                    NOT FOR PUBLICATION WITHOUT THE
                  APPROVAL OF THE APPELLATE DIVISION
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    parties in the case and its use in other cases is limited. R. 1:36-3.




                                          SUPERIOR COURT OF NEW JERSEY
                                          APPELLATE DIVISION
                                          DOCKET NO. A-0077-16T4

A.R.,

     Petitioner-Appellant,

v.

DIVISION OF MEDICAL ASSISTANCE
AND HEALTH SERVICES and OCEAN
COUNTY BOARD OF SOCIAL SERVICES,

     Respondents-Respondents.
____________________________________

           Argued January 24, 2018 – Decided July 17, 2018

           Before Judges Koblitz and Suter.

           On appeal from the Division of Medical
           Assistance and Health Services, Department of
           Human Services.

           Rodney J. Alberto argued the cause for
           appellant (The Alberto Brothers Law Firm,
           attorneys; Rodney J. Alberto, on the brief).

           Patrick Jhoo, Deputy Attorney General, argued
           the cause for respondent (Gurbir S. Grewal,
           Attorney General, attorney; Patrick Jhoo, on
           the brief).

PER CURIAM
     A.R. appeals from the July 22, 2016 final decision of the New

Jersey     Department    of   Human    Services,     Division   of    Medical

Assistance and Health Services (DMAHS), which adopted the decision

of the Administrative Law Judge (ALJ), affirming the denial of

A.R.'s application for Medicaid benefits for failure to verify

certain financial information.         We affirm the denial.

                                           I.

     A.R. applied for Medicaid on February 13, 2015, through a

representative    from    Senior      Planning    Services   (SPS).      That

application referenced an investment account that A.R. held with

PNC Bank.     On the same day that A.R. applied, the Ocean County

Board of Social Services (Board) issued a written request that

"[a]ny and all pertinent verifications of all resources . . .

(bank accounts, C.D.'s . . . annuities . . .) [o]pened or closed

in the last [five] years prior to application" be provided to it

in three weeks.     Information submitted to the Board showed that

on December 31, 2010, A.R.'s PNC investment account had a balance

of $56,216.20, that the account balance increased by March 31,

2011, to $108,622.10, and that on April 30, 2011, the account had

a zero balance.     This financial activity had taken place within

the five-year look back period.            See N.J.A.C. 10:71-4.10(b)(9).

      The Board requested verification of the activity in this

account.    In a June 11, 2015 letter to SPS, the Board provided a


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list of information or documents that were necessary for A.R. to

establish Medicaid eligibility. The Board noted the PNC investment

account had "increased in value (almost double)" and asked SPS to

"[p]rovide verification of this increase" within the next two

weeks.

     On June 25, 2015, SPS wrote to the Board advising that "an

advisor at PNC" told it that the PNC investment account statement

showed a mistake.    SPS explained that A.R. held no assets in PNC.

"The only thing in the account was the annuity held with Allstate."

That annuity was closed out and the money deposited into Fidelity,

an "MM account also held within PNC."       That account was closed and

the funds were used to open an Individual Retirement Account.              SPS

advised, "The mistake was that [PNC] added the same money (the

money that was closed out and then re-deposited).          PNC is working

on sending a letter."       Upon receipt, SPS promised to send it

"directly."

     On September 29, 2015, the Board again wrote to SPS about the

investment    account,   saying   that   within   two   weeks,   it   needed

"verification from PNC about this.         (Show activity between Dec.

2010 and March 2011)."      SPS responded on October 16, 2015, that

the money in the investment account was a "close out" from an

Allstate annuity that was deposited. "The cash equivalents account

then closed into [another account]."


                                    3
                                                                 A-0077-16T4
     On October 27, 2015, SPS arranged a conference call with a

representative from PNC, the caseworker from the Board and SPS.

They discussed what had occurred in the account, but the PNC

representative advised it would not provide a written explanation.

The Board denied A.R.'s Medicaid application on October 28, 2015,

because    it   had   not   been   provided   with   verification   of   the

investment account activity.

     A.R. filed a new application for Medicaid on November 25,

2015.     On December 28, 2015, a vice-president from PNC sent a

letter explaining what had occurred within the investment account.

            PNC   Investments   requires    that   annuity
            positions appear within a client's brokerage
            account as a "held away" position. [A.R.]
            liquidated his Allstate annuity contract on
            March 24, 2011 and the amount received at
            distribution was $53,054.22 . . . .      Based
            upon the timing of this liquidation, the
            Allstate annuity contract continued to appear
            as a "held away" position with the client's
            PNC Investments account statement for the
            period of March 1-31, 2011, when it should not
            have appeared, as it was no longer a position
            at the close of March.

A.R.'s Medicaid application was approved on December 28, 2015,

retroactive to August 1, 2015.

     A fair hearing was held before an ALJ in June 2016, about

A.R.'s benefits denial in October 2015.        The case worker explained

that PNC said it would not provide verification of the account but

ultimately it did.      She needed the verification because the "bank


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                                                               A-0077-16T4
statements didn’t make any sense."           If they had, she would have

accepted them. She asked for clarification "on several occasions."

      The Initial Decision denied A.R.'s Medicaid application

because he failed to provide the necessary financial verification.

Although A.R., through SPS, had communicated with PNC about the

investment account, the ALJ found PNC's response was that "the

source and verification of the investment account increase was

self-explanatory by a review of the annuity statements."                  The

record showed that the Board had asked for "a clear and succinct

explanation" about the increase "[o]n numerous occasions."               A.R.

did not comply with N.J.A.C. 10:71-2.2 "by not verifying or

explaining the PNC investment account resource increase."

     The Final Agency Decision found that A.R. "was given several

opportunities to provide the requested information but failed to

provide [it] prior to the October 28, 2015 denial of benefits."

Without this verification, "the [Board] was unable to complete its

eligibility determination and the denial was appropriate."                The

final decision adopted the initial decision by denying A.R.'s

Medicaid application.

     On   appeal,   A.R.   contends   that    DMAHS's   decision   was    not

supported by credible evidence because the Board never asked in

writing that PNC verify in writing what had occurred with the

account and it denied A.R.'s application for benefits the day


                                      5
                                                               A-0077-16T4
after the conference call.        He alleges that consistent with

N.J.A.C. 10:71-2.3(c), he should have been given an exceptional

circumstances extension of time to submit the verification.                  He

argues that he satisfied the requirement to assist the Board but

that the Board did not assist him with obtaining the verification

needed for his eligibility.

                                  II.

     We review an agency's decision for the limited purpose of

determining   whether   its   action    was   arbitrary,   capricious        or

unreasonable.   "An administrative agency's decision will be upheld

'unless there is a clear showing that it is arbitrary, capricious,

or unreasonable, or that it lacks fair support in the record.'"

R.S. v. Div. of Med. Assistance & Health Servs., 434 N.J. Super.

250, 261 (App. Div. 2014) (quoting Russo v. Bd. of Trs., Police &

Firemen's Ret. Sys., 206 N.J. 14, 27 (2011)).              "The burden of

demonstrating the agency's action was arbitrary, capricious or

unreasonable rests upon the [party] challenging the administrative

action."   E.S. v. Div. of Med. Assistance & Health Servs., 412

N.J. Super. 340, 349 (App. Div. 2010) (alteration in original)

(quoting In re Arenas, 385 N.J. Super. 440, 443-44 (App. Div.

2006)).

     "Medicaid is a federally-created, state-implemented program

that provides 'medical assistance to the poor at the expense of


                                   6
                                                               A-0077-16T4
the public.'"   In re Estate of Brown, 448 N.J. Super. 252, 256

(App. Div.) (quoting Estate of DeMartino v. Div. of Med. Assistance

& Health Servs., 373 N.J. Super. 210, 217 (App. Div. 2004)),

certif. denied, In re Estate of Brown, 230 N.J. 393 (2017); see

also 42 U.S.C. § 1396-1.   To receive federal funding, the State

must comply with all federal statutes and regulations.        Harris v.

McRae, 448 U.S. 297, 301 (1980).

     In New Jersey, the Medicaid program is administered by DMAHS

pursuant to the New Jersey Medical Assistance and Health Services

Act, N.J.S.A. 30:4D-1 to -19.5.       Through its regulations, DMAHS

establishes "policy and procedures for the application process."

N.J.A.C.   10:71-2.2(b).   "[T]o      be   financially   eligible,     the

applicant must meet both income and resource standards."          Brown,

448 N.J. Super. at 257; see also N.J.A.C. 10:71-3.15; N.J.A.C.

10:71-1.2(a).

      The county welfare boards (CWA) evaluate eligibility. They

exercise "direct responsibility in the application process to

. . . [r]eceive applications."        N.J.A.C. 10:71-2.2(c)(2).      "The

process of establishing eligibility involves a review of the

application for completeness, consistency, and reasonableness."

N.J.A.C. 10:71-2.9.

     The Board "shall verify the equity value of resources through

appropriate and credible sources . . . .           If the applicant's


                                  7
                                                             A-0077-16T4
resource statements are questionable, or there is reason to believe

the identification of resources is incomplete, the [Board] shall

verify the applicant's resource statements through one or more

third parties."    N.J.A.C. 10:71-4.1(d)(3).     The applicant is

responsible for cooperating fully with the verification process

if the CWA has to contact the third party in reference to verifying

resources.   N.J.A.C. 10:71-4.1(d)(3)(i).    The applicant "shall

provide written authorization allowing the [Board] to secure the

appropriate information."   Ibid.

     Here, the Board questioned the reported increase in A.R.'s

PNC investment account and asked for verification.   A.R. contends

that the final decision was not supported by credible evidence

because the Board never asked in writing for PNC to provide a

written explanation about the increase in the account.

      N.J.A.C. 10:71-4.1(d)(3) provides that if an applicant's

identification of resources is incomplete, the Board must verify

the resource statements through a third party.   This record shows

that the Board asked for verification about the PNC account on

February 13, when the application was made, and again on June 15,

September 29, and October 27, 2015.

     We disagree with A.R.'s argument that when SPS told the Board

what the PNC bank representative had said about A.R.'s account,

that this information was adequate verification of A.R.'s PNC


                                 8
                                                         A-0077-16T4
account.    This statement was not credible evidence that the bank

statement was mistaken.        The regulations did not require the Board

to accept this type of representation as proof that the bank made

an error.   It was clear the Board wanted written verification from

PNC about the account.         Otherwise it simply would have approved

A.R.'s application on June 25 once SPS explained its understanding

of the account increase.

     A.R. contends that he should have been given more time to

provide    verification   of    the   account.   The   Board   denied     his

application on October 28, 2015, just one day after a conference

call with PNC.    He contends his situation presented an exceptional

case, warranting an extension.

      The regulations establish timeframes to process a Medicaid

application, with the "[d]ate of effective disposition" being the

"effective date of the application" where the application has been

approved.    N.J.A.C. 10:71-2.3(b)(1).      "The maximum period of time

normally essential to process an application for the aged is

[forty-five]     days."        N.J.A.C.   10:71-2.3(a).        New   Jersey

regulations recognize:

            there will be exceptional cases where the
            proper processing of an application cannot be
            completed within the [forty-five day] period.
            Where substantially reliable evidence of
            eligibility is still lacking at the end of the
            designated period, the application may be
            continued in pending status. In each such


                                      9
                                                                A-0077-16T4
            case, the [Board] shall be prepared to
            demonstrate that the delay resulted from one
            of the following:

                 . . . .

            (2) A determination to afford the applicant,
            whose   proof   of   eligibility    has   been
            inconclusive, a further opportunity to develop
            additional evidence of eligibility before
            final action on his or her application.

            [N.J.A.C. 10:71-2.3(c)(2).]

     A.R.'s application was made in February 2015 and still was

pending in October 2015.       This was considerably past the standard

timeframe to approve or reject the application.           By October, PNC

advised that it would not provide the verification sought by the

Board.     Although A.R. wanted additional time, it was another two

months until the requested verification was received from PNC.

There was nothing arbitrary, capricious or unreasonable about not

extending the deadline further in light of PNC's representations

that it would not provide verification and the time that already

had elapsed.

     A.R.     claims   he    satisfied    N.J.A.C.   10:71-2.2(d)(2)          by

assisting the Board in trying to verify the account.             He argues

the Board did not assist him as required by N.J.A.C. 10:71-2.2(c).

However,    although   the   Board   is   responsible   for   assisting       an

applicant, the regulations did not create an affirmative duty upon




                                     10
                                                                A-0077-16T4
the Board to procure all documents necessary to complete the

application, especially when A.R. had SPS as his representative.

     Here, DMAHS rendered its final decision after interpreting

its own regulations.   We may reverse only upon a showing that the

DMAHS acted arbitrarily, capriciously or unreasonably. "Deference

to   an   agency   decision   is    particularly   appropriate    where

interpretation of the Agency's own regulation is in issue." R.S.,

434 N.J. Super. at 261 (quoting I.L. v. Div. of Med. Assistance &

Health Servs., 389 N.J. Super. 354, 364 (App. Div. 2006)).        It is

not arbitrary, capricious or unreasonable for DMAHS to deny an

application that did not have the information necessary to verify

eligibility after giving several adjournments.

     Medicaid applications must be processed promptly and Medicaid

is intended to be a resource of last resort, reserved for those

who have a proven financial or medical need for assistance.          See

N.E. v. Div. of Med. Assistance & Health Servs., 399 N.J. Super.

566, 572 (App. Div. 2008).

     Affirmed.




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