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Estate of V.M. v. Division of Medical Assistance and Health Services

April 25, 2006


On appeal from a Final Decision of the Department of Human Services, Division of Medical Assistance and Health Services, HMA 5123-04.

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




Argued March 28, 2006

Before Judges Coburn, Collester and Lisa.

Appellant, Estate of V.M., appeals from a final decision of the Division of Medical Assistance and Health Services (Division) that denied appellant's request to modify the eligibility date for Medicaid benefits. Appellant argues that the Division's findings are not supported by the record, that V.M. was wrongfully deprived of the right to directly receive notice of the denial of her earlier Medicaid applications, and that the appropriate remedy is to grant Medicaid benefits retroactively based upon the date of the initial application made on V.M.'s behalf. We reject these arguments and affirm.

The Division referred the matter to the Office of Administrative Law, where it was tried on stipulated facts. These are the pertinent facts, derived from the stipulation.

V.M. became a resident at Woodcliff Lake Manor Care Center in May 2002. V.M.'s daughter, C.L.W., filed a Medicaid application on V.M.'s behalf on June 18, 2002, which was denied on July 18, 2002. Further applications were filed by either C.L.W. or her husband, J.W., on March 25, 2003, which was denied on May 6, 2003, and on June 10, 2003, which was denied on July 29, 2003. Notice of each denial was sent to C.L.W. or J.W. No notice of denial was sent to V.M. No request for a fair hearing of the denials was made by either C.L.W. or J.W.

Another application was made by C.L.W. or J.W. on January 13, 2004. The application was approved, and Medicaid benefits were granted to V.M., retroactive to October 1, 2003. V.M. subsequently died. C.L.W. was appointed administrator of her mother's estate. Acting in that capacity, she requested a fair hearing from the aspect of the approval of Medicaid benefits setting the effective date at October 1, 2003. The estate contended that because notices of the denial of the three earlier applications were not sent personally to V.M., the proceedings were defective, and the benefits ultimately approved should be made retroactive based upon the date of the first application.

The Administrative Law Judge (ALJ) issued his Initial Decision on June 7, 2005. He rejected appellant's argument and affirmed the eligibility date set by the Division. The ALJ noted that under the applicable regulations, the notice of denial and the right to a fair hearing must be sent in writing to "the applicant for, or beneficiary of, Medicaid Only," N.J.A.C. 10:71-8.3, and that "applicant" is defined to include "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. Thus, because C.L.W. and J.W. acted as V.M's authorized agents in submitting the application forms, notice of action sent to them was in full compliance with the regulatory requirements. On July 19, 2005, the Division issued its final decision. It adopted the initial decision of the ALJ, substantially for the reasons set forth by the ALJ.

We find unpersuasive appellant's argument that the New Jersey regulations previously quoted are invalid because they are contrary to federal regulations pertaining to such notices. States that choose to participate in the Medicaid program must comply with the federal Medicaid statute and regulations and must submit a State Plan for approval by the Secretary of the United States Department of Health and Human Services (Secretary). County of Camden v. Waldman, 292 N.J. Super. 268, 278 (App. Div. 1996), certif. denied, 149 N.J. 140 (1997).

The federal Medicaid regulations require that the applicant be notified in writing of a State agency decision. 42 C.F.R. § 431.245(a) (2006). Unless the "context indicates otherwise," the regulations define "applicant" as the "individual whose written application for Medicaid has been submitted . . . but has not received final action" and includes "an individual . . . whose application is submitted through a representative or a person acting responsibly for the individual." 42 C.F.R. § 400.203 (2006). Thus, according to appellant, the agent of the individual for whose benefit the application has been made is not an "applicant" and notice of a State agency action to the agent is ineffectual. We reject the restrictive interpretation of the federal regulations urged by appellant.

The federal regulations also provide that "[w]ithin broad Federal rules, each State decides eligible groups, types and range of services, payment levels for services, and administrative and operating procedures." 42 C.F.R. ยง 430.0 (2006) (emphasis added). The Medicaid program in New Jersey has been approved by the Secretary. The notice provisions under the New Jersey program are reasonable and consistent with the objectives of the federal Medicaid Act. See Monmouth Med. Ctr. v. State, ...

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