761 S.E.2d 267 | Ga. | 2014
Lead Opinion
We granted certiorari in Cook v. Bottesch, 320 Ga. App. 796 (740 SE2d 752) (2013) to consider whether the Court of Appeals properly interpreted 42 USC § 1396p with respect to whether a Medicaid applicant’s purchase of an annuity was subject to an asset transfer penalty. In this case, the Georgia Department of Human Services, Family and Children Services (“DFCS”) granted appellee Jerry L. Glover’s application for Medicaid benefits but imposed a multi-month asset transfer penalty on him pursuant to § 2339 of DFCS’s Georgia Economic Support Services Manual (the “Eligibility Manual”) due to his refusal to name the State as the remainder beneficiary on an annuity.
Appellants, David Cook in his official capacity as Commissioner of DCH and Clyde L. Reese in his official capacity as Commissioner of DFCS, appealed to this Court arguing that the Court of Appeals improperly interpreted the annuity section of the Medicaid Act and erred in holding that § 2339 as applied to Glover violated federal law. Asserting that the statutory provisions at issue are ambiguous, appellants contend that the Court of Appeals was required to defer to CMS’s interpretation of the federal statute. See Chevron U.S.A., Inc. v. Natural Resources Defense Council, Inc., 467 U. S. 837, 843, n. 9 (104 SCt 2778, 81 LE2d 694) (1984) (reviewing court must give effect to an agency’s regulation containing a reasonable interpretation of an ambiguous statute). Because we find that the federal statutory provisions at issue are ambiguous and the relevant administrative agencies’ interpretations thereof are based on a permissible construction of the statutory language,
Medicaid is a joint federal-state program that provides medical care to needy individuals. See Douglas v. Independent Living Center of Southern California, Inc., _ U. S. _ (132 SCt 1204, 182 LE2d 101) (2012). As a participant in the Medicaid program, the State of Georgia is required to have an approved state plan for medical assistance which complies with certain requirements imposed by the Medicaid Act as well as with regulations promulgated by the Secretary of Health and Human Services. See Wilder v. Virginia Hosp. Assn., 496 U. S. 498, 502 (110 SCt 2510, 110 LE2d 455) (1990); 42 USC § 1396a (a). As federal administrator of the Medicaid program, CMS is responsible for the approval of state Medicaid plans and for providing statutory interpretation and guidance with respect to
In Georgia, DCH is the state agency responsible for administering the Medicaid program and is statutorily authorized by the State “to establish such rules and regulations as may be necessary or desirable in order to execute the state plan and to receive the maximum amount of federal financial participation available.” OCGA § 49-4-142 (a). See also 42 CFR § 431.10. DCH, which issues policies and procedures governing the state’s Medicaid program, contracts with DFCS to make Medicaid eligibility determinations. Relevant to this case, federal law requires Georgia’s plan for medical assistance to comply with the provisions of 42 USC § 1396p with respect to the transfer of assets by Medicaid applicants. See 42 USC § 1396a (a) (18). Specifically, in assessing an applicant’s eligibility for medical assistance under the plan, subsection 1396p (c) requires that the state provide a penalty for the disposal of assets for less than fair market value during a five-year, look-back period. This subsection additionally sets forth rules regarding the assessment of penalties for the transfer of various types of assets, as well as provisions for protecting certain transfers from the penalty. With respect to the treatment of annuities, subsection 1396p (c) (1) (F) specifically requires:
For purposes of this paragraph, the purchase of an annuity shall be treated as the disposal of an asset for less than fair market value unless —
(i) the State is named as the remainder beneficiary in the first position for at least the total amount of medical assistance paid on behalf of the institutionalized individual under this title [42 USCS §§ 1396 et seq.]; or
(ii) the State is named as such a beneficiary in the second position after the community spouse or minor or disabled child and is named in the first position if such spouse or a representative of such child disposes of any such remainder for less than fair market value.
Next, subsection 1396p (c) (1) (G) provides:
*498 For purposes of this paragraph with respect to a transfer of assets, the term “assets” includes an annuity purchased by or on behalf of an annuitant who has applied for medical assistance with respect to nursing facility services or other long-term care services under this title [42 USCS §§ 1396 et seq.] unless • — ■
(ii) the annuity —
(I) is irrevocable and nonassignable;
(II) is actuarially sound (as determined in accordance with actuarial publications of the Office of the Chief Actuary of the Social Security Administration); and
(III) provides for payments in equal amounts during the term of the annuity, with no deferral and no balloon payments made.
CMS has interpreted the interplay between these subsections as requiring that all annuities comply with both (F) and (G) in order to avoid the imposition of a penalty. See CMS, Changes in Medicaid Annuity Rules under the Deficit Reduction Act of 2005, § II.B (July 27, 2006) Letter Enclosure § 6012.
In reversing DCH’s decision upholding the penalty, the Court of Appeals noted that the CMS interpretation on which it was based, requiring an annuitant applicant to comply with both 42 USC § 1396p (c) (1) (F) and (G) to avoid the asset transfer penalty, was partly inconsistent with the court’s own reading of the federal statute. See Bottesch, 320 Ga. App. at 802-803. Although agreeing that a plain
In reviewing the provisions of the federal Medicaid statute at issue, we disagree with the Court of Appeals’ conclusion that the statutory language is plain and unambiguous and the congressional intent clear. Here, 42 USC § 1396p (c) (1) does not indicate whether subsections (F) and (G) are independent requirements each of which must be satisfied to exempt an annuity from the penalty or, alternatively, if the requirement provided in (F) only applies to an annuity when the annuity fails the exception provided in (G). Nor do we find corresponding language in other provisions of the statute to be especially illuminating.
The Court of Appeals’ opinion sets forth a plausible interpretation of subsections (F) and (G) of 42 USC § 1396p (c) (1). However, based on our review of the statutory provisions, we find DCH’s interpretation of § 2339, which is consistent with CMS’s interpretation of the statute, to be reasonable and entitled to deference. Accordingly, we hold the Court of Appeals erred in finding the language of 42 USC § 1396p (c) (1) to be plain and unambiguous and erred in failing to defer to DCH’s decision upholding the transfer of asset penalty in this case. See Pruitt Corp. v. Ga. Dept. of Community Health, 284 Ga. 158, 159 (664 SE2d 223) (2008) (“When an administrative agency decision is the subject of judicial review, judicial deference is to be afforded the agency’s interpretation of statutes it is charged with enforcing or administering and the agency’s interpretation of rules and regulations it has enacted to fulfill the function given it by the legislative branch.”).
Glover, an 82-year-old man residing in a Gainesville, Georgia, nursing home purchased an irrevocable, non-assignable, and actuarially sound annuity for himself shortly before applying for Medicaid benefits. In connection with processing his application, DFCS asked Glover to verify that he had named the State of Georgia as the remainder beneficiary on the annuity and Glover refused, claiming that § 2339 was inapplicable to his annuity and in contravention of other provisions of federal law. Thereafter, DFCS approved Glover’s application for benefits, but assessed a seven-month transfer of asset penalty against him. The penalty imposed precluded the payment of benefits on Glover’s behalf to the nursing home during the penalty period.
This case involves the judicial review of the state administrative agency’s decision as well as the federal administrative agency’s interpretation of a federal statute upon which the state agency relied.
CMS’s interpretations of the Medicaid law and regulations are binding on State Medicaid agencies. See CMS State Medicaid Manual, a copy of which can be accessed on the Internet at http://www.cms.gov/Regulations-and-Guidance/guidance/Manuals/Paper-Based-ManualsItems/CMS021927.html.
A copy of this letter is available at http://downloads.cms.gov/cmsgov/archiveddownloads/SMDL/downloads/TO AEnclosure.pdf.
We note that in reaching different conclusions with respect to the meaning of the statutory sections at issue, both the Court of Appeals and the superior court relied on 42 USC § 1396p (e) as support for their opposing interpretations.
While CMS’s interpretation that the requirements of subsection (F) apply to all annuities has been adopted by at least one federal appellate court, see Hutcherson, 667 F3d at 1069-1070;
“If a statute is ambiguous, and if the implementing agency’s construction is reasonable, Chevron requires a federal court to accept the agency’s construction of the statute, even if the agency’s reading differs from what the court believes is the best statutory interpretation. [Cit.]” National Cable & Telecommunications Assn. v. Brand X Internet Svcs., 545 U. S. 967, 980 (125 SCt 2688, 162 LE2d 820) (2005). “Chevron established a ‘presumption that Congress, when it left ambiguity in a statute meant for implementation by an agency, understood that the ambiguity would be resolved, first and foremost, by the agency, and desired the agency (rather than the courts) to possess whatever degree of discretion the ambiguity allows’ ” Id. at 982 (quoting Smiley v. Citibank (South Dakota), N.A., 517 U. S. 735, 740-741 (116 SCt 1730, 135 LE2d 25) (1996)).
There is some question as to whether the CMS opinion letter in this case actually is entitled to Chevron-style deference or only “entitled to respect” if it has the power to persuade. Skidmore, supra, 323 U. S. at 140 (“We consider that the rulings, interpretations and opinions of the [agency], while not controlling upon the courts by reason of their authority, do constitute a body of experience and informed judgment to which courts and litigants may properly resort for guidance. The weight of such judgment in a particular case will depend upon the thoroughness evident in its consideration, the validity of its reasoning, its consistency with earlier and later pronouncements, and all those factors which give it power to persuade, if lacking power to control.”); United States v. Mead Corp., 533 U. S. 218, 228 (121 SCt 2164, 150 LE2d 292) (2001) (explaining the Skidmore principle that “[t]he fair measure of deference to an agency... has been understood to vary with circumstances, and courts have looked to the degree of the agency’s care, its consistency, formality, and relative expertness, and to the persuasiveness of the agency’s position.” (footnotes omitted)). Although the United States Supreme Court refused to extend Chevron deference to “opinion letters” in Christensen, supra, 529 U. S. 576, and federal district courts since have interpreted this to include CMS opinion letters, see Hughes, supra, 734 F3d at 485; Estate of Landers v. Leavitt, 545 F3d 98, 107 (2nd Cir. 2008), we note that in NationsBank of N.C., N.A. v. Variable Annuity Life Ins. Co., 513 U. S. 251 (115 SCt 810, 130 LE2d 740) (1995) the Supreme Court applied Chevron deference to an interpretive letter issued by the Comptroller of the Currency interpreting the National Bank Act.
The decision in Pruitt, supra, is not inconsistent with the holding in this case as alleged in the concurrence. The issue in Pruitt involved DCH’s interpretation of the phrase “last approved cost report” as used by, but not defined in, its manual on nursing facility policies. 284 Ga. at 158. Unlike the issue in this case which involves a claim that a DCH policy is based on an erroneous interpretation of the federal Medicaid statute, the issue in Pruitt only involved a dispute over the common meaning of words used in a DCH manual. See id. Moreover, in Pruitt this Court specifically declined to decide the issue of whether a DCH decision based on a policy reflected in its manual would be entitled to judicial deference. See id. at 160. As the propriety
Concurrence Opinion
concurring specially.
Although I believe the majority opinion reaches the right result, I am dubious of its conclusion that the interpretation of the federal Medicaid statute at issue, 42 USC § 1396p, by the United States Department of Health and Human Services, Centers for Medicare and Medicaid Services (CMS), and by the Georgia Department of Community Health (DCH) is entitled to the full measure of judicial deference required by Chevron U.S.A., Inc. v. Natural Resources Defense Council, Inc., 467 U. S. 837 (104 SCt 2778, 81 LE2d 694) (1984). The CMS interpretation is “contained in an opinion letter, not one arrived at after, for example, a formal adjudication or notice-and-comment rulemaking,” and the United States Supreme Court has said that, normally, “[interpretations such as those in opinion letters — like interpretations contained in policy statements, agency manuals, and enforcement guidelines, all of which lack the force of law — do not warrant Chevron-style deference.” Christensen v. Harris County, 529 U. S. 576, 587 (120 SCt 1655, 146 LE2d 621) (2000). Instead, an interpretation contained in an opinion letter is generally entitled only to so-called Skidmore deference, meaning that the agency’s position is “ ‘entitled to respect’ ” to the extent that it has the “ ‘power to persuade’ ” the reviewing court. Christensen, 529 U. S. at 587 (quoting Skidmore v. Swift & Co., 323 U. S. 134, 140 (65 SCt 161, 89 LE 124) (1944)).
Similarly, the DCH interpretation here is contained not in a formal rule but rather in the department’s Medicaid policy manual, and this Court has held, consistent with the approach taken federally in Christensen, that it is erroneous for a Georgia court to give the full “deference due a [state] statute, rule or regulation to a term in a departmental manual, the terms of which ha[ve] not undergone the scrutiny afforded a statute during the legislative process or the adoption process through which all rules and regulations must pass.” Pruitt Corp. v. Ga. Dept. of Community Health, 284 Ga. 158, 159-160 (664 SE2d 223) (2008). As under federal law, however, under state law an administrative agency’s policy reflected in a manual may still be entitled to some degree of judicial deference. See id. at 160 (reserving this question).
I see no need to resolve these complex administrative law questions in this case. In my view, the better reading of 42 USC § 1396p — the whole of the statute, including subsection (e) as well as subsections (c) (1) (F) and (G) — accords with the reading expressed by CMS in its opinion letter and by DCH in its manual that an annuity which complies with (c) (1) (F) must also comply with (c) (1) (G) to avoid an asset transfer penalty. To the extent that ordinary statutory construction leaves any doubt, even applying just Skidmoretype deference, I would resolve the doubt in favor of the interpretation provided by these expert agencies administering this highly complex regulatory scheme. See Estate of Landers v. Leavitt, 545 F3d 98, 107 (2d Cir. 2008) (explaining that, “in cases such as those involving Medicare or Medicaid, in which CMS, ‘a highly expert
For these reasons, I concur in the result reached by the majority opinion, but I do not join all of its reasoning.
I am authorized to state that Justice Blackwell joins in this special concurrence.
