Freiner v. Exec. Off. of Health & Hum. Serv.

235 N.E.3d 248

Holly T. FREINER, personal representative,¹

v.SECRETARY OF the EXECUTIVE OFFICE OF HEALTH AND HUMAN SERVICES & another.²

SJC-13514

Supreme Judicial Court of Massachusetts, Suffolk.

Argued February 7, 2024.

Decided June 14, 2024.

West Codenotes

Validity Called into Doubt

130 Mass. Code Regs. 517.011(A)

Medicaid. MassHealth. Marriage. Regulation. Assignment. Administrative Law, Agency’s interpretation of regulation. Due Process of Law, Administrative hearing. Words, "Refuses to cooperate."

Civil action commenced in the Superior Court Department on April 9, 2020.

The case was heard by Maureen Mulligan, J., on a motion for judgment on the pleadings, and entry of separate and final judgment was ordered by David A. Deakin, J.

The Supreme Judicial Court on its own initiative transferred the case from the Appeals Court.

James R. Knudsen, Wakefield, for the plaintiff.

Cassandra Bolanos, Assistant Attorney General, for the defendants.

Patricia Keane Martin, Wellesley, Clarence D. Richardson, Jr., & C. Alex Hahn, for Massachusetts Chapter of the National Academy of Elder Law Attorneys, amicus curiae, submitted a brief.

Present: Budd, C.J., Gaziano, Kafker, Wendlandt, & Georges, JJ.

WENDLANDT, J.

This case arises at the intersection of Medicaid and marriage. The Medicaid program must preserve its limited resources to pay benefits only for those who are unable to afford care on their own. Consistent with that directive, the financial resources available to an applicant for Medicaid long-term benefits must fall below a threshold amount in order for the applicant to be eligible. When an applicant for long-term care benefits is married, determining eligibility requires a delicate balance. On the one hand, the Medicaid program seeks to ensure that a financially secure couple cannot shift the burden of paying for the care of a married applicant (institutionalized spouse) onto Medicaid by sheltering assets under the name of the applicant’s spouse (community spouse) in order to make the institutionalized spouse appear impoverished "enough" to meet the eligibility requirements for Medicaid benefits. On the other hand, the Medicaid program aims to avoid effectively impoverishing the community spouse by forcing the community spouse to spend virtually all the couple’s assets before the institutionalized spouse can obtain benefits.

To address this challenge, Federal and State statutes and regulations govern how State Medicaid agencies must treat the resources available to the community spouse when determining the institutionalized spouse’s eligibility. Before an institutionalized spouse may receive assistance, that spouse must disclose not only her own and the couple’s joint resources, but also those resources ostensibly available only to the community spouse. A State Medicaid agency may not, however, deny the institutionalized spouse benefits because of resources determined to be available to the community spouse, if the institutionalized spouse assigns to the agency her rights to spousal support. This scheme allows the agency to attempt to recoup, through litigation if necessary, the benefits it paid on behalf of the institutionalized spouse from the resources available to the community spouse.

Recognizing that in some circumstances an institutionalized spouse may not be able to determine the community spouse’s resources, Massachusetts’s Medicaid program, MassHealth,³ offers an additional protection for applicants; specifically, pursuant to 130 Code Mass. Regs. § 517.011 (2017) (regulation), if the community spouse "refuses to cooperate" or if that spouse’s "whereabouts [are] unknown," MassHealth nonetheless will provide benefits to the institutionalized spouse even if the couple’s combined resources cannot be calculated.⁴ At issue in this case is the scope of the phrase "refuses to cooperate" in the regulation.

We conclude that MassHealth’s board of hearings (board) reasonably construed the phrase "refuses to cooperate" to exclude the situation presented here, where the community spouse’s principal act of non-cooperation with the institutionalized spouse was the refusal to disclose her financial resources in connection with the institutionalized spouse’s application for benefits from MassHealth. We agree with the agency’s reasonable determination that, in the context of a "long-term and ongoing level of cooperation" throughout the marriage, such a refusal to disclose the community spouse’s financial resources does not fall within the type of "refus[al] to cooperate" required by the regulation. Further concluding that the process resulting in the board’s decision to deny the long-term care benefits in this case was not arbitrary or capricious, we affirm the decision of the Superior Court judge.⁵

1. Background. The following facts, as set forth in the administrative record, largely are undisputed.⁶

Costa and Mary Tingos were married in September 1957. The couple lived together for over fifty years, until May 2015, when Costa,⁷ who was then eighty-two years old, moved into a residential nursing home.

As described by the couple, the marriage had its challenges; Costa had a long history of gambling problems and financial mismanagement, which eventually drove a wedge between the married couple. Indeed, at some point Mary considered divorcing Costa, but the couple remained married for religious reasons and because their two children "did not want [them] to get divorced."

Both spouses contributed financially to the marriage, albeit in unequal amounts. For much of the marriage, Mary worked consistently and paid the couple’s major expenses, including the mortgage on the family home;⁸ Costa also worked and contributed to the payment of utility and cable bills. Beginning sometime around 2003, Mary and Costa started keeping their income and assets "almost entirely separate."⁹ They continued to live together in the family home and also continued filing their State and Federal income taxes jointly on the advice of their accountant.

When Costa moved into the nursing facility, Mary continued to assist her husband by helping coordinate his care. She also served as his attorney-in-fact under his power of attorney so she could manage his bank account and pay bills on his behalf.

2. Prior proceedings. a. Initial application. In September 2015, shortly after his admission into the residential nursing facility,¹⁰ Costa filed an application for MassHealth long-term care benefits. In his application, Costa stated:

"For decades my wife and I have kept our income and assets almost entirely separate, although I lived with her in her home and/or apartment and I contributed to some expenses such as cable[ ] and utilities. Mary is refusing to support me financially or cooperate with my application for benefits or provide information. I hereby assign to MassHealth my rights to obtain spousal support from her."

In response to a request from MassHealth, Costa disclosed certain financial information, including his and Mary’s joint tax returns, but he did not provide additional requested information regarding Mary’s income and assets.

In December 2015, MassHealth issued a denial letter. Citing 130 Code Mass. Regs. § 515.008 (2014),¹¹ MassHealth explained, "You did not give MassHealth the information it needs to decide your eligibility within the required time frame."

b. First hearing. Costa requested a hearing to review the denial of his application.¹² Costa asserted that "[he] should not be disqualified due to the refusal of [his] spouse to cooperate when [he] ha[d] assigned the division [his] right to support." A hearing was held in February 2016. In a written decision, the board denied Costa’s administrative appeal, concluding:

"[Costa] has not satisfied the provisions of 130 [Code Mass. Regs. §] 517.011. Specifically, … [Costa] has not demonstrated by a preponderance of the evidence that his spouse will not cooperate. [Costa] did not submit any evidence, other than his own statement in a letter, to demonstrate that the spouse will truly not cooperate …. [Costa] did not produce any evidence from the community spouse, testimonial or otherwise, confirming her unwillingness to cooperate. Further, there was no evidence present-ed at or post-hearing regarding any efforts [Costa] has undertaken to compel the spouse to cooperate."

Costa sought judicial review of the board’s decision, pursuant to G. L. c. 30A. In February 2018, a Superior Court judge vacated the decision, concluding that the denial letter had not given Costa sufficient notice that the reason for the denial was insufficient evidence of Mary’s noncooperation; thus, he was not on notice that he would have to present such evidence at his hearing before the board. The judge remanded the matter to the board.

c. Second heating. The board held a second hearing in May 2018, at which Costa testified that he had not asked Mary to provide the requested financial information; instead, he explained that his attorney had notified him of Mary’s refusal to cooperate. In support of Costa’s position at the healing, Mary, who did not testify, submitted an affidavit. She averred, "I refuse to cooperate with my husband with his application for MassHealth long-term care benefits and I will not provide him with any information regarding my income, assets and other financial information."

The board again denied Costa’s appeal, affirming the decision to deny his application for benefits. The board concluded that an applicant has a duty "to make reasonable efforts … to access his spouse’s income and assets … [and Costa] has not demonstrated that he has made any [such] effort."

Costa sought judicial review of the board’s decision, pursuant to G. L. c. 30A. In October 2019, a different Superior Court judge (second judge) vacated the board’s decision and remanded the matter.

The second judge concluded that Costa had not received sufficient notice that he would be required to demonstrate that he had made specific efforts...