As I reported in a May 22, 2008 blog posting several months ago, I received a denial notice from the Middlesex County welfare agency in a case in which the applicant’s Medicaid eligibility plan involved making a loan to a relative. The borrowing relative signed a promissory note agreeing to repay the note in monthly installments, including interest. The note and underlying loan were bona fide under NJ law. Unfortunately, the agency considered the loan and note to be a gift, resulting in the applicant being incorrectly charged for a penalty period under the Medicaid transfer of resources rules for many months, costing hundreds of thousands of additional dollars to privately pay for care during the penalty period. Most troubling was the reason for the agency’s determination. According to the agency, the loan was determined to be a gift because the loan was made in order to qualify for Medicaid and, under the agency’s incorrect view of the Medicaid law in New Jersey, motivation for making the loan was the principal factor in determining Medicaid eligibility.
I filed an appeal of the denial of Medicaid eligibility. In New Jersey, an appeal of a Medicaid denial leads to a trial, called a Fair Hearing, before an Administrative Law Judge (ALJ). While waiting for a trial date in the administrative forum, I filed a motion for summary judgment on the Medicaid applicant’s behalf, asking that the case be resolved before trial. A summary judgment motion can be granted only when there is no dispute as to the facts in the case, and the party seeking summary judgment is entitled to a decision in his favor as a matter of law. In this case, ALJ Joseph Paone agreed with our position, and granted summary judgment in favor of the Medicaid applicant. The judge held that (1) the motivation for the loan was irrelevant in determining the status of the loan, and (2) the loan was not a gift under federal law. The result of the ALJ’s decision would be that the Medicaid applicant was eligible for nursing home Medicaid benefits. The ALJ’s decision can be found here – aljs-decision.
Middlesex County welfare filed exceptions to the ALJ’s decision. In New Jersey, an ALJ’s decision is subject to plenary review, and can be reversed, by the Director of the State’s Division of Medical Assistance and Health Services, the State Medicaid agency. Happily, I received the Director’s decision today, affirming the ALJ’s decision. The Director’s decision can be found here – gl-v-dmahs.
I have been informed that this administrative law case is the first published opinion in the nation approving a promissory note and loan as an estate planning strategy for Medicaid eligibility.
Categories
- Affordable Care Act
- Alzheimer's Disease
- Arbitration
- Attorney Ethics
- Attorneys Fees
- Beneficiary Designations
- Blog Roundup and Highlights
- Blogs and Blogging
- Care Facilities
- Caregivers
- Cemetery
- Collaborative Family Law
- Conservatorships
- Consumer Fraud
- Contempt
- Contracts
- Defamation
- Developmental Disabilities
- Discovery
- Discrimination Laws
- Doctrine of Probable Intent
- Domestic Violence
- Elder Abuse
- Elder Law
- Elective Share
- End-of-Life Decisions
- Estate Administration
- Estate Litigation
- Estate Planning
- Events
- Family Law
- Fiduciary
- Financial Exploitation of the Elderly
- Funeral
- Future of the Legal Profession
- Geriatric Care Managers
- Governmental or Public Benefit Programs
- Guardianship
- Health Issues
- Housing for the Elderly and Disabled
- In Remembrance
- Insolvent Estates
- Institutional Liens
- Insurance
- Interesting New Cases
- Intestacy
- Law Firm News
- Law Firm Videos
- Law Practice Management / Development
- Lawyers and Lawyering
- Legal Capacity or Competancy
- Legal Malpractice
- Legal Rights of the Disabled
- Liens
- Litigation
- Mediation
- Medicaid Appeals
- Medicaid Applications
- Medicaid Planning
- Annuities
- Care Contracts
- Divorce
- Estate Recovery
- Family Part Non-Dissolution Support Orders
- Gifts
- Life Estates
- Loan repayments
- MMMNA
- Promissory Notes
- Qualified Income Trusts
- Spousal Refusal
- Transfers For Reasons Other Than To Qualify For Medicaid
- Transfers to "Caregiver" Child(ren)
- Transfers to Disabled Adult Children
- Trusts
- Undue Hardship Provision
- Multiple-Party Deposit Account Act
- New Cases
- New Laws
- News Briefs
- Newsletters
- Non-Probate Assets
- Nursing Facility Litigation
- Personal Achievements and Awards
- Personal Injury Lawsuits
- Probate
- Punitive Damages
- Reconsideration
- Retirement Benefits
- Reverse Mortgages
- Section 8 Housing
- Settlement of Litigation
- Social Media
- Special Education
- Special Needs Planning
- Surrogate Decision-Making
- Taxation
- Technology
- Texting
- Top Ten
- Trials
- Trustees
- Uncategorized
- Veterans Benefits
- Web Sites and the Internet
- Webinar
- Writing Intended To Be A Will
Vanarelli & Li, LLC on Social Media