P.D. 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NOT FOR PUBLICATION WITHOUT THE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-2605-16T3

P.D.,

        Petitioner-Appellant,

v.

DIVISION OF MEDICAL ASSISTANCE
AND HEALTH SERVICES,

        Respondent-Respondent.



              Submitted January 31, 2018 — Decided March 14, 2018

              Before Judges Koblitz and Manahan.

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

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

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

PER CURIAM

        Plaintiff appeals from the January 20, 2017 final decision

of the New Jersey Department of Health, Division of Medical

Assistance and Health Services (DMAHS), which adopted the decision
of the Administrative Law Judge (ALJ) affirming the denial of

P.D.'s application for Medicaid benefits.               P.D., through his

representative, applied for Medicaid benefits on August 24, 2015,

and died shortly thereafter on September 13.1 P.D. was responsible

for submitting certain financial documentation evidencing                   his

income and financial resources. P.D. failed to submit his Vanguard

pension documents and requested bank statements by the due date,

in spite of several adjournments.           Camden County Board of Social

Services (CCBSS) denied P.D.'s Medicaid application.              P.D. argues

that CCBSS should have allowed more time for P.D. to provide

information and assisted P.D.'s representative in obtaining the

needed records.

     P.D.'s representative attributes his delay in submitting

these   documents     to   difficulties     that   P.D.'s     representatives

experienced in obtaining the documents after P.D.'s death.             P.D.'s

counsel   argued    that   pursuant   to    N.J.A.C.   10:71-2.2(c),    CCBSS

should have assisted P.D.'s representative, who asked for help.

     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,


1
  Neither party was able to provide us with an accurate assessment
of the amount of money involved in this appeal of a three-week
loss of Medicaid.
                                      2                              A-2605-16T3
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, 27 (2011)).         "The burden of

demonstrating 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 Servs., 
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.),

certif. denied, 
188 N.J. 219 (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)), certif. denied, In re Estate of Brown, 
230 N.J. 393 (2017);

see also 42 U.S.C. § 1396-1.      To receive federal funding, the

State must comply with all federal statutes and regulations.

Harris v. McRae, 
448 U.S. 297, 301 (1980).

     In New Jersey, the Medicaid program is administered by DMAHS

pursuant to the New Jersey Medical Assistance and Health Services

Act, 
N.J.S.A. 30:4D-1 to -19.5.       The county welfare boards, such

as CCBSS, evaluate eligibility.


                                  3                          A-2605-16T3
     One of the objectives of Medicaid is to provide "medical

assistance to needy persons who are institutionalized in nursing

homes as a result of illness or other incapacity."          R.S., 
434 N.J.

Super. at 258 (quoting M.E.F. v. A.B.F., 
393 N.J. Super. 543, 545

(App. Div. 2007)).     "DMAHS provides institutional level Medicaid

benefits to individuals residing in nursing homes pursuant to the

Medicaid Only program, N.J.A.C. 10:71-1.1 to -9.5."            Brown, 
448 N.J. Super. at 257.      "[A]n applicant seeking such benefits must

have financial eligibility as determined by the regulations and

procedures."   Ibid.; see also N.J.A.C. 10:71-1.2(a).            "[T]o be

financially eligible, the applicant must meet both income and

resource standards."      Ibid.; N.J.A.C. 10:71-3.15.

     Through   its    regulations,   DMAHS    establishes    "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)(2).     The regulations establish timeframes 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).

     "The process of establishing eligibility involves a review

of   the    application     for   completeness,      consistency,       and

reasonableness."     N.J.A.C. 10:71-2.9.     "The maximum period of time


                                     4                            A-2605-16T3
normally essential to process an application for the aged is 45

days."   N.J.A.C. 10:71-2.3(a).            New Jersey regulations recognize:

              there will be exceptional cases where the
              proper processing of an application cannot be
              completed within the [45-day] period. Where
              substantially     reliable     evidence     of
              eligibility is still lacking at the end of the
              designated period, the application may be
              continued in pending status.     In each such
              case, the CWA [(county welfare agency)] shall
              be prepared to demonstrate that the delay
              resulted from one of the following:

                   . . . .

              (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).]

      Here, CCBSS provided P.D.'s authorized representative with a

Pending Notice requesting the verification documents, advising

that the documentation must be provided by September 25, 2015.

When CCBSS did not receive the documentation, it sent a second and

final notice, requesting that P.D. submit the documents by October

15,   2015.      It   was    not   until       October   22,   2015   that    P.D.'s

representative submitted some of the requested documentation.

CCBSS did not deny P.D.'s application until November 5, 2015.                       It

was not until November 9, 2015 that P.D.'s representative provided

the 1099 form regarding P.D.'s pension. The requested bank records



                                           5                                 A-2605-16T3
were not provided until September 8, 2016, four days before the

Fair Hearing.

     CCBSS had the discretion, pursuant to N.J.A.C. 10:71-2.3(c),

to extend the deadline even further and could have placed P.D.'s

application in pending status.   CCBSS, however, did not use the

forty-five day standard set out in N.J.A.C. 10:71-2.3(a) as a

basis for denying eligibility.       See 42 C.F.R. § 435.912(g)(2)

(2013).   Instead, CCBSS gave P.D.'s representative over seventy

days2 to procure the requested verification documents.   CCBSS has

the obligation to address Medicaid applications timely.          See

N.J.A.C. 10:71-2.2(c)(5).

     P.D. also contends that CCBSS had the affirmative duty to

obtain the Vanguard and bank records by its own efforts.     During

a Medicaid application process, the CWA, CCBSS here, is responsible

for assisting an applicant "in exploring their eligibility for

assistance," N.J.A.C. 10:71-2.2(c)(3), and making known to the

applicant "the appropriate resources and services both within the

agency and the community, and, if necessary, assist in their use."

N.J.A.C. 10:71-2.2(c)(4). The applicant must "[c]omplete, with

assistance from the CWA if needed, any forms required by the CWA

as a part of the application process," N.J.A.C. 10:71-2.2(e)(1),


2
  P.D.'s application was submitted August 25, 2015. The initial
deadline date was September 25, 2015 and P.D.'s application was
ultimately denied on November 5, 2015.
                                 6                         A-2605-16T3
and "[a]ssist the CWA in securing evidence that corroborates his

or her statements."    N.J.A.C. 10:71-2.2(e)(2).       The applicant is

"the primary source of information," but the CWA is responsible

for making "the determination of eligibility and to use secondary

sources   when   necessary,   with    the   applicant's   knowledge   and

consent."    N.J.A.C. 10:71-1.6(a)(2).

     "The CWA shall verify the equity value of resources[3] through

appropriate and credible sources. . . .             If the applicant's

resource statements are questionable, or there is reason to believe

the identification of resources is incomplete, the CWA shall verify

the applicant's resource statements through one or more third

parties."   N.J.A.C. 10:71-4.1(d)(3).       The applicant is responsible

for cooperating fully with the verification process if the CWA has

to contact the third-party in reference to verifying resources.

N.J.A.C. 10:71-4.1(d)(3)(i).     "If necessary, the applicant shall

provide written authorization allowing the CWA to secure the

appropriate information."     Ibid.

     N.J.A.C. 10:71-2.10 discusses collateral investigation:

            (a)   "Collateral investigation" shall refer
            to contacts with individuals other than
            members of applicant's immediate household,
            made with the knowledge and consent of the
            applicant(s).

3
  A resource is "any real or personal property which is owned by
the applicant . . . and which could be converted to cash to be
used for his or her support and maintenance."    N.J.A.C. 10:71-
4.1(b).
                                     7                          A-2605-16T3
           (b)    The primary purpose of collateral
           contacts is to verify, supplement or clarify
           essential information.

     Here,   CCBSS   did    not      attempt    to   procure    the   missing

documentation.    The question, then, becomes whether CCBSS had the

burden to procure the requested verification documents.               N.J.A.C.

10:71-2.10 does not obligate CCBSS to conduct its own collateral

investigation, as P.D. contends.            Similarly, nothing in N.J.A.C.

10:71-4.1(d)(3) places a burden on CCBSS to acquire the required

verification documents from P.D.'s pension company or bank, but

rather   states   only   that   if   an     applicant's    identification    of

resources is incomplete, CCBSS must verify the resource statements

through a third party.

     Although CCBSS is responsible for assisting an applicant, the

regulations did not create an affirmative duty upon CCBSS to

procure all documents necessary to complete P.D.'s application,

especially when P.D. had a representative.

     "An administrative agency's interpretation of statutes and

regulations within its implementing and enforcing responsibility

is ordinarily entitled to our deference."                 New Jersey Div. of

Child Prot. & Permanency v. V.E., 
448 N.J. Super. 374, 390 (App.

Div. 2017) (quoting Wnuck v. N.J. Div. of Motor Vehicles, 
337 N.J.

Super. 52, 56 (App. Div. 2001)).           "Deference to an agency decision

is particularly appropriate where interpretation of the Agency's

                                       8                              A-2605-16T3
own regulation is in issue." R.S., 
434 N.J. Super. at 261 (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)).

     Here,   the       DMAHS    rendered       its   final    decision      after

interpreting its own regulations.               We may reverse only upon a

showing   that   the    DMAHS    acted       arbitrarily,    capriciously,      or

unreasonably.      Denying      an application that did not have the

information necessary to verify eligibility after giving several

adjournments is not arbitrary, capricious or unreasonable because

Medicaid applications must be processed promptly and Medicaid is

intended to be a resource of last resort, reserved for those who

have a proven financial or medical need for assistance.               See N.E.

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

     Affirmed.




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