Tim NAY, Respondent on Review, v. DEPARTMENT OF HUMAN SERVICES, Petitioner on Review.
(CA A150722; SC S062978)
In the Supreme Court of the State of Oregon
December 15, 2016
385 P.3d 1001
BALDWIN, J.
Argued and submitted November 9, 2015; decision of Court of Appeals affirmed in part and vacated in part, rule amendments to OAR 461-135-0832(10)(b)(B)(viii) (2010) and OAR 461-135-0835 (1)(e)(B)(iii) (2010) held invalid
Matthew W. Whitman, Portland, argued the cause and filed the brief for respondent on review. Also on the brief was the firm of Nay & Friedenberg, Portland.
BALDWIN, J.
The decision of the Court of Appeals is affirmed in part and vacated in part. The rule amendments to
** Linder, J., retired December 31, 2015, and did not participate in the decision of this case. Nakamoto, J., did not participate in the consideration or decision of this case.
In general, the Department of Human Services is required by law to recover Medicaid payments from those assets in which the Medicaid recipient had an interest at the time of death. In 2008, the department amended its administrative rules regarding the scope of that recovery. The amended rules allow the department to recover the payments from assets that the recipient had transferred to a spouse up to five years before a person applies for Medicaid. Pursuant to
I. BACKGROUND
A. Medicaid
This case involves the recovery of payments by the state under Medicaid. Medicaid “is a cooperative endeavor in which the Federal Government provides financial assistance to participating States to aid them in furnishing health care to needy persons.” Harris v. McRae, 448 US 297, 308, 100 S Ct 2671, 65 L Ed 2d 784 (1980). The full scheme is quite complex, but most of those details are not relevant to our analysis here. (For a more detailed explanation of the legal framework, see Nay, 267 Or App at 242-45.) It is sufficient here to note that (1) a person may be eligible to receive certain benefits under the program, and (2) those benefits later may be recovered by the state from certain assets. The latter aspect—the recovery of those benefit payments by the state, known as “estate recovery“—is the issue on which this case turns.
B. Estate Recovery
1. Current Statutes
We first briefly address the relevant federal and state statutes regarding the recovery of those Medicaid
It is plausible that the validity of the rule amendments should be evaluated against the versions of the statutes in effect when the rules were amended, and not by later versions. The partiеs did not address that question in their briefing. However, we have reviewed the statutory amendments since 2008 and do not find any substantive changes that would affect our analysis of the issues here. Thus, we follow the lead of the parties and the Court of Appeals and quote all relevant statutes as they exist currently.
2. Federal Statutes
Federal law generally prohibits recovery of properly paid Medicaid benefits, except from the Medicaid recipient‘s estate. The relevant statute provides, in part:
“(b) Adjustment or recovery of medical assistance correctly paid under a State plan
“(1) No adjustment or recovery of any medical assistance correctly paid on behalf of an individual under the State plan may be made, except that the State shall seek adjustment or recovery of any medical assistance correctly paid on behalf of an individual under the State plan in the case of the following individuals:
“(A) In the case of an individual described in subsection (a)(1)(B) of this section, the State shall seek adjustment or recovery from the individual‘s estate ***.
“(B) In the case of an individual who was 55 years of age or older when the individual received such medical
assistance, the State shall seek adjustment or recovery from the individual‘s estate, but only for [certain identified forms of medical assistance.]”
Because recovery can be made only from the Medicaid recipient‘s estate, much depends on what “estate” means. Federal law provides some guidance on that as well. The federal statute defining “estate,”
“(4) For purposes of this subsection, the term ‘estate,’ with respect to a deceased individual—
“(A) shall include all real and personal property and other assets included within the individual‘s estate, as defined for purposes of State probate law; and
“(B) may include, at the option of the State ***, any other real and personal property and other assets in which the individual had any legal title or interest at the time of death (to the extent of such interest), including such assets conveyed to a survivor, heir, or assign of the deceased individual through joint tenancy, tenancy in common, survivorship, life estate, living trust, or other arrangement.”
The permissive definition of “estate” in subparagraph (B) applies only to the extent of the interest that the Medicaid recipient held at the time of death. See
Estate recovery can occur only after the Mediсaid recipient‘s spouse also has died.
Oregon statutes generally parallel the federal provisions.
“Medical assistance pursuant to ORS chapter 414 paid to or on behalf of an individual [in certain circumstances not relevant here] may be recovered from the estate of the individual or from any recipient of property or other assets held by the individual at the time of death including the estate of the surviving spouse.”
The estate recovery may not occur from a spouse until the spouse has died (and certain other conditions are met).
In a later subsection, the legislature has directed that Oregon will use the expanded, permissive definition of “estate” authorized by
“(6) As used in this section:
“(a) ‘Estate’ includes all real and personal property and other assets in which the deceased individual had any legal title or interest at the time of death including assets conveyed to a survivor, heir or assign of the deceased individual through joint tenancy, tenancy in common, survivorship, life estate, living trust or other similar arrangement.”
The department concedes that state law also limits estate recovery to the value of the Medicaid recipient‘s interest in those assets. The existence of some fractional interest in an asset does not permit estate recovery of the full value of the asset. See
In addition, the Oregon legislature has authorized the setting aside of certain property transfers that otherwise would be subject to estate recovery. The general authority to set aside those transfers is found in
“Except with respect to bona fide purchasers for value, the department, the authority, the conservator for the recipient or the personal representative of the estate of a deceased recipient may prosecute a civil suit or action to set
aside the transfer, gift or other disposition of any money or property made in violation of any provisions of ORS 411.630, 411.708 and 416.350 and the department or the authority may recover out of such money or property, or otherwise, the amount or value of any public assistance or medical assistance obtained as a result of the violation, with interest, together with costs and disbursements incurred in recovering the public assistance or medical assistance.”
As relevant here, the legislature has specified that two different classes of transfer may be avoided for purposes of estate recovery. The first class consists of transfers of property made without adequate consideration.
“Transfers of real or personal property by recipients of such aid without adequate consideration are voidable and may be set aside under ORS 411.620(2).”
The department admits that that statute does not apply to transfers that were completed before a person could be considered to be a “recipient[] of such aid.”
The second class of transfers that may be avoided are those transfers that the Medicaid recipient made with the intent to hinder or prevent еstate recovery.
“A person may not transfer, conceal or dispose of any money or property with the intent:
“*****
“(b) Except as to a conveyance by the person to create a tenancy by the entirety, to hinder or prevent the department or the authority from recovering any part of any claim it may have against the person or the estate of the person.”
C. Rule Amendments
With that statutory background, we turn to the challenged rule amendments. There are two rules at issue. The first rule,
Prior to 2008, those rules contained a “loophole” that allowed Medicaid recipients and their spouses to avoid estate recovery. Before applying for Medicaid benefits, the department asserts, a future Medicaid recipient could transfer an asset to their spouse—an “interspousal transfer.” By doing so, the Medicaid recipient “could permanently prevent [the department] from recovering the recipient‘s interest in marital property.”
In order to close that “loophole,” the department amended the two rules at issue. The amended rules themselves are the same in substance, if different in operation: Both of the amended rules now expressly provide that estate recovery may reach any interspousal transfers made in the 60 months—five years—before the Medicaid recipient first applies for benefits.
The first amendment expanded the definition of the word “estate.” As amended through October 1, 2010,
“(10) ‘Estate’ means:
“*****
“(b) With respect to the collection of payments made for public assistance provided on or after July 18, 1995:
“*****
“(B) For recipients who die on or after October 1, 2008, all real property, personal property, or other assets, wherever located, in which a recipient had any legal title or ownership or beneficial interest at the time of death of the recipient, including real property, personal property, or other assets conveyed by the recipient to, subsequently acquired by, or traceable to, a person, inсluding the recipient‘s spouse and any successor-in-interest to the recipient‘s spouse, through:
“(i) Tenancy by the entirety;
“(ii) Joint tenancy;
“(iii) Tenancy in common;
“(iv) Not as tenants in common, but with the right of survivorship;
“(v) Life estate;
“(vi) Living trust;
“(vii) Annuity purchased on or after April 1, 2001; or
“(viii) Other similar arrangement, such as an interspousal transfer3 of assets, including one facilitated by a court order, which occurred no earlier than 60 months prior to the first date of request established from the recipient‘s and the recipient‘s spouse‘s applications, or at any time thereafter, whether approved, withdrawn, or denied, for the public assistance programs referenced in OAR 461-135-0835(2).”
(Emphases omitted.) The amendment at issue here is
The second amendment expanded the list of the spouse‘s assets from which the department could recover Medicaid payments. As amended through October 1, 2010,
“(e) For a recipient who died on or after October 1, 2008:
“*****
“(B) *** [T]he Department has a claim against the estate of the recipient‘s spouse for public assistance paid to the recipient, but only to the extent that the recipient‘s
spouse recеived property or other assets from the recipient through any of the following:
“(i) Probate.
“(ii) Operation of law.
“(iii) An interspousal transfer, including one facilitated by a court order, which occurs:
“(I) Before, on, or after October 1, 2008; and
“(II) No earlier than 60 months prior to the first date of request (see OAR 461-135-0832) established from the applications of the recipient and the recipient‘s spouse, or at any time thereafter, whether approved, withdrawn, or denied, for the public assistance programs referenced in section (2) of this rule.”
(Emphasis omitted.) The change at issue is
D. Court of Appeals’ Decision
Petitioner requested judicial review from the Court of Appeals pursuant to
The Court of Appeals agreed with petitioner and rejected the department‘s assertion that the federal and state statutes allowed it to recover transfers that the Medicaid recipient had made prior to his or her death. Nay, 267 Or at 259-63. As noted, the federal and state statutes defining “estate” provide that that term includes assets as to which the Medicaid recipient had an interest at the time of death.
The Court of Appeals also considered the department‘s suggestion that generic terms included in both the state and federal definitions of “estate” are broad enough to allow the department to recover “assets that the Medicaid recipient fully transferred away during his or her life.” 267 Or App at 248. The department noted, in that regard, that the state statute provides that “estate” additionally includes “assets conveyed to a survivor, heir or assign of the deceased individual through joint tenancy, tenancy in common, survivorship, life estate, living trust or other similar arrangement.”
The court found that argument unpersuasive. In context, the only assets that fell within either the federal or state definitions were those in which the Medicaid recipient had some property interest at the time that the Medicaid recipient died. The generic terms “other arrangement” and “other similar arrangement” shared the same qualities as the examples that preceded it in both statutes, 267 Or App at 247-48—“assets conveyed *** through joint tenancy, tenancy in common, survivorship, life estate, [and] living trust,”
The Court of Appeals thus held the rules invalid. The rule amendments allowed recovery of transfers made before the recipient‘s death, even though the recovery of “such predeath transfers are antithetical to the definition
The department sought review, which we allowed.
II. STANDARD OF REVIEW
We begin by focusing our attention on the standard of judicial review we should apply to determine whether the rule amendments are valid. As we will explain, the correctly identified standard of judicial review effectively determines the result in this case.
As noted, petitioner brought this action pursuant to
“(3) Judicial review of a rule shall be limited to an examination of:
“(a) The rule under review;
“(b) The statutory provisions authorizing the rule; and
“(c) Copies of all documents necessary to demonstrate compliance with applicable rulemaking procedures.”
“(4) The court shall declare the rule invalid only if it finds that the rule:
“(a) Violates constitutional provisions;
“(b) Exceeds the statutory authority of the agency; or
“(c) Was adopted without compliance with applicable rulemaking procedures.”
Challenges to a rule‘s validity under
That is not the correct legal standard when an administrative rule is challenged, however. This court has explained that the standard for a facial challenge to the constitutionality of a statute is “foreign to the administrative law of this state” when the court is reviewing “what at bottom simply are challenges to the validity of an administrative rule.” See Friends of Columbia Gorge v. Columbia River (S055772), 346 Or 366, 375-76, 213 P3d 1164 (2009) (Court of Appeals had erred in concluding that a management plan should be reviewed under federal standard for determining the constitutionality of statute, which was whether the statute “cannot be applied consistently with the law under any circumstance” (internal quotation marks and citation omitted)). In fact, “this court, so far as we can determine, has never applied that standard to anything other than a constitutional challenge to a statute.” Id. at 376.
As this court had previously explained, the correct sequence and nature for analyzing a challenge under
“In the proper sequencе of analyzing the legality of action taken by officials under delegated authority, the first question is whether the action fell within the reach of their authority, the question which in the case of courts is described as ‘jurisdiction.’ If that is not in issue, as it is not in this case, the question is whether the action was taken by procedures prescribed by statute or regulation. Assuming that proper procedures were followed, the next question is whether the substance of the action, though within the scope of the agency‘s or official‘s general authority, departed from a legal standard expressed or implied in the particular law being administered, or contravened
some other applicable statute. These steps are designed to assure that the challenged action, particularly an action challenged for arguably violating constitutional rights, in fact was authorized by the state‘s or local government‘s politically accountable policy makers.”
Planned Parenthood Assn. v. Dept. of Human Res., 297 Or 562, 565, 687 P2d 785 (1984); see also Friends of Columbia Gorge, 346 Or at 376-77 (applying that standard).
We do not understand petitioner to challenge the department‘s “jurisdiction” to promulgate a rule in this area generally, or to assert that the department failed to follow the required rulemaking procedures. See Nay, 267 Or App at 242 (noting that petitioner does not challenge department‘s compliance with rulemaking procedures). Instead, the initial question is whether the rules “depart[] from a legal standard expressed or implied in the particular law being administered, or contravene[] some other applicable statute.” Planned Parenthood, 297 Or at 565; see State ex rel Engweiler v. Felton, 350 Or 592, 620, 260 P3d 448 (2011) (evaluating whether rules “depart from the legal standard expressed or implied in the enabling statutes” (internal quotation marks, alterations, and citation omitted)).
Planned Parenthood further explained that that standard required examining whether the rule “corresponds to the statutory policy.” 297 Or at 573.
“To the extent that the rule departs from the statutory policy directive, it ‘exceeds the statutory authority of the agency’ within the meaning of those words in ORS 183.400(4)(b).”
Id. The court added that that understanding was the only way to give meaning to the statutory direction to consider whether the rule “[e]xceeds the statutory authority of the agency“:
“‘Authority’ in that section cannot be takеn to mean only the overall area of an agency‘s authority or ‘jurisdiction,’ because that construction would leave rules open to substantive review only for constitutional violations under ORS 183.400(4)(a). In effect, such an interpretation would expand every official‘s rulemaking power on matters within
his general assignment to the limits of constitutional law, whatever the legislative policy of the statute might be.”
In Planned Parenthood, this court held the rule at issue invalid under
“We find it difficult to relate these arbitrary numerical rules either to the variable of medical need or to the variable of financial need implicit in the legislative program. Nor do we see how they allow for consideration of ‘[t]he conditions existing in each case,’ as commanded by ORS 414.042(1)(d) [the relevant statute].”
In Leo v. Keisling, 327 Or 556, 964 P2d 1023 (1998), this court similarly held that a rule did not conform to the legislature‘s statutory policy directive.4 The legislature had directed the Secretary of State to promulgate rules regarding statistical sampling of initiative petition signatures in order to “verify” that the initiative petition had enough signatures to qualify to be on the ballot. Id. at 563 (quoting
“Th[e] policy [in the rule] cannot be reconciled with the policy in the statutory directive: ‘to verify’ that a petition contains the required number of signatures, i.e., six percent of the total number of votes cast for all candidates in the last gubernatorial election.”
In Friends of Columbia Gorge, this court also applied the Planned Parenthood standard to hold invalid part of a management plan. That case is somewhat more difficult to analyze, because it involved a commission created by interstate compact and governed by federal law. See 346 Or at 369-72, 384. Although this court concluded that the Planned Parenthood standard applied to the challenge to the management plan, id. at 376-77, the court also held that the commission, pursuant to federal law, was entitled to deference when it resolved ambiguities and filled gaps in the federal statutory scheme. See id. at 377-84. Even so, the court concluded that two provisions of the plan violated the federal act at issue. Id. at 399, 408. In the first case, the federal act “require[d]” the management plan to insure that development occurred without causing adverse cumulative effects to natural resources. Id. at 393 (quoting relevant federal statutes). The management plan had made “some effort” to prevent certain types of development from having adverse cumulative effects on natural resources, but “those efforts are incomplete.” Id. at 398 (emphasis in original). Because the management plan “fails to require that [certain types of] development take place without causing adverse cumulative effects to natural resources,” those portions of the management plan were invalid. Id. at 398-99 (emphasis in original). The second set of plan provisions were similarly defective. See id. at 405-08 (concluding that provisions of management plan “do not appear to be directed toward requiring that commercial, residential, and mineral resource development not cause adverse cumulative effects to cultural resources” (emphasis in original)).
III. DISCUSSION
The department asserts that we should first examine whether the rules are valid under state law before considering whether they are valid under federal law. See State v. Sarich, 352 Or 601, 617, 291 P3d 647 (2012) (noting “this court‘s usual methodology of considering issues of state law before issues of federal law“). We agree, and begin by examining whether the rules are valid under state law.
A. Legal Standards Established By Rule Amendments
We must first identify the legal standard established by the amended rules. As we will explain, the two amendments establish the same basic legal standard.
The first amended rule,
“(10) ‘Estate’ means:
“*****
“(b) With respect to the collection of payments made for public assistance provided on or after July 18, 1995:
“*****
“(B) For recipients who die on or after October 1, 2008, all real property, personal property, or other assets, wherever located, in which a recipient had any legal title or ownership or beneficial interest at the time of death of the recipient, including real property, personal property, or other assets conveyed by the recipient to, subsequently acquired by, or traceable to, a person, including the recipient‘s spouse and any successor-in-interest to the recipient‘s spouse, through:
“*****
“(viii) Other similar arrangement, such as an interspousal transfer of assets, including one facilitated by a court order, which occurred no earlier than 60 months prior to the first date of request established from the recipient‘s and the recipient‘s sрouse‘s applications, or at any time thereafter, whether approved, withdrawn, or denied, for the public assistance programs referenced in OAR 461-135-0835(2).”
The second amended rule is
“(e) For a recipient who died on or after October 1, 2008:
“*****
“(B) *** [T]he Department has a claim against the estate of the recipient‘s spouse for public assistance paid to the recipient, but only to the extent that the recipient‘s spouse received property or other assets from the recipient through any of the following:
“*****
“(iii) An interspousal transfer, including one facilitated by a court order, which occurs:
“(I) Before, on, or after October 1, 2008; and
“(II) No earlier than 60 months prior to the first date of request (see OAR 461-135-0832) established from the applications of the recipient and the recipient‘s spouse, or at any time thereafter, whether approved, withdrawn, or denied, for the public assistance programs referenced in section (2) of this rule.”
The two amended rules thus establish the same fundamental legal standard for recovering payments to a Medicaid recipient from the estate of the recipient‘s spouse. The department must show that (1) an asset was transferred from the Medicaid recipient to the spouse, and (2) the transfer occurred within five years before the Medicaid recipient first applied for benefits. If the department so demonstrates, then the department may recover from the spouse‘s estate up to at least the value of the amount transferred by the Medicaid recipient.
Under
We turn to the sources of law identified by the department, and begin with the presumption of equal contribution and common ownershiр under Oregon marital dissolution law.
B. Marital Dissolution Law
As petitioner notes, Oregon is a separate property state, meaning that a spouse may hold property solely in his or her own name. See
The statutory provision relied on by the department relates to property division on a marital dissolution. It provides, in part:
“(1) Whenever the court renders a judgment of marital annulment, dissolution or separation, the court may provide in the judgment:
“*****
“(f) For the division or other disposition between the parties of the real or personal property, or both, of either or both of the parties as may be just and proper in all the circumstances. In determining the division of property under this paragraph, the following apply:
“*****
“(B) The court shall consider the contribution of a party as a homemaker as a contribution to the acquisition of marital assets.
“(C) Except as provided in subparagraph (D) of this paragraph, there is a rebuttable presumption that both parties have contributed equally to the acquisition of property during the marriage, whether such property is jointly or separately held.
“*****
“(E) Subsequent to the filing of a petition for annulment or dissolution of marriage or separation, the rights of the parties in the marital assets shall be considered a species of co-ownership, and a transfer of marital assets under a judgment of annulment or dissolution of marriage or of separation entered on or after October 4, 1977, shall be considered a partitioning of jointly owned property.”
In making the property division, the court may award any marital property. It is not limited to awarding marital assets. Thus, the court may award to one spouse an asset that the other spouse obtained prior to the marriage and has always held separately. The court may also award to one spouse a marital asset as to which the other spouse rebutted the presumption of equal contribution. See Kunze, 337 Or at 135 (so noting). The ultimate question is whether the division is “just and proper in all the circumstances.”
If the court awards marital assets obtained during the marriage, but held in the name of a single spouse, then
To summarize:
We do not, however, find it necessary to determine whether the presumption of equal contribution to the acquisition of marital assets creates a property interest within the meaning of
In comparing the legal standards, we find major variations. The presumption of equal contribution on a marital dissolution applies only to assets obtained during the marriage (marital assets); the rule amendmеnts at issue apply to all property, without regard to when that property was obtained, as long as the Medicaid recipient transferred it to the spouse. The marital dissolution presumption is only a presumption, and it can be rebutted; the rule amendments are absolute on their face. The marital dissolution presumption is simply a factor used by the courts to make a just and proper distribution of all marital property, whether separately or jointly owned; the rule amendments directly attach to a particular asset, apparently in a fixed amount. The rule amendments thus use broader criteria than the marital dissolution statute, and they would allow the department to make estate recovery in situations where
C. Elective Share Under Probate Law
The department alternatively contends that the rule amendments are valid because Oregon probate law—specifically, the statutes relating to the elective share—gives a Medicaid recipient a “legal title or interest at the time of death” in the property that the recipient had transferred to the spouse. We turn now to that contention.
The elective share statutes are found in
We now compare those legal standards to the standards found in the amended rules. We again assume, for purposes of argument, that the elective share under probate law constitutes the sort of interest in property at death described by the definition of “estate” in
D. Other Avoidable Transfers
Finally, the department asserts that the rule amendments are valid because the Medicaid recipient retains an interest at death as to assets that were transferred with inadequate consideration or with actual intent to hinder or prevent estate recovery, two statutes mentioned previously. We will assume for purposes of argument that both statutes create the sort of interest in property at death
1. Transfers Without Adequate Consideration
By law, transfers for inadequate consideration can be avoided under
“Transfers of real or personal property by recipients of such aid without adequate consideration are voidable and may be set aside under ORS 411.620(2).”
The department contends that the rule amendments are valid under that statute.
Again, we find broad differences between the legal standards contained in that statute and the amended rules. As the department concedes, that statute does not apply to transfers made by someone before they either became a Medicaid recipient or at least applied for such aid, because the statute applies only to transfers made “by recipients of such aid.” The rule amendments, on the other hand, expressly apply to transfers made before someone applies for Medicaid—up to five years before that time. The statute makes voidable only those transfers made without adequate consideration. The rule amendments on their face apрly without regard to the amount of consideration. Thus, the amended rules again would allow the department to recover in situations where the statute would not. The rule amendments depart from the statutory legal standard.
2. Transfers With Intent to Hinder or Prevent Estate Recovery
In addition, transfers that the Medicaid recipient made with the intent to hinder or prevent estate recovery are forbidden by
“A person may not transfer, conceal or dispose of any money or property with the intent:
“*****
“(b) Except as to a conveyance by the person to create a tenancy by the entirety, to hinder or prevent the
department or the authority from recovering any part of any claim it may have against the person or the estate of the person.”
Here again, the rule amendments create a very different legal standard from that found in the statute. The statute requires a showing that the transfer was made with a very specific and particular intent: to hinder or prevent the department from making estate recovery. The rule amendments requirе no showing of any intent as to the transfer; textually, an interspousal transfer made within the relevant time period is invalid without any need to consider the transferor‘s intent. The rule amendments thus would allow the department to make estate recovery in circumstances where the statute would not.
E. Summary: Rules Are Invalid Under State Law
The legislature did not grant the department generalized authority to determine what transactions should be set aside. Instead, the legislature reserved that task to itself. It defined “estate” to include property interests that the Medicaid recipient held at the time of death. It also authorized the department to recover certain transfers—transfers made without adequate consideration by a Medicaid recipient, and transfers made with intent to hinder or prevent estate recovery.
The rule amendments at issue here show no connection to those limitations. They do not refer to the sources of law that they supposedly effectuate (e.g., property division under marital dissolution law, elective share under probate law). They do not incorрorate the limitations found in those sources of law (e.g., the presumption of equal contribution on marital dissolution is rebuttable; the amount of the elective share is limited by number of years of marriage). The rule amendments instead allow the department to recover transfers based on an unrelated set of legal criteria. Because the amended rules “departed from a legal standard expressed or implied in the particular law being administered,” Planned Parenthood, 297 Or at 565, the department exceeded its authority in adopting them, and they are invalid under
The department nonetheless asks us to reverse the Court of Appeals insofar as it concluded that the rules are inconsistent with federal law. In the event that the rules are held invalid, the department intends to ask the legislature to amend the state statutes in a way that would allow it to recover such transfers; it believes that the decision of the Court of Appeals would preclude that.
In this particular case, we conclude that it is appropriate for us to vacate that part of the Court of Aрpeals’ opinion. Because we agree with petitioner that the amended rules are invalid under state law, they are simply invalid. It is unnecessary for us to decide whether, or to what extent, the rules might also be invalid under federal law.
IV. CONCLUSION
The department promulgated rule amendments that allow it to obtain estate recovery from transfers made to a spouse within the five years before a person applies for Medicaid. Our standard for judicial review is whether the department exceeded its statutory authority,
Notes
“‘Interspousal transfer’ means any transfer, or chain of transfers, that effectively transfers title or control of an asset, or an interest in an asset, from one spouse to another, including: direct transfers between spouses, transfers from one or both spouses to a trust, and transfers from one trust to another trust.”
If one spouse transfers an asset to another, it is possible that that statutory amendment could terminate the presumption of equal сontribution. We need not, and do not, decide that question here.