C.M. v. DIVISION OF MEDICAL ASSISTANCE AND HEALTH SERVICES, et al.

 

NOT FOR PUBLICATION WITHOUT THE

APPROVAL OF THE APPELLATE DIVISION

SUPERIOR COURT OF NEW JERSEY

APPELLATE DIVISION

DOCKET NO. A-4850-04T14850-04T1

C.M.,

Petitioner-Appellant,

v.

DIVISION OF MEDICAL ASSISTANCE

AND HEALTH SERVICES, and

MIDDLESEX COUNTY BOARD OF

SOCIAL SERVICES.

Respondents-Respondents.

_________________________________

 

Submitted February 15, 2006 - Decided March 15, 2006

Before Judges Lefelt and R. B. Coleman.

On appeal from a Final Decision of

the Division of Medical Assistance

And Health Services, Docket No.

HMA4038-04.

Patricia Montalbano, pro se, filed

a brief for C.M., appellant.

Zulima V. Farber, Attorney General,

attorney for respondent (Michael J.

Hass, Assistant Attorney General,

of Counsel; Caitlin L. Aviss,

Deputy Attorney General, on the

brief).

PER CURIAM

Petitioner C.M. appeals from a final decision by the Director of the Division of Medical Assistance and Health Services (DMAHS), which concluded that Medicaid eligibility covering petitioner's institutionalization at the Cranbury Care Center had not been established until May 1, 2004. Petitioner argues on appeal that his eligibility should have been back- dated to December 2003, the date of his first contact with the Middlesex County Board of Social Services pertaining to Medicaid eligibility. Petitioner contends that retroactive eligibility is warranted because the Middlesex Board unduly delayed processing his application and failed to advise petitioner in timely fashion that a revocable funeral contract was the cause of ineligibility. Because petitioner could have quickly converted that asset to an irrevocable funeral contract, thereby rendering the asset exempt, petitioner claims the Board's processing delay caused a five month loss of Medicaid coverage. We disagree and affirm.

When institutionalized in September 2003, petitioner was eighty-six years old and suffering from Alzheimer's disease. His wife, J.M., is one year younger and though she remains in the marital home, requires significant medical assistance for chronic obstructive pulmonary disease, emphysema, congestive heart failure, and severe osteoporosis.

After contacting the Middlesex Board in December, petitioner formally applied for Medicaid on January 7, 2004. The pertinent rule, N.J.A.C. 10:71-2.3, provides that the initial "contact date" shall constitute "the first month of possible eligibility." On his initial application, petitioner did not disclose the existence of a revocable trust agreement held by his wife with a Staten Island funeral home, valued at $12,685. Instead this information was delivered by hand to the agency on the date petitioner's application was received by the Board.

The DMAHS rule, N.J.A.C. 10:70-2.1(d)(1), provides that "disposition of an application for the Medically Needy Program must be accomplished within 30 days of the date of application . . . for persons applying on the basis of being aged." Nevertheless, thirty-three days after the application was submitted, a caseworker informed petitioner's family that "she hadn't even looked at the application."

By early March, however, the Middlesex Board was working on the application and sent a letter to petitioner's family seeking further information and verification. In late March, the Board requested additional information with regard to C.M.'s accounts. The letter enclosed a copy of countable resources and advised that the Board could not determine "eligibility for 12/1/03. Information needed by 4/5/04." The resources revealed that $70,835.18 was countable and exceeded the resource level at which Medicaid eligibility could be established, $64,785.65 in December 2003, by approximately $6,000. The prepaid revocable funeral contract held by C.M.'s wife with the New York funeral home was listed as a countable resource with a value of $7,106. This trust was countable and properly included in the eligibility determination. N.J.A.C. 10:71-4.1; N.J.A.C. 10:71-4.4(b)(9)(i) and (ii).

Shortly after receiving the Board's letter, petitioner converted the funeral trust on April 9, 2004, into an irrevocable agreement, which resulted in its exclusion from petitioner's countable resources. N.J.A.C. 10:71-4.4(b)(9)(ii)(1)(A). On April 20, 2004, the Middlesex Board requested additional information on various accounts and a possible beneficiary change.

Eventually on April 29, 2004, the Board informed petitioner that his application had been "APPROVED" and that eligibility existed for the period "from 5/1/04[.]" The letter included a "resource assessment" detailing the amount of resources C.M. and J.M. were deemed to have between September 2003 and May 2004. The breakdown clearly reflected that C.M. was not eligible for Medicaid before May of 2004 due to excess resources above the minimum amount permitted for eligibility.

After requesting a "Fair Hearing," petitioner's dispute was transmitted to the Office of Administrative Law for a hearing to be conducted by an Administrative Law Judge. The ALJ, after conducting the hearing, accepted petitioner's argument that the Board's undue delay caused an excessive period of initial ineligibility and granted an eligibility date retroactive to December 2003. This decision was reversed by the Director of DMAHS, as the Director concluded that the cause of petitioner's ineligibility was excess assets and not the Middlesex Board's processing delay.

Our review of an administrative agency decision is extremely limited. We will reverse such determinations only if they are unconstitutional, arbitrary, capricious, unreasonable, or violative of expressed or implicit legislative policies. Campbell v. Dep't of Civil Serv., 39 N.J. 556, 562 (1963). The DMAHS decision in this matter does not suffer from any of these infirmities.

We start our analysis by recognizing that the ALJ's decision must have been based upon the doctrine of equitable estoppel, though the ALJ cited only one agency rule in support of his decision. Basically, the judge believed that the Board's processing delay should estop the agency from denying benefits. Equitable estoppel is, however, rarely applied to governmental entities absent a finding of malice. O'Malley v. Dep't of Energy, 109 N.J. 309, 316-18 (1987); Cipriano v. Dept. of Civil Serv., 151 N.J. Super. 86, 91 (App. Div. 1977).

Here, the Middlesex Board clearly exceeded the processing time provided by the pertinent rule. See N.J.A.C. 10:70-2.1(d)1. After receiving petitioner's application on January 9, 2004, the Board did not respond until March 9, about two months later, when they asked for additional information. Although the regulations permit the processing of some applications to exceed the thirty-day time limit, "when substantially reliable evidence of eligibility or entitlement is lacking at the end of the processing period," N.J.A.C. 10:70-2.1(d)2, here there is evidence that the Board did not commence work until the thirty-day period had expired. In addition, the Board also failed, under the controlling rule, to advise the applicant "prior to the expiration of the processing period [of] the specific reasons for the delay." N.J.A.C. 10:70-2.1(d)3.

Nevertheless, there is no authority directly supporting petitioner's argument. As the Director of DMHAS noted, the delay in processing the application does not alter "the fact that [petitioner] had excess resources" up until April 2004. For whatever reason, petitioner's wife's funeral fund was not converted from revocable to irrevocable before the initial application was received by the Middlesex Board.

In addition, petitioner did not appear to be unaware of the "spend-down" requirement under Medicaid rules. See N.J.A.C. 10:49-2.3(d)(1). The Director emphasized that petitioner "had counsel during the application process and was clearly taking steps to plan for Medicaid eligibility by transferring assets worth over $60,000 to his daughters in the past three years and setting up burial accounts worth over $24,000." Although in the reply brief, petitioner disputes that Medicaid planning was occurring, the record supports the Director's conclusion that the failure to convert the wife's funeral trust from revocable to irrevocable "appears to be an error in the couple's estate planning scheme."

We agree with the Director that equitable estoppel is not appropriate here. The Middlesex Board's delay was not malicious or so irregular as to warrant an estoppel in the interests of justice. O'Neill v. State, Dep't of Treasury, 178 N.J. Super. 211, 214 (App. Div. 1991). The Board's action did not mislead petitioner in any way and was not the controlling cause of the failure to convert the fund from revocable to irrevocable.

We are somewhat sympathetic to petitioner's argument that the Middlesex Board should be held accountable for the processing delay. But, we cannot agree that it is proper to award Medicaid benefits during a period of ineligibility solely to encourage the agency to work with greater expedition. Simply put, the Director cannot grant eligibility where there is none.

We note also that the Director's decision modified the ALJ's decision regarding F.W.'s monthly minimum maintenance allowance and directed the Middlesex Board to increase the allowance if the wife could provide documentation of certain costs and expenses. The Board has apparently complied with this directive.

Petitioner's brief contains a section entitled "Statement Regarding Exceptional Circumstances of" his wife, J.M. The section, however, does not explain the basis for any appeal from the Board's decision adjusting upwards J.M.'s monthly maintenance. Indeed, such an appeal would first go to the Director of DMAHS and not to us.

In any event, that section of petitioner's brief merely indicated that "it has been necessary for the family to help with the shortfall as [petitioner's wife's] resources are almost exhausted. That is why it is so crucial to her future to deal with arguments [concerning petitioner's eligibility date] fairly." Accordingly, the issue of whether the wife has received an appropriate increase in her minimum monthly needs allowance is not properly before us.

 
Affirmed.

(continued)

(continued)

9

A-4850-04T1

March 15, 2006