Court Opinion

ID: 4455225
Source: CourtListenerOpinion
Date Created: 2019-11-13 15:07:04.691908+00
Date Added: 2024-06-11T09:24:52.513072
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NOT FOR PUBLICATION WITHOUT THE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-3559-17T4

M.H.,

          Petitioner-Appellant,

v.

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

     Respondents-Respondents.
______________________________

                    Submitted October 24, 2019 – Decided November 13, 2019

                    Before Judges Suter and DeAlmeida.

                    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 briefs).

                    Gurbir S. Grewal, Attorney General, attorney for
                    respondent Division of Medical Assistance and Health
                    Services (Melissa H. Raksa, Assistant Attorney
            General, of counsel; Jacqueline R. D'Alessandro,
            Deputy Attorney General, on the brief).

PER CURIAM

      Petitioner M.H. appeals from a February 27, 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 information

necessary to verify his eligibility. We affirm.

                                        I.

      On March 8, 2016, M.H. submitted an application for Medicaid benefits

to the county welfare agency (CWA) for Ocean County. The application listed

M.H. as single and having no resources of any kind. Through an investigation,

CWA discovered M.H. was married.

      On April 4, 2016, CWA requested M.H. submit information and

documents regarding his marital status, immigration status, residency, bank

accounts, real property, life insurance policies, and other assets held in the past

five years to verify his eligibility for benefits.      See N.J.A.C. 10:71-4.10

(disallowing benefits for applicants who dispose of assets at less than fair market

value during a sixty-month lookback period). The agency also requested M.H.

provide information and documents regarding his spouse's income.                See

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N.J.A.C. 10:71-5.5(a) (including the income of an applicant's spouse in some

circumstances to determine eligibility for benefits). Finally, CWA requested

M.H. explain why his receipt of social security benefits had been suspended.

      CWA informed M.H. his application would be denied if the requested

information and documents were not provided by April 18, 2016.             CWA

subsequently extended the deadline to April 28, 2016.

      On April 18, 2016, M.H.'s counsel submitted some, but not all, of the

information and documents requested by CWA. No social security information

was provided. However, M.H.'s counsel enclosed a copy of a letter to the Social

Security Administration requesting an explanation of why M.H.'s benefits had

been suspended. Counsel represented M.H. was married, but separated from his

spouse five years earlier. He produced no evidence establishing the separation

or its duration. Counsel asked CWA to request a spousal waiver from DMAHS,

that is, to have M.H.'s eligibility for benefits determined without consideration

of his spouse's assets. See 42 U.S.C. § 1396r-5(c)(3)(C). In addition, counsel

requested CWA's assistance in obtaining an explanation for the suspension of

M.H.'s social security benefits and asked the agency to obtain any outstanding

information it believed necessary to complete M.H.'s application.

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      On April 28, 2016, CWA, citing N.J.A.C. 10:71-2.2, denied M.H.'s

application because he did not provide the requested information and

documents. M.H. requested a fair hearing.

      The matter was transferred to the Office of Administrative Law, where a

fair hearing was held before ALJ Kathleen M. Calemmo. The hearing addressed

whether: (1) counsel's April 18, 2016 letter substantially complied with CWA's

information request; (2) CWA fulfilled its obligations under federal and state

law to assist M.H. in obtaining the financial information necessary to verify his

application; and (3) M.H. was entitled to a spousal waiver. M.H. called no

witnesses.   A CWA representative testified M.H.'s application was denied

because it was incomplete and provided insufficient information to determine if

a spousal waiver was warranted.

      On January 23, 2018, ALJ Calemmo issued an initial decision

recommending the denial of benefits be affirmed.        The ALJ examined the

responsibilities assigned to CWA and the applicant in N.J.A.C. 10:71-2.2 with

respect to the submission of information and determined the information

provided by M.H. was insufficient to establish eligibility for benefits. The ALJ

noted the only information provided about M.H.'s marital status was the hearsay

statements of his counsel and concluded "[t]here is nothing in the record to

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support [M.H.'s] claim of separation." In addition, the ALJ found the only

document in the record regarding M.H.'s assets was a bank statement for a one-

month period.1

      The ALJ concluded M.H. did not establish an entitlement to a spousal

waiver. As the ALJ explained, "[p]etitioner was not present at the hearing and

there was no one at the hearing to offer any testimony on his behalf. It is not

known what efforts, if any, were made by the petitioner to obtain information

from his wife."

      On February 27, 2018, the Director issued a final decision adopting the

ALJ's recommendation.         The Director agreed with ALJ          Calemmo's

determination M.H. failed to provide the information necessary to verify

eligibility for benefits.

      This appeal followed.    M.H. raises the following arguments for our

consideration:

             POINT I

             RESPONDENT HAS VIOLATED FEDERAL LAW
             BY FAILING TO ASSIST M.H. IN COMPLETING
             HIS MEDICAID APPLICATION.

1
  Prior to the hearing, CWA discovered a bank account in M.H.'s name not listed
on his application for benefits. The only records obtained from the account were
for a one-month period in 2013 and showed the address of M.H.'s wife.

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                                       5
            POINT II

            RESPONDENT HAS VIOLATED STATE LAW BY
            FAILING TO ASSIST M.H. IN COMPLETING HIS
            MEDICAID APPLICATION.

            POINT III

            RESPONDENT HAS VIOLATED FEDERAL AND
            STATE LAW BY FAILING TO PROVIDE
            ADDITIONAL TIME TO M.H. IN ORDER TO
            ALLOW HIM SUFFICIENT TIME TO PROVIDE
            REQUESTED VERIFICATIONS.

            POINT IV

            RESPONDENT HAS VIOLATED STATE LAW BY
            FAILING TO PROVIDE WRITTEN NOTICE OF THE
            DENIAL OF A SPOUSAL WAIVER TO M.H.

                                        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:

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            (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

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

(2009)). "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. N.J. 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

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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. N.J. 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 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.

N.J.S.A. 30:4D-5. 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).

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      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). The applicant must: "1. [c]omplete, with assistance from the CWA if

needed, any forms required by 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)(1) to (3).

            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).]

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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
            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-

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                                      10
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.

      Having carefully reviewed the record and applicable legal principles, we

conclude DMAHS's decision is not arbitrary, capricious, or unreasonable and

comports with controlling law. The CWA's role is to assist the applicant in

completing an application and to verify financial information provided by the

applicant when necessary. The CWA extended the deadline for submission of

M.H.'s financial information, including information relating to his marital status

and spouse's assets, in light of the false statement in M.H.'s application that he

was single. M.H. did not submit the necessary information. He provided no

information with respect to his spouse's assets. In addition, the only information

provided about M.H.'s marital status were the hearsay statements of his counsel

that M.H. had been separated from his spouse for five years. No documents,

affidavits, or other evidence supporting counsel's representations were

submitted. CWA could not verify necessary information relating to M.H.'s

assets, marriage, and residence.

      We disagree with M.H.'s argument that the CWA violated federal and

State law by not adequately assisting him in completing his application.

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                                         11
DMAHS, as our State Medicaid "agency[,] must request and use information

relevant to verifying an individual's eligibility for Medicaid in accordance with

§ 435.948 through § 435.956 of this subpart."            Income and Eligibility

Verification Requirements, 42 C.F.R. § 435.945(b) (2017).         To fulfill this

obligation DMAHS must request:

            (1) Information related to wages, net earnings from
            self-employment, unearned income and resources from
            the State Wage Information Collection Agency
            (SWICA), the Internal Revenue Service (IRS), the
            Social Security Administration (SSA), the agencies
            administering the State unemployment compensation
            laws, the State-administered supplementary payment
            programs under section 1616(a) of the Act, and any
            State program administered under a plan approved
            under Titles I, X, XIV, or XVI of the Act; and

            (2) Information related to eligibility or enrollment from
            the Supplemental Nutrition Assistance Program, the
            State program funded under part A of title IV of the
            Act, and other insurance affordability programs.

            [42 C.F.R. § 435.948(a)(1) to (2) (2013).]

In addition, DMAHS may request "information relating to financial eligibility

from other agencies in the State and other States and Federal programs to the

extent the agency determines such information is useful to verifying the

financial eligibility of an individual[.]" 42 C.F.R. § 435.948(a) (2013). Bank

records do not fall within the scope of 42 C.F.R. § 435.948(a)(1). M.H., in

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                                      12
essence, argues DMAHS has a legal obligation to investigate M.H.'s assets and

marital status, verify the accuracy of the information it finds, and complete his

application. The law does not put that onus on the agency.

      Additionally, while the CWA cannot mandate applicants submit financial

information for eligibility verification when that information is available

electronically under 42 C.F.R. § 435.952(c) (2016), New Jersey's Asset

Verification System, a computer system that facilitates access to financial

information, was not yet operational at the time M.H.'s application was

considered.

      Finally, the parties acknowledge M.H. asked for, and was denied, a

spousal waiver. Because M.H.'s application was denied based on his failure to

submit any information relating to his own assets, we need not address whether

M.H. was entitled to a spousal waiver.

      To the extent we have not addressed other arguments raised by M.H., we

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

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

      Affirmed.

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