Illinois Department of Public Aid, DAB No. 376 (1983)

GAB Decision 376

January 27, 1983 Illinois Department of Public Aid; Docket No. 82-30
Garrett, Donald; Settle, Norval Ford, Cecilia


The Illinois Department of Public Aid (State) appealed a disallowance
by the Regional Director, Region V which was based on an HHS audit
report, Audit Control No. 05-10251. The Agency disallowed $627,991 in
federal financial partipation (FFP) in the costs of personnel in the
State Department of Public Aid's Bureau of Program Integrity (BPI)
claimed during the period from January 1, 1977 to June 30, 1979. The
disallowed amount is the difference between the State's claim for
personnel costs at the 75% rate for skilled professional medical
personnel (SPMP) and the amount which is allowable at the 50% rate
generally available for administrative expenditures not qualifying for a
higher rate under Title XIX of the Social Security Act (Medicaid).

The disallowance determination stated that 95 of the 99 employees in
the BPI were not "physicians, dentists, other health practitioners,
nurses, medical social workers, psychiatric social workers, and other
specialized personnel in the field of medical care" (42 CFR 432.2) and
were therefore not SPMP. After analyzing the briefs and exhibits
submitted by the parties in accordance with 45 CFR 16.8, the Board
determined that there were basic factual and legal questions remaining
unanswered. The Board held a telephone conference to discuss these
questions, gave the parties detailed guidance as to how to answer them,
and established a briefing schedule to allow the parties to respond
fully to the Board's concerns. We also sent a transcript of the
conference call to the parties along with a letter which emphasized the
briefing schedule and reiterated the questions to be answered.

The Agency submitted additional briefing in response to the Board's
request. However, the State did not submit its post-conference brief on
time, did not respond to Board telephone inquiries about this
submission, and did not respond to an Order to Show Cause why the record
should not be closed given the State's failure to make any further
submissions. The Board then issued a ruling which (2) closed the
record. /1/ The State subsequently sent its submission to the Board
along with a letter saying merely that the State had inadvertently
failed to make its submission 1-1/2 months earlier. Considering the
procedural history of the appeal (as detailed above), the Board declined
to reopen the record to include this submission, rejecting the State's
explanation as inadequate, and returned the State's submission. In a
subsequent letter, the State requested that the Board accept its
submission, stating that the case had been reassigned from an attorney
who had left State employment. The Board once again declined to reopen
the record, stating both that transition from one State counsel to
another was a routine matter and that, in light of the appeal's
procedural history, reopening the record would be appropriate only under
extraordinary circumstances.


As will be discussed below, we uphold the disallowance because the
State has not shown that the people in question were in fact SPMP
performing functions eligible for the higher rate of funding.

Applicable law, regulations, and guidelines

Section 1903(a) of the Social Security Act provides for payment of:

(2) ... 75 per centum of the sums expended... (as found necessary by
the Secretary for the proper and efficient administration of the State
plan) as are attributable to compensation or training of skilled
professional medical personnel....

* * *

(7) ... 50 per centum of the remainder of the amounts expended... as
found necessary by the Secretary for the proper and efficient
administration of the State plan. /2/

(3) Agency implementing regulations, 42 CFR 432.50(b)(1) and 433.15(
b)(5), provide 75% FFP for skilled professional medical personnel and
supporting staff. Sections 432.50(b)(6) and 433.15(b)(6) implement the
50% matching provision generally applicable to FFP claims for costs of
administration. Section 432.50(c)(1) provides that rates of FFP higher
than 50% "are applicable only to those portions of positions or duties
that qualify for those rates."


The term "skilled professional medical personnel" is not defined in
Title XIX. Agency regulations contain the following definition at 42
CFR 432.2 (1978):

"Skilled professional medical personnel" means physicians, dentists,
and other health practitioners; nurses; medical and psychiatric social
workers; medical, hospital, and public health administrators, and
licensed nursing home administrators; and other specialized presonnel
in the field of medical care. /3/

The regulations are supplemented by Part 2-41-20 of the Medical
Assistance Manual (Manual). This Part was issued in an Action
Transmittal by the Social and Rehabilitation Service (predecssor agency
to HCFA) in July, 1975, SRS-AT-75-50. The Action Transmittal describes
Part 2-41-20 as an "(implementation) and interpretation of the
regulation on Federal financial participation in State expenditures for
staffing of the medical assistance program." The Manual contains the
following "principles" which are used to assess claims for 75% FFP:


B. Principles

1. General

* * *

a. The function of a "skilled professional medical" position whether
at the State or local level, is the principal basis for determining
eligibility for increased Federal matching. The title of a position or
its organizational placement in the Medical Assistance Unit
administering title XIX (4) will be used as subsidiary evidence to
confirm that a staff function is eligible for 75 percent matching.

* * *

b. Staffing will normally include some employees engaged in
functions which are neither skilled professional medical functions nor
supportive of such functions.

Therefore, salaries and related costs of the total cadre of personnel
involved in the administration of the title XIX program are not
reimbursable at the 75 percent rate.

* * *

2. Specific

a. The function, rather than the title, of a position is the
significant factor. Staff classified as skilled professional medical
personnel must be in functions at a professional level of responsibility
in the administration of the title XIX medical assistance program
requiring medical subject area expertise.

"Professional" and "medical" functions are defined as follows:

Professional -- the function is at a level which requires college
education or equivalent and it relates directly to non-routine aspects
of the program requiring the exercise of judgment.

Medical -- the function is peculiar to medical programs and requires
expertise in medical services care delivered, studying and evaluating
the economics of medical care, planning the program's scope, or
maintaining liaison on the medical aspects of the program with providers
of service and other agencies which provide health care.

As a class, these functions require knowledge and skills gained from
professional training (5) in a health science or allied scientific
field. They involve overseeing the delivery of medical care and
services.

Staff positions in which the primary function is the application of
administrative practices and procedures unrelated to the specialized
field of medical care management are eligible for 50 percent matching.
For example, a physician in charge of an accounting operation would be
eligible for staff reimbursement only at 50 percent FFP.

* * *

C. Examples of Organizational Functions

Following are examples of functions needed to operate State title XIX
programs and the expected level of Federal matching....

* * *

5. Audit Staff - 50 or 75 percent FFP

Personnel engaged in routine claims review, such as auditing whether
the codes correctly coincide with billed charges, are matched at 50
percent. Matching at 75 percent would apply to those skilled
professional medical personnel (and directly supporting staff) whose
function involves assessing the necessity for and adequacy of the
medical care and services provided, as in utilization review.

6. Other Skilled Professional Medical Personnel - 75 percent FFP

Staff includes personnel such as physicians, dentists, pharmacists,
hospital administrators, medical economists, medical and psychiatric
social workers, and registered nurses who are responsible for activities
such as: providing liaison on professional medical matters, medical
services program development, medical care assessments, and research and
evaluation concerning all aspects of the delivery and economics of
medical services. Included would be members of medical review and
independent professional review teams.

* * *

(6) Section 2-41-20(B)(2)(b) of the Manual provides that the official
position descriptions are the "basic substantiation" for a position's
professional medical status. This section also provides for
consideration of "(job) announcements emphasizing requirements at or
above the college level in medical care and medical care
administration." Further, its listing in an appropriate medical
classification" in a dictionary or handbook of occupational titles is a
secondary indicator that a position is a skilled medical position.

Positions at Issue

The State claimed personnel costs for the entire staff of the BPI (99
people) at 75% FFP. The Agency found that only four of the employees,
who were classified as Medical Consultants, met the definition of SPMP.
The rest were executives, accountants, typists, and other administrative
employees, found by the Agency not to be reimbursable at 75%.

In its post-conference brief, the Agency clarified its position by
explaining that the audit report did not reach the question of whether
the specific personnel in dispute here were qualified to perform skilled
medical functions. Rather, the audit recommendation and subsequent
disallowance stated that the positions were not skilled medical
positions and the functions performed in those positions did not require
professional medical training.

The Agency emphasized that the State's Cost Allocation Plan
identified the positions which were considered skilled medical personnel
services to be claimed at 75%. They were Medical Assistant Consultant
I-III, Nurse I-VI, and Pharmacist I-IV. (Attachment to Agency's October
4, 1982 brief) None of the 95 employees whose salaries were questioned
by the Agency were in these positions. Instead their positions had the
following titles:

Numb
Position Code Position Classification Emplo
00122 through 00124 Accountant II, III, IV 41320 Social
Services, Career Trainee 13851 through 13855 Executive I, II, III, IV,
V 08203 Clerk Typist III 00140 Account. &
Fiscal Admin. Career Trainee 27131, 27132 Methods & Procedures
Advisor I, II 35866, 35867 Public Aid Investigator II, III
08053, 08054 Clerk II, IV 08153 Clerk
Stenographer III 00515 Administrative Clerk 39701
Secretary I 09900 Court Reporter 42753
Statistician III


(Attachment A (audit workpapers) to Agency's May 18, 1982 brief)

(7) An explanation of the functions that these people performed was
stated in the audit report (p. 52) and reiterated by the State in its
initial brief:

The primary functions of the BPI personnel were (i) utilization
controls; (ii) post-payment monitoring of recipient and provider
treatment patterns; (iii) desk and field audits of medical providers;
and (iv) liaison with Professional Standards and Review Organizations.

Analysis

The State argued that in claiming 75% FFP for the entire BPI, it was
relying on a November 8, 1976 letter from M. Keith Weikel, then
Commissioner of Social and Rehabilitation Services, to the State. This
letter, in part, states that:

Some States have asked about Federal matching for persons using
patient and provider profiles. 45 CFR 250.120 as interpreted in the
Medical Assistance Manual... defines (SPMP) and staff directly
supporting such personnel and permits matching for them at the 75
percent rate. Qualified persons who (a) analyze provider and recipient
profiles, (b) conduct field investigations to make judgments about the
necessity for and adequacy of care provided or received, (c) make
decisions about corrective actions, or (d) maintain liaison on the
medical aspects of the program with providers of service do meet the
definition and are matchable at 75 percent.

(Attachment B to State's April 19, 1982 brief)

The State argued that under its interpretation of the Weikel letter,
all utilization review personnel are SPMP or supporting staff, and its
claim for 75% FFP for the entire BPI was based on this interpretation.
The Agency's position was that the State took the quoted section out of
context and that the surrounding sentences make it clear that only
people meeting the definition of SPMP in the regulations and Medical
Assistance Manual who do the enumerated tasks are qualified for 75% FFP.

In order to understand the Weikel letter, one must understand its
context. It was written at a time when the federal government was
placing emphasis on the problems of fraud and abuse in its programs. In
this context, Mr. Weikel's letter discussed states' utilization review
efforts as a chief response to this problem. The letter noted that an
essential part of the effectiveness of utilization (8) review is
adequate staff, he stated that "qualified persons" who do at least
certain utilization review tasks (as enumerated in the letter) can be
reimbursed at 75%. Mr. Weikel's discussion of the availability of 75%
FFP was premised on the definition of SPMP in the regulations and
Medical Assistance Manual. The letter also explained that there are
some utilization review-type functions for which 75% FFP is not clearly
allowable, e.g., staff "utilized to make disposition of a provider
over-utilization or abuse situation" and indicated that an opinion from
the Agency's legal counsel was being sought.

The Medical Assistance Manual itself (see page 5 of this decision)
states that functions such as utilization review are eligible for FFP at
75% if they are performed by SPMP. This section in the Medical
Assistance Manual must be read in the context of other relevant sections
of the Manual (see pp. 3-5 of this decision) which indicate that a
skilled medical function requires medical services expertise, and "as a
class," requires knowledge and skills gained from professional training
in a health or allied scientific field. The Manual does not state that
utilization review-type functions, in general, are skilled medical
functions, no matter who performs them. The Weikel letter is not
reasonably characterized, therefore, as representing an Agency decision
to expand the scope of what are considered skilled medical functions, as
stated in the Medical Assistance Manual, but is more reasonably
interpretated as merely emphasizing the importance of utilization review
tasks and stating the Agency's commitment to reimburse the states at a
75% rate for the cost of SPMP who perform these tasks.

During the telephone conference, in response to questions posed by
the Board, the Chief of the BPI described in general the functions and
qualifications of the people in one section of BPI (see Transcript, pp.
5-9). His brief description indicates that this section may do
utilization review. However, it was made clear by the Board
(Transcript, pp. 9-10) that the series of questions by the Board
relating to functions and qualifications, and the answers by the State
were for the purpose of showing the State what sort of detailed
information was still needed. As was explained above in "Procedural
History", this detailed information was not timely submitted and was,
therefore, not entered into the record.

The determination of whether a position is a skilled professional
medical one is not an exact science. Rather, the determination is based
upon the examination of detailed information about the actual tasks
performed by and the qualifications of questioned personnel and a
reasonable application of the guidelines set out in the Medical
Assistance Manual, implementing the statute and regulations.

(9) While BPI may be responsible for utilization review, the State
has not provided the detailed information to show that all the people in
BPI were SPMP performing utilization review functions. It also has not
shown that the positions required medical services expertise, which is a
necessary component of a skilled medical position. /4/


As was emphasized in New York State Department of Social Services,
Decision No. 204, August 7, 1981, the State has the burden to provide
documentation sufficient to show that its claim for 75% FFP for the
costs of SPMP and support personnel was proper. 50% FFP is the rate
generally allowable for administrative expenditures; the State bears
the burden of showing how a position qualifies for a higher rate but has
not provided sufficient information to support a determination that it
is entitled to anything other than the 50% rate. The disallowance must
therefore be upheld.

Conclusion

For the reasons stated above, we uphold the disallowance based on the
State's failure to document that there were in fact SPMP performing
functions eligible for 75% reimbursement. /1/ The Board decided that
although, under 45 CFR 16.15(b), dismissal of the appeal was
possible because of the State's failure to meet a deadline, it would be
more appropriate to decide the appeal on the record as it then existed
because the State had submitted an appeal file and brief. /2/ In
paragraphs (1), (3), (4), (5) and (6), section 1903(a) sets the rate of
FFP for other types of expenditures for the Medicaid program.
/3/ Prior to September 29, 1978, the definition of SPMP was at 42 CFR
450.120(a)(1) (1977). Although the wording is slightly different, the
same job classifications are included in both the 1977 and 1978
sections. /4/ For example, one of the positions claimed as SPMP
is that of "court reporter." On its face, such a position would appear
to involve neither medical expertise nor judgment on non-routine
matters, and would not be considered a SPMP (although it might be
possible that such a position would be a supporting one for a SPMP).

SEPTEMBER 22, 1983