The opinion
IN THE COMMONWEALTH COURT OF PENNSYLVANIA
Mary Lou Brenckman, :
Petitioner :
:
v. :
:
Department of Human Services, : No. 443 C.D. 2018
Respondent : Submitted: September 9, 2019
BEFORE: HONORABLE ANNE E. COVEY, Judge
HONORABLE MICHAEL H. WOJCIK, Judge
HONORABLE ROBERT SIMPSON, Senior Judge
OPINION NOT REPORTED
MEMORANDUM OPINION BY
JUDGE COVEY FILED: October 1, 2019
Mary Lou Brenckman (Brenckman) petitions this Court for review of the
Department of Human Services (DHS) Secretary’s (Secretary) March 1, 2018 Final
Order upholding the Bureau of Hearings and Appeals’ (BHA) Final Administrative
Action Order denying Brenckman’s appeals. The sole issue for this Court’s review is
whether the BHA erred by denying Brenckman’s undue hardship waiver applications
(Applications). After review, we affirm.
The facts of this case are not disputed. In May 2014, Brenckman was
hospitalized due to injuries from a fall. On July 18, 2014, Brenckman was transferred
to hospice care at Zerbe Sister Nursing Center (ZSNC) because her health was
declining. In July 2015, doctors re-evaluated Brenckman’s condition, removed her
from hospice care and admitted her to a ZSNC cottage, where a private caregiver
lived with her for a month as she underwent therapy. See Reproduced Record (R.R.)
at 39a-42a. Thereafter, Brenckman was admitted to ZSNC’s Long Term Care (LTC)
facility (Facility) to receive skilled nursing care.
Between April 10, 2012 and August 31, 2016, Brenckman’s son and
purported power-of-attorney (POA), Allan Brenckman (Son), withdrew $159,394.02
of Brenckman’s assets to cover his living expenses.1 With the money that remained,
Brenckman paid ZSNC for her care from July 2014 until “funds to pay for her care
were exhausted as of [November 13, 20]16.” R.R. at 95a. It was then that Son
“realized the huge error he committed in ‘borrowing’ his mother’s funds. The money
was entirely gone, and [Brenckman] would need to apply for [Medical Assistance
1
Although not record evidence, Brenckman represents in her brief to this Court that she
made Son her POA and executed a will leaving her entire estate to him before she entered hospice
care. See Brenckman Br. at 5. For the first time in her brief to this Court, she further describes that
Son ignored the operation of his landscape business to remain by her side during what Son believed
were her final days, and his business suffered as a result. See Brenckman Br. at 5-6.
Still refusing to leave [Brenckman’s] side, [Son] made a decision that
has proven to be a costly mistake. Realizing that [Brenckman] had a
significant estate, and with the knowledge that the entire estate was
coming to him when she would soon perish, [Son] decided that he
would begin using [Brenckman’s] funds through the use of the [POA]
from [Brenckman] to pay for his own living expenses. [Son’s]
thought was that all of the money would soon be his[;] he would
rather use the money now to be by [Brenckman’s] side. So, [Son]
decided to ‘borrow’ [Brenckman’s] funds to pay for his own living
expenses. Certainly, there were enough funds there to cover the time
he needed to stay with [Brenckman].
As the story unfolds, [Brenckman] did not die.
Brenckman Br. at 6.
The BHA’s decision is limited to the record before it. See Section 275.4(g)(6), (h)(2) of
DHS’ Regulations, 55 Pa. Code § 275.4(g)(6), (h)(2). Moreover, “[i]t is well-settled that the Court
may not consider information attached to a brief but not part of the certified record.” Henderson v.
Unemployment Comp. Bd. of Review, 77 A.3d 699, 714 n.6 (Pa. Cmwlth. 2013). Because
Brenckman raised these facts for the first time in her brief to this Court, we will not consider them.
2
(MA)2] to pay for her necessary care.”3 Brenckman Br. at 7. Brenckman still resides
at the Facility.
On January 5, 2017, the Lancaster County Assistance Office (CAO)
received Brenckman’s MA/LTC benefits application seeking MA from November 13,
2016. After a hearing, on June 21, 2017, the CAO determined that Brenckman was
ineligible for MA/LTC benefits for a period of time4 because $159,394.02 of her
assets had been transferred in the previous five years, primarily to Son, for less than
fair market value (FMV).5 Son appealed from the CAO’s ineligibility assessment.
As of the date the BHA’s hearing record was closed in the instant matter, the
MA/LTC ineligibility appeal had not been adjudicated.
On June 28, 2017, Son authorized ZSNC to submit the Applications on
Brenckman’s behalf and, on June 30, 2017, ZSNC submitted the Applications to the
CAO. Therein, Son disclosed that $159,394.02 of Brenckman’s assets had been
withdrawn, and are not recoverable.6 Son declared that, “as a result of [Brenckman’s]
2
MA is also known as Medicaid.
3
“Medicaid is a cooperative federal-state program that provides medical care to needy
individuals.” Douglas v. Indep. Living Ctr. of S. California, Inc., 565 U.S. 606, 610 (2012).
“Pursuant to Section 442.1 of the [Human Services] Code, Act of June 13, 1967, P.L. 31, as
amended, . . . added by Act of July 31, 1968, P.L. 904[, 62 P.S. § 442.1], [DHS] is authorized to
establish eligibility standards for the medically needy.” Steinberg v. Dep’t of Pub. Welfare, 758
A.2d 734, 734 n.1 (Pa. Cmwlth. 2000).
4
The specific ineligibility period was not made a part of this record.
5
Section 178.2 of DHS’ Regulations defines FMV as “[t]he price which property can be
expected to sell for on the open market or would have been expected to sell for on the open market
in the geographic area in which the property is located.” 55 Pa. Code § 178.2.
“During the period of ineligibility for MA payment for [nursing facility care], the nursing
facility . . . may charge the private pay rate.” 55 Pa. Code § 178.104(h).
6
In one Application, Son declared that $24,000.00 of Brenckman’s assets, representing
insurance policy proceeds paid to her upon her husband’s 2011 death, had been distributed from a
joint account between April 10, 2012 and January 28, 2014, prior to Brenckman’s 2014 fall. See
R.R. at 8a-9a. In the other Application, Son asserted that he removed $135,394.02 of Brenckman’s
assets from his joint account with Brenckman between July 3, 2014 and August 31, 2016 to
3
fall and related injuries, [Brenckman] require[d] 24[-hour,] 7 days a week care. She
[wa]s unable [to] walk, her comprehension and verbal communication [were] poor
and [her] health [wa]s failing. She must be cared for in a full[-]time skilled care
facility.” R.R. at 9a; Certified Record (C.R.) Item 3, Ex. C-1 at 2.
The CAO forwarded the Applications to DHS’ Bureau of Policy (BOP)
for a determination. On July 11, 2017, the BOP informed the CAO that the
Applications were denied. On July 21, 2017, DHS’ Office of Income Maintenance
(OIM) notified Brenckman that the Applications were denied. On July 26, 2017, Son
appealed from the denials.
A hearing was conducted on the denials before an Administrative Law
Judge (ALJ) on September 17, 2017. On October 16, 2017, the ALJ denied
Brenckman’s appeal because “[n]o evidence was provided to establish that
[Brenckman] was evicted, deprived of medical care, food, shelter, or that her life is
endangered[,]” and “[n]o evidence was provided to establish [that] the imposition of
the period of ineligibility for MA/LTC benefits deprived [Brenckman] of necessary
care, medical services, or the necessities of life.” Brenckman Br. App. A, ALJ
Adjudication at 13. On October 24, 2017, the BHA affirmed the ALJ’s Adjudication.
See Brenckman Br. App. A, BHA Final Administrative Action Order. On November
8, 2017, Brenckman filed an application seeking reconsideration, which the Secretary
granted on November 16, 2017. On March 1, 2018, the Secretary issued the Final
Order upholding the BHA’s Final Administrative Action Order. Brenckman
appealed to this Court.7
maintain his business after Brenckman’s 2014 fall. See Certified Record Item 3, Ex. C-1 at 1-2.
The latter Application was not included in the reproduced record.
7
“Our review requires that we determine whether [DHS’] adjudication comports with the
applicable law, whether its findings are supported by substantial evidence, and whether any
constitutional rights were violated.” Steinberg, 758 A.2d at 736 n.3.
4
Preliminarily, “[t]he [MA] program is a cooperative state-federal
program which requires participating states to comply with federal law applicable to
the program.” Geriatric & Med. Servs., Inc. v. Dep’t of Pub. Welfare, 616 A.2d 746,
748 n.1 (Pa. Cmwlth. 1992). Section 1917(c) of the Social Security Act requires, in
relevant part:
(1)(A) In order to meet the requirements of this subsection .
. . , the State plan must provide that if an institutionalized
individual . . . disposes of assets for less than [FMV] on
or after the look-back date specified in subparagraph
[(1)](B)(i), the individual is ineligible for [MA] for
[nursing facility] services . . . during the period beginning
on the date specified in subparagraph [(1)](D) and equal to
the number of months specified in subparagraph [(1)](E).
....
(2) An individual shall not be ineligible for medical
assistance by reason of paragraph (1) to the extent that--
....
(D) the State determines, under procedures established by
the State (in accordance with standards specified by the
Secretary), that the denial of eligibility would work an
undue hardship as determined on the basis of criteria
established by the Secretary.
The procedures established under subparagraph
[(2)](D) shall permit the facility in which the
institutionalized individual is residing to file an
undue hardship waiver application on behalf of the
individual with the consent of the individual or the
personal representative of the individual.[8]
While an application for an undue hardship waiver is
pending under subparagraph [(2)](D) in the case of an
individual who is a resident of a nursing facility, if the
application meets such criteria as the Secretary specifies,
8
See also Section 178.104b(c) of DHS’ Regulations, 55 Pa. Code § 178.104b(c).
5
the State may provide for payments for nursing facility
services in order to hold the bed for the individual at the
facility, but not in excess of payments for 30 days.
42 U.S.C. § 1396p(c) (emphasis added).
“The requirements of [Section 1917(c) of the Social Security Act,] 42
U.S.C. § 1396p(c) [(relating to asset transfers)] have been recognized and adopted by
[DHS].” Geriatric & Med. Servs., 616 A.2d at 748 n.2. Accordingly, “in order to
participate in the MA program, the Commonwealth is required to impose a period of
ineligibility for MA/LTC benefits on institutionalized individuals who transfer assets
for less than FMV within a five-year look-back period. 55 Pa. Code § 178.104.”9
Colonial Park Care Ctr., LLC v. Dep’t of Pub. Welfare, 123 A.3d 1094, 1097 (Pa.
Cmwlth. 2015). The “applicant bears the burden of establishing eligibility for
[MA].” Steinberg v. Dep’t of Pub. Welfare, 758 A.2d 734, 736 (Pa. Cmwlth. 2000).
Thus, in Pennsylvania,
[i]n order to prevent an applicant from improperly disposing
of otherwise available assets to qualify for [MA], certain
transfers of assets affect eligibility. [DHS’] [R]egulations
9
Section 178.2 of DHS’ Regulations defines “look-back date/look-back period” as “[t]he
specified period of time immediately before the date of an institutionalized individual’s application
for MA benefits which determines the earliest date on which a transfer of assets for less than FMV
can result in ineligibility for MA.” 55 Pa. Code § 178.2. Section 178.104(c) of DHS’ Regulations
declares that the look-back date “shall be 36 months from the date on which the individual is both
institutionalized and has applied for MA, except in the case of payments from a trust . . . [when] the
look-back date shall be 60 months.” 55 Pa. Code § 178.104(c). However, in Section 178.104a(a) of
its Regulations (entitled “Clarification of fair consideration provisions for disposition of assets
made on or after February 8, 2006--statement of policy,” adopted in 2007), DHS clarifies that
“[c]onsistent with [S]ection 1917(c)(1)(B)(i) of the Social Security Act[, 42 U.S.C §
1396p(c)(1)(B)(i),]. . . regarding . . . transfers of assets, effective for an application made on or after
March 3, 2007, the look-back period for assets transferred on or after February 8, 2006, shall be 60
months.” 55 Pa. Code § 178.104a(a). Because Brenckman’s assets at issue here were transferred
after February 8, 2006, and her MA application was filed after March 3, 2007, the applicable look-
back period is 60 months. Thus, Brenckman’s look-back period was the 60 months preceding her
January 5, 2017 MA application (i.e., January 5, 2012 to January 5, 2017).
6
provide a ‘look-back’ period of [60] months from the date
an applicant is both institutionalized and has applied for
[MA]. 55 Pa. Code § 178.104(c). If an applicant disposes
of assets for less than [FMV] during the ‘look-back’ period,
[DHS] presumes that the transfer was made to qualify for
[MA]. The applicant may rebut the presumption by
establishing that the individual intended to dispose of the
assets for [FMV], the assets were transferred exclusively for
a purpose other than to qualify for [MA],[10] or the assets
transferred for less than [FMV] were returned to the
applicant. 55 Pa. Code § 178.10[5].
Steinberg, 758 A.2d at 736. “If the applicant fails to rebut the presumption, then
[she] will be disqualified from receiving MA for a period equal to the number of
months of average nursing home care that the transferred assets could have
purchased.”11 Colonial Park Care Ctr., 123 A.3d at 1097. Moreover, “[d]uring the
period of ineligibility for MA payment for [nursing facility care], the nursing facility .
. . may charge the private pay rate.” 55 Pa. Code § 178.104(h).
Here, on June 21, 2017, Brenckman was declared ineligible for MA/LTC
benefits for a period of time because $159,394.02 of her assets were transferred
during the look-back period for less than FMV. This Court does not know the status
of Brenckman’s appeal from that ruling. Notwithstanding, Section 1917(c)(2)(D) of
the Social Security Act, adopted by DHS, states that Brenckman may nevertheless
be eligible for MA if “the denial of eligibility would work an undue hardship[.]”
10
In order to establish that the asset in question was transferred solely
for some purpose other than to qualify for MA, proof of the following
is required: 1) purpose of transfer; 2) attempts to dispose of asset at its
FMV; 3) reason for accepting less than FMV; 4) plan for self-support
post-transfer; and 5) transferor’s relationship to transferee. 55 Pa.
Code § 178.105(c)[].
Colonial Park Care Ctr., 123 A.3d at 1101.
11
See Section 1917(c)(1)(E) of the Social Security Act, 42 U.S.C. § 1396p(c)(1)(D); see
also Sections 178.104(d) and 178.104a(d) of DHS’ Regulations, 55 Pa. Code §§ 178.104(d),
178.104a(d).
7
42 U.S.C. § 1396p(c)(2)(D) (emphasis added). The Applications were filed to vacate
the ineligibility period based on undue hardship.
Section 178.2 of DHS’ Regulations specifies that such undue hardship
“[e]xists when denial of MA would deprive the individual of medical care and
endanger the individual’s health or life; also exists when the individual . . . would be
deprived of food, clothing, shelter or other necessities of life.” 55 Pa. Code § 178.2.
DHS states in Section 178.104b(a) of its Regulations (entitled “Clarification of fair
consideration provisions for disposition of assets made on or after February 8, 2006--
statement of policy,” adopted in 2007 and amended in 2011):
For the purposes of this statement of policy, an undue
hardship exists when application of the transfer of assets
penalty provision would deprive the individual of one of
the following:
(1) Medical care so that the individual’s health or
life would be endangered.
(2) Food, clothing, shelter or other necessities of
life.
55 Pa. Code § 178.104b(a) (emphasis added). This Court has ruled that “the
applicant in the undue hardship waiver appeal must offer evidence pertinent to
the circumstances surrounding the transfer of assets during the look-back
period.” Colonial Park Care Ctr., 123 A.3d at 1100 (emphasis added).
OIM did not explain in its July 21, 2017 notice why Brenckman’s
Applications were denied. Rather, it merely informed her:
You previously received a notice stating you would not
qualify for payment of [LTC] facility services for a certain
time period because you gave away or transferred assets for
less than [FMV]. You requested an undue hardship waiver.
8
Your request for an undue hardship waiver is denied.[12]
You remain eligible for all other [MA] benefits.
Citations: 42 U.S.C. § 1396p(c) and 55 Pa. Code §
178.104a
R.R. at 14a (emphasis added).
At the September 17, 2017 ALJ hearing, CAO OIM Caseworker Jerry
Gehman (Gehman) testified that his office received the BOP’s denial on July 21,
2017. He explained that, although CAO does not offer input in the undue hardship
assessment process, the BOP “use[s] the facts that [CAO] found during the
establishment of eligibility. But [the BOP] use[s] [its] own reasoning in denying the
application for undue hardship.” R.R. at 112a. Gehman stated:
[The BOP’s] reasoning is as follows[:] The Long-Term
Care Chapter 440 states that all circumstances related to the
Undue Hardship Waiver request must be evaluated to
determine if the individual would be deprived of medical
care that would endanger the individual’s health or life or
deprive the individual of . . . food, clothing, shelter or other
necessities of life. This includes evaluating if an . . .
unexpected illness or injury occurred after the transfer of
the assets. . . .
In Pennsylvania, the MA form 401 Admissions Notice
Packet [(MA 401)] is given to all individuals as they enter
a[n LTC] facility, whether they are applying for MA or not.
Part two of the MA 401 clearly states that a[n LTC] facility
resident may be found ineligible for payment of [LTC]
services if assets are gifted.
[Son] signed the application for [MA/LTC] on 12/27/2016,
and would have been made aware of the ramifications of
such transfers on [Brenckman’s] eligibility.
12
At the ALJ hearing, DHS’ CAO OIM Caseworker Jerry Gehman represented that the
parties “discussed how the decision [wa]s arrived at,” R.R. at 109a, and “there [was] no room for a
change” from the undue hardship decision. R.R. at 110a.
9
For those reasons, it is [DHS’] decision to deny the Undue
Hardship Waiver request for [Brenckman].
I can only summarize that it’s the [BOP’s] stance then that .
. . any hardship situation that . . . your mother may have
been placed in in this situation doesn’t fit the definition of
undue in the [BOP’s] opinion. Because . . . it was the
actions . . . that you took that put her in . . . that position,
after you were already informed . . . those actions . . . were
against policy and were against [MA] eligibility rules when
she was admitted to the [F]acility [and] . . . you were
informed of . . . the rules when the MA 401 packet was –
was explained to you and . . . when you signed the
application and agreed to the eligibility rules.
R.R. at 112a-114a.
Son testified:
My mom is being well-taken care of right now at the
[Facility]. If . . . she were [sic] not able to be there, there’s
no place else for her to go. I can’t bring her home. I don’t
have . . . the facilities, number one. I don’t have the . . .
money to support her. That’s all part of what the hearing
was last time, in terms of how all of this got to the point
where it is.
But the long and short of it is she . . . just has nowhere to go
to receive the care that she needs. And so I wanted
[ZSNC’s Community Care Coordinator Stefanie Miley
(Miley)] to make sure that she represented the [Facility’s]
position on that.
R.R. at 126a.
Miley testified that Brenckman came to ZSNC in July 2014. She
produced Brenckman’s physician’s orders reflecting that Brenckman’s condition was
deteriorating, and she required the services of a skilled nursing care facility. Miley
reported that, according to Brenckman’s doctors, her prognosis for rehabilitation
potential was poor, and she may not ever return home or be discharged. See R.R. at
119a; see also R.R. at 18a-23a, 75a. She stated that Brenckman requires care 24
10
hours per day, 7 days per week, with the physical assistance of at least one person for
all but a few activities that require either two people and/or mechanical lifts “which
cannot be provided outside of [the Facility].” R.R. at 120a.
Miley declared that, “[ZSNC] can’t continue to keep [Brenckman] [at
the Facility] without payment of some sort, but she does require the care.” R.R. at
120a. Miley presented ZSNC’s bill for Brenckman’s care from January 2017 until
the September 2017 ALJ hearing totaling $104,783.54. See R.R. at 121a; see also
R.R. at 13a (Facility Statement).13 She explained that the Facility has not been paid
since January “on good faith that this would be resolved[,]” but “if . . . this does not
get resolved and the [LTC] benefits continue to be deprived, the [Facility] will not be
able to keep [Brenckman]. . . . So . . . our position is that will then create the undue
hardship.”14 R.R. at 126a-127a; see also R.R. at 128a.
Based upon the evidence presented, the ALJ concluded, and the BHA
and the Secretary agreed:15
No evidence was provided to establish that [Brenckman]
was evicted, deprived of medical care, food, shelter, or that
her life is endangered.
13
Although the Facility Statement is unmarked in the record, it was clearly referred to in the
ALJ notes of testimony as Exhibit A-4. See R.R. at 107a, 123a-124a.
14
Section 201.29(f) of Pennsylvania’s Department of Health’s (DOH) Regulations states, in
pertinent part: “The resident shall be transferred or discharged only for medical reasons, for
[her] welfare or that of other residents or for nonpayment of stay if the facility has demonstrated
reasonable effort to collect the debt.” 28 Pa. Code § 201.29(f) (emphasis added). Section
201.29(g) of DOH’s Regulations provides, in relevant part, that “the facility is responsible to assure
that appropriate arrangements are made for a safe and orderly transfer and that the resident is
transferred to an appropriate place that is capable of meeting the resident’s needs.” 28 Pa. Code §
201.29(g).
15
“[T]he [ALJ], as the fact-finder, is charged with the responsibility of resolving conflicts in
testimony and may reject the testimony of any witness.” Godown v. Dep’t of Pub. Welfare, 813
A.2d 954, 958 (Pa. Cmwlth. 2002).
11
Furthermore, no evidence was provided to establish [that]
the imposition of the period of ineligibility for [MA/]LTC
benefits deprived [Brenckman] of necessary care, medical
services, or the necessities of life. Therefore, because
[Brenckman] did not meet [the] criteria set forth under [the
R]egulations, she is not eligible to receive an [unnecessary
hardship waiver].
ALJ Adjudication at 12-13.
Brenckman argues that the BHA “erred in its interpretation of [Section
178.2 of DHS’ Regulations,] 55 Pa. Code § 178.2[,] wherein it ruled that because
[Brenckman] was already receiving care from [ZSNC] . . . , [Brenckman] was not
suffering undue hardship under the [Regulations].” Brenckman Br. at 11.
Brenckman asserts that the BHA’s interpretation would require ZSNC to eject her
from the Facility before she could demonstrate the hardship necessary to meet the
waiver criteria, which is not consistent with DHS’ Regulations.16 Accordingly,
Brenckman claims that the determination of whether she qualified for an undue
16
The skilled nursing facility in Colonial Park made the same argument:
[T]he Chief ALJ erred in interpreting the undue hardship
[R]egulations to require that a resident demonstrate physical
deprivation of medical care or necessities of life when no one
admitted to a skilled nursing facility could ever qualify for a waiver
on that basis. In support, it cites the [DOH’s] [R]egulation providing
that a facility may not discharge a nursing home resident
involuntarily, even for non-payment, unless he or she is transferred to
a place that can continue to meet his or her current medical care and
other needs. [See Section 201.29(g) of DOH’s Regulations,] 28 Pa.
Code § 201.29(g). To that end, Colonial Park maintains that the Chief
ALJ’s literal interpretation of the undue hardship language as
requiring physical hardship renders the waiver meaningless and
deprives [the resident] of due process.
Colonial Park Care Ctr., 123 A.3d at 1099. However, this Court did not specifically address that
issue.
12
hardship waiver should have been made as of the time she entered the Facility, rather
than when the BHA’s ruling was issued.
In one Application, Son stated that $24,000.00 of Brenckman’s assets,
representing proceeds from his deceased father’s life insurance,17 was gifted to him
and other family members between April 10, 2012 and January 28, 2014 prior to
Brenckman’s July 2014 fall. See R.R. at 9a. In the other Application, Son admitted
that, between July 3, 2014 and August 31, 2016, he withdrew a total $135,394.02
from his joint account with Brenckman “to operate [his] business while [Brenckman]
was in and out of the hospital, [h]ospice and skilled care.”18 C.R. Item 3, Ex. C-1 at
17
Brenckman’s husband/Son’s father passed away in 2011. See R.R. at 118a.
18
It is unclear based on this record whether Son withdrew the money with Brenckman’s
express consent, in his capacity as Brenckman’s POA, or whether Son removed the money from a
joint account Brenckman and he co-owned. In the Applications, Son represented that the money
was withdrawn from a joint account he co-owned with Brenckman. However, in Brenckman’s brief
to this Court, she refers to Son borrowing her funds. No evidence was presented to the ALJ of
either circumstance.
Section 5601.4(a)(2) of the Probate, Estates and Fiduciaries Code (Code) states: “An agent
under a [POA] may [make a gift] only if the [POA] expressly grants the agent the authority and
exercise of the authority is not otherwise prohibited by another agreement or instrument to which
the authority or property is subject[.]” 20 Pa.C.S. § 5601.4(a)(2). In addition,
[a]n agent may make a gift of the principal’s property only as the
agent determines is consistent with the principal’s objectives if
actually known by the agent and, if unknown, as the agent
determines is consistent with the principal’s best interest based on
all relevant factors, including:
(i) The value and nature of the principal’s property.
(ii) The principal’s foreseeable obligations and need for
maintenance.
....
(iv) Eligibility for a benefit, program or assistance under a statute
or regulation.
13
2. Son further represented in the Application that “[his] business . . . failed due to
[Son] not being available to his clients during these time periods.” Id. Before this
Court, Brenckman argues that her assets were exhausted “[t]hrough no fault of her
(v) The principal’s personal history of making or joining in making
gifts.
20 Pa.C.S. § 5601.4(d) (emphasis added).
The subject POA is not part of this record. Thus, this Court is not aware of the specific
parameters of Son’s authority to gift Brenckman’s money. Nevertheless, the parties do not dispute
that Son was Brenckman’s agent. Section 5601(f) of the Code defines “agent” as “[a] person
designated by a principal in a [POA] to act on behalf of that principal.” 20 Pa.C.S. § 5601(f). As
Brenckman’s POA, Son as her agent was generally bound by Section 5601.3(a) of the Code to
“[a]ct . . . in the principal’s best interest[,]” 20 Pa.C.S. § 5601.3(a) (emphasis added) and,
[e]xcept as otherwise provided in the [POA], . . . :
(1) Act loyally for the principal’s benefit.
(1.1) Keep the agent’s funds separate from the principal’s funds
unless:
(i) the funds were not kept separate as of the date of the execution of
the [POA]; . . .
....
(6) Attempt to preserve the principal’s estate plan, to the extent
actually known by the agent, if preserving the plan is consistent
with the principal’s best interest based on all relevant factors,
including:
(i) The value and nature of the principal’s property.
(ii) The principal’s foreseeable obligations and need for
maintenance.
....
(iv) Eligibility for a benefit, program or assistance under a statute
or regulation.
20 Pa.C.S. § 5601.3(b) (emphasis added).
14
own. That fact alone supports the need for the undue hardship waiver.”19 Brenckman
Br. at 11.
Unless rebutted, the law presumes that Son’s withdrawals of
$159,394.02 of Brenckman’s assets between April 10, 2012 and August 31, 2016
were made solely so Brenckman would qualify for MA. Steinberg. DHS determined
that the evidence provided during the MA hearing was not sufficient to overcome that
presumption. Accordingly, DHS declared Brenckman ineligible for MA for a period
of time.
Notwithstanding, if Brenckman established on the record “circumstances
surrounding the transfer of assets during the look-back period,” Colonial Park Care
Ctr., 123 A.3d at 1100, and that she would suffer an undue hardship – such that she
would be deprived of necessary medical care, food, clothing or shelter – as a result of
DHS imposing the ineligibility period, the penalty could be waived. See 42 U.S.C. §
1396p(c)(2)(D); 55 Pa. Code § 178.104b(a). Here, the ALJ determined, and the BHA
and the Secretary agreed, that since substantial evidence supported that Brenckman
has received necessary round-the-clock skilled nursing care at the Facility since July
2015, and would continue to do so until ZSNC transferred her to another facility for
lack of payment, there is no record basis for an undue hardship waiver. ZSNC may
only transfer Brenckman, even for non-payment, to a place that can care for her
medical needs and other life necessities. See Section 201.29(g) of Pennsylvania
Department of Health’s (DOH) Regulations, 28 Pa. Code § 201.29(g).
19
“An agent cannot make any gift under [a POA] unless the [POA] specifically states the
agent is authorized to do so.” In re Estate of Moskowitz, 115 A.3d 372, 386 (Pa. Super. 2015). The
parties do not allege that Son acted contrary to his responsibilities as Brenckman’s agent. Thus, if
Brenckman either expressly permitted Son to take the money, or he was authorized to do so under
the POA, her assets were arguably exhausted by her own hand.
15
This Court does not have the benefit of the record created in the MA
case. Nor did Brenckman or Son present any evidence at the ALJ hearing “pertinent
to the circumstances surrounding the transfer of assets during the look-back period.”
Colonial Park Care Ctr., 123 A.3d at 1100. Rather, the only evidence they offered
consisted of proof that Brenckman has received the skilled nursing care she requires,
such that Brenckman has not suffered undue hardship as a result of DHS imposing
the ineligibility period due to Son using assets that could have been used to pay
ZSNC for Brenckman’s LTC. Accordingly, the Secretary properly held that
Brenckman is not entitled to an undue hardship waiver.
This Court acknowledges that since ZSNC continues to provide
Brenckman necessary care during the ineligibility period, Brenckman is hard-pressed
to establish undue hardship. However, the circumstances presented in this case do
not implicate an undue hardship waiver. Brenckman is receiving and will continue to
receive necessary care.20 Even if ZSNC found it necessary to transfer Brenckman to
another facility, ZSNC is legally mandated to transfer Brenckman to a place that can
provide the care she requires. See Section 201.29(f), (g) of DOH’s Regulations, 28
Pa. Code § 201.29(f), (g). In addition, Brenckman had assets that would have paid
for such care, but for Son using her funds for himself.21 Now, Son is asking for
Commonwealth taxpayers to pay the Facility for a period of time that the funds he
20
Although ZSNC is temporarily financially deprived for keeping Brenckman in its care
under these circumstances, according to DHS, “under Pennsylvania law, the [Facility] has the
authority to file an action against [Son] to collect the unpaid bill. See [Section 4603(a)(1)(ii) of the
Domestic Relations Code,] 23 Pa.C.S. § 4603(a)(1)(ii).” There is no record evidence that ZSNC
has taken any such action. DHS Br. at 9.
21
Son used funds available for Brenckman’s LTC, possibly as early as April 2012, but
definitely as of July 2014, and continued to do so for up to another year after it was clear that
Brenckman was going to live and would require LTC. If Son signed Brenckman’s MA 401 as the
BHA found, he was well aware that using her available funds could jeopardize her future eligibility
for MA.
16
used would have covered Brenckman’s care. However, the law is clear that “[DHS]
is the payer of last resort under the Commonwealth’s statutory scheme. 55 Pa. Code
§ 178.6(a).” Colonial Park Care Ctr., 123 A.3d at 1097.
Brenckman urges this Court to consider her undue hardship waiver
qualification as of the date she entered the Facility. However, the relevant portions of
Section 1917(c) of the Social Security Act (e.g., “the denial of eligibility would work
an undue hardship[]” 42 U.S.C. § 1396p(c)(2)(D)) (emphasis added), and Section
178.104b(a) of DHS’ Regulations (e.g., “would deprive the individual of one of the
following[]” 55 Pa. Code § 178.104b(a) (emphasis added)), are written in the future
tense. Thus, Congress intended for, and DHS properly did consider, current and
future conditions when assessing undue hardship.
Even if, as Brenckman argues, DHS assessed Brenckman’s qualification
for the undue hardship waiver as of the date she entered the Facility, she would not
meet the waiver requirements. When Brenckman entered the Facility in July 2015,
she had spent one year in hospice care, one month with live-in help and she still had
sufficient funds remaining to pay for her LTC for 2½ years thereafter. Therefore,
viewing Brenckman’s situation as of when she was admitted into the Facility, DHS’
“application of the transfer of assets penalty [did not] deprive [Brenckman] of . . . (1)
[m]edical care so that [her] health or life would be endangered[; or] (2) [f]ood,
clothing, shelter or other necessities of life.” 55 Pa. Code § 178.104b(a).
For the above reasons, the Secretary’s Final Order is affirmed.
___________________________
ANNE E. COVEY, Judge
17
IN THE COMMONWEALTH COURT OF PENNSYLVANIA
Mary Lou Brenckman, :
Petitioner :
:
v. :
:
Department of Human Services, : No. 443 C.D. 2018
Respondent :
ORDER
AND NOW, this 1st day of October, 2019, the Department of Human
Services Secretary’s March 1, 2018 Final Order is affirmed.
___________________________
ANNE E. COVEY, Judge