New Jersey Court rejects denial of Medicaid benefits where spouse refused to cooperate

When a married person applies for MLTSS Medicaid benefits, the applicant must provide 5 years of records pertaining to all financial activity of the applicant and their spouse. The applicant also must supply proof of the spouse’s current income and assets. Sometimes, the spouse just refuses to cooperate with the process, creating a dilemna for the Medicaid applicant. In some circumstances, the couple is actually estranges and not living together. Sometimes the spouse actually resides out of state – the couple is still married, but they live separate and apart. In other circumstances, it’s a second marriage and the children of the community spouse don’t wish to cooperate with the process. And sometimes, they live together and the spouse just refuses to produce the evidence. Whether willful or otherwise, the situation is referred to as having a spouse who refuses to cooperate, sometimes called “spousal refusal.” Unlike some other states, New Jersey did not adopt a specific regulation concerning what to do if the spouse refuses to cooperate. However, there is an explicit provision in federal Medicaid law that says that benefits cannot be denied if the applicant has assigned to the State all of the rights he has under state law to support by his spouse, or if denial of benefits would work “an undue hardship.”  In fact on a Medicaid application, the applicant has to sign just such an assignment of rights. The federal law is at 42 U.S.C. § 1396r-5(c)(3)(A)  and (c)(3)(C).

The federal statute says:  “42 USC 1396r-5(c)(3). Assignment of support rights. The institutionalized spouse shall not be ineligible by reason of resources determined under paragraph (2) to be available for the cost of care where—

(A) the institutionalized spouse has assigned to the State any rights to support from the community spouse;
(B) the institutionalized spouse lacks the ability to execute an assignment due to physical or mental impairment but the State has the right to bring a support proceeding against a community spouse without such assignment; or
(C) the State determines that denial of eligibility would work an undue hardship.

A recent case illustrates what can happen in a case where the spouse of the Medicaid applicant simply refuses to cooperate with the process due to disability or emotional distress. N.S. v. Div. of Med. Assistance & Health Servs., N.J. Super. App. Div. (per curiam). NS was 87 and had moved to a nursing home. His 86 year old wife was the community spouse. His daughter was his legal guardian, and she did not have a close relationship with her stepmother. Six written demands for information were sent to NS’s wife, which she didn’t answer, and in 2 personal visits she told NS’ guardian to just stop asking about all of that because “it was causing her stress.” He asked for the hardship waiver based on his wife’s refusal to cooperate.

In this case, the county board of social services refused to approve Medicaid without the records from the spouse, and refused to apply this federal requirement. Evidently the state’s “policy” was that at a minimum, the spouses had to be estranged from one another. A fair hearing took place, and substantial evidence was placed in the record concerning the efforts made to get information and the refusal by the community spouse . Nonetheless, the Administrative Law Judge sustained the county board’s denial, and the state Division of Medical Assistance and Health Services (DMAHS) issued a Final Agency Decision adopting that recommendation. However, the appellate division reversed, holding that that decision was arbitrary and capricious and disregarded the evidence in the case record. The decision was “not approved for publication,” which means it is instructive but is not precedential or binding on other courts.

P.S. There is some interesting discussion at the end of the case (see page 18-19) regarding demands for information that didn’t exist and that had been reasonably explained by N.S.’s guardian in correspondence to the caseworker. For more on THAT type of problem, see our post here.

Call us for representation on Medicaid eligibility planning, asset preservation, fair hearings and appeals ……… 732-382-6070

There’s no “income cap” anymore for Medicaid long term benefits

When I first started filing Medicaid applications for my clients back in 1995, a person who needed long-term care services in the home or assisted living but had run out of money could not even apply for Medicaid if their gross monthly income was higher than the “income cap.” Of course, the income cap was well below the amount that was needed to pay for care, which meant that a lot of people couldn’t receive necessary services. Basically it meant that many people who would have done well in a community environment with a home health aide and other support ended up moving into a nursing home, because that was the only setting where Medicaid would pay for them. Or they had to do without care or cobble together a plan in which family members took care of them.

Finally, in 2014 when the State’s Comprehensive Medicaid Waiver went into effect, the income cap was eliminated as a bar to receipt of community & assisted living services. There is a special procedure that the applicant has to use, because the income has to be funneled through a structure called a Qualified Income Trust (QIT), but at least the person can now apply for Medicaid benefits. You can read more about QIT’s in our earlier blogs.

We continue to meet people who haven’t heard this good news. If your family is struggling with how to arrange and pay for long term care, call us for legal advice regarding Medicaid eligibility that fits your specific situation.

For personalized advice about a Medicaid plan call … 732-382-6070

Save your receipts and bills for five years, for the look-back

If medical catastrophe strikes and someone in your family needs nursing home care, they may want to apply for Medicaid to pick up those costs.  The regulations are complex, but there are lots of legal strategies that we use to help a person become eligible and to protect the rest of the family at the same time. The process doesn’t stop there, though. The applicant has to prepare and file an application for Medicaid, which we do for people through their local board of social services. And to support this application, we need five complete years of documentation. We can be most effective for you and seniors in your situation if the application is complete.

To best protect your ability to pursue a Medicaid application should it be necessary, save every bit of documentation. Bank statements, cancelled checks, credit card statements, receipts, withdrawal and deposit slips, and tax returns. Photographs of things you bought for cash. Proof that a person who you’ve hired is actually working for you. Are you worried about Mom or Dad? help them create a system to save all this paperwork on a rolling five year basis. The burden of proof is on the applicant within the framework of the published laws, but time and again we see that applications are being denied for failure to produce proofs. It is easier to save these things as you go along than to try to track them down later in the midst of applying for Medicaid.

The 5-year lookback requires the agency to scrutinize all transactions that occurred during the 5 years preceding your application. We have to prove that money which was spent was used to purchase goods and services, and wasn’t used to make gifts. This means a lot of paper verification. So save those bits and scraps, keep things organized, and call when you are ready to apply.

Call us about elder care planning for seniors and for Medicaid eligibility planning and applications … 732-382-6070