Case Studies

Elder & Disability Law Attorney Reunites Family After Early End to Involuntary Commitment Order

Back view of patient woman sitting on bed in hospital ward, looking away at window and hope everything will be better.

Elder and disability law attorney Jane Fearn-Zimmer recently assisted a New Jersey family with legal advice/advocacy and secured the early release of their loved one, after a series of unfortunate events culminated in an involuntary commitment order, apparently due to a medical misdiagnoses.

In this case, a family member expressed concern to the relative’s new physician, who did not know the patient well, and had spent minimal time with the patient. The patient was going through a very difficult marital separation and was understandably upset. The middle-aged patient had known no pre-existing diagnosis of chronic mental illness and had cared for other family members for many years while also maintaining employment.

The family member was escorted to the hospital by the police from the medical office. The patient was promptly made the subject of an involuntary commitment order and was transferred to a behavioral health facility. Jane was retained by the family to help get the relative released.

Getting in touch with a medical facility’s administrator can be challenging even before the pandemic, but since Jane knows the ins-and-outs of the behavioral health system, it was seamless for her to communicate quickly and efficiently with the right people. She was able to get the facility’s executive and its medical doctor to clear the patient for release prior to the scheduled involuntary commitment hearing date after she learned that the patient was not receiving appropriate care for a medical issue and group therapy sessions could not be held because the patients were confined to their rooms. Both patient and family were thrilled to be reunited.

“Jane helped me during my darkest time. She gave me hope as she acted in the most professional and attentive manner throughout the process of gaining our discovery. She was very attentive to all my needs, answering my concerns as they came up daily,” said the client “This type of reassurance was a Godsend to me and enabled me to keep my composure knowing that I had a loyal, intelligent human on the outside representing my best interests and protecting my human rights. I feel forever indebted to her for her kindness and dedication to working so hard on my behalf, presenting a factual case, which enabled her to gain me an early emergency, after a lengthy and difficult stay. I am forever grateful for her.”

Questions? Let Jane know.

Medicaid Caregiver Child Exemption Success Story in New Jersey:

Home Saved & Nursing Home Paid

Property insurance and security concept

Seasoned elder law attorney Jane M. Fearn-Zimmer, obtained a landmark Medicaid Final Agency Decision for her elderly, ailing client and her family after a three-year long dispute with the Division of Medical Assistance & Health Services and the Burlington County Board of Social Services in New Jersey. The Appellate Court ultimately ruled in favor of Jane’s client and reversed a Medicaid penalty computed on the sum of $179,000, based on the equalized value of the family home, which was gifted by the elderly mother to her caregiver child. The final ruling is based on the exemption for a transfer to a caregiver child. This exception to the Medicaid transfer penalty is intended to encourage children to take care of their aging parents so the parent can remain at home as long as possible. The conditions of the exemption may be met where the parent has a documented need for 24/7 skilled nursing care during the two years immediately prior to the date the parent enters into a nursing home and the child provides such vital, round-the-clock care for the parent during that period. If these conditions are met, then the parent may transfer their home to the child without incurring any Medicaid penalty period, provided that the parent is otherwise financially eligible for Medicaid.

This case is a significant breakthrough, because since approximately 2015, there has been a substantial decrease in caregiver child exemptions awarded on Medicaid applications in the State of New Jersey, due in part to an internal change in the State’s Medicaid policy. Attorneys throughout the state began to notice that requests for caregiver child status were denied, particularly where the proposed caregiver child was gainfully employed, or working for pay, whether inside or outside the home.


In 2007, the adult child in the Burlington County case gave up his own home out of state and returned to New Jersey, moving back into the aging parents’ home to assist them as they progressed through age and various illnesses. The child cared for the parents for seven years while residing in their home and earned income by working on long-term projects as an independent contractor from the parents’ home. The level of support and care provided by the child increased with the parents’ progressive declines. After the client’s husband passed away in 2015, and the client entered a nursing facility, the mother transferred the home to the child under the caregiver child exemption, allowing the elderly parent to apply for Medicaid coverage to pay for her nursing home bill.

As mentioned above, in order to qualify for the caregiver child exception, the caregiver child must reside in the parent’s home and must serve as the parent’s caregiver for a period of two years. In this particular case, the child had already served this role for seven years.

Medicaid is a public welfare benefit program with a countable resource threshold of less than $2,000. Unless an individual has less than $2,000 in countable assets (defined to include most annuities, bank and brokerage accounts, United States savings bonds, cash, the cash surrender value of whole life insurance, individual retirement accounts, and deferred compensation plans including 401(k) and 457(b) accounts) during the month of Medicaid eligibility sought, the individual will not qualify for Medicaid and any Medicaid penalty period will not begin to run.

In this case, the first and second Medicaid applications, along with the caregiver child exemption application, were denied, in part based on the child’s work at home, resulting in the imposition of a steep Medicaid penalty period of nearly 18 months on the client’s application. This meant that Medicaid would deny any payment for a period of nearly 18 months, for the elderly mother’s skilled nursing care during the penalty period. Medicaid, combined with her modest social security income, would not pay for her care, until the Medicaid penalty period was run. Because the elderly parent was already “spent down” for Medicaid, this meant that there was no source to pay for her skilled nursing care, the cost of which escalated to well over $200,000 during the Medicaid penalty period. This situation placed both the child and the aging parent in financial jeopardy.

The Result:

Jane undertook the case at the Fair Hearing level, first challenging the improper Medicaid penalty in Federal Court, where the County acknowledged during a hearing that it would no longer continue to condition the caregiver child exemption on unemployment by the caregiver child. However, the County declined to remove the Medicaid penalty, now claiming that the mother, who was diagnosed with dementia and used a walker, did not require round-the-clock care. The County had claimed that the father, who was diagnosed with multiple serious, chronic health conditions, was allegedly caring for the mother. Jane took the case to a Medicaid Fair Hearing before an administrative law judge resulting in a very strong initial decision finding that all of the requirements for the caregiver exemption were met.

The Initial Decision was upheld by the Agency Director in a Final Agency Decision, which led to the issuance of a new Medicaid determination removing the $179,000 Medicaid penalty period for the home transfer. As a result of the decision, the family home has been saved and the nursing home will be paid through Medicaid.

The Decision and its Significance:

Since approximately 2015, the State of New Jersey very frequently denied caregiver child applications on the basis of a child’s ability to work while providing care for the parent. However, unless the child was wealthy or receiving disability benefits, he or she would have no funds to pay for the household expenses. Jane managed to overcome prior policy through relentless litigation in both Federal Court and the State Administrative Fair Hearing System over a three-year period.

In the State Administrative Fair Hearing, Jane won a favorable initial decision by strategically examining and presenting the medical records, utilizing a physiatrist as an expert witness, and building upon other arguments and facts in the case.

Unfortunately, the vast majority of the 21 favorable Initial Decisions finding caregiver child status since 2015 on Medicaid Fair Hearings in New Jersey were reversed and ultimately denied at the Final Agency Decision level based on an alleged lack of credible medical evidence. Jane’s case was an exception, as it was eventually upheld in favor of her client by the Agency Director.

The decision has far-reaching implications, demonstrating that there is hope for families whose homes could otherwise be subjected to a Medicaid lien upon the death of the parent under the Medicaid estate recovery program. For example, elderly individuals in need of skilled nursing care as the result of Alzheimer’s, Parkinson’s, ALS, MS or other chronic illnesses, who need to pay for long-term care but still want to protect their home, may potentially be eligible for the caregiver child exemption, under the right circumstances, through careful Medicaid planning and advocacy in the Medicaid application process. Eligibility for the caregiver child exemption is very fact-specific and the results obtained in this case are not a guarantee of a specific result in another case. However, with the right facts, establishing eligibility for the exemption may be possible. The beneficiaries of a decision such as this one are elderly, their families, and the nursing home industry.

This is a precedential decision based on black letter federal law applicable in all 50 states. It is particularly relevant in New Jersey, Massachusetts, Ohio and Connecticut, which have had some apparent tension with the states or commonwealths’ attempts to limit the caregiver child exception to the Medicaid transfer penalty.

Questions? Let Jane know.