M.H v. DIVISION OF MEDICAL ASSISTANCE AND HEALTH SERVICES and OCEAN COUNTY BOARD OF SOCIAL SERVICES -
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APPROVAL OF THE APPELLATE DIVISION
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SUPERIOR COURT OF NEW JERSEY
APPELLATE DIVISION
DOCKET NO. A-3559-17T4
M.H.,
Petitioner-Appellant,
v.
DIVISION OF MEDICAL
ASSISTANCE AND HEALTH
SERVICES and OCEAN COUNTY
BOARD OF SOCIAL SERVICES,
Respondents-Respondents.
______________________________
Submitted October 24, 2019 – Decided November 13, 2019
Before Judges Suter and DeAlmeida.
On appeal from the New Jersey Department of Human
Services, Division of Medical Assistance and Health
Services.
SB2 Inc., attorneys for appellant (Laurie M. Higgins,
on the briefs).
Gurbir S. Grewal, Attorney General, attorney for
respondent Division of Medical Assistance and Health
Services (Melissa H. Raksa, Assistant Attorney
General, of counsel; Jacqueline R. D'Alessandro,
Deputy Attorney General, on the brief).
PER CURIAM
Petitioner M.H. appeals from a February 27, 2018 final decision of the
Director, Division of Medical Assistance and Health Services (DMAHS),
adopting the initial decision of an Administrative Law Judge (ALJ) finding him
ineligible for Medicaid benefits because he failed to submit information
necessary to verify his eligibility. We affirm.
I.
On March 8, 2016, M.H. submitted an application for Medicaid benefits
to the county welfare agency (CWA) for Ocean County. The application listed
M.H. as single and having no resources of any kind. Through an investigation,
CWA discovered M.H. was married.
On April 4, 2016, CWA requested M.H. submit information and
documents regarding his marital status, immigration status, residency, bank
accounts, real property, life insurance policies, and other assets held in the past
five years to verify his eligibility for benefits. See N.J.A.C. 10:71-4.10
(disallowing benefits for applicants who dispose of assets at less than fair market
value during a sixty-month lookback period). The agency also requested M.H.
provide information and documents regarding his spouse's income. See
A-3559-17T4
2 N.J.A.C. 10:71-5.5(a) (including the income of an applicant's spouse in some
circumstances to determine eligibility for benefits). Finally, CWA requested
M.H. explain why his receipt of social security benefits had been suspended.
CWA informed M.H. his application would be denied if the requested
information and documents were not provided by April 18, 2016. CWA
subsequently extended the deadline to April 28, 2016.
On April 18, 2016, M.H.'s counsel submitted some, but not all, of the
information and documents requested by CWA. No social security information
was provided. However, M.H.'s counsel enclosed a copy of a letter to the Social
Security Administration requesting an explanation of why M.H.'s benefits had
been suspended. Counsel represented M.H. was married, but separated from his
spouse five years earlier. He produced no evidence establishing the separation
or its duration. Counsel asked CWA to request a spousal waiver from DMAHS,
that is, to have M.H.'s eligibility for benefits determined without consideration
of his spouse's assets. See 42 U.S.C. § 1396r-5(c)(3)(C). In addition, counsel
requested CWA's assistance in obtaining an explanation for the suspension of
M.H.'s social security benefits and asked the agency to obtain any outstanding
information it believed necessary to complete M.H.'s application.
A-3559-17T4
3
On April 28, 2016, CWA, citing N.J.A.C. 10:71-2.2, denied M.H.'s
application because he did not provide the requested information and
documents. M.H. requested a fair hearing.
The matter was transferred to the Office of Administrative Law, where a
fair hearing was held before ALJ Kathleen M. Calemmo. The hearing addressed
whether: (1) counsel's April 18, 2016 letter substantially complied with CWA's
information request; (2) CWA fulfilled its obligations under federal and state
law to assist M.H. in obtaining the financial information necessary to verify his
application; and (3) M.H. was entitled to a spousal waiver. M.H. called no
witnesses. A CWA representative testified M.H.'s application was denied
because it was incomplete and provided insufficient information to determine if
a spousal waiver was warranted.
On January 23, 2018, ALJ Calemmo issued an initial decision
recommending the denial of benefits be affirmed. The ALJ examined the
responsibilities assigned to CWA and the applicant in N.J.A.C. 10:71-2.2 with
respect to the submission of information and determined the information
provided by M.H. was insufficient to establish eligibility for benefits. The ALJ
noted the only information provided about M.H.'s marital status was the hearsay
statements of his counsel and concluded "[t]here is nothing in the record to
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4
support [M.H.'s] claim of separation." In addition, the ALJ found the only
document in the record regarding M.H.'s assets was a bank statement for a one-
month period.1
The ALJ concluded M.H. did not establish an entitlement to a spousal
waiver. As the ALJ explained, "[p]etitioner was not present at the hearing and
there was no one at the hearing to offer any testimony on his behalf. It is not
known what efforts, if any, were made by the petitioner to obtain information
from his wife."
On February 27, 2018, the Director issued a final decision adopting the
ALJ's recommendation. The Director agreed with ALJ Calemmo's
determination M.H. failed to provide the information necessary to verify
eligibility for benefits.
This appeal followed. M.H. raises the following arguments for our
consideration:
POINT I
RESPONDENT HAS VIOLATED FEDERAL LAW
BY FAILING TO ASSIST M.H. IN COMPLETING
HIS MEDICAID APPLICATION.
1
Prior to the hearing, CWA discovered a bank account in M.H.'s name not listed
on his application for benefits. The only records obtained from the account were
for a one-month period in 2013 and showed the address of M.H.'s wife.
A-3559-17T4
5
POINT II
RESPONDENT HAS VIOLATED STATE LAW BY
FAILING TO ASSIST M.H. IN COMPLETING HIS
MEDICAID APPLICATION.
POINT III
RESPONDENT HAS VIOLATED FEDERAL AND
STATE LAW BY FAILING TO PROVIDE
ADDITIONAL TIME TO M.H. IN ORDER TO
ALLOW HIM SUFFICIENT TIME TO PROVIDE
REQUESTED VERIFICATIONS.
POINT IV
RESPONDENT HAS VIOLATED STATE LAW BY
FAILING TO PROVIDE WRITTEN NOTICE OF THE
DENIAL OF A SPOUSAL WAIVER TO M.H.
II.
"Judicial review of agency determinations is limited." Allstars Auto Grp.,
Inc. v. N.J. Motor Vehicle Comm'n, 234 N.J. 150, 157 (2018). "An
administrative agency's final quasi-judicial decision will be sustained unless
there is a clear showing that it is arbitrary, capricious, or unreasonable, or that
it lacks fair support in the record." Ibid. (quoting Russo v. Bd. of Trs., Police
& Firemen's Ret. Sys., 206 N.J. 14, 27 (2011)). In reviewing the agency's
decision, we consider:
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6
(1) whether the agency's action violates express or
implied legislative policies, that is, did the agency
follow the law;
(2) whether the record contains substantial evidence to
support the findings on which the agency based its
action; 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. (quoting In re Stallworth, 208 N.J. 182, 194
(2011)).]
"A reviewing court 'must be mindful of, and deferential to, the agency's
expertise and superior knowledge of a particular field.'" Id. at 158 (quoting
Circus Liquors, Inc. v. Governing Body of Middletown Twp., 199 N.J. 1, 10
(2009)). "A reviewing court 'may not substitute its own judgment for the
agency's, even though the court might have reached a different result. '"
Stallworth, 208 N.J. at 194 (quoting In re Carter, 191 N.J. 474, 483 (2007)).
"Deference to an agency decision is particularly appropriate where
interpretation of the [a]gency's own regulation is in issue." R.S. v. N.J. Div. of
Med. Assistance & Health Servs., 434 N.J. Super. 250, 261 (App. Div. 2014)
(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)). "However, a reviewing
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7
court is 'in no way bound by [an] agency's interpretation of a statute or its
determination of a strictly legal issue.'" Allstars Auto Grp., 234 N.J. at 158
(alteration in original) (quoting Dep't of Children & Families, Div. of Youth &
Family Servs. v. T.B., 207 N.J. 294, 302 (2011)).
"Medicaid is a federally-created, state-implemented program that
provides 'medical assistance to the poor at the expense of the public.'" In re
Estate of Brown, 448 N.J. Super. 252, 256 (App. Div. 2017) (quoting Estate of
DeMartino v. N.J. Div. of Med. Assistance & Health Servs., 373 N.J. Super.
210, 217 (App. Div. 2004)); 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).
Pursuant to the New Jersey Medical Assistance and Health Services Act,
N.J.S.A. 30:4D-1 to -19.5, DMAHS is responsible for administering Medicaid.
N.J.S.A. 30:4D-5. Through its regulations, DMAHS establishes "policy and
procedures for the application process . . . ." N.J.A.C. 10:71-2.2(b). "[T]o be
financially eligible, the applicant must meet both income and resource
standards." Estate of Brown, 448 N.J. Super. at 257; see also N.J.A.C. 10:71-
3.15; N.J.A.C. 10:71-1.2(a).
A-3559-17T4
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The Medicaid applicant is "the primary source of information. However,
it is the responsibility of the agency to make 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 must "[a]ssist the applicant[] in
exploring their eligibility for assistance[,]" and "[m]ake 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)(3)
to (4). The applicant must: "1. [c]omplete, with assistance from the CWA if
needed, any forms required by the CWA as a part of the application process; 2.
[a]ssist the CWA in securing evidence that corroborates his or her statements;
and 3. [r]eport promptly any change affecting his or her circumstances."
N.J.A.C. 10:71-2.2 (e)(1) to (3).
The CWA shall verify the equity value of resources
through appropriate and credible sources.
Additionally, the CWA shall evaluate the applicant's
past circumstances and present living standards in order
to ascertain the existence of resources that may not have
been reported. 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).]
A-3559-17T4
9
The applicant bears a duty to cooperate fully with the CWA in its verification
efforts, providing authorization to the CWA to obtain information when
appropriate. N.J.A.C. 10:71-4.1(d)(3)(i).
If verification is required in accordance with the
provisions of N.J.A.C. 10:71-4.1(d)[(3)], the CWA
shall . . . verify the existence or nonexistence of any
cash, savings or checking accounts, time or demand
deposits, stocks, bonds, notes receivable or any other
financial instrument or interest. Verification shall be
accomplished through contact with financial
institutions, such as banks, credit unions, brokerage
firms and savings and loan associations. Minimally,
the CWA shall contact those financial institutions in
close proximity to the residence of the applicant or the
applicant's relatives and those institutions which
currently provide or previously provided services to the
applicant.
[N.J.A.C. 10:71-4.2(b)(3).]
The CWA may perform a "[c]ollateral investigation" wherein the agency
contacts "individuals other than members of applicant's immediate household,
made with the knowledge and consent of the applicant . . . ." N.J.A.C. 10:71-
2.10(a). "The primary purpose of collateral contacts is to verify, supplement or
clarify essential information." N.J.A.C. 10:71-2.10(b). Neither N.J.A.C. 10:71-
4.1(d)(3) nor N.J.A.C. 10:71-2.10 require a CWA to undertake an independent
investigation of an applicant. The agency instead is charged with verifying
information provided by an applicant. For example, while N.J.A.C. 10:71-
A-3559-17T4
10
4.2(b)(3) requires the CWA to contact an applicant's financial institutions to
verify an account's existence, it does not require the agency to obtain records
directly from a financial institution.
Having carefully reviewed the record and applicable legal principles, we
conclude DMAHS's decision is not arbitrary, capricious, or unreasonable and
comports with controlling law. The CWA's role is to assist the applicant in
completing an application and to verify financial information provided by the
applicant when necessary. The CWA extended the deadline for submission of
M.H.'s financial information, including information relating to his marital status
and spouse's assets, in light of the false statement in M.H.'s application that he
was single. M.H. did not submit the necessary information. He provided no
information with respect to his spouse's assets. In addition, the only information
provided about M.H.'s marital status were the hearsay statements of his counsel
that M.H. had been separated from his spouse for five years. No documents,
affidavits, or other evidence supporting counsel's representations were
submitted. CWA could not verify necessary information relating to M.H.'s
assets, marriage, and residence.
We disagree with M.H.'s argument that the CWA violated federal and
State law by not adequately assisting him in completing his application.
A-3559-17T4
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DMAHS, as our State Medicaid "agency[,] must request and use information
relevant to verifying an individual's eligibility for Medicaid in accordance with
§ 435.948 through § 435.956 of this subpart." Income and Eligibility
Verification Requirements, 42 C.F.R. § 435.945(b) (2017). To fulfill this
obligation DMAHS must request:
(1) Information related to wages, net earnings from
self-employment, unearned income and resources from
the State Wage Information Collection Agency
(SWICA), the Internal Revenue Service (IRS), the
Social Security Administration (SSA), the agencies
administering the State unemployment compensation
laws, the State-administered supplementary payment
programs under section 1616(a) of the Act, and any
State program administered under a plan approved
under Titles I, X, XIV, or XVI of the Act; and
(2) Information related to eligibility or enrollment from
the Supplemental Nutrition Assistance Program, the
State program funded under part A of title IV of the
Act, and other insurance affordability programs.
[42 C.F.R. § 435.948(a)(1) to (2) (2013).]
In addition, DMAHS may request "information relating to financial eligibility
from other agencies in the State and other States and Federal programs to the
extent the agency determines such information is useful to verifying the
financial eligibility of an individual[.]" 42 C.F.R. § 435.948(a) (2013). Bank
records do not fall within the scope of 42 C.F.R. § 435.948(a)(1). M.H., in
A-3559-17T4
12
essence, argues DMAHS has a legal obligation to investigate M.H.'s assets and
marital status, verify the accuracy of the information it finds, and complete his
application. The law does not put that onus on the agency.
Additionally, while the CWA cannot mandate applicants submit financial
information for eligibility verification when that information is available
electronically under 42 C.F.R. § 435.952(c) (2016), New Jersey's Asset
Verification System, a computer system that facilitates access to financial
information, was not yet operational at the time M.H.'s application was
considered.
Finally, the parties acknowledge M.H. asked for, and was denied, a
spousal waiver. Because M.H.'s application was denied based on his failure to
submit any information relating to his own assets, we need not address whether
M.H. was entitled to a spousal waiver.
To the extent we have not addressed other arguments raised by M.H., we
conclude they are without sufficient merit to warrant discussion in a written
opinion. R. 2:11-3(e)(1)(E).
Affirmed.
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