BRMM Wins Significant Elder Law Case in Michigan Court of Appeals

BRMM attorneys Don Rosenberg and Scott Robbins recently won an important elder law case in the Michigan Court of Appeals. In rendering the decision, the Court of Appeals recognized that the case was one of first impression.

In the case, the appellate court ruled that state probate courts have jurisdiction under Michigan's Estates and Protected Individuals Code (EPIC) to enter protective orders providing support for a community spouse whose institutionalized spouse receives Medicaid benefits. The Court of Appeals also clarified the standards to be applied by probate courts in such cases.

Importance of the Decision in Elder Law and Medicaid Community Spouse Support Cases

The Department of Health and Human Services (DHHS) administers Medicaid in Michigan. In representing DHHS, the Michigan Attorney General has consistently objected to the use of probate court protective orders as a way to ensure that a married couple was not impoverished by one spouse being in a nursing home. While many probate judges never thought the state's position had merit, there were some probate judges who were of the opinion otherwise.

The recognition by the Court of Appeals of the clear jurisdiction of probate courts in cases involving support of a community spouse with an institutionalized husband or wife receiving Medicaid benefits has great significance — and in fact is a landmark decision — in Michigan elder law. In light of the decision, a community spouse now has an alternative to pursuing administrative remedies under Medicaid when support issues arise. In appropriate cases, relief can be sought in probate court rather than through the available Medicaid administrative processes.

In addition, the Court’s decision clearly sets out the standards that probate courts will apply under EPIC in reviewing these support cases.

Background of the Case

Joseph Vansach, Jr. resides in a long-term care facility in Michigan. Medicaid benefits pay for his care expenses. Prior to the circumstances that gave rise to the case, Joseph had a patient pay obligation under Medicaid law and regulations, based on his and his wife's community assets and income.

Ramona Fenner-Vansach, Joseph’s wife, received a community spouse monthly income allowance (CSMIA)under Medicaid. Claiming that she lacked sufficient income to meet her needs and was entitled to additional support, Ramona petitioned the St. Clair County Probate Court for a protective support order under Michigan's Estates and Protected Individuals Code (EPIC).

Despite opposition from DHHS, the probate court granted Ramona’s petition and issued an order requiring payment of 100% of Joseph’s monthly income to his spouse. The order resulted in Joseph having no income to meet the patient pay amount that he was required to contribute toward his care and effectively decreased the patient pay amount to zero.

DHHS filed an appeal to the Michigan Court of Appeals, asserting that: 1) Medicaid/DHHS is the sole agency to make Medicaid determinations, and the probate court lacked jurisdiction under EPIC to issue the order; 2) Federal law controls, and even if the probate court has jurisdiction, the community spouse has to exhaust available administrative remedies first; and 3) If the probate court has jurisdiction, Ramona failed to establish the necessary requirements for a support order under EPIC.

Another case with similar facts and issues was consolidated with the Vansach case on appeal.

Michigan Probate Court Jurisdiction Over Community Spouse Support Cases

In holding that Michigan probate courts have jurisdiction under EPIC to issue protective support orders in cases involving the community spouse of an institutionalized Medicaid recipient, the Court of Appeals relied on provisions of EPIC as well as provisions of federal Medicaid law.

The appellate court stated that while Medicaid provisions allow a community spouse to pursue administrative proceedings for modification of support determinations, those administrative remedies do not confer exclusive jurisdiction on DHHS regarding income allocation between spouses. The court cited a provision of Medicaid law as plainly recognizing the possibility that courts may have jurisdiction to enter support orders affecting calculation of the CSMIA.

While the provision in the Medicaid law does not give courts jurisdiction over such cases, the Court of Appeals found that under EPIC, Michigan probate courts clearly have subject-matter jurisdiction to enter protective orders that direct distribution of a protected individual’s income to or for the use of the protected individual’s dependents. The Court stated that probate court authority under EPIC is consistent with Congress’s objectives in enacting the Medicaid law and the spousal impoverishment provisions of the law, and that as such, EPIC does not present an obstacle to accomplishment of Medicaid law provisions.

The court did note that the probate court’s authority extends only to issuing support orders under EPIC. That authority does not include altering the CSMIA or modifying Medicaid patient-pay amounts, even though the practical effect of a probate court support order may be to reduce the patient-pay amount and provide a basis for the community spouse to request redetermination of the CSMIA.

It is important to note that while the probate court has jurisdiction, the probate court is not making a Medicaid determination, and the fact that Medicaid is constrained by federal law to comply with the court order does not result in the probate court losing jurisdiction.

Standards for Probate Court Support Orders

While the Court of Appeals recognized the authority of the probate court to enter support orders for community spouses of institutionalized spouses receiving Medicaid, the appellate court also stated that the authority is limited by the statutory language of EPIC. Those provisions require the probate court to determine that two elements are demonstrated by clear and convincing evidence: 1) that the protected individual is incapacitated, and 2) that the money is needed for the support of the person entitled to the individual’s support and that the entry of a protective order is necessary.

The Court of Appeals concluded that in the context of a protective order, the required finding of need must take into account the requesting spouse’s needs and also the protected individual’s needs and circumstances. Whether the spouse is entitled to support will depend on all the facts and circumstances, including the incapacitated person’s financial means and ability to provide assistance with care expenses.

The appellate court explained further that when a case involves Medicaid benefits, weighing all the facts and circumstances requires giving consideration to the needs of both spouses as they actually exist under Medicaid. That includes taking into account the patient-pay amount of the institutionalized spouse and the CSMIA provided to the community spouse, as well as requiring the community spouse to demonstrate by clear and convincing evidence that he or she needs money and is entitled to it despite the Medicaid support allowance and patient pay provisions.

In the case, the order of the probate court awarded the community spouse 100% of the institutionalized spouse’s income, leaving the institutionalized spouse with no income to contribute to his care expenses. The Court of Appeals concluded that the order did not take into account the institutionalized spouse’s needs and circumstances under Medicaid. As such, the appellate court found that the probate court abused its discretion in applying the statutory standards. The case was remanded to the probate court for further proceedings consistent with the Court of Appeals decision.

The full opinion of the court is available at In re Estate of Joseph Vansach, Jr.

Elder Law at BRMM: A Tradition of Dedication and Excellence

BRMM attorney Don Rosenberg focuses his practice elder law, estate planning, Medicaid planning, end of life care, and other aspects of planning for seniors and those with special needs. Don began practicing elder law before the term gained popularity and has received numerous awards and recognition for his work in the field of elder law and elder care.

At BRMM, we combine our elder law knowledge and experience with a sensitive, compassionate approach to the challenges elders and their families face. If you have a concern involving elder law or estate planningthat you would like to discuss with one of our experienced elder law attorneys, we are here to help.

Our office is located in Troy, Michigan. We serve clients throughout the Tri County and Detroit area, as well as in other parts of Michigan. We also represent clients from other states who have an elder loved one in Michigan or an interest in a Michigan estate or trust. Call us at (248) 494-4577 or complete our online form to set up your free, confidential consultation.

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