We granted certiorari in Cook v. Bottesch, 320 Ga. App. 796 740 SE2d 752 2013 to consider whether the Court of Appeals properly interpreted 42 U.S.C. § 1396p with respect to whether a Medicaid applicant’s purchase of an annuity was subject to an asset transfer penalty. In this case, the Georgia Department of Human Services, Family and Children Services “DFCS” granted appellee Jerry L. Glover’s application for Medicaid benefits but imposed a multi-month asset transfer penalty on him pursuant to § 2339 of DFCS’s Georgia Economic Support Services Manual the “Eligibility Manual” due to his refusal to name the State as the remainder beneficiary on an annuity.1 Glover appealed the penalty to an Office of State Administrative Hearings Administrative Law Judge “ALJ” who issued an initial decision reversing the penalty. DFCS thereafter filed a request for agency review by the Georgia Department of Community Health “DCH”, the state agency responsible for administering Georgia’s Medicaid program, and DCH issued a final decision upholding the penalty. Pursuant to OCGA § 50-13-19 of the Administrative Procedures Act, Glover then sought judicial review from the Superior Court of Hall County which affirmed the final agency decision. The Court of Appeals granted Glover’s application for discretionary appeal and reversed the superior court, concluding that § 2339 of the Eligibility Manual as applied to Glover was inconsistent with the plain language of the federal Medicaid statute and that pursuant to 42 U. S. C. § 1396p c 1 F and G, Glover’s annuity was not an asset to which the asset transfer penalty would apply. See Cook v. Bottesch, supra. In holding that the penalty did not apply, the Court of Appeals found the federal statutory language was unambiguous and refused to defer to DCH’s decision which was based on a contrary interpretation of the statute provided by the United States Department of Health and Human Services, Centers for Medicare and Medicaid Services “CMS”, the federal agency charged with administering the Medicaid program.
Appellants, David Cook in his official capacity as Commissioner of DCH and Clyde L. Reese in his official capacity as Commissioner of DFCS, appealed to this Court arguing that the Court of Appeals improperly interpreted the annuity section of the Medicaid Act and erred in holding that §2339 as applied to Glover violated federal law. Asserting that the statutory provisions at issue are ambiguous, appellants contend that the Court of Appeals was required to defer to CMS’s interpretation of the federal statute. See Chevron U. S. A. v. Natural Resources Defense Council, 467 U. S. 837, 843, n. 9 104 SCt 2778, 81 LEd2d 694 1984 reviewing court must give effect to an agency’s regulation containing a reasonable interpretation of an ambiguous statute. Because we find that the federal statutory provisions at issue are ambiguous and the relevant administrative agencies’ interpretations thereof are based on a permissible construction of the statutory language,2 we reverse the Court of Appeals’ decision in this case.
