Source: http://openjurist.org/999/f2d/684
Timestamp: 2013-05-23 09:45:52
Document Index: 43186615

Matched Legal Cases: ['§ 1396', '§ 1396', '§ 1396', '§ 1396', '§ 1396', '§ 447', '§ 447', '§ 447']

999 F2d 684 Himes v. E Shalala | OpenJurist
999 F. 2d 684 - Himes v. E Shalala	Home999 f2d 684 himes v. e shalala
999 F2d 684 Himes v. E Shalala 999 F.2d 684
41 Soc.Sec.Rep.Ser. 573, Medicare & Medicaid GuideP 41,564Craig HIMES; Kenneth Holz, by his Power of Attorney,Bernice Holz; Bernice Holz; Delores Scott; Willie Brown,Jr., by his parent and next friend Mollie Brown; MollieBrown; Ryan Trudsoe, by his parent and next friend, DeannaBennett; Deanna Bennett; Dolores Bragg, on behalf ofthemselves and all others similarly situated, Plaintiffs-Appellants,v.Donna E. SHALALA, Secretary of the United States Departmentof Health and Human Services, in her official capacity;Mary Jo Bane, individually and in her official capacity asCommissioner of the New York State Department of SocialServices; W. Burton Richardson, Director of the MonroeCounty Department of Social Services; Karen Schimke,Commissioner of the Erie County Department of SocialServices; Rita B. Otterbein, Commissioner of the WayneCounty Department of Social Services; Joseph P. Menaldino,Commissioner of the Warren County Department of SocialServices; Ruth A. Brandwein, Ph.D., Director of the SuffolkCounty Department of Social Services, in their individualand official capacities, Defendants-Appellees.
Argued April 20, 1993.Decided July 28, 1993.
After many states chose to provide coverage to the "medically needy," Congress realized that it was "fiscally improvident to rely exclusively on the States to set income limits for both aspects of the Medicaid program." Schweiker v. Hogan, 457 U.S. 569, 575-76, 102 S.Ct. 2597, 2602, 73 L.Ed.2d 227 (1982). Consequently, in 1968 Congress enacted § 1396b(f) (the "FFP cap" or the "FFP limits"), which limits federal financial participation in Medicaid by providing:
On September 4, 1991, the United States District Court for the Western District of New York (Larimer, J.) denied the plaintiffs' motion for a preliminary injunction to enjoin defendants from counting as "available income" court-ordered support payments and mandatory payroll deductions in determining Medicaid eligibility. Himes v. Sullivan, 779 F.Supp. 258 (W.D.N.Y.1991) ("Himes I "). Plaintiffs argued that the inclusion of these payments violated their rights under the Federal Medicaid Act and that the processes used to implement New York State's new rules violated certain New York State regulations. The district court found that plaintiffs could not demonstrate a likelihood of success on the merits because the Secretary's rational construction of the term "available income" in 42 U.S.C. § 1396a(a)(17)(B) deserved substantial deference, and that NYSDSS had complied with both the notice and consultation requirements mandated by federal regulations.
This Court affirmed the district court's denial of plaintiffs' motion for a preliminary injunction by Summary Order filed January 13, 1992. Subsequently, plaintiffs and the defendants filed cross-motions for summary judgment in the district court. In their motion for summary judgment plaintiffs relied on essentially the same arguments previously asserted in their motion for a preliminary injunction, but contended that the result should be different because of certain facts obtained during discovery. Specifically, plaintiffs uncovered three references in a supplement to the Department of Health, Education, and Welfare's "Handbook of Public Assistance Administration" ("Handbook") which define available income as resources which are "in hand." Notwithstanding this new evidence, the district court issued an opinion and order granting the defendants' motions for summary judgment and dismissing the complaint. Himes v. Sullivan, 806 F.Supp. 413 (W.D.N.Y.1992) ("Himes II "). The District Court adopted its analysis from Himes I, and additionally pointed to recent case law in two other circuits upholding the Secretary's interpretation of "available income" under 42 U.S.C. § 1396a(a)(17)(B) as a permissible construction of the statute. See Peura v. Mala, 977 F.2d 484 (9th Cir.1992); Emerson v. Steffen, 959 F.2d 119 (8th Cir.1992). The district court determined that § 1396a(a)(17)(B) did not on its face prohibit inclusion of court-ordered support payments or mandatory payroll deductions, that the Secretary's interpretation of "available" was reasonable, and that deference should be given to the agency's interpretation of the statute whether or not there had been consistency in its interpretation of available income in New York State.
On review of an agency's construction of a statute that it administers, a court must first determine whether the plain language of the statute speaks directly to the issue. See Chevron U.S.A. v. Natural Resources Defense Council, 467 U.S. 837, 842, 104 S.Ct. 2778, 2781, 81 L.Ed.2d 694 (1984). If Congress has directly addressed the matter, the court as well as the agency must give effect to congressional intent. See id. at 842-43, 104 S.Ct. at 2781-82. If, however, Congress has not directly addressed the matter at issue, then the court must determine whether the agency's construction of the statute was a permissible one. See id. at 843, 104 S.Ct. at 2782.
In determining whether the Secretary's construction is permissible, a court need not find that it would have interpreted the statute in the same manner. See id. at 843 n. 11, 104 S.Ct. at 2782 n. 11. Rather, a court must uphold the agency's interpretation unless it is an impermissible construction of the statute. See id. at 843, 104 S.Ct. at 2782. Moreover, "courts must exhibit particular deference to the Secretary's position with respect to legislation as intricate as [Medicaid]." DeJesus v. Perales, 770 F.2d 316, 327 (2d Cir.1985), cert. denied, 478 U.S. 1007, 106 S.Ct. 3301, 92 L.Ed.2d 715 (1986).
Plaintiffs claim that "available" is an adjective meaning "suitable or ready for use or service; at hand ... readily obtainable; accessible." Random House Dictionary of the English Language 142 (2d ed. unabridged 1987). They cite Consumer Product Safety Commission v. GTE Sylvania, Inc., 447 U.S. 102, 100 S.Ct. 2051, 64 L.Ed.2d 766 (1980), in claiming that this dictionary definition of available should be dispositive. In Consumer Product, the Court looked to the common usage of the term "public" to determine its meaning in the context of the Consumer Product Safety Act. See id. at 108-09, 100 S.Ct. at 2056-57. In that case, however, Congress had not left the responsibility for defining the term to the Commission. Because here Congress has expressly delegated authority to the Secretary to define the meaning of "available," we find plaintiffs' reliance on Consumer Product and the dictionary definition misplaced.
Although the committee reports and legislative debates make reference to "actual availability" when discussing the provision, such discussions make no reference to the exclusion for court-ordered child support payments or mandatory withholdings from income. Rather, the legislative history clearly indicates that any reference to "actual availability" was intended to guard against the false attribution of unrealized income from one individual to another. When Congress spoke of actually available income, it indicated its concern about the unfounded attribution of income from relatives, a prevalent state practice at the time. See S.Rep. No. 404, 89th Cong., 1st Sess. 78, reprinted in 1965 U.S.C.C.A.N.1943, 2018 ("Examples of income assumed include support orders from absent fathers, which have not been paid or contributions from relatives which are not in reality received by the needy individual."). Furthermore, in the context of an AFDC case, the Supreme Court examined the genesis of the "actual availability principle" and found that it "served primarily to prevent the States from conjuring fictional sources of income and resources by imputing financial support from persons who have no obligation to furnish it." Heckler v. Turner, 470 U.S. 184, 200, 105 S.Ct. 1138, 1147, 84 L.Ed.2d 138 (1985).
Rust v. Sullivan, --- U.S. ----, ----, 111 S.Ct. 1759, 1769, 114 L.Ed.2d 233 (1991) (citations omitted). The issuance of SMM Transmittal No. 33 does not represent an inexplicable, sharp break from the past. Rather it is a reasonable attempt to interpret and apply all sections of the statute, including § 1396a(r)(2) added in 1988, dealing with the use of more liberal income disregards. Because the circumstances surrounding the issuance of SMM Transmittal No. 33 and approval of New York's changed eligibility rules provide sufficient justification of the Secretary's current policy, deference is still due her interpretation.
As stated by the district court, an inconsistent position alone is not enough to require this Court to give less deference to the Secretary's definition of available income. See Himes II, 806 F.Supp. at 417, cf. Lewis v. Grinker, 965 F.2d 1206, 1223 (2d Cir.1992) (giving the Secretary's position less deference because it was the " 'rare and exceptional circumstance' " where the application urged by the Secretary "would fly in the face of legislative history"); New York City Health and Hospitals Corp. v. Perales, 954 F.2d 854, 858 (2d Cir.) (refusing to defer to the administrator's interpretation in this "rare" instance because the Secretary's policy was inconsistent and the regulation was at odds with the clear intent of the statute, both facially and as elaborated by legislative history), cert. denied --- U.S. ----, 113 S.Ct. 461, 121 L.Ed.2d 369 (1992).
Plaintiffs argue for a broader reading of the section than its plain language indicates. They rely on Morabito v. Blum, 528 F.Supp. 252 (S.D.N.Y.1981), to contend that the advance publication requirements apply equally to changes in the Medicaid program that directly affect Medicaid recipients, such as eligibility and cutbacks in services. In Morabito, the court rejected the defendants' argument that § 447.205 was intended to protect only Medicaid providers, and stressed that the regulation addresses itself to the public rather than health care providers. See id. at 270.
Morabito is not applicable, however, because the regulation has been amended since it was decided. See Fulkerson v. Commissioner, Me. Dep't of Human Services, 802 F.Supp. 529, 536 (D.Me.1992) (holding that the changes in the regulations since Morabito now render § 447.205 inapplicable to changes in state plans which do not involve rate-setting standards or methodology); Philadelphia Welfare Rights Org. v. O'Bannon, 517 F.Supp. 501, 507 (E.D.Pa.1981) (upholding Secretary's interpretation that 42 C.F.R. § 447.205 relates only to payment rates and methods and did not apply to a termination of coverage for adult eyeglasses) aff'd, 681 F.2d 808 (3d Cir.1982).
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