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From Health Law Daily, September 2, 2015

Ohio pulled out of ‘interpretive wormhole,’ spouses are part of ‘family’

By Mary Damitio, J.D.

Ohio Medicare beneficiaries are entitled to have their resident spouses included in the calculations of their family size for the purposes of determining whether they were eligible for Medicare payment assistance, the Sixth Circuit ruled. Likening the inquiry to whether our solar system includes the planet Venus, the court found the Ohio Department of Medicaid’s (Department) interpretation of “family,” which excluded resident spouses, to be contradictory to federal law (Wheaton v. McCarthy, September 1, 2015, Kethledge, R.).

Background. Three Ohio Medicare beneficiaries brought a putative class action suit against the Director of the Department alleging violations of the Medicaid Act after their applications for Medicare payment assistance were denied as a result of their spouses being excluded from the Department’s calculation of their family size. The district court granted the Director’s motion to dismiss the action, finding that the Medicaid Act did not define “family,” and that the Department was free to create its own definition of the term.

Payment assistance. The Medicaid Act requires states that receive Medicaid funding to provide payment assistance to certain low-income Medicare beneficiaries for out-of-pocket Medicare expenses (42 U.S.C. §§1396a(a)(10)(E), 1396d(p)). In order to determine whether the beneficiaries are entitled to payment assistance, the state must compare the beneficiary’s income to the federal poverty line for “a family of the size involved” (42 U.S.C. §§1396d(p)(2)(A), 1396a(a)(10)(E)(iii),(iv)). As a family grows larger, the federal poverty line income rises, thus making it generally easier for beneficiaries with larger families to quality for assistance payments than beneficiaries with smaller families. Ohio does not include a beneficiary’s resident spouse as a member of the “family” for the purposes of determining payment assistance eligibility.

“Family.” The Department’s interpretation of “family” was directly contradicted by the plain meaning of the term, which the court noted, did not mean whatever the state wanted it to mean. The Medicaid Act provides no definition of the term “family,” so the court looked to the term’s ordinary meaning and concluded that a spouse is included within that definition.

Interpretive wormhole. While the Department had considerable latitude in defining “family” for the purposes of payment assistance eligibility, it did not have so much latitude as to exclude a beneficiary’s resident spouse. The court rejected the Department’s argument that the statute should be open to its interpretation because the Act stated, “family of the size involved,” rather than just “family.” The court concluded that the term “involved,” was not an “interpretive wormhole, whose supposed ambiguity leads to a galaxy of unfettered agency discretion.” Additionally, the court rejected the Department’s argument that eligibility should be based upon the “individual-need” standard of the supplemental security income (SSI) program rather than the “family-need” standard, because the statute expressly adopted the latter standard.

The case is No. 14-4023.

Attorneys: Miriam H. Sheline (Pro Seniors, Inc.) for Leslie Wheaton. Rebecca L. Thomas, Office of the Ohio Attorney General, for John McCarthy, Director, Ohio Department of Medicaid.

Companies: Ohio Department of Medicaid

MainStory: TopStory CMSNews EligibilityNews KentuckyNews MichiganNews OhioNews TennesseeNews

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