How to Challenge a Medicaid Denial for Gifts Made Within Five Years

By Fredrick P. Niemann, Esq. of Hanlon Niemann, a Freehold, NJ Appealing Denial of Medicaid Attorney

With each passing day, more and more citizens apply for Medicaid benefits when they can no longer pay for or provide necessary services for themselves.

At its very core, there are two main hurdles for Medicaid applicants in New Jersey to overcome: the $2,163.00/month income limit for Global Options (soon to be abolished on or about October 1, 2014) and the $2,000.00 asset limit. While seemingly straightforward, each limit is stringently monitored to ensure that Medicaid benefits are awarded to those eligible applicants and not to applicants who transfer and gift away their finances with the intention of qualifying for Medicaid. Great scrutiny is placed on compliance with the asset limit since it is much easier for individuals to adjust. It is in this way that the government applies a sixty (60) month “look-back” period to determine if a Medicaid applicant is truly eligible or attempting to avoid a period of ineligibility. Any transfers made for less than fair market value within this sixty (60) month look-back period will result in a period of ineligibility (called a “penalty period”) for a duration determined based on the amount transferred and the average monthly cost of nursing home care within New Jersey.

But what about unique and truly extenuating circumstances? For instance, what is to happen to an individual healthily enjoying the later years of their life when suddenly disaster hits? Individuals caught in such a situation have no opportunity to plan ahead for times of need and may face lengthy periods of ineligibility for gifts given to family members without any intention of circumventing the Medicaid resource limits. Fortunately, New Jersey permits asset transfers made within the 5 year look-back period when the gifts were not intended to unlawfully circumvent the Medicaid resource cap, for eligibility purposes.

The specific statute on this matter is N.J.A.C. 10:71-4.10(e)(6)(ii), which states that “[t]he application of a transfer penalty as set forth in this section shall not apply when: A satisfactory showing is made, to the State that: The assets were transferred exclusively for a purpose other than to qualify for medical assistance.” Thus, upon proof that any transfers made by a Medicaid applicant, including any gifts or payments to family members, were made prior to any contemplation of Medicaid eligibility whatsoever, then it should follow that no transfer penalty shall apply.

According to N.J.A.C. 10:71-4.10(j), “[a]ny applicant or beneficiary may rebut the presumption that assets were transferred to establish Medicaid eligibility by presenting convincing evidence that the assets were transferred exclusively (that is, solely) for some other purpose.” As previously mentioned, a Medicaid applicant retains the ability to contest the assumption that any transfers made within the sixty (60) month look-back period were done with any intent to qualify for Medicaid eligibility. In order for the applicant to meet their burden, they must successfully prove that the rationale behind any transfer was purely for purposes of which do not include circumventing the Medicaid resource cap. See Id.

In order for an applicant to support a claim that transfers made within the look-back period were for reasons other than becoming Medicaid eligible, the applicant will be required to produce evidence explaining the nature of the transfer, any documents relating to the transfer, and statements from any individuals with information relating to the transfer. The burden of proof is on the applicant to show that the transfer was executed without for reasons of which do not include establishing Medicaid eligibility.

In E.S. v. Division of Medical Assistance Health Services, 412 N.J. Super. 340 (2010), the court examined the appropriateness of a transfer penalty imposed by DMAHS on a Medicaid applicant where the transfer in question was premeditated payment on a life care contract (“LCC”) from the applicant to her daughter. DMAHS concluded that the payment of $56,550 to the applicant’s daughter in lieu of services to be rendered in accordance with the LCC was a transfer of assets for less than fair market value during the look-back period intended to permit the applicant to qualify for Medicaid. In E.S., it seems as though the court placed a heavy burden on overcoming the agency’s presumption that the transfer involved an intent to become Medicaid eligible.

In order to permit an applicant to launch a successful appeal to any denial of Medicaid benefits stemming from his or her alleged transfers, he or she will need to make a strong case that any transfers conducted before their circumstances or deteriorating health required financial assistance were for reasons other than Medicaid compliance. The argument to be made is as follows: an applicant made gifts or transfers for less than fair market value while he or she was in good physical health and at a time when he or she was in no way contemplating an application for Medicaid. Unfortunate circumstances have lead to the applicant’s rapid demise in health and have since necessitated Medicaid assistance to ensure his or her future wellbeing. Therefore, in order to substantiate such claims the applicant will likely need to produce any copies of checks or transfers made out to their recipients, health records from both the time in which the transfers were made and after the applicant’s circumstances necessitated Medicaid assistance, and statements from both the applicant and anyone who received a transfer from him or her.

Though the burden is high, upon a sufficient showing that any transfers made in good health were devoid of the intent to qualify for Medicaid assistance, an applicant can avoid a penalty period of ineligibility.

To discuss your NJ Appealing Medicaid denial matter, please contact Fredrick P. Niemann, Esq. toll-free at (855) 376-5291 or email him at Please ask us about our video conferencing consultations if you are unable to come to our office.


Medicaid Eligibility Services and Estate Recovery Laws in New Jersey

By Fredrick P. Niemann, Esq. of Hanlon Niemann, Monmouth County, NJ Medicaid Law Firm

Medicaid is a government health care program designed to ensure that medical treatment is available to those individuals whose income and resources are inadequate to otherwise provide for such care. In order to be eligible for Medicaid, applicants must meet certain requirements which include being a resident of New Jersey, a U.S. Citizen or qualified alien (most immigrants who arrive after August 22, 1996 are barred from Medicaid for five years, but could be eligible for NJ FamilyCare and certain programs for pregnant women), and applicants must also meet specific standards for financial income and resources.

Income with regard to Medicaid eligibility includes both cash income and in-kind income. It also considers a person’s resources. Cash income includes employment earnings (salary, social security, pension benefits, and tax refunds). In-kind income includes food or shelter, or something the individual uses to obtain either food or shelter. Subject to certain exceptions, states are required to exempt certain categories of income and resources when determining eligibility. For example, food stamps are exempt from income in determining an applicant’s Medicaid eligibility in New Jersey. Resources include cash or other property that can be liquidated or converted into cash-in-hand such as stocks and bonds.


Once an applicant is determined eligible to receive benefits, New Jersey provides the following services to Medicaid recipients:

  • Inpatient and outpatient hospital treatment
  • Laboratory tests and X-rays
  • Early and Periodic Screening, Diagnostic and Treatment services
  • Home health care
  • Physician services
  • Nurse-midwife services
  • Assistance with family planning and any necessary supplies
  • Nursing facilities for people over 21


Treatment in residential treatment centers

  • Optical appliances
  • Dental care
  • Optometry services
  • Chiropractic services
  • Psychologist
  • Podiatrist
  • Prosthetics and orthotics
  • Drugs necessary during long term care
  • Drugs at retail cost
  • Durable medical equipment
  • Hearing aid services
  • Hospice care
  • Transportation
  • Personal care services
  • Licensed practitioner services
  • Private duty nursing
  • Services in a clinic
  • Physical, occupational and speech therapy
  • Inpatient psychiatric care for individuals under 21 and over 65
  • Intermediate care facilities for the mentally retarded

As noted above, certain classes of assets are exempted when determining eligibility for Medicaid, and because of this a Medicaid recipient may be sufficiently needy to qualify for Medicaid and yet still leave a considerable estate when they pass away. When an individual who receives Medicaid benefits passes away Federal law mandates that states must pursue Medicaid estate recovery. Estate recovery is the process by which the state seeks to recover the amount spent on the recipient’s behalf from their exempt assets after the recipient’s death.

New Jersey’s estate recovery provisions are found New Jersey’s state statutes at N.J.S.A. 30:4D-7.2 and New Jersey’s administrative regulations at N.J.A.C. 10:49-14.1. New Jersey may recover for care given to institutionalized individuals as well as for home and community-based care and for prescription drug services. New Jersey law outlines certain situations when estate recovery cannot be made. These include when the Medicaid recipient has a surviving child under 21 or a blind or permanently and totally disabled child. The policy of estate recovery makes advance legal planning critical for families of such Medicaid recipients with exempt assets.

To discuss your NJ Medicaid matter, please contact Fredrick P. Niemann, Esq. toll-free at (855) 376-5291 or email him at Please ask us about our video conferencing consultations if you are unable to come to our office.


Do I Recommend That Parents Gift Their Home to a Child(ren)?

By Fredrick P. Niemann, Esq. of Hanlon Niemann, a Freehold, NJ Medicaid Attorney

A client purchased their home in 1971 and paid $75,000 for it. Over the years they put an additional $150,000 of renovations into the home. The home is now valued at $875,000. The parents want to change ownership to the house so that it will be owned by the parents and their son jointly with rights of survivorship. Their question to me is, will Medicaid penalize this transfer? Then I’m asked if it is a better approach to transfer the house outright to their child now to start the five-year look back period under New Jersey Medicaid?

I’m not always a big fan of outright gifting valuable assets to children without compelling reasons. Generally (but not always), I think everyone is better off using a trust or waiting until the owner dies. A transfer of the home to a child will cause five years of ineligibility for Medicaid benefits for both parents. Depending on their health and other resources, this may or may not be a risk they should take. A transfer outright to a child has several drawbacks, including the following: The house is subject to claims of creditors and others should the child be sued or divorced or pass away. In addition, when the child sells the house, he/she will have to pay capital gains taxes calculated on the difference between the parents’ purchase price, plus the value of the improvements made to the property, and the son’s selling price. While you may not have to pay gift taxes on the gift or capital gains when your children sell the house, they may be facing other significant taxes. The reason is that when you give away your property, the tax basis (or the original cost) of the property for the giver becomes the tax basis for the recipient. If the children sell the house, they will have to pay capital gains taxes on the difference between your purchase price and the selling price. The only way for your children to avoid the taxes is for them to live in the house for at least two years before selling it. In that case, they can exclude up to $250,000 ($500,000 for a couple) of their capital gains from taxes.

These risks are avoided by transferring the house to a properly-drafted irrevocable grantor trust. The trust protects the house for the parents (and the son and his family as well) and gives the son a “step-up” in basis upon the parents’ death, reducing or eliminating capital gain taxes.

When you give anyone property valued at more than $14,000+ in any one year, you are supposed to file a gift tax form. Also, under current law, you can gift a total of $5.34 million over your lifetime without incurring a gift tax. If your residence is worth less than $5.34 million, you likely won’t have to pay any gift taxes, but you should still file a gift tax form.

Inherited property does not face the same taxes as gifted property. If the children inherit the property, the property’s tax basis is “stepped up,” which means the basis would be the value of the property at the time of the owner’s death. However, the home will remain in your estate, which may have estate tax consequences.

Beyond the tax consequences, gifting a house to children can affect your eligibility for Medicaid coverage for long-term care. There are other options for giving your house to your children, including putting it in a trust or selling it to them. Before you give away your home, consult with an elder law attorney, who can advise you on the best method for passing on your home.

To discuss your NJ Medicaid and other elder law matters, please contact Fredrick P. Niemann, Esq. toll-free at (855) 376-5291 or email him at Please ask us about our video conferencing consultations if you are unable to come to our office.



Does Applying for Medicaid on an Incapacitated Person’s Behalf Require a Guardianship?

By Fredrick P. Niemann, Esq. of Hanlon Niemann, a Freehold, NJ Medicaid Application Attorney

Consider the following hypothetical situation. Mother is in a nursing home and is mentally and physically incapacitated. She has advanced vascular dementia. She has no more money left and needs to apply for Medicaid. Her daughter does not have a power of attorney or a guardianship in place. She intends to supply the information requested by Medicaid for the application. Is it necessary for her to have a guardianship for her before she can receive Medicaid?

That’s a good question and the answer is “maybe”. Some facilities just want someone to file the Medicaid application so they can get paid and really don’t care about a power of attorney or guardianship. Others are more demanding. While it may depend on your county’s Medicaid office, the real question is whether you can get them the information they need and gain access to her funds to pay her monthly income to the nursing home. If you’re able to accomplish this without being appointed guardian, it shouldn’t be necessary for purposes of Medicaid. However, the facility may still want someone to become guardian in order to make health care decisions for your mother. Your situation is a prime example of why I urge everyone to execute a durable power of attorney and health care directive.

To discuss your NJ Medicaid application, power of attorney or guardianship questions, please contact Fredrick P. Niemann, Esq. toll-free at (855) 376-5291 or email him at Please ask us about our video conferencing consultations if you are unable to come to our office.



California Court Blocks Home Health Aide’s Injury Claim

By Fredrick P. Niemann, Esq. of Hanlon Niemann, a Freehold, NJ Medicaid Eligibility Attorney

Fredrick P. Niemann, Esq. of Hanlon Niemann Issues Warning to Families Providing Care to Loved One With Private Caregivers

If you have a home health aide or caregiver taking care of a family member, you should read this decision and immediately contact your homeowner’s insurance agent and get “casual employment/employee workers compensation and/or liability insurance for your home health aide.

A home health aide for a woman suffering from Alzheimer’s disease can’t sue the homeowners over a job-related injury, the California Supreme Court has ruled.

The court—possibly the first in the country to address whether in-home caregivers for Alzheimer’s patients can sue under such circumstances—concluded that Carolyn Gregory bore the same “primary assumption of risk” as a caregiver who worked in a hospital or other institution.

“California and other jurisdictions have established the rule that Alzheimer’s patients are not liable for injuries to caregivers in institutional settings,” Justice Carol Corrigan wrote. “We conclude that the same rule applies to in-home caregivers who, like their institutional counterparts, are employed specifically to assist these disabled persons.”

The opinion called upon the California Legislature to consider laws that would better protect caregivers — particularly since Alzheimer’s patients have been known to become violent.

The number of persons afflicted with this disease can only be expected to grow in coming years. Training requirements and enhanced insurance benefits for caregivers exposed to the risk of injury are among the subjects worthy of legislation investigation.”

Click here to read the decision:

In this case, the caregiver sued after her client, age 85, came up from behind her as she was washing dishes. In attempting to restrain her, the caregiver sliced her own hand with a large knife. The caregiver’s husband had been told that the aged client could be “combative and would bite, kick, scratch and flail.”

The caregiver, who worked for a home health care agency, sued the family for negligence and battery. The Superior Court Judge granted summary judgment against her, and was affirmed by an intermediate state appeals court.

The Supreme Court affirmed both lower court decisions, citing public policy changes in recent years that discourage institutionalizing the mentally disabled.

“The majority opinion walked carefully through some very difficult issues and arrived at a decision that is consistent with prior law and fair under the circumstances.”

Counsel for the caregiver acknowledged that the decision was based on public-policy considerations.

“Their primary consideration was staying away from decisions that would discourage in-home caregiving in the future, because the burden on government entities and care facilities is very high these days,” he said.

But the court limited its ruling to professional home health care workers who are trained and employed by an agency—not all caregivers.

Here’s what I want you to remember: “The decision does not apply, for instance, to caregivers hired directly by homeowners or to situations in which caregivers aren’t adequately warned about risks, says Fredrick P. Niemann, Esq. of Hanlon Niemann, a Freehold, New Jersey Medicaid Eligibility for Long Term Care Attorney.

To discuss your NJ Medicaid Eligibility or Alzheimer’s matter, please contact Fredrick P. Niemann, Esq. toll-free at (855) 376-5291 or email him at Please ask us about our video conferencing consultations if you are unable to come to our office.


Sometimes Your Home Can Be Transferred to a Child Without a Medicaid Penalty

By Fredrick P. Niemann, Esq. of Hanlon Niemann, a Freehold, NJ Medicaid Attorney

You are a daughter or son of a sick and aging parent. Assume you have been caring for your mother and/or father for a number of years. You may even live in their home. Mom has severe COPD and dad has dementia. What needs to be done to protect Mom and Dad’s home if one or both of them need to be placed in a nursing home?

There’s good news for you. If structured correctly and properly documented, your parents can transfer the house to you without a penalty under New Jersey Medicaid laws. Generally, a transfer causes up to five years of ineligibility for Medicaid coverage. However, you can qualify for the so-called “caretaker child” exception to Medicaid’s rules governing the transfer of the home. In states like NJ, to qualify for this exception you need documented medical proof and affidavits from a doctor saying that for at least the past two years were it not for the care you provided to your parents, they would have had to move to a nursing home. If you think you qualify, reach out to us to better understand your rights and what must be done to assert your claim.

To discuss your NJ Medicaid matter, please contact Fredrick P. Niemann, Esq. toll-free at (855) 376-5291 or email him at Please ask us about our video conferencing consultations if you are unable to come to our office.


House Bill Would Make Income from Community Spouse’s Annuity Available to Medicaid Applicant

New legislation in the U.S. Congress would change the way income from a community spouse’s annuity is counted for the purposes of Medicaid eligibility. The bill would make a portion of the income available to the institutionalized spouse.

In April 2015, Rep. Markwayne Mullin (R-Okla.) introduced H.R. 1771 to amend the section of the Medicaid law dealing with the treatment of income (42 U.S.C. 1396r–5(b)(2)). The proposed amendment would provide that if the annuity pays income solely in the community spouse’s name, one-half of the income will be considered available to the institutionalized spouse. The same thing is true if the annuity pays income to both the institutionalized spouse and the community spouse. If the annuity pays income to the community spouse and another person, then one-half of the community spouse’s portion will be considered available to the institutionalized spouse. Fredrick P. Niemann, Esq. of Hanlon Niemann, a Monmouth County Elder Law Firm, responds with the following reaction. “The politicians should leave the system alone! Medicaid leaves community spouses with a minimal financial income. They need all the monthly support they can get.”

The legislation has been referred to the House Committee on Energy and Commerce.

To read the proposed amendment, click here.

To discuss your NJ Medicaid matter, please contact Fredrick P. Niemann, Esq. toll-free at (855) 376-5291 or email him at Please ask us about our video conferencing consultations if you are unable to come to our office.

SSA Clarifies Its Position on Court Established (d)(4)(A) Trusts

After much criticism, the SSA has issued an Administrative Message clarifying its policy regarding (d)(4)(A) Special Needs Trusts created by court order.

Recently, some SSA offices have been refusing to approve court-established (d)(4)(A) trusts because they were not created by a court “order.”

The SSA has now issued an Administrative Message. The message states that “[i] in the case of a special needs trust established through the actions of the court, the creation of the trust must be required by a court order. The special needs trust exception can be met when courts approve petitions and establish trusts by court order.

When the court issues an order approving the creation of the trust, it will meet the requirements of the regulation. In the second example, a judge orders the creation of a trust to hold a settlement, and the trust document lists the settlement as the trust’s original corpus. This trust also passes muster with the SSA. The SSA gives a negative example that when a court approves a trust that has already been created ahead of time, or when a court amends a defective trust with a nunc pro tunc order to make the amendment retroactive to the date the trust was originally created, the trusts will not qualify for the special needs trust exception. As often the case, I believe this position is a bunch of legal %$#%^*, just another example of legalize trumping reasonableness and fairness.

If you are contemplating the creation of a special needs trust especially as a lawyer with a personal injury case you should call to speak with me before you accept any funds from settlement or verdict.

To discuss your NJ Special Needs Trust matter, please contact Fredrick P. Niemann, Esq. toll-free at (855) 376-5291 or email him at Please ask us about our video conferencing consultations if you are unable to come to our office.

This Just In From the State: 2015-2016 Community Spousal Maintenance, Shelter and Utility Allowance Adjustments (MMNA & CSRA Allowance)

Effective July 1, 2015 the new base income allowance for a community spouse will increase from $1,966.25 to $1,991.25. The new standard for determining the excess shelter allowance for the community spouse increases from $589.88 to $597.38. Therefore, in computing the community spouse allowance, the community spouse’s shelter costs in excess of $597.38 shall be added to the base allowance of $1,991.25. If the community spouse is paying directly for their utilities, the utility allowance is also added as a shelter expense. The utility amount has been increased effective October 1, 2014 from $454.00 per month to $491.00 per month. The community spouse’s own gross income is subtracted from the overall allowance to determine the amount that may be deducted from the institutionalized spouse’s income prior to applying that income to their cost share of institutional care.

The Board of Social Services will apply the new standards in the post-eligibility treatment of income beginning with the month of July 2015 for all new cases and cases subject to re-determination.

The community spouse’s resource allowance (CSRA) remains unchanged. The community spouse’s share of the couple’s countable resources is the greater of $23,844.00, or one – half of the couple’s total resources, not to exceed $119,220.00. These figures will be effective from July 1, 2015 to June 30, 2016.

The increased standard also changes the computations of the applicable allowances.

To discuss your NJ Medicaid matter, please contact Fredrick P. Niemann, Esq. toll-free at (855) 376-5291 or email him at Please ask us about our video conferencing consultations if you are unable to come to our office.

When Can Medicare Stop Paying for Skilled Care and Rehabilitation

By Fredrick P. Niemann, Esq. of Hanlon Niemann, a Freehold, NJ Medicaid Attorney

Often times families and patients are told by representatives of a nursing home or outpatient Medicare provider that Medicare will not pay for continued rehab, therapy or care because the patient is not improving. But is this policy legal? The short answer is no!

The Medicare Policy Manuals have been revised. These changes must be followed in NJ. The revisions have been published by the Centers for Medicare Medicaid Services (CMS). The changes in policy pertain to care in Inpatient Rehabilitation Facilities (IRF), Skilled Nursing Facilities (SNF), Home Health care (HH), and Outpatient Therapies (OPT). Translated, it means nursing homes and outpatient visitations at home and/or health care facilities.

The Transmittal from Medicare announces the new policy revisions as follows:

Abolition of the No Improvement Standard

The “No Improvement Standard” is not to be applied in determining Medicare coverage for maintenance claims that require skilled care. Medicare has long recognized that even in situations where no improvement is possible, skilled care may nevertheless be needed for maintenance purposes (i.e., to prevent or slow a decline in condition).

In truth, this policy is the required legal Medicare standard. Medicare coverage of skilled services is based on the “unique medical condition of the individual beneficiary”); (prohibiting the use of utilization screens or “rules of thumb” to make coverage decisions); 42 C.F.R. § 409.44(b)(3)(iii) (providing that the determination of whether a skilled service is reasonable and necessary “must be based solely upon the beneficiary’s unique condition and individual needs without regard to whether the illness, or injury is acute, chronic, terminal, or expected to last a long time”); 42 C.F.R. §409.32(c) “Even if full recovery or medical improvement is not possible, a patient may need skilled services to prevent further deterioration or preserve current capabilities.”; “Rules of thumb” in the Medicare medical review process are prohibited… Medical denial decisions must be based on a detailed and thorough analysis of the beneficiary’s total condition and individual need for care.

Patients should discuss with their health care providers the Medicare maintenance standard and whether it is applicable to them. Health care providers should apply the maintenance standard and provide medically necessary nursing services or therapy services, or both, to patients who need them to maintain their function, or prevent or slow their decline. Under the maintenance standard articulated in the settlement, the important issue is whether the skilled services of a health care professional are needed, not whether the Medicare beneficiary will “improve.”

CMS has issued a Fact Sheet outlining the “new policy”. You can use this fact sheet now as evidence that skilled maintenance services are coverable for skilled nursing facility care, outpatient therapy, and home health care.

For people needing assistance with appeals, the Center for Medicare Advocacy has self-help materials available. This information can help individuals understand proper coverage rules and learn how to contest Medicare denials for outpatient, home health, or skilled nursing facility care.

To discuss your NJ Medicaid, Medicare and Elder Care matter, please contact Fredrick P. Niemann, Esq. toll-free at (855) 376-5291 or email him at Please ask us about our video conferencing consultations if you are unable to come to our office.