Decision Denying Application For Medicaid Benefits Not Appealed May Be Binding On Any Subsequent Application

R.M. applied for nursing home Medicaid benefits to the State Medicaid agency, the Division of Medical Assistance and Health Services. The Division denied the application because she failed to provide necessary financial verifications. R.M. appealed the denial, and the Division conducted a fair hearing. As a result, the Division gave R.M. additional time to supply the needed documents. R.M. supplied the documents, and the Division approved the application but imposed a penalty based upon a transfer of cash assets valued at $688,418.98. The Division gave R.M. several months to demonstrate that she transferred $688,418.98 in cash assets solely for reasons other than to obtain Medicaid eligibility. She failed to meet the deadline, and the application was denied.

R.M. did not immediately challenge the determination, but rather filed a new application for Medicaid benefits. The Division informed R.M. in writing that additional documents were required to “complete” application. R.M. supplied the additional information. The Division then indicated that the denial of R.M.’s original stood, and the agency would take “no additional action” on R.M.’s new application.

R.M. then wrote to the Division seeking a fair hearing regarding its refusal to consider her new application. The Division replied, confirmed the previously issued eligibility determination, and advised that R.M. was “still serving her previously imposed penalty.” The Division subsequently denied R.M.’s fair hearing request.

R.M. appealed to the Superior Court, Appellate Division, arguing that the Division failed to comply with its own regulations by refusing to grant a fair hearing on the new application. R.M. argued that the Division’s refusal to accept and process her second Medicaid application was arbitrary and capricious.

The Superior Court, Appellate Division, disagreed with R.M. The Court held as follows:

[T]he Division was explicit in multiple letters to R.M. that it decided her Medicaid benefit eligibility in the first application. She was deemed eligible at that time, subject to a transfer penalty. R.M. could have pursued a fair hearing on the eligibility decision in the first application and presented any objections to it, but she did not do so. R.M.’s second Medicaid application appeared to be an attempt to restart the clock, and she has made no showing that the Division in any way failed to follow the law or was arbitrary, capricious, or unreasonable. In fact, the Division’s actions in disregarding the second Medicaid application are amply supported in the record.

As a result, the Court affirmed the Division’s actions, and dismissed R.M. appeal.

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

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