STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

HERMAN POLLARD, )

)

Petitioner, )

)

vs. ) CASE NO. 90-2999

)

DEPARTMENT OF HEALTH AND )

REHABILITATIVE SERVICES, )

)

Respondent. )

)

RECOMMENDED ORDER

On September 14, 1990, a hearing was conducted in the above-styled case in Tallahassee, Florida, before Stephen F.

Dean, assigned Hearing Officer of the Division of Administrative Hearings. In this case, Ronald Pollard challenges the charges for care assessed by the Department of Rehabilitative Services (DHRS) for the care of Herman Pollard. Ronald Pollard is the brother of Herman Pollard and his Representative Payee.

APPEARANCES

For Petitioner: George Drumming, Jr., Esquire

317 E. Park Avenue Tallahassee, FL 32301

For Respondent: M. Gene Stephens

Assistant Hospital Attorney Florida State Hospital Chattahoochee, FL 32324

STATEMENT OF THE CASE

On April 4, 1990, Ronald H. Pollard requested an administrative hearing to consider his request for waiver of the maintenance fee required by DHRS for the care of Herman Pollard.

This matter initially was scheduled to be heard on July 16, 1990. Ronald Pollard's request for a continuance was not opposed, and the case was continued to September 14, 1990.

The Petitioner introduced Exhibits 1-4 and the Respondent introduced Exhibits 1-4, all of which were received into the record. Neither party ordered a transcript. The Petitioner and Respondent filed proposed findings which were read and considered. The Appendix attached hereto and incorporated by reference herein states which findings were adopted and which were rejected and why.

ISSUES

1. Whether DHRS may compel Ronald H. Pollard to pay the maintenance fee.

   
   

2. Whether DHRS properly determined the amount of maintenance fee.

STIPULATION

Steve Rohan is qualified by education and training to testify for DHRS about its maintenance fee procedures.

FINDINGS OF FACT

1. Herman Pollard is hospitalized at Florida State Hospital, Chattahoochee, Florida, and has been since July 26, 1989. Herman is competent, but has suffered from a mental illness diagnosed as schizophrenia for many years and has been institutionalized periodically for the treatment of this disease over the years. He has spent more years with his family than he has spent being institutionalized.

   
   

2. Herman Pollard receives monthly Social Security Disability Income (SSDI) benefits from the Social Security Administration (SSA). His father had been appointed Representative Payee by SSA to receive Herman's SSDI benefits.

   
   

3. For several years prior to 1988, Herman Pollard

   lived in North Carolina. After his father died, Herman relocated to Tallahassee, Florida, and lived with his brother, Ronald Pollard, and his brother's wife. The brother's 62-year-old mother resides in another Florida city. She is unable to care for Herman, and Ronald is the only living relative able to care for Herman.

   
   

4. Ronald was appointed Representative Payee for his brother. A Representative Payee receives and disburses Social Security benefits on behalf of a social beneficiary. A Representative Payee has a fiduciary duty under federal law to disburse the money received to pay for the actual recipient's needs and care. However, the federal law prohibits any legal action by a creditor to enforce payment of a debt by a creditor or any assignment of future benefits. A Representative Payee may be criminally prosecuted by the Federal Government for violation of his fiduciary duty.

   
   

5. Although Ronald acceded to his father's request to take care of Herman, Ronald has not adopted Herman or been made his legal custodian or guardian. Ronald Pollard is not legally responsible for his brother's support.

   
   

6. A Responsible Party is legally responsible for a patient's financial support.

7. Upon moving to Tallahassee, Herman lived in an apartment with Ronald and his wife. He spent the day in an adult day care program. However, his behavior became increasingly

   disturbing to the other adults requiring care; and Herman had to cease his participation. Ronald's apartment provided cramped

   living quarters for the three of them. Ronald and his wife purchased a three-bedroom home to provide Herman with his own bedroom. Herman is unable to drive, and Ronald and his wife provide transportation for Herman for treatment and doctors' visits.

   
   

8. Ronald informally apportions one-third of the expenses, e.g., mortgage and car payments, food, clothing, and utilities, to Herman. The $346.00 in SSDI, which Ronald received in benefits for Herman, is less than one-half of the monthly expenses of $700.00 incurred in Herman's behalf.

   
   

9. Because of Herman's mental illness, he was determined to be in need of more specialized temporary care than was available at home and was placed in a local treatment facility. Subsequently, it was determined that a more restrictive setting was required; and Herman was involuntarily placed in the Florida State Hospital. On July 24, 1990, a Final Order was issued authorizing continued involuntary placement for Herman. In re: Herman Pollard, Case No. 90-4023(B).

   
   

10. On October 1, 1989, DHRS provided Ronald Pollard

    with a Notice of Maintenance Fee, having identified Ronald as the Responsible Party. The Notice advised Ronald of monthly billings of $296.00 for Herman's stay at the Hospital.

    
    

11. On November 27, 1989, Ronald responded with a request that the "billings be adjusted to no liability" against him. (Hearing Officer's emphasis.

    
    

12. On March 12, 1990, DHRS' Fee Waiver Committee recommended denial of Ronald's request for a fee waiver, stating that:

    
    

    Discussions with appropriate staff indicate client's treatment is expected to be long term. Also, the brother's current apartment (sic) was purchased after the client was admitted.

    
    

13. Ronald advised Ronald E. Rohan, Florida State Hospital's Accounting Supervisor and Acting Chairman of the Fee Waiver Committee, that he and his wife purchased their house before Herman was hospitalized. DHRS stipulates they did.

    
    

14. On March 21, 1990, DHRS' District Administrator denied Ronald's request for a fee waiver. On March 29, 1990, Ronald was advised that this request had been disapproved because, "Discussions with appropriate staff indicate client's

    treatment is expected to be long term." On April 4, 1990, Ronald requested an administrative hearing.

15. DHRS arrives annually at a daily charge for medical and personal services for its patients. This charge is currently $200.00 per day. The State is charged by law to assess and collect for the services which the Hospital provides.

    
    

16. DHRS determined Herman's maintenance fee generally based upon disposable income. DHRS computes disposable income based upon Rule 10-6.020, Florida Administrative Code. Domestic expenses such as rent, automobile payments or transportation costs for Herman were not considered by DHRS because it did not consider Herman as having domestic expenses. DHRS included Herman's SSDI benefits as income and after allowing $50.00 for his personal use, set his maintenance fee at $296.00.

    
    

17. Rule 10-6.010(19), Florida Administrative Code, excludes SSDI benefits from income.

    
    

18. DHRS uses a combination of persuasion, threat of court action, and court action to recover payment of maintenance

    fees from a Responsible Party. DHRS may obtain a lien against the Responsible Party's real property in favor of DHRS pursuant to Section 402.17, Florida Statutes, and Rule 10-6.023(6), Florida Administrative Code. In this case, DHRS is treating the Representative Payee, Ronald Pollard, as a Responsible Party.

    
    

19. On June 25, 1990, Kingsley R. Ross, an Assistant Secretary of DHRS, acknowledged that charging, assessing or collecting fees by DHRS from social security benefits may be in conflict with federal statutes.

    
    

    CONCLUSIONS OF LAW

    
    

20. The Division of Administrative Hearings has jurisdiction over the parties and subject matter of this dispute. This Recommended Order is entered pursuant to Section 120.57, Florida Statutes.

    
    

21. Ronald has never been determined to be legally responsible for Herman's financial support. "Responsible Party" is defined by Rule 10-6.010(19), Florida Administrative Code, as:

    
    

    Any person legally responsible for the financial support of the client, and may include a minor client's natural or adoptive parent, a client's spouse, and an estate or trust established for the financial support of a client, but not a payor of third party benefits.

    
    

22. DHRS erroneously identified Ronald as the Responsible

    Party for Herman. The fact that Ronald voluntarily accepted his brother into his home did not make Ronald responsible for

    Herman's support. Ronald does not meet the definition of a Responsible Party for Herman.

23. The SSA appointed Ronald as the Representative Payee for Herman. DHRS recognizes that a Representative Payee acts on a client's behalf to receive benefits owed to the client. Rule 10-6.012, Florida Administrative Code, provides that such a Representative Payee is liable in his fiduciary capacity, but not in his personal capacity, for paying the maintenance fee. Ronald manages Herman's monthly benefits because Herman is unable to do so due to his mental condition. However, Ronald is not responsible for Herman's debts. Contrary to the argument advanced by DHRS, there is no status as "Responsible Party for SSI" or "Responsible Party to the extent of the funds received from Social Security on Herman's behalf."

    
    

24. The Representative Payee is not personally liable for the patient's debts to the State for care provided, and the State cannot proceed against the property of a Representative Payee for the debts of patient. As is discussed in detail below, the State may not initiate legal action to enforce payment from Social Security Income (SSI). There is no res against which the State can proceed. Ronald Pollard is a Representative Payee, but not a Responsible Party, and is not personally liable for the debts of his brother, Herman.

    
    

    Herman's Social Security Benefits Are Protected

    
    

25. The Social Security Act, 42 U.S.C. Section 407(a), provides that:

    
    

    The right of any person to any future payment under this subchapter shall not be transferable or assignable, at law or in equity, and none of the moneys paid or payable or rights existing under this subchapter shall be subject to execution, levy, attachment, garnishment, or other legal process, or to the operation of any bankruptcy or insolvency law.

    
    

26. Section 407(a) has been interpreted by the U.S. Supreme Court to "unambiguously rule out any attempt to attach Social Security benefits." Bennett v. Arkansas, 485 U.S. 395, 108 S.Ct. 1204, 1205 (1988). [State of Arkansas barred from seeking prison inmates' social security benefits to pay for care and maintenance services].

    
    

27. The provisions of 42 U.S.C. also bars the State from seeking to reach Social Security benefits to pay for maintenance expenses of mental patients placed voluntarily and involuntarily in institutions. Kriegbaum v. Katz, 59 U.S.L.W. 2084 (2nd Cir. July 31, 1990) (State of Washington barred from taking Social Security benefits from involuntarily committed patients of mental hospitals to pay for cost of patient care and maintenance); Hatch

    v. Hill, (No. CV85-P-2157-WC N.D. Ala 1988) (State of Alabama barred from attempting to persuade representative payees to turn over Social Security benefits to pay for care and treatment of voluntarily committed mentally-ill patients).

28. Clearly, under its own rules, Ronald was never individually liable for paying the fees to DHRS as a Responsible

    Party. Although it may be Ronald's fiduciary duty as Herman's Representative Payee to expend the Social Security benefits for Herman's use and benefit, the State may not attach the benefits for reimbursement of its case. Ronald may voluntarily reimburse

    part of Herman's maintenance expenses to DHRS.

    
    

29. Although DHRS may not legally enforce payment of SSI by a Representative Payee, the Representative Payee may be civilly and criminally liable for failure to properly carry out his or

    her fiduciary duty. 42 U.S.C.A.. 408(e). The federal law indicates that the Representative Payee is responsible to pay for

    the care of a recipient who is institutionalized. There is no apparent right for the State of Florida to enforce the Representative Payee's fiduciary duty to the patient. The only remedy available for DHRS is to seek a change of Representative Payee.

    
    

    Maintenance Fee

    
    

30. The foregoing discussion is only an interesting abstraction because Rule 10-6.019, Florida Administrative Code, establishes the methodology for assessing fees using the schedule in Rule 10-6.20, supra. Rule 10-6.20(2), supra, provides that the fees will be based upon the following formula:

    
    

    1. Gross income, less normal payroll deduction for Social Security tax and income tax, equals net income.

    2. Net income, less fixed and allowable expenses, equals disposable income.

       
       

31. Rule 10-6.20(3), supra, provides that the residential fees is the lower of:

    
    

    1. Client's disposable income after providing for a personal allowance (or)

    2. The cost of care, less reimbursements from other sources.

       
       

32. Rule 10-6.010(11) includes as gross income:

    
    

    income from salaries, wages, commissions, net rental and royalty income, net income

    from self-employment, alimony, pensions, annuities, gain from the sale of assets, capital gains, public assistance, welfare payments, retirement or disability insurance payments. Unemployment as workers' compensation, Social Security and Veterans' Administration payments . . . [.] The benefit payments, for example, 55A, 551, VA, retirement, mentioned here are those received for members of the family other than the client. Benefit payments received for the client are not considered part of gross income." (Emphasis supplied.)

33. The rule above specifically excludes payments received for the client from gross income. SSI is such a payment received for the client. Therefore, SSI cannot be included in gross income. There is no evidence that Herman has any other source of income. Using the formula in Rule 10-6.020(2), Florida Administrative Code, Herman's gross income is zero, his net income is zero; and the lower of his disposable income (zero) or his cost of care ($200.00/day) is also zero. See Rule 10- 6.020(3), supra. Based upon the formula adopted by DHRS, Herman's maintenance or residential fee, as it is also termed, would be zero, not $296.00, as assessed.

    
    

34. Therefore, in summary:

1. Under the methodology for computing the applicable fees, Herman's fee would be zero, the amount of his income excluding 551 paid for Herman.

2. Ronald Pollard is not the Responsible Party for Herman Pollard. He has no legal obligation to provide for Herman's support. See 10-6.010(19), Florida Administrative Code. His position as Representative Payee does not create such an obligation. See 10-6.012(1)(d), Florida Administrative Code.

3. Ronald Pollard is the Representative Payee for the Social Security benefits payable for Herman Pollard.

   He is legally obligated to use the SSI in payment for Herman's care.

4. Under the restrictions of federal law, the State may not use legal process to collect the SSI paid to the Representative Payee not voluntarily paid to the State.

5. Although the State may institute a challenge to the Representative Payee's conduct of his or her duties, the State cannot execute, attach, levy, garnish or use other legal process to collect the money.

RECOMMENDATION

Based upon the foregoing Findings of Fact and Conclusions of Law, it is recommended that DHRS assess the maintenance fee in accordance with its formula at zero; amend its records to reflect that Ronald Pollard is not liable for the treatment or debts of Herman Pollard; and cease its efforts in this matter since collection is barred by federal law

DONE and ENTERED this 18 day of October, 1990, in Tallahassee, Florida.

STEPHEN F. DEAN

Hearing Officer

Division of Administrative Hearings The Desoto Building

1230 Apalachee Parkway

Tallahassee, FL 32399-1550

(904) 488-9675

Filed with the Clerk of the Division of Administrative Hearings this 18 day of October, 1990.

APPENDIX TO RECOMMENDED ORDER IN CASE NO. 90-2999

Petitioner's Proposed Findings of Fact

Unnumbered paragraph numbers 1-10 are substantially adopted but reorganized and rewritten.

Respondent's Proposed Findings of Fact 1-7. Adopted.

1. Rejected, as contrary to the facts. Herman lived

   with Ronald, Herman had domestic expenses.

2. Rejected. As discussed in the Conclusions of Law, Ronald is not the Responsible Party.

3. Rejected. There has been a legal claim asserted. To the extent that these proceedings are legal actions,

Petitioner and Respondent are engaged in litigating this dispute.

COPIES FURNISHED:

George Drumming, Jr., Esquire

317 E. Park Avenue Tallahassee, FL 32301

1. Gene Stephens

   Assistant Hospital Attorney Florida State Hospital Chattahoochee, FL 32324

   
   

   Sam Power Clerk

   Department of Health and Rehabilitative Services 1323 Winewood Boulevard

   Tallahassee, FL 32399-0700

   Linda Harris General Counsel

   Department of Health and Rehabilitative Services 1323 Winewood Boulevard

   Tallahassee, FL 32399-0700

   
   

   NOTICE OF RIGHT TO SUBMIT EXCEPTIONS

   
   

   All parties have the right to submit written exceptions to this Recommended Order. All agencies allow each party at least 10 days in which to submit written exceptions. Some agencies allow a larger period within which to submit written exceptions. You should contact the agency that will issue the final order in this case concerning agency rules on the deadline for filing exceptions to this Recommended Order. Any exceptions to this Recommended Order should be filed with the agency that will issue the final order in this case.

   
   

   =================================================================

   AGENCY FINAL ORDER

   =================================================================

   
   

   STATE OF FLORIDA

   DEPARTMENT OF HEALTH AND REHABILITATIVE SERVICES

   
   

   
   

   HERMAN POLLARD,

   
   

   Petitioner,

   
   

   CASE NO.: 90-2999

   vs.

   
   

   DEPARTMENT OF HEALTH AND REHABILITATIVE SERVICES,

   
   

   Respondent.

   /

   
   

   FINAL ORDER

   
   

   This cause came on before me for the purpose of issuing a final agency order. The Hearing Officer assigned by - the Division of Administrative Hearings (DOAH) in the above- styled case submitted a Recommended Order to the Department of Health and Rehabilitative Services (HRS). A copy of that Recommended Order is attached hereto.

   RULING ON EXCEPTIONS FILED BY THE DEPARTMENT

   
   

   Counsel maintains that Ronald Pollard (Ronald) is a "responsible party" and thus legally obligated to financially support petitioner, his adult brother. The relevant statutory definitions are found in Section 402.33(1), Florida Statutes (1989) and read as follows:

   
   

   1. "Representative payee" means an individual or entity which acts on behalf of a client as the receiver of any or all benefits owing to the client.

   2. "Responsible party" means any person legally responsible for the financial support of the client and may include a minor client's natural or adoptive parent, a client's spouse, and an estate or trust established for the financial support of a client, but not a payor of third-party benefits.

Counsel asserts that Ronald is a responsible party based only on his status as representative payee. This is rejected. The definition of responsible party does not include a representative payee.

The Social Security benefits received by Ronald as representative payee are the property and income of petitioner. While a representative payee may be liable in tort (conversion) or subject to federal and state criminal prosecution if he misappropriates the Social Security benefits, his status as representative payee does not make him personally responsible for the financial support of the person eligible for the Social Security benefits (beneficiary). In other words the representative payee is under a fiduciary duty to receive the benefits and disburse those benefits only for the beneficiary's use and benefit. Only if current maintenance (food, clothing, shelter, medical care, and personal comfort items) is fully paid may a representative payee use benefits to pay other expenses, save, or invest.

Returning to the present case, Ronald's apportionment of one-third of his household expenses to petitioner 1/ while petitioner is institutionalized does not satisfy the requirement of federal law that benefits must be used first for current maintenance. Federal authorities should be advised of this situation.

Because Ronald is not personally responsible to support his brother, the fee must be based on petitioner's income (the Social Security benefits) not Ronald's income. See Section 10-6.010(11) and 10-6.016(2) (c), Florida Administrative Code. The fee of $296.00 for each month of petitioner's hospitalization is proper.

Finding of fact 13 is corrected to reflect that Stephen E. Rowan is Florida State Hospital's acting Chairman of the fee Waiver Committee. This Final Order is the department's final decision on this matter and this order is consistent with federal and state law.

FINDINGS OF FACT

The department hereby adopts and incorporates by reference the findings of fact set forth in the Recommended Order except where inconsistent with the ruling on the exceptions.

CONCLUSIONS OF LAW

The department hereby adopts and incorporates by reference the conclusions of law set forth in the Recommended Order except where inconsistent with the ruling on the exceptions.

Based upon the foregoing, it is

ADJUDGED, that Ronald Pollard is not a "responsible party" and therefore is not personally liable for the treatment and maintenance of petitioner at Florida State Hospital. It is further adjudged that a fee of $296.00 be assessed against petitioner for each month of his hospitalization at Florida State Hospital.

DONE and ORDERED this 21st day of February , 1991 in Tallahassee, Florida.

Robert B. Williams Acting Secretary Department of Health and Rehabilitative Services

by

Deputy Secretary for Administration

ENDNOTE

1/ See finding of fact eight (8) which demonstrates

that Ronald retained and used all of petitioner's Social Security benefits to pay petitioner's "share" of Ronald's household expenses.

A PARTY WHO IS ADVERSELY AFFECTED BY THIS FINAL ORDER IS ENTITLED TO JUDICIAL REVIEW WHICH SHALL BE INSTITUTED BY FILING ONE COPY OF A NOTICE OF APPEAL WITH THE AGENCY CLERK OF HRS, AND A SECOND COPY, ALONG WITH FILING FEE AS PRESCRIBED BY LAW, WITH THE DISTRICT COURT OF APPEAL IN THE APPELLATE DISTRICT WHERE THE AGENCY MAINTAINS ITS HEADQUARTERS OR WHERE A PARTY RESIDES. REVIEW PROCEEDINGS SHALL BE CONDUCTED IN ACCORDANCE WITH THE FLORIDA APPELLATE RULES. THE NOTICE OF APPEAL MUST BE FILED WITHIN 30 DAYS OF RENDITION OF THE ORDER TO BE REVIEWED

Copies furnished to:

M. Gene Stephens

Assistant Hospital Authority Florida State Hospital Chattahoochee, FL 32324

George Drumming, Jr., Esquire

317 East Park Avenue Tallahassee, FL 32301

Stephen F. Dean Hearing Officer

DOAH, The DeSoto Building 1230 Apalachee Parkway

Tallahassee, FL 32399-1550

CERTIFICATE OF SERVICE

I HEREBY CERTIFY that a copy of the foregoing was sent to the above-named

people by U.S. Mail this 27 day of February , 1991.

R. S. Power, Agency Clerk Assistant General Counsel Department of Health and Rehabilitative Services 1323 Winewood Boulevard Building One, Room 407

Tallahassee, Florida 32399-0700 904/488-2381

Docket for Case No: 90-002999

Orders for Case No: 90-002999