If New Jersey Does Not Give You Clear Reasons Why They Denied Your Medicaid Application, Then Appeal… and Win

HNWAppealing the Denial of Medicaid, Elder Law

  • Denial of Medicaid eligibility for long term care can be successfully appealed
  • The state in its notice of denial must give you the statutory reasons for its denial
  • Federal Medicaid laws must be followed by the state when denying a Medicaid MLTSS application

Federal Law Mandates the Contents of a Notice of Medicaid Denial

As I’ve often written in my blogs, New Jersey’s unofficial philosophy is delay, frustrate and deny applications for Medicaid long term care.  Many denials are vague, unclear and wrong but few people know what to do if they are denied Medicaid eligibility.  A recent case outside NJ slammed the state and overruled their denial because the reasons for the denial were unconstitutional.  Let’s take a look at this case.

Background of a Recent Lawsuit Reversing Medicaid Denial of Nursing Home Eligibility

The notice of denial stated the plaintiff(s) had countable assets exceeding the federal and state mandated limits for Medicaid eligibility.  These notices were standardized denial notices sent to applicants for long-term care services in a nursing facility.

The notice also contained a chart showing how the office counted plaintiffs income, a statement “how to ask for a fair hearing” and a “Fair Hearing Request Form”.  Plaintiff appealed and filed a lawsuit.

Legal Sufficiency of the Notice Denying Medicaid Eligibility

The court started out by citing the key Federal Medicaid regulation:

A notice under 42 C.F.R. § 431.206(c )(2)… must contain:

  • A statement of what action the agency … intends to take and the effective date of such action;
    A clear statement of the specific reasons supporting the intended action;
     The specific regulations that support or the change in Federal and State law that requires the action;
    An explanation of

    • The individual’s right to request a local evidentiary hearing if one is available, or a State agency hearing;
    • Or in cases of an action based on a change in law, the circumstances under which a hearing will be granted.

The Federal Medicaid notice provisions are enforceable against a state Medicaid agency. In this case the state’s standard form of notice denying benefits because of excess assets did not provide “[a] clear statement of the specific reasons supporting the intended action” and therefore violates Federal law.

Understanding Why the Court Reversed the State’s Denial of Medicaid Eligibility

The court ruled the state failed to give a clear statement of reasons for its determination of why the office deemed the applicant’s assets (in a trust) countable.  The office’s notice did not give a “clear statement” or “specific reasons” for counting a trust’s assets as for Medicaid purposes.  Stating what, but not why, falls short of Federal notice requirements.  Without the notice required by the regulation, an applicant lacks the information required to prepare for an appeal of Medicaid denial.

The state argued that events occurring after the denial notice eventually give the applicant an understanding of the specific reasons why the office denied the claim. The court rejected this argument.

First, and most simply, the argument ignores the plain language of the governing regulations that the agency must give the applicant “[a]t at the time the agency denies an individual’s claim for eligibility, clear and detailed notice”.  Notice given at a later time falls outside that clear commands aid the court.

The court offered further reasons for its decision.  A clear statement of specific reasons promotes the statutory requirement that Medicaid applications be handled “with reasonable promptness”.  It reduces the prospect of delays and continuances attributable to the applicant’s efforts to learn the office’s specific reasons.

The State Must Give Clear Reasons for Medicaid Denial

A clear and specific statement of reasons allows the applicant to save time and expense researching, investigating and preparing for arguments upon which the agency might have, but did not, rely. Self-represented persons undoubtedly benefit from an ability to focus upon and understand what actually led to the agency’s decision, not to mention the reduction in anxiety that uncertainty can cause. Applicants represented by counsel may save significant resources. Moneys spent trying to discern the agency’s reasons cannot be recovered by suing the agency. In any case, focusing upon the agency’s real and stated reasons allows a better opportunity to prepare, without wasting money or diluting the applicant’s efforts.

Moreover, the regulations prevent the agency from using its superior knowledge to the detriment of the citizen. Having reviewed the application at the staff level, the office undoubtedly knows the clear and specific reasons why it denied the application. There is no reason why it should withhold this information, except for unfair tactical advantage. Whether intentional or not, this tactic also operates as leverage in forcing a vulnerable applicant to negotiate a quick resolution even if the office is in the wrong. The regulation prevents the government from disadvantaging its citizens in these ways. The states denial was reversed and remanded to conform to the court’s decision.

To discuss your qualifications for Medicaid Denial and/or of Medicaid eligibility, please contact Fredrick P. Niemann, Esq. toll-free at (855) 376-5291 or email him at fniemann@hnlawfirm.com.  Please ask us about our video conferencing consultations if you are unable to come to our office.

By Fredrick P. Niemann, Esq., of Hanlon Niemann & Wright, a Freehold Township, Monmouth County NJ Medicaid Attorney

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