Before Termination, A Medicaid Recipient Must Be Screened For Eligibility For All Other Medicaid Programs

The New Jersey Appellate Division held that the state Medicaid agency is required to screen a Medicaid recipient for eligibility for all other Medicaid programs before terminating the recipient from the Medicaid program for which the recipient is presently eligible. D.C. v. Div. of Med. Assistance & Health Servs., 2020 WL 4290056 (N.J. Super. Ct. App. Div. July 28, 2020)

D.C. and M.L., a married couple, were both disabled. D.C. received $810 per month in Social Security Disability (SSD) benefits. M.L. received $706 per month in SSD benefits. For a time, the couple also received Medicaid benefits under the New Jersey FamilyCare Aged, Blind, and Disabled (ABD) Program. The ABD Program consists of multiple programs for people who live in the community and need help. In this cases, D.C. and M.L. received medical coverage. and assistance in paying their monthly Medicare premiums, co-pays and deductibles.

The couple became ineligible for their ABD Medicaid program in 2017 because of a change in circumstances. The New Jersey Department of Human Services, Division of Medical Assistance and Health Services (DMAHS), sent the couple termination notices advising them that their ABD Program benefits would be terminated effective August 31, 2017.

On August 30, 2020, D.C. and M.L. applied for another Medicaid program called the Specified Low-Income Medicare Beneficiaries (SLMB) Program. Although they qualified for the SLMB Program, DMAHS denied the application, stating that the SLMB application could not be considered until D.C. and M.L. were terminated from the ABD Program.

The couple appealed, filing for a Fair Hearing before an Administrative Law Judge (ALJ). The couple argued that they must be screened for eligibility for all other Medicaid programs before they could be terminated pursuant to federal law providing that  “agencies that administer or process Medicaid applications . . . [must] also screen for other programs” prior to terminating benefits. In addition, the couple also argued that, since that screening process would show that both of them were eligible for the SLMB Medicaid program, they both must be transferred to SLMB with no gap in coverage. The ALJ rejected the couple’s arguments, stating that the couple could apply for SLMB after they were terminated, and seek retroactive benefits for the period during which they were without coverage while the Medicaid agency processed their new application. The decision was affirmed by the Director of the state Medicaid office.

The couple then filed another appeal to the Superior Court of New Jersey, Appellate Division. In the appeals court, the couple maintained that DMAHS “violate[d] federal Medicaid law” by “upholding the termination of [the couple’s] Medicaid benefits without first screening for eligibility for all Medicaid programs.”

The Appellate Division agreed with D.C. and M.L., reversing the prior decisions. The appeals court held as follows: “Because State Medicaid agencies are required under federal regulations to assess beneficiaries’ eligibility for other Medicaid programs before terminating benefits, we agree that petitioners should have been transferred to the SLMB Program with no gap in coverage.” The court also rejected the proposed remedy of retroactive benefits, stating it “subverts the purpose of a pre-termination review, which is to prevent unwarranted lapses in Medicaid coverage, and undermines the fundamental tenet of a program designed to provide financial assistance to a ‘vulnerable population’ subsisting on a low fixed income.”

As a result of the D.C. and M.L. case, the NJ Medicaid agency will be required to change termination procedures for thousands of NJ Medicaid recipients to make sure that they are not improperly terminated.

The case is attached here – [gview file=””]

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