Opinion ID: 3011184
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Heading Rank: 1

Heading: facts

Text: Thomas and Carolyne Cleary, representing themselves and a class of persons similarly situated, sued the New Jersey Department of Health Services to enjoin application of its income-first rule. They contend that the New Jersey rule violates the MCCA when it attributes a portion of Thomas Cleary's income to his wife (income-first method) instead of allowing the couple to dedicate more of their resources to Carolyne Cleary's support (resource-first method). The Clearys argue that the Federal statute mandates a resource-first approach and that the New Jersey rule is an impermissible construction of the Act. In denying the Clearys' motion for injunctive relief, the District Court held that the income-first method is a permissible interpretation of the MCCA. When the Clearys brought this action, Thomas Cleary was 79 years old and suffering from Parkinson's disease and dementia. On November 21, 1995, Thomas entered a long-term care facility in New Jersey. A year later, Carolyne Cleary sought Medicaid benefits on behalf of her husband and, pursuant to the Act, requested an assessment of the couple's assets by the Passaic County Board of Social Services. The board determined that the Clearys' total resources had been worth $240,000 at the time of Thomas' institutionalization and assessed the then-current value of their assets as $180,000. 4 Under the Spousal Impoverishment Provisions (SIP) of the MCCA, 42 U.S.C. S 1396, et seq., several steps are taken when a couple applies for Medicaid benefits to cover the care of a spouse who has been institutionalized. First, the state must calculate the total value of the couple's resources and allocate a share of the resources to each spouse. 42 U.S.C. S 1396r-5(c)(1). The amount allocated to the community spouse is called the Community Spouse Resource Allowance (CSRA).1 This amount then need not be spent for the care of the institutionalized spouse. The income generated from the CSRA, along with the community spouse's other income, such as social security, makes up the community spouse's Minimum Monthly Maintenance Needs Allowance (MMMNA). The MMMNA is a level of income which has been estimated by the state as necessary to permit the non institutionalized spouse to live independently in the community. If either spouse is dissatisfied with the CSRA, he or she may request a fair hearing. 42 U.S.C. S 1396r-5(e). The Clearys challenge New Jersey's method of revising the CSRA when it, along with the community spouse's other sources of income, is insufficient to meet the MMMNA. The issue that divides the parties to this appeal is the question of what constitutes the community spouse's other sources of income. According to the Clearys, the Act provides that any shortfall between the MMMNA and the amount available to the community spouse as income is to be made up by the substitution of another CSRA, i.e., a larger portion of the couple's joint resources is to be attributed to the community spouse. The income from such a reallocated amount, along with the community spouse's other income, should then be sufficient to meet the MMMNA. This is the resource-first approach. However, in New Jersey, before reformulating a CSRA with a larger share of resources, the fair hearing officer will consider a contribution of income from the institutionalized spouse to _________________________________________________________________ 1. The CSRA is the greatest of (a) $12,000, (b) the lesser of one-half total joint resources or $60,000, (c) an amount established pursuant to a fair hearing under subsection (e)(2) or (d) and amount transferred under court order. 42 U.S.C. S 1396r-5(f)(2)(A). 5 make up the shortfall between the MMMNA and the community spouse's other income. This is the income-first approach. At the time she applied for Medicaid benefits for her husband, Carolyne Cleary was informed that Thomas was ineligible due to the couple's excess resources. Therefore, the Clearys were required to spend down their resources below a certain level before they could become eligible for Medicaid. Prior to the MCCA, an individual had to spend down all his or her resources before eligibility. The MCCA altered this by providing a protected spousal share of resources for the non-institutionalized or community spouse. Pursuant to the Act, New Jersey determined that Carolyne Cleary was entitled to $1,524.50 per month as her MMMNA. At the time of the assessment, Mrs. Cleary's total monthly income was $828.25 ($516.50 in social security payment and $311.75 in interest from her CSRA). Thus, her income fell short of her MMMNA by $696.25. Under New Jersey's income-first approach, this shortfall should be remedied by taking a portion of Thomas Cleary's income to be included as part of Carolyne Cleary's. Only after this step, will New Jersey look to other assets of the Clearys to augment Carolyne Cleary's income. The Clearys contend that this method does not conform to the provisions of the Act and that Thomas' income cannot be transferred to Carolyne. The Clearys assert that New Jersey must make up the MMMNA shortfall by allocating a larger portion of the couple's resources to Carolyne's CSRA. The Clearys filed suit in the District Court seeking injunctive relief from application of the income-first rule. The District Court denied their motion and granted motions to intervene by the New Jersey Association of Health Care Facilities and the New Jersey Association of Nonprofit Homes for the Aging.2 _________________________________________________________________ 2. The Clearys also sought declaratory and injunctive relief in the District Court on the issue of their right to be notified under the Act of the requirements and procedures for eligibility for Medicaid. The District Court denied injunctive relief on this issue as well. The Clearys, however, are not appealing the notice issues. 6