McGovern v. Arizona Health Care Cost Containment System Administration
2016 Ariz. App. LEXIS 271
Ariz. Ct. App.2016Background
- Patrick McGovern applied for Medicaid (ALTCS) long-term care benefits; AHCCCS denied eligibility, finding his "countable" income and resources exceeded limits.
- Disputed resources: three Bank of America joint accounts held with his daughter (one received his pension) and a Ford Focus titled jointly but in the daughter's possession.
- McGovern lacked capacity; his sister held a power of attorney but BOA would not permit POA access without the daughter’s signed joint-owner acknowledgement; the daughter refused consent.
- AHCCCS ALJ and Director concluded the accounts and vehicle were legally "available" and countable because McGovern had a legal right to them and could obtain a conservatorship to access funds; AHCCCS rejected a rule requiring "practical" access.
- Superior court reversed the Director without explanation; AHCCCS appealed. The Court of Appeals reversed the superior court and affirmed the AHCCCS Director, vacating attorneys’ fees awarded to McGovern.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether joint bank accounts and jointly titled car are "resources" available for Medicaid eligibility | McGovern: assets were inaccessible in practice (daughter’s refusal), so should be treated as unavailable | AHCCCS: availability is determined by legal right to liquidate/control; practical access barriers irrelevant | Court: Assets are countable and available because McGovern had legal rights and could obtain a conservatorship to access them |
| Whether lack of mental capacity or need to obtain conservatorship makes assets "unavailable" | McGovern: inability to exercise control without conservator renders assets unavailable | AHCCCS: need for conservatorship does not render resource unavailable under federal regulation and SSA guidance | Court: Requiring conservatorship does not make resource unavailable; conservatorship is a proper means to access assets |
| Whether AHCCCS must assist applicants to obtain access (e.g., obtain conservator) | McGovern: AHCCCS should not count assets if applicant cannot practically obtain them without agency help | AHCCCS: no legal duty to assist; Medicaid is payer of last resort—applicant must use available resources first | Court: AHCCCS did not err; law does not impose a "readily accessible" or convenience requirement |
| Whether administrative decision was arbitrary/capricious | McGovern: Director’s decision ignored practical impediments and was contrary to law | AHCCCS: decision consistent with federal regulation and precedent focusing on legal right to liquidate | Court: Director’s decision supported by substantial evidence and correct legal interpretation; not arbitrary |
Key Cases Cited
- Smith v. Arizona Long Term Care Sys., 207 Ariz. 217 (App. 2004) (availability hinges on legal ability to make resources available; both liquid and illiquid resources counted)
- Chalmers v. Shalala, 23 F.3d 752 (3d Cir. 1994) (practical difficulty or expense of liquidating a resource does not make it unavailable)
- Frerks v. Shalala, 52 F.3d 412 (2d Cir. 1995) (funds subject to court order/conservatorship are nonetheless "available" for benefits eligibility)
- Blaylock v. Harris, 531 F. Supp. 24 (W.D. Mo. 1981) (retirement/savings accounts are "available" where plaintiff is presently entitled to convert them for support)
- Whiteco Outdoor Advertising v. City of Tucson, 193 Ariz. 314 (App. 1998) (administrative factual findings supported by reasonable evidence are binding on appellate review)
- Lavine v. Milne, 424 U.S. 577 (U.S. 1976) (applicants bear burden of proving eligibility for government benefits)