Abney v. S. Dep't of Health Care Serv.

317 Cal.Rptr.3d 825

Debra ABNEY, Plaintiff and Appellant,

v.STATE DEPARTMENT OF HEALTH CARE SERVICES et al., Defendants and Respondents.

A164775

Court of Appeal, First District, Division 2.

Filed January 31, 2024

Trial Court: San Francisco County Superior Court; Trial Judge: Honorable Suzanne Ramos Bolanos; (San Francisco City & County Super. Ct. No. CPF20517020)

Attorney for Plaintiff and Appellant, Debra Abney: Western Center on Law & Poverty, David Kane, Robert D. Newman, Richard A. Rothschild, Los Angeles; Bay Area Legal Aid, Michael Keys;

Attorney for Defendants and Respondents, State Department of Health Care

Services et al.: Rob Bonta, Attorney General of California, Cheryl L. Feiner, Senior Assistant Attorney General, Gregory D. Brown, Charles J. Antonen, Supervising Deputy Attorneys General, Katherine J. Grainger, Deputy Attorney General.

Attorney for Respondent City and County of San Francisco: David Chiu, City Attorney, Wayne Snodgrass, Tara M. Steeley Deputy City Attorneys

Richman, J.

In 2018, the Social Security Administration notified appellant Debra Abney that it would begin withholding almost $600 from her Social Security payment each month to satisfy a debt she owed the IRS. The City and County of San Francisco (the County) subsequently notified Abney that it would consider the garnished money as income for the purposes of calculating her eligibility for benefits under Medi-Cal, making her ineligible to receive those benefits without a share of cost. Abney unsuccessfully sought writs of administrative mandate and ordinary mandamus seeking to reverse that decision, the trial court rejecting her argument that the tax garnishment was not income "actually available to meet [her] needs" under the regulations implementing the Medi-Cal program. We also reject the argument, and we affirm.

BACKGROUND

Medicaid and Medi-Cal

Medi–Cal is California’s program under the joint federal-state program known as Medicaid. (Welf. & Inst. Code, § 14000 et seq.) Medicaid provides federal financial assistance to participating states to support the provision of health care services to certain categories of low-income individuals and families, including the aged, blind, and disabled, as well as pregnant women and others. (42 U.S.C. § 1396 et seq.)

Because California has opted to participate in the Medicaid program and receive federal matching funds, it must comply with all federal Medicaid requirements. (Conlan v. Bontá (2002) 102 Cal.App.4th 745, 753, 125 Cal.Rptr.2d 788.) Among other things, the state must administer its Medicaid program through a plan that has been approved by the federal Centers for Medicare and Medicaid Services. (See 42 U.S.C. § 1396a; 42 C.F.R. §§ 430.10, 430.15(b) (2014); Welf. & Inst. Code, § 14100.1.) Respondent, the California Department of Health Care Services (Department), is the state agency that administers Medi-Cal, but counties are responsible for eligibility determinations, subject to the direction of the Department. (Welf. & Inst. Code, § 14100.1; Cal. Code Regs.,¹ tit. 22, § 50004, subd. (c).)

The federal Medicaid Act requires that a state plan must "include reasonable standards … for determining eligibility for and the extent of medical assistance under the plan which … provide for taking into account only such income and resources as are, as determined in accordance with standards prescribed by the Secretary [of Health and Human Services], available to the applicant or recipient …." (42 U.S.C. § 1396a(a)(17).) A state’s "methodology to be employed in determining income and resource eligibility for individuals … may be less restrictive, and shall be no more restrictive" than the federal Medicaid standard. (42 U.S.C. § 1396a(r)(2)(A); 42 C.F.R. § 435.601(d).)

California offers several different Medi–Cal programs, including, as relevant here, the Aged, Blind, and Disabled Federal Poverty Level Program (ABD FPL) and the Aged, Blind and Disabled Medically Needy Program (ABD MN). (42 U.S.C. §§ 1396a(a)(10)(A)(ii)(X), (a)(10)(C); Welf. & Inst. Code, §§ 14005.7, 14005.40.) The ABD FPL program provides medical coverage to eligible California residents with no share of cost, provided that their "[c]ountable income, as determined in accordance with Section 1902(m) of the federal Social Security Act (42 U.S.C. Sec. 1396a(m)), does not exceed" certain limits. (Welf. & Inst. Code, § 14005.40, subd. (c)(1) see id. subd. (c).) The ABD MN program allows individuals to receive Medi–Cal when their income exceeds the limits for the ABD FPL program. (See Welf. & Inst. Code, §§ 14005.7; 14005.) However, under the ABD MN program, recipients are required to pay a share of cost if they incur medical expenses in a given month. (Welf. & Inst. Code, §§ 14005.7, subds. (b), (c); 14005.9.)

Under California’s Medi-Cal regulations, "Income includes benefits in cash or in kind" from various sources, but income "shall be considered as income only if it is currently available in accordance with Sections 50513 through 50517." (Cal. Code Regs., tit. 22, § 50501, subds. (a), (b).) The referenced regulations provide that "[o]nly income which is actually available to meet the needs of a person or family shall be considered in determining that person’s or family’s share of cost," and similarly, "[i]ncome which is not available to meet current needs of a person or family shall not be considered in determining that person’s or family’s share of cost." (Cal. Code Regs., tit. 22, § 50513, subd. (a); Cal. Code Regs., tit. 22, § 50515, subd. (a).)

Abney’s Medi–Cal Benefits

Since at least November 1, 2011, Abney has been receiving Medi–Cal benefits— initially through the ABD FPL program— for a household of one.

On November 2, 2018, the Social Security Administration sent Abney an award letter informing her that it would begin withholding $598.20 from her monthly Social Security payment "to pay your debt to the IRS," leaving her with a monthly Social Security payment of $845.80.

On March 19, 2019, the County sent Abney a "Notice of Action," informing Abney that her Medi–Cal share of cost had changed to $729 per month beginning April 1, 2019. The County determined that Abney had gross unearned income of $1,484.50, and after an income deduction of $155 and a $230 disregard, a net nonexempt income of $1,099, exceeding the ABD FPL income limit of $1,041, and making her ineligible for that program. However, the County calculated that Abney was eligible for "Regular Medi–Cal" with a $729 monthly share of cost, based on an income deduction of $155.50 and a "maintenance need" of $600.

On June 10, Abney requested an administrative hearing on the Notice of Action. Abney submitted a statement of position, arguing that the $598.20 withheld from her Social Security payment was not "income which is actually available to meet [her] needs" within the meaning of section 50513, subdivision (a), and should not have been included in determining her Medi–Cal eligibility. A hearing was held on September 26, and on December 3, the administrative law judge denied Abney’s claim, relying on Title 20, section 416.1123, subdivision (a)(2) of the Code of Federal Regulations, which provides: "We also include more [of your unearned income] than you actually receive if amounts are withheld from unearned income because of a garnishment, or to pay a debt or other legal obligation, or to make any other payment such as payment of your Medicare premiums."

The Proceedings Below

On February 13, 2020, Abney filed in San Francisco County Superior Court a combined petition for writ of administrative mandate under Code of Civil Procedure sections 1094.5 and ordinary mandamus under Code of Civil Procedure section 1085. Abney alleged that the County violated its legal duty to determine her Medi–Cal eligibility by failing to comply with the California regulations defining available income.

On December 1, 2020, while her case was pending in the trial court, Abney again became eligible to receive Medi-Cal under the ABD FPL program after the Legislature raised the income limits for that program. Abney maintains, however, that because of the County’s erroneous eligibility calculation, she was required to pay $135 per month in Medicare premiums from April 2019 through November of 2020.

On February 10, 2022, the trial court denied the petition for writ of mandate, concluding as follows:

"[T]he State Plan and the Welfare and Institutions Code both state that ‘countable income’ is determined in accordance with section 1902(m) of the Medicaid statute, codified at 42 U.S.C. section 1396a(m). (See California State Plan, Supplement 8a to Attachment 2.6, at p. 6; Welf. & Inst. Code sec. 14005.40.) The federal Medicaid statute, in turn, defers to the Social Security Act’s definition of ‘income.’ (See 42 U.S.C. sec. 1396a(m), referencing 42 U.S.C. sec. 1382a; see also Welf. & Inst. Code sec. 14005.7 [income under the Medically Needy program is ‘determined, defined, counted, and valued, in accordance with Title XIX of the federal Social Security Act’].) ‘Unearned income’ is expressly defined in the federal Social Security regulations to include amounts withheld to pay a debt. (20 C.F.R. § 416.1123 [‘We also include more than you actually receive if amounts are withheld from unearned income because of a garnishment, or to pay a debt or other legal obligation’]; see also Cervantez v. Sullivan (9th Cir. 1992) 963 F.2d 229, 232 [‘we followed four other circuits in holding the word "received" is used in subsection (a)(2)(B) as a "mere grammatical link," and does not require that funds be physically received by claimants to be counted as "income" ’].)

"Additionally, pursuant to its statutory authority under Welfare and Institutions Code sections 14005.40 and 14001.11, the Department provides guidance to counties regarding Medi-Cal eligibility. The Department has recently advised counties on this precise issue, consistently instructing them that, pursuant to the above-mentioned rules, income...