Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

May v. Azar

Alabama Court of Civil Appeals

August 2, 2019

Jean C. May
v.
Stephanie Azar, as commissioner of the Alabama Medicaid Agency Stephanie Azar, as commissioner of the Alabama Medicaid Agency
v.
Jean C. May

          Appeals from Montgomery Court (CV-18-900178)

          EDWARDS, JUDGE.

         In appeal number 2180004, Jean C. May ("Jean"), who is a resident of the John Knox Manor nursing home ("the nursing home"), appeals from a judgment of the Montgomery Circuit Court ("the trial court") affirming a decision of the Alabama Medicaid Agency ("the Agency") that denied Jean's application for medical assistance ("Medicaid benefits") under the State Medicaid Plan ("Alabama's State Plan") adopted pursuant to 42 U.S.C. § 1396 et seq., Title XIX of the Social Security Act. In appeal number 2180033, Stephanie Azar, as commissioner of the Agency, cross-appeals from the trial court's order denying the Agency's motion to vacate an order granting Jean's motion to waive the cost bond for preparation of the transcript of the proceedings before the Agency pursuant to Ala. Code 1975, § 41-22-20(b).

         Contextual Background, Facts, and Procedural History

         At issue in Jean's appeal is whether the Agency properly included certain property belonging to her husband, Isaac W. May ("Isaac"), as a resource available to Jean for the purpose of determining her eligibility for Medicaid benefits under Alabama's State Plan. However, before discussing the facts and procedural history that are relevant to Jean's appeal and the cross-appeal, we give a general discussion of the history and purposes of the federal Medicaid program ("the Medicaid program"). The Medicaid program was established to enable each state

"to furnish (1) medical assistance on behalf of families with dependent children and of aged, blind, or disabled individuals, whose income and resources are insufficient to meet the costs of necessary medical services, and (2) rehabilitation and other services to help such families and individuals attain or retain capability for independence or self-care."

42 U.S.C. § 1396-1. In pertinent part, "medical assistance" includes nursing-home care. See 42 U.S.C. § 1396d(a) (defining "medical assistance");[1] see also 42 U.S.C. § 1396d(f) (defining "nursing facility services"); 42 U.S.C. § 1396r(a) (defining "nursing facility").

         Funds appropriated by the federal government for the Medicaid program are "used for making payments to States which have submitted, and had approved by the Secretary [of the United States Department of Health and Human Services], State plans for medical assistance." 42 U.S.C. § 1396-1; see also 42 C.F.R. § 430.10. The Agency administers Alabama's State Plan. See Ala. Admin. Code (Alabama Medicaid Agency), r. 560-X-1-.02;[2] see also Ala. Code 1975, § 22-6-150(6). The Agency is authorized to "adopt rules necessary ... to administer the Alabama Medicaid Program in a manner consistent with state and federal law ...." Ala. Code 1975, § 22-6-164; see also 42 U.S.C. § 1396a (discussing state-plan requirements and options).

         As the Supreme Court summarized in Schweiker v. Gray Panthers, 453 U.S. 34, 36-38 (1981):

"The Medicaid program, established in 1965 as Title XIX of the Social Security Act (Act), 79 Stat. 343, as amended, 42 U.S.C. § 1396 et seq. (1976 ed. and Supp. III), 'provid[es] federal financial assistance to States that choose to reimburse certain costs of medical treatment for needy persons.' Harris v. McRae, 448 U.S. 297, 301 (1980). Each participating State develops a plan containing 'reasonable standards ... for determining eligibility for and the extent of medical assistance.' 42 U.S.C. § 1396a(a)(17). An individual is entitled to Medicaid if he fulfills the criteria established by the State in which he lives. State Medicaid plans must comply with requirements imposed both by the Act itself and by the Secretary of Health and Human Services (Secretary). See id., § 1396a (1976 ed. and Supp. III).
"....
"As originally enacted, Medicaid required participating States to provide medical assistance to 'categorically needy' individuals who received cash payments under one of four welfare programs established elsewhere in the Act. See § 1396a(a)(10) (1970 ed.). The categorically needy were persons whom Congress considered especially deserving of public assistance because of family circumstances, age, or disability. States, if they wished, were permitted to offer assistance also to the 'medically needy' -- persons lacking the ability to pay for medical expenses, but with incomes too large to qualify for categorical assistance. In either case, the Act required the States to base assessments 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.' § 1396a(a)(17)(B) (emphasis added). Specifically, eligibility decisions could 'not take into account the financial responsibility of any individual for any applicant or recipient of assistance ... unless such applicant or recipient is such individual's spouse' or minor, blind, or disabled child. § 1396a(a)(17)(D).
"Believing it reasonable to expect an applicant's spouse to help pay medical expenses, some States adopted plans that considered the spouse's income in determining Medicaid eligibility and benefits. These States calculated an amount considered necessary to pay the basic living expenses of the spouse and 'deemed' any of the spouse's remaining income to be 'available' to the applicant, even where the applicant was institutionalized and thus no longer living with the spouse.
"....
"In 1972, Congress replaced three of the four categorical assistance programs with a new program called Supplemental Security Income for the Aged, Blind, and Disabled (SSI), 42 U.S.C. § 1381 et seq., Pub. L. 92-603, 86 Stat. 1465. Under SSI, the Federal Government displaced the States by assuming responsibility for both funding payments and setting standards of need."

         (Footnotes omitted.) See also Alabama Medicaid Agency v. Primo, 579 So.2d 1355, 1357 (Ala. Civ. App. 1991).

         In 1988, Congress enacted The Medicare Catastrophic Coverage Act ("the MCCA"), which amended portions of the statutes governing the federal Medicare program, see 42 U.S.C. § 1395 et seq. (Title XVIII of the Social Security Act), and the Medicaid program. See Pub. L. No. 100-360, 102 Stat. 683 (1988). Regarding the latter, 42 U.S.C. § 1396r-5 was enacted, in part, to provide certain protections to a noninstitutionalized spouse ("the community spouse," as defined in 42 U.S.C. § 1396r-5(h)(2)) when the other spouse is institutionalized ("the institutionalized spouse," as defined in 42 U.S.C. § 1396r-5(h)(1)) in a nursing facility or medical institution. See Wisconsin Dep't of Health & Family Servs. v. Blumer, 534 U.S. 473, 480 (2002) (quoting H.R. Rep. No. 100-105, pt. 2, p. 65 (1987)). In summarizing the history behind the enactment of the MCCA, the United States Supreme Court stated:

"Because spouses typically possess assets and income jointly and bear financial responsibility for each other, Medicaid eligibility determinations for married applicants have resisted simple solutions. See, e.g., [Schweiker v. Gray Panthers], [453 U.S.] at 44-48 [(1981)]. Until 1989, the year the MCCA took effect, States generally considered the income of either spouse to be 'available' to the other. We upheld this approach in [Schweiker], observing that 'from the beginning of the Medicaid program, Congress authorized States to presume spousal support.' Id., at 44; see id., at 45 (quoting passage from S. Rep. No. 404, 89th Cong., 1st Sess., pt. 1, p. 78 (1965), U.S. Code Cong. & Admin. News 1965, pp. 1943, 2018, including statement that 'it is proper to expect spouses to support each other'). Similarly, assets held jointly by the couple were commonly deemed 'available' in full to the institutionalized spouse.
"At the same time, States generally did not treat resources held individually by the community spouse as available to the institutionalized spouse. Accordingly, assets titled solely in the name of the community spouse often escaped consideration in determining the institutionalized spouse's Medicaid eligibility. See H.R. Rep. No. 100-105, pt. 2, pp. 66-67 (1987).
"As Congress later found when it enacted the MCCA in 1988, these existing practices for determining a married applicant's income and resources produced unintended consequences. Many 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. See id., at 66-68. Conversely, couples with ample means could qualify for assistance when their assets were held solely in the community spouse's name.
"In the MCCA Congress sought to protect community spouses from 'pauperization' while preventing financially secure couples from obtaining Medicaid assistance. See id., at 65 (bill seeks to 'end th[e] pauperization' of the community spouse 'by assuring that the community spouse has a sufficient -- but not excessive -- amount of income and resources available'). 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.
"Income allocation is governed by §§ 1396r-5(b) and (d). Covering any month in which 'an institutionalized spouse is in the institution,' § 1396r-5(b)(1) provides that 'no income of the community spouse shall be deemed available to the institutionalized spouse.' The community spouse's income is thus preserved for that spouse and does not affect the determination whether the institutionalized spouse qualifies for Medicaid. In general, such income is also disregarded in calculating the amount Medicaid will pay for the institutionalized spouse's care after eligibility is established.
"Other provisions specifically address income allocation in the period after the institutionalized spouse becomes Medicaid eligible. Section 1396r-5(b)(2)(A) prescribes, as a main rule, that if payment of income is made solely in the name of one spouse, that income is treated as available only to the named spouse (the 'name-on-the-check' rule). Section 1396r-5(d) provides a number of exceptions to that main rule designed to ensure that the community spouse and other dependents have income sufficient to meet basic needs. Among the exceptions, § 1396r-5(d)(3) establishes for the community spouse a 'minimum monthly maintenance needs allowance,' or MMMNA. The MMMNA is calculated by multiplying the federal poverty level for a couple by a percentage set by the State. Since 1992, that percentage must be at least 150%, §§ 1396r-5(d)(3)(A)-(B), but the resulting MMMNA may not exceed $1, 500 per month in 1988 dollars ($2, 175 in 2001 dollars), §§ 1396r-5(d)(3)(C), (g).2
"If the income of the community spouse determined under § 1396r-5(b)(2), which states the 'name-on-the-check' rule, is insufficient to yield income equal to or above the MMMNA, § 1396r-5(d)(1)(B) comes into play. Under that provision, the amount of the shortfall is 'deducted' from the income of the institutionalized spouse --reducing the amount of income that would otherwise be considered available for the institutionalized spouse's care -- so long as that income is actually made available to the community spouse. The amount thus reallocated from the institutionalized spouse to the community spouse is called the 'community spouse monthly income allowance,' or CSMIA, § 1396r-5(d)(1)(B). The provision for this allowance ensures that income transferred from the institutionalized spouse to the community spouse to meet the latter's basic needs is not also considered available for the former's care. As a result, Medicaid will pay a greater portion of the institutionalized spouse's medical expenses than it would absent the CSMIA provision.
"Resource allocation is controlled by §§ 1396r-5(c) and (f). For purposes of establishing the institutionalized spouse's Medicaid eligibility, a portion of the couple's assets is reserved for the benefit of the community spouse. § 1396r-5(c)(2). To determine that reserved amount (the CSRA [community spouse resource allowance]), the total of all of the couple's resources (whether owned jointly or separately) is calculated as of the time the institutionalized spouse's institutionalization commenced; half of that total is then allocated to each spouse (the 'spousal share'). § 1396r-5(c)(1)(A). The spousal share allocated to the community spouse qualifies as the CSRA, subject to a ceiling of $60, 000 indexed for inflation (in 2001, the ceiling was $87, 000) and a floor, set by the State, between $12, 000 and $60, 000 (also indexed for inflation; in 2001, the amounts were $17, 400 and $87, 000). §§ 1396r-5(c)(2)(B), (f)(2)(A), (g). The CSRA is considered unavailable to the institutionalized spouse in the eligibility determination, but all resources above the CSRA (excluding a small sum set aside as a personal allowance for the institutionalized spouse, currently $2, 000, see 20 CFR § 416.1205 (2001)) must be spent before eligibility can be achieved. § 1396r-5(c)(2).
"The MCCA provides for a 'fair hearing' mechanism through which a couple may challenge the State's determination of a number of elements that affect eligibility for, or the extent of assistance provided under, Medicaid. §[] 1396r-5(e). The dispute in this case centers on § 1396r-5(e)(2)(C), which allows a couple to request a higher CSRA. That section provides in relevant part:
"'If either ... spouse establishes that the [CSRA] (in relation to the amount of income generated by such an allowance) is inadequate to raise the community spouse's income to the [MMMNA], there shall be substituted, for the [CSRA] under subsection (f)(2) of this section, an amount adequate to provide [the MMMNA].'
"If the couple succeeds in obtaining a higher CSRA, the institutionalized spouse may reserve additional resources for posteligibility transfer to the community spouse. The enhanced CSRA will reduce the resources the statute deems available for the payment of medical expenses; accordingly, the institutionalized spouse will become eligible for Medicaid sooner.
"___
"2The State must also provide for an 'excess shelter allowance' if necessary to cover, inter alia, unusually high rent or mortgage payments. §§ 1396r-5(d)(3)(A)(ii), (d)(4). Either spouse may request a hearing to seek a higher MMMNA for the community spouse; such an increase will be allowed if the couple establishes 'exceptional circumstances resulting in significant financial duress.' § 1396r-5(e)(2)(B)."

Blumer, 534 U.S. at 479-484 (some footnotes omitted); see also Hutcherson v. Arizona Health Care Cost Containment Sys. Admin., 667 F.3d 1066, 1069 (9th Cir. 2012) ("The CSRA [community spouse resource allowance] is designed to ensure that the community spouse can meet his or her minimum monthly maintenance needs. All assets above the CSRA must be spent before the institutionalized individual can be eligible for Medicaid assistance." (internal citation omitted)). The United States Supreme Court further noted that the resource allocation under 42 U.S.C. § 1396r-5 provides for certain exclusions: "[E]xclude[d] from the definition of 'resources' [are] the couple's home, one automobile, personal belongings, and certain other forms of property. §§ 1382b(a) (1994 ed. and Supp. V), 1396r-5(c)(5) (1994 ed.)." Blumer, 534 U.S. at 482 n.3.

         As the foregoing illustrates, and not surprisingly, adding the complexities of the Medicaid program into the federal government's amalgamation of several other welfare programs addressed to somewhat different concerns, developing the eligibility criteria that must be met to qualify for the Medicaid program and those other programs, attempting to efficiently allocate the limited available public resources among those programs, and adjusting for the different and changing responsibilities of the federal government and state governments in relation to those programs has resulted in statutory and regulatory framework of mythical-hydra-like complexity. As one commentator has noted:

"'One of the few pleasant aspects of slogging through the federal Medicaid statute, regulations, and guidelines, and trying to understand their interrelationship with a given state's Medicaid program, is that the natural confusion which this effort engenders places one in the company of numerous distinguished jurists. The list of judges who have figuratively wept in the face of this program's complexity is a decidedly impressive one. Judge Friendly, describing a particularly arcane portion of the statute, called it 'almost unintelligible to the uninitiated.'[3] Justice Powell, discussing the Social Security Act in the context of a Medicaid case, described it as 'Byzantine' and 'among the most intricate ever drafted by Congress.'[4] Chief Justice Burger, in the unusual posture of the sole dissenter opposing a majority opinion authored by Justice Rehnquist, termed 'the Medicaid program ... a morass of bureaucratic complexity,' and accused the Court majority of 'get[ting] lost in the Medicaid maze.'[5] District court judges have been no less kind; one called the Medicaid statute 'an aggravated assault on the English language, resistant to attempts to understand it, '[6] while another, in perhaps the most abstruse and literary reference, referred to the federal Medicaid regulations as 'so drawn that they have created a Serbonian bog from which the agencies are unable to extricate themselves.'[7]
"... The Serbonian Bog is 'a bog or marsh once surrounding Lake Serbonis (now dry), famous for swallowing up in its shifting sands those attempting to cross it.'"

Joel C. Dobris, Medicaid Asset Planning by the Elderly: A Policy View of Expectations, Entitlement and Inheritance, 24 Real Prop. Prob. & Tr. J. 1, 11-12 (1989) (quoting National Senior Citizens Law Center, Representing Older Persons 23 (1985), and Funk & Wagnalls New Standard Dictionary of the Eng. Language 2231 (1963) (definition of "Serbonian Bog"), respectively) (footnotes omitted). Soberly prepared for the task at hand, we turn our attention to the facts and issues before us.

         On January 13, 2016, Jean was admitted into the nursing home, which is located in Montgomery County. Jean was approximately 83 years old when she was admitted to the nursing home. Isaac continued to reside in their marital residence, which is also located in Montgomery County. Isaac was approximately 85 years old when Jean was admitted to the nursing home.

         When Jean was admitted to the nursing home, she and Isaac owned resources valued at approximately $517, 599.19. Those resources included their marital residence; life-insurance and burial-insurance policies; bank accounts; Southern Company stock; automobiles; and a one-half interest owned by Isaac in a commercial property hereinafter referred to as the "Wagnon property."[8] Jean and Isaac's son owns an automobile-parts business that operates on the Wagnon property, which also contains an automobile-salvage yard. The automobile-parts business had originally been owned by Isaac, who conveyed that business to his son on January 1, 2010.

         After Jean was admitted to the nursing home, Isaac began liquidating some of his and Jean's resources to pay for Jean's nursing-home care. On February 28, 2017, Jean filed an application with the Agency for Medicaid benefits.[9] It is undisputed that, for purposes of determining Jean's eligibility for Medicaid benefits, the maximum value of resources available to Jean, subject to certain exclusions discussed infra, could not exceed $2, 000. It is also undisputed that, in making its resource assessment, the Agency was required to consider resources of both Jean, as the institutionalized spouse, and Isaac, as the community spouse, subject to certain exclusions discussed infra. Further, it is undisputed that the maximum allowable community spouse resource allowance ("CSRA") when Jean filed her application for Medicaid benefits was $120, 900.

         As part of the documentation submitted to the Agency in support of Jean's application for Medicaid benefits, she included a copy of a Montgomery County ad valorem tax assessment for the Wagnon property; that assessment valued the Wagnon property at approximately $382, 300. Jean also supplied the Agency with a copy of a document entitled "Exclusive Right to Sell & Lease" ("the listing agreement"). The listing agreement purportedly authorized Hodges Commercial Real Estate, LLC, to sell or lease the Wagnon property "[a]t the sales price of $675, 000 or at the annual rental of $50, 000-$60, 000 or at such price and terms as shall be acceptable to" the owners of the Wagnon property. The listing agreement further provided that the "[c]urrent business would have at least 60 days to move out."[10] In addition to a copy of the listing agreement, Jean also supplied the Agency with an "Addendum to Exclusive Authorization to Sell Listing Agreement." The addendum was dated March 6, 2017, and purportedly reduced the offering price of the Wagnon property from $675, 000 to $575, 000.

         Also, during the Agency's evaluation of Jean's application for Medicaid benefits, the Agency supplied her with an "Agreement to Sell Property" form (Alabama Medicaid Agency Form 226) ("the ATSP form"). According to Carolyn C. Smith, the Medicaid eligibility specialist that the Agency assigned to review Jean's application, the ATSP form is supplied by the Agency when an applicant seeks to exclude real property from consideration as an available resource for purposes of determining the applicant's eligibility for Medicaid benefits. Isaac completed and executed the ATSP form regarding his interest in the Wagnon property. That form is dated March 20, 2017, and stated that the estimated current market value of the Wagnon property was $450, 000. The ATSP form indicates that the "Medicaid Claimant" was Jean.[11]

         According to the Agency, it was required to apply a special set of laws to determine Jean's eligibility for Medicaid benefits. See 42 U.S.C. § 1396r-5, and Ala. Admin. Code (Alabama Medicaid Agency), r. 560-X-25-.16, discussed infra. Purportedly pursuant to those laws, the Agency determined the value of Jean's and Isaac's resources when Jean entered the nursing home, a process which colloquially is referred to as a "snapshot." See 42 U.S.C. § 1396r-5(c)(1)(A) and (c)(2); Ala. Admin. Code (Alabama Medicaid Agency), r. 560-X-25-.16(3)(a) and (9)(b). A snapshot is used to determine the value of the nonexcluded resources that the community spouse may retain upon a determination of the institutionalized spouse's eligibility for Medicaid benefits, i.e., the CSRA, see 42 U.S.C. § 1396r-5(c)(1) and (f)(2); Ala. Admin. Code (Alabama Medicaid Agency), r. 560-X-25-.16(9)(b), and the value of the remaining nonexcluded resources that are considered to be available to the institutionalized spouse for purposes of determining that spouse's eligibility for Medicaid benefits. See 42 U.S.C. § 1396r-5(c)(2); Ala. Admin. Code (Alabama Medicaid Agency), r. 560-X-25-.16(9)(b). The value of any excess nonexcluded resources must be "spent down" on qualified expenses___after the date of institutionalization___before the institutionalized spouse will be eligible to receive Medicaid benefits. See, e.g., Singleton v. Commonwealth of Kentucky, 843 F.3d 238, 240 (6th Cir. 2016) ("By statutory design, an individual who needs custodial care must spend down any assets that exceed the Medicaid eligibility threshold before the government will pick up the tab.").

         By letter dated August 4, 2017, the Agency informed Jean and Isaac that it was denying Jean's application for Medicaid benefits because Jean purportedly had excess resources.[12] According to a "Resource Assessment Notice" prepared by the Agency and also dated August 4, 2017, when Jean entered the nursing home, she and Isaac owned nonexcluded resources valued at $335, 599.19, including $191, 500 for the value of Isaac's one-half interest in the Wagnon property, $4, 073.10 in a bank account, $62, 933.52 in "excess" cash value in a life-insurance policy, $1, 410.74 in a savings account, $67, 237.63 in Southern Company stock, $1, 444.20 in an individual-retirement account, and an automobile valued at $7, 000.[13] Also, the Agency determined that Isaac was entitled to protect $120, 900 as his CSRA. Thus, according to the August 2017 notice,

"[t]he remaining amount $ $214, 699.19 is a countable resource for the institutionalized spouse [J.C.M.] and is used to determine [her] eligibility for Medicaid [benefits]. When the total countable resources have been spent down to the amount that can be protected for the community spouse plus $2, 000.00 for the institutionalized spouse, an application should be made to the local Medicaid District Office."

         Jean timely filed a request for a fair hearing regarding the Agency's denial of her application for Medicaid benefits. See Ala. Code 1975, § 41-22-12; Ala. Admin. Code (Alabama Medicaid Agency), r. 560-X-3-.01 et seq. (discussing the fair-hearing procedures). An administrative-law judge ("ALJ") was appointed to conduct Jean's fair hearing. The ALJ held an ore tenus proceeding on October 13, 2017. At the hearing, the Agency argued that Isaac's one-half interest in the Wagnon property was a nonexcluded resource for purposes of determining both the value of Isaac's CSRA and Jean's eligibility for Medicaid benefits. See Ala. Admin. Code (Alabama Medicaid Agency), r. 560-X-25-.16(9)(b)1. ("The following types of otherwise excluded resources ... shall be included in the assessment: Equity value of real property normally excluded from assets due to a bona fide effort to sell ...."); see also 42 U.S.C. § 1396r-5(c)(2) and (5), discussed infra. According to Jean, however, Isaac's one-half interest in the Wagnon property was an included resource for purposes of determining his CSRA (thus increasing the value of the resources Isaac could retain), but an excluded resource for purposes of determining Jean's eligibility for Medicaid benefits. Jean contended that the Agency could not consider Isaac's one-half interest in the Wagnon property as an available resource to her because, pursuant to what she claimed was an applicable exclusion, Isaac had listed the Wagnon property for sale in March 2016 and had thereafter made, and was continuing to make, a bona fide effort to sell the property. See Ala. Admin. Code (Alabama Medicaid Agency), r. 560-X-25-.06(2)(e)5 (describing the bona-fide-effort-to-sell-interest-in-real-property exclusion); see also 42 U.S.C. § 1382b(b) (describing the "reasonable efforts to sell" exclusion for purposes of conditional eligibility for Supplemental Security Income for the Aged, Blind, and Disabled, 42 U.S.C. § 1381 et seq. (Title XVI of the Social Security Act)); 20 C.F.R. § 416.1245(b)(1).[14] As discussed infra, eligibility criteria for the Supplemental Security Income for the Aged, Blind, and Disabled program ("the SSI program") are generally made applicable to the Medicaid program pursuant to the state-plan requirements described in 42 U.S.C. § 1396a. Resolution of the issues Jean raises on appeal essentially depend on a determination whether § 1396r-5 (which is part of Title XIX governing the Medicaid program) establishes an exception to the application of the exclusion described in § 1382b(b) (which is part of Title XVI governing the SSI program).

         On December 14, 2017, the ALJ issued a recommendation to the commissioner of the Agency, Stephanie Azar ("Commissioner Azar"), regarding the Agency's denial of Jean's application for Medicaid benefits. The December 2017 recommendation discusses the evidence presented at the hearing and various state regulations, federal regulations, and federal statutes governing the Agency and its eligibility determinations. The December 2017 recommendation then concludes "that the Agency's August 4, 2017, excess resource determination be reevaluated and that [Isaac]'s ownership interest in the Wagnon Property be excluded, under the bona fide effort to sell exclusion, as a countable resource for eligibility purposes."

         The ALJ submitted the December 2017 recommendation to Commissioner Azar for final administrative decision. See Ala. Admin. Code (Alabama Medicaid Agency), r. 560-X-3-.01(2). On January 12, 2018, Commissioner Azar issued a final administrative decision rejecting the ALJ's recommendation and upholding the Agency's denial of Jean's application for Medicaid benefits:

"It is ... the recommendation of the ALJ that the Agency's August 4, 2017, excess resource determination be reevaluated and that [Isaac's] ownership interest in the Wagnon property be excluded, under the bona fide effort to sell exclusion, as a countable resource for eligibility purposes.
"....
"As you are aware, the Medicaid program requires applicants to meet specific income and resource limits to obtain financial eligibility for Medicaid benefits. Medicaid acknowledges resource and income exclusions exist in certain circumstances. One of these is the bona fide effort to sell exclusion. With this exclusion an individual may, in some cases, receive a property exclusion in exchange for agreeing to reimburse the Agency for any expenditures during the period for which the property, which would otherwise be a countable resource, is excluded by Medicaid as a countable asset.
"... Rule 560-X-25-.16(9)(b), [Ala. Admin. Code (Alabama Medicaid Agency), ] specifically addresses the bona fide effort to sell exclusion as the same pertains to married couples during a resource assessment. Specifically, Step 1 of the resource assessment states: 'The following type of otherwise excluded resources ... shall be included in the assessment: Equity value of real property normally excluded from assets due to a bona fide effort to sell....' (Emphasis added.) The ALJ discussed this rule in the recommendation. However, I do not concur with the ALJ's application of the rule.
"The Agency followed federal and state rules and regulations by including the resource amount in the resource assessment. The Agency correctly assessed a protected amount of resources to the community spouse while leaving the 'remaining amount ... a countable resource ... to be used for the institutionalized spouse.' Id. Therefore, regarding this issue, I do not concur with the ALJ and reinstate the Agency's determination of excess resources."

         On January 26, 2018, Jean filed a notice of appeal with the Agency, informing it that she intended to seek judicial review of the January 2018 decision. On January 29, 2018, Jean filed a petition in the trial court seeking judicial review of the Agency's decision pursuant to the Alabama Administrative Procedure Act, Ala. Code 1975, § 41-22-1 et seq. See Ala. Code 1975, § 41-22-20(d). Jean also filed a motion for waiver of the requirement that she file "a cost bond with the [A]gency to cover the reasonable costs of preparing the transcript of the proceeding" before the ALJ. Ala. Code 1975, § 41-22-20(b) (indicating that the cost bond may be "waived by the agency or the court on a showing of substantial hardship"). In Jean's motion, she alleged that she was "impoverished" and that "requiring [her] to furnish a cost bond from her meager resources as a condition of appeal would cause her undue hardship." In support of her motion, Jean submitted an affidavit from Isaac, as her attorney-in-fact. In addition to stating that Jean was a resident in the nursing home and that the Agency had denied her application for Medicaid benefits, Isaac's affidavit states:

"[Jean] was required to spend down her own resources below $2, 000 in order to seek Medicaid eligibility in the first place; therefore, she is impoverished and has almost no assets to her name. Requiring her to pay a cost bond from her meager resources in order to initiate this appeal would be a substantial hardship.
"I further swear that the following is true relating to [Jean's] ability to pay the cost of prosecuting the appeal: [Jean] is not presently employed. Within the last 12 months her sole source of income was $759.00 per month of Social Security benefits. This income is applied toward the cost of her nursing home care, which is approximately $6, 000 per month. [Jean] has less than $2, 000 on deposit in a bank account which receives her Social Security funds. She owns a one-half interest in a 2007 Chevrolet Tahoe jointly owned with me; this vehicle is my sole source of transportation. As her husband, I am [Jean's] sole dependent."

         On February 1, 2018, the trial court entered an order finding that Jean was "impoverished[] and that requiring [her] to post a cost bond as a condition of appeal would cause her undue hardship." The order then waived the cost bond and decreed that Jean "shall proceed in forma pauperis without ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.