Medicaid Denial Vacated; Appeals Court Rejects ALJ’s Conclusion that Testimony of Medicaid Applicant’s Son Lacked Credibility

After being denied Medicaid because of a $70,000 joint bank account she maintained with her son, the Medicaid applicant, S.M., appealed the case to An administrative hearing. S.M. argued that Medicaid had failed to consider that her son was the sole source of $60,000 of those bank funds. After the ALJ affirmed Medicaid’s denial, and the ALJ’s decision was adopted by the Director, S.M. appealed to the Superior Court, Appellate Division. Included in the appeal was S.M.’s motion to supplement the record with a letter from the bank regarding the source of the funds.

On appeal, the Appellate Division granted the motion to supplement the record. In vacating the ALJ’s decision, the appeals court also took the unusual step of disregarding the ALJ’s credibility findings regarding the testimony of S.M.’s son. The ALJ had rejected the son’s testimony that the majority of the bank funds had come from the sale of his home, because the ALJ found him to be “confrontational and defensive” on the issue under cross-examination. However, the appeals court reviewed the transcript and determined that the son’s cross-examination was brief, and had not concerned the issue of the bank funds. The court concluded that “there is nothing about the brief cross-examination that would remotely suggest that [the son] was anything other than responsive.” The Appellate Division went on the state that “we are left with the strong impression that there has been a manifest denial of justice… that calls for our intervention.” Accordingly, it vacated the final agency decision, and remanded the case.

A copy of S.M. v. D.M.A.H.S. can be found here – S.M. v Division of Medical Assistance and Health Services

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