Massachusetts Appeals Court Case of Kaptchuk v. Director of the Office of Medicaid Shows That MassHealth Fair Hearing Appeals Should Not Be Treated Lightly

In the 2013 Massachusetts Appeals Court case of Kaptchuk v. Director of Office of Medicaid, a MassHealth denial was upheld.  An application for MassHealth benefits for Nina Kaptchuk had been denied due to “disqualifying transfers.”   A “fair hearing” had been requested, and the denial was not overturned.  A so-called 30A appeal was filed with the Superior Court under Massachusetts General Laws, Chapter 30A, Section 14, and the judge there did not overturn the denial.  On this further appeal to the Massachusetts Appeals Court, the MassHealth denial remained in effect.

The Superior Court and the Massachusetts Appeals Court only reviewed the facts presented at the fair hearing to see if the hearing officer analyzed the facts fairly. Unfortunately, new or better facts cannot be presented after a fair hearing. The Massachusetts Appeals Court suggested that the preparation for the fair hearing was inadequate. Transfers to or for the benefit of a disabled person can be treated as non-disqualifying, but the lawyer handling the appeal apparently did not introduce sufficient evidence proving the mental illness of the daughter who received amounts of money from Nina Kaptchuk.

Even though MassHealth regulations do not state what the MassHealth appellant’s burden of proof is, this Massachusetts Appeals Court decision states that the burden was on the MassHealth appellant to produce “convincing” evidence.

The point that should be taken from this case:  Do not treat any fair hearing lightly. Any point you want to make should be proven from every possible angle, and do not presume common sense. Most especially, do not assume that you will get another chance to explain the facts as you see them.

The decision is pasted below:

Appeals Court of Massachusetts. Nina KAPTCHUK v. DIRECTOR OF the OFFICE OF MEDICAID & another.FN1

FN1. Office of Medicaid Board of Hearings.

No. 12–P–1279. June 4, 2013.

By the Court (RUBIN, FECTEAU & HINES, JJ.).

MEMORANDUM AND ORDER PURSUANT TO RULE 1:28 *1 Plaintiff Nina Kaptchuk appeals from a judgment of the Superior Court that affirmed a decision of the Office of Medicaid Board of Hearings (board). In connection with Kaptchuk’s application for long-term nursing care benefits under the State Medicaid program, commonly known as MassHealth, the board disallowed approximately $64,800 as “disqualifying transfers” made during the five year “look-back” period prior to Kapchuk’s admission to the nursing home. See 130 Code Mass. Regs. §§ 520.019(B)(2), 520.019(C) (2009). Consequently, the board determined that Kaptchuk did not qualify for Medicaid benefits from September 13, 2010, through May 6, 2011.

The board found the verbal assertions made on Kaptchuk’s behalf by her counsel insufficient to carry Kaptchuk’s burden of establishing that the transfers at issue, allegedly made to cover the cost of Kaptchuk’s adult daughter’s monthly rental payments, did not constitute “disqualifying transfers” because they were made “exclusively for a purpose other than to qualify for MassHealth” benefits. 130 Code Mass. Regs. § 520.019(F)(1) (2009). On appeal, Kaptchuk avers that the board’s decision is unsupported by substantial evidence, as well as based on an error of law and is arbitrary and capricious. See G.L. c. 30A, §§ 14(7), 1(6); Forman v. Director of the Office of Medicaid, 79 Mass.App.Ct. 218, 221 (2011) (“reasonable interpretations by an agency of its governing law, which are supported by substantial evidence, must be respected”). In essence, Kaptchuk argues that it cannot fairly be inferred that she intended the transfers to qualify her for Medicaid benefits because: those transfers were commenced roughly four years before she was admitted to the nursing home; the transfers were made to assist her mentally ill daughter; and the transfers were monthly payments of a relatively nominal amount. The board found that Kaptchuk was admitted to a nursing home in April, 2010. During the previous sixty months, Kaptchuk made payments totaling $59,800, apparently to her adult daughter. Counsel for Kaptchuk represented to the board that those payments were to cover Kaptchuk’s adult daughter’s rent (about $1,150 per month).FN2 Particularly, Kaptchuk’s counsel represented that the daughter was mentally ill and that Kaptchuk’s intent was simply “to pay the daughter’s rent.” Kaptchuk did not introduce any evidence supporting counsel’s assertion that the daughter was, in fact, mentally ill, although the board found that guardianship proceedings at one time had been initiated but subsequently withdrawn and there were at least some unauthenticated documents before the board from doctors describing the daughter as schizophrenic. Moreover, it is undisputed that the daughter has never received Social Security disability income benefits or any other form of public assistance.

FN2. In addition, Kaptchuk transferred $5,000 in 2006 to her son and concedes that this payment constitutes a disqualifying transfer.

We agree with the judge’s conclusion that the board’s decision was not in error. Kaptchuk bore the burden to prove by convincing evidence that the money was transferred for an exclusive purpose other than to qualify for Medicaid, and verbal assurances, such as those from her attorney, to the effect that Kaptchuk was not considering Medicaid at the time of the transfers and that the transfers were to benefit Kaptchuk’s adult daughter were insufficient to satisfy that burden. See Gauthier v. Director of the Office of Medicaid, 80 Mass.App.Ct. 777, 785 (2011). The judge found significant the lack of any evidence that these monthly payments were, indeed, rental payments, that the daughter was not able to afford these payments without her mother’s financial assistance, and that the daughter was permanently or substantially disabled.

*2 As the judge noted, while there is some logic to Kaptchuk’s argument, it lacks an evidentiary basis. Given that the burden of persuasion is on Kaptchuk and she, based on the above, failed to meet this burden, the board’s decision is supported by substantial evidence. See G.L. c. 30A, § 14(7).

Additionally, Kaptchuk claims that the board clearly erred by concluding that the rental payments were not for “fair market value,” relying on Gauthier v. Director of the Office of Medicaid, supra at 786–787. See 130 Code Mass. Regs. § 520.019(F)(2) (2009). Her reliance is misplaced, however. While there was no evidence to indicate that the daughter did not receive fair market value for her rental, there was no evidence, unlike in Gauthier, establishing that Kaptchuk received a tangible benefit equivalent to the rental payments she made to her daughter. See id. at 784.

Judgment affirmed.