In this case, Petitioner’s son, P.M., resided with his mother, Petitioner R.M., for more than fifty years, in R.M.’s home. In December 2019, R.M. was admitted to a nursing facility. Since that time, R.M. no longer resided at her former home. After R.M. was admitted into the nursing facility, P.M. and Petitioner’s daughter, R.K., petitioned the court for legal guardianship of Petitioner. After their appointment as R.M.’s co-guardians, P.M. and R.K. transferred title to Petitioner’s home to P.M.
On March 31, 2020, the co-guardians filed an application for Medicaid benefits for R.M. On October 5, 2020, the Monmouth County Division of Social Services (MCDSS) granted Petitioner’s Medicaid application with eligibility as of September 1, 2020. However, a penalty of 849 days was assessed resulting from the transfer of assets, totaling $303,820.96, for less than fair market value during the five-year look-back period. The transfer of assets resulted from gifts to family members, totaling $18,730.12,1 and the transfer of Petitioner’s home to her son, P.M., for $285,090.84 less than the home’s fair market value.
Petitioner appealed. Petitioner did not contest the penalty imposed as a result of the gifts to family members. She contested only the imposition of the penalty related the transfer of her home to her son, P.M. Petitioner argued that the transfer of the home to P.M. should be exempt from the imposition of a penalty on Petitioner’s receipt of Medicaid benefits as a result of P.M. being Petitioner’s caregiver for the two-year period prior to Petitioner being admitted into the nursing facility.
At the hearing before an administrative law judge (ALJ), P.M. testified that he provided regular care to Petitioner, including managing her medications, doing all of her shopping, making her meals, doing her laundry, assisting her in toileting, regularly changing her clothes including incontinence underwear when soiled, changing bed sheets when soiled, and assisting her with showering, which included undressing Petitioner, holding her up in the shower, drying her off, and re-dressing her. Medical documentation was also submitted.
The ALJ reversed the penalty imposed as a result of the home transferred to P.M. The ALJ found that, under the Medicaid regulations, a transfer penalty, or delay in Medicaid eligibility, is triggered by the disposal of financial resources at less than fair market value during the 5-year look- back period. However, a Medicaid applicant will not be subject to a penalty when the individual transfers the equity interest in a home which serves (or served immediately prior to entry into institutional care) as the individual’s principal place of residence” and when “title to the home” is transferred to a son or daughter if the son or daughter “resid[ed] in the individual’s home for a period of at least two years immediately before the date the individual becomes an institutionalized individual” and “provided care to such individual which permitted the individual to reside at home rather than in an institution or facility.”
Based on the regulations cited above, the ALJ reversed the initial decision by MCDSS and found instead that the transfer of R.M. ‘s home to P.M. was exempt from a Medicaid transfer penalty because P.M. provided care to Petitioner beyond normal support and that Petitioner required an institutional level of care for the two years immediately preceding institutionalization.
The Assistant Commissioner for the Division of Medical Assistance and Health Services (DMAHS) reversed the ALJ’s decision on review and remanded the matter for additional proceedings. The Order of Remand found that the documentation submitted by Petitioner was insufficient to determine Petitioner’s care needs for the entire two-year period immediately preceding institutionalization, i.e. December 2017 through December 2019. Petitioner was directed to provide additional documentation that demonstrated Petitioner’s care needs during that period.
On remand, Petitioner submitted substantial additional medical evidence. As a result, the Assistant Commissioner of DMAHS ultimately held that:
Petitioner has shown through credible documentary evidence that the care P.M. provided, and that Petitioner needed, for the two years prior to institutionalization exceeded normal personal support activities and Petitioner’s physical or mental condition “required special attention and care” as required by the regulations in order to qualify for the exemption. … Petitioner has shown that she qualifies for the caregiver exemption related to this transfer … .
Although it took two years of effort to obtain the correct result in this case, the penalty resulting from R.M.’s transfer of her home to her son P.M. was reversed.
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