C.G. VS. DIVISION OF MEDICAL ASSISTANCE AND HEALTH SERVICES (DIVISION OF MEDICAL ASSISTANCE AND HEALTH SERVICES)

• Court: New Jersey Superior Court Appellate Division
• Decided: September 16, 2019
• Docket: A-3898-17T4
• Status: Unpublished

Opinion

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION This opinion shall not "constitute precedent or be binding upon any court."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-3898-17T4

C.G.,

Petitioner-Appellant,

v.

DIVISION OF MEDICAL ASSISTANCE AND HEALTH SERVICES, and ATLANTIC COUNTY BOARD OF SOCIAL SERVICES,

Respondents-Respondents. _____________________________

Submitted September 9, 2019 – Decided September 16, 2019

Before Judges Fasciale and Moynihan.

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 New Jersey Department of Human Services, 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

C.G. appeals from a March 19, 2018 final agency decision by the

Department of Human Services Division of Medical Assistance and Health

Services (DMAHS) upholding an initial determination by an administrative law

judge (ALJ) denying C.G.'s Medicaid application for failure to provide

necessary financial verifications. 1 DMAHS concluded that the failure to

produce that information prevented the county welfare agency (CWA) from

completing a required eligibility determination. We affirm.

In July 2015, C.G.'s daughter-in-law (A.S.G.) filled out C.G.'s application.

In March 2017, after it resolved C.G.'s request for a spousal waiver, the CWA

processed C.G.'s name using its Asset Verification System (AVS). That

uncovered a discrepancy between who had been the rightful owner of a TD bank

account. A.S.G. submitted information saying C.G.'s son owned it, but the AVS

report indicated C.G. was the owner. The CWA requested bank account

statements, beginning in October 2013.

1 C.G.'s notice of appeal identified the date of the decision as April 3, 2018, but that is the date of the letter forwarding the final agency decision to Future Care Consultants (FCC). A-3898-17T4 2 In May 2017, FCC (which became C.G.'s designated representative)

responded partially by producing a statement covering only September 2015 to

October 2015. That statement conflicted with the one submitted by A.S.G.,

which showed that C.G.'s name and pension information had been deleted. On

the statement that FCC produced, C.G.'s pension income appeared, but that

information was missing on the Medicaid application.

In May and June 2017, the CWA renewed its request for the verifications.

On July 5, 2017, the CWA notified FCC that it would deny the application unless

FCC submitted the verifications within ten days. FCC failed to comply with the

deadline, and the CWA denied C.G.'s application on July 27, 2017. In

September 2017, C.G. purportedly subpoenaed information. In early December

2017, C.G.'s counsel produced additional documentation to the CWA.

One week later, the ALJ conducted a hearing. The ALJ found that no

exceptional circumstances existed warranting the late submission of the

requested information. The ALJ concluded, based on the record before the

CWA, that C.G. failed to produce the requested information in accordance with

N.J.A.C. 10:71-2.2(e) and N.J.A.C. 10:71-3.1(b); that the CWA appropriately

processed the application; and that the CWA correctly denied the application.

DMAHS then rendered the decision under review.

A-3898-17T4 3 On appeal, C.G. asserts DMAHS issued an arbitrary decision. C.G. says

it failed to access an available Income and Eligibility Verification System

(IEVS), which C.G. says would have shown his pension information. 2 C.G.

argues that the CWA did not help him obtain the verifications, and that the ALJ

erred by refusing to consider the late submission. C.G. requests that we vacate

the final decision and remand to the CWA to "re-determine [C.G.'s] eligibility

for Medicaid."

We begin by addressing our standard of review and general governing

legal principles. This court's review of DMAHS's determination is limited.

Barone v. Dep't of Human Servs., Div. of Med. Assistance & Health Servs., 210

N.J. Super. 276, 285 (App. Div. 1986) (explaining that "we must give due

deference to the views and regulations of an administrative agency charged with

the responsibility of implementing legislative determinations"); see also Wnuck

v. N.J. Div. of Motor Vehicles, 337 N.J. Super. 52, 56 (App. Div. 2001) (stating

"[i]t is settled that [a]n administrative agency's interpretation of statutes and

2 We conclude that this contention is without sufficient merit to warrant discussion in a written opinion. R. 2:11-3(e)(1)(E). We note briefly that the IEVS system pertains to use by the State in post-eligibility evaluations, not to determine county-level eligibility requirements. 42 U.S.C. § 1320b-7(a)(4)(C); N.J.A.C 10:49-14.4. Nevertheless, the application otherwise remained incomplete. A-3898-17T4 4 regulations within its implementing and enforcing responsibility is ordinarily

entitled . . . deference") (second alteration in original) (citations and internal

quotation marks omitted).

We have previously stated that "[w]here [an] action of an administrative

agency is challenged, a presumption of reasonableness attaches to the action of

an administrative agency[,] and the party who challenges the validity of that

action has the burden of showing that it was arbitrary, unreasonable or

capricious." Barone, 210 N.J. Super. at 285 (citation and internal quotation

marks omitted). "Delegation of authority to an administrative agency is

construed liberally when the agency is concerned with the protection of the

health and welfare of the public." Ibid. Thus, our task is limited to deciding

(1) whether the agency's decision offends the State or Federal Constitution; (2) whether the agency's action violates express or implied legislative policies; (3) whether the record contains substantial evidence to support the findings on which the agency based its action; and (4) 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.

[A.B. v. Div. of Med. Assistance & Health Servs., 407 N.J. Super. 330, 339 (App. Div. 2009) (citation omitted).]

A-3898-17T4 5 The Medicaid program was created when Congress added Title XIX to the

Social Security Act, 42 U.S.C. §§ 1396 to 1396w-5, "for the purpose of

providing federal financial assistance to States that choose to reimburse certain

costs of medical treatment for needy persons." Harris v. McRae, 448 U.S. 297,

301 (1980). Participation in the Medicaid program is optional for states,

however, "once a State elects to participate, it must comply with the

requirements of Title XIX." Ibid. The New Jersey Medical Assistance and

Health Services Act, N.J.S.A. 30:4D-1 to -19.5, authorizes New Jersey's

participation in the Medicaid program.

The Commissioner of the New Jersey Department of Human Services has

the power to issue regulations dealing with eligibility for medical assistance.

N.J.S.A. 30:4D-7. DMAHS is a division of the Department of Human Services

that operates the Medicaid program in New Jersey. N.J.S.A. 30:4D-4. The

CWA grants or denies applications for Medicaid benefits. N.J.A.C. 10:71-3.15.

Pursuant to this regulation, the CWA must determine "income and resource

eligibility." N.J.A.C. 10:71-3.15(a). N.J.A.C. 10:71-4.1(b) defines resource to

include:

[A]ny real or personal property which is owned by the applicant (or by those persons whose resources are deemed available to him or her, as described in N.J.A.C. 10:71-4.6) and which could be converted to

A-3898-17T4 6 cash to be used for his or her support and maintenance. Both liquid and non[-]liquid resources shall be considered in the determination of eligibility, unless such resources are specifically excluded under the provisions of N.J.A.C. 10:71-4.4(b).

The regulation explains that a resource must be "available" to be considered in

determining eligibility. N.J.A.C. 10:71-4.1(c). A resource is "available" when:

"1. [t]he person has the right, authority or power to liquidate real or personal

property or his or her share of it; 2. [it is] deemed available to the applicant

([pursuant to] N.J.A.C. 10:71-4.6 . . . ); or 3. [it arises] from a third-party claim

or action" under certain circumstances. Ibid. The value of the resource is

"defined as the price that the resource can reasonably be expected to sell for on

the open market in the particular geographic area minus any encumbrances (that

is, its equity value)." N.J.A.C. 10:71-4.1(d). The regulation explains that "[t]he

CWA shall verify the equity value of resources through appropriate and credible

sources." N.J.A.C. 10:71-4.1(d)(3). "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).

In delineating the responsibilities in the application process, the regulation

states that the applicant is required to "[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). Moreover, the applicant is expected to

A-3898-17T4 7 "[a]ssist the CWA in securing evidence that corroborates his or her statements."

N.J.A.C. 10:71-2.2(e)(2). "The process of establishing eligibility involves a

review of the application for completeness, consistency, and reasonableness."

N.J.A.C. 10:71-2.9.

Important to this appeal, the regulation notes that "[e]ligibility must be

established in relation to each legal requirement to provide a valid basis for

granting or denying medical assistance[,]" and that an applicant's statements

regarding eligibility are "evidence." N.J.A.C. 10:71-3.1(a), (b). "Incomplete or

questionable statements shall be supplemented and substantiated by

corroborative evidence from other pertinent sources, either documentary or

non[-]documentary." N.J.A.C. 10:71-3.1(b). Thus, these regulations establish

that an applicant must provide sufficient documentation to the agency to allow

it to determine eligibility and corroborate the claims of the applicant.

It is undisputed that in his application for Medicaid benefits, C.G. failed

to timely disclose required information as to the TD account, such as the

ownership of the account and the source of its funding. After the CWA learned

that the account may contain income from a pension, it sought further

information (N.J.A.C. 10:71-2.2(e) and N.J.A.C. 10:71-3.1(b)) because C.G.'s

application omitted it, and pension information was not available through the

A-3898-17T4 8 AVS system. Notwithstanding any outstanding pension verifications, the

application remained incomplete due to outstanding issues pertaining to the

ownership of the TD account and the ownership of the funds deposited into the

account.

The record does not support C.G.'s argument that the CWA failed to assist

him. The CWA's caseworker requested required verifications from A.S.G. and

FCC. The caseworker sought that information even though C.G. submitted an

incomplete application and despite receiving inconsistent documentation. She

corresponded with FCC about the needed information on multiple occasions,

explained what the CWA needed, extended deadlines for the production, and

otherwise complied with the regulations. At no point did C.G. timely

supplement his application to verify the required information.

Finally, there is no legal basis to require the ALJ to determine Medicaid

eligibility in the first instance. Although C.G. argues the ALJ shou ld have

conducted a de novo review of the record – a record that did not exist before the

CWA – we have previously stated:

[A]s required by federal and state law, only the designated Medicaid agency is authorized to determine Medicaid eligibility. That determination requires a detailed analysis, to be conducted through the expertise of the agency charged with administration of the complex statutory and regulatory Medicaid provisions.

A-3898-17T4 9 [In re A.N., 430 N.J. Super. 235, 244 (App. Div. 2013) (emphasis added).]

In other words, the Office of Administrative Law does not stand in the place of

local county welfare agencies. Rather, local county welfare agencies evaluate

Medicaid eligibility. N.J.S.A. 30:4D-7(a); N.J.A.C. 10:71-1.5, 2.2(c). Indeed,

it is the obligation of the CWA to "review . . . the application for completeness,

consistency, and reasonableness." N.J.A.C. 10:71-2.9. On this record, there is

no basis to remand to the CWA, as urged by C.G., especially because he has

offered no reason for failing to comply with the obligations imposed by N.J.A.C.

10:71-2.2(e) and N.J.A.C. 10:71-3.1(b).

Applying the governing standards of review and legal principles, we

conclude there exists substantial credible evidence in the record to suppo rt the

findings made by the ALJ and DMAHS, and that the final agency decision was

not arbitrary, capricious, or unreasonable.

Affirmed.

A-3898-17T4 10