Merritt v. Ohio Dept. of Job & Family Servs. ( 2021 )

[Cite as Merritt v. Ohio Dept. of Job & Family Servs., 2021-Ohio-4540.]
IN THE COURT OF APPEALS
TWELFTH APPELLATE DISTRICT OF OHIO
BUTLER COUNTY
JEROME MERRITT, :
Appellant, : CASE NO. CA2021-04-044
: OPINION
- vs - 12/27/2021
:
OHIO DEPARTMENT OF JOB AND :
FAMILY SERVICES,
:
Appellee.
ADMINISTRATIVE APPEAL FROM BUTLER COUNTY COURT OF COMMON PLEAS
Case No. CV2020-11-1687
sb2 inc., and Amy C. Baughman, for appellant.
Dave Yost, Ohio Attorney General, and Theresa R. Dirisamer, Assistant Attorney General,
for appellee.
PIPER, P.J.
{¶1} Appellant, Jerome Merritt, appeals a decision of the Butler County Court of
Common Pleas upholding a decision of appellee, the Ohio Department of Job and Family
Services ("the Agency").
{¶2} Jerome is an elderly man who suffered a stroke and requires long-term, 24-
hour skilled nursing care. Jerome's son, Glenn Merritt, arranged for Jerome's admission to
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Heritagespring of West Chester ("Heritagespring") to receive necessary care, and Jerome
designated Glenn his healthcare and general power of attorney. As part of the process of
obtaining Medicaid benefits, Glenn authorized Heritagespring to act as Jerome's Medicaid
Authorized Representative.
{¶3} Heritagespring filed an application for long term Medicaid benefits on
Jerome's behalf and requested both ongoing and retroactive coverage. It also advised
Glenn to establish a Qualified Income Trust ("QIT") on Jerome's behalf should Jerome's
income level be too high to qualify him to receive benefits. Glenn then established the QIT
and funded it with a $100.00 deposit, but did not make subsequent deposits until several
months later.
{¶4} Jerome receives $1,358 in monthly Social Security benefits, as well as
$2,353.48 in monthly retirement benefits. Out of his total monthly benefits, Jerome pays
two ex-wives monthly spousal support of $300 and $1,755.99. Even though there were
spousal support obligations, Jerome's application for long-term Medicaid was denied for
being over the maximum income limit. Once Glenn properly funded the QIT, Jerome's
Medicaid eligibility was established as of July 2020. However, he was not credited for the
months between his initial denial and his proper funding of the QIT. Glenn appealed the
decision on behalf of Jerome and an Agency hearing officer held a hearing on the matter.1
{¶5} The Agency hearing officer upheld the initial decision denying Jerome's
request for long-term Medicaid. Glenn then appealed that decision on Jerome's behalf to
the Butler County Court of Common Pleas, and the Common Pleas Court affirmed the
Agency's decision. Glenn now appeals that decision, raising the following assignments of
1. At first, the Agency denied the request for a hearing because it determined that the attorney who filed the
request did not have proper authorization to request a hearing on Jerome's behalf. However, this court
reversed that decision, finding that proper authorization had been given so that a hearing should be held.
Merritt v. Ohio Dept. of Job & Family Servs., 12th Dist. Butler No. CA2019-09-160, 2020-Ohio-2674.
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error. For ease of discussion, we will address some assignments of error together when
the issues are interrelated.
{¶6} Assignment of Error No. 1:
{¶7} JEROME MERRITT'S ACTUAL NEED FOR A QIT IS QUESTIONABLE,
HOWEVER, THIS ALLEGED NEED SHOULD NOT PRECLUDE HIM FROM BEING
AWARDED BENEFITS FROM THE DATE OF THE APPLICATION BECAUSE HIS
INCOME WAS NOT CORRECTLY BASED UPON HIS AVAILABLE INCOME.
{¶8} Assignment of Error No. 2:
{¶9} ASSUMING, ARGUENDO, THAT JEROME MERRITT DID REQUIRE A QIT
TO QUALIFY, NOTHING IN THE OAC STATES THAT RETROACTIVE COVERAGE IS
NOT APPLICABLE ONCE A QIT IS ESTABLISHED.
Administrative Appeals
{¶10} According to R.C. 5101.35(E), "an appellant who disagrees with an
administrative appeal decision of the director of job and family services * * * may appeal
from the decision to the court of common pleas."
{¶11} "R.C. Chapter 2506 governs the standards applied to appeals of
administrative agency decisions." Hindu Soc. of Greater Cincinnati v. Union Twp. Bd. of
Zoning Appeals, 12th Dist. Clermont No. CA2018-11-081, 2019-Ohio-2494, ¶ 17. "A
common pleas court reviewing an administrative appeal pursuant to R.C. 2506.04 weighs
the evidence in the whole record and determines whether the administrative order is
unconstitutional, illegal, arbitrary, capricious, unreasonable, or unsupported by the
preponderance of the substantial, reliable, and probative evidence." Bingham v. City of
Wilmington Bd. of Zoning Appeals, 12th Dist. Clinton No. CA2012-05-012, 2013-Ohio-61, ¶
6. An agency's decision is presumed to be valid and the burden is upon the party contesting
the determination to prove otherwise. Terrace Park v. Anderson Twp. Bd. of Zoning
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Appeals, 1st Dist. Hamilton Nos. C-140741 and C-140745, 2015-Ohio-4602, ¶ 13.
{¶12} An appeal to the court of appeals, pursuant to R.C. 2506.04, is more limited
in scope. Queen v. Union Twp. Bd. of Zoning Appeals, 12th Dist. Fayette No. CA2015-05-
011, 2016-Ohio-161, ¶ 13. "[T]he standard of review for courts of appeals in administrative
appeals is designed to strongly favor affirmance." Cleveland Clinic Found. v. Cleveland Bd.
of Zoning Appeals, 141 Ohio St.3d 318, 2014-Ohio-4809, ¶ 30. As such, during our review,
this court may not substitute its judgment for that of the common pleas court. Smith v.
Warren Cty. Rural Zoning Bd. of Zoning Appeals, 12th Dist. Warren No. CA2018-07-078,
2019-Ohio-1590, ¶ 18. Rather, "this court must affirm the common pleas court's decision
unless it finds, as a matter of law, that the lower court's decision was not supported by a
preponderance of reliable, probative, and substantial evidence." Taylor v. Wayne Twp. Bd.
of Trustees, 12th Dist. Butler No. CA2008-02-032, 2009-Ohio-193, ¶ 10.
{¶13} "Within the ambit of questions of law for appellate-court review is whether the
common pleas court abused its discretion[.]" Independence v. Office of the Cuyahoga Cty.
Executive, 142 Ohio St.3d 125, 2014-Ohio-4650, ¶ 14. An abuse of discretion is indicated
where there is an arbitrary, unreasonable, or unconscionable attitude on the part of the
common pleas court. Natl. Amusements, Inc. v. Union Twp. Bd. of Zoning Appeals, 12th
Dist. Clermont No. CA2002-12-107, 2003-Ohio-5434, ¶ 7. An "arbitrary" decision "is one
made 'without consideration of or regard for facts [or] circumstances.'" State v. Beasley,
152 Ohio St.3d 470, 2018-Ohio-16, ¶ 12. A decision is "unreasonable" where it is not
supported by a sound reasoning process. Nationwide Agribusiness Ins. Co. v. Heidler, 12th
Dist. Clinton Nos. CA2018-06-003, CA2018-07-004, CA2018-09-012, and CA2018-09-015,
2019-Ohio-4311, ¶ 46.
Qualified Income Trust - QIT
{¶14} In his first two assignments of error, Jerome argues that he does not need to
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maintain a QIT because his available income is below the maximum income threshold if the
amounts of his spousal support obligations are not considered as part of his available
income. Additionally, Jerome argues that even if he needed a QIT, once established,
retroactive coverage is not prohibited.
{¶15} A QIT is a trust that allows an individual whose income is otherwise over the
income level to have income excluded when determining Medicaid eligibility. The QIT
receives the excess income into the trust to be used specifically for healthcare purposes.
Ohio Adm.Code 5160:1-6-03.2(B)(6). According to Ohio Adm.Code 5160:1-6-03.1(H), the
first step in determining one's income for purposes of qualifying for long-term Medicaid
coverage is to first "total only the individual's gross income, earned and unearned * * * then
exclude the following income types." The code then lists 23 exclusions, none of which are
applicable in the case sub judice.
{¶16} According to Ohio Adm.Code 5160:1-3-03.1(B)(1), "eligibility for medical
assistance is dependent in part upon the amount of monthly income available to or received
by the individual." (B)(1)(a) goes on to provide, "gross income, prior to any deductions or
exclusions, that can be reliably anticipated is considered available in calculating countable
income for a month. * * * Any portion of the income which is retained by an individual into
the next month becomes a resource." Ohio Adm.Code 5160:1-3-03.1(B)(1)(b).
{¶17} Thus, the plain meaning of the code makes clear that "available" income is
determined by the person's gross income before any deductions or exclusions are
calculated. As such, one's gross income is not reduced by required monthly obligations or
payments. While one's "resources" may be impacted by monthly obligations, such do not
impact one's gross income unless expressly excluded by the code section mentioned
above.
{¶18} The same may be said for the meaning of "income" as stated in Ohio
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Adm.Code 5160:1-1-01(B)(32). "Income" means cash, * * * or something of value which is
received, available, and attributable to an individual." (Emphasis added.) Based on the
clear definitions noted above, Jerome was not entitled to have his monthly spousal support
payments deducted from his income for purposes of determining whether the QIT was
necessary.2 After reviewing the record, and based on Jerome's undisputed monthly
income, the Common Pleas Court did not abuse its discretion in affirming the Agency's
determination that Jerome's income exceeded the maximum threshold and that a QIT was
required for Medicaid eligibility.
Application of Federal Law
{¶19} Jerome suggests that Ohio has not set forth reasonable standards for
determining Medicaid eligibility. According to 42 U.S.C. 1396a(a)(17), a state must provide
"reasonable standards" for determining eligibility requirements that take into account
income and resources "available" to the applicant. However, the federal statute does not
define the term "available," and only directs states to adopt reasonable standards that are
"consistent with [Medicaid] objectives." Lankford v. Sherman, 451 F.3d 496, 509 (8th
Cir.2006). The Lankford court determined that "the reasonable-standards provision focuses
on the aggregate practices of the states in establishing reasonable Medicaid services"
based upon financial need. Id. However, the court noted that Congress did not provide
"meaningful instruction" on the interpretation of how "reasonable standards" apply to
medical needs. Id. Instead, states are granted "broad discretion" to implement the general
2. Ohio Adm.Code 5160:1-3-03.1 was amended in 2020, and now provides in relevant part, "(C) Under certain
circumstances, the amount of income determined available to an individual may be greater than the amount
of income that the individual actually receives for his or her own use. The following types of income deductions
are not subtracted from the individual’s countable income for purposes of determining eligibility for medical
assistance. This list is not all-inclusive. (1) Court-ordered income deductions. (a) This includes child and/or
spousal support, even if such support is paid directly to the former spouse or child’s guardian by the employer
or benefit payer." (Emphasis added.) This amendment clearly supports our analysis of how the code instructs
an agency to determine eligibility.
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goals of Medicaid's reasonable-standards provision.
{¶20} Ohio acted within its broad discretion in setting the terms for Medicaid
assistance by setting forth the process for determining eligibility based upon the applicant's
gross income, before deductions are calculated. Thus, there is no conflict between federal
law and Ohio's applicable code.
Notice
{¶21} Jerome also asserts that he lost several months of eligibility because the
Agency did not provide him notice that a QIT was required and notify him of how much
funding the QIT would require. While there is no requirement listed in the code regarding
an agency's duty to inform an applicant that a QIT may be required, the record indicates
that the Agency did inform Glenn that a QIT may be necessary, that Jerome's application
for long-term care was denied because his income exceeded the maximum threshold, and
that Jerome may become eligible by depositing excess funds into a QIT. Moreover, the
notice of denial included a statement that Jerome's QIT was underfunded. Thus, the record
indicates that the Agency performed its duty under the code to determine Jerome's eligibility
and state the reasons for denial. The Agency's denial provided relevant notice of the QIT
issue and properly informed Jerome that he needed to set up and properly fund the QIT in
order to ensure eligibility.
Retroactivity
{¶22} The relevant code in place at the time of Jerome's application provided,
(b) The administrative agency shall approve retroactive
eligibility for medical assistance effective no later than the first
day of the third month before the month of application if the
individual:
(i) Reports he or she received medical services of a type
covered by medical assistance within the three months prior to
the application month; and
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(ii) Requests retroactive eligibility be determined; and
(iii) Would have been eligible for medical assistance at the time
the services were provided if an application had been made at
that time, regardless of whether the individual was alive when
the application actually was made. Actual income received in
each retroactive month shall be used to determine eligibility for
that month.
Ohio Adm.Code 5160:1-2-01(L)(1)(b).3
{¶23} Given our analysis above, Jerome's income made him ineligible for long-term
Medicaid and he was required to fund a QIT with his excess income in order to become
eligible. Thus, he remained ineligible until his QIT was properly funded, and he was not
eligible prior to that date, retroactively or otherwise.
{¶24} While Glenn argues that he would have established the QIT earlier had he
known one was needed, the record establishes that Glenn did establish the QIT before he
submitted the application for eligibility on Jerome's behalf. He did not, however, fully fund
the QIT, nor was it in compliance with the code's clear directive regarding eligibility
requirements based on income levels.
{¶25} After reviewing the record, we find that the trial court properly affirmed the
Agency's determination that Jerome's income exceeded the threshold maximum and that
he was not eligible for long-term Medicaid assistance until his QIT was fully funded. As
such, Jerome's first two assignments of error are overruled.
{¶26} Assignment of Error No. 3:
{¶27} THE JULY 19, 2018 DENIAL SHOULD BE OVERTURNED BECAUSE CMS
NEVER APPROVED THE OHIO REGULATIONS RELATING TO QITS AS THEY EXIST
CURRENTLY, AND BECAUSE THE STATE DID NOT RECEIVE CMS APPROVAL, THE
3. Under the most recent version of the regulation, effective December 14, 2020, this language is now located
in subsection (M)(1)(b).
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REGULATIONS ARE NOT VALID. FURTHER, BECAUSE OHIO HAS NEVER OBTAINED
CMS APPROVAL FOR THE ENACTMENT OF THEIR QIT REGULATIONS, FEDERAL
LAW PREEMPTS STATE LAW.
{¶28} Jerome argues in his third assignment of error that the common pleas court
erred in denying his application for long-term Medicaid assistance because the Agency's
rules regarding QITs have not been approved by the Center for Medicare and Medicaid
Services ("CMS") and that federal law preempts Ohio's use of QITs.
{¶29} In his brief, Jerome recognizes that Ohio's Administrative Code allows for the
use of QITs, but argues that the state never approved the requirement that a QIT be created
and funded "prior to submitting a Medicaid application." However, the code does not require
the creation and funding of a QIT before a person may apply for coverage, only that the QIT
be created and funded before that person can be ruled eligible for Medicaid benefits. Thus,
there is no need for the CMS to approve the requirement that a QIT be created and funded
prior to submitting a Medicaid application, as suggested by Jerome, as no such requirement
exists.
{¶30} Jerome next argues that Ohio's use of QITs without taking into consideration
spousal support obligations renders the code in conflict with federal law and that federal
law preempts state law. However, and as noted above, Jerome's arguments center upon
a misguided use of the term "available." He continues to argue that his "available" income
must deduct his spousal support obligations from his monthly benefits.
{¶31} However, like Ohio, federal law does not exclude spousal support obligations
from one's available income. Johnson v. Flanagan, 179 Ga.App. 708, 710, 347 S.E.2d 643(1986) (amounts that may be deducted from the individual's gross income "does not include
alimony payments"); see also Clark v. Commr. of Income Maintenance, 209 Conn. 390,
396, 551 A.2d 729 (1988) (reversing the lower court's decision because it subtracted the
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applicant's alimony obligation when determining available income for Medicaid eligibility
pursuant to federal law). Instead, the federal regulations list "required" and "optional"
deductions, which again, are not applicable to the case sub judice according to 42 C.F.R.
435.725(c) and (d) and which do not include a deduction for spousal support obligations.
After reviewing the record, we find that Jerome's third assignment of error lacks
merit, and is thus, overruled.
{¶32} Assignment of Error No. 4:
{¶33} THE LOWER COURT'S APRIL 12, 2021 DECISION UPHOLDING THE
ADMINISTRATIVE APPEAL DECISION AFFIRMS THE AGENCY'S VIOLATION OF
FEDERAL LAW AND THE AMERICANS WITH DISABILITIES ACT AND THE
REHABILITATION ACT OF 1973, BECAUSE IT PLACES UNDUE BURDEN ON MR.
MERRITT, WHO IS DISABLED.
{¶34} Jerome argues in his final assignment of error that the common pleas court's
decision violates federal law because it places an undue burden on him.
{¶35} The record reveals that Jerome did not raise this argument before the Agency
or the common pleas court. "It is axiomatic that a party cannot raise new issues or legal
theories for the first time on appeal and failure to raise an issue before the trial court results
in waiver of that issue for appellate purposes." BAC Home Loans Servicing, LP v. Mullins,
12th Dist. Preble No. CA2013-12-015, 2014-Ohio-4761, ¶ 22. As such, we will not address
Jerome's argument, and his final assignment of error is overruled.
{¶36} Judgment affirmed.
HENDRICKSON and BYRNE, JJ., concur.
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