H.T. VS. DIVISION OF MEDICAL ASSISTANCE AND HEALTH SERVICES (DIVISION OF MEDICAL ASSISTANCE AND HEALTH SERVICES) (CONSOLIDATED)

NOT FOR PUBLICATION WITHOUT THE
APPROVAL OF THE APPELLATE DIVISION
This opinion shall not "constitute precedent or be binding upon any court." Although it is posted on the
internet, this opinion is binding only on the parties in the case and its use in other cases is limited. R. 1:36-3.

SUPERIOR COURT OF NEW JERSEY
APPELLATE DIVISION
DOCKET NOS. A-4263-16T1
A-5424-16T1

H.T.,

Petitioner-Appellant,

v.

DIVISION OF MEDICAL
ASSISTANCE AND HEALTH
SERVICES and HUDSON COUNTY
BOARD OF SOCIAL SERVICES,

Respondents-Respondents.
______________________________

Submitted February 5, 2019 – Decided March 1, 2019

Before Judges Rothstadt, Gilson and Natali.

On appeal from the New Jersey Department of Human
Services, Division of Medical Assistance and Health
Services.

SB2, Inc., attorneys for appellant (Ada Sachter
Gallicchio, on the brief).

Gurbir S. Grewal, Attorney General, attorney for
respondent Division of Medical Assistance and Health
Services (Melissa H. Raksa, Assistant Attorney
 General, of counsel; Jacqueline R. D'Alessandro,
Deputy Attorney General, on the brief).

PER CURIAM

These consolidated appeals require us to resolve two independent issues.

In appeal A-5424-16, we decide if respondent Division of Medical Assistance

and Health Services (Division) abused its discretion when it denied petitioner

H.T.'s request for Medicaid benefits under the New Jersey Care Special

Medicaid Program. Because we conclude that the Division correctly determined

that H.T. presented no evidence, and advanced no argument, to dispute the

Division's finding that she was financially ineligible for benefits under that

program, we affirm.

The issues related to appeal A-4263-16 are more complex. In that appeal,

H.T. contends that the Division improperly failed to respond to a request to

transfer this matter to the Office of Administrative Law (OAL) for a hearing

with respect to her request for Medicaid benefits under the separate Nursing

Home Medicaid program. According to H.T., the agency responsible for

evaluating her eligibility for the Nursing Home Medicaid program never sent

her, or her designated representative, written notice denying her request for

benefits as required by the applicable regulations and, therefore, the Division's

failure to schedule a hearing, ostensibly because her request was untimely, was

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an abuse of discretion. After conducting a thorough review of the record in light

of the arguments raised on appeal, we remand for further proceedings.

I.

We discern the relevant facts from the limited record before us. On March

2, 2016, H.T. was admitted to a nursing home in Union City. Willie Batista,

apparently acting on H.T.'s behalf, filed a Medicaid application for the Nursing

Home Medicaid program. According to the Division, applicants for the Nursing

Home Medicaid Program must be clinically eligible to qualify for benefits. In

order to determine if H.T. was clinically eligible, the Division contends that H.T.

was evaluated by the Division of Aging Services, Office of Community Choice

Options (OCCO), within the Department of Human Services. The Division

further asserts that on July 29, 2016, OCCO sent a letter to H.T., "at the nursing

facility where she resides," informing her that she was clinically ineligible for

the program. OCCO's letter stated H.T. was deemed clinically ineligible

because she failed to "meet [nursing facility] level of care in accordance with

N.J.A.C. 8:85-2.1."

Because an applicant must not only qualify clinically for the Nursing

Home Medicaid program, but also must establish financial eligibility, on July

21, 2016, the Hudson County Board of Social Services (BSS) sent Batista an

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"Extended Final Notice," seeking additional financial information and bank

records. The July 21, 2016 letter advised Batista that if the requested

information was not received by August 5, 2016, H.T.'s "case will be denied."

On August, 5, 2016, the BSS denied H.T.'s claim because H.T.'s "[g]ross

income exceed[ed] 100% of [the] poverty level." The letter included standard

language notifying that a fair hearing must be requested within twenty days.

Notably, rather than respond to the nursing home program to which Batista

initially applied, the BSS's August 5, 2016 denial related to a different program,

designated in the letter as "NJ Care Special Medicaid Program." According to

the Division, the NJ Care Special Medicaid program, as opposed to the Nursi ng

Home Medicaid Program, was referenced in the letter because after H.T. was

deemed clinically ineligible for the Nursing Home Medicaid Program, the BSS

"evaluated her for other programs for which she might have been eligible." H.T.

maintains, however, that she never received written notification of OCCO's July

29, 2016 determination until March 20, 2017, when her counsel made a formal

request.

After the August 5, 2016 denial, Miriam Kaluszyner and Sam Stern, of

Future Care Consultants (FCC), H.T.'s authorized representatives,

communicated by email with Leah Baldwin, the BSS employee handling H.T.'s

A-4263-16T1
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application for Medicaid benefits. During that exchange, Kaluszyner and Stern

were advised that "although she met financial eligibility for the Nursing Home

[Medicaid] Program, she did not meet the clinical eligibility," based on OCCO's

assessment.

H.T. filed a timely request for fair hearing with respect to the BSS's denial

of benefits under the NJ Care Special Medicaid Program. Significantly, the form

memorializing that request was contained as part of the August 5, 2016 denial

letter which, as noted above, referred only to the NJ Care Special Medicaid

Program. The matter was transmitted to the OAL and a fair hearing was held on

November 1, 2016, before an Administrative Law Judge (ALJ). However,

before a decision was issued by the ALJ, H.T., through counsel, submitted

requests on March 20, 2017 and March 29, 2017 for a fair hearing to challenge

OCCO's determination that H.T. was clinically ineligible for the Nursing Home

Medicaid program.

On April 13, 2017, the ALJ issued her initial decision. She explained that

OCCO found H.T. clinically ineligible for the Nursing Home Medicaid Program

and, as a result, the BSS, without a request from H.T., evaluated her for

"eligibility for a second program, NJ Care [Special Medicaid Program], which

did not require clinical eligibility." With respect to the NJ Care Special

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Medicaid Program, the ALJ concluded that H.T.'s "income exceeded the limits

. . . ." The ALJ also stated as "relevant" and "undisputed" that OCCO "notified

[H.T.] of its decision; H.T. was not clinically eligibl[e] for the . . . [nursing]

[p]rogram[;] and . . . she did not meet [nursing facility] level of care in

accordance with N.J.A.C. 8:85-2.1."

The Division issued its Final Agency Decision on June 21, 2017, which

adopted, with minor amendments, the ALJ's initial decision. The Division

affirmed the ALJ's finding that H.T. was financially ineligible for NJ Care

Special Medicaid Program because her "income exceeded 100% of the poverty

level, or $990 per month." The Division concluded that the ALJ's determination

affirming the BSS's denial of benefits was reasonable as H.T. presented no

evidence to contradict the BSS's finding and made no argument that she was

financial eligible for that program.

The Division also acknowledged that while the appeal related to H.T.'s

challenge to the BSS's denial of her eligibility for the NJ Care Special Medicaid

Program, the "substance of [H.T.'s] argument . . . focused on the denial of

[H.T.'s] clinical eligibility for the [Nursing Home Medicaid Program], and

[DDS's] failure to issue a notice of clinical eligibility." The Division noted that

A-4263-16T1
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OCCO found H.T. clinically ineligible on July 29, 2016, and continued to screen

H.T. for eligibility for other programs thereafter.

On appeal, H.T. asserts that the BSS improperly considered and denied

her eligibility for the NJ Care Special Medicaid Program, rather than the Nursing

Home Medicaid Program, which she applied for. As to her claim for benefits

under the Nursing Home Medicaid Program, she continues to maintain that she

never received a copy of the July 29, 2017 letter from OCCO, and the Division's

failure to schedule a hearing was an abuse of discretion.

The Division argues that we should affirm its finding that she was

financially ineligible for the NJ Care Special Medicaid Program based on the

administrative record. As to H.T.'s request for a hearing with respect to the

BSS's decision that she was clinically ineligible for the Nursing Home Medicaid

Program, the Division maintains that it "reasonably declined" to take action on

H.T.'s March 2017 request because it was "beyond the twenty-day window in

which such a request could be made" under applicable regulations.

II.

We accord substantial deference to a state administrative agency to the

extent it acts within its sphere of delegated functions. In re Anthony Stallworth,

208 N.J. 182, 194 (2011). We generally do not overturn the agency's decision

A-4263-16T1
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unless it is shown to be "arbitrary, capricious, or unreasonable, or . . . not

supported by substantial credible evidence in the record as a whole." Stallworth,

208 N.J. at 194 (quoting Henry v. Rahway State Prison, 81 N.J. 571, 580 (1980))

(alteration in original); see also W.T. v. Div. of Med. Assistance & Health

Servs., 391 N.J. Super. 25, 36 (App. Div. 2007).

Similarly, we accord substantial deference to an "agency's interpretation

of statutes and regulations within its implementing and enforcing responsibility

. . . ." E.S. v. Div. of Med. Assistance & Health Servs., 412 N.J. Super. 340,

355 (App. Div. 2010) (quoting Wnuck v. N.J. Div. of Motor Vehicles, 337 N.J.

Super. 52, 56 (App. Div. 2001)). We do not give deference to an agency's legal

determinations. A.B. v. Div. of Med. Assistance & Health Servs., 407 N.J.

Super. 330, 340 (App. Div. 2009).

III.

Appeal A-5424-16

Initially, we note that H.T. failed to brief the issue of her financial

eligibility for the NJ Care Special Medicaid Program and, accordingly, any

argument that she is financially eligible for that program is deemed waived. See

El-Sioufi v. St. Peter's Univ. Hosp., 382 N.J. Super. 145, 155 n.2 (App. Div.

2005). Even if we consider the merits of H.T.'s appeal, moreover, we conclude

A-4263-16T1
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that the Division did not abuse its discretion when it determined that H.T. was

financially ineligible for that program. The BSS, after requesting financial

information from H.T., found that she was financially ineligible "because her

income exceeded 100% of the poverty level, or $990 per month." H.T. did not

challenge that finding by way of competent evidence or otherwise before the

BSS, ALJ, or Division. On these facts, there is no basis to disturb the June 21,

2017 Final Agency Decision.

Appeal A-4263-16

With respect to the Division's failure to act on H.T.'s request for a fair

hearing, a remand is necessary so that OAL can develop an appropriate factual

record regarding H.T.'s receipt of the July 29, 2016 letter from OCCO.

The New Jersey Medical Assistance and Health Services Act, N.J.S.A.

30:4D-1 to -19.5, provides the authority for New Jersey's participation in the

federal Medicaid program. The Division is the administrative agency within the

Department of Human Services that is charged with administering the Medicaid

program. N.J.S.A. 30:4D-7. In this regard, the Division has the authority to

oversee all State Medicaid programs and issue "all necessary rules and

regulations." Ibid. Under the applicable regulations, if an applicant is denied

Medicaid benefits, "[i]t is the right of every applicant . . . to be afforded the

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opportunity for a fair hearing in the manner established by the policies and

procedures set forth in N.J.A.C. 10:49-10 and 10:69-6." N.J.A.C. 10:71-8.4(a).

Applicants have the right to fair hearings when "their claims . . . are denied or

are not acted upon with reasonable promptness . . . ." N.J.A.C. 10:49-10.3(b).

Requests for fair hearings must be submitted to the Division in writing within

twenty days of the denial, reduction, or partial denial of Medicaid benefits.

N.J.A.C. 10:49-10.3(b)(1) and (3).

Here, we conclude that the record is insufficient for us to conclude

factually when H.T. received the July 29, 2016 letter notifying her that she was

deemed clinically ineligible for the Nursing Home Medicaid Program. In this

regard, we do not believe that the Division's and ALJ's findings that H.T.

received the July 29, 2016 letter resolves the issue for two, independent reasons.

First, the issue before the ALJ was not whether H.T. received the July 29,

2016 letter, or if she qualified for the Nursing Home Medicaid Program, but

rather, whether the BSS properly concluded that she was financially ineligible

for the NJ Care Special Medicaid program. As the Division concedes on appeal,

the Division has taken no action with respect to H.T.'s March 2017 request for

a fair hearing on her challenge to OCCO's determination that she was clinically

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ineligible for the Nursing Home Medicaid Program. Thus, any findings with

respect to that program by the ALJ and the Division are, at best, dicta.

Second, we conclude that to the extent the ALJ made findings with respect

to H.T.'s receipt of the July 29, 2016 letter, those findings were not supported

by substantial, credible evidence in the record. The ALJ does not cite or rely

upon any witness testimony to support the conclusion that the OCCO notified

H.T. of its decision. And, rather than an "uncontested" fact, as characterized by

the ALJ, H.T., through counsel, has continuously maintained that she did not

receive the July 29, 2016 letter, and requested a fair hearing to dispute OCCO's

clinical finding.1

Further, while we acknowledge that in certain circumstances, there is a

legal presumption of proper mailing, we cannot conclude that presumption

1
Pursuant to N.J.A.C. 8:85-1.8(e)(3)(ii)(1), the OCCO is required to mail an
executed denial letter to an individual deemed clinically ineligible. We reject
any claim that the August 15, 2017 email exchange between the BSS employee
and H.T.'s representatives, informing them of H.T.'s denial, satisfied the
Division's notice obligations. See N.J.A.C. 10:71-8.3 ("The county welfare
agency shall promptly notify, in writing, the applicant for . . . Medicaid . . . of
any agency decision."); Meyer v. N.J. Dep't of Human Servs., Div. of Family
Dev., 269 N.J. Super. 310, 313 (App. Div. 1993) ("[D]ue process requires the
agency to [provide] . . . detailed information . . . to enable claimant to understand
what the agency has decided, so that they may assess the correctness of the
agency's decision, make an informed decision as to whether to appeal, and be
prepared for the issue to be addressed at the hearing.") (quoting Ortiz v. Eichler,
616 F.Supp. 1046, 1062 (D.Del. 1985)).
A-4263-16T1
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should be afforded to the Division on this record. See First Resolution

Investment Corp. v. Seker, 171 N.J. 502 (2002) (discussing Rule 1:5-4, which

provides that service by regular mail is complete upon mailing, only if sent

simultaneously with certified or registered mail); see also SSI Med. Servs. v.

HHS, Div. of Med. Assistance & Health Servs., 146 N.J. 614, 621, 623 (1996)

(holding that the presumption of proper mailing can be invoked by proof: "(1)

that the mailing was correctly addressed; (2) that the proper postage was affixed;

(3) that the return address was correct; and (4) that the mailing was deposited in

a proper mail receptacle or at the post office," or evidence of business mailing

custom or practice, along with "other corroboration that the custom was

followed in a particular instance.").

Initially, we note that the July 29, 2016 letter is unsigned. Further, the

Division failed to establish by direct or circumstantial evidence that it actually

mailed the July 29, 2016 letter, and that it was received by H.T., or her

designated representative, at the nursing home address as shown on the letter.

In this regard, the record is devoid of a certification of service, or testimony

regarding the Division's practice and procedure in mailing correspondence by

regular mail. The Division has furnished no corroborating proof of OCCO's

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mailing customs, either in an appellate appendix or the statement of items

comprising the record pursuant to Rule 2:5-4(b).

We further observe that it would be illogical for H.T., and her attorney, to

disregard the July 29, 2016 letter and wait eight months before pursuing a fair

hearing. After receiving the August 5, 2016 denial letter, H.T. responded within

twenty days with a timely fair hearing request with respect to the BSS's denial

of benefits under the NJ Care Special Medicaid Program. These events are

consistent with H.T.'s assertion that she never received the letter on July 29,

2016 or within the twenty-day period of its issuance.

For the aforementioned reasons, we conclude that the matter must be

remanded to the Division. We are mindful that H.T. and her designated

representative have not tendered a certification attesting, under penalty of

perjury, that she did not receive the July 29, 2016 letter. As a condition of a

remand, H.T.'s representative must submit such a certification to the Division

within fifteen days of our opinion. If the Division is satisfied with the

certification and abandons its position that service was properly made upon

H.T., then the merits of the case shall proceed expeditiously to a fair hearing.

If, however, the Division continues to doubt H.T.'s claim that she was not served

with the July 29, 2016 letter, the matter shall be referred to the OAL for a fact-

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finding hearing initially to determine when H.T. received the July 29, 2016

letter, and if she made a timely request for a fair hearing. The OAL's ruling on

those subjects may then, in turn, be reviewed or challenged before the agency,

and ultimately by this court if further review is sought.

Affirmed as to appeal A-5424-16, and remanded as to appeal A-4263-16

for further proceedings consistent with this opinion. We do not retain

jurisdiction.

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