Planning for Life

MassHealth Held to Violate Notice Requirements in Trust Cases

Posted by Harry S. Margolis on July 3, 2018

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By Harry S. Margolis

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In the combined cases of Jean Maas v. Mary Lou Sudders (Suffolk CA No. 18-129-D) and Henry Hirvi and Eva Hirvi v. Mary Lou Sudders (Suffolk CA No. 18-845-D), Superior Court Judge Douglas H. Wilkins finds that in denying applications for MassHealth benefits in cases involving trusts, MassHealth fails to satisfy the requirements of federal regulation 42 C.F.R. sec. 431.210 (b) that it explain the reasons for the denial.

Inadequate Notice

In these cases, as in all other MassHealth denials, the denial notice simply says:

Reason and Manual Citation

     You have more countable assets than MassHealth benefits allow. 130 CMR 520.003, 520.004.

MassHealth's practice is to provide a legal memorandum at the hearing on an appeal that explains its reasoning. Elder law attorneys have long complained that the failure to provide this explanation in advance of the hearing denies them the ability to prepare and have attempted to subpoena these legal memoranda in advance of such hearings.

Such subpoena requests have been universally turned down. The fair hearing officers always permit litigants time to respond to the legal memoranda in writing after the hearings, but this raises the question as to the purpose of the hearing itself, as well as where this leaves appellants not represented by counsel.

Judge Wilkins in his June 22, 2018, decision finds that MassHealth's notices violate both Massachusetts and federal regulations:

   Among other things, the Massachusetts regulations require advance written notice "to permit adequate preparation of the case." 130 Code Mass. Regs. 610.046 (A)

. . .

   The Office's standard form of notice denying benefits because of trust assets does not provide "[a] clear statement of the specific reasons supporting the intended action" and therefore violates 42 C.F.R. sec. 431.210.

. . .

   The fail, however, to give any "reason" -- let alone a clear statement of a specific reason -- for the most essential determination of all: why the Office deemed the asset (trust) countable. Even less does the Office's notice give a "clear statement" or "specific reasons" for counting a trust's assets as the applicant's assets for Medicaid purposes.

Subsequent Cure Argument

Judge Wilkins also rejected MassHealth's argument that by providing its legal memorandum at the fair hearing and the practice of permitting a written response solve the problem of notice. He finds that such action does not "cure" a clear violation of the Massachusetts and federal regulations. The practice adds to delays in the process which add to the costs and stress endured by the litigants:

While delay in itself is an incurable detriment, the financial, resource and psychic burden placed upon the applicant -- and any family members or others who may be devoting their own limited time and resources to help the applicant -- during the delay are also problematic and irreparable. A clear and specific statement of reasons allows the applicant to save time and expense researching, investigating and preparing for arguments upon which the agency might have, but did not, relay. Self-represented persons undoubtedly benefit from an ability to focus upon and understand what actually led to the agency's decision, not to mention the reduction in anxiety that uncertainty can cause.

Subpoenas, Consistency & Class Action

Judge Wilkins rejects the plaintiffs' arguments regarding the issuance of subpoenas, the lack of consistency in MassHealth decisions, and a request for certification of a class in large part because he finds them unnecessary and premature. He reasons that if MassHealth were to supply clear reasons for its denial of coverage in cases involving trusts that this would solve the problem without the need for subpoenas or a certified class.

Kudos to Barreira

This decision is the result of a litigation strategy led by Plymouth elder law attorney Brian E. Barreira.atrny[1] In addition to bringing and arguing the cases, he enlisted dozens of members of the Massachusetts Chapter of the National Academy of Elder Law Attorneys to submit affidavits recounting their experiences with MassHealth trust cases. These, undoubtedly, had in an impact on Judge Wilkins's ultimate decision.

As with most litigation, the case is not over. Judge Wilkins did not specify how MassHealth must meet its requirement of providing adequate notice. With the department fighting every step of the way, and apparently intentionally increasing the cost of Massachusetts residents seeking coverage, this will no doubt continue to be contested.

Topics: MassHealth, trusts, long-term care planning

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