Court Finds Medicaid Applicant Eligible For Benefits; Her Bank’s Lack Of Cooperation Prevented Applicant From Accessing Her Accounts

A.D., a retired physician, began residing at Bergen Regional Medical Center (Bergen Regional), a nursing home, in October 2004. She was 80 years old at the time. She began receiving Medicaid benefits in late 2004.

In 2006, the Bergen County Board of Social Services (Board) discovered two Keogh accounts at Citibank in A.D.’s name valued at approximately $22,000, exceeding the resource eligibility limit for Medicaid. A.D. did not know about these accounts, which were apparently set up by a former employer. A.D.’s attorney tried on numerous occasions, beginning in 2006 and continuing for two years thereafter through 2008, to liquidate all the funds in the two Keogh accounts. A.D., through her agent under a power of attorney, assisted in these efforts. Citibank refused to liquidate the accounts for various reasons having to do principally with its internal administrative requirements. After years of effort, the final Keogh account was liquidated in May 2008. Thereafter, the Board  advised A.D. that since the Keogh accounts had not been reported on the Medicaid application, A.D. was ineligible for Medicaid benefits from December 1, 2005 through May 31, 2008.

A.D. filed a request for an administrative Fair Hearing. The administrative law judge found that the delay in distributing the funds was largely due to Citibank’s failure to comply with the liquidation requests and cooperate with A.D’s attorney and agent under her power of attorney. However, after finding that Citibank caused over two years of delay, the administrative law judge determined “that at all times relevant [A.D.] had access to her [Keogh] accounts which were in the custody of CitiBank …,” and, as a result, A.D. was ineligible for Medicaid benefits. The Director of the Medicaid adopted the administrative law judge’s decision, finding that “at all times [A.D.] had access to the funds in quest[ion],” and therefore did not meet the resource standard for Medicaid eligibility until June 1, 2008.

A.D. appealed to the Superior Court of New Jersey, Appellate Division. Although A.D. died on August 31, 2010, Bergen Regional continued to prosecute the appeal as it was owed more than $151,000 for the period when A.D. was denied Medicaid eligibility.

On appeal, the appeals court reversed, finding that A.D. should have been deemed eligible for Medicaid on January 1, 2007 due to Citibank’s actions which prevented A.D. from accessing her Keogh accounts for over two years:

We find that the agency incorrectly found that the Keogh accounts were accessible to A.D. As the administrative law judge found, Citibank prevented A.D. from accessing the accounts for over two years. Had Citibank properly processed A.D.’s original . . . request to liquidate her Keogh accounts, she would have reduced her assets in time to be eligible for Medicaid on January 1, 2007. . . . As the administrative law judge found, Citibank had no valid reason for requiring a specialized form to withdraw funds. A.D.’s lawyer sent a general Citibank withdrawal form with a signed and notarized letter from A.D. explaining that she wished to withdraw all her funds. . .. Citibank’s lack of cooperation was beyond the control of A.D.

The case is annexed here – A.D. v. Division of Medical Assistance and Health Services