Opinion ID: 1557350
Heading Depth: 1
Heading Rank: 3

Heading: WHETHER OUR TRIAL COURTS HAVE SUBJECT MATTER JURISDICTION UNDER 42 U.S. CODE SECTION 1396r-5 TO INCREASE THE MMMNA AND THE CSRA PRIOR TO AN AGENCY DETERMINATION OF MEDICAID ELIGIBILITY.

Text: A. Background ¶ 10. The Medicaid program is part of Title XIX of the Social Security Act, enacted in 1965. 42 C.F.R. § 430.0 (2009). It is jointly financed by the state and federal governments to provide medical assistance to low-income persons who are age 65 or over, blind, disabled, or members of families with dependent children or qualified pregnant women or children. Id. State participation is voluntary, and each state determines eligibility within broad Federal rules. [1] Id. ¶ 11. In order to be eligible for Medicaid, the applicant must meet certain financial and non-financial criteria. See Miss. Code Ann. § 43-13-115 (Rev.2009). Married applicants who receive long-term care (i.e., institutionalized spouses) have specific limitations on their income and resources. [2] The Division must determine the couple's income and resources and allocate resources between the institutionalized spouse and the community spouse when determining eligibility. See 42 U.S.C. § 1396r-5 (2006). This determination is governed by 42 U.S.Code Section 1396r-5, the statute at issue in this case. B. 42 U.S.C. § 1396r-5 ¶ 12. The spousal-impoverishment provisions of the MCCA affect the allocation of income and resources between the institutionalized and community spouses. See 42 U.S.C. § 1396r-5 (2006). The statute provides rules for treatment of income and resources during the eligibility process and post-eligibility. See id. ¶ 13. In computing resources for purposes of eligibility, the state agency must assess the couple's total value of the resources. [3] 42 U.S.C. § 1396r-5(c)(1)(A)(I) (2006). The community spouse is allowed to retain a community spousal resource allowance (CSRA), which is excluded from the eligibility calculation and is subject to a statutory cap. [4] Wis. Dep't of Health & Family Servs. v. Blumer, 534 U.S. 473, 482-83, 122 S.Ct. 962, 151 L.Ed.2d 935 (2002) (citing 20 C.F.R. § 416.1205). The MCCA specifically defines the CSRA as follows: [T]he community spouse resource allowance for the community spouse is an amount (if any) by which (A) the greatest of (i) $12,000 (subject to adjustment under subsection (g) of this section [which governs inflation]), or, if greater (but not to exceed the amount specified in clause (ii)(II)) an amount specified under the State plan, (ii) the lesser of (I) the spousal share computed under subsection (c)(1) of this section, or (II) $60,000 (subject to adjustment under subsection (g) of this section), (iii) the amount established under subsection (e)(2) of this section [Fair hearing provision]; or (iv) the amount transferred under a court order under paragraph (3)[.] [5] 42 U.S.C. § 1396r-5(f)(2)(A) (2006) (emphasis added). McCormick's treatise provides the following explanation for understanding the statute's definition of the CSRA: For example, the Medicaid statute permit[s] the community spouse to keep a community spouse resource allowance (CSRA) equal to the greatest of $12,000 adjusted for inflation or one half of the couple's resources up to $60,000 adjusted for inflation. The state may also simply permit the community spouse to retain resources up to the inflation adjusted $60,000 figure. Alternatively, by court order, or by decision of an administrative judge (where additional resources are necessary to produce income to support the community spouse), the community spouse may be permitted to keep a greater amount. Harvey L. McCormick, Medicare and Medicaid Claims and Procedures § 28:17 (4th ed.2005). [An] 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. Blumer, 534 U.S. at 483-84, 122 S.Ct. 962. ¶ 14. Once the institutionalized spouse becomes eligible, the agency must determine the amount of income that is to be applied monthly to payment for the costs of care in the institution. 42 U.S.C. § 1396r-5(d)(1) (2006). In determining the amount of income that is to be applied for the cost of care, the statute allows various protected amounts to be deducted from the institutionalized spouse's income, one being the community spouse monthly income allowance (CSMIA). 42 U.S.C. § 1396r-5(d)(1)(B) (2006). The CSMIA is calculated based upon the minimum monthly maintenance needs allowance (MMMNA). 42 U.S.C. § 1396r-5(d)(2) (2006). The statute provides the following definition of the CSMIA: In this section ( except as provided in paragraph (5) ), the community spouse monthly income allowance for a community spouse is an amount by which (A) except as provided in subsection (e) of this section, the minimum monthly maintenance needs allowance (established under and in accordance with paragraph (3)) for the spouse, exceeds (B) the amount of monthly income otherwise available to the community spouse (determined without regard to such an allowance). 42 U.S.C. § 1396r-5(d)(2) (2006) (emphasis added). The MMMNA is established by each state based upon the official poverty line and an excess-shelter allowance; however, it is subject to a statutory cap. [6] 42 U.S.C. § 1396r-5(d)(3) (2006). ¶ 15. The language except as provided in paragraph (5) (in the definition of the CSMIA) references the following provision, which is also relevant to this case: (5) Court ordered support If a court has entered an order against an institutionalized spouse for monthly income for the support of the community spouse, the community spouse monthly income allowance for the spouse shall not be less than the amount of the monthly income so ordered. 42 U.S.C. § 1396r-5(d)(5) (2006). ¶ 16. The definition of the CSMIA references another relevant provision, subsection (e)(2), which is the fair-hearing provision: (2) Fair hearing (A) In general If either the institutionalized spouse or the community spouse is dissatisfied with the determination of (i) the community spouse monthly income allowance; (ii) the amount of the monthly income otherwise available to the community spouse (as applied under subsection (d)(2)(B) of this section); (iii) the computation of the spousal share of resources under subsection (c)(1) of this section; (iv) the attribution of resources under subsection (c)(2) of this section; or (v) the determination of the community spouse resource allowance (as defined in subsection (f)(2) of this section); such spouse is entitled to a fair hearing described in section 1396a(a)(3) of this title with respect to such determination if an application for benefits under this subchapter has been made on behalf of the institutionalized spouse. Any such hearing respecting the determination of the community spouse resource allowance shall be held within 30 days of the date of the request for the hearing. (B) Revision of minimum monthly needs allowance If either such spouse establishes that the community spouse needs income, above the level otherwise provided by the minimum monthly maintenance needs allowance, due to exceptional circumstances resulting in significant financial distress, there shall be substituted, for the minimum monthly maintenance needs allowance in subsection (d)(2)(A) of this section, an amount adequate to provide such additional income as is necessary. (C) Revision of the community spouse resource allowance If either such spouse establishes that the community spouse resource allowance (in relation to the amount of income generated by such an allowance) is inadequate to raise the community spouse's income to the minimum monthly maintenance needs allowance, there shall be substituted, for the community spouse resource allowance under subsection (f)(2) of this section, an amount adequate to provide such a minimum monthly maintenance needs allowance. 42 U.S.C. § 1396r-5(e)(2) (2006) (emphasis added). C. Merits of the Case ¶ 17. When reviewing an issue of subject matter jurisdiction, this Court applies a de novo standard of review. Schmidt v. Catholic Diocese of Biloxi, 18 So.3d 814, 821 (Miss.2009). ¶ 18. Mrs. Alford contends that the unambiguous language of the MCCA provides our state courts with authority to increase the CSRA and the MMMNA. Mrs. Alford points to 42 U.S. Code Section 1396r-5(d)(5) and 42 U.S. Code Section 1396r-5(f)(3) in support of her argument. As noted supra, those provisions provide that: (5) Court ordered support If a court has entered an order against an institutionalized spouse for monthly income for the support of the community spouse, the community spouse monthly income allowance for the spouse shall not be less than the amount of the monthly income so ordered. 42 U.S.C. § 1396r-5(d)(5) (2006) (emphasis added). (3) Transfers under court orders If a court has entered an order against an institutionalized spouse for the support of the community spouse, section 1396p of this title shall not apply to amounts of resources transferred pursuant to such order for the support of the spouse or a family member (as defined in subsection (d)(1) of this section). 42 U.S.C. § 1396r-5(f)(3) (2006) (emphasis added). Mrs. Alford argues that the phrase has entered indicates that a court order must be entered prior to an application for Medicaid benefits. She asserts that 42 U.S. Code Section 1396r-5 provides for two, alternative mechanisms for increasing the MMMNA and CSRA: (1) by court order prior to filing a Medicaid application, and (2) filing an application for Medicaid and increasing the MMMNA and CSRA through the fair-hearing process under 42 U.S. Code Section 1396r-5(e). In support of her argument, Mrs. Alford cites Blumberg v. Tennessee Department of Human Services, 2000 WL 1586454 (Tenn.Ct. App. Oct. 25, 2000), and M.E.F. v. A.B.F., 393 N.J.Super. 543, 925 A.2d 12 (2007). ¶ 19. In Blumberg, the plaintiff filed a petition in circuit court requesting a transfer of his wife's assets and an increase in the MMMNA. Blumberg, 2000 WL 1586454 at . The court ordered the plaintiff's wife to pay all of her monthly income to her husband as a community spouse allowance. Id. Thereafter, the plaintiff filed a Medicaid application on behalf of his wife. Id. While his wife was approved for Medicaid, the plaintiff was denied an increase in his income allocation. Id. The agency ordered that the wife's monthly income was to be applied to her cost of care. Id. ¶ 20. On appeal, the Tennessee Court of Appeals determined that the agency had exceeded its jurisdiction by reversing the circuit court's order. Id. at . In deciding this issue, the appellate court determined that the language of 42 U.S. Code Section 1396r-5(d)(5) and 42 U.S.Code Section 1396r-5(e) of the MCCA provided two absolute alternative methods of setting a spouse's allowance and we are bound to recognize both procedures. Id. at -. Accordingly, the court held the agency was without authority to ignore the circuit court's order. Id. In support of its holding, the court reasoned that had the legislature intended a different interpretation, it could simply have stated in precise language that the administrative process is the only procedure available. Id. ¶ 21. Similar to the Tennessee Court of Appeals, the New Jersey Superior Court has implicitly ruled that the MCCA provides two independent means to increase the MMMNA. M.E.F. v. A.B.F., 393 N.J.Super. 543, 925 A.2d 12 (2007). In M.E.F., the institutionalized spouse had been receiving Medicaid benefits when the community spouse petitioned the family court for separate maintenance under the state's domestic laws. Id. at 15. The family court denied the petition for lack of factual support and procedural inadequacies. Id. Thereafter, the community spouse petitioned the state agency for an increase in her MMMNA, which the agency granted. Id. ¶ 22. After obtaining an increase in the MMMNA, the community spouse renewed her motion for separate maintenance in family court. Id. At a hearing on the motion, the community spouse argued for an additional increase in her MMMNA. Id. at 15-16. The family court denied the motion, ruling that the MCCA's provisions regarding court orders of support applied only to orders already in existence [prior to institutionalization]. Id. at 16. ¶ 23. On appeal, the Superior Court held that the community spouse's effort to obtain a court order after she had requested an increase in the MMMNA from the agency constituted impermissible parallel litigation and a form of forum shopping. Id. at 20. The court reasoned that, having embarked upon the administrative path by receiving and challenging the MMMNA provided to her, [the community spouse] is limited to that path until a final administrative determination has been reached. Id. at 22. ¶ 24. While the courts in Blumberg and M.E.F. ruled only upon the issue of jurisdiction to increase the MMMNA, the Superior Court of the District of Columbia has ruled that the MCCA provides two alternative methods of increasing the MMMNA and the CSRA. In re Estate of Tyler, 2002 WL 1274125,  (D.C.Super. May 30, 2002). In Tyler, the plaintiff petitioned the trial court for a transfer of all the institutionalized spouse's assets and an order awarding her income and resources for her support as a community spouse. Id. at . The plaintiff filed her petition after her spouse had applied for Medicaid, but prior to Medicaid's determination of the spouse's eligibility. Id. at -. During the pendency of the court proceedings, the state agency denied Medicaid benefits due to excess resources. Id. at . ¶ 25. While the trial court denied the petition, it found that, under the MCCA, the community spouse may seek either administrative or judicial relief to increase the MMMNA and the CSRA. Id. at -3 (citing 42 U.S.C. § 1396r-5(e) and 42 U.S.C. § 1396r-5(d)(5)). After reviewing the express language of 42 U.S.Code Section 1396r-5, the court stated [t]here can be no doubt ... that Congress intended that spousal support orders for income not only be taken into account [by the agency] in calculating income allowances, but also bypass the standard Medicaid rules regarding resources and income. Id. at  (citing 42 U.S.C. § 1396r-5(d)(2) and (A), (d)(5), and (f)(2)(A)(iv) and (f)(3)). In other words, the court found that court orders preempt the spousal resource and income allowances under the MCCA. Id. ¶ 26. The Division urges this Court to adopt the holding of Arkansas Department of Health & Human Services v. Smith, 370 Ark. 490, 262 S.W.3d 167 (2007), which is contrary to Blumberg, M.E.F., and Tyler. The Arkansas Supreme Court held that the state agency charged with administering Medicaid is the  sole entity that may determine whether a Medicaid applicant is eligible for Medicaid, as well as for any of the deductions or allowances permitted under the MCCA. Ark. Dep't of Health & Human Servs., 262 S.W.3d at 173 (emphasis added). In reaching its decision, the appellate court analyzed those MCCA provisions that refer to a court order, 42 U.S. Code Sections 1396r-5(d)(5), (f)(2)-(3). Id. at 172-73. The court agreed with the agency's argument that reading the statute in its entirety makes it clear that any allocation of a couple's assets can only occur after a determination of Medicaid eligibility has been made. Id. at 172. The court noted that Section 1396r-5(b)(2) speaks of the attribution of income `for purposes of the post-eligibility income determination' and that Section 1396r-5(d)(1) permits deductions or allowances from the institutionalized spouse's income ` after an institutionalized spouse is determined... to be eligible for medical assistance.' Id. (quoting 42 U.S.C. §§ 1396r-5(b)(2), (d)(1)). The court noted that Congress expressly had authorized state and local agencies to determine Medicaid eligibility under 42 U.S. Code Section 1396(a)(a)(5). Id. Furthermore, the court focused on the language of Section 1396r-5(f)(2)-(3) and provided the following analysis, which we find especially relevant to this case: [The community spouse] then goes on to argue that Congress used the word shall in § 1396r-5(f)(3), thereby making the language mandatory. However, what [the community spouse's] argument fails to recognize is that the word shall does not actually appear to direct DHHS to apply the court's order. Reading the statute closely reveals that what the Medicaid-administering agency shall do is not apply 42 U.S.C. § 1396p to resources transferred pursuant to such order. Section 1396p deals with liens, adjustments and recoveries, and transfers of assets. That statute discusses when a lien may be imposed against the property of an individual who has been receiving medical assistance. Moreover, the fallacy in [the community spouse's] reliance on subsections (f)(2) and (f)(3) becomes apparent when one reads § 1396r-5(f)(1), which provides as follows: An institutionalized spouse may, without regard to section 1396p(c)(1) of this title, transfer an amount equal to the community spouse resource allowance (as defined in paragraph(2)), but only to the extent the resources of the institutionalized spouse are transferred to (or for the sole benefit of) the community spouse. The transfer under the preceding sentence shall be made as soon as practicable after the date of the initial determination of eligibility, taking into account such time as may be necessary to obtain a court order under paragraph (3). (Emphasis added.) The emphasized language makes it clear that the transfers between an institutionalized spouse and a community spouse, as specified in this statute must, transpire after a determination has been made about the institutionalized spouse's Medicaid eligibility. Id. at 172-73. ¶ 27. The court further noted that the community spouse could seek administrative review of the CSMIA (the community spouse's monthly income allowance), and the CSRA under the MCCA's fair-hearing provisions and then seek judicial review. Id. at 173-74 (citing 42 U.S.C. § 1396r-5(e)). The court ruled that agencies are better equipped than courts, by specialization, insight and experience, and more flexible procedures to determine and analyze underlying legal issues affecting their agencies. Id. The court concluded that the court order language was insufficient to confer jurisdiction, even impliedly, on the circuit court[,] especially given the fact that sections 1396r-5(d)(5) & (f)(3) only generally reference an order of spousal support; they do not mention a court-ordered CSRA, CSMIA, or MMMNA. Id. ¶ 28. The Missouri Court of Appeals also has held that its state courts are without jurisdiction under the MCCA. Amos v. Estate of Amos, 267 S.W.3d 761 (Mo.Ct.App.2008); see also Huynh v. King, 269 S.W.3d 540 (Mo.Ct.App.2008). Finding that the agency had primary jurisdiction, the Missouri Court of Appeals found: The application of Medicaid regulations demands administrative expertise. A single state agency must oversee the program. Uniformity of result is critical. None of these objectives is furthered by conferring parallel jurisdiction on a probate court, and the Act's mere reference to an amount transferred under a court order, without further explanation, is insufficient to do so. Id. ¶ 29. We find that the opinions of the Arkansas Supreme Court and the Missouri Court of Appeals provide a more compelling interpretation of the spousal-impoverishment provisions. Notably, 42 U.S. Code Section 1396r-5(e) specifically provides a mechanism for administrative review and revision of the CSMIA, MMMNA, and CSRA. Furthermore, Mississippi Code Section 43-13-116 sets forth the administrative-hearing process and provides that an aggrieved claimant is entitled to seek judicial review in a court of proper jurisdiction. Miss.Code Ann. § 43-13-116(3)(e)(xvii) (Rev.2009). This Court previously has ruled that `where a remedy before an administrative agency is provided, relief must be sought by exhausting this remedy before the courts will act.' Davis v. Barr, 250 Miss. 54, 157 So.2d 505, 507 (1963) (quoting 2 Am.Jur.2d Administrative Law, § 595, p. 426). This Court also has described the doctrine of primary jurisdiction, which is relevant to the case sub judice: the courts cannot or will not determine a controversy involving a question which is within the jurisdiction of an administrative tribunal prior to the decision of that question by the administrative tribunal, where the question demands the exercise of sound administrative discretion requiring the special knowledge, experience, and services of the administrative tribunal to determine technical and intricate matters of fact, and a uniformity of ruling is essential to comply with the purposes of the regulatory statute administered. Ill. Cent. R. Co. v. M.T. Reed Const. Co., 51 So.2d 573, 575 (Miss.1951) (quoting 42 Am.Jur. Public Administrative Law, § 254). However, Mrs. Alford argues that the doctrine of administrative remedies should not apply, as the Division's rule states: The CS [community spouse] share of total countable resources is the maximum allowed under federal law. In order for a CS to receive a share larger than the federal maximum, a court order would be required granting the CS a greater share of total resources after Medicaid had made a decision regarding spousal shares. Code Miss. R. 13 000 036 at § 9210 (Rev. 1999) (emphasis added). Mrs. Alford argues that the Division's own rules limit its authority to grant the requested relief, and as such, an administrative appeal is futile and a waste of resources. ¶ 30. We note that this agency rule applies only to countable resources and does not specifically address the agency's ability to raise the MMMNA (the needs allowance) above the federal maximum. We reaffirm that the rule requiring exhaustion of administrative remedies will be applied even though a party contends that the action of the administrative agency is beyond the power and jurisdiction of the agency. Everitt v. Lovitt, 192 So.2d 422, 428 (Miss.1966). Furthermore, the relevant inquiry concerns the provisions of 42 U.S. Code Section 1396r-5, which the Division is bound to follow. ¶ 31. Keeping in mind the doctrines of exhaustion of administrative remedies and primary jurisdiction, we hold that the statutory language if a court has entered an order is insufficient to confer upon the courts parallel jurisdiction to increase the MMMNA and CSRA. We conclude that the plain language of the MCCA does not confer jurisdiction upon our state courts to increase the MMMNA and CSRA prior to an exhaustion of administrative remedies.