Notice of Medicaid Ineligibility violates Due Process if it doesn’t specify the Reason

The Superior Court of Massachusetts recently addressed the question of whether a state Medicaid agency had given adequate notice to the Medicaid applicant of the reason for denial of eligibility. What’s useful for New Jersey purposes is the exended discussion of the federal regulations pertaining to Notices of denial, and the explanation given by the Court as to why the Notices in question were deficient.

The case concerned assets that were held in a Trust. An applicant cannot be eligible for Medicaid if his or her non-excluded “countable” resources exceed a certain limit. In this case, each Notice merely stated  that the applicant was ineligible due to having excess resources, but gave no explanation as to why the assets of the Trust were being counted as the applicant’s resources. The Court held that the Notice was deficient; stayed (enjoined) the denial of benefits pending the outcome of the lawsuit, and certified the case to move forward as a class action because the practice had adversely affected all the individuals in the lawsuit class in a similar manner.

Maas vs Sudders et al and Hirvi vs Sudders et al. (Mass Superior Court, 2018)

Federal regulations require that a Medicaid agency give explicit written notice of reasons for an adverse action and of the opportunities for appeal. The notice must be served on the affected individual. The law provides as follows:

§ 431.210 Content of notice.

A notice required under § 431.206 (c)(2), (c)(3), or (c)(4) of this subpart must contain –

(a) A statement of what action the agency, skilled nursing facility, or nursing facility intends to take and the effective date of such action;

(b) A clear statement of the specific reasons supporting the intended action;

(c) The specific regulations that support, or the change in Federal or State law that requires, the action;

(d) An explanation of –

(1) The individual‘s right to request a local evidentiary hearing if one is available, or a State agency hearing; or

(2) In cases of an action based on a change in law, the circumstances under which a hearing will be granted; and

(e) An explanation of the circumstances under which Medicaid is continued if a hearing is requested.”

We have seen situations over the years in which no reason was given for an adverse conclusion by the county Medicaid Agency. For example, the denial of benefits notice might just say “applicant has excess resources” without specifying which resources are allegedly in excess of the limits. There are times that there can be a bona fide legal and factual dispute over whether certain resources are countable or excludable. Or the denial notice might say that “there were transfers of assets in violation of N.J.A.C. 10:71-4.10″ without specifying what is being treated as a “transfer.” In some circumstances, a check that was payable to cash is treated as a gift to a third party (transfer of assets) for no reason other than it was a check payable to “cash.” An applicant needs to know just what the issue is, so that s/he can prepare for an appeal. This is a matter of Due Process, a principal established by the US Supreme Court in 1970 in the landmark case of Goldberg vs. Kelly.

Medicaid applications are a landmine of potential legal problems. Applicants can benefit by legal advice which protects their rights in this process.

For individual senior care advice on protecting your rights, interests and resources, call us at …. 732-382-6070

Some trust assets may disqualify a Medicaid applicant

One friend tells another, “Put your assets in a trust so the nursing home won’t take them.” But this technique isn’t necessarily the “magic bullet.” The concept of countable assets and resources is broader under Medicaid law  than it is under some other bodies of law. Placing your assets into a trust structure might avoid some problems — like probate in a state where probate estate administration requires ongoing aggravating  interaction with the probate court, or help with Veterans Pension eligibility, or to preserve them for your children while protecting them against the kids’ future creditors. Doing so doesn’t necessarily insulate the assets in the event you apply for Medicaid.

A “resource” is an asset other than income to which the Medicaid applicant or his/her spouse has the right, title and interest, and power to convert the asset to cash. If the applicant’s assets are in a trust, the trust can be counted as a resource if there are any circumstances under which the trust assets can be paid to/spent on the Medicaid applicant. So whether the assets that are sitting in a trust can be counted as resources is a crucial issue. Medicaid is a means-tested program with strict resource limits, and it can take a very long time to receive the Agency’s decision about the application. So it can be a nasty surprise to find out  months down the road that you never were eligible because the assets in the trust are countable resources.

This happened in a recent New Hampshire case. The applicant, Ms. Braiterman,  had transferred some of her assets to an irrevocable trust in 1994. Her children were the beneficiaries.She was not a beneficiary, and she had resigned as Trustee, but she had the retained  power to appoint herself as trustee. She also had the power to impose conditions on the trustee’s appointment of income or principal to the beneficiaries. Now this may have been a great plan with reference to estate tax/cost basis planning. But when she applied for Medicaid years later, the assets in the trust were counted,  so she had excess resources and her application was denied. Why? Because as a condition for the trustee to make a payment to her children, she could have required the trustee to obligate the children to spend the funds on her..

A similar result occurred in Washington State.  Margaret  Berto applied for Medicaid. She and her husband, who died before her, had transferred  their assets into a revocable living trust. In his Will he created a trust for her, so at his death, some of  the revocable trust’s assets were transferred to the testamentary trust. She was the co-trustee and she was the sole beneficiary. Presumably the assets in the revocable trust were spent down prior to the time she applied for Medicaid. The Trust was counted as an available resource, and eligibility for Medicaid was denied.

What makes the excess-resource cases even worse is that by the time the applicant receives the bad news, s/he and her spouse  may have amassed an enormous debt to  the nursing home.

 Careful planning can prevent a crisis. Medicaid planning requires careful evaluation of the specific Medicaid rules, which often compel a different plan than estate and tax

Call us for advice and representation on Medicaid eligibility planning, applications and  appeals…. 732 – 382-6070

Nursing Home resident on Medicaid gets second chance to win her bid for a medically necessary power wheelchair

When an individual resides in a nursing home and receives Medicaid benefits, the facility is paid an all-encompassing per diem rate which is designed to cover all of the costs of medically necessary services that the facility provides to the resident. There are times that a facility declines to provide some specialty service or equipment because of its extra cost, or the facility seeks Medicaid reimbursement for the service and is rebuffed by the Division of Medical Assistance and Health Services (DMAHS). The remedy is for an appeal to be taken. The Medicaid recipient is the petitioner, and seeks a Fair Hearing at the Office of Administrative Law. In a recent  case, the nursing home resident had her day in court but the total record was considered insufficient for the Appellate Division, which remanded for further findings. The case is called  M.S. v. Div. of Med. Assistance and Health Serv., App. Div.  (per curiam)  

M.S. was a 73-year-old hemiplegic who resided in a health care facility and used a wheelchair. She asked the Division to  authorize a power wheelchair for her because of her difficulties in operating the one-armed manual wheelchair she was using. The division denied the application, saying that the wheelchair was considered part of the per diem rate paid to the facility under N.J.A.C. 10:59-1.4(a)(4). After her Fair Hearing, the Administative Law Judge (ALJ) reversed the denial, and found that the  deterioration and pain in petitioner’s right shoulder were caused by her manual wheelchair and would be alleviated by a power wheelchair. The Judge found that a power wheelchair was medically necessary. The Director of DMAHS reversed the ALJ. M.S. appealed to the Appellate Division.

The Appellate panel found that: (1) power wheelchairs were “not routinely used” or essential to the facility’s function, and as such they were not considered part of the facility’s per diem rate, and (2) the power wheelchair was not excluded by (a)(4) and could be covered if “required due to the medical need of” petitioner; (3) petitioner showed that a power wheelchair was medically necessary; (4) there was no sufficient, competent and credible evidence to support the director’s conclusion that the facility was required under the Medicaid per diem rate to push petitioner’s wheelchair. However, the Court found the record below to be inadequate because  the ALJ made no finding on whether the purchase of the power wheelchair was a cost-effective solution to petitioner’s increasing difficulty in propelling herself to activities with the manual wheelchair. The decision below was vacated and remanded for further fact-finding proceedings.

As the saying goes, “the squeaky wheel gets the oil” or “don’t ask, don’t get,” and this is certainly true when it comes to advocating for residents’ needs in a nursing home. And when pursuing administrative appeals — especially in the Medicaid context, given the high rate of reversal —  it is particularly important to make sure that you introduce copious evidence  through documents or testimony to substantiate every single fact that would be necessary to support the decision you are looking for.

Call us for representation on Medicaid applications and fair hearings … 732-382-6070

Appealing reduction of home care hours under NJ Medicaid

Has your loved one been receiving home care services under any of the New Jersey Medicaid Home and Community-based programs such as Global Options? The State’s Comprehensive Medicaid Waiver replaced that program with MLTSS – Medicaid Long Term Services and Supports — and each recipient  is assigned to a Managed Care Organization (MCO) which performs a care plan assessment and determines the amount of hours of services to be  provided to the Medicaid participant. There is an individual capitation rate assigned for each participant, which is a dollar cost for services. To read the State’s Fact Sheet, published by DMAHS (Division of Medical Assistance and Health Services), look at Consumer_FAQs

Cases are beginning to appear in which the amount of hours is being reduced without there being any actual decrease in the participant’s level of medical need. This raises many legal issues which might even be constitutional in nature, and you should promptly consult with an elder law attorney.

These adverse decisions can be appealed by filing a Request for Hearing before the Office of Administrative Law. The appeal request must be filed promptly — you have just 20 days from the date the Notice is actually served on the participant. The hearing is an administrative trial – records need to be obtained, evidence and legal briefs would be submitted, and the hearing involves presentation of witnesses who testify about the relevant issues. Subpoenas may have to be issued to the State to obtain evidence. If all of the issues aren’t properly presented, there is a risk of waiving your rights without even realizing it.

Call us for representation on Medicaid fair hearing appeals … 732-382-6070