South Carolina              
Administrative Law Court
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SC Administrative Law Court Decisions

CAPTION:
The Estate of Thomas S. Townsend vs. SCDHHS

AGENCY:
South Carolina Department of Health and Human Services

PARTIES:
Appellant:
The Estate of Thomas S. Townsend

Respondents:
South Carolina Department of Health and Human Services
 
DOCKET NUMBER:
01-ALJ-08-0494-AP

APPEARANCES:
For the Appellant: Kenneth W. Ebener, Esquire

For the Respondent: George R. Burnett, Esquire
 

ORDERS:

ORDER

This matter is before me pursuant to the appeal of the Estate of Thomas S. Townsend (Appellant), from a final decision of the Respondent, South Carolina Department of Health and Human Services (Department), denying the Appellant's application for an undue hardship waiver or exemption from the Department's claim against the Estate of Thomas S. Townsend for reimbursement of Medicaid expenses. The Administrative Law Judge Division (Division) has jurisdiction to hear this matter pursuant to S.C. Code Ann. § 1-23-600 (1986 & Supp. 2001). A hearing on the appeal was held on June 20, 2002, at the offices of the Division in Columbia, South Carolina. Upon consideration of the briefs and the arguments presented at the hearing, together with a review of the applicable law, the decision of the Department is affirmed in keeping with this Order.

STATEMENT OF THE CASE

Thomas S. Townsend received nursing home services which were covered by Medicaid. After Mr. Townsend's death on April 21, 1998, the Department, which administers the Medicaid program in South Carolina, filed a claim in the Lexington County Probate Court against the Appellant in the amount of $79,901.37 for nursing home services that were provided by Medicaid. The Estate as listed with the Probate Court consists of a house in the Hulon Greene Community located in West Columbia, South Carolina.

The Appellant contested the claim with the Department, asserting an undue hardship waiver of the amount claimed against the estate, based on his assertion that he would have lived with his father, thereby meeting a waiver exception, if he had been allowed to by the Board of Directors of Hulon Greene. The Appellant's request for a waiver was denied on February 1, 2001. In accordance with 27 S.C. Code Ann. Regs. 126-152 (Supp. 2001), the Appellant requested a contested case hearing (fair hearing) before a hearing officer of the Department. That hearing was held on August 8, 2001. On September 26, 2001, Hearing Officer Kimberly B. Burrell issued a final order and decision, in which she affirmed the Department's determination that the Appellant did not qualify for an undue hardship waiver. This appeal followed.

ISSUE ON APPEAL

The Appellant contends that the hearing officer applied the statutory guidelines too narrowly in denying his request for an undue hardship waiver.

STANDARD OF REVIEW

Jurisdiction on appeal is vested in the Division pursuant to S.C. Code Ann. § 44-6-190 (Supp. 2001). The provisions of the South Carolina Administrative Procedures Act (APA) govern an appeal from a final order of the Department. Under the APA, the Division "shall not substitute its judgment for that of the agency as to the weight of the evidence on questions of fact." S.C. Code Ann. § 1-23-380(A)(6) (1986 & Supp. 2001). However, the Administrative Law Judge may reverse or modify the decision of the Department if substantial rights of the Appellant have been prejudiced because the administrative findings or decisions are "clearly erroneous in view of the reliable, probative and substantial evidence on the whole record," "affected by . . . error of law," or "arbitrary or capricious." Id; See also Lark v. Bi-Lo, 276 S.C. 130, 276 S.E.2d 304 (1981).

Substantial evidence is that evidence which, in considering the record as a whole, would allow reasonable minds to reach the conclusion that the administrative agency reached. See, e.g., Jennings v. Chambers Development Co., 335 S.C. 249, 516 S.E.2d 453 (Ct. App. 1999). The possibility of drawing two inconsistent conclusions from the evidence does not prevent an administrative agency's finding from being supported by substantial evidence. Id. Where there is a conflict in the evidence, the agency's findings of fact are conclusive. Id.; See also Harbin v. Owens-Corning Fiberglas, 316 S.C. 423, 450 S.E.2d 112 (Ct. App. 1994). The party challenging an agency action has the burden of proving convincingly that the agency's decision is unsupported by substantial evidence. Waters v. S.C. Land Resources Conservation Comm'n, 321 S.C. 219, 467 S.E.2d 913 (1996). This tribunal cannot substitute its judgment for that of the Department upon a question as to which there is room for a difference of intelligent opinion. See, e.g., Chemical Leamen Tank Lines v. S.C. Pub. Serv. Comm'n, 258 S.C. 518, 189 S.E.2d 296 (1972).

DISCUSSION

Background

The Department is charged with the administration of the Medicaid program in South Carolina. Medicaid is a joint state and federal program designed to assist with the medical needs of persons meeting certain financial and other criteria. As part of the Medicaid program, states are required to recover from the estates of certain Medicaid recipients costs properly incurred for those persons' medical care. The Medicaid Estate Recovery program was mandated by the federal Omnibus Budget Reconciliation Act of 1993, as codified at 42 U.S.C. § 1396p(b). This legislation requires the states to set up procedures which conform to guidelines issued by the Secretary of the federal Department of Health and Human Services to waive certain claims against estates of Medicaid recipients in instances of undue hardship. To date, the Secretary has not issued any guidelines for determining undue hardship. However, in order to comply with the congressional mandate to promulgate undue hardship procedures, South Carolina has enacted undue hardship

criteria. Those criteria are codified at S.C. Code Ann. § 43-7-460 (Supp. 2001). That statute provides in pertinent part:

(A) The State Department of Health and Human Services shall seek recovery of medical assistance paid under the Title XIX State Plan for Medical Assistance from the estate of an individual who:

* * *

(2) was fifty-five years of age or older when the individual received medical assistance, but only for medical assistance consisting of nursing facility services, home and community-based services, and hospital and prescription drug services provided to individuals in nursing facilities or receiving home and community-based services.



* * *

(C) Recovery under this section must be waived by the department upon proof of undue hardship, asserted by an heir or devisee of the property claimed pursuant to 42 U.S.C. 1396p(b)(3). Until conflicting hardship standards and criteria are issued by the Secretary of the United States Department of Health and Human Services, the following are considered instances of undue hardship in which recovery must be waived:

(1) with respect to the decedent's home property, if the decedent could have transferred the home property on or after the date of his or her Medicaid application without incurring a penalty under 42 U.S.C. 1396p(c), if the property could have been transferred without a penalty to a:

* * *

(d) surviving child of the deceased who lived in the home for a period of at least two years immediately before the decedent became institutionalized and who provided care which allowed the decedent to delay institutionalization.



However, hardship under this item only applies if the individual to whom the property could have been transferred without penalty is actually residing in the home at the time the hardship is claimed. . . .



(2) with respect to the decedent's home and one acre of land surrounding the house, if an immediate family member:

(a) has resided in the home for at least two years immediately prior to the recipient's death;

(b) is actually residing in the home at the time the hardship is claimed;

(c) owns no other real property or agrees to sell all other interest in real property and give the proceeds to the department; and

(d) has annual gross family income that does not exceed one hundred eighty-five percent of the federal poverty guidelines.



(Emphasis added).

Application of the Undue Hardship Criteria

The Appellant contends, through the son as the Personal Representative for the Estate, that an undue hardship waiver should be granted to the son because he currently has no home and he would have lived in his father's home if granted permission to do so by Hulon Greene. The hearing officer reviewed the three (3) instances of undue hardship listed in Section 43-7-460(C) in determining whether an undue hardship existed for a waiver in the Appellant's case. Therefore, in determining this case, the hearing officer examined, in part, whether the Appellant's son was currently living in the house or had lived there for the two-year time period before the decedent became institutionalized. None of the exceptions listed in the statute apply to the Appellant's situation. Consequently, the hearing officer determined that the Appellant was ineligible to receive an undue hardship waiver.

The Appellant contends that the hearing officer erred in determining that the listed statutory criteria constitutes the only instances in which a finding of undue hardship may be made. The Department contends that under the rule of statutory construction expressio unius est exclusio alterius, there is a strong inference that no other exceptions were intended. Expressio unius est exclusio alterius means that the enumeration of particular things excludes the idea of something else not mentioned. Pennsylvania Nat. Mut. Cas. Ins. Co. v. Parker, 282 S.C. 546, 320 S.E.2d 458 (Ct. App. 1984). (1)

"The cardinal rule of statutory construction is to ascertain and effectuate the intent of the legislature." Hodges v. Rainey, 341 S.C. 79, 533 S.E.2d 578, 581 (2000). The best evidence of legislative intent is the statute's actual language. Id. Therefore, where a statute's language is clear and unambiguous, conveying a clear and definite meaning, no other meaning may be imposed. Id. Here, the definition of the word "instance" is "1a. An example that is cited to prove or invalidate a contention or illustrate a point. b. A case or an occurrence. 2. Law. A legal proceeding or process. . . ." American Heritage College Dictionary 752 (3rd. ed. 1993). Applying definition "1a" of "instance" would lead to a determination that the General Assembly meant to say in Section 43-7-460 that: "Until conflicting hardship standards and criteria are issued by the Secretary of the United States Department of Health and Human Services, the following are considered [examples] of undue hardship in which recovery must be waived. . . ." Therefore, the three following "instances" in Section 43-7-460 would only be examples of situations when the Department must waive recovery of medical assistance because of "undue hardship."

On the other hand, applying definition "1b" of "instance" would lead to a determination that the General Assembly meant to say in Section 43-7-460 that: "Until conflicting hardship standards and criteria are issued by the Secretary of the United States Department of Health and Human Services, the following are considered [occurrences] of undue hardship in which recovery must be waived. . . ." Consequently, applying that definition, the three following "instances" in Section 43-7-460 would be the only occurrences when the Department must waive recovery of medical assistance because of "undue hardship."

If a statute is ambiguous, courts must ascertain legislative intent through statutory construction. See Abell v. Bell, 229 S.C. 1, 91 S.E.2d 548 (1956). An ambiguity arises when the language of a statute is capable of being understood by reasonably well-informed persons in either of two or more senses. Southeastern Fire Ins. Co. v. South Carolina Tax Comm'n, 253 S.C. 407, 171 S.E.2d 355 (1969). In this case, the definitions of "instances" could lead to the interpretation that "instances" means examples or occurrences. These two definitions have diametric results.

Therefore, because the word "instances" may be seen as either referencing criteria to consider or establishing specific criteria to consider, resorting to other rules of statutory construction is proper. In this case, the Department construes the listed criteria in Section 43-7-460 to constitute the only instances in which a finding of undue hardship may be made. The construction of a statute by an agency charged with its administration will be accorded the most respectful consideration and will not be overruled absent compelling reasons. Jasper County Tax Assessor v. Westvaco Corp., 305 S.C. 346, 409 S.E. 2d 333 (1991). Furthermore, "a statute must be construed in the light of its intended purpose; and if such purpose can be reasonably discovered in its language, the purpose will prevail over the literal import of the statute, for the dominant factor in the rule of construction is the intent, not the language, of the legislature." Abell v. Bell, 229 S.C. 1, 91 S.E. 2d 548, 550 (1956). Here, the three criteria listed in Section 43-7-460 are very specific. That specificity reflects a legislative intent of not merely creating examples but of offering specific instances when a finding of undue hardship must be made.

Deduction of Expenses Paid from Recovery Claim

The Appellant also argues that he is entitled to the out-of-pocket expenses and expenditures he paid for the care and maintenance of the Estate following his father's institutionalization. This issue properly belongs before the Probate Court. S.C. Code Ann. § 62-1-302 (1987 & Supp. 2001) (The Probate Court has exclusive original jurisdiction over all subject matter related to estates of decedents).

ORDER

For the foregoing reasons, the Department's decision to deny the Appellant's request for an undue hardship waiver is hereby AFFIRMED.

AND IT IS SO ORDERED





____________________________ Ralph King Anderson, III

Administrative Law Judge



July 3, 2002

Columbia, South Carolina

1. I do not find that the rule of construction expressio unius est exclusio alterius is applicable in this case. The issue in this case is not whether the listing of the criteria creates the inference that no other exceptions were intended, but whether the word "instances" creates the inference that the criteria listed are exclusive or exemplary. In other words, there is no logical basis in concluding that by merely listing instances in which an individual is eligible to receive an undue hardship waiver, the Legislature intended to exclude all other instances. The opposite conclusion is equally plausible, that by specifically referencing the listed criteria as "instances," the Legislature intended to allow others if those instances were analogous to the criteria listed. See South Carolina Dept. of Consumer Affairs v. Rent-A-Center, Inc., 345 S.C. 251, 547 S.E.2d 881 (2001).


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