A recent decision of the Appellate Division of the Superior Court of New Jersey highlights the dangers inherent in the Medicaid application process. Medicaid is a federal and state health payment plan for needy individuals. In order to be eligible for Medicaid, an individual must have very limited assets and insufficient income with which to pay for her care.
Medicaid is a federal and state program, meaning that both the federal government and the state governments that participate in the Medicaid program (which is every state) contribute to the costs associated with the program. New Jersey, for instance, might pay 50% of the costs associated with the program and the federal government might pay the other 50% of the costs. (With some states, the division might favor the state, for instance, a state might only pay 30% of the costs associated with the program.)
In New Jersey, the New Jersey Division of Medical Assistance and Health Services (DMAHS), which is part of the New Jersey Department of Human Services, is responsible for administering the Medicaid program. DMAHS (an acronym pronounced as “Damas”) contracts with the various county board of social services to handle the application process, so if an individual wants to apply for Medicaid, she would apply with the county board of social services for the county in which she resides. With respect to residence, if a Medicaid applicant had her home in Monmouth County but was in a nursing home in Ocean County, then the applicant would apply in Ocean County because Ocean County is where the applicant is residing.
By law, the county must process an application for Medicaid benefits within forty-five days of the date on which the application was filed unless the county believes there are circumstances warranting a longer processing time and the county informs the applicant of the need to take a longer time to process her application. From a practical standpoint—having applied many, many times for my clients—I can tell you that the counties almost never approve (or deny) an application within forty-five days. I tell my clients to expect an application process that will last anywhere from four to six months after the date the application is filed. That doesn’t even include the month or two I like to take to ready the client for the application process by gathering information.
After I file an application for Medicaid on behalf of a client—despite having taken a month or two to ready the client’s application and to ensure that the client is providing all the supporting documentation—I always anticipate questions from the caseworker who processes the application on behalf of the county. One of the biggest pieces of information that is requested in any application for Medicaid is five years of financial statements for every account that the applicant owned during that period of time. The application process is essentially a forensic accounting into the applicant’s affairs.
If the applicant fails to provide requested information, the county can deny the application. In the recent case, the applicant had a trust. The applicant and the applicant’s attorney told the county that the only asset ever owned in the trust was a house. The county essentially said “Prove that only the house was in the trust, not other assets.” The applicant was then forced to prove a negative, that the only asset ever owned in the trust was a house when that was the only asset ever owned in the trust.
The Court said since the applicant and her attorney testified to the fact that the only asset that was in the trust was the house and since there was no evidence that the testimony was false, the county should have accepted that testimony. But this case highlights the dangers of a Medicaid application. As an applicant, you are very much at the mercy of the county and must sue the state if the county takes inappropriate actions.