Contracts of Employments by dxt12439

VIEWS: 4 PAGES: 12

More Info
									                                     of^^
                              DEPW-OF H    w SERVICIS
                                ASSISTANCE Heum Se~vlces
                 DIVISION MWICAI.
                        OF                  AND
                                P O BOX 712
                            T       J N
                                  ~N 086254712
                           TELEPHONE1-800-3SClS6l

                                                                                                       Dimcror
                                         STATE OF NEW JERSEY
                                         DEPARTMENT OF HUMAN SERVICES
                                         DIVISION OF MEDICAL ASSISTANCE
                                         AND HEALTH SERVICES



C.S.,
             PETITIONER,                           .        ADMINISTRATIVE ACTION

                                                            FINAL AGENCY DECISION

DIVISION OF MEDICAL ASSISTANCE :
                                                   .        OAL DKT. NO- HMA 1036-08

AND HEALTH SERVICES AND                            .
UNION COUNTY BOARD OF

SOCIAL SERVICES,
            RESPONDENTS.
                                                   .
E.S.,

            PETITIONER.

            v.
                                                  I



DIVISION OF MEDICAL ASSISTANCE :                            OAL DKT, NO. HMA 1122-08
AND HEALTH SERVICES AND                           .
MIDDLESEX COUN'N BOARD O F                        .
SOCIAL SERVICES,

            RESPONDENTS.                          .
        N ~ J ~ L r A n E q u a l o p p b r & r i @ ~ p l o y nP r i n r a d o a ~ M P ~ r m d R ~ e
L.K.,                                    .
                                         I


                                         I


                PETITIONER,



DIVISION OF MEDICAL ASSISTANCE :               OAL DKT. NO. HMA 3499-08

AND HEALTH SERVICES AND

UNION COUNTY BOARD OF
SOCIAL SERVICES.
                 RESPONDENTS.            .
         As Diredor of the Division of Medical Assistance and Health Services, I

have reviewed the record in this case, including the Initial Decision, the OAL
case file, the Motions in Support of and Opposed to Summary Docision and the
documents in evidence. Both parties filed exceptions.
         Procedurally, the time period for the Agency Head to file a Final Agency

Decision   in   this matter is December 8, 2008, in accordance with an Order or

Extension.

         Based on my review of the record, I FIND that none of the Petitioners
have received fair market value for the assets transferred to their children and

grandchildren and that Respondents properly imposed a transfer penalty. These

"care agreements", set up either just prior to or just after applying for Medicaid

beneflts, serve as a vehicle to transfer assets to these relatives for some

specious jobs that may or may not occur at a later date. In fact, absent a few

adjustments such as commute and life expectancy, the contracts mirror each
other.
       Petitioners argue In exceptions that they should have the opportunity to

show ('the market value of a personal sewices contraot for caregiving services."

I disagree. The questlon here is did Petitioners' receive anything of value for the
transfer of cash to their relatives and the ALJ is correctly answered 'no".

Petitioners have not received the care promised in the contract nor is there

guarantee they will receive care.

       I find it highly unlikely that a caregiver contract such as the ones

presented here would be even contemplated with a non-related third party. Each

contract professes the desire to treat the arrangement in a business like fashion.

However, business contracts do not usually acknowledge that the employee will

have to "limit his activities and to forego opportunities, contracts, employments,
vacations and other not-yet contemplated life-time options or liberties" and that

the employee has his "own professional or familial responsibilities to career and

family" and "shall   . . . devote as much of their time that is not devoted to career
and family to fulfill their obligations under this Contract." (Section 3).

       As another example, the contract language vacillates between providing

cam on as "as needed" basis then bases payment on an 8 hour week. The
hourly rate alleges to be based on a rate for home health aides, a profession

licensed by the State of New Jersey. There is no pmof that Petitioners' children

and grandchildren are so licensed, insured or bonded to act in that capacity or in

any capacity contemplated by the "care' Petitioners are to receive.

       Furthermore, Petitioners have no recourse against the caregivers,

especially as L.S.'s POA is also her caregiver. The ALJ notes that if Petitioners

were to die prematurely, the relative receives a windfall. Conversely, were the
relative to die before Petitioner, there is no provision to return the funds for future
                                            3
"care". Moreover, the caregiver relative has the unfettered right to terminate the
oontraot with 90 days notice. The Agreement is noticeably silent as to the return
of funds already given to the relative upon such a termination.

       Medicaid is not prohibiting such actions, if desired by the Petitioners.

Petitioners have the right to give away all of their assets and possessions.

However, if they wish to have public funds to pay for their medical care, the
contracts must be examined under rubric of Medicaid law.           For example, an

individual can give all his money to a trust that will available for his care until he

enters a nursing home when the corpus becomes unavailable. Upon applying for

Medicaid, his application would be denied due to the transfer of funds that he can

no longer access and a penalty imposed Rarnev v. Retnertson, 268 F.3d 955,

958 (10th Cir.2001); H.R.Rep. No. 265, 99th Cong., 1st Sess., pt.1. at 71 (1985).
Here, Petitioners have received nothing of value for the transfers and the

penalties were properly imposed.

      THEREFORE, it is on                of DECEMBER 2008,

       ORDERED:

       That the Initial Decision is hereby ADOPTED.



                              *& *
                             %- A
                            J O ~ ~Guhl, Director
                                      R .
                            Division of Medical Assistance
                            and Health Services
                                 State of New Jersey
                             OFFICE OF ADMINISTRATIVE LAW


                                                     INITIAL DECISION
                                                     SUMMARY DECISION
                                                     CONSOLIDATED


                                                     OAL DKT- NO. HMA 1: 036-08
C.S.,
                      .-
        Petitioner,
        v.
DIVISION      OF       MEDICAL   ASSISTANCE    AND
HEALTH SERVICES .4NT) UNION COUNTY SOARD
OF SOCIAL SERVICES,
        Respondent.



E.S.,                                                OAL DKT. NO. HMA 1122-08
        Petitioner.
        v.
DIVISION      OF      MEDICAL    ASSISTANCE    AND
HEALTH SERVICES AND MIDDLESEX COUNTY
BOARD OF SOCIAL SERVICES,
        Respondent.
'
    OAL DKT. NOS.HMA 1036-08, HMA 1 122-08&          H M A 3499-08

    L.K.,                                                 OAL OKT.NO. HMA 3499-08
            Petitioner,
            v.
    DIVISION      OF      MEDICAL   ASSISTANCE        AND
    HEALTH SERVICES AND UNION COUNTY BOARD
    OF SOCIAL SERVICES,
            Respondent.


            Linda S. Emhow-Levenberg, Esq., for petitioners (Fink, Rosner, Ershow-
                   Levenberg, attorneys)


            Lawrence Rosa, Esq., for respondent Middlesex County Board of Social
                   Services


            Toe McLaughlin. Deputy Attorney General. for respondent Division of Medical
                   Assistance (Anne Milgram, Attorney General of New Jersey, attorney)


    Record Closed: August 15,2008                   Decided: September 8, 2008

    BEFORE JOSEPH A. PAONE, ALJ;


                  STATEMENT OF THE CASE AND PROCEDURAL HlSTORY


            Petitioners C.S., E.S. and L.K. each appeal their denial of Medicaid eligibility.
    Each filed for a fair hearing and the Division of Medical Assistance and Health Services
    (DMAHS) transmitted the contested cases to the Office of Administrative Law between
    January 3, 2008, and April 1, 2008. N.J.S.A. 52:14B-1 through -15; N.J.S.A. 52:14F-1
    through -13. Their respective cases were consolidated at the joint requesr of counsel
    because the cases presented a common question of law.

            Petitioners each entered into a written contract with a relative, which obligated
    that relative to provide life-care services in exchange for a prepaid fee based on the
OAL DKT. NOS. HMA 1036-08, HMA 1122-08 8 HMA 3499-08

actuarially life expectancy of that petitioner. Petitioners assert that the contracts are
evidence of valid payments made under the terms of the contracts for sewices to be
provided in the future.   Petitioners applied for Medicaid, but were denied due to the
imposition of a transfer penalty. Respondents DMAHS, Union County Board of Social
Services, and Middlesex County Board of Social Sewices contend that each petitioner's
payment to a relative via the contracts constituted an uncompensated transfer of assets
during the look-back period.


      Respondents moved for summary decision and submitted briefs on May 30,
2008. Counsel for petitioners submitted a reply brief in opposition to summary decision
on June 13. 2008. On August 15, 2008, oral arguments were heard, on which date the
record closed. Thereafter, supplemental briefs were received and considered.




      The parties have stipulated to the following relevant FACTS:

      1.       Petitioners have each entered Into a similar    rte
                                                              witn   'Life Care Contract"
      with a family member for personal-care services, and, pursuant to the contract,
      C.S. prepaid $40,861, E.S. prepaid $56,550, and L.K. prepaid $48,443.20.


      2.       The contracts were executed and payments made during the 'look-back
      period   ."
      3.   The length of each contract is based upon the actuarial life expectancy of
      each peritloner, but the family member with whom each petitioner contracted
      remains obligated to continue to provide services without receipt of further
      payment, even if a petitioner outlives her actuarial life expectancy, and the family
      member receives a windfall if a petitioner dies prematurely.
OAL DKT. NOS. HMA 1036-08.HMA 1122-08 & HMA 3499-08

      4.       The servlces to be provided by a family member to each petitioner under
      the contract are solely and exclusively for the benefit of that petitioner and may
      not be assigned or transferred to anyone else.


      5.       Petitioners are elderly individuals within the meaning of the regulations
      governing the Medicaid program..


      6.       Petitioners have each applied for institutional Medicaid benefits and have
      been denied.


      7.       As a result of the prepayments made pursuant to the contracts. each
      county welfare agency determined that each petitioner transferred resources for
      less than fair market value in order to become eligible for institutional Medicaid
      benefits and imposed a transfer penalty.


                                CONCLUSIONS OF LAW


       The issue that this motion raises is whether a Medicaid applicant's prepayment
of a large sum of money, pursuant to a Life Care Contract. to a family member for
personal-care services to be performed in the future constitutes a transfer of assets for
less than fair market value, subjecting that applicant to the Imposition of a penalty
period.    Since the facts related to this issue are undisputed, the matter is ripe for
                                                                                    ..
summary decision. &J,A.C. 1:1-12.5(b); Brill v. Guardian Life Ins. Go. of Am.. 142 N J
520, 523 (19951.


      Medicaid eligibility is based upon an applicant's income and resources.
Pursuant to the Medicaid Act, 42 U.S.C.A.      39   1396 el sea, a resource cannot be
transferred or disposed of for less than fair market value during a specified period of
time known as a "look-back period." 42 U.S.C.A.        5   1396p(c)(l); see also N.J.A.C.
                                 N.J.A.C. 10:72-4.5(b)(3). If such a transfer occurs, a
10:71-4.7(a); N.J.A.C. 10:71-4.10;
Medicaid applicant will be subject to a transfer penalty, which requires a period of
Medicaid ineligibility, irrespective of her other resources.       Ibid, This period of
OALDKT. NOS. HMA 1036-08. HMA 1122-088 HMA 3499-08

ineligibility, which is not in issue, I determined in accordance with 42 U.S.C.A. 9
                                      s
1398p(c)(l)(E).   Respondents contend that each petitioner engaged in a transfer        of
assets for less than fair market value. ,And since this transfer took place, as stipulated,
during the look-back period. petitioners are each subject to a transfer penalty.


       Petitioners assert that the decision to impose a transfer penalty on them for the
money paid to their relatives for future services is wrong because the prepayments
constitute "a bona fide payment for value. pursuant to a written contract which meets all
of the requirements of N.J.A.C. 10:71-4_1O(b)(G)(ii)." That regulation provides:

              In regard to transfers intended to compensate a friend or
              relative for care or services provided in the past. care and
             services provided for free at the time they were delivered
             shall be presumed to have been intended to be delivered
             without compensation.       In regard to transfers allegedly
             intended to compensate a friend or a relative for care or
             services that were provided in the past, care and services
             provided for free at the time they were delivered shall be
             presumed to have been intended to b e delivered without
             compensation. Thus a transfer of assets to a friend or
                                                                 for
             relative for the alleqed Durpose of corn~ensatinq care or
             services provided free in the past shall be presumed to have
             been transferred for no compensation. This oresum~tioq
             mav be rebutted bv the uresentarion of credible
             docurnentarv evidence wreexistinq the delivery of
             corn~ensation. Further, the amount of compensation or the
             fair market value of the transferred asset shall not be greater
             than the prevailing rates for similar care or services in the
             community. That portion of compensation in excess of the
             prevailing rate shall be considered to be uncompensated
             value.

             rlbid. (Emphasis added.)]

       Respondents counter that the foregoing regulalion does not apply to the facts in
the cases sub iudice.    Specifically, respondents maintain that the regulation merely
speaks TO payments for past services and is intended to address payments made to
friends or relatives for care 'or services received prior to the submission of a Medicaid
application. Whereas here, under the Life Care Contract, payment was made for future
OAL DKT. NOS.HMA 1036-08, HMA 1122-08 8 HMA 3499-08

services to be received after the submission of a Medicaid application.             Thus.
petitioners' reliance on N.J.A.C. 10:71-4.10(b)(6)(ii) is misplaced.


       Petitioners also rely on Reed v. Missouri De~artrnent Social Services, Family
                                                           of
                                                                              of
Support Division, 193 S.W.3d 839 (Mo. App. 2006)and Brewton v. State Oe~artment
Health 81Hospitals, 956   So.2d 15, 17 (La. Ct. App. 2007) in support of the position that
a personal care contract has value. But respondents do not challenge the validity of the
Life Care Contract, and even concede that these contracts may have value. Their only
dispute is whether the specific Life Care Contract under review here constitutes an
asset for which each petitioner received less than "fair market value." as that term is
                                                                      -.- . .
defined by the relevant section of the New Jersey Administrative Code. The Missouri
and Louisiana courts were not required to address any regulation similar to the one
extant in New Jersey. defining "fair market value." In Reed, the court merely found that
that personal care contract constituted "fair and valuable consideration." Reed. suora,
193 S.W.3d at 844. And in Brewton. the court reasoned that the personal care contract
in dispute had "a tangible andlor intrinsic value to the individual that is roughly
equivalent to or greater than the value of the transferred asset." Brewton, supra, 956
-26 at 18 (emphasis added).
So.


       Section 14 of each Life Care Contract provides:


              The Resident may not assign. transfer, convey, hypothecate
              or otherwise alienate any rights or benefits. damages, costs
              and expenses the resident is to obtain under this Agreement
              to any third party. This Agreement is for services unique to
              the Resident and the Caregiver shall have no obligation to
              render services or otherwise be liable to any other person or
              entity.

And N.J.A.C. 10:71-4.10(b)(6) provides that


              Mair-market value shall be an estimate of the value of an
              asset, based on generally available market information, if
              sold at the prevailing price st the time it was actually
              transferred.  Value shall be based on the criterla for
              evaluating assets as found in N.J.A.C. 10:71-4.l(d).
0 4 L DKT. NOS. H M A 1036-08,    HMA 1122-08& HMA 3499-08


N.J.A.C. 10:71-4.l(d) adds that "the value of a resource shall be defined as the pdce
that the resource can reasonably be expected to sell for on the open market in the
particular geographic area . . . ." But section 14 of each contract limits any value of the
Life Care Contract to only the Medicaid applicant because it prohibits the sale, transfer
or assignment of any rights or benefits conferred by the contract.          "In determining
whether or not an asset was transferred for fair-market value, only tangible
compensation. with intrinsic value[.] shall be considered. For example, a transfer for
'love and affection' shall not be considered a transfer for fair market value."    N.J.A.C.
10:71-4.1O(b)(6)(i). Respondents convincingly argue that because a Life Care Contract
cannot be sold to anyone else by virtue of section 14, it lacks intrinsic value and, thus,
possess no fair market value. Consequently, the sum paid to a relative for personal life
care services pursuant to the Life Care Contract constitutes a transfer of assets for less
than fair market value.


       Petitioners argue in reply that a personal service contract is permitted by the
common law and, hence, a regulation          in   derogation thereof cannot be enforced.
However, no case in support of this legal postulate was cited by petitioners. Nor could I
find any such case.


       I therefore, CONCLUDE,
        ,                          as a matter of law, that because the rights or benefits
of the Life Care Contract in issue here cannot be transferred to another, the
prepayment by a Medicaid applicant to a family member for future personal-care
services pursuant to that contract is a transfer of assets for less than fair market value.


                                         ORDER

       Accordingly, I hereby ORDER that petitioners' motion for summary decision is
GRANTED and the denial of Medicaid eligibility to petitioners C.S., E.S.,and L.K. due
to the imposition of a transfer penalty is AFFIRMED.
   DKT. NOS. HMA 1036-08.
0;4~                     HMA 1122-08& HMA 3499-08

       I hereby FILE my initial decision with the DIRECTOR OF THC DIVISION OF
MEDICAL ASSISTANCE AND HEALTH SERVICES for consideration.


       This recommended decision may be adopted, modified or rejected by the
DIRECTOR      OF THE      DIVISION OF       MEDICAL ASSISTANCE AND               HEALTH
SERVICES, the designee of the Commissioner of the Department of Human Services,
who by law is authorized to make a final decision in this matter. If the Director of the
Division of Medical Assistance and Health Services does not adopt, modify or reject this
decision within forty-five (45) days and unless such time limit is otherwise extended, this
recommended decision shall become a tinal decision in accordance with N.J.S.A.
52:14B-10.


       Within seven (7) days from the date on which this recommended decision was
mailed to the parties, any party may file wrinen exceptions with the DIRECTOR OF THE
DIVISION OF MEDICAL ASSISTANCE AND HEALTH SERVICES, Mail Code #3, P.O.
BOX712, Trenton,    New Jersey 08625-0712, marked "Attention: Exceptions." A          copy
of any exceptions must be sent to the judge and to the other parties.




September 8, 2008

DATE                                            JOSEPH A. PAONE, ALJ




                                                                         C'

                                                 Mailed to Parties:




DATE                                            OFFICE OF ADMINISTRATIVE LAW
Ir

								
To top