Martin Fagan was injured in a motorcycle crash and entered a nursing home. In 2012, he began receiving Medicaid benefits. In 2015, he received a $2 million personal injury settlement, and the state discontinued his Medicaid benefits. Mr. Fagan transferred $879,453.32 of the settlement proceeds to his wife in two chunks. When Mr. Fagan reapplied for Medicaid, the state determined that he transferred assets for less than market value and imposed a transfer penalty.

Mr. Fagan appealed, arguing that because the transfers to his wife were pre-eligibility transfers, he could transfer an unlimited amount to her without incurring a penalty. The state upheld the penalty period, and Mr. Fagan sued for injunctive relief in federal court. The state and Mr. Fagan filed motions for summary judgment.

The U.S. District Court, District of Connecticut, grants summary judgment to the state, holding that the penalty period is appropriate. The court rules that any transfer to a community spouse made after the institutionalized spouse is Medicaid eligible is prohibited if it happens during the same period of institutionalization. According to the court, there is no reason why statutory language “should be interpreted to give an institutionalized individual, found ineligible for benefits upon redetermination, a second opportunity to make transfers to his spouse prohibited at the time of his initial eligibility determination when the coverage relates to the same period of institutionalization.” 

For the full text of this opinion, click here.

Once New York State determines a Medicaid applicant is no longer entitled to Medicaid, it sends a letter notifying the applicant that he or she may request a fair hearing. The state then sends two more letters, notifying applicants that a fair hearing has been requested and scheduled. If an applicant misses the hearing, a default judgment will be entered against him or her.

Two Medicaid applicants initiated a class action against the state of New York, claiming that the state does not provide proper notice before entering a default judgment. The applicants asked for a preliminary injunction, requiring the state to mail a default notice to applicants before their appeals are abandoned. The U.S. district court granted the applicants a preliminary injunction, holding that the applicants showed a likelihood of success on the merits based on federal and state regulations. The applicants filed a motion for summary judgment. The state argued that the applicants did not have standing because they did not show that they were injured by not receiving another notice.

The U.S. District Court, Eastern District of New York, grants the applicants’ motion for summary judgment and makes the preliminary injunction permanent. According to the court, the applicants demonstrated irreparable injury because the wrongful denial of Medicaid benefits is “the type of non-monetary, imminent harm that is properly characterized as irreparable.”

For the full text of this decision, go to: http://cases.justia.com/federal/district-courts/new-york/nyedce/2:2009cv05248/298636/162/0.pdf?ts=1490887205