GAB Decision 517
Docket No. 83-200
February 29, 1984
Illinois Department of Public Aid;
Ford, Cecilia Sparks; Garrett, Donald Settle, Norval
The Illinois Department of Public Aid appealed a decision by the
Health Care Financing Administration disallowing $4,021,650 in federal
financial participation (FFP) claimed by the State under Title XIX
(Medicaid) of the Social Security Act. The claims disallowed were for
per diem rates for inpatient psychiatric services rendered to
individuals aged 22 to 64 in institutions for mental diseases (IMDs).
Services to individuals in this age group in IMDs are generally excluded
from the definition of "medical assistance" in which federal Medicaid
funding is available. The State contended nonetheless that FFP was
available for these services because they were provided during the month
the individual receiving the services was admitted to the IMD. An
Agency regulation stated that "FFP is available in expenditures for
services furnished to eligible individuals during the month in which
they become . . . patients in an institution for . . . mental
diseases." 42 CFR 435.1008(b). This regulation reflects a policy of
permitting states to consider a person eligible for Medicaid for a full
month if that person is eligible during any part of the month, as a
matter of administrative convenience. The State contended that the
Agency's longstanding interpretation of this regulation was to permit
FFP in the claims here. The Agency determined that this regulation
could not be read to overcome restrictions in the State Medicaid plan
concerning what services were covered. Therefore, the Agency concluded,
there was no FFP in that portion of the per diem rates which represented
"institutional services" provided by IMDs to this age group because
these services were not covered in the State plan.
The issues raised by this appeal are primarily those addressed by the
Board in Joint Consideration: IMD Admission/Discharge Issue, Decision
No. 436, May 31, 1983. There, the Board upheld disallowances taken
against five States, concluding that the Agency's interpretation that
the IMD exclusion limits covered services was supported by the statutory
scheme as a whole and by the Agency's regulatory scheme. The Board
further concluded that the Agency had no longstanding interpretation
permitting the States to ignore these limitations during partial months
in IMDs and that the States had not shown otherwise that the Agency
should be precluded from taking the disallowances.
(2) Here, Illinois relied on arguments made by the State of New York
in the appeals leading to Decision No. 436. See Appeal file, Ex. F.
Illinois also stated that it had made these claims "only after
investigating their legality, and after inquiring whether its State Plan
would cover these individuals." State's brief, p. 1. The State said
that it had "specifically asked HCFA whether the claims were legitimate
under the applicable statutory and regulatory framework, and received
written confirmation from the Regional Administrator of Region V that
the claims did in fact comply with the law." State's brief, p. 1.
Based on the Regional Administrator's letter, the State made two
arguments: (1) that the letter constituted an admission that was
binding on the Agency in this proceeding; and (2) that the Agency was
precluded from disallowing the FFP claimed here because the Regional
Administrator's letter specifically approved the aspect of the State's
Medicaid plan involved here.
For the reasons stated below, we adopt the analysis we set out in
Decision No. 436. The State has presented nothing which would lead us
to conclude that that analysis was incorrect, nor has the State provided
any evidence to show that it relied to its detriment on any Agency
action in incurring and claiming the disallowed costs. The Regional
Administrator's letter did not specifically address the complex
questions of statutory and regulatory interpretation which are relevant
here, nor did it specifically find that the State's Medicaid plan
covered these services. While the letter may have implied that per diem
rates could be claimed, this implication is not a necessary one and
arguably conflicts with applicable statutory and regulatory provisions.
Thus, we do not think that the State could have reasonably relied on
that implication. Indeed, the record shows that the State was aware of
the potential conflict. Moreover, the State submitted its first claim
prior to receiving the letter. Finally, we do not agree with the State
that the letter constituted either a binding admission or plan approval.
Accordingly, we uphold the disallowance.
Our decision is based on the parties' written submissions. Below, we
first summarize our conclusions from Decision No. 436. We then discuss
the Regional Administrator's letter and state why that letter does not
preclude us from applying the rationale in Decision No. 436 here.
Finally, we address the State's arguments that the letter constituted an
admission or State plan approval.
I. Summary of Decision No. 436
In the cases leading to Decision No. 436, the States argued that the
effect of the statutory exclusion of services to individuals aged 22 to
64 in IMDs was solely to render those individuals (3) ineligible for
Medicaid. Therefore, the States reasoned, the partial month eligibility
provision as applied to IMDs in 42 CFR 435.1008(b) overcame the
exclusion by rendering the individual eligible during the full month in
which the individual became a patient in an IMD (or left the IMD). This
made FFP available in any services provided during this time period,
including inpatient psychiatric services claimed at a per diem rate, the
States concluded.
The Board examined the relevant statutory provisions and concluded
that the statutory scheme as a whole supports the Agency interpretation
that the exclusion results not only in rendering patients between the
ages of 22 and 64 in IMDs ineligible for Medicaid, but also results in
the absence of any provision covering inpatient services in an IMD when
provided to those individuals. Decision No. 436, pp. 5-11. In
particular, the Board found the following to be relevant:
* When the definition of "medical assistance" in section 1905(a)
of
the Act lists as covered services inpatient services in hospitals,
skilled nursing facility (SNF) services, and intermediate care facility
(ICF) services (optional coverage), each service description is modified
by the parenthetical limitation "other than services in an institution
for . . . mental diseases." Paragraphs 1905(a)(1), (4), and (15).
* While a state may cover some hospital, SNF, or ICF services in IMDs
under paragraphs 1905(a)(14) and (16), these services are defined in
terms of the age groups to whom they may be provided: age 65 and over
or under age 21. Moreover, even for persons in these age groups, IMD
services are covered only if they meet certain conditions. This shows
that the exclusion resulted in part from a concern with the nature of
services provided by such institutions.
* The general IMD exclusion is not placed with the provisions of
section 1905(a) which relate to categorical and financial eligibility
for Medicaid. Instead, it appears as a general limitation on what can
be included in the term "medical assistance." This is consistent with
the view that the exclusion relates not only to what persons are
eligible for Medicaid but also to what services are covered.
The Board found that, since 1966, the Agency had consistently
interpreted the IMD exclusion to be a limit on what services could (4)
be covered and that this interpretation was embodied in Agency
regulations. These regulations made it sufficiently clear that the
Agency considered the IMD exclusion to be a limit on covered services as
well as on individual eligibility. Moreover, where optional IMD
services may be covered, they are specifically defined in terms of the
age groups to whom they may be provided and must meet certain other
conditions as well. The States did not deny that these limitations also
appear in their state plan descriptions of what services are covered
under their Medicaid programs. Decision No. 436, pp. 11-16.
The Board examined a series of documents submitted by the States in
support of their proposition that the Agency had a longstanding policy
of partial month coverage of inpatient psychiatric services to
individuals aged 22 to 64 in IMDs. The Board grouped the documents into
the following categories: formal policy issuances; internal Agency
memoranda; correspondence from regional Medicaid officials; and
miscellaneous. In summary, the Board determined the following:
* The formal policy issuances concerned inmates in public
institutions, rather than patients in medical institutions or
intermediate care facilities qualified under Medicaid to provide
inpatient psychiatric services to the aged or children. They simply do
not address the question of the allowability of FFP in inpatient
psychiatric services for individuals aged 22 to 64 during a partial
month of institutionalization. Decision No. 436, p. 17.
* The internal memoranda were not intended as an official
interpretation of the statutory IMD exclusion and how it affected
covered services, and, in any event, the States could not reasonably
have relied on them since they evidenced an internal disagreement over
whether inpatient psychiatric services were covered during partial
months. Indeed, since the States did not show when they became aware of
the internal memoranda, there is a substantial question of whether the
States relied on them at all. Decision No. 436, pp. 18-21.
* While statements in correspondence from Region II officials may
have suggested, for a brief period, that the claims were allowable, the
States should have known from the context in which the statements were
made that payment was uncertain. Correspondence from Region V may have
suggested (5) concurrence with Ohio's proposed interpretation that FFP
was available for "institutional services" provided by an IMD during
the
month of admission, but also conditioned any concurrence on submission
of a state plan amendment. /1/ In Region III, there was no
correspondence submitted indicating approval of the state's claims, and,
in Region I, a memorandum was issued which indicated to the contrary
that FFP would not be available in the expenditures. Decision No. 436,
pp. 21-25.
* Other miscellaneous documents submitted by the States supported the
Agency's position, rather than the States', and some of the documents
indicated that some of the States may have known that the claims
potentially conflicted with regulatory provisions limiting services
coverage. Decision No. 436, pp. 25-27.
In light of these conclusions about the documents the States had
submitted, and the facts presented in the record, the Board concluded
that the States had not shown that they reasonably relied on Agency
action to their detriment. The Board held that the Agency was not
precluded from taking the disallowances based on any of the theories
advanced by the States, including the doctrine of equitable estoppel.
/2/
(6) II. How our analysis in Decision No. 436 applies here
A. The State did not present facts on relevant points
Illinois incorporated by reference into its brief here the arguments
presented by the State of New York in cases leading to Decision No.
436. State's brief, Ex. F. However, Illinois did not elaborate on
those arguments, nor state any reason why it thought the Board's
analysis of those arguments was incorrect. Further, although the Board
had noted specific defects in the States' factual showings in Decision
No. 436, Illinois made no factual presentation here relevant to the
points addressed in Decision No. 436. The State did not show, nor evan
allege, that it was aware of the internal Agency memoranda on partial
month eligibility prior to submitting these claims. The State did not
show, nor even allege, that it was aware of correspondence from
officials of regions other than Region V prior to submitting these
claims. Finally, the State did not show, nor even allege, that it
incurred the costs in question here in reliance on any Agency action.
/3/
(7) B. The evidence the State did present
The only evidence which the State presented which might distinguish
this case from those decided in Decision No. 436 relates to
communications between the State and regional Agency personnel. The
State's evidence consists of the following:
* A letter dated February 5, 1979 to a person identified as the
Regional Commissioner, Social Security Administration, /4/ from the
Chief, Bureau of Policy and Procedures, Illinois Department of Public
Aid (IDPA). Appeal file, Ex. G. This letter requests clarification of
42 CFR 435.1008(b), asking, among other things, whether individuals age
22-65 who enter an institution are eligible during the first month.
* A letter dated March 13, 1979, from the Regional Administrator,
HCFA, Region V, to the Chief, Bureau of Policy and Procedures, IDPA,
acknowledging receipt of the February 5 letter and stating that Region V
had requested review by the Washington office of the questions raised in
that letter. Appeal file, Ex. H.
* A memorandum dated March 8, 1979 to the Director, Medicaid Bureau,
HCFA, from the Regional Medicaid Director, HCFA, Region V. Appeal file,
Ex. I. This memorandum states that it is a follow-up to a discussion
between regional office and central office staff regarding questions
raised by the IDPA. In addition to the questions mentioned in the
February 5 letter, this memorandum lists the following question as one
of the issues raised: "Does coverage extend to all services, including
per diem rates?"
(8) * A memorandum dated March 23, 1979, from the Director, Medicaid
Bureau, HCFA, to the Regional Medicaid Director, Region V, stating that
the questions in the March 8 memorandum relevant here had been referred
to the Office of General Counsel for consideration and response. Appeal
file, Ex. J.
* A memorandum dated April 3, 1979, to "State Reps" from an
Eligibility Specialist, HCFA, Region V, informing them of what was said
in the March 23 memorandum. Appeal file, Ex. K.
* An IDPA Inter-Office Memorandum dated August 27, 1979, to Members
of DMHDD/DPA Mental Health Issues Work Group from the Associate
Administrator for Management, Medical Assistance Program, IDPA,
transmitting issue papers, including one on "Title XIX coverage for
publicly-institutionalized clients aged 22-64 in state-operated
in-patient psychiatric facilities." Appeal file, Ex. M. This issue
paper discusses ways in which 42 CFR 435.1008 had been clarified and the
status of the questions remaining open, as well as the fiscal impact of
potential coverage, and an area called "Changes needed in state plan,
etc." We discuss below what this issue paper says about this area.
* An affidavit, dated November 16, 1983, by the Assistant Chief of
the Bureau of Provider Services, Division of Medical Programs, IDPA.
Appeal file, Ex. N. In the affidavit, this State official attests that
she consulted with a Medical Program Representative, HCFA, Region V,
between November 1979 and January 20, 1980, "regarding HCFA's position
on whether states could legally claim FFP for services, including
institutional services, rendered to individuals aged 22 to 64 in
institutions for mental diseases during the first and last partial
months of care for otherwise eligible Medicaid recipients." Ex. N, p.
2. The affiant states that the HCFA representative told her that "FFP
claims for partial months of eligibility seemed to be in accord with the
Social Security Act and the controlling federal regulations, and that
HCFA was recognizing such claims as valid in other states." Finally, the
affiant states that, when she consulted with the HCFA representative
about the necessity of amending the Illinois State Plan prior to making
claims for partial months, to the best of her recollection, the
representative "assured me that no state plan amendment was necessary."
Ex. N, p. 2.
(9) * A letter dated September 9, 1980, from the Regional
Administrator, HCFA, Region V, to the Chief, Bureau of Policy and
Procedures, IDPA, regarding clarification received from HCFA's Central
Office on the questions raised by IDPA. Appeal file, Ex. O. This
memorandum states:
With respect to the second issue raised--that of individuals between
the ages of 21 and 64--FFP is available for medical care and services to
an otherwise eligible individual during the first month of
institutionalization. Coverage extends to all services specified in the
approved State plan including per diem rates.
Although the State's primary arguments were that the Regional
Administrator's letter was an admission binding on the Agency, and that
it constituted a State plan approval precluding the disallowance, we
first discuss the letter, and the other evidence submitted by the State,
to determine whether it would alter our conclusion in Decision No. 436
that the Agency did not have a longstanding policy that the costs
claimed here were allowable. We also discuss the State's argument that
the letter constituted a binding "policy ruling" similar to the one
the
Board applied in Florida Department of Health and Rehabilitative
Services, Decision No. 414, April 29, 1983.
C. The effect of the Regional Administrator's letter and other
evidence
Before analyzing the evidence the State presented here, we note that
the critical issue is whether the partial month eligibility provision
permits the State to ignore the limitations on service coverage
resulting from the IMD exclusion. The question arises in the context of
the State's claim for the full per diem rates because those rates
include costs which are for services such as room and board which are
not covered under applicable statutory and regulatory provisions except
when part of the aggregate of services provided by an institution which
is a hospital, SNF, ICF, or inpatient psychiatric facility. The Agency
did not deny that the partial month eligibility provision provided a
basis for FFP in services which are separately covered in a state plan,
such as dental services or eyeglass services. In Decision No. 436, the
Board concluded that the partial month eligibility provision at 42 CFR
435.1008 could only be read as providing FFP during partial months in
services covered in a state plan. The Board concluded that the IMD
exclusion resulted in service descriptions being (10) written so that
there was an absence of any provision covering hospital, SNF, ICF, or
inpatient psychiatric facility services to individuals aged 22-64. In
other words, general descriptions of hospital, SNF, and ICF services
were limited by the phrase "other than in an IMD," and provisions
covering these services in IMDs under certain conditions were limited to
individuals over age 65 or under age 22. /5/
We do not think that the Regional Administrator's letter should be
considered evidence of an Agency policy that these coverage limitations
were overcome by the partial month eligibility provision. Our reasons
are:
* The letter was not issued as part of the Agency's system of
guidance to the states on policy matters.
* The letter is consistent with the disallowance in that it makes
availability of FFP under the partial month eligibility provision
contingent on whether a claim is for services "specified in the approved
State plan."
* The letter does not specifically consider the question of the
effect of the limitations on service coverage in IMDs. Although the
phrase "including per diem rates" could be read as implying that the
limitations on coverage provisions for services claimed using per diem
rates could be ignored for partial month claims, it could also be read
as merely meaning that, if a State plan specifies coverage of per diem
rates for services to individuals aged 22-64 in IMDs during partial
months, FFP is available. In context, we think only the latter reading
is reasonable. The letter does not purport to address the question of
what services are actually covered in state plans. Moreover, the March
8, 1979 memorandum from Region V to the Central Office raised the
coverage issue in the context of the need for a definition of "eligible
individual" as used in 42 CFR 435.1008 "in light of age and other
restrictions regularly imposed on care for individuals in such treatment
settings." Ex. I. In other words, the primary focus was on individual
eligibility as affected by the IMD exclusion, rather than service
coverage.
(11) Illinois did not allege that it had amended its State plan to
specifically cover inpatient psychiatric services at a per diem rate
when provided to individuals aged 22-64 during partial months in IMDs.
The State official said in her affidavit that she was told by a Medicaid
Program Representative that an amendment was not needed "prior to the
state's making claims for partial months of eligibility." This statement
does not specifically relate to claims for per diem rates, however, and
the Agency has never claimed that an amendment would be necessary for
partial month coverage of services separately covered in a state plan.
In any event, the State has not provided any basis on which we could
find the Agency bound by an oral statement, particularly when made by a
person who has not been shown to have the authority to issue policy
statements.
We also think that it is significant that the State's own analysis of
the question of coverage of per diem rates based on partial month
eligibility was that a State plan amendment would be required. The
issue paper described above stated:
The Title XIX plan would need to be changed. . . . Specifically, a
change would be required to incorporate this population as part of the
Title XIX State plan.
Appeal file, Ex. M.
Finally, we note that the State did not allege specifically that it
had relied on the Regional Administrator's letter in determining that it
could claim FFP in the per diem rates. Indeed, the Agency alleged, and
the State did not deny, that the State first claimed for such costs on
the expenditure report for the quarter ended March 31, 1980. This
report would have been submitted prior to the Regional Administrator's
letter of September 9, 1980.
D. The Regional Administrator's letter was not a binding policy
ruling
In Decision No. 436, the Board distinguished the documents the States
said they relied on from a letter which the Board had found to be a
binding policy ruling in Florida Department of Health and Rehabilitative
Services, Decision No. 414, April 29, 1983. Illinois argued here that
the Regional Administrator's letter was such a policy ruling. Illinois
relied on the following statement, made by the Board in a footnote in
Decision No. 414:
An Agency cannot retroactively apply a new interpretation of an
ambiguous regulation, where a ruling was issued by an authorized
official, is (12) supportable (e.g., uncompromised by an obvious or
substantial error) and is not contrary to applicable statutes or
regulations. . . . This Department has long given binding effect to
policy rulings applicable to specific facts, where issued in writing by
an authorized official.
Decision No. 414, p. 13, note 14.
Illinois argued that the facts here closely parallel the facts in
Decision No. 414 and that the Regional Administrator's letter was a
policy ruling falling squarely within the Board's "command" in Decision
No. 414. State's brief, pp. 9-10.
We disagree. This case is distinguishable from Decision No. 414 and
outside the scope of the Board's statement there for the following
reasons:
* Unlike the letter in the case leading to Decision No. 414, the
Regional Administrator's letter was not intended to apply an ambiguous
regulation to specific facts. The letter does not address what services
are in fact covered in the Illinois State plan for these individuals.
Moreover, as discussed above, the letter does not purport to interpret
coverage provisions and the effect that the partial month eligibility
provision would have on them. /6/
* In Decision No. 414, the Agency conceded that it considered the
letter there to be a policy ruling, and the determination conveyed in
the letter had been made by the head of the administering agency. Here,
although the letter was based on guidance from "Central Office," there
is no showing of who in the "central office" provided the guidance,
what
that person said, or what effect the guidance was intended to have.
* The ruling in Decision No. 414 interpreted an ambiguous regulation
in a manner which was consistent with other program regulations, the
statute, and the underlying (13) program purposes. Here, the Regional
Administrator's letter, read as the State said it should be read,
potentially conflicts with regulations on covered services and with the
statute.
Thus, we conclude that the Regional Administrator's letter was not a
policy ruling binding on the Agency in this appeal.
III. The Regional Administrator's letter was not a binding admission
The State argued that the Regional Administrator had "admitted that
the State's claims were valid under HCFA's interpretation of the law and
regulations." State's brief, p. 7. The State cited "hornbook law"
that
a litigant is bound by its own admissions, quoting the following
definition of "admission":
(A) voluntary acknowledgment made by a party of the existence or
truth of certain facts which are inconsistent with his claim in an
action and amount therefore to proof against him.
29 Am. Jur. 2d Evidence Sec. 597, quoted at State's brief, p. 7.
The State also cited cases in support of the proposition that
governmental bodies are bound by their admissions the same as other
litigants. State's brief, p. 7.
We do not agree with the State that the Regional Administrator's
statement constitutes an admission. Since the Regional Administrator
did not address the question of whether, in fact, the Illinois State
plan covered per diem rates for IMD services to individuals in this age
group, his statement cannot be considered an admission on that question.
Nor did the Regional Administrator specifically state that HCFA had an
interpretation that FFP in the full per diem rates for inpatient
psychiatric services was allowable during partial months for these
individuals, regardless of the limitations on covered services. The
Regional Administrator simply did not acknowledge the existence or truth
of any facts which would help the State here. The statement addresses
legal issues, is too vague, and, indeed, can be read in a manner which
is not inconsistent with the position the Agency has taken here.
Thus, the Regional Administrator's statement does not meet the
definition of "admission" quoted, above. Since we have reached this
conclusion, we do not need to address the question of whether an
admission by the Agency outside the context of litigation would be
binding on the Agency, even though it is a governmental body.
(14) IV. The Regional Administrator's letter did not constitute plan
approval
The State's final argument was that the Regional Administrator's
letter constituted "defacto approval of the aspect of the Illinois State
Plan at issue." Reply brief, p. 4. The State said that the letter
provided the State with an "official interpretation of the approved
State plan," constituting "official recognition that those services
included within the per diem rates would be considered covered under the
State plan for this age category for the limited purpose of claims
during partial months of eligibility." Reply brief, p. 4. Thus, the
State said, having determined that the claims were in conformity with
the State plan, HCFA could not now reverse its position and disallow the
claims. In support of this proposition, the State relied on the
following statement made by the Seventh Circuit in Illinois Department
of Public Aid v. Schweiker, 707 F.2d 273 (7th Cir. 1983):
(I)t is not at all clear that having made an initial determination of
plan conformity the Secretary could in effect reverse it, despite the
absence of changed circumstances, when he later received requests for
reimbursement from the state for expenditures made in strict conformity
with the approved plan.
707 F.2d at 278.
As discussed above, we do not think that the Regional Administrator's
letter did constitute an official interpretation that the costs claimed
here were allowable. Even if it had, that would not render that letter
a plan approval or the issue addressed one of plan conformity.
Under the applicable statutory and regulatory provisions, plan
approval is a specific process through which the Agency determines
whether a State plan or State plan amendment conforms to applicable
federal requirements. See, e.g., 45 CFR Part 201, Subpart A (1980).
/7/ The Agency has not said here, as the court (15) found it did in
Illinois, that the claims are unallowable even though consistent with
the State plan which was previously approved. To the contrary, the
Agency is saying that there is an absence of any provision in the
approved State plan which covers these services, and, therefore, they
are unallowable. Mere mention of the approved State plan by the
Regional Administrator does not transform his letter into a "plan
approval" document. We do not think that there is anything in the
Illinois decision which would preclude the disallowance here.
Conclusion
For the reasons stated above, we uphold this disallowance, subject to
reduction to the extent the State can show what part of its per diem
rates were for the costs of services separately covered in its State
plan. /1/ Ohio contended that it had submitted amendments covering
inpatient psychiatric services in IMDs during the month of admission,
but the Board found that the provision the State relied on did not
provide such coverage. The provision appeared in agreements between two
state agencies and merely said that one agency would "(i)nclude in the
state plan provision to allow Medicaid payment for services rendered
during the month of admission to a certified" IMD. The Board concluded
that Agency approval of these agreements could not be considered
approval extending the State plan to cover inpatient psychiatric
services to individuals aged 22 to 64. Decision No. 436, pp. 27-28;
see also, Ohio Department of Public Welfare, Decision No. 486, December
13, 1983. /2/ Illinois did not specifically raise equitable
estoppel here and stated that the Agency's discussion of estoppel cases
in its brief was "not relevant." Reply brief, p. 5. However, certain
facts necessary to establish a claim of estoppel are also relevant to
the question of whether the Agency had a longstanding policy
interpretation that FFP was available in states' claims and thus the
disallowances are invalid. Thus, we note below that Illinois has failed
to make the requisite factual showing, just as the other states did.
/3/ As we noted in Decision No. 436, these IMD services costs would have
been incurred and paid for by the States even if the partial month
eligibility provision did not exist. Indeed, one of the reasons
Congress enacted the IMD exclusion was that these types of costs had
traditionally been recognized as the responsibility of the states. S.
REP. 404, Pt. 1, 89th Cong., 1st Sess. 144 (1965). Here, a review
report which led to this disallowance noted the following about billings
to the Illinois Department of Public Aid (IDPA) for services provided to
Medicaid patients by the Illinois Department of Mental Health and
Developmental Disabilities (DMHDD): These billings do not however,
generate an expenditure by the State Medicaid Agency. They are, rather,
a compilation of data in order to claim FFP. The patients are
essentially wards of the State, the cost of whose care is otherwise
borne by the State, were it not for the availability of FFP under
Medicaid. Appeal file, Ex. B. /4/ This person may have been the
wrong person to receive the letter, since the Social Security
Administration does not administer Medicaid, or perhaps the agency was
just misidentified. There may have been some confusion since in 1978
public assistance programs, including Medicaid, which had been
administered by the Social and Rehabilitation Service, were transferred
to other agencies, such as the newly created Health Care Financing
Administration. /5/ These limitations appear in the service
descriptions in the Illinois State plan. Agency brief, attachment. /6/
In Decision No. 414, we also noted that Florida had relied to
its detriment on the policy ruling. Here, the State has not shown that
it relied on the Regional Administrator's letter either in incurring the
claimed costs or in submitting its claims. /7/ As used in the
Social Security Act, including Title XIX, a plan conformity dispute is
one which arises when the Secretary disapproves a State plan or a State
plan amendment as being inconsistent with (not in conformity with)
applicable federal requirements. See, Social Security Act, section
1116, and 45 CFR 201.4, Part 213.
NOVEMBER 14, 1984