What Should You Do If Your Medicaid Application Is Denied?

The short answer: read the notice, find the reason, and note the deadline, because in New Jersey it is short. A New Jersey Medicaid applicant has 20 days from the date of the denial notice to request a fair hearing. New York and Connecticut allow 60. Whether to appeal at all depends on why the application was denied. A denial for missing documents is usually best answered by supplying them and reapplying. A denial for excess income or assets may be correct, in which case the answer is planning and a new application, or may rest on a mistake about what counts, in which case a hearing is the remedy. A denial that imposes a transfer penalty is the one most worth fighting, because the agency’s calculation and its treatment of individual transactions are often wrong.

This article explains what a denial notice contains, the appeal deadlines and process in New Jersey, New York, and Connecticut, how a fair hearing works, when reapplying beats appealing, and how New Jersey’s process changed on July 1, 2026.

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Why Are Medicaid Applications Denied?

Denials of long-term care Medicaid fall into a few categories, and the right response differs for each:

• Failure to provide requested information. The most common reason. The county agency sent a Request for Information letter, the deadline passed, and the file was incomplete. Our article on what documents a Medicaid application requires describes what the agency expects.
• Excess resources. Countable assets above 2,000 dollars in New Jersey or New York, or 1,600 dollars in Connecticut, on the first day of the month. Sometimes correct; sometimes the agency counted an asset that is exempt, counted a joint account that belonged to someone else, or valued something wrongly.
• Excess income. In New Jersey, gross monthly income above the 2026 cap of 2,982 dollars without a Qualified Income Trust in place. New York and Connecticut have no income cap, so this ground does not arise there in the same form.
• Transfer penalty. The agency found transfers for less than fair value in the five-year look-back and imposed a period of ineligibility. These decisions turn on whether each transaction was a gift, whether an exemption applied, and whether the arithmetic was right.
• Clinical ineligibility. The nursing assessment did not find the need for a nursing facility level of care.
• Procedural grounds, such as a missed interview or an application filed in the wrong county.

The notice must state the reason and the applicable rule, and it must explain how to appeal. Read it against the file. An agency that denied for “failure to provide” a document that was in fact submitted, or that counted a resource the regulations exempt, has made an error a hearing can correct.

How Long Do You Have to Appeal?

Federal law sets an outer limit and lets states set shorter ones. Under 42 C.F.R. 431.221(d), the agency “must allow the applicant or beneficiary a reasonable time, not to exceed 90 days from the date that notice of action is mailed, to request a hearing,” and under 431.221(b) it “may not limit or interfere with the applicant’s or beneficiary’s freedom to make a request for a hearing.” The three states set very different periods.

New Jersey. Under N.J.A.C. 10:49-10.3(b)(3), “claimants shall have 20 days from the date of notice of Medicaid Agent or NJ FamilyCare program action in which to request a hearing.” The request is “any clear expression (submitted in writing)” that the claimant wants to present the case to a higher authority. Twenty days from the date on the notice, not from receipt, is the shortest deadline in the region and the one most often missed.

New York. Under 18 NYCRR 358-3.5, a fair hearing request for medical assistance “must be made within 60 days after the social services agency’s determination, action, or failure to act.” Requests go to the State Office of Temporary and Disability Assistance, which conducts hearings for the Department of Health.

Connecticut. The Department of Social Services requires a hearing request within 60 days of the date on the Notice of Action, schedules the hearing within 30 days of the request, and issues a decision within 60 days after the hearing, through its Office of Legal Counsel, Regulations and Administrative Hearings.

Submit the request in writing, keep proof of the date it was sent and received, and do not rely on a phone call. If the deadline is close, send the request first and assemble the argument afterward.

How Does a New Jersey Fair Hearing Work?

The county agency forwards the request to the Division of Medical Assistance and Health Services, which transmits the case to the Office of Administrative Law. An administrative law judge holds a hearing at which the applicant, usually through counsel, may present documents and witnesses and cross-examine the agency’s caseworker. The judge issues an Initial Decision. The Director of the Division then reviews it and issues a Final Agency Decision that may adopt, modify, reverse, or remand it. The Final Agency Decision may be appealed to the Superior Court, Appellate Division.

The process changed on July 1, 2026. During the unwinding of pandemic-era continuous enrollment, the Division operated under federal waivers that, among other things, let certain Initial Decisions in cases denied for excess income, excess resources, or failure to provide information become final automatically without Division review, and suspended the federal requirement of final action within 90 days. Medicaid Communication 26-06 announced that those waivers expired June 30, 2026. Since July 1, the Division again reviews every Initial Decision, using what it calls a streamlined process for the three routine categories in which it expects to issue brief decisions adopting the judge’s ruling, and the 90-day rule under 42 C.F.R. 431.244(f) applies again. An applicant who wants the Director to look closely at an adverse Initial Decision should file exceptions identifying a clear error or an unusual circumstance, since the Communication says detailed review will otherwise be rare.

A hearing is abandoned if the applicant fails to appear and does not respond within five days to the agency’s inquiry, so the hearing date must be kept.

Should You Appeal or Reapply?

Often both, and sometimes only the second.

Reapply when the denial was for missing documents or a curable financial problem. New Jersey’s application guidance says an applicant denied for failure to respond to a Request for Information, for incomplete documents, or for excess income or resources “do[es] not have to wait to reapply,” and that the county agency “will accept your new application with just the missing document(s)” or updated information, pulling the rest from the old file. An applicant who spends down the excess resources, or establishes a Qualified Income Trust, and reapplies is often approved faster than a hearing would conclude. The cost is that eligibility runs from the new application date, so months of coverage may be lost.

Appeal when the agency got the law or the facts wrong. A transfer penalty imposed on a payment that was for fair value, a resource counted that was exempt, a joint account attributed entirely to the applicant when a child funded it, a caregiver child exemption denied on inadequate review, or a QIT rejected on a technicality are all hearing issues. A successful appeal makes eligibility retroactive to the original application date, which can mean tens of thousands of dollars of nursing home bills paid.

Do both when the deadline is short. Filing a hearing request within 20 days preserves the original eligibility date while the family gathers the documents or corrects the problem. The appeal can be withdrawn if a new application is approved first.

What Happens While the Appeal Is Pending?

For a new applicant, nothing is paid until eligibility is established, and the nursing home bill accrues. Facilities generally wait for pending applications and appeals because approval is retroactive, but the family should keep the facility informed in writing. For a current recipient whose benefits are being terminated or reduced, a timely hearing request generally continues benefits pending the decision, which is a reason to request the hearing before the effective date in the notice.

What Should You Bring to the Hearing?

The agency’s file, obtained in advance; the denial notice and every Request for Information; the documents the agency says were missing, with proof of when they were sent; bank statements and explanations for any transaction the agency treated as a gift; the caregiver agreement, deed, trust, or other instrument behind any disputed transfer; medical records supporting a caregiver child exemption or a clinical dispute; and, where the issue is the value of an asset, an appraisal. The applicant bears the burden of proving eligibility, so the hearing is won with paper, not testimony.

How Do You Avoid the Denial in the First Place?

Most denials trace to the application. Assembling five years of statements before filing, explaining every large transaction in writing, obtaining cash value letters and deeds, and answering every Request for Information by its deadline prevents the “failure to provide” denial that accounts for most of them. Understanding the transfer rules before applying, as described in our article on protecting assets from nursing home costs, prevents the penalty denials that are hardest to unwind.

Plan Well. Live Better.

A Medicaid denial is a setback, not the end, but the clock starts the day the notice is dated. At Milvidskiy Law Group, we review denial notices, file the hearing request on time, and decide with the family whether to fight, reapply, or both. Learn more about our Medicaid planning services.

This article is for general informational purposes only and does not constitute legal advice. Reading it does not create an attorney-client relationship. Appeal deadlines and procedures depend on the notice, the program, and the state, and they change. The rules described were verified in September 2026 against 42 C.F.R. Part 431, N.J.A.C. 10:49-10.3, New Jersey Medicaid Communication 26-06, 18 NYCRR 358-3.5, and Connecticut Department of Social Services hearing guidance, and should be confirmed against the specific notice before relying on them.