E.B. VS. DIVISION OF MEDICAL ASSISTANCE AND HEALTH SERVICES (DIVISION OF MEDICAL ASSISTANCE AND HEALTH SERVICES)

NOT FOR PUBLICATION WITHOUT THE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 NO. A-3087-15T4

E.B.,

Petitioner-Appellant,

v.

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

Respondents-Respondents.
______________________________

Argued December 11, 2017 – Decided July 13, 2018

Before Judges Accurso and O'Connor.

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

Samuel B. Fineman argued the cause for
appellant (Cohen Fineman, LLC, attorneys;
Samuel B. Fineman, of counsel and on the
brief).

Melissa Bayly, Deputy Attorney General,
argued the cause for respondent Division of
Medical Assistance and Health Services
(Christopher S. Porrino, Attorney General,
attorney; Melissa H. Raksa, Assistant
 Attorney General, of counsel, Melissa Bayly,
on the brief).

PER CURIAM

Petitioner E.B. sought Medicaid benefits to pay for the

cost of her nursing home care. Respondent Camden County Board

of Social Services (Board) imposed a transfer penalty of

$69,211.90, because petitioner transferred resources for less

than fair market value during the "look-back period"1 preceding

her admission into a nursing home.

After an evidentiary hearing, an Administrative Law Judge

(ALJ) affirmed the Board in an initial decision. Petitioner

appealed from such decision, but the Division of Medical

Assistance and Health Services (Division) adopted the initial

decision, affirming the penalty. Petitioner now appeals from

the Division's decision. We affirm.

I

Petitioner entered a nursing home on May 29, 2013. Through

her daughter, J.W., petitioner applied for Medicaid benefits to

cover the cost of the nursing home. The application was

approved, but with a transfer of assets penalty in the amount of

1
"The look-back period is a fixed term of months preceding an
application for Medicaid benefits in which transfers of assets
or income are closely scrutinized to determine if they were made
for the sole purpose of Medicaid qualification." E.S. v. Div.
of Med. Assistance & Health Servs., 412 N.J. Super. 340, 344
(App. Div. 2010) (citing H.K. v. State, 184 N.J. 367, 380)).
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$99,754.80. Petitioner challenged the penalty, and the Board

determined some of the transfers were in fact for fair value and

reduced the penalty to $82,102.94. Petitioner appealed, and the

matter was transferred to the Office of Administrative Law as a

contested case. Just before the hearing, the Board agreed to

reduce the penalty to $69,211.90, finding other expenditures

made by petitioner during the look-back period were acceptable.

The salient evidence was provided by J.W. She testified

that, in 2003, her then eighty-year old mother moved into her

home. There was an area of J.W.'s home which, although

physically attached to the house, was a separate unit. That

unit comprised a living room, bedroom, and bathroom, and is

where petitioner lived. The family referred to this living area

as petitioner's "apartment." Petitioner moved into the

apartment because she was afraid of living by herself and was

unable to shop or cook for herself.

In 2009, petitioner was diagnosed with Lewy Body Dementia.2

Soon after her diagnosis, petitioner became intermittently

delusional, requiring J.W. and the members of her household to

keep "an eye on" and "an ear out" for her. By 2011, a family

2
"[A] degenerative cerebral disorder of the elderly,
characterized initially by progressive dementia or psychosis,
and subsequently by parkinsonian findings, usually with severe
rigidity. . . ." Stedman's Medical Dictionary 555 (28th ed.
2006).
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member had to be in the same room as petitioner at all times.

When the family went to sleep, J.W. kept a baby monitor on in

her bedroom so she could hear petitioner if she arose during the

night.

In 2009, J.W. resigned from her position as an insurance

adjuster in order to care for her mother full time. At times,

other family members or a friend helped with petitioner's care.

In addition to providing supervision, J.W. assisted her mother

with the activities of daily living, although she hired a

professional caretaker to assist with bathing petitioner.

In 2011, J.W. was finding it too difficult to make ends

meet because she was not earning income. She determined she

either had to return to work and let a third party care for her

mother during the day, or pay herself from petitioner's savings

to compensate her for providing companion services. She chose

the latter solution. At that time, J.W. held power of attorney

for petitioner. J.W. did not provide any details about her

budget and what had changed since 2009 that made it necessary

for her to return to work.

J.W. searched "Craigslist"3 to learn the average wage of

companion caretakers, and ascertained the wages ranged from

3
"A website of classified ads and community notices that serves
an urban area." PCMAG.COM,
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eight to twelve dollars per hour. J.W. admitted the site did

not provide the tasks a companion was expected to perform for

this particular wage range.

J.W. decided to pay herself ten dollars per hour from

petitioner's funds to provide companion services to her mother.

Specifically, J.W. paid herself $400 per week to provide forty

hours of companion services, plus $25 per week for the two-and-

a-half hours she claimed she spent each week to shop for

petitioner's food, medication, and toiletries. J.W. paid

herself $425 per week from April 2011 to May 2013, when

petitioner entered the nursing home. J.W. did not keep a ledger

of the services she provided and the days and hours she

performed them. J.W. claimed that, when lucid, her mother

understood and agreed to J.W. paying herself from petitioner's

funds to compensate J.W. for her services.

J.W. also testified she never intended to place petitioner

in a nursing home; her plan was to care for her mother for the

remainder of her mother's life. However, in 2013, petitioner

fell and was no longer able to communicate. J.W. determined she

could no longer care for her and decided petitioner had to be

placed in a nursing home. Family members and one friend also

https://www.pcmag.com/encyclopedia/term/56356/craigslist (last
visited June 25, 2018).
5
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testified about providing companion services for petitioner, but

J.W. predominantly provided the services at issue.

Following the hearing, the ALJ found the $69,211.90 removed

from petitioner's funds in order to pay for companion services

was not for fair value, and in an initial decision affirmed the

imposition of the Board's transfer penalty. First, the ALJ

found the "proof of services rendered on a daily basis to the

petitioner" deficient. Although the ALJ did not elaborate on

how the proofs were lacking, it is implicit he was referring to

the complete absence of any evidence detailing when and what

specific tasks J.W. performed for petitioner. There were no log

sheets or like records tracking the hours she worked and the

duties she performed.

Second, the ALJ found the hourly rate paid to J.W. was not

substantiated as appropriate for companion services. Third, he

noted J.W. began receiving wages when it was "foreseeable that

[petitioner's] advanced age and deteriorating condition would

require intensive care and the possibility of entering a nursing

care facility." Finally, he observed there was no pre-existing

written agreement between petitioner and J.W. to pay for the

subject services.

Petitioner appealed to the Division, but it adopted the

ALJ's initial decision, noting petitioner failed to show she
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received fair market value for the assets she transferred during

the look-back period.

II

On appeal, petitioner contends the Division's decision is

arbitrary, capricious, and unreasonable because she rebutted the

presumption she transferred her assets for less than fair market

value during the look-back period and, further, the Division

misapplied the applicable case law.

"Appellate courts have 'a limited role' in the review of

[administrative agency] decisions." In re Stallworth, 208 N.J.

182, 194 (2011) (quoting Henry v. Rahway State Prison, 81 N.J.

571, 579 (1980)). We are bound to defer to an agency decision

unless we conclude it is "arbitrary, capricious or unreasonable,

or [] not supported by substantial credible evidence in the

record as a whole." Stallworth, 208 N.J. at 194 (alteration in

original) (quoting Henry, 81 N.J. at 579-80). "Deference to an

agency decision is particularly appropriate where interpretation

of the [a]gency's own regulation is in issue." R.S. v. Div. of

Med. Assistance & Health Servs., 434 N.J. Super. 250, 261 (App.

Div. 2014) (quoting I.L. v. N.J. Dep't of Human Servs., Div. of

Med. Assistance & Health Servs., 389 N.J. Super. 354, 364 (App.

Div. 2006)).

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 Among other eligibility requirements, an individual seeking

nursing home benefits must have limited financial eligibility.

See N.J.A.C. 10:71-1.2(a). Specifically, "[t]he regulations

governing an individual's eligibility for Medicaid reimbursement

of nursing home costs provide that in order for an individual to

[receive such benefits], the value of that individual's

resources may not exceed $2,000." H.K., 184 N.J. at 380

(footnote omitted) (citing N.J.A.C. 10:71-4.5(c)).

An applicant is ineligible for Medicaid nursing home

benefits if the individual "has disposed of assets at less than

fair market value at any time during or after the 60-month

period immediately before . . . the date the individual applies

for Medicaid as an institutionalized individual," referred to as

the "look-back" period. N.J.A.C. 10:71-4.10(a)(2); see also

N.J.A.C. 10:71-4.10(b)(9)(ii). Fair market value is defined as:

an estimate of the value of an asset, based
on generally available market information,
if sold at the prevailing price at the time
it was actually transferred. Value shall be
based on the criteria for evaluating assets
as found in N.J.A.C. 10:71-4.1(d).

[N.J.A.C. 10:71-4.10(b)6.]

If an applicant transfers assets during the look-back

period for less than fair market value, there is a rebuttable

presumption "the [asset] was transferred for the purpose of

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establishing Medicaid eligibility." H.K., 184 N.J. at 380

(citing N.J.A.C. 10:71-4.10(j)). The burden of rebutting the

presumption rests on the applicant, who must provide "convincing

evidence" the asset was transferred exclusively for some purpose

other than to establish eligibility. N.J.A.C. 10:71-4.10(j).

The purpose of imposing a penalty for disposing assets for less

than fair market value during the look-back period is to

maximize Medicaid resources for those truly in need. See Estate

of DeMartino v. Div. of Med. Assistance & Health Servs., 373

N.J. Super. 210, 219 (App. Div. 2004).

Here, J.W. and, on occasion, other family members, provided

care to petitioner for approximately two years without

compensation. Then, in April 2011, J.W. determined she was in

need of money and rationalized that, because she left her job to

care for petitioner, it was acceptable for her to pay herself

from petitioner's funds to perform services she had previously

provided gratuitously out of love and affection.

We understand J.W.'s reasoning, specifically, that if she

had to return to work, petitioner may as well pay her rather

than a third party to provide companion services, especially

because J.W. is a family member and would have her best

interests in mind. Nevertheless, "a transfer of assets to a

friend or relative for the alleged purpose of compensating for
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care or services provided free in the past shall be presumed to

have been transferred for no compensation." N.J.A.C. 10:71-

4.10(b)(6)ii.

Petitioner did not rebut this presumption. She did not

provide the requisite "convincing evidence" the asset was

transferred exclusively for some purpose other than to establish

eligibility. First, J.W. did not show why she could not have

paid a competent professional ten dollars per hour to take care

of her mother, which would have freed her up to return to work.

As a former claims adjuster, presumably J.W. was capable of

earning more than ten dollars per hour and, thus, would have

been in a better position to address her budget needs. Further,

while a third party may not have been a relative, that does not

mean a competent professional caretaker could not have been

located to meet petitioner's needs.

Second, J.W. offered few details about when and what

specific services she provided during each pay period, which is

hardly consistent with providing the requisite convincing

evidence petitioner's assets were transferred exclusively for

some purpose other than to establish eligibility. N.J.A.C.

10:71-4.10(j). Third, as the ALJ noted, J.W. began receiving

wages when it was "foreseeable that [petitioner's] advanced age

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and deteriorating condition would require intensive care and the

possibility of entering a nursing care facility."

In the final analysis, petitioner failed to show her assets

were transferred for fair value. Supported by substantial and

credible evidence, the Division's final decision was neither

arbitrary, capricious, nor unreasonable.

Petitioner's remaining arguments either lack sufficient

merit to warrant further discussion in our opinion, see Rule

2:11-3(e)(1)(E), or were not presented when petitioner was

before the agency. We will not consider questions or issues not

properly presented to the agency when the opportunity was

available "unless the questions so raised on appeal go to the

jurisdiction of the trial court or concern matters of great

public interest." Nieder v. Royal Indem. Ins. Co., 62 N.J. 229,

234 (1973) (quoting Reynolds Offset Co., Inc. v. Summer, 58 N.J.

Super. 542, 548 (App. Div. 1959)).

Finally, petitioner correctly points out and the Division

concedes there is a typographical error in the Division's final

decision. The decision states the penalty transfer is

$68,756.90 when in fact the penalty is $69,211.90.

Affirmed and remanded for entry of a corrected final

decision to state the transfer penalty is $69,211.90.

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