Court Opinion

ID: 7805206
Source: CourtListenerOpinion
Date Created: 2022-08-31 15:10:07.000402+00
Date Added: 2024-06-11T16:29:58.621651
License: Public Domain

[Cite as Gardner v. Ohio Dept. of Job & Family Servs., 2022-Ohio-3021.]

                           IN THE COURT OF APPEALS
                  FIRST APPELLATE DISTRICT OF OHIO
                            HAMILTON COUNTY, OHIO

 DIANNA G. GARDNER, by and         :                         APPEAL NO. C-210376
 through her daughter and power of                           TRIAL NO. A-2001239
 attorney, Kelly Strunk,

         Plaintiff-Appellant,                     :
                                                                O P I N I O N.
   vs.                                            :

 OHIO DEPARTMENT OF JOB AND :
 FAMILY SERVICES,

         Defendant-Appellee.                      :

Civil Appeal From: Hamilton County Court of Common Pleas

Judgment Appealed From Is: Reversed and Cause Remanded

Date of Judgment Entry on Appeal: August 31, 2022

Pro Seniors, Inc., Matthew B. Barnes and Miriam H. Sheline, for Plaintiff-Appellant,

Dave Yost, Ohio Attorney General, and Angela M. Sullivan, Assistant Attorney
General, for Defendant-Appellee.
                      OHIO FIRST DISTRICT COURT OF APPEALS

CROUSE, Judge.

       {¶1}   On March 19, 2019, plaintiff-appellant Diana Gardner entered the

Burlington House Rehab and Alzheimer’s Center. At the time of her admission,

Gardner owned real property in West Virginia, but had been attempting to sell the

property since December 2018. On August 20, 2019, Gardner applied for long-term

Medicaid. The Hamilton County Department of Job and Family Services (“HCJFS”)

rejected her application because it determined that Gardner’s resources, including the

West Virginia property, exceeded $2,000, the Medicaid-eligibility-resource limit.

       {¶2}   In October 2019, Gardner appealed the decision and requested a state

hearing with the Ohio Department of Job and Family Services (“ODJFS”) in

accordance with R.C. 5101.35(B). The hearing officer affirmed HCJFS’s decision.

Gardner filed an administrative appeal to the director of ODJFS in accordance with

R.C. 5101.35(C). The director affirmed the denial of Gardner’s Medicaid application.

Gardner appealed to the Hamilton County Common Pleas Court pursuant to R.C.

5101.35(E). Her case was heard by a magistrate, who affirmed the denial of her

Medicaid application. She filed objections to the magistrate’s decision. The trial court

overruled the objections and adopted the magistrate’s decision.

       {¶3}   Gardner has appealed, arguing in one assignment of error that the trial

court erred in upholding ODJFS’s denial of her Medicaid application for being over

the Medicaid-eligibility-resource limit. She contends that ODJFS, when calculating a

Medicaid applicant’s resources, is required to exclude real property that the applicant

is making reasonable efforts to sell.

                                               2
                      OHIO FIRST DISTRICT COURT OF APPEALS

                                Standard of Review

       {¶4}    Our review of factual issues is limited to determining whether the

common pleas court abused its discretion in finding that ODJFS’s decision was

supported by reliable, probative and substantial evidence. Weaver v. Ohio Dept. of Job

& Family Servs., 153 Ohio App.3d 331, 2003-Ohio-3827, 794 N.E.2d 92, ¶ 3 (1st Dist.).

On questions of law, we review de novo. Id. “Courts must give due deference to an

administrative agency’s construction of a statute or rule that the agency is empowered

to enforce. Unless the construction is unreasonable or repugnant to that statute or

rule, courts should follow the construction given to it by the agency.” Id. at ¶ 12.

       {¶5}    However, a court owes no duty of deference to an administrative

interpretation if the ordinance is unambiguous. Twism Ents., LLC v. State Bd. of

Registration, 1st Dist. Hamilton Nos. C-200411 and C-210125, 2021-Ohio-3665, ¶ 16,

quoting Cleveland Clinic Found. v. Bd. of Zoning Appeals, 141 Ohio St.3d 318, 2014-

Ohio-4809, 23 N.E.3d 1161, ¶ 29. “If the intent of Congress is clear, that is the end of

the matter; for the court, as well as the agency, must give effect to the unambiguously

expressed intent of Congress.” Twism at ¶ 16, quoting Chevron, U.S.A., Inc. v. Natural

Resources Defense Council, Inc., 467 U.S. 837, 842-843, 104 S.Ct. 2778, 81 L.Ed.2d

694 (1984). “A statute is ambiguous when its language is subject to more than one

reasonable interpretation.” Twism at ¶ 18.

               Medicaid and the Reasonable-Efforts Exclusion

       {¶6}    In order to understand Gardner’s argument, we must first analyze the

interplay between the federal Medicaid and Supplemental Security Income (“SSI”)

programs. Title XIX of the Social Security Act established the Medicaid program. The

federal Medicaid provisions are contained in 42 U.S.C. 1396 et seq. “Medicaid is a

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                      OHIO FIRST DISTRICT COURT OF APPEALS

cooperative federal-state program that provides federal funding for state medical

services to the poor. State participation is voluntary; but once a State elects to join the

program, it must administer a state plan that meets federal requirements.” (Citation

omitted.) Frew v. Hawkins, 540 U.S. 431, 433, 124 S.Ct. 899, 157 L.Ed.2d 855 (2004).

       {¶7}    Pursuant to 42 U.S.C. 1396a(a)(10)(A)(ii)(X), “A State plan for medical

assistance must provide * * * for making medical assistance available, * * * at the

option of the State, to any group or groups of individuals described in 42 U.S.C.S §

1396d(a) * * * who are not individuals described in clause (i) of this subparagraph but

* * * who are described in subsection (m)(1).” 42 U.S.C. 1396d(a)(iii) includes

individuals who are age 65 years or older.

       {¶8}    According to 42 U.S.C. 1396a(m),

      (1) Individuals described in this paragraph are individuals—

      (A) who are 65 years of age or older or are disabled individuals (as

      determined under section 1614(a)(3) [42 U.S.C.S § 1382c(a)(3)]),

      (B) whose income (as determined under section 1612 [42 U.S.C.S § 1382a]

      for purposes of the supplemental security income program, except as

      provided in paragraph (2)(C)) does not exceed an income level established

      by the State consistent with paragraph (2)(A), and

      (C) whose resources (as determined under section 1613 [42 U.S.C.S §

      1382b] for purposes of the supplemental security income program) do not

      exceed (except as provided in paragraph (2)(B)) the maximum amount of

      resources that an individual may have and obtain benefits under that

      program.

(Emphasis added.)

                                                4
                      OHIO FIRST DISTRICT COURT OF APPEALS

       {¶9}    Title XVI of the Social Security Act established the SSI program (42

U.S.C. 1381 et seq.). The purpose of SSI is to “insure a minimum level of income for

persons who are over age 65, or blind, or disabled, who do not have sufficient income

and resources to maintain a standard of living at the established federal minimum

income level.” Coker v. Ulch, 166 Ohio App.3d 778, 2006-Ohio-2349, 853 N.E.2d 358,

¶ 23 (6th Dist.).

       {¶10} 42 U.S.C. 1382b contains the definition of “resources” for SSI. By its

citation in 42 U.S.C. 1396a(m)(1), section 1382b also defines resources for federal

Medicaid eligibility. See Underwood v. Ohio Dept. of Job & Family Servs., 11th Dist.

Geauga No. 2019-G-0215, 2019-Ohio-4924, ¶ 28.

       {¶11} Furthermore, 42 U.S.C. 1396a(r)(2)(a) provides,

      The methodology to be employed in determining income and resource

      eligibility for individuals under subsection * * * (a)(10)(A)(ii) * * * may be

      less restrictive, and shall be no more restrictive, than the methodology—

      (i) in the case of groups consisting of aged, blind, or disabled individuals,

      under the supplemental security income program under title XVI [42

      U.S.C.S §§ 1381 et seq.]

                                          ***

      (B) For purposes of this subsection and subsection (a)(10), methodology is

      considered to be “no more restrictive” if, using the methodology, additional

      individuals may be eligible for medical assistance and no individuals who

      are otherwise eligible are made ineligible for such assistance.

(Emphasis added.)

                                                5
                      OHIO FIRST DISTRICT COURT OF APPEALS

        {¶12} In other words, if an applicant would be eligible for SSI, but not for

Medicaid, then the Medicaid regulations are too restrictive. See Underwood, 11th Dist.

Geauga No. 2019-G-0215, 2019-Ohio-4924, at ¶ 22 (“States opting to participate in the

Medicaid program can choose one of three options: SSI criteria, 209(b), and 1634.

Eligibility is determined differently under each option. The ‘1634 states’, including

Ohio as of August 1, 2016, allow the SSA to make Medicaid eligibility determinations

for SSI recipients. In such states, if the SSA determines that an individual is eligible

for SSI, that individual is automatically enrolled in Medicaid without further

verification required.”); May v. Azar, 302 So.3d 222, 247 (Ala.Civ.App.2019), fn. 23

(“It may also help to keep in mind that, although all persons qualified to receive

benefits under the SSI program may qualify for the Medicaid program, the reverse is

not true * * *.”).

        {¶13} 42 U.S.C. 1382b also provides for the reasonable-efforts exclusion at

the center of the controversy in the present case:

      (b) Disposition of resources; grounds for exemption from disposition

      requirements.

      (1) The Commissioner of Social Security shall prescribe the period or

      periods of time within which, and the manner in which, various kinds of

      property must be disposed of in order not to be included in determining an

      individual’s eligibility for benefits. Any portion of the individual’s benefits

      paid for any such period shall be conditioned upon such disposal; and any

      benefits so paid shall (at the time of the disposal) be considered

      overpayments to the extent they would not have been paid had the disposal

      occurred at the beginning of the period for which such benefits were paid.

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                       OHIO FIRST DISTRICT COURT OF APPEALS

      (2) Notwithstanding the provisions of paragraph (1), the Commissioner of

      Social Security shall not require the disposition of any real property for so

      long as it cannot be sold because (A) it is jointly owned (and its sale would

      cause undue hardship, due to loss of housing, for the other owner or

      owners), (B) its sale is barred by a legal impediment, or (C) as determined

      under regulations issued by the Commissioner of Social Security, the

      owner’s reasonable efforts to sell it have been unsuccessful.

(Emphasis added.)

       {¶14} The reasonable-efforts exclusion applies to Medicaid applicants. See

May, 302 So.3d at 241-242 (recognizing that the exclusions of 1382b “generally are

incorporated” into a state’s Medicaid plan pursuant to 1396a(a), including in

Alabama); see also Fabula v. Buck, 598 F.2d 869, 873 (4th Cir.1979) (“The Social

Security Act expressly allows an applicant for SSI benefits, whose assets exceed that

program’s eligibility limits, to dispose of the excess assets in order to become eligible.

The individual is entitled to receive conditional SSI payments pending the disposal,

and during this period the state must provide Medicaid benefits to him.”) (Citation

omitted.)

       “Countable Resources” under the Ohio Administrative Code

       {¶15} Gardner acknowledges that at the time she applied for Medicaid, the

Ohio Administrative Code did not explicitly provide for a reasonable-efforts exclusion.

Nonetheless, she argues that her real property is not a “countable resource” under the

code because she did not have the “legal ability to access [the property] in order to

convert it to cash.”

                                                7
                     OHIO FIRST DISTRICT COURT OF APPEALS

        {¶16} According to the Ohio Administrative Code that was in effect at the time

Gardner applied for Medicaid (2019 version), an individual was ineligible for Medicaid

if his/her resources exceeded $2,000. Ohio Adm.Code 5160:1-3-05.1(B)(8)(a). “

‘Resources’ means cash, funds held within a financial institution, investments,

personal property, and real property an individual and/or the individual’s spouse has

an ownership interest in, has the legal ability to access in order to convert to cash,

and is not legally prohibited from using for support and maintenance.” (Emphasis

added.) Ohio Adm.Code 5160:1-3-05.1(B)(7), citing Ohio Adm.Code 5160:1-1-

01(B)(81).

        {¶17} Gardner argues that two federal regulations, 20 C.F.R. 416.1201 and

416.1245 should inform our interpretation of Ohio Adm.Code 5160:1-1-01(B)(72).

        {¶18} 20 C.F.R. 416.1201(a)(1) defines “resources” in the SSI context and

provides in relevant part: “If a property right cannot be liquidated, the property will

not be considered a resource of the individual.” 20 C.F.R. 416.1201(c) defines

“nonliquid resources,” which are excluded from the section 416.1201(a) definition of

resources, as, inter alia, “property * * * which cannot be converted to cash within 20

days” and provides examples including buildings and land. Underwood, 11th Dist.

Geauga No. 2019-G-0215, 2019-Ohio-4924, at ¶ 20. Gardner contends that SSI

provided “a separate rule for disposing of real property” in 20 C.F.R. 416.1245(b)(1)

(“Excess real property is not included in countable resources for so long as the

individual’s reasonable efforts to sell it have been unsuccessful.”). She contends that

the test to determine whether a resource is countable is whether it can be converted to

cash.

                                              8
                      OHIO FIRST DISTRICT COURT OF APPEALS

       {¶19} This court rejected Gardner’s argument in Cowan v. Ohio Dept. of Job

& Family Servs., 2021-Ohio-1798, 173 N.E.3d 109 (1st Dist.). “The first problem * * *

is that 20 C.F.R. 416.1201 deals with SSI determinations, a federal obligation. And

Ohio courts considering similar arguments have squarely rejected the grafting of 20

C.F.R. 416.1201 onto Medicaid eligibility, which represents a state responsibility.” Id.

at ¶ 15; Underwood, 11th Dist. Geauga No. 2019-G-0215, 2019-Ohio-4924, at ¶ 29

(holding “20 C.F.R. 416.1201 inapplicable to determining Ohio Medicaid eligibility”);

Communicare v. Ohio Dept. of Job and Family Servs., 8th Dist. Cuyahoga No. 106874,

2019-Ohio-3757, ¶ 14-15 (same).

       {¶20} The Cowan court also analyzed the plain language of the definition of

“resource” under Ohio Adm.Code 5160:1-1-01(B) and concluded that “ ‘legal ability to

access’ precludes an exemption for impracticability.” Cowan at ¶ 16. If the applicant

has the legal authority to sell the property, the plain language of the code renders it a

countable resource, assuming some other exclusion does not apply. Cowan at ¶ 16,

citing Communicare at ¶ 13 (“Whether [the applicant] was able to find a purchaser is

a wholly different consideration from what the regulation contemplated, namely

whether [the applicant] had the legal authority to sell the properties in the first

place.”).

       {¶21} SSI’s definition of “resources” in 20 C.F.R. 416.1201 is inapplicable in

the Medicaid context and does not inform our interpretation of “resources” under the

Ohio Administrative Code.

       {¶22} Unable to achieve exclusion under the plain language of the Ohio

Administrative Code, Gardner contends that Cowan, Underwood, and Communicare

                                               9
                       OHIO FIRST DISTRICT COURT OF APPEALS

are inapposite because they did not address the applicability of the reasonable-efforts

exclusion in 42 U.S.C. 1382b(b)(2) to Ohio Medicaid law.

                              Ohio Medicaid State Plan

       {¶23} Gardner argues that the reasonable-efforts exclusion in 42 U.S.C.

1382b(b)(2) is incorporated into Ohio law through the Ohio Medicaid State Plan.1

       {¶24} To be eligible for Medicaid, an individual must meet all eligibility

requirements set out in an approved state plan amendment, including resource-

eligibility requirements. Ohio Adm.Code 5160:1-2-10(B)(8)(b); see R.C. 5162.05(A)(1)

(“The medicaid program shall be implemented in accordance with * * * the medicaid

state plan * * *”).

       {¶25} Gardner argues the Medicaid State Plan, in accordance with federal law,

requires that Ohio use resource-eligibility criteria that is no more restrictive than SSI-

eligibility criteria, which thereby incorporates the reasonable-efforts exclusion into

Ohio law.

       {¶26} At the time Gardner applied for Medicaid, the Medicaid State Plan

provided the following:

      5. Methods for Determining Resources

      b. Aged individuals. For aged individuals covered under section

      1902(a)(10)(A)(ii)(X) of the Act, the agency uses the following methods for

      treatment of resources:

      ______The methods of the SSI program.

      ___X__SSI methods and/or any more liberal methods described in

      Supplement 8c to Attachment 2.6-A.

1The Ohio Medicaid State Plan can be accessed at https://medicaid.ohio.gov/about-us/medicaid-
state-plan/msp-sections.

                                                 10
                      OHIO FIRST DISTRICT COURT OF APPEALS

     ______Methods that are more restrictive (except for individuals

     described in section 1902(m)(1) of the Act) and/or more liberal than those

     of the SSI program. Supplement 5 to Attachment 2.6-A describes the more

     restrictive methods and supplement 8b to Attachment 2.6-A specifies the

     more liberal methods.

Ohio Medicaid State Plan, Section 2.6A, page 16a, citing 42 U.S.C. 1396a(a)(10)(A),

1396a(m)(1)(C), and 1396a(r).2

       {¶27} Two conclusions can be drawn from the foregoing: (1) Ohio must, and

has agreed to, determine Medicaid eligibility using methodology that is no more

restrictive than SSI eligibility criteria, and (2) a Medicaid eligibility methodology that

does not include a reasonable-efforts exclusion is more restrictive than SSI’s eligibility

criteria, which means that Ohio must provide for a reasonable-efforts exclusion.
                              Conditional Benefits

       {¶28} In concluding otherwise, the trial court held that the reasonable-efforts

exclusion falls under SSI “conditional benefits.” It described SSI payments made

under the reasonable-efforts exclusion as conditional, refundable “overpayments.” It

found that when the reasonable-efforts exclusion applies, the applicant is allowed to

collect SSI payments for up to nine months while attempting to sell the property, but

is not actually eligible for SSI during that timeframe because the value of the real

property placed the applicant over the resource limit. See 20 C.F.R. 416.1240 and

1242(a).

       {¶29} The trial court held that Medicaid does not, and cannot, provide for

conditional benefits because: (1) conditional benefits are recoverable by the state,

2Section 2.6A, page 16a has since been superseded by “TN 20-0015, Non-MAGI Based
Methodologies.”

                                               11
                     OHIO FIRST DISTRICT COURT OF APPEALS

which creates a conflict with Medicaid’s anti-recovery provision (42 U.S.C. 1396p); (2)

calculating refundable benefits in the Medicaid context is impractical; and (3) Ohio

did not have “reasonable notice” of the requirement to include a reasonable-efforts

exclusion.

       {¶30} The trial court failed to discern the purpose of the conditional-benefits

period. The state is permitted to recover payments made during the nine-month

conditional-benefits period, but this period does not make all payments made as a

result of the reasonable-efforts exclusion “conditional”; rather, the period is used to

evaluate whether the efforts to sell have been reasonable and unsuccessful.

       {¶31} Congress amended 42 U.S.C. 1382b(b) in 1987. Will v. Kizer, 208

Cal.App.3d 709, 717-718, 256 Cal.Rptr. 328 (1989). Shortly thereafter, interim rules

were promulgated regarding “reasonable efforts to sell.” The substance of these

interim rules became 20 C.F.R. 416.1245. Id. at 718; compare 20 C.F.R. 416.1245.

     While the secretary’s interim regulations continue to insist on a

     conditional payment period “to evaluate the reasonableness of the

     individual’s efforts to sell,” the secretary agrees that “once reasonable

     efforts have been demonstrated (as defined by the Secretary in

     regulations), and such efforts have proven unsuccessful, the individual’s

     eligibility for SSI benefits is no longer conditioned upon the disposal of the

     individual’s property; instead, the property will not be counted as a

     resource and the individual will be eligible for SSI benefits for so long as

     he or she continues reasonable efforts to sell.”

(Emphasis added.) Will at 719, quoting 53 Fed.Reg. 13254 and 13255.

                                              12
                     OHIO FIRST DISTRICT COURT OF APPEALS

       {¶32} 20 C.F.R. 416.1245 is entitled “Exceptions to required disposition of real

property.” It provides:

     Excess real property is not included in countable resources for so long as

     the individual’s reasonable efforts to sell it have been unsuccessful. The

     basis for determining whether efforts to sell are reasonable, as well as

     unsuccessful, will be a 9-month disposal period described in § 416.1242.

     If it is determined that reasonable efforts to sell have been unsuccessful,

     further SSI payments will not be conditioned on the disposition of the

     property and only the benefits paid during the 9-month disposal period

     will be subject to recovery. In order to be eligible for payments after the

     conditional benefits period, the individual must continue to make

     reasonable efforts to sell.

(Emphasis added.)

       {¶33} The text of 42 U.S.C. 1382b also demonstrates a distinction between

conditional benefits and the reasonable-efforts exclusion:

     (b) Disposition of resources; grounds for exemption from disposition

     requirements.

     (1) The Commissioner of Social Security shall prescribe the period or

     periods of time within which, and the manner in which, various kinds of

     property must be disposed of in order not to be included in determining an

     individual’s eligibility for benefits. Any portion of the individual’s benefits

     paid for any such period shall be conditioned upon such disposal; and any

     benefits so paid shall (at the time of the disposal) be considered

                                               13
                          OHIO FIRST DISTRICT COURT OF APPEALS

         overpayments to the extent they would not have been paid had the disposal

         occurred at the beginning of the period for which such benefits were paid.

         (2) Notwithstanding the provisions of paragraph (1), the Commissioner

         of Social Security shall not require the disposition of any real property for

         so long as it cannot be sold because * * * (C) as determined under

         regulations issued by the Commissioner of Social Security, the owner’s

         reasonable efforts to sell it have been unsuccessful.

(Emphasis added.)

          {¶34} In other words, despite the conditional-payments provision in 42 U.S.C.

1382b(b)(1), real property which an applicant is making reasonable efforts to sell is

excluded as a resource.

          {¶35} The Program Operations Manual System (“POMS”)3 contains

administrative interpretations by the Social Security Administration and is not the

product of formal rulemaking, but its interpretations are nonetheless relevant to our

determination. See Washington State Dept. of Social & Health Servs. v. Guardianship

Estate of Keffeler, 537 U.S. 371, 385, 123 S.Ct. 1017, 154 L.Ed.2d 972 (2003).

          {¶36} POMS SI 01130.140 is entitled “Real Property Following Reasonable but

Unsuccessful Efforts to Sell It Throughout a 9-Month Period of Conditional Benefits.”

It states:

         Real property that an individual has made reasonable but unsuccessful

         efforts to sell throughout a 9-month period of conditional benefits will

         continue to be excluded for as long as:

         • the individual continues to make reasonable efforts to sell it

3   Accessible at https://secure.ssa.gov/apps10/.

                                                    14
                        OHIO FIRST DISTRICT COURT OF APPEALS

                                          ***

     2. Distinction Between This And The Conditional Benefits Exclusion

     If the property is later sold, benefits paid during the 9-month conditional-

     benefits period are subject to recovery as overpayments. Benefits paid as

     a result of this exclusion are not subject to recovery as overpayments of

     conditional benefits.

(Emphasis added.) Accord “Conditional Benefits Overpayments,” POMS SI 01150.202

(“If the conditional-benefits period ends without sale of excess real property, despite

continuing reasonable efforts to sell, see SI 01130.140 for its continued exclusion.

Refund of the conditional benefits overpayment is not due unless or until a sale occurs

so long as the owner continues to make reasonable efforts to sell.”); “Conditional

Benefits,” POMS SI 01150.200 (“[W]hen the excess resources are in the form of real

property which cannot be sold for certain specified reasons (undue hardship or

unsuccessful reasonable efforts to sell), the owner can receive regular (not conditional)

benefits.”); “Excluded Resources,” POMS SI 01110.210 (no time limit on the exclusion

of property under the reasonable-efforts exclusion).

       {¶37} The primary purpose of requiring the nine-month conditional-benefits

period is to evaluate whether the efforts to sell have been reasonable and unsuccessful.

SSI benefits paid because of the reasonable-efforts exclusion are not inherently

conditional benefits.

   A. Anti-Recovery Provision

       {¶38} The trial court held that the state would be prohibited from recovering

conditional Medicaid benefits paid to Gardner because the benefits would have been

“correctly paid,” and under 42 U.S.C. 1396p(b) (“anti-recovery provision”), correctly

                                                15
                       OHIO FIRST DISTRICT COURT OF APPEALS

paid benefits are recoverable by the state only in narrow circumstances. Therefore, the

trial court held that to incorporate the reasonable-efforts exclusion into Medicaid

would contradict 42 U.S.C. 1396p(b).

        {¶39} Ohio must provide a reasonable-efforts exclusion for real property. See

42 U.S.C. 1382b(b). But doing so would not require the provision of conditional

benefits.

        {¶40} Pursuant to 20 C.F.R. 416.1245, the first nine months of benefits are

recoverable as conditional benefits, but Ohio is not required to implement 20 C.F.R.

416.1245. See Underwood, 11th Dist. Geauga No. 2019-G-0215, 2019-Ohio-4924, at ¶

28 (42 U.S.C. 1382b is specifically incorporated into the Medicaid Act. 20 C.F.R.

416.1201 cites 42 U.S.C. 1382b as one of its authorities, but that does not make 20

C.F.R. 416.1201 a Medicaid rule or incorporate it into the Medicaid statutory

framework.).

        {¶41} Ohio recently enacted Ohio Adm.Code 5160:1-3-05.1(C)(6) (effective

April 1, 2022), which provides the criteria that must be met in order for property to be

excluded due to unsuccessful attempts to sell the property. Although there was no

equivalent provision in place when Gardner applied for Medicaid benefits, Ohio

Adm.Code 5160:1-3-05.1(C)(6) expresses Ohio’s chosen criteria for the reasonable-

efforts exclusion and it does not require a conditional-benefits period.4

        {¶42} Other states also provide for a reasonable-efforts exclusion without

requiring a conditional-benefits period. See, e.g., Michigan State Medicaid Plan,

Supplement 8b to Attachment 2.6-A:5

4 The version of Ohio Adm.Code 5160:1-3-05.1(C)(6) effective April 1, 2022, is substantially the
same as Ohio’s previous version of Ohio Adm.Code 5160:1-3-05.1(C)(6), which was repealed in
August 2016.
5 Accessible at https://www.mdch.state.mi.us/dch-
medicaid/manuals/MichiganStatePlan/MichiganStatePlan.pdf.

                                                  16
                      OHIO FIRST DISTRICT COURT OF APPEALS

      For the SSI-related categories of the Act:

                                        ***

      Un-salable property is not a countable resource. The property is un-salable

      when either: a) two knowledgeable sources state the property is un-salable

      due to a specified condition, or b) an actual sale attempt is made and no

      reasonable offer to purchase has been received. Conditional eligibility and

      repayment agreements are not required.

(Emphasis added.)

       {¶43} Furthermore, the state can seek recovery of its payments against

Gardner’s estate once she dies. See R.C. 5162.21; Ohio Adm.Code 5160:1-2-07; see also

California Advocates for Nursing Home Reform v. Bonta, 106 Cal.App.4th 498, 508,

130 Cal.Rptr.2d 823 (2003) (“[B]ecause an applicant’s principal residence is excluded

as a countable resource in determining eligibility (see 42 U.S.C. § 1382b(a)(1)), some

persons who possess valuable assets are allowed to receive benefits. Congress justified

this incongruity by authorizing ‘estate recovery,’ that is, the recovery of all or a portion

of the benefits paid from the estate of such a beneficiary after his or her death.”).

   B. Impractical to Implement

       {¶44} The trial court found that it would be impractical to allow for a

reasonable-efforts exclusion in the Medicaid context because Medicaid does not

provide cash payments like SSI; it provides medical care to needy individuals. The

court found that calculation of payments, very easy in the SSI context, would be

complicated and sometimes impossible in the Medicaid context.

       {¶45} As discussed above, Ohio must provide for a reasonable-efforts

exclusion. Ohio has not incorporated 20 C.F.R. 416.1240-1245 into Ohio Medicaid law,

                                                17
                     OHIO FIRST DISTRICT COURT OF APPEALS

and is not required to tie the reasonable-efforts exclusion to a conditional-benefits

period. Ohio Adm.Code 5160:1-3-05.1(C)(6) (effective April 1, 2022) defines the

conditions that must be met for application of the reasonable-efforts exclusion, and a

conditional-benefits period is not among the conditions. Therefore, determining

whether the efforts to sell have been reasonable and unsuccessful does not necessarily

require calculating repayments.

   C. Clear Notice

       {¶46} While Congress has broad power to set the terms on which it disburses

federal money to the states, any conditions it attaches to a state’s acceptance of such

funds must be set out “unambiguously.” Arlington Cent. School Dist. Bd. of Edn. v.

Murphy, 548 U.S. 291, 296, 126 S.Ct. 2455, 165 L.Ed.2d 526 (2006),

quoting Pennhurst State School and Hosp. v. Halderman, 451 U.S. 1, 101 S.Ct. 1531,

67 L.Ed.2d 694 (1981). Legislation under the “Spending Power” is in the “nature of a

contract: in return for federal funds, the States agree to comply with federally imposed

conditions.” Pennhurst at 17. “Fund recipients are bound only by those conditions that

they accept ‘voluntarily and knowingly,’ and states cannot knowingly accept

conditions of which they are ‘unaware’ or which they are ‘unable to ascertain.’ ”

Arlington at syllabus. Thus, Ohio must have “clear notice” that it must apply the

reasonable-efforts exclusion in the Medicaid context. Id.

       {¶47} The analysis begins with the text of the act. If the “language is plain,”

the court’s duty “is to enforce it according to its terms.” Id., quoting Hartford

Underwriters Ins. Co. v. Union Planters Bank, N.A., 530 U.S. 1, 6, 120 S.Ct. 1942, 147

L.Ed.2d 1 (2000).

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                      OHIO FIRST DISTRICT COURT OF APPEALS

       {¶48} Ohio had clear notice that it was required to adopt Medicaid resource-

eligibility criteria equivalent to or more liberal than SSI resource-eligibility criteria

because it stated as much in the Ohio Medicaid State Plan. The state plan also cited to

42 U.S.C. 1396a(a)(10)(A), 1396a(m)(1)(C), and 1396a(r). The plain language of those

sections is clear: resource eligibility for purposes of Medicaid is determined under 42

U.S.C. 1382b, and 1382b(b)(2) provides that the disposition of real property shall not

be required for so long as it cannot be sold despite reasonable efforts to sell.

                                 20 C.F.R. 416.1240

       {¶49} Finally, the trial court held that even if the reasonable-efforts exclusion

applies, Gardner does not meet the eligibility criteria because she did not furnish an

agreement to sell the property within a certain period of time. See 20 C.F.R. 416.1240.

The court stated that Gardner cannot “have it both ways” by arguing that 20 C.F.R.

416.1245 applies, but claiming that she was not required to furnish a signed agreement

under 20 C.F.R. 416.1240.

       {¶50} As discussed above, Ohio is required to provide a reasonable-efforts

exclusion, but is not required to adopt 20 C.F.R. 416.1240-1245. Ohio is free to furnish

its own criteria, and currently does not require that an applicant sign an agreement to

sell the property within a certain period of time. See Ohio Adm.Code 5160:1-3-

05.1(C)(6) (effective April 1, 2022).

                                        Conclusion

       {¶51} The trial court erred in holding that the reasonable-efforts exclusion

does not apply in the Medicaid context. The sole assignment of error is sustained. The

trial court’s judgment is reversed and the cause is remanded to ODJFS to determine

whether Gardner meets the requirements of the reasonable-efforts exclusion.

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                      OHIO FIRST DISTRICT COURT OF APPEALS

                                               Judgment reversed and cause remanded.

MYERS, P.J., and ZAYAS, J., concur.

Please note:
       The court has recorded its own entry on the date of the release of this opinion.

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