Source: https://law.justia.com/cases/massachusetts/court-of-appeals/volumes/88/88massappct558.html
Timestamp: 2019-03-22 16:13:40
Document Index: 239978939

Matched Legal Cases: ['§ 47', '§ 1396', '§ 1396', '§ 9', '§ 16', '§ 520', '§ 520', '§ 520']

MAURICE NEEDHAM vs. DIRECTOR OF THE OFFICE OF MEDICAID. :: :: Massachusetts Appeals Court Decisions :: Massachusetts Case Law :: Massachusetts Law :: US Law :: Justia
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MAURICE NEEDHAM vs. DIRECTOR OF THE OFFICE OF MEDICAID.
SULLIVAN, J. This is an appeal pursuant to G. L. c. 30A from a judgment of the Superior Court reversing the denial of long-term care benefits under the Commonwealth's Medicaid program. A judge of the Superior Court concluded that the Director of the Office of Medicaid (MassHealth) [Note 2] was bound by an order of a judge of the Probate and Family Court reforming a trust, and was obligated to consider the reformed trust when determining countable assets for purposes of Medicaid eligibility for long-term care
benefits. We conclude that MassHealth is bound by Federal law in making eligibility determinations, that Federal law prohibits recognition of the reformation of the trust within the statutory look-back period, and that MassHealth therefore could not be compelled to consider the reformed trust in evaluating eligibility. Accordingly, we reverse the judgment and remand for entry of judgment in favor of MassHealth.
Pursuant to G. L. c. 118E, §§ 47, 48, a hearing officer held an evidentiary hearing on Needham's subsequent administrative appeal to the MassHealth board of hearings. At Needham's request, the hearing was suspended in 2012 in order to permit the filing of a complaint in the Probate and Family Court to approve a stipulation between Needham, as beneficiary of the irrevocable trust, and his children, the co-trustees of the trust. [Note 6] The stipulation was meant to remove the provisions of the irrevocable trust that
rendered Needham ineligible for MassHealth long-term care benefits. At the parties' request, a judge of the Probate and Family Court approved the stipulation, which stated that the reformation was effective ab initio. [Note 7] The administrative hearing resumed and the judgment of May 25, 2012, incorporating the approved stipulation was offered into evidence.
An appeal pursuant to G. L. c. 30A ensued. Ruling on Needham's motion for judgment on the pleadings, a judge of the Superior Court concluded that MassHealth, "as an arm of the Commonwealth, is bound by [the Probate and Family] [C]ourt's order," and that because the judgment of the Probate and Family Court approved a stipulation reforming the trust ab initio, the original trust had never existed. A Superior Court judgment
entered for Needham, ordering MassHealth to consider the issue of his eligibility by reference to the trust "in its current form." Now before us is MassHealth's further appeal pursuant to G. L. c. 30A. [Note 10]
"In order to receive Federal funding, the State program must be approved and meet all of the requirements of Title XIX and the implementing regulations." Haley v. Commissioner of Pub. Welfare, 394 Mass. 466 , 467 (1985), citing Harris v. McRae, 448 U.S. 297, 301 (1980). Specifically, "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 [United States] Secretary [of Health and Human Services], available to the applicant or recipient'" (emphasis omitted). Tarin v. Commissioner of the Div. of Med. Assistance, supra at 746-747, quoting from 42 U.S.C. § 1396a(a)(17)(B). A State is also required to comply with the disqualifying transfer provisions of the Federal law. See 42 U.S.C. § 1396a(a)(18).
The issue before us is not whether the trust was reformed as a matter of State law. The issue is whether MassHealth is required to recognize a reformation as a matter of Federal law when determining whether there has been a disqualifying transfer. The answer to that question in this case is no. Were the answer different, persons of means would be permitted to enjoy otherwise countable assets held in trust throughout their lives, transfer those assets for less than fair market value by reforming the trust ab initio when their health declines, and thereby obtain Medicaid payment for long-term nursing home care without complying with the waiting period imposed by Federal law. [Note 12] Needham's assertion that the Probate and Family Court judgment renders the original trust nonexistent for purposes of Medicaid eligibility does not withstand scrutiny when assessed against the mandates of applicable State and Federal statutes and regulations. [Note 13] "Congress has declared a contrary intent, that Medicaid benefits be made available only to those who genuinely lack sufficient resources to provide for themselves." Doherty v. Director of the Office of Medicaid, 74 Mass. App. Ct. at 443. See Cohen v. Commissioner of the Div. of Med. Assistance, 423 Mass. 399 , 403-404 (1996) (discussing legislative history of Medicaid qualifying trust statute). In this context, what "Congress says goes." Boston Med. Center Corp. v. Secretary of Exec. Office of Health and Human Servs., 463 Mass. 447 , 461 (2012) (citation omitted).
[Note 1] Also known as Maurice E. Needham.
[Note 2] The Office of Medicaid, also known as MassHealth for the Massachusetts Medicaid program it administers, see G. L. c. 118E, § 9A, falls under the authority of the Secretary of the Executive Office of Health and Human Services. See G. L. c. 6A, §§ 16, 16B.
[Note 3] At the time Needham was over sixty-four and resided in a nursing home.
[Note 4] The revocable trust was created in 1996, but the designation of the irrevocable trust as beneficiary occurred in 1999, on the same day the irrevocable trust was created. Needham's wife was also a settlor of each trust, but she passed away in 2007. We refer to Needham as the settlor.
[Note 5] In MassHealth's view, this made the assets available to the settlor. In addition, the settlor retained control over the real estate held in trust because any sale of the real estate required the settlor's consent.
[Note 6] One of Needham's daughters, a remainderman and a plaintiff in the case, signed the stipulation on Needham's behalf acting under a power of attorney.
[Note 7] The complaint for declaratory relief and reformation alleged that the reformation was a matter of form only, and that reformation was requested to correct a scrivener's error and to better effectuate the settlor's intent. The complaint did not refer to the statutory or regulatory provisions governing disqualifying transfers. MassHealth was not named as a party, although Needham represents that it was notified.
[Note 8] All citations in this opinion to the United States Code and the Massachusetts regulations are to the versions just indicated.
[Note 9] Under the applicable regulations, the look-back period begins on the first date the individual is both in a nursing facility and has applied for benefits. 130 Code Mass. Regs. § 520.019(B). There are also provisions for "cure," which are not at issue in this appeal. See, e.g., 130 Code Mass. Regs. § 520.024(C).
[Note 10] Although nominally a remand, the judgment was final in all material ways with respect to the agency, and the judgment is therefore a final, appealable disposition as to the agency. See Cliff House Nursing Home, Inc. v. Rate Setting Commn., 378 Mass. 189 , 191 (1979).
[Note 11] A statute or regulation violative of Title XIX would be preempted under the Supremacy Clause of the United States Constitution. See Boston Med. Center Corp. v. Secretary of Exec. Office of Health and Human Servs., 463 Mass. 447 , 461 (2012) ("The purpose of the Supremacy Clause is . . . to ensure that, in a conflict with state law, whatever Congress says goes" [citation omitted]).
[Note 12] The period of ineligibility is calculated in accordance with 130 Code Mass. Regs. § 520.019(G).
[Note 13] Needham's reliance on the procedure employed in Bosch litigation cases is inapt. See generally O'Connell v. Houser, 470 Mass. 1004 , 1006 (2014). In Commissioner of Internal Rev. v. Estate of Bosch, 387 U.S. 456, 465 (1967), the United States Supreme Court held that the determination of a State's highest court would be considered binding on matters of State law in related Federal tax proceedings. Here we deal not with a question of State law, but a question of eligibility governed by Federal law, as supplemented by State statutes and regulations that follow the Federal mandate.