Stanley v. R.I. Exec. Office of Health & Human Servs. James Senay

CHERYL STANLEY v. R.I. EXECUTIVE OFFICE OF HEALTH AND HUMAN SERVICES

JAMES SENAY v. R.I. EXECUTIVE OFFICE OF HEALTH AND HUMAN SERVICES

C.A. No. PC-2015-1857

c/w C.A. No. PC-2015-3094

STATE OF RHODE ISLAND AND PROVIDENCE PLANTATIONS PROVIDENCE, SC. SUPERIOR COURT

June 21, 2016

DECISION

CARNES, J. This matter is before the Court for decision on the consolidated appeal of two decisions of the Rhode Island Executive Office of Health and Human Services (OHHS), which found the appellants ineligible to receive benefits under the state's Medicare Premium Payment program (MPP) as a Qualified Medicare Beneficiary (QMB).¹ Jurisdiction is pursuant to G.L. 1956 § 42-35-15.

IFacts

Appellant Cheryl Stanley is a Medicare beneficiary with a monthly income of $1480. She lives with Elmer Stanley, her husband of thirty-four years. In November of 2014, she applied for payment assistance, and the OHHS denied her application in December 2014. The agencyinformed her that her countable income of $1460 (Social Security Income of $1480 minus the $20 standard deduction) exceeded the "qualified standard of $1312.88" for one person, and thus her application was being denied. She maintains that her application should have been considered according to the income guidelines for a two-person household. The parties are in agreement that if the guidelines for a two-person household had been used in considering her application, said application would have been approved.

In the other consolidated case, appellant James Senay is a Medicare beneficiary who had been receiving MPP benefits since 2012, during which time OHHS applied the guidelines for a two-person household. OHHS terminated such benefits in February 2015, informing him that his countable income of $1695 (Social Security Income of $1715 minus the $20 standard deduction) exceeded the "qualified standard" for a one-person household, which was $1312.88. Appellant Senay maintains that his application should have been considered according to the income guidelines for a two-person household. The parties are similarly in agreement that if the guidelines for a two-person household had been used in considering his application, said application would have been approved. The Court notes that Mrs. Senay passed away March 31, 2015, and therefore the "household size" of Mr. Senay is only at issue for March 2015 on this administrative appeal. Senay Compl. ¶ 9, Def. Ex. 15 at 19. Further relevant facts as set forth in the record are discussed infra.

IIStandard of Review

The review of a decision by a state agency by this Court is governed by the Administrative Procedures Act. Section 42-35-15(g) of the act provides that:

"The court shall not substitute its judgment for that of the agency as to the weight of the evidence on questions of fact. Thecourt may affirm the decision of the agency or remand the case for further proceedings, or it may reverse or modify the decision if substantial rights of the appellant have been prejudiced because the administrative findings, inferences, conclusions, or decisions are:

"(1) In violation of constitutional or statutory provisions;

"(2) In excess of the statutory authority of the agency;

"(3) Made upon unlawful procedure;

"(4) Affected by other error or law;

"(5) Clearly erroneous in view of the reliable, probative, and substantial evidence on the whole record; or

"(6) Arbitrary or capricious or characterized by abuse of discretion or clearly unwarranted exercise of discretion."

This section precludes a reviewing court from substituting its judgment for that of the agency in regard to the credibility of witnesses or the weight of the evidence concerning questions of fact. Costa v. Registrar of Motor Vehicles, 543 A.2d 1307, 1309 (R.I. 1988). The court's review is limited to determining whether substantial evidence exists to support the department's decision. Newport Shipyard Inc. v. R.I. Comm'n for Human Rights, 484 A.2d 893, 897 (R.I. 1984). If '"competent evidence exists in the record, the Superior Court is required to uphold the agency's conclusions."' Auto Body Ass'n of R.I. v. State Dep't of Bus. Regulation, 996 A.2d 91, 95 (R.I. 2010) (quoting R.I. Pub. Telecomms. Auth. v. R.I. State Labor Relations Bd., 650 A.2d 479, 485 (R.I. 1994)).

It is well settled that '"deference will be accorded to an administrative agency when it interprets a statute whose administration and enforcement have been entrusted to the agency . . . even when the agency's interpretation is not the only permissible interpretation that could be applied."' Id. at 97 (quoting Pawtucket Power Assocs. Ltd. P'ship v. City of Pawtucket, 622 A.2d 452, 456-57 (R.I. 1993)); see also Unistrut Corp. v. State Dep't of Labor and Training, 922 A.2d 93, 99 (R.I. 2007) (quoting Arnold v. R.I. Dep't of Labor and Training Bd. of Review, 822 A.2d164, 169 (R.I. 2003)) ("'[W]hen the administration of a statute has been entrusted to a governmental agency, deference is due to that agency's interpretation of an ambiguous statute unless such interpretation is clearly erroneous or unauthorized."').

"If competent evidence exists in the record considered as a whole, the court is required to uphold the agency's conclusions. However, it may reverse, modify, or remand the agency's decision if the decision is violative of constitutional or statutory provisions, is in excess of the statutory authority of the agency, is made upon unlawful procedure, is affected by other errors of law, is clearly erroneous in view of the reliable, probative, and substantial evidence on the whole record, or is arbitrary or capricious and is therefore characterized by an abuse of discretion." Barrington Sch. Comm. v. R.I. State Labor Relations Bd., 608 A.2d 1126, 1138 (R.I. 1992) (citing § 42-35-15(g)).

IIIAnalysis

States are not required to participate in the federal-state program known as Medicaid, but those states that participate are required to comply with federal Medicaid law. Wilder v. Virginia Hosp. Ass'n, 496 U.S. 498, 501, 110 S.Ct. 2510, 2513 (1990). Federal law requires states to cover certain categories of people. 42 U.S.C. § 1396a(a)(10)(A). Included among those to whom the state is required to provide coverage are "qualified medicare beneficiar[ies]" described in 42 U.S.C. § 1396d(p)(1). 42 U.S.C. § 1396a(a)(10)(E)(i). QMBs are eligible for the state's MPP, which pays Medicare premiums and out-of-pocket health care expenses.

a. The Stanley Matter

Medicare Part A covers hospital insurance coverage and Medicare Part B covers physician services, durable medical equipment, and outpatient services. Appellant Ex. 9 at 1. According tothe OHHS, Mr. Stanley, husband of Plaintiff Stanley, did not have any income and was therefore not considered to be part of the "filing unit" when Mrs. Stanley's application for the MPP benefit as a "qualified beneficiary" was considered. On December 24, 2014, Mrs. Stanley informed the OHHS that she would appeal the denial of the MPP benefit. Appellant Aff. at 1. At a hearing held on February 23, 2015, OHHS Supervisor Kristen Grosso testified that, according to the R.I. Medicaid Code of Administrative Rules (MCAR), Section 0372 (Special Treatment Coverage Groups), for eligibility for Medicare Part B premium payment to exist, "an individual or member of a couple must meet the non-financial requirements of citizenship, alienage, residency, enumeration, and third party resource requirements, must be enrolled in Part A, and meet income and resource limits." Def. Ex. 22 at 2. She further testified:

"[I]n order to be eligible, you have to be considered part of the filing unit so you either have to have income, you have to have resources, more importantly you have to be . . . receiving Medicare Part B. Unfortunately, Elmer doesn't meet any of those criteria so instead of looking at the case as a family unit or couple's unit, we can only look at the case as a single person filing. So that dramatically changes the income limit and resource limit that we review. We can't look at it as a couple." Def. Ex 23 at 5.

b. The Senay Matter

Similarly, the OHHS stated that since Mrs. Senay, wife of Appellant Senay, did not have any income, she was, for purposes of Appellant Senay's application, not part of the "filing unit" when Mr. Senay's application for MPP benefits was considered. Mr. Senay had been receiving MPP benefits since 2012 because the OHHS had calculated his eligibility based on a household size of two people. Def. Ex. 15 at 16-18. On January 26, 2015, the OHHS sent Mr. Senay a denial notice that stated that his MPP-QI-1 (Qualified Individual) benefits would be discontinued because his monthly income of $1695 exceeded the maximum for a household of one, which was $1312.88. Def. Ex. 2 at 1. On February 3, 2015, Mr. Senay sent to the OHHS a notice of appealstating that he and his wife are a two-person household and therefore should be evaluated based on the income guidelines for a household of that size. Def. Ex. 1. A hearing was scheduled for May 14, 2015. Def. Ex. 5. Cheryl Tremblay, a supervisor at the Woonsocket office of the OHHS, testified on behalf of the OHHS. She testified that Mr. Senay's application for continued MPP benefits had been denied because the application was evaluated by comparing his income to the maximum for a one-person household. Def. Ex 15 at 2-3. She conceded that if Mr. Senay's spouse had been the source of the majority of their household income, the application would have been evaluated by the guidelines for a couple and therefore would have been approved. Def. Ex. 15 at 11-13.

IVArguments

OHHS argues that the methodology used to calculate Appellants' income and determine eligibility for the MPP program is similar to that upheld by the court in Skaliotis v. R.I. Dep't of Human Servs, 1996 WL 936920.² In Skaliotis, petitioner was a Medicare beneficiary who was found to be ineligible to receive benefits as a QMB or a Special Low-Income Medicare Beneficiary. He applied for benefits in June 1994 and was...