Timm v. Mont. Dep’t of Pub. HHS, 2008 MT 126 (2008)

In Timm v. Mont. Dep’t of Pub. HHS, 2008 MT 126 (2008), Linda Timm entered the nursing home in July 2002. The Timm family applied for Medicaid on November 1, 2002 reporting, among other resources, the Community Spouse’s one-third interest in J & R Transportation, Inc., worth roughly $20,150. The Department completed its first resource assessment on February 12, 2004, informing Timm that they were over-resourced by $27,000. The Community Spouse, to circumvent Montana’s “no corporation, no trust” rule, traded his interest in the corporation for a truck which he used in the course of business; the truck was titled in his name. Thereafter, Medicaid informed the Timm family that Mrs. Timm was eligible beginning March 1, 2004, which left them with outstanding medical debt of over $35,000. They filed a fair hearing request, among other issues, challenging the original decision that treating Mr. Timm’s interest in the corporation as countable rather than exempt property essential to self support. They argued the Department’s rule counting property owned in corporate form rather than individual form violated Montana’s equal protection clause. The Montana Supreme Court agreed with Timm after reviewing supplemental authority showing that the Department permitted exclusion of property essential to self-support held within a limited liability company. Relying on CMS guidance, the Court also held that incurred medical expenses must be considered “Not a Medicaid covered expense” so long as they were not actually paid for by Medicaid.