In an unpublished, per curiam decision, a New Jersey appeals court ruled that a grant of funds awarded by a state agency which were held by an elderly Medicaid recipient in a bank account for the benefit of her disabled grandson are not countable resources that would affect her Medicaid eligibility. I.M. v. Division of Medical Assistance and Health Services (N.J. Super. Ct., App. Div., No. A126509T3, June 3, 2011)(unpublished).

I.M., 79, is a recipient of community-based Medicaid as well as the sole caregiver for her 21-year-old mentally disabled grandson, J.M. In December 2007, the New Jersey Division of Developmental Disabilities (DDD) sent I.M. a grant of $2,000 to purchase items and services for J.M.’s benefit. She spent some of the funds for J.M.’s special needs and deposited the remainder, $1,480, into a new bank account to be spent for J.M. at a later date.

The Division of Medical Assistance and Health Services (DMAHS) considered the $1,480 to be I.M.’s countable resource, which pushed her resources above the Medicaid limit of $2,000 and resulted in the termination of her benefits. I.M. subsequently deposited the $1,480 in a new account in J.M.’s name, with I.M. as the representative payee. At a fair hearing, an Administrative Law Judge (ALJ) concluded that the termination of I.M.’s Medicaid benefits had been improper. Nevertheless, DMAHS maintained its position that the bank account was an available resource, and I.M. appealed.

The Superior Court of New Jersey, Appellate Division, reversed. The court agreed with the ALJ that “availability” under Medicaid regulations incorporates a legal rather than physical sense of possession:

[B]y placing DDD’s grant money in a new bank account titled in J.M.’s name and social security number with I.M. listed only as representative payee, I.M. has fairly established that she holds these funds in trust for her disabled grandson and that they are not available for her personal use. Thus, while I.M. may have physical access to J.M.’s funds, she holds them as his fiduciary, restricted in their use by the very terms of the DDD grant, as well as of the bank account in which they are held.

As a result, I.M. was found to be eligible for continuing Medicaid benefits.

The I.M. case is attached here – I.M. v. Division of Medical Assistance and Health Services

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