In A Medicaid Case, An ALJ's Findings Of Fact Based Upon The Credibility Of Witnesses Cannot Be Rejected Without Proper Cause

For most of her life, V.P. resided in her home with her adult son, R.P. V.P. suffered from many significant impairments, including spinal scoliosis and other degenerative diseases of the spine, hypertension, diabetes, gastroesophageal reflux disease, anxiety, and frequent urinary tract infections. As a result of her poor health, V.P. relied upon her son R.P. to assist her with most activities of daily living at home. In that regard, R.P. helped V.P. move around the home, assisted her walking up and down the stairs, cleaned the house, drove her to doctors’ appointments, ran errands, supervised her medicine intake and helped her bathe and with the toilet. He also cooked all V.P.’s meals, making sure that they fit within her dietary requirements for diabetes and high blood pressure. He usually cut up V.P.’s food because she could not do it herself. R.P. only left V.P. alone when he went to work. Whenever R.P. left the house, he kept his cell phone on, called regularly from work, and left work early or stayed home when his mother was sick or needed him.

In October 2008, when she was 88 years old, V.P. was admitted to a nursing home after suffering a stroke and heart attack. In March 2009, shortly after transferring ownership of her home to R.P, V.P. applied for Medicaid benefits. The Burlington County Board of Social Services and the Division of Medical Assistance and Health Services (DMAHS) concluded that V.P. was ineligible for nursing home Medicaid based upon the transfer of her home to R.P. V.P. appealed that determination, and the matter was transmitted to the Office of Administrative Law for a hearing. The Administrative Law Judge (ALJ) found that the transfer met the “child caregiver exception” and recommended a reversal of the disqualification. The “caregiver child exception” to the Medicaid transfer of resources rules permits an individual to transfer his or her home to an adult son or daughter without the imposition of a penalty, or period of ineligibility for Medicaid, when the adult child resided in the home for at least two years before the individual became institutionalized and provided care which permitted the individual to reside at home rather than in an institution. N.J.A.C. 10:71-4.10(d), which contains the “caregiver child exemption”, provides as follows:

(d)[A]n individual shall not be ineligible for an institutional level of care because of the transfer of his or her equity interest in a home which serves (or served immediately prior to entry into institutional care) as the individual’s principal place of residence and the title to the home was transferred to: . . . .

4. A son or daughter of the institutionalized individual . . . who was residing in the individual’s home for a period of at least two years immediately before the date the individual becomes an institutionalized individual and who has provided care to such individual which permitted the individual to reside in the home rather than in an institution or facility.

i. The care provided by the individual’s son or daughter for the purposes of this subchapter shall have exceeded normal personal support activities (for example, routine transportation and shopping). The individual’s physical or mental condition shall have been such as to require special attention and care. The care provided by the son or daughter shall have been essential to the health and safety of the individual and shall have consisted of activities such as, but not limited to, supervision of medication, monitoring of nutritional status, and insuring the safety of the individual.

The Director of DMAHS rejected the recommendation of the ALJ. The Director focused on the lack of notation in any medical record indicating that V.P. needed help walking from her doctor’s waiting room to the examining room. Also, the Director pointed out that V.P.’s only medications were Valium and Tylenol. In addition, he noted that R.P.’s initial certification concerning care he provided for his mother did not include the fact that he helped his mother to walk or in the bathroom. Consequently, the Director concluded that V.P. needed only normal support activities, not special attention and care, and thus was not eligible for the “child caregiver exemption.”

V.P. appealed the Director’s denial of Medicaid benefits to the Superior Court of New Jersey, Appellate Division, and the Appellate Division reversed. The appeals court held that the Director improperly reversed the ALJ’s findings of fact based upon the credibility of lay witnesses without cause, contrary to the statutory requirements set forth in N.J.S.A. 52:14B-10(c):

The agency head may not reject or modify any findings of fact as to issues of credibility of lay witness testimony unless it is first determined from a review of the record that the findings are arbitrary, capricious or unreasonable or are not supported by sufficient, competent, and credible evidence in the record. In rejecting or modifying any findings of fact, the agency head shall state with particularity the reasons for rejecting the findings and shall make new or modified findings supported by sufficient, competent, and credible evidence in the record.

Having decided that the Director did not demonstrate that the ALJ’s credibility findings were arbitrary, capricious or were unsupported by the record, the appeals court reversed the denial of Medicaid benefits.

The case can be found here – V.P. v. Department of Human Services