Evangelical Good Samaritan Society v. North Dakota Department of Human Services
2015 ND 96
N.D.2015Background
- Emma Rieger, a basic care resident, signed a durable power of attorney earlier in 2013 and on November 18, 2013 signed (1) a Designation of Authorized Representative naming The Evangelical Good Samaritan Society — Mott (the Society), (2) an Assignment of Medicaid Benefits, and (3) an Authorization for Release of Health Information.
- An online Medicaid application was submitted; the Department of Human Services denied eligibility because Rieger’s countable assets exceeded the Medicaid limit and noted assets taken by Rieger’s power-of-attorney agents were countable.
- The Society timely appealed the denial and requested a fair hearing; an Administrative Law Judge dismissed the appeal for lack of subject-matter jurisdiction, concluding a nursing facility could not be an "authorized representative" under state regulation, the new federal rule was inapplicable, the assignment was invalid, and Rieger’s competency was questionable.
- The district court reversed, holding state rules inconsistent with the new federal regulation (42 C.F.R. § 435.923) were preempted and the Society had standing to appeal.
- The North Dakota Supreme Court affirmed: it held the federal rule governed, a designation executed before the rule’s effective date was valid once the rule took effect, the Department could not rely on its own failure to impose regulatory conditions to invalidate the designation, and the Society had standing to pursue the appeal on Rieger’s behalf.
Issues
| Issue | Plaintiff's Argument (Society) | Defendant's Argument (DHS) | Held |
|---|---|---|---|
| Whether federal regulation 42 C.F.R. § 435.923 preempts state rules limiting authorized representatives | Federal rule permits organizations as authorized representatives and sets modalities for designation; preempts conflicting state rules | Federal rule didn’t apply because Rieger’s designation was signed before the rule’s effective date | Court held the rule applied; anticipatory execution of designation before effective date is valid once rule is in effect |
| Whether the Society satisfied conditions in § 435.923(e) to act as an authorized representative | Society argued DHS failed to require the affirmations the regulation places on agencies, so DHS cannot now invalidate the designation | DHS argued the Society failed to provide required affirmations and Rieger waived confidentiality/conflict protections | Court held DHS cannot refuse recognition based on DHS’s own failure to require the regulatory affirmation; designation stands |
| Whether the existence of a durable power of attorney (and alleged misuse by POA agents) prevented Rieger from designating the Society | Society argued multiple representatives can be appropriate, especially where POA agents were alleged fiduciary wrongdoers | DHS argued POA agents had exclusive authority and Rieger hadn’t revoked the POA, so Society lacked authority | Court held failure to revoke the POA did not invalidate the designation; DHS’s position was unreasonable when it alleged the POA agents had misused funds |
| Whether the Assignment of Medicaid Benefits invalidates standing or is necessary for standing | Society contended the separate Designation of Authorized Representative sufficed to give it standing to appeal, regardless of assignment validity | DHS argued assignment of future Medicaid benefits is prohibited/invalid and Society cannot be both assignee and representative | Court found it unnecessary to decide assignment validity and held the Designation alone conferred standing to appeal on behalf of Rieger |
Key Cases Cited
- Druggan v. Anderson, 269 U.S. 36 (U.S. 1925) (legislative provisions may be enacted in anticipation of future legal changes)
- Northwestern Fed. Sav. & Loan Ass’n v. Ternes, 315 N.W.2d 296 (N.D. 1982) (federal agency rules have the force of law and can preempt state law)
- Whitecalfe v. North Dakota Dep’t of Transp., 727 N.W.2d 779 (N.D. 2007) (standing requires an interest in the subject matter)
- Finstad v. Gord, 844 N.W.2d 913 (N.D. 2014) (standing is a question of law reviewed de novo)
- Henson v. Georgia Indus. Realty Co., 142 S.E.2d 219 (Ga. 1965) (discussing validity of actions taken in anticipation of future legal changes)