PS 02010.018 Iowa

A. PS 00-473 Eligibility for Supplemental Security Income (SSI) Benefits Involving Residents of a Public Institution; Your memorandum dated February 10, 2000

DATE: February 23, 2000

1. SYLLABUS

This opinion concerns a facility in Iowa that is being operated as a Publicly Operated Community Residence (POCR). The facility is operated by the county to provide shelter and services for 16 mentally disabled individuals. Because the facility meets the statutory requirements of a POCR, the residents are not subject to the general prohibition against SSI eligibility for residents of public institutions. The administrator asked SSA if the residents of this facility would continue to be eligible for SSI if the facility was expanded to serve up to 24 individuals. The opinion states that Section 1611(e)(1)(C) of the Social Security Act clearly limits a POCR to 16 or fewer residents. Thus, a public facility with more than 16 residents would not be considered a POCR and its residents would be ineligible for SSI.

2. OPINION

You ask for our legal opinion regarding the SSI eligibility of residents of a proposed public institution. Residents of Country Acres Care, a county-operated facility in Sidney, Iowa, are currently eligible for SSI benefits (when all income and resource requirements are met), because the facility is classified as a Publicly Operated Community Residence (POCR), as defined in 20 C.F.R. § 416.211(c) (April 1, 1999) and section 1611(e)(1)(C) of the Social Security Act, 42 U.S.C. § 1382(e)(1)(C) (Supp. 1999). Country Acres Care wishes to accommodate more than 16 residents. However, if a POCR exceeds the 16-person limitation, it will be classified as a public institution, thus precluding payment of SSI benefits to its residents.

Country Acres Care Administrator, Clifford G~, asserts that the facility may have to close due to financial reasons unless it is able to increase the facility's size from 16 to 24 residents because it cannot maintain appropriate services with only 16 residents. Country Acres Care serves individuals with psychiatric and mental retardation disabilities. From July 1988 until July 1, 1999, the facility was a privately operated. The county government is now responsible for administration and fiscal control of the facility. In order to ensure continued SSI benefits for its residents, the county reduced the facility to 16 or fewer beds.

Mr. G~ claims that county-operated residential care facilities, such as Country Acres Care, which perform the same functions as private/nonprofit regimental care facilities, are disadvantaged by the 16-resident limitation because SSA allows payment of the full Federal Benefit Rate to private/nonprofit facilities with more than 16 residents. Mr. G~ alleges that, if Country Acres Care has to close, its current residents will be moved to state mental hospitals and to nursing homes with Medicaid waiver provisions for community based placement. Mr. G~ believes that residents forced to move to state mental hospitals will be adversely affected because their disabilities do not require them to be institutionalized. Residents placed in local nursing homes under the Medicaid waiver provisions will be housed with a primarily elderly population and will not receive services tailored to their disabilities. You ask whether Mr. G~, the county, and/or Country Acres Care residents have any way to avoid the discontinuation of the residents' SSI benefits if the county expands to a 24-resident facility. We do not believe that, under current law and regulations, the facility, the county, or the residents can avoid the discontinuation of the residents' SSI benefits if the county expands to more than 16 residents.

In 1972, Congress created the federal SSI program to provide a Federal guaranteed minimum income level for aged, blind, and disabled persons. 42 U.S.C. §§ 1381 et seq. (West 1992 and Supp. 1999); 20 C.F.R. § 416.110 (April 1, 1999). An SSI recipient's income and resources must be below specified levels. 42 U.S.C. § 1382(a) (Supp. 1999). Although the SSI program is broad, its coverage is not complete. From its inception, the SSI program has excluded from eligibility anyone who is an "inmate in a public institution." 42 U.S.C. § 1382(e)(1)(A). Individuals residing in an institution which receives Medicaid benefits are eligible for a reduced amount of SSI benefits (not exceeding $300 per year). 42 U.S.C. § 1382e(1)(B); 20 C.F.R. § 416.211(b).

In 1976, Congress created an exception to the definition of a public institution by defining it as not including a POCR serving no more than 16 residents. 42 U.S.C. § 1382(e)(1)(C). The reason for carving out this exception to the definition of a public institution is revealed in the legislative history of the 1976 amendments.

There has been a long-standing prohibition in public assistance statutes against payments on behalf of persons in public institutions largely on the grounds that these programs should not be used to subsidize State and local institutions which may be substandard or which may represent an inappropriate type of care for the individuals involved. There are some situations, however, in which this prohibition may work to the disadvantage of the aged and disabled individuals whom the legislation is tended to help. This is particularly true with regard to the mentally retarded who often can be best served by placement in a small home or other institutional setting of a residential nature.

The committee believes that States and localities should not be discouraged from creating and subsidizing residential facilities which may be of great benefit to many individuals who need a place to live but do not need the kind of care which is provided in a Medicaid institution. The bill would amend present law to provide that the prohibition against SSI payments to persons in public institutions would not be applicable in the case of publicly operated community residences which serve no more than 16 residents. . . .

S. Rep. No. 94-1265, 94th Cong., 2nd Sess. 1976, 1976 U.S.C.C.A.N. 5997, 1976 WL 14058 (Legis. Hist.). Thus, the amendment was intended to encourage and benefit POCRs, such as Country Acres Care, who do not have more than 16 residents. The legislative history did not reveal how Congress arrived at the number 16.

Congress vested authority to promulgate rules and regulations implementing the SSI program to the Commissioner of the Social Security Administration. 42 U.S.C. § 405(a). Pursuant to that authority, the Commissioner promulgated a regulation defining a "public institution," consistent with the Congressional definition, as an institution that is operated or controlled by the Federal government, a State, or a political subdivision of a State such as a city or a county. The term public institution does not include a publicly operated community residence which serves 16 or fewer residents.

20 C.F.R. § 416.201; see 20 C.F.R. § 416.211(c). Thus, if a POCR, such as Country Acres Care, serves more than 16 residents it meets the definition of a public institution and residents will lose their SSI benefits. The Supreme Court has stated that an agency's interpretation of its own regulations is entitled to substantial deference. The agency's interpretation must be given controlling weight unless it is plainly erroneous or inconsistent with the regulation. Thomas Jefferson Univ. v. Shalala, 512 U.S. 504, 512 (1994). In this case, however, the 16-resident limit is required by the statute.

Mr. G~'s argument appears to be that POCRs with more than 16 residents do not receive equal protection compared to similar privately-operated facilities. We did not find a case in which this issue was directly addressed. However, we did locate a number of related cases in which plaintiffs questioned the constitutionality of the government's definition of a public institution and/or whether the residents therein could receive SSI benefits.

In Vinyard v. Massey, 586 F. Supp. 3 (W.D. Mo. 1984), the plaintiff, confined in a penal institution, argued that it was unconstitutional for Congress to decline to grant SSI to an otherwise eligible individual because he resided in a public institution which did not receive Medicaid funds. The court held that the issue was governed by the United States Supreme Court's decision in Schweiker v. Wilson, 450 U.S. 221 (1981), in which the Court ruled that the statute at issue distinguished between "'residents in public institutions receiving Medicaid funds for their care and residents in such institutions not receiving Medicaid funds.' Id. at 233-34." Employing a rational basis test, the Court determined that the statute was constitutional and was "'rationally related to the legitimate legislative desire to avoid spending federal resources on behalf of individuals whose care and treatment are being fully provided for by state and local government units.' Id. at 237." Vinyard v. Massey, 586 F. Supp. at 4-5. In Wilson, the Court held that a classification judged under the rational-basis standard did not allow the "Court to substitute its personal notions of good public policy for those of Congress." 450 U.S. at 221-22. The Court also stated that-

[t]he equal protection obligation imposed by the Due Process Clause of the Fifth Amendment is not an obligation to provide the best governance possible. This is a necessary result of different institutional competences, and its reasons are obvious. Unless a statute employs a classification that is inherently invidious or that impinges on fundamental rights, areas in which the judiciary then has a duty to intervene in the democratic process, this Court properly exercises only a limited review power over Congress, the appropriate representative body through which the public makes democratic choices among alternative solutions to social and economic problems."

450 U.S. at 230. In addition, "'the drawing of lines that create distinctions is peculiarly a legislative task and an unavoidable one. Perfection in making the necessary classifications is neither possible nor necessary.'" Wilson, 450 U.S. at 234, quoting Massachusetts Bd. Of Retirement v. Murgia, 427 U.S. 307, 314 (1976).

In Department of Health & Human Services v. Chater, 163 F.3d 1129 (9th Cir. 1998), the Commissioner denied applications for disability benefits submitted by children residing in group homes for juvenile rehabilitation. The State appealed on behalf of children who resided in privately owned and operated group homes and publicly operated group homes serving 16 or fewer residents. The court upheld the Commissioner's decision that the claimants were "inmates in a public institution" and, pursuant to 42 U.S.C. § 1382(e)(1)(A), they were not eligible to receive SSI benefits. The court also agreed that public and private group homes for juvenile rehabilitation serving fewer than 16 residents were not POCRs whose residents would otherwise be entitled to benefits pursuant to an exception for POCRs. Detention facilities are excluded from the definition of POCRs. 20 C.F.R. § 416.211(c)(5)(iii).

Based upon Mr. G~'s description of Country Acres Care's beautiful setting and unique services, we believe the facility's residents are indeed fortunate. While we recognize the situation Country Acres Care faces, the residents will lose their SSI benefits if the county-operated facility has more than 16 residents. Considering the cases cited above and the legislative history of this provision, we believe a court would find that the statute and regulations are constitutional. We see no way for the county-operated facility to achieve a different result without legislative changes in the federal statute. As the Court stated in Wilson, supra, the current standards "must be considered Congress' deliberate, considered choice. The legislative record . . . appears to be unequivocal." 450 U.S. at 235.


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PS 02010.018 - Iowa - 10/07/2008
Batch run: 01/27/2009
Rev:10/07/2008