ark bar elder law

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Arkansas Bar Association

110th Annual Meeting

Elder Law Update

Raymon B. Harvey

Arkansas Elder Law & Special Needs Trusts

650 S. Shackleford Rd., Ste 400

Little Rock, Arkansas 72211

[email protected]

www.ArkansasElderLaw.com

501-221-3416

Medicaid Cheat Sheet for Long Term Care Benefits - 2008

Single Individual with Care at Home

Income:

Assets:

Transfers:

$1,911.00 per month cap.

Miller Trust is not allowed if income exceeds cap.

No requirement to contribute to cost of care.

$2,000.00 total countable assets.

Includes: anything that can be converted to cash.

Excludes: the home and land attached, one car (may have limit on value),

personal possessions, and anything that cannot be converted to cash.

There can be no Medicaid eligibility if any transfers were made on or after

February 8,2006. The transfer rules were changed on February 8,2006 and prior

transfers mayor may not result in a penalty.

Married Individual with Care at Home

Income:

Assets:




Both spouses' assets are looked at. $2,000.00 total countable assets. The spouse

can keep one-half of all countable assets as of the date of the application up to a

maximum of$104,400.00 and a minimum of$20,880.00.

mailto:[email protected]

http://www.arkansaselderlaw.com/

http://www.arkansaselderlaw.com/

mailto:[email protected]



Transfers:







Married Couple Both with Care at Home

Income:

Assets:

Transfers:

$1,911.00 per month cap, per individual.



$3,000.00 total countable assets.Includes: anything that can be converted to cash.






Single Individual with Nursing Home Care

Income:

Assets:

Transfers:


Miller Trust is allowed if income exceeds cap.

Keeps $40.00 per month and contributes the rest for cost of care.





Benefits are delayed one month for every $4,215.00 (or portion thereof) given

away within 36 months of the date the application for benefits is submitted (the

"look-back"). The calculation of the penalty depends on whether the gift was

before or after February 8, 2006. The "look-back" will gradually extend to 60

months by February 2011.



Married Individual with Nursing Home Care and Well Spouse at Home

Income:

Assets:

Transfers:



Keeps $40.00 per month and contributes the rest for cost of care. Spouse at home

can receive income to raise his/her income up to $1,712.00 a month (this amount

increases every July 1st) .

Both spouses' assets are looked at. $2,000.00 total countable assets. The spouse

can keep one-half of all countable assets as of the date of institutialization up to a

maximum of$104,400.00 and a minimum of$20,880.00.









Married Couple Both with Nursing Home Care

Income:

Assets:

Transfers:

$1,911.00 per month cap, per individual.

Miller Trust is allowed if income exceeds cap.













Arkansas Cases - Update

Arkansas Department of Health and Human Services, Petitioner,

vs. Honorable Vann Smith., Respondent

Supreme Court of Arkansas

370 Ark. 490

Opinion Delivered: September 13,2007 by Tom Glaze, Associate Justice

Vella A. Fox, Appellant v. Arkansas Department of Health and Human Services, Appellee

CA07-829

Court of Appeals of Arkansas, Division Three

Decided March 5, 2008

Opinion by Judge Larry D. Vaught

Arkansas Legislation - Update

Act 621 of the 86th General Assembly, Regular Session, 2007

TO ESTABLISH THE "ARKANSAS SUBSIDIZED GUARDIANSHIP ACT" OF 2007

Act 820 of the 86th General Assembly, Regular Session, 2007

AN ACT TO PROVIDE FOR PUBLIC GUARDIANSHIP OF INCAPACITATED ADULTS



No. 06-6

SUPREME COURT OF ARKANSAS

ARKANSAS DEPARTMENT OF

HEALTH AND HUMAN SERVICES,PETITIONER,

VS.

HONORABLE VANN SMITH.,

RESPONDENT,

Opinion Delivered September 13, 2007

A PETITION FOR WRIT OF

PROHIBITION, OR, IN THE

ALTERNATIVE, WRIT OF

CERTIORARI TO THE CIRCUIT

COUR T OF PULASKI COUNTY,

ARKANSAS, NO. DR2005-2845,

HONORABLE VANN SMITH,

CIRCUIT JUDGE

WRIT OF PROHIBITIONGRANTED.

TOM GLAZE, Associate Justice

The Arkansas Department of Health and Human Services (DHHS), petitions this court

for a writ of prohibition instructing the Circuit Court of Pulaski County that it is without

jurisdiction to grant Karen Blaylock's request for an increase of her Medicaid Community

Spouse Monthly Income Allowance (CSMIA) and Medicaid Community Spouse Resource

Allowance (CSRA) until her husband applies for Medicaid.

Karen Blaylock's husband, Alan Blaylock, became disabled in 1986; he suffered further

injuries when he was beaten during a home-invasion robbery in 2005. As a result of the 2005

injuries, Alan required twenty-four-hour care and supervision to meet his daily needs, and he

was institutionalized at Timber Ridge Ranch in early 2005.

On July 15, 2005, Karen filed an amended petition in the Pulaski County Circuit

Court, seeking an order of support prior to applying for Medicaid benefits to help cover

06-6



Alan's long-term care costs. DHHS, as the entity responsible for administering the Arkansas

Medicaid program, was granted permission to intervene in the Blaylocks' suit. After being

allowed to intervene, DHHS filed a motion for summary judgment, contending that, because

Alan had not applied for Medicaid and DHHS had made no determination of his eligibility

for benefits, Karen and Alan had failed to exhaust their administrative remedies. Accordingly,

DHHS argued that the circuit court lacked jurisdiction over the matter.

On November 22, 2005, the circuit court denied DHHS's motion for summary

judgment. In that order, the court determined that it had jurisdiction, finding that the

Medicare Catastrophic Coverage Act (MCCA), 42 U.S.C. § 1396r-5, and the Arkansas

Medical Services Manual provided implied authority for the court to allocate property outside

an action for divorce or separate maintenance. In addition, the court found that the Blaylocks

did not need to exhaust their administrative remedies prior to seeking a court order, because

cases from other jurisdictions had found that Congress provided two alternative means by

which a community spouse might obtain a higher resource or income allowance calculated

under the MCCA - 1) through an administrative hearing under 42 U.S.C. § 1396r5-(e), or

2) by judicial order. Given these two alternative routes, the court found that it was within

Karen's discretion to choose which method she wanted to use to obtain a higher allowance.

Following the circuit court's denial ofDHHS's motion for summary judgment, DHHS

sought a writ of prohibition from our court on January 4, 2006.

1

Prohibition is an

1 On May 16, 2006, Karen provided this court with documentation that Alan had

passed away and that she had been lawfully appointed by the circuit court as administratix

of his estate. However, the documentation did not contain an order of revivor from the

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extraordinary writ that is appropriate only when the trial court is wholly without jurisdiction.

Manila Sch. Dist. No. 15 v. Wagner, 357 Ark. 20, 159 S.W.3d 285 (2004). The writ is

appropriate only when there is no other remedy, such as an appeal, available. ld. Prohibition

is a proper remedy when the jurisdiction of the trial court depends upon a legal rather than

a factual question. ld. However, prohibition is never issued to prohibit a trial court from

erroneously exercising its jurisdiction. ld.

In its first point, DHHS argues that the circuit court lacked jurisdiction to consider

Karen's petition because of a failure to exhaust her administrative remedies. Generally, the

doctrine of exhaustion of administrative remedies provides that no one is entitled to judicial

relief for a supposed or threatened injury until the prescribed statutory administrative remedy

has been exhausted. See Centerpoint Enelgy Resources Corp , v. Circuit Court of Miller County,

___ Ark. , S.W.3d (june 7, 2007); Austin v. Center Point Enelgy Arkla, 365 Ark.

138,226 S.W.3d 814 (2006). A basic rule of administrative procedure requires that an agency

be given the opportunity to address a question before a complainant resorts to the courts.

Austin, supra; Dixie Downs, Inc. v. Arkansas Racing Comm'n, 219 Ark. 356,242 S.W.2d 132

circuit court. We remanded the matter to the circuit court in order to determine whether

such an order was appropriate. See Ark. Dep't of Human Servs. v. Smith, 366 Ark. 584, _

S.W.3d (2006) (per curiam).

The circuit court subsequently determined that Alan's death did not extinguish the

cause of action and that revivor was appropriate. DHHS, joined by Karen, then asked this

court to reinstate the petition. We granted the motion to reinstate the petition to this

court's active docket on April 5, 2007, and directed the parties to supplement the record

with the order of the circuit court on remand within fifteen days of that date, stating that

we would "decide the case on the original briefs." See Ark. Dep't c] Human Servs. v.

Circuit Court of Pulaski County, 369 Ark. 345, S.W.3d (2007) (per curiam).

-3- 06-6



(1951). Where a party has failed to exhaust his or her administrative remedies, the trial court

lacks jurisdiction over the suit. See Staton v. American Mfrs. Mut. Ins. Co., 362 Ark. 96, 207

S.W.3d 456 (2005).

The issue before us is (1) whether Karen was entitled to proceed directly to circuit

court to obtain an order of support, or (2) whether she was first required to avail herself of the

administrative procedures set out in the Medicaid Catastrophic Coverage Act. DHHS urges

this court to adopt the latter approach and conclude that, because Karen did not exhaust her

administrative remedies, the circuit court lacked jurisdiction to consider her petition.

Before addressing this specific issue, however, it is necessary to examine the

complexities of the MCCA on which Karen's petition was premised.

The federal Medicaid program provides funding to States that reimburse

needy persons for the cost of medical care. See Social Security Act, tit. XIX,

as added, 79 Stat. 343, and as amended, 42 U.S.C. § 1396 et seq. (1994 ed. and

Supp. V) "Each participating State develops a plan containing reasonable

standards ... for determining eligibility for and the extent of medical assistance"

within boundaries set by the Medicaid statute and the Secretary of Health and

Human Services. Schweiker v. Gray Panthers, 453 U.S. 34 (internal quotation

marks omitted); § 1396a(a)(17) (1994 ed.) [footnote omitted]. In formulating

those standards, States must "provide for taking into account only such income

and resources as are, as determined in accordance with standards prescribed by

the Secretary, available to the applicant." § 1396a(a)(17)(B) (emphasis added).

Wisconsin DEpartment (f Health & Family Services v. Blumer, 534 U.S. 473, 479 (2002).

The objective of the MCCA was to protect married couples when one spouse IS

institutionalized in a nursmg home, so that the spouse who continues to reside in the

community (the so-called "community spouse") is not impoverished and has sufficient income

and resources to live independently. See, e.g., Chambers v. Ohio Dep't (f Human Servs., 145

-4- 06-6



F.3d 793,798 (6thCir. 1998) (citing H.R. Rep. No. 100-105(11), 100th Cong., 2d Sess. at

65 (1988), r ep r in te d i n 1988 U.S.C.C.A.N. 857, 888). In essence, the MCCA allows a couple

to avoid having to spend all of the couple's assets on the institutionalized spouse's long-term

medical and custodial care before the institutionalized spouse is eligible for Medicaid benefits.

Under the MCCA, which governs the treatment of income and resources for

institutionalized spouses, income is allocated between spouses pursuant to a complex formula.

See 42 U.S.C. § 1396r-5(b) & (d). That formula provides that "no income of the community

spouse shall be deemed available to the institutionalized spouse." 42 U.S.C. § 1396r-5(b)(1).

The effect of the formula is to preserve the community spouse's income for that spouse, thus

avoiding "pauperization" of that spouse, and to prevent that spouse's income from affecting

the determination of whether the institutionalized spouse qualifies for Medicaid. S ee B lume r,

534 U.S. at 480. Section 1396r-5(b)(2) then sets out the rules to be used "[i]n determining

the income of an institutionalized spouse or community spouse for purposes of the post-

eligibility income determination described in subsection (d) of this section." (Emphasis added.)

Subsection (d) then provides a number of exceptions to those rules; those exceptions

are "designed to ensure that the community spouse and other dependents have income

sufficient to meet basic needs." Blumer, 534 U.S. at 481. Among those exceptions are the

"Minimum Monthly Maintenance Needs Allowance" (MMMNA), 42 U.S.C. § 1396r-

5(d)(3); the Community Spouse Monthly Income Allowance (CSMIA), 42 U.S.C. § 1396r-

5(d)(2); and the Community Spouse Resource Allowance (CSRA), 42 U.S.C. § 1396r-

5(£)(2).

- 5 - 06-6



These last two allowances are at issue in the instant case, as Karen's petition sought an

order increasing her CSMIA and CSRA. Under the MCCA, the CSMIA comes into play

when the income of the community spouse is insufficient to yield an income equal to or

above the MMMNA. The CSMIA allows the community spouse to deduct the amount of

that shortfall from the institutionalized spouse's income; the amount so deducted is then not

considered "available" to the institutionalized spouse. As a result, Medicaid will pay a greater

portion of the institutionalized spouse's medical expenses than it would absent the CSMIA

provision. See Blumer, 534 U.S. at 482.

In addition, for purposes of establishing the institutionalized spouse's Medicaid

eligibility, a portion of the couple's assets is reserved for the community spouse. This reserved

amount is the CSRA, which is determined by calculating the total of all of a couple's assets,

and then allocating half to the community spouse. The CSRA is considered unavailable to

the institutionalized in the eligibility determination, but all resources above that amount must

be spent before eligibility can be achieved. See Blumer, 534 U.S. at 483.

As just mentioned, Karen sought an order from the circuit court establishing her

CSMIA and CSRA; DHHS, however, contended that the circuit court lacked jurisdiction

to entertain Karen's petition. The crux ofDHHS's argument is that, in enacting the MCCA,

Congress did not create an independent, original cause of action in state courts whereby

potential Medicaid applicants could get a preemptive court order attributing and allocating

assets in anticipation of a future application for Medicaid. Because the Blaylocks had not

-6- 06-6



applied for Medicaid, DHHS contends that their attempt to pursue relief in state court is

without a jurisdictional foundation. We agree.

The circuit court determined that, under the MCCA, it had the "implied authority"

to make a pre-Medicaid-eligibility-determination allocation of the Blaylocks' assets. That

decision was premised largely on two provisions in the MCCA that refer to a "court order."

Section 1396r-5 (d)(5) declares that, "[ilf a court has entered an order against an institutionalized

spouse for monthly income for the support of the community spouse, the community spouse

monthly income allowance for the spouse shall be not less than the amount of the monthly

income so ordered." (Emphasis added.) In addition, section 1396r-5(f)(3) provides that, "[ilf

a court has entered an order against an institutionalized spouse for the support of the community

spouse, section 1396p of this title shall not apply to amounts of resources transferred pursuant

to such order for the support of the spouse or a family member[.]" (Emphasis added.)

DHHS counters, however, that reading the statute in its entirety makes it clear that any

allocation of a couple's assets can only occur after a determination of Medicaid eligibility has

been made. For example, DHHS notes language from § 1396r-5(b)(2) that speaks of the

attribution of income "for purposes of the post-eligibility income determination." (Emphasis

added.) Similarly, § 1396r-5(d)(1) permits deductions or allowances from the institutionalized

spouse's income "after an institutionalized spouse is determ ined ... to be eligible for medical

assistance." (Emphasis added.)

Congress has declared that "the determination of eligibility for medical assistance under

the [State] plan [for medical assistance] shall be m ade by the State or local agency adm inistering the

-7- 06-6



S ta te p la n[.]" 42 U.S.C. § 1396a(a)(S) (emphasis added). In Arkansas, that agency is the

Department of Health & Human Services. S ee, e.g ., Ark. Code Ann. § 2S-10-129(a)(2)(C)

(Rep!. 2002) (recognizing that DHHS "is presently charged with, among other things, all

welfare activity in the state, including ... [m]edical assistance."); Ark. Code Ann. § 20-10-

129(a)(4) (declaring it the legislature's intent to give DHHS the authority to adopt rules in

conformity with federal laws); Ark. Code Ann. § 20-77-101(a) (Rep!. 2001) (referring to the

"Medicaid medical assistance program administered by the Department of Human Services").

DHHS accordingly reasons that it is the only body empowered or authorized to make

Medicaid determinations, including determinations concerning the allocation of assets within

the context of the CSRA and CSMIA.

Karen responds primarily by pointing to § 1396r-S(f)(2) & (3). Subsection (f) generally

deals with permitting the transfer of resources to the community spouse; section 1396r-S (f)(2)

defines the CSRA in part as the "amount by which ... the greatest of ... the amount

transferred under a court order under paragraph (3) exceeds the amount of resources otherwise

available to the community spouse[.]" Paragraph (3) of subsection (f), as mentioned above,

declares that "if a court has entered an o rder against an institutionalized spouse for the support c] th e

co mm unity sp ouse, section 1396p of this title shall not apply to amounts of resources transferred

pursuant to such order for the support of the spouse or a family member[.]"

Focusing on the above highlighted language, Karen then goes on to argue that

Congress used the word "shall" in § 1396r-S(f)(3), thereby making the language mandatory.

However, what Karen's argument fails to recognize is that the word "shall" does not actually

-8- 06-6



appear to direct DHHS to apply the court's order. Reading the statute closely reveals that

what the Medicaid-administering agency "shall" do is to not apply 42 U.S.C. § 1396p to

resources transferred pursuant to such order. Section 1396p deals with liens, adjustments and

recoveries, and transfers of assets. That statute discusses when a lien may be imposed against

the property of an individual who has been receiving medical assistance.

Moreover, the fallacy in Karen's reliance on subsections (f)(2) and (f)(3) becomes

apparent when one reads § 1396r-S(f)(1), which provides as follows:

An institutionalized spouse may, without regard to section 1396p(c)(1)

of this title, transfer an amount equal to the community spouse resource

allowance (as defined in paragraph (2)), but only to the extent the resources of

the institutionalized spouse are transferred to (or for the sole benefit of) the

community spouse. The transfer under the p receding sentence shall be m ade as soo n

a s p r ac tic ab le a fte r th e d ate o f th e in itia l d ete rm in atio n o f e lig ib ility , taking into account

such time as may be necessary to obtain a court order under paragraph (3).

(Emphasis added.) The emphasized language makes it clear that the transfers between an

institutionalized spouse and a community spouse, as specified in this statute, must all transpire

cfter a determination has been made about the institutionalized spouse's Medicaid eligibility.

Given this language, we must conclude that DHHS's argument is correct. As discussed

above, Congress has declared that Medicaid eligibility "shall be made by the State or local

agency administering the State [Medicaid] plan." See 42 U.S.C. § 1396a(a)(S). In Arkansas,

that agency is DHHS; in turn, DHHS has promulgated the rules and regulations governing

Medicaid applications and eligibility. See Ark. Code Ann. § 20-10-129(a)(4). Thus, because

DHHS is the entity charged with administering the Arkansas Medicaid Program, it - rather

-9- 06-6



than the circuit court - is the sole entity that may determine whether a Medicaid applicant

is eligible for Medicaid, as well as for any of the deductions or allowances permitted under the

MCCA.

Moreover, the MCCA provides a means for administrative review of DHHS's

decisions regarding eligibility. Under 42 U.S.C. § 1396r-5(e), if the applicant disagrees with

DHHS's decision, that person can seek a review of that decision. Under § 1396r-5(e)(1),

once the Medicaid-administering agency determines eligibility for benefits, the State is to

notify the applicant and the spouse of the amount of allowances and how those allowances

were computed. If either spouse disagrees with DHHS's determination, § 1396r-5(e)(2)

provides for a review of that decision, as follows:

(A) In general

If either the institutionalized spouse or the community spouse IS

dissatisfied with a determination of-

(i) the comm unity spouse monthly incom e allowance;

(ii) the am ount (f m onthly incom e o therwise ava ilable to the community spouse(as applied under subsection (d)(2)(B) of this section);

(iii) the computation of the spousal share of resources under subsection

(c)(l) of this section;

(iv) the attribution of resources under subsection (c)(2) of this section;

or

(v) the determ ination of the com munity spouse resource a llowance (as defined

in subsection (f) (2) of this section);

such spouse is entitled to a fair hearing described in section 1396a(a) (3) of this

title with respect to such determination if an application for benefits under thissubchapter has been made on behalf of the institutionalized spouse. Any such

hearing respecting the determination of the community spouse resource

allowance shall be held within 30 days of the date of the request for the

hearing.

(Emphasis added.)

-10- 06-6



Should the applicant then still disagree with DHHS's determinations, at that point, the

applicant may seek judicial review under the Administrative Procedures Act, Ark. Code Ann.

§ 25-15-101 et seq. (Rep!. 2002).2 Only at that point - i.e., once the applicant has exhausted

his or her administrative remedies - does the state court system come into play. This

conclusion comports with our court's consistent holdings that administrative agencies are

better equipped than courts, by specialization, insight through experience, and more flexible

procedures to determine and analyze underlying legal issues affecting their agencies. See, e.g.,

Ark. Dep't of Health & Human Servs. v. R. C., 368 Ark. 660, S.W.3d (2007); Wright

v. Ark. State Plant Ed., 311 Ark. 125,842 S.W.2d 42 (1992).

In sum, DHHS is the sole entity charged with administering Medicaid and determining

eligibility for Medicaid benefits. The fact that Congress used language to the effect of "if a

court has entered an order of support" - without any further explanation of the

circumstances in which such an order might be entered - is insufficient to confer

jurisdiction, even impliedly, on the circuit court. This is particularly so when one considers

that sections 1396r-5 (d) (5) & (f) (3) only generally reference an order of spousal support; they

do not mention a court-ordered CSRA, CSMIA, or MMMNA. One who wishes to apply

for Medicaid must go through the process established by Congress and the State and cannot

do an "end run" around that process by seeking a preemptive court order of spousal support.

The Blaylocks failed to avail themselves of their administrative remedies, let alone

2Ark. Code Ann. § 20-10-129(c) (Rep!. 2002) provides that "[a]ll rules

promulgated pursuant to this section shall be promulgated in conformity with the Arkansas

Administrative Procedures Act, § 25-15-201[.]"

-11- 06-6



exhaust them, and as such, the circuit court was utterly without jurisdiction to consider the

Blaylocks' petition. Further, because DHHS was without another available remedy, such as

an appeal (as this case comes to us after the denial of a motion for summary judgment - a

non-appealable order), the writ of prohibition will lie in this case. See Ouachita Railroad v.

Circuit Court of Union County, 361 Ark. 333,206 S.W.3d 811 (2005) ("a writ of prohibition

is a proper remedy for lack of subject-matter jurisdiction in the trial court even when a

petitioner is not entitled to an appeal from a denial of a motion for summary judgment");

Ramirez v. White County Circuit Court, 343 Ark. 372, 38 S.W.3d 298 (2001) ("if there is no

jurisdiction, the only way petitioners can obtain review by this court is by way of a petition

for a writ of prohibition. Therefore, a petition for writ of prohibition is a proper method to

obtain review of jurisdiction by this court").

Because we grant DHHS's petition for writ of prohibition on this point, it IS

unnecessary to address any remaining issues.

Petition for writ of prohibition granted.

-12- 06-6



ARKANSAS COURT OF APPEALS

NOT DESIGNATED FOR PUBLICATION

LARRY D. VAUGHT, JUDGE

DIVISION III

CA07-829

March 5, 2008

VELLAA. FOX

APPELLANT

APPEAL FROM THE WASHINGTON

COUNTY CIRCUIT COURT

[CV2006-1893-2]

V.

ARKANSAS DEPARTMENT OF

HEALTH &HUMAN SERVICES

APPELLEE

HON. KIM MARTIN SMITH,

JUDGE

AFFIRMED

Appellant Vella Fox applied for Long Term Care Medicaid but was found ineligible

for those benefits by appellee Department of Health and Human Services. The Washington

County Circuit Court affirmed the denial. On appeal, Fox argues that (1) the trial court erred

in refusing to allow her to present additional evidence and (2) there was insufficient evidence

to support the trial court's denial of benefits. We affirm.

On December 1, 2005, Fox, who was eighty years old and in poor health, entered a

nursing home. To assistwith the cost of the care, Fox, on January 11, 2006, applied for Long

Term Care Medicaid with the Washington County DHS. Fox's daughter, Susan, held a

power of attorney for Fox and handled the application for benefits. Fox was awarded benefits

beginning February 1, 2006; however, she was denied benefits for December 2005 and

January 2006 because her countable resources exceeded the limit of$2000. In denying benefits



for those two months, the Washington County DHS office relied in part upon an annual

statement from the Principal Life Insurance Company, which reflected that Fox owned a life

insurance policy with a cashvalue of $2033.16.

Following the denial of benefits for December 2005 and January 2006, Fox requested

an administrative hearing, which was held onJuly 20,2006. It was learned at the hearing that

the Principal Lifepolicy had a facevalue of$30,000. Susan, on behalf of her mother, testified

that while the stated cash value of the policy was $2033.16, that amount should be reduced

because there was an outstanding loan against the policy in the amount of $16,000. Susan

testified:

... the net cash value of $2033 in, in my opinion should be offset by the fact that there

is a $16,000 loan against the policy so I could not cash in the policy without paying off

this $16,000 loan. So it's my argument that there really isn't a $2000 cash value to the

policy. It's really got a negative value because of the loan against it.

Susan further testified that none of the accumulated interest on the $16,000 loan-totaling

approximately $973-had been paid.

DHS offered the testimony of Brenda Bass,a DHS family-support specialist,who was

assigned to Fox's claim. Bass testified that her duties include Long Term Care Certification,

which involves interviewing clients and determining their eligibility for Long Term Care.

According to Bass,when Fox made her application for benefits, she was receiving $961.50 a

month in social security income, had a bank account balance of $65.56, and had two life

insurance policies-a Life Investors policy with a cashvalue of$569.20 and the Principal Life

2



policy with a cash value of $2033.16. Because these countable assets exceeded the resource

limit, Bass testified that Fox was ineligible for Long Term Care Medicaid.

On July 26,2006, the hearing officer entered a final order, affirming the Washington

County DHS's denial of benefits. The hearing officer found that the preponderance of the

evidence demonstrated that Fox was ineligible for Long Term Care Medicaid because her

countable resources were in excess of $2000. Fox appealed the final order by filing a

complaint in the Washington County Circuit Court on August 25,2006.

On November 27, 2006, Fox filed a motion for leave to present additional evidence

and remand for further proceedings. In this motion, Fox argued that she had obtained two

letters from Principal Life ("Principal Lifeletters") that support her position that she isentitled

to Long Term Care Medicaid. The trial court denied the motion, finding that Fox failed to

show a good reason for failing to timely obtain and present the Principal Life letters.

A hearing before the trial court washeld May 31, 2007. After arguments from counsel,

the court affirmed the hearing officer's final order denying Fox benefits. The trial court found,

among other things, that Fox failed to demonstrate good cause supporting her request to

present additional evidence and that substantial evidence supported the hearing officer's

decision because the Principal Life annual statement established that the cash value of the

policy exceeded the resource limit. The trial court entered an order outlining these findings

onJune 19, 2007.

Fox's first point on appeal is that the trial court erred in refusing to allow her to present

the Principal Life letters as additional evidence. Arkansas Code Annotated section

3



25-15-212(f) (Repl. 2002) permits the circuit court to order that additional evidence be taken

before the administrative agency if the court finds that the evidence ismaterial and that there

were good reasons for failure to present it in the proceeding before the agency.

We have held that, when aparty appliesfor leave to present additional evidence under

section 25-15-212(f), the trial court should first view the application for additional evidence

to determine if the party was diligent; that the trial court may then in the exercise of its

discretion conduct a hearing to determine if the additional evidence fits within the

requirements of the statute; and that, if the trial court finds that under the requirements of the

statute additional evidence should be taken, the trial court may then remand to the

appropriate agency to hear the additional evidence. Dep't o f F in. &Admin. v. Samuhel, 51

Ark. App. 76, 909 S.W.2d 656 (1995). The trial court's decision to grant or deny a motion

to present additional evidence is within the discretion of the trial court and should not be

overturned absent an abuse of that discretion. See S am uh el, su pr a; 1 v1 arsh all v . A lco ho lic B ever ag e

C o ntro l B d., 15 Ark. App. 255, 692 S.W.2d 258 (1985).

The only reason Fox gives for not presenting the Principal Life letters in July 2006 is

that the letters did not exist then. She argues that the letters were not created until September

2006; therefore, it was impossible to introduce them any earlier. The trial court found that

this was not a good reason for not timely obtaining the letters.

The record demonstrates that Fox was capable of timely presenting evidence from

Principal Life because she was the party who provided the 2005 Principal Life annual

statement to DHS for consideration with the application for benefits. The record further

4



establishes that the Principal Life letters were requested by Susan, on behalf of Fox, because

they are addressed to Susan. What is not clear from the record is why Fox could not timely

present these letters, i.e., why Fox did not request and present the Principal Life letters in

January 2006, when she applied for benefits, or inJuly 2006, at the administrative hearing. To

the contrary, the record is completely void of any explanation as to why the letters were not

requested and presented at these earlier times. Moreover, as of August 2006, when Fox filed

her complaint in circuit court, she never mentioned the need for these letters, the importance

of these letters, or that she had requested these letters and was waiting for them.

The Principal Life letters were first discussedby Fox in her November 2006 motion

to present additional evidence. In this motion, Fox again failed to give any reason for failing

to obtain and present these letters when she applied for benefits in January 2006 or at the July

2006 administrative hearing. In light of the facts that Fox failed to give any reason, good or

otherwise, for not timely presenting the Principal Life letters, we cannot say that the trial

court abused its discretion in refusing to grant Fox's motion to present additional evidence.

For her second point on appeal, Fox argues that there is insufficient evidence

supporting the trial court's finding that she was not eligible for Long Term Care Medicaid.

The rules governing judicial review of administrative decisions are the same for both the

circuit and appellate courts and this review is limited in scope: administrative decisions will

be upheld if supported by substantial evidence and not arbitrary, capricious, or characterized

by an abuse ofdiscretion. Samuhel, supra. In determining whether there issubstantial evidence,

we review the entire record rather than merely the evidence supporting the administrative

5



decision. Id . To establish an absence of substantial evidence to support the decision, an

appellant must demonstrate that the proof before the administrative tribunal was so nearly

undisputed that fair-minded men could not reach its conclusion. Williams v. Scott, 278 Ark.

453,647 S.W.2d 115 (1983). Finally, the question is not whether the testimony would have

supported a contrary finding but whether it supports the finding that was made. Id .

Fox's claim for benefits in this case arises under the Medicaid program, created by

federal law but administered in part by the Arkansas DHS. The DHS Medical Services

Manual, § 3000 et seq., sets forth the guidelines applicable Long Term Care Medicaid. To be

eligible for these benefits, an individual's countable resources cannot exceed $2000. Medical

Services Manual, § 3310 (2)(c ) (5). Resources are generally defined as those assets, including

both real and personal property, which an individual possesses. Id . at § 3330. Resources

include all liquid assetsaswell as those assetswhich are not presently in liquid fonn. Id . Life

insurance policies that have a cash surrender value in excess of$1500 are counted against the

resource limit. Id . at § 3332.3(2)(a).

The record demonstrates that Fox is not eligible for Long Term Care Medicaid

because she had countable resources in excess of $2000. The only document Fox timely

offered into evidence was the Principal Life annual statement, which reflected a cashvalue for

that policy in excessof$2000. Furthermore, she had a bank account with a balance of$65.56

and second life insurance policy with Life Investors with a cash value of$569.20.

Fox argued to the trial court that the hearing officer erred because he did not deduct

from the cashvalue the interest on the loan taken on the Principal Life policy. She argued that

6



deducting the loan interest of$982.14 and adding the dividend of$917.57 would result in a

cash value less than $2000. The cash value of the Principal Life policy in that case would be

$1968.59, which islessthan $2000; however, inmaking this argument, Fox ignores her other

countable resources-her savings account and second life insurance policy, which total

$634.76. In such a case, Fox's countable resource would be $2603.35.

Because substantial evidence supports the trial court's finding that Fox had countable

resources in excess of$2000, we affirm the trial court's denial of Long Term Care Medicaid.

Affirmed.

GRIFFENand BAKER,]]., agree.

7



Stricken language would be deleted from and underlined language would be added to the law as it existed

prior to this session ofthe General Assembly.

Act 621 of the Regular Session

12

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State of Arkansas

86th General Assembly

Regular Session, 2007

As Engrossed: H312107 H3112107

A BillHOUSE BILL 2256

5 By: Representative E. Brown

6

7

8

9

For An Act To Be Entitled

AN ACT TO ESTABLISH THE "ARKANSAS SUBSIDIZED

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18 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF ARKANSAS:

GUARDIANSHIP ACT" OF 2007; AND FOR OTHER

PURPOSES.

SubtitleTO ESTABLISH THE "ARKANSAS SUBSIDIZED

GUARDIANSHIP ACT" OF 2007.

19

20 SECTION 1. Arkansas Code Title 9, Chapter 8, is amended to add an

21 additional subchapter to read as follows:

22

23

9-8-201. Title - Purpose

(a) This subchapter shall be known and may be cited as the "Arkansas

24 Subsidized Guardianship Act".

25 (b) The purpose of this subchapter is to create the framework for

26 subsidized guardianships in the event that funding becomes available for such

27 a program.

28

29

30

9-8-202. Administration, Funding and Limitations

(a) Contingent upon adequate funding, appropriation, and position

31 authorization, both programmatic and administrative, the Department of Health

32 and Human Services shall establish and administer a program of subsidized

33 guardianship.

34 (b) Guardianship subsidies and services for children under this

35 program shall be provided out of funds appropriated to the department or made

1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 03-12-200708:45 MXR033



As Engrossed: H3/2/07 H3/12/07 HB2256

1 available to it from other sources and shall be subject to any restrictions

2 as outlined in the funds appropriated or made available to the department.

3

4 9-8-203. Promulgation of Regulations.

5 (a) The Department of Health and Human Services shall promulgate rules

6 and regulations to implement this program.

7 (b) The department shall promulgate rules and regulations that include

8 eligibility requirements in accordance with any requirements from the funding

9 stream.

10

11

12

9-8-204. Eligibility.

(a) A child is eligible for a guardianship subsidy if the Department

13 of Health and Human Services determines the following:

14 (1) The child has been removed from the custody of his or her

15 parent(s) as a result of a judicial determination to the effect that

16 continuation in the custody of the parent(s) would be contrary to the welfare

17 of the child;

18 (2) The department is responsible for the placement and care of

19 the child;

20 (3) Being returned home or adopted are not appropriate

21 permanency options for the child;

22

23

24

(4) Permanent placement with a guardian is in the child's best

interest;

(5) The child demonstrates a strong attachment to the

25 prospective guardian and the guardian has a strong commitment to caring

26 permanently for the child;

27 (6) With respect to a child who has attained fourteen (14) years

28 of age, the child has been consulted regarding the guardianship;

29 (7) If permitted or required by the funding stream, the guardian

30 is qualified pursuant to a means-based test;

31 (8) If permitted or required by the funding stream, the

32 necessary degree of relationship exists between the prospective guardian and

33 the child; and

34 (9) The child has special needs.

35 (b)(I) The department shall redetermine eligibility of the

36 guardianship on an annual basis and shall include confirmation that the

2 03-12-2007 08:45 MXR033




1 guardian is still providing care for the child.

2 (2) If permitted or required by the funding stream, the annual

3 redetermination of eligibility shall include whether or not the guardian is

4 qualified pursuant to a means-based test.

5

6 9-8-205. Guardianship subsidy agreement.

7 (a) A written guardianship subsidy agreement must be entered before

8 the guardianship is established.

9 (b) The guardianship subsidy agreement shall become effective upon

10 entry of the order of guardianship.

11 (c)(I) In the case of a child whose eligibility is based on a high

12 risk for development of a serious physical, mental, developmental, or

13 emotional condition, the guardianship subsidy agreement shall provide no

14 guardianship subsidy until the child actually develops the condition.

15 (2) No guardianship subsidy shall be made until adequate

16 documentation is submitted by the guardian showing that the child has now

17 developed the condition upon which eligibility was based.

18 (3) Upon acceptance by the Department of Health and Human

19 Services that the child has developed the condition upon which eligibility

20 was based, the guardianship subsidy shall be retroactive to the date the

21 guardian submitted adequate documentation that the child developed the

22 condition.

23 (d) No guardianship subsidy may be made for any child who has attained

24 eighteen (18) years of age unless permitted by the funding stream.

25

26 9-8-206. Subsidy amount

27 (a)(I) The amount of the guardianship subsidy shall be determined

28 through agreement between the guardian and the Department of Health and Human

29 Services but cannot exceed the current foster care board rate.

30 (2) The amount of the guardianship subsidy shall be based on

31 consideration of the circumstances and needs of the guardian and the child as

32 well as the availability of other resources to meet the child's needs.

33

34

35

9-8-207. Records confidential.

(a) All subsidized guardianship records personally identifying a

36 juvenile shall be confidential and shall not be released or otherwise made

3 03-12-2007 08:45 MXR033




1 available except to the following persons or entities and to the extent

2 permitted by federal law:

3

4

5

6

7

(1) The guardian;

(2) The attorney for the guardian;

(3) The child;

(4) The attorney ad litem for the child;

(5) For purposes of review or audit by the appropriate federal

8 or state agency;

9 (6) To a grand jury or court upon a finding that information in

10 the record is necessary for the determination of an issue before the court or

11 grand jury;

12 (7)(i) To individual federal and state representatives and

13 senators in their official capacity and their staff members with no

14 redisclosure of information.

15 (ii) No disclosure of any information that

16 identifies by name or address any recipient of a subsidy or service shall be

17 made to any committee or legislative body;

18 (8) The administration of any federal program or federally

19 assisted program that provides assistance, in cash or in kind, or services

20 directly to individuals on the basis of need.

21 (b)(I) Any person or agency to whom disclosure is made shall not

22 disclose to any other person any personally identifying information obtained

23 pursuant to this section.

24 (2) Nothing in this subsection shall prevent subsequent

25 disclosure by the guardian or the child.

26 (3) Any person disclosing information in violation of this

27 subsection shall be guilty of a Class C misdemeanor.

28

29

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31

32

33

34

35

36

/s/ E. Brown

A PP RO VE D: 3 /2 8/ 20 07

4 03-12-2007 08:45 MXR033



Stricken language would be deleted from and underlined language would be added to the law as it existed

prior to this session ofthe General Assembly.

Act 820 of the Regular Session

12

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State of Arkansas

86th General Assembly

Regular Session, 2007

As Engrossed: H3/14/07

A BillHOUSE BILL 2335

5 By: Representative Stewart

6

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8

9

For An Act To Be Entitled

AN ACT TO REQUIRE A PUBLIC HIGH SCHOOL AND AN

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25 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF ARKANSAS:

INSTITUTION OF HIGHER EDUCATION TO PROV IDE

ELECTRONIC STUDENT TRANSCRIPTS TO THE DEPARTMENT

OF HIGHER EDUCATION TO DETERMINE STUDENT

ELIGIBILITY FOR STATE FINANCIAL AID PROGRAMS; AND

FOR OTHER PURPOSES.

Subtitle

TO REQUIRE A PUBLIC HIGH SCHOOL AND AN

INSTITUTION OF HIGHER EDUCATION TO

PR OV IDE ELE CTRO NIC STU DEN T TRA NSC RIP TS

TO THE DEPARTMENT OF HIGHER EDUCATION TO

DETERMINE STUDENT ELIGIBILITY FOR STATE

FINANCIAL AID.

26

27

28

29

SECTION 1. Arkansas Code § 6 -80-107 is amended to read as follows:

6-80-107. Transcripts.

(a)(I) By May 1, 2007, the Department of Higher Education, in

30 cooperation with the Department of Education, shall prescribe a uniform

31 method of formatting and transmitting transcripts that shall be used by all

32 grade nine through twelve (9-12) public high schools and institutions of

33 higher education in the state.

34 (2) The uniform transcripts shall be transmitted electronically

35 to the Department of Higher Education as necessary to process state financial

1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 03-14-200709:39 JSE198



As Engrossed: H3/14/07 HB2335

1 aid applications for both high school students and higher education students

2 and between public high schools to correctly enroll and place students that

3 transfer between public schools.

4 (3) All public high schools in Arkansas shall begin submitting

5 electronic transcripts to the Department of Higher Education for state

6 scholarship programs by January 1, 2008.

7 (4) Except as provided under subsection (b)(2) of this section,

8 all institutions of higher education in Arkansas shall begin submitting

9 electronic transcripts to the Department of Higher Education by July 1, 2008.

10 (b)1ll ~ Except as provided under subdivision (b)(2) of this

11 section, after implementation of the uniform method prescribed under

12 subsection (a) of this section, no institution of higher education shall be

13 eligible to receive state financial aid on behalf of students unless the

14 institution provides uniform, electronic transcripts as prescribed by the

15 Department of Higher Education under this section.

16 (2) Any institution of higher education with less than ten (10)

17 students who are recipients of financial aid programs administered by the

18 Department of Higher Education are exempt from the requirements under

19 subsection (a) and the penalty under this subsection (b).

20 (c)(I) The Department of Education shall prescribe a uniform method of

21 formatting and electronically transmitting transcripts that shall be used by

22 all kindergarten through grade eight (K-8) public elementary and middle

23 schools in the state.

24 (2) The uniform transcripts shall be transmitted electronically

25 between all kindergarten through grade twelve (K-12) public schools as

26 necessary to correctly enroll and place students transferring between public

27 schools.

28

29 /s/ Stewart

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31 APPROVED: 4/2/2007

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ark bar elder law

Documents