In 1986, Plaintiff Andres Nieves, Sr. purchased a home in Dover, New Jersey (the “home”) with his son, Andres Nieves, Jr. (“Nieves, Jr.”) In 2002, plaintiff suffered a stroke rendering him unable to perform various “activities of daily living” without assistance. Plaintiff resided in the home with his son until he entered a long-term care facility in 2015.

Between 2002, when plaintiff suffered a stroke, and 2015, when plaintiff entered a long-term care facility, Nieves, Jr. provided plaintiff with care that enabled him to remain at home rather than a nursing home, including supervision of medication, nutritional status, and safety. Although he had a job outside the home, Nieves, Jr. employed private caregivers or enlisted his brother to care for plaintiff while he worked. When Nieves, Jr. was unable to find outside care, he stayed home from work to care for his father.

Plaintiff conveyed title to the home to Nieves, Jr. by deed dated December 22, 2011.

In 2015, after moving into the long-term care facility, plaintiff applied for Medicaid benefits. With his application, plaintiff submitted certifications intended to demonstrate that plaintiff’s transfer of his home to Nieves, Jr. in 2011 was exempt from Medicaid’s transfer of assets penalty because Nieves, Jr. was a “caregiver child.” In that regard, under the Medicaid rules, any transfers of assets from the Medicaid applicant to another during the 5 year period prior to the filing of an application for benefits results in the imposition of a penalty, or period of ineligibility for Medicaid. However, an applicant is not subject to this “transfer of assets” penalty if the applicant’s home was transferred to a son or daughter who “was residing in such individual’s home for a period of at least two years immediately before” the individual moved into a long-term care facility and “who provided care to such individual which permitted such individual to reside at home rather than in the long-term care facility (the “caregiver child exemption”). Plaintiff claimed that his transfer of the home to his son fell within the caregiver child exception.

The Medicaid agency found that plaintiff was eligible for Medicaid benefits but imposed a 954-day penalty for the 2011 transfer of plaintiff’s home to Nieves, Jr. under the transfer of assets rule. The agency explained that, under its interpretation of the Medicaid rules,  the “caregiver child exemption” is met when “only one child is responsible for care giving and in order to give that level of care the child cannot be employed for 2 years immediately before the date the individual became institutionalized or institutional level of care needed.”

Plaintiff requested a fair hearing to challenge the Medicaid agency’s interpretation of the “caregiver child exemption” under the Medicaid rules and the imposition of the transfer of assets penalty. Plaintiff argued that “nowhere in the definition of a caregiver child does it require that child be unemployed or available 24/7 to perform the services.”

Soon thereafter, plaintiff also filed a complaint in federal court for the district of New Jersey for an order permanently enjoining the State of New Jersey from interpreting the federal and state caregiver child exemption to the transfer of assets rule to require that a caregiver child (a) be the only caregiver for an applicant and (b) be otherwise unemployed for the two years before the applicant’s institution. Plaintiff also sought an order requiring defendant to reprocess his Medicaid application without imposing a transfer of assets penalty, as well as awarding attorneys’ fees and costs.

Plaintiff then withdrew his request for a fair hearing, noting that he had filed an action against defendants in federal court addressing the same issues.

Plaintiff filed a motion for a preliminary injunction in the pending federal lawsuit, claiming he was likely to prevail in this case and would suffer permanent harm if defendant was not required to immediately reverse its “caregiver child” position. Soon thereafter, the Medicaid agency issued a revised eligibility determination holding that the “caregiver exemption has been approved” with respect to Nieves, Jr. and finding plaintiff to be retroactively eligible for benefits without a transfer of assets penalty.

The State filed a motion to dismiss plaintiff’s complaint, claiming that, because the agency granted plaintiff the Medicaid benefits he sought and withdrew any interpretation of the caregiver child exemption requiring that a child be the Medicaid applicant’s sole caregiver and be unemployed, plaintiff did not present a justiciable case or controversy.

The Court denied plaintiff’s motion and granted the State’s motion, dismissing plaintiff’s complaint. The Court held as follows:

Defendants argue, correctly, that Plaintiff does not present a justiciable case or controversy. Plaintiffs first claim for relief is moot because the [Medicaid agency] issued a letter . . .  stating that it does not interpret the federal or state caregiver child exemptions to require that the child be the sole caregiver or unemployed for two years before an applicant’s institutionalization. There is no “real and substantial controversy” between Plaintiff and Defendants because the Parties do not hold opposing interpretations of the state or federal statutes in question. (Citations Omitted)

The case is attached here – Nieves v. Connolly

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