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What to Do If Your Medicaid Application Is Denied

If you apply for long-term care assistance through Medicaid in New Jersey and your application is denied, the situation may seem hopeless. The good news is that you can appeal the decision.

Medicaid is a program for individuals with minimal resources, so it has strict asset eligibility requirements. Qualifying for Medicaid requires navigating the complicated application process, which has many potential stumbling blocks. However, an initial Medicaid denial does not mean you will not eventually qualify for benefits.

The Medicaid agency may deny a Medicaid application for a number of reasons, including the following:

1. Missing documentation. You need to show proof that you are eligible for benefits, which usually means providing 5 years of bank records, financial statements, property deeds, retirement accounts and other personal records.

2. Excess assets. In order to be eligible for Medicaid benefits, a nursing home resident may have no more than $2,000 in "countable" assets.

3. Transferred assets. If you transferred assets for less than market value within five years before applying for Medicaid benefits, you may be subject to a penalty period before you become eligible for benefits. 

When you get a denial notice, read it carefully. The notice will (or should) explain why the application was denied. Upon receipt of the denial notice, an applicant can try informally asking the agency to reverse the decision. If a mistake was made by the applicant, this is the easiest and quickest way to proceed. If the caseworker made a mistake, it may be more complicated and require escalation to a supervisor.

Even if the applicant choses to attempt to proceed informally to reverse the denial, a request for an appeal should be submitted in the event informal efforts are not successful.   In New Jersey, appeals of Medicaid denials are done through an administrative fair hearing. The form to request a fair hearing is included with the denial notice. A fair hearing must be requested within 20 days of the date of the denial notice by filing a request with the Division of Medical Assistance and Health Services (“DMAHS”). 

The Medicaid agency will set the fair hearing date. The fair hearing is conducted before an administrative law judge. Applicants must attend the hearing, or their cases will be dismissed. The applicant has the right to have witnesses testify at the hearing and question the Medicaid agency’s witnesses.  An applicant also has a right to request the Medicaid file from the County.  It is wise to have an attorney to help you through the fair hearing process. An attorney can make sure you have all the correct documentation and information to present at the hearing.

 After the fair hearing, the judge issues an initial decision with the judge’s findings of fact and conclusions of law. If the applicant disagrees with the findings or conclusions in the initial decision, exceptions to the decision must be submitted to the judge and the Medicaid agency within 13 days of the date the decision was mailed. The initial decision is transmitted to the New Jersey Division of Medical Assistance and Health Services (DMAHS), which then has 45 days from the date of receipt to issue a final agency decision accepting, rejecting, or modifying the initial decision. If DMAHS finds in favor of the applicant, benefits will be granted retroactive to the date of the applicant’s eligibility for Medicaid. If DMAHS finds in favor of Medicaid, the applicant may file a further appeal with the Superior Court of New Jersey, Appellate Division. A request for judicial review of the Final Agency Decision must be initiated within 45 days from the date of receipt of the decision. Successfully challenging the Final Agency Decision in the Appellate Division is difficult and expensive.   As a result, it is important to try and resolve the matter during the initial Medicaid application, if possible. 

Receiving a Medicaid denial can lead to stress and uncertainty. However, it is important to remember that there are options for appealing a denial. The Elder Law attorneys at Mandelbaum Barrett can walk you through the appeal process to remove the guesswork and anxiety and achieve the best possible result.