New Jersey Superior Court Reports

M.B.-M. v. DIVISION OF MEDICAL ASSISTANCE AND HEALTH SERVICES, A-5086-12T1 (N.J.Super. 9-15-2015)

ESTATE OF G.B. (deceased) by M.B.-M., as Executor, Petitioner-Appellant, v.

DIVISION OF MEDICAL ASSISTANCE AND HEALTH SERVICES and SOMERSET COUNTY BOARD

OF SOCIAL SERVICES, Respondents-Respondents.

No. A-5086-12T1.

Superior Court of New Jersey, Appellate Division.

Submitted December 17, 2014.

Decided September 15, 2015.

[EDITOR'S NOTE: This case is unpublished as indicated by the issuing court.]

On appeal from the Department of Human Services, Division of Medical

Assistance and Health Services.

Before Judges Fuentes and O'Connor.

M.B.-M., appellant pro se.

John J. Hoffman, Acting Attorney General, attorney for respondent Division

of Medical Assistance and Health Services (Melissa H. Raksa, Assistant

Attorney General, of counsel; Molly Moynihan, Deputy Attorney General, on

the brief).

PER CURIAM.

M.B.-M., the daughter of decedent G.B., appeals from the final agency

determination of the Director of the Division of Medical Assistance and

Health Services (Director), imposing an

Page 2

asset transfer penalty of $27,320.29 against the estate of G.B. for selling

her home to family members for less than fair market value during the time

when G.B. was an institutionalized individual. This penalty determination

was based on G.B. receiving Medicaid assistance in the form of thirty hours

of in-home caregiver services, making her the legal equivalent of an

institutionalized individual during the relevant time period. G.B. died on

January 28, 2013.

The Director's decision was based, in part, on the Initial Decision issued

by an Administrative Law Judge (ALJ) who conducted hearings at which

appellant appeared pro se as decedent's daughter and representative pursuant

to N.J.A.C. 1:10B-5.1 and N.J.A.C. 1:1-5.4. The Director concurred with the

ALJ's finding that the transfer of G.B.'s home to appellant was subject to

the penalty. However, the Director reversed the ALJ's decision to exempt

from the penalty $42,000 of the transfer "due to the 'caregiver exemption'

under N.J.A.C. 10:71-4.10(d)(4)."

Appellant argues the Director erred in not finding she was exempt from

this penalty under the "caregiver exemption" provision in N.J.A.C.

10:71-4.10(d)(4). Even if we were to reject this argument, appellant argues

her mother did not sell her home to her "at a reduced amount." After

reviewing therecord and applying the relevant standards of review, we discern no legal

basis to interfere with the Director's decision.

In 1991, G.B. began receiving benefits from the Division of Medical

Assistance and Health Services (DMAHS) through the Community Care Program

for the Elderly and Disabled (CCPED), a Medicaid waiver program that

provides additional services to enable eligible individuals to remain in

their homes. Without these services, these elderly and/or disabled persons

would be placed in nursing homes or similar institutions. Because this was

part of Medicaid, an individual receiving this assistance must meet certain

financial eligibility criteria. As described by the Director, G.B. was able

to receive these services and remain in her home "through a Home and

Community Based Services (HCBS) waiver program that provided additional

services to help individuals who would otherwise be institutionalized remain

in the community."

In this case, this determination was made by the Somerset County Board of

Social Services.N.J.A.C. 10:60-10.1(c). G.B. was deemed eligible to

participate because she was sixty-five years or older and was financially

eligible to receive Medicare benefits. N.J.A.C. 10:60-10.1(d)(1). G.B. was

required to submit financial information to the Board of Social Services on

a yearly basis to renew her eligibility status. In March 2012,

the Board of Social Services was notified that G.B. had been placed in a

hospice facility, the cost of which was not covered by the waiver provisions

of the HCBS. However, G.B. was eligible to have hospice facility costs

covered under the regular Medicaid program.

In the process of transferring G.B.'s hospice status to ensure proper

funding under the regular Medicaid program, the Board of Social Services

discovered G.B. had not been residing at her home since 2009. The record

shows G.B. sold her home to her daughter in February 2010 and received

$27,320.29 from the proceeds of this sale. This amount far exceeded the

$2000 resource eligibility limit of the HCBS. Furthermore, the closing

documents showed G.B. reduced the net proceeds of the sale by giving

appellant a $42,000 equity interest in the property in the form of a "gift."

On June 30, 2012, the Board of Social Services found G.B. ineligible to

receive CCPED services due to excess income.

Based on the evidence presented at the fact-finding hearing, the ALJ found

in her initial decision that "[t]here is little question that [G.B.] had

resources of $27,320 in February 2010, putting her over the resource limit

for eligibility." In her final decision, the Director concurred with the

ALJ's findings and adopted her conclusions on this issue. With

respect to the $42,000 equity interest "gift," the ALJ framed the question

as follows:

Additionally, [G.B.] has acknowledged what amounts to a gift of

$42,000 in foregone proceeds to her daughter. The legal issue is

whether any provisions affect [G.B's] circumstances, such that a

penalty period should not apply or should be reduced in length.

N.J.A.C. 10:71-4.10(d)(4) provides:

[A]n individual shall not be ineligible for an institutional level

of care because of the transfer of his or her equity interest in a

home which serves (or served immediately prior to entry into

institutional care) as the individual's principal place of residence

and the title to the home was transferred to:

A son or daughter of the institutionalized individual ... who was

residing in the individual's home for a period of at least two years

immediately before the date the individual becomes an

institutionalized individual and who has provided care to such

individual which permitted the individual to reside at home rather

than in an institution or facility.

Considering appellant's testimony and the documentary evidence presented

at the fact-finding hearing, the ALJ concluded appellant met the eligibility

requirements under this regulation. Specifically, the ALJ found appellant

tended her mother in decline for many years, and assisted her

mother in avoiding institutionalization.

According to the witnesses, G.B. was receiving Medicaid in 2010,

at the time she sold her home. The sale occurred on February 2,

2012, and resulted in proceeds of $27,320.09. By March 1, 2010,

according to the bank statement for the period February 12, 2010

through March 17, 2010, the checkbook had a balance of $1,472.78.

Since 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) and

10:71-4.5(a)(1), and the resource maximum for an individual is

$2000, N.J.A.C. 10:71-4.5(c), G.B. would appear to have retained

eligibility on March 1,[2010].

The Director rejected the ALJ's legal conclusion finding appellant

eligible for the exemption provided under N.J.A.C. 10:71-4.10(d)(4) with

respect to the $42,000 equity gift. The Director concluded that to be

eligible for the "caregiver exemption," N.J.A.C. 10:71-4.10(d)(4), appellant

must prove: (1) she provided "care for the two years immediately before

[G.B.] became an institutionalized individual;" and (2) the care appellant

provided "prevented [G.B.] from entering a nursing home during that time."

The Director noted the regulation is based on "the theory" that the

child-care-giver should be allowed "to keep the home" because the care she

provided to her mother "prevented Medicaid from having paid for long term

care services for at least two years."

Based on the evidence before her, the Director found G.B. "was an

institutionalized individual since 1991 by virtue of

meeting nursing home level of care to permit her to receive waiver services"

through the HCBS. Stated differently, the thirty hours per week of caregiver

services G.B. received from 1991 until she left her home in 2009 was the

functional equivalent of being "classified an institutionalized individual

for Medicaid purposes." While appellant may have cared for her mother since

1991, the Director found G.B. was able to remain in her own home during this

time period because she received the services provided by the HCBS.

Our standards of review of final decisions of a State administrative

agency is well-settled. We will "not upset an agency's ultimate

determination unless the agency's decision is shown to have been 'arbitrary,

capricious, or unreasonable, or [] not supported by substantial credible

evidence in the record as a whole.'" Barrick v. State, 218 N.J. 247, 259

(2014) (internal citations omitted). We do not substitute our judgment for

the judgment made by the head of the agency. Id. at 260.

Our inquiry as an appellate court is circumscribed by the following three

factors:

(1) whether the agency's action violated the legislative policies

expressed or implied in the act governing the agency; (2) whether

the evidence in the record substantially supports the findings on

which the agency's actions were premised; and (3) "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."

[Ibid.]

Here, the record supports the Director's findings and ultimate conclusions

of law. Although appellant cared for her mother during the relevant time

period, the key factor that permitted G.B. to remain in her home until 2009

was the Medicaid assistance she received through the services provided by

the HCBS. The $27,320.09 G.B. received from the proceeds of the sale of her

home in 2010 rendered her ineligible for Medicaid services because it placed

her over the $2000 limit. The $42,000 G.B. "gifted" appellant in the form of

an equity interest in the home is likewise subject to the penalty for the

reasons expressed by the Director.

Appellant's argument challenging the conclusion that G.B. did not reduce

the price of the property when she sold it to appellant and her husband

lacks sufficient merit to warrant discussion in a written opinion. R.

2:11-3(e)(1)(D)-(E). The $42,000 gift is prima facie evidence that this was

not an "arm's length" transaction.

Finally, we note that in the brief filed on behalf of the Director, the

Attorney General apprised us that the DMAHS had

instituted a recovery action against the Estate of G.B. under N.J.S.A.

30:4D-7.2, and indicated it would continue to keep us informed on the status

of this action as events warranted. As of the filing of this opinion, we

have not received any further information related to this parallel

proceeding.

Affirmed.