TN 27 (06-16)

PR 06805.024 Massachusetts

A. PR 16-095 - Whether a decision issued by the Massachusetts Supreme Judicial Court overturned a criminal conviction and whether/when benefits can be reinstated (R~)

Date: March 14, 2016

1. Syllabus

This precedent provides information on what the Agency must do if a court overturns a beneficiary’s criminal conviction. The Social Security Act prohibits payments of Title II benefits to a person that a correctional or mental health institution confines more than 30 continuous days when his or her confinement is in connection with a criminal offense. However, if a court overturns a conviction and the court does not order a new trial, we must reinstate the beneficiary’s monthly benefits and repay any withheld benefits. Conversely, if a court overturns a conviction and it orders a new trial, and the beneficiary remains confined until the new trial commences, benefits remain suspended until the court makes a decision regarding the beneficiary’s conviction or acquittal.

2. Opinion

I. Questions Presented

R~ (the insured number holder (NH)) provided a copy of the Massachusetts Supreme Judicial Court decision vacating his April 2003 conviction and remanding the matter for a new trial. The NH also provided a copy of the “Entry of Nolle Prosequi” filed in the Berkshire County Superior Court in November 2015. The questions presented are whether his conviction has been overturned for purposes of Social Security benefits, and if so, what is the effective date of benefits reinstatement?

II. Short Answer

While the Supreme Judicial Court ordered a new trial after vacating the NH’s conviction, the prosecution subsequently entered a nolle prosequi effectively terminating the case. Therefore, his conviction was overturned and no additional legal proceedings are required. He is thus entitled to repayment of any withheld benefits. Additionally, SSA properly reinstated his benefits in June 2015, when he was released from confinement while the Supreme Judicial Court considered his case.

III. Background

We considered the following information provided by the Center for Programs Support. The NH receives Title II benefits. His benefits were initially suspended in November 2001, and they were reinstated in June 2015.

We also reviewed the documents provided. The October XX, 2015 decision issued by the Massachusetts Supreme Judicial Court vacated the April 2003 conviction and remanded the matter to the Berkshire County Superior Court for a new trial. The November XX, 2015 “Entry of Nolle Prosequi” filed in Berkshire County Superior Court stated that the Commonwealth of Massachusetts was “terminating prosecution at [that] time.” Finally, the article by the National Registry of Exonerations indicated that the NH was released on bond in June 2015 while the Supreme Judicial Court considered his case.

IV. Applicable Law

Relevant Federal Law

The Social Security Act (“Act”) prohibits payments of Title II benefits to an individual “who is confined in a jail, prison, or other penal institution or correctional facility pursuant to his conviction of a criminal offense,” if he is confined for more than 30 continuous days. 42 U.S.C. § 402(x)(1)(A)(i); see also 20 C.F.R. § 404.468; POMS GN 02607.160.

However, if the conviction is overturned, the NH may be entitled to reinstatement of benefits. Specifically, if the conviction is overturned and no additional legal proceedings are required, suspended benefits are reinstated and any withheld benefits are repaid. POMS GN 02607.200(A)(3)(a). If the conviction is overturned, a new trial is ordered, and the beneficiary is released from confinement pending the new trial, benefits are reinstated effective with the first full month after the beneficiary’s release from confinement. POMS GN 02607.200(A)(3)(b). If the conviction is overturned, a new trial is ordered, and the beneficiary remains confined until the new trial commences, benefits remain suspended until the court makes a decision regarding conviction or acquittal. Id.

Relevant Massachusetts Law

The underlying criminal charges and conviction in this case were rendered under Massachusetts law. In Massachusetts, an “entry of nolle prosequi is the equivalent of a dismissal.” Com. v. Mogelinski, 473 Mass. 164, 40 N.E.3d 544, 549 (2015); see also Mass. R. Crim. P. 16 (addressing “entry of a nolle prosequi” under the heading “dismissal by the prosecution”). Therefore, entry of nolle prosequi dismisses the underlying criminal charges, terminating the pending case as to those particular charges. See id.; Com. v. Miranda, 415 Mass. 1, 6 (1993) (“the entry of a nolle prosequi . . . terminated that indictment”). This holds equally true when the entry of nolle prosequi follows after a conviction was vacated and a new trial was ordered. See Com. v. Bertini, 89 Mass. App. Ct. 1104, 2016 WL 427846, *1 (Feb. 4, 2016) (unpublished) (holding that where the defendant’s motion for new trial was granted, the subsequent “filing of the nolle prosequi effectively terminated the criminal case”); see also Com. v. McClusky, 151 Mass. 488, 490 (1890) (where the prosecution entered a nolle prosequi after the conviction was vacated and before further proceedings, the defendant was “entitled to be released and discharged from actual or constructive custody on this complaint, at the very least, until some step is taken to recall the nolle prosequi and to revive the complaint”); Com. v. Smith, 98 Mass. 10, 11 (1867) (describing prosecution’s entry of a nolle prosequi after a conviction was vacated and a new trial was ordered as a “mode of disposing of an indictment”).

V. Analysis

It is apparent from the plain language of the Act that benefits are properly suspended based on a criminal conviction only while the beneficiary is incarcerated for that conviction. In pertinent part, the statute provides that Title II payments are prohibited while the beneficiary “is confined in a jail, prison, or other penal institution or correctional facility . . . .” 42 U.S.C. § 402(x)(1)(A)(i) (emphasis added). Consistent with this, the Program Operations Manual System (POMS) provides that benefits should be suspended “if the individual is in custody at a correctional institution while he/she is appealing his/her conviction,” but not “if the individual is no longer in the correctional institution (released) while he/she is appealing his/her conviction.” GN 02607.200(A)(2). Therefore, it appears consistent with both the language of the Act and the guidance in POMS that the NH’s benefits were properly reinstated when he was released from confinement on bond in June 2015, pending the appeal of his conviction.

At that time, the NH was entitled to have his benefits reinstated because he was no longer confined pending an appeal. GN 02607.200(A)(2). However, he did not become entitled to repayment of his withheld benefits until his judgment was later overturned and a nolle prosequi was entered. Compare POMS GN 02607.200(A)(3)(a) (providing that any withheld benefits are repaid if a conviction is overturned and “[n]o additional legal proceedings are required”), with Subsection (A)(3)(b) (omitting any mention of repayment of benefits when new trial is required). The Commonwealth’s entry of a nolle prosequi stating their intent not to seek prosecution effectively dismissed the charges and terminated the criminal case. See Mogelinski, 40 N.E.3d at 549 (an “entry of nolle prosequi is the equivalent of a dismissal”); Bertini, 2016 WL 427846, *1 (filing of a nolle prosequi after the judge granted the defendant’s motion for new trial “effectively terminated the criminal case”). The NH’s conviction has been overturned and no additional legal proceedings are currently contemplated, much less “required.” Therefore, it is our opinion that the matter falls under Subsection (A)(3)(a), governing situations where a conviction has been overturned and no additional legal proceedings are required. Accordingly, any benefits that were withheld on the basis of the incarceration should be repaid.

VI. Conclusion

Based on the Supreme Judicial Court’s decision overturning the conviction, and the Commonwealth’s entry of nolle prosequi, the NH has had his conviction overturned and no additional legal proceedings are required. For that reason, any benefits that were withheld should be repaid. Additionally, the NH’s benefits were properly reinstated in June 2015, when he was released from confinement pending his appeal.

Christopher Michaels

Regional Chief Counsel (Acting)

By: Gwendolyn N. J. Russell
Assistant Regional Counsel

B. PR 12-132 Request for Opinion — Suspension of Benefits: Not Guilty by Reason of Insanity or Incompetent to Stand Trial

DATE: September 5, 2012

1. SYLLABUS:

This opinion establishes that an individual confined under Massachusetts General Laws chapter 123, section 16 (Section 16), is subject to suspension of title II benefits under section 202(x)(1)(A) of the Social Security Act (Act). The opinion explains that absent proof that the individual is paying the full cost of his care, it is reasonable for the agency to assume that the individual is being confined at public expense.

2. OPINION

This memorandum responds to your June 7, 2012 memorandum requesting our legal opinion whether individuals confined under Massachusetts General Laws chapter 123, section 16 (Section 16), are subject to suspension of title II benefits under section 202(x)(1)(A) of the Social Security Act (Act). You noted that the General Counsel for The Commonwealth of Massachusetts Department of Mental Health (DMH) disagrees with the agency’s position that individuals confined under Section 16 are subject to suspension of benefits. DMH objects to this policy, in part, because it believes the agency incorrectly presumes that individuals are confined under Section 16 “at public expense.” [1] As discussed below, we conclude that the agency’s policy of suspending title II benefits to individuals confined under Section 16 is legally supportable because otherwise such individuals would be double-compensated in the form of title II benefits and taxpayer-funded living arrangements in state institutions.

I. Title II Rules Governing Payment of Benefits to Certain Individuals Confined in an Institution at Public Expense

The Ticket to Work and Work Incentives Improvement Act of 1999 amended section 202(x) of the Social Security Act to prohibit the payment of title II benefits where an individual is confined by court order in an institution at public expense in connection with certain verdicts or findings. See Ticket to Work and Work Incentives Improvement Act of 1999, Pub. L. No. 106-170, § 402(b), 113 Stat. 1860, 1907 (1999) (effective April 1, 2000). Section 202(x) of the Act, as amended, provides in pertinent part:

(1)(A) Notwithstanding any other provision of this subchapter, no monthly benefits shall be paid under this section or under section 423 of this title to any individual for any month ending with or during or beginning with or during a period of more than 30 days throughout all of which such individual—

(i) is confined in a jail, prison, or other penal institution or correctional facility pursuant to his conviction of a criminal offense, [or]

(ii) is confined by court order in an institution at public expense in connection with--

(I) a verdict or finding that the individual is guilty but insane, with respect to a criminal offense,

(II) a verdict or finding that the individual is not guilty of such an offense by reason of insanity,

(III) a finding that such individual is incompetent to stand trial under an allegation of such an offense, or

(IV) a similar verdict or finding with respect to such an offense based on similar factors (such as a mental disease, a mental defect, or mental incompetence) . . . .

On its face, section 202(x)(1)(A)(ii) states that no benefits shall be paid while the individual “is confined at public expense” (emphasis added). The Act clearly precludes the agency from disbursing title II benefits to individuals while they are confined in an institution at public expense in connection with certain verdicts or findings. Specifically, the fact that no benefits shall be paid while the individual “is confined at public expense” suggests that the relevant inquiry is whether the public is bearing the cost of confinement at the time of the confinement. That the state may later be reimbursed is a separate inquiry, and one that should not preclude application of section 202(x)(1)(A)(ii) to an individual who is currently confined at public expense.

Both the legislative history of the statute and relevant case law suggest that the purpose of the nonpayment provision is to conserve scarce Social Security resources and avoid “payment of benefits to people who don’t need them because they are being maintained at the expense of the taxpayer, who is also the source of the benefits and doesn’t want to pay twice over.” Milner v. Apfel, 148 F.3d 812, 814 (7th Cir. 1998); see H.R. Rep. No. 103-491 (1994), reprinted in 1994 U.S.C.C.A.N. 3266, 3268, 3273; Dawley v. Barnhart, No. 05-11440-GAO, 2006 WL 2085976, at *2 (D. Mass. July 26, 2006) (“Like other provisions of the Act, 42 U.S.C. § 402(x)(1)(A)(iii) was intended to limit the drain on scarce Social Security resources by persons whose basic needs are already being provided for by the State.”); Artz v. Barnhart, 214 F. Supp. 2d 459, 465 (D.N.J. 2002) (42 U.S.C. § 402(x)(1)(a)(II) “should be construed broadly to prevent the depletion of public funds at the hands of acquitees receiving double compensation for living expenses”), aff’d, 330 F.3d 170 (3d Cir. 2003). Thus, it appears that the statute aims to prevent “double compensation,” or the simultaneous receipt of title II benefits and certain types of taxpayer-funded care.

II. Confinement Under Section 16

The prohibition on payment of title II benefits to individuals confined in connection with a finding of either not guilty by reason of insanity, or incompetence to stand trial, is statutory. The Act contains separate provisions barring payment of benefits to prisoners, see 42 U.S.C. § 402(x)(1)(A)(i), and to persons confined by court order in an institution at public expense in connection with certain verdicts or findings, see 42 U.S.C. § 402(x)(1)(A)(ii). The agency’s authority to deny benefits to persons confined under Section 16 arises from the latter provision.[2] Section 16 contains three subsections relevant to the inquiry here. Subsection (a) provides that a court may order a person who has been found incompetent to stand trial, or who has been found not guilty by reason of mental illness or mental defect to be hospitalized at a facility [3] for a period of forty days for observation and examination. Subsection (b) provides that a person found or believed to be incompetent to stand trial or found not guilty of any crime by reason of mental illness or other mental defect is subject to a court ordered commitment at a mental health facility for up to six months. Subsection (c) provides that after the expiration of a commitment under subsection (b), a court may order an individual to continue to be committed for one-year periods. We believe that each of the enumerated situations meets the requirements in 42 U.S.C. § 402(x)(1)(A)(ii)(II), (III), or (IV) that the court-ordered confinement in an institution be in connection with a verdict or finding of not guilty by reason of mental illness or incompetence, or a finding of incompetence to stand trial.

However, such confinement may not be “at public expense,” as required by 42 U.S.C. § 402(x)(1)(A)(ii). As the legislative history and case law discussed above suggests, the “public expense” requirement of 42 U.S.C. § 402(x)(1)(A)(ii) aims to prevent the confined individual from contemporaneously receiving two forms of support: title II benefits and publicly funded support. Massachusetts state law permits DMH to “make charges for the care of any person in its facilities.” Mass. Gen. Laws. ch. 123, § 32. DMH may charge the confined individual or a third party for the cost of confinement. Id. If the individual or a third party pays the total cost of confinement while the individual is confined, the individual may be eligible for title II benefits during confinement. If, however, the total cost of confinement is not paid contemporaneously to the confinement, the agency could reasonably find the individual to be “confined at public expense,” and thus ineligible to receive title II benefits.

Furthermore, although DMH may bill a person or an eligible third party, it is not required to do so. Id. (“The department may make charges for the care of any person in its facilities.”) (emphasis added). If DMH does elect to send a bill, there is no guarantee that it will receive payment. And even if payment is received, it may not cover the entire cost of confinement, leaving the public responsible for at least a portion of the confinement. See id. (allowing the Department to “make adjustments to the charges based upon said person’s individual circumstances”). Furthermore, individuals confined under Section 16 may be confined at Bridgewater State Hospital, which is not a “facility” for which the Department can bill patients. Mass. Gen. Laws ch. 123, §§ 1, 32.

We provided guidance to the State of Connecticut in 1998 regarding a similar situation. In that case, the State of Connecticut asserted that a certain individual was not confined at public expense because a State statute allowed the State to bill the individual for the cost of his confinement. We explained that, despite that statute, the individual was confined at public expense because he was not, in fact, paying for the cost of his confinement. Thus, absent proof that the individual is paying the full cost of his care, we believe it is reasonable for the agency to assume that the individual is being confined at public expense.

CONCLUSION

For the reasons discussed above, we believe there is legal support for the agency’s position that individuals confined under Section 16 are generally subject to suspension of title II benefits under 42 U.S.C. § 402(x)(1)(A)(ii).


Footnotes:

[1]

. . DMH also charges that the agency incorrectly interprets Section 16 to be “a penal statute, thereby classifying an individual committed under such a statute as a prisoner...,” and cites to the language in 42 C.F.R. 411.4(b) as support. However, that regulation applies only to reimbursement of medical expenses under Medicare, which falls under the jurisdiction of the Center for Medicare and Medicaid Services (CMS).

[2]

. . DMH argues that the agency incorrectly suspends benefits in these cases by classifying Section 16 as a “penal statute,” and relies on the Medicare reimbursement regulation to do so. See 42 C.F.R § 411.4(b) (applying special conditions for reimbursement of cost of medical services furnished to individuals in custody of penal authorities). DMH’s argument conflates the Medicare reimbursement provisions (administered by CMS) with the title II nonpayment provisions (administered by SSA). The agency’s authority to suspend benefits in these cases is not based on the cited regulation but is, as noted above, statutory. Indeed, the plain language of section 202(x)(1)(A)(ii) prevents the agency from disbursing such payments in certain enumerated circumstances, none of which requires the individual be “in the custody of penal authorities.”

[3]

. . A facility is defined as “a public or private facility for the care and treatment of mentally ill persons, except for the Bridgewater State Hospital.” Mass. Gen. Laws ch. 123, § 1.


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PR 06805.024 - Massachusetts - 06/06/2016
Batch run: 06/06/2016
Rev:06/06/2016