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S.D. v. Division of Medical Assistance and Health Services and Monmouth County Board of Social Services

April 03, 2002


On appeal from the Office of Administrative Law, HMA-6332-00.

Before Judges King, Cuff and Wecker.

The opinion of the court was delivered by: King, P.J.A.D.


Submitted: February 14, 2002

Appellant challenges the decision of the agency, the Division of Medical Assistance and Health Services, setting her eligibility date for Medicaid benefits at July 1, 2000 instead of July 1, 1999. In reaching this decision on behalf of the agency, the Director of the Division "reversed" the decision of the Administrative Law Judge (ALJ) and rejected his factual findings and legal conclusions, including his eligibility date recommendation.

The factual issue at the OAL hearing before the ALJ was whether the appellant received proper notice of the $2000 "pay down" requirement for Medicaid eligibility. In his "factual discussion" the ALJ explained the situation this way.

The essential facts in this matter are not in dispute[]. Marie Drutz, testifying on behalf of respondent county welfare agency (CWA), testified that on March 9, 1999, the petitioner's daughter F.R. applied for Medicaid-only eligibility on behalf of petitioner. The petitioner had been previously admitted to a nursing home on October 16, 1998. At the time of the application, the petitioner had resources of $13,211. Ms. Drutz was advised that petitioner's daughter, F.R., had been advised to spend down petitioner's resources to the $2,000 eligibility limit. Ms. Drutz explained that the petitioner's income continued to accumulate in her bank accounts and, as a result, she was not resource eligible until December 1999 resulting in her being eligible for Medicaid only as of January 1, 2000.

As part of the efforts by F.R. to spend down petitioner's resources, life insurance policies were cashed in and the proceeds were used for a prepaid burial in May 1999. Ms. Drutz explained that one of the problems was that on May 24, 1999, the petitioner's daughter used her own funds to pay a nursing home bill in the amount of $2,367. There was $3,553 in petitioner's bank accounts as of June 1999.

On cross-examination Ms. Drutz testified that she [F.R.] was not present on the date of the initial application made on behalf of petitioner. She understood that F.R. had problems in her family and her husband was sick, and there were some other difficulties.

Deneen Wyche testified that in April 1999, she sent a notice entitled "Important Notice" advising petitioner's daughter of the necessity to spend down the petitioner's resources to the $2,000 eligibility limitation. On cross-examination she admitted that she had been involved in more than 20 cases but that she recalled sending the "Important Notice" in this case. She also spoke to F.R. about the spend down on March 28, 1999, according to her notes. She recalled that F.R. was moving, had problems with her back and also had lost documentation necessary for this matter.

F.R., the daughter of the petitioner testified that petitioner was admitted to the nursing home in October 1998. She was advised to apply for Medicaid when petitioner's account balances fell under $10,000 and that is what she did. She testified that she was completely unaware of the resource eligibility limitation of $2,000 and that she was required to spend down her mother's resources to that amount. The first notice she received of the necessity to spend down resources was the "Important Notice" which she received in December 1999, or January 2000.

The ALJ then proceeded with his "Legal Discussion and Analysis" in this fashion:

It is undisputed that through the month of December 1999, petitioner had resources which exceeded the sum of $2,000. N.J.A.C. 10:71-4.1(e) requires that eligibility be determined as of the first day of the month and that if an applicant's resources exceed $2,000 the applicant is not eligible for Medicaid only.

Petitioner does not dispute the foregoing, but argues based on B.W. v. Division of Medical Assistance and Health Services, 95 N.J.A.R. 2d (DMA) 2 that petitioner should be eligible at an earlier date because of the failure of the respondent to notify the petitioner of the eligibility requirement. In the B.W. case, the petitioner's granddaughter was never counseled by a representative of the Medicaid office regarding Medicaid eligibility and the significance of having resources in excess of $2,000. Thus, the issue in that case was whether the county welfare agency has the obligation to affirmatively counsel a client regarding eligibility. In that matter the ALJ relied upon N.J.A.C. 10:71-2.2(c) and Meyer v. Dept. of Human Services, 269 N.J. Super. 310 (App. Div. 1993), in holding that it is the county welfare agency's responsibility to notify ineligible persons of the reasons for the ineligibility. Because the CWA in that matter failed to counsel the applicant's ...

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