SUPERIOR COURT OF NEW JERSEY

APPELLATE DIVISION

DOCKET NO. A-4265-16T1

J.C.,

Petitioner-Appellant,

v.

DIVISION OF MEDICAL

ASSISTANCE AND HEALTH

SERVICES and UNION COUNTY

BOARD OF SOCIAL SERVICES,

Respondents-Respondents.

______________________________

Submitted February 5, 2019 – Decided 

Before Judges Rothstadt, Gilson and Natali.

On appeal from the New Jersey Department of Human 

Services, Division of Medical Assistance and Health 

Services.

SB2, Inc., attorneys for appellant (Laurie M. Higgins, 

on the brief).

Gurbir S. Grewal, Attorney General, attorney for 

respondent Division of Medical Assistance and Health 

Services (Melissa H. Raksa, Assistant Attorney 

NOT FOR PUBLICATION WITHOUT THE

APPROVAL OF THE APPELLATE DIVISION

This opinion shall not "constitute precedent or be binding upon any court." Although it is posted on the 

internet, this opinion is binding only on the parties in the case and its use in other cases is limited. R. 1:36-3.

February 21, 2019
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General, of counsel; Mark D. McNally, Deputy 

Attorney General, on the brief). 

PER CURIAM

Petitioner, J.C., by her designated authorized representative (DAR), 

appeals from the failure of respondent, Division of Medical Assistance and 

Health Services (DMAHS), to respond to her request for a hearing before the 

Office of Administrative Law (OAL) to challenge a decision of the Union

County Board of Social Services (BSS) regarding her eligibility for Medicaid 

benefits. After conducting a thorough review of the record in light of the 

arguments raised on appeal, we remand for DMAHS to transfer the matter to the 

OAL for a hearing. 

On December 21, 2016, BSS posthumously approved J.C. for Medicaid 

benefits from March 1, 2016 to May 24, 2016, the date of her death. Prior to 

her death, J.C. identified Sharon Phillips-South and Cranford Rehab and Nursing 

Center (CRNC) as her DAR. The DAR was executed by J.P., J.C.'s daughter 

and power of attorney.

Subsequently, BSS made two determinations, the first on January 9, 2017, 

and the second on March 1, 2017, as to J.C.'s available income for pre-eligibility 

medical expenses (PEME). J.C.'s counsel, upon receipt of the BSS's January 9, 

2017 decision, filed a fair hearing request with DMAHS. The OAL scheduled 
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a hearing for March 1, 2017, before an Administrative Law Judge (ALJ), but 

J.C.'s counsel cancelled the hearing.1 That same day, BSS issued a revised 

statement of J.C.'s available income for purposes of Medicaid eligibility, 

correcting the dates for the PEME. Shortly thereafter, on March 8, 2017, J.C.'s 

counsel sent DMAHS another request for a fair hearing to challenge the March 

1, 2017 revised PEME calculations.

After requesting a hearing, J.C.'s counsel continued to communicate with 

representatives of DMAHS, and asked that the agency honor the January 9, 2017 

PEME calculation. DMAHS responded by indicating that its March 2017 

calculation correctly limited J.C.'s Medicaid eligibility. Despite J.C.'s March 8, 

2017 request, DMAHS failed to transfer the dispute to the OAL for a hearing. 

As a result, J.C. filed this appeal. 

On appeal, J.C. claims that due to DMAHS's "unlawful inaction," we 

should order it to "rescind the March 1, 2017 [PEME determination] and hold 

that the January 9, 2017 statement of available income be the final allocation," 

or, direct that J.C.'s appeal regarding BSS's PEME determination be transmitted 

to the OAL. DMAHS, for the first time on appeal, argues that in accordance 

 

1

 It is unclear from the record why J.C. cancelled the March 1, 2017 hearing.
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with 42 C.F.R. § 435.923(c)2and state law, it had no obligation to respond to 

CRNC's request for a hearing because CRNC's DAR "extinguished on [J.C.'s] 

death" and CRNC is not the personal representative of J.C.'s estate.

J.C. responds by asserting that under a separate Medicaid regulation, 42 

C.F.R. § 400.203,

3

and related Medicare regulations, J.C. remains a Medicaid 

"applicant" and, accordingly, the OAL is required to schedule a fair hearing. 

J.C. further maintains that in accordance with the doctrine of in pari materia we 

should read "42 C.F.R. § 400.203 and 42 C.F.R. § 435.923(c) as a unified and 

 

2 42 C.F.R. § 435.923(c) provides in relevant part that the:

power to act as an authorized representative is valid 

until the applicant or beneficiary modifies the 

authorization or notifies the agency that the 

representative is no longer authorized to act on his or 

her behalf, or the authorized representative informs the 

agency that he or she no longer is acting in such 

capacity, or there is a change in the legal authority upon 

which the individual or organization's authority was 

based. 

[(emphasis added).]

3 42 C.F.R. § 400.203 defines a Medicaid applicant as: 

an individual whose written application for Medicaid 

has been submitted to the agency determining Medicaid 

eligibility, but has not received final action. This 

includes an individual (who need not be alive at the 

time of application) whose application is submitted 

through a representative or a person acting responsibly 

for the individual.

[(emphasis added).]
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harmonious whole" so as to permit CRNC to prosecute J.C.'s application before 

the OAL without requiring CRNC to petition the probate court to become a 

representative of J.C.'s estate.

The New Jersey Medical Assistance and Health Services Act, N.J.S.A. 

30:4D-1 to -19.5, provides the authority for New Jersey's participation in the 

federal Medicaid program. The DMAHS is the administrative agency within the 

Department of Human Services that is charged with administering the Medicaid 

program. N.J.S.A. 30:4D-7. In this regard, the DMAHS has the authority to 

oversee all State Medicaid programs and issue "all necessary rules and 

regulations." Ibid. 

Under applicable state and federal regulations, if an "applicant" is denied 

Medicaid benefits, the "applicant . . . [is] to be afforded the opportunity for a 

fair hearing in the manner established by the policies and procedures set forth 

in N.J.A.C. 10:49-10 and 10:69-6." N.J.A.C. 10:71-8.4(a); 42 C.F.R. § 431.220. 

Applicants have the right to fair hearings when "their claims . . . are denied or 

are not acted upon with reasonable promptness . . . ." N.J.A.C. 10:49-10.3(b);

42 C.F.R. § 431.220(a)(1). Requests for fair hearings must be submitted to

DMAHS in writing within twenty days of the denial, reduction, or partial denial 

of Medicaid benefits. N.J.A.C. 10:49-10.3(b)(1) and (3); 42 C.F.R. §
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431.221(d). According to J.C., a fair hearing can only be denied if "the applicant 

withdraws the request in writing, or if the applicant fails to appear at a scheduled 

hearing without good cause." See 41 C.F.R. § 431.223.

We interpret DMAHS's argument that it failed to schedule a fair hearing 

because CRNC was "an unauthorized third party," as a claim that CRNC did not 

have standing, and therefore, no right to request a hearing, as N.J.A.C. 10:71-

8.4 permits fair hearings only for an "applicant." See also 42 C.F.R. § 431.221. 

We conclude that DMAHS shall transfer the matter to the OAL for it to address 

that standing claim, and if CRNC is successful, the merits of the dispute related 

to the BSS's March 1, 2017 revised PEME calculations at a fair hearing 

conducted consistent with fundamental notions of due process. A hearing will 

permit DMAHS to exercise its "special competence" and address in the first 

instance whether CRNC is an applicant with standing, after considering 42 

C.F.R. § 400.203, 42 C.F.R. § 435.923(c), and the related Medicare regulations 

cited by J.C. See Muise v. GPU, Inc., 332 N.J. Super. 140, 158, (App. Div.

2000) (quoting Daaleman v. Elizabethtown Gas Co., 77 N.J. 267, 269 n.1

(1978)).

At that hearing, it will be necessary for the OAL to make factual findings 

regarding the circumstances surrounding the scheduling of the fair hearing on 
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March 1, 2017, to address the January 9, 2017 dispute between J.C. and the BSS, 

and the legal effect, if any, on that initial referral. As noted, the OAL scheduled 

that hearing, despite J.C.'s death, which is contrary to DMAHS's current position 

that J.C.'s passing represented a "change in the legal authority upon which the 

individual or organization's authority was based," see 42 C.F.R. § 435.923(c), 

requiring a new DAR by an estate representative.

 If the OAL determines CRNC has standing, it should address J.C.'s 

claims on the merits. In the event CRNC is deemed not to have standing, the 

OAL should also determine whether J.C.'s estate should be permitted, under the 

circumstances, to identify a new DAR for the purposes of prosecuting J.C.'s 

claim at a fair hearing. The OAL's ruling may be reviewed or challenged before 

the agency, and ultimately by this court if further review is sought. 

Accordingly, we remand for DMAHS to transfer the matter for a hearing 

before the OAL. We do not retain jurisdiction.