67 A.3d 671
N.J. Super. Ct. App. Div.2013Background
- Plaintiffs challenge Medicaid Communication No. 11-03 and the MDAR form to designate an authorized representative.
- The MDAR form standardizes representation for Medicaid applicants/recipients.
- E.S. and E.B., elderly facility residents, received Medicaid benefits but were denied fair hearings when representation was contested.
- Facilities sought to act as authorized representatives via unsigned, undated forms; the Division rejected these in favor of MDAR.
- The court held that the Division may require a standardized MDAR form during ongoing APA rulemaking and deferred full resolution of merits to the rulemaking process while directing expeditious fair hearings.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Does the MDAR form conflict with federal Medicaid law (preemption) | MDAR conflicts with federal rights to designate representatives | MDAR aligns with federal/state law permitting designation by an applicant | No federal preemption; MDAR consistent with regulations |
| Does the MDAR form violate due process or the right to fair hearing | MDAR requirement impedes access to hearings | Form protects process integrity and ensures proper authorization | MDAR does not violate due process; form supports fair hearings |
| Is the MDAR rulemaking under APA required or sufficient as regulatory guidance | MDAR acts as binding rule without proper APA procedure | MDAR is regulatory guidance; APA rulemaking underway | Temporary curative remand; continue MDAR during rulemaking; issue moot pending rule adoption |
| What is the effect of the private assignment forms versus MDAR on public policy | Private forms undermine safeguards and accountability | MDAR provides greater protections and avoids fraud | MDAR preferred; private forms considered problematic; MDAR preserves recipient rights during hearings |
Key Cases Cited
- Gabor v. Hyland, 166 N.J. Super. 275 (App.Div. 1979) (upheld standardized authorization as reasonably related to program integrity)
- K.P. v. Albanese, 204 N.J. Super. 166 (App.Div. 1985) (agency action must be arbitrary, capricious, or unreasonable for reversal)
- Monmouth Med. Ctr. v. State, 158 N.J. Super. 241 (App.Div. 1978) (court respects agency rulemaking authority in Medicaid context)
- Tirgan v. Mega Life & Health Ins., 304 N.J. Super. 385 (Law Div. 1997) (discusses assignment concepts and rights to pursue benefits)