On appeal from a Final Agency Decision of the Director of the Division of Medical Assistance and Health Services, New Jersey Department of Human Services.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Before Judges Yannotti and Espinosa.
S.S. appeals from a final determination of the Director of the Division of Medical Assistance and Health Services (Division), who found that S.S. was eligible for Medicaid benefits as of March 1, 2009, and the penalty period resulting from her transfer of certain assets for less than their fair market value ran from that date. We affirm.
The relevant facts are not in dispute. S.S. is an elderly person. As of November 2007, S.S. was residing in a nursing home. She became medically eligible for Medicaid Only benefits on January 28, 2008. S.S. claimed that she became financially eligible for such benefits as of September 1, 2008, when her assets purportedly fell below the maximum resource level permitted under the applicable regulations.
It appears, however, that sometime after February 2006 but before September 2008, S.S. transferred $76,570.40 of her monies to her son. From those funds, S.S.'s son used $42,909.75 to pay for S.S.'s care in the nursing home in the period from September 1, 2008, through February 28, 2009. The balance of the transferred funds, $33,660.65, had not been accounted for. Accordingly, the Division was required to impose a 147-day period of ineligibility because S.S. had transferred the $33,660.65 for less than fair market value.
The Division determined that S.S. was medically and financially eligible for Medicaid Only benefits as of March 1, 2009, and the transfer penalty period ran from that date. S.S. filed an administrative appeal challenging that determination, and the matter was referred to the Office of Administrative Law for a hearing before an administrative law judge (ALJ).
The ALJ issued an initial decision dated April 14, 2010, in which she stated that, under the applicable federal law governing the Medicaid program, a penalty for transferring assets for less than their fair market value does not begin to run when the applicant is only financially eligible or only medically eligible. The ALJ wrote that the transfer penalty begins to run "when the applicant meets all of the requirements for Medicaid eligibility[.]"
The ALJ found that, in this case, S.S. was medically eligible for Medicaid benefits as of January 28, 2008, but she was not financially eligible as of September 1, 2008, as she claimed. The ALJ noted that, although it appeared that S.S.'s resources did not exceed the eligibility limits established by N.J.A.C. 10:71-4.5(a) as of September 1, 2008, this was because she had transferred her monies to her son for less than their fair market value, thereby creating a "false financial eligibility[.]"
The ALJ rejected S.S.'s argument that the transfer penalty period should run from September 1, 2008. The ALJ wrote that S.S. was seeking: to have the penalty period of 147 days run concurrently with the period of time when a portion of the transferred funds was being used to pay for her nursing home care, in which case [S.S.] would suffer no financial detriment by virtue of the assets being transferred for less than fair market value, i.e., while the penalty was running, her son would pay the nursing home bills, and then when the penalty expired, the son would cease paying the nursing home bills, and the [Medicaid program] would presumably assume responsibility for [S.S.'s] care. Any funds transferred but not used for nursing home care would thus be protected from being used for [S.S.'s] benefit and would remain divested from her.
The ALJ concluded that such a result would be inconsistent with the statutes and regulations governing the State's Medicaid program. The ALJ stated that Medicaid cannot provide benefits for those who have the resources to provide for their own care but who intentionally impoverish themselves in order to preserve their assets, and thereby become a public charge. [S.S.] attempted to do just that, expecting that her failure to pay a nursing home bill until [October 2008] would establish financial eligibility, thereby entitling her to the immediate imposition of the transfer penalty, and the ability to protect other transferred resources.
The Director issued his final decision in the matter on July 15, 2010. The Director adopted the ALJ's findings of fact and conclusions of law. The Director added, however, that there was no doubt S.S. had impoverished herself as of September 1, 2008, by giving $76,570.40 to her son, with the apparent understanding that he would pay for her nursing home care with some of those funds, after which Medicaid would assume responsibility for the cost of her care.
The Director observed that the transfer created a "false financial eligibility," as the ALJ found. The Director concluded that S.S. did not become financially eligible for Medicaid benefits until March 1, 2009, and the 147-day transfer penalty period, which was calculated based on the $33,660.65 that S.S. had transferred to her son ...