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                                       SUPERIOR COURT OF NEW JERSEY
                                       APPELLATE DIVISION
                                       DOCKET NO. A-2147-16T3









              Submitted February 6, 2018 – Decided February 21, 2018

              Before Judges Carroll and Leone.

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

              SB2 Inc., attorneys for appellant (Ada Sachter
              Gallicchio, on the briefs).

              Gurbir S. Grewal, Attorney General, attorney
              for respondent (Melissa H. Raksa, Assistant
              Attorney General, of counsel; Lauren S. Kirk,
              Deputy Attorney General, on the brief).

     J.H. appeals the November 23, 2016 final agency decision of

the Division of Medical Assistance and Health Services (DMAHS)

that denied her application for Medicaid benefits.         We affirm.

     J.H. submitted an application for Medicaid benefits to the

Ocean County Board of Social Services (OCBSS) on February 22,

2016.   That same day, OCBSS provided a letter to J.H. requesting

documentation     and    verification   required    to   determine       her


     On February 26, 2016, OCBSS sent J.H. a notice requesting the

following information: (1) verification of a $159.83 payment to

Allstate and the policy's cash surrender value if it was a life

insurance policy; (2) current statements for a Wells Fargo checking

account, and verification for twenty-one designated payments and

cash withdrawals totaling more than $14,000 during the period

between February 8, 2012, and November 30, 2015; (3)            the listing

agreement for J.H.'s home; (4) information regarding the purpose

of a separate $334.75 payment; and (5) "[a]ny and all pertinent

verifications of all resources solely or jointly owned (bank

accounts, C.D.'s, stocks, bonds, money markets, 401K's, IRA's,

annuities,     trusts,   cash   surrender   value   of   life    insurance

policies, etc.) opened or closed in the last [five] years prior

to application in addition to the accounts listed above."                The

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notice advised J.H. of the name and phone number of the OCBSS

representative J.H. could call "if [she] ha[d] any questions

regarding this matter."       Finally, the notice instructed J.H. her

application could be denied if she failed to furnish the requested

information by March 7, 2016.

     On March 7, 2016, OCBSS sent J.H. another notice advising

that her application could be denied if she failed to supply the

information by March 21, 2016.       On March 21, 2016, OCBSS sent J.H.

a "final notice," again requesting information concerning bank

accounts and insurance policies.          J.H. was instructed to supply

the information by April 4, 2016, or OCBSS "may take action to

deny" her application.      As with the prior notices, OCBSS provided

J.H. with the name and phone number of its representative to call

if she had any questions.         On April 13, 2016, J.H.'s application

for Medicaid was denied for non-compliance with the February 26,

March 7, and March 21, 2016 notices.

     At J.H.'s request, a hearing was conducted concerning the

denial   of   her    application.         On   September   30,    2016,    an

Administrative      Law   Judge   (ALJ)   issued   an   Initial    Decision

affirming the denial of Medicaid benefits to J.H.          In his written

opinion, the ALJ determined:

               The issue in this case is whether [OCBSS]
          appropriately denied [J.H.'s] application
          when she did not provide the requested

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            information by April 4, 2016.     42 C.F.R. §
            435.912(c)(3)    and  N.J.A.C.    10:71-2.3(a)
            provide that the agency has forty-five days
            to render a decision on eligibility for an
            applicant who is not applying on the basis of
            disability.    In the present case, [OCBSS]
            advised [J.H.] a number of documents and
            explanations were requested.     There is no
            dispute that those documents were not received
            on time and one [was received] after the
            application had been denied.     In addition,
            some of the verifications were not provided
            at all because there were no records produced
            regarding the commingled bank account.

       The ALJ also rejected J.H.'s argument that OCBSS should have

assisted her in securing the requested information.            The ALJ found

J.H. never requested assistance and that at all times OCBSS dealt

only    with   J.H.'s   authorized     representative    at    Future     Care


       On administrative appeal to the DMAHS, the Director reviewed

the record, including the ALJ's Initial Decision, and adopted the

findings and conclusions of the ALJ in their entirety.                     The

Director    concluded   "[t]he   credible     evidence   in     the     record

demonstrates that [J.H.] failed to provide the needed information

prior to the April 13, 2016 denial of benefits.                Without this

information,    OCBSS   was   unable     to   complete   its    eligibility

determination and the denial was appropriate."

       On appeal, J.H. contends DMAHS's final decision was arbitrary

and capricious.    Specifically, she argues: (1) the ALJ was biased

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against her; (2) the ALJ failed to provide an analysis as part of

his decision; (3) OCBSS violated her due process rights by failing

to provide adequate notice of the denial; and (4) OCBSS failed to

offer her the necessary assistance with her Medicaid application.

     We review an agency's decision for the limited purpose of

determining    whether   its    action      was   arbitrary,   capricious    or

unreasonable.   "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.'"

R.S. v. Div of Med. Assistance and Health Servs., 
434 N.J. Super.
 250, 261 (App. Div. 2014) (quoting Russo v. Bd. of Trs., Police &

Firemen's Ret. Sys., 
206 N.J. 14, 25 (2011)).                  "The burden of

demonstrating that the agency's action was arbitrary, capricious

or   unreasonable    rests      upon       the    [party]   challenging     the

administrative action."        E.S. v. Div. of Med. Assistance & Health

412 N.J. Super. 340, 349 (App. Div. 2010) (alteration in

original) (quoting In re Arenas, 
385 N.J. Super. 440, 443-44 (App.

Div. 2006)).

     "Medicaid is a federally-created, state-implemented program

that provides 'medical assistance to the poor at the expense of

the public.'"   Matter of Estate of Brown, 
448 N.J. Super. 252, 256

(App Div.) (quoting Estate of DeMartino v. Div. of Med. Assistance

& Health Servs., 
373 N.J. Super. 210, 217 (App. Div. 2004); 42

                                       5                              A-2147-16T3
U.S.C.A. § 1396-1), certif. denied, 
230 N.J. 393 (2017).                  To

receive federal funding, the State must comply with all the federal

statutes and regulations.     Harris v. McRae, 
448 U.S. 297 (1980).

     In New Jersey, the Medicaid program is administered by DMAHS

pursuant to the New Jersey Medical Assistance and Health Services

N.J.S.A. 30:4D-1 to -19.5.           "In order to be financially

eligible,   the   applicant   must   meet   both   income   and   resource

standards."   Brown, 
448 N.J. Super. at 257 (citing N.J.A.C. 10:71-

3.15).   The county welfare boards evaluate eligibility.           Through

those county agencies, DMAHS 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) (citing

N.J.S.A. 30:4D-1 to -19.1).

     DMAHS's regulations establish "policy and procedures for the

application process."    N.J.A.C. 10:71-2.2(b).      The county welfare

boards exercise "direct responsibility in the application process

to . . . [r]eceive applications."         N.J.A.C. 10:71-2.2(c).       They

also "[a]ssure the prompt and accurate submission of eligibility

data."   N.J.A.C. 10:71-2.2(c)(5).       The regulations establish time

frames to process an application, with the "date of effective

disposition" being the "effective date of the application" where

the application has been approved.        N.J.A.C. 10:71-2.3(b)(1).

                                     6                             A-2147-16T3
       Under both federal and New Jersey law, except in unusual or

exceptional     circumstances,    Medicaid    eligibility    determinations

must    be     made   within     forty-five    days.         42    C.F.R.     §

435.912(c)(3)(ii); N.J.A.C. 10:71-2.3(a). Examples of exceptional

cases where the forty-five day period can be enlarged include:

             1. Circumstances wholly within the applicant's
             control; [or]

             2. A determination to afford the applicant,
             whose   proof   of   eligibility    has   been
             inconclusive, a further opportunity to develop
             additional evidence of eligibility before
             final action on his or her application[.]

             [N.J.A.C. 10:71-2.3(c)(1)-(2).]

       Here,   DMAHS's   final   agency   decision     was   not   arbitrary,

capricious or unreasonable.          J.H. does not dispute that: her

application for Medicaid was filed on February 22, 2016; she was

given four opportunities to provide the information necessary to

determine her eligibility for benefits; she did not timely submit

all the required information; and she never requested additional

time.    When the verifying information was not timely provided,

DMAHS properly denied the application.         DMAHS was correct to deny

an application that did not have the information necessary to

verify eligibility because Medicaid is intended to be a resource

of last resort and is reserved for those who have a financial or

                                     7                                A-2147-16T3
medical need for assistance.    See N.E. v. Div. of Med. Assistance

& Health Servs., 
399 N.J. Super. 566, 572 (App. Div. 2008).

     J.H. has failed to demonstrate any unusual or exceptional

circumstances that would warrant a continuation of her eligibility

determination    beyond   the   normal   forty-five   day   deadline.

Moreover, contrary to J.H.'s argument, the notice of denial was

adequate because it stated it was for non-compliance, it identified

the contact letters to which plaintiff failed to respond, and the

letters detailed the information requested.    While J.H. complains

OCBSS failed to assist her in obtaining the information necessary

to complete her Medicaid application, the record is devoid of any

indication that either J.H. or her authorized representative ever

sought such assistance.

     After carefully reviewing the record and the applicable legal

principles, we conclude that J.H.'s further arguments are without

sufficient merit to warrant discussion in a written opinion, Rule

2:11-3(e)(1)(E), and that the agency's decision is supported by

sufficient credible evidence in the record.     R. 2:11-3(e)(1)(D).


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