a more restrictive "methodology" in determining eligibility for Medicaid than is used to determine eligibility for SSI. The fact is that states may and currently do include OASDI COLAs in determining SSI eligibility. The Pickle Amendment does not mandate states to disregard COLAs in determining SSI eligibility; it requires states to treat individuals who have become ineligible for SSI as a result of COLAs in the same way as it treats SSI recipients for purposes of Medicaid eligibility. Thus, the Pickle Amendment seeks to preserve these individuals' Medicaid benefits, not their SSI benefits. In fact, the Pickle Amendment implicitly acknowledges that COLAs may be used to render ineligible someone who had previously been eligible for SSI.
States are thus allowed to use OASDI COLAs in determining SSI eligibility, and they do use them to render certain individuals ineligible for SSI. All § 1396a(r)(2) requires is that states use an equally or less restrictive "methodology" in determining Medicaid eligibility. The Secretary's regulation comports precisely with this requirement: it allows § 209(b) states either to include or disregard COLAs in calculating Medicaid eligibility. The Court finds § 435.135(c) entirely consistent with the mandate of § 1396a(r)(2).
B. Is the Regulation Arbitrary and Capricious?
Plaintiffs also challenge the Secretary's regulation as arbitrary and capricious, in violation of 5 U.S.C. § 706(2)(A) (1988). In reviewing the regulation, the Court must consider whether it "was based on a consideration of the relevant factors and whether there has been a clear error of judgment." Adams House Health Care v. Sullivan, 282 App. D.C. 362, 895 F.2d 767, 770 (D.C. Cir. 1990) (citing Motor Vehicle Mfrs. Ass'n v. State Farm Mutual Auto. Ins. Co., 463 U.S. 29, 43, 77 L. Ed. 2d 443, 103 S. Ct. 2856 (1983)) (internal quotations omitted). Applying this standard, the Court cannot agree with plaintiffs.
The Court has already determined that the Secretary's regulation is a reasonable interpretation of the Pickle Amendment. Moreover, the Secretary argues that, in promulgating the challenged regulation, he considered the matters raised in this case and "followed a fully-reasoned course" in adopting the approach set out in the regulation. During the notice and comment period, the Secretary received at least one comment suggesting that the Pickle Amendment requires individuals who lose SSI due to COLAs to be treated "in a like manner and subject to the same terms and conditions as a person who remains eligible for SSI," and that a regulation allowing states to include COLAs in determining Medicaid eligibility would therefore violate the terms of the Amendment. The Secretary's response defended the proposed interpretation:
. . . [The Pickle Amendment] does not provide that a person who loses SSI eligibility due to a cost-of-living increase will be treated in a like manner and subject to the same terms and conditions as a person who remains eligible for SSI. Rather, the statute provides that 'medical assistance. . . shall be provided . . . in a like manner and subject to the same terms and conditions as are applicable (to SSI recipients).' . . .
[Our] position is consistent with our view that [§ 209(b)] permits States to use their criteria for financial eligibility for medicaid for the aged, blind, and disabled which were in effect under an approved plan on January 1, 1972, or to use criteria which are less restrictive that the 1972 standards . . . .. Since [the Pickle Amendment] permits States which use SSI criteria for determining medicaid eligibility to disregard OASDI cost-of-living increases in a limited manner, our regulation permits [§ 209(b)] States to disregard these cost-of-living increases only to the same extent as the "SSI" States.
43 FR 44,529 -30 (1978). The Secretary reiterated this interpretation of the Pickle Amendment in response to comments to revised regulations in 1986. See 51 FR 12,325 -26, 12,328 (1986). Plaintiffs can point to no inconsistency in these comments, nor do they dispute that the Secretary supported his interpretation with reasoned arguments.
The Court can find no "clear error of judgment" in the Secretary's interpretation of the Pickle Amendment. Rather, the rulemaking record reflects the Secretary's consideration of some of the very issues being litigated here, as well as a consistency between his interpretation of the Amendment at the time of promulgation of the regulation and his current interpretation. Thus, the Court concludes that the Secretary's regulation is not arbitrary and capricious.
Having reviewed the language and legislative history of the Pickle Amendment, the Court finds the Secretary's regulation a reasonable interpretation of that statutory provision. Moreover, 42 C.F.R. § 435.135(c) is consistent with § 1396a(r)(2) of the Medicare Catastrophic Coverage Act. Finally, the Court finds that the regulation is not arbitrary and capricious. Thus, the Court hereby denies plaintiffs' motion for summary judgment and grants defendant's motion for summary judgment. An order consistent with this Memorandum Opinion will be entered this day.
NORMA HOLLOWAY JOHNSON
UNITED STATES DISTRICT JUDGE
EDITOR'S NOTE: The following court-provided text does not appear at this cite in 785 F. Supp. 179.
Dated: January 24, 1992
ORDER AND JUDGMENT - January 24, 1992, Filed
Upon consideration of the motion of plaintiffs for summary judgment, the motion of defendant for summary judgment, the submissions of the parties, the record as a whole, and consistent with the accompanying Memorandum Opinion, it is this 24th day of January, 1992,
ORDERED that the motion of plaintiffs for summary judgment be, and hereby is, denied; and it is further
ORDERED that the motion of defendant for summary judgment be, and hereby is, granted; and it is further
ORDERED that judgment be, and hereby is, entered in favor of defendant.
NORMA HOLLOWAY JOHNSON
UNITED STATES DISTRICT JUDGE