On appeal from the Division of Medical Assistance and Health Services.
The opinion of the court was delivered by: Yannotti, J.A.D.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Before Judges Skillman, Yannotti and LeWinn.
This is an appeal from a final determination of the Director of the Division of Medical Assistance and Health Services (Director), which found that N.E. was not eligible for "Medicaid Only" benefits. For the reasons that follow, we affirm.
On December 12, 2004, N.E. was hospitalized at Monmouth Medical Center after suffering a serious hemorrhage. He was transported to the HealthSouth Rehabilitation Hospital on December 31, 2004, and on February 28, 2005, he was transferred to the Willow Creek Rehabilitation and Care Center, where he remained until his death on December 28, 2006. On May 27, 2005, N.E.'s spouse, D.E., filed an application on N.E.'s behalf with the Somerset County Board of Social Services (Board) seeking Medicaid Only benefits.
As of May 1, 2005, N.E. and D.E. had combined countable resources in the amount of $206,734.55, which included an individual retirement account (IRA) in N.E.'s name with a balance of $196,857.10. Pursuant to a State regulation then in effect, D.E. was permitted to retain $92,760 of the couple's countable resources as her "community spouse resource allowance" or CSRA. This left N.E. with available resources in the amount of $113,974.55. The Board issued a determination dated August 12, 2005, denying the application because an institutionalized spouse is only eligible for Medicaid Only benefits if his "remaining resources are less than or equal to $2,000[.]" N.J.A.C. 10:71-4.8(a)(2).
N.E. filed a request for a fair hearing pursuant to N.J.A.C. 10:71-8.4(a), and challenged the Board's determination. The matter was referred to the Office of Administrative Law for a hearing before an administrative law judge (ALJ). In that proceeding, N.E. argued that all of his remaining resources should be transferred to D.E. to generate sufficient income to meet the deficit in her "minimum monthly maintenance needs allowance" or MMMNA, thereby making N.E. Medicaid-eligible as of May 1, 2005. In response, the Board asserted, among other things, that the transfer of N.E.'s remaining resources was not permitted under the State's regulations because N.E.'s income had to be applied first to the deficit in D.E.'s MMMNA and, furthermore, N.E. had been receiving social security disability payments since June 2005 that were sufficient to address the shortfall in D.E.'s MMMNA.
The ALJ issued an initial decision dated August 17, 2006. The ALJ found that the State's regulations require that an applicant's eligibility be determined based upon the resources available to the institutionalized spouse as of "the first moment of the first day of the month" in which the application is submitted. N.J.A.C. 10:71-4.8(a)(2). The ALJ stated that, under the regulations, the agency "takes a snapshot of the couple's finances" as of that date. The ALJ found that "[s]ince [N.E.'s] [s]ocial [s]security benefits were not awarded until June 2005, they have no relevance to whether [N.E.] was resource eligible on May 1, 2005."
The ALJ further found that all of N.E.'s available resources were required to generate sufficient income to meet the shortfall in D.E.'s MMMNA. The ALJ therefore determined that D.E. was "entitled to [N.E.'s] remaining resource balances so that [D.E.] and her family may be provided for under the current regulations." For these reasons, the ALJ concluded that N.E. did not have any excess resources as of May 1, 2005, and consequently he was eligible for Medicaid benefits on that date.
The Board filed exceptions to the ALJ's initial decision with the Director, who issued a final decision dated November 15, 2006, in which she concluded that the ALJ erred by finding N.E. Medicaid-eligible. The Director noted that, under the State's Medicaid regulations, N.E.'s eligibility for Medicaid benefits must be based on the amount of his countable resources that remained after the deduction of D.E.'s CSRA, and that determination had to be made based on the couple's resources as of May 1, 2005. On that date, after deduction of the amount prescribed for D.E.'s CSRA, N.E. had resources that exceeded the maximum permitted. The Director further noted that in June of 2005, N.E. began to receive social security disability benefits. She concluded that the ALJ erred by "reformulating [the] CSRA" as of May 1, ...