Watch out for the Rules of Evidence in Medicaid appeal hearings

The first level of appeal when the State Medicaid Agency issues an adverse decision is called a “Fair Hearing” and takes place at the NJ Office of Administrative law (OAL). The Judge is referred to as an Administrative Law Judge or “ALJ.” That Judge issues an initial decision that is subject to review and final decision by the NJ Division of Medical Assistance and Health Services (Medicaid). The burden of proof is on the applicant, and the hearing is conducted generally like a trial — witnesses can be questioned under oath; documents can be introduced in evidence. The formal rules of evidence that govern the New Jersey courts are relaxed somewhat, but there are still requirements to prove each point of the legal case by using some non-hearsay evidence. The following case illustrates what can go wrong when “the i’s aren’t dotted and the T’s aren’t crossed,” as they say.

 B.S. v. Div. of Med. Assistance & Health Servs., was an unsuccessful appeal after an unsuccessful Fair Hearing. The 92-year-old  Petitioner lived in a nursing home and had applied for Medicaid. When her 5 years’ of financial records were submitted for the required “look-back” scrutiny, the county division for social services noticed that there were two large bank withdrawals from her account. The funds had been transferred to her daughter’s account. The daughter was told to provide proof that either (a) all of the transferred money had been actually spent for benefit of the applicant or that (b) the transfer was some kind of purchase at fair market value for goods or services. The requested proof wasn’t supplied and a 224-day “transfer penalty” was imposed. The request for Fair Hearing was then filed.

The OAL has a rule that requires a “residuum” of non-hearsay evidence for each fact to be proven. If the other party won’t stipulate to the fact, then it must be proven through what’s called “competent” evidence – i.e., non-hearsay. Here’s the rule:

1:1-15.5 Hearsay evidence; residuum rule

(a) Subject to the judge’s discretion to exclude evidence under  N.J.A.C. 1:1-15.1(c) or a valid claim of privilege, hearsay evidence shall be admissible in the trial of contested cases. Hearsay evidence which is admitted shall be accorded whatever weight the judge deems appropriate taking into account the nature, character and scope of the evidence, the circumstances of its creation and production, and, generally, its reliability.

(b) Notwithstanding the admissibility of hearsay evidence, some legally competent evidence must exist to support each ultimate finding of fact to an extent sufficient to provide assurances of reliability and to avoid the fact or appearance of arbitrariness.”

Apparently, at the hearing, her evidence was made up of  “unauthenticated bank records” and a power of attorney, ruling that petitioner had failed to submit any competent evidence. The case was scheduled for hearing three times, and neither the Petitioner (nor her attorney) presented any witnesses to testify about what had occurred or to explain any documents that were presented in evidence.  As a result, the ALJ ruled that there was insufficient evidence to show that the transfers were anything other than an outright gift — which causes a penalty under the Medicaid program. The Director affirmed (adopted the decision) and the Appellate Division affirmed.

The burden of proof rests with the applicant in Medicaid cases. Careful detailed preparation is needed to successfully prove a case at an administrative hearing.

Call us for representation on Medicaid applications and appeals of denials …. 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

Medicaid Eligibility – What if the Services aren’t delivered?

After a Medicaid long-term care application is approved and the Plan of Care (PoC) for  home and community-based services is approved (MLTSS-HCBS), the individual may be faced with a wait. The New Jersey Medicaid HMO’s that provide the services for the State of New Jersey are required by the State contract to have a deep enough provider pool to service the need. However, clients are reporting that they are being told to “just wait until we can find someone who can service your area.” This is obviously unacceptable, and the question is, what remedies are available.

Disability Rights New Jersey is a nonprofit organization that has attorneys who are tackling these issues now. Lawsuits may be the only remedy, and there may be procedural football between the HMO and the State Department of Health and Human Services/ Division of Medical Assistance and Health Services (DMAHS). Who exactly bears the responsibility when promised services are not delivered to approved, eligible individuals? Section VIII, Paragraph 53 of the Special Terms and Conditions in the federally-approved Comprehensive Medicaid Waiver says that ” A “Plan of Care” is a written plan designed to provide the demonstration enrollee with appropriate services and supports in accordance with his or her individual needs. All individuals receiving HCBS or MLTSS under the demonstration must be provided services in accordance with their plan.” (emphasis added)

One approach could be that  failure to provide services would be appealed through the administrative “fair hearing” process at the NJ Office of Administrative Law.  The other approach could be that a mandamus action has to be filed in state or federal court.

The individual should be entitled to a Notice of Inadequacy when the HMO claims it has an inadequate provider pool. After a time, the applicant should call the HMO if services are not forthcoming. If the HMO reports network inadequacy as the reason, then the approved individual can (1) contact the Office of Quality Management and request to be placed into a different HMO or (2) can select a Person-Employed Provider option which would enable them to select their own aide but will add additional obligations on them as a household employer, state plan mn hcbs, or (3) wait some more, or (4) go to a nursing home or (5) borrow money from a friend or family member to hire private care, or (6) consider legal options.

The open question is whether a failure to provide services to an approved Medicaid applicant gives rise to a cause of action through the civil courts to compel the provision of services. Another open question is whether the failure to provide approved services is an adverse action by a government agency that gives rise to a right to an administrative fair hearing under the state’s Administrative Procedure Act (APA). In any event, a person who has been approved for Medicaid Home and Community-based Services who isn’t receiving services in a timely way should consult with elder law counsel to map out their options.

Call us for representation on regarding New Jersey Medicaid applications and appeals … 732-382-6070

Transfers during the look-back merely raise presumption of intent to qualify for Medicaid

When a medicaid application is processed, five years’ of transactions are examined, and among other things, they look to see if there were uncompensated transfers or “gifts.” The agency then must presume that the transfers were made for the purpose of expediting eligibility, and can impose a transfer penalty  for the gifts. You are entitled to a Fair Hearing at the Office of Administrative Law to try to “rebut the presumption” by providing “convincing evidence” that gifts were made exclusively for a purpose unrelated to potential Medicaid eligibility. Sometimes, life takes a terrible turn and an otherwise healthy person makes gifts to their children but then becomes catastrophically ill and requires Medicaid to pay for their bills. That’s what happened to Mr. and Mrs. M in a case I handled  6 years ago.

Mr. and Mrs. M were in their mid-50’s. He retired at about 57 years of age. Coincidentally, the factory where his  wife worked closed down. They had 2 children. They sold their house in NJ, transferred some of the modest proceeds to their children, and took a long-awaited and prolonged vacation out of the country . Upon their return, staying in their daughter’s apartment as they began looking for a new house to buy, Mrs. M. became desperately ill with a rampaging infectious condition and required lengthy hospitalization. She had no insurance and did not survive the crisis. In processing the Medicaid application, the agency  imposed a transfer penalty for the gifts. We appealed.

Estate of M.M. vs Division of Medical Assistance & Health Services & Union County Board of Social Services, OAL docket no. HMA 13911-08 (2009)

DMAHS’ Final Agency Decision May 2009 adopting the ALJ Initial Decision, reverses County Board’s action that penalized pre-eligibility transfers of assets. The Agency confirmed the ALJ findings that  transfers made to her daughters a year before the application were made exclusively for a reason unrelated to medicaid eligibility.

These cases are all fact-sensitive. Particularly in the case of younger applicants, there is opportunity to “rebut the presumption” with the careful development and presentation of the relevant evidence.

Call us for advice about Medicaid eligibility, planning, applications and appeals … 732-382-6070

Appeal of a Medicaid Denial Must be Filed within 20 days of Notice

When an application for Medicaid benefits is filed with a County Board of Social Services in New Jersey, it may be many months before the applicant hears back from the caseworker who is processing the application. If the applicant is in a nursing home or is suffering with Alzheimers Disease or other dementias it is crucial that they have a representative such as a family member, agent under power of attorney, or lawyer, who can keep in touch with the agency, provide an accessible mailing address,  and send the updated financial records while the eligibility determination is in process and the application is pending. Should there come a time that the agency denies eligibility, it is required to serve the applicant with Notice of a Denial of Benefits. Notice is required in order to preserve the applicant’s constitutional Due Process Rights to appeal a deprivation of Medicaid benefits. The first appeal is called a Request for Fair Hearing, which takes place at the NJ Office of Administrative Law before an Administrative Law Judge.

Once the Notice has been served, the applicant has just twenty (20) days to request their Fair Hearing. N.J.A.C. 10:40-3(a). If there are “extraordinary and extenuating circumstances,” the applicant can request an extension. One of those circumstances could be that the applicant simply never received any Notice of the Denial. In a recent unpublished (non-precedential) decision of the NJ Superior Court Appellate Division called Reuter v Burlington County Board of Social Services and DMAHS, docket no. A-0514-13T2, that is what occurred. The applicant filed a late request for hearing on the 147th day and the request for extension was denied. Since the Agency had no proof that it had actually served Notice of Denial, the refusal of an extension was reversed and the case was remanded for further fact-finding.


For representation on Medicaid application denials and fair hearings, call 732-382-6070