ABA GP|Solo Elder Law Committee
Newsletter • Winter 2009
Chairs:
Kenneth Vercammen (Edison, NJ)
Jay Foonberg (Beverly Hills, CA)
In this issue:
1. Spending Down Medicaid Planning
2. Social Networking Websites for Business and Exposure
3. Exempt Medicaid Transfers
1. Spending Down Medicaid Planning
By Thomas D. Begley, Jr., Esquire
The client who engages in Medicaid planning is usually a person of modest means who has been diagnosed with an illness and therefore the option of long-term care insurance is no longer available. A typical client may own a home and have countable assets of between $100,000 and $400,000. Most clients' goals are as follows:
To obtain the best quality of care for the institutionalized person
To maintain the standard of living of the community spouse, including providing sufficient income and assets so that the community spouse can continue to reside in the family home
Avoid Medicaid liens being placed on the home
Preserving a modest legacy for the children
Addressing tax issues, including:
Federal and state income taxes
Federal and state gift taxes
Federal estate tax
State estate tax
State inheritance tax
At the beginning of the initial client meeting, the attorney must begin the process of managing client expectations.
There are many strategies available to obtain or accelerate Medicaid eligibility. Significant factors include whether the client is married; whether the client is in crisis; the nature and extent of the client's assets; and the size of the IRAs of the respective spouses.
Spending Down
Most states limit a Medicaid recipient to approximately $2,000 of countable resources. One way to achieve this limit is to "spend down" all but the permissible amount of countable resources. What clients typically want to avoid is spending all of their assets on nursing home care. There are several ways a client might spend down his assets.
Pay Off Debts
Repayment of a debt is not considered a transfer, because the individual is receiving fair market value, and transfers are penalized only if the transferor does not receive fair market value. Typical debts clients might have include mortgages, home equity loans, car loans, and credit card bills. In order for the spend down to be accomplished, the check must actually be written and delivered. An outstanding debt is simply a liability that does not reduce assets for Medicaid eligibility purposes.
Payment for Services
Payment for services, including medical bills and legal fees, does not constitute a transfer. The services performed by the attorney are the value the client receives for the payment. Therefore, there is no uncompensated transfer of funds.
Prepayment of Real Estate Taxes
In situations where the home is occupied by a community spouse it makes sense to prepay real estate taxes. Since the home is occupied by the community spouse it is a non-countable resource. Expenditure of the funds for payment of the real estate taxes constitutes valid spend down.
Buy Household Goods or Personal Effects
Personal effects and household goods are excluded to the extent that the total equity value of such resources does not exceed $2,000. In practice, Medicaid does not appear to enforce the $2,000 limit.
The personal effects actually should be used by the community spouse. An excellent example of a violation of the "pig principle" is a recent New Jersey case. In that case, a 92-year-old grandmother was penalized for transfer of assets. The grandmother lived in a nursing home and purchased a computer that was kept at her granddaughter's home. The court held that there was no evidence that the Medicaid applicant received anything of value for her $1,478.61 expenditure.
Make Home Improvements
Making home improvements is a way to convert countable assets (i.e., cash and securities) into a non-countable asset (i.e., a personal residence). A home and lot used as a principal residence are excludable resources.
Purchase New Home
Occasionally, when one spouse enters a nursing home, the community spouse decides that the current home is too big and decides to move to a smaller home or a condominium. Since the home is a non-countable resource, if the home is sold and the proceeds of sale from the original principal residence are reinvested into a more expensive home, the additional funds spent on the new home are converted from a countable asset to a non-countable asset. This strategy relies on the principal residence exemption.
Purchase Life Estate from Children
The Deficit Reduction Act-2005 exempts from the transfer of assets penalties the purchase of a life interest in another individual's home if the purchaser resides in the home for a period of at least one year after the date of the purchase. The Act is silent as to how the life estate is to be valued, but elsewhere there are references to the publication of the Office of Chief Actuary of the Social Security Administration.
In a New Jersey case, a parent purchased a life estate in a child's house for $126,665.10. The decision noted that a life estate entitles the person to use and occupy the home. There was no evidence that the daughter or her family vacated the home. The daughter and her family had no legal right to remain in the home absent payment of rent.
The CMS Guidance contains some troubling language: "Unless a state has a provision for excluding the value of life estates in its approved State Medicaid Plan, or the property in which the individual has purchased a life estate qualifies as the individual's exempt home, the value of the life estate should be counted as a resource in determining Medicaid eligibility."
The child would not receive a Section 121 exclusion from the sale of a principal residence, because he did not sell his entire interest in the residence.
Prepaid Funeral
Most states do not count funds in an irrevocable funeral trust as countable assets. Also, most states do not have a dollar limit on the amount that can be expended for the funeral. The monies must be put in an irrevocable trust; the trust must be for the benefit of the Medicaid applicant; and the trust must be established by an individual who reasonably anticipates applying for or receiving Medicaid benefits.
An alternative to an irrevocable funeral trust is an irrevocable assignment of a life insurance policy in exchange for funeral services of the same or greater value as the cash surrender value of the policy. Funeral directors require a paid-up policy.
Irrevocable policies issued by companies, such as Choices or Forethought, are also acceptable to Medicaid and to most funeral homes. One of the nice features of these policies is that insurance companies having significant assets back them and they can be used in most funeral homes.
Purchase of burial spaces for adult children and their spouses do not constitute transfers for Medicaid penalty purposes. The burial space resource exemption applies to burial spaces for the Medicaid Applicant and also any member of his or her immediate family. Immediate family means an individual's minor or adult children, including adopted children and stepchildren, an individual's brothers, sisters, parents, adoptive parents, and the spouses of those individuals. Neither dependency nor living in the same household will be a factor in determining whether a person is an immediate family member.
Purchase New Car
Frequently, when one spouse enters a nursing home, the other spouse is driving an old car with high mileage. A good strategy is to have the community spouse purchase a new car as part of the spend down. Under current law the best time to purchase the car would be after the institutionalized spouse enters a nursing home. Under federal law, the first $4,500 of the value of a car is excluded from the calculation of countable assets. However, if the car is used for medical transportation or transportation in connection with employment, the entire value of the car is non-countable. Many states simply permit one car to be non-countable regardless of value or use.
Copyright 2008 by Begley & Bookbinder, P.C., an Elder & Disability Law Firm with offices in Moorestown, Stone Harbor and Lawrenceville, New Jersey and Oxford Valley, Pennsylvania and can be contacted at 800-533-7227. The firm services southern and central New Jersey and eastern Pennsylvania. Tom Begley Jr. is one of the speakers with Kenneth Vercammen at the NJ State Bar Association's Annual Nuts & Bolts of Elder Law and co-author with Kenneth Vercammen, martin Spigner and Kathleen Sheridan of the 400 plus page book on Elder Law.
The Firm provides services in connection with protecting assets from nursing home costs, Medicaid applications, Estate Planning and Estate Administration, Special Needs Planning and Guardianships. If you have a legal problem in one of these areas of law, contact Begley & Bookbinder at 800-533-722
2. Social Networking Websites for Business and Exposure
A newer way to connect with friends and obtain business is become active in online social networking websites. At the ABA Annual meeting the GP Solo Division held a program which looked at online social networking. For example, schedule a free seminar on Probate & Estate Planning for Accountants and Financial Planners. Visit some of the below Social networking site for ideas. These are examples of Ken Vercammen’s profile. :
Facebook:
http://www.facebook.com/event.php?sid=f89130f4cec290fe43c099fe37a58d31&eid=56435283974
Linkedin.com:
http://www.linkedin.com/in/kennethvercammen
Myspace:
http://www.myspace.com/kennethvercammen
Twitter:
http://twitter.com/vercammen
Meet the Elite:
http://www.MeetTheElite.net/vercammen
Google:
http://www.google.com/s2/profiles/105523288807097339409
Flickr:
http://www.flickr.com/photos/kenvercammen/
YouTube:
http://www.youtube.com/user/kvercammen
Justia Lawyer Directory:
http://lawyers.justia.com/lawyer/mr-kenneth-albert-vercammen-esq-1171249/
JD Supra:
http://www.jdsupra.com/profile/KennethVercammen/
Athlinks:
http://www.athlinks.com/racer.aspx?rid=23481836
Avvo Legal rating:
http://www.avvo.com/attorneys/08817-nj-kenneth-vercammen-571594.html?edit=true
Friendfeed.com:
http://friendfeed.com/vercammen
Gather:
http://vercammen.gather.com/
Mixx:
http://www.mixx.com/users/vercammen
Orkut:
http://www.orkut.com/Main#Profile.aspx?rl=ls&uid=17513593040289518671
Plaxo:
http://KennethVercammen.myplaxo.com/
Virb.com:
http://www.virb.com/backend/kenvercammen/events
3. Exempt Medicaid Transfers
By Thomas D. Begley, Jr., Esquire
As a general rule, when assets are transferred to third parties, the transfer results in a period of Medicaid ineligibility. Some transfers, however, are exempt and do not result in the imposition of a period of ineligibility for Medicaid. It is important to make transfers that are consistent with the estate planning goals of the client. If inconsistent transfers are made, they may result in litigation from beneficiaries of the estate who consider themselves to be treated unfairly.
1. The Family Home
There are four exceptions from the general transfer rules relating to a principal residence. These transfers are exempt.
Community Spouse
The residence can be transferred to the community spouse without penalty. A married couple can simply deed the house to the community spouse. There is no transfer penalty because the transfer is between spouses. In a typical situation, husband and wife own the home as tenants by the entirety. If one spouse enters a nursing home, and the community spouse predeceases that spouse, then by operation of law, title to the home will vest in the institutionalized spouse. The institutionalized spouse would then be required to sell the home and use the proceeds for nursing home care. In states that have a broad definition of estate for purposes of Medicaid estate recovery, the home should always be transferred to the community spouse to avoid Medicaid estate recovery.
If the property is deeded to the community spouse, and that spouse dies first, the property can be left by the will of the community spouse to a special needs trust for the benefit of the institutionalized spouse or to the children. The elder law attorney must also be aware of the state elective share statute, which prohibits a person from disinheriting a spouse. Medicaid could, conceivably, take the position that failure of the surviving spouse to exercise his rights under the elective share statute constitutes a transfer, subject to the transfer penalty provisions.
Child Under 21, Blind, or Disabled
The home can be transferred to a child of the institutionalized individual who is under the age of 21, or a child of any age who is blind or disabled. For example, a person about to enter a nursing home has a daughter who is blind. The potential Medicaid applicant can transfer the home to the blind daughter as an exempt transfer, and there will be no transfer penalty. In a second marriage situation, the question remains whether the institutionalized individual could transfer ownership of the home to a stepchild who met the criteria of caregiver.
Sibling
The home can be transferred to a brother or sister of the institutionalized individual who already had an equity interest in the home prior to the transfer and who was residing in the home for a period of at least one year immediately before the individual becomes an institutionalized individual. It may not be necessary for the sibling to be named on the deed to the property for a year prior to the transfer. The sibling may have an equity interest if he or she has paid taxes or other expenses and has actually lived in the home for a period of time. For example, a potential Medicaid applicant is not married and lives in his home with his brother. Each owns a portion of the house as tenants in common and they have been living together for more than one year. The potential Medicaid applicant would simply deed the property to the healthy sibling, and there would be no transfer penalty.
Caregiver Child
The home can be transferred to a caregiver child. A caregiver is defined as a son or daughter of the institutionalized individual who is 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 that permitted the individual to reside at home rather than in an institution or facility. The care provided by the son or daughter must have been essential to the safety of the individual and consisted of activities such as, but not limited to, supervision of medication, monitoring of nutritional status, and ensuring the safety of the individual.
There may be an issue as to when the transfer of the home to the caregiver child must take place. In a New Jersey case, the Burlington County Board of Social Services contended that a deed transferred 90 days after institutionalization did not qualify, and that such transfers need be made within 30 days of institutionalization. The Administrative Law Judge held and the Director affirmed that there is no time set forth in the regulation as to when the deed must be given. The only reference to time is that the home must be the home in which the individual resided immediately prior to entering the nursing home. Based on this case, it would appear that a deed could be given at any time prior to, or subsequent to, entering a nursing home. For example, a potential Medicaid recipient is about to enter a nursing home. His daughter has lived with him for two years and provided a level of care sufficient to keep him out of a nursing home. The deed to the house can simply be deeded to the daughter. There would be no transfer penalty, because this is an exempt transfer.
Special California Ruling
The California Department of Health Services has ruled that transfer of a home may be an exempt transfer. The letter states that the home is an exempt resource so long as the individual files a written notice of intent to return home. Exempt property can be retained without affecting Medicaid eligibility. Since the transfer is not made for purposes of establishing Medicaid eligibility it is an exempt transfer.
2. Non-Home Assets
Community Spouse
The transfer penalties do not apply to a transfer of assets to the community spouse. This is also an exempt transfer. The assets forming a part of the Community Spouse Resource Allowance (CSRA) must be transferred to the community spouse within 90 days of Medicaid eligibility; otherwise, they are no longer exempt as part of the CSRA.
For example, a husband is ready to enter a nursing home. The husband transfers all of his assets to his wife. All assets in the names of the husband and wife are also transferred to the wife. This protects the assets as a part of the wife's CSRA. If the wife dies prematurely, her will leaves the assets to a special needs trust for the benefit of the husband, and on the death of the husband to their children.
Exempt Children
Transfers from the institutionalized individual or the community spouse to the institutionalized individual's child, who is blind or permanently and totally disabled, are exempt. Therefore, there is no transfer penalty. For example, a potential Medicaid applicant is single and has $100,000 of assets. He could transfer the $100,000 to his blind daughter immediately prior to entering a nursing home. There would be no period of ineligibility due to the transfer.
Sibling
The home can be transferred to a brother or sister of the institutionalized individual who already had an equity interest in the home prior to the transfer and who was residing in the home for a period of at least one year immediately before the individual becomes an institutionalized individual. It may not be necessary for the sibling to be named on the deed to the property for a year prior to the transfer. The sibling may have an equity interest if he or she has paid taxes or other expenses and has actually lived in the home for a period of time. For example, a potential Medicaid applicant is not married and lives in his home with his brother. Each owns a portion of the house as tenants in common and they have been living together for more than one year. The potential Medicaid applicant would simply deed the property to the healthy sibling, and there would be no transfer penalty.
Taxation
In transferring a home to an exempt child, consideration must be given to the gift tax rules, carry over basis, and the capital gains tax exclusion from the sale of a principal residence.
Copyright 2009 by Begley & Bookbinder, P.C., an Elder & Disability Law Firm with offices in Moorestown, Stone Harbor and Lawrenceville, New Jersey and Oxford Valley, Pennsylvania and can be contacted at 800-533-7227. The firm services southern and central New Jersey and eastern Pennsylvania. Tom Begley Jr. is one of the speakers with Kenneth Vercammen at the NJ State Bar Association's Annual Nuts & Bolts of Elder Law and co-author with Kenneth Vercammen, martin Spigner and Kathleen Sheridan of the 400 plus page book on Elder Law.
The Firm provides services in connection with protecting assets from nursing home costs, Medicaid applications, Estate Planning and Estate Administration, Special Needs Planning and Guardianships. If you have a legal problem in one of these areas of law, contact Begley & Bookbinder at 800-533-722
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General Practice, Solo and Small Firm Division:
Elder Law Committee and the ESTATE PLANNING, PROBATE & TRUST COMMITTEE
Who We Are
The Elder Law Committee of the ABA General Practice Division is directed towards general practitioners and more experienced elder law attorneys. The committee consistently sponsors programs at the Annual Meeting, the focus of which is shifting to advanced topics for the more experienced elder lawyer.
This committee also focuses on improving estate planning skills, substantive law knowledge and office procedures for the attorney who practices estate planning, probate and trust law. This committee also serves as a network resource in educating attorneys regarding Elder Law situations.
To help your practice, we feature in this newsletter edition a few articles and tips on marketing and improving service to clients. But your Editor and chairs can't do it all. Please send articles, suggestions or ideas you wish to share with others.
Let us know if you are finding any useful information or anything you can share with the other members. You will receive written credit as the source and thus you can advise your clients and friends you were published in an ABA publication. We will try to meet you needs.
We also seek articles on Elder Law, Probate, Wills, Medicaid and Marketing. Please send your marketing ideas and articles to us. You can become a published ABA author.
Jay Foonberg, Co-Chair, Author of Best Sellers "How to Start and Build a Law Practice" and "How To Get and Keep Good Clients", Beverly Hills, CA JayFoonberg@aol.com
We will also provide tips on how to promote your law office, your practice and Personal Marketing Skills in general. It does not deal with government funded "legal services" for indigent, welfare cases.
Kenneth Vercammen, Esq. Chair
KENNETH VERCAMMEN & ASSOCIATES, PC
ATTORNEY AT LAW
2053 Woodbridge Ave.
Edison, NJ 08817
(Phone) 732-572-0500
(Fax) 732-572-0030
Kenv@njlaws.com
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Sunday, January 25, 2009
Mode JUDGMENT OF LEGAL INCAPACITY & APPOINTING A GUARDIAN
Mode JUDGMENT OF LEGAL INCAPACITY & APPOINTING A GUARDIAN
SUPERIOR COURT OF NEW JERSEY
CHANCERY DIVISION [insert county] COUNTY
PROBATE PART
In the Matter of [insert the incapacitated
person’s name], an Incapacitated Person
Docket No.
CIVIL ACTION
JUDGMENT OF LEGAL INCAPACITY AND
APPOINTING A GUARDIAN OF THE PERSON
AND ESTATE
THIS MATTER being opened to the Court by [insert the plaintiff attorney’s name], attorney
for [insert the plaintiff’s name], in the presence of [insert the court appointed attorney’s name], attorney for
the then alleged incapacitated person, and [insert the incapacitated person’s name], the then alleged
incapacitated person, and no demand having been made for a jury trial, and the Court sitting
without a jury having found from the report of [insert the court appointed attorney’s name], Esq.,
together with the report of the examining physicians [insert the name of the physician] M.D. and
[insert the name of the physician] M.D. (alternate licensed practicing psychologist) and proofs given that
[insert the incapacitated person’s name] is an incapacitated person who lacks sufficient capacity to
govern himself/herself and manage his/her affairs, and it further appearing that [insert the
proposed guardian’s name] consents to serve as Guardian of the Person and Estate of [insert the
incapacitated person’s name] and for good cause shown:
IT IS on this ___ day of ____________, 20 ___ ORDERED AND ADJUDGED that:
1. [Insert the incapacitated person’s name] is an incapacitated person and is unfit and
unable to govern himself/herself and manage his/her affairs, except that [insert the incapacitated
person’s name] is fully able at this time to govern himself/herself and manage his/her own
affairs with respect to the following areas: [insert areas of decision making that the incapacitated person
retains, such as, living arrangements, marriage, advance directives, voting, gifting, manage finances, execute a will,
establish a trust, execute contracts, make judgments regarding daily activities et cetera].
2. [Insert the proposed guardian’s name] be and hereby is appointed Guardian of the
Person and Estate of [insert the incapacitated person’s name] and that Letters of Guardianship of the
Person and Estate be issued upon his/her (a) qualify according to law, (b) acknowledging to
Revised 03/2005, CN 10510-English page 1 of 5
the Surrogate of [insert county] County, upon receipt of a copy of the guardian’s manual and
annual report form, the receipt of the same and (c) entering into a surety bond unto the
Superior Court of New Jersey in the amount of $_____________, which bond shall contain
the conditions set forth N.J.S.A. 3B:15-7 and R. 1:13-3. The court shall approve the bond as
to form and sufficiency.
3. Upon qualifying, the Surrogate of [insert county] County shall issue Letters of
Guardianship of the Person and Estate to [insert the proposed guardian’s name] and thereupon [insert
the proposed guardian’s name] be and hereby is authorized to perform all the functions and duties
of a Guardian as allowed by law, except as limited herein or in areas where [insert the
incapacitated person’s name] retains decision making rights.
4. The Guardian of the Estate may not alienate, mortgage, transfer or otherwise
encumber or dispose of real property without court approval. Said limitation shall be stated
in the Letters of Guardianship.
5. The court having reviewed the affidavit or certification of services of [insert the
court appointed attorney’s name], Esq., previously filed with the court, [insert the proposed guardian’s
name] shall pay [insert the court appointed attorney’s name], court-appointed attorney for [insert the
incapacitated person’s name], a fee of $_______________ for professional services rendered and
$___________ for expenses incurred, which disbursements are hereby approved.
6. The court having reviewed the affidavit or certification of services of [insert the
plaintiff attorney’s name], Esq., previously filed with the court, [insert the proposed guardian’s name]
shall pay [insert the plaintiff attorney’s name], attorney for plaintiff, a fee of $_____________ for
professional services and $______________ for expenses incurred, which sum includes
reimbursement or payment of the cost of the physician affidavits or certifications, which
disbursements are hereby approved.
7. [Insert the proposed guardian’s name] is hereby directed to file annually a report of the
well-being of [insert the incapacitated person’s name]. The report must be filed each year on the
anniversary date of this Judgment with the Surrogate of [insert county] County.
[IF APPLICABLE]
A copy of the report must also be served upon [insert the court appointed attorney’s name or next-of-kin].
8. [Insert the proposed guardian’s name] is directed to file an annual informal accounting
Revised 03/2005, CN 10510-English page 2 of 5
on the anniversary date of this judgment, or any time as ordered by this court, with the
Surrogate of [insert county] County. Said annual informal account does not replace or satisfy
the duty to file and bring on for approval a formal accounting as required by law or as
ordered by the court.
[IF APPLICABLE]
A copy of the informal accountings must also be served upon [insert the court appointed attorney’s
name or next-of-kin]..
9. [Insert the proposed guardian’s name] is hereby directed to advise the Surrogate of
[insert county] County within ten (10) days of any changes in the address or telephone number
of himself or herself or the incapacitated person or within thirty (30) days of the incapacitated
person’s death or of any major change in status or health.
10. [Insert the proposed guardian’s name] shall cooperate fully with any Court staff or
volunteers until the guardianship is terminated by the death or return to competency of [insert
the incapacitated person’s name] or the Guardian’s death, removal or discharge.
11. [Insert the plaintiff attorney’s name], attorney for plaintiff, shall serve a copy of this
Judgment upon all interested parties and attorneys of record within seven (7) days from the
receipt hereof.
12. [Insert the proposed guardian of the estate’s name] shall file with the Court within 90
days, an inventory of all of the incapacitated person’s property and income. Within said
period a copy of the inventory shall be served on all next-of-kin and parties in interest.
13. [Insert the court appointed attorney’s name], court appointed attorney for [insert the
incapacitated person’s name], having reported to the court and advocated on behalf of the
incapacitated person, be and hereby is discharged from any further obligation to act as
attorney for [insert the incapacitated person’s name].
[USE IF APPLICABLE]
14. It appearing that the plaintiff and the attorney appointed to represent the alleged
incapacitated person have inquired about powers-of-attorney, health care directives and trusts
for the benefit of the incapacitated person that were executed by the incapacitated person and
proof of service having been made on the attorneys-in-fact, representative or trustee
designated in such document or documents, and good cause shown appearing that the
Revised 03/2005, CN 10510-English page 3 of 5
authority therein contained should be revoked [alternate language: modified]
It is ORDERED and ADJUDGED that the power and authority conferred by [insert an
appropriate description, such as, a power of attorney executed on (date) designating [insert the agent’s name] as
attorney-in-fact, health care representative or trustee] be and hereby is revoked [alternate language: modified
as follows (insert narrative of modification)].
[USE IF APPLICABLE]
Nothing herein shall affect or limit the [insert an appropriate description of any power of attorney, health
care directive or revocable trust that will not be revoked or modified, notwithstanding the principal’s incapacity and the
report by the attorney for the alleged incapacitated person].
[USE IF APPLICABLE]It further appearing that [insert the name] [insert appropriate
description, such as, attorney-in-fact or trustee] under a [insert date executed] [insert appropriate description,
such as, power of attorney or revocable trust] has power and control over the incapacitated person’s
real and personal property and doubt or concern, whether the [insert attorney in fact or trustee]
is acting within the powers delegated or is acting solely for the benefit of the
incapacitated person, having been raised.
It is hereby ORDERED and ADJUDGED that [insert name] [insert appropriate description, such
as, attorney-in-fact or trustee] under the herein revoked [alternate modified] [insert appropriate description,
such as, power of attorney or revocable trust] shall within sixty (60) days serve upon the guardian of
the incapacitated person’s estate an accounting that reports all corpus and income receipts
and disbursements under the said [insert appropriate description, such as, power of attorney or revocable
trust].
[USE IF APPLICABLE]
15. It appearing that the best interest of the incapacitated persons requires that the
attorney appointed for the incapacitated person should review and report on the [initial]
ability of the Guardian to perform and fulfill the duties required. [Insert the court appointed
attorney’s name], be and hereby is directed to continue to act on behalf of the court and [insert the
incapacitated person’s name] for a period of [insert the number of months, years or until the ward dies or is
returned to competency that the court determines is appropriate]. During said continuing period [insert the
court appointed attorney’s name] must review all reports, accountings and [here insert any special
functions, i.e., confirm the placement of the incapacitated person in a nursing home, confirm marshalling of assets,
Revised 03/2005, CN 10510-English page 4 of 5
confirm that the Guardian has created estate books and records et cetera] and shall communicate to the court
through the surrogate’s office any matters or issues that he or she perceives are necessary to
be identified and raised for the best interest of [insert the incapacitated person’s name]. While acting
pursuant to the terms of this order, [insert the court appointed attorney’s name] shall be vested with
such immunities or other defenses that an agent of the court is entitled to claim.
16. [Here insert any additional powers, limitations or conditions deemed necessary to protect the
incapacitated person and his/her estate.]
______________________________________
J.S.C
Revised 03/2005, CN 10510-English page 5 of 5
SUPERIOR COURT OF NEW JERSEY
CHANCERY DIVISION [insert county] COUNTY
PROBATE PART
In the Matter of [insert the incapacitated
person’s name], an Incapacitated Person
Docket No.
CIVIL ACTION
JUDGMENT OF LEGAL INCAPACITY AND
APPOINTING A GUARDIAN OF THE PERSON
AND ESTATE
THIS MATTER being opened to the Court by [insert the plaintiff attorney’s name], attorney
for [insert the plaintiff’s name], in the presence of [insert the court appointed attorney’s name], attorney for
the then alleged incapacitated person, and [insert the incapacitated person’s name], the then alleged
incapacitated person, and no demand having been made for a jury trial, and the Court sitting
without a jury having found from the report of [insert the court appointed attorney’s name], Esq.,
together with the report of the examining physicians [insert the name of the physician] M.D. and
[insert the name of the physician] M.D. (alternate licensed practicing psychologist) and proofs given that
[insert the incapacitated person’s name] is an incapacitated person who lacks sufficient capacity to
govern himself/herself and manage his/her affairs, and it further appearing that [insert the
proposed guardian’s name] consents to serve as Guardian of the Person and Estate of [insert the
incapacitated person’s name] and for good cause shown:
IT IS on this ___ day of ____________, 20 ___ ORDERED AND ADJUDGED that:
1. [Insert the incapacitated person’s name] is an incapacitated person and is unfit and
unable to govern himself/herself and manage his/her affairs, except that [insert the incapacitated
person’s name] is fully able at this time to govern himself/herself and manage his/her own
affairs with respect to the following areas: [insert areas of decision making that the incapacitated person
retains, such as, living arrangements, marriage, advance directives, voting, gifting, manage finances, execute a will,
establish a trust, execute contracts, make judgments regarding daily activities et cetera].
2. [Insert the proposed guardian’s name] be and hereby is appointed Guardian of the
Person and Estate of [insert the incapacitated person’s name] and that Letters of Guardianship of the
Person and Estate be issued upon his/her (a) qualify according to law, (b) acknowledging to
Revised 03/2005, CN 10510-English page 1 of 5
the Surrogate of [insert county] County, upon receipt of a copy of the guardian’s manual and
annual report form, the receipt of the same and (c) entering into a surety bond unto the
Superior Court of New Jersey in the amount of $_____________, which bond shall contain
the conditions set forth N.J.S.A. 3B:15-7 and R. 1:13-3. The court shall approve the bond as
to form and sufficiency.
3. Upon qualifying, the Surrogate of [insert county] County shall issue Letters of
Guardianship of the Person and Estate to [insert the proposed guardian’s name] and thereupon [insert
the proposed guardian’s name] be and hereby is authorized to perform all the functions and duties
of a Guardian as allowed by law, except as limited herein or in areas where [insert the
incapacitated person’s name] retains decision making rights.
4. The Guardian of the Estate may not alienate, mortgage, transfer or otherwise
encumber or dispose of real property without court approval. Said limitation shall be stated
in the Letters of Guardianship.
5. The court having reviewed the affidavit or certification of services of [insert the
court appointed attorney’s name], Esq., previously filed with the court, [insert the proposed guardian’s
name] shall pay [insert the court appointed attorney’s name], court-appointed attorney for [insert the
incapacitated person’s name], a fee of $_______________ for professional services rendered and
$___________ for expenses incurred, which disbursements are hereby approved.
6. The court having reviewed the affidavit or certification of services of [insert the
plaintiff attorney’s name], Esq., previously filed with the court, [insert the proposed guardian’s name]
shall pay [insert the plaintiff attorney’s name], attorney for plaintiff, a fee of $_____________ for
professional services and $______________ for expenses incurred, which sum includes
reimbursement or payment of the cost of the physician affidavits or certifications, which
disbursements are hereby approved.
7. [Insert the proposed guardian’s name] is hereby directed to file annually a report of the
well-being of [insert the incapacitated person’s name]. The report must be filed each year on the
anniversary date of this Judgment with the Surrogate of [insert county] County.
[IF APPLICABLE]
A copy of the report must also be served upon [insert the court appointed attorney’s name or next-of-kin].
8. [Insert the proposed guardian’s name] is directed to file an annual informal accounting
Revised 03/2005, CN 10510-English page 2 of 5
on the anniversary date of this judgment, or any time as ordered by this court, with the
Surrogate of [insert county] County. Said annual informal account does not replace or satisfy
the duty to file and bring on for approval a formal accounting as required by law or as
ordered by the court.
[IF APPLICABLE]
A copy of the informal accountings must also be served upon [insert the court appointed attorney’s
name or next-of-kin]..
9. [Insert the proposed guardian’s name] is hereby directed to advise the Surrogate of
[insert county] County within ten (10) days of any changes in the address or telephone number
of himself or herself or the incapacitated person or within thirty (30) days of the incapacitated
person’s death or of any major change in status or health.
10. [Insert the proposed guardian’s name] shall cooperate fully with any Court staff or
volunteers until the guardianship is terminated by the death or return to competency of [insert
the incapacitated person’s name] or the Guardian’s death, removal or discharge.
11. [Insert the plaintiff attorney’s name], attorney for plaintiff, shall serve a copy of this
Judgment upon all interested parties and attorneys of record within seven (7) days from the
receipt hereof.
12. [Insert the proposed guardian of the estate’s name] shall file with the Court within 90
days, an inventory of all of the incapacitated person’s property and income. Within said
period a copy of the inventory shall be served on all next-of-kin and parties in interest.
13. [Insert the court appointed attorney’s name], court appointed attorney for [insert the
incapacitated person’s name], having reported to the court and advocated on behalf of the
incapacitated person, be and hereby is discharged from any further obligation to act as
attorney for [insert the incapacitated person’s name].
[USE IF APPLICABLE]
14. It appearing that the plaintiff and the attorney appointed to represent the alleged
incapacitated person have inquired about powers-of-attorney, health care directives and trusts
for the benefit of the incapacitated person that were executed by the incapacitated person and
proof of service having been made on the attorneys-in-fact, representative or trustee
designated in such document or documents, and good cause shown appearing that the
Revised 03/2005, CN 10510-English page 3 of 5
authority therein contained should be revoked [alternate language: modified]
It is ORDERED and ADJUDGED that the power and authority conferred by [insert an
appropriate description, such as, a power of attorney executed on (date) designating [insert the agent’s name] as
attorney-in-fact, health care representative or trustee] be and hereby is revoked [alternate language: modified
as follows (insert narrative of modification)].
[USE IF APPLICABLE]
Nothing herein shall affect or limit the [insert an appropriate description of any power of attorney, health
care directive or revocable trust that will not be revoked or modified, notwithstanding the principal’s incapacity and the
report by the attorney for the alleged incapacitated person].
[USE IF APPLICABLE]It further appearing that [insert the name] [insert appropriate
description, such as, attorney-in-fact or trustee] under a [insert date executed] [insert appropriate description,
such as, power of attorney or revocable trust] has power and control over the incapacitated person’s
real and personal property and doubt or concern, whether the [insert attorney in fact or trustee]
is acting within the powers delegated or is acting solely for the benefit of the
incapacitated person, having been raised.
It is hereby ORDERED and ADJUDGED that [insert name] [insert appropriate description, such
as, attorney-in-fact or trustee] under the herein revoked [alternate modified] [insert appropriate description,
such as, power of attorney or revocable trust] shall within sixty (60) days serve upon the guardian of
the incapacitated person’s estate an accounting that reports all corpus and income receipts
and disbursements under the said [insert appropriate description, such as, power of attorney or revocable
trust].
[USE IF APPLICABLE]
15. It appearing that the best interest of the incapacitated persons requires that the
attorney appointed for the incapacitated person should review and report on the [initial]
ability of the Guardian to perform and fulfill the duties required. [Insert the court appointed
attorney’s name], be and hereby is directed to continue to act on behalf of the court and [insert the
incapacitated person’s name] for a period of [insert the number of months, years or until the ward dies or is
returned to competency that the court determines is appropriate]. During said continuing period [insert the
court appointed attorney’s name] must review all reports, accountings and [here insert any special
functions, i.e., confirm the placement of the incapacitated person in a nursing home, confirm marshalling of assets,
Revised 03/2005, CN 10510-English page 4 of 5
confirm that the Guardian has created estate books and records et cetera] and shall communicate to the court
through the surrogate’s office any matters or issues that he or she perceives are necessary to
be identified and raised for the best interest of [insert the incapacitated person’s name]. While acting
pursuant to the terms of this order, [insert the court appointed attorney’s name] shall be vested with
such immunities or other defenses that an agent of the court is entitled to claim.
16. [Here insert any additional powers, limitations or conditions deemed necessary to protect the
incapacitated person and his/her estate.]
______________________________________
J.S.C
Revised 03/2005, CN 10510-English page 5 of 5
Model Order for Scheduling Hearing for Guardianship
Model Order for Scheduling Hearing for Guardianship
of Alleged Incapacitated Person
This Directive promulgates a model form of order for scheduling a hearing for the
guardianship of an alleged incapacitated person. The Judicial Council approved this
form order at its February 27, 2008 meeting.
The purpose of the order for hearing is to schedule and give notice of the
guardianship hearing to interested persons and to provide formal notice of the hearing
to the alleged incapacitated person (AIP). R. 4:86-4. Orders for hearing are required
because use of an order to show cause would be inconsistent with the underlying
allegations of a guardianship action, namely, that the alleged incapacitated person is
under a disability and is unable to manage his or her personal and business affairs. A
summary action order to show cause also is inconsistent with the alleged incapacitated
person’s right to a jury trial. R. 4:86-4; N.J.S.A. 3B:12-24.
This model order provides guidance in drafting acceptable orders for
guardianship hearings and is preformatted to comply with the Rules of Court. Use of
the model order is encouraged but not mandatory; however, any variations from the
model must nonetheless conform to the requirements of the Rules of Court and any
applicable Administrative Directives.
Attachment
cc: Chief Justice Stuart Rabner
Hon. Glenn A. Grant, Acting Admin. Director Designate
Christina P. Higgins, Acting Deputy Administrative Director
AOC Directors and Assistant Directors
Trial Court Administrators
Civil Division Managers
Kevin M. Wolfe, Chief
Steven D. Bonville, Special Assistant
Francis W. Hoeber, Special Assistant
[Questions or comments may
be directed to 609-292-8470.]
Directive # 10-08
1
SUPERIOR COURT OF NEW JERSEY
CHANCERY DIVISION _________ COUNTY
PROBATE PART
In the Matter of ___________________, an
Alleged Incapacitated Person
Docket No.:
CIVIL ACTION
ORDER FIXING GUARDIANSHIP
HEARING DATE AND APPOINTING
ATTORNEY FOR ALLEGED
INCAPACITATED PERSON
This matter having been opened to the Court by ________________________ , attorney for
the plaintiff, __________________________________________ for a judgment declaring
_________________________ an incapacitated person and appointing a guardian pursuant to
N.J.S.A. 3B:12-24.1 and Rules 4:86-1 to 8 and for such other relief as the Court may deem just, and
the Court having read and considered the verified complaint, the supporting certifications or
affidavits, and all other papers and pleadings filed in this matter, and for good cause shown:
IT IS on this ________ day of __________________, 20___, ORDERED that:
1. This matter be set down for hearing before this Court at the ______________ County
Court House, _______________________________, New Jersey, on the _________ day of
__________________, 20___ , at ________ o’clock in the ______ noon, or as soon thereafter as
plaintiff may be heard, to determine the issues of incapacity of _____________________________
and the appointment of a guardian.
2. A copy of the verified complaint, supporting affidavits or certifications and this Order,
shall be served on _____________________________, the alleged incapacitated person, by
personally serving the same at least 20 days prior to the date scheduled for the hearing.
3. A separate notice shall be personally served on the alleged incapacitated person stating
that if he/she desires to oppose the action he/she may appear either in person or by attorney and may
demand a trial by jury.
4. A copy of the verified complaint, supporting affidavits or certifications and this Order
shall also be served on all the next-of-kin and other parties-in-interest identified in the verified
Model Order for Scheduling Hearing for Guardianship
of Alleged Incapacitated Person (Rule 4:86-4) –
Promulgated by Directive #10-08
2
complaint by certified mail, return receipt requested at least 20 days prior to the date scheduled for
the hearing.
5. _________________, Esquire, whose address is: _____________________________ and
telephone number is: _______________________ be and hereby is appointed as attorney for the
alleged incapacitated person. Said attorney shall personally interview the alleged incapacitated
person, examine the medical records, make inquiry of persons having knowledge of the alleged
incapacitated person’s circumstances, his/her physical and mental state and his/her property, make
reasonable inquiries to locate any Will, powers of attorney or health care directives previously
executed by the alleged incapacitated person, or to discover any interests the alleged incapacitated
person may have as a beneficiary of a will or trust. Said attorney shall prepare a written report of
findings and recommendations and an affidavit of services to be filed with the Court and with the
plaintiff’s attorney and other parties who have filed a written response at least ____ days prior to the
hearing.
6. A copy of the verified complaint, supporting affidavits or certifications and this Order
shall be immediately served on the attorney for the alleged incapacitated person by personal service
or certified mail, return receipt requested.
7. The attorney above appointed to represent the alleged incapacitated person is hereby
regarded as a HIPAA (Health Insurance Portability and Accountability Act) representative for the
alleged incapacitated person and shall have the right and power to examine records, including
medical and psychiatric records, pertaining to the alleged incapacitated person and to visit and
confer with the alleged incapacitated person.
8. The plaintiff shall file with the Surrogate of _________ County a proof of service of the
pleadings required by this order to be served on the alleged incapacitated person and the parties in
interest no later than _____ (__) days before the date this matter is scheduled to be heard.
9. Any next-of-kin and other party-in-interest who wishes to be heard with respect to any of
the relief requested in the verified complaint shall file with the Surrogate of ______________
County at [insert address of Surrogate in the County where the action is being brought] together
with the applicable filing fee and serve upon the attorney for the plaintiff and the attorney for the
alleged incapacitated person at the address set forth above, a written answer, an answering affidavit ,
3
a motion returnable on the date this matter is scheduled to be heard or other written response _____
days before the date this matter is scheduled to be heard.
__________________________________
J. S. C.
of Alleged Incapacitated Person
This Directive promulgates a model form of order for scheduling a hearing for the
guardianship of an alleged incapacitated person. The Judicial Council approved this
form order at its February 27, 2008 meeting.
The purpose of the order for hearing is to schedule and give notice of the
guardianship hearing to interested persons and to provide formal notice of the hearing
to the alleged incapacitated person (AIP). R. 4:86-4. Orders for hearing are required
because use of an order to show cause would be inconsistent with the underlying
allegations of a guardianship action, namely, that the alleged incapacitated person is
under a disability and is unable to manage his or her personal and business affairs. A
summary action order to show cause also is inconsistent with the alleged incapacitated
person’s right to a jury trial. R. 4:86-4; N.J.S.A. 3B:12-24.
This model order provides guidance in drafting acceptable orders for
guardianship hearings and is preformatted to comply with the Rules of Court. Use of
the model order is encouraged but not mandatory; however, any variations from the
model must nonetheless conform to the requirements of the Rules of Court and any
applicable Administrative Directives.
Attachment
cc: Chief Justice Stuart Rabner
Hon. Glenn A. Grant, Acting Admin. Director Designate
Christina P. Higgins, Acting Deputy Administrative Director
AOC Directors and Assistant Directors
Trial Court Administrators
Civil Division Managers
Kevin M. Wolfe, Chief
Steven D. Bonville, Special Assistant
Francis W. Hoeber, Special Assistant
[Questions or comments may
be directed to 609-292-8470.]
Directive # 10-08
1
SUPERIOR COURT OF NEW JERSEY
CHANCERY DIVISION _________ COUNTY
PROBATE PART
In the Matter of ___________________, an
Alleged Incapacitated Person
Docket No.:
CIVIL ACTION
ORDER FIXING GUARDIANSHIP
HEARING DATE AND APPOINTING
ATTORNEY FOR ALLEGED
INCAPACITATED PERSON
This matter having been opened to the Court by ________________________ , attorney for
the plaintiff, __________________________________________ for a judgment declaring
_________________________ an incapacitated person and appointing a guardian pursuant to
N.J.S.A. 3B:12-24.1 and Rules 4:86-1 to 8 and for such other relief as the Court may deem just, and
the Court having read and considered the verified complaint, the supporting certifications or
affidavits, and all other papers and pleadings filed in this matter, and for good cause shown:
IT IS on this ________ day of __________________, 20___, ORDERED that:
1. This matter be set down for hearing before this Court at the ______________ County
Court House, _______________________________, New Jersey, on the _________ day of
__________________, 20___ , at ________ o’clock in the ______ noon, or as soon thereafter as
plaintiff may be heard, to determine the issues of incapacity of _____________________________
and the appointment of a guardian.
2. A copy of the verified complaint, supporting affidavits or certifications and this Order,
shall be served on _____________________________, the alleged incapacitated person, by
personally serving the same at least 20 days prior to the date scheduled for the hearing.
3. A separate notice shall be personally served on the alleged incapacitated person stating
that if he/she desires to oppose the action he/she may appear either in person or by attorney and may
demand a trial by jury.
4. A copy of the verified complaint, supporting affidavits or certifications and this Order
shall also be served on all the next-of-kin and other parties-in-interest identified in the verified
Model Order for Scheduling Hearing for Guardianship
of Alleged Incapacitated Person (Rule 4:86-4) –
Promulgated by Directive #10-08
2
complaint by certified mail, return receipt requested at least 20 days prior to the date scheduled for
the hearing.
5. _________________, Esquire, whose address is: _____________________________ and
telephone number is: _______________________ be and hereby is appointed as attorney for the
alleged incapacitated person. Said attorney shall personally interview the alleged incapacitated
person, examine the medical records, make inquiry of persons having knowledge of the alleged
incapacitated person’s circumstances, his/her physical and mental state and his/her property, make
reasonable inquiries to locate any Will, powers of attorney or health care directives previously
executed by the alleged incapacitated person, or to discover any interests the alleged incapacitated
person may have as a beneficiary of a will or trust. Said attorney shall prepare a written report of
findings and recommendations and an affidavit of services to be filed with the Court and with the
plaintiff’s attorney and other parties who have filed a written response at least ____ days prior to the
hearing.
6. A copy of the verified complaint, supporting affidavits or certifications and this Order
shall be immediately served on the attorney for the alleged incapacitated person by personal service
or certified mail, return receipt requested.
7. The attorney above appointed to represent the alleged incapacitated person is hereby
regarded as a HIPAA (Health Insurance Portability and Accountability Act) representative for the
alleged incapacitated person and shall have the right and power to examine records, including
medical and psychiatric records, pertaining to the alleged incapacitated person and to visit and
confer with the alleged incapacitated person.
8. The plaintiff shall file with the Surrogate of _________ County a proof of service of the
pleadings required by this order to be served on the alleged incapacitated person and the parties in
interest no later than _____ (__) days before the date this matter is scheduled to be heard.
9. Any next-of-kin and other party-in-interest who wishes to be heard with respect to any of
the relief requested in the verified complaint shall file with the Surrogate of ______________
County at [insert address of Surrogate in the County where the action is being brought] together
with the applicable filing fee and serve upon the attorney for the plaintiff and the attorney for the
alleged incapacitated person at the address set forth above, a written answer, an answering affidavit ,
3
a motion returnable on the date this matter is scheduled to be heard or other written response _____
days before the date this matter is scheduled to be heard.
__________________________________
J. S. C.
Federal lawsuit filed against NJ to expand Medicaid eligibility Frugard v Velez
Federal lawsuit filed against NJ to expand Medicaid eligibility Frugard v Velez
The Director of the NJ Division of Medical Assistance and Health Services refused to accept the well reasoned decision by Judge JOSEPH PAONE, ALJ and denied Medicaid eligibility to certain senior citizens. Director John Guhl wrote: held “Simply put, if you are seeking to shift the cost of nursing home care to the taxpayers by giving away assets so as to artificially create impoverishment, there must be a financial price to pay. Based on the basic eligibility rules, the penalty can only apply to those eligible for waiver services as the receipt of which is an eligibility requirement for that particular category.
I FIND that there is no comparability issue as this case deals with the
actual receipt of waiver services before Petitioners' penalty periods begin, not the
treatment of their assets and income. Moreover, it is disingenuous to argue the
same treatment as nursing home patients since the Petitioners are seeking
waiver services which is entirely based on permitting states to waiver of the
requirements of section 1902(a)(1) (relating to state-wideness), section
1902(a)(10)(B) (relating to comparability), and section 1902(a)(10)(C)(i)(III)
(relating to income and resource rules applicable in the community).
The income level in the community is much lower than the one afforded to
those seeking institutional level of care services either through nursing facility
services or services furnished under the waiver. If Petitioners want to be treated
like nursing facility patients, they need to enter such a facility. Without the receipt
of waiver services, Petitioners are not eligible under the waiver or entitled to the
higher income levels afforded waiver recipients. Without eligibility, there is no
start date for the penalty period.”
On of the losing plaintiffs in this case has filed a lawsuit in the United State District Court for the District of New Jersey seeking to force the NJ Department of Human Services and Division of Medical Assistance and Health Services to change this policy and permit Medicaid eligibility.
Portions of the Decisions are below:
Decision by John R. Guhl, Director
Division of Medical Assistance and Health Services
STATE OF NEW JERSEY
DEPARTMENT OF HUMAN SERVICES
DIVISION OF MEDICAL ASSISTANCE
AND HEALTH SERVICES
O.B., :
:
PETITIONER, : ADMINISTRATIVE ACTION
:
v. : FINAL AGENCY DECISION
:
DIVISION OF MEDICAL ASSISTANCE : OAL DKT. NO. HMA 6519-07
:
AND HEALTH SERVICES AND : CONSOLIDATED
:
MIDDLESEX COUNTY BOARD OF :
:
SOCIAL SERVICES, :
:
RESPONDENTS. :
________________________________________
As Director of the Division of Medical Assistance and Health Services, I
have reviewed the record in this case, including the Initial Decision, the OAL
case file, the briefs filed, the exceptions submitted by both parties and the
documents in evidence. Petitioners and Respondent filed exceptions.
Procedurally, the time period for the Agency Head to file a Final Agency Decision
in this matter is July 14 , 2008, in accordance with an Order of Extension.
Based on my review of the record, I hereby REVERSE the Initial Decision
as inconsistent with federal law. This matter concerns date on which the transfer
penalty should start for Petitioners. All admit that they transferred assets for the
purpose of impoverishing themselves to qualify for Medicaid. The transferred
amounts ranged from $41,927.81 (O.B.) to $128,986.26 (J.B.). They also are
not residing in nursing facilities but in the community. Petitioners were denied
Medicaid eligibility due the transfers.
Petitioners argue that New Jersey's actions regarding their eligibility have
created only two options (1) to enter the nursing facility for 30 days or (2) wait
five years. What Petitioners' fail to acknowledge that this situation is of their own
making and that they can have family members return the assets. They may
also seek a hardship waiver, however, to meet that criterion they would have to
take legal action against those relatives if they did not return the assets willingly.
Petitioners have failed to pursue either option and prefer to argue that they
should be able to wait out the penalty period in the community.
This case turns on the reading of the Medicaid provisions of the Deficit
Reduction Act of 2005, which was passed in large part to stop elder law
attorneys from "exploit[ing] loopholes to get people with means onto Medicaid."
http://finance.senate.gov/hearings/statements/020906cg.pdf. The section in
4
question deals with the start date of the transfer penalty, which Petitioners' all
agree should be imposed.
c) Taking into account certain transfers of assets.
(1)
(A) In order to meet the requirements of this subsection for
purposes of section 1902(a)(18) [42 USCS § 1396a(a)(18)], the
State plan must provide that if an institutionalized individual or the
spouse of such an individual (or, at the option of a State, a
noninstitutionalized individual or the spouse of such an individual)
disposes of assets for less than fair market value on or after the
look-back date specified in subparagraph (B)(i), the individual is
ineligible for medical assistance for services described in
subparagraph (C)(i) (or, in the case of a noninstitutionalized
individual, for the services described in subparagraph (C)(ii)) during
the period beginning on the date specified in subparagraph (D) and
equal to the number of months specified in subparagraph (E).
(B) (i) The look-back date specified in this subparagraph is a
date that is 36 months (or, in the case of payments from a trust or
portions of a trust that are treated as assets disposed of by the
individual pursuant to paragraph (3)(A)(iii) or (3)(B)(ii) of subsection
(d) or in the case of any other disposal of assets made on or after
the date of the enactment of the Deficit Reduction Act of 2005
[enacted Feb. 8, 2006], 60 months) before the date specified in
clause(ii).
(ii) The date specified in this clause, with respect to--
(I) an institutionalized individual is the first date as of which
the individual both is an institutionalized individual and has applied
for medical assistance under the State plan, or
(II) a noninstitutionalized individual is the date on which the
individual applies for medical assistance under the State plan or, if
later, the date on which the individual disposes of assets for less
than fair market value.
(C)
(i) The services described in this subparagraph with respect
to an institutionalized individual are the following:
(I) Nursing facility services.
(II) A level of care in any institution equivalent to that of
nursing facility services.
(III) Home or community-based services furnished under a
waiver granted under subsection (c) or (d) of section 1915 [42
USCS § 1396n(c) or (d)]
. . .
(D) (i) In the case of a transfer of asset made before the date of
the enactment of the Deficit Reduction Act of 2005 [enacted Feb. 8,
2006], the date specified in this subparagraph is the first day of the
first month during or after which assets have been transferred for
5
less than fair market value and which does not occur in any other
periods of ineligibility under this subsection.
(ii) In the case of a transfer of asset made on or after the date
of the enactment of the Deficit Reduction Act of 2005 [enacted Feb.
8, 2006], the date specified in this subparagraph is the first day of a
month during or after which assets have been transferred for less
than fair market value, or the date on which the individual is eligible
for medical assistance under the State plan and would otherwise be
receiving institutional level care described in subparagraph (C)
based on an approved application for such care but for the
application of the penalty period, whichever is later, and which does
not occur during any other period of ineligibility under this
subsection.
42 U.S.C.A. 1396p
The Initial Decision reads the clause "would otherwise be receiving
institutional level care described in subparagraph (C)" in isolation and finds that
since it is in future tense, Congress permits the penalty period to run while the
individual is in the community.
However, the both clauses must be read together. For Petitioners "the
date on which the individual is eligible for medical assistance under the State
plan" is contingent on their actual receipt of waiver services. In the Stipulation of
Facts, Petitioners claim that but for the uncompensated transfer they were
eligible for benefits under the waiver program. This is not the same as being
eligible for medical assistance under the State plan.
Due to Petitioners' income level, they could only be found eligible for State
plan services by virtue of residing in a nursing home or through the waiver
program. As they are not in a nursing home, they must show that they are
eligible through the waiver program. As Petitioner are not receiving waiver
services, they are not eligible for services under the State plan.
6
To be eligible under a section 1915 waiver, a person must actually be
receiving services. Further, 42 U.S.C.A 1915(c)(1) states that "The Secretary
may by waiver provide that a State plan approved under this title may include as
“medical assistance” under such plan payment for part or all of the cost of home
or community-based services (other than room and board) approved by the
Secretary which are provided pursuant to a written plan of care to individuals
with respect to whom there has been a determination that but for the provision of
such services the individuals would require the level of care provided in a
hospital or a nursing facility or intermediate care facility for the mentally retarded
the cost of which could be reimbursed under the State plan." No such services
are being provided to Petitioners.
42 C.F.R. 435.217 provides that a state may provide services in the
community to individuals that would be eligible for Medicaid if institutionalized
and that individual actually "receives the waivered services." Since the home
and community based waiver program uses the institutional income limit (300%
of the Federal Benefit Rate) to access both waiver and State Plan services, the
individual must actually be receiving a waiver service in order to access State
Plan services. For example, if an individual stops using waiver services, they are
no longer eligible for the waiver and lose access to State Plan services. Similarly
if a waiver program's slots are full, those individuals on the waiting list are not
considered eligible and cannot access services. Their eligibility is contingent on
the receipt of waiver services. Without the provision of waiver services,
Petitioners' Medicaid eligibility does not exist.
Nor can an individual procure similar home and community based services
outside a waiver so as to mimic eligibility. Congress was very general in defining
7
the first two levels of care as nursing facility and level of care services equivalent
to nursing facility services. 42 U.S.C.A. 1396p(c)(1)(C). However, when
describing home and community services, Congress defined those services
furnished under a waiver. There was no need to qualify 42 U.S.C.A.
1396p(c)(1)(C) "is receiving" services since by virtue of the definition of
institutional level services, Congress specified that the waiver services must be
furnished under 42 U.S.C.A. 1396n(c). In the community, there is no way to
ascertain whether the individual is receiving services so that Congress specified
that the penalty period begins only if home and community based services are
furnished under a waiver, thus penalizing the individual for the transfer as those
services would no longer be paid for by Medicaid.
The Initial Decision finding would permit individuals in the community to
operate under the old rules, whereby the penalty period can lapse before any
financial hardship on the individual. Under the old rules the start date was the
date of transfer. Individuals were coached to transfer assets in such a way as to
either wait out the penalty period or the look back period. The DRA sought to
stop the choreographed transfers that resulted in little, if any, penalty and create
a financial burden that would give pause to individuals who sought to protect
assets at the taxpayers' expense.
The DRA was designed to make the penalty period more onerous as a
disincentive for individuals who transferred assets. Under Petitioners' argument,
individuals, such as themselves would have a different outcome than those in a
nursing facility. In a nursing facility, Medicaid's refusal to pay for care creates a
financial burden as medical charges are accrued. There is no penalty as
Medicaid cannot refuse to pay for services as there are no services furnished
8
under the waiver being accessed. Thus, Congress crafted a start date of the
penalty period that would have some teeth – namely not permit individuals to wait
out the penalty in the community.
Simply put, if you are seeking to shift the cost of nursing home care to the
taxpayers by giving away assets so as to artificially create impoverishment, there
must be a financial price to pay. Based on the basic eligibility rules, the penalty
can only apply to those eligible for waiver services as the receipt of which is an
eligibility requirement for that particular category.
I FIND that there is no comparability issue as this case deals with the
actual receipt of waiver services before Petitioners' penalty periods begin, not the
treatment of their assets and income. Moreover, it is disingenuous to argue the
same treatment as nursing home patients since the Petitioners are seeking
waiver services which is entirely based on permitting states to waiver of the
requirements of section 1902(a)(1) (relating to state-wideness), section
1902(a)(10)(B) (relating to comparability), and section 1902(a)(10)(C)(i)(III)
(relating to income and resource rules applicable in the community).
The income level in the community is much lower than the one afforded to
those seeking institutional level of care services either through nursing facility
services or services furnished under the waiver. If Petitioners want to be treated
like nursing facility patients, they need to enter such a facility. Without the receipt
of waiver services, Petitioners are not eligible under the waiver or entitled to the
higher income levels afforded waiver recipients. Without eligibility, there is no
start date for the penalty period.
9
THEREFORE, it is on this 14TH day of JULY 2008,
ORDERED:
That the Initial Decision is hereby REVERSED.
/S/
John R. Guhl, Director
Division of Medical Assistance and Health Services
The well reasoned decision by Judge JOSEPH PAONE, ALJ
State of New Jersey
OFFICE OF ADMINISTRATIVE LAW
INITIAL DECISION
SUMMARY DECISION CONSOLIDATED
O.B., OAL DKT. NO. HMA6519-07
Agency Final Decision
Petitioner,
v.
DIVISION OF MEDICAL ASSISTANCE AND HEALTH SERVICES AND MIDDLESEX COUNTY BOARD OF SOCIAL SERVICES,
Respondents.
__________________________________________
E.B., OAL DKT. NO. HMA8059-07
Petitioner,
v.
DIVISION OF MEDICAL ASSISTANCE AND HEALTH SERVICES AND OCEAN COUNTY BOARD OF SOCIAL SERVICES,
Respondents.
__________________________________________
E.A.F., OAL DKT. NO. HMA8310-07
Petitioner,
v.
DIVISION OF MEDICAL ASSISTANCE AND HEALTH SERVICES AND MONMOUTH COUNTY BOARD OF SOCIAL SERVICES,
Respondents
Record Closed: April 8, 2008 Decided: April 9, 2008
BEFORE JOSEPH PAONE, ALJ:
STATEMENT OF THE CASE AND PROCEDURAL HISTORY
Petitioners O.B., E.B., E.A.F., J.B. and R.M. each appeal their denial of Medicaid eligibility. Each filed for a fair hearing and the Division of Medical Assistance and Health Services (DMAHS) transmitted the contested cases to the Office of Administrative Law between August 15, 2007, and February 27, 2008. N.J.S.A. 52:14B-1 through -15; N.J.S.A. 52:14F-1 through -13. Their respective cases were consolidated at the request of their attorneys because the cases presented a common question of law. (Second Amended Order, dated April 8, 2008). Petitioners contend that when an applicant for a Medicaid waiver program makes an uncompensated transfer of an asset during the look-back period, the penalty period begins to run the month the transfer is made and the applicant is otherwise eligible for Medicaid benefits but for the application of the penalty period. Respondent DMAHS posits that a penalty period never commences in such a situation.
All parties moved for summary decision and submitted initial briefs and multiple reply briefs. Oral argument was heard on March 17, 2008. Upon receipt of the final stipulation of facts, related to the R.M. case, on April 8, 2008, the record closed.
STATEMENT OF FACTS
The parties have stipulated to the following relevant FACTS:
1. Petitioners are each elderly individuals within the meaning of the regulations governing the Medicaid program.
2. Petitioners have each applied for benefits under a community-based services Medicaid waiver program established pursuant to 42 U.S.C.A. ��1396n(c). O.B. applied for benefits on December 8, 2006; E.B. applied on May 1, 2007; E.A.F. on April 16, 2007; J.B. on January 29, 2007; and R.M. on June 4, 2007
3. Petitioners have each made certain uncompensated transfers of assets after February 8, 2006. O.B. transferred $34,400.66 on July 27, 2006, and $7,527.15 on August 18, 2006. E.B. transferred $80,000 on March 2, 2007. E.A.F. transferred $115,447 on April 11, 2007. J.B. transferred $128,986.26 between November 2, 2006, and January 25, 2007. R.M. transferred $47,817.25 on March 22, 2007.
4. Petitioners have each been denied Medicaid benefits under their respective community-based services Medicaid waiver program as a result of the transfers.
5. But for the uncompensated transfer of assets, petitioners were each eligible for benefits under a community-based services Medicaid waiver program.
CONCLUSIONS OF LAW
Since it is undisputed that petitioners are otherwise eligible for a community-based services Medicaid waiver program but for an uncompensated transfer of assets made after February 8, 2006, and during the look-back period, and are each subject to a period of ineligibility for those services as a result of the transfer, there are no genuine issues of material fact. Therefore, pursuant to N.J.A.C. 1:1-12.5(b) and Brill v. Guardian Life Insurance Co. of America, 142 N.J. 520, 523 (1995), the matter is ripe for summary decision.
The Medicaid Act was established in 1965 pursuant to Title XIX of the Social Security Act. 42 U.S.C.A. �� 1396 et seq. The joint federal-state program provides medical assistance to “aged, blind, or disabled individuals, whose income and resources are insufficient to meet the costs of necessary medical care.” 42 U.S.C.A. � 1396. These individuals are known as the “categorically needy.” Although participation is not obligatory, if a state chooses to participate in the program, it must submit a state plan to the Secretary of the United States Department of Health and Human Services for approval, which must comply with the comprehensive requirements provided in 42 U.S.C.A. � 1396a. The Medicaid Act also allows a participating state to offer coverage to a class of individuals known as “optionally needy.” 42 U.S.C.A. ��1396a(a)(10)(A)(ii)(I) to (XVIII). Individuals eligible for community-based waiver services (42 U.S.C.A. � 1396a(a)(10)(A)(ii)(VI)), as well as individuals residing in a nursing facility for at least thirty consecutive days (42 U.S.C.A. � 1396a(a)(10)(A)(ii)(V)), are included in this category. As a participant in the program offering coverage to the optionally needy, the State of New Jersey is responsible for enforcement of the Medicaid Act in New Jersey. N.J.S.A. 30:4D-1 et seq. Medicaid eligibility is based upon an applicant's income and resources. When it is determined that an applicant has transferred a resource for less than fair market value during a specified period of time known as a “look-back period,” a penalty period arises. 42 U.S.C.A. � 1396p(c)(1). Compare N.J.A.C. 10:71-4.7(a); N.J.A.C. 10:72-4.5(b)(3). A penalty period is a measurable period of time during which the applicant is ineligible for an institutional level of services. 42 U.S.C.A. � 1396p(c)(1).
The Deficit Reduction Act of 2005 (DRA) modified the Medicaid Act by increasing the look-back period from three to five years. The State of New Jersey has not enacted any statute or regulation implementing the DRA. The DRA provides that the look-back begins on the “first date as of which the individual both is an institutionalized individual and has applied for medical assistance under the State plan.” 42 U.S.C.A. ��1396p(c)(1)(B)(ii)(I). Accordingly, “if an institutionalized individual . . . disposes of assets for less than fair market value on or after the look-back date . . . the individual is ineligible for medical assistance services described in subparagraph (C)(i) . . . during the period beginning on the date specified in subparagraph (D) . . . .” 42 U.S.C.A. ��1396p(c)(1)(B)(i). The length of the period of ineligibility is governed by 42 U.S.C.A. ��1396p(c)(1)(E), and is not an issue in dispute in this case. 42 U.S.C.A. ��1396p(c)(1)(C)(i) lists the following medical assistance services:
(I) Nursing facility services.
(II) A level of care in an institution equivalent to that of nursing facility services.
(III) Home or community-based services furnished under a waiver granted under [42 U.S.C.A. � 1396n(c) or (d)].
42 U.S.C.A. � 1396p(h)(3) defines an “institutionalized individual” as one
who is an inpatient in a nursing facility, who is an inpatient in a medical institution and with respect to whom payment is made based on a level of care provided in a nursing facility, or who is described in [42 U.S.C.A. � 1396(a)(10)(A)(ii)(VI)].
[Emphasis added.]
42 U.S.C.A. � 1396a(a)(10)(A)(ii)(VI) adds that an institutionalized individual is one
who would be eligible under the State plan under [42 U.S.C.A. �� 1396 et seq.] if [she] were in a medical institution, with respect to whom there has been a determination that but for the provision of home or community based services described in [42 U.S.C.A. ��1396n(c),(d), or (e)] [she] would require the level of care provided in a hospital, nursing facility or intermediate care facility for the mentally retarded the cost of which could be reimbursed under the State plan, and who will receive home or community-based services pursuant to a waiver granted by the Secretary under [42 U.S.C.A. � 1396n(c), (d), or (e)].
[Emphasis added.]
Petitioners additionally urge consideration of N.J.A.C. 10:71-4.7(b)(3) and N.J.A.C. 10:71-4.10(b)(2), which the parties agreed in their Joint Stipulation were enacted to implement 42 U.S.C.A. � 1396p(c)(1)(B), and which also define an institutionalized individual as “a person seeking benefits under a home or community care waiver program” (emphasis added). Neither the federal statute nor the State regulation requires the actual receipt of home- or community-based services in order for a person to be characterized as an institutionalized individual. Therefore, I CONCLUDE that petitioners' applications seeking community-based waiver services are sufficient to classify petitioners as institutionalized individuals.
Since the parties have stipulated that each petitioner made an uncompensated transfer of an asset within months, and in E.A.F.'s case days, of their respective applications seeking community-based waiver services, I CONCLUDE, as the parties agreed during oral argument, that the uncompensated transfers of assets in question were each made during the look-back period. And I further CONCLUDE that as institutionalized individuals, the petitioners must each be subject to a penalty period or period of ineligibility for community-based services furnished under a waiver.
The issue in dispute in this matter is at what point the penalty period begins when an applicant for a Medicaid waiver program has made an uncompensated transfer of an asset during the look-back period. While the DMAHS agrees with petitioners that they are subject to a penalty period, the DMAHS contends that a penalty period can never begin because an applicant seeking community-based waiver services must await the expiration of the look-back period before she can seek those services. Petitioners, however, contend that if an applicant is otherwise eligible for Medicaid benefits but for the transfer of assets, the penalty period must start the month the uncompensated transfer of the asset is made.
The DRA added 42 U.S.C.A. � 1396p(c)(1)(D)(ii), a new subclause, to the Medicaid Act. Prior to enactment of the DRA, the penalty period resulting from an uncompensated transfer of assets commenced the month that the applicant made the uncompensated transfer, irrespective of what resources remained in the applicant's name. Since the parties have stipulated that the transfers were made after February 8, 2006, their periods of ineligibility must commence
the first day of a month during or after which assets have been transferred for less than fair market value, or the date on which the individual is eligible for medical assistance under the State plan and would otherwise be receiving institutional level care described in subparagraph (C) [a community-based waiver service] based on an approved application for such care but for the application of the penalty period, whichever is later, and which does not occur during any other period of ineligibility under this subsection.
[42 U.S.C.A. � 1396p(c)(1)(D)(ii) (emphasis added).]
Petitioners persuasively argue that according to the plain-language canon, the statute means what it says “and no further search is necessary or appropriate in the absence of clear ambiguity.” In re M.G., 307 N.J. Super. 348, 354 (App. Div. 1998), certif. denied, 154 N.J. 607 (1998). This cardinal doctrine of statutory construction directs that the penalty period assessed against an applicant must begin when the applicant 1) is eligible for medical assistance under the state plan, and 2) would otherwise be receiving home- or community-based services furnished under a waiver based on an approved application for such care, 3) but for the application of the penalty period. Simply stated, the penalty start date is the point in time when the applicant is eligible and would otherwise be receiving services, but for the penalty period. Petitioners submit that the insertion of “would otherwise be” and “but for” in the statute creates the grammatical tense known as the “present unreal conditional,” which is used to express what one would do in an unreal or imaginary situation. They urge that the application of this grammatical analysis to the statute makes it apparent that the statute intends that the penalty period begins when “an applicant for Medicaid benefits would otherwise be receiving services furnished under a waiver but for the fact that the applicant made an uncompensated transfer.” The applicant, however, isn't really receiving those services.
The DMAHS argues that the penalty period for an uncompensated transfer cannot start against an applicant for community-based waiver services until she is eligible for medical assistance under the State plan and is actually receiving community-based waiver services. But, as the DMAHS's reasoning continues, such an applicant cannot actually receive waiver services because the uncompensated transfer of assets prohibits receipt of waiver services. In reaching this circuitous position, the DMAHS relies on an enclosure that accompanied a letter to the State Medicaid Director from the Centers for Medicare and Medicaid Services (CMS), dated July 27, 2006. The CMS enclosure provides that
[f]or transfers of assets made on or after February 8, 2006, the period of ineligibility will begin with the . . . date on which the individual is eligible for medical assistance under the State plan and is receiving institutional level of care services (based on an approved application for such services) that, were it not for the imposition of the penalty period, would be covered by Medicaid.
[Emphasis added.]
The CMS enclosure, however, misquotes the statute, and the DMAHS's reliance on it is, thus, misplaced. In order to accommodate the language of the CMS enclosure, the DMAHS is obligated to take an inherently contradictory position. While the DMAHS deems petitioners “institutionalized individuals” in determining the look-back period start date, it denies that petitioners are “institutionalized individuals” for purposes of determining the penalty period start date. The DMAHS reasons that an applicant must be receiving waiver services in order to be denominated an institutionalized individual. Otherwise, the penalty period cannot commence. But, as had been previously noted, an “institutionalized individual” is not only an inpatient in a nursing facility or medical institution, but also, as the federal statute provides, one who would be eligible for community-based waiver services if she were in a medical institution, or, as State regulations allow, is seeking those services. 42 U.S.C.A. � 1396p(c)(1)(D)(ii) does not require that one actually receive institutional-level care as respondent contends. The statute merely demands that one “would otherwise be receiving institutional level care�.�.�. but for the application of the penalty period.”
Petitioners proffer that the Congressional Record refutes the DMAHS's construction. A proposed House Bill had provided that the beginning date for a period of eligibility be
[t]he date on which the individual is eligible for medical assistance under the State plan and is receiving services described in subparagraph (C) based on an approved application for such care but for the application of the penalty period.
[151 Cong. Rec. H10571 (daily ed. Nov. 17, 2005) (emphasis added).]
But the “is receiving services” language in the proposed legislation was later changed by Conference Agreement to the present text — “would otherwise be receiving institutional level care.” Id. at H12709-H12710. Petitioners point out that the use of the present participle “is receiving” would have suggested that the applicant must actually be receiving waiver services. But the verb tense change made during Conference Committee demonstrates that Congress was aware that an applicant for benefits under a community-care waiver program, who had made an uncompensated transfer of an asset, could not be receiving waiver services before applying for those services.
The purpose of the DRA is to deter self-impoverishment in order to qualify for Medicaid by penalizing those who transfer assets for less than fair market value. There is no evidence in the legislative record cited by the DMAHS that Congress intended to eliminate community-based waiver services completely to those who made such transfers. Application of the DMAHS's tortured construction of the DRA, however, would entirely eliminate the imposition of a penalty period and require anyone making uncompensated transfers within a look-back period and seeking waiver services to wait up to five years from the date of the transfer before an application could be made for home- or community-based waiver services. While the DMAHS suggests that its interpretation is consistent with the DRA's objective, which was to lighten the taxpayers' burden, its interpretation would actually encourage placement in a nursing facility over less-costly waiver services and undermine the impetus for the DRA's enactment.
The plain meaning of 42 U.S.C.A. � 1396p(c)(1)(D)(ii) is clear and the DMAHS's strained interpretation is conflicting, contrived and inconsistent with the statute's legislative history. I, therefore, CONCLUDE that the penalty period for an applicant for a Medicaid waiver program who has made an uncompensated transfer of an asset during the look-back period begins on the date on which she is otherwise eligible for Medicaid waiver services based on an application that would be approved, but for the transfer of assets. Thus the penalty period for each petitioner should commence on the date each petitioner submitted her application for community-based waiver services.
ORDER
Accordingly, I hereby ORDER that a penalty shall be assessed against each petitioner as a result of her uncompensated transfer of an asset and that the start date of the penalty period shall be the date on which the application for waiver services was made after the uncompensated transfer.
I hereby FILE my initial decision with the DIRECTOR OF THE DIVISION OF MEDICAL ASSISTANCE AND HEALTH SERVICES for consideration.
This recommended decision may be adopted, modified or rejected by the DIRECTOR OF THE DIVISION OF MEDICAL ASSISTANCE AND HEALTH SERVICES, the designee of the Commissioner of the Department of Human Services, who by law is authorized to make a final decision in this matter. If the Director of the Division of Medical Assistance and Health Services does not adopt, modify or reject this decision within forty-five (45) days and unless such time limit is otherwise extended, this recommended decision shall become a final decision in accordance with N.J.S.A. 52:14B-10.
Within seven (7) days from the date on which this recommended decision was mailed to the parties, any party may file written exceptions with the DIRECTOR OF THE DIVISION OF MEDICAL ASSISTANCE AND HEALTH SERVICES, Mail Code #3, P.O. Box 712, Trenton, New Jersey 08625-0712, marked “Attention: Exceptions.” A copy of any exceptions must be sent to the judge and to the other parties.
The Director of the NJ Division of Medical Assistance and Health Services refused to accept the well reasoned decision by Judge JOSEPH PAONE, ALJ and denied Medicaid eligibility to certain senior citizens. Director John Guhl wrote: held “Simply put, if you are seeking to shift the cost of nursing home care to the taxpayers by giving away assets so as to artificially create impoverishment, there must be a financial price to pay. Based on the basic eligibility rules, the penalty can only apply to those eligible for waiver services as the receipt of which is an eligibility requirement for that particular category.
I FIND that there is no comparability issue as this case deals with the
actual receipt of waiver services before Petitioners' penalty periods begin, not the
treatment of their assets and income. Moreover, it is disingenuous to argue the
same treatment as nursing home patients since the Petitioners are seeking
waiver services which is entirely based on permitting states to waiver of the
requirements of section 1902(a)(1) (relating to state-wideness), section
1902(a)(10)(B) (relating to comparability), and section 1902(a)(10)(C)(i)(III)
(relating to income and resource rules applicable in the community).
The income level in the community is much lower than the one afforded to
those seeking institutional level of care services either through nursing facility
services or services furnished under the waiver. If Petitioners want to be treated
like nursing facility patients, they need to enter such a facility. Without the receipt
of waiver services, Petitioners are not eligible under the waiver or entitled to the
higher income levels afforded waiver recipients. Without eligibility, there is no
start date for the penalty period.”
On of the losing plaintiffs in this case has filed a lawsuit in the United State District Court for the District of New Jersey seeking to force the NJ Department of Human Services and Division of Medical Assistance and Health Services to change this policy and permit Medicaid eligibility.
Portions of the Decisions are below:
Decision by John R. Guhl, Director
Division of Medical Assistance and Health Services
STATE OF NEW JERSEY
DEPARTMENT OF HUMAN SERVICES
DIVISION OF MEDICAL ASSISTANCE
AND HEALTH SERVICES
O.B., :
:
PETITIONER, : ADMINISTRATIVE ACTION
:
v. : FINAL AGENCY DECISION
:
DIVISION OF MEDICAL ASSISTANCE : OAL DKT. NO. HMA 6519-07
:
AND HEALTH SERVICES AND : CONSOLIDATED
:
MIDDLESEX COUNTY BOARD OF :
:
SOCIAL SERVICES, :
:
RESPONDENTS. :
________________________________________
As Director of the Division of Medical Assistance and Health Services, I
have reviewed the record in this case, including the Initial Decision, the OAL
case file, the briefs filed, the exceptions submitted by both parties and the
documents in evidence. Petitioners and Respondent filed exceptions.
Procedurally, the time period for the Agency Head to file a Final Agency Decision
in this matter is July 14 , 2008, in accordance with an Order of Extension.
Based on my review of the record, I hereby REVERSE the Initial Decision
as inconsistent with federal law. This matter concerns date on which the transfer
penalty should start for Petitioners. All admit that they transferred assets for the
purpose of impoverishing themselves to qualify for Medicaid. The transferred
amounts ranged from $41,927.81 (O.B.) to $128,986.26 (J.B.). They also are
not residing in nursing facilities but in the community. Petitioners were denied
Medicaid eligibility due the transfers.
Petitioners argue that New Jersey's actions regarding their eligibility have
created only two options (1) to enter the nursing facility for 30 days or (2) wait
five years. What Petitioners' fail to acknowledge that this situation is of their own
making and that they can have family members return the assets. They may
also seek a hardship waiver, however, to meet that criterion they would have to
take legal action against those relatives if they did not return the assets willingly.
Petitioners have failed to pursue either option and prefer to argue that they
should be able to wait out the penalty period in the community.
This case turns on the reading of the Medicaid provisions of the Deficit
Reduction Act of 2005, which was passed in large part to stop elder law
attorneys from "exploit[ing] loopholes to get people with means onto Medicaid."
http://finance.senate.gov/hearings/statements/020906cg.pdf. The section in
4
question deals with the start date of the transfer penalty, which Petitioners' all
agree should be imposed.
c) Taking into account certain transfers of assets.
(1)
(A) In order to meet the requirements of this subsection for
purposes of section 1902(a)(18) [42 USCS § 1396a(a)(18)], the
State plan must provide that if an institutionalized individual or the
spouse of such an individual (or, at the option of a State, a
noninstitutionalized individual or the spouse of such an individual)
disposes of assets for less than fair market value on or after the
look-back date specified in subparagraph (B)(i), the individual is
ineligible for medical assistance for services described in
subparagraph (C)(i) (or, in the case of a noninstitutionalized
individual, for the services described in subparagraph (C)(ii)) during
the period beginning on the date specified in subparagraph (D) and
equal to the number of months specified in subparagraph (E).
(B) (i) The look-back date specified in this subparagraph is a
date that is 36 months (or, in the case of payments from a trust or
portions of a trust that are treated as assets disposed of by the
individual pursuant to paragraph (3)(A)(iii) or (3)(B)(ii) of subsection
(d) or in the case of any other disposal of assets made on or after
the date of the enactment of the Deficit Reduction Act of 2005
[enacted Feb. 8, 2006], 60 months) before the date specified in
clause(ii).
(ii) The date specified in this clause, with respect to--
(I) an institutionalized individual is the first date as of which
the individual both is an institutionalized individual and has applied
for medical assistance under the State plan, or
(II) a noninstitutionalized individual is the date on which the
individual applies for medical assistance under the State plan or, if
later, the date on which the individual disposes of assets for less
than fair market value.
(C)
(i) The services described in this subparagraph with respect
to an institutionalized individual are the following:
(I) Nursing facility services.
(II) A level of care in any institution equivalent to that of
nursing facility services.
(III) Home or community-based services furnished under a
waiver granted under subsection (c) or (d) of section 1915 [42
USCS § 1396n(c) or (d)]
. . .
(D) (i) In the case of a transfer of asset made before the date of
the enactment of the Deficit Reduction Act of 2005 [enacted Feb. 8,
2006], the date specified in this subparagraph is the first day of the
first month during or after which assets have been transferred for
5
less than fair market value and which does not occur in any other
periods of ineligibility under this subsection.
(ii) In the case of a transfer of asset made on or after the date
of the enactment of the Deficit Reduction Act of 2005 [enacted Feb.
8, 2006], the date specified in this subparagraph is the first day of a
month during or after which assets have been transferred for less
than fair market value, or the date on which the individual is eligible
for medical assistance under the State plan and would otherwise be
receiving institutional level care described in subparagraph (C)
based on an approved application for such care but for the
application of the penalty period, whichever is later, and which does
not occur during any other period of ineligibility under this
subsection.
42 U.S.C.A. 1396p
The Initial Decision reads the clause "would otherwise be receiving
institutional level care described in subparagraph (C)" in isolation and finds that
since it is in future tense, Congress permits the penalty period to run while the
individual is in the community.
However, the both clauses must be read together. For Petitioners "the
date on which the individual is eligible for medical assistance under the State
plan" is contingent on their actual receipt of waiver services. In the Stipulation of
Facts, Petitioners claim that but for the uncompensated transfer they were
eligible for benefits under the waiver program. This is not the same as being
eligible for medical assistance under the State plan.
Due to Petitioners' income level, they could only be found eligible for State
plan services by virtue of residing in a nursing home or through the waiver
program. As they are not in a nursing home, they must show that they are
eligible through the waiver program. As Petitioner are not receiving waiver
services, they are not eligible for services under the State plan.
6
To be eligible under a section 1915 waiver, a person must actually be
receiving services. Further, 42 U.S.C.A 1915(c)(1) states that "The Secretary
may by waiver provide that a State plan approved under this title may include as
“medical assistance” under such plan payment for part or all of the cost of home
or community-based services (other than room and board) approved by the
Secretary which are provided pursuant to a written plan of care to individuals
with respect to whom there has been a determination that but for the provision of
such services the individuals would require the level of care provided in a
hospital or a nursing facility or intermediate care facility for the mentally retarded
the cost of which could be reimbursed under the State plan." No such services
are being provided to Petitioners.
42 C.F.R. 435.217 provides that a state may provide services in the
community to individuals that would be eligible for Medicaid if institutionalized
and that individual actually "receives the waivered services." Since the home
and community based waiver program uses the institutional income limit (300%
of the Federal Benefit Rate) to access both waiver and State Plan services, the
individual must actually be receiving a waiver service in order to access State
Plan services. For example, if an individual stops using waiver services, they are
no longer eligible for the waiver and lose access to State Plan services. Similarly
if a waiver program's slots are full, those individuals on the waiting list are not
considered eligible and cannot access services. Their eligibility is contingent on
the receipt of waiver services. Without the provision of waiver services,
Petitioners' Medicaid eligibility does not exist.
Nor can an individual procure similar home and community based services
outside a waiver so as to mimic eligibility. Congress was very general in defining
7
the first two levels of care as nursing facility and level of care services equivalent
to nursing facility services. 42 U.S.C.A. 1396p(c)(1)(C). However, when
describing home and community services, Congress defined those services
furnished under a waiver. There was no need to qualify 42 U.S.C.A.
1396p(c)(1)(C) "is receiving" services since by virtue of the definition of
institutional level services, Congress specified that the waiver services must be
furnished under 42 U.S.C.A. 1396n(c). In the community, there is no way to
ascertain whether the individual is receiving services so that Congress specified
that the penalty period begins only if home and community based services are
furnished under a waiver, thus penalizing the individual for the transfer as those
services would no longer be paid for by Medicaid.
The Initial Decision finding would permit individuals in the community to
operate under the old rules, whereby the penalty period can lapse before any
financial hardship on the individual. Under the old rules the start date was the
date of transfer. Individuals were coached to transfer assets in such a way as to
either wait out the penalty period or the look back period. The DRA sought to
stop the choreographed transfers that resulted in little, if any, penalty and create
a financial burden that would give pause to individuals who sought to protect
assets at the taxpayers' expense.
The DRA was designed to make the penalty period more onerous as a
disincentive for individuals who transferred assets. Under Petitioners' argument,
individuals, such as themselves would have a different outcome than those in a
nursing facility. In a nursing facility, Medicaid's refusal to pay for care creates a
financial burden as medical charges are accrued. There is no penalty as
Medicaid cannot refuse to pay for services as there are no services furnished
8
under the waiver being accessed. Thus, Congress crafted a start date of the
penalty period that would have some teeth – namely not permit individuals to wait
out the penalty in the community.
Simply put, if you are seeking to shift the cost of nursing home care to the
taxpayers by giving away assets so as to artificially create impoverishment, there
must be a financial price to pay. Based on the basic eligibility rules, the penalty
can only apply to those eligible for waiver services as the receipt of which is an
eligibility requirement for that particular category.
I FIND that there is no comparability issue as this case deals with the
actual receipt of waiver services before Petitioners' penalty periods begin, not the
treatment of their assets and income. Moreover, it is disingenuous to argue the
same treatment as nursing home patients since the Petitioners are seeking
waiver services which is entirely based on permitting states to waiver of the
requirements of section 1902(a)(1) (relating to state-wideness), section
1902(a)(10)(B) (relating to comparability), and section 1902(a)(10)(C)(i)(III)
(relating to income and resource rules applicable in the community).
The income level in the community is much lower than the one afforded to
those seeking institutional level of care services either through nursing facility
services or services furnished under the waiver. If Petitioners want to be treated
like nursing facility patients, they need to enter such a facility. Without the receipt
of waiver services, Petitioners are not eligible under the waiver or entitled to the
higher income levels afforded waiver recipients. Without eligibility, there is no
start date for the penalty period.
9
THEREFORE, it is on this 14TH day of JULY 2008,
ORDERED:
That the Initial Decision is hereby REVERSED.
/S/
John R. Guhl, Director
Division of Medical Assistance and Health Services
The well reasoned decision by Judge JOSEPH PAONE, ALJ
State of New Jersey
OFFICE OF ADMINISTRATIVE LAW
INITIAL DECISION
SUMMARY DECISION CONSOLIDATED
O.B., OAL DKT. NO. HMA6519-07
Agency Final Decision
Petitioner,
v.
DIVISION OF MEDICAL ASSISTANCE AND HEALTH SERVICES AND MIDDLESEX COUNTY BOARD OF SOCIAL SERVICES,
Respondents.
__________________________________________
E.B., OAL DKT. NO. HMA8059-07
Petitioner,
v.
DIVISION OF MEDICAL ASSISTANCE AND HEALTH SERVICES AND OCEAN COUNTY BOARD OF SOCIAL SERVICES,
Respondents.
__________________________________________
E.A.F., OAL DKT. NO. HMA8310-07
Petitioner,
v.
DIVISION OF MEDICAL ASSISTANCE AND HEALTH SERVICES AND MONMOUTH COUNTY BOARD OF SOCIAL SERVICES,
Respondents
Record Closed: April 8, 2008 Decided: April 9, 2008
BEFORE JOSEPH PAONE, ALJ:
STATEMENT OF THE CASE AND PROCEDURAL HISTORY
Petitioners O.B., E.B., E.A.F., J.B. and R.M. each appeal their denial of Medicaid eligibility. Each filed for a fair hearing and the Division of Medical Assistance and Health Services (DMAHS) transmitted the contested cases to the Office of Administrative Law between August 15, 2007, and February 27, 2008. N.J.S.A. 52:14B-1 through -15; N.J.S.A. 52:14F-1 through -13. Their respective cases were consolidated at the request of their attorneys because the cases presented a common question of law. (Second Amended Order, dated April 8, 2008). Petitioners contend that when an applicant for a Medicaid waiver program makes an uncompensated transfer of an asset during the look-back period, the penalty period begins to run the month the transfer is made and the applicant is otherwise eligible for Medicaid benefits but for the application of the penalty period. Respondent DMAHS posits that a penalty period never commences in such a situation.
All parties moved for summary decision and submitted initial briefs and multiple reply briefs. Oral argument was heard on March 17, 2008. Upon receipt of the final stipulation of facts, related to the R.M. case, on April 8, 2008, the record closed.
STATEMENT OF FACTS
The parties have stipulated to the following relevant FACTS:
1. Petitioners are each elderly individuals within the meaning of the regulations governing the Medicaid program.
2. Petitioners have each applied for benefits under a community-based services Medicaid waiver program established pursuant to 42 U.S.C.A. ��1396n(c). O.B. applied for benefits on December 8, 2006; E.B. applied on May 1, 2007; E.A.F. on April 16, 2007; J.B. on January 29, 2007; and R.M. on June 4, 2007
3. Petitioners have each made certain uncompensated transfers of assets after February 8, 2006. O.B. transferred $34,400.66 on July 27, 2006, and $7,527.15 on August 18, 2006. E.B. transferred $80,000 on March 2, 2007. E.A.F. transferred $115,447 on April 11, 2007. J.B. transferred $128,986.26 between November 2, 2006, and January 25, 2007. R.M. transferred $47,817.25 on March 22, 2007.
4. Petitioners have each been denied Medicaid benefits under their respective community-based services Medicaid waiver program as a result of the transfers.
5. But for the uncompensated transfer of assets, petitioners were each eligible for benefits under a community-based services Medicaid waiver program.
CONCLUSIONS OF LAW
Since it is undisputed that petitioners are otherwise eligible for a community-based services Medicaid waiver program but for an uncompensated transfer of assets made after February 8, 2006, and during the look-back period, and are each subject to a period of ineligibility for those services as a result of the transfer, there are no genuine issues of material fact. Therefore, pursuant to N.J.A.C. 1:1-12.5(b) and Brill v. Guardian Life Insurance Co. of America, 142 N.J. 520, 523 (1995), the matter is ripe for summary decision.
The Medicaid Act was established in 1965 pursuant to Title XIX of the Social Security Act. 42 U.S.C.A. �� 1396 et seq. The joint federal-state program provides medical assistance to “aged, blind, or disabled individuals, whose income and resources are insufficient to meet the costs of necessary medical care.” 42 U.S.C.A. � 1396. These individuals are known as the “categorically needy.” Although participation is not obligatory, if a state chooses to participate in the program, it must submit a state plan to the Secretary of the United States Department of Health and Human Services for approval, which must comply with the comprehensive requirements provided in 42 U.S.C.A. � 1396a. The Medicaid Act also allows a participating state to offer coverage to a class of individuals known as “optionally needy.” 42 U.S.C.A. ��1396a(a)(10)(A)(ii)(I) to (XVIII). Individuals eligible for community-based waiver services (42 U.S.C.A. � 1396a(a)(10)(A)(ii)(VI)), as well as individuals residing in a nursing facility for at least thirty consecutive days (42 U.S.C.A. � 1396a(a)(10)(A)(ii)(V)), are included in this category. As a participant in the program offering coverage to the optionally needy, the State of New Jersey is responsible for enforcement of the Medicaid Act in New Jersey. N.J.S.A. 30:4D-1 et seq. Medicaid eligibility is based upon an applicant's income and resources. When it is determined that an applicant has transferred a resource for less than fair market value during a specified period of time known as a “look-back period,” a penalty period arises. 42 U.S.C.A. � 1396p(c)(1). Compare N.J.A.C. 10:71-4.7(a); N.J.A.C. 10:72-4.5(b)(3). A penalty period is a measurable period of time during which the applicant is ineligible for an institutional level of services. 42 U.S.C.A. � 1396p(c)(1).
The Deficit Reduction Act of 2005 (DRA) modified the Medicaid Act by increasing the look-back period from three to five years. The State of New Jersey has not enacted any statute or regulation implementing the DRA. The DRA provides that the look-back begins on the “first date as of which the individual both is an institutionalized individual and has applied for medical assistance under the State plan.” 42 U.S.C.A. ��1396p(c)(1)(B)(ii)(I). Accordingly, “if an institutionalized individual . . . disposes of assets for less than fair market value on or after the look-back date . . . the individual is ineligible for medical assistance services described in subparagraph (C)(i) . . . during the period beginning on the date specified in subparagraph (D) . . . .” 42 U.S.C.A. ��1396p(c)(1)(B)(i). The length of the period of ineligibility is governed by 42 U.S.C.A. ��1396p(c)(1)(E), and is not an issue in dispute in this case. 42 U.S.C.A. ��1396p(c)(1)(C)(i) lists the following medical assistance services:
(I) Nursing facility services.
(II) A level of care in an institution equivalent to that of nursing facility services.
(III) Home or community-based services furnished under a waiver granted under [42 U.S.C.A. � 1396n(c) or (d)].
42 U.S.C.A. � 1396p(h)(3) defines an “institutionalized individual” as one
who is an inpatient in a nursing facility, who is an inpatient in a medical institution and with respect to whom payment is made based on a level of care provided in a nursing facility, or who is described in [42 U.S.C.A. � 1396(a)(10)(A)(ii)(VI)].
[Emphasis added.]
42 U.S.C.A. � 1396a(a)(10)(A)(ii)(VI) adds that an institutionalized individual is one
who would be eligible under the State plan under [42 U.S.C.A. �� 1396 et seq.] if [she] were in a medical institution, with respect to whom there has been a determination that but for the provision of home or community based services described in [42 U.S.C.A. ��1396n(c),(d), or (e)] [she] would require the level of care provided in a hospital, nursing facility or intermediate care facility for the mentally retarded the cost of which could be reimbursed under the State plan, and who will receive home or community-based services pursuant to a waiver granted by the Secretary under [42 U.S.C.A. � 1396n(c), (d), or (e)].
[Emphasis added.]
Petitioners additionally urge consideration of N.J.A.C. 10:71-4.7(b)(3) and N.J.A.C. 10:71-4.10(b)(2), which the parties agreed in their Joint Stipulation were enacted to implement 42 U.S.C.A. � 1396p(c)(1)(B), and which also define an institutionalized individual as “a person seeking benefits under a home or community care waiver program” (emphasis added). Neither the federal statute nor the State regulation requires the actual receipt of home- or community-based services in order for a person to be characterized as an institutionalized individual. Therefore, I CONCLUDE that petitioners' applications seeking community-based waiver services are sufficient to classify petitioners as institutionalized individuals.
Since the parties have stipulated that each petitioner made an uncompensated transfer of an asset within months, and in E.A.F.'s case days, of their respective applications seeking community-based waiver services, I CONCLUDE, as the parties agreed during oral argument, that the uncompensated transfers of assets in question were each made during the look-back period. And I further CONCLUDE that as institutionalized individuals, the petitioners must each be subject to a penalty period or period of ineligibility for community-based services furnished under a waiver.
The issue in dispute in this matter is at what point the penalty period begins when an applicant for a Medicaid waiver program has made an uncompensated transfer of an asset during the look-back period. While the DMAHS agrees with petitioners that they are subject to a penalty period, the DMAHS contends that a penalty period can never begin because an applicant seeking community-based waiver services must await the expiration of the look-back period before she can seek those services. Petitioners, however, contend that if an applicant is otherwise eligible for Medicaid benefits but for the transfer of assets, the penalty period must start the month the uncompensated transfer of the asset is made.
The DRA added 42 U.S.C.A. � 1396p(c)(1)(D)(ii), a new subclause, to the Medicaid Act. Prior to enactment of the DRA, the penalty period resulting from an uncompensated transfer of assets commenced the month that the applicant made the uncompensated transfer, irrespective of what resources remained in the applicant's name. Since the parties have stipulated that the transfers were made after February 8, 2006, their periods of ineligibility must commence
the first day of a month during or after which assets have been transferred for less than fair market value, or the date on which the individual is eligible for medical assistance under the State plan and would otherwise be receiving institutional level care described in subparagraph (C) [a community-based waiver service] based on an approved application for such care but for the application of the penalty period, whichever is later, and which does not occur during any other period of ineligibility under this subsection.
[42 U.S.C.A. � 1396p(c)(1)(D)(ii) (emphasis added).]
Petitioners persuasively argue that according to the plain-language canon, the statute means what it says “and no further search is necessary or appropriate in the absence of clear ambiguity.” In re M.G., 307 N.J. Super. 348, 354 (App. Div. 1998), certif. denied, 154 N.J. 607 (1998). This cardinal doctrine of statutory construction directs that the penalty period assessed against an applicant must begin when the applicant 1) is eligible for medical assistance under the state plan, and 2) would otherwise be receiving home- or community-based services furnished under a waiver based on an approved application for such care, 3) but for the application of the penalty period. Simply stated, the penalty start date is the point in time when the applicant is eligible and would otherwise be receiving services, but for the penalty period. Petitioners submit that the insertion of “would otherwise be” and “but for” in the statute creates the grammatical tense known as the “present unreal conditional,” which is used to express what one would do in an unreal or imaginary situation. They urge that the application of this grammatical analysis to the statute makes it apparent that the statute intends that the penalty period begins when “an applicant for Medicaid benefits would otherwise be receiving services furnished under a waiver but for the fact that the applicant made an uncompensated transfer.” The applicant, however, isn't really receiving those services.
The DMAHS argues that the penalty period for an uncompensated transfer cannot start against an applicant for community-based waiver services until she is eligible for medical assistance under the State plan and is actually receiving community-based waiver services. But, as the DMAHS's reasoning continues, such an applicant cannot actually receive waiver services because the uncompensated transfer of assets prohibits receipt of waiver services. In reaching this circuitous position, the DMAHS relies on an enclosure that accompanied a letter to the State Medicaid Director from the Centers for Medicare and Medicaid Services (CMS), dated July 27, 2006. The CMS enclosure provides that
[f]or transfers of assets made on or after February 8, 2006, the period of ineligibility will begin with the . . . date on which the individual is eligible for medical assistance under the State plan and is receiving institutional level of care services (based on an approved application for such services) that, were it not for the imposition of the penalty period, would be covered by Medicaid.
[Emphasis added.]
The CMS enclosure, however, misquotes the statute, and the DMAHS's reliance on it is, thus, misplaced. In order to accommodate the language of the CMS enclosure, the DMAHS is obligated to take an inherently contradictory position. While the DMAHS deems petitioners “institutionalized individuals” in determining the look-back period start date, it denies that petitioners are “institutionalized individuals” for purposes of determining the penalty period start date. The DMAHS reasons that an applicant must be receiving waiver services in order to be denominated an institutionalized individual. Otherwise, the penalty period cannot commence. But, as had been previously noted, an “institutionalized individual” is not only an inpatient in a nursing facility or medical institution, but also, as the federal statute provides, one who would be eligible for community-based waiver services if she were in a medical institution, or, as State regulations allow, is seeking those services. 42 U.S.C.A. � 1396p(c)(1)(D)(ii) does not require that one actually receive institutional-level care as respondent contends. The statute merely demands that one “would otherwise be receiving institutional level care�.�.�. but for the application of the penalty period.”
Petitioners proffer that the Congressional Record refutes the DMAHS's construction. A proposed House Bill had provided that the beginning date for a period of eligibility be
[t]he date on which the individual is eligible for medical assistance under the State plan and is receiving services described in subparagraph (C) based on an approved application for such care but for the application of the penalty period.
[151 Cong. Rec. H10571 (daily ed. Nov. 17, 2005) (emphasis added).]
But the “is receiving services” language in the proposed legislation was later changed by Conference Agreement to the present text — “would otherwise be receiving institutional level care.” Id. at H12709-H12710. Petitioners point out that the use of the present participle “is receiving” would have suggested that the applicant must actually be receiving waiver services. But the verb tense change made during Conference Committee demonstrates that Congress was aware that an applicant for benefits under a community-care waiver program, who had made an uncompensated transfer of an asset, could not be receiving waiver services before applying for those services.
The purpose of the DRA is to deter self-impoverishment in order to qualify for Medicaid by penalizing those who transfer assets for less than fair market value. There is no evidence in the legislative record cited by the DMAHS that Congress intended to eliminate community-based waiver services completely to those who made such transfers. Application of the DMAHS's tortured construction of the DRA, however, would entirely eliminate the imposition of a penalty period and require anyone making uncompensated transfers within a look-back period and seeking waiver services to wait up to five years from the date of the transfer before an application could be made for home- or community-based waiver services. While the DMAHS suggests that its interpretation is consistent with the DRA's objective, which was to lighten the taxpayers' burden, its interpretation would actually encourage placement in a nursing facility over less-costly waiver services and undermine the impetus for the DRA's enactment.
The plain meaning of 42 U.S.C.A. � 1396p(c)(1)(D)(ii) is clear and the DMAHS's strained interpretation is conflicting, contrived and inconsistent with the statute's legislative history. I, therefore, CONCLUDE that the penalty period for an applicant for a Medicaid waiver program who has made an uncompensated transfer of an asset during the look-back period begins on the date on which she is otherwise eligible for Medicaid waiver services based on an application that would be approved, but for the transfer of assets. Thus the penalty period for each petitioner should commence on the date each petitioner submitted her application for community-based waiver services.
ORDER
Accordingly, I hereby ORDER that a penalty shall be assessed against each petitioner as a result of her uncompensated transfer of an asset and that the start date of the penalty period shall be the date on which the application for waiver services was made after the uncompensated transfer.
I hereby FILE my initial decision with the DIRECTOR OF THE DIVISION OF MEDICAL ASSISTANCE AND HEALTH SERVICES for consideration.
This recommended decision may be adopted, modified or rejected by the DIRECTOR OF THE DIVISION OF MEDICAL ASSISTANCE AND HEALTH SERVICES, the designee of the Commissioner of the Department of Human Services, who by law is authorized to make a final decision in this matter. If the Director of the Division of Medical Assistance and Health Services does not adopt, modify or reject this decision within forty-five (45) days and unless such time limit is otherwise extended, this recommended decision shall become a final decision in accordance with N.J.S.A. 52:14B-10.
Within seven (7) days from the date on which this recommended decision was mailed to the parties, any party may file written exceptions with the DIRECTOR OF THE DIVISION OF MEDICAL ASSISTANCE AND HEALTH SERVICES, Mail Code #3, P.O. Box 712, Trenton, New Jersey 08625-0712, marked “Attention: Exceptions.” A copy of any exceptions must be sent to the judge and to the other parties.
Sunday, January 11, 2009
Free Seminar- 2009 update Wills and Estate Planning
Free Seminar- 2009 update Wills and Estate Planning
WHEN: January 28, 2009 12:30-1:10 PM
WHERE: Law Office of Kenneth Vercammen, 2053 Woodbridge Ave, 2nd floor, Edison, NJ
The cost for this program when held at Middlesex County College was $29.00. If you mail back you can attend for free
COST: Free if you pre-register. This program is limited to 15 people
Complimentary Sandwiches to pre-registered persons at 12:10
SPEAKER: Kenneth Vercammen, Esq.
(Author- Answers to Questions About Probate)
The new NJ Probate Law made a number of substantial changes in Probate and the administration of estates and trusts in New Jersey.
Main Topics:
1. The New Probate Law and preparation of Wills
2. 2009 increases in Federal Estate and Gift Tax exemption
3. NJ Inheritance tax
4. Power of Attorney
5. Living Will
6. Administering the Estate/ Probate/Surrogate
7. Question and Answer
COMPLIMENTARY MATERIAL: Brochures on Wills, "Answers to Questions about Probate" and Administration of an Estate, Power of Attorney, Living Wills, Real Estate Sales for Seniors, and Trusts.
Here is your opportunity to listen to an experienced attorney who will answer questions how to distribute your property as you wish and avoid many rigid provisions of state law.
To attend or for Information: Mike McDonald 732-572-0500
or email kenvnjlaws@verizon.net
Can’t attend? We can email you materials
Send email to kenvnjlaws@verizon.net
Our recent NJ Laws Email Newsletter discussed increased duties of the Executor or Administrator. The email newsletter also discussed how the revised NJ Probate Law makes a number of substantial changes in Probate and the administration of estates and trusts in New Jersey. If you send us your e-mail address we can provide you with a Free report on the changes in the law which may affect you. We also recently established the NJ Elder Law blog at http://elder-law.blogspot.com.
Website www.njlaws.com now provides Legal Information on Probate and Elder Law.
Very truly yours,
KENNETH VERCAMMEN
Chair ABA Elder Law Committee, Solo & Small Firm Division
To receive the njlaws Free Legal newsletter via email with Estate Administration & Probate information, email us at kenvnjlaws@verizon.net or fax us your email address.
Fax 732-572-0030
We send the newsletter via email only.
Email address: __________________________
WHEN: January 28, 2009 12:30-1:10 PM
WHERE: Law Office of Kenneth Vercammen, 2053 Woodbridge Ave, 2nd floor, Edison, NJ
The cost for this program when held at Middlesex County College was $29.00. If you mail back you can attend for free
COST: Free if you pre-register. This program is limited to 15 people
Complimentary Sandwiches to pre-registered persons at 12:10
SPEAKER: Kenneth Vercammen, Esq.
(Author- Answers to Questions About Probate)
The new NJ Probate Law made a number of substantial changes in Probate and the administration of estates and trusts in New Jersey.
Main Topics:
1. The New Probate Law and preparation of Wills
2. 2009 increases in Federal Estate and Gift Tax exemption
3. NJ Inheritance tax
4. Power of Attorney
5. Living Will
6. Administering the Estate/ Probate/Surrogate
7. Question and Answer
COMPLIMENTARY MATERIAL: Brochures on Wills, "Answers to Questions about Probate" and Administration of an Estate, Power of Attorney, Living Wills, Real Estate Sales for Seniors, and Trusts.
Here is your opportunity to listen to an experienced attorney who will answer questions how to distribute your property as you wish and avoid many rigid provisions of state law.
To attend or for Information: Mike McDonald 732-572-0500
or email kenvnjlaws@verizon.net
Can’t attend? We can email you materials
Send email to kenvnjlaws@verizon.net
Our recent NJ Laws Email Newsletter discussed increased duties of the Executor or Administrator. The email newsletter also discussed how the revised NJ Probate Law makes a number of substantial changes in Probate and the administration of estates and trusts in New Jersey. If you send us your e-mail address we can provide you with a Free report on the changes in the law which may affect you. We also recently established the NJ Elder Law blog at http://elder-law.blogspot.com.
Website www.njlaws.com now provides Legal Information on Probate and Elder Law.
Very truly yours,
KENNETH VERCAMMEN
Chair ABA Elder Law Committee, Solo & Small Firm Division
To receive the njlaws Free Legal newsletter via email with Estate Administration & Probate information, email us at kenvnjlaws@verizon.net or fax us your email address.
Fax 732-572-0030
We send the newsletter via email only.
Email address: __________________________
Wednesday, January 7, 2009
3B:3-36 Failure of testamentary provision; residuary devise to two or more residuary devisees; death of one or more before testator
3B:3-36. Except as provided in N.J.S.3B:3-35:
a.a devise, other than a residuary devise, that fails for any reason becomes a part of the residue.
b.if the residue is devised to two or more persons, unless a contrary intention shall appear by the will, the share of a residuary devise that fails for any reason passes to the other residuary devisee, or to other residuary devisees in proportion to the interest of each in the remaining part of the residue.
L.1981, c.405, s.3B:3-36, eff. May 1, 1982; amended 2004, c.132, s.32.
a.a devise, other than a residuary devise, that fails for any reason becomes a part of the residue.
b.if the residue is devised to two or more persons, unless a contrary intention shall appear by the will, the share of a residuary devise that fails for any reason passes to the other residuary devisee, or to other residuary devisees in proportion to the interest of each in the remaining part of the residue.
L.1981, c.405, s.3B:3-36, eff. May 1, 1982; amended 2004, c.132, s.32.
3B:3-35 Anti-lapse; deceased devisee; class gifts.
3B:3-35 Anti-lapse; deceased devisee; class gifts.
If a devisee who is a grandparent, stepchild or a lineal descendant of a grandparent of the decedent is dead at the time of the execution of the governing instrument, fails to survive the decedent, or is treated as if he predeceased the decedent, any descendants of the deceased devisee who survives the decedent by 120 hours take by representation in place of the deceased devisee. One who would have been a devisee under a class gift if he had survived the decedent is treated as a devisee for purposes of this section whether his death occurred before or after the execution of the governing instrument. For purposes of this section, a"stepchild" means a child of the surviving, deceased or former spouse who is not a child of the decedent.
L.1981, c.405, s.3B:3-35, eff. May 1, 1982; amended 2004, c.132, s.31; 2005, c.160, s.5.
If a devisee who is a grandparent, stepchild or a lineal descendant of a grandparent of the decedent is dead at the time of the execution of the governing instrument, fails to survive the decedent, or is treated as if he predeceased the decedent, any descendants of the deceased devisee who survives the decedent by 120 hours take by representation in place of the deceased devisee. One who would have been a devisee under a class gift if he had survived the decedent is treated as a devisee for purposes of this section whether his death occurred before or after the execution of the governing instrument. For purposes of this section, a"stepchild" means a child of the surviving, deceased or former spouse who is not a child of the decedent.
L.1981, c.405, s.3B:3-35, eff. May 1, 1982; amended 2004, c.132, s.31; 2005, c.160, s.5.
3B:3-34 Will construed to pass all property of testator including after-acquired property.
3B:3-34. Unless a will expressly provides otherwise, it is construed to pass all property the testator owns at death including property acquired after the execution of the will, and all property acquired by the estate after the testator's death.
L.1981, c.405, s.3B:3-34, eff. May 1, 1982; amended 2004, c.132, s.30.
L.1981, c.405, s.3B:3-34, eff. May 1, 1982; amended 2004, c.132, s.30.
3B:3-33.1 Testator's intention; settlor's intention; rules of construction applicable to wills, trusts and other governing instruments.
a. The intention of a testator as expressed in his will controls the legal effect of his dispositions, and the rules of construction expressed in N.J.S.3B:3-34 through N.J.S.3B:3-48 shall apply unless the probable intention of the testator, as indicated by the will and relevant circumstances, is contrary.
b.The intention of a settlor as expressed in a trust, or of an individual as expressed in a governing instrument, controls the legal effect of the dispositions therein and the rules of construction expressed in N.J.S.3B:34 through N.J.S.3B:3-48 shall apply unless the probable intent of such settlor or of such individual, as indicated by the trust or by such governing instrument and relevant circumstances, is contrary. For purposes of this Title, when construing each of these rules of construction the word "testator" shall include but not be limited to a settlor or a creator of any other governing instrument; the word "will" shall include a trust or other governing instrument; the word "devise" shall include any disposition in a trust or other governing instrument; and the word "devisee" shall include a beneficiary of a trust or other governing instrument.
L.2004,c.132,s.28.
b.The intention of a settlor as expressed in a trust, or of an individual as expressed in a governing instrument, controls the legal effect of the dispositions therein and the rules of construction expressed in N.J.S.3B:34 through N.J.S.3B:3-48 shall apply unless the probable intent of such settlor or of such individual, as indicated by the trust or by such governing instrument and relevant circumstances, is contrary. For purposes of this Title, when construing each of these rules of construction the word "testator" shall include but not be limited to a settlor or a creator of any other governing instrument; the word "will" shall include a trust or other governing instrument; the word "devise" shall include any disposition in a trust or other governing instrument; and the word "devisee" shall include a beneficiary of a trust or other governing instrument.
L.2004,c.132,s.28.
3B:3-33 Choice of law as to meaning and effect of wills; testator's intention; rules of construction.
3B:3-33. The meaning and legal effect of a disposition in a will, trust or other governing instrument shall be determined by the local law of a particular state selected in the will, trust or other governing instrument, unless the application of that law is contrary to the provisions relating to the elective share described in N.J.S.3B:8-1 et seq. or any other public policy of this State otherwise applicable to the disposition.
L.1981, c.405, s.3B:3-33, eff. May 1, 1982; amended 2004, c.132, s.29
L.1981, c.405, s.3B:3-33, eff. May 1, 1982; amended 2004, c.132, s.29
3B:3-32 Requirement of survival by 120 hours; exceptions; survivorship with respect to future interests.
3B:3-32. a. Except as provided in subsections b. and c., for purposes of construing a will, trust agreement, or other governing instrument, an individual who is not established by clear and convincing evidence to have survived an event, including the death of another individual, by 120 hours is deemed to have predeceased the event.
b.If it is not established by clear and convincing evidence that one of two co-owners with right of survivorship survived the other co-owner by 120 hours, one-half of the property passes as if one had survived by 120 hours and one-half as if the other had survived by 120 hours.
c.If there are more than two co-owners and it is not established by clear and convincing evidence that at least one of them survived the others by 120 hours, the property passes in the proportion that one bears to the whole number of co-owners.
d.The 120 hour survival requirement of subsections a., b. and c. shall not apply if: (1) the will, trust agreement, or other governing instrument, contains some language applicable to the event dealing explicitly with simultaneous deaths or deaths in a common disaster, or requiring survival for a stated time period; (2) application would cause a non-vested property interest or power of appointment to be invalid under a rule against perpetuities concerning an interest created prior to the enactment of P.L. 1999, c. 159 (effective on July 8, 1999); or (3) it is established by clear and convincing evidence that application to multiple governing instruments would result in an unintended failure or duplication of a disposition.
e.For purposes of this section, "co-owners with right of survivorship" includes joint tenants, tenants by the entireties, and other co-owners of property or accounts held under circumstances that entitle one or more to the whole of the property or account on the death of the other or others.
To the extent this section is inconsistent with the "Uniform Simultaneous Death Law" (N.J.S.3B:6-1 et seq.), the provisions of this section shall apply.
L.1981, c.405, s.3B:3-32, eff. May 1, 1982; amended 2004, c.132, s.27.
b.If it is not established by clear and convincing evidence that one of two co-owners with right of survivorship survived the other co-owner by 120 hours, one-half of the property passes as if one had survived by 120 hours and one-half as if the other had survived by 120 hours.
c.If there are more than two co-owners and it is not established by clear and convincing evidence that at least one of them survived the others by 120 hours, the property passes in the proportion that one bears to the whole number of co-owners.
d.The 120 hour survival requirement of subsections a., b. and c. shall not apply if: (1) the will, trust agreement, or other governing instrument, contains some language applicable to the event dealing explicitly with simultaneous deaths or deaths in a common disaster, or requiring survival for a stated time period; (2) application would cause a non-vested property interest or power of appointment to be invalid under a rule against perpetuities concerning an interest created prior to the enactment of P.L. 1999, c. 159 (effective on July 8, 1999); or (3) it is established by clear and convincing evidence that application to multiple governing instruments would result in an unintended failure or duplication of a disposition.
e.For purposes of this section, "co-owners with right of survivorship" includes joint tenants, tenants by the entireties, and other co-owners of property or accounts held under circumstances that entitle one or more to the whole of the property or account on the death of the other or others.
To the extent this section is inconsistent with the "Uniform Simultaneous Death Law" (N.J.S.3B:6-1 et seq.), the provisions of this section shall apply.
L.1981, c.405, s.3B:3-32, eff. May 1, 1982; amended 2004, c.132, s.27.
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