Burns v. VowellBurns v. Vowell
MEMORANDUM AND ORDER
As stated in the Memorandum Opinion signed and entered this day the Court is of the opinion that there exists in this case a question under the Eleventh Amendment and
Edelman v. Jordan,
1. Within fifteen (15) days of the entry of this Memorandum and Order Plaintiffs shall file a brief addressing the question of whether or not this Court has the authority to order payment of any retroactive benefits to Mrs. Burns.
2. Within thirty (30) days of the entry of this Memorandum and Order Defendant shall file a reply brief addressing the same question.
3.Plaintiffs may file a response to Defendants’ brief within ten (10) days of receipt of the brief.
MEMORANDUM OPINION
This cause of action is before the Court on Plaintiffs’ application for a preliminary injunction. The parties have filed proposed findings of fact and conclusions of law, briefs on various questions, and a hearing was held on August 18, 1976, at which both argument and testimony were offered. The Court has considered all the pleadings, other instruments on file in this case, and the evidence offered at the hearing, and the Court is now of the opinion that a preliminary injunction should be issued in favor of Plaintiffs.
Before dealing with the facts and the applicable law, the Court would first dispose of a number of other matters. The Court has jurisdiction over the subject matter of this cause of action,
On the question of the class allegation, Plaintiffs claim the existence of the class of persons within the requirements of
The final matter is whether or not a three-judge district court should be convened to hear this case. None of the parties has requested a three-judge court, and the Court is of the opinion that one is not required. However, this issue will be dealt with more fully below. Therefore, the facts of this case can now be outlined.
The basic facts of this cause of action are neither complex nor in dispute. On May 28, 1976, the parties filed their Stipulation of Fact which succinctly outline the basic facts. For the sake of completeness and in order to avoid unnecessary duplication of effort, the Court includes the stipulations in this opinion, and they are as follows:
1. Named plaintiff Juanita Burns suffers from Alzheimer’s disease, a chronic neuropsychopathic disorder characterized by impaired intellectual ability and requires skilled nursing home care twenty-four (24) hours per day.
2. The total cost of Mrs. Burns’ care, $537.90 per month, was paid by Medicaid until April, 1976.
3. On February 25, the State Department of Public Welfare notified Mr. Burns that, effective March 1, 1976, the amount of Medicaid vendor payments paid for Mrs. Burns’ nursing home care would be reduced from $537.90 to $153.82, and that Mr. Burns would be liable for the additional $384.08.
4. Mr. and Mrs. Burns appealed this decision and an administrative hearing was held on April 5, 1976.
5. At the hearing Mr. Burns presented evidence alleging that he has necessary living expenses of at least $379.80 per month.
6. A decision (XI) was rendered April 5, 1976, sustaining the original decision, effective April, 1976, on the grounds that it complied with Texas State Department of Public Welfare Medicaid Eligibility Handbook (MEH), sections 3523, 2525, 2530, 2444.1 and 5532 (X2).
7. These regulations are portions of defendant’s policy regarding the amount of Medicaid vendor payments paid for the care of an institutionalized Medicaid recipient.
8. These regulations provide that an amount equal to the monthly SSI standard payment amount, presently $157.70, is diverted from the couple’s total income to meet the needs of an ineligible spouse.
9. These regulations provide under the facts of this case that any income in excess of the SSI standard payment amount is presumed to be available to the institutionalized spouse, and is applied against the cost of institutional care.
10. These regulations do not consider the actual needs or actual contribution of the ineligible spouse.
11. These regulations are based on provisions of the State plan as approved by HEW (X3), directives from the Department of Health, Education, and Welfare contained in a letter (X4), and Title XIX regulations, 45 C.F.R. 248.3 (X5).
12. Mr. Burns has income of $541.78.
At the hearing it was also brought out that Mrs. Burns receives $25.00 per month in Supplemental Security Income from the Social Security Administration which is paid to Mr. Burns and is used to pay some of Mrs. Burns’ expenses. Mr. Burns is unable to engage in any gainful employment, and he spends between ten and twelve hours per day at the nursing home taking *1138 care of Mrs. Burns. Mr. and Mrs. Burns have not resided together since April 15, 1974, and Mr. Burns filed for divorce on April 1, 1976, because a termination of the marital relationship would permit Mrs. Burns to receive full Medicaid payments under the current state regulations. However, Mr. Burns testified that he would dismiss the divorce proceeding if he received affirmative relief in this Court.
Mr. Burns’ monthly income was stated to be $561.80 rather than $541.78 as indicated in stipulation 12. He receives $258.80 from Goodyear, his former employer, and $303.00 from Social Security. Mr. Burns testified that his living expenses are $409.80 as opposed to $379.80 as stated in stipulation 5. It was also brought out that the current Supplemental Security Income standard payment amount which the State would permit Mr. Burns to retain out of his income for his own needs is now $167.80 rather than $157.70 as indicated in stipulation 8. Thus, the figures offered at the hearing show that the State expects Mr. Burns to pay $394.00 toward Mrs. Burns’ care.
As indicated in stipulation 1, Mrs. Burns requires and receives constant nursing care. According to the testimony of Ms. Joyce Purcell, administrator of the nursing home, Mrs. Burns is classified as receiving care known as Intermediate III, but that Mrs. Burns is actually receiving the higher more expensive level of care known as Skilled, though she is charged only for Intermediate III. The care classification is assigned by a physician of the State Department of Public Welfare. Ms. Purcell further testified that because Mrs. Burns’ payments were in arrears for some five months, the last day on which Mrs. Burns would be permitted to remain in the nursing home would be August 24, 1976. However, at the request of the Court made at the hearing, Ms. Purcell sought and obtained from the Governing Board of the nursing home a fifteen-day extension in order to permit the Court to render this opinion. Therefore, the last day on which Mrs. Burns would have been permitted to remain absent affirmative relief • from this Court would have been September 2, 1976.
Finally, Defendant offered in evidence the testimony of Mr. R. M. Bryant, Program Regulation Specialist, who works in the state administration of its Title XIX plan. In essence, Mr. Bryant’s testimony was that the State plan and the regulations contained in the Medicaid Eligibility Handbook (MEH) are derived directly from and comport completely with the applicable federal regulation,
In their original complaint plaintiffs anticipated and addressed the three-judge court question saying that such a court need not be convened as “plaintiffs may be granted their relief without resort to the constitutional grounds of their claim [and their] statutory grounds are sufficient to be dispositive of their cause of action.” The Court is of the opinion that Plaintiffs’ argu
*1139
ment is correct and follows the ruling of the Supreme Court in
Hagans v. Lavine,
[T]he coincidence of a constitutional and statutory claim should not automatically require a single-judge district court to defer to a three-judge panel, which . could then merely pass the statutory claim back to the single judge.
Id.
at 544,
The procedure used by Defendant and challenged by Plaintiffs has been referred to as “deeming,” and has been defined as “a bureaucratic decision to deem a portion of the income of the non-institutionalized spouse available to the institutionalized spouse.” Deford, The Medicaid Deeming Procedure: The Intolerable Financial Burden on The Non-Institutionalized Spouse, CLEARING-HOUSE REVIEW 12 (May 1976) (hereinafter referred to as Deford). The problem arises because of an apparent conflict between the applicable federal statutes and regulations, and the state regulations.
The federal statue which is applicable here is
A State plan for medical assistance must— . . . (17) include reasonable standards . . . which . . . (B) provide for taking into account only such income and resources as are, as determined in accordance with standards prescribed by the Secretary, available to the applicant or recipient and . . . (C) provide for reasonable evaluation of any such income of resources, and (D) do not take into account the financial responsibility of any individual for any applicant or recipient of assistance under the plan unless such applicant or recipient is such individual’s spouse
The corresponding regulations propounded by the Secretary of Health, Education and Welfare, are contained in
§ 248.3(b) . With respect to both the categorically needy 1 and if they are included in the plan, the medically needy, a State plan must:
*1140 (1) Provide that only such income and resources as are actually available will be considered and that income and resources will be reasonably evaluated.
§ 248.21(a) State plan requirements. A State plan under title XIX of the Social Security Act must:
(2) With respect to both the categorically needy and if they are included in the plan, the medically needy;
(i) Provide that only such income and resources as are actually available will be considered and that income and resources will be reasonably evaluated.
The Texas State Plan does have sections corresponding to the requirements of these regulations, §§ 2.6 and 2.7-A ¶ 2, but even though the required sections in the Plan exist they were applied in such a way through the challenged sections of the Medicaid Eligibility Handbook that deeming was in fact used in arriving at the figure which Mr. Burns is expected to pay toward Mrs. Burns’ nursing home expenses. The State Department of Public Welfare Hearing Officer stated that the decision “is in compliance with Medicaid Eligibility Handbook Sections 3523, 2525, 3530, 3441.1 and 5532.’’ Exhibit 1 to Stipulations of Fact. The Court is of the opinion that such a deeming procedure is inconsistent with the federal statute even though there exists in Texas a relative responsibility statute. Texas Family Code § 4.02.
The only case that this Court has been able to find which directly addresses the basic legal question here is
Franssen v. Juras,
Congressional purpose to calculate need with real rather than presumed dollars is evident from the report of the House Ways and Means Committee that accompanied the Medicaid bill.
These provisions are designed so that the States will not assume the availability of income which may not in fact be available or over-evaluate income and resources which are available. Examples of income assumed include support orders from absent fathers which have not been paid or contributions from relatives which are not in reality received by the needy individual.
While this Court is in agreement with the basic holding in
Franssen,
it is also of the opinion that
Franssen
did not go far enough. There is legislative history which would indicate that deeming is never a proper procedure within the requirements for the establishment of means for reasonably evaluating financial responsibility of non-institutionalized spouses. Any apparent conflict between subsections (B) and (D) of
In evaluating these problems, the Senate Finance Committee which prepared the report on the Medicaid Statute offers this explanation: “Those provisions are designed so that the States will not assume the availability of income which may not, in fact, be available . . . ” 11 Such an apparent expression of purpose and meaning of availability is also supported by HEW’s own Handbook of Public Assistance Administration, wherein the statement is made that “[ajvailable in *1141 come and resources are income and resources which are ‘in hand’ or under the control of the individual . . . ” 12 Neither of these statements, however, answers the question of how to correlate subsection (D) • with subsection (B). Whereas they appear to indicate that “available income” means what it says, they go no further than the apparent meaning of subsection (B) itself.
Another passage from the legislative history may provide the bulwark on which to make the necessary argument.
The [Senate Finance] Committee has heard of hardships on certain individuals by requiring them to provide support and to pay for the medical care needed by relatives. The Committee believes it is proper to expect spouses to support each other and parents to be held accountable for the support of their minor children and their blind or permanently and totally disabled children even though 21 years of age or older. Such requirements for support may reasonably include the payment by such relatives, if able, for medical care. 18 (Emphasis added.)
Deford at 14. Thus, while the income of a non-institutionalized spouse can be considered, it must be done through the application of reasonable standards and not on the basis of an irrebuttable presumption that the money is available for the care and support of the institutionalized spouse. Deeming as employed by the Texas regulations is not consistent with the federal statutes and regulations, and cannot be employed to impute income. Thus where nursing home care is made available to eligible recipients, their spouses cannot “be held accountable beyond their means.” Id., the Texas relative responsibility law applies in this case but only insofar as it allows the State “to demand reasonable payment from a spouse or parent who is able.” Id. at 15. At the hearing Plaintiffs’ counsel represented that Mr. Burns would be willing and able to pay up to $152.00 toward Mrs. Burns’ care rather than the $394.00 which Defendant has demanded, but at this point in the proceedings the Court is not going to attempt to treat the question of reasonable allocation of financial responsibility on an ineligible non-institutionalized spouse, or the question of what are the proper procedures for the State to employ.
Deeming procedures have been invalidated in other contexts and this Court is of the opinion that they are sufficiently analogous as to be of substantial precedential value for this case. In
Van Lare v. Hurley,
Thus the New York regulations at issue are also invalid. This is clearly so insofar as they are based on the assumption that the nonpaying lodger is contributing to the welfare household, without inquiry into whether he in fact does so.
Id.
at 346,
In
McLaughlin v. Wohlgemuth,
The issue of financial responsibility should not cloud the horizon; as in McLaughlin, it is not a question of legal obligation, but a question of how financial support, and how much of it, should be made available to the recipient. The rebuttable presumption is the logical result, since it assumes an obligation by the legally responsible party while not placing that person in an untenable position or jeopardizing the position of the recipient of the benefit system, the institutionalized spouse.
Deford at 17. Surely in the case at bar there can be nothing more untenable than convening a proceeding called a “Fair Hearing” at which Plaintiffs were permitted to be represented by counsel and to offer evidence where the result was virtually a foregone conclusion by virtue of the State’s regulations mandating the use of deeming of income. Thus the Court is of the opinion that Medicaid Eligibility Handbook Sections 3523, 2525, 3530, 3441.1 and 5532 are in all probability invalid. However, because the Court is only granting at this time a preliminary injunction as to the two named Plaintiffs, the Court is not making a ruling on the merits of Plaintiffs’ cause of action and is not issuing a declaratory judgment as to the validity of the state regulations under attack.
As indicated previously, this opinion is being rendered in connection with the preliminary injunction to be issued. It remains only now for the Court to outline briefly the four prerequisites for the issuance of a preliminary injunction. They are as follows: (1) A substantial likelihood that Plaintiff will prevail on the merits; (2) A substantial threat that Plaintiff will suffer irreparable injury if the injunction is not granted; (3) That the threatened injury to Plaintiff outweighs the threatened harm the injunction may do to Defendant; and (4) That granting the preliminary injunction will not disserve the public interest.
Canal Authority v. Callaway,
First, the Court has engaged in some discussion of the legal issues in this case and the merits thereof. While the Court is reserving a final decision on the merits, it is of the opinion that Plaintiff’s likelihood of success is more than merely substantial, it is highly probable. What really remains now in this case prior to a final determination of the merits is a determination of the class action allegation and a determination of the scope and substance of any permanent injunction that may be issued.
Second, the irreparable injury to Plaintiffs if Mrs. Burns is forced to leave the nursing home is so apparent and substantial as to be beyond question. The injunction must be granted both to preserve the status quo and to prevent the improper termination of Mrs. Burns’ nursing home care. Mrs. Burns has no adequate legal remedy, and her eviction would clearly impair the Court’s ability to render a final judgment.
Third, any harm that may befall Defendant is the expenditure of money; the threatened injury to Plaintiffs is the cessation of indispensable nursing case for Mrs. Burns. The weight of the relative harms is clearly in favor of Plaintiffs.
Fourth, the public interest can only be served by the avoidance of unnecessary pain and suffering for the named Plaintiffs, *1143 and by the final adjudication of the propriety of certain important state welfare regulations. The public interest as expressed in the federal statutes and regulations involved here also favors the issuance of the injunction.
Lastly, the Court would mention the possible sovereign immunity and Eleventh Amendment problem under
Edelman v. Jordan,
ORDER GRANTING PRELIMINARY INJUNCTION
The Court, having considered Plaintiffs’ application for a preliminary injunction and having held a hearing on said application at which all parties were represented, for the reasons stated in the Memorandum Opinion signed and entered this day; hereby OR-
DERS that a Preliminary Injunction is herein issued to provide as follows:
1. Defendant, Raymond W. Vowell, or his successors, as commissioner of the State Department of Public Welfare, his agents and employees, and all persons in active concert and participation with him are restrained and enjoined from doing any act or causing or permitting any act to be done which would in any way interfere with, adversely affect, or jeopardize the present or future status of Mrs. Juanita Burns as a resident and patient in the Blalock Nursing Home.
2. Defendant, Raymond W. Vowell, or his successors, as Commissioner of the State Department of Public Welfare, or his designated agent or employee shall reimburse the Blalock Nursing Home for the full amount of the cost of the nursing care and residence of Mrs. Juanita Burns as of August 1, 1976, and shall continue to pay the full amount of the cost of the nursing care and residence of Mrs. Juanita Burns in the future until further order of this Court or other court of competent jurisdiction.
The Clerk shall file this Order Granting Preliminary Injunction and provide all parties with a true copy.
Notes
. While the parties did not so stipulate, upon inquiry by the Court Plaintiffs’ counsel stated that Mrs. Bums is categorically needy as defined by
. On June 28, 1976, the Court entered a Memorandum and Order requiring the Secretary of Health, Education, and Welfare to inform the Court if he desired to be a party in the case at bar or to file an amicus brief. On July 16, 1976, the Court granted the Secretary’s Motion For Extension of Time so that the Secretary’s official position was not available to the Court at the time of the hearing on the application for the preliminary injunction.
S.REP. No. 404, U.S.Code Cong. & Admin. News, 89th Cong., 1st Sess., pp. 1943, 2018 (1965).
Supp.D, § D-4230(4)
Surpa [sic] note 11.