Hutcherson v. Arizona Health Care Cost Containment System Administration
2012 U.S. App. LEXIS 1491
| 9th Cir. | 2012Background
- Hutcherson appeal after district court granted AHCCCS summary judgment. Betty Hutcherson needed long-term care and applied for Medicaid to AHCCCS in 2007 but assets exceeded limit. John Hutcherson purchased a $100,000 annuity, naming AHCCCS first remainder and Hutcherson daughter Appellant second. Annuity paid $2,781.63 monthly for 36 months; after John’s death AHCCCS continued to receive monthly payments and deducted costs paid for Betty’s care. AHCCCS had paid $23,840.51 before John’s death and $2,552.92 monthly thereafter, reducing the annuity payments; remaining funds were paid to Appellant as secondary remainder beneficiary. In 2009 Betty stopped Medicaid; the annuity’s remaining balance was used to satisfy AHCCCS’s claim. Appellant filed suit in 2009 seeking declaration AHCCCS had no right to recover from the annuity or only to pre-death costs. The district court granted summary judgment in AHCCCS’s favor.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Scope of recovery under §1396p(c)(1)(F)(i) after 2006 amendment | AHCCCS cannot recover for costs incurred after John's death; only pre-death costs. | §1396p(c)(1)(F)(i) allows recovery for costs on Betty and post-death costs. | AHCCCS may recover from the annuity for costs paid on Betty’s behalf, including post-death costs. |
| Interpretation of 'institutionalized individual' after 2006 amendment | Amendment is a technical correction; should be read to mean annuitant. | Plain language defines 'institutionalized individual' as Betty, the person qualifying for Medicaid. | Statutory language controls; 'institutionalized individual' means Betty; AHCCCS can recover as primary beneficiary. |
| Effect of 2006 amendment on the recovery cap | Recovery capped at amount paid before John's death. | Recovery extends to costs incurred after John's death; not capped by pre-death payments. | Recovery not capped; AHCCCS may recover the full costs paid on Betty’s behalf. |
Key Cases Cited
- Wis. Dep’t of Health & Family Servs. v. Blumer, 534 U.S. 473 (U.S. 2002) (CSRA and asset spend-down context for Medicaid eligibility)
- United States v. R.L.C., 503 U.S. 291 (Supreme Court 1992) (statutory amendments can be interpreted via plain language)
- Kasten v. Saint-Gobain Performance Plastics Corp., 563 U.S. 1 (Supreme Court 2011) (statutory interpretation dependent on text and context)
- Hughes Aircraft Co. v. Jacobson, 525 U.S. 432 (Supreme Court 1999) (plain-language reading governs when not absurd)
- Arlington Cent. School Dist. Bd. of Educ. v. Murphy, 548 U.S. 291 (Supreme Court 2006) (plain-language controls over contextual considerations)
- City of Los Angeles v. San Pedro Boat Works, 635 F.3d 440 (9th Cir. 2011) (de novo review of summary judgment in appellate circuit)