{ "id": 4306075, "name": "J. BRIAN McDONALD, as Independent Adm'r of the Estate of Betty J. McDonald, Plaintiff-Appellee, v. THE DEPARTMENT OF HUMAN SERVICES et al., Defendants-Appellants", "name_abbreviation": "McDonald v. Department of Human Services", "decision_date": "2010-12-28", "docket_number": "No. 4\u201410\u20140290", "first_page": "792", "last_page": "804", "citations": [ { "type": "official", "cite": "406 Ill. App. 3d 792" } ], "court": { "name_abbreviation": "Ill. App. Ct.", "id": 8837, "name": "Illinois Appellate Court" }, "jurisdiction": { "id": 29, "name_long": "Illinois", "name": "Ill." }, "cites_to": [ { "cite": "220 N.E.2d 415", "category": "reporters:state_regional", "reporter": "N.E.2d", "year": 1966, "pin_cites": [ { "page": "426" } ], "opinion_index": 0 }, { "cite": "35 Ill. 2d 427", "category": "reporters:state", "reporter": "Ill. 2d", "case_ids": [ 5380636 ], "year": 1966, "pin_cites": [ { "page": "447-48" } ], "opinion_index": 0, "case_paths": [ "/ill-2d/35/0427-01" ] }, { "cite": "667 N.E.2d 701", "category": "reporters:state_regional", "reporter": "N.E.2d", "weight": 5, "year": 1996, "pin_cites": [ { "page": "705" }, { "page": "705" }, { "page": "705" }, { "page": "705" }, { "page": "705" } ], "opinion_index": 0 }, { "cite": "281 Ill. App. 3d 888", "category": "reporters:state", "reporter": "Ill. App. 3d", "case_ids": [ 150251 ], "weight": 5, "year": 1996, "pin_cites": [ { "page": "893" }, { "page": "893" }, { "page": "893" }, { "page": "893" }, { "page": "893" } ], "opinion_index": 0, "case_paths": [ "/ill-app-3d/281/0888-01" ] }, { "cite": "665 N.E.2d 795", "category": "reporters:state_regional", "reporter": "N.E.2d", "year": 1996, "pin_cites": [ { "page": "806" } ], "opinion_index": 0 }, { "cite": "171 Ill. 2d 410", "category": "reporters:state", "reporter": "Ill. 2d", "case_ids": [ 57339 ], "year": 1996, "pin_cites": [ { "page": "431" } ], "opinion_index": 0, "case_paths": [ "/ill-2d/171/0410-01" ] }, { "cite": "23 Ill. Reg. 11301", "category": "laws:admin_register", "reporter": "Ill. Reg.", "weight": 5, "opinion_index": 0 }, { "cite": "843 N.E.2d 336", "category": "reporters:state_regional", "reporter": "N.E.2d", "weight": 4, "year": 2006, "pin_cites": [ { "page": "338" }, { "page": "338" }, { "page": "339" }, { "page": "338-39" } ], "opinion_index": 0 }, { "cite": "218 Ill. 2d 302", "category": "reporters:state", "reporter": "Ill. 2d", "case_ids": [ 5735869 ], "weight": 4, "year": 2006, "pin_cites": [ { "page": "304-05" }, { "page": "305" }, { "page": "306" }, { "page": "306" } ], "opinion_index": 0, "case_paths": [ "/ill-2d/218/0302-01" ] }, { "cite": "722 N.E.2d 736", "category": "reporters:state_regional", "reporter": "N.E.2d", "year": 1999, "pin_cites": [ { "page": "747" } ], "opinion_index": 0 }, { "cite": "309 Ill. App. 3d 129", "category": "reporters:state", "reporter": "Ill. App. 3d", "case_ids": [ 349562 ], "year": 1999, "pin_cites": [ { "page": "143" } ], "opinion_index": 0, "case_paths": [ "/ill-app-3d/309/0129-01" ] }, { "cite": "797 N.E.2d 1078", "category": "reporters:state_regional", "reporter": "N.E.2d", "year": 2003, "pin_cites": [ { "page": "1084" } ], "opinion_index": 0 }, { "cite": "343 Ill. App. 3d 471", "category": "reporters:state", "reporter": "Ill. App. 3d", "case_ids": [ 3718512 ], "year": 2003, "pin_cites": [ { "page": "479" } ], "opinion_index": 0, "case_paths": [ "/ill-app-3d/343/0471-01" ] }, { "cite": "886 N.E.2d 1011", "category": "reporters:state_regional", "reporter": "N.E.2d", "weight": 2, "year": 2008, "pin_cites": [ { "page": "1019" }, { "page": "1018" } ], "opinion_index": 0 }, { "cite": "228 Ill. 2d 200", "category": "reporters:state", "reporter": "Ill. 2d", "case_ids": [ 5706718 ], "weight": 2, "year": 2008, "pin_cites": [ { "page": "212" }, { "page": "211" } ], "opinion_index": 0, "case_paths": [ "/ill-2d/228/0200-01" ] } ], "analysis": { "cardinality": 1030, "char_count": 31562, "ocr_confidence": 0.782, "pagerank": { "raw": 4.03580807328026e-08, "percentile": 0.14499513292087685 }, "sha256": "868bc259fd7b166510f83f8626b807589211eebeb7debc6aa8069d052321f490", "simhash": "1:6325bdafddda6104", "word_count": 4930 }, "last_updated": "2023-07-14T19:33:07.786999+00:00", "provenance": { "date_added": "2019-08-29", "source": "Harvard", "batch": "2018" }, "casebody": { "judges": [], "parties": [ "J. BRIAN McDONALD, as Independent Adm\u2019r of the Estate of Betty J. McDonald, Plaintiff-Appellee, v. THE DEPARTMENT OF HUMAN SERVICES et al., Defendants-Appellants." ], "opinions": [ { "text": "JUSTICE POPE\ndelivered the opinion of the court:\nThis Medicaid case asks us to resolve a tension between the need to preserve scarce public medical resources for the truly needy and the desire of families to preserve their assets while qualifying for medical assistance through a perceived legitimate loophole. This tension manifests itself in this case where an applicant\u2019s eligibility for medical assistance was delayed by the imposition of a penalty period by the transfer of nearly $125,000 in cash gifts in the year leading up to her application for benefits.\nIn June 2007, plaintiff, J. Brian McDonald, acting pursuant to power of attorney, applied for medical assistance on behalf of his mother, Betty J. McDonald, to help cover her long-term-care expenses. Defendant, the Department of Healthcare and Family Services (Healthcare and Family Services), investigated Betty\u2019s application, and defendant, the Department of Human Services (Human Services), approved Betty\u2019s application but imposed a penalty period of noncoverage because of certain nonallowable transfers Brian made on behalf of Betty.\nThese nonallowable transfers consisted of systematic monthly gifts from Betty\u2019s checking account to Brian and his siblings. Each month, one of Betty\u2019s children would receive two checks: one for an amount less than twice Betty\u2019s monthly long-term-care expenses and one for the exact amount of Betty\u2019s monthly social-security benefits. When added together, these gifts totaled more than twice Betty\u2019s monthly long-term-care expenses, resulting in a two-month penalty period for each month\u2019s gifts.\nBrian appealed the penalty period, arguing the social security gifts, each of which was labeled a \u201cgift of income\u201d in the check\u2019s memorandum line, were not subject to the asset-transfer policy that resulted in the penalty. Under Brian\u2019s theory, only the gifts of assets should have been used in calculating the penalty period; since each gift of assets was for less than twice Betty\u2019s monthly long-term-care expenses, each would result in only one penalty month. Brian claimed the transfers of income were exempted from the penalty, citing Human Services\u2019 \u201cCash, SNAP, and Medical Policy Manual\u201d (Medical Policy Manual). He also relied on a January 2001 letter from the chief of the bureau of policy of the Department of Public Aid (later succeeded by Healthcare and Family Services as the agency charged with executing Illinois\u2019s Medicaid laws), which gave an interpretation of the policy manual\u2019s asset-transfer provisions for an unrelated individual. After a hearing held before an administrative law judge, Human Services upheld the imposition of the penalty period, issuing the departments\u2019 final administrative decision.\nBrian then sought administrative review in the circuit court, presenting two arguments. First, Brian argued the departments misapplied their own policies, again citing the Medical Policy Manual and the January 2001 letter. Second, Brian alternatively argued the departments were estopped from changing the way the policy manual was applied and from departing from the January 2001 letter\u2019s interpretation of their policies. The court reversed and remanded to Human Services for it to rescind the portion of the penalty period that resulted from the \u201cgifts of income.\u201d\nThe departments appeal, arguing federal and state statutory laws require Human Services to impose a penalty period for transfers of income, as well as assets, for less than fair market value and asserting the departments\u2019 own rules and policies are in accord with these statutes. Again, Brian maintains the departments misinterpreted their rules and policies and argues, alternatively, the departments are estopped from departing from the interpretation provided in the January 2001 letter.\nWe reverse the circuit court\u2019s judgment and affirm the administrative decision because we find (1) the departments correctly applied the law they are charged with enforcing; (2) the relevant sections of the Medical Policy Manual do not conflict with that law; and (3) the departments were not bound by the January 2001 letter.\nI. BACKGROUND\nBetty moved into a nursing home in June 2006. There, she incurred continuing monthly long-term-care expenses of $4,365. Each month from June 2006 through December 2006, Betty received $1,542.01 from social security and $573.90 from an annuity. Beginning January 2007, Betty\u2019s monthly income from social security increased to $1,583.44, and she continued to receive $573.90 from her annuity. The annuity payments were never deposited into any of Betty\u2019s bank accounts. These annuity payments were never considered by the departments in setting the penalty period and are not an issue on appeal. Beginning in June 2006 and continuing through June 2007, through Brian, as power of attorney, Betty made gifts by check nearly each month to one of her children. These checks were marked as either gifts of assets or gifts of income in the memorandum line. Gifts of assets were in the amount of $7,500 from June 2006 through August 2006 and in the amount of $7,800 from September 2006 through June 2007. Gifts of income were in the amount of $1,542.01 from June 2006 through December 2006 and in the amount of $1,583.44 from January 2007 through June 2007.\nBrian applied for medical-assistance benefits on Betty\u2019s behalf in June 2007. Healthcare and Family Services determined the gifts noted above were nonallowable transfers under the Medical Policy Manual and calculated a penalty period from March 2007 through July 2008. Healthcare and Family Services approved Betty\u2019s application for medical assistance subject to the 17-month penalty period. On Betty\u2019s behalf, Brian appealed the portion of the penalty period attributable to the \u201cgifts of income,\u201d and Human Services upheld the full penalty period after a hearing by an administrative law judge.\nAfter receiving the unfavorable administrative decision, Brian initiated this administrative-review action in the circuit court with Betty as the named plaintiff. On administrative review, the circuit court reversed and remanded with directions \u201cto exclude from each of the monthly transfer calculations[ ] all transfers of income made by [Betty] during that same calendar month.\u201d The court appeared to be persuaded by Brian\u2019s estoppel argument, which consisted of two sub-arguments, the first of which can also be understood as a separate argument based on a straight application of law.\nFirst, Brian argued the plain meaning of a section from the Medical Policy Manual regarding \u201cincome mixed with an asset\u201d demonstrates a gift of income made in the month when the income is received does not constitute a nonallowable transfer. The section provides, in similar language to sections in other portions of the policy manual, \u201cMoney considered as income for a month is not an asset for the same month. Any income added to a bank account is income for that month, and not a part of the account\u2019s asset value for the month.\u201d Department of Human Services Medical Policy Manual, PM 07 \u2014 02\u201406\u2014a (eff. March 1, 1997) (hereinafter Medical Policy Manual); see also Medical Policy Manual, PM 07 \u2014 04\u201409\u2014a (eff. October 1, 2010). According to Brian, this means the funds comprising the gifts Brian made to himself and his siblings from Betty\u2019s social security benefits never became an asset. Because the money was not an asset, according to Brian, it cannot be subject to the departments\u2019 \u201casset-transfer\u201d or \u201ctransfer-of-asset\u201d policy.\nSecond, Brian argued the departments were estopped from deviating from the interpretation of policy expressed in a letter written by the chief of the bureau of policy development of the Department of Public Aid. The letter was written by then-chief John Rupcich in January 2001 in response to an inquiry by Joe Oettel, who appears not to be related in any way to this case or the parties. Oettel inquired, relying on the above-quoted language from the policy manual, \u201cDoes this mean that income given away to another person during the same month it is received is NOT subject to the asset transfer policy and therefore is NOT used in calculating a penalty period as explained in [the policy manual section]?\u201d Rupcich responded, without reference to any discrete facts or circumstances, \u201cIncome given away during the same month it is received is not subject to the transfer of asset policy.\u201d According to Brian, this statement by the chief of the bureau of policy was a general interpretation of Illinois\u2019s Medicaid/medical-assistance law, made by the agency charged with implementing it, that bound the departments in future medical-assistance cases and on which applicants can rely. Thus, according to Brian, the departments\u2019 departure from this interpretation in Betty\u2019s case was arbitrary and capricious.\nIn October 2009, the circuit court, having accepted Brian\u2019s estoppel argument, reversed the administrative decision and remanded to the departments to rescind Betty\u2019s penalty period insofar as it resulted from their inclusion of Brian\u2019s gifts of Betty\u2019s income in the calculation of nonallowable transfers. In November 2009, the departments filed a motion to reconsider the court\u2019s judgment. Later that month, the court allowed Brian to substitute himself, as independent administrator of Betty\u2019s estate, for Betty, who had died in September 2009, as plaintiff in this action. In March 2010, the court denied defendants\u2019 motion to reconsider.\nThis appeal followed.\nII. ANALYSIS\nOn appeal, defendants maintain the circuit court erred because both Brian\u2019s interpretation of the policy manual and the interpretation expressed in the January 2001 letter were contrary to federal and state statutes governing medical-assistance eligibility and benefits. According to defendants, certain provisions of the federal medical-assistance laws are binding on any states participating in the Medicaid program. Among these provisions are the asset-transfer policy and the corresponding penalties at issue in this case. Defendants point to state legislation designed to keep the state in compliance with the federal asset-transfer policy and penalty provisions and a rule from the Illinois Administrative Code governing state asset-transfer policy. Based on these authorities, which defendants insist control over any internal, unpromulgated department policies, defendants maintain the policy manual as interpreted by Brian cannot be given force to disallow Betty\u2019s full penalty period. Alternately, defendants maintain the departments were required to depart from the interpretation contained in the January 2001 letter.\nIn response, Brian argues the federal and state statutes are irrelevant because his argument from the beginning of the proceedings has been that the departments misapplied their own rules and policies. According to Brian, the departments are bound to follow both the policy manual and the letter interpreting it consistently in every case. Because the departments failed to adhere to these authorities in Betty\u2019s case, Brian maintains, the penalty period attributable to his gifts of Betty\u2019s income should be vacated under either of his two theories. Those theories are (1) the departments misinterpreted their rules and policies, and (2) even if legally correct, the departments were estopped from applying their interpretation because it marked a departure from their previous interpretation evidenced by the January 2001 letter.\nWe agree with defendants.\nA. Standard of Review\nOn appeal in an administrative-review action, we review the departments\u2019 decision, not the circuit court\u2019s, in the sense that we give the circuit court\u2019s decision no deference. See Cinkus v. Village of Stickney Municipal Officers Electoral Board, 228 Ill. 2d 200, 212, 886 N.E.2d 1011, 1019 (2008). The scope of judicial review of administrative decisions \u201cextend[s] to all questions of law and fact presented by the entire record before the court.\u201d 735 ILCS 5/3 \u2014 110 (West 2008). Neither party challenges the departments\u2019 findings of fact; rather, they dispute the interpretation of the relevant statutes, regulations, and provisions of the departments\u2019 policy manual and the extent to which the departments are bound by the January 2001 letter and Brian\u2019s alleged reliance on it. These are legal questions, which we review de novo. Cinkus, 228 Ill. 2d at 211, 886 N.E.2d at 1018. However, the departments\u2019 interpretation of their own rules and regulations \u201c \u2018enjoys a presumption of validity.\u2019 \u201d Montalbano v. Department of Children & Family Services, 343 Ill. App. 3d 471, 479, 797 N.E.2d 1078, 1084 (2003), quoting Nolan v. Hillard, 309 Ill. App. 3d 129, 143, 722 N.E.2d 736, 747 (1999).\nB. Gifts of Income and Asset-Transfer Policy\nFederal and state statutes, state administrative rules, and Human Services\u2019 departmental Medical Policy Manual all support defendants\u2019 conclusion that gifts of income are subject to asset-transfer policy and the corresponding penalties at issue in this case. Consequently, defendants\u2019 imposition of a 17-month penalty period on Betty\u2019s eligibility for medical assistance was proper.\nMedicaid is \u201ca cooperative program in which the federal government reimburses state governments for a portion of the costs to provide medical assistance\u201d to, among others, medically needy persons with low income and low assets who contribute a mandatory amount of any excess assets to their own healthcare costs. Gillmore v. Illinois Department of Human Services, 218 Ill. 2d 302, 304-05, 843 N.E.2d 336, 338 (2006). States that opt into Medicaid \u201cmust comply with certain broad requirements imposed by federal statutes and regulations.\u201d Gillmore, 218 Ill. 2d at 305, 843 N.E.2d at 338. Among these requirements is that the state implement and enforce the asset-transfer policies defined by the federal Medicaid statute (see 42 U.S.C. \u00a71396p (2006)). See Gillmore, 218 Ill. 2d at 306, 843 N.E.2d at 339. In turn, the federal asset-transfer policy mandates a penalty period of noncoverage for medical-assistance applicants who divest their property in order to qualify for benefits by transferring it for less than fair market value. Gillmore, 218 Ill. 2d at 306, 843 N.E.2d at 338-39.\nAsset transfers are defined consistently in the federal and state medical-assistance statutes, state regulations promulgated by Human Services, and Human Services\u2019 Medical Policy Manual. The federal statute imposes a penalty when an applicant or his or her spouse \u201cdisposes of assets for less than fair market value\u201d within a certain period leading up to the applicant\u2019s request of benefits. 42 U.S.C. \u00a71396p(c)(1)(A) (2006). In turn, the statute defines \u201cassets\u201d in terms of income and resources. \u201cThe term \u2018assets\u2019, with respect to an individual, includes all income and resources of the individual and of the individual\u2019s spouse, including any income or resources which the individual or such individual\u2019s spouse is entitled to but does not receive because of action.\u201d 42 U.S.C. \u00a71396p(h)(1) (2006). Thus, under the federal statute, a transfer of a medical-assistance applicant\u2019s income for less than fair market value would subject the applicant to penalties. This result is mandated on all states that participate in the Medicaid program. 42 U.S.C. \u00a71396p(c) (2006).\nState policies on transfers of assets comply with the federal requirement. The Illinois Public Aid Code (Code) prohibits transfers of a medical-assistance applicant\u2019s interest in personal property for less than fair market value. Section 5 \u2014 2.1(a) of the Code provides, in pertinent part,\n\u201cTo the extent required under federal law, a person shall not make or have made a *** transfer of any legal or equitable interests in *** personal property, whether vested, contingent[,] or inchoate, for less than fair market value. A person\u2019s interest in *** personal property includes all income and assets to which the person is entitled or to which the person would be entitled if the person had not taken action to avoid receiving the interest.\u201d 305 ILCS 5/5\u2014 2.1(a) (West 2008).\nAs it includes income in a person\u2019s interest in personal property, the state statute, like the federal statute, would prohibit the transfer of an applicant\u2019s income for less than fair market value.\nThe relevant section of the Illinois Administrative Code (Administrative Code) is consistent with these federal and state statutes, though less explicit in its operation. Rather, section 120.387(d) of Title 89 of the Administrative Code merely defines a transfer of assets in terms of transfers of personal property. Specifically, in the case of a person in long-term care, it provides,\n\u201cA transfer of assets occurs when an institutionalized person[ ] *** buys, sells[,] or gives away real or personal property or changes *** the way property is held. *** A transfer occurs when an action or actions are taken which would cause an asset or assets not to be received (for example, waiving the right to receive an inheritance).\u201d 89 Ill. Adm. Code \u00a7 120.387(d), as amended by 23 Ill. Reg. 11301, 11310 (eff. August 27, 1999).\nSections 120.387(e) and (f) define the circumstances under which a transfer is allowable or nonallowable. 89 Ill. Adm. Code \u00a7\u00a7120.387(e), (f), as amended by 23 Ill. Reg. 11301, 11310-12 (eff. August 27, 1999). Nonallowable transfers incur penalty periods of ineligibility. 89 Ill. Adm. Code \u00a7 120.387(f), as amended by 23 Ill. Reg. 11301, 11312 (eff. August 27, 1999). By defining asset transfers in relation to transfers of personal property rather than assets, the Administrative Code does not distinguish between transfers of assets and transfers of income. That is, if a transfer of income is made under circumstances that would render any other transfer nonallowable, the transfer of income is itself nonallowable. This result is consistent with the federal and state statutes on asset-transfer policy and the corresponding penalties.\nThese provisions and federal and state law are extrapolated in Human Services\u2019 Medical Policy Manual. The Medical Policy Manual is comprised of a policy manual, which describes the Medicaid laws and provides general guidance on Medicaid issues, and a Worker\u2019s Action Guide, which gives more specific guidance to agency caseworkers in determining eligibility and notifies them of common difficulties. The entire Medical Policy Manual is available to the public online, although it appears to be primarily an internal manual to guide employees of the departments in navigating Medicaid issues.\nThe Medical Policy Manual is consistent with the federal and state statutory and administrative laws on transfers of assets and related penalties. Like the Administrative Code, the manual defines \u201ctransfer of assets\u201d in terms of personal property without distinguishing between income and assets. Section PM 07 \u2014 02\u201420 of the Medical Policy Manual states, in pertinent part:\n\u201cAn asset transfer occurs when a client or their spouse *** buys, sells, [or] gives away real or personal property or changes the way property is held. *** A transfer *** occurs when an action is taken that causes an asset not to be received (for example, waiving the right to receive an inheritance).\u201d Medical Policy Manual, PM 07\u2014 02 \u2014 20 (eff. April 17, 1998).\nCompare Medical Policy Manual, PM 07 \u2014 02\u201420 (1998), with 89 Ill. Adm. Code \u00a7120.387(d), as amended by 23 Ill. Reg. 11301, 11310 (eff. August 27, 1999) (quoted above). In turn, section PM 07 \u2014 02\u201406 of the policy manual defines \u201cpersonal property\u201d as \u201canything owned by a person that is not land or permanently affixed to land,\u201d including checking-account funds. Medical Policy Manual, PM 07 \u2014 02\u201406 (eff. March 1, 1997). The policy manual goes on to define allowable and nonallowable transfers but both relate back to the definition of \u201casset transfer\u201d that would include transfers of income as well as transfers of assets. See Medical Policy Manual, PM 07 \u2014 02\u201420\u2014b, 07 \u2014 02\u2014 20 \u2014 c, 07 \u2014 02\u201420\u2014d (1998) (eff. April 17, 1998, March 1, 1997, and April 17, 1998, respectively).\nThese authorities support defendants\u2019 determination that the gifts of Betty\u2019s income were nonallowable transfers of assets for less than fair market value that must be penalized. The federal statute mandates penalties for nonallowable transfers of a medical-assistance applicant\u2019s assets, where assets include that person\u2019s income. The Code prohibits nonallowable transfers of an applicant\u2019s interest in personal property, where that person\u2019s interest in property includes his or her income. The Administrative Code and the Medical Policy Manual penalize nonallowable transfers of personal property without excluding income from personal property. As they were made for less than fair market value in the months leading up to her application for medical assistance, Brian\u2019s gifts of Betty\u2019s social security benefits would result in a penalty period under any of these federal and state authorities.\nNotwithstanding the plain meaning of section PM 07 \u2014 02\u201420 of the policy manual, let alone the controlling statutes and regulations, Brian has maintained the departments overlooked a critical distinction in the Medical Policy Manual between income and assets. Brian cites section PM 07 \u2014 02\u201406\u2014a of the policy manual, which guides agency employees in calculating a person\u2019s assets. It states, in pertinent part, as follows:\n\u201cMoney considered as income for a month is not an asset for the same month. Any income added to a bank account is income for that month, and not a part of the account\u2019s asset value for the month. To figure the asset value of the account, subtract the income from the bank balance. For the following month(s) any remaining income in the account is an asset.\u201d Medical Policy Manual, PM 07 \u2014 02\u201406\u2014a (eff. March 1, 1997).\nBrian asserts this section requires the departments to exclude transferred amounts of income in calculating nonallowable transfers because, essentially, he maintains \u201casset transfer\u201d policy can apply only to transfers of assets.\nBrian misunderstands the significance of this distinction between income and assets in determining medical-assistance eligibility. The distinction is necessary to determine whether and to what extent an applicant must \u201cspend down\u201d his or her excess assets or income in order to be eligible for medical assistance. See 305 ILCS 5/5 \u2014 2.07 (West 2008). Though equally essential to the operation of the medical-assistance program, the spend-down provisions are wholly separate from those defining eligibility penalties for nonallowable transfers. We find the manual\u2019s provisions regarding \u201cincome mixed with an asset,\u201d such as section PM 07 \u2014 02\u201406\u2014a, are irrelevant to the calculation of nonallowable transfers of personal property. Transfers of personal property for purposes of determining any penalty period include transfers of income and assets. When determining eligibility in the first instance, income that is consumed in a month on legitimate living expenses would not be counted as an asset. Accordingly, the departments did not err in their application of the law they are charged with implementing and enforcing or the Medical Policy Manual in Betty\u2019s case.\nIn addition, the State Medicaid Manual, a federal manual that provides guidance to state employees in making penalty determinations, provides as follows:\n\u201cTreatment Of Income As Asset. \u2014 Under OBRA 1993, income, in addition to resources, is considered to be an asset for transfer (and trust) purposes. Thus, when an individual\u2019s income is given or assigned in some manner to another person, such a gift or assignment can be considered a transfer of assets for less than fair market value.\n* * *\nWhen you find that income or the right to income has been transferred, a penalty for that transfer must be imposed for institutionalized individuals (if no exceptions apply).\u201d (Emphasis in original.) State Medicaid Manual, Health Care Financing Administration Publication No. 45 \u2014 3, Transmittal 64, \u00a73258.6 (November 1994).\nEven if a medical-assistance applicant\u2019s income were distinct from his or her assets for purposes of calculating nonallowable transfers for a month, we note we would reach the same conclusion in Betty\u2019s case because a transfer of income would be a transfer of a future asset. Under the provision of the policy manual Brian relies on, income becomes an asset by remaining in the account where it is deposited until the following calendar month. Federal and state asset-transfer policy extends to transfers of a person\u2019s future interest in an asset, including actions that \u201cwould cause an asset or assets not to be received (for example, waiving the right to receive an inheritance).\u201d 89 Ill. Adm. Code \u00a7 120.387(d), as amended by 23 Ill. Reg. 11301, 11310 (eff. August 27, 1999). The social security benefits deposited in Betty\u2019s account would have become an asset if Brian had not given them away in the month they were received. Under his interpretation of section PM 07 \u2014 02\u201406\u2014a of the policy manual, Brian\u2019s transfer of Betty\u2019s social security benefits caused an asset not to be received the following month. Thus, even if we considered section PM 07 \u2014 02\u201406\u2014a and similar provisions to be relevant to the calculation of nonallowable transfers, the transfers of income involved in this case would still be subject to the departments\u2019 scrutiny. Accordingly, we reject Brian\u2019s argument that Betty\u2019s ineligibility period resulted from the departments\u2019 misapplication of their own policies regarding asset transfers, and we further find the departments\u2019 imposition of a penalty period for Brian\u2019s nonallowable transfers of Betty\u2019s social security income complied with the Medicaid laws that the departments are charged with implementing.\nC. Equitable Estoppel\nDefendants argue, next, the circuit court erred in reversing on the basis of Brian\u2019s argument that his and Betty\u2019s reliance on the January 2001 letter estopped the departments from subjecting transfers of income to asset-transfer policy. We agree with defendants equitable estoppel is inapplicable to this case.\n\u201cGenerally, the doctrine of equitable estoppel may be invoked when a party reasonably and detrimentally relies on the words or conduct of another.\u201d Brown\u2019s Furniture, Inc. v. Wagner, 171 Ill. 2d 410, 431, 665 N.E.2d 795, 806 (1996). However, public policy disfavors application of equitable estoppel to bar state action. Deford-Goff v. Department of Public Aid, 281 Ill. App. 3d 888, 893, 667 N.E.2d 701, 705 (1996). Thus, equitable estoppel will not apply unless (1) doing so would be necessary to prevent fraud and injustice and (2) the state itself induced a private actor\u2019s reliance. \u201cWhen equitable estoppel is invoked against the State, it will be applied only to prevent fraud and injustice.\u201d Deford-Goff, 281 Ill. App. 3d at 893, 667 N.E.2d at 705. Otherwise, estoppel would \u201cimpair the functioning of the [s]tate in the discharge of its government functions\u201d because \u201cvaluable public interests may be jeopardized or lost by the negligence, mistakes[,] or inattention of public officials.\u201d Hickey v. Illinois Central R.R. Co., 35 Ill. 2d 427, 447-48, 220 N.E.2d 415, 426 (1966). This is particularly true when, as here, public revenues are concerned. Deford-Goff, 281 Ill. App. 3d at 893, 667 N.E.2d at 705. Further, when estoppel is sought to bar state action, the acts inducing detrimental reliance \u201cgenerally must be the acts of the [s]tate itself, such as legislation, rather than the unauthorized acts of a ministerial officer.\u201d Deford-Goff, 281 Ill. App. 3d at 893, 667 N.E.2d at 705.\nThe January 2001 letter, in which the chief of the bureau of policy of the predecessor to Healthcare and Family Services wrote, \u201cIncome given away during the same month it is received is not subject to the transfer[-]of[-]asset policy,\u201d cannot estop the departments from relying on contrary legal authority in imposing a penalty period of ineligibility on Brian\u2019s gifts of Betty\u2019s social security benefits to himself and his siblings. Estoppel cannot apply against the defendants in this case because no fraud or injustice resulted from the penalty period. Penalties for nonallowable transfers help ensure those applicants who can afford to contribute to their own medical needs do so. Betty, who made gifts of income totaling nearly $20,000 in the year preceding her application for medical assistance, could clearly have contributed to her own long-term-care expenses. It was neither fraudulent nor unjust for the departments to impose penalties for these gifts when the purpose of the penalties was solely to account for money that should have been available to offset the government\u2019s contributions to Betty\u2019s long-term care.\nFurther, Brian\u2019s reliance on the letter does not support application of equitable estoppel because the letter does not constitute an act by the state itself. The chief of the bureau of policy of the predecessor agency of Healthcare and Family Services is a ministerial officer whose erroneous acts should not bind the state through equitable estoppel. See Deford-Goff, 281 Ill. App. 3d at 893, 667 N.E.2d at 705. The policy expressed in the letter is irreconcilable with federal and state laws, and it would be absurd for us to require the departments to adhere to erroneous interpretations of the statutes and rules they enforce, made by officers of a predecessor agency some years earlier for the benefit of an unrelated third party. Accordingly, we reverse the circuit court\u2019s determination that Brian\u2019s reliance on the January 2001 letter estopped the departments from applying relevant law that contradicted the letter\u2019s statement of policy.\nEven if we were to look past the compelling precedent that warns against application of equitable estoppel in these circumstances, we are troubled by several questions regarding the merits of Brian\u2019s claim that were not satisfactorily addressed by either the departments or the circuit court and on which we are not convinced Brian carried his burden of proof at either level of proceedings below. These questions include whether Brian actually relied on the January 2001 letter; whether such reliance, if actual, was also reasonable; and whether such reliance, if actual and reasonable, was also detrimental. However, we find it unnecessary to reach these questions as we conclude equitable estoppel should not be applied in the first place.\nLastly, we note the State of Illinois departments involved in this litigation owe it to the citizens of this state to adopt clear, understandable rules which assist applicants in navigating the complicated eligibility and transfer of assets requirements of the Medicaid laws. If the participants can know and understand the rules, they can avoid the minefield that erupted in this case.\nIII. CONCLUSION\nFor the reasons stated, we reverse the circuit court\u2019s judgment and affirm the administrative decision imposing the full 17-month penalty period as a condition of Betty\u2019s medical-assistance eligibility.\nReversed.\nMYERSCOUGH and APPLETON, JJ., concur.", "type": "majority", "author": "JUSTICE POPE" } ], "attorneys": [ "Lisa Madigan, Attorney General, of Chicago (Michael A. Scodro, Solicitor General, and Carl J. Elitz (argued), Assistant Attorney General, of counsel), for appellants.", "Duane D. Young (argued), of LaBarre, Young & Behnke, of Springfield, for appellee." ], "corrections": "", "head_matter": "J. BRIAN McDONALD, as Independent Adm\u2019r of the Estate of Betty J. McDonald, Plaintiff-Appellee, v. THE DEPARTMENT OF HUMAN SERVICES et al., Defendants-Appellants.\nFourth District\nNo. 4\u201410\u20140290\nArgued November 19, 2010.\nOpinion filed December 28, 2010.\nRehearing denied January 25, 2011.\nLisa Madigan, Attorney General, of Chicago (Michael A. Scodro, Solicitor General, and Carl J. Elitz (argued), Assistant Attorney General, of counsel), for appellants.\nDuane D. Young (argued), of LaBarre, Young & Behnke, of Springfield, for appellee." }, "file_name": "0792-01", "first_page_order": 808, "last_page_order": 820 }