Medicaid Applicant Did Not Provide Specific Enough Evidence of the Purpose of Transfers to Rebut Penalty Period

In a Medicaid penalty case, a New Jersey appeals court holds that the family of a centenarian Medicaid applicant did not provide specific enough evidence of the services provided to the applicant to rebut the presumption that the applicant made transfers in order to qualify for Medicaid. E.C. v. Division of Medical Assistance and Health Services (N.J. Super. Ct., App. Div., No. A-0832-17T4, March 25, 2019).

Nursing home resident E.C. applied for Medicaid benefits in 2015 at age 103. The state approved her application, but found she had transferred $84,702.20 to her niece and imposed a penalty period. E.C. appealed. At a hearing, the niece provided an affidavit, claiming she spent the transferred funds on E.C.'s behalf. A caregiver testified that she was paid $150 a week to provide housekeeping services to E.C. before she entered the nursing home and that she continued to provide services and make purchases for E.C. after she moved to the nursing home.

The administrative law judge (ALJ) affirmed the penalty, but reduced the amount to $81,102.20. The ALJ found credible the caregiver's testimony regarding her pay for caregiver services before E.C. entered the nursing home. The state affirmed the penalty, and E.C. appealed.

The New Jersey Superior Court, Appellate Division, affirms, holding that the evidence did not overcome the presumption that expenditures were for the purpose of accelerating E.C.'s Medicaid eligibility. The court notes that while the caregiver was specific with the amount she received for her services before E.C. entered the nursing home, after E.C. entered the nursing home, there "was a lack of specificity, including an absence of receipts, with respect to the expenditures [the caregiver] made on behalf of E.C., making a fair market value determination impossible."

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