March 12, 2008
DIVISION OF MEDICAL ASSISTANCE AND HEALTH SERVICES, RESPONDENT, AND BERGEN COUNTY BOARD OF SOCIAL SERVICES.
On appeal from the Division of Medical Assistance and Health Services, OAL Docket No. HMA 9620-03.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Argued telephonically February 13, 2008
Before Judges A.A. Rodríguez and C.S. Fisher.
In this appeal, we affirm the decision of the Director of the Division of Medical Assistance and Health Services (DMAHS) which imposed a period of ineligibility in Medicaid benefits paid on behalf of appellant A.H.'s parents and which, as a result, required A.H.'s repayment to the State Treasurer of $67,792.
The facts are not complicated. The record reveals that A.H. applied for Medicaid benefits for his father in March 2002. The application was initially denied, but A.H. reapplied and his father was found eligible retroactive to the original application date.
A few months later, A.H. obtained, with a power of attorney, a $85,200 mortgage loan on his parents' condominium. The lender issued a check to A.H., payable to his parents, in the amount of $83,355.32, which A.H. deposited into bank accounts in their names (the bank accounts). Less than a month later, A.H. wrote himself a check in the amount of $35,000 from these funds. The next day, A.H. applied for institutional Medicaid benefits for his mother without disclosing her ownership interest in the bank accounts. Had A.H. made a full disclosure, a period of ineligibility on the benefits would have been imposed.
In the months that followed, A.H. wrote checks to himself from the bank accounts in the total amount of $24,250. On June 13, 2003, the Bergen County Board of Social Services advised A.H. that his parents' condominium was considered a non-liquid resource and, because A.H. had failed to submit and comply with a plan of liquidation, his parents' benefits would be terminated effective September 30, 2003. A.H. requested a hearing and elected to continue his parents' receipt of benefits during the appeal process.
A hearing was conducted by an administrative law judge (ALJ), who found from the stipulated facts and the evidence he found credible that the total resources of A.H.'s parents exceeded the resource standard, thus requiring the imposition of a ten-month penalty period and the repayment of $67,792. The Director adopted the findings and conclusions of the ALJ.
In appealing the Director's final agency decision, A.H. argues:
I. [THE ALJ] CONDUCTED SETTLEMENT DISCUSSIONS AND IS PRECLUDED BY STATUTE FROM HEARING THE CASE.
II. [A.H.] OUGHT NOT TO BE PERSONALLY LIABLE FOR THE MONEY USED TO PROVIDE MEDICAL ASSISTANCE TO HIS PARENTS.
III. CREDIT FOR THE $35,000 LOAN BY [A.H.] TO [HIS PARENTS] MUST BE MADE.
We find no merit in these arguments.
In Point I, A.H. claims there was a defect in the agency proceedings that led to the determination in question. Citing N.J.A.C. 1:1-4.2, A.H. argues that the ALJ should not have sat as the trier of fact in light of his involvement in settlement discussions. The cited regulation, however, only bars an ALJ from conducting a hearing on a disputed matter if the judge conducted settlement discussions prior to the agency's transmission of the matter to the Office of Administrative Law.*fn1
That is not what occurred here. The case was assigned to the ALJ, who thereafter engaged the parties in settlement discussions prior to the hearing after the matter was transmitted by DMHAS to the Office of Administrative Law. N.J.A.C. 1:10-4.2 has no application to what occurred here.
Moreover, throughout these proceedings, A.H. was represented by counsel, who never objected to the ALJ's continued handling of the case following the unsuccessful settlement discussions. Although in such a setting judges should be careful to ensure that their involvement in settlement discussions does not impair their impartiality, there is nothing in the record to suggest that the settlement discussions impacted upon the ALJ's ability to fairly consider the evidence adduced at the hearing.
A.H. argues in Point II that he should not have been held personally liable. There is no merit in this contention. To qualify for SSI/Medicaid Only benefits, an individual's countable resources cannot exceed $2,000. N.J.A.C. 10:71-4.5(c). A "resource" is defined as "any real or personal property which is owned by the applicant . . . which could be converted to cash to be used for his/her support and maintenance." N.J.A.C. 10:71-4.1(b). Here, the record unequivocally demonstrated that A.H.'s parents had resources beyond this limit, as indicated not only by their ownership of the condominium but also by A.H.'s ability to obtain a mortgage loan of $85,200. The ALJ found that these additional resources required the imposition of a ten-month period of ineligibility.
In addition, A.H. was found responsible for the overpayment. Liability may be imposed upon "a recipient, legally responsible relative, representative payee, or any other party or parties whose action or inaction resulted in the incorrect or illegal payments of who received the benefit of the divestiture, or from their respective estates." N.J.S.A. 30:4D-7(i). Here, the record reveals that A.H. failed to take the required steps to liquidate the condominium -- a resource that rendered his parents ineligible for benefits -- and then borrowed against this asset and transferred a large portion of those funds to himself. When his failure to liquidate the condominium was brought to his attention, A.H. elected to continue the payment of benefits despite the distinct possibility that a period of ineligibility would be imposed. A.H.'s active role in dealing with his parents' assets, in applying for benefits, and in personally benefiting from those assets while, at the same time, ineligible benefits were provided for the benefit of his parents, more than amply triggered A.H.'s personal liability for the repayment.
Our standard of review of a final agency decision does not permit our intervention absent a showing -- which has not been made here -- that the decision was "arbitrary, capricious or unreasonable, or that it lacked fair support in the evidence, or that it violated legislative policies expressed or implicit" in the governing legislation. Campbell v. Dep't of Civil Serv., 39 N.J. 556, 562 (1963); see also Henry v. Rahway State Prison, 81 N.J. 571, 589-90 (1980). After carefully considering the matter, we conclude that the imposition of personal liability on A.H. was neither arbitrary, capricious or unreasonable, was well-supported by the evidence, and was entirely consistent with the applicable legislative policies.
In Point III, A.H. argues that he was entitled to a credit of $35,000 because he had lent his parents that amount in 1988. In support, A.H. relied on his own testimony as well as a note allegedly signed by his parents which appears to acknowledge this alleged debt. The note is dated November 15, 1988, it was not recorded and the signatures were not notarized. In a finding adopted by the Director, the ALJ found that the testimony regarding this alleged loan was not credible.
It is true, as A.H. argues on appeal, that the fact that the alleged note was not recorded is not, as a general matter, a bar to its enforceability. However, the fact that the promissory note was not recorded and its signatures not notarized raised legitimate questions about the document's authenticity and the genuineness of the debt. Whether A.H. made a $35,000 loan to his parents in 1988 was a matter very much in doubt and presented a factual question for the ALJ's resolution. The ALJ's decision indicates that he weighed A.H.'s evidence regarding this alleged debt and found it wanting. Our standard of review does not permit us to second guess that fact finding. Campbell, supra, 39 N.J. at 562.