M.K. v. Division of Medical Assistance, Superior Court of New Jersey, Appellate Division (2016)

In M.K. v. Division of Medical Assistance, Superior Court of New Jersey, Appellate Division (2016), the Division imposed a period of ineligibility for benefits because she transferred ownership of her home to her daughter, J.K., for less than fair-market value within sixty months of entering a nursing home facility (the look-back period). The applicant argued no penalty should be imposed because the transfer was a home transferred to a caregiver child.

The record showed that J.K., the child, provided substantial care for the parent from 2002 through September 30, 2010. The parent was admitted to a nursing home, but was unhappy and was discharged to her son’s home where, for five months, her son and his wife attempted to provide care. After numerous falls, M.K. returned to the nursing home. Meanwhile, M.K. deeded her home to J.K.

After filing the Medicaid application, M.K. disclosed she transferred her home to J.K. She attached a letter from J.K. delineating the level of care she provided M.K. prior to her transfer to a nursing home and a letter from her treating physician stating her physical conditions had “compromised [M.K.’s] ability to care for herself and increased her dependence upon [J.K.] for activities of daily living.” The Board found this was insufficient to establish that “M.K. needed an “institutional level of care based on her medical needs,” which was provided by J.K., so as to delay M.K.’s transfer to an institutional facility.” They also found that the child failed to prove she resided with her parent during the two year period immediately prior to the transfer.

At hearing, multiple family members testified and M.K. physician provided evidence. However, the Board found that while J.K. provided M.K. with “care exceeding normal person support activities . . . necessary to [M.K.]’s health and safety,” which allowed her to remain in her home. However, the ALJ rejected the argument that M.K. needed an institutional level of care as of September 2010, noting M.K. could be alone for approximately five hours per day, which suggested “some ability to move about her house without assistance and . . . not necessarily in need of an institutional level of care in September 2010.” As of March 2011, the ALJ agreed M.K.’s circumstances had changed and she found M.K. was in full need of a nursing level of care. However, she found J.K. was not M.K.’s caregiver for a full two years prior to that date because of the intervening period of care provided by M.K.’s son and his wife.

The Board decision was affirmed on appeal for two reasons. First, the record regarding the level of care provided was muddled with insufficient specifics. Second, there was insufficient explanation regarding why M.K. left the nursing home after her initial admission – did she need institutional-level care? “Consequently, we reject the contention that denial of the caregiver child exception for failure to fulfill the two-year time period immediately before institutionalization was arbitrary or capricious.”

Analysis: Assuming New Jersey is an SSI State (it is) and that it’s Medicaid program cannot be more restrictive than SSI (it can’t), then this case should have gone the other direction consistent with POMS SI 011550.122. See also 42 C.F.R. 435.121.

Decided: May 16, 2016

42 U.S.C. § 1396p(c)(1)(D)(ii)
42 U.S.C. § 1396p(c)(2)(A)(iv)