No. 96 Matter of Estate of Tomeck

The Saratoga County Department of Social Services (DSS), supported by the State Attorney General, is appealing lower court rulings that rejected its claim for $324,812.12 from the estate of Margaret Tomeck as reimbursement for Medicaid payments DSS made for the nursing home care of her husband, John Tomeck, from 1997 until his death in 2005. Margaret Tomeck, who lived in Saratoga Springs, died in 2002.

DSS initially denied Medicaid coverage to the husband in 1997, finding the couple had excess assets and income under the spousal impoverishment provisions of the federal Medicaid Act. DSS determined they had combined assets of $123,830.90, which exceeded the $74,820 "community spouse resource allowance" (CSRA) that Margaret could retain without making her husband ineligible for Medicaid. At a hearing before the State Department of Health, the Tomecks contended Margaret was entitled to an increase in her CSRA because her net monthly income of $1,072.24 fell below the "minimum monthly maintenance needs allowance" (MMMNA) of $1,976 that Medicaid eligibility rules allowed for the uninstitutionalized spouse in 1997. The Department of Health upheld the denial of benefits, holding that under its "income first" policy, $903.76 of the husband's monthly income (consisting primarily of Social Security benefits) was properly deemed to be available to Margaret,
bringing her income up to the MMMNA level. Margaret then signed a spousal refusal, attesting that she needed to retain all of her income and assets to support herself and that she could not contribute to her husband's care, which had the effect of qualifying her husband for Medicaid in July 1997.

After Margaret's death, DSS filed its claim for reimbursement from her estate, contending that her refusal to contribute to her husband's care created an implied contract with her under Social Services Law § 366(3)(a) that allowed DSS to recover its Medicaid expenditures. The statute applies to "a responsible relative with sufficient income and resources to provide medical assistance" who refuses to provide necessary care to a Medicaid applicant. The Tomeck Estate argued there was no implied contract because Margaret did not have the means to pay for her husband's care. Surrogate's Court denied the DSS claim for reimbursement, holding that John Tomeck's
Social Security benefits were improperly allocated to Margaret. The court denied the estate's request for attorney's fees.

The Appellate Division, Third Department affirmed. Relying on the Second Circuit's ruling in Robbins v DeBuono (218 F3d 197), the court held that DSS violated the anti-alienation provisions of the Social Security Act (42 USC § 407) by attributing John Tomeck's benefits to Margaret in order to raise her income level to the MMMNA before she signed the spousal refusal. "Thus, because [Margaret] did not have 'sufficient income and resources to provide medical assistance' to her husband at that point, no implied contract was created and her estate cannot now be held liable for the medical assistance furnished to her husband," it said.

DSS and the Attorney General argue, in part, that Robbins has been superceded by the U.S. Supreme Court's more restrictive reading of the anti-alienation provisions in Washington State Dept. of Social & Health Servs. v Guardianship Estate of Keffeler (537 US 371). They argue that attributing John Tomeck's benefits to Margaret as part of the Medicaid eligibility determination does not violate the statute because it "does not take control over the social security income in order to discharge an existing or anticipated liability."