OAH Docket No. 4-3101-15063-2

 

 

 

STATE OF MINNESOTA

OFFICE OF ADMINISTRATIVE HEARINGS

 

FOR THE VETERANS HOMES BOARD

 

 

 

In the Matter of the Appeal of the Discharge of M.S. from the Minnesota Veterans Home – Silver Bay

FINDINGS OF FACT, CONCLUSIONS AND RECOMMENDATION

 

Administrative Law Judge Bruce H. Johnson conducted a hearing in this contested case proceeding beginning at 9:30 a.m. on Monday, October 14, 2002, in the conference room of the Minnesota Veterans Home at Silver Bay, Minnesota.

 

            Donald E. Notvik, Assistant Attorney General, Suite 500, 525 Park Street, St. Paul, Minnesota 55103-2106, represented the Minnesota Veterans Home – Silver Bay (the Veterans Home), which is located at 45 Banks Boulevard, Silver Bay, Minnesota 55614.   M.S. (the Resident) and his wife, L.L.S., attended the hearing.  L.L.S. (the Resident’s Wife) represented him at the hearing.  The OAH hearing record closed on October 14, 2002, when the hearing ended.

 

NOTICE

 

            This Report is only a recommendation to the Minnesota Veterans Homes Board (the Board) and not a final decision.  The Board will make its final decision after reviewing this report and the hearing record.  In making that decision the Board may adopt, reject or modify the Findings of Fact, Conclusions, and Recommendation that appear in this report.

 

Under Minnesota Law,[1] the Board may not make its final decision until after the parties have had access to this Report for at least ten days.  During that time the Board must give any party adversely affected by this Report an opportunity to file objections to the Report and to present argument supporting its position.  Parties should contact Stephen Musser, Executive Director, Minnesota Veterans Homes Board, Veterans Service Building, Room 122, 20 West 12th Street, St. Paul, Minnesota 55155, telephone (651) 296-2076, to find out how to file objections or present argument.

 

The record of this proceeding closes upon the filing of exceptions to the report and the presentation of argument to the Board, or upon the expiration of the deadline for doing so.  The Board must notify the parties and the Administrative Law Judge of the date on which the record closes.  If the Board fails to issue a final decision within 90 days of the close of the record, this report will constitute the final agency decision.[2]

 

 

STATEMENT OF THE ISSUE

Whether the Veterans Home should discharge the Resident for failure to make full payment of the maintenance charges that were established in his Admission Agreement.

 

            Based upon the record in this matter, the Administrative Law Judge makes the following:

 

 

FINDINGS OF FACT

 

1.                  The Resident is a veteran of the armed forces of the United States and is physically disabled.

2.                  The Resident’s wife suffers from a number of chronic medical conditions that impair her ability to engage in gainful employment.  She is currently unemployed, and her sole source of support is the retirement and disability benefits that her husband is receiving.[3]

3.                  On August 9, 2000, the Resident was admitted to the Veterans Home.  At that time, both he and his wife signed an Admission Agreement under which the Veterans Home agreed to provide him with a residence and certain residential care services.  He, in turn, agreed to pay the Veterans Home a monthly maintenance charge.  The Admission Agreement stated that the Veterans Home would have to calculate the Resident’s monthly maintenance charge in the way that is specified by the Veterans Home Board Rules.  Specifically, paragraphs 5 and 7 of the Resident’s Admission Agreement provide that:[4]

“5.        CALCULATION OF MAINTENANCE CHARGE.  Your maintenance charge is calculated according to Minnesota Rules, parts 9050.0500 to 9050.0900, and is based upon your financial ability to contribute to payment of your cost of care.  You must provide accurate financial information to the Home so that your maintenance charge can be correctly determined.  Based upon the Home’s calculation of your income, assets, and other sources of benefits that are available to pay for your cost of care, your maintenance charge is ________.  A detailed calculation of the determination of your maintenance charge has been provided to you by the Home.”

*  *  *

 “7.       RESIDENT’S OBLIGATION TO PAY MAINTENANCE.  You must pay your maintenance charge by the due date.  Payment is due by the last day of the month.  If you do not pay your maintenance charge by the due date, the Home will notify you that your account is delinquent.  In accordance with Minnesota Statute 334.01, simple interest may be charged by the Home on delinquent accounts.  We may discharge you from the Home for not paying your maintenance charge by the due date.”[5]

4.                  The Veterans Home initially calculated the Resident’s monthly maintenance charge in the way specified in his Admission Agreement and in applicable Minnesota rules.[6] In calculating that charge, the Veterans Home deducted and excluded an amount that the Board’s rules indicated was necessary to meet the basic needs of the Resident’s wife.[7]   At the time of admission, the spousal needs exclusion was calculated to be $1,698.35.[8]  The Veterans Home also ignored $90.00 of the Resident’s monthly income to provide him with a personal needs allowance.[9]  After making these and other necessary deductions, the Resident’s initial monthly maintenance charge was $125.06.[10]

5.                  Due to a change in the Resident’s monthly income, the Veterans Home recalculated his maintenance charge on January 8, 2001.  Since the Resident’s wife had not supplied the Veterans Home with any additional information relating to her monthly living expenses, the spousal needs exclusion was again calculated to be $1,698.35.  And after making this and other necessary deductions, the Resident’s monthly maintenance charge was raised to $206.11.[11]

6.                  By December 1, 2001, the Resident’s wife was $766.77 in arrears in paying her husband’s monthly maintenance charges, and on December 7, 2001, the Veterans Home sent her and the Resident an Initial Notice of Involuntary Discharge.[12]

7.                  On January 8, 2002, and as allowed by Minnesota Rules,[13] the Resident’s wife requested reconsideration of the Initial Notice of Involuntary Discharge.  Her request for reconsideration was based on a number of unforeseen financial difficulties and hardships that she had encountered since August 9, 2000.[14]

8.                  In early 2002, the home owned by the Resident’s wife was in foreclosure, and she agreed to apply any net proceeds from the foreclosure sale to pay the arrearages in her husband’s monthly maintenance charges.  The foreclosure sale occurred in March 2002 but realized no net proceeds.[15]

9.                  When the Resident was first admitted to the Veterans Home, his wife was receiving health insurance through the Minnesota Care program and was paying a monthly premium.  Sometime before April 2002, the financial difficulties experienced by the Resident’s wife no longer made it possible for her to pay the premium for Minnesota Care.  So she allowed that health insurance to lapse.[16]

10.             At the request of the Veterans Home, the Resident’s wife provided it with documentation of the financial difficulties described in Findings 7 and 8, as well as her other financial difficulties.[17]  The Veterans Home had received all of that documentation by May 1, 2002.[18]

11.             On May 1, 2002, the Veterans Home recalculated the Resident’s monthly maintenance charges based on the new information that his wife had provided.  Largely because the Resident’s wife no longer had a mortgage payment and because there was no longer a cost associated with her lapsed health insurance, the Resident’s monthly maintenance charge was increased to $429.04.[19]

12.             The Resident’s wife had no assets or outside income with which to pay the increased maintenance charges, so after May 1, 2002, she continued to be in arrears in paying those charges.[20]

13.             On June 28, 2002, the Veterans Home’s Administrator sent the Resident and his wife a Reconsideration Decision and Discharge Order stating that the Veterans Home was going to involuntarily discharge him because he had failed to comply with his payment obligations.  The decision and order also advised them of the Resident’s appeal rights. [21]

14.             On July 1, 2002, the Resident’s wife submitted an appeal of that Reconsideration Decision and Discharge Order.[22]

15.             On August 9, 2002, the Veterans Home recalculated the Resident’s monthly maintenance charges based on some new information that his wife had provided regarding his income and her expenses.  As a result of that information, the Resident’s monthly maintenance charge was reduced to $321.36.[23]

16.             Since August 9, 2002, the Resident’s wife has been unable to pay even the reduced monthly maintenance charge in full, and the Resident’s account has fallen further in arrears.  The balance owed on that account as of September 1, 2002, was $1,998.85.[24]

17.             On September 3, 2002, the Veterans Home issued the Notice of and Order for Hearing that began this administrative appeal.

18.             Neither the Resident nor his wife currently have any assets that would enable them to pay the arrearages in his monthly maintenance charge account.

19.             These Findings are based on all of the evidence in the record.  Citations to portions of the record are not intended to be exclusive references.

20.             The Memorandum that follows explains the reasons for these Findings, and, to that extent, the Administrative Law Judge incorporates that Memorandum into these Findings.

21.             The Administrative Law Judge adopts as Findings any Conclusions which are more appropriately described as Findings.

Based upon these Findings of Fact, the Administrative Law Judge makes the following:

CONCLUSIONS

 

1.                  Minnesota law[25] gives the Administrative Law Judge and the Board authority to conduct this proceeding, to consider the issues raised here, and to make findings, conclusions, and orders.

2.                  The Resident received proper notice of his proposed discharge and of the time and place of the hearing in this administrative appeal.

3.                  The Veterans Home and the Board have complied with all of the legal requirements for conducting this proceeding.

4.                  Veterans Homes Board rules require veterans homes to institute proceedings to discharge a resident “when an account is delinquent . . . .”[26]  The Board’s rules also require a veterans home to institute proceedings to discharge a resident who “fails or refuses to comply with payment obligations in the admission agreement . . . .“[27]

5.                  Under Minnesota law,[28] the Veterans Home has the burden of proving by a preponderance of the evidence that the Resident is delinquent in the payment of his maintenance charges or that he has refused or failed to pay those charges.

6.                  Failure or refusal of a veterans home resident “to comply with payment obligations in the admission agreement” is grounds for involuntarily discharging the Resident from the facility.[29]

7.                  The Resident has not paid all of the monthly maintenance charges specified in his admission agreement since he was admitted to the Veterans Home on August 9, 2000, and the Board therefore has the authority to discharge him from the Veterans Home.

8.                  If the Resident’s wife is able to either obtain a source or income or to reduce her monthly living expenses to pay the arrearages, the result will be a commensurate increase in the Resident’s monthly maintenance charges.

9.                  The Memorandum that follows explains the reasons for these Conclusions, and, to that extent, the Administrative Law Judge incorporates that Memorandum into these Conclusions.

10.             The Administrative Law Judge adopts as Conclusions any Findings that are more appropriately described as Conclusions.

 

            Based upon these Conclusions, the Administrative Law Judge makes the following:

 

 

RECOMMENDATION

 

            The Administrative Law Judge HEREBY RECOMMENDS that the Board affirm the Administrator’s order discharging the Resident for failure to pay his monthly maintenance charges.

 

Dated this

25th

day of

October

2002.

 

S/ Bruce H. Johnson

BRUCE H. JOHNSON

Administrative Law Judge

 

NOTICE

 

            Under Minnesota law, the Board must notify the parties of the date on which the record of this contested case proceeding closes[30] and must serve its final decision upon each party and the Administrative Law Judge by first-class mail.[31]

MEMORANDUM

 

This case poses an difficult situation for all concerned.  Largely because of things that were beyond the ability of the Resident’s wife to control, or at the very least difficult for her to control, she began slipping behind in paying her husband’s full monthly maintenance charges.  Her home was the only real asset available to pay the arrearages.  But when she lost it in a foreclosure sale, there were no net proceeds available to pay those arrearages.  She then tried to save money by letting her Minnesota Care health insurance lapse so that the amount of the premium would be available to pay the arrearages.  But decreasing her monthly living expenses resulted in a commensurate increase in her husband’s monthly maintenance charge, and she ended up falling even further behind.  This represents almost a classic “Catch 22.”

The Veterans Home also took the position in its hearing memorandum that a statute passed by the legislature effectively prohibits it from entering into a payment agreement with the Resident and his wife that would provide for payment of the arrearages over time.[32]  But it is not completely clear to the ALJ that the legislature intended that result when it enacted the statute in question.   On the one hand, the statute suggests that the Board may only enter into payment agreements for charges incurred prior to May 1, 1990.  But on the other hand, the statute does not explicitly state that the Board must discharge residents when arrearages occur after May 1, 1990.  In any event, it is unnecessary in this case to determine what exactly the statute means.  The Resident and his wife appear to have no assets that could be sold or applied to pay the arrearages off in full.  And anything the Resident’s wife might do to bring in to generate extra income or to reduce her own living expenses would only result in a higher maintenance charge for her husband.  In other words, based on the evidence presented at the hearing, the Resident’s wife lacks the means to eliminate the arrearages over time.  So, it appears that even an interpretation of the statute that is favorable to the Resident would not be helpful in resolving this situation.[33]

B.H.J.