Opinion
Argued September 7, 2000.
Decided October 24, 2000.
Appeal, by permission of the Court of Appeals, from an order of the Appellate Division of the Supreme Court in the Fourth Judicial Department, entered November 12, 1999, which affirmed a judgment of the Supreme Court (Barbara Howe, J.), entered in Erie County in a proceeding pursuant to CPLR article 78, granting a petition to review a determination of the Commissioner of Health which sustained a finding that petitioner was not entitled to an "income disregard" based on the needs of his ineligible spouse for purposes of determining his eligibility for Medicaid benefits, granting class certification, directing that 18 NYCRR 360-4.6 (a)(2)(i) applies to petitioner, directing respondents to calculate back to the date of initial determination petitioner's medical assistance eligibility by including in their calculations the additional income disregard set forth in 18NYCRR 360-4.6 (a)(2)(i), and directing that upon such recalculation, respondents shall pay to petitioner any amount which he had been improperly compelled to expend as a spend-down amount by virtue of respondents' having failed to make such additional income disregard.
Eliot Spitzer, Attorney General, Albany (Victor Paladino, Preeta D. Bansal, Daniel Smirlock and Peter G. Crary of counsel), for appellants.
Legal Services for the Elderly, Disabled or Disadvantaged of Western New york, Inc. , Buffalo (Anthony Szczygiel of counsel), for respondent Marzec.
The issue here is whether Medicaid regulations governing eligibility for benefits authorized a reduction in the applicant's income in an amount necessary to meet the needs of his ineligible spouse. The Appellate Division answered in the affirmative. For reasons stated in this Opinion, we now reverse.
On October 1, 1996, petitioner Raymond Marzec applied for Medicaid benefits to the Erie County Department of Social Services ("DSS"). At that time petitioner's gross income, derived solely from Social Security, was $717 per month. Thereafter, petitioner was hospitalized from October 8 until October 16, 1996 .
In November 1996, DSS notified petitioner that his hospitalization would be covered by Medicaid. DSS calculated petitioner's costs based on a six month period beginning October 1, 1996 and ending March 31, 1997 (see, 42 C.F.R. § 435.831[a][1]). After taking into account all available income and resources, DSS concluded that petitioner had excess income of $138 per month, which he was required to spend on medical expenses before Medicaid would pay his medical bills (see, 42 U.S.C. § 1369[a][17]; 18 NYCRR 360-4.8 [c][1]). Thus, DSS required petitioner to spend down a total of $828 (six months times $138) before receiving benefits, leaving him with $711 in medical bills. DSS determined further that 18 NYCRR 360-4.6 did not entitle petitioner to an "income disregard" — a deduction in the amount of income and resources deemed available to the applicant — for the care of his ineligible spouse.
Petitioner requested a hearing to review the determination, arguing that inasmuch as his spouse was entirely dependent upon him for financial support, DSS should have made a dependent family member deduction from his income pursuant to 18 NYCRR 360-4.6(a)(2)(i). At the hearing, the Administrative Law Judge disagreed, concluding the calculations were in accordance with the Federal SSI-guidelines and State budgeting methodology for determining Medicaid benefits. The Commissioner of Health upheld that determination. Petitioner then commenced a CPLR article 78 proceeding seeking review of the agency's determination. Concluding that the administrative determination was "unreasonable and irrational," Supreme Court granted the petition and directed DSS to recalculate petitioner's medical assistance eligibility. The Appellate Division affirmed with two Justices dissenting. This Court granted leave to appeal.
Under 18 NYCRR 360-4.6(a)(2)(i), a Medicaid applicant is allowed a disregard, for the "amount of income determined in accordance with Federal guidelines to meet the needs of dependent family members who live with the applicant/recipient, and who are not certified blind or certified disabled." Petitioner contends that this regulation authorizes an income disregard of an amount necessary to meet the needs of his wife. Appellants, the Commissioner of Health and DSS Commissioner, argue that there should be no deduction because the Federal guidelines do not provide for an income disregard for petitioner's spouse in this instance. We agree with appellants.
The procedure for determining Medicaid eligibility, set out in 18 NYCRR 360-4.1, requires (1) a determination of the size of a household, (2) a determination of all income and resources available to the applicant during the period for which assistance is sought, (3) a disregard of certain kinds of income and resources and (4) a comparison of the available resources with the eligibility standards. There is no dispute that petitioner is considered a one person household for purposes of the regulations, that petitioner's resources are limited to social security or that the comparison of available resources and eligibility is appropriate. Only the issue of whether there should be a disregard for petitioner's dependent spouse — the third factor — is before us.
In the words of the regulation, 18 NYCRR 360-4.6: "Not all of the income and resources available to an applicant/recipient is counted in determining his/her financial eligibility for MA [medical assistance]. Certain types and amounts of income and resources are disregarded. After these disregards have been applied, what remains is the applicant'/recipient' (sic) net available income and resources."
The applicable regulation, 18 NYCRR 360-4.6(a)(1), enumerates the disregards for all applicants and recipients of medical assistance. Subdivision 2 of that regulation itself explicitly requires that DSS and the Department of Health look to "Federal guidelines" in order to determine the amount of the income disregard, if any, to which petitioner is entitled, in order to meet the needs of certain family members (see 18 NYCRR 360-4.6 [a][2][i]).
Significantly, there are no Federal guidelines supporting the deduction petitioner seeks. Federal regulations do permit a disregard, for example, from the income of an ineligible spouse that would be deemed available to the applicant for the care of ineligible children (see, 20 C.F.R. § 16.1163). There is, however, no Federal guideline authorizing an income disregard for the amount of money needed to support a spouse who is not 65 years of age, blind or disabled. The absence of such a disregard is consistent with the efforts to assist only those who are most in need of the limited public funds available (Glosenger v Perales, 83 N.Y.2d 984, 989).
DSS determined that there should be no disregard for the support of petitioner's wife. An agency's interpretation of its regulations must be upheld unless the determination is "irrational and unreasonable" (Seittelman v Sabol, 91 N.Y.2d 618, 625; Matter of Cortlandt Nursing Care Center v Whalen, 46 N.Y.2d 979, 980; Matter of Sigety v Ingraham, 29 N.Y.2d 110, 114).
Appellants' interpretation of the regulation is not irrational or unreasonable and should be sustained.
Given this disposition, we need not and do not reach the question of class action certification.
Accordingly, the order of the Appellate Division should be reversed, without costs, and the petition dismissed.
Order reversed, without costs, and petition dismissed. Opinion by Judge Smith. Chief Judge Kaye and Judges Levine, Ciparick, Wesley and Rosenblatt concur.