2012 VT 95


In re Marilyn Clifford (2012-114)
 
2012 VT 95
 
[Filed 9-Nov-2012]
 
NOTICE:  This opinion is
subject to motions for reargument under V.R.A.P. 40 as well as formal revision
before publication in the Vermont Reports.  Readers are requested to
notify the Reporter of Decisions by email at: JUD.Reporter@state.vt.us or by
mail at: Vermont Supreme Court, 109 State Street, Montpelier, Vermont
05609-0801, of any errors in order that corrections may be made before this
opinion goes to press.
 
 

2012 VT 95

 

No. 2012-114

 

In re Marilyn Clifford


Supreme Court


 


 


 


On Appeal from


 


Secretary, Agency of Human
  Services


 


 


 


September Term, 2012


 


 


 


 


Douglas
  Racine, Secretary


 

Jay Abramson of Law Office of Jay
Abramson, St. Johnsbury, for Appellant.
 
William H. Sorrell, Attorney General, Montpelier, and Heidi
J. Moreau, Assistant Attorney
  General, Waterbury, for Appellee.
 
 
PRESENT:  Reiber, C.J., Dooley, Skoglund,
Burgess and Robinson, JJ.
 
 
¶ 1.            
REIBER, C.J.   Applicant Marilyn Clifford appeals the
denial of long-term home-care benefits under the Medicaid-funded Choices for
Care program, arguing that a second home on an adjacent piece of property
should have been excluded from the financial-eligibility calculation.  We
affirm. 
¶ 2.            
Applicant applied for Choices for Care in July 2011.  The program
provides financial assistance for case management, personal care, adult day
services, and home modifications, among other things.  The Department of
Children and Families determines an applicant’s financial eligibility for the
program based on the applicant’s available resources.  Under state and
federal rules, the department may exclude a limited number of resources,
including the applicant’s home, from the calculation to protect them for
personal use.
¶ 3.            
The state Medicaid rule governing the home exclusion for countable
resources provides, in relevant part:
Home
means the property in which an individual resides and has an ownership interest
and which serves as the individual’s principal place of residence.  This
property includes the shelter in which an individual resides, the land on which
the shelter is located, related outbuildings, and surrounding property not
separated from the home by intervening property owned by others
. . . The home includes contiguous land and any other
buildings located on the land.  
 
Medicaid Rules §4241.1. 
 
¶ 4.            
The department concluded that applicant’s resources exceeded the
permitted threshold by $85,815.94 after including in its calculation the
$97,900 value of a farmhouse applicant and her husband owned on a piece of land
adjacent to their primary residence.  The farmhouse was listed as a
separate residence for tax purposes, and applicant and her husband rented it
out for $500 a month until the tenant died in August 2011.  Although the
department included the value of the farmhouse, it excluded the value of the
piece of land on which the primary residence was situated and the other
outbuildings, and specifically exempted the land associated with the farmhouse
lot.    
¶ 5.            
Applicant sought a fair hearing review by the Human Services Board. 
Before the board, she argued that the state rules implementing federal Medicaid
policies exclude the value of an applicant’s home, which, according to the
board and secretary’s understanding of the applicant’s position, would include
“ ‘all buildings of any type’ so long as they are situated on land contiguous
to the primary residence.”  The Human Services Board agreed with applicant
and ordered the exclusion of the farmhouse.   
¶ 6.            
The secretary of the Agency of Human Services reversed the board’s
decision.  The secretary concluded that the board’s interpretation of the
home exclusion contradicted the plain language of Medicaid Rules § 4241.1, its
legislative history, and the policy underlying the Medicaid program.  This
appeal followed. 
¶ 7.            
On appeal, applicant contends that the language of the home-exclusion
rule excludes “any building” on a contiguous piece of land from countable
resources, and not simply those buildings that are related to the primary
residence.  Applicant maintains that the secretary’s conclusion that the
exclusion is limited to “related outbuildings” on both primary and contiguous
lands renders the term “any other buildings” meaningless. We disagree.
¶ 8.            
The secretary of the Agency of Human Services may reverse or modify the
Medicaid decisions of the Human Services Board when “the decision or order
implicates the validity or applicability of any agency policy or rule.”  3
V.S.A. § 3091(h)(1)(A)(ii).   “Generally, we
grant deference to the Secretary . . .
regarding interpretations of the department's governing statutes and
regulations, and will not disturb the Secretary's interpretations absent a
compelling indication of error.”  Jacobus
v. Dep’t of PATH, 2004 VT 70, ¶ 23, 177 Vt. 496, 857 A.2d
785.  We look to the disputed statutory or regulatory language to
determine whether an indication of such an error exists.
¶ 9.            
In this appeal, we must determine whether the applicable rule requires a
second home located on an adjacent, contiguous piece of property to be excluded
from an applicant’s countable resources.  We conclude that the rule does
not mandate such an exclusion.  Rather, the rule
limits the exclusion of buildings on an applicant’s principal and contiguous
properties to the “shelter in which an individual resides” and “related
outbuildings.”  When construing statutes and regulations, specific
provisions “generally trump more general ones.”  Smith v. Desautels, 2008 VT 17, ¶ 17, 183 Vt. 255, 953 A.2d 620
(citation omitted).  Thus, we must interpret the rule’s later reference to
“any other buildings located on [contiguous] land” in the context of the more
specific command that the department exclude only “related outbuildings” on the
principal property.  To permit the exclusion of any building on
contiguous property would render the rule’s language regarding related
outbuildings incongruous.  We therefore find no compelling
 indication of error in the Secretary’s conclusion that the Department of
Children and Families correctly understood the Medicaid Rule to permit the
exclusion of only “the shelter in which the applicant resides,” contiguous
lands, and “related outbuildings.”
¶ 10.         We
recognize that the rule’s wording is not a model of clarity, but we observe
that adopting an exclusion for buildings located on
adjacent lands that is more expansive than the exclusion the rule permits for
buildings located on the principal property flies in the face of common
sense.  When construing statutory and regulatory language, we presume that
its drafters did not intend an interpretation that would yield “absurd or
irrational consequences.”  See Shlansky
v. City of Burlington, 2010 VT 90, ¶ 8, 188 Vt. 470, 13 A.3d 1075
(quotation omitted).  Applicant urges us to adopt an interpretation that
would, for example, require the department to exclude from countable resources
the value of apartment complexes or retail fast-food service facilities located
on contiguous land irrespective of their value.  The rule’s purpose is to
protect and preserve an applicant’s home.  We can conceive of no rational
reason why the drafters would limit the exclusion an applicant may claim to
only “related” buildings on the property where the home is actually located
while permitting the exclusion of any and all buildings further afield on
adjacent parcels.  We conclude that such a distinction is not only wholly
irrational but also directly contravenes the purposes of the Medicaid program
and the state legislative developments that led to the current home-exclusion
rule.
¶ 11.         Choices
for Care is a federally approved Medicaid waiver program that permits the state
to use Medicaid funds to provide in-home care for residents who would otherwise
require hospitalization or placement in a nursing home.  In re Ryan, 2008 VT 93, ¶ 9, 184 Vt. 597, 958 A.2d 678. 
“Medicaid was created, in part, to provide medical assistance to disabled
individuals who lack the resources to meet their need for medical services,
and rehabilitation and other services to help those individuals ‘attain or
retain capability for independence or self-care.’ ” Id. (quoting 42
U.S.C. § 1396) (emphasis added).  To achieve Medicaid’s goal of assisting
the truly needy, administrators have enacted regulations governing financial
eligibility for its various programs.  The financial eligibility rules
balance the need to ensure that patients who can afford to pay their own
medical bills do so with the need to preserve assets necessary for an
applicant’s own support.  See, e.g., 20 C.F.R. § 416.1210
(requiring state programs to exclude certain personal assets from financial
eligibility calculations). Permitting applicants to exclude a
potentially limitless number of unrelated buildings on land contiguous to a
primary residence would defeat this careful balance.    
¶ 12.         Nor
does the rule’s drafting history suggest any intention to offer such broad
asset exclusions under the guise of a regulation designed to protect an
applicant’s interest in her home.  In 2002, the state Legislature directed
the department then responsible for determining long-term-care eligibility to
more closely align its home-exclusion rules with the federal minimum exclusion
and its accompanying regulatory definitions. 
2001, No. 142 (Adj. Sess.), § 148(m)(1).  Federal
Medicaid regulations define an applicant’s home “as any property in which an
individual (and spouse, if any) has an ownership interest and which serves as
the individual's principal place of residence. This property includes the
shelter in which an individual resides, the land on which the shelter is
located and related outbuildings.”  20 C.F.R. §
416.1212(a).  The state act specifically provided that Medicaid
applicants would be “permitted to claim one principal place of residence as an
excluded resource.”  2001, No. 142 (Adj. Sess.), § 148(m)(1). 
In response, the department made several amendments to the home-exclusion rule
aimed, in part, at clarifying “its intent that only one home be
excludable.”  Vt. Dep’t of Prevention, Assistance, Transition and Health
Access, Bulletin No. 02-21F at 4 (June 28, 2002).  The department’s
amendment of the home-exclusion rule must be understood to comport with the
Act’s stated intent to exclude only the principal residence because an agency’s
regulations cannot exceed the scope of its statutory authority.  Cf. Martin
v. State, Agency of Transportation, Dept. of Motor Vehicles, 2003 VT 14, ¶
15, 175 Vt. 80, 819 A.2d 742.  (“It is axiomatic that an administrative
agency's power to promulgate regulations may extend only as far as its
legislative grant of authority.”)(citation omitted).* 

¶ 13.         Given
the language of the regulation, the legislative history that led to its
promulgation, and the policy considerations attending the Medicaid program, we
conclude that the Secretary correctly interpreted the home-exclusion rule when
he reinstated the determination of the Department of Children and Families.
Thus, we find no compelling indication of error in the Secretary’s
determination and affirm.
Affirmed. 
 

 


 


FOR THE COURT:


 


 


 


 


 


 


 


 


 


 


 


Chief
  Justice

 





*  The
Legislature directed the department to make the changes as part of the Fiscal
Year 2003 Appropriations Act.  2001, No. 142 (Adj. Sess.), §148(m)(1).  We consult the Act merely to help ascertain the
intent of the home-exclusion rule’s drafters.  Because no party has
challenged the department’s authorization to enact such a regulation, we make
no conclusion regarding whether the appropriations act, which was not codified
in the Vermont Statutes Annotated, continues to constrain the department’s
regulatory authority beyond the expiration of the fiscal year covered by the
legislation.



