Rejection for
Medicaid where family would not provide info on assets
A.T.,
Petitioner,
v.
DIVISION OF MEDICAL ASSISTANCE
AND HEALTH SERVICES and UNION
COUNTY BOARD OF SOCIAL SERVICES,
Respondents-Respondents.
____________________________________
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Argued October 26, 2015 – Decided
Before Judges Lihotz, Fasciale and Nugent.
On appeal from the Department of Human Services, Division
of Medical Assistance and Health Services.
NOT FOR PUBLICATION WITHOUT THE
APPROVAL OF THE APPELLATE DIVISION
SUPERIOR COURT OF NEW JERSEY
APPELLATE DIVISION
PER CURIAM
S.T.,
on behalf of his elderly mother A.T., appeals from a February 24, 2014 final
agency decision by the Director of the Division of Medical Assistance and
Health Services (DMAHS) denying A.T. Medicaid eligibility from June 1, 2007 to
September 30, 2008. We affirm.
This
case arose after a rehabilitation center filed a separate lawsuit seeking
reimbursement for services it provided to A.T., which A.T. had sought to recoup
from the Union County Board of Social Services (UCBSS) in a related third-party
complaint.[1] DMAHS adopted the findings of the administrative
law judge (ALJ) concluding that A.T. failed to timely provide the requisite
verifications (the verifications), thereby depriving the UCBSS of the
opportunity to evaluate the merits of her application for Medicaid benefits. A.T. re-applied for Medicaid a year later,
eventually producing the missing information, and the UCBSS authorized Medicaid
benefits effective October 1, 2008. We
discern the following facts from the record on appeal.
I.
On
July 3, 2007, the South Mountain Healthcare and Rehabilitation Center (SMHRC)
admitted A.T. as one of its residents.
On July 22, 2007, A.T. appointed her grandson, D.T., as her power of
attorney (POA). A.T. designated her son,
S.T., as an alternate POA.
On August 28,
2007, D.T. and S.T. applied to the UCBSS for Medicaid benefits to pay for
A.T.'s stay at SMHRC. S.T. signed the
application, a statement of understanding for nursing home applicants, a
statement of understanding addendum, and an affidavit of understanding. These documents stated that Medicaid had no
obligation to pay any medical expenses until the application was approved in
writing, and failure to produce the verifications could result in denial of the
application. Only D.T.'s address was
listed on the application. S.T., despite
signing the form, did not include his mailing address on the application.
The UCBSS
determined that the application was incomplete.
As a result, the UCBSS attempted to verify A.T.'s eligibility for
Medicaid benefits by requesting certain information. The UCBSS requested the verifications on
three separate occasions, repeating the warning that failure to provide the
requested information would result in denial of the application. Despite the repeated requests for the verifications,
the UCBSS was unable to determine A.T.'s eligibility because the Medicaid
application remained incomplete.
On August 28,
2007, the UCBSS provided D.T. and S.T. with a
"Verifications[-]Needed" form, which provided a list of items needed
to verify A.T.'s eligibility. The
requested verifications included papers related to A.T.'s checking account
statements; a copy of a pre-paid irrevocable funeral trust; a copy of a deed to
land owned in Virginia; written proof that a life insurance policy had been
liquidated; a copy of the Blue Cross Blue Shield quarterly bill; and a copy of
the POA. D.T. and S.T. did not provide
the information.
On September 20
and October 19, 2007, the UCBSS made its second and third requests to D.T. for
the same items requested on August 28, 2007.
The bank account statements, the deed for the Virginia property, and
written proof the life insurance policy was liquidated were critical to the
UCBSS's eligibility determination. The
second and third letters also requested that the information be provided within
ten days to enable the UCBSS to determine A.T.'s eligibility for Medicaid
benefits.
On November 9,
2007, the UCBSS denied A.T.'s application for failure to provide the
eligibility verifications. The denial letter,
sent to D.T., notified him that he could request a fair hearing on behalf of
A.T. It was not until November 15, 2011,
that S.T., on behalf of A.T., requested a fair hearing.
In the interim,
D.T. and S.T. sporadically communicated with the UCBSS without fully providing
the verifications. On November 26, 2007,
D.T. and S.T. wrote the UCBSS informing them that they found a certificate of
deposit (CD) in the amount of $10,000, and from that amount, they paid SMHRC
$8,000, but withheld $2,000 to pay bills and to clean A.T.'s apartment; they
were waiting for A.T.'s insurance company to convert the policy to paid-up
insurance so they could place the proceeds into a trust; and that they were
attempting to obtain a survey and appraisal for the Virginia property before
listing it for sale.
On December 4,
2007, D.T. and S.T. wrote the UCBSS asking questions about their obligation to
sell the Virginia property. On December
6, 2007, the UCBSS responded in a letter addressed to D.T., indicating that
D.T. should contact an attorney regarding his and S.T.'s legal questions as to
the Virginia property and stating that he could re-apply for Medicaid benefits
once DMAHS obtained the previously-requested information. On December 11, 2007, S.T. informed the UCBSS
that he had contacted an attorney to assist with the sale of A.T.'s Virginia
property.
On January 27,
2008, D.T. and S.T. wrote UCBSS again, rather than re-applying for
benefits. In their letter, they
indicated that the insurance policy had not yet been transferred to an
irrevocable trust, there was a buyer for the Virginia property, and $15,000
plus all balances exceeding $2,000 would be turned over to SMHRC once the
property was sold. On January 30, 2008,
the UCBSS reminded D.T. and S.T. that they were required to file a new
application for Medicaid benefits, and provided specific details as to the
re-application procedure.
On August 13,
2008, approximately one year after the initial application, D.T. and S.T.
re-applied for Medicaid benefits on behalf of A.T. By this time, A.T. had purportedly sold her
property in Virginia for $12,000. The
UCBSS requested written confirmation that A.T. had turned over the proceeds of
the sale to SMHRC, and informed D.T. and S.T. that the burial trust, in the
amount of $8,873, was revocable, and that unless it was converted to an
irrevocable trust, the value of the trust would be counted as an asset. On September 18, 2008, the UCBSS followed up by
notifying D.T. and S.T. that it had not received proof that the life insurance
policy had been converted to an irrevocable trust.
On November 18,
2008, S.T. informed the UCBSS that an irrevocable trust had been obtained, and
based on that information, requested retroactive eligibility to October 27,
2008. On approximately November 28,
2008, S.T. sent a copy of the irrevocable trust to UCBSS. On January 6, 2009, the UCBSS approved the
re-application for Medicaid benefits, retroactive to October 1, 2008.
In November 2009,
SMHRC filed a complaint against A.T. and S.T. in the Superior Court of New
Jersey, Law Division, Union County, and in May 2010, SMHRC filed an amended
complaint adding D.T. A third-party
complaint against UCBSS was filed in approximately June 2010.
In
November 2011, S.T., for the first time, requested a fair hearing seeking to
challenge the November 9, 2007 UCBSS determination denying A.T.'s August 28,
2007 application for Medicaid benefits.
In February 2012, DMAHS denied the fair hearing request as
time-barred. S.T. appealed that decision
and, in July 2012, we remanded the matter to the OAL for further
proceedings.
The ALJ conducted
hearings on November 27, 2012, and on June 10, 2013. The ALJ issued a written decision on January
17, 2014. The ALJ concluded that the
UCBSS properly denied A.T.'s August 28, 2007 application because A.T. failed to
provide the requested verification information as to her assets and
resources. Additionally, the ALJ
explained as to the Virginia property that
[l]iquidation of the resource and distribution of the net proceeds
were not the only issues. A.T.'s failure
to provide even a deed prior to November 9, 2007, in response to three separate
requests, was one consideration in the denial of benefits as of that date. The UCBSS had no proof of exactly what land
was owned, nor any basis to evaluate the Virginia property and qualify [A.T.]
for Medicaid for six months pending the sale of the property. The UCBSS had no idea what the value of the
asset was and, accordingly, it was not a matter of providing the applicant with
time to liquidate, but rather whether or not the applicant would even qualify
for benefits based upon the value of the land [A.T.] owned in Virginia.
As
to the insurance policy, the ALJ found that it was not until August 2008 that
it was converted to an irrevocable trust.
A.T. appealed to the DMAHS and on February 24, 2014, the Director of the
DMAHS issued the final agency decision under review.
On appeal, S.T.
argues that the ALJ (1) failed to understand what documents are necessary for a
Medicaid eligibility determination; (2) neglected to acknowledge when the UCBSS
received "the necessary documents"; (3) imposed a UCBSS thirty-day
rescission rule without recognizing that S.T. did not receive the November 9,
2007 denial notice; (4) subjected S.T. to the UCBSS's rescission period, which
otherwise violated the Administrative Procedure Act (APA), N.J.S.A.
52:14B-1 to -15; and (5) failed to treat A.T.'s life insurance policy as a
non-liquid resource.
We begin by
addressing our standard of review and general governing legal principles. This court's review of DMAHS's determination
is limited. Barone v. Dep't of Human Servs., 210 N.J. Super. 276, 285 (App. Div. 1986), aff'd,
107 N.J. 355 (1987) (explaining that "we must give due deference to
the views and regulations of an administrative agency charged with the
responsibility of implementing legislative determinations"); see also
Wnuck v. N.J. Div. of Motor Vehicles, 337 N.J. Super. 52, 56
(App. Div. 2001) (indicating that "[i]t is settled that [a]n administrative
agency's interpretation of statutes and regulations within its implementing and
enforcing responsibility is ordinarily entitled to . . . deference")
(citations and internal quotation marks omitted) (second alteration in
original).
We have previously
stated that "[w]here [an]
action of an administrative agency is challenged, a presumption of
reasonableness attaches to the action of [the] administrative agency[,] and the
party who challenges the validity of that action has the burden of showing that
it was arbitrary, unreasonable or capricious." Barone, supra, 210 N.J.
Super. at 285 (citations and internal quotation marks omitted). "Delegation of authority to an
administrative agency is construed liberally when the agency is concerned with
the protection of the health and welfare of the public." Ibid.
Thus, this court's task is limited to deciding
(1) whether the agency's decision
offends the State or Federal Constitution; (2) whether the agency's action
violates express or implied legislative policies; (3) whether the record
contains substantial evidence to support the findings on which the agency based
its action; and
(4) whether in applying the legislative policies to the facts, the agency
clearly erred in reaching a conclusion that could not reasonably have been made
on a showing of the relevant factors.
[A.B. v. Div. of Med. Assistance & Health Servs., 407 N.J. Super. 330, 339 (App. Div.), certif. denied, 200 N.J. 210 (2009).]
[A.B. v. Div. of Med. Assistance & Health Servs., 407 N.J. Super. 330, 339 (App. Div.), certif. denied, 200 N.J. 210 (2009).]
The Medicaid program was
created when Congress added Title XIX to the Social Security Act "for the
purpose of providing federal financial assistance to States that choose to
reimburse certain costs of medical treatment for needy persons." Harris v. McRae, 448 U.S. 297,
301, 100 S. Ct. 2671, 2680, 65 L. Ed. 2d 784, 794 (1980). Participation in the Medicaid program is
optional for states; however, "once a State elects to participate, it must
comply with the requirements of Title XIX." Ibid. The New Jersey Medical Assistance and Health
Services Act, N.J.S.A. 30:4D-1 to -19.5,[2]
authorizes New Jersey's participation in the Medicaid program.
The Commissioner of the New Jersey
Department of Human Services has the power to issue regulations dealing with
eligibility for medical assistance. N.J.S.A.
30:4D-7. DMAHS is a division of the
Department of Human Services that operates the Medicaid program in New
Jersey. N.J.S.A. 30:4D-4. Applications for Medicaid benefits are either
granted or denied by the local county welfare agencies (CWA). N.J.A.C. 10:71-3.15. Pursuant to this regulation, a CWA must
determine "income and resource eligibility[.]" Ibid.
N.J.A.C.
10:71-4.1(b) defines resource to
include
any real or personal property which is owned by the
applicant (or by those persons whose resources are deemed available to him or
her, as described in N.J.A.C. 10:71-4.6) and which could be converted to
cash to be used for his or her support and maintenance. Both liquid and non[-]liquid resources shall
be considered in the determination of eligibility, unless such resources are
specifically excluded under the provisions of N.J.A.C. 10:71-4.4(b).
The regulation
explains that a resource must be "available" to be considered in
determining eligibility. N.J.A.C.
10:71-4.1(c). A resource is
"available" where the "person has the right, authority or power
to liquidate real or personal property or his or her share of it[,]"
resources that "have been deemed available" pursuant to N.J.A.C.
10:71-4.6, and resources arising from a third-party claim or action under
certain circumstances. Ibid. The value of the resource is "defined as
the price that the resource can
reasonably be expected to sell for on the open market in the particular
geographic area minus any encumbrances (that is, its equity value)." N.J.A.C. 10:71-4.1(d). The regulation explains that "[t]he CWA shall verify the equity value of
resources through appropriate and credible sources." N.J.A.C. 10:71-4.1(d)(3). "Resource
eligibility is determined as of the first moment of the first day of each
month." N.J.A.C.
10:71-4.1(e).
In
delineating the responsibilities in the application process, the regulation
states that the applicant is required to
"[c]omplete, with assistance from the CWA if needed, any forms
required by the CWA as a part of the application process[.]" N.J.A.C. 10:71-2.2(e)(1). Moreover, the applicant is
expected to "[a]ssist the CWA in securing evidence that corroborates his
or her statements[.]" N.J.A.C.
10:71-2.2(e)(2). "The process of establishing
eligibility involves a review of the application for completeness, consistency,
and reasonableness." N.J.A.C.
10:71-2.9. Retroactive eligibility for
Medicaid is governed by the regulation and allows "outstanding unpaid
medical bills incurred within the three month period prior to the month of
application" to be compensated upon approval by the agency. N.J.A.C. 10:71-2.16(a).
Finally, the regulation
notes that "[e]ligibility must be established in relation to each legal
requirement to provide a valid basis for granting or denying medical assistance"
and that an applicant's statements regarding eligibility are
"evidence."
N.J.A.C. 10:71-3.1(a), (b). "Incomplete or questionable statements shall be supplemented and substantiated by corroborative evidence from other pertinent sources, either documentary or non[-]documentary." N.J.A.C. 10:71-3.1(b). Thus, these regulations establish that an applicant must provide sufficient documentation to the agency to allow it to determine eligibility and corroborate the claims of the applicant.
N.J.A.C. 10:71-3.1(a), (b). "Incomplete or questionable statements shall be supplemented and substantiated by corroborative evidence from other pertinent sources, either documentary or non[-]documentary." N.J.A.C. 10:71-3.1(b). Thus, these regulations establish that an applicant must provide sufficient documentation to the agency to allow it to determine eligibility and corroborate the claims of the applicant.
Here, the ALJ concluded
that
A.T.'s application of August 28, 2007, was properly denied
on November 9, 2007, because petitioner did not supply the requested
information regarding her assets and resources in due time to approve the
application. I further [conclude] that
the UCBSS did not act in an arbitrary, capricious and unreasonable manner in
failing to rescind the denial, because petitioner did not supply the requested
information regarding her assets and resources within thirty days after the
denial letter to meet all eligibility requirements.
Applying
these governing standards of review and legal principles, we conclude there
exists substantial credible evidence in the record to support the ALJ's
findings, and that the ALJ's decision was not arbitrary, capricious, or
unreasonable.
II.
We reject S.T.'s contention that the ALJ failed to
distinguish between what documents were necessary to a Medicaid eligibility
determination.
On August 28, 2007, the UCBSS provided S.T. and D.T. with a
"Verifications[-]Needed" form, which provided a checklist of required
documentation or information. The
regulations require the applicant to assist in procuring necessary documents
and to provide the agency with required materials. N.J.A.C. 10:71-2.2(e)(1)-(2). At the hearing, S.T.'s counsel
argued that
[t]here's liquid resources and non-liquid resources. . . .
their own regulations say that any asset that takes more than [twenty] days to
liquidate, is non-liquid and may not be counted. . . . my contention is, basically,
that both the life insurance -- life insurance policy and the real property --
. . . . [a]re inaccessible resources that shouldn’t have been counted.
The
regulation defining "resource" clearly states that "[b]oth
liquid and non[-]liquid resources shall be considered in the determination of
eligibility, unless such resources are specifically excluded under the
provisions of N.J.A.C. 10:71-4.4(b)." N.J.A.C. 10:71-4.1(b) (emphasis
added). None of the potential resources
at issue in this case are explicitly excluded by N.J.A.C. 10:71-4.4(b).
As
to the deed for the property in Virginia, the ALJ correctly found that the
UCBSS was without necessary information to evaluate that resource. Nancy Moharter, a supervisor in the Medicaid
department at UCBSS, testified that obtaining a copy of the deed to the
property was critical to the eligibility determination, and that the deed was
not provided until after the initial application was denied. Ms. Moharter made clear in her testimony that
the decision as to whether real property is accessible or not is made after the
Division receives the required verifications.
As to the life insurance policy, the cash
value of A.T.'s policy was $8,873. Once
UCBSS received the required verifications, it may have determined that the real
property and life insurance should not have been counted as resources, pursuant
to N.J.A.C. 10:71-4.4(b), but the resource determination was never
reached because the verifications were never provided. Ms. Moharter testified that "[l]ife
insurance is not usually inaccessible.
You can cash it in."
However, to make that determination, the agency needs information as to
the details of the policy to determine whether it should be considered a
resource under the regulations and Medicaid Communication 87-26.
The ALJ properly
found that "no credible evidence was submitted that A.T.'s life insurance
policy was not accessible to her, or that [D.T. or S.T.] took steps to convert
the life insurance policy to an irrevocable trust until after the November 9,
2007[] denial letter was issued."
D.T. did not request that the life insurance policy be converted to
paid-up insurance until December 14, 2007, well after the denial letter had
been issued.
III.
S.T. argues that the ALJ erred by failing to recognize when
the necessary documents were received by the UCBSS. It is undisputed that the verifications were
not submitted until after the UCBSS denied A.T.'s first application for
Medicaid benefits. S.T. argues that
"it appears" there were certain attachments to a November 26, 2007
letter relating to A.T.'s financial affairs, but there is no indication what
those documents were, and in any event, November 26, 2007 was after the denial
of benefits on November 9, 2007.
Plaintiff contends that the deed to the Virginia property was enclosed
in a letter dated December 11, 2007. Although
the deed was eventually supplied after the denial of eligibility, that document
alone was insufficient to assure A.T. qualified for benefits because it was one
of several assets whose values needed to be verified.
S.T. argues that the ALJ failed to consider a November 26,
2007 letter from D.T. and A.T. to UCBSS indicating the life insurance policy
was in the process of being converted to a paid-up policy to be placed into a
trust. This letter is dated after the
initial denial of coverage on November 9, 2007.
And the paid-up policy was not used to purchase a burial trust until
August 13, 2008. It was not until after
September 18, 2008 that an irrevocable trust was created, which prevented the
assets from being counted as a resource.
Thus, there is no evidence S.T. or D.T. complied with the UCBSS
verification request, which asked for a "copy of pre[-]paid funeral trust
(irrevocable) when completed."
IV.
We reject
S.T.'s argument that the ALJ failed to "account" for the fact that
the UCBSS mailed the November 9, 2007 denial notice to D.T.
S.T.
asserts that he should not be held to the thirty-day rule because the UCBSS
mailed the November 9, 2007 denial letter to D.T. The UCBSS "shall promptly notify, in writing, the applicant for, or
beneficiary of, Medicaid Only of any agency decision." N.J.A.C.
10:71-8.3. The "[a]pplicant"
is defined as "the aged, disabled or blind individual or his/her
authorized agent who executes the formal written application . . . ." N.J.A.C. 10:71-2.1.
The UCBSS sent the denial notice to the
correct person. A.T. identified D.T. as
her POA. D.T. listed his address on the
August 28, 2007 application. As a
result, the UCBSS properly mailed the November 9, 2007 denial notice to
D.T. See Estate of V.M. v.
Div. of Med. Assistance & Health Servs., 385 N.J. Super. 165,
169-70 (App. Div. 2006). The UCBSS also
mailed to D.T. the September 20, 2007 and October 19, 2007 letters requesting
verifications. S.T. testified that he
and D.T. were in contact with each other.
It is undisputed that S.T. had knowledge that the first
application was deficient because he received the August 28, 2007 verifications
form itemizing the outstanding information that the UCBSS had requested. The ALJ recited these facts, which fully
support her conclusion D.T. was informed of the requirements for verifications
and the notice of denial.
V.
After
reviewing the record and the briefs, we conclude that S.T.'s remaining
contentions are without sufficient merit to warrant discussion in a written
opinion. R. 2:11-3(e)(1)(E). We add the following brief remarks.
S.T.
contends that the UCBSS's thirty-day rescission policy violates the APA. Ms.
Moharter explained that this thirty-day rescission period is an informal policy
within Union County that grants additional clemency to applicants that provide
required documentation within fifteen days after the denial. Thus, Union County has an informal
policy, benefitting the applicant, which allows the caseworker to rescind a
denial if the applicant comes forward with the required information within
fifteen days. Here, because S.T. and
D.T. failed to provide the UCBSS with all verifications within the fifteen-day
period, we need not resolve whether formal rule making is in order because such
a determination would have no impact on A.T.'s status, rendering the issue
moot.
Affirmed.
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[1] The parties to that lawsuit settled the
matter subject to a hearing in the Office of Administrative Law (OAL) regarding
A.T.'s first application for Medicaid benefits.
[i]t is the intent of the Legislature to make statutory
provision which will enable the State of New Jersey to provide medical
assistance, insofar as practicable, on behalf of persons whose resources are
determined to be inadequate to enable them to secure quality medical care at
their own expense, and to enable the State, within the limits of funds
available for any fiscal year for such purposes, to obtain all benefits for
medical assistance provided by the Federal Social Security Act as it now reads
or as it may hereafter be amended, or by any other Federal act now in effect or
which may hereafter be enacted.
