Court Opinion

ID: 4529677
Source: CourtListenerOpinion
Date Created: 2020-04-29 14:09:04.178462+00
Date Added: 2024-06-11T12:23:17.135845
License: Public Domain

NOT FOR PUBLICATION WITHOUT THE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.

                                                         SUPERIOR COURT OF NEW JERSEY
                                                         APPELLATE DIVISION
                                                         DOCKET NO. A-0461-18T4

J.T.,

          Petitioner-Appellant,

v.

DIVISION OF MEDICAL
ASSISTANCE AND HEALTH
SERVICES and GLOUCESTER
COUNTY BOARD OF
SOCIAL SERVICES,

     Respondents-Respondents.
_______________________________

                    Argued telephonically March 19, 2020 –
                    Decided April 29, 2020

                    Before Judges Suter and DeAlmeida.

                    On appeal from the New Jersey Department of Human
                    Services, Division of Medical Assistance and Health
                    Services.

                    Carri-ann R. Levine, argued the cause for appellant
                    (Cowart Dizzia, LLP, attorneys; Cari-ann R. Levine, on
                    the brief).
            Jacqueline R. D'Alessandro, Deputy Attorney General,
            argued the cause for respondent Division of Medical
            Assistance and Health Services (Gurbir S. Grewal,
            Attorney General, attorney; Melissa H. Raksa,
            Assistant Attorney General, of counsel; Jacqueline R.
            D'Alessandro, on the brief).

            John Anthony Alice argued the cause for respondent
            Gloucester County Board for Social Services.

PER CURIAM

      Petitioner J.T. 1 appeals from an August 13, 2018 final decision of the

Director, Division of Medical Assistance and Health Services (DMAHS),

adopting the initial decision of an Administrative Law Judge (ALJ) finding him

ineligible for Medicaid benefits because he failed to submit documents

necessary to verify his eligibility. We affirm.

                                        I.

      The following facts are derived from the record. On June 21, 2017, J.T.'s

daughter, F.T., brought him to Deptford Center for Rehabilitation and

Healthcare (Deptford Center) for short-term rehabilitation.    J.T. previously

executed a power of attorney in favor of F.T. After J.T. was admitted to

Deptford Center, F.T. failed to appear for scheduled care meetings and did not

1
  We identify petitioner by his initials to protect the confidentiality of his
medical records.
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                                        2
respond to communications regarding her father's medical care.            Deptford

Center did not initially file an application on behalf of J.T. for Medicaid benefits

because his stay was expected to be short term.

      On August 10, 2017, it became apparent to Deptford Center J.T. would

need long-term treatment at its facility. J.T. could not speak and suffered from

dementia. In light of F.T.'s absence, on August 15, 2017, J.T.'s son, Ja.T.,

purported to act on behalf of his father by executing a form designating Cheryl

Zuchowski,2 a Deptford Center employee, as the designated authorized

representative (DAR) for J.T.

      Zuchowski submitted an application for Medicaid benefits on J.T.'s behalf

to respondent Gloucester County Board of Social Services, the county welfare

agency (CWA) for Gloucester County. On October 17, 2017, the CWA denied

J.T.'s application for failure to provide the asset verification necessary to

establish eligibility for the program.

      On October 23, 2017, Zuchowski filed a second application for Medicaid

benefits on behalf of J.T. The application listed an account at Sun National

Bank with a value of $755 as J.T.'s only asset.

2
  Zuchowski is also identified in the record as Cheryl Soistmann. Her name
change is immaterial to the issues before the court.
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                                         3
      On October 31, 2017, Zuchowski sent an email to the CWA seeking

advice. She informed the agency of J.T.'s inability to speak or write and that

F.T. had "disappeared" and was not returning telephone calls.            Zuchowski

reported that her efforts to obtain J.T.'s bank records in support of the application

had failed because the bank demanded verbal consent of J.T. or approval of F.T.

According to Zuchowski, the bank would not accept Ja.T.'s authorization to

release the bank records.

      On November 8, 2017, a CWA representative responded to Zuchowski's

email and suggested she initiate proceedings for the appointment of a guardian

for J.T. The CWA also ran an asset verification system report for J.T. in an

effort to obtain his bank record. The Sun National Bank account records,

however, did not appear on the report.

      On November 22, 2017, the CWA informed Zuchowski in writing that the

production of statements for J.T.'s Sun National Bank account for the period

from August 1, 2016 to October 1, 2017 was necessary to evaluate his eligibility

for benefits. The letter stated that "[i]f this information is not received by

[December 11, 2017], the case will be denied."

      On December 1, 2017, a physician conducted an examination of J.T. He

diagnosed J.T. with dementia and probable Alzheimer's disease. Zuchowski did

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                                         4
not inform the CWA of the physician's report or initiate guardianship

proceedings for J.T. at that time.

      On December 26, 2017, the CWA denied J.T.'s second application. The

agency stated it was unable to determine J.T.'s eligibility without the bank

records requested in the November 22, 2017 letter.

      J.T. died on January 23, 2018.       The following day, Deptford Center

attempted to initiate guardianship proceedings for J.T. Because J.T. had died,

the guardianship petition was not processed.

      J.T. challenged the denial of his application through a request for a fair

hearing.3 The matter was transferred to the Office of Administrative Law, where

a fair hearing was held before ALJ Susan L. Olgiati.

      On July 5, 2018, ALJ Olgiati issued an initial decision recommending the

denial of benefits be affirmed. The ALJ determined the maximum forty-five-

day period for deciding an application, N.J.A.C. 10:71-2.3(a), applied here and

began with the filing of J.T.'s second application for benefits. In light of the

denial of J.T.'s first application, the ALJ found his representatives were aware

of the need to secure his bank records when they filed the second application.

3
   The record does not contain evidence the Administrator of J.T.'s estate
authorized Deptford Center to appeal the CWA's decision on his behalf.
                                                                        A-0461-18T4
                                       5
      The ALJ determined the CWA satisfied its obligation to assist J.T. in

securing the information necessary to determine his eligibility. As ALJ Olgiati

noted, the CWA suggested initiation of guardianship proceedings before setting

the December 11, 2017 deadline. Zuchowski obtained a medical evaluation of

J.T. but did not share the results with the CWA, advise the CWA of continued

difficulty obtaining J.T.'s bank records, request an extension of the December

11, 2017 deadline, or initiate the guardianship process. In addition, the ALJ

found that after the deadline passed, the CWA waited an additional fifteen days,

until December 26, 2017, sixty-four days after the application was filed, to issue

a denial. ALJ Olgiati found the circumstances surrounding J.T.'s application

were exceptional, requiring additional time beyond the maximum forty-five-day

period, which the CWA provided.

      On August 13, 2018, the Director issued a final decision adopting the

ALJ's recommendation. The Director agreed with the ALJ's determination J.T.

"failed to provide the needed information prior to the December 26, 2017 denial

of benefits. Without this information, the [CWA] was unable to complete its

eligibility determination and the denial was appropriate."

      This appeal followed.      J.T. raises the following arguments for our

consideration:

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                                        6
             POINT I

             THE FINAL DECISION WAS ARBITRARY AND
             CAPRICIOUS BECAUSE IT HELD J.T. AND HIS
             ATTORNEY-IN-FACT TO AN IMPOSSIBLE
             STANDARD CONTRARY TO CONTROLLING
             LAW.

             A.   THE MEDICAL CONDITIONS OF J.T. AND
             HIS    SISTER4  CREATED   EXCEPTIONAL
             CIRCUMSTANCES, MAKING THE DENIAL IN
             [EIGHTY-ONE]5 DAYS CONTRARY TO STATE
             AND FEDERAL LAW.

             B.   [THE CWA] OWED       A    DUTY   OF
             ASSISTANCE, PARTICULARLY TO J.T. WHO WAS
             PERMANENTLY UNABLE TO COMMUNICATE.

             POINT II

             THE   FINAL   AGENCY    DECISION     WAS
             CAPRICIOUS    BECAUSE     IT   UNFAIRLY
             DISCRIMINATES ON THE BASIS OF DISABILITY.

             POINT III

             RAPID   DENIALS   OF   MEDICAID   TO
             INCAPACITATED RESIDENTS IN NEED OF A

4
  J.T.'s brief refers to F.T. both as J.T.'s daughter and J.T.'s sister. ALJ Olgiati's
findings of fact identify F.T. as J.T.'s daughter. The exact familial relationship
between J.T. and F.T. is immaterial to our legal analysis. In addition, despite
the reference in J.T.'s point heading, the record contains no evidence with
respect to F.T. having a medical condition.
5
  It is not clear why J.T.'s point heading refers to an eighty-one-day period. As
found by ALJ Olgiati and as recognized elsewhere in J.T.'s brief, the CWA
denied J.T.'s application sixty-four days after it was filed.
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                                          7
            GUARDIAN CREATE SERIOUS PUBLIC POLICY
            IMPLICATIONS.

                                        II.

      "Judicial review of agency determinations is limited." Allstars Auto Grp.,

Inc. v. N.J. Motor Vehicle Comm'n, 234 N.J. 150, 157 (2018).                   "An

administrative agency's final quasi-judicial decision will be sustained unless

there is a clear showing that it is arbitrary, capricious, or unreasonable, or that

it lacks fair support in the record." Ibid. (quoting Russo v. Bd. of Trs., Police

& Firemen's Ret. Sys., 206 N.J. 14, 27 (2011)). In reviewing the agency's

decision, we consider:

            (1) whether the agency's action violates express or
            implied legislative policies, that is, did the agency
            follow the law;

            (2) whether the record contains substantial evidence to
            support the findings on which the agency based its
            action; 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. (quoting In re Stallworth, 208 N.J. 182, 194
            (2011)).]

      "A reviewing court 'must be mindful of, and deferential to, the agency's

expertise and superior knowledge of a particular field.'" Id. at 158 (quoting

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                                        8
Circus Liquors, Inc. v. Governing Body of Middletown Twp., 199 N.J. 1, 10

(2009) (internal quotation omitted)). "A reviewing court 'may not substitute its

own judgment for the agency's, even though the court might have reached a

different result.'" Stallworth, 208 N.J. at 194 (quoting In re Carter, 191 N.J.
474, 483 (2007)). "Deference to an agency decision is particularly appropriate

where interpretation of the [a]gency's own regulation is in issue." R.S. v. Div.

of Med. Assistance & Health Servs., 434 N.J. Super. 250, 261 (App. Div. 2014)

(quoting I.L. v. N.J. Dep't of Human Servs., Div. of Med. Assistance & Health

Servs., 389 N.J. Super. 354, 364 (App. Div. 2006)). "However, a reviewing

court is 'in no way bound by [an] agency's interpretation of a statute or its

determination of a strictly legal issue.'" Allstars Auto Grp., 234 N.J. at 158

(alteration in original) (quoting Dep't of Children & Families, Div. of Youth &

Family Servs. v. T.B., 207 N.J. 294, 302 (2011)).

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

provides 'medical assistance to the poor at the expense of the public.'" In re

Estate of Brown, 448 N.J. Super. 252, 256 (App. Div. 2017) (quoting Estate of

DeMartino v. Div. of Med. Assistance & Health Servs., 373 N.J. Super. 210,

217 (App. Div. 2004)); see also 42 U.S.C. § 1396-1. To receive federal funding

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                                       9
the State must comply with all federal statutes and regulations. Harris v. McRae,

448 U.S. 297, 301 (1980).

      Pursuant to the New Jersey Medical Assistance and Health Services Act,

N.J.S.A. 30:4D-1 to -19.5, DMAHS is responsible for administering Medicaid

in our State. N.J.S.A. 30:4D-4. Through its regulations, DMAHS establishes

"policy and procedures for the application process . . . ." N.J.A.C. 10:71-2.2(b).

"[T]o be financially eligible, the applicant must meet both income and resource

standards." Estate of Brown, 448 N.J. Super. at 257; see also N.J.A.C. 10:71-

3.15; N.J.A.C. 10:71-1.2(a).

      We begin with J.T.'s argument the CWA provided insufficient assistance

in completing his second application. In New Jersey, the Medicaid applicant is

"the primary source of information. However, it is the responsibility of the

agency to make the determination of eligibility and to use secondary sources

when necessary, with the applicant's knowledge and consent." N.J.A.C. 10:71-

1.6(a)(2). The CWA must "[a]ssist the applicant[] in exploring their eligibility

for assistance[,]" and "[m]ake known to the applicant[] the appropriate resources

and services both within the agency and the community, and, if necessary, assist

in their use . . . ." N.J.A.C. 10:71-2.2(c)(3) to (4). However, the applicant must:

"1. [c]omplete, with assistance from the CWA if needed, any forms required by

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                                       10
the CWA as a part of the application process; 2. [a]ssist the CWA in securing

evidence that corroborates his or her statements; and 3. [r]eport promptly any

change affecting his or her circumstances." N.J.A.C. 10:71-2.2 (e).

            The CWA shall verify the equity value of resources
            through      appropriate     and     credible    sources.
            Additionally, the CWA shall evaluate the applicant's
            past circumstances and present living standards in order
            to ascertain the existence of resources that may not have
            been reported. 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).]

The applicant bears a duty to cooperate fully with the CWA in its verification

efforts, providing authorization to the CWA to obtain information when

appropriate. N.J.A.C. 10:71-4.1(d)(3)(i).

            If verification is required in accordance with the
            provisions of N.J.A.C. 10:71-4.1(d)[(3)], the CWA
            shall . . . . verify the existence or nonexistence of any
            cash, savings or checking accounts, time or demand
            deposits, stocks, bonds, notes receivable or any other
            financial instrument or interest. Verification shall be
            accomplished through contact with financial
            institutions, such as banks, credit unions, brokerage
            firms and savings and loan associations. Minimally,
            the CWA shall contact those financial institutions in
            close proximity to the residence of the applicant or the
            applicant's relatives and those institutions which

                                                                        A-0461-18T4
                                      11
             currently provide or previously provided services to the
             applicant.

             [N.J.A.C. 10:71-4.2(b)(3).]

      The CWA may perform a "[c]ollateral investigation" wherein the agency

contacts "individuals other than members of applicant's immediate household,

made with the knowledge and consent of the applicant . . . ." N.J.A.C. 10:71-

2.10(a). "The primary purpose of collateral contacts is to verify, supplement or

clarify essential information." N.J.A.C. 10:71-2.10(b). Neither N.J.A.C. 10:71-

4.1(d)(3) nor N.J.A.C. 10:71-2.10 require a CWA to undertake an independent

investigation of an applicant. The agency instead is charged with verifying

information provided by an applicant. For example, while N.J.A.C. 10:71 -

4.2(b)(3) requires the CWA to contact an applicant's financial institutions to

verify an account's existence, it does not require the agency to obtain records

directly from a financial institution.

      After carefully reviewing the record, we conclude there is sufficient

support for the Director's determination the CWA fulfilled its obligation to assist

J.T. in obtaining the information necessary to determine his eligibility for

benefits. J.T.'s representative contacted the CWA eight days after submitting

his second application to inform the agency of F.T.'s unavailability, J.T.'s

medical condition, and the bank's insistence on securing approval of either F.T.

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                                         12
or J.T. before releasing his bank records. The CWA advised Zuchowski to seek

appointment of a guardian for J.T.

      In addition, the agency ran an electronic search for J.T.'s bank records,

which proved unsuccessful. After waiting more than three weeks from the

submission of the application, the CWA set a December 11, 2017 deadline for

production of the bank records. As of that date, J.T.'s representative had not

initiated guardianship proceedings, informed the CWA of J.T.'s medical

evaluation, or reported on the progress, if any, of its efforts to obtain the bank

records. J.T.'s representative did not request an extension of the December 11,

2017 deadline or acknowledge it passing. After the deadline passed, the CWA

waited an additional fifteen days, during which it received no communication

from J.T.'s representative, before denying his application. In the days following

the denial of the application, J.T.'s representative did not communicate with the

CWA. It was not until January 24, 2018, the day after J.T. died, that Zuchowski

attempted to initiate guardianship proceedings.         The CWA satisfied its

obligation to provide assistance and advice to J.T.'s representative.        J.T.'s

representative failed to act with sufficient diligence to complete his application.

      Nor do we agree with J.T.'s argument the CWA acted inappropriately

when it denied his application after sixty-four days. "The maximum period of

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                                       13
time normally essential to process an application for the aged is [forty-five]

days; for the disabled or blind, [ninety] days." N.J.A.C. 10:71-2.3(a). The

regulation recognizes, however,

            that there will be exceptional cases where the proper
            processing of an application cannot be completed
            within the [forty-five/ninety-] 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:

            1.    Circumstances wholly within the applicant's
            control;

            2.     A determination to afford the applicant, whose
            proof of eligibility has been inconclusive, a further
            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 CWA.

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

      The regulation establishes a maximum period for the CWA to process an

application. It does not give applicants the right to hold their applications open

for forty-five or ninety days to obtain the information necessary to establish

eligibility for benefits. While the regulation authorizes a CWA to keep an

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                                       14
application in pending status for longer than the prescribed periods, it does not

require that it do so in every instance in which an application is incomplete,

particularly in the absence of a request for an extension by the applicant . Here,

J.T.'s representative did not seek an extension of the December 11, 2017

deadline, either before its expiration or in the fifteen days thereafter before

issuance of the December 26, 2017 denial. We see no abuse of discretion in the

CWA deciding J.T.'s application sixty-four days after it was filed. 6

      To the extent we have not addressed other arguments raised by J.T., we

conclude they are without sufficient merit to warrant discussion in a written

opinion. R. 2:11-3(e)(1)(E).

      Affirmed.

6
  In light of our holding, we need not decide whether the Director's decision
applying the forty-five-day period was correct, given J.T.'s apparent disability.
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                                       15