¶ 1. ROGGENSACK, J.
Ann Buettner appeals a circuit court order affirming the determination of the Division of Hearings and Appeals (DHA) to terminate Ann's medical assistance due to the divestment of assets. Ann argues that her husband Richard's purchase of two "balloon annuities" did not constitute a prohibited divestment under WIS. STAT. § 49.453 (1997-98).
¶ 2. In March 1998, Richard Buettner purchased two "irrevocable annuities" for $100,000 each from Richard and Ann's adult children, Ronald Buettner and Kathleen Buettner. The "annuities" were nonassignable, unsecured financial instruments that required Ronald and Kathleen to each pay Richard fifty dollars per month for seventy-one months followed by a lump sum or "balloon" payment of $100,000 on March 1,
¶ 3. In April 1999, Ann received notice terminating her medical assistance benefits effective May 1, 1999. DHFS determined that Richard's purchase of the two "balloon annuities" constituted a divestment of assets under WIS. STAT. § 49.453 subjecting Ann to divestment penalties. DHFS's decision was based in part on an operations memo prepared by the Department of Workforce Development in 1999 (Ops Memo 99-19)
¶ 4. Ann filed a petition for judicial review of the DHA's decision in Milwaukee County Circuit Court and an action for declaratory judgment in Dane County Circuit Court that Ops Memo 99-19 was void as an improperly promulgated administrative rule under WIS. STAT. § 227.01(13). Additionally, Ann alleged that DHFS's "retroactive application" of Ops Memo 99-19 violated her right to due process under the Fourteenth Amendment.
¶ 5. The circuit court consolidated the two actions for purpose of review. In August 2000, the court granted summary judgment to DHFS declaring that Ops Memo 99-19 was not an administrative rule and therefore compliance with Wisconsin ch. 227 rulemaking procedures was not required. In a separate order, the circuit court affirmed DHA's determination that under WIS. STAT. § 49.453, Richard's purchase of the two "balloon annuities" constituted a divestment of assets. The court declined to address Ann's claim that DHFS's decision to terminate her benefits based on Ops Memo 99-19 violated her right to due process. Buettner appeals.
¶ 6. The construction of WIS. STAT. § 49.453 and its application to undisputed facts is a question of law that we review de novo. See Tannler v. DHSS, 211 Wis.2d 179, 183, 564 N.W.2d 735, 738 (1997). However, we generally accord an administrative agency's statutory interpretation one of three levels of deference: great weight, due weight or no deference. Id. at 184, 564 N.W.2d at 738; Artac v. DHFS, 2000 WI App 88, ¶ 9, 234 Wis.2d 480, 610 N.W.2d 115. Great weight deference is warranted where:
Tannler, 211 Wis. 2d at 184, 564 N.W.2d at 738. Due weight deference is appropriate "if the agency decision is very nearly one of first impression." Id. (citation omitted). Finally, we review the agency's decision de novo "if the case is one of first impression for the agency and the agency lacks any special expertise." Id.
¶ 7. Ann contends that the proper standard of review is de novo because the final decision to terminate her medical assistance benefits was made by DHA, rather than DHFS. Ann relies on Roehl Transport Inc. v. DHA, 213 Wis.2d 452, 570 N.W.2d 864 (Ct. App. 1997), and its progeny for the proposition that we grant
¶ 8. DHFS, in contrast, argues that "at least due weight" deference must be accorded DHA's decision to terminate Ann's medical assistance because the decision was based on DHFS's long-standing interpretation of WIS. STAT. § 49.453 as detailed in Ops Memo 99-19 and the attached decisions MDV-30/35213 and MDV30/35331. Stated differently, DHFS contends that Artac does not apply because we are in effect reviewing DHFS's interpretation of § 49.453. DHFS relates this case to Sea View Estates Beach Club, Inc. v. DNR, 223 Wis.2d 138, 588 N.W.2d 667 (Ct. App. 1998). In Sea View, we granted great weight deference to a decision by the DHA to issue Sea View a pier permit. We concluded that because the Department of Natural Resources (DNR) expressly adopted the hearing examiner's decision as its own pursuant to WIS. STAT. § 227.46(3)(a), great weight deference was warranted because the DNR had expertise in regulating piers and had been charged by the legislature with the duty to enforce the laws regulating piers in navigable waters. Sea View, 223 Wis. 2d at 149, 588 N.W.2d at 672. Thus, we distinguished Roehl on the basis that the DNR adopted the hearing examiner's decision as its own. That is not the case here. As the circuit court noted, DHFS did not adopt DHA's decision to terminate Ann's
¶ 9. The parties agree that whether Ops Memo 99-19 is void as an improperly promulgated administrative rule is a question of law that we review de novo. See Schoolway Transp. Co. v. DOT, 72 Wis.2d 223, 232, 240 N.W.2d 403, 408 (1976).
¶ 10. Medical assistance is a joint federal and state program aimed at ensuring medical care for those who cannot pay for their own care. Tannler, 211 Wis. 2d at 190, 564 N.W.2d at 741. Accordingly, to be eligible for medical assistance in Wisconsin, certain financial requirements must be met. See WIS. STAT. ch. 49. Because individuals are generally not eligible unless they have limited assets, those seeking medical assistance may need to spend down assets before they can qualify. Tannler, 211 Wis. 2d at 191-92, 564 N.W.2d at 741 (Abrahamson, C.J., concurring). However, under WIS. STAT. § 49.453, individuals become ineligible for certain medical assistance benefits if they transfer assets in a manner prohibited by the statute. The purpose of prohibiting certain types of asset transfers is to prevent those who could afford to pay for their own medical needs from receiving medical assistance. Id. at 190, 564 N.W.2d at 741.
¶ 11. The relevant Wisconsin statutory provisions pertaining to Richard's asset transfer are WIS. STAT.
(Emphasis added). Section 49.453(4)(a) addresses divestment of assets to irrevocable annuities and provides:
¶ 12. Ann argues that Richard's purchase of the "balloon annuities" was not a divestment of assets under WIS. STAT. § 49.453 because the financial instruments comply with § 49.453(4)(a), which she contends determines whether divestment has occurred when the transfer of assets is to an annuity. Stated differently, Ann asserts that because Richard purchased an irrevocable annuity, the "fair market value" requirement of
¶ 13. The purpose of all statutory construction is to discern the intent of the legislature. State v. Setagord, 211 Wis.2d 397, 406, 565 N.W.2d 506, 509 (1997). We give the language of an unambiguous statute its ordinary meaning. Id. Applying this test to WIS. STAT. § 49.453, we conclude that the underlying determination of whether an asset transfer results in medical assistance ineligibility is whether the individual or someone acting on his or her behalf transferred assets for less than the fair market value of the income or asset. See § 49.453(2). Subsection (4) merely provides one way in which the transfer of assets to an annuity may render an individual ineligible for medical assistance. As DHFS points out, subsec. (4) does not state that a transfer has been made for fair market value under subsec. (2)(a) so long as the asset transfer does not exceed the value of the benefit. Rather, it simply provides an additional requirement that is applicable only to irrevocable annuities. Thus, § 49.453 required DHFS to examine whether Richard's cash transfer
¶ 14. Ann does not address WIS. STAT. § 49.453(2)(a), but chooses instead to buttress her argument with the "cardinal rule" of statutory construction that when two statutes apply to the same subject, the more specific statutory provision controls the matter. She concludes, therefore, that because the financial instruments are annuities that comply with specific provisions of subsec. (4), she remains eligible for medical assistance. We agree with Ann's recitation of this well-settled rule of statutory construction. However, it is also well-settled that the rule applies only when there is a conflict between the two statutory provisions. Jones v. State, 226 Wis.2d 565, 576, 594 N.W.2d 738, 743 (1999). The rule also states that "conflicts between different statutes, by implication or otherwise, are not favored and will not be held to exist if they may otherwise be reasonably construed." Id. (citation omitted). Ann does not argue that subsecs. (2)(a) and (4) conflict, she asserts only that subsec. (2)(a) does not apply. We do not agree. There is nothing in the plain language of § 49.453 to suggest that provisions (2)(a) and (4) are mutually exclusive or that the purchase of an irrevocable annuity constitutes a divestment only if the annuitant receives an amount less than her initial investment. Section 49.453 requires courts to look to the substance of an "annuity" transaction rather than its form; subsec. (4) provides one way to do this. Thus, we construe § 49.453 to require irrevocable annuity transactions, made on or after an individual's look-back
¶ 15. Ann additionally challenges this construction by pointing to subsequent legislation that amended WIS. STAT. § 49.453(4) so that fixed rate irrevocable annuities are now required to have equal periodic payments. See 1999 Wis. Act 9, § 1430-33. She argues that if under the previous version of the statute, the purchase of an irrevocable "balloon annuity" constituted a divestment, the legislature would not have needed to amend the statute. We do not find this argument persuasive.
¶ 16. WISCONSIN STAT. § 49.453(4)(a) (2001-02), as amended, provides:
We agree that there exists an inference that the legislature intends to create a new right or withdraw an existing right when it amends a statute. Lang v. Lang, 161 Wis.2d 210, 220, 467 N.W.2d 772, 776 (1991). Additionally, we agree with Ann that 1999 Wis. Act 9, § 1430-33 explains the requirements of § 49.453(4) to include, for example, an express requirement that an annuity provide for: (1) equal payments, (2) periodic payments that include both principal and interest and (3) interest that accrues at a particular rate. We do not agree, however, that the legislature's decision to state these requirements in the statute suggests that, prior to the amendment, transfers with no legitimate underlying economic substance were permitted by the statute. We note that the text of the amendment suggests that it was intended to clarify the meaning of "exceeds the expected value of the benefit" rather than substantively altering the requirements of § 49.453. See ProCD, Inc. v. Zeidenberg, 86 F.3d 1447, 1452 (7
¶ 17. Additionally, our construction is consistent with legislative intent. The purpose of medical assistance is to ensure medical care for those unable to pay for the care they need. Tannler, 211 Wis. 2d at 190, 564 N.W.2d at 741. The divestment provisions and the income and asset eligibility rules are intended to ensure that only those persons receive assistance. Subsection (4) allows the elderly to retain this choice so long as the amount transferred does not "exceed the expected value of the benefit." However, to allow medical assistance eligibility by the divesting of assets to family members for no economic advantage would contradict the basic purpose of the statute. See State v. Clausen, 105 Wis.2d 231, 244, 313 N.W.2d 819, 825 (1982) ("[A] statute should be construed to give effect to its leading idea, and the entire statute should be brought into harmony with the statute's purpose."). Accordingly, the annuity must also meet the "fair market value" requirement of subsec. (2)(a).
¶ 18. WISCONSIN STAT. ch. 47 does not define "fair market value." However, the Medical Assistance Handbook drafted by DHFS to assist county economic support workers who administer the medical assistance program defines "fair market value" as "an estimate of the value of the asset, if sold at the prevailing [market] price at the time it was actually transferred." In addition,
¶ 19. Accordingly, DHA found that Richard's $200,000 cash transfer for the two annuities was made for less than fair market value. The examiner noted that the annuities were nonassignable and unsecured, and were private financial instruments that paid a rate of return of less than one percent, with exceptionally low monthly income payments of fifty dollars per annuity. Additionally, it noted that the financial transaction transpired between the Buettners and their two children and was clearly not an "arms-length transaction." We agree with DHA that "[no] person of sound mind would give [$200,000] to an unrelated third party in exchange for the unsecured, low yield, and non-alienable promises in the instant document." Therefore, we conclude that DHA properly determined that Richard's purchase of the two annuities constituted a prohibited divestment of assets.
¶ 20. Ann challenges DHA's finding by asserting that the burden to prove that the asset transfer was made for less than fair market value rests with the county and because the "economic support specialist ... could not provide any evidence as to the fair market value of the transactions," there is insufficient factual basis to determine that the asset transfer was made for less than fair market value. In addition, Ann argues
¶ 21. Ann also challenges DHA's finding by again pointing to the 1999 amendment to WIS. STAT. § 49.453 as "proof" that prior to the amendment, a cash transfer to an annuity constituted a divestment only if the amount transferred "exceeds the expected value of the benefit." See § 49.453(4). We again disagree. For purposes of determining whether the transfer constituted a prohibited divestment, it is immaterial whether the amendment was a clarification or substantive change. Section 49.453, with or without the amendment, requires Ann to show that she received fair market value for the $200,000 cash transfer. Because she failed to do this, § 49.453(2)(a) renders her ineligible to receive medical assistance for institutionalized care.
¶ 22. DHFS's decision to terminate Ann's medical assistance benefits was based in part on Ops Memo 99-19 and the attached fair hearing decisions, MDV 30/35331 and MDV 30/35213, which construed WIS. STAT. § 49.453 to prohibit financial instruments with inadequate interest rates and "balloon" payments. Because the 1999 amendment to § 49.453 expressly added "equal payment" and interest rate requirements, Ann argues that Ops Memo 99-19 constituted an administrative rule, which was not properly promulgated under WIS. STAT. § 227.10 and should therefore be declared invalid. Ann also argues that DHFS "retroactively" applied the new requirements of Ops Memo 99-19 to Richard's transaction, which resulted in the termination of her benefits, violating her right to "fair warning" under the Due Process Clause of the Fourteenth Amendment.
¶ 23. We have already concluded that WIS. STAT. § 49.453 prohibited Ann's transfer. This prohibition results from application of the plain language of the statute, rather than any interpretation or statement of policy contained within Ops Memo 99-19. Accordingly, because § 49.453(2) prohibits the transaction, with or without Ops Memo 99-19, we need not decide whether DHFS improperly relied on the memo.
¶ 24. With regard to Ann's due process argument, Ann cites Elections Board v. WMC, 227 Wis.2d 650, 597 N.W.2d 721 (1999), for the proposition that "a deprivation of the due process right of fair warning can occur ... from unforeseeable and retroactive interpretation of that statutory language." Id. at 679-80, 597 N.W.2d at 735. While this may be true, Ann ignores a critical difference between Elections Board and the facts here. In Elections Board, the Election Board for the State of Wisconsin attempted to apply a new, context-based standard to several advertisements after their broadcast. The court held that "it would be profoundly unfair to apply a previously unarticulated test, retroactively, to these defendants." Id. at 679, 597 N.W.2d at 735 (emphasis added). In contrast, DHFS reviewed Ann's case, determined that the purchase of the annuities constituted a prohibited divestment under WIS. STAT. § 49.453 and terminated Ann's future medical assistance benefits. Unlike Elections Board, DHFS's decision was not based on a "previously unarticulated test." The fair market value requirement of subsec. (2)(a) prohibited transactions with no economic substance both when DHFS certified Ann for medical assistance and when she received notice terminating her benefits. Additionally, we note that DHFS's decision had only prospective application; DHFS did not attempt to recoup monies already paid for Ann's care. Accordingly, we conclude that DHFS's decision to terminate Ann's future medical assistance did not violate the Due Process Clause.
¶ 25. We conclude that WIS. STAT. § 49.453 required DHFS to examine whether Richard's cash transfer
By the Court.—Order affirmed.
In a section entitled "REVIEWS" the memo provides: