GAB Decision 441
Docket No. 82-214
June 30, 1983
Illinois Department of Public Aid;
Garrett, Donald; Settle, Norval Ford, Cecilia
The Illinois Department of Public Aid (Illinois, State) appealed a
$15,643,493 disallowance by the Health Care Financing Administration
(HCFA, Agency) of federal financial participation (FFP) claimed under
Title XIX of the Social Security Act. The disallowance was based on an
audit of amounts claimed for reimbursement by State-owned/
State-operated intermediate care facilities for the mentally retarded
(ICF/MRs) during the period July 1, 1975 through December 31, 1980.
The State identified three principal issues related to the
disallowance in its appeal. As discussed below, the Board severed one
issue, which will be dealt with separetely. Two issues are decided
here:
1. Whether the State is entitled to $10,333,960 FFP for services to
Medicaid recipients prior to the date the State survey agency signs the
certification and transmittal where there is no record of a decision by
that agency prior to the signature date. We conclude it is not.
2. Whether the State is entitled to $555,273 FFP for services to
applicants for Medicaid benefits more than three months prior to the
date of application where the State backdated eligibility dates to
coincide with either the date the State purportedly certified the
facility or the date the applicant entered the facility. We conclude it
is not.
The State also appealed a third part of the disallowance ($4,753,260
FFP) based on a provision in the rate setting methodology in the State
plan which allegedly set rates for some facilities in excess of what
HCFA identified as their actual costs. HCFA argued that the State was
not entitled to FFP for the excess, even though it had approved the
methodology at issue. Because the State was continuing efforts to
resolve this part of the disallowance through negotiation and because
the Board perceived the need for additional development of the record
concerning this issue, it was severed.
(2) DISCUSSION
1. Whether the State is entitled to FFP for services to Medicaid
recipients by an ICF/MR prior to the date the survey agency signed the
HCFA Form 1539.
a. Background
During the period May 1, 1976 through June 30, 1980, the State
claimed FFP for services rendered prior to the dates the State survey
agency signed the certification and transmittal forms (C&T, HCFA Form
1539). HCFA disallowed these claims on the grounds that the regulations
in effect at the time authorized FFP only upon and after certification,
evidenced by the aforesaid signature. 42 CFR 442.12 (1978) and 42 CFR
449.33(a)(6)(1977) (formerly 45 CFR 249.33(a)(2)) (1975).
HCFA noted that the State had attempted to backdate the certification
to commence as of the date of the survey, but contended that the State
survey agency had not notified the facility or the Illinois Department
of Public Aid (the single State agency) in writing of a determination to
certify prior to the signing of the C&T.
The State argued that certification was effective as of the date of
the survey (in the instance of a facility with no deficiencies) or as of
the date a facility submitted an acceptable plan of correction (in the
instance of a facility with deficiencies). The State contended that in
a vast majority of cases the survey team's finding of no deficiencies
was accepted by the reviewing official in the survey agency and thus was
tantamount to certification. In the instance of a facility found to
have deficiencies, the State contended that as of the time a plan of
correction was submitted, both the facility and the survey agency had
knowledge that the certification requirements were met. The State noted
that current regulations (not in effect at the time of the claims at
issue) establish the date of a survey or of the submission of an
acceptable plan of correction as the date of certification. 42 CFR
442.13 (effective July 1, 1980).
b. Analysis
In general, the Board has held that HCFA may treat the date of
signing of the C&T Form 1539 as the date of certification. Maryland
Department of Health and Mental Hygiene, Decision No. 107, July 2, 1980.
The Board also has recognized that although the signature on a C&T form
is presumptively the best evidence that a certification determination
was in fact made, certification prior to signature may be shown if (3)
certain conditions are met. New Jersey Department of Human Services,
Decision No. 137, December 1, 1980; Washington Department of Social and
Health Services, Decision No. 176, May 26, 1981. Where a state contends
that certification took place earlier than the C&T date, it must show by
clear evidence that all requirements for certification were met, that
the survey agency so determined, and that it committed that
determination to writing in the form of notification to either the
single state agency or the facility. Washington, p. 5.
The State submitted an affidavit by the Chief of the Division of
Geriatric and Long-Term Care Programs, Illinois Department of Public
Health, (the survey agency), in 1977-78, who asserted that he was
familiar with the certification practices of the Department of Public
Health during that period. He stated that in virtually all of the
situations where the surveyors' reports indicated compliance with
certification requirements, the reviewing official in the survey agency
adopted the surveyors' conclusions and issued HCFA Form 1539 showing the
survey date as the date of certification. In cases where a plan of
correction was necessary, he indicated that the C&T showed the date of
submission of the plan as the date of certification. In both instances
these events precede the signature date.
The State has not shown by the affidavit or otherwise that there was
a written record of the survey agency's determination of certification
earlier than the date of the signature on the C&T. The surveyor's
written report is not evidence of certification because the State did
not show that it was executed by an official authorized to certify.
Indeed, the admitted practice of submitting that report for review
indicates that the surveyor lacked that authority. Nor is the absence
of authority overcome by the fact that the reviewing official seldom, if
ever, rejects the surveyor's recommendation. Similarly, the submission
of a plan of correction is not proof of a decision to accept that plan.
The regulatory change accepting the survey and submission dates as
certification dates was not in effect during the period involved here.
42 CFR 442.13 (45 Fed. Reg. 22936, April 4, 1980). The State did not
contend that the 1980 change was retroactive and we find here, as the
Board has in similar cases in the past, that it was not retroactive.
Washington, supra and Pennsylvania Department of Public Welfare,
Decision No. 255, February 10, 1982.
Thus, we conclude that the signature on the C&T form is the best
evidence of certification and that the State failed to show by other
clear evidence that there was a determination of certification prior to
that date.
(4) 2. Whether the State is entitled to FFP for services to Medicaid
applicants more than three months prior to the date of application.
For the period between July 1975 and October 1977, regardless of when
an individual actually applied for benefits, the State claimed FFP
starting with the month of certification of the facility rendering the
services (or, if later than certification, the month the applicant
entered the facility). FFP is available beginning with the third month
prior to the month of application, which in this case was later than the
date from which the State claimed FFP. 45 CFR 206.10(a)(6) (1974).
The State argued that it would have been futile to obtain
applications from potential Medicaid recipients until the facility in
which they received care and services was certified. The State also
contended that as a result of federal court decisions in Illinois it was
liable for payments to an otherwise eligible individual even for a
period during which the facility providing services to that individual
was not certified, if the facility later is determined to be
certifiable. Thus, according to the State, FFP should be available as
though the application had been filed in time to qualify as of the date
of certification.
The Agency countered that the determination that a facility meets the
qualifications to participate in the Medicaid program is separate from
the determination of eligibility of an individual for Medicaid benefits.
The State did not reply to this argument.
We find that in this case the date of eligibility of an individual is
controlled by 45 CFR 206.10(a)(6). FFP is not available earlier than
the third month preceding the date of application, even though prior to
that three month period a person later determined to have been eligible
resided in a facility found to have been certifiable. The State is not
authorized to backdate eligibility earlier than the third month
preceding application, even though it might have solicited an
application at an earlier date if it had known the facility would be
determined to be certifiable.Eligibility and certification are separate
determinations, and the State is not entitled to FFP prior to the time
an individual is eligible for benefits.
(5) CONCLUSION
For the the reasons discussed above, we uphold the disallowance in
the amount of $10,890,233. The remaining $4,753,260 has been severed
and redocketed for additional proceedings.
JULY 07, 1984