# Amicus Curiae Brief — Atkins v. Rivera

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URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385012_0457%3A08

## Record

- **Collection:** Supreme Court brief
- **Document type:** Amicus Curiae Brief
- **Published:** January 1, 1986
- **Citation:** 477 U.S. 154

## Text

eupreme Court, U.S, 7"
FILED

No. 85-632 | JAN 31 ‘$aa
POR OA) JR

—_

‘ ™ . ea * |
Iu the Supreme Court of the United States

OCTOBER TERM, 1985

CHARLES ATKINS. COMMISSIONER.
MASSACHUSETTS DEPARTMENT OF PUBLIC WELFARE.
PETITIONER

SANTOS RIVERA. ET AL.

ON WRIT OF CERTIORARI TO THE
SUPREME JUDICIAL COURT OF MASSACHUSETTS

BRIEF FOR THE UNITED STATES AS
AMICUS CURIAE SUPPORTING PETITIONER

(CHARLES FRIED

solcio)or (rere ral

RICHARD K. WILLARD
1 cc stant Attor eu (re neral

KENNETH 8S. GELLER

De pity Solicitor (+6 }

JERROLD J. GANZFRIED

4 oO I ’ }
AS stant to the SOT ror freneral

JOHN F. CorRDEsS
NICHOLAS S. ZEPPOS
Attorneys
Di partme« tof Justice

RONALD E.. ROBERTSON Washinaton. D.C. 20530

(General Counsel (202) ¢ 2219

DAVID R. SMITH
Attor ey

De partment of Health

and Human Services

Washington, D.C. 20201

QUESTION PRESENTED

part icipat-

use up to a sh

nerliod r compu yr tne e income
must Spe

Medicaid

lawful.

re S

Interest of the United States
Statement 2
Summary of argument 9

Argument:

The Secretary’s regulation authorizing up to
month period for computing excess income that n :
be spent down to qualify for Medicaid is consistent
with the lancuage and policies of the Medicaid Act
and is clearly within the scope of the Secretary s
rulemaking authority 12
\. The Secretary's longstanding regulation ad pted
pursuant to an express grant of rulemaki!
authority must be given controlling weight 12
B. The Secretary’s regulation is consistent with the
“same methodology” language of the Act sinc
that language does not refer to the length of the
spend dow ner od 19
C. The Secretary's regulation is consistent with the
“comparability” requirement of the Act 26
Conclusion 30
rr . . rr Ce i ’
TABLE OF AUTHORITIES
(Cases:

American Paper Institute, Inc. v. American Ele:
trie Power Corp., 461 U.S. 402 ; 4

Andrus Vv. Shell Oil Co.. 446 U.S. 657 L5

A pe r Hosiery Co. v. Leader, 310 U.S. 469 16

Batterton Vv. Francis, 432 U.S. 416 10. 13

Beltran v. Myers, 701 F.2d 91, cert. denied, 462

U.S. 1134 97 OS

Cases—Continued: Page

Board of Governors V. First Lincolnwood Corp.,
139 U.S. 234 16
Caldwell v. Blum, 621 F.2d 491, cert. denied, 452
U.S. 909
Calkins v. Blum, 511 F. Supp. 1073, aff'd, 675 F.2d
14 28
Chevron U.S.A. Ine. v. Natural Resources Defense
Council, Inc., No. 82-1005 (June 25, 1984) 13-14, 21
Connecticut Department of Income Maintenance V.
Heckler, No. 83-2136 (May 20, 1985) 20, 21

DeJesus Vv. Perales, 770 F.2d 316 passim
Doe v. Wilson, [1982] Medicare and Medicaid

Guide (CCH) * 32,148 (D. Vt. Aug. 16, 1982) 19
EEOC v. Associated Dry Goods Corp., 449 U.S.

590 16

. Fabula v. Buck, 598 F.2d 869 28
Ford Motor Cre dit Co. V. Milhollin, 444 U.S. 555 27
Greklek v. Toia. 565 F.2d 1259, cert. denied, 436

U.S. 962 28
, Harris v. McRae, 448 U.S. 297 1.2
4 Hogan V. Heckler, 769 F.2d 886 passim
Morton v. Mancari, 417 U.S. 535 26
Norweaian Nitrogen Products Co. v. Unite d States,
288 U.S. 294 15
Parsoi s Stee l, Tne. Vv. Fu st Alabama Bank, No. 4 -
1616 (Jan. 27, 1986) 26
Schweiker v. Gray Panthers, 453 U.S. 34 passim
Schweiker v. Hogan, 457 U.S. 569 1,10, 16, 18, 29
T’nited States V. Ruthe rford, 442 U.S. 544 16
Williams v. St. Clair, 610 F.2d 1244 6, 13
Winter v. Miller, 676 F.2d 276 5

Statutes and regulations:
Deficit Reduction Act of 1984, Pub. L. No. 98-369,
S$ 2373(c), 98 Stat. 1112 25
Omnibus Budget Reconciliation Act of 1981, Pub

L. No. 97-35, 95 Stat. 357 ef seq.:

§ 2171 (a), 95 Stat. 807 16
$ 2171 (a) (3), 95 Stat. 807 21
S$ 2315(a), 95 Stat. 855 25

Tax Equity and Fiscal Respo1 lity Act of 1982,
Pub. L. No. 97-248, § 137(b) (8), 96 Stat. 378 16. ?]
Pub. L. No. 92-6038, 86 Stat. 1329, et seq

Tit. II, 86 Stat. 1370:

S 209(b), 86 Stat. 1389 :
Tit. II], 86 Stat. 1465 5
Pub. L. No. 93-233, § 13(a) (3), 87 Stat. 960 16
12 U.S.C. (1970 ed.) 301 et seq
12 U.S.C. 602 et seq. 5
12 T7 SC. (1976 ed.) 602(a) (8) 26
12 U.S.C. 602 (a) (13) 8, 20
12 U.S.C. 602(a) (13) (A) 25
12 U.S.C. (1976 ed.) 602(a) (28) 26
12 U.S.C. (1970 ed.) 1201 et seq 3
12 U.S.C. 1302 13, 19
12 T7 S.C. (1970 ed.) 1351 ef seq 3
12 U.S.C. 1381 et seq 3
12 U.S.C. 1396 17
12 ULS.( 396a i.a

l

1396a (a) (10)

U.S.C. 1396a (a) (10) (A) 1) 2

[ 1396a (a) (10) (CO) {

[ 1396a (a) (10) (C) (i) 91. 292

12 U.S.C. 1396a (a) (10) (C) 1) CID) 17

U.S.C. 1396a(a) (10) (C) (1) CIID) 7.8.11, 19, 25
| 12396a (a) (10) (C) Civ) 17
| 1396a (a) (] ‘

12 U.S.C. 13896a (f) 3

. 1896b 9
]

396b (f) (1) (B) 1) {

12 S.C. 1896b(f) (2) §. 29
2, S.C 1396p (c) (?) (BRB) (1) 6
Mass. Ann. Laws ch. 118E (Law. Co-op. 1975)

~ p

‘ . . or 4 9
sectiol o9.4 ‘ |

Section 435.110 (a) 5

> Bed

Section eve) 120 (a) 2

utes and regulations—Continued : Page
Section 435.401 (c) 26
Section 435.725 8)
Section 435.733 6
Section 435.811 (c) |
Sections 435.821-435.823 5
Section 435.831 2.5, 8, 13, 23, 24
Section 435.831 (a) 5
Section 435.831 (a) (1)-(3) 20
Section 435.831 (b) ]
Section 435.831 (c) i
Section 435.831 (d) 30
Section 435.832 6
Section 440.220 17
15 C.F.R. 248.21(a) (4) (1970) 5
24 Fed. Reg. 1321 (1969) (codified at 45 C.F.R
948. 21(a) (4) (1970)) 15

Mass. Admin. Code tit. 106 (1983) :

S 505.200 5
S§ 506.100-506.200 5
S 506.510 6

Miscellaneous :

16 Fed. Reg. 47980 (1981) 24
H.R. Rep. 213, 89th Cong., Ist Sess (1965) 1,5, 10, 14,

H.R. Rep. 97-757, 97th Cong., 2d Sess. Pt. I

(1982) 16, 22
H.R. Rep. 98-861, 98th Cong., 2d Sess. (1982) 29
Medicaid Proaram;: Medicaid Eliaqithility and Cov-

erage Criteria, 46 Fed. Reg. 47976 (1981) 22
S. Rep. 404, 89th Cong., Ist Sess. (1965) 5), 14
S. Rep. 97-139, 97th Cong., Ist Sess. (1981) 25, 26

I'S. Den’t of Health, Education and Welfare,
Handhook of Public Assistance Administration
Supplement D (June 17, 1966) 15

In the Supreme Court of the United States
OCTOBER TERM, 1985

No. 85-632
CHARLES ATKINS, COMMISSIONER.
MASSACHUSETTS DEPARTMENT OF PUBLIC WELFARE
PETITIONER
Uv.

SANTOS RIVERA, ET AL.

ON WRIT OF CERTIORARI TO THE
SUPREME JUDICIAL COURT OF MASSACHUSETTS

BRIEF FOR THE UNITED STATES AS
AMICUS CURIAE SUPPORTING PETITIONER

INTEREST OF THE UNITED STATES

Medicaid is a joint federal-state program “provid-
ing federal financial assistance to States that choose
to reimburse certain costs of medical treatment for
needy persons.” Harris v. McRae, 448 U.S. 297, 301
(1980). In developing plans for administering the
Medicaid program, states are given discretion to de-
termine who will receive Medicaid assistance as well
as the kinds of assistance provided. State Medicaid
plans, however, must comply with requirements im-
posed by the Act and by the Secretary of Health and
Human Services. 42 U.S.C. 1396a.

The United States has a significant interest in the
resolution of this case. The Supreme Judicial Court
of Massachusetts held that the Commonwealth of
Massachusetts violated the Medicaid Act by using a
six-month period for determining the excess income
that an applicant must spend on medical care before

(])

9

qualifying for Medicaid. The court held that Massa-
chusetts must use a one-month period. Massachusetts’
choice of a six-month period, however, is specifically
authorized by a regulation adopted by the Secretary
at the inception of the Medicaid program. See 42
C.F.R. 435.831. Presently, some 29 states participat-
ing in the Medicaid program use other than a one-
month period.

In the Secretary’s judgment, the regulation a1-
thorizing states to select up to a six-month period
furthers substantial policies that underlie the Med-
icaid program. It allows participating states the
choice of targeting their limited financial resources
at the most needy individuals and eases the admin-
istrative burdens placed on the states. The decision
below, by invalidating the Secretary’s longstanding
regulation, substantially disrupts the operation of the
Medicaid program. This result, if upheld by this
Court, would increase the cost of participating in
that aspect of the Medicaid program at issue in this
case—a program that is wholiy voluntary for the
states—and would thereby raise the prospect that,
rather than incur these added expenses, states will
curtail the scope of covered services, restrict eligi-
bility, or even withdraw from the program alto-
gether.

STATEMENT

1. Congress established the Medicaid program in
1965 “for the purpose of providing federal financial
assistance to States that choose to reimburse certain
costs of medical treatment for needy persons.”
Harris v. McRae, 448 U.S. 297, 301 (1980); see
Schweiker v. Gray Panthers, 453 U.S. 34, 36 (1981).
As a cooperative federal-state program,’ Medicaid

1 Both federal and state funds are used to finance the
program. See 42 U.S.C. 1396b.

3

leaves the decision whether to participate entirely to
the discretion of each state. Once that initial deci-
sion has been made, states electing to participate must
comply with requirements imposed by the Act and by
the Secretary of Health and Human Services. See
42 U.S.C. 1396a; Gray Panthers, 453 U.S. at 37.

Individuals covered by certain cash assistance pro-
grams—Supplemental Security Income for the Aged,
Blind, and Disabled (SSI) (42 U.S.C. 1381 ef seq.)
and Aid to Families with Dependent Children
(AFDC) (42 U.S.C. 602 et seqg.)—automatically
qualify for Medicaid. Thus, states that choose to par-
ticipate in the Medicaid program are required to pro-
vide Medicaid to these persons, termed the “‘categori-
cally needy.” See 42 U.S.C. 1396a(a)(10)(A) (i);
12 C.F.R. 435.4, 435.110(a), 435.120(a).* At its op-

> When Medicaid was enacted in 1965 there was no SSI pro-
gram. Rather, there were three separate state-administered
programs for the aged, blind, and disabled. See 42 U.S.C.
(1970 ed.) 301 et seq. (Old Age Assistance) ; 42 U.S.C. (1970
ed.) 1201 et seq. (Aid to the Blind); 42 U.S.C. (1970 ed.)
1351 et seq. (Aid to tre Permanent and Totally Disabled). In
1972, Congress replaced these programs with SSI. Pub. L
No. 92-603, Tit. III, 86 Stat. 1465, codified at 42 U.S.C. 1381
et seq. See Gray Panthers, 453 U.S. at 38.

Under the SSI program the federal government sets the
standard of need, which often is much higher than the state
standards set under the former state-run programs. Thus,
with the enactment of the SSI program, it was easier to qualify
for SSI, and Medicaid, since these people were now considered
categorically reedy. see Gray Panthe rs, 453 U.S. at 38. Con-
gress feared that in some states this would lead to a dramatic
increase in the number of persons who automatically qualify
for Medicaid and that, faced with this fiscal burden, some
states would withdraw from the Medicaid program. To avoid

this problem Congress “‘offered what has become known as the
‘$ 209(b) option.’” Gray Panthers, 453 U.S. at 38: see 42
U.S.C. 1396a(f). This gives states the choice of providing
Medicaid only to those SSI recipients who would have been

4

tion, a participating state may also provide coverage
to other “less needy” individuals. See H.R. Rep. 213,
89th Cong., 1st Sess. 66 (1965); 42 U.S.C. 1396a
(a)(10)(C). In general, these are people who would
otherwise qualify for SSI or AFDC except that their
income exceeds the levels set for these categorical as-
sistance programs. See Schweiker v. Hogan, 457 U.S.
569, 572-573 (1982). They are referred to as the
“medically needy.” See ibid.; 42 C.F.R. 435.4. The
medically needy may qualify for Medicaid only if
they incur medical expenses that reduce their income
to the Medicaid eligibility income standard. See 42
U.S.C. 1396a(a) (17); 42 C.F.R. 435.831(¢).*

2. The same initial steps are used for determining
the Medicaid eligibility of the medically needy as are
used for determining eligibility for SSI and AFDC
assistance. See Hogan v. Heckler, 769 F.2d 886, 888
(1st Cir. 1985). First, gross income is calculated.
eligible for Medicaid under the state standards in existence on
January 1, 1972—i.e., prior to the enactmert of the SSI pro-
gram. Those who receive SSI but fail to meet the preexisting
state standards may qualify for Medicaid by spending their
excess income on medical care. See Gray Panthers, 457 U.S.
at 39 n.5. Massachusetts has not elected to limit coverage
under Section 209(b) (86 Stat. 1389).

‘This group may be subdivided into the “AFDC-related
medically needy” and the “SSI-related medically needy,” de-
pending on the type of assistance for which the recipient
would qualify were it not for the excess income.

4The income eligibility standard for the medically needy
may not exceed 1331:° of the highest payment made by
the state under the state’s AFDC program. See 42 U.S.C.
1396b(f) (1) (B) (i); 42 C.F.R. 435.811(c); Schweiker Vv.
Hogan, 457 U.S. at 576-580. Thus, a person whose income
falls between the AFDC eligibility standard and the Medicaid
standard would qualify for Medicaid without incurring any
medical expenses. 42 C.F.R. 435.831(b). The present case
does net involve persons in that situation.

This may include money earned by the applicant, as
well as by a third party such as a spouse or a parent.
See 42 C.F.R. 435.821-435.823. Next, various deduc-
tions are subtracted from the gross income to arrive
at “countable income.” See 42 C.F.R. 435.831(a);
106 C.M.R. 505.200, 506.100-506.200.

Up to this point there is no difference between the
computations for deteimining eligibility for SSI,
AFDC and Medicaid. For example, the deductions
from income for a medically needy applicant must be
the same as those allowed to applicants for the cor-
responding cash program, SSI or AFDC. See 42
C.F.R. 435.831(a). However, because the medically
needy possess income above the Medicaid eligibility
standard, determination of their eligibility involves
an extra step not applicable to SSI or AFDC.

As noted above, before medically needy applicants
qualify for Medicaid they must incur medical ex-
penses that reduce their income (‘“‘spend down’’) to
the Medicaid eligibility standard. This “spend down
concept was incorporated into the Medicaid Act at its
origin.” Winter v. Miller, 676 F.2d 276, 277 (7th
Cir. 1982); see also 42 U.S.C. 1396a(a)(17): H.R.
Rep. 213, supra, at 68; S. Rep. 404, 89th Cong., Ist
Sess. 78-79 (1965). Since the first Medicaid regula-
tions were adopted in 1969 (45 C.F.R. 248.21(a) (4)
(1970) (now 42 C.F.R. 435.831) ), the Secretary has
permitted states to compute the excess income that
must be spent on medical care over a period of time
up to six months. This period is referred to as the
“spend down period.”

3. Massachusetts is one of 34 states (alone with
the District of Columbia, Puerto Rico, and the Virgin
Islands) that have elected to participate in the Med-

>“C_M.R.” refers to the Code of Massachusetts Ree
(Mass. Admin. Code tit. 106 (1983) ).

8

and resource standards and methodologies. This
amendment makes clear that the Department
had no authority to alter the rules that applied
before September 30, 1981, with respect to med-
ically needy income levels, medically needy re-
source standards, and the methodology for treat-
ing medically needy income and resources. The
Committee bill reaffirms the financial require-
ments previously in effect for the medically needy
(42 C.F.R. sec. 4835.800-435.845).

The language in the House Report is critical in
two respects. First, in emphasizing that the “same
methodology” requirement was intended to overrule
only the 1981 regulations dealing with matters other
than spend down, the Report made clear that the
spend down period was in no way affected by the
amendment. See DeJesus v. Perales, 770 F.2d at 727;
Hogan vy. Heckler, 769 F.2d at 901. Second, the Re-
port expressly approved the pre-1981 OBRA regula-
tions, which contained the regulation authorizing a
six-month spend down (42 C.F.R. 435.831). As the
First Circuit noted in Hogan v. Heckler, 769 F.2d
at 901 (emphasis in original): “the quoted Report
specifically ‘affirm[ed] the financial requirements’
previously contained in 42 C.F.R. 8§ 435.800-435.845.
This included the regulation challenged in this action
allowing a six month spenddown period, 42 C.F.R.
S 435.831. * * * It is hard to imagine a clearer indi-
cation that Congress did not intend to equate the
length of the spenddown period with the length of the
budget period used to determine income.”

That Congress did not intend to abrogate the spend
down regulation is obvious from an examination of
the 1981 regulations to which the “same methodol-
ogy” language was directed. The preamble to the
1981 regulations discussed the concept of methodol-
ogy, and conclusively establishes that the spend down

24

period was not included (46 Fed. Reg. 47980 (1981)
(emphasis added) ):

G. Treatment of Income and Resources

1. Provisions: States are no longer required
to apply a uniform methodology for treating in-
come and resources in such matters as deemed
income, interest, court-ordered support pay-
ments, and infrequent and irregular income.
father the State plan must specify the meth-
odology that will be used; and that methodology
must be reasonable. (See 42 C.F.R. 435.850-
435.852 and 436.850-436.852, as added by this
final rule.)

2. Discussion: Before the 1981 Amendments,
the methodology for treatment of income and
resources of the medically needy depended on
the individuals’ relationship to a specific cash
assistance program. For example, the method-
ology for deeming the income of medically needy
aged, blind, and disabled was taken from the
SSI program. This was based on the former
wording of section 1902(a)(10) of the Act that
described the medically needy, in part, as in-
dividuals who “except for income and resources”
would be eligible for cash assistance and for
Medicaid as categorically needy. Furthermore,
section 1902(a)(17)(C) of the Act required
that the meinedology for the treatment of in-
come and resources be reasonable and gave the
Secretary authority to prescribe standards re-
garding that methodology.

Thus, the term “methodology,” as used in the pre-
amble to the 1981 regulations, referred solely to the
general treatment of income and resources; it did not
include the length of the spend down period. Nor was
42 C.F.R. 435.831 (which authorizes the use of a six-
month spend down period) identified as a regulation

or
As

a

relevant to the change in permissible “methodology.”
Since the 1982 TEFRA amendment adding the “same
methodology” language sought to undo only the changes
made by the 1981 regulations, and those regulations
clearly did not affect the spend down period, the ref-
erence to “methodology” in 42 U.S.C. 1396a(a) (10)
(C) (i) (IIL) cannot sensibly be read to include spend
down. See DeJesus v. Perales, 770 F.2d at 327;
Hogan v. Heckler, 769 F.2d at 901. Accordingly,
the state court’s conclusion that the 1982 amendment
to the Act disapproved of HHS’s regulation authoriz-
ing up to a six-month spend down period must be
rejected.”

14 Subsequent legislative history further buttresses the Sec-
retary’s reading of the “same methodology” language. See
DeJesus V. Perales, 770 F.2d at 326 n.12. In the Deficit Reduc-
tion Act of 1984, Congress amended Sectien 1396a(a) (10)
(C) (i) (IIIT) to impose a moratorium on the Secretary’s dis-
approval of state Medicaid plans that might be inconsistent
with the “same methodology” language of Section 1396a(a)
(10) (C) (i) (IIT). See Deficit Reduction Act of 1984, Pub. L.
No. 48-369, § 2373(c), 98 Stat. 1112. In enacting this mora-
torium, Congress reaffirmed that its sole intent in using the
term “same methodology” was to override the Secretary’s
1981 OBRA regulations. See H.R. Rep. 98-861, 98th Cong.,
2d Sess. 1366-1367 (1982).

'* The state superior court (Pet. App. A43) attributed sig-
nificance to a provision in the 1981 OBRA that mandated one-
month budgeting to calculate AFDC benefits. See Pub. L. No.
97-35, § 2315(a), 95 Stat. 855 (codified at 42 U.S.C. 602(a)
(13) (A)). According to the state court, this represented an
implicit repeal of the Secretary’s longstanding regulation and
implicitly required that the spend down amount be computed
over a one-month period. The court’s analysis is flawed in
several respects. First, the legislative history of the change
makes clear that it was aimed solely at correcting problems
in the AFDC program. See S. Rep. 97-139, 97th Cong.,
Ist Sess. 516-517 (1981). Nothing in this amendment to the
AFDC statute or its legislative history even hints at an intent

26

C. The Secretary’s Regulation Is Consistent With The
“Comparability” Requirement Of The Act

In the courts below, respondents also claimed that
the Secretary’s six-month spend down regulation con-
flicted with the “comparability” requirement of 42
U.S.C. 1396a(a)(17). Although the Supreme Judi-
cial Court did not address that issue, respondents
(Br. in Opp. 8 & n.4) rely on it as a basis for de-
fending the judgment below.”

to alter the Secretary’s regulation authorizing a six-month
spend down period under the Medicaid Act. The state court’s
reliance on this AFDC amendment therefore is flatly incon-
sistent with the settled rule that repeals by implication are
disfavored. Parsons Steel, Inc. Vv. First Alabama Bank, No.
84-1616 (Jan. 27, 1986), slip op. 5; Morton v. Mancari, 417
U.S. 535 (1974). Second, as the First Circuit noted in Hogan
v. Heckler, 769 F.2d at 901-902, although OBRA amended the
AFDC statute to mandate one-month budgeting for calculat-
ing benefits, the 1982 House Report on TEFRA states that
in OBRA Congress “expressly approved of [the Secretary’s]
regulations, including [the spend down regulation].” This ex-
plicit endorsement of the Secretary’s spend down regulation
surely nullifies any contrary inferences to be drawn from the
AFDC amendment. Finally, although it was not until 1981
that Congress required a one-month budgeting period for cal-
culating AFDC benefits, many states had previously used a
one-month budget (see S. Rep. 97-139, supra, at 516), and the
pre-existing AFDC statute had required states to determine
AFDC eligibility (as opposed to the level of AFDC benefits)
on a monthly basis. See 42 U.S.C. (1976 ed.) 602(a) (8) and
(28); S. Rep. 97-139, supra, at 440. Thus, “throughout the
period during which the Secretary’s regulation permitting a
six-month spend-down has been in force, eligibility for AFDC
has been determined by calculating income on a monthly basis.”
DeJesus V. Perales, 770 F.2d at 323 n.9.

16 Respondents also contend (Br. in Opp. 7-8) that another
of the Secretary’s regulations, 42 C.F.R. 435.401(c), bars the
use of a six-month spend down period. That contention has
no merit. Section 435.401(c) prevents a state’s eligibility
requirements for the medically needy from being more restric-

or

Section 1396a(a)(17) (emphasis added) provides
in pertinent part:

* *

A State plan for medical] assistance must
include reasonable standards (which shall be
comparable for all growps and may, in accord-
ance with standards prescribed by the Secretary,
differ with respect to income levels, but only in
the case of [the medically needy], based on the
variations between shelter costs in urban areas
and rural areas) for determining eligibility for
and the extent of medical assistance under the
plan * * *

Respondents alleged in the state courts (J.A. 21-22)
that since the AFDC program uses a one-month
budget period, Section 1396a(a)(17) requires that a
“comparable” period be used for the Medicaid spend
down period. The First and Second Circuits correctly
rejected this spurious contention. See DeJesus v.
Perales, 770 F.2d at 323-324, 327; Hogan v. Heckler,
769 F.2d at 891-898."

tive than those used for the related categorically needy. The
Secretary has consistently interpreted that regulation to
apply solely to those determinations common to calculating
eligibility for categorical assistance and Medicaid. Because
AFDC eligibility involves no spend down calculation, it is im-
possible for the Medicaid spend down to be “more restrictive”
than the nonexistent AFDC measure. The Secretary’s inter-
pretation of his regulations is thus clearly reasonable and is
due the greatest deference. Ford Motor Credit Co. v. Mil-
hollin, 444 U.S. 555 (1980).

17 Cases that have read Section 1396a(a)(17) or Section
1396a(a) (10) to require comparability between the medically
needy and categorically needy are readily distinguishable.
Most important, none of those cases dealt with the spend down
period. Instead, they all concerned income and resource com-
putations for determining the Medicaid eligibility of the
medically needy—computations that are common to determin-
ing eligibility for AFDC. See Beltran v. Myers, 701 F.2d 91

28

First, the statute’s “comparability” requirement is
not relevant to determining the spend down amount.
The “comparability” requirement of Section 1396a
(a)(17) was a feature of the original Medicaid Act;
for nearly two decades, however, the Secretary has
interpreted that requirement not te preclude states

(9th Cir.), cert. denied, 462 U.S. 1134 (1983) (transfer of
assets rule) ; Caldwell v. Blum, 621 F.2d 491 (2d Cir. 1980),
cert. denied, 452 U.S. 909 (1981) (same); Fabula v. Buck,
598 F.2d 869 (4th Cir. 1979) (same); Greklek v. Toia, 565
F.2d 1259 (2d Cir. 1977), cert. denied, 436 U.S. 962 (1978)
(work expenses deductions from income); Calkins v. Blum,
511 F. Supp. 1073 (N.D.N.Y. 1981), aff’d, 675 F.2d 44 (2d Cir
1982) (income disregard rule). Thus, they did not concern
the problem presented here—a computation unique to deter-
mining the Medicaid eligibility of the medically needy. See
De “esus V. Perales, 770 F.2d at 328.

These cases differ from this one in another significant re-
spect. In striking down the state Medicaid rules at issue, the
courts relied heavily on the fact that the state rules conflicted
with the Secretary’s regulations that mandated identical treat-
ment for the particular computation. See Caldwell, 621 F.2d
at 495; Greklek, 565 F.2d at 1261 n.5; Calkins, 511 F. Supp. at
1093. Here, by contrast, the state’s Medicaid rule is affirma-
tively authorized by the Secretary’s longstanding regulation.
See Hogan V. Heckler, 769 F.2d at 898.

Respondents also claim (Br. in Opp. 8) that Massachusetts
violates the comparability requirement by treating some
AFDC-related medically needy differently from others. In
particular, respondents state that in Massachusetts some
AFDC-related medically needy qualify for Medicaid without
a spend dowr because Massachusetts uses a Medicaid income
eligibility standard that is slightly higher than the AFDC
standard (see note 4, supra). Respondents then assert that
Massachusetts computes the income of this group over one
month, but uses a six-month period for those AFDC-related
medicaily needy not in this group. In fact, however, there is no
disparity in treatment in computing the spend down amount
among the AFDC-related medically needy, because there is no
need to perform that computation for persons who already
meet the Medicaid standard.

29

from using spend down periods as long as six months.
Indeed, it would be anomalous to conclude that the
“comparability” requirement implicitly governs the
spend down period when the statute’s express refer-
ence to the spend down concept, which is at the end
of the same subsection, specifies only that state plans
must “‘provide for flexibility in the application of such
standards with respect to income by taking into ac-
count, except to the extent prescribed by the Secre-
tary, the costs * * * incurred for medical care.” 42
U.S.C. 1396a(a) (17) ; see also 42 U.S.C. 1396b(f) (2).

Accordingly, Section 1396a(a)(17) gives broad
discretion to the Secretary, and to participating
states, to determine how to take the costs of medical
care into account in determining Medicaid eligibility
for the medically needy. This express delegation to
the Secretary to determine how much an applicant
for Medicaid must spend for medical care refutes
respondents’ argument that the vague “comparable
standards” language reflects Congress’s intent that
the spend down amount be computed in a specific
fashion. See DeJesus v. Perales, 770 F.2d at 324;
Hogan v. Heckler, 769 F.2d at 893, 896-897.

Second, as this Court has recognized, although Sec-
tion 1396a(a)(17) requires “comparability among
the various ‘categories’ for which federal assistance
[is] available, * * * th[is] provision[] d[oes] not
require that the medically needy be treated compar-
ably to the categorically needy in all respects.”
Schweiker v. Hogan, 457 U.S. at 587. Thus, it can-
not be asserted that the Act mandates identical treat-
ment for both the categorically needy and the medi-
cally needy in every aspect of determining Medicaid
eligibility. If Congress had intended that there be
no difference in treatment between the categorically
needy and the medically needy, it surely would have

30

said so. But the statute says that treatment must be
“comparable,” not identical. As Judge Friendly
wrote for the Second Circuit, “[c]omparison invites
an examination of differences as well as resem-
blances.” DeJesus v. Perales, 770 F.2d at 324. And
the obvious difference between the categorically needy
and the medically needy is that while the former au-
tomatically qualify for Medicaid, the latter have ex-
cess income that must be spent on medical care before
they qualify. See 42 U.S.C. 1396a(a) (17); 42 C.F.R.
435.831(d). The categorically needy have no spend
down amount, hence no spend down period. Compara-
bility, therefore, can hardly require identical treat-
ment on the point at issue in this case.

CONCLUSION
The judgment of the Supreme Judicial Court of
Massachusetts should be reversed.

Respectfully submitted.

CHARLES FRIED

Solicitor General
RICHARD K. WILLARD

Assistant Attorney General
KENNETH S. GELLER

Deputy Solicitor General
JERROLD J. GANZFRIED

Assistant to the Solicitor General

JOHN F. CORDES
RONALD E. ROBERTSON NICHOLAS §S. ZEPPOS
General Counsel Attorneys
DAVID R. SMITH
Attorney
Department of Health
and Human Services

FEBRUARY 1986

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Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385012_0457%3A08. Public record. Not legal advice.