GAB Decision 674
July 22, 1985
Tennessee Department of Health and Environment;
Ford, Cecilia Sparks; Garrett, Donald F. Settle, Norval D. (John)
Docket No. 84-225
DECISION
The Tennessee Department of Health and Environment (Tennessee) appealed
a decision by the Health Care Financing Administration (HCFA)
disallowing $228,443 in federal funds claimed by Tennessee under the
Medicaid program. HCFA based this disallowance on its determination
that, during the quarter ending December 31, 1983, Tennessee was not
operating an effective program of utilization control at four
intermediate care facilities (ICFs) including an intermediate care
facility for the mentally retarded and one facility providing both
intermediate and skilled nursing services. /1/ Generally, HCFA alleged
that, physicians at these facilities failed to recertify patients in a
timely fashion; that recertifications otherwise did not meet
statutory-regulatory requirements; that plans of care for certain
patients were not updated in a timely fashion; and that some plans of
care were missing altogether. During the course of these proceedings,
HCFA reviewed documentation submitted by Tennessee and concluded that
one facility (Rhea County Nursing Home) should be dropped from the
disallowance. As a result of this revision, the amount of federal
funding now in dispute is $182,755.86.
For the reasons set out below, we uphold the disallowance as revised by
HCFA. Our decision is based on the briefing and evidence submitted by
the parties. Tennessee withdrew its earlier request for an evidentiary
hearing in this matter by letter dated July 11, 1985.
(2) Background
I. The Statute and Regulation
Under Title XIX of the Social Security Act (Act), states which have an
approved Medicaid state plan receive federal financial participation in
expenditures for medical services to needy individuals. Services which
qualify as "medical assistance" under section 1905(a) of the Act,
including ICF services, are reimbursed generally at the federal medical
assistance percentage (FMAP) rate. Sections 1903(a)(1); 1905(b).
However, section 1903(g)(1) of the Act, as in effect during the time
period in question here, provided that, with respect to amounts paid for
certain "long-stay services," the FMAP "shall be decreased .
. . unless
the State . . . makes a showing satisfactory to the Secretary that there
is in operation in the State an effective program of control over
utilization of such services . . . ." Section 1903(g)(1) further
provided:
. . . such a 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, or, if later, the time the
individual applies for medical assistance under the State plan (and the
physician, or a physician assistant, or nurse practitioner . . .
recertifies, where such services are furnished over a period of time, in
such cases, 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), that such services are or were required
to be given on an inpatient basis because the individual needs or needed
such services; and
(B) in each case, such services were furnished under a plan
established and periodically reviewed and evaluated by a physician;
* * *
The statutory provisions for recertifications for residents of ICFs were
implemented by federal regulation at 42 CFR 456.360, which provides:
(b) Recertification. (1) A physician, or physician assistant or
nurse practitioner (as defined in Sec. 481.2 of this chapter) 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.
(3) (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 regulations implementing plan of care requirements are found at 42
CFR 456.380 and provide in part:
(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.
* * *
(c) the team must review each plan of care at least every 90 days.
II. Pertinent Facts
Federal surveyors, assessing Tennessee's compliance with utilization
control requirements for the final quarter of 1983, determined that each
of the following facilities had several violations of the utilization
control standards set out in the statute and regulations: Unicoi County
Nursing Home, Gallatin Nursing Home, Inc., Mountain View Nursing Home,
and Orange Grove Center, Inc. In its brief Tennessee presented several
arguments challenging HCFA's interpretation and application of the
utilization control requirements. However, Tennessee also submitted a
document, titled ADMISSION, in which it conceded the existence of at
least one utilization control violation at each of the four facilities
remaining in issue after HCFA dropped the Rhea County Nursing Home from
the disallowance.
Analysis
Based on Tennessee's admission, there is no further issue as to the
existence of utilization control violations at these four facilities.
Under the Agency's interpretation of the Act, which the Board has upheld
as reasonable, HCFA is required to impose a disallowance once there is a
finding of even one violation in a facility. Under that interpretation,
HCFA does not have the discretion to waive the statutory reduction once
there is a finding that a violation occurred. Tennessee Department of
Public Health, Decision No. 167, April 30, 1981; Colorado Department of
Social Services, (4) Decision No. 169, April 30, 1981; /2/ Ohio
Department of Public Welfare, Decision No. 191, June 24, 1981; Georgia
Department of Medical Assistance, Decision No. 207, August 28, 1981;
Virginia Department of Health, Decision No. 208, August 28, 1981;
Kansas Department of Social Services, Decision No. 312, June 21, 1982;
Georgia Department of Medical Assistance, Decision No. 508, January 31,
1984; Michigan Department of Social Services, Decision No. 518,
February 29, 1984. New York State Department of Social Services,
Decision No. 531, April 23, 1984. Moreover, given the disallowance
formula, the amount disallowed depends on the number of facilities where
violations are found and is the same regardless of whether there is one
violation or many violations in each facility. Accordingly, there is no
reason for us to consider the remaining violations for the three
facilities where Tennessee's admission did not cover all the violations
found, even if there were some question whether we would uphold the
Agency's finding for all other patients (with regard to whether the
physician must personally date a recertification, see Minnesota
Department of Human Services, Decision No. 615, December 24, 1984).
Since Tennessee has admitted that there were utilization control
violations at the Unicoi, Gallatin, Mountain View and Orange Grove
facilities, we uphold this disallowance.
Conclusion
Based on our analysis above, we uphold the disallowance in the revised
amount of $182,755.86. /1/ HCFA's Enclosure 2, which accompanied the
Notice of Disallowance, indicated that the funding disallowed
was related strictly to violations at the ICF level. /2/ See
also, Colorado Department of Social Services v. Department of Health and
Human Services, 558 F. Supp. 337 (D. Col. 1983); aff'd, No. 83-1395
(10th Cir. May 9, 1984).
OCTOBER 04, 1985