On July 28, 2010, the 3rd Circuit Federal Appeals Court issued its decision in the case of Sable vs. Velez.   The issue in the Sable case was whether a promissory note pursuant to the Deficit Reduction Act (DRA) was considered an available asset to determine countable assets for nursing home Medicaid eligibility.  The NJ Department of Health and Senior Services argued that a promissory note used for Medicaid eligibility purposed was nothing more than a "trust like" device and therefore should be considered a countable asset under Social Security law.

The 3rd Circuit remanded the case to the Federal District Court due to an error of law for the lower court to perform a correct analysis under Federal law to determine whether a DRA compliant promissory note was a "trust like" device.

The Sable case is considered a victory for nursing home residents and their families. Please contact our office should you have any questions regarding the use of promissory notes for Medicaid eligibility purposes.