SUPERIOR COURT OF NEW JERSEY

APPELLATE DIVISION

DOCKET NO. A-0433-19

G.M.,

Petitioner-Appellant,

v.

DIVISION OF MEDICAL

ASSISTANCE AND HEALTH

SERVICES and CAMDEN

COUNTY BOARD OF 

SOCIAL SERVICES,

Respondents-Respondents.

____________________________

Argued May 26, 2021 – Decided June 16, 2021

Before Judges Whipple and Firko.

On appeal from the New Jersey Department of Human 

Services, Division of Medical Assistance and Health 

Services.

Michael Heinemann argued the cause for appellant.

Mark D. McNally, Deputy Attorney General, argued 

the cause for respondent Division of Medical 

Assistance and Health Services (Gurbir S. Grewal, 

Attorney General, attorney; Melissa H. Raksa, 

NOT FOR PUBLICATION WITHOUT THE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.
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Assistant Attorney General, of counsel; Mark D. 

McNally, on the brief).

PER CURIAM

Petitioner G.M.1appeals from the final agency decision of respondent 

New Jersey Department of Human Services, Division of Medical Assistance and 

Health Services (Division) denying her Medicaid application. We affirm.

The record in this case reveals petitioner was eighty-three years old at the 

relevant time, suffered from dementia, and was permanently institutionalized at 

a long-term skilled nursing facility. Petitioner's nephew, B.J., held petitioner's 

power-of-attorney (POA). On January 20, 2018, the Camden County Board of 

Social Services (CWA) received petitioner's application for Medicaid benefits. 

The application included a form designating Senior Planning Services (SPS) as 

petitioner's designated authorized representative (DAR) for Medicaid purposes. 

Naomi Steinmetz of SPS was named as petitioner's DAR.

On October 9, 2018, the CWA sent a letter to Steinmetz requesting 

verification of financial information regarding ten specific items. The CWA 

advised in its letter that petitioner's application would remain in pending status 

1

 We learned during oral argument that regrettably, petitioner passed away on 

December 19, 2019. On May 28, 2021, we granted counsel for G.M.'s motion 

to substitute her estate as appellant nunc pro tunc to May 26, 2021.
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until October 24, 2018, to allow time for the documentation to be provided. Item 

number five requested verification of the source and purpose of recurring 

transactions appearing on petitioner's 2013 bank statements labelled, "ACH 

DEPOSIT UNITEDCAPITALCRE UNITED CAP" (UCC), in the amount of 

$300. The transactions included debits and credits to and from petitioner's 

account.

On October 25 and November 26, 2018, petitioner's DAR provided 

additional information for nine out of the ten items listed in the CWA's October 

9, 2018 letter. However, item number five—the UCC transactions—remained 

unresolved. Item number four was a request for information verifying a set of 

recurring transactions "ACH DEBIT MILTONBOUHOUTSOS" in the amount 

of $180. The DAR forwarded a letter from Milton Bouhoutsos, an attorney-atlaw, outlining the background of the transactions and explaining the debits 

against petitioner's account were applied to satisfy previously incurred debts.

Steinmetz's November 26, 2018 letter noted petitioner's family believed 

the UCC transactions were part of a scam that she was a victim of. In addition, 

Steinmetz provided unauthenticated screenshots indicating UCC was no longer 

in business, and therefore, she was unable to provide formal documentation 

detailing petitioner's UCC transactions.
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On November 28, 2018, Deena Teichman, Director of Operations at SPS, 

sent an email to the CWA claiming SPS hit a "dead end" in obtaining documents 

regarding the UCC transactions and queried as to "what else [SPS] should/could 

do"? On November 30, 2018, petitioner was notified by the CWA that her 

application for Medicaid benefits was denied because she failed to provide 

sufficient verification of the UCC transactions.

Steinmetz requested a fair hearing, and the matter was transferred to the 

Office of Administrative Law (OAL) as a contested case. At the May 13, 2019 

fair hearing, Michelle Acevedo appeared on behalf of the CWA and Abe 

Jankelovits of SPS appeared on behalf of petitioner. Acevedo admitted the 

CWA took longer than the proscribed time to review petitioner's application due 

to understaffing and an overwhelming caseload. And, candidly, Acevedo 

acknowledged that the UCC was a defunct collection agency. The CWA took 

the position that this matter constitutes a "gray area," but it needed "something 

more specific, an agreement, a billing summary, anything that could really show 

what those payments were for."

Steinmetz did not testify at the hearing. B.J. testified petitioner was 

disorganized and that he did not become her POA until 2017; therefore, he had 

no information about the UCC transactions or her finances prior to 2017. 
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Following the hearing, the SPS representative provided a May 16, 2019 letter 

from Bouhoutsos advising he had no record of any transactions involving 

petitioner and the UCC transactions. The parties submitted written summations.

On July 12, 2019, the ALJ issued an initial decision affirming the denial 

of petitioner's Medicaid eligibility, finding that petitioner "failed to 

demonstrate, by a preponderance of the evidence, that appropriate verifications 

were submitted in a timely fashion to the [CWA], regarding the UCC 

transactions." The ALJ further commented that there was a lack of testimony 

from petitioner's POA as to any steps or efforts undertaken to determine the 

nature of the UCC transactions.

In addition, the ALJ noted "[n]othing was presented as to additional 

efforts made by the DAR to obtain further information about [the] UCC 

[transactions], except for a subsequent letter from an attorney, which was dated 

after testimony was taken in this matter." The ALJ also found that although the 

CWA "admittedly did not process [petitioner's] Medicaid application in a timely 

fashion, apparently due to understaffing," the CWA "did extend additional time 

to [Steinmetz] to provide supplemental verifications regarding multiple issues."

On August 16, 2019, the Division issued its final administrative decision 

adopting the ALJ's initial decision. The Assistant Commissioner emphasized 
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the information provided regarding the UCC transactions was "circumstantial at 

best" and highlighted discrepancies in the screenshots and documentation 

provided by the DAR attempting to substantiate petitioner's argument that UCC 

was no longer doing business. In conclusion, the Assistant Commissioner found 

petitioner failed to corroborate the nature of the transactions or their source. 

This appeal followed.

Petitioner argues that: (1) the subject verifications were not required under 

Medicaid regulations for a determination of Medicaid eligibility; (2) the CWA's 

ten-month delay in receiving G.M.'s application was an egregious violation of 

Medicaid regulations and prejudiced her ability to obtain the verifications; and 

(3) the Division's denial of Medicaid benefits was arbitrary and capricious since 

the verifications were impossible to obtain, and the CWA refused to provide 

guidance or assistance as required by Medicaid regulations. We disagree.

Appellate review of the Division's final agency action is limited. K.K. v. 

Div. of Med. Assistance & Health Servs., 453 N.J. Super. 157, 160 (App. Div. 

2018). We "defer to the specialized or technical expertise of the agency charged 

with administration of a regulatory system." In re Virtua-West Jersey Hosp. 

Voorhees for a Certificate of Need, 194 N.J. 413, 422 (2008). "[A]n appellate 

court ordinarily should not disturb an administrative agency's determinations or 
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findings unless there is a clear showing that (1) the agency did not follow the 

law; (2) the decision was arbitrary, capricious, or unreasonable; or (3) the 

decision was not supported by substantial evidence." Ibid.

A presumption of validity attaches to the agency's decision. See Brady v. 

Bd. of Rev., 152 N.J. 197, 210 (1997). The party challenging the validity of an 

agency's decision has the burden of showing that it was arbitrary, capricious, or 

unreasonable. J.B. v. N.J. State Parole Bd., 444 N.J. Super. 115, 149 (App. Div. 

2016) (quoting In re Hermann, 192 N.J. 19, 27-28 (2007)). "Deference to an 

agency decision is particularly appropriate where interpretation of the Agency's 

own regulation is in issue." I.L. v. Div. of Med. Assistance & Health Servs., 

389 N.J. Super. 354, 364 (App. Div. 2006). However, "an appellate court is 'in 

no way bound by the agency's interpretation of a statute or its determination of 

a strictly legal issue.'" R.S. v. Div. of Med. Assistance & Health Servs., 434 

N.J. Super. 250, 261 (App. Div. 2014) (quoting Mayflower Sec. Co. v. Bureau 

of Sec. in Div. of Consumer Affairs of Dep't of Law & Pub. Safety, 64 N.J. 85, 

93 (1973)).

Medicaid is a federally-created, state-implemented program that provides 

"medical assistance to the poor at the expense of the public." Estate of 

DeMartino v. Div. of Med. Assistance & Health Servs., 373 N.J. Super. 210, 
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217 (App. Div. 2004) (quoting Mistrick v. Div. of Med. Assistance & Health 

Servs., 154 N.J. 158, 165 (1998)); see also 42 U.S.C. § 1396-1. Although a state 

is not required to participate, once it has been accepted into the Medicaid 

program it must comply with the Medicaid statutes and federal regulations. See

Harris v. McRae, 448 U.S. 297, 301 (1980); United Hosps. Med. Ctr. v. State, 

349 N.J. Super. 1, 4 (App. Div. 2002); see also 42 U.S.C. § 1396a(a) and (b).

The State must adopt "'reasonable standards . . . for determining eligibility 

for . . . medical assistance . . . [that are] consistent with the objectives' of the 

Medicaid program[,]" Mistrick, 154 N.J. at 166 (first alteration in original) 

(quoting L.M. v. Div. of Med. Assistance & Health Servs., 140 N.J. 480, 484 

(1995)), and "provide for taking into account only such income and resources as 

are . . . available to the applicant." N.M. v. Div. of Med. Assistance & Health 

Servs., 405 N.J. Super. 353, 359 (App. Div. 2009) (quoting Wis. Dep't of Health 

& Family Servs. v. Blumer, 534 U.S. 473, 479 (2002)); see also 42 U.S.C. § 

1396a(a)(17)(A)-(B).

New Jersey participates in the federal Medicaid program pursuant to the 

New Jersey Medical Assistance and Health Services Act, N.J.S.A. 30:4D-1 to -

19.5. Eligibility for Medicaid in New Jersey is governed by regulations adopted 

in accordance with the authority granted by N.J.S.A. 30:4D-7 to the 
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Commissioner of the Department of Human Services (DHS). The Division is 

the agency within the DHS that administers the Medicaid program. N.J.S.A. 

30:4D-5, -7; N.J.A.C. 10:49-1.1. Accordingly, the Division is responsible for 

protecting the interests of the New Jersey Medicaid Program and its 

beneficiaries. N.J.A.C. 10:49-11.1(b).

In this State, in order to qualify for Medicaid benefits, an applicant's 

resources cannot exceed $2000. N.J.A.C. 10:71-4.5(c). Resources are defined 

as:

any real or personal property which is owned by the 

applicant (or by those persons whose resources are 

deemed available to him or her, as described in 

N.J.A.C. 10:71-4.6) and which could be converted to

cash to be used for his or her support and maintenance. 

Both liquid and non[-]liquid resources shall be 

considered in the determination of eligibility, unless 

such resources are specifically excluded under the 

provisions of N.J.A.C. 10:71-4.4(b).

[N.J.A.C. 10:71-4.1(b).]

The regulations explain that a resource must be "available" to be 

considered by the CWA in determining an applicant's eligibility. N.J.A.C. 

10:71-4.1(c). A resource is deemed "available" when: "1. [t]he person has the 

right, authority or power to liquidate real or personal property or his or her share 

of it; 2. [r]esources have been deemed available to the applicant ([pursuant to 
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N.J.A.C. 10:71-4.6]); or 3. [r]esources arising from a third-party claim or action" 

under certain circumstances. Ibid. 

The value of the resource is "defined as the price that the resource can 

reasonably be expected to sell for on the open market in the particular 

geographic area minus any encumbrances (that is, its equity value)." N.J.A.C. 

10:71-4.1(d). Importantly, the regulation explains that "[t]he CWA shall verify 

the equity value of resources through appropriate and credible sources." 

N.J.A.C. 10:71-4.1(d)(3) (emphasis added). A determination regarding resource 

eligibility is made "as of the first moment of the first day of each month." 

N.J.A.C. 10:71-4.1(e). The CWA may deny eligibility for Medicaid if the 

applicant fails to timely provide verifying information or "verifications." 

N.J.A.C. 10:71-2.2(e); N.J.A.C. 10:71-3.1.

In order to discourage an applicant from disposing of assets for the sole 

purpose of becoming eligible for Medicaid nursing home facility services, 

regulations impose a period of ineligibility to an applicant receiving an 

institutional level of benefits who transfers resources for less than fair market 

value during a sixty-month look-back period. N.J.A.C. 10:71-4.10(a)(2). 

Transfers made within the look-back period "are presumed to be improperly 

motivated to obtain Medicaid eligibility." W.T. v. Div. of Med. Assistance and 
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Health Servs., 391 N.J. Super. 25, 36 (App. Div. 2007). However, an applicant 

retains the right to rebut the presumption. N.J.A.C. 10:71-4.10(j). If the 

presumption is not rebutted, the State imposes a transfer penalty, calculating the 

period of ineligibility following a transfer of an available resource. N.J.A.C. 

10:71-4.10(b)(4) and 10:71-4.10(c).2 Where an applicant’s resource statements 

are questionable, or there is reason to believe the identification of resources is 

incomplete, the CWA can request verification of the applicant’s resource 

statements through one or more third parties. N.J.A.C. 10:71-4.1(d)(3).

Applicants must provide the CWA with the information necessary to 

enable it to determine if the applicant is eligible for benefits. Further, applicants 

must "[a]ssist the CWA in securing evidence that corroborates his or her 

statements," N.J.A.C. 10:71-2.2(e)(2), and the applicant must do so from 

pertinent sources. See N.J.A.C. 10:71-3.1(b). The CWA is permitted to deny 

an application if the applicant fails to timely provide verifying information or 

"verifications." See N.J.A.C. 10:71-2.2(e); -2.12; -3.1(b).

We address the documents and information the CWA requested the 

petitioner provide. The CWA requested petitioner provide source and purpose 

2

 "The transfer penalty is calculated by dividing the uncompensated portion of 

the transferred resource by the monthly average cost of nursing home care in 

this State." W.T., 391 N.J. Super. at 37.
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verification for the recurring debit and deposit transactions from UCC appearing 

on her bank statements from April 2, 2013, through December 2, 2013. 

Steinmetz merely submitted webpage screen shots ostensibly taken from a 

Facebook page, the Better Business Bureau, internet search results, and a copy 

of UCC's former website. Petitioner's former attorney could not provide 

answers to the CWA's inquiry. As the ALJ noted in her decision, the CWA 

"cannot read between the lines and hypothesize what was the purpose of the 

[UCC] debit and deposit transactions." Because the CWA is tasked with 

ensuring that applicants have below $2000 in resource levels, and petitioner's 

proof of eligibility was inconclusive, the Division's decision to deny petitioner's

application was not arbitrary, capricious, or unreasonable.

Moreover, we reject petitioner's argument that the UCC verifications were 

unnecessary under the Medicaid regulations for a determination of eligibility. 

"The CWA shall verify the equity value of resources through appropriate and 

credible sources. . . . If the applicant's resource statements are questionable, or 

there is reason to believe the identification of resources is incomplete, the CWA

shall verify the applicant's resource statements through one or more third 

parties." N.J.A.C. 10:71-4.1(d)(3). This condition is not waivable and was not 

satisfied here by petitioner.
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Petitioner claims she complied with N.J.A.C. 10:71-2.2(d)(2) by assisting 

the CWA in trying to verify the account. She argues the CWA did not assist her 

as required by N.J.A.C. 10:71-2.2(c). However, although the CWA is 

responsible for assisting an applicant, the regulations did not create an 

affirmative duty upon the CWA to procure all documents necessary to complete 

the application, especially when petitioner had Steinmetz as her representative.

The regulations establish timeframes to process a Medicaid application, 

with the "[d]ate of effective disposition" being the "effective date of the 

application" where the application has been approved. N.J.A.C. 10:71-

2.3(b)(1). "The maximum period of time normally essential to process an 

application for the aged is [forty-five] days." N.J.A.C. 10:71-2.3(a). New 

Jersey regulations recognize:

there will be exceptional cases where the proper 

processing of an application cannot be completed 

within the [forty-five day] period. Where substantially 

reliable evidence of eligibility is still lacking at the end 

of the designated period, the application may be 

continued in pending status. In each such case, the 

[CWA] shall be prepared to demonstrate that the delay 

resulted from one of the following:

. . . .

(2) A determination to afford the applicant, whose 

proof of eligibility has been inconclusive, a further 
14 A-0433-19

opportunity to develop additional evidence of 

eligibility before final action on his or her application.

(3) An administrative or other emergency that could not 

reasonably have been avoided; or

(4) Circumstances wholly outside the control of both 

the applicant and the CWA.

[N.J.A.C. 10:71-2.3(c).]

Petitioner's application was made in January 2018 and was still pending 

in November 2018. The record shows petitioner's DAR was granted extensions 

of time to submit sufficient verification of the UCC transactions in dispute. The 

ALJ found the CWA was understaffed and was processing an "overwhelming" 

number of applications that led to the delay in reviewing petitioner's application. 

Given the deference we accord the ALJ's findings, and having determined that 

they are supported by sufficient credible evidence in the record, we conclude the 

decision was neither arbitrary nor unreasonable. We discern no basis to disturb 

the decision on this score.

Here, the Division rendered its final decision after interpreting its own 

regulations. We may reverse only upon a showing that the Division acted 

arbitrarily, capriciously, or unreasonably. "Deference to an agency decision is 

particularly appropriate where interpretation of the Agency's own regulation is 

in issue." R.S., 434 N.J. Super. at 261 (quoting I.L., 389 N.J. Super. at 364). It 
15 A-0433-19

is not arbitrary, capricious, or unreasonable for the Division to deny an 

application that did not have the information necessary to verify eligibility after 

giving extensions.

Affirmed.