H.R. v. Div. of Med. Assistance & Health Servs.
| Decision Date | 02 January 2020 |
| Docket Number | DOCKET NO. A-2996-17T1 |
| Parties | H.R., Petitioner-Appellant, v. DIVISION OF MEDICAL ASSISTANCE AND HEALTH SERVICES and ATLANTIC COUNTY BOARD OF SOCIAL SERVICES, Respondents-Respondents. |
| Court | New Jersey Superior Court — Appellate Division |
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
This opinion shall not "constitute precedent or be binding upon any court." Although it is posted on the internet, this opinion is binding only on the parties in the case and its use in other cases is limited. R. 1:36-3.
Before Judges Sumners and Natali.
On appeal from the New Jersey Department of Human Services, Division of Medical Assistance and Health Services.
Cowart Dizzia, LLP, attorneys for appellant (Jenimae Almquist, on the briefs).
Gurbir S. Grewal, Attorney General, attorney for respondent (Melissa H. Raksa, Assistant Attorney General, of counsel; Nicholas Logothetis, Deputy Attorney General, on the brief).
H.R. appeals the January 24, 2018 final agency decision of the Director of the Division of Medical Assistance and Health Services (DMAHS) that denied him Medicaid benefits.1 We affirm.
In approximately July 2016, H.R. was hospitalized after his mobile home was destroyed in a fire. On July 19, 2016, he was transferred to the Hammonton Center for Rehabilitation and Healthcare (Hammonton Center) where he became a full-time resident. Due to H.R.'s significant cognitive impairment and functional deficits, the Hammonton Center filed a complaint on September 23, 2016, seeking the appointment of a guardian of H.R.'s person and his estate. A hearing was set for December 7, 2016, but was adjourned to January 11, 2017. During this period the court did not appoint a temporary guardian.
On January 11, 2017, the court entered a judgment of legal incapacity and appointed a guardian. The judgment required the guardian to "enter into a suretybond unto the Superior Court of New Jersey in the amount of $50,000," before receiving letters of guardianship. In a February 23, 2017 order, however, the court waived the bond requirement and ordered the Surrogate to issue letters of guardianship, which the guardian received that day. Additionally, the court ordered H.R.'s bank account with Fulton Bank ending in *9008 to be "paid over to the Hammonton Center." The court further required all future Social Security and Veteran's Administration benefits to be directed to the Hammonton Center.
On December 23, 2016, while H.R.'s guardianship was still pending, the Hammonton Center filed a Medicaid application with the Atlantic County Board of Social Services (ACBSS) on H.R.'s behalf. On February 6, 2017, the Atlantic County Medicaid Long Term Care Unit (LTC Unit) denied H.R.'s application, as H.R. "failed to provide documents needed to make [a] determination." The guardian testified before the Administrative Law Judge (ALJ) that she asked a caseworker "whether she needed to request a [f]air [h]earing or if [ACBSS] w[as] building off of the [December 2016] Medicaid application." She further testified that the caseworker "told her to keep getting her the information requested." Neither the guardian nor the Hammonton Center requested a fair hearing with respect to the denial of H.R.'s December 2016 Medicaid application.
On March 8, 2017, the guardian filed a new Medicaid application for the wrong program on H.R.'s behalf, and ACBSS, accordingly, did not accept the application. Notably, in a letter accompanying the application, the guardian represented that the combined value of H.R.'s real property was $2500.
The guardian filed another Medicaid application on March 13, 2017, this time for the correct program. In this application, the guardian represented that the fair market value of H.R.'s real property was $5000. Additionally, she identified three bank accounts that H.R. owned: 1) a Fulton Bank account ending in *9008 with a balance of $6460.94; 2) a Fulton Bank account ending in *2538 with a nominal balance of $13; and 3) a Univest Bank account ending in *7463 with a $7677.95 account value. A Univest Bank account ending in *2581 with an account value of $63.08 was later identified.
According to the guardian's testimony before the ALJ, she learned of the Univest account on March 12, 2017, in the course of a discussion with H.R.'s friend at the hospital. She maintains that she contacted Univest by telephone and received confirmation that Univest would prepare the relevant paperwork so she could appropriately disburse those funds, but that she was unable to travel to Univest to execute the necessary documents as she was at the hospital with H.R.
On March 17, 2017, H.R. passed away. Approximately one week later, on March 23, 2017, the court entered a consent order which required that H.R.'s Fulton Bank "account ending in *9008 shall be paid over to the Hammonton Center, except [that]: 1) $1406 shall be paid to Sara Winstock, Esq[.;] [and] 2) $1205.45 shall be paid to Egg Harbor Township" to satisfy existing and future tax debt on two lots of land that H.R. owned. At the end of March 2017 or April 2017, the account ending in *9008 was spent down consistent with the March 23, 2017 consent order and the account was closed.
On April 27, 2017, H.R.'s March 13, 2017 Medicaid application was denied by the LTC Unit as H.R. was deceased and "over-resourced," as his estate was "over the $2000 resource limit." ACBSS never received information or documentation that H.R.'s *9008 account was spent down, but Barbara Paugh, an Administrative Supervisor with ACBSS, testified that "even if the [*9008] account was not counted towards the resource limit, H.R.'s estate would still have been over the $2000 resource limit."
On May 9, 2017, the guardian filed a request for a fair hearing with respect to the denial of H.R.'s March 13, 2017 Medicaid application. The DMAHS transmitted the matter to the Office of Administrative Law (OAL), and the OAL held a hearing on August 3, 2017. The ALJ heard testimony from the guardian,Paugh, and Jannell Thomas, the Medicaid Coordinator at the Hammonton Center.
At the August 3, 2017 hearing, the guardian testified that after she presented her letters of guardianship, it took almost two weeks to obtain H.R.'s account information from Fulton Bank, due to the bank's legal processes. The guardian further stated that she went to the Social Security Administration office twice in order to "determine where [H.R.'s] social security was being deposited." Before receiving the information, however, she left due to the wait time.
With respect to H.R.'s Univest Bank account, the guardian confirmed that she learned of the account on March 12, 2017 from H.R.'s friend at the hospital, and contended that it was ACBSS' responsibility to inform her of the existence of the Univest Bank account. As to H.R.'s real property, the guardian testified that she did not obtain an appraisal, but that the property was "not worth anything."
The ALJ issued her initial decision on October 30, 2017. With respect to the December 2016 Medicaid application, the ALJ found that "[n]o [f]air [h]earing request was filed on the denial of the . . . [Hammonton Center's] application."
In considering the March 13, 2017 Medicaid application, the ALJ noted that because H.R. was a full-time resident of the Hammonton Center, his "real property became an eligible resource that [ACBSS] was required to consider in determining H.R.'s Medicaid eligibility at the time of filing." She added that H.R. offered no credible evidence to dispute the $19,300 tax assessed value of H.R.'s real property. Further, the ALJ found that while H.R.'s Fulton Bank account was not a countable resource because it was subject to the court's March 23, 2017 spend down order, the Univest Bank account was not included in the order and was therefore an includable resource in determining H.R.'s Medicaid eligibility. Accordingly, the ALJ concluded that H.R. was "over the resource limit of $2000 thereby making him ineligible for Medicaid . . . ."
On January 24, 2018, the Director of DMAHS issued a final agency decision adopting the ALJ's initial decision "as to the finding that [p]etitioner is not eligible for benefits" with respect to the March 13, 2017 Medicaid application. The Director noted that H.R. "had a guardian who had authority to access [his] assets." In this regard, the Director concluded that H.R.'s assets, "including the bank accounts that exceeded $7000 and real estate, were correctly applied to the Medicaid standard and [ACBSS] correctly found him ineligible for benefits." However, because it was unclear whether H.R.'s application "wasreviewed for retroactive benefits as he did not acknowledge unpaid medical bills on the March 2017 application," the Director returned the matter to ACBSS to determine H.R.'s eligibility for retroactive benefits under N.J.A.C. 10:49-2.9(b) and 42 U.S.C. § 1396a(a)(34).2 This appeal followed.
On appeal, H.R. makes three primary arguments. First, he maintains that DMAHS' denial was arbitrary and capricious because the decision "improperly deemed H.R.'s unknown and inaccessible bank accounts and property as 'resources' under Medicaid regulations in direct conflict with applicable law." Specifically, H.R. claims that his cognitive impairment, his death, the state of his land, the delay in issuing letters of guardianship, and the guardian's difficulty receiving information from the financial institutions, rendered H.R.'s resources unavailable. In addition, H.R. asserts that "the ALJ erroneously held a high value against [him] in relation to the land where his trailer had stood before a fire led to his institutionalization." H.R. further claims that "the value of a resource that is inaccessible through no fault of the applicant is expressly excluded by N.J.A.C. 10:71-4.4(b)(6)."
Second, H.R. contends that the DMAHS ignored the fact that the guardian "had no authority to request a fair hearing at the time that the [December 23,...
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