A New Jersey administrative law judge holds that a Medicaid applicant's payment to his adult children for services rendered under a power of attorney was properly considered a gift and subject to a penalty period, despite a court order awarding wages for services rendered. V.M. v. Division of Medical Assistance and Health Services, et al., OAL Docket No. 5769-09 (March 22, 2010, Union County).
In 2002, V.M., an elderly widower, executed a power of attorney, appointing two of his four adult children as co-agents. In January 2008, after having been admitted to a nursing home and approved for Medicaid nursing home benefits, V.M. sold his former home and received approximately $202,748 in net proceeds. The co-agents reported the sale and receipt of the proceeds to Medicaid. Later they filed an action in superior court seeking compensation of $102,555.55 for services they had rendered over the preceding five or so years, including taking their father to family gatherings, doctor visits, the bank and to dinner, plus $24,400 for expenses incurred on their father's behalf. Medicaid was not notified of the action. As the matter was uncontested, the superior court eventually awarded the co-agents the amounts they had requested.
Subsequently, Medicaid terminated V.M.'s nursing home benefits, concluding that he had excess resources and that the payment to his adult children for services rendered under the power of attorney was actually more in the nature of a gift. V.M. appealed, asserting that because the superior court had authorized payment to the co-agents for the services, the agency was precluded from treating the payment as an uncompensated transfer and denying benefits.
An administrative law judge (ALJ) disagrees and affirms the denial of Medicaid benefits. The ALJ notes that the superior court had not ruled on Medicaid eligibility but rather on compensating agents under a separate state law. Accordingly, the ALJ concludes that the agency is entitled to consider the payment to the co-agents in the context of the Medicaid eligibility rules and to thereby find that in light of the lengthy time that the co-agents were not compensated for their services, the payment was actually an uncompensated transfer.
This decision was brought to our attention by ElderlawAnswers member Donald D. Vanarelli and adapted from his blog. Attorney Vanarelli represented V.M. in the case. Exceptions have been filed by the parties and the case now goes to the Director of the Medicaid agency for review and the entry of a final agency decision.