In re: Estate of Roy W. Barnett ( 2005 )

IN THE COURT OF APPEALS OF TENNESSEE
AT JACKSON
SEPTEMBER 21, 2004 Session
IN RE: ESTATE OF ROY W. BARNETT, DECEASED
Direct Appeal from the Chancery Court for Haywood County
No. P-1489 George R. Ellis, Chancellor
No. W2003-02530-COA-R3-CV - Filed January 20, 2005
This appeal arises out of a claim filed against Decedent’s estate by the Bureau of TennCare.
Decedent’s estate filed an exception to the claim arguing that such claim was barred because
Decedent was not provided with notice of the State of Tennessee’s recovery provisions as required
by section 71-5-118(l) of the Tennessee Code. The trial court found that the Bureau of TennCare’s
claim was barred on the basis that no written notice of the State’s recovery provisions was provided
to Decedent or his family members. The Bureau of TennCare brought the instant appeal to this
Court, and, for the following reasons, we reverse.
Tenn. R. App. P. 3; Appeal as of Right; Judgment of the Chancery Court Reversed and
Remanded
ALAN E. HIGHERS, J., delivered the opinion of the court, in which W. FRANK CRAWFORD , P.J., W.S.,
and DAVID R. FARMER , J., joined.
Paul G. Summers, Attorney General and Reporter, Sue A. Sheldon, Senior Counsel, Nashville, TN,
for Appellant, Bureau of Tenncare
C. Thomas Hooper, Brownsville, TN, for Appellee, Estate of Roy W. Barnett
OPINION
Facts and Procedural History
Roy W. Barnett (“Decedent”) died on December 19, 2002, at the age of eighty-nine. At the
time he died, he was a resident of the Crockett County Nursing Home in Alamo, Tennessee. On July
1, 1992, Decedent enrolled in the TennCare program and began receiving TennCare reimbursements
for nursing facility services on December 21, 1993. After Decedent availed himself of the
homestead exemption removing his home from consideration of his financial assets, he was
medically and financially eligible for TennCare assistance. Because of his income level, which was
in part due to the rent collected from leasing his home, Decedent paid $600 per month for nursing
facility services and the State of Tennessee paid approximately $2,400 per month.
After Decedent died on December 19, 2002, his Last Will and Testament was admitted to
probate. Subsequently, the State of Tennessee Bureau of TennCare (“Bureau”) filed a claim against
Decedent’s estate to recover the unpaid balance of reimbursements for nursing facility services in
the amount of $198,681.83. Decedent’s estate filed an exception to the claim, and the trial court held
a hearing on the matter on August 28, 2003. In an order dated September 10, 2003, the trial court
held that, because the State of Tennessee did not inform decedent or his family members of the
State’s recovery provisions, the estate’s exception to the claim should be granted and the claim by
the Bureau should not be allowed. The Bureau filed its notice of appeal and presents the following
issue for our review: whether the trial court erred when it disallowed the Bureau’s claim against
Decedent’s estate. For the following reasons, we reverse and remand for further proceedings
consistent with this opinion.
Standard of Review
In reviewing the decision of the chancery court, we utilize the following standard of review:
This case was tried in the probate court without a jury. Accordingly, the standard of
review is de novo upon the record with a presumption of correctness as to the
findings of fact, unless the preponderance of the evidence is otherwise. Tenn. R.
App. P. 13(d); Cross v. City of Memphis, 20 S.W.3d 642, 644-45 (Tenn. 2000). To
the extent that the determination of the issues rests on statutory construction, they
present questions of law. Myint v. Allstate Ins. Co., 970 S.W.2d 920, 924 (Tenn.
1998). Questions of law are reviewed de novo with no presumption of correctness.
Id.
Bowden v. Ward, 27 S.W.3d 913, 916 (Tenn. 2000); see also In re Estate of Daughrity, No. M2003-
02244-COA-R3-CV, 2004 Tenn. App. LEXIS 765, at *6 (Tenn. Ct. App. Nov. 16, 2004).
Application of Tennessee Code Annotated § 71-5-118(l)
The Bureau argues that the trial court erred when it applied section 71-5-118(l) of the
Tennessee Code and barred the Bureau’s claim against Decedent’s estate. As an initial matter, we
refer to this Court’s discussion of the requirements of federal law for state medical assistance
programs:
The Bureau is required by both state and federal law to seek recovery of benefits paid
to Decedent under the facts presented in this case.
The Medicaid program was created in 1965, when Congress added
Title XIX to the Social Security Act, 79 Stat. 343, as amended, 42
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U.S.C. § 1396 et seq. (1976 ed. and Supp. II), for the purpose of
providing federal financial assistance to States that choose to
reimburse certain costs of medical treatment for needy persons.
Although participation in the Medicaid program is entirely optional,
once a State elects to participate, it must comply with the
requirements of Title XIX.
Harris v. McRae, 448 U.S. 297, 301, 65 L. Ed. 2d 784, 100 S. Ct. 2671 (1980). A
state wishing to participate in the federal Medicaid program must establish a state
plan for medical assistance which “provides for the establishment or designation of
a single State agency to administer or to supervise the administration of the plan.”
42 U.S.C. § 1396a(a)(5) (2003).
Tennessee chose to participate in the federal Medicaid program when the
legislature promulgated the Tennessee Medical Assistance Act of 1968. Tenn. Code
Ann. § 71-5-101 (2003). Accordingly, Tennessee is required to comply with 42
U.S.C. § 1396a which mandates that participating states must “comply with the
provisions of section 1917 [42 USCS § 1396p] with respect to liens, adjustments, and
recoveries of medical assistance correctly paid, transfers of assets, and treatment of
certain trusts.” 42 U.S.C. § 1396a(a)(18) (2003). Section 1396p provides, in
relevant part, as follows:
Liens, adjustments and recoveries, and transfer of assets.
....
(b) Adjustment or recovery of medical assistance correctly paid under
a State plan.
(1) No adjustment or recovery of any medical assistance correctly
paid on behalf of an individual under the State plan may be made,
except that the State shall seek adjustment or recovery of any medical
assistance correctly paid on behalf of an individual under the State
plan in the case of the following individuals:
....
(B) In the case of an individual who was 55 years of age or older
when the individual received such medical assistance, the State shall
seek adjustment or recovery from the individual's estate, but only for
medical assistance consisting of --
(i) nursing facility services, home and community-based services, and
related hospital and prescription drug services, or
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(ii) at the option of the State, any items or services under the State
plan.
....
(2) Any adjustment or recovery under paragraph (1) may be made
only after the death of the individual's surviving spouse, if any, and
only at a time --
(A) when he has no surviving child who is under age 21, or (with
respect to States eligible to participate in the State program
established under title XVI [42 USCS §§ 1381 et seq.]) is blind or
permanently and totally disabled, or (with respect to States which are
not eligible to participate in such program) is blind or disabled as
defined in section 1614 [42 USCS § 1382c]; and
....
(3) The State agency shall establish procedures (in accordance with
standards specified by the Secretary) under which the agency shall
waive the application of this subsection (other than paragraph (1)(C))
if such application would work an undue hardship as determined on
the basis of criteria established by the Secretary.
42 U.S.C. § 1396p (2003). Congress amended the Medicaid Act in 1993 to require,
not just permit, states to seek recovery of medical costs from the estates of certain
deceased beneficiaries to combat rising costs and perceived abuses. State v. U.S.
Dep't of Health & Human Servs., 289 F.3d 281, 284 (4th Cir. 2002).
In re Estate of Daughrity, No. M2003-02244-COA-R3-CV, 2004 Tenn. App. LEXIS 765, at *6-10
(Tenn. Ct. App. Nov. 16, 2004).
The notice section at issue in this case is located in section 71-5-118(l) of the Tennessee
Code and requires that “[a]ll applicants for medical assistance under this part, and all applicants for
reverification of eligibility to receive such assistance, shall receive a warning, in easily readable
language, regarding the state recovery provisions, as well as the administrative, civil and criminal
liability provisions of this chapter.” Tenn. Code Ann. § 71-5-118(l) (2003).
Initially, the Bureau argues that the notice requirement of section 71-5-118(l) of the
Tennessee Code should not apply in this case to correctly paid benefits since the remainder of that
section concerns fraud, abuse, and incorrectly paid benefits. Therefore, the State contends that the
notice provision, by virtue of its appearance in section 71-5-118, does not apply to cases of correctly
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paid benefits addressed in section 71-5-116 of the Tennessee Code. However, the warning provision
states that the notice requirement applies to applicants for medical assistance and applicants for
reverification of eligibility to receive medical assistance under this part. Tenn. Code Ann. § 71-5-
118(l) (2003). Therefore, we are not persuaded by the Bureau’s argument that the notice provision
does not apply because of its appearance in section 71-5-118 rather than section 71-5-116.
The Bureau next argues that the trial court erred because the notice provision of section 71-5-
118(l) did not come into effect until July 21, 2002. We agree. We are mindful of the rules of
statutory construction:
It is a well-settled principle that this Court’s role in construing statutes is “to
ascertain and give effect to” the legislative purpose without unduly restricting or
expanding a statute’s coverage beyond its intended scope. Mooney v. Sneed, 30
S.W.3d 304, 306 (Tenn. 2000). “‘The legislative intent and purpose are to be
ascertained primarily from the natural and ordinary meaning of the statutory
language, without a forced or subtle interpretation that would limit or extend the
statute’s application.’” Id. (quoting State v. Blackstock, 19 S.W.3d 200, 210 (Tenn.
2000)). Courts are not authorized to alter or amend a statute and must “‘presume that
a legislature says in a statute what it means and means in a statute what it says
there.’” 30 S.W.3d at 307 (quoting Gleaves v. Checker Cab Transit Corp., 15 S.W.3d
799, 803 (Tenn. 2000)).
Poper v. Rollins, 90 S.W.3d 682, 684 (Tenn. 2002).
Section 71-5-118(l) requires a warning for “[a]ll applicants for medical assistance under this
part, and all applicants for reverification of eligibility to receive such assistance.” Tenn. Code Ann.
§ 71-5-118(l) (2003). The evidence is undisputed that after July 21, 2002, Decedent was neither an
applicant for medical assistance nor an applicant for reverification of eligibility to receive medical
assistance. Decedent originally enrolled in the TennCare program in 1992 and began receiving
assistance in 1993, prior to the effective date of section 71-5-118(l). Further, Decedent’s last
reverification for eligibility occurred on January 7, 2002, also prior to the effective date of section
71-5-118(l). Decedent died on December 19, 2002, prior to his next reverification, which was
performed annually. Therefore, the Bureau was not required to issue the written warning mandated
by section 71-5-118(l), and the decision of the trial court barring the Bureau’s claim on this basis was
error. The plain language of the statute requires a warning only for applicants who seek medical
assistance or applicants who wish to reverify their eligibility for medical assistance. Under the
narrow circumstances of this case and the plain language of section 71-5-118(l), Decedent was
neither one at any time after the statute’s effective date and before his death.
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Conclusion
For the reasons stated above, we reverse the decision of the chancery court and remand for
further proceedings consistent with this opinion. Costs of this appeal are taxed to the Appellee, the
estate of Roy W. Barnett, for which execution may issue if necessary.
___________________________________
ALAN E. HIGHERS, JUDGE
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