J.S. v. Neb. Dep't of Health & Human Servs.

306 Neb. 20

944 N.W.2d 266

J.S., appellant,

v.NEBRASKA DEPARTMENT OF HEALTH AND HUMAN SERVICES et al., appellees.

No. S-18-1149.

Supreme Court of Nebraska.

Filed June 5, 2020

Allison Derr, Robert McEwen, and Sarah Helvey, of Nebraska Appleseed Center for Law in the Public Interest, for appellant.

Douglas J. Peterson, Attorney General, and Ryan C. Gilbride, Lincoln, for appellees.

Heavican, C.J., Miller-Lerman, Cassel, Stacy, Funke, Papik, and Freudenberg, JJ.

Cassel, J.

I. INTRODUCTION

In E.M. v. Nebraska Dept. of Health & Human Servs. (E.M. ),¹ we held that legislation² creating the bridge to independence program (B2I)³ did not "affirmatively provide[ ]"⁴ eligibility to noncitizen applicants who were not "lawfully present."⁵ In this Administrative Procedure Act⁶ appeal, J.S., a noncitizen who was admitted into B2I, challenges the district court's judgment affirming a state agency's denial of Medicaid⁷ eligibility after she reached age 19. Essentially, we must decide whether the statutes or regulations she cites authorized her participation despite her immigration status and age. Because they did not, we affirm the judgment.

II. BACKGROUND

1. B2I

In E.M. ,⁸ we briefly introduced B2I, Nebraska's extended foster care program, which was created by the Young Adult Bridge to Independence Act (YABI).⁹ In this appeal, we rely upon that description.

2. PRWORA AND L.B. 403

Similarly, in E.M.,¹⁰ we extensively discussed the Personal Responsibility and Work Opportunity Reconciliation Act of 1996 (PRWORA)¹¹ and its Nebraska counterpart.¹² As we explained there, PRWORA declared certain individuals to be ineligible for any state public benefit.¹³ Like PRWORA's prohibition on federal public benefits,¹⁴ its proscription on state public benefits applies "[n]otwithstanding any other provision of law"¹⁵ but with specified exceptions.¹⁶

There, we focused on the exception created by § 1621(d), which authorized a State to make an "alien who is not lawfully present in the United States" eligible for a State public benefit by enactment of a State law which "affirmatively provides for such eligibility." First, we determined that for the purposes of state or local public benefits eligibility under § 4-108, "lawfully present" means the alien classifications under § 1621(a)(1), (2), and (3).¹⁷ Second, we held that in order to affirmatively provide a state public benefit to aliens not lawfully present in the United States, as authorized by § 1621(d), the Legislature must make a positive or express statement extending eligibility by reference to immigration status.¹⁸

3. J.S. AND DHHS

J.S. is a citizen of El Salvador, who fled to Nebraska as a minor. She was adjudicated in juvenile court¹⁹ and placed into foster care. At the time she applied to the Nebraska Department of Health and Human Services (DHHS) for B2I, she had a pending application for special immigrant juvenile (SIJ) status. Upon turning 19 years old, J.S. was accepted into B2I but was denied Medicaid coverage after her 19th birthday.

She requested a fair hearing with DHHS. At the hearing, the parties presented evidence and made arguments. In DHHS’ order, it found that she did not meet "the basic requirement[s] of ‘citizenship or alien status’ required for all Medicaid recipients." It upheld the denial of Medicaid benefits.

4. DISTRICT COURT

J.S. filed a timely petition for review in the district court. She argued that she was eligible for Medicaid under the Children's Health Insurance Program (CHIP)²⁰ and former foster care.²¹

She also contended that B2I extended medical assistance to all young adults regardless of immigration status.

The district court disagreed that CHIP or former foster care supported Medicaid eligibility. The court reasoned: Congress allowed the states to provide Medicaid benefits to certain lawfully residing alien children under CHIP, a state could elect to extend benefits to individuals under 21 years old (and pregnant women) who are "lawfully residing" aliens,²² but Nebraska chose to limit CHIP to children under 19 years old (and pregnant women). Thus, the court concluded that even though J.S. was considered lawfully residing as defined by CHIP regulations, she exceeded the age limitation when she reached her 19th birthday.

The court then considered whether J.S. could receive Medicaid under B2I. That program provides several services to participants, including "[m]edical care under the medical assistance program for young adults who met the eligibility requirements of [§] 43-4504 and have signed a voluntary services and support agreement as provided in [§] 43-4506."²³ The court acknowledged that § 1621(a) declared aliens who are not qualified aliens, nonimmigrants, or paroled into the United States for less than 1 year ineligible for State or local public benefits. And the court recognized that § 1621(d) authorized an exception where a state law affirmatively provided for such eligibility. The court concluded that because the Nebraska Legislature did not affirmatively provide for unlawful aliens to receive Medicaid benefits under B2I, J.S. was not entitled to Medicaid benefits. The court noted that whether J.S. should have been accepted into B2I was not before the court.

The court affirmed DHHS’ denial of Medicaid benefits. J.S. filed a timely appeal, and we later granted her petition to bypass the Nebraska Court of Appeals.²⁴

III. ASSIGNMENTS OF ERROR

J.S. assigns, reordered, that the district court erred in (1) affirming DHHS’ denial of Medicaid benefits, (2) determining that citizenship or immigration status was relevant to eligibility for medical coverage for participants in B2I, and (3) failing to determine that DHHS’ practice of denying medical coverage to participants in B2I due to alien status violated the separation of powers clause of the Nebraska Constitution.

IV. STANDARD OF REVIEW

A judgment or final order rendered by a district court in a judicial review pursuant to the Administrative Procedure Act may be reversed, vacated, or modified by an appellate court for errors appearing on the record.²⁵ When reviewing an order of a district court under the Administrative Procedure Act for errors appearing on the record, the inquiry is whether the decision conforms to the law, is supported by competent evidence, and is neither arbitrary, capricious, nor unreasonable.²⁶ Whether an agency decision conforms to the law is by definition a question of law.²⁷

The meaning and interpretation of statutes and regulations are questions of law for which an appellate court has an obligation to reach an independent conclusion irrespective of the decision made by the court below.²⁸

V. ANALYSIS

1. MEDICAID PARTICIPATION

The Medicaid program provides joint federal and state funding of medical care for individuals whose resources are insufficient to meet the cost of necessary medical care.²⁹ A state is not obligated to participate in the Medicaid program; however, once a state has voluntarily elected to participate, it must comply with standards and requirements imposed by federal statutes and regulations.³⁰

DHHS concedes that Nebraska has "elected to participate in the Medicaid program"³¹ through enactment of the Medical Assistance Act.³² But it argues that it properly determined J.S. was not eligible under the applicable statutes and regulations.

Challenging the district court's judgment affirming DHHS’ denial of Medicaid eligibility, J.S. makes three arguments: First, she argues that neither CHIP nor former foster care conditions Medicaid eligibility on immigration status. Second, she contends that B2I extends Medicaid coverage to all young adults in B2I and that although she would be ineligible for federal matching funds, the State should furnish medical care with state funds only. Finally, she asserts that DHHS’ practice of denying Medicaid to unlawful aliens participating in B2I violated the separation of powers clause of the Nebraska Constitution.³³

We note that in this court, as in the court below, the parties do not question J.S.’ participation in B2I; they contest only her eligibility for Medicaid benefits. Therefore, we are concerned only with whether J.S. is eligible for Medicaid under the Medical Assistance Act and § 43-4505(1).

Before turning to the arguments, we note that we will refer to the "Medicaid state plan."³⁴ This is a "comprehensive written document, developed and amended by [DHHS] and approved by the federal Centers for Medicare and Medicaid Services, which describes the nature and scope of the medical assistance program and provides assurances that [DHHS] will administer the program in compliance with federal requirements."³⁵

2. MEDICAID ELIGIBILITY VIA CHIP OR FORMER FOSTER CARE

J.S. concedes that PRWORA "generally restricts immigrants’ rights to receive federal, state, and local public benefits," that it "limits the receipt of federally reimbursed Medicaid to only U.S. citizens or ‘qualified aliens,’ " and that it "imposes a five-year waiting period," which, in combination, effectively permits noncitizens, nonqualified aliens, and qualified aliens subject to the waiting period to "only receive medical coverage for the treatment of emergency medical conditions, even as to children and pregnant women."³⁶

Nevertheless, J.S. argues that she was eligible for Medicaid under CHIP and former foster care. Before addressing her specific arguments, we review the regulations adopted by DHHS to administer the Medicaid program in Nebraska.

(a) DHHS Regulations

The Medical Assistance Act requires DHHS to "administer the [Medicaid] program"³⁷ and empowers it to "adopt and promulgate rules and regulations."³⁸ For purposes of construction, a rule or regulation of an administrative agency is generally treated like a statute.³⁹ Properly adopted and filed regulations have the effect of statutory law.⁴⁰ Absent a statutory or regulatory indication to the contrary, language contained in a rule or regulation is to be given its plain and ordinary meaning.⁴¹ DHHS’ regulations...