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

Taking on the State

A representative of a nursing home contacted me about a disturbing Medicaid denial they received. I don’t represent nursing homes but nursing homes know of me and my reputation and will sometimes call me for my opinion which I am happy to give. This case had already gone to one Fair Hearing Appeal. The caseworker from the County Board of Social Services had identified $60,000 of checks that she contended were made without receiving “adequate return value.” During the hearing, she attempted to amend the claim to $113,000 as improper and to deny benefits for 792 days. In Medicaid language, this means that the state would not reimburse the nursing home until after two years had passed. Not a great result for a 95-year-old widow suffering from Alzheimer’s disease, or the facility. The family had no resources to self-pay.

The nursing home was interested in having the result reversed. They were already out approximately $40,000 in unreimbursed fees and were not thrilled with funding an additional $70,000 of care. Clearly, the caseworker’s decision had to be examined and perhaps challenged. Eviction was not an option the nursing home was willing to consider. It also wanted to avoid funding her care. The administrator saw the value of paying an elder law attorney to represent the resident. Of course, the resident’s guardian agreed to the arrangement.

Appeal A Denial! You Can Win With the Right Facts

Sometimes County Board caseworkers get things very wrong, resulting in improperly denied benefits. This case involved a “lookback period” which started 60 months prior to the filing of the Medicaid application. The agency looked for transfers within 5 years for less than “fair market value”. Generally, the agency examines transactions with family members and often treats these as gifts. The amount of the gifts is then divided by the state’s reimbursement rate to compute the penalty period. For example in New Jersey the average statewide reimbursement rate is $332.50 per day.

$113,810 ÷ $332.50 = 342 Days of a penalty period

Don’t Roll Over and Play Dead

The caseworker acts as the initial gatekeeper. If an application is denied or penalty period is imposed, the applicant must be notified of the decision and provided with an opportunity for a “Fair Hearing.” If unsuccessful at the Fair Hearing, further appeals are available typically to the agency director, then to the state courts.

Federal Option

However, the state’s administrative process is not the only avenue for relief. Denials of benefits often trigger claims under 42 U.S.C. § 1983 and therefor can be brought into federal court. A successful § 1983 claim can entitle the victors to attorney’s fees. In many jurisdictions, especially in New Jersey, this may be the best answer. It is good to review both federal and state decisions in order to determine the most advantageous route. In this case, the most expeditious way to challenge the caseworker was through the Fair Hearing.

Pretrial Preparation

Since this case involved review of a denial, family witnesses were interviewed and records examined. A legal brief demonstrated flaws in the caseworker’s logic and legal basis. It also involved developing the family story that proved that the disputed funds were paid for care, that there were time logs, and the necessity of care. The state agency filed a reply, which used a different but nonetheless incorrect legal standard.

The Hearing

Before the hearing, counsel delivered an exhibit that showed how challenged checks matched time records kept by the caregiver. Just like any trial, a lawyer wants his/her evidence moved into the record and theirs out. Although not requested, we filed a brief containing the proposed findings of fact and conclusions of law.

Don’t Be Afraid to Fight

I come from a litigation background, so a Fair Hearing is simple. Evidence standards also come somewhat easy to me. Pretrial procedures are within my comfort zone. Requests for information in discovery result in production by the County.


The imposition of a penalty period is often based upon ill founded views of the law and the facts. Despite being confronted with the applicant’s case, many agencies are unwilling to make any substantial concessions. Unless the applicant won, she might have died without ever receiving any benefits. Ultimately, the administrative law judge agreed with the applicant’s position and accepted her facts.

To discuss your NJ Medicaid Appeal 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.