Kaspari v. North Dakota Dep’t of Human Svcs.

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The Department of Human Services appealed a judgment reversing the Department's calculations of Appellees David and Sarah Kaspari's monthly recipient liabilities for their nursing home costs. In 1996, the Kasparis conveyed approximately 561 acres of farmland to their son and daughter-in-law. The Kasparis retained a life estate in the farmland and leased their interest in the land to a third-party tenant. The Kasparis exercised their water rights and constructed irrigation equipment on the land, which was paid for with a series of loans secured by mortgages on the land. The new loans were combined with an existing mortgage on the land. After the irrigation equipment was placed on the land, the Kasparis received increased rental payments for the irrigated land. In April 2009, the Kasparis entered a nursing home and thereafter applied to Social Services for Medicaid for their nursing home care. After an initial determination by Social Services and a subsequent administrative hearing, the Department decided the Kasparis were eligible for benefits and calculated their respective recipient liabilities without allowing deductions for their payments for interest on the mortgage. The district court reversed and remanded the case for recalculation of the Kasparis' respective monthly recipient liabilities, concluding deductions for their payments of mortgage interest and real estate taxes should be considered. The Department argued to the Supreme Court that the district court erred in construing Medicaid regulations to allow the Kasparis to reduce their monthly recipient liabilities for nursing home care by their payments for mortgage interest and for real estate taxes relating to their life estate interest in the farmland. Upon review, the Supreme Court held that the district court erred in construing the Medicaid regulations. The Court reversed the judgment and remanded the case to reinstate the Department's decision.