In this matter of apparent first impression, the court was asked to determine whether a future statutory lien pursuant to N.J.S.A. 30:4D-7.2 ("Medicaid Lien Statute") has priority over an accrued Division of Developmental Disabilities ("DDD") lien pursuant to N.J.S.A. 30:4-80.1 ("DDD Lien Statute"). The effect of that priority would be to bar appellant, DDD, from recovering on its lien against the inherited property of G.W. ("Gabrielle"), an adjudicated incapacitated person.
The court concluded the Medicaid Lien Statute and the DDD Lien Statute are not inconsistent with one another. The Medicaid Lien Statute is clear that although Medicaid liens are "preferred claim[s] against the recipient's estate" and "have a priority equivalent to" N.J.S.A. 3B:22-2(d), N.J.S.A. 30:4D-7.2(d)(1) (emphasis added), they cannot come into being until the recipient of the funds has passed away, as "[a] lien may be filed against and recovery sought from the estate of a deceased recipient." N.J.S.A. 30:4D-7.2(a)(1) (emphasis added). By its plain language, a Medicaid lien may attach only to the estate of a decedent, not the property of a living person. When both liens exist at the same time, an existing DDD lien cannot take priority over an existing Medicaid lien. However, in a situation such as this one, where no Medicaid lien exists because the recipient is still alive, DDD is entitled to recover on its lien, the only statutorily recognized lien in existence.
Because the plain language of the Medicaid Lien Statute and the DDD Lien Statute demonstrate DDD is entitled to recover its lien now and the DDD lien is not subordinate to a non-existing Medicaid lien, the court vacated the trial court's order finding the future Medicaid lien had priority over the existing DDD lien and remanded for an order consistent with its opinion. However, the court affirmed the trial court's appointment of the Arc of Bergen and Passaic Counties ("Arc") as the guardian of Gabrielle's property and ordered Arc and DDD to engage in the compromise process pursuant to N.J.S.A. 30:4-80.6(c) regarding DDD's lien.