Medicaid applicant must prove that funds in Joint account were contributed by other co-owner

An applicant for Medicaid to pay for nursing home care is not eligible if the available resources exceed a certain level. The regulations for New Jersey Medicaid specify how joint accounts are treated: “All funds in the account are resources to the individual, so long as he or she has unrestricted access to the funds (that is, an “or” account) regardless of their source. When the individual’s access to the account is restricted (that is, an “and” account), the CWA [caseworker] shall consider a pro rata share of the account toward the appropriate resource maximum, unless the client [applicant] and the other owner demonstrate that actual ownership of the funds is in a different proportion.” N.J..A.C 10:71-4.1(d)2.

The burden of proof is on the applicant, and since this is an administrative proceeding, the burden is the mere preponderance of the evidence. However, applicants should always be prepared to provide specific, orderly, non-hearsay evidence which has extra corroboration if possible.  Live testimony is often important. If an application is denied, the applicant can seek a Fair Hearing before the Office of Administrative Law. The Director of the NJ Division of Medical Assistance and Health Services makes the final determination and then either party can appeal to the Appellate Division.

In a recent non-precedential decision called S.M. v. Div. of Med. Assistance and Health Serv., N.J. Super. App. Div. (per curiam), the Agency had rejected an application for Medicaid benefits because of a joint bank account she owned with her son. The amount in the account was $70,000, but her resource limit for eligibility was $2,000. She claimed that $60,000 of the funds was contributed by her son when he sold his house. The Administrative Law Judge apparently found the son to lack credibility, and apparently there were gaps in the evidence. The denial was confirmed by both the Judge and the Agency director, but the Court found that this decision didn’t rest on “substantial evidence in the record” and a remand was necessary to address the unresolved gaps in the evidence. The case was remanded for further proceedings.

Moral of the story: gather ye evidence while ye may. It’s necessary to put together an orderly, strong legal case for that first administrative proceeding. This is no guarantee of success with DMAHS, which often reverses favorable ALJ decisions, but it can make for a sturdier record as the case moves through the appellate process.

Call us for advice on Medicaid eligibility and for representation in Medicaid  Fair Hearings and Appeals ……. 732-382-6070

County Medicaid Agency Backs Off – Small Business Saved

Recently, a senior client who had a very small business that he ran by himself came to see me in a panic.  He was just making ends meet. His spouse had been on Medicaid in a nursing home for several years, but the county board of social services was now questioning the nature of the business and whether it was a countable resource that should have been spent down.  They were going to  terminate the wife’s eligibility.  “How can I appeal this?” was one of his worries.

The client was distraught, but we helped him to keep a level head.  Our first step was to file for a Medicaid Fair Hearing and make sure that benefits were continued while that administrative appeal was going on. Next was getting more information about this business–did it have any other employees other than the spouse?  What equipment or real estate was owned by the business?  How were taxes handled–could we see the returns?  Did the applicant spouse have an ownership interest in the business?

Once we had this information, it looked like these business activities and the equipment associated with them would fall firmly in the category of excluded resources under the New Jersey Medicaid regulations (N.J.A.C. 10:71-4.4):

“Excludable resources (b) The following resources shall be classified as excludable:  5. Nonhome property that is used in a business or nonbusiness self-support activity that is essential to the means of self-support of an individual and/or spouse, is excluded from resources.   i. Tools, equipment or other items that are used for trade or business and required for employment, including, but not limited to, the machinery and livestock of a farmer, are assumed to be of a reasonable value and producing a reasonable rate of return and are, therefore, excluded from resources.”

Further, under the Social Security Administration interpretive publication (called the POMS), there is no value limit to property that is essential to a trade or business.  It would all be excludable as long as it is in current use. The income the business generates to a community spouse is exempt, regardless of how much.  This is true of all income of a community spouse.

Once we fully disclosed the nature of the business and how it was essential to the spouse’s self-support, the county backed off and reinstated benefits. We could then withdraw the fair hearing.  The client was relieved and thrilled.  He could get back to caring for his wife without this cloud hanging over his head!

The Medicaid regulations are a thorny thicket, but sometimes protection is available if you can just find where it is hidden in there.

If you or a spouse needs Medicaid, but you are unsure about how an active business affects this, give us a call…. 732-382-6070