Opinion
2013-09-09
B.D., Petitioner-Appellant, v. NEW JERSEY DEPARTMENT OF HUMAN SERVICES, DIVISION OF MEDICAL ASSISTANCE AND HEALTH SERVICES, Respondent-Respondent. M.M. and I.M., Petitioners-Appellants, v. NEW JERSEY DEPARTMENT OF HUMAN SERVICES, DIVISION OF MEDICAL ASSISTANCE AND HEALTH SERVICES, Respondent-Respondent. T.J., Petitioner-Appellant, v. NEW JERSEY DEPARTMENT OF HUMAN SERVICES, DIVISION OF MEDICAL ASSISTANCE AND HEALTH SERVICES, Respondent-Respondent. G.G., Petitioner-Appellant, v. NEW JERSEY DEPARTMENT OF HUMAN SERVICES, DIVISION OF MEDICAL ASSISTANCE AND HEALTH SERVICES, Respondent-Respondent.
Joshua M. Spielberg argued the cause for appellants (Legal Services of New Jersey, attorneys; Mr. Spielberg, of counsel and on the briefs; Melville D. Miller, Jr., on the briefs). Jennifer L. Finkel, Deputy Attorney General, argued the cause for respondent (Jeffrey S. Chiesa, Attorney General, attorney; Melissa H. Raksa, Assistant Attorney General, of counsel and on the brief; Ms. Finkel and Vicki A. Mangiaracina, Deputy Attorney General, on the briefs).
RECORD IMPOUNDED
NOT FOR PUBLICATION WITHOUT THE
APPROVAL OF THE APPELLATE DIVISION
Before Judges Simonelli, Koblitz and Accurso.
On appeal from the Department of Human Services, Division of Medical Assistance and Health Services, Docket Nos. HMA 2659-11 (A-2456-11), HMA 12902-11 (A-4744-11), HMA 8956-11 (A-5761-11), and HMA-0890-12 (A-0109-12).
Joshua M. Spielberg argued the cause for appellants (Legal Services of New Jersey, attorneys; Mr. Spielberg, of counsel and on the briefs; Melville D. Miller, Jr., on the briefs).
Jennifer L. Finkel, Deputy Attorney General, argued the cause for respondent (Jeffrey S. Chiesa, Attorney General, attorney; Melissa H. Raksa, Assistant Attorney General, of counsel and on the brief; Ms. Finkel and Vicki A. Mangiaracina, Deputy Attorney General, on the briefs). PER CURIAM
Appellants appeal from the final agency decision of respondent New Jersey Department of Human Services (DHS), Division of Medical Assistance and Health Services (DMAHS) terminating them from the New Jersey FamilyCare Medicaid program (NJFC). We affirm.
We begin with a review of the relevant authority and undisputed factual background.
I.
Medicaid is a federally-created, state-implemented program that provides "'medical assistance to the poor at the expense of the public.'" Estate of DeMartino v. Div. of Med. Assist. & Health Servs., 373 N.J. Super. 210, 217 (App. Div. 2004) (quoting Mistrick v. Div. of Med. Assist. & Health Servs., 154 N.J. 158, 165 (1998)), certif. denied, 182 N.J. 425 (2005); 42 U.S.C.A. § 1396-1. Although a state is not required to participate, once it has been accepted into the Medicaid program it must comply with the Medicaid statutes and federal regulations. See Harris v. McRae, 448 U.S. 297, 301, 100 S. Ct. 2671, 2680, 65 L. Ed. 2d 784, 794 (1980); United Hosps. Med. Ctr. v. State, 349 N.J. Super. 1, 4 (App. Div. 2002); 42 U.S.C.A. § 1396a(a) and (b). The state must adopt "'reasonable standards . . . for determining eligibility for . . . medical assistance [that are] consistent with the objectives' of the Medicaid program," Mistrick, supra, 154 N.J. at 166 (quoting L.M. v. Div. of Med. Assist. & Health Servs., 140 N.J. 480, 484 (1995)), and "provide for taking into account only such income and resources as are . . . available to the applicant." N.M. v. Div. of Med. Assist. & Health Servs., 405 N.J. Super. 353, 359 (App. Div.) (internal quotation marks omitted), certif. denied, 199 N.J. 517 (2009); see 42 U.S.C.A. § 1396a(a)(17)(A)-(B).
New Jersey participates in the federal Medicaid program pursuant to the New Jersey Medical Assistance and Health Services Act, N.J.S.A. 30:4D-1 to -19.5. Eligibility for Medicaid in New Jersey is governed by regulations adopted in accordance with the authority granted by N.J.S.A. 30:4D-7 to the Commissioner of DHS (Commissioner). DMAHS is the agency within DHS that administers the Medicaid program. N.J.S.A. 30:4D-5 & - 7; N.J.A.C. 10:49-1.1. Accordingly, DMAHS is responsible for protecting the interests of the New Jersey Medicaid Program and its beneficiaries. N.J.A.C. 10:49-11.1(b).
NJFC is a "federal and state funded health insurance program created to help New Jersey's uninsured children and certain low-income parents and guardians to have affordable health coverage." S.J. v. Div. of Med. Assist. & Health Servs., 426 N.J. Super. 366, 368, n.1 (App. Div.) (citations and internal quotation marks omitted), certif. denied, 212 N.J. 461 (2012). A family whose income does not exceed 133% of the federal poverty level (FPL) may be eligible for NJFC. N.J.A.C. 10:49-2.5(a).
Under certain circumstance, families, parents or caretakers with incomes above 133% of the FPL may be eligible as well. See N.J.A.C. 10:49-2.5(b)-(g).
DMAHS provides Medicaid benefits under the umbrella of NJFC through a number of sub-programs, including the Aid to Families with Dependent Children-related Medicaid program (AFDC-related Medicaid), N.J.A.C. 10:69-1.1 to -12.10, which includes the Transitional Medicaid program (TMP), N.J.S.A. 30:4D-6c and N.J.A.C. 10:69-5.13; and the Children's Health Insurance program (CHIP), N.J.S.A. 30:4J-8 to -19 and N.J.A.C. 10:79-1.1 to -8.10. See also N.J.A.C. 10:49-1.2 & -1.3. Although NJFC administers both programs under the NJFC label, they are separate programs with separate funding, application procedures and eligibility requirements. See N.J.A.C. 10:69-1.1 to -12.10 (AFDC-related Medicaid including TMP); N.J.A.C. 10:79-1.1 to -8.10 (CHIP); S.J., supra, 426 N.J. Super. at 375-77.
AFDC-related Medicaid "is a State program with Federal participation. It is designed to make payments to providers for medical care and services on behalf of certain individuals whose income is determined to be inadequate to enable them to secure quality medical care at their own expense." N.J.A.C. 10:69-1.4(a). Benefits are provided through the Medicaid program under Title XIX of the Social Security Act (SSA). 42 U.S.C.A. § 1396; S.J., supra, 426 N.J. Super. at 368.
CHIP "is a program administered by [DMAHS, DHS] to provide plan-defined health care benefits to certain children[]" who do not qualify for Medicaid but are in families that cannot afford health insurance. N.J.A.C. 10:79-1.1(a); see also 42 U.S.C.A. § § 1397aa to 1397mm. Benefits are provided under Title XXI of the SSA. 42 U.S.C.A. § 1397aa; S.J., supra, 426 N.J. Super. at 368.
AFDC-related Medicaid and CHIP are need-based or means-tested assistance programs, meaning, "eligibility is determined on the basis of the income or resources of the recipient." Gifford v. Benjamin, 383 N.J. Super. 516, 519 (App. Div. 2006) (citations and internal quotation marks omitted). Thus, to be eligible for AFDC-related Medicaid, applicants must meet the income standards set forth in N.J.A.C. 10:69-10.1 to -10.4; to be eligible for CHIP, applicants must meet the income standards set forth in N.J.A.C. 10:79-4.1 to -4.5.
Both programs have other eligibility requirements that are not pertinent to this appeal.
For AFDC-related Medicaid, income may be earned or unearned. N.J.A.C. 10:69-10.10. Unemployment insurance (UI), Social Security Disability Income (SSDI) and Temporary Disability Income (TDI) are considered unearned income, N.J.A.C. 10:69-10.18; 20 C.F.R. 416.1121, as is child support, N.J.A.C. 10:69-10.18, -10.21; see also N.J.A.C. 10:69-10.3(a) (explaining that child support is counted in the income eligibility determination). An applicant is ineligible for AFDC-related Medicaid if the household's total earned or unearned income for any month exceeds the applicable amount for the appropriate household size. N.J.A.C. 10:69-10.3.
After an applicant becomes eligible for AFDC-related Medicaid, he or she must submit a yearly redetermination application to determine continuing eligibility. N.J.A.C. 10:69-5.2. In the meantime, the applicant has a continuing obligation to "furnish accurate and timely information . . . concerning changes in income or other circumstances which may affect the receipt of benefits" and must inform NJFC "of any change as soon as possible but in no event later than two weeks after the change takes place." N.J.A.C. 10:69-5.12; see also N.J.A.C. 10:78-2.7 (stating that NJFC recipients have an "ongoing responsibility to report changes in family circumstances"); N.J.A.C. 10:78-11.2 (requiring NJFC recipients to "immediately" report changes that could impact eligibility). In addition, when applicants apply for NJFC they sign a form certifying that "[b]y signing this form, I represent that I have read and understood the . . . [NJFC] program 'Rights and Responsibilities,' . . . and that I will obey the law and regulations of the program." The "Rights and Responsibilities" notice states, in pertinent part, "I understand that I must tell [NJFC] immediately about any changes in my information, such as a change in income[.]" See "Rights and Responsibilities, NJFAMILYCARE," http://www.njfamilycare.org/pages/FC_Rights_Resp-en.pdf. (emphasis added.) The notice also provides a telephone number to call to report any changes. Ibid.
An AFDC-related Medicaid recipient who becomes ineligible because of earnings or increased earnings from employment or new employment, increased hours of employment, or UI or TDI benefits, N.J.A.C. 10:69-5.13(a)1i-iii, is eligible for TMP for a period of twenty-four months "beginning with the month in which the family is no longer eligible for AFDC-related Medicaid[.]" N.J.A.C. 10:69-5.13(a). For a recipient who becomes ineligible because of the receipt of child support, AFDC-related Medicaid coverage continues "for a period of four calendar months beginning with the month in which such ineligibility begins." N.J.A.C. 10:69-5.13(a)4.
An NJFC recipient who is terminated from the program must receive "timely and adequate written notice detailing the reasons for the proposed action." N.J.A.C. 10:49-10.4(a); see also N.J.A.C. 10:69-5.11(a). "'Timely notice' means that the notice is mailed at least 10 days before the effective date of the agency action." N.J.A.C. 10:69-6.1; see also N.J.A.C. 10:49-10.4(a)(1). "Adequate advance notice" means
a written notice that includes a statement of the action . . . DMAHS intends to take, reasons for the proposed departmental action, the specific regulations that support, or the change in Federal or State law that requires the action, the claimant's right to request a fair hearing, or in cases of a departmental action based on a change in law, the circumstances under which a hearing shall be granted, and the circumstances under which assistance shall be continued if a fair hearing is requested.See also N.J.A.C. 10:69-6.1.
[N.J.A.C. 10:49-10.4(a)2].
In 2009, the Governor acted to severely reduce spending across the entire budget in or to achieve the balanced budget mandated by N.J. Const., art. VIII, § II, ¶2. See Office of Mgmt. & Budget, Fiscal 2011 Budget in Brief, N.J. Dep't of Treasury, 6-8 (Mar. 16, 2010) (Fiscal 2011 Budget in Brief), http://www.state.nj.us/treasury/omb/publications/11bib/BIB.pdf. On February 11, 2010, in face of declining revenues, the Governor issued an Executive order authorizing the Director of the Division of Budget and Accounting (DBA) to freeze spending. 42 N.J.R. 660(b) (Mar. 15, 2010). On March 1, 2010, the Director of DBA adopted a plan to freeze NJFC enrollment for parents and caretakers whose gross income was between 134% to 200% of the FPL, which he projected would save the State $24.63 million. See Fiscal 2011 Budget in Brief, supra, at 43; Appropriations Act, Fiscal Year 2011 (AA FY2011), L. 2010, c. 35 (June 29, 2010).
In response to the on-going economic downturn, in June 2009, the Legislature approved the Appropriations Act for Fiscal Year 2010 (AA FY2010). L. 2009, c. 68 (June 29, 2009). In AA FY2010, the Legislature expressed its intent to cut funding for and suspend statutory programs:
Notwithstanding any other law or regulation to the contrary, because of the economic downturn and the crisis in the financial markets, it is not possible in Fiscal Year 2010 to appropriate monies to fund all programs authorized by statute. As a result, the Governor's Budget Message and Recommendations for Fiscal Year 2010 recommended, and the Legislature agrees, that either no State funding or less thanRegarding DHS, AA FY2010 authorized the Commissioner to make changes to NJFC based on the Director of DBA's plan:
the statutorily-required amount be appropriated for certain of these statutory programs. To the extent that these or other statutory programs have not received all or some appropriations for Fiscal Year 2010 in this Appropriations Act which would be required to carry out these statutory programs, such lack of appropriations represents the intent of the Legislature to suspend in full or in part the operation of the statutory programs, including any statutorily-imposed restrictions or limitations on the collection of State revenue that is related to the funding of those programs.
[L. 2009, C. 68, § 75]
Notwithstanding the provisions of any law or regulation to the contrary, the [NJFC] program benefit service packages, premium contributions, copayment levels, enrollment levels, and any other program features or operations may be modified as the Commissioner of [DHS] deems necessary based upon a plan approved by the Director of [DBA] to ensure that monies expended for the [NJFC] program do not exceed the amount hereinabove appropriated.
[L. 2009, C. 68, § 1 (emphasis added).]
On March 2, 2010, the Director of DMAHS issued Medicaid Communication 10-01, which explained to county welfare and statewide eligibility determination agencies that "changes will be made to [NJFC,]" including a change requiring that "[n]ew applications received on or after March 1, 2010 for [NJFC] will no longer be processed for higher income parents." The Director also explained that DMAHS would be sending "[a] more detailed Medicaid Communication explaining these changes and their operational impact . . . for both groups affected by these changes. Appropriate material will be included with that communication."
On March 16, 2010, the Governor issued the Fiscal 2011 Budget in Brief detailing the lack of State revenues to cover State expenses. Fiscal 2011 Budget in Brief, supra, at 6. Regarding NJFC, including its sub-programs, the Fiscal 2011 Budget in Brief provided as follows, in pertinent part:
Freeze on [NJFC] Enrollment for Adults
Enrollment for parents between 134%-200% of the [FPL] in [NJFC] was frozen on March 1, 2010. The Fiscal 2011 Budget assumes no new enrollees will be accepted under this part of the program, resulting in budgetary savings of $24.63 million. The freeze is projected to affect 39,000 adults.
The termination of [NJFC] benefits for restricted alien adults will begin on April 1, 2010. Savings in fiscal 2011 will total $29.8 million.
[Id. at 43.]
Pursuant to the authority granted by AA FY2010, on May 28, 2010, the Commissioner adopted a special amendment to N.J.A.C. 10:78, which was filed on June 1, 2010. See 42 N.J.R. 1404(a) (July 6, 2010). In accordance with the Director of DBA's plan, the amendment closed enrollment in all NJFC programs, including CHIP, as of February 28, 2010, for "parents and caretakers whose benefits are not funded or payable under Title XIX of the [SSA.]" N.J.A.C. 10:78-1.1(a) & -3.4(b). The exclusion applied to parents and caretakers who submitted an application "after being terminated from enrollment in the [NJFC] program," including termination from AFDC-related Medicaid. N.J.A.C. 10:78-3.4(b). The amendment did not change the eligibility standards, methodologies, or procedures applicable to AFDC-related Medicaid, nor did it affect those individuals who remained eligible for that program. The special amendment also terminated the enrollment in NJFC of certain applicants or beneficiaries who were adult restricted aliens as of April 1, 2010, or deemed those persons ineligible for enrollment in or benefits from NJFC. N.J.A.C. 10:78-1.1(a) & -3.2(e).
On June 29, 2010, the Legislature approved AA FY2011, which contained a provision nearly identical to AA FY2010 regarding the Commissioner's authority to promulgate regulations and modify NJFC. See L. 2010, c. 35, § 1.
On July 6, 2010, the Commissioner published notice of the specially adopted amendment of N.J.A.C. 10:78, explaining:
In accordance with [AA FY2010], these amendments are effective upon filing with the Office of Administrative Law (OAL). . . . However, [AA FY2010] also separately
allows [DHS] to modify enrollment levels and any other program features or operations for the reasons described below based upon a plan approved by the Director of [DBA]. [DHS] has such approval. Therefore, this notice of specially adopted amendments serves as public notice of program modifications that are already legally effective, as well as amends existing administrative rules, which contain text that is inconsistent with the program modifications.
[43 N.J.R. 1404(a).]
II.
B.D.
B.D. had a household of four: one parent and three children. She became eligible for AFDC-related Medicaid in June 2007. At that time, her total income included unearned income of $480 per month from child support.
In July 2009, B.D. began receiving $784.27 per month in child support, which exceeded the AFDC-related Medicaid unearned income limit of $507 per month for a household of four. See N.J.A.C. 10:69-10.3(c). Thus, she became ineligible for AFDC-related Medicaid as of July 2009, but eligible for continued AFDC-related Medicaid for four months beginning in July 2009, the month in which the ineligibility began. See N.J.A.C. 10:69-5.13(a)4 & -10.3. B.D. did not report the change until nine months later on April 8, 2010, when she submitted her redetermination application. By that time, CHIP was closed to new applicants.
On January 18, 2011, NJFC notified B.D. that she was ineligible for AFDC-related Medicaid because she exceeded the monthly unearned income limit and ineligible for CHIP because the program was closed to new applicants, and NJFC considered her a new applicant. NJFC determined that B.D.'s ineligibility began in July 2009, when her unearned income changed, and she was only eligible for continued AFDC-related Medicaid for four months from July 2009 to November 2009. Thus, B.D. was terminated from NJFC. Coverage for the children continued.
At oral argument of this appeal, appellants' counsel advised that in light of our Supreme Court's denial of certification in S.J., supra, appellants have abandoned their arguments that NJFC erred in classifying them as new applicants excluded from CHIP pursuant to N.J.A.C. 10:78-3.4(b).
NJFC also advised B.D. of her right to request a fair hearing within twenty days. B.D. requested a fair hearing, and her AFDC-related Medicaid benefits were reinstated and continued pending the hearing. See N.J.A.C. 10:49-10.4(b).
In an October 31, 2011 initial decision, Administrative Law Judge John Russo (ALJ Russo) affirmed NJFC's decision. ALJ Russo found that NJFC properly terminated B.D. from AFDC-related Medicaid because her unearned income exceeded the monthly limit, and she was ineligible for CHIP because the program was closed to new applicants. ALJ Russo determined that B.D. was required, but failed, to immediately notify NJFC of her unearned income change and did not do so until April 2010, and thus caused her ineligibility for CHIP. ALJ Russo also found that NJFC treated B.D. the same as others for whom NJFC retroactively applied a start date for continued AFDC-related Medicaid; NJFC properly applied B.D.'s continued four-month eligibility retroactively to July 2009; and B.D. provided no evidence or legal authority requiring NJFC to set a different start date for her continued coverage.
ALJ Russo rejected B.D.'s argument that she was improperly terminated from NJFC before the Commissioner published the amendment to N.J.A.C. 10:78-3.4(b). Citing Guaman v. Velez, 421 N.J. Super. 239 (App. Div. 2011), ALJ Russo concluded that AA FY2010 granted the Commissioner the authority to amend the NJFC regulations and the Commissioner complied with all procedural requirements before closing NJFC applications to new parents/caretakers. The Director of DMAHS adopted ALJ Russo's initial decision.
M.M. and I.M.
M.M. and I.M. had a household of five: two parents and three children. They became eligible for AFDC-related Medicaid in November 2006.
On August 22, 2009, I.M. began receiving unearned income of $1,295.57 per month from UI benefits, which exceeded the AFDC-related Medicaid unearned income limit of $567 per month for a family of five. See N.J.A.C. 10:69-10.3(c). Thus, M.M. and I.M. became ineligible for AFDC-related Medicaid as of August 22, 2009, but eligible for TMP for twenty-four months beginning September 2009. See N.J.A.C. 10:69-5.13(a)1iii & -10.3. M.M. and I.M. did not report the change until almost ten months later in May 2010, when they submitted their redetermination application.
On May 24, 2010, NJFC notified M.M. and I.M that they were ineligible for AFDC-related Medicaid because they exceeded the monthly unearned income limit. NJFC also advised, incorrectly, that they were eligible for TMP from May 1, 2010 to August 31, 2011 (the May 2010 notice). NJFC later corrected this mistake and determined that the ineligibility began on August 22, 2009, when I.M.'s unearned income changed, and M.M. and I.M. were eligible for TMP from September 1, 2009 to August 31, 2011.
Thereafter, I.M.'s UI benefits increased to $2,270.49 per month. Before their TMP expired, in May 2011, M.M. and I.M. submitted a redetermination application. On September 23, 2011, NJFC notified them that they were ineligible for AFDC-related Medicaid because their unearned income exceeded the monthly limit and CHIP was closed to new applicants. Thus, M.M. and I.M. were terminated from NJFC. Coverage for the children continued.
NJFC also notified M.M. and I.M. of their right to request a fair hearing within twenty days. They requested a fair hearing, and their AFDC-related Medicaid benefits were reinstated and continued pending the hearing.
In a March 2, 2012 initial decision, ALJ Irene Jones (ALJ Jones) affirmed NJFC's decision. ALJ Jones found that the May 2010 notice qualified as an adverse action, as defined by N.J.A.C. 10:69-6.1, because NJFC denied M.M.'s and I.M.'s reapplication for AFDC-related Medicaid. ALJ Jones also determined that although the May 2010 notice was inadequate and violated due process, the remedy was a hearing to determine eligibility, not an award of benefits. She concluded that the hearing before her cured any due process violation because M.M.'s and I.M.'s AFDC-related Medicaid benefits were reinstated and they continued receiving benefits pending the hearing.
ALJ Jones also concluded that NJFC properly transferred M.M. and I.M. to TMP on September 1 2009, and they were ineligible for CHIP because the program was closed to new applicants. The Director of DMAHS adopted ALJ Jones's initial decision.
T.J.
T.J. had a household of three: one parent and two children. She received wages from her employment as a cook for a college fraternity for approximately eight months a year and received UI benefits for the remaining four months. Because she was a seasonal worker, her earned and unearned income was averaged over a twelve-month period.
T.J. became eligible for AFDC-related Medicaid in October 2000. In April and May 2010, she submitted a redetermination application. On October 13, 2010, NJFC notified T.J. that she was ineligible for AFDC-related Medicaid because she exceeded the unearned income limit of $443 per month for a family of three (the October 2010 notice). NJFC determined that T.J. began receiving UI benefits of $1400 per month in May 2009; however, it did not state this in the October 2010 notice. NJFC also advised T.J., incorrectly, that she was eligible for TMP from October 1, 2010 to June 30, 2011. NJFC later corrected this mistake and determined that because T.J.'s ineligibility began in May 2009, when her unearned income allegedly increased beyond the monthly limit, she was eligible for TMP for twenty-four months from June 1, 2009 to June 30, 2011. Coverage for the children continued.
In May 2011, T.J. submitted a redetermination application and a letter explaining that the $1400 UI figure was incorrect because her employer had over-reported her 2009 wages, resulting in an overpayment of UI benefits in 2010. She submitted a document from the New Jersey Department of Labor and Workforce Development, which indicated that she received $8400 in UI benefits during the period May 22 to August 21, 2010, and was overpaid $1778. Thus, she was only entitled to $6622 in UI benefits in 2010. However, dividing $6622 by twelve months, T.J.'s 2010 UI benefits were $551.83 per month, which still exceeded the monthly unearned income limit. Thus, T.J. was ineligible for AFDC-related Medicaid as of May 22, 2010.
At oral argument of this appeal, T.J.'s counsel conceded that T.J.'s 2010 total income made her ineligible for AFDC-related Medicaid in 2011, and she was not eligible for CHIP.
On June 17, 2011, NJFC notified T.J. that she was ineligible for CHIP because the program was closed to new applicants. Attached to the notice was an Explanation of Eligibility Determination, which included NJFC's calculation of the unearned income of $1400 per month from UI benefits it claimed T.J. began receiving in May 2009. NJFC also notified T.J. of her right to request a fair hearing within twenty days. T.J. requested a fair hearing, and her AFDC-related Medicaid benefits were reinstated and continued pending the hearing.
At the hearing, T.J. argued that she was improperly transferred to TMP as of June 2009 because her unearned income fell below the monthly limit. She provided her 2009 Form 1040A income tax return, which reported income of $20,520 in wages and $3453 in UI benefits.
In a March 12, 2012 initial decision, ALJ Leland McGee (ALJ McGee) concluded that NJFC did not provide adequate notice to T.J. in accordance with N.J.A.C. 10:78-6.1(b) and (c). ALJ McGee also determined that NJFC had improperly terminated T.J. from AFDC-related Medicaid and transferred her to TMP as of June 2009 because it miscalculated her monthly 2009 income by relying on the $1400 monthly UI benefits. Utilizing T.J.'s 2009 Form 1040A income tax return, ALJ McGee calculated T.J.'s 2009 UI benefits at $288 per month and determined that she was still eligible for AFDC-related Medicaid because her monthly unearned income fell below the limit. ALJ McGee made no determination as to whether T.J. was eligible for AFDC-related Medicaid in 2010 or 2011.
DMAHS rejected ALJ McGee's initial decision. DMAHS found that T.J. was ineligible for CHIP because it was closed to new applicants. DMAHS also determined that T.J. was ineligible for AFDC-related Medicaid as of June 1, 2009, based on her unearned income of $14 00 per month from UI benefits.
G.G.
G.G. had a household of six: two parents and four children. In June 2008, he submitted an application to the Middlesex County Medicaid program. At the time, the family's total income was $3,427.40 per month, consisting of G.G.'s unearned income of $2,270.49 per month from TDI benefits and the earned income of his wife, S.G., of $1,156.91 per month. Based on G.G.'s and S.G.'s total income, the county welfare agency determined that they were ineligible for the county Medicaid program and forwarded G.G.'s file to NJFC.
On August 8, 2008, G.G. advised NJFC that his last check for TDI benefits was issued on July 25, 2008, and he was uncertain whether those benefits would continue. NJFC checked "DABS" and confirmed there were no active TDI payments to G.G. in August 2008. Thus, NJFC excluded G.G.'s TDI of $2,270.49 per month from the family's total income and determined that G.G. and S.G. were eligible for AFDC-related Medicaid as of August 1, 2008.
"DABS" is the computer system the State uses to verify TDI payments. N.J.A.C. 10:69-8.5(e).
In October 2008, G.G. began receiving unearned income of $1,510.50 per month from SSDI benefits and the four children each began receiving $188 per month in SSDI benefits. The total unearned income of $2,262.50 per month exceeded the AFDC-related Medicaid unearned income limit of $624 per month for a family of six. See N.J.A.C. 10:69-10.3(c). Thus, G.G. and S.G. became ineligible for AFDC-related Medicaid as of October 2008, but eligible for TMP for twenty-four months from October 2008 to September 2010.
G.G. did not report the change until almost three years later on May 4, 2011, when he submitted a redetermination application. NJFC checked "SVES" and discovered that the family began receiving the SSDI benefits in October 2008. On September 29, 2011, NJFC notified G.G. that he was ineligible for AFDC-related Medicaid because he had other health insurance coverage, S.G. was ineligible for AFDC-related Medicaid because the family's unearned income exceeded the monthly limit, and S.G. was ineligible for CHIP because the program was closed to new applicants. Thus, S.G. was terminated from NJFC. Coverage for the children continued and G.G. had coverage under other health insurance.
"SVES" is the computer system the State uses to verify SSDI benefits. N.J.A.C. 10:69-3.4.
--------
NJFC also notified G.G. of the right to request a fair hearing within twenty days. G.G. requested a fair hearing, and S.G.'s AFDC-related Medicaid benefits were reinstated and continued pending the hearing.
The parties stipulated there were no factual disputes and requested that ALJ Jesse Strauss (ALJ Strauss) decide the matter on motion and cross-motion for summary judgment. In a June 19, 2012 initial decision, ALJ Strauss granted summary judgment to NJFC. ALJ Strauss found that NJFC properly excluded G.G.'s TDI benefits from the family's total income in its initial eligibility determination in August 2008, and properly placed the family in AFDC-related Medicaid; S.G. became ineligible for AFDC-related Medicaid in October 2008 because the family's unearned income exceeded the monthly limit; and S.G. caused her ineligibility for CHIP by failing to timely report the change in unearned income until May 2011. DMAHS affirmed ALJ Strauss's initial decision.
III.
On appeal, appellants raise the following contentions:
B.D.
B.D. contends that the Commissioner lacked authority to apply the amendment to N.J.A.C. 10:78-3.4(b) retroactively to February 28, 2010. She argues that the New Jersey Administrative Procedure Act (APA), N.J.S.A. 52:14B-1 to -30, prohibited DMAHS from implementing the amendment until it was published in the New Jersey Register.
B.D. also contends that it was arbitrary and capricious for DMAHS to treat her differently than other similarly-situated recipients by determining her ineligibility for AFDC-related Medicaid as of the date she reported the change in unearned income rather than the date of the change.
M.M. and I.M.
M.M. and I.M. contend it was arbitrary and capricious for DMAHS to treat them differently than other similarly-situated recipients by transferring them to TMP as of the date the change in unearned income occurred rather than the date they reported the change. They also contend that DMAHS's decision to transfer them to TMP was improper and should be voided due to inadequate notice.
T.J.
T.J. contends that her transfer to TMP as of June 2009 was improper because DMAHS used an incorrect UI income figure to determine she was ineligible for AFDC-related Medicaid in May 2009. She contends that pursuant to N.J.A.C. 10:69-10.25(f)2, her ineligibility began in May 2011, when she reported the change in unearned income, not when the change occurred, thus making her eligible for TMP starting June 1, 2011. She contends it was arbitrary and capricious for DMAHS to treat her differently than other similarly-situated recipients by transferring her to TMP as of the date the change in unearned income occurred rather than the date she reported the change. She also contends that her termination from NJFC should be invalidated due to inadequate notice.
G.G.
G.G. contends that NJFC incorrectly placed his family in AFDC-related Medicaid in August 2008 and should have placed them in CHIP in August 2008 because the family's 2008 total monthly income made them ineligible for AFDC-related Medicaid. Alternatively, G.G. argues that ALJ Strauss erred in granting summary judgment because there was an ambiguity about whether NJFC placed the family in the wrong program. G.G. also argues, alternatively, that it was arbitrary and capricious for DMAHS to treat S.G. differently than other similarly-situated recipients by determining her ineligibility as of the date they reported the change in unearned income rather than the date of the change.
Standard of Review
Our review of an agency decision is limited. In re Stallworth, 208 N.J. 182, 194 (2011). "[A] 'strong presumption of reasonableness attaches to [an agency decision].'" In re Carroll, 339 N.J. Super. 429, 437 (App. Div.) (quoting In re Vey, 272 N.J. Super. 199, 205 (App. Div. 1993), aff'd, 135 N.J. 306 (1994)), certif. denied, 170 N.J. 85 (2001); see also In re N.J.A.C. 7:1B-1.1 , 431 N.J. Super. 100, 114 (App. Div. 2013). "In order to reverse an agency's judgment, [we] must find the agency's decision to be 'arbitrary, capricious, or unreasonable, or [ ] not supported by substantial credible evidence in the record as a whole.'" Stallworth, supra, 208 N.J. at 194 (second alteration in original) (quoting Henry v. Rahway State Prison, 81 N.J. 571, 579-80 (1980)).
In determining whether agency action is arbitrary, capricious, or unreasonable, [we] must examine:
(1) whether the agency's action violates express or implied legislative policies, that is, did the agency follow the law; (2) whether the record contains substantial evidence to support the findings on which the agency based its action; and (3) whether in applying the legislative policies to the facts, the agency clearly erred in reaching a conclusion that could not reasonably have been made on a showing of the relevant factors.
[Ibid. (quoting In re Carter, 191 N.J. 474, 482-83 (2007)).]
We "'may not substitute [our] own judgment for the agency's, even though [we] might have reached a different result.'" Ibid. (quoting Carter, supra, 191 N.J. at 483). "This is particularly true when the issue under review is directed to the agency's special 'expertise and superior knowledge of a particular field.'" Id. at 195 (quoting In re Hermann, 192 N.J. 19, 28 (2007)). Furthermore, "'[i]t is settled that "[a]n administrative agency's interpretation of statutes and regulations within its implementing and enforcing responsibility is ordinarily entitled to our deference.E.S v. Div. of Med. Assist. & Health Servs., 412 N.J. Super. 340, 355 (App. Div. 2010) (second alteration in original) (quoting Wnuck v. N.J. Div. of Motor Vehicles, 337 N.J. Super. 52, 56 (App. Div. 2001)). "Nevertheless, 'we are not bound by the agency's legal opinions.'" A.B. v. Div. of Med. Assist. & Health Servs., 407 N.J. Super. 330, 340 (App. Div.) (quoting Levine v. N.J. Dep't of Transp., Div. of Motor Vehicles, 338 N.J. Super. 28, 32 (App. Div. 2001)), certif. denied, 200 N.J. 210 (2009). "Statutory and regulatory construction is a purely legal issue subject to de novo review." Ibid. Applying the above standards, we discern no reason to disturb DMAHS's decisions.
Retroactivity
AA FY2010 granted the Commissioner the authority to modify the NJFC regulations in accordance with the Director of DBA's plan to freeze NJFC enrollment as of March 1, 2010, for parents and caretakers, such as appellants, whose gross income was 134% to 200% of the FPL "[n]otwithstanding the provisions of any other law or regulation to the contrary," including the APA. As another panel of this court explained:
Specific provisions in an appropriations act may be an expression of legislative intent. In re Boyan, 127 N.J. 266, 268 (1992). As the Court explained in Camden v. Byrne, 82 N.J. 133, 154 (1980): "[A] definite legislative intent as reflected in the general appropriation laws necessarily supersedes any previously expressed legislative desires at least for the duration of the particular appropriation act. The earlier statutes cannot coexist with the enacted appropriation and, consequently, must be deemed to be suspended by adoption of the later appropriation acts." See also Mid-Atl. Solar Energy v. Christie, 418 N.J. Super. 499, 505 (App. Div. 2011) ("Our courts have long recognized that the Legislature has the authority to change or suspend the operation of its prior enactments through an Appropriations Act.").
[Guaman, supra, 421 N.J. Super. at 258-59 (alteration in original).]
Guaman concerned the amendments to N.J.A.C. 10:78-1.1 and - 3.2(e) that the Commissioner had also adopted on May 28, 2010 and published on July 6, 2010. Id. at 252-53. Those amendments retroactively closed enrollment in all NJFC programs as of April 1, 2010, to certain adult restricted aliens. N.J.A.C. 10:78-3.2(e). The panel recognized that in light of the legislative intent of AA FY2010, the Legislature granted the Commissioner "expansive authority" to change NJFC's non-financial eligibility requirements and "suspend in whole or in part the processing of applications for any or all categories of individuals covered by the program." Guaman, supra, 421 N.J. Super. at 260 (internal quotation marks omitted) (citing L. 2010, c. 35). The panel also determined there was insufficient merit to warrant discussion of the plaintiffs' argument that the Commissioner failed to comply with procedural prerequisites before closing enrollment as of April 1, 2010. Id. at 261 (citing R. 2:11-3(e)(1)(E)).
We conclude that as per AA FY2010 and Guaman, the Commissioner had the authority to close new parent/caretaker NJFC applications retroactive to February 28, 2010, notwithstanding the provisions of the APA to the contrary. We find that B.D.'s arguments to the contrary lack sufficient merit to warrant further discussion. R. 2:11-3(e)(1)(E).
Disparate Treatment
We find no merit in appellants' contentions that DMAHS treated them differently than other similarly-situated recipients. Appellants used each other as examples of disparate treatment.
The record confirms, however, that DMAHS treated all appellants the same. DMAHS determined everyone's ineligibility as of the date their change in unearned income occurred not the date they reported it, and transferred them to the appropriate AFDC-related Medicaid program for which they were eligible at that time. When their eligibility for those programs ended, DMAHS properly terminated them from NJFC because CHIP was closed to new applicants.
As for B.D., although her eligibility for continued AFDC-related Medicaid ended in November 2009, when CHIP was still open to new applicants, her violation of the clear and unambiguous mandatory requirements of N.J.A.C. 10:69-5.12, N.J.A.C. 10:78-11.2, and the "Rights and Responsibilities" notice to immediately report her change in unearned income entitled her to no relief whatsoever. To permit otherwise would encourage recipients to purposely delay reporting a change in circumstance that renders them ineligible for NJFC and allow them to continue receiving benefits to which they are not entitled, such as what occurred here.
Likewise, we find no merit in T.J.'s contention that pursuant to N.J.A.C. 10:69-10.25(f)2, her ineligibility began ten days after she reported the change in unearned income in May 2011. N.J.A.C. 10:69-10.25(f)2 provides:
A significant change in circumstances of the eligible family may result in loss of eligibility. The termination of eligibility shall be effective no later than the first day of the month following the month in which the significant change in circumstanceWe conclude that the part of N.J.A.C. 10:69-10.25(f)2 providing that termination of eligibility becomes effective ten business days after the change is reported applies to recipients who, unlike any of the appellants, immediately reported a change in circumstances, as mandated by N.J.A.C. 10:69-5.12, N.J.A.C. 10:78-11.2, and the "Rights and Responsibilities" notice.
occurred, or 10 business days after the change is reported to the [County Board of Social Services], whichever is later. Termination of eligibility shall be subject to timely and adequate notice and meet the requirements of [N.J.A.C.] 10:69-6.
Inadequate Notice
Inadequate notice is a procedural defect that can be cured by a de novo hearing. Ensslin v. Twp. of N. Bergen, 275 N.J. Super. 352, 361 (App. Div. 1994) (citing In re Appeal of Darcy, 114 N.J. Super. 454, 461 (App. Div. 1971)), certif. denied, 142 N.J. 446 (1995). Assuming their notices were inadequate, M.M., I.M. and T.J. received a de novo hearing and their benefits were reinstated and continued pending the hearing. Thus, there is no reason to invalidate DMAHS's decision to transfer them to TMP and terminate them from NJFC after their TMP expired.
Remaining Contentions
We reject G.G.'s contention that NJFC improperly placed the family in the wrong program in August 2008. G.G. failed to immediately report the family's monthly unearned income from SSDI, which made S.G. ineligible for AFDC-related Medicaid benefits in October 2008. This failure resulted in S.G. receiving benefits to which she was not entitled. We have considered G.G.'s contention regarding the grant of summary judgment in light of the record and applicable legal principles and conclude it lacks sufficient merit to warrant discussion in a written opinion. R. 2:11-3(e)(1)(E).
We agree with T.J.'s contention that NJFC improperly transferred her to TMP as of June 2009. NJFC provided no support for its claim that T.J.'s UI benefits increased to $1400 in May 2009. On the other hand, T.J. provided her 2009 Form 1040A income tax return, which confirmed that she received $3453 in UI benefits in 2009. Divided by twelve months, T.J. received $287.75 per month in UI benefits in 2009, which is less than the AFDC-related Medicaid monthly unearned income limit of $443 for a family of three. See N.J.A.C. 10:69-10.3(c). Accordingly, ALJ McGee was correct that T.J.'s transfer to TMP as of June 2009 was improper. However, T.J.'s 2010 UI benefits of $551.83 per month exceeded the monthly unearned income limit as of May 22, 2010. Thus, she was ineligible for AFDC-related Medicaid as of May 22, 2010, but eligible for TMP from June 2010 to May 2012. Because CHIP was no longer available, T.J.'s eligibility for NJFC terminated in May 2012.
Affirmed.
I hereby certify that the foregoing is a true copy of the original on file in my office.
CLERK OF THE APPELLATE DIVISION