On May 5, 2025, the New Jersey Appellate Division issued its decision in A.D. v. Essex
County Department of Family Services, a case that serves as a clear—and
costly—reminder that Medicaid is a program grounded in strict procedural compliance.
The court’s ruling reinforced a message elder law practitioners know well: if a Medicaid
application lacks the right documentation, even technical eligibility won’t save it.
The decision underscores the need to meet every regulatory requirement. Even a
plausible explanation will not suffice if it doesn’t come with the documentation that
regulations explicitly require.
The Background
A.D., (“Petitioner”), lived in an assisted living facility in West Orange, and applied for
Medicaid benefits in December 2022 through a designated authorized representative
(DAR), requesting coverage retroactive to November 1, 2022. The initial application was
denied after the DAR failed to respond to a “request for information” issued by the
Division of Medical Assistance and Health Services (DMAHS).
A second application was submitted in February 2023, but it too failed—this time
because of the following deficiencies.
First, the VA benefit letter submitted by the DAR did not include a detailed breakdown of
the Aid and Attendance (A&A) benefit versus other components of the VA survivor’s
pension. This breakdown is necessary to determine countable income and whether a
Qualified Income Trust (QIT) was needed. The DAR argued that no QIT was necessary,
but this could not be verified without complete VA documentation.
Second, the financial documents submitted showed that A.D. was over the $2,000
Medicaid resource limit on the requested eligibility date. Although Petitioner had written
a substantial check to the assisted living facility that would have brought the resources
below the limit, no proof that the check had been timely written was provided. As a
result, the agency treated the funds as still available, and therefore countable.
Lastly, in addition to financial requirements, Medicaid applicants must also meet the
clinical eligibility requirements for nursing care services. A.D. claimed clinically eligible
as of November 2022, stating that a Pre-Admission Screening (PAS) request was
submitted in December 2021, and that the State failed to timely conduct the screening.
However, under regulations, clinical eligibility is usually based on the completion of the
PAS—not the request date. The Appellate Division found no evidence of a December
2021 request. Instead, the documentation showed a PAS request was made on
December 2022, and medical eligibility was approved in January 2023.
These documentation gaps—the absence of a proper VA breakdown, unverified
payments, and no proof of a timely PAS request—formed the basis for the agency’s
denial and the Appellate Division agreed.
Regulatory Context: No Room for Ambiguity
The Medicaid application process is governed by an intricate set of regulations. This
case highlights three main regulatory principles in New Jersey that applicants must
heed.
- VA Letters Must Contain Specific Allocations
VA benefit letters must itemize amounts attributed to A&A, Widow’s Pension, and other
categories. A lump-sum statement is insufficient. A.D.’s letter lacked this detail,
preventing the agency from determining countable income or the need for a QIT. - Asset Limits Must Be Met and Verifiable
To be financially eligible for Medicaid, an applicant’s available resources cannot exceed
$2,000. Here, A.D.’s account balance exceeded that threshold. Though Petitioner
claimed to have written large checks that would have brought the resources under the
limit, the record lacked proof that these checks were drafted. Medicaid caseworkers will
only rely on documentary evidence. - Clinical Eligibility Is Based on Completion Date
Regulations tie Medicaid eligibility to the PAS completion date, not the PAS request
date. If the PAS is not completed within the required timeframes (14 to 30 days of the
request) the PAS date may be dated back to the request date. Unfortunately, in A.D.’s
case no documentation that the PAS was requested before December 2022 was
produced by Petitioner.
Why This Case Matters
While A.D. may have been functionally and financially eligible for Medicaid, they failed
to document that eligibility as required. This case drives home a demanding reality:
Medicaid is not a program of “close enough.” The regulatory framework mandates
documentation that is detailed and timely.
Takeaways for Applicants and Advocates
For elder law attorneys and family members assisting loved ones with Medicaid
applications, the lesson is critical:
- Get the right documentation—every time. Especially when dealing with complex
income sources like VA benefits, make sure you request and submit the full
breakdown of benefits. - Track asset levels carefully. If an applicant is relying on pending payments or
outstanding checks to bring assets below the threshold, submit proofs. - Know what income is countable and establish a QIT if the income exceeds the
allowable limits. - Request the PAS as soon as you know a Medicaid application is on the horizon –
as many as six months in advance if possible.
Conclusion
In this case the Appellate Division affirmed that Medicaid compliance is a matter of what
the regulations say, not what a well-meaning applicant thinks should suffice. This
decision underscores the need for meticulous documentation and procedural accuracy
at every step of the application process.
For those of us helping clients or loved ones navigate Medicaid, the message is clear:
precision is not optional—it’s everything.