Washington Department of Social and Health Services, DAB No. 487 (1983)

GAB Decision 487
Docket No. 83-89

December 17, 1983

Washington Department of Social and Health Services;
Garrett, Donald; Settle, Norval Ford, Cecilia


The Washington Department of Social and Health Services (State)
appealed a decision by the Health Care Financing Administration (Agency)
to disallow $172,506.60 in federal financial participation claimed by
the State under Title XIX of the Social Security Act (Act) for the
quarter ending June 30, 1982. The disallowance was based upon the
Agency's determination that the State had violated the utilization
control requirements of section 1903(g) of the Act in ten skilled
nursing facilities (SNFs). The Agency originally found violations for
60 patients in these facilities. However, after reviewing materials
submitted by the State, the Agency accepted the State's arguments with
regard to 14 patients thereby eliminating one SNF from the list of
deficient facilities and reducing the disallowance to $155,252.34. The
record in this case includes briefs and documentation submitted by both
parties. For the reasons set out below, we uphold the disallowance.

Pertinent Statutes and Regulations

Section 1903(g) of the Act requires that the state agency responsible
for the administration of a state's Medicaid plan under Title XIX of the
Act show to the satisfaction of the Secretary that the state has an
effective program of control over utilization of long-term inpatient
services in certain facilities, including SNFs. This showing must be
made for each quarter that the federal medical assistance percentage
(FMAP) is requested with respect to amounts paid for such services for
patients who have received care for 60 days in SNFs or the FMAP will be
reduced according to the formula set out in section 1903( g)(5).

Specifically, sections 1903(g)(1)(A) and (B) provide that the state
"must" show that --

(A) in each case for which payment is made under the State plan, a
physician certifies at the time of admission . . . (and recertifies,
where such services are furnished over a period of time, in such cases,
at least every 60 days . . .) that such services are . . . required to
be given on an inpatient basis because the individual needs . . . such
services; and

(2) (B) in each such case, services were furnished under a plan
established and periodically reviewed and evaluated by a physician . .
. .

The implementing regulation for the certification and recertification
of need for skilled care is found at 42 CFR 456.260 (1981). The
regulation provides:

(a)(1) A physician must certify for each applicant or recipient that
SNF services are or were needed.

(2) The certification must be made at the time of admission or, if an
individual applies for assistance while in a SNF, before the Medicaid
agency authorizes payment.

* * *

(b)(2) Recertification must be made at least every 60 days after
certification.

The Agency also issued Action Transmittal AT-80-68 (October 1, 1980)
/1/ to State Medicaid Administrators to clarify what "constitutes a
valid certification and recertification for the purposes of satisfying
statutory and regulatory requirements."


Background

Section 1903(g)(2) of the Act requires the Secretary to conduct
timely onsite surveys of private and public institutions in which
recipients of medical assistance may receive care and services. Agency
reviewers conducted a survey of ten SNFs in the State to verify that the
requirements of sections 1903(g)(1)(A) and (B) were met for the quarter
ending June 30, 1982. See, 42 CFR 456.652(a)(1) and (2).

(3) The Agency reported numerous violations in all ten facilities.
The Agency alleged violations of 42 CFR 456.260, concluding that
physicians failed to sign and date certifications on or before admission
or to sign and date recertifications in a timely fashion (within 60
days). The Agency also determined that physicians had failed to
properly establish or review plans of care (42 CFR 456.280). The Agency
alleged that, in some cases, physicians had not established complete
plans of care prior to a patient's admission while in other instances
physicians had failed to properly or timely update the plans. /2/


The State argued that it had developed a Turn-Around Document (TAD)
in order to eliminate unnecessary physician visits and concomitant
costs. The State argued that the TAD established a uniform process for
recertification. The State contended that the TAD also maintained
compliance with technical paper requirements and provided for "a signed
and dated physician's statement that continuation of the specific level
of care is necessary" as required by Action Transmittal 80-68. The
State indicated that the TAD had been designed with the "encouragement
and approval" of appropriate federal officials in the Regional Office.
However, the State expressed the fear that this document had been
ignored by federal reviewers during their assessment of the State's
utilization control program. (State's Brief, p. 3)

The State submitted a copy of a memorandum (Memorandum 82-6) which it
issued on January 19, 1982 to nursing home administrators, physicians,
regional directors, and other health care officials addressing changes
in requirements for physician visits to Medicare/ Medicaid nursing home
patients. In part, Memorandum 82-6 provided:

Approval has been granted by the federal Department of Health and
Human Servics (DHHS) changing requirements for physician involvement for
Medicare/Medicaid nursing home patients. The present on-site survey
requirements for physician visits are extended, effective immediately.
(4) Physician involvement in all cases will continue when medically
necessary.

- For Skilled Nursing Care Patients: Physicians visit at or near the
time of admission, and thereafter as needed, not to exceed 90 days
between visits. (The old requirement was for visits at admission and
every 30 days thereafter; except after the first 90 days the visit
schedule could be extended to 60 days with documented physician
justification).

* * *

The department formally requested a waiver to the present DHHS
requirements for physician certification and recertification of
individual client need for nursing home care. The state has not been
granted authority to change the current requirements. We recognize that
these requirements are duplicative of other physician involvement. We
are resubmitting a request to the federal government for waiver approval
to coincide with survey requirements.

Until a waiver can be obtained from DHHS or the Social Security Act
is modified, physician certification still must be provided at the time
of admission. Recertification of individual recipients must still be
provided every 60 days thereafter. . . .

The State did not submit any evidence to show that the Agency
actually provided a waiver from the regulatory requirements of 42 CFR
456.260, which would have allowed physicians in the State to certify or
recertify patients on a time-frame different from that provided in the
regulations.

In its notice of appeal, the State, apparently reflecting upon the
various bases for the disallowance, contended that the Agency had
misinterpreted Congressional intent in its assessment of the State's
utilization control program. The State indicated that the federal
surveyors did not take into account individual patient care needs and
the appropriateness of services provided. Specifically, the State
maintained that Congress did not intend the following interpretations to
be applied to the program:

- Refusal to recognize telephone orders by physicians

- Failure to recognize identifiable physicians' signatures consistent
with accepted standards of medical practice

- Failure to recognize valid physicians' recertification signed on
the 61st day.

(5) Along with both its notice of appeal and its brief, the State
submitted documentation aimed at reducing the disallowance.

The Agency argued that the regulation at 42 CFR 456.260 and Action
Transmittal 80-68 clearly set out the requirements for valid
certification and recertification under section 1903(g)(1)(A). The
Agency denied that it had failed to consider the TAD in assessing the
State's compliance with utilization control requirements. The Agency
indicated that the TAD had been accepted as evidence of proper
recertification. However, the Agency maintained, "only those dates
appearing in the 'Date of Recertification' column on the TAD may be used
for recertification purposes. Dates appearing under the column 'Date of
Last Visit' (which apparently are neither completed, nor certified,
through signature, by the physician) do not fulfill the recertification
requirements." (Agency Brief, p. 4)

The Agency did review the additional documentation submitted by the
State and withdrew 14 individuals from the original list of 60 patients
for whom violations had been found. This action resulted in one
facility, Long Lake Convalescent Center, being dropped from the original
list of ten facilities alleged to have had utilization control
violations and reduced the overall disallowance to $155,252.34. (Agency
Brief, pp. 4-5)

The Agency review left 46 individual alleged violations in nine SNFs
for our consideration. The Agency noted that the State had not disputed
20 of these individual violations involving five facilities. Therefore,
the Agency argued, the disallowance relative to those five facilities
should be upheld as a matter of course.

Analysis

I. Regulation and Board Precedent

Although we are faced with some 46 individual violations for review,
the violations themselves touch upon only a small number of statutory
and regulatory provisions and these have been addressed by the Board on
several other occasions. Below, we will first discuss the regulations
and past Board decisions which bear on these violations. Then, we will
address the discrepancies on a facility by facility basis.

A. Certification and Recertification

As noted above, the regulation at 42 CFR 456.260 requires in
pertinent part that a physician certify that a patient need skilled
nursing services before admission to a SNF. Recertification must occur
at least every 60 days after certification.

(6) Action Transmittal 80-68 defined certification as "the process by
which a physician attests to an individual's need for a specific level
of institutional care. The certification must be provided by the
physician on or . . . prior to an individual's admission to an
institution." Action Transmittal 80-68 also identified several
conditions "which must be met in order for the certification to be
considered valid": i.e., that it be in writing, signed by a physician
using his/her signature or initials, and dated at the time it is signed
or initialed.

Action Transmittal 80-68 provided several examples of acceptable
certification documents, including:

physician orders, which clearly indicate the need for a particular
level of care, signed and dated on or . . . before the date of admission
. . . .

As we noted above, Action Transmittal 80-68 is an updated version of
SRS Action Transmittal 75-122. This Board has determined that Action
Transmittal 75-122 was "quite clearly . . . an interpretation of the
terms used in the statute: 'certification . . . by a physician' and 'at
the time of admission.'" The Board found that the requirements set out
in the Action Transmittal were "not new, substantive requirements but
are merely interpretations of the terms of the statute and regulation."
Social Service Board of North Dakota, Decision 166, April 30, 1981. In
North Dakota the Board stated:

We conclude that the State's obligations have not been altered. The
only restrictions that the Action Transmittal places on the
certifications which are not explicit in the statute and regulation are
those that the certification be in writing and that time of admission
means on or before the date of admission. Both of these are logical
extensions of a requirement that there be a certification at the time of
admission and both carry out the purpose of the statute, i.e., that the
Secretary be satisfied that the State have an effective program of
utilization control. These requirements appear to be reasonable for
purposes of administrative convenience. (How can the Agency verify that
a certification has actually been made if it is not in writing?) We
conclude that there is no alteration of rights or other substantial
impact on the state that is not already imposed by the statute and
regulations.

We believe that the rationale of the North Dakota decision applies
here as well. See, also, Nevada Department of Human Resources, Decision
471, October 31, 1983.

(7) Action Transmittal 80-68 reiterated that recertification must be
provided at least every 60 days after the initial certification. The
Action Transmittal set out numerous examples of documentation acceptable
for purposes of recertification. The uniform requirement for any of
these pieces of documentation is that they be signed and dated by a
physician. In both the North Dakota and Nevada decisions, we indicated
that the Agency requirement for a dated physician's signature or initial
on a certification was a logical extension of the underlying purpose of
the utilization control program. We see no reason why that same
rationale should not apply to the recertification process.

B. Timely Recertifications and 100% Compliance

The Board has had numerous opportunities to address the questions of
timely recertification and 100% compliance with the requirements of
section 1903(g). The Board most recently addressed these issues in
Kansas State Department of Social and Rehabilitation Services, Decision
No. 312, June 21, 1982. On Page 4 of that decision we provided a
comprehensive review of our position on these questions, which is
unchanged for purposes of this appeal:

In a series of decisions the Board has thoroughly examined the
recertification requirement and concluded that total, rather than
substantial, compliance is mandated if the reduction provided for in
section 1903(g)(5) is to be avoided. In Tennessee Department of Public
Health, Decision No. 167, April 30, 1981, the Board upheld the Agency's
interpretation of the Act, based on the legislative history and specific
amendments of section 1903(g), that it does not have the discretion to
waive the statutory reduction once there is a finding that a violation
has occurred. In support of the Agency's interpretation, the Board
referred to the Comptroller General's Opinion (59 Comp. Gen. 286, March
4, 1980). The Comptroller General concluded that if the requirements of
section 1903(g) are not met in every case, the Secretary has no
alternative but to consider the State's showing unsatisfactory or
invalid and impose the reduction according to the statutory formula.
The Comptroller General based this conclusion on the legislative history
of the Act and on the fact that amendments to the Act described specific
circumstances in which the Secrtary could waive the statutory
provisions, leading the Comptroller General to conclude that Congress
did not intend to permit waivers under any other circumstances.

The Board thus sustained the Agency's action in assessing a
disallowance when only one patient in a facility failed to meet the
certification requirements of (8) section 1903(g)(1)(A) (Colorado
Department of Social Services, Decision No. 169, April 30, 1981) and
when recertifications were made 1-4 days after the 60-day limit (Georgia
Department of Health, Decision No. 207, August 28, 1981; Virginia
Department of Health, Decision No. 208, August 28, 1981). Under the
formula in section 1903(g)(5) for computing the reduction, the amount of
the disallowance remains the same regardless of the number of violations
in a particular facility as long as there is at least one violation.
See, e.g., Hawaii Department of Social Services and Housing, Decision
No. 295, May 7, 1982.

C. Telephone Orders

As we noted above, the Board has consistently held that
certifications must be signed and dated not later than the date of
admission and recertifications must be signed and dated within 60 days
of the original certification or last recertification. The Board has
been faced on several occasions with the question of whether telephone
orders constitute a valid method of certification and recertification.
The Board's position on this issue is that while a physician may
initially transmit orders to certify or recertify a patient by
telephone, the physician is still obligated to sign the certification on
the day of admission, or sign the recertification within the prescribed
60 day period. See, North Dakota, supra; Idaho Department of Health
and Welfare, Decision No. 250, January 28, 1982; Nevada, supra.

D. Plans of Care

The regulation at 42 CFR 456.280(a) clearly requires that a written
plan of care, for a skilled care patient, be established by a physician
prior to the patient's admission to a SNF. Paragraph (c) of the
regulation just as clearly states that the plan of care must be updated
at least every 60 days.

II. The TADs

We find no merit in the State's argument that the Agency failed to
consider the TADs as acceptable recertification documents. The Agency
asserted that a TAD, completed in a manner consistent with the
regulatory standards for recertification, was acceptable. The TADs used
by the State clearly provided a column in which a physician could date
the signature used for recertification. Additionally, Memorandum 82-6
reemphasized the standards by which the validity of recertifications
would be assessed. Our review of the TADs submitted here supports the
Agency position that physicians either neglected to properly date the
signatures offered as proof of recertification or failed to recertify
patients on a (9) timely basis. Given the explicit nature of the TAD
itself, and the instructions set out in the State's own Memorandum, as
well as the evidence offered by the parties, we believe that the Agency
analysis of the TADs was reasonable.

III. The Facilities

A. SNFs with Undisputed Violations

The Agency indicated that the State did not dispute alleged
deficiency findings for at least one patient in each of the following
five facilities:

1. Whitman Manor - Invalid and untimely recertifications; (4
unchallenged untimely update of plans of violations)
care. 2. Bellevue Terrace - No plan of care; untimely
recertifications Nursing and untimely update of plans (5
unchallenged of care. violations) 3. Firlane Terrace
- Untimely recertification; untimely Convalescent update of
plan of care. Center (2 unchallenged violations) 4. Riverwood
Care - Invalid and untimely recertifications; Center
untimely update of plan of (8 unchallenged care.
violations) 5. Needham Nursing - Invalid and untimely
recertifications; Home no plan of care update. (1
unchallenged violation


As we noted above, the Board has consistently held that even one
violation in a facility will put that facility out of compliance with
the requirements of section 1903(g)(1). The State has not attempted to
refute the Agency's findings with respect to any of these patients.
Therefore, we accept the Agency's determination of at least one
violation in each facility. We sustain the disallowance for these
facilities.

B. The Facilities with Disputed Violations

The State challenged each alleged individual discrepancy in the four
remaining SNFs. A single individual violation puts an entire facility
out of compliance; nevertheless, we have examined each of the Agency's
allegations.

(10) Cliff Manor

The Agency alleged that two patients in this facility were not
properly certified while one other had neither proper certification, nor
a timely plan of care.

The first page of documentation submitted for the allegedly
improperly certified patient (State Attachment C) indicates that the
patient was admitted to Cliff Manor on "6-30-82" and required skilled
nursing care. However, the physician's signature accompanying this
document was dated "July 82." There was no other documentation submitted
by the State which would qualify as a certification document. Since the
certification of need for this patient was signed and dated after
admission, the patient was not properly certified. (See, 42 CFR
456.260)

The second patient at Cliff Manor was admitted on "5-28-82." (State
Attachment D). The form indicating the need for skilled nursing care is
signed by the attending physician. However, the only date accompanying
the signature is "6/3/82." Additionally, it is not clear that this date
was meant to accompany the physician's signature, since it appears
somewhat detached from that signature, under that of a Licensed
Practical Nurse. In either event, the document does not show that this
certification was timely.

The Agency also alleged that this patient's plan of care was
untimely. The record shows that the physician established a plan of
care by telephone orders, transcribed by a nurse, on "5-28-82," the date
of admission. The Agency did not challenge the substantive quality of
the plan of care, but appeared to imply that since the physician did not
sign and date the plan of care on the date of admission, the plan of
care was untimely.

The regulation at 42 CFR 456.280 requires that a written plan of care
be established by the physician before a patient's admission to a SNF.
The regulation does not require that a physician sign and date the plan
of care before admission, nor are we aware that the Agency issued any
informational guidelines on this subject. (Action Transmittal 80-68
deals exclusively with the issues of certification and recertification.)
In Nevada, supra, we were faced with a similar situation. As in Nevada,
we think that it was reasonable for the State to conclude that it met
the plan of care requirements set out in 42 CFR 456.280. The Agency has
not demonstrated that it had issued (or the State had notice of) any
interpretation of the regulation which indicates that a plan of care
must be signed and dated by a physician in a manner similar to a
certification. The plan was ordered by a (11) physician and was
substantively complete before the patients' admission. In Nevada, we
stated:

Accordingly, we conclude that the plans of care were timely since the
requirement that the physician actually sign and date the plan of care
on (or before) the date of admission is not so obvious an extension of
the statutory and regulatory provisions that it applies without notice.

We believe that this rationale applies here as well. Therefore we
find the plan of care for this patient was timely.

The Physician's Orders for the third patient at Cliff Manor indicate
that she was admitted on "5-4-82" in need of skilled care. (State
Attachment E) However, the physician's signature accompanying this
document is dated "5-7." Therefore, this certification is untimely.

Our review of the documentation for Cliff Manor supports the Agency
position that this facility had several utilization control violations
during the quarter under review. Since even one violation would provide
a sufficient basis for upholding a disallowance, we sustain the
disallowance for Cliff Manor.

Highline Convalescent Center

The Agency alleged violations for two patients in this facility. The
Agency contended that both the recertification and plan of care for one
patient were untimely. The Agency also argued that the plan of care for
a second patient had not been updated.

In reference to the first patient, the State argued that the Agency
had misinterpreted the recertification date on the TAD. The State
contended that the date read "5-21-82", not "5-27-82" as the Agency
claimed. (State Attachment M; State Reply Brief, p. 3) Reviewing the
TAD it appears that the date reads "5-21-82." However, the State's
recertification argument fails for other reasons. While the TAD clearly
indicates that this patient needed skilled care, there is no evidence
before us which would enable us to determine the date of the last
recertification prior to the "5-21" date. The Physician's Orders
contain what would appear to be a physician's signature accompanied by a
date of "3/22/82." However, the Physician's Orders do not indicate the
level of care needed by the patient. Therefore, this document, although
it otherwise appears to contain nearly the entire scope of the patient's
medical history, would not be acceptable as a valid recertification. On
the TAD in a column entitled "Date of last visit," the "3/22/82" date
(12) appears in typewritten form alongside the "5/ 21/83"
recertification date. However, there is no evidence in the TAD that a
recertification occurred on "3/22/82." (Looking at the subsequent
recertification dates on this TAD, we note that each recertification
date is accompanied by a typed "Date of last visit." None of these dates
correspond to any of the prior dates of recertification.) Without a
starting point from which we can measure the 60 day interval between
recertifications, we cannot conclude that this patient was recertified
in a timely manner.

Even if the State could produce evidence to show that a valid
recertification was performed on "3/22/82," we would uphold the
violation for this patient because we do not believe that plan of care
was updated in a timely fashion. The Physician's Orders bearing the
written "3/22/82" date are accompanied by an additional page indicating
a continuation of ordered care for the patient along with a physician's
signature dated "5/27/82." Although the State persuaded us that
recertification date on the TAD was "5-21-82," the State has not
challenged the accuracy of the date on the Physician's Orders. Further,
given the evidence before, us, we believe that the date on the
Physician's Orders is "5/27/82." We draw support for our position from
both the Physician's Orders and the TAD. The same physician signed both
documents. Even a perfunctory review of his handwriting demonstrates a
clear distinction in the way in which the physician writes his sevens
and ones. In fact, it was this distinction which convinced us to accept
the State's position with regard to the recertification date on the TAD.
Additionally, as we noted above, a typewritten notation on the TAD
confirmed that the physician had visited the patient on "5/27/82." Based
on these facts we conclude that the plan of care was updated on
"5/27/82." Thus, the update occurred outside the 60 day limit
established in 42 CFR 456.280(c).

Regarding the second patient at Highline, the Agency accepted
Physician's Orders dated "2-2-82" as a starting point for calculating a
plan of care update. (State Attachment N; Respondent Brief, p. 8).
The Agency questioned subsequent updates for the patient (April 2 and
April 30, 1982) because these dates were contained on the continuation
page of Physician's Orders dated "5/13/82." We believe the Agency
misread this document. There is no indication that the "5/13/82" date
referred to by the Agency is part of a dated physician's signature. The
lower portion of each page provides for signature of reviewers.
However, there is no indication that these reviews must be the type
conducted by physicians in order to update a plan of care. One reviewer
was a Registered Nurse, while the other was not the attending physician.
Additionally, there are several dates accompanying each signature. Thus
it is apparent that these individuals indicated their review by merely
redating their (13) signatures. The only indication of a review of
these Orders by a physician are the physician's signatures dated
"4-2-82" and "4-30-82." Therefore, since we accept both these dates as
evidence of timely updates of this plan of care, we believe there was no
violation for this patient.

In spite of the fact that our analysis leaves this facility with but
a single violation, that one violation is sufficient to sustain the
disallowance for this facility.

Sunrise View Convalescent Center

The Agency argued that the certification/recertification for
continued care, as well as the update of the plan of care, for one
patient in this facility was untimely and invalid. The Agency contended
that since a disallowance is proper when federal utilization control
requirements have not been met even for a single individual in a
facility, the disallowance should be sustained for this facility.

The Physician's Orders submitted by the State with regard to this
patient contained the following printed statement:

I certify that nursing services are required to be given on an
in-patient basis because of this patient's need for INC/SNC on a
continuing basis. (State Attachment Q)

The physician signed and dated ("04/07/82") this statement in the
appropriate blank. However, the statement did not clearly indicate that
the physician made a determination that the patient needed a "specific
level of institutional care" as required by Action Transmittal 80-68,
since he did not indicate whether he was certifying for INC or SNC on
the form. Additionally, the document showed that although the patient
was admitted "04-01-82," the physician did not sign the statement
indicating a need for in-patient care until "4/07/ 82." /3/ Thus, the
certification was untimely as well as not indicative of the level of
care needed. Based on the evidence, the disallowance for this facility
was proper. The Agency also alleged an untimely update of this
patient's plan of care, but neither party specifically briefed this
issue.


(14) Parkway Nursing Home

The Agency alleged that recertifications for four patients in this
facility were improper. The Agency indicated that the recertification
for one patient did not indicate the specific level of care the patient
needed. The Agency also indicated that of the remaining three patients,
two were recertified at intervals of 65 days, while for the third a
period of 95 days passed between recertifications. The documentation
supplied by the State regarding all four individuals (State Attachments
V-Y) supports the Agency position. The State did not contest the
Agency's determination of the time interval between any of these alleged
recertifications. Rather, the State argued that the documentation
proved its contention of timely recertifications. The regulation at 42
CFR 456.260(b)(2) clearly requires that recertifications for skilled
patients occur at intervals of not more than 60 days. Therefore, we
uphold the disallowance for this facility.

Conclusion

For the reasons set out above, we uphold this disallowance as
modified by the Agency in the amount of $155,252.34. /1/ The Agency had
previously issued Action Transmittal SRS-AT-75-122 (November 13,
1975) to State Medicaid Administrators to clarify "what is required (for
certification and recertification) in order for States to be considered
in adherence with the statute and regulation." Action Transmittal 80-68
replaced Action Transmittal 75-122 and was intended to further clarify
the requirements, not to change them substantively. /2/ In its
Attachment A, the State provided abbreviated responses to the violations
cited by the Agency. In more than one instance the State indicated that
physicians had reviewed and updated plans of care in 90 day intervals.
As we discuss in the text below, plans of care for skilled care patients
must be reviewed at 60 day intervals. Plans of care for intermediate
care patients may be reviewed at 90 day intervals (42 CFR 456.380).
There is no evidence that any intermediate care patients are involved in
this disallowance. /3/ The State alleged that the Physician's
Orders were signed on April 27, 1982. The date was handwritten and
somewhat unclear. However, the patient was admitted on April 1, 1982,
and, in that context, it appears more likely that the date accompanying
the physician's signature was "4-07-82."

NOVEMBER 14, 1984