Medicaid Denial Reversed; Agency Failed to Accommodate Disabled Applicant or Assist in Obtaining Information and Documents

After he was admitted to a nursing home in 2013, petitioner, R.P., accrued unpaid bills of $264,146 for nursing care services. As a result, three successive Medicaid applications were filed on R.P.’s behalf. It was undisputed that R.P. lacked the capacity to assist with any of the Medicaid applications.

The first Medicaid application, filed in November 2013, was denied eight months later for failure to provide information and/or documents needed to make an eligibility determination. Petitioner requested a fair hearing, and the administrative law judge affirmed the denial.

In July 2014, petitioner filed a second Medicaid application. The second application was denied in October 2014 for the same reason as the first, i.e., failure to provide information and/or documentation required to make a determination. Petitioner again appealed, requesting a fair hearing. While the appeal was pending, petitioner filed a third Medicaid application in April 2015.

At the hearing on the denial of the second application, petitioner submitted a certification from his attorney describing the information sought by the Medicaid agency and the many attempts counsel made to obtain the requested information from third parties such as banks and the IRS without assistance from the petitioner due to his incapacity. Counsel also showed that much of the bank information sought by the agency was for a period beyond the 5-year look-back period, therefore not required to make a determination.  Based upon the many efforts to obtain the information by counsel, petitioner asserted that the circumstances were beyond his control and that he was entitled to more time to make submissions. In addition, petitioner asserted that the agency was asking for information that does not exist and, that it could have made a determination on the application without the information.

The administrative law judge (ALJ) hearing the appeal reversed the denial of Medicaid benefits. The ALJ ruled that petitioner, as a disabled person, was entitled to accommodations when applying for public benefits which the Medicaid agency failed to provide:

[The law requires that a public entity shall make reasonable modifications in policies, practices, or procedures when the modifications are necessary to avoid discrimination on the basis of disability … And public agencies indeed have a duty to offer reasonable modifications to their policies, practices, and procedures under the Fourteenth Amendment for disabled individuals so they are not effectively or unintentionally denying access to the vital programs which have in fact funded by the applicants. … In the instant matter, petitioner is indisputably a disabled individual that is entitled to an accommodation when applying for a public benefit, which has been deemed a property interest. … When Medicaid applicants are mentally incapable of assisting in their pursuit of Medicaid coverage, the regulations clearly protect them from being penalized; due to their inability to submit in-depth analysis of five years’ worth financial transactions for items; such as stock transactions and thousands of ordinary banking transactions …

The ALJ also found that disabled applicants were entitled to more time when the information sought by the agency is in the possession of third parties:

[T]he regulations include protective provisions directing the [Medicaid agency] that disabled applicants are entitled to more time, if matters are outside the control of the [Medicaid agency], or financial information is unavailable and in the possession of third parties.

In addition, the ALJ found that the equities of the situation weighted in favor of affording the petitioner a decision on the merits of his Medicaid application:

Procedural dismissal of cases involving protected rights of the disabled should be avoided, if possible. … Petitioner is entitled to a decision on the merits his Medicaid application since it is a program that petitioner helped fund over his lifetime. There is considerable prejudice to the petitioner and the long-term care facility while there is no comparable or measureable prejudice to the [Medicaid agency]. Over $250,000 in care was provided to petitioner by the long-term care facility that could or will, go unreimbursed. This is fundamentally unfair because it’s based upon a technical or procedural denial of assistance rather than from a meritorious consideration of the application. The procedural denial is extraordinarily harmfully to the long-term care facilities and its residents …

Finally, the ALJ found that the Medicaid agency had a duty to assist applicants in completing the Medicaid application and in obtaining necessary information and documents:

The processing of Medicaid applications involves shared responsibility. The burden does not rest exclusively with the applicant. N.J.A.C. 10:71-2.2 sets forth responsibilities for both the [Medicaid agency] and the applicant, during the application process. Specifically, N.J.A.C. 10:71-2.2(e) states “as a participant in the application process, an applicant shall: 1. Complete, with the assistance from the [Medicaid agency] if needed, any forms required by the [Medicaid agency] as a part of the application process; 2. Assist the [Medicaid agency] in securing evidence that corroborates his or her statements …

The case is attached here – R.P. v Division of Medical Assistance and Health Services