Opinion ID: 1350648
Heading Depth: 3
Heading Rank: 1

Heading: Deference to HCFA

Text: The state argues that we must defer to HCFA's interpretation of the federal anti-lien provision. The state asserts that HCFA has decided that the antilien provision does not bar a state from imposing a lien on a medical assistance recipient's rights to recover for other than medical care. Deference to agency interpretation is called for, however, only when there is an ambiguity in the expression of congressional intent. Chevron, 467 U.S. at 842, 104 S.Ct. 2778 (If the intent of Congress is clear, that is the end of the matter.); see also United States v. LaBonte, 520 U.S. 751, 762 n. 6, 117 S.Ct. 1673, 137 L.Ed.2d 1001 (1997) (concluding no ambiguity, and thus no need to decide whether Sentencing Guidelines Commission is owed deference). We have already concluded that there is no ambiguity in the statement that [n]o lien may be imposed against the property of any individual prior to his death on account of medical assistance paid or to be paid on his behalf under the State plan   . 42 U.S.C. § 1396p(a)(1). Similarly, the federal assignment requirement and the third-party recovery provision are not ambiguous and interact smoothly with our interpretation of the anti-lien provision. Because the intent of Congress is clear, there is no need for deference to an agency interpretation on the grounds that the statute is ambiguous. Even if we were to conclude that the federal assignment requirement and third-party recovery provision inject some ambiguity into federal law, agency deference is still not appropriate here. When an agency statement does not reflect formal rules or agency adjudications, yet attempts to address an ambiguity in the law, deference to the agency under Chevron is not appropriate. See Christensen v. Harris County, 529 U.S. 576, 587, 120 S.Ct. 1655, 146 L.Ed.2d 621 (2000) (concluding that opinion letters, policy statements, agency manuals, and enforcement guidelines are not warranted Chevronstyle deference). Such agency interpretations are only entitled to respect    to the extent that those interpretations have the power to persuade. Id. (internal quotation marks omitted); see also Wis. Dep't of Health and Family Servs. v. Blumer, 534 U.S. 473, 122 S.Ct. 962, 976 (2002) (The Secretary [of Health and Human Services'] position [regarding Medicaid law] warrants respectful consideration.). The state urges us to defer to various agency letters, directives, and approvals demonstrating the agency's interpretation of the anti-lien provision as not prohibiting a state from recovering on third-party actions for other than medical care. These materials include a Best Practices Guide that cites Minnesota's subrogation statute as model legislation and various letters from HCFA's administrators to state administrators and others stating that medical assistance liens are not prohibited under federal law. These agency materials are not accorded deference because they do not reflect formal rules or adjudications. Christensen, 529 U.S. at 587, 120 S.Ct. 1655. And, although these materials are entitled to some respect and may be used to persuade this court, we are not persuaded by the interpretations contained in these materials. The state has referenced two agency adjudications that, if relevant, would be entitled to deference under a Chevron analysis. The two adjudications were made by the Department of Health and Human Services Appeals Board (Board). [25] Cal. Dep't of Health Servs., DAB No. 1504 (Dep't of Health & Human Servs. Jan. 5, 1995); Wash. State Dep't of Soc. and Health Services, DAB No. 1561 (Dep't of Health & Human Servs. Feb. 7, 1996). Both adjudications addressed whether HCFA properly withheld federal funds from a state program based on the state's failure to recover a sufficient amount from settlements between recipients and third-party tortfeasors. In both the California and Washington adjudications, the Board stated that HCFA properly characterized recoveries from third parties first as payments for medical care. The Board reasoned that [t]his characterization prevents manipulation of tort awards by recipients who seek to prevent the public from being reimbursed for the funds it has advanced for their medical care (e.g., by suing for pain and suffering or lost wages rather than for medical costs). DAB No. 1561, p. 5. We need not defer to these agency adjudications because they do not address the central issue presented here, which is whether the federal anti-lien provision preempts state laws that purport to allow states to impose liens on recovery of amounts not designated as payment for medical expenses. Indeed, the agency adjudications do not mention the federal antilien provision. [26] We are nonetheless mindful of the concern expressed in the agency adjudications that Medicaid recipients could fashion a settlement to exclude payment for costs of medical care so as to avoid any obligation to reimburse the state and federal governments. But the state has options other than to ignore a clear provision in federal law that prohibits a lien from being imposed against the property of any individual on account of medical assistance paid. The state can protect its right to reimbursement by participating in the litigation so as to ensure recovery of medical costs paid. In this case, the state did not actively participate in the litigation until settlement, despite being a plaintiff on impleader. But the state did participate at the settlement and did release each defendant from any liability to the state for medical expenses. At this time, the state did establish its claim to part of the settlement proceedsbut in a dispute solely with Martin.