decrease in the institutionalized spouse’s patient-pay amount under Medicaid. Under Medicaid, there exists an administrative remedy for challenging the CSMIA, and the DHHS’s basic position on appeal is that this administrative process is the sole avenue by which a community spouse may seek a modification of the CSMIA. Alternatively, assuming that the probate court has the authority to enter support orders with potential Medicaid implications, the DHHS argues that Ramona and Beverly failed to establish the necessary prerequisites for a support order under EPIC and that the probate courts abused their discretion by stripping Joseph and Jerome of all income so that Ramona and Beverly could maintain their current lifestyles. To provide context for our analysis of these issues, we begin with a brief overview of Medicaid’s spousal-impoverishment provisions and the availability of a support order under EPIC.
"The Medicaid program, 42 USC 1396 et seq., was established by Congress in 1965 as a cooperative federal-state program in which the federal government reimburses the state for a portion of the costs of medical care for needy individuals." Cook v. Dep’t of Social Servs. , 225 Mich.App. 318, 320, 570 N.W.2d 684 (1997). "Participation in Medicaid is essentially need-based, with states setting specific eligibility requirements in compliance with broad mandates imposed by federal statutes and regulations."4
Mackey v. Dep’t of Human Servs. , 289 Mich.App. 688, 693, 808 N.W.2d 484 (2010). "To be eligible for Medicaid long-term-care benefits in Michigan, an individual must meet a number of criteria, including having $2,000 or less in countable assets." Hegadorn v. Dep’t of Human Servs. Dir. , 320 Mich.App. 549, 552-553, 904 N.W.2d 904 (2017) (quotation marks and citation omitted), lv. gtd. 501 Mich. 984, 907 N.W.2d 578 (2018). Even if eligible for benefits, Medicaid recipients have an obligation to contribute to the cost of their care to the extent that they are financially able as determined on the basis of post-eligibility calculations of income. See 42 USC 1396a(a)(17) ; 42 USC 1396r-5(d)(1) ; 42 CFR 435.725 ; Kent County v. Dep’t of Social Servs. , 149 Mich.App. 749, 751-752, 386 N.W.2d 663 (1986). However, Medicaid, "with all of its complicated rules and regulations, has also become a legal quagmire that has resulted in the use of several ‘loopholes’ taken advantage of by wealthier individuals to obtain government-paid long-term care they otherwise could afford." Mackey , 289 Mich.App. at 693-694, 808 N.W.2d 484.
The rules governing Medicaid are particularly complicated in cases involving married couples, who ‘‘typically possess assets and income jointly and bear financial responsibility for each other...." Wisconsin Dep’t of Health & Family Servs. v. Blumer , 534 U.S. 473, 479, 122 S.Ct. 962, 151 L.Ed.2d 935 (2002). Historically, because the income of both spouses and any jointly held assets were considered available to the institutionalized spouse for Medicaid purposes, "[m]any community spouses were left destitute by the drain on the couple’s assets necessary to qualify the institutionalized spouse for Medicaid and by the diminution of the couple’s income posteligibility to reduce the amount payable by Medicaid for institutional care." Id . at 480, 122 S.Ct. 962. However, in some cases, by titling assets solely in a community spouse’s name, "couples with ample means could qualify for assistance when their assets were held solely in the community spouse’s name." Id .
Congress sought to address these problems with the enactment of the "spousal impoverishment" provisions of the Medicare Catastrophic Coverage Act of 1988 (MCCA), 42 USC 1396r-5. Blumer , 534 U.S. at 477, 480, 122 S.Ct. 962. Specifically, "Congress sought to protect community spouses from ‘pauperization’ while preventing financially secure couples from obtaining Medicaid assistance." Id . at 480, 122 S.Ct. 962. In other words, the basic goal of these spousal-impoverishment provisions was to assure that "the community spouse has a sufficient—but not excessive—amount of income and resources available." Id . (quotation marks and citation omitted). "To achieve this aim, Congress installed a set of intricate and interlocking requirements with which States must comply in allocating a couple’s income and resources." Id .
Relevant to the present case, in addition to other rules regarding the allocation of resources, Medicaid provides various rules for the allocation of income between spouses for purposes of determining Medicaid eligibility as well as posteligibility income calculations that apply after an institutionalized spouse is "determined or redetermined" to be eligible for medical assistance. See § 1396r-5(b) and (d).
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