Bowen v. Kizer

PETITIONER: Bowen
RESPONDENT: Kizer
LOCATION: Dickinson School District Superintendent's Office

DOCKET NO.: 86-863
DECIDED BY: Rehnquist Court (1988-1990)
LOWER COURT:

CITATION: 485 US 386 (1988)
ARGUED: Nov 10, 1987
DECIDED: Mar 23, 1988

Facts of the case

Question

Media for Bowen v. Kizer

Audio Transcription for Oral Argument - November 10, 1987 in Bowen v. Kizer

William H. Rehnquist:

Mr. Merrill, you may proceed whenever you are ready.

Thomas W. Merrill:

Thank you, Mr. Chief Justice and may it please the Court:

At issue in this case is a decision in the Health Care Financing Administration, a unit in the Department of Health and Human Services disapproving a proposed amendment to California's state Medicaid plan.

The question is ultimately one of statutory construction: did the Administrator properly conclude that the California amendment violates the plain and unequivocal language of Section 1903(f) of the Medicaid Act, or is there some escape route from this conclusion, as the Court of Appeals found, and as the Respondents maintain?

Section 1903(f) provides that when a state elects to participate in a Medicaid program, the federal government will reimburse the state only for families whose income after medical expenses falls below a certain cap.

Section 1903(f) sets that cap at 4/3rds the highest amount ordinarily paid by the state under the AFDC program to a family of the same size having no income or resources.

In other words, if the highest amount ordinarily paid to an AFDC family of two, without any income and resources is $300 a month, then the cap on federal financial participation for a family of two would be $400 a month.

In September 1983 California submitted an amendment to its Medicaid plan to the Administrator of the Health Care Financing Administration.

The amendment provided that for adult couples and only for adult couples, that the medically needy income level would be 4/3rds the highest amount ordinarily paid to an AFDC family of three.

In its application, which we have reproduced at page 24 of the Joint Appendix, California admitted that the new standard for adult couples exceeded the federal cap by $142 a month.

The State also indicated by crossing out a notation at the bottom of the page that it did not have a method of excluding these excess payments from future requests for federal reimbursement.

The Administrator promptly rejected the proposed amendment as violating both section 1903(f) and the Secretary's implementing regulations.

This, we submit, was clearly correct: Section 1903(f) imposes a limit on financial participation based on a fixed numerical relationship on a level of benefits ordinarily paid to an AFDC family of the same size.

The Secretary's regulations expressly provide that this limit applies to couples.

California, however, proposed to set its medically needy income level for couples based on the amount paid to a family of three.

An adult couple is a family of two; a family of two is not the same size as a family of three.

Thus, the California amendment, as the Administrator properly found, violated the plain terms of the statute and the regulations.

The fact that the statute gives the Secretary authority to prescribe standards does not change this conclusion.

The Secretary is empowered only to set standards for determining the amount of benefits ordinarily paid to a family of a given size.

He is not empowered to set standards for determining what "same size" means.

In any event, the Secretary has exercised the delegated authority given by Section 1903(f).

The Secretary's regulations, which remained unchanged in this respect since 1971, state that the cap on federal financial participation is to be determined for any given family, including adult couples, by looking to the amount ordinarily received by an AFDC family of the same size.

Thus, if there were any doubt about the meaning of the statute created by the delegation to set standards to the Secretary, it is in Judge Kozinski's phrase, "neatly excised by the regulations".

Three arguments have been advanced in this case in an effort to defeat the plain import of this statute and the regulations.

First the Ninth Circuit held that the California Amendment was authorized by a provision contained in a 1979 internal agency manual.

And that this manual was a legislative regulation binding on the Agency.

Second, the respondents maintain that, even if the manual was not a legislative regulation, it was at least a valid guideline and as such is entitled to deference by the courts.

Third, both the courts of appeals and the Respondent claim that Congress, when it enacted the Deficit Reduction Act in 1984, intended to permit the California amendment.

I would address each of these three contentions in turn:

The primary theory of the court of appeals was that a certain manual provision, the so-called ROM 2572-D, was a legislative regulation.