Maine Department of Human Services, DAB No. 516 (1984)

GAB Decision 516
Docket No. 83-154

February 29, 1984

Maine Department of Human Services;
Ballard, Judith; Ford, Cecilia Sparks Teitz, Alexander


The Maine Department of Human Services (State) appealed a
disallowance of $87,666.64 taken by the Health Care Financing
Administration (Agency) for alleged violations of section 1903(g) of the
Social Security Act (the Act). Specifically, the Agency determined that
for the quarter ending September 30, 1982 there was one violation of the
utilization control requirements (sections 1903(g)(1)(A) and (B) of the
Act) in each of three intermediate care facilities (ICFs). We conclude
that the disallowance should be upheld for one violation and reversed
for the other two.

This decision is based on the written record and on oral argument
presented to the Board by the parties.

Statutory and Regulatory Background

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. This showing must be made for each
quarter, or the federal medical assistance percentage (FMAP) requested
for amounts paid by the state for long-term care services will be
decreased according to the formula set out in section 1903(g)(5).
Section 1903(g) provides that the showing must include evidence 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 or were required
to be given on an inpatient basis because the individual needs . . .
such services; and

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

* * *

(2) These statutory requirements were implemented at 42 CFR 456.360
and 456.380 (1981) for ICFs. Section 456.360 provided:

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

* * *

(b) Recertification. (1) A physician, or physician assistant or nurse
practitioner . . . acting within the scope of practice as defined by
State law and under the supervision of a physician, must recertify for
each applicant or recipient that ICF services are needed.

(2) Recertification must be made at least --

(ii) Every 60 days after certification in an ICF . . .

The Agency issued Medicaid Action Transmittal 80-68, dated September
1980, as a clarification of what constitutes a valid certification and
recertification.

Section 456.380 provided:

(a) Before admission to an ICF or before authorization for payment, a
physician must establish a written plan of care for each applicant or
recipient.

Section 456.381 provides:

A written report of each evaluation and plan of care must be entered
in the applicant's . . . record --

(a) At the time of admission; . . . .

* * *

The Alleged Violations

The Agency conducted a violation survey in ten ICFs in the State
during January, February, and March 1983. The purpose of the survey was
to verify that during the quarter ending September 30, 1982 a physician
certified each patient on or before the date of admission or
authorization for Medicaid payment and recertified each patient at least
every 60 days thereafter, and that a plan of care was established by a
physician for each recipient upon admission and updated at least every
90 days thereafter. The Agency determined that (3) there were
violations of these requirements for three patients, one in each of
three facilities.

The specific violations found for two patients were that valid
recertifications were not made every 60 days during the quarter in
question. For the third patient, the Agency found that no plan of care
was established when he reentered the ICF after a six-day stay in a
hospital for injuries sustained in a fall.

Discussion

Patient Delina K.

The Agency determined that valid recertifications were made for this
patient on May 1, 1982 and July 7, 1982 and that a violation existed
because a period of 67 days had elapsed between recertifications. The
State alleged that the patient's attending physician had not signed a
recertification in a timely fashion because he was ill. The State
offered another document as evidence that the patient was recertified in
a timely fashion. This document was a multi-disciplinary team
conference form which recorded the recommendations made at a conference
held June 24, 1982 (54 days from the last valid recertification). /1/
The form contained recommendations for the patient's care and included a
statement saying "Continued professional care in nursing home." /2/ A
physician initialed the form but did not date it. /3/ The State
submitted affidavits asserting that the physician had signed the form
within 7 days after June 24, 1982.


(4) The Agency argued that the multi-disciplinary conference form was
not a timely recertification because the physician did not date the form
when he signed it. The Agency pointed to its interpretation of the
statute and regulations set out in Medicaid Action Transmittal AT-80-68,
issued September 1980. That interpretation says that a recertification
must be dated at the time it is signed by a physician.

The State, on the other hand, argued that the date of a physician's
signature could be shown by contemporaneous records. In support of this
argument, the State referred to California Department of Health
Services, Decision No. 326, June 30, 1982, in which the Board held that,
where the State had not had notice that a physician's signature on a
plan of care must be dated, the State could show through contemporaneous
records that a plan of care was reviewed timely.

Furthermore, the State argued that the language of the statute does
not require the physician to date his signature and that, under the
statute, the Secretary must promulgate regulations for "supporting
material." Transcript, pp. 16-17. The State pointed to language in
section 1903(g)(1)(A) which says,

(and recertifies, . . . at least every 60 days, and accompanied by
such supporting material, appropriate to the case involved, as may be
provided in regulations of the Secretary), . . . .

The State argued that this language meant that the Secretary need not
require supporting material, but if the Secretary should require
supporting material, a regulation must be promulgated.

This Board has previously concluded that the Agency's Action
Transmittal SRS-AT-75-122 (later reissued as AT-80-68) interpreting the
requirements for physician certification and recertification did not
impose new substantive requirements. Social Service Board of North
Dakota, Decision No. 166, April 30, 1981. The Board said that the
interpretation was a logical extension of the statutory requirements and
was reasonable for purposes of administrative convenience, given the
need to verify that a certification had been made in a timely manner.
The Board held, therefore, that the specific statements about what
constitutes a certification need not be promulgated in a regulation
through notice and comment rulemaking. This same rationale applies to
the statement that a recertification must include a dated signature to
show that it was made by the proper person in a timely manner. The
Board's conclusion in Decision No. 326, supra, that California could
show the date of a plan of care through contemporaneous records was
based on California's lack of notice of the dating requirement for plans
of care, which was (5) set out in Regional Letter 82-2. See also Nevada
Department of Human Resources, Decision No. 471, October 31, 1983. In
this case, however, the State admitted that it had notice of AT-80-68.
Transcript, p. 17.

The meaning of the statutory language pointed to by the State is not
clear. The statute does not define "supporting material," nor is it
clear which portion of the provision the words, "as may be provided in
regulations . . ." modifies. Finally, the use of the word "may" rather
than shall implies discretion on the part of the Secretary. Nor is
there any indication in the statute's legislative history about
congressional intention. Thus, we cannot conclude that the language
precludes the Secretary from taking a disallowance based on lack of a
dated signature unless there is a regulation specifically stating this
requirement.

Even if we were to conclude that any provision stating what
constitutes a timely recertification must appear in a regulation, the
State would not prevail here. The Secretary has implemented the statute
by promulgating a regulation that a physician recertify a patient at
least every 60 days. The State has the burden to show that the
recertification occurred within 60 days. A dated signature is clearly
evidence of a timely recertification. Here, the State presented
affidavits which alleged that the physician must have signed the alleged
recertification within 7 days of June 24, 1982, because the physician's
routine was to visit the facility at least once a week. However, the
physician does not allege specifically the day upon which he signed the
form, and since he could have signed it as late as the 7th day, i.e.,
July 1, 1982, the State still has not met its burden to show that the
physician recertified the patient in a timely manner. The
recertification was due on June 30, 1982, 60 days from May 1, 1982.
Thus, even if we were to accept the State's argument that it could show
through evidence outside the recertification document that a timely
recertification had occurred, the State has not clearly shown that the
recertification occurred on or before June 30, 1982. We cannot conclude
that the requirements for timely recertification were met for this
patient.

Patient Paul M.

The Agency found that a valid recertification was made on April 25,
1982 and again on July 1, 1982, a period of 67 days. The Agency
determined that the July 1, 1982 recertification was untimely, and that
a violation existed for the quarter beginning July 1, 1982. The State,
on the other hand, argued that since a valid recertification was made on
July 1, 1982, no violation existed on that day and, therefore, that a
disallowance for the violation could only have been taken for the
quarter ending June 30, 1982. The State (6) pointed to section 1903(
g)(3)(A)(iv), which provided that a reduction in the FMAP under section
1903(g) could not be imposed unless notice of that reduction is provided
to the State "no later than the first day of the fourth calendar quarter
following the calendar quarter with respect to which such showing was
made." The State argued that, under this language, the latest date by
which the Agency could notify the State of a reduction for the quarter
ending June 30, 1982 would have been April 1, 1983. The Agency's notice
of disallowance was issued June 27, 1983, and therefore, would have been
untimely for a disallowance taken for the quarter ending June 30, 1982.
Thus, the State argued that the Agency could not take a reduction in
FMAP for this violation.

The Agency argued that, although a valid recertification occurred on
July 1, 1982, it was untimely because it was due June 24, 1982, and that
an untimely but otherwise valid recertification was itself a violation.
However, the Agency provided no explanation why its basis for finding a
violation was the execution of a recertification, albeit untimely,
rather than the lack of a recertification made within 60 days of the
previous recertification.

The State argued that the Agency had not notified the states of this
interpretation, and that such an interpretation was absurd because it
would discourage physicians from recertifying once they did not do so
within 60 days from the previous recertification.

The statute and regulation require that a recertification be made "at
least every 60 days." Thus, clearly a violation occurred when a
recertification was not made on the 60th day, i.e., June 24, 1982. We
agree with the State, however, that it would be counterproductive to
consider the recertification itself a violation under circumstances
where the only flaw is that it was executed after the 60th day.

The record does not show that the states have had notice that the
Agency would consider the act of executing a valid recertification after
the 60th day in itself a violation. Without notice to the states, and
without a reasonable explanation for such an interpretation, we cannot
uphold the Agency's position in this instance. Thus, we conclude that,
although a violation could have been found when a recertification was
not made on the 60th day, in the quarter ending June 30, 1982, a valid
recertification was executed on July 1, 1982 and, therefore, on that day
there was no longer a violation. Thus, we cannot conclude that the
Agency can take a disallowance for untimely recertification of this
patient for the quarter ending September 30, 1982.

(7) Under section 1903(g)(3)(A)(iv), the notice of a reduction in the
FMAP for the quarter ending June 30, 1982 would have to have been
provided no later than April 1, 1983, and the record shows that this did
not occur. Therefore, we conclude that there was no violation for this
patient for the quarter ending September 30, 1982 and that the Agency
failed to meet the deadline for notifying the State that it would reduce
the FMAP for the quarter ending June 30, 1982.

Patient Robert A.

This patient required hospitalization due to injuries sustained in a
fall. The patient entered a hospital on August 19, 1982 and returned to
the ICF on August 25, 1982. The Agency asserted that this constituted a
discharge from the ICF and a readmission and that, under section
456.380, a plan of care must be established upon admission. The Agency
alleged that there was no evidence that a plan of care was established
for the patient upon his readmission to the ICF and that, as a result, a
violation of section 456.380 existed.

The State argued that the Agency has not defined "admission" and that
there is no reason to believe that a 6-day absence from the ICF for
treatment unrelated to his level of long-term care constitutes a
discharge and readmission. Moreover, the State argued that the
regulation requiring establishment of a plan of care upon admission does
not clearly notify the State that when a patient is temporarily absent
from his long-term care facility, a new plan of care should be
established upon readmission. /4/ The Agency argued that the definition
of "admission" should be that used in the normal course of business.
Transcript, p. 93. The Agency argued that since facilities do not
always hold a bed for patients who are temporarily out of the facility,
there could be a discharge and readmission under these circumstances.
Furthermore, the Agency argued, a hospital stay might be considered a
change in the level of care and that would require a new plan of care,
or at least a statement that the previous plan of care remained
unchanged. The Agency could not explain why a 6-day hospital stay
should constitute a change in the level of long-term care (i.e., over 60
days). Transcript, pp. 94-96.


(8) At the Board's request, the State investigated further the facts
of the patient's stay in the hospital, and submitted information that
the patient's bed was held for his return, that the bed was paid for
during his absence, and that the records at the facility show a "bed
hold." Letter of February 1, 1984. Moreover, the State alleged that the
record for the patient showed that the physician entered in writing that
his original nursing home orders be renewed upon the patient's return to
the ICF. The Agency did not challenge these factual allegations.

The Agency's regulations do not define "admission" and do not clearly
establish that this factual situation would constitute an "admission."
Since the facility's records do not show the patient's emergency stay in
a hospital as a discharge from the facility and a readmission, we
conclude that this was not a situation to which section 456.380 should
apply. Moreover, there is information in the record that the physician
fulfilled any substantive obligation on his part by indicating that
there should be no change in the patient's previous plan of care. We
reverse the disallowance for this violation. /5/


(9) Conclusion

Based on the analysis set out above, we uphold the finding of a
violation for patient Delina K., but reverse the findings for the other
two patients. Thus, the Agency should modify the amount of the
disallowance to reflect this conclusion. /1/ We note that the statute
requires a physician to recertify. The meeting held on June 24,
1982 was not itself a recertification. Thus, the issue here centers
around when the appropriate person "certified" by signing a statement
indicating the patient's need for a specific level of care. /2/
The State pointed out that the facility was an intermediate care
facility only and, therefore, the level of care referred to in the
document could only be the ICF level. The Agency did not challenge this
assertion, nor did it question the validity of the document as a
recertification on any basis other than the question of timeliness.
Transcript of Oral Argument, p. 76. /3/ Although a physician's
assistant or nurse practitioner may recertify in some circumstances (see
45 CFR 456.360(b)), the State did not allege that any such person did
recertify this patient, nor is there any evidence of it in the record.
/4/ The State also argued that the Agency violated 45 CFR 74.304(c),
which sets forth a standard for an appealable final decision. The
standard states that the decision should contain a complete statement of
the background and basis of the component's decision, and enough
information to enable the grantee and any reviewer to understand the
issues and the position of the Agency. The State argued that this
patient was not included in the preliminary notice to the State about
the federal reviewer's findings, and that the notice of disallowance
listed the violation for this patient as "untimely update of plan of
care." The State also pointed out that at the time of the federal
review, the reviewer had indicated that she did not believe that section
456.380 applied to the factual situation presented for Robert A.
Therefore, the State argued, it did not have enough information to
enable it to understand the basis for the finding that a violation
existed and to understand the Agency's position and the issues
presented. We do not explore this issue further here since we reverse
the violation on the facts. However, we do note that this Board has
previously held that there is no basis for reversing a disallowance
simply because an agency does not initially provide a complete
explanation of the issues presented by a disallowance, so long as the
agency does so during the appeal process and the state has an
opportunity to rebut the findings and to present arguments on the legal
issues. Indiana Department of Public Welfare, Decision No. 489,
December 30, 1983. /5/ A situation where a patient returned to a
nursing facility after a brief hospital stay was also presented in
Nevada Department of Human Resources, Decision No. 471, October 31,
1983. The record in Nevada contained a "Facility Admission and
Discharge Notice" showing the patient's "admission" to a skilled nursing
facility after a hospital stay for cataract surgery. The State did not
dispute that the patient's return to the SNF was an "admission," and the
issue in that case centered around whether the physician had timely
established a valid plan of care.

NOVEMBER 14, 1984