Estate of Marion Atkinson, Respondent, vs. Minnesota Department of Human Services, Appellant, and Otter Tail County Department of Human Services, Respondent.

This opinion will be unpublished and
may not be cited except as provided by
Minn. Stat. § 480 A. 08, subd. 3 (1994).

STATE OF MINNESOTA
IN COURT OF APPEALS
C9-96-335

Estate of Marion Atkinson,
Respondent,

vs.

Minnesota Department of Human Services,
Appellant,

and

Otter Tail County Department of Human Services,
Respondent.

  Filed September 10, 1996
Affirmed
Amundson, Judge
Dissenting, Peterson, Judge

Otter Tail County District Court
File No. CX-95-879

Oscar J. Sorlie, Jr., Pemberton, Sorlie, Sefkow, Rufer & Kershner, P.L.L.P., P.O. Box 866, Fergus Falls, MN 56537, Scott Dymoke, 1002 Broadway Avenue, Wheaton, MN 56296 (for Respondent)

Hubert H. Humphrey, III, Attorney General, Peter B. Hofrenning, Assistant Attorney General, 445 Minnesota Street, Suite 900, St. Paul, MN 55101, Waldemar B. Senyk, Otter Tail County Attorney, Kurt A. Mortenson, Assistant County Attorney, Otter Tail County Courthouse, Fergus Falls, MN 56537 (for Appellant)

Considered and decided by Amundson, Presiding Judge, Norton, Judge, and Peterson, Judge.
U N P U B L I S H E D O P I N I O N

AMUNDSON , Judge
Appellant Department of Human Services challenges the district court's reversal of the Commissioner's order denying medical assistance benefits to respondent's wife because of excess assets. We affirm.
  FACTS
Marion Atkinson entered a nursing home as a paying resident on April 17, 1991. On August 3, 1993, Marion and her husband, respondent Merle Atkinson, completed an asset assessment and submitted it to the county. The assessment indicated that on the date of Marion's institutionalization, she and Merle had assets totaling $175,533. Merle was allocated $72,660, which is the maximum allowed for the spousal share under the statute, and Marion was allocated the remaining $102,873.
On November 3, 1994, Marion applied for medical assistance benefits. At that time, Marion claimed to have assets of $1,537. The Otter Tail County Department of Human Services required the Atkinsons to complete another asset assessment. From this assessment, the county determined that, as of the date of Marion's application, Marion had assets of $1,537, and Merle had assets of $149,684. Merle contends that his assets had grown "because of a prosperous investment and because he had been prudent in saving his income."
Otter Tail County determined that, for the purpose of determining Marion's eligibility for medical assistance, the Atkinsons had total assets of $151,221. Merle was allocated $72,660, and the county determined that the remaining $77,024 was available to Marion and denied her application for medical assistance benefits because of excess assets.
A hearing was held before a referee to review the decision of the Otter Tail County Department of Human Services. The referee recommended that the decision be affirmed. The Commissioner of Human Services adopted that recommendation, and the Atkinsons appealed to district court. The district court reversed the Commissioner's order, concluding that the Commissioner had misinterpreted the law in allowing an assessment to be conducted twice. This appeal followed.
  DECISION
In reviewing agency decisions, this court is not bound by the decision of the district court and may independently examine the record and arrive at its own conclusions as to the propriety of the decision. See In reSignal Delivery Serv. , 288 N.W.2d 707, 710 (Minn. 1980).
When statutory interpretation is at issue, an agency is entitled to some deference when the statutory language is technical in nature and the agency's interpretation is one of longstanding application. In re Hibbing Taconite Co. , 431 N.W.2d 885, 889 (Minn. App. 1988). If the agency's conclusions are based on legal rather than factual considerations, this court does not have to defer to the agency's expertise. Ebenezer Soc'y v. Minnesota Dep't ofHuman Servs. , 433 N.W.2d 436, 439 (Minn. App. 1988).
The Department of Human Services (the department) argues that, under Minn. Stat. § 256B.059, subd. 5(a) (1994), when a person applies for medical assistance benefits, the department is to review the asset assessment done as of the date of institutionalization to establish the amount to be allocated to the community spouse and then consider all assets available to either spouse as of the date of application in determining eligibility.
The referee concluded that
[t]he equal division of the assets at the time of nursing home entry in step one is solely for the purpose of evaluating whether one-half of the assets will be the maximum amount which can be set aside for the community spouse. When the Medical Assistance application is made, the set-aside for the community spouse is still determined in the context of the assets which are existing at the time of application. The initial question at application then is not whether the institutionalized spouse has used up his one-half share of the assets, but what amount must be set aside for the community spouse. Any amount in excess of that share is considered available to the nursing home spouse.

The referee further concluded that the Atkinsons' argument that Merle should be able to retain the increase in value of the assets must be rejected under 42 U.S.C. § 1924(c)(2). Finally, in affirming the denial of benefits, the referee stated that
[u]pon a reapplication, total assets of both Petitioner and his spouse will need to be reduced to the allowable limit. At that time the Petitioner may give evidence of the amount of the assets that have already been reduced through expenditures for the medical care and personal needs of the institutionalized spouse.

The district court, in reversing the Commissioner's order adopting the referee's recommendation, stated that the statute allows for only one asset assessment and that must be as of the date of the first period of institutionalization. The court concluded that the department had erred in including the appreciation of Merle's assets in determining Marion's eligibility for medical assistance. In support of this conclusion, the court cited Dullardv. Minnesota Department of Human Servs. , 529 N.W.2d 438, 444 (Minn. App. 1995), in which this court held that the state can only consider assets as of the date of institutionalization when determining eligibility of someone moving from another state. The district court, however, did order that Merle prove that the money initially allotted to Marion had, in fact, been spent for her care.
The Medicaid program is a cooperative state-federal program that is intended to provide medical assistance to medically needy people. Whitehouse v. Ives , 736 F. Supp. 368, 370 (D. Me. 1990). The federal government shares the cost of the program with the states that elect to participate in the program and in return, the participating states must comply with requirements imposed by the Medicaid statute and regulations promulgated by the Secretary of the federal Department of Health and Human Services. Id.  
In 1988, Congress enacted the Medicare Catastrophic Coverage Act of 1988 (1988 Act) to address, in part, the problem of the community spouse often being left with insufficient assets to maintain themselves. See P.L. 100-360 . The 1988 Act made substantial changes in the treatment of the community spouse's resources for "deeming" purposes. Brown v.Magnant , 773 F. Supp. 1164, 1170 (S. D. Ind. 1990).
The federal statute provides that all the resources held by either spouse are considered available to the institutionalized spouse, except that the community spouse can keep $12,000 or one-half of the resources, whichever is greater, but not more than $60,000. 1 Id. (citing 42 U.S.C.A. § 1396r-5(f)(2) (1992)). However, after eligibility for Medicaid is established, "'no resources of the [community spouse] shall be deemed available to the institutionalized spouse.'" Id. (quoting 42 U.S.C.A. § 1396r-5(c)(4)) (1992)).
The federal statute also provides that the "total value of the resources to the extent either the institutionalized spouse or the community spouse has an ownership interest" is to be computed "as of the beginning of the first continuous period of institutionalization." 42 U.S.C.A. § 1396r-5(c)(1)(A). The spousal share is also to be determined as of the date of institutionalization and is equivalent to one-half the total resources. Id. To determine the resources available to an institutionalized spouse at the time of application for benefits, all resources held by either spouse are considered available to the institutionalized spouse, "but only to the extent that the amount of such resources exceeds the amount computed" under subsection (f)(2)(A) of this section (as of the time of application for benefits)." 42 U.S.C.A. § 1396r-5(c)(2). Thus, the federal statute provides that, at the time of application, the resources that are considered to be available to the institutionalized spouse are only those resources that exceed the amount allowed the community spouse, which is determined as of the date of institutionalization.
The Minnesota statute provides that
At the beginning of a continuous period of institutionalization of a person, * * *, or upon application for medical assistance, the total value of assets in which either the institutionalized spouse or the community spouse had an interest at the time of the first period of institutionalization of 30 days or more shall be assessed and documented and the spousal share shall be assessed and documented.

Minn. Stat. § 256B.059, subd. 2 (1994). The statute goes on to provide that
At the time of application for medical assistance benefits, assets considered available to the institutionalized spouse shall be the total value of all assets in which either spouse has an ownership interest, reduced by the following: * * *
(ii) the lesser of the spousal share or $70,740 * * *
  Id. , subd. 5(a). After the institutionalized spouse is found eligible for medical assistance, the assets of the community spouse cannot be considered available to the institutionalized spouse. Id. , subd. 5(b).
The state argues that the Minnesota statute requires that the asset assessment be completed to determine the community spouse share. Upon application for medical assistance, however, all current assets are to be considered, and the previously determined spousal share is allocated to the community spouse. The state contends that, until Marion is found eligible for medical assistance, any appreciation in Merle's assets can be considered. The statute does provide that all assets are to be considered upon applying for medical assistance. However, the statute also provides that an asset assessment, even if it is completed upon applying for medical assistance, is to look at the assets of the couple as of the date of institutionalization. Thus, the statute indicates that, regardless of whether the application for medical assistance comes at the time of the asset assessment or after, the state is to assess the couple's assets as of the initial date of institutionalization.
This interpretation is supported by the reports from the House of Representatives addressing the revision of the federal statute.
The purpose of the Committee bill is to end this pauperization by assuring that the community spouse has a sufficient - but not excessive - amount of income and resources available to her while her spouse is in a nursing home at Medicaid expense. * * *
The attribution of resources into spousal shares, and the subsequent imposition oflimits on the community spouse's shares , would occur only once , at the time of initial application. After the month in which an institutionalized spouse has met the resource eligibility standard and is determined to be eligible for benefits, no resources of the community spouse, regardless of value, would be considered available to the institutionalized spouse. Thus, if while the care of the institutionalized spouse is being paid for by Medicaid, the community spouse's countable resources grow to exceed the $48,000 initial limit, the State would not be authorized to require the community spouse to apply any excess toward the cost of care of the institutionalized spouse.
The Committee observes that, in many cases, the institutionalized spouse may not apply for Medicaid benefits until months after his admission to a nursing home . Often these individuals and their spouses have "spent down" a significant amount of their life savings to pay the nursing home charges. Repeated division of the couple's total resources into equal spousal shares at each application or reapplication for benefits would result in the pauperization of the community spouse , as the couple's total resources would effectively be reduced to twice the resource eligibility standard, generally $3600, before the institutionalized spouse qualified for Medicaid. Precisely the opposite result is intended by the Committee. For this reason, the bill requires, in effect, that a "snapshot" of the couple's total resources be taken at the time of initial institutionalization, and that attribution of resources into spousal shares proceed on the basis of that "snapshot," regardless of the point at which the institutionalized spouse actually files application for benefits. * * *
Assume that the couple's joint savings account at the time of institutionalization contains not $20,000, but $50,000. Under the bill, the husband would be allowed, without penalty, to transfer $25,000 of this amount to an account in the wife's name. Of the remaining half, $23,000 would have to be spent before the husband would become resource-eligible for Medicaid.

P.L. 100-360, Medicare Catastrophic Coverage Act of 1988, H.R. No. 100-105(II) at 65, 71, 77 (July 1, 1987) (emphasis added).
Because the House reports indicate that the intent of the legislature was to assess a couple's resources only as of the date of institutionalization, not again at the time of application, and assuming that Merle Atkinson can prove that the resources originally allocated to Marion were spent down due to expenses related to her care, Marion is eligible for medical assistance benefits.
  Affirmed.

PETERSON

, Judge (dissenting)
I respectfully dissent because the conclusion reached by the majority fails to consider the purpose of asset assessments in the broad medical assistance statutory scheme.
The Minnesota medical assistance statute provides:
To be eligible for medical assistance, a person must not individually own more than $3,000 in assets, or if a member of a household with two family members (husband and wife, or parent and child), the household must not own more than $6,000 in assets, plus $200 for each additional legal dependent. In addition to these maximum amounts, an eligible individual or family may accrue interest on these amounts, but they must be reduced to the maximum at the time of an eligibility redetermination.

Minn. Stat. § 256B.056, subd. 3 (1994).
The purpose of the asset limitation in the medical assistance statute is to ensure that benefits are not provided to a person who owns assets that could be used to pay for that person's medical care. Cf. Dullard v. Minnesota Dep't of Human Serv's. , 529 N.W.2d 438, 442 (Minn. App. 1995) (purpose of medicaid is to provide medical assistance to medically needy people). As a result of the limitation, a person who owns assets worth more than the applicable limit is required to use those assets to pay for medical care before obtaining assistance from the state. See Minn. R. 9509.0064, subpt. 1 (1993) (person's own assets must be used to pay for person's health services until assets are reduced to within eligibility limits). A person becomes eligible to receive medical assistance benefits only when the value of the person's assets drops below the eligibility limit. Id. Therefore, when a person applies for benefits, it must be determined whether the person meets the asset limitation.
Minn. Stat. § 256B.059 (1994), establishes procedures to be used for applying the medical assistance asset limitations when a married person is institutionalized and that person's spouse remains in the community. These procedures attribute a portion of the married couple's assets to the community spouse before determining whether the institutionalized spouse meets the asset limitation for medical assistance eligibility. Id.  
Under Minn. Stat. § 256B.059, subds. 1, 2, the total value of a couple's assets (as of the time of institutionalization) is first divided into two equal shares.
"Spousal share" means one-half of the total value of all assets, to the extent that either the institutionalized spouse or the community spouse had an ownership interest at the time of institutionalization.

Minn. Stat. § 256B.059, subd. 1(c). At this stage, all that occurs is that the value of the spousal share is established; specific assets are not assigned to either spouse. Id. , subds. 1, 2. When the institutionalized spouse applies for medical assistance benefits, the spousal share determined at this initial stage is used to determine whether the institutionalized spouse meets the asset limitation and, therefore, qualifies to receive benefits. Id. , subd. 5(a).
At the time of application for medical assistance benefits, assets considered available to the institutionalized spouse shall be the total value of all assets in which either spouse has an ownership interest, reduced by * * *:

* * *

(ii) the lesser of the spousal share or $70,740 * * *.

Id. , subd. 5(a) (1).
If an institutionalized spouse applies for medical assistance on the date the spouse is first institutionalized and the assets available to the institutionalized spouse on that date exceed the amount allowed to qualify for medical assistance, the institutionalized spouse does not qualify for medical assistance at that time. See id. (assets considered available to institutionalized spouse shall be total value of all assets in which either spouse has ownership interest, reduced by spousal share); Minn. Stat. § 256B.056, subd. 3 (to be eligible for medical assistance, person must not own more than $3,000 in assets and two-person household may not own more than $6,000 in assets). But this does not mean that the institutionalized spouse can never qualify to receive medical assistance. The institutionalized spouse can qualify to receive medical assistance if the couple spends down its assets to the point where the assets available to the institutionalized spouse drop below the statutory asset limit. See Minn. R. 9505.0063, subpt. 1 (1993) (assets in excess of eligibility limits may be reduced as provided in rule so that person becomes eligible for medical assistance).
There must, therefore, be some way to determine whether the assets of an institutionalized spouse who did not qualify for medical assistance on the date of institutionalization have diminished to the amount necessary to qualify. To determine whether the assets available to the institutionalized spouse have declined to this amount, it must be possible to assess the couple's assets as of the time of application for medical assistance.
The majority concludes that Minn. Stat. § 256B.059, subd. 5,
provides that an asset assessment, even if it is completed upon applying for medical assistance, is to look at the assets of the couple as of the date of institutionalization.

Under the majority's construction of the statute, an institutionalized spouse who did not meet the asset limitation requirement on the date of institutionalization could never become eligible for medical assistance benefits because the value of the couple's assets for purposes of determining eligibility would remain fixed at the value as of the date of institutionalization. This could not have been the intent of the legislature. See Minn. Stat. § 645.17 (1994) (when interpreting statutes, court guided by presumption that legislature does not intend result that is "absurd, impossible of execution, or unreasonable").
Merle Atkinson is correct when he argues that Minn. Stat. § 256B.059, subd. 2, requires that his spousal share be valued at the time of institutionalization rather than at the time of application for medical assistance. That is exactly what was done here. Merle Atkinson's spousal share was determined to have a value of $72,660 at the time of institutionalization. His spousal share has continued to have a value of $72,660 throughout this proceeding.
Merle Atkinson's real complaint, however, is that, due to successful investments, the value of his spousal share increased between the date of institutionalization and the time of application, and the Department of Human Services did not permit him to retain the increase in value. But when Marion Atkinson applied for medical assistance, the Department did exactly what is required by Minn. Stat. § 256B.059, subd. 5.
When Marion Atkinson applied for medical assistance, it was necessary to determine what assets were available to her. Under Minn. Stat. §256B.059, subd. 5, assets considered available to Marion Atkinson at the time of application were "all assets in which either spouse has an ownership interest, reduced by * * * the spousal share." Merle Atkinson does not dispute that at the time of application he owned assets worth $149,684.34 and Marion Atkinson owned assets worth $1,537. The total value of these assets was $151,221.34. When this amount was reduced by the value of Merle Atkinson's spousal share, $72,660, the total value of assets available to Marion Atkinson was $78,561.34, which is far greater than the medical assistance asset limitation.