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J.M v. Division of Medical Assistance and Health Services and Cape May County

August 30, 2011


Per curiam.


Submitted January 4, 2011

Before Judges Carchman and Graves.

On appeal from the Division of Medical Assistance and Health Services.

Monzo Catanese, P.C., attorneys for appellant (Joseph F. Pelusi, on the brief). Paula T. Dow, Attorney General, attorney for respondent Division of Medical Assistance and Health Services (Melissa H. Raksa, Assistant Attorney General, of counsel; Julie Hubbs, Deputy Attorney General, on the brief).

Petitioner J.M. appeals from a November 30, 2009 final decision of the Division of Medical Assistance and Health Services (the Division) denying her application for Medicaid benefits. For the reasons that follow, we affirm.

We begin with a brief background of Medicaid's statutory framework. Medicaid is a federal-state program that extends medical benefits to those "whose income and resources are insufficient to meet the costs of necessary medical services."

42 U.S.C.A. § 1396-1. Although participating states must have their plans approved by the U.S. Secretary of Health and Human Services in order to receive federal funding, ibid., they are granted discretion to develop "reasonable standards" that are "consistent with the objectives of" the program. 42 U.S.C.A. § 1396a(a)(17)(A); see also Mistrick v. Div. of Med. Assistance & Health Servs., 154 N.J. 158, 166 (1998). In New Jersey, the Legislature has empowered the Commissioner of Human Services to promulgate "all necessary rules and regulations" to ensure federal approval, N.J.S.A. 30:4D-7, and the Division is responsible for the program's day-to-day administration. N.J.S.A. 30:4D-5; N.J.A.C. 10:71-2.2(a).

Our Legislature has expressly stated its intent "to provide medical assistance, insofar as practicable, on behalf of persons whose resources are determined to be inadequate to enable them to secure quality medical care at their own expense." N.J.S.A. 30:4D-2. According to the Legislature, such assistance "shall be the last resource benefit[]" to those in need. Ibid.

With these goals in mind, the Commissioner has limited Medicaid eligibility to individuals with resources valued at $2000 or less. N.J.A.C. 10:71-4.5(c). The term "resources" includes any real or personal property, liquid or nonliquid, "which is owned by the applicant (or by those persons whose resources are deemed available to him/her, as described in N.J.A.C. 10:71-4.6) and which could be converted to cash to be used for his/her support and maintenance." N.J.A.C. 10:71-4.1(b). Additionally, the disposal of assets for less than fair market value may preclude benefit eligibility. N.J.A.C. 10:71-4.10(a). To obtain Medicaid benefits, an individual must submit an application to his or her local county board of social services. N.J.A.C. 10:71-2.2(c), (d). The appeal in this case stems from the denial of J.M.'s application.

J.M., who is now seventy-nine years old, resided in Rosemont, Pennsylvania, with her husband from 1963 to 2008. The couple separated in February 2008,*fn1 and J.M. moved in with her daughter, M.R., who lived in a two-story, two-bedroom rental house in Cape May, New Jersey, with her husband, G.R., and a son.*fn2 J.M.'s marital home was sold on February 28, 2008, and she and her husband equally shared the net proceeds, which amounted to $305,717.90.

On March 10, 2008, J.M. wrote a check to M.R. and G.R. in the amount of $150,000, a sum roughly equal to her share of the real estate settlement. In the memo line of the check, J.M. wrote "Gift." One month later, on April 10, 2008, M.R. and G.R. purchased a three-bedroom, ranch-style house (the Property) in North Cape May, New Jersey, for $407,500. They used the money provided by J.M. as a down payment and obtained a mortgage loan for the remainder of the cost.

In early May 2008, J.M. collapsed at home. M.R.'s son discovered J.M. on the floor, "drenched in sweat," and saying "she couldn't see and couldn't get herself up." Paramedics transported J.M. to the emergency room at Cape Regional Medical Center, where she was diagnosed with a severe bacterial infection. J.M. stayed at Cape Regional for approximately one week until she was approved for short-term nursing facility placement by the Department of Health and Senior Services (DHSS). J.M. was then moved to North Cape Center, where she remained until November 20, 2008.

On July 17, 2008, M.R. and G.R. signed a document granting J.M. a life estate in the Property "[i]n consideration for the receipt of the sum of One Hundred Fifty Thousand Dollars." The grant was witnessed by an attorney, and M.R. and G.R. attempted to record it. However, an October 8, 2008 letter from the office of the Cape May County Clerk indicated that the document could not be recorded under N.J.S.A. 46:16-1. The letter suggested that "a deed for nominal consideration be drawn from [M.R. and G.R.] to themselves with a paragraph describing the life estate granted to [J.M.]." That same day, J.M. withdrew her application for Medicaid benefits, which had been filed on September 4, 2008.

M.R. and G.R. executed a deed on November 7, 2008, that transferred a life estate in the Property to J.M.*fn3 The deed recited that the life estate was granted "for the sum of ONE HUNDRED FIFTY THOUSAND ($150,000.00) DOLLARS plus other good ...

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