Nay v. Dept. of Human Services

Amended provisions OAR 461-135-0835(1)(e)(B)(iii) and OAR 461-135-0832(10)(b)(B)(viii) are invalid because they exceed the statutory authority granted by ORS 416.350 and 42 USC sec. 1396p.

Nay sought a judicial declaration that certain amendments to administrative rules promulgated by the Department of Human Services (DHS) are invalid. Nay argued that DHS improperly amended OAR 461-135-0835(1)(e)(B)(iii) and OAR 461-135-0832(10)(b)(B)(viii) (OARs) to expand the provisions that allow DHS to recover assets owned by a Medicaid recipient at the time of the recipient’s death. The expansion to the OARs allows DHS to also recover assets that the recipient conveyed to the recipient’s spouse or others within five years of the date of the Medicaid application or anytime thereafter. Because the Court was considering a facial challenge to OARs, the scope of judicial review was limited to a determination of whether those OARs on their face comply with the applicable statutory and judicial requirements. Nay argued that the OARs exceed the scope of both federal and state law, because the challenged amendments purport to allow DHS to engage in estate recovery from assets in which the deceased Medicaid recipient had no legal interest at the time of his or her death. DHS argued that “estate assets” should be broadly interpreted to include assets that the Medicaid recipient transferred away during his or her life. The Court held that the OAR provisions as amended are invalid, finding that they exceed the statutory authority of the state and Federal governments that is granted by ORS 416.350 and 42 USC section 1396p. Held invalid.