R.S. v. Division of Medical Assistance and Health Services and Union County Board of Social Services
434 N.J. Super. 250
| N.J. Super. Ct. App. Div. | 2014Background
- Husband (R.S.) institutionalized in Nov. 2010 and later qualified for Medicaid; wife (D.S.) remained in the marital home and filed for separate maintenance in Nov. 2010.
- Family Part issued an uncontested separate maintenance order (Dec. 2010, amended Mar. 2011) requiring R.S. to pay nearly all his Social Security and workers’ compensation income to D.S. as spousal support.
- Union County Board of Social Services (Board) approved R.S. for Medicaid (effective Apr. 2011) and calculated the community spouse monthly income allowance (CSMIA) under N.J.A.C. 10:71-5.7(c), giving D.S. $1,514.93, rather than the larger amount in the Family Part order.
- R.S. appealed, arguing the Division must apply the Family Part support order under 42 U.S.C. § 1396r-5(d)(5) and N.J.A.C. 10:71-5.7(f); he also sought attorney’s fees under §§ 1983/1988.
- Administrative Law Judge and the Division refused to give effect to the Family Part order, finding the court proceeding was non-adversarial, the order appeared intended to circumvent Medicaid spousal-impoverishment rules, and D.S. had not shown "exceptional circumstances" warranting an increased CSMIA.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the Division must apply a family-court support order in lieu of its CSMIA calculation under federal and state rules | R.S.: plain language of 42 U.S.C. § 1396r-5(d)(5) and N.J.A.C. 10:71-5.7(f) requires use of the court order amount | Division: statute/regulation must be read in context; court orders obtained without notice or adversarial process to Medicaid may not be enforced if designed to circumvent Medicaid rules | Court: Division need not give effect to a non-adversarial Family Part order devised to evade Medicaid limits; affirmed denial of enforcement |
| Whether the record supports the Division's factual and arithmetic CSMIA determination | R.S.: Family Part documents/control the allocation of income | Division: Board used applicants’ income/expense evidence and regulatory methodology; no showing of exceptional circumstances | Court: substantial evidence supports Board/Division calculations; Division did not err |
| Whether the Division improperly created new policy (rule-making) or a de facto notice requirement | R.S.: agency imposed an "exceptional circumstances" gate and treated lack of notice as dispositive, amounting to rule-making | Division: applied existing statutory/regulatory exceptional-circumstances standard; consideration of notice was factual, not rule-making | Court: no improper rule-making; agency applied authorized exception and reasonably considered lack of adversarial process/notice |
| Entitlement to attorney’s fees under 42 U.S.C. §§ 1983, 1988 | R.S.: Division’s refusal to enforce the order violated his rights, so fees warranted | Division: R.S. did not prevail on substantive claims | Court: Fees denied because R.S. lost on the merits |
Key Cases Cited
- H.K. v. Div. of Med. Assistance & Health Servs., 379 N.J. Super. 321 (App. Div. 2005) (agency may reject court orders entered to circumvent Medicaid spousal-impoverishment rules)
- M.E.F. v. A.B.F., 393 N.J. Super. 543 (App. Div. 2007) (discusses procedural limits on forum-shopping between agency hearings and family-court support orders)
- Mistrick v. Div. of Med. Assistance & Health Servs., 154 N.J. 158 (1998) (legislative purpose of spousal-impoverishment provisions and treating couple’s resources as whole)
- Wis. Dep’t of Health & Family Servs. v. Blumer, 534 U.S. 473 (2002) (explains CSMIA purpose: prevent double-counting income available to community spouse)
- Cesare v. Cesare, 154 N.J. 394 (1998) (deference owed to trial-court factfinding after evidentiary hearing)