State, Family & Social Services Administration v. Marion General Hospital

OPINION GARRARD, Judge. The State of Indiana, Family and Social Services Administration (“FSSA”) appeals the reversal of its denial of benefits to twenty-six individuals under the Hospital Care for the Indigent program (“HCI”), claiming that the failure to incorporate Indiana’s Medicaid “spend-down” provisions into its financial eligibility rule was not arbitrary and capricious. We affirm. FACTS The present appeal is a consolidation of appeals brought by QHG, Inc. and Marion General Hospital (collectively “Hospitals”) against the FSSA to recover benefits denied under the HCI. Together, the two claims involve twenty-six individuals who were denied benefits under the HCI because they exceeded the maximum monthly income level set by the FSSA.1 It is undisputed that all twenty-six individuals exceeded the maximum monthly income level and, under the FSSA monthly income rule, were ineligible for assistance. After the initial denial of the benefits, the Hospitals appealed to the FSSA, which upheld the original denials. The Hospitals then petitioned the Grant Circuit Court and the Allen Superior Court to review the decision of the FSSA. Using similar language, the two trial courts found the FSSA’s denial of benefits to be arbitrary and capricious, an abuse of discretion, and contrary to law, and reversed the FSSA’s denials. The trial courts found that the maximum monthly income rule was contrary to law because it failed to incorporate the Indiana Medicaid “spend-down” provisions.2 The FSSA ap [1123] pealed these two decisions and on April 19, 1996, filed a motion to consolidate the two appeals, which we granted. ISSUE I. Whether the trial courts properly found that the FSSA’s failure to incorporate “spend-down” provisions into the FSSA’s monthly income rule was error. DISCUSSION In our review of the FSSA’s denial of benefits, we stand in the shoes of the trial court. Bd. of Reg. for Land Surveyors v. Bender, 626 N.E.2d 491, 496 (Ind.Ct.App.1993). We look to see if the denial of benefits by the FSSA was arbitrary, capricious, an abuse of discretion or contrary to law. Lutheran Hosp. v. Dept. of Public Welfare, 571 N.E.2d 542, 544 (Ind.1991). ‘We do not reweigh the evidence presented to an administrative agency, but if the agency’s findings lack the support of substantial evidence or the agency’s order is contrary to law, we shall reverse.” Id. The Hospitals claim that the FSSA’s failure to incorporate “spend-down” provisions into its monthly income rule was arbitrary, capricious, and contrary to law because the plain language of the statute granting the FSSA the power to promulgate the income rules3 required the inclusion of the “spend-down” provisions. Indiana Code § 12-16-3-3 authorizes the FSSA to make rules setting income and resource eligibility standards for individuals whose medical care is to be paid by the HCI. This power to promulgate rules is limited, however, by subsection (b), which states: “To the extent possible, rules adopted under this section must meet the following conditions: (1) Be consistent with IC 12-15-21-2 and IC 12-15-21-3.” Indiana Code § 12-15-21-2 and § 12-15-21-3 refer to the Indiana Medicaid Act and both parties agree that these sections include “spend-down” provisions. The Hospitals argue that the language “to the extent possible ... be consistent” means that “if possible” the FSSA must include “spend-down” provisions, and that the FSSA has failed to show that it is not possible to include “spend-down” provisions in the monthly income rule. The FSSA argues that, because the statute says only that it must be consistent, not identical, the statute gave the FSSA the discretion to use its expertise to promulgate the current monthly income rule. In construing Ind.Code § 12-16-3-3, we “must give effect to the plain and manifest meaning of the language employed.” Dept. of Pub. Wel. v. St. Joseph’s Med. Ctr., 455 N.E.2d 981, 983 (Ind.Ct.App.1983). Only if the language employed is ambiguous will we search for legislative intent. Id. Because the language employed in the statute is not ambiguous, we need not search for the legislative intent; instead, we will give effect to the plain meaning of the statute. “Consistent” is defined as “free from variation or contradiction.” WebsteR’s Ninth New Collegiate Diotionaey 280 (9th ed. 1983). “Possible” is defined as “being within the limits of ability, capacity, or realization.” Id. at 918. Using these ordinary meanings, the phrase “to the extent possible ... be consistent with” means to the extent within the limits of ability the rules must be free from variation or contradiction. By failing to include the “spend-down” provisions, the FSSA rule varies from the provisions of the Medicaid Act. Indiana Code § 12-16-3-3 requires that, within the limits of ability, the FSSA rules must not vary from the provisions of the Medicaid Act. For the FSSA to justify its monthly income rule under the statute, the FSSA must not have been able to include “spend-down” provisions in its rule. The issue before us, therefore, is whether the FSSA was not able to include the “spend-down” provisions in its rule. If the FSSA was able to include the “spend-down” provisions, then the FSSA exceeded the bounds of the authority granted by Ind.Code § 12-16-3-3, and the rule upon which the denial of benefits was based is invalid. The agency is authorized to depart from consistency with IC 12-15-21-2 and IC 12-15-21-3 but only for articulable reasons determining that consistency is not possible. “The relevant inquiry is whether there is substantial evidence of [1124] probative value to support the agency’s determination.” Bd. of Reg. for Land Surveyors v. Bender, 626 N.E.2d 491, 496 (Ind.Ct.App.1993). The FSSA presented no evidence that it was not able to incorporate the “spend-down” provisions. In fact, the FSSA presented no evidence at all to support its decision. Because the FSSA’s decision not to include the “spend-down” provisions was not supported by any evidence, the trial courts correctly reversed the denials of the benefits. The FSSA’s monthly income rule violated the plain language of Ind.Code § 12-16-3-3 and, therefore, the denial of benefits based on this rule was error. Affirmed. FRIEDLANDER and ROBERTSON, JJ., concur. Footnotes [1] Ind.Admin.Code tit. 470, r. 11.1-1-5. For the purposes of this opinion, we will refer to this section as the FSSA monthly income rule. [2] Because we need not define "spend-down” provisions for the purposes of this appeal, we decline to do so. For a definition of "spend-down” provisions, see Indiana Dept. of Public Welfare v. Payne, 622 N.E.2d 461 (Ind.1993), reh'g denied. [3] Ind.Code § 12-16-3-3.