Pre-Emption Ruling a Setback to DSS Controlling Long-Term Costs

A U.S. district court judge recently ruled in favor of an elderly couple who challenged the validity of a state Medicaid statute concerning the treatment of available resources (assignment of support rights) when one spouse is in a nursing home and the other remains in the community. The plaintiff nursing home resident had applied for Medicaid benefits in 2010 and in his application, claimed that his spouse refused to support him, and therefore, her assets should be disregarded for purposes of Medicaid eligibility. DSS denied the application, citing state law that only allows a spouse to make this claim when the community spouse cannot be located or the community spouse cannot provide the required information about his or her assets. Neither scenario was at play here.

The institutionalized spouse filed a civil rights lawsuit claiming that state statute conflicted with federal Medicaid law, which requires a state to approve an application as long as the applicant has assigned support rights to the state.

The court found that federal Medicaid law preempted the much narrower state law, and required assignment in all cases. And because the plaintiff faced “imminent and irreparable harm” without the nursing home care and the pre-emption claim had merit, the court issued a preliminary injunction and advanced the case for immediate summary judgment to determine if DSS should permanently be prevented from determining the institutionalized spouse’s Medicaid eligibility without regard to his wife’s resources.

In the interim, DSS will grant Medicaid eligibility to the plaintiff prospectively from September 28, 2011. Cross motions and briefs will be filed with the court for summary judgment and a final ruling.