On appeal from a final agency decision of the Department of Human Services, Division of Medical Assistance and Health Services, HMA-4713-2004S and HMA 8178-2004S.
The opinion of the court was delivered by: Wecker, J.A.D.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Submitted January 25, 2006
Before Judges Wefing, Wecker and Graves.
This is an appeal from a final agency decision of the Division of Medical Assistance and Health Services. The decision reversed the findings and conclusions of the Administrative Law Judge and denied Medicaid Only benefits to a nursing home patient, I.L., on the ground that her countable assets exceeded the allowable maximum.*fn1 At issue is the period June 1, 2002 through December 31, 2004. There is no dispute that I.L. was ineligible prior to June 1, 2002 and eligible as of January 1, 2005.
The question presented by this appeal is whether an individual is eligible for the Medicaid Only program when she was the legal owner of life insurance whose value ordinarily would have disqualified her for a brief period, but because she suffered from dementia and likely from Alzheimer's disease, and because no guardian had power over her assets, the cash value of the policies was not accessible to her. As of June 1, 2002, I.L. owned three life insurance policies having a total cash surrender value of $5,913. To be eligible for the Medicaid Only program, an applicant may not own total countable resources that exceed $2,000. See N.J.A.C. 10:71-4.4(b)3. The issue is whether petitioner's medical condition rendered these assets "not accessible" under N.J.A.C. 10:71-4.4(b)(6), thereby excluding the cash value of the life insurance policies from petitioner's countable resources.
We now hold that the cash value of I.L.'s insurance policies was not accessible to her on June 1, 2002, and contrary to the determination of the Division, she was eligible for benefits as of that date. We therefore reverse.
These are the salient facts and the relevant procedural history gleaned from the record on appeal. Three separate applications for Medicaid Only benefits were filed on behalf of I.L. between 2001 and 2004. Each application was rejected by the Atlantic County Board of Social Services.*fn2 Petitioner's daughter, G.A.T., filed the first application on her behalf in August 2001; the Board denied that application in October 2001 for failure to provide required documentation, including proof of I.L.'s financial circumstances. See N.J.A.C. 10:4.2(b) and (c). Petitioner's granddaughter, K.T., filed the second application on her behalf in May 2002. The Board did not act upon that application for more than a year, until June 2003, when it again denied petitioner's application for failure to provide required documentation.*fn3 The third and final application on I.L.'s behalf was filed with the Board in June 2004. That application was filed by Absecon Manor Nursing and Rehabilitation Center, where petitioner had resided since June 2002. The Board denied the third application in August 2004 on the ground that I.L. owned "countable resources" in excess of $2,000, thereby rendering her ineligible for the Medicaid Only program. See N.J.A.C. 10:71-4.5(c). The countable resources cited by the Board were three life insurance policies with a combined cash value of $5,913.34.
Appeals from the Board's decisions on both the second and third applications were filed with the Division. The appeals were referred to the Office of Administrative Law (OAL) as contested cases and consolidated in September 2004. The consolidated appeals were heard in the OAL.
These are the relevant facts that were before the administrative law judge. On May 2, 2002, I.L. was found on the floor of her apartment in a confused state and admitted to the Atlantic City Medical Center. I.L. was eighty-five years old in May 2002 and suffering from Alzheimer's disease with severe dementia; she had a history of hypertension and had previously suffered a stroke.
After several weeks in the hospital, I.L.'s granddaughter sought to have her moved to a nursing home. On May 7, 2002, the New Jersey Department of Health and Senior Services approved I.L.'s placement in a nursing facility, under a pre-admission screening program. See N.J.S.A. 30:4D-17.10 to -17.15. The approval was contingent upon a determination that I.L. was eligible for Medicaid benefits. On May 17, I.L.'s granddaughter filed an application with the Board to enroll I.L. in the Medicaid Only program, and on May 28, 2002, her granddaughter completed an application for residence with Absecon Manor on her grandmother's behalf. Three days later, on May 31, petitioner was admitted to Absecon Manor.
After I.L.'s admission, it appears that I.L.'s daughter and granddaughter abandoned her to the care of the nursing home. They did not cooperate in dealing with the Board or with Absecon Manor. After learning that the Board had denied I.L.'s application for Medicaid benefits for failure to provide documentation, Absecon Manor began compiling the required documentation of I.L.'s financial resources and discovered that she owned two bank certificates of deposit before her admission to Absecon Manor. The record clearly establishes that I.L.'s daughter and granddaughter withdrew the entire balance in each certificate, more than $37,000, and closed the accounts before her May 2002 hospitalization.*fn4 Apparently as a result of I.L.'s ownership of those accounts and the transfers without consideration within the thirty-six month "look back" period, see N.J.A.C. 10:71-4.10, I.L. was determined to be ineligible for Medicaid benefits through May 31, 2002.
Having compiled the necessary documentation, Absecon Manor filed I.L.'s third application with the Board.*fn5 Absecon Manor reported that I.L. still owned three life insurance policies, with cash surrender values of $2,821, $997, and $2,095, respectively, or a total of $5,913.*fn6 The Board, citing the $5,913.34 total value of those life insurance policies, concluded that I.L. was ineligible for the Medicaid Only program. See also N.J.A.C. 10:71-4.5(c). As of October 7, 2004, Absecon Manor had not been reimbursed for over $100,000 allegedly spent to provide services to I.L.
Administrative Law Judge Bruce M. Gorman heard arguments and issued an Initial Decision concluding that petitioner's insurance policies were not countable assets for purposes of determining her Medicaid eligibility. The decision reversed the Board's denial of benefits for the contested period.
We agree with the administrative law judge's conclusions with respect to the second and third applications. Addressing the denial of the second application (for failure to ...