Medicaid Eligibility Denied Based Upon A Home Transfer To A "Caregiver Child" Who Was Employed Full-Time

(The A.N. case, described below, was decided on administrative appeal in 2007 and affirmed the denial of Medicaid benefits. I represented the Medicaid applicant, A.N. You may ask why I would resurrect an administrative decision more than 2 year old which I lost. It’s a legitimate question. The answer is that I believe the case will assist other practitioners who may face the issues in the A.N. case, involving the application of the “caregiver child” exception to the Medicaid rules when the adult child providing the care is employed on a full-time basis outside the home. The case may help other practitioners with similar cases to overcome the objections raised by the  Director of the State Medicaid office. Good luck.)

A.N. v. Division of Medical Assistance and Health Services and Passaic County Board of Social Services, OAL DKT. NO. HNA 05980-07 involved an appeal from the denial of nursing home Medicaid benefits sought by applicant A.N. The applicant had transferred his home as a gift to his son T.N. and then applied for Medicaid benefits. A.N. claimed that the transfer was exempt from the imposition of a penalty period under Medicaid’s transfer of assets rules because T.N. was a “caregiver child”. In that regard, an applicant for Medicaid benefits who disposes of assets for less than fair market value within sixty (60) months from the date of the Medicaid application will be found ineligible for benefits, except in certain limited cases in which the transfer is exempt. One such exempt transfer, set forth in the Medicaid regulations at N.J.A.C. 10:71-4.10(d)(4), involves the transfer of the applicant’s principal residence to his or her adult child who resided in the home with the applicant for at least two (2) years prior to the date the applicant was admitted to the nursing facility and provided care which permitted the applicant to remain at home rather than the nursing facility. A.N. claimed that the transfer of his home to T.N. met the “caregiver child” exception. However, the local Medicaid agency denied the application, finding that A.N. failed to prove that his son was his caregiver during the two (2) years before was admitted to a nursing home. A.N. appealed from the denial, filing a request for a Fair Hearing.

On appeal, a hearing was held before Administrative Law Judge (ALJ) James A. Geraghty in Peterson, NJ. The “caregiver child” T.N. and his brother A.N., another son of the applicant, testified. Although T.N. was employed full-time outside the home during the two (2) year period when he was caring for his father at home prior to A.N.’s institutionalization, the ALJ found that T.N. met the requirements of a “caregiver child” based upon the nature of the care provided:

The undisputed facts as found above reveal that during the two-year period immediately preceding his application for Medicaid, petitioner A.N. suffered from dementia and knee joint immobility rendering him wheelchair bound and incapable of self care. During this time his son T.N. lived with him and became his principal caregiver at a level exceeding normal personal support. T.N. administered his father’s medication, prepared his meals and otherwise saw to his nutritional needs, maintained his principal.residence, and modified it to accommodate his father’s wheelchair and to guarantee his safety. It is clear that T.N.’s care was essential to allow A.N. to remain at home in the community. Otherwise, institutionalization would have been necessary.

The ALJ’s decision in favor of the Medicaid application was, like all administrative cases in New Jersey, subject to review by the director of the agency involved in the decision, in this case the Division of Medical Assistance and Health Services, the State Medicaid agency.  In the A.N. case, the Director reversed the ALJ’s decision, affirming the denial of Medicaid benefits. The Director found that T.N.’s full-time employment outside the home indicated that he did not provide the sufficient level of care to meet the requirements of the “caregiver child” exception. The Director found:

Significantly, during the time in question T.N. worked full time. The record is silent on whether care was needed during those hours and who rendered it. If Petitioner was left alone for 8 or more hours a day, five days a week, there is no basis to find that he needed nursing home level of care. … There is no doubt T.N. did provide care for his father, however, he has failed in his burden to demonstrate with competent evidence that Petitioner’s physical or mental condition was such to have required special attention and care and that such care permitted Petitioner to reside at home rather than an institution for at least two years immediately prior to the date he became [Citations Omitted] … Thus, I FlND that the transfer of Petitioner’s house to T.N. does not meet the caregiver exemption.

So, there you have it. We lost the case. However, I firmly believe that the Director’s decision would have been overturned had the appeal continued. There simply is no requirement in the law that the “caregiver child” provide care on a full-time basis. Rather, the law focuses on the quality and level of care provided, not the quantity. Unfortunately, no appeal from the Director’s decision was ever filed.

The Initial Decision by the ALJ in the A.N. case can be found here – A.N. v. DMAHS – ALJ’s Decision

The Final Agency Decision by the Director of the Division of Medical Assistance and Health Services can be found here – A.N. v. DMAHS – Director’s Decision

UPDATED ON FEBRUARY 1, 2010: Attached hereto are guidelines from the Union County Medicaid office setting forth the evidence which the office requires to approve as bona fide the transfer of a Medicaid applicant’s home to a “caregiver child”. Item No 5 on the guidelines indicates that the Medicaid office still conducts an investigation into the nature of any employment outside the home in which the alleged “caregiver child” has engaged. The guidelines are attached here – Guidelines From Union County Medicaid Regarding Transfer Of The Home To A Caregiver Child