Peggy Armstrong Russell Hansen Yvonne Hansen and Mary Howell v. Charles Palmer, in His Capacity as Director, Iowa Department of Human Services

879 F.2d 437, 1989 U.S. App. LEXIS 10290, 1989 WL 78733
CourtCourt of Appeals for the Eighth Circuit
DecidedJuly 19, 1989
Docket88-1974
StatusPublished
Cited by4 cases

This text of 879 F.2d 437 (Peggy Armstrong Russell Hansen Yvonne Hansen and Mary Howell v. Charles Palmer, in His Capacity as Director, Iowa Department of Human Services) is published on Counsel Stack Legal Research, covering Court of Appeals for the Eighth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Peggy Armstrong Russell Hansen Yvonne Hansen and Mary Howell v. Charles Palmer, in His Capacity as Director, Iowa Department of Human Services, 879 F.2d 437, 1989 U.S. App. LEXIS 10290, 1989 WL 78733 (8th Cir. 1989).

Opinions

FAGG, Circuit Judge.

In response to Peggy Armstrong’s application for Supplemental Security Income (SSI) benefits, see 42 U.S.C. § 1381a (Supp. IV 1986), the United States Social Security Administration (SSA) determined Armstrong was not disabled, id. § 1382c(a)(3) (1982 & Supp. IV 1986). Thus, Armstrong failed to qualify for SSI. Without a change in her physical condition, Armstrong later sought benefits from the Iowa Department of Human Services (state agency) under Iowa’s Medicaid plan, see Iowa Code ch. 249A (1987). The state agency denied her claim based on the SSA’s nondisability determination under SSI.

Armstrong then filed this class action in the district court. Armstrong, on behalf of the members of her class (collectively Armstrong), asserted that in determining Medicaid benefits, federal law required that the state agency decide independently whether the claimants were disabled. The district court agreed and ordered the state agency to redetermine Armstrong’s disability despite the SSA’s nondisability determination. In doing so, the court relied on Rousseau v. Bordeleau, 624 F.Supp. 355, 361 (D.R.I.1985). The state agency now appeals, and we reverse.

SSI is a federal cash assistance program for individuals who are aged, blind, or disabled and who also have limited incomes and resources. See 42 U.S.C. §§ 1381-1381a (1982 & Supp. IV 1986). Medicaid is a cooperative federal-state program that helps the poor pay for medical care. Schweiker v. Gray Panthers, 453 U.S. 34, 36, 101 S.Ct. 2633, 2636, 69 L.Ed.2d 460 (1981). Medicaid incorporates the disability standard contained in. SSI. See 42 U.S.C. §§ 1382c(a)(3), 1396d(a)(vii) (1982 & Supp. IV 1986). Under Medicaid, participating states must provide benefits to disabled individuals who actually receive SSI benefits. Id. § 1396a(a)(10)(A)(i)(II) (Supp. IV 1986). At their option, participating states also may extend Medicaid benefits to individuals who are not receiving SSI benefits, but who are eligible for those benefits based on disability and financial need. Id. § 1396a(a)(10)(A)(ii)(I) (1982. & Supp. IV 1986); 42 C.F.R. § 435.1(b)(2) (1987). These individuals are known as “optional categorically needy,” Herweg v. Ray, 455 U.S. 265, 268-69, 102 S.Ct. 1059, 1062-63, 71 L.Ed.2d 137 (1982), and Armstrong claims she is among them.

Iowa provides benefits to the optional categorically needy. See Iowa Code [439]*439§ 249A.3(2)(d) (1987). When an individual claims benefits as a member of this group, the Iowa state agency determines whether the claimant is disabled in either of two ways. First, if the SSA has not made a disability determination for the SSI program, the state agency makes an independent determination based on the claimant’s medical report and social history. Second, if the SSA has already found a claimant not disabled under SSI, the state agency adopts this determination. Because the SSA had found Armstrong not disabled under SSI, the state agency denied her Medicaid benefits.

The issue on appeal is clear: in deciding a claimant’s eligibility for Medicaid, may the state agency adopt the SSA’s nondisa-bility determination made previously under SSI. We exercise de novo review over this question of statutory and regulatory construction. Department of Social Servs. v. Bowen, 804 F.2d 1035, 1037 (8th Cir.1986). Two district court decisions have addressed this question and have reached opposite results. Compare Fratone v. Division of Pub. Welfare of N.J. Dep’t of Human Servs., [1988-2 Transfer Binder] Medicare & Medicaid Guide (CCH) 1137,093, at 16,878 (D.N.J. Feb. 8, 1988) with Rousseau, 624 F.Supp. at 361.

Congress has authorized participating states to enter into agreements under which the Secretary of Health and Human Services (Secretary) makes Medicaid eligibility determinations for those states. 42 U.S.C. § 1383c(a) (Supp. IV 1986). Iowa’s agreement authorizes the Secretary to make the Medicaid eligibility determinations only for individuals who actually receive SSI benefits. See 20 C.F.R. § 416.2112 (1987). Because Armstrong does not receive SSI benefits, the state agency correctly acknowledges its responsibility to determine whether she is disabled. See id. § 416.2107.

That acknowledgment, however, does not resolve the issue presented here. The state agency must make the disability determination, but the federal statutes do not establish procedures for making this determination. See, e.g., 42 U.S.C. § 1396a(a)(4)-(5) (1982). Instead, to deal with the complexity of the Medicaid scheme, Congress has granted the Secretary exceptionally broad authority for shaping the program through regulations. Gray Panthers, 453 U.S. at 43,101 S.Ct. at 2640. The Secretary can adopt “regulations, not inconsistent with [the statutes], as may be necessary [for the program’s] * * * efficient administration.” 42 U.S.C. § 1302 (Supp. IV 1986); see Connecticut Dep’t of Income Maintenance v. Heckler, 471 U.S. 524, 530 n. 16,105 S.Ct. 2210, 2214 n. 16, 85 L.Ed.2d 577 (1985). Further, the state agency must follow these regulations. See Gray Panthers, 453 U.S. at 37, 101 S.Ct. at 2636; Savage v. Toan, 795 F.2d 643, 644 (8th Cir.1986).

Here, the Secretary has adopted two relevant regulations. Under the first regulation, a state agency may offer Medicaid benefits to “individuals who would be eligible for * * * SSI * * * but who are not receiving these benefits.” 42 C.F.R. § 435.210 (1987). The other regulation provides that a state agency must have a physician and a social worker determine disability based on a medical report and social history. Id. § 435.541(a)-(b). When applied to a Medicaid claimant whom the SSA has already found ineligible for SSI benefits, these regulations appear inconsistent. In those situations not covered by an agreement between the Secretary and participating state, section 435.541 directs the state agency to make an independent disability determination on Medicaid applications. Because only the SSA decides “who would be eligible for * * * SSI,” however, the Secretary believes section 435.210 compels the state agency to adopt the SSA’s nondisability determination when considering Medicaid applications.

These regulations must be read together “to give effect, if possible, to [both] * * * provisions.” Jay v.

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879 F.2d 437, 1989 U.S. App. LEXIS 10290, 1989 WL 78733, Counsel Stack Legal Research, https://law.counselstack.com/opinion/peggy-armstrong-russell-hansen-yvonne-hansen-and-mary-howell-v-charles-ca8-1989.