GAB Decision 508
Docket No. 83-158
January 31, 1984
Georgia Department of Medical Assistance;
Settle, Norval; Teitz, Alexander Garrett, Donald
The Georgia Department of Medical Assistance (State) appealed a
decision by the Health Care Financing Administration (Agency) to
disallow $222,957.11 in federal financial participation claimed by the
State under Title XIX of the Social Security Act (Act) for the quarter
ending September 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 six intermediate care
facilities (ICF). Since the State filed its appeal, the Agency has
reexamined the method of calculating the penalty and reduced the
disallowance to $205,238.82.
The record in this case includes briefs and documentation submitted
by both parties. The State had initially requested an evidentiary
hearing on this matter, but subsequently withdrew its request. 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 the state's Medicaid plan under Title XIX 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 ICFs. 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 an ICF 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 intermediate care patients is found at 42 CFR 456.360
(1981). The regulation provides:
(a)(1) A physician must certify for each applicant or recipient that
ICF 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 ICF, before the Medicaid
agency authorizes payment.
* * *
(b)(2) Recertification must be made at least --
(ii) Every 60 days after certification in an ICF other than a public
institution for the mentally retarded or persons with related
conditions.
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."
Finally, services for intermediate care patients must be provided in
accordance with a written plan of care established before admission to a
facility or authorization for payment. (42 CFR 456.380(a)) The plan of
care for an intermediate care patient must be reviewed at least every 90
days. (42 CFR 456.380(c))
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 (3) care and services.
Agency reviewers conducted a survey of ten ICFs to certify that the
requirements of sections 1903(g)(1)(A) and (B) were met for the quarter
ending September 30, 1982. The Agency found violations in six of the
ten facilities surveyed. The Agency alleged violations of 42 CFR
456.360, concluding that intermediate care patients were not certified
or recertified in a timely manner and that physicians failed to follow
the proper procedure for recertifying a patient when a signature stamp
is used. The Agency also alleged violations of 42 CFR 456.380
concluding that plans of care for intermediate care patient has not been
established or updated in a timely fashion and that some plans of care
were substantively deficient.
The State argued that Action Transmittal 80-68 implementing 42 CFR
456.360 had been improperly promulgated. The State maintained that the
Action Transmittal substantively altered the regulatory framework of 42
CFR 456.360(b), subjecting it to the notice and comment requirements of
section 4 of the Administrative Procedure Act, 5 U.S.C. 553. The State
contended that Action Transmittal 80-68 should not be used as a basis
for the disallowance, since it is "contrary to applicable statutory and
regulatory guidelines, was not properly promulgated, and is clearly
ambiguous." (State Brief, p. 12) Specifically, the State argued that the
Agency's requirement that a physician sign and date each recertification
was not supported by either the statute's language or its legislative
history.
The State maintained that it had complied with all applicable
statutes and regulations to show an effective utilization review. The
State contended that "nearly every patient" cited by the Agency has
been
recertified and had a plan of care update in a timely fashion. (State
Brief, p. 11) The State admitted that one patient had been recertified
at an interval greater than 60 days, but argued that this one
discrepancy did not support the Agency's decision to take a
disallowance. Finally, the State made specific arguments as to why each
of the Agency's findings concerning individual patients was incorrect.
Analysis
I. Issues Relating to More Than One Violation
We first address the State's arguments that challenge the
disallowance in its entirety.
A. Action Transmittal 80-68 Was Not Subject to Section 553 of the
Administrative Procedure Act
Action Transmittal 80-68 is an updated version of SRS Action
Transmittal 75-122. This Board has previously rejected the argument
that the requirements set out in Action Transmittal (4) 75-122 should
have been promulgated under section 553 of the Administrative Procedure
Act. The Board found that the requirements set out in the Action
Transmittal were "not new, substantive requirements but . . . 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 Action Transmittal (SRS-AT-75-122) 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 have held that the rationale of the North Dakota decision applies
to the issue of recertification as well. See, Washington Department of
Social and Health Services, Decision 482, December 17, 1983.
The State here has not presented any arguments which would cause us
to conclude that our analysis in prior decisions was incorrect. In view
of this and based upon our analysis in North Dakota, we conclude that
Action Transmittal 80-68 was not subject to the notice and comment
provisions of the Administrative Procedure Act.
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 the
appeal of the Washington Department of Social and Health Services,
supra. In Washington, we reaffirmed our position on timely
recertification and 100% compliance as discussed in Kansas State
Department of Social and Rehabilitation Services, Decision No. 312, June
21, 1982. On page 4 of the Kansas decision we provided a comprehensive
review of our position on these (5) issues, which the State here has not
convinced us to change 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 Secretary 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 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.
Thus, in spite of the State's argument of the contrary, we conclude
once again that the standards of section 1903(g) are not fulfilled by
anything less than 100% compliance with the statutory and regulatory
requirements.
(6) II. The Facilities
Having disposed of the State's general arguments, we now address
issues raised by violations in particular facilities.
A. Pine Manor
The Agency found two violations in this facility. The Agency
determined that one patient had an untimely initial certification while
for the other there was a 64 day interval between recertifications. We
address here the second patient only. /2/ The State admitted that 64
days had elapsed between recertifications for the second patient.
(State Brief, p. 6) However, the State argued that one discrepancy did
not support the Agency's decision to take a disallowance. We disagree
based on the analysis set out on page 5 above. Under the Act, the
Agency has no discretion to waive a penalty, once it is clear that
violations exist no matter how few or minor the violations are. Here,
the State admits that a violation exists, and therefore, we must uphold
the Agency decision to take a disallowance for this facility.
B. Georgia Retardation Center
The Agency found a violation in this facility based upon an allegedly
untimely update of a plan of care for one patient. The federal
regulation at 42 CFR 456.380(c) requires that a plan of care be updated
at least every 90 days. The Agency contended that more than 90 days had
passed between plan of care updates for this patient.
The Agency argued that a Bi-Monthly Medical Review (Medical Review)
conducted in August 1982 (State Tab F) could not be viewed as a valid
plan of care because the Medical Review was merely a summary of the
patient's progress and did not contain any orders by the physician for
medication activities, treatment, etc., as required by 42 CFR 456.380(
b). (Agency Brief, p. 11)
The State maintained that the Medical Review qualified as a valid
plan of care review. The State argued that 42 CFR 456.380(c) did not
require that a new plan of care be (7) provided for a patient every 90
days, but merely that a review take place.
The regulation at 42 CFR 456.380(a) requires that a physician must
establish a written plan of care for each patient before the patient's
admission to an ICF. The regulation at 42 CFR 456.380(b) indicates that
a plan of care must include:
(1) Diagnosis, symptoms, complaints and complications . . .;
(2) A description of the individual's functional level;
(3) Objectives;
(4) Any orders for medical social and dietary services;
(5) Plans for continuing care;
(6) Plans for discharge.
We have reviewed the State's submission regarding this patient and we
find that the Medical Review is inadequate as a plan of care review of
update. A reasonable interpretation of the plan of care "review"
required by the regulations is that it should cover the same items once
again that must be included in the original plan of care or that it
should indicate in what way if any the original plan should be altered.
Here the Review relied upon by the State discussed how the patient had
progressed during the prior two month period but did not purport to
consider what the current plan of care should be. For example, as the
Agency argued, the plan did not say what medical services or plan for
continuing care would still be required for this patient. Indeed, the
Review stated that the patient "had no medical . . . evaluation" in
the
months covered by the review.
Accordingly, we agree with the Agency that there was no plan of care
update for this patient within 90 days and uphold the disallowance taken
for the Georgia Retardation Center.
C. Habersham Nursing Home
The Agency initially found 11 individual violations in this facility.
The bases of these violations were invalid or untimely recertifications
(9), failure to recertify (1), and invalid and untimely update of a
patient's plan of care (1). Since the State initiated this appeal, the
Agency withdrew its determination that there was a failure to recertify
one patient for continued care, leaving ten individual violations for
our consideration.
(8) The Agency alleged that for seven patients at this facility, 61
days had passed between recertifications. The State argued that each of
these patients had been recertified within the 60-day period. (State
Brief, p. 8; State Tab G, pp. 10-12, 16, 18, 21-24, 24, 26-27) Both
parties agreed as to the actual dates by which the recertification
period for each patient was to be measured. In each instance under
review, we agree that the date on which the recertification occurred was
the 61st day. (E.g., at State Tab G, p. 11, the patient was recertified
on July 13, 1982 and again on September 12, 1982, an interval of 61
days.) The State did not indicate how it calculated the period between
recertifications but we counted as day one the day after the prior
recertification. Therefore, we uphold the Agency finding with regard to
these individuals. As we discussed on pages 4 and 5, a violation has
occurred even if the State missed only one day in performing the review.
The Agency invalidated the August 7, 1982 recertification with
respect to another patient in this facility because the physician's
rubber stamped signature was not initialed as required by Action
Transmittal 80-68. The signature on our copy of this patient's
recertification (State Tab G, p. 2) did not reproduce clearly enough to
allow us to determine whether it had, in fact, been initialed by the
physician. However, the State did not deny the Agency's allegation, but
chose instead to challenge the validity of the requirement by arguing
that the Action Transmittal was an improper attempt to alter the
Medicaid regulations.
This is our first opportunity to address the signature stamp
requirement under the regulatory interpretation provided by Action
Transmittal 80-68. The uniform requirement for any valid
recertification document is that it is signed and dated by a physician.
In North Dakota, 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. The conditions for patient recertification
including those accomplished by use of a signature stamp are clearly set
out in the Action Transmittal. The Action Transmittal prescribes that a
rubber stamped physician's signature is valid for purposes of
recertification only when the physician initials the stamped signature.
In view of the accepted standards for recerntification, we believe that
this is a necessary requirement. A signature stamp is a device
susceptible to abuse by its very nature and the Agency requirement for
initials along with the stamped signature is clearly reasonable. We
believe that the Action Transmittal in this respect was a valid
interpretation of the regulations, not an attempt to alter them. The
facts here support the Agency contention that the recertification for
(9) this patient did not meet the regulatory standard. The State did
not deny that the physician had not initialed the stamped signature.
Therefore we sustain the disallowance for this patient.
The Agency cited another patient at this facility as having an
untimely update of her plan of care. The Agency admitted that the
patient had a valid plan of care update on July 24, 1982 (Agency Brief,
p. 13; State Tab G, p. 9). The Agency noted that the next update was
due in October 1982 and that two intervening actions by physicians
(August 24 and September 24, 1982) were insufficient as plan of care
updates. The State argued that the plan of care had been properly
updated on both August 24 and September 24, 1982.
The quarter under consideration for this disallowance ran from July 1
- September 30, 1982. The Agency admitted that the July 24 update was
valid. Therefore, as the Agency noted, the next update was not due
until October 1982. The update in question was valid until a point in
time which was outside the calendar quarter with which we are concerned.
Therefore, this violation should not have been taken and, although it
will not affect the overall disallowance, we reverse it.
The final violation cited by the Agency in this facility was for a
patient for whom no recertification was performed. Along with its
initial brief, the State submitted an affidavit from its Director of the
Division of Program Management who stated that the Agency had submitted
no documentation to the State for this patient. See, Rice Affidavit.
The Agency did submit a copy of the original certification document with
its Brief. The State could have overcome the Agency's allegation by
providing evidence of the recertification. However, the State did not
respond to this issue in its Reply Brief. Although a finding for the
State regarding this individual would not have any effect on the
disallowance due to the other violations found in this facility, the
State's failure to provide documentation to rebut the Agency's
contention leaves us no alternative but to uphold the violation for this
patient.
In view of our findings for this facility, we uphold the Agency
decision to include it in the overall disallowance.
D. McRae Manor Nursing Home
The Agency found five individual recertification violations in this
facility.
The first patient (State Tab H, pp. 1-2) was recertified on May 14,
1982. Therefore, the next recertification would have been due by July
13, 1982. However, at the time of the next (10) recertification the
attending physician did not indicate the actual date of the
recertification. The Action Transmittal specifically requires that the
recertification document be dated as the only reliable method of
determining the timeliness of the recertification. Absent any proof of
the date of recertification, we have no means by which to accurately
determine whether the recertification occurred within the timeframe
established by the regulation. Therefore, we conclude that a violation
did exist with regard to this patient.
The Agency alleged that the second patient (State Tab H, pp. 11-12)
was recertified on July 7, 1982 and again on September 7, 1982, a 61-day
interval. The recertification document upon which the Agency relied
indicated that the date of the July recertification was July 8, not July
7. However, even with this additional day added to the recertification
period, the next recertification was due September 6. The State's
documentation clearly shows that the next recertification took place on
September 7, outside the 60-day interval. Therefore, this patient was
improperly recertified. See, p. 5 above.
The Agency also cited the recertifications of four additional
patients as having been invalid because the recertifications were not
dated. (Agency Tab D; State Tab H, pp. 16, 22, 26) Although the "Due
Date" for each recertification is clearly indicated, the actual date of
recertification is absent in each case. As we discussed above, the
dates of recertification must be recorded in order to determine if the
recertification occurred within the prescribed 60-day period.
Accordingly, we uphold the five violations for this facility and
conclude that the disallowance for it was proper.
E. Berrien Nursing Center
The Agency cited five patients in this facility as having untimely
and invalid updates of their plans of care. (State Tab J; Agency Tab
E) The plans of care for these patients were established by the same
physician. The Agency based its conclusions on the fact that the
reviews which the State claimed were updates generally consisted of the
notation "continue previous orders." The Agency indicated that a plan
of
care review, as envisioned by the regulation required a more indepth
analysis than has been provided in this instance.
Based upon our review of the evidence submitted for four of the five
patients involved, we agree with the Agency's (11) position. /3/ As the
Agency noted, the burden rests with the State to show that the updates
of these plans of care were valid. See, Missouri Department of Social
Services, Decision No. 214, September 23, 1981. The mere phrase
"continue previous orders" does not, by itself demonstrate precisely
what occurred in terms of a patient's plan of care. The phrase could
have just as easily been used in reference to a specific aspect of the
patient's plan of care (e.g., medication, treatment) as to the entire
plan of care. We also note that in the case of four of the patients,
the notation "care plan reviewed" was used on records outside the
quarter in question. See, the last three plans of care in State Tab J
and Agency Tab E. We cite to these notations as an indication that, at
least in the mind of the attending physician, there apparently existed a
distinction between continuing previous orders and reviewing a plan of
care. Given this distinction and the uncertainty of the phrase
"continue previous orders," we believe that the Agency was correct
in
concluding that there were no valid plan of care updates here.
Therefore, we uphold the disallowance for this facility.
F. Snellville Nursing Home
The Agency found one individual violation at this facility.
Snellville is an ICF. However, the patient in question was certified as
needing skilled nursing care. The Agency argued that the certification
of this patient was in violation of 42 CFR 456.360(a) which requires
that a physician certify for each applicant that ICF services are or
were needed. (Supplemental Agency Brief, pp. 2-3). The State argued
that 42 CFR 456.360(a) permitted retention of a skilled care patient in
an ICF because the patient needed a level of care "at least" equal
to
that of intermediate care. Further, the State also argued that since
Snellville was an ICF and only an ICF rate was paid, the disallowance
should be overturned. (State Reply Brief, p. 8)
We reject the State's position. The Board was faced with a similar
question in the appeal of the Wisconsin Department of Health and Social
Services, Decision 482, November 30, 1983. In Wisconsin, the Agency
interpreted the recertification (12) requirement to be met only if these
is assurance that the patient is receiving appropriate care, i. e., the
level of care needed. In this instance, the Agency takes the identical
position with regard to an initial certification. Here, as in
Wisconsin, we believe that the Agency has properly interpreted the
requirement.
Section 1905(c) of the Act defines an ICF as:
an institution which is licensed . . . to provide . . .
health-related care and services to individuals who do not require the
degree of care and treatment which a hospital or skilled nursing
facility is designed do provide . . . .
Thus, the Act clearly differentiates between skilled and intermediate
care based on a qualitative, rather than solely an economic, basis.
This distinction is also supported by the federal regulation at 42 CFR
440.40(a)(1) which defines SNF services as those services that are --
(ii) Provided by a facility . . . that is certified to meet the
requirements for participation . . . as evidenced by a valid agreement
between the Medicaid agency and the facility for providing skilled
nursing services . . . .
Further, Action Transmittal 80-68 defines recertification as the
process by which a physician attests to an individual's need for
continued placement at a specific level of care and provides basically
the same definition for certification, i.e., attests to an individual's
need for a specific level of institutional care.
The certification here did not meet the Action Transmittal
requirement of being an attestation that the patient needed placement at
the ICF level of care. Rather, it indicated a need for skilled care.
We concluded in Wisconsin that one of the purposes of utilization
control is to ensure that Medicaid patients are receiving the level of
care they need. Here, the patient was not receiving the level of care
needed and the certification was invalid. Accordingly, we conclude the
disallowance for this facility was proper.
(13) Conclusion
Based on our analysis above, we uphold the entire disallowance in the
amount of $205,238.82. /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 SRS-AT-75-122. /2/ The documentation submitted for
the first patient was illegible. The appellant had the opportunity to
supplement its briefing by supplying more legible documentation but did
not do so. However, given the State's admission with regard to the
recertification of the second patient, further evidence as to the first
individual, even if acceptable, would not change the disallowance
calculation here. /3/ The State had originally complained that the
Agency failed to identify why the plan of care for the fifth
patient was invalid or untimely. This issue remained undeveloped
throughout this appeal and we are unable to uphold the Agency's finding.
Nevertheless, since even one violation is sufficient to uphold a
disallowance for the facility, the calculation of the disallowance is
not affected.
NOVEMBER 14, 1984