M.C. v. DIVISION OF MEDICAL ASSISTANCE AND HEALTH SERVICES

NOT FOR PUBLICATION WITHOUT THE

APPROVAL OF THE APPELLATE DIVISION

This opinion shall not "constitute precedent or be binding upon any court." Although it is posted on the internet, this opinion is binding only on the parties in the case and its use in other cases is limited. R.1:36-3.

SUPERIOR COURT OF NEW JERSEY

APPELLATE DIVISION

DOCKET NO. A-0

M.C.,

Petitioner-Appellant,

v.

DIVISION OF MEDICAL ASSISTANCE

AND HEALTH SERVICES and

MONMOUTH COUNTY BOARD OF

SOCIAL SERVICES,

Respondents-Respondents.

_______________________________

December 13, 2016

Submitted September 13, 2016 Decided

Before Judges Rothstadt and Sumners.

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

Schutjer Bogar LLC, attorneys for appellant (John Pendergast, on the brief).

Christopher S. Porrino, Attorney General, attorney for respondent Division of Medical Assistance and Health Services (Melissa H. Raksa, Assistant Attorney General, of counsel; Jennifer L. Cavin, Deputy Attorney General, on the brief).

PER CURIAM

Appellant M.C. appeals from the October 20, 2014 final agency decision of the Division of Medical Assistance and Health Services (the Division) which imposed a 623-day period of Medicaid ineligibility for benefits because she transferred assets for less than fair market value within sixty months (the look-back period) of entering a skilled nursing facility in violation of N.J.A.C. 10:71-4.10(a). For the reasons that follow, we affirm.

Medicaid is a federally-created, state-implemented program that provides "medical assistance to the poor at the expense of the public." Estate of DeMartino v. Div. of Med. Assistance & Health Servs., 373 N.J. Super. 210, 217 (App. Div. 2004) (quoting Mistrick v. Div. of Med. Assistance & Health Servs., 154 N.J. 158, 165 (1998)), certif. denied, 182 N.J. 425 (2005); see also 42 U.S.C.A. 1396-1. Although a state is not required to participate, once it has been accepted into the Medicaid program it must comply with the Medicaid statutes and federal regulations. See Harris v. McRae, 448 U.S. 297, 301, 100 S. Ct. 2671, 2680, 65 L. Ed. 2d 784, 794 (1980); United Hosps. Med. Ctr. v. State, 349 N.J. Super. 1, 4 (App. Div. 2002); see also 42 U.S.C.A. 1396a(a) and (b). The state must adopt "reasonable standards . . . for determining eligibility for . . . medical assistance . . . [that are] consistent with the objectives' of the Medicaid program[,]" Mistrick, supra, 154 N.J. at 166 (first alteration in original) (quoting L.M. v. Div. of Med. Assistance & Health Servs., 140 N.J. 480, 484 (1995)), and "provide for taking into account only such income and resources as are . . . available to the applicant." N.M. v. Div. of Med. Assistance & Health Servs., 405 N.J. Super. 353, 359, (App. Div.), certif. denied, 199 N.J. 517 (2009); see also 42 U.S.C.A. 1396a(a)(17)(A)-(B).

New Jersey participates in the federal Medicaid program pursuant to the New Jersey Medical Assistance and Health Services Act, N.J.S.A. 30:4D-1 to -19.5. Eligibility for Medicaid in New Jersey is governed by regulations adopted in accordance with the authority granted by N.J.S.A. 30:4D-7 to the Commissioner of the Department of Human Services (DHS). The Division is the agency within the DHS that administers the Medicaid program. N.J.S.A. 30:4D-5, -7; N.J.A.C. 10:49-1.1. Accordingly, the Division is responsible for protecting the interests of the New Jersey Medicaid Program and its beneficiaries. N.J.A.C. 10:49-11.1(b).

In this case, M.C. applied for institutional level Medicaid benefits while she was residing in a skilled nursing home. The Division provides such benefits pursuant to the Medicaid Only program, N.J.A.C. 10:71-1.1 to -9.5. Among other eligibility requirements, an individual seeking such benefits must have financial eligibility as determined by the regulations and procedures. See N.J.A.C. 10:71-1.2(a). The local county welfare agencies evaluate eligibility. N.J.S.A. 30:4D-7a; N.J.A.C. 10:71-1.5, -2.2(c). Through those county agencies, the Division serves as a "gatekeeper to prevent individuals from using Medicaid to avoid payment of their fair share for long-term care." W.T. v. Div. of Med. Assistance & Health Servs., 391 N.J. Super. 25, 37, (App. Div. 2007).

An individual, such as M.C., shall be deemed ineligible for Medicaid benefits services if the individual "has disposed of assets at less than fair market value at any time during or after the [sixty-]month period immediately before . . . the date the individual applies for Medicaid as an institutionalized individual[,]" which we refer to as the look-back period. N.J.A.C. 10:71-4.10(a)(2); see also N.J.A.C. 10:71-4.10(b)(9)(ii). "Fair-market value" is defined as "an estimate of the value of an asset, based on generally available market information, if sold at the prevailing price at the time it was actually transferred. Value shall be based on the criteria for evaluating assets as found in N.J.A.C. 10:71-4.1(d)." N.J.A.C. 10:71-4.10(b)(6). If the applicant transferred assets during the look-back period, "[t]he fair market value . . . of the asset shall be ascertained" and "fully documented[.]" N.J.A.C. 10:71-4.10(c).

The transfer of an asset for less than fair market value during the look-back period raises a rebuttable presumption that the asset was transferred for the purpose of establishing Medicaid eligibility. H.K. v. State, 184 N.J. 367, 380 (2005) (citing N.J.A.C. 10:71-4.10(j)); see also 42 U.S.C.A. 1396p(c)(1). To rebut that presumption, the applicant must present "convincing evidence that the assets were transferred exclusively (that is, solely) for some other purpose." N.J.A.C. 10:71-4.10(j). The presumption "shall be considered successfully rebutted only if the applicant demonstrates that the asset was transferred exclusively for some other purpose." N.J.A.C. 10:71-4.10(l)(1). "If the applicant had some other purpose for transferring the asset, but establishing Medicaid eligibility appears to have been a factor in his or her decision to transfer, the presumption shall not be considered successfully rebutted." N.J.A.C. 10:71-4.10(l)(2). The regulations are clear that the applicant bears the burden of proof to rebut the presumption by presenting credible documentary evidence of the fair market value of the transferred assets. N.J.A.C. 10:71-4.10(j).

If it is determined that the applicant transferred an asset for less than fair market value during the look-back period, to become eligible for Medicaid institutional level services, the applicant will be subject to a period of Medicaid ineligibility to be imposed once he or she is otherwise eligible for Medicaid benefits. N.J.S.A. 30:4D-3(i)(15)(b); N.J.A.C. 10:71-4.10(c)(4). The period of ineligibility, determined in accordance with 42 U.S.C.A. 1396p(c)(1)(E), "shall be the number of months equal to the total, cumulative uncompensated value of all assets transferred by the individual, on or after the look-back date, divided by the average monthly cost of nursing home services in the State of New Jersey[.]" N.J.A.C. 10:71-4.10(m)(1). The period of ineligibility begins on the later of the first day of the month during or after which the individual transferred the assets for less than fair market value or the date on which he or she is eligible for medical assistance and would be receiving institutional level services but for the penalty period. 42 U.S.C.A. 1396p(c)(1)(D)(ii).

The record in this case reveals that in December 2012, M.C. was admitted to Liberty Royal Rehabilitation and Healthcare Center. She initially applied for Medicaid benefits in April 2013, but was denied for failure to provide information. She reapplied, and on October 7, 2013, the Monmouth County Board of Social Services (MCBSS) determined that her eligibility was subject to a 623-day period of ineligibility because she transferred $162,610 within the look-back period for less than fair market value. M.C. was advised that she would be eligible for benefits on October 17, 2014, and could reapply in September, 2014. Her subsequent appeal was withdrawn.

In March 2014, M.C. reapplied for Medicaid benefits. Within two weeks, MCBSS denied the application citing its earlier October 7, 2013 determination. This time, however, M.C.'s appeal proceeded to a fair hearing before the Office of Administrative Law.

At the hearing, a representative of MCBSS testified and presented documents detailing M.C.'s transfers for less than fair market value. M.C.'s daughter testified that the transfers were to establish a college fund for M.C.'s granddaughter, gifts to the daughter and granddaughter, and a loan to the daughter to avoid foreclosure on the daughter's home. The daughter claimed that the loan was paid back.

The Administrative Law Judge (ALJ) issued an initial decision on September 24, 2014. He found that the daughter was credible regarding the gifts, but that she was not credible regarding the loan as there was no documentation supporting its issuance and repayment. He concluded that M.C. did not overcome the presumption that the transfers were for the purpose of obtaining Medicaid eligibility; thus, failing to demonstrate the transfers were for M.C.'s benefit. The ALJ affirmed the 623-day penalty imposed on M.C. before she was eligible for Medicaid.

In an October 20, 2014 final agency decision, the Division concurred with the ALJ's factual findings and adopted his initial decision applying a 623-day penalty to M.C.'s receipt of Medicaid benefits. The Division relied upon N.J.A.C. 10:71-4.10(j), reasoning that M.C. did not rebut the presumption that the transfers were made exclusively to establish Medicaid eligibility because there was no evidence that M.C. received fair market value for the transfers. This appeal followed.

Before us, M.C. argues the Division's conclusion that she did not rebut the presumption that the transfers were made to qualify for Medicaid was arbitrary, capricious, and unreasonable.1 M.C. contends her daughter's testimony that the transfers were gifts and for a loan that was repaid established they were not made to qualify for Medicaid.2 We are unpersuaded.

Our review of an agency decision is limited. R.S. v. Div. of Med. Assistance & Health Servs., 434 N.J. Super. 250, 260-61 (App. Div. 2014). "An administrative agency's decision will be upheld 'unless there is a clear showing that it is arbitrary, capricious, or unreasonable, or that it lacks fair support in the record.'" Id. at 261 (quoting Russo v. Bd. of Trs., 206 N.J. 14, 25 (2011)). In determining whether agency action is arbitrary, capricious, or unreasonable, our role is restricted to three inquiries

(1) whether the agency action violates the enabling act's express or implied legislative policies; (2) whether there is substantial evidence in the record to support the findings upon which the agency based application of legislative policies; and (3) whether, in applying the legislative policies to the facts, the agency clearly erred by reaching a conclusion that could not reasonably have been made upon a showing of the relevant factors.

[Ibid. (quoting H.K. v. Div. of Med. Assistance & Health Servs., 379 N.J. Super. 321, 327 (App. Div.), certif. denied, 185 N.J. 393 (2005)).]

"Deference to an agency decision is particularly appropriate where interpretation of the [a]gency's own regulation is in issue." Ibid. (quoting I.L. v. N.J. Dep't of Human Servs., Div. of Med. Assistance & Health Servs., 389 N.J. Super. 354, 364 (App. Div. 2006)). "Nevertheless, 'we are not bound by the agency's legal opinions.'" A.B. v. Div. of Med. Assistance & Health Servs., 407 N.J. Super. 330, 340 (App. Div.) (quoting Levine v. State, Dep't of Transp., 338 N.J. Super. 28, 32 (App. Div. 2001)), certif. denied, 200 N.J. 210 (2009). "Statutory and regulatory construction is a purely legal issue subject to de novo review." Ibid.

Applying the above standards, we discern no reason to disturb the Division's final agency decision. M.C. merely asserts that the transfers were gifts and a loan. This does not rebut the presumption that the transfers for less than fair market value were made to qualify for Medicaid eligibility. The record is devoid of convincing evidence that the assets were transferred exclusively for a purpose other than to establish Medicaid eligibility. There is also no documentary proof that the loan was repaid, nor that a college fund was established. The Division's decision was reasonable, comports with governing statutes and regulations, is supported by substantial, credible evidence in the record, and is not arbitrary, capricious or unreasonable.

Affirmed.

1 In her notice of appeal, M.C. stated the Division ignored her petition for undue hardship waiver and sought a remand. However, the argument is not addressed in her initial or reply brief, and is deemed waived. R. 2:6-2(a)(5); accord El-Sioufi v. St. Peter's Univ. Hosp., 382 N.J. Super. 145, 155 n.2 (App. Div. 2005) (holding an issue that is not briefed is deemed waived upon appeal); Pressler & Verniero, Current N.J. Court Rules, comment 4 on R. 2:6-2 (2016).

2 M.C. relies upon several unpublished administrative decisions which we do not address as reliance on them offends the restrictions set forth in Rule 1:36-3 against applying binding or precedential value to unpublished opinions.