Full Opinion

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION This opinion shall not "constitute precedent or be binding upon any court." Although it is posted on the internet, this opinion is binding only on the 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-1276-25 H.K., Petitioner-Appellant, v. MIDDLESEX COUNTY BOARD OF SOCIAL SERVICES, Respondent-Respondent. Submitted October 20, 2026 – Decided November 12, 2026 Before Judges Gooden Brown and Bergman. On appeal from the New Jersey Department of Human Services, Division of Medical Assistance and Health Services. Simon P. Wercberger LLC, attorneys for appellant (Eliyahu Pekier, on the briefs). Apruzzese, McDermott, Mastro and Murphy, PC, attorneys for respondent Middlesex County Board of Social Services (Kyle J. Trent, of counsel and on the brief). Jennifer Davenport, Attorney General, attorney for respondent Department of Human Services, Division of Medical Assistance and Health Services (Sookie Bae- Park, Assistant Attorney General, of counsel; Francis X. Baker, Deputy Attorney General, on the brief). PER CURIAM Petitioner H.K. 1 appeals from a final agency decision of the New Jersey Division of Medical Assistance and Health Services (Division), which adopted an Administrative Law Judge's (ALJ) initial decision affirming the Middlesex County Board of Social Services' (MCBSS) denial of petitioner's Medicaid application. We affirm. I. On April 4, 2024, through a designated authorized representative (DAR), petitioner applied for Medicaid benefits under the Aged, Blind, Disabled program. On December 31, 2024, before acting on the application, MCBSS issued a request for information (RFI). The RFI sought, among other things, additional TD Bank and Wells Fargo records and specifically advised that MCBSS had identified "a significant change in balance" in petitioner's Wells Fargo account ending in 3758 for July 2021 through August 2021 and June 2024 through December 2024. As to that account, the RFI directed petitioner to 1 We use initials to protect the privacy interests of petitioner and his family members. A-1276-25 2 provide "all pages of bank statements for these months, along with written explanation and verification of all deposits and withdrawals into/from your account." The RFI required a response by January 14, 2025, and further instructed that if petitioner did not have the requested information, he should "send a letter of explanation." On January 14, 2025, the DAR emailed MCBSS a partial response. The response included some, but not all, of the requested bank statements. As to the Wells Fargo account, the response included statements from August 1, 2024 through December 31, 2024, but did not include the statements requested for July 2021, August 2021, June 2024, or July 2024. The DAR also explained that the Wells Fargo account was in petitioner's ex-wife's name and that petitioner had been added to the account when they intended to live together, "which is why the checks were rerouted to her account." The DAR did not, however, provide written explanations for the deposits or withdrawals reflected on the Wells Fargo statements. Instead, the email stated: "If there [were] any additional withdrawals that verification was not provided, please penalize as opposed to denying." The Wells Fargo statements submitted by petitioner reflected multiple deposits through Zelle from J.K., petitioner's relative. The record is not uniform A-1276-25 3 as to the exact number and total amount of those deposits, but their range was identified between $1,105.00 and $1,205.00.2 On January 31, 2025, MCBSS denied the application, stating petitioner had "failed to provide requested information required to determine eligibility in a timely manner." Petitioner requested a fair hearing, and the matter was transmitted to the Office of Administrative Law. At the September 30, 2025 hearing, Kirk Eichenlaub, a Human Services Specialist 3 for MCBSS, testified the denial was based on petitioner's failure to provide verification or explanation for the Zelle deposits into the Wells Fargo account. Eichenlaub also acknowledged that MCBSS later accepted petitioner's explanations and documents relating to the TD Bank account, and that the Wells Fargo Zelle deposit documentation remained the outstanding issue. Miri Rothberg, supervisor for petitioner's representative, testified that in her view, the RFI did not specifically require an explanation of the Zelle deposits because, based on her prior experience, a county agency would ordinarily expressly state if it wanted explanations for "Zelle, Venmo, etc." She further 2 This discrepancy does not affect the outcome because the denial turned on the absence of any written explanation for the recurring deposits shown on the produced statements, not their amounts. A-1276-25 4 testified she believed MCBSS should have understood the deposits were not income because the sender, J.K., was petitioner's relative. Rothberg acknowledged, however, that her office did not provide a written explanation for the deposits in response to the RFI because she "didn't believe that it was necessary." The hearing record also reflected petitioner later filed a second Medicaid application and included a September 29, 2025, letter explaining the Zelle transfers were from petitioner's daughter for daily living expenses and should not be treated as income. The ALJ noted it appeared petitioner was later approved after that explanation was submitted, although the approval itself is not formally included in the record. In a written decision, the ALJ affirmed MCBSS's denial. The ALJ found MCBSS's RFI sufficiently clear and concluded petitioner "failed to provide information that the Board specifically and clearly requested in its request for information." The ALJ also acknowledged MCBSS waited nearly nine months before issuing the RFI and failed to notify petitioner of the delay as required by regulation but concluded the delay did not warrant a finding of eligibility where the requested documentation had not been provided. The initial decision became the final agency decision pursuant to N.J.S.A. 52:14B-10(f). A-1276-25 5 On appeal, petitioner argues: (1) MCBSS violated federal and state timeliness regulations by failing to process the application within forty-five days and by failing to issue a supplemental RFI before denying the application; and (2) the denial was arbitrary, capricious, and unreasonable because MCBSS breached its duty to communicate with and assist the applicant. II. Our review of an agency's determination is limited. "Our function is to determine whether the administrative action was arbitrary, capricious or unreasonable." Burris v. Police Dep't, Twp. of W. Orange, 338 N.J. Super. 493, 496 (App. Div. 2001) (citing Henry v. Rahway State Prison, 81 N.J. 571, 580 (1980)). The agency's decision must be supported by "substantial evidence" in the record as a whole. Circus Liquors, Inc. v. Governing Body of Middletown Twp., 199 N.J. 1, 10 (2009) (quoting Mazza v. Bd. of Trs., Police & Firemen's Ret. Sys., 143 N.J. 22, 25 (1995)). A presumption of validity attaches to the agency's action, Brady v. Bd. of Rev., 152 N.J. 197, 210 (1997), and courts defer to the agency's expertise in administering a regulatory scheme, In re Virtua-West Jersey Hosp. Voorhees for a Certificate of Need, 194 N.J. 413, 422 (2008) (citation omitted). We are not, however, bound by an agency's interpretation of a statute or strictly legal issue. In re Carter, 191 N.J. 474, 483 (2007) (citations omitted). A-1276-25 6 Our review is guided by three inquiries: "(1) whether the agency's decision conforms with relevant law; (2) whether the agency's decision is supported by substantial credible evidence in the record; and (3) whether, in applying the law to the facts, the administrative agency clearly erred in reaching its conclusion. " Twp. Pharm. v. Div. of Med. Assistance & Health Servs., 432 N.J. Super. 273, 283-84 (App. Div. 2013) (citing In re Stallworth, 208 N.J. 182, 194 (2011)). "Medicaid is a federally-created, state-implemented program" intended to provide medical assistance to persons whose income and resources are insufficient to meet the costs of necessary care. Matter of Est. of Brown, 448 N.J. Super. 252, 256-57 (App. Div. 2017); see also 42 U.S.C. § 1396-1. In New Jersey, the Division administers the Medicaid program. N.J.S.A. 30:4D-4, -7. County welfare agencies evaluate applications and determine eligibility. N.J.S.A. 30:4D-7a; N.J.A.C. 10:71-2.2(a); N.J.A.C. 10:71-3.15. An applicant bears responsibility to assist the county agency in securing corroborating evidence. N.J.A.C. 10:71-2.2(e)(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. An application must be substantiated with corroborative evidence from pertinent sources. N.J.A.C. 10:71-3.1(b). To determine financial eligibility, the agency must assess both income and resources. Brown, 448 N.J. Super. at 257 (citations omitted). "All income, A-1276-25 7 whether in cash or in-kind, shall be considered in the determination of eligibility" unless specifically exempted. N.J.A.C. 10:71-5.1(b). The agency must also evaluate periodic and irregular income. N.J.A.C. 10:71-5.2(a), (b). Certain family contributions may be treated as income rather than excluded loans, depending on their nature and frequency. N.J.A.C. 10:71-5.3(a)(6)(i). Gifts may also be countable income unless they fall within a narrow exclusion for small occasional gifts. N.J.A.C. 10:71-5.4(a)(8)(i). Resources likewise must be identified and verified through credible sources. N.J.A.C. 10:71-4.1(b), (d). A. Petitioner first contends MCBSS violated the forty-five-day processing requirement set forth in 42 C.F.R. § 435.912(c)(3) and N.J.A.C. 10:71-2.3(a) and failed to provide the written notice of delay required by N.J.A.C. 10:71 - 2.3(d). The record supports petitioner's contention that MCBSS did not comply with the ordinary processing timetable. Petitioner's application was filed on April 4, 2024. MCBSS did not issue its RFI until December 31, 2024, approximately eight months later. The ALJ expressly acknowledged that MCBSS took "almost nine months after the application date" to act and failed to notify petitioner of the delay as required by regulation. A-1276-25 8 However, these facts do not end the analysis. Here, the dispositive question is whether the January 31, 2025, denial was arbitrary, capricious, unreasonable, or unsupported by substantial credible evidence. Although the delay was regrettable and contrary to the governing timing provisions, the regulations do not provide an applicant shall be deemed eligible simply because the agency acted outside of the forty-five day period. Eligibility still must be established in relation to the legal requirements of the program. See N.J.A.C. 10:71-3.15; N.J.A.C. 10:71-3.1(b); N.J.A.C. 10:71-2.2(e)(2). Here, the denial was not based on delay. It was based on petitioner's failure to provide requested financial verifications necessary for MCBSS to determine eligibility. As the ALJ recognized, the agency's failure to process the application more promptly did not relieve petitioner of the obligation to substantiate his eligibility. Nor does the later, apparent approval of a second application compel reversal of the first denial. The later application included an explanation for the Zelle deposits that had not been supplied in response to the first RFI. Review of the January 31, 2025, denial must be based on the record before the agency at that time, not on later-submitted material. We therefore concur with the ALJ, as adopted by the final agency decision, that the delay, while improper, does not invalidate an otherwise A-1276-25 9 supported denial, and conclude this determination was not arbitrary, capricious or unreasonable. B. Petitioner next contends MCBSS should have issued a second, more specific RFI before denying the application and that the initial RFI was too general because it did not expressly identify "Zelle deposits." The record does not support these contentions. The December 31, 2024, RFI did not make a vague or open-ended demand. It specifically requested, as to the Wells Fargo account, "all pages of bank statements" for identified months "along with written explanation and verification of all deposits and withdrawals into/from your account." The RFI also instructed petitioner to send a letter of explanation if he did not have the requested information. The Zelle transfers shown on the Wells Fargo statements were deposits into petitioner's account and thus fell squarely within the express terms of the RFI. Petitioner's DAR produced some Wells Fargo statements and those statements showed multiple Zelle deposits. Despite the RFI's request, no written explanation was provided for those deposits, or for the withdrawals and other transactions in the account. In addition, some of the requested Wells Fargo statements were not produced at all. On this record, MCBSS did not deny the A-1276-25 10 application for failure to submit unrequested information; the denial of the application was based on petitioner's failure to provide information the RFI specifically requested. We further conclude MCBSS was not required to issue a second RFI repeating the original demand in more granular terms. The governing regulations impose on the applicant the obligation to assist in securing evidence that corroborates his statements. N.J.A.C. 10:71-2.2(e)(2). Once MCBSS sought additional information and afforded petitioner time to respond, petitioner had to either provide the requested information, explain why it was unavailable, or request additional time or assistance. The DAR did not do so. Instead, she decided that no explanation for the Zelle deposits was necessary and asserted MCBSS should "penalize as opposed to denying" if the additional verification as requested was lacking. The ALJ reasonably concluded that, had MCBSS responded further, it would merely have "redirected petitioner to its original request for a written explanation of all deposits." We conclude the above findings by the ALJ as affirmed in the final agency decision were not arbitrary because they were based on credible, substantial evidence in the record, and therefore were not error. A-1276-25 11 C. Petitioner also argues the Board's affirmance of the ALJ's denial was arbitrary and capricious because MCBSS breached its duty to assist and communicate with Medicaid applicants under N.J.A.C. 10:71-2.2(c), and because 42 C.F.R. § 435.952(d) barred denial without a further request for information. We are unpersuaded. County welfare agencies carry responsibilities in the application process, including assisting applicants in exploring eligibility. N.J.A.C. 10:71-2.2(c)(3). But that obligation does not eliminate the applicant's own regulatory responsibilities. The applicant remains the primary source of information and must assist the agency in securing corroborating evidence. N.J.A.C. 10:71- 1.6(a)(2); N.J.A.C. 10:71-2.2(e)(2). The record clearly shows MCBSS sought additional information before denying the application. Its RFI requested the missing statements and written explanations and gave petitioner adequate time to respond. That is the very kind of request contemplated by 42 C.F.R. § 435.952(c) and (d). Although petitioner's DAR responded, she did not fully comply with the request. She failed to advise MCBSS she was unable to obtain the explanation as required, request more time, or request MCBSS to assist in securing the missing A-1276-25 12 information. Instead, she affirmatively chose not to provide an explanation because she believed an explanation was unnecessary. Moreover, we conclude the unexplained deposits were not immaterial. MCBSS was required to determine petitioner's countable income and available resources. N.J.A.C. 10:71-5.2; N.J.A.C. 10:71-4.1. The fact that the deposits appeared to come from a relative did not automatically exclude them from consideration. Depending on the circumstances, recurring family contributions may constitute countable income rather than excluded loans. N.J.A.C. 10:71- 5.3(a)(6)(i). Other transfers may be gifts, which also may be countable unless they fall within a narrow exception. N.J.A.C. 10:71-5.4(a)(8)(i). Therefore, without an explanation of the source and purpose of the deposits, MCBSS could not reasonably determine whether they were income, gifts, loans, or evidence of previously unreported resources. Under these circumstances, we conclude the ALJ correctly determined MCBSS was entitled to require further explanation and verification before determining eligibility. The agency's denial was not arbitrary or capricious; it reflected petitioner's failure to provide requested information necessary to evaluate eligibility. In sum, although we agree MCBSS did not comply with the normal regulatory timeframe for processing the application, MCBSS failed to provide A-1276-25 13 timely notice of the delay, and it did not provide an amended RFI, these actions do not compel reversal of a denial otherwise supported by the record. Additionally, the record supports the ALJ's finding that petitioner failed to provide the financial information and explanations MCBSS specifically requested in its initial RFI, which we deem integral in determining his eligibility for Medicaid benefits. To the extent we have not specifically addressed petitioner's remaining arguments, it is because we have determined they lack sufficient merit to warrant discussion in a written opinion. R. 2:11-3(e)(1)(D), (E). Affirmed. A-1276-25 14