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McGovern v. Arizona Health Care Cost Containment System Administration

Court of Appeals of Arizona, First Division

November 8, 2016

PATRICK MCGOVERN, Deceased, Plaintiff/Appellee,
v.
ARIZONA HEALTH CARE COST CONTAINMENT SYSTEM ADMINISTRATION, an Agency of the State of Arizona; THOMAS J. BETLACH, in his capacity as Director of AHCCCS, Defendants/Appellants.

         Appeal from the Superior Court in Maricopa County No. LC2014-000540-001 The Honorable Crane McClennen, Judge, Retired.

         REVERSED.

          Jackson White PC, Mesa By Richard Tyler White Counsel for Plaintiff/Appellee.

          Johnston Law Offices PLC, Phoenix By Logan T. Johnston, III Counsel for Defendants/Appellants.

          Judge Jon W. Thompson delivered the opinion of the Court, in which Presiding Judge Diane M. Johnsen and Chief Judge Michael J. Brown joined.

          OPINION

          THOMPSON, JUDGE.

         ¶1 The Arizona Health Care Cost Containment System (AHCCCS) appeals from a final judgment overturning its director's decision denying Patrick McGovern's application for Medicaid benefits. We reverse the trial court's judgment.

         FACTUAL AND PROCEDURAL HISTORY

         ¶2 AHCCCS denied McGovern's application for Medicaid benefits under its long-term care program, the Arizona Long-Term Care System (ALTCS), finding McGovern's "countable" income and "countable" resources exceeded the qualifying limits. McGovern appealed the decision, arguing that certain assets were "unavailable" because he was unable to access them.[1]

         ¶3 The denial turned on whether McGovern's three Bank of America (BOA) accounts, owned jointly with his daughter, and a Ford Focus he owned, but that was in his daughter's possession and titled in both their names were properly counted as resources. McGovern's monthly pension was deposited in one of the three bank accounts. McGovern's sister held a power of attorney to access his assets because McGovern lacked mental capacity to control them.

         ¶4 Under BOA's policy, co-owners of a bank account each may exercise control over the account without the consent of the other, but both account owners must sign a "Joint Owner Acknowledgement" to allow a third-party to access the account using a power of attorney. Under the policy, even though McGovern lacked capacity to exercise control over his BOA accounts, the bank would not permit McGovern's sister to exercise his power of attorney to access his accounts without the signed consent of McGovern's daughter. McGovern's daughter refused to consent.

         ¶5 An administrative law judge (ALJ) recommended McGovern's appeal be denied, reasoning that while there were practical impediments to accessing the resources, the applicable regulations do not disallow resources subject to institutional or lack of cooperation impediments, and the resources were otherwise legally available. The Director of AHCCCS issued a decision adopting the ALJ's recommendation and AHCCCS's argument that McGovern's position would encourage fraudulent collusion by joint owners to render assets "unavailable."

         ¶6 McGovern's representatives timely appealed the AHCCCS Director's decision to the superior court. There, McGovern's attorneys argued the Director's decision was arbitrary and capricious, contrary to law, and unreasonable. After briefing and oral argument, without explanation, the court adopted McGovern's arguments and authorities and reversed the Director's decision. The court also ordered AHCCCS to pay McGovern's nursing home for his care from the date of his AHCCCS application until he died, and his requested ...


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