ESTATE OF G.B. v. DIVISION OF MEDICAL ASSISTANCE AND HEALTH SERVICES and SOMERSET COUNTY BOARD OF SOCIAL SERVICES -

NOT FOR PUBLICATION WITHOUT THE

APPROVAL OF THE APPELLATE DIVISION

SUPERIOR COURT OF NEW JERSEY

APPELLATE DIVISION

DOCKET NO. A-0

ESTATE OF G.B. (deceased) by

M.B.-M., as Executor,

Petitioner-Appellant,

v.

DIVISION OF MEDICAL ASSISTANCE AND

HEALTH SERVICES and SOMERSET COUNTY

BOARD OF SOCIAL SERVICES,

Respondents-Respondents.

_____________________________________

September 15, 2015

Submitted December 17, 2014 Decided

Before Judges Fuentes and O'Connor.

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

M.B.-M., appellant pro se.

John J. Hoffman, Acting Attorney General, attorney for respondent Division of Medical Assistance and Health Services (Melissa H. Raksa, Assistant Attorney General, of counsel; Molly Moynihan, Deputy Attorney General, on the brief).

PER CURIAM

M.B.-M., the daughter of decedent G.B., appeals from the final agency determination of the Director of the Division of Medical Assistance and Health Services (Director), imposing an asset transfer penalty of $27,320.29 against the estate of G.B. for selling her home to family members for less than fair market value during the time when G.B. was an institutionalized individual. This penalty determination was based on G.B. receiving Medicaid assistance in the form of thirty hours of in-home caregiver services, making her the legal equivalent of an institutionalized individual during the relevant time period. G.B. died on January 28, 2013.

The Director s decision was based, in part, on the Initial Decision issued by an Administrative Law Judge (ALJ) who conducted hearings at which appellant appeared pro se as decedent s daughter and representative pursuant to N.J.A.C. 1:10B-5.1 and N.J.A.C. 1:1-5.4. The Director concurred with the ALJ s finding that the transfer of G.B. s home to appellant was subject to the penalty. However, the Director reversed the ALJ s decision to exempt from the penalty $42,000 of the transfer "due to the 'caregiver exemption' under N.J.A.C. 10:71-4.10(d)(4)."

Appellant argues the Director erred in not finding she was exempt from this penalty under the "caregiver exemption" provision in N.J.A.C. 10:71-4.10(d)(4). Even if we were to reject this argument, appellant argues her mother did not sell her home to her "at a reduced amount." After reviewing the record and applying the relevant standards of review, we discern no legal basis to interfere with the Director s decision.

In 1991, G.B. began receiving benefits from the Division of Medical Assistance and Health Services (DMAHS) through the Community Care Program for the Elderly and Disabled (CCPED), a Medicaid waiver program that provides additional services to enable eligible individuals to remain in their homes. Without these services, these elderly and/or disabled persons would be placed in nursing homes or similar institutions. Because this was part of Medicaid, an individual receiving this assistance must meet certain financial eligibility criteria. As described by the Director, G.B. was able to receive these services and remain in her home "through a Home and Community Based Services (HCBS) waiver program that provided additional services to help individuals who would otherwise be institutionalized remain in the community."

In this case, this determination was made by the Somerset County Board of Social Services. N.J.A.C. 10:60-10.1(c). G.B. was deemed eligible to participate because she was sixty-five years or older and was financially eligible to receive Medicare benefits. N.J.A.C. 10:60-10.1(d)(1). G.B. was required to submit financial information to the Board of Social Services on a yearly basis to renew her eligibility status. In March 2012, the Board of Social Services was notified that G.B. had been placed in a hospice facility, the cost of which was not covered by the waiver provisions of the HCBS. However, G.B. was eligible to have hospice facility costs covered under the regular Medicaid program.

In the process of transferring G.B. s hospice status to ensure proper funding under the regular Medicaid program, the Board of Social Services discovered G.B. had not been residing at her home since 2009. The record shows G.B. sold her home to her daughter in February 2010 and received $27,320.29 from the proceeds of this sale. This amount far exceeded the $2000 resource eligibility limit of the HCBS. Furthermore, the closing documents showed G.B. reduced the net proceeds of the sale by giving appellant a $42,000 equity interest in the property in the form of a "gift." On June 30, 2012, the Board of Social Services found G.B. ineligible to receive CCPED services due to excess income.

Based on the evidence presented at the fact-finding hearing, the ALJ found in her initial decision that "[t]here is little question that [G.B.] had resources of $27,320 in February 2010, putting her over the resource limit for eligibility." In her final decision, the Director concurred with the ALJ s findings and adopted her conclusions on this issue. With respect to the $42,000 equity interest "gift," the ALJ framed the question as follows

Additionally, [G.B.] has acknowledged what amounts to a gift of $42,000 in foregone proceeds to her daughter. The legal issue is whether any provisions affect [G.B s] circumstances, such that a penalty period should not apply or should be reduced in length.

N.J.A.C. 10:71-4.10(d)(4) provides

[A]n individual shall not be ineligible for an institutional level of care because of the transfer of his or her equity interest in a home which serves (or served immediately prior to entry into institutional care) as the individual's principal place of residence and the title to the home was transferred to

A son or daughter of the institutionalized individual . . . who was residing in the individual's home for a period of at least two years immediately before the date the individual becomes an institutionalized individual and who has provided care to such individual which permitted the individual to reside at home rather than in an institution or facility.

Considering appellant s testimony and the documentary evidence presented at the fact-finding hearing, the ALJ concluded appellant met the eligibility requirements under this regulation. Specifically, the ALJ found appellant

tended her mother in decline for many years, and assisted her mother in avoiding institutionalization.

According to the witnesses, G.B. was receiving Medicaid in 2010, at the time she sold her home. The sale occurred on February 2, 2012, and resulted in proceeds of $27,320.09. By March 1, 2010, according to the bank statement for the period February 12, 2010 through March 17, 2010, the checkbook had a balance of $1,472.78. Since resource eligibility is determined as of the first moment of the first day of each month, N.J.A.C. 10:71-4.1(e) and 10:71-4.5(a)(1), and the resource maximum for an individual is $2000, N.J.A.C. 10:71-4.5(c), G.B. would appear to have retained eligibility on March 1,[2010].

The Director rejected the ALJ s legal conclusion finding appellant eligible for the exemption provided under N.J.A.C. 10:71-4.10(d)(4) with respect to the $42,000 equity gift. The Director concluded that to be eligible for the "caregiver exemption," N.J.A.C. 10:71-4.10(d)(4), appellant must prove: (1) she provided "care for the two years immediately before [G.B.] became an institutionalized individual;" and (2) the care appellant provided "prevented [G.B.] from entering a nursing home during that time." The Director noted the regulation is based on "the theory" that the child-care-giver should be allowed "to keep the home" because the care she provided to her mother "prevented Medicaid from having paid for long term care services for at least two years."

Based on the evidence before her, the Director found G.B. "was an institutionalized individual since 1991 by virtue of meeting nursing home level of care to permit her to receive waiver services" through the HCBS. Stated differently, the thirty hours per week of caregiver services G.B. received from 1991 until she left her home in 2009 was the functional equivalent of being "classified an institutionalized individual for Medicaid purposes." While appellant may have cared for her mother since 1991, the Director found G.B. was able to remain in her own home during this time period because she received the services provided by the HCBS.

Our standards of review of final decisions of a State administrative agency is well-settled. We will "not upset an agency's ultimate determination unless the agency's decision is shown to have been 'arbitrary, capricious, or unreasonable, or [] not supported by substantial credible evidence in the record as a whole.'" Barrick v. State, 218 N.J. 247, 259 (2014) (internal citations omitted). We do not substitute our judgment for the judgment made by the head of the agency. Id. at 260.

Our inquiry as an appellate court is circumscribed by the following three factors

(1) whether the agency's action violated the legislative policies expressed or implied in the act governing the agency; (2) whether the evidence in the record substantially supports the findings on which the agency's actions were premised; and (3) "whether in applying the legislative policies to the facts, the agency clearly erred in reaching a conclusion that could not reasonably have been made on a showing of the relevant factors."

[Ibid.]

Here, the record supports the Director s findings and ultimate conclusions of law. Although appellant cared for her mother during the relevant time period, the key factor that permitted G.B. to remain in her home until 2009 was the Medicaid assistance she received through the services provided by the HCBS. The $27,320.09 G.B. received from the proceeds of the sale of her home in 2010 rendered her ineligible for Medicaid services because it placed her over the $2000 limit. The $42,000 G.B. "gifted" appellant in the form of an equity interest in the home is likewise subject to the penalty for the reasons expressed by the Director.

Appellant s argument challenging the conclusion that G.B. did not reduce the price of the property when she sold it to appellant and her husband lacks sufficient merit to warrant discussion in a written opinion. R. 2:11-3(e)(1)(D)-(E). The $42,000 gift is prima facie evidence that this was not an "arm s length" transaction.

Finally, we note that in the brief filed on behalf of the Director, the Attorney General apprised us that the DMAHS had instituted a recovery action against the Estate of G.B. under N.J.S.A. 30:4D-7.2, and indicated it would continue to keep us informed on the status of this action as events warranted. As of the filing of this opinion, we have not received any further information related to this parallel proceeding.

Affirmed.