On appeal from Superior Court of New Jersey, Chancery Division-Family Part, Gloucester County, FM-08-905-05.
The opinion of the court was delivered by: Payne, J.A.D.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Argued telephonically March 7, 2007
Before Judges Kestin, Weissbard and Payne.
In this appeal, we are asked to construe provisions of the Medicaid Catastrophic Care Act of 1988 (MCCA or Act) and its state regulatory counterpart that, in situations in which a Medicaid-eligible spouse is institutionalized, provide a maintenance allowance for the support of the spouse who remains in the community. Specifically, we are asked to determine the mechanisms available to the "community spouse" to increase the amount of allocated support to be obtained from the "institutionalized spouse" and the level of proof required.
Medicaid is a jointly-funded, federal-state program that, among other things, provides medical assistance to needy persons who are institutionalized in nursing homes as the result of illness or other incapacity. Prior to 1988, the Medicaid eligibility criteria of the program required, in situations in which one spouse was institutionalized and needed Medicaid assistance to defray the cost of care and one remained in the community, that the couple "spend down" their assets and allocate what remained in a fashion that often impoverished community spouses (often wives) with few independent assets and little income. In order to remedy this circumstance, Congress passed the "spousal impoverishment provisions" of the Medicare Catastrophic Coverage Act of 1988, 42 U.S.C.A. § 1396r-5.
A component of the MCCA, set forth in 42 U.S.C.A. § 1396r-5(d), captioned "Protecting income for community spouse," provides that, in determining how much of the Medicaid-eligible institutionalized spouse's remaining monthly income is available to defray the costs of care, certain amounts first be deducted or offset from that income. 42 U.S.C.A. § 1396r-5(d)(1). Among them is an amount designated as the community spouse's monthly income allowance. 42 U.S.C.A. § 1396r-5(d)(1)(B). That allowance, in turn, is the amount by which the community spouse's needs in the form of a minimum monthly maintenance needs allowance (MMMNA), established by each state in compliance with federal standards, exceeds the community spouse's income.
42 U.S.C.A. § 1396r-5(d)(2) and (3). A cap on the amount of the MMMNA is established by 42 U.S.C.A. § 1396r-5(d)(3)(C).
Within paragraph (d) is a further provision relating to deductions from the institutionalized spouse's monthly income which states:
(5) Court ordered support If a court has entered an order against an institutionalized spouse for monthly income for the support of the community spouse, the community spouse monthly income allowance for the spouse shall not be less than the amount of the monthly income so ordered.
[42 U.S.C.A. § 1396r-5(d)(5).]
This "court ordered support" provision within paragraph (d) is immediately followed by paragraph (e), which establishes a fair hearing mechanism for use in contesting the amount of the community spouse's MMMNA, stating in 42 U.S.C.A. § 1396r-5(e)(2)(B):
If either . . . spouse establishes that the community spouse needs income, above the level otherwise provided by the minimum monthly maintenance needs allowance, due to exceptional circumstances resulting in significant financial duress, there shall be substituted, for the minimum monthly maintenance needs allowance . . . an amount adequate to provide such additional income as is necessary.
In New Jersey, the statutory provisions implementing Medicaid are set forth in the Medical Assistance and Health Services Act, N.J.S.A. 30:4D-1 to -42. Pursuant to that statute, the Division of Medical Assistance and Health Services (Division), within the Department of Human Services, is vested with the authority to administer Medicaid. N.J.S.A. 30:4D-7; see also 42 U.S.C.A. 1396a(a)(5) (requiring states participating in Medicaid to establish or designate a single state agency to administer or supervise the plan). In accordance with its designated authority, the Division has promulgated regulations implementing the MCCA. N.J.A.C. 10:49-1.1 et seq. Regulations governing eligibility determinations, resource allocations and income distribution are set forth at N.J.A.C. 10:71-4.1 to -5.9. Provisions for the establishment of the MMMNA and a fair hearing mechanism for its review are set forth at N.J.A.C. 10:71-5.7. A regulation providing precedence to court ordered support, similar to 42 U.S.C.A. § 1396r-5(d)(5), appears at N.J.A.C. 10:71-5.7(f).*fn1
The wording of the State regulations differs somewhat from that of the MCCA. However, we have previously determined, when discussing Medicaid regulations concerning resource allocation, that the New Jersey regulations "essentially track the federal statute." A.K. v. Div. of Med. Assistance, 350 N.J. Super. 175, 180 (App. Div. 2002). As in A.K., no argument suggests that the state regulations are not "consistent with and reflective of the federal statute." Id. at 181. We note, however, that the standard for an increase in the MMMNA pursuant to federal statute requires proof of "exceptional circumstances resulting in significant financial duress," 42 U.S.C.A. § 1396r-5(e)(2), whereas New Jersey regulations require proof of "exceptional circumstances resulting in financial duress." N.J.A.C. 19:71-5.7(e). Nonetheless, because of the close parallels between federal law and state regulation, and the absence of any evidence that New Jersey sought to diverge from the MCCA model, our analysis will focus in large measure on the federal statute and its history.
The relationship between the "court ordered support" and "fair hearing" provisions of the MCCA in determining the MMMNA of a community spouse who seeks an upward modification of the allowance ...