Monterey County Superior Court Superior Court No. PR046057 Hon. Paul M. Marigonda Judge.
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Counsel Myers Urbatsch Kevin Patrick Urbatsch and Lily Moallem for Plaintiff and Appellant.
Kamala D. Harris Attorney General Julie Weng-Gutierrez, Assistant Attorney General Susan M. Carson, Hadara R. Stanton and Cheryl Lynn Feiner, Deputy Attorneys General, for Defendant and Respondent.
In this case we are called upon to examine the relationship between “special needs trusts, ” which allow certain individuals to qualify for public medical assistance under the federal Medicaid program, and the provisions entitling the state to recover the amounts it has paid to provide such assistance. Deborah Herting, trustee of the Alexandria A. Pomianowski Special Needs Trust, appeals fro an order requiring the trust to reimburse respondent, the State Department of Health Care Services (DHCS or the Department) for medical expenses the Department had paid in behalf of the trust beneficiary, Alexandria Pomianowski, before her death. Herting contends that the trust assets were exempt from the Department’s reimbursement rights because the beneficiary was under 55 years of age when the services were provided. We conclude that the Department was entitled to reimbursement of the medical expenses it paid under both the federal Medicaid statutes and the statutes and regulations implementing Medicaid through California’s medical assistance program, known as Medi-Cal. Accordingly, we will affirm the order.
The federal Medicaid program, created in 1965 by adding Title XIX to the Social Security Act (42 U.S.C. § 301 et seq.), is a complex “system of ‘
cooperative federalism, ’ ” in which both the federal government and participating states “reimburse certain costs of medical treatment for needy persons.” (Harris v. McRae (1980) 448 U.S. 297, 301, 308 [65 L.Ed.2d 784, 100 S.Ct. 2671]; see 42 U.S.C. § 1396 et seq.) Those eligible for Medicaid assistance include “severely impaired individuals” such as Alexandria Pomianowski, the beneficiary of the trust at issue. (42 U.S.C. § 1396a(a)(10)(A)(i)(II)(bb).)
The functioning of the Medicaid system depends on a “financial contribution by both the Federal Government and the participating State.” (Harris v. McRae, supra, 448 U.S. at p. 308.) “Although participation in the Medicaid program is entirely optional, once a State elects to participate, it must comply with the requirements of Title XIX, ” many of which are set forth in 42 United States Code section 1396a et seq. (hereafter “section 1396a”) (Harris v. McRae, supra, at p. 301.)Nevertheless, “ ‘[t]he [Medicaid] program was designed to provide the states with a degree of flexibility in designing plans that meet their individual needs. [Citation.] As such, states are given considerable latitude in formulating the terms of their own medical assistance plans.’ [Citation.]” (Olszewski v. Scripps Health) (2003) 30 Cal.4th 798, 810 [135
Cal.Rptr.2d 1, 69 P.3d 927].) California has implemented the Medicaid program through the Medi-Cal Act, described in Welfare and Institutions Code section 14000, et seq.
In this case, the relevant statutory provisions are those delineating Medicaid and Medi-Cal eligibility and recovery requirements, particularly 42 United States Code section 1396p (hereafter “section 1396p”) and Welfare and Institutions Code section 14009.5, respectively. Section 1396a(a)(18), specifically requires the state to “comply with the provisions of section 1396p... with respect to liens, adjustments and recoveries of medical assistance correctly paid, transfers of assets, and treatment of certain trusts." (Fn. omitted.) Accordingly, Welfare and Institutions Code section 14009.5 prescribes the conditions under which DHCS may claim reimbursement from the estate of a Medi Cal recipient. Entering into the picture are the provisions for “special needs trusts, ” which, in Probate Code sections 3600-3605, enable a disabled person to ...