PUBLISHED OPINION
Case No.: 96‑0118
For Complete Title †Petition
to review filed
of Case, see attached opinion
Petition
to review filed by Petitioner‑Respondent
Submitted on Briefs October
09, 1996
JUDGES: Cane, P.J.,
LaRocque Myse, JJ.
Concurred:
Dissented: Cane, P.J.
Appellant
ATTORNEYSOn behalf of
respondent-appellant, the cause was submitted on the brief of James E. Doyle,
attorney general, and Donald P. Johns, assistant attorney general of
Madison.
Respondent
ATTORNEYSOn behalf of
petitioner-respondent, the cause was submitted on the brief of Scott
Thompson and Kittelsen, Barry, Ross, Wellington and Thompson of
Monroe.
|
COURT OF APPEALS DECISION DATED AND RELEASED NOVEMBER 12, 1996 |
NOTICE |
|
A party may file with the
Supreme Court a petition to review an adverse decision by the Court of
Appeals. See § 808.10 and
Rule 809.62(1), Stats. |
This opinion is subject to
further editing. If published, the
official version will appear in the bound volume of the Official Reports. |
No. 96-0118
STATE
OF WISCONSIN IN
COURT OF APPEALS
PHYLLIS A. TANNLER,†
Petitioner-Respondent,
v.
STATE DEPARTMENT OF
HEALTH
AND SOCIAL SERVICES,
Respondent-Appellant.
APPEAL from an order of the circuit
court for Green County: DAVID G.
DEININGER, Judge. Reversed.
Before Cane, P.J., LaRocque and Myse,
JJ.
LaROCQUE, J. The State Department of Health and Social
Services appeals the decision and order of the circuit court reversing the
department’s final decision and order terminating Phyllis A. Tannler’s
eligibility for Medical Assistance (MA) benefits. The department argues that its decision is entitled to deference
and that the court misinterpreted the relevant statutes. We reverse the circuit court and affirm the
department's decision.
Medical Assistance, also known as
"Medicaid," is a joint federal-state program whose purpose is to
provide medical services to the poor and needy. 42 U.S.C. § 1396,
et seq. To be eligible to receive MA
benefits, an individual must meet strict income and asset limits. In determining whether an individual is entitled
to benefits, a state may only consider the income and assets actually
“available” to the applicant. 42 U.S.C. § 1396a(a)(17); 42 C.F.R. § 435.845. An individual is prohibited from divesting
himself or herself of assets in order to meet these limits. Divestment resulting in MA ineligibility is
defined as the disposal of resources or assets at less than fair market value
within certain time periods relative to the application for MA or the
institutionalization of the person making the disposition. Section 49.453(2), Stats.; Wis. Adm. Code
§ HSS 103.065(4). The definition
of “assets” thus becomes relevant in divestment cases. The relevant definition
of “assets” in Wisconsin is given in § 49.453(1)(a), Stats., which states that “’Assets’ has the meaning given in
42 USC 1396p(e)(1).” That section
defines assets as follows:
The term “assets”, with respect to an
individual, includes all income and resources of the individual and of the
individual’s spouse, including any income or resources which the individual or
such individual’s spouse is entitled to but does not receive because of action—
(A) by the individual or such individual’s
spouse ....
The relevant facts are not in
dispute. Phyllis was initially
determined to be eligible for MA benefits in 1993 when a “community spouse
asset allocation” was completed, transferring certain assets to her husband
Adolph. Adolph died in 1994 leaving a
will that bequeathed all his assets and property to a grandson, while leaving
Phyllis nothing. Phyllis did not object
to the admission of the will to probate, nor did she file any elections or
requests for classification of marital property or allowances.
Phyllis continued to receive MA
benefits until 1995 when the department notified her that it was terminating
her eligibility because Phyllis “is refusing to take action to claim the
statutorily required portion of a deceased spouse’s estate.” A hearing was held after which the hearing
examiner issued a proposed decision concluding that Phyllis’ failure to assert
a claim against Adolph’s estate was not a divestment of an asset. The examiner cited the definition of “asset”
contained in 42 U.S.C. §
1396p(e)(1). The examiner concluded
that Phyllis did not divest herself of her share of Adolph’s estate
"because of action” on her part.
To the contrary, the examiner concluded that she “took no action to
avoid receiving” the share and “[a]n action is simply not the same thing as
inaction and the terms cannot be used interchangeably.”
The department reversed the hearing
examiner’s proposed decision and terminated Phyllis’ MA eligibility. The department relied in part on the
interpretation of 42 U.S.C. §
1396p(e)(1) contained in the MA Handbook, which stated that divestment
actions that cause income or assets not to be received “because of action” of
the spouse include “[r]efusing to take action to claim the statutorily required
portion of a deceased spouse’s or parent’s estate.” The department further considered the distinction between action
and inaction in this case to be “one without a difference.”
Subsequently,
Phyllis sought judicial review of the department’s decision and order. The court reversed the department’s decision
and order, finding that the department erroneously interpreted 42 U.S.C. § 1396p(e)(1) and that a correct
interpretation compelled that the department’s action be set aside. The department now appeals.
In a ch. 227, Stats., appeal, we review the agency’s
decision and therefore give no deference to the decision of the trial
court. Soo L. R.R. Co. v. Office
of Comm’r of Transp., 170 Wis.2d 543, 549, 489 N.W.2d 672, 674 (Ct.
App. 1992). Interpretation of a statute
and its application to the undisputed facts are questions of law we review de
novo. Local No. 695 v. LIRC,
154 Wis.2d 75, 82, 452 N.W.2d 368, 371 (1990).
We first look to the statutory language and, if that language is
unambiguous, we construe the statute in accordance with its ordinary meaning. Riverwood Park, Inc. v. Central
Ready-Mixed Concrete, Inc., 195 Wis.2d 821, 828, 536 N.W.2d 722, 724
(Ct. App. 1995). A statute is ambiguous
if it is capable of being understood by reasonably well-informed persons as
having two or more different meanings. Id. If the statute is ambiguous, we may examine
its content, subject matter, scope, history and purpose to determine
legislative intent. Id.
We conclude that two reasonable
persons could attribute different meanings to the word "action" as
used in the definition of assets in the Medicaid statute, 42 U.S.C. § 1396p(e)(1). It could mean, as Phyllis contends, only
affirmative or active conduct. It could
mean, as the department contends, "acts of omission" as well. The department's contention is not
unreasonable. The law routinely treats
a failure to act as "action" for the purpose of imposing
consequences. Thus, for example, the
legislature's grant of governmental immunity under § 893.80(4), Stats., for torts of agents and
employees speaks of "acts done in their official capacity
...." (Emphasis added.) Nevertheless, when courts consider the
limits upon that immunity, they treat a failure to act in the same light as
active conduct. See, e.g., Domino
v. Walworth County, 118 Wis.2d 488, 347 N.W.2d 917 (Ct. App. 1984)
(question of governmental immunity for deputy sheriff's failure to act to
effect removal of a fallen tree across road).
The department’s determination that
Phyllis divested herself of an asset under the terms of § 1396p(e)(1) is a
legal conclusion. We are not bound by
an agency’s conclusions of law. See
Kelley Co. v. Marquardt, 172 Wis.2d 234, 244, 493 N.W.2d 68, 73
(1992). We do, however, defer to an
agency’s legal conclusions in certain instances:
First,
if the administrative agency’s experience, technical competence, and
specialized knowledge aid the agency in its interpretation and application of
the statute, the agency determination is entitled to “great weight.” The second level of review provides that if
the agency decision is “very nearly” one of first impression it is entitled to
“due weight” or “great bearing.” The
lowest level of review, the de novo standard, is applied where it is
clear from the lack of agency precedent that the case is one of first
impression for the agency and the agency lacks special expertise or experience
in determining the question presented.
Jicha
v. DILHR, 169 Wis.2d 284, 290-91, 485 N.W.2d 256, 258-59 (1992)
(citations omitted).
The department argues that we should
give its interpretation of 42 U.S.C.
§ 1396p(e)(1) great weight. However, we
conclude that the appropriate standard is the middle standard, because while
our research uncovered no cases directly on point, the MA Handbook does
speak directly to the issue presented by this case. Because the MA Handbook is designed to assist state and
local agencies to implement the federal-state MA program, we conclude that its
provisions are persuasive in resolving disputes such as the one before the
court.[1] Accordingly, we give the department’s
interpretation of § 1396p(e)(1) due weight when interpreting its language.
We conclude that the reference to
"action" in 42 U.S.C. §
1396p(e)(1) is ambiguous. While it
requires that an individual take “action,”
Phyllis argues that “action” means the affirmative performance of an
act. The department argues that
Phyllis' election not to file a claim is sufficient to constitute action.
Because the statute is ambiguous, we
consider its purpose. Medical
assistance is a joint federal-state program aimed at providing medical services
to the poor and needy. 42 U.S.C. § 1396, et seq. The divestment provisions of that program
are an attempt to prevent the government, and therefore the taxpayers, from
having to subsidize the medical care of individuals who are, but for the
divestment, able to pay the cost of their own care. The department’s interpretation of § 1396p(e)(1) is
consistent with this purpose: a failure
to file a claim for one’s statutorily-required share of an estate results in
the government subsidizing the health care of that individual when, but for the
failure to file, the individual would be able to pay the cost of her own
care. Giving due weight to the
department’s final decision and order, we conclude that Phyllis’ decision not
to file a claim against Adolph’s will was an action within the meaning of §
1396p(e)(1) because her decision resulted in exactly the type of divestment
that provision was designed to address.[2] We decline to adopt a construction of that
section that would defeat its legislative purpose. See Town of De Pere v. City of De Pere,
184 Wis.2d 278, 283-84, 516 N.W.2d 1, 2-3 (Ct. App. 1994).
Finally, we note that § 1396p(e)(1),
Stats., also defines “assets” as
“income or resources which the individual ...
is entitled to but does not receive because of action ... by the ...
individual’s spouse ...." In this
case, Adolph drafted a will that failed to leave to Phyllis property to which
she was entitled under Wisconsin law.
Neither party discusses whether Adolph's conduct constituted “action by the
¼
individual’s spouse,” thereby resulting in Phyllis’ ineligibility. We therefore decline to address the question
further.
By the Court.—Order
reversed.