New Jersey Department of Human Services, DAB No. 688 (1985)

GAB Decision 688

August 26, 1985

New Jersey Department of Human Services;
Settle, Norval D. (John); Garrett, Donald F. Ford, Cecilia Sparks
Docket Nos. 84-61 and 84-216

DECISION

The New Jersey Department of Human Services (State) appealed two
disallowances by the Health Care Financing Administration (Agency). The
State claimed federal financial participation (FFP) under Title XIX
(Medicaid) of the Social Security Act (the Act) for certain personnel
costs based on the availability of an enhanced FFP rate of 75% for
compensation or training of skilled professional medical personnel
(SPMP). HCFA disallowed the portion of the State's claims which
exceeded the 50% rate generally applicable to administrative costs for
the Medicaid program.

Board Docket No. 84-61 involves $245,655 for the first quarter of
calendar year 1982. Board Docket No. 84-216 involves $1,220,937 for
April 1, 1982 to June 30, 1983. Both disallowances covered the same
personnel costs and raise the same substantive issues. Pursuant to the
State's request, the Board considered the appeals jointly.

This decision is based on the written record and the transcript of a
telephone conference call held to permit the parties to respond to the
Board's questions and to permit the State to add its final comments to
the record in light of an Agency submission. The Board had originally
granted the State's request for an evidentiary hearing; the State
ultimately withdrew its request. Board's letter of December 10, 1984.
In lieu of the hearing, the Board gave the State several opportunities
to submit documentary evidence.

During the Board's proceedings, the State withdrew its appeal regarding
all costs except for personnel compensation costs for the Bureau of
Administrative Control (State Cost Center 532). Telephone Conference
Tr., p. 4, Vol. I. Therefore, we will address below only the positions
in this Bureau. /1/ The State(2) claimed FFP for personnel costs in this
Bureau at 62.5%, based on the availability of FFP at 75% for a portion
of the duties performed by the employees.


As explained more fully below, we conclude that, although the positions
in question may involve some functions related to SPMP functions, the
weight of the evidence shows that the positions require the
administrative, investigative, or other non-medical functions necessary
to take action against aberrant providers or to pursue money claims
arising out of the Medicaid program, such as third-party liability
claims or overpayments. Moreover, we conclude that the State did not
document the time actually spent by the personnel on the duties alleged
to be SPMP.

I. Applicable law, regulations, and guidelines.

Section 1903(a) of the Act provides for payment of:

(2) . . . 75 per centum of the sums expended . . . (as found
necessary by the Secretary for the proper and efficient administration
of the State plan) as are attributable to compensation or training of
skilled professional medical personnel, and staff directly supporting
such personnel. . . .

* * * *

(7) . . . 50 per centum of the remainder of the amounts expended . .
. as found necessary by the Secretary for the proper and efficient
administration of the State plan. /2/


Agency implementing regulations, 42 CFR 432.50(b)(1) and 433.15(b)(5),
provide 75% FFP for skilled professional medical personnel. Sections
432.50(b)(6) and 433.15(b)(7) implement the 50% matching provision
generally applicable to FFP claims for costs of administration. Section
432.50(c)(1) provides that rates of FFP higher than 50% "are applicable
only to those portions of the individual's working time that are devoted
to the kinds of positions or duties that qualify for those rates."(3)

The term "skilled professional medical personnel" is not defined in
Title XIX. Agency regulations contain the following definition at 42
CFR 432.2:

"Skilled professional medical personnel" means physicians, dentists,
and other health practitioners; nurses; medical and psychiatric social
workers; medical, hospital, and public health administrators, and
licensed nursing home administrators; and other specialized personnel
in the field of medical care.

The regulations are supplemented by Part 2-41-20 of the Medical
Assistance Manual (Manual). This Part was issued in an Action
Transmittal by the Social and Rehabilitation Service (predecessor agency
to HCFA) in July, 1975, SRS-AT-75-50. The Action Transmittal describes
Part 2-41-20 as an "(i)mplementation and interpretation of the
regulation on Federal financial participation in State expenditures for
staffing of the medical assistance program." The State did not contest
the applicability of the Manual, and, indeed, the Manual was the primary
focus of the parties' briefing in this case.

The Manual contains the following "principles" which are used to assess
claims for 75% FFP:

B. Principles

1. General

* * * *

a. The function of a "skilled professional medical" position whether
at the State or local level, is the principal basis for determining
eligibility for increased Federal matching. The title of a position or
its organizational placement in the Medical Assistance Unit
administering title XIX will be used as subsidiary evidence to confirm
that a staff function is eligible for 75 percent matching.

* * * *

b. Staffing will normally include some employees engaged in
functions which are neither skilled professional medical functions nor
supportive of such functions.(4)

Therefore, salaries and related costs of the total cadre of personnel
involved in the administration of the title XIX program are not
reimbursable at the 75 percent rate.

* * * *

2. Specific

a. The function, rather than the title, of a position is the
significant factor. Staff classified as skilled professional medical
personnel must be in functions at a professional level of responsibility
in the administration of the title XIX medical assistance program
requiring medical subject area expertise.

"Professional" and "medical" functions are defined as follows:

Professional -- the function is at a level which requires college
education or equivalent and it relates directly to non-routine aspects
of the program requiring the exercise of judgment.

Medical -- the function is peculiar to medical programs and requires
expertise in medical services care delivered, studying and evaluating
the economics of medical care, planning the program's scope, or
maintaining liaison on the medical aspects of the program with providers
of service and other agencies which provide health care.

As a class, these functions require knowledge and skills gained from
professional training in a health science or allied scientific field.
They involve overseeing the delivery of medical care and services.

Staff positions in which the primary function is the application of
administrative practices and procedures unrelated to the specialized
field of medical care(5) management are eligible for 50 percent
matching. For example, a physician in charge of an accounting operation
would be eligible for staff reimbursement only at 50 percent FFP.

* * * *

C. Examples of Organizational Functions

Following are examples of functions needed to operate State title XIX
programs and the expected level of Federal matching. . . .

* * * *

5. Audit Staff - 50 or 75 percent FFP

Personnel engaged in routine claims review, such as auditing whether
the codes correctly coincide with billed charges, are matched at 50
percent. Matching at 75 percent would apply to those skilled
professional medical personnel (and directly supporting staff) whose
function involves assessing the necessity for and adequacy of the
medical care and services provided, as in utilization review.

6. Other Skilled Professional Medical Personnel - 75 percent FFP

Staff includes personnel such as physicians, dentists, pharmacists,
hospital administrators, medical economists, medical and psychiatric
social workers, and registered nurses who are responsible for activities
such as: providing liaison on professional medical matters, medical
services program development, medical care assessments, and research and
evaluation concerning all aspects of the delivery and economics of
medical services. Included would be members of medical review and
independent professional review teams.

* * * *

Section 2-41-20(B)(2)(b) of the Manual provides that the official
position descriptions are the "basic substantiation"(6) for a position's
professional medical status. This section also provides for
consideration of "(j)ob announcements emphasizing requirements at or
above the college level in medical care and medical care
administration." Further, its listing in an "appropriate medical
classification" in a dictionary or handbook of occupational titles is a
secondary indicator that a position is a skilled medical position.

II. Positions at Issue.

The Bureau of Administrative Control is comprised of three units, two
Recovery Units (RUs) and one Administrative Action Unit (AAU). Each
unit is headed by a supervisory medical review analyst (SMRA) and
staffed by medical review analysts (MRAs), with general supervision
exercised by the Bureau Chief. Telephone Conference Tr., pp. 11-12 and
16-17, Vol. I. The two RUs are responsible for the State's third-party
liability recoveries; the AAU handles "the exclusion of providers from
the programs, recovery of overpayments made to providers, and recovery
of" statutory penalties. State Brief, p. 9.

The State attributed the 62.5% FFP rate claimed for these units to a
federal review determination in 1978 that "much of the work done by that
Bureau qualified for SPMP federal funding." The State then asserted that
"(T)he functions of the personnel in this cost center has remained
unchanged since 1978 and that rate of FFP should be continued." /3/
State Brief, p. 10.

Based on the record, we conclude that the State is disputing the payment
of a 50% FFP rate for the SMRA and MRA positions in the Bureau of
Administrative Control. During the conference call, the Agency argued
that the State's appeal did not encompass the SMRA (7) positions.
However, the State's appeal and briefing were quite general and, while
documentation specific to the SMRA position was not submitted until late
in the Board's proceedings, we see no reason to limit the scope of the
State's appeal to exclude the three SMRA positions. /4/ Telephone
Conference Tr., pp. 4-11, Vol. I.


Ex. F to the State's brief is a three page chart which lists the
education and experience for the Chief, three SMRAs, and 16 MRAs in the
Bureau of Administrative Control. (This chart is undated; it is
unclear from the record whether the chart covers the time period at
issue or covers a later time and was submitted for illustrative
purposes.) With the exception of one MRA, all employees are listed as
having college degrees. For the SMRAs, one is a registered nurse and
one has a teaching certificate with a masters degree in secondary
education. All three SMRAs had worked as MRAs. The MRAs range from one
chiropracter and several registered nurses to a notary public. In
general the MRAs had prior job experience in some type of health care
management or claims adjudication.(8)

A. Recovery Units

For the SMRA position the State submitted a position description and a
document entitled "Promotional Job Analysis." The position description
defines the Recovery Unit SMRA position as being "responsible for
planning, supervising and coordinating the" recovery of money.

The required education and experience are: a college degree
"supplemented by a Master's degree in business administration, hospital
or health administration, or public administration" or "relevant
professional experience" and supervisory experience with a health agency
engaged in various types of activities, such as investigation or
authorization of medical or health services.

The position description shows that the RU SMRAs are responsible for
developing the procedures, records, accounting systems, and reporting
systems necessary to identify, recover, and report third party liability
claims by the Medicaid Program. They also supervise the preparation of
case materials, testify at recovery proceedings, and coordinate with
other state agencies.

The position requires "(b)asic knowledge" of "medical information,
medical terminology, common symptoms and diagnosis," health care
providers and facilities, "insurance and legal terminology" relevant to
fiscal recovery, and "insurance coverage."

The "Promotional Job Analysis" for the RU SMRA contains four paragraphs
titled "Task Statement" giving a percentage of time for each task. This
document attributes 55% of the job's time to investigation of potential
third-party liability or insurance or other fund sources "to determine
viability for recovery" of Medicaid funds. 25% is attributed to review,
analysis, and identification of medical diagnoses using computerized
reports, communication with the courts, or insurance carriers or others,
and the negotiation of settlements. The remaining 20% is attributed to
co-ordination with other agencies to gather information and responding
to telephone inquiries or the like.

The main documents for the MRA position are the position description,
two letters and one internal memorandum prepared by MRAs for third-party
liability cases, and two certifications by MRAs. (Apparently the same
position description covers the RU MRAs and the AAU MRAs.)

The MRA position requires a college degree or equivalent years in work
experience and three years of work "involving the review,(9) analysis,
investigation and authorization of medical care services in a large
agency."

The MRAs (1) plan and implement "surveillance systems and procedures"
related to legal and standard of care requirements, (2) analyse reports
on provider and recipient utilization practices to determine the quality
and necessity of medical services, (3) identify situations involving
potential fraud, abuse, third-party liability, or general insurance
sources and take steps to recover all monies due Medicaid, (4) confer
with "professional consultants"; (5) review surveillance reports on
providers or recipients, (6) investigate or audit health care facilities
to obtain information about fraud, insurance coverage, third-party
liability, or other misuse of program benefits, and (7) assist in
preparation of cases for trial and testify if necessary.

The MRA position requires the same "(b)asic knowledge" as detailed above
for the SMRA position as well as familiarity with pertinent federal and
state agencies and laws and knowledge of investigative techniques.

One MRA letter simply forwards medical records and informs an insurance
company of the amount of Medicaid's claim, the other is a letter to an
attorney and gives the basis for the State's third-party liability
claim. The second letter states:

After thorough review of (hospital) records and (a doctor's) report,
it clearly indicates that (the recipient's) condition is due to the
improper surgery done initially which was in 1978 at the time of the
pinning of her hip. He also clearly indicates that the need for
subsequent surgery and any other residual conditions she may now have
would not have existed had the initial surgery been performed correctly.

The internal memorandum states in greater detail the MRA's actions to
gather information about this claim, her dealings with the recipient's
attorney to pursue the claim, and her stated conclusion, based in part
on a physician's "expert testimony report," that due to the physician's
malpractice Medicaid incurred further surgical costs.

One MRA certification states:

I am required to pinpoint a recipient's initial diagnosis and follow
a recipient's treatment in order to determine what Medicaid expenditures
are related to the incident giving rise to the civil (10) litigation so
that the amount of reimbursement owed can be calculated.

B. Administrative Action Unit

The record contains a certification by the AAU SMRA, but no specific
position description. The certification states on page 2 that the SMRA
is

responsible for reviewing Medicaid cases and determining if action
must be taken concerning:

(a) quality/necessity of service

(b) documentation requirements

(c) provider's suspension, debarment or disqualification.

She goes on to state that (1) "(I)n reviewing quality of care and
necessity of services" she must determine "whether the Medicaid provider
is practicing within his/her specialty," (2) she determines whether
referrals made by Medicaid providers are appropriate based on recorded
symptoms, (3) she determines whether a provider is "neglecting to make
appropriate referrals" such as "a general practitioner has a patient
with a diagnosis of chronic sinusitis billing for ten to fifteen visits
on a two-month period," (4) she observes claims/records to determine if
the diagnosis is in line with the recorded symptoms, (5) she reviews
plans of care, (6) must recognize omissions of treatment, (7) in
reviewing documentation requirements, she must be aware of the criteria
for billing certain codes, and (8) must justify provider suspension
recommendations to a committee of mixed lay and professional people.

It is unclear from the record whether there is a separate position
description for this SMRA. The position description for the MRAs in the
administrative action unit is the same as that detailed above for the
recovery unit MRAs.

The State also submitted a descriptive summary of the administrative
action unit prepared in August of 1982, which it stated was
representative of the time period at issue here. This summary states in
pertinent part that:

The above Unit has as its function the receipt and analysis of
various case files and materials forwarded to it, the formulation of
recommendations for administrative resolution, and the implementation of
such recommendations upon approval of same. (11)

The summary goes on to state that cases "go through a rather elaborate
screening process" before referral to AAU, including consideration of
other referrals--such as for criminal action. The summary describes how
cases, once referred, are logged in and reviewed to determine how to
proceed.

The summary details potential actions as:

the seeking of overpayment recovery, plus penalties as appropriate; a
referral for peer review; a referral to the Professional Association of
the discipline concerned; a referral back to the investigating or
initiating agency for further work-up; a withholding of payments due to
provider; a referral to the contractor for assistance; a referral for
some sort of exclusion action; or possibly no action if none is
warranted or if it would not be cost effective to proceed.

* * * *

The summary states that most administrative actions consist of recovery
proceedings and if a case does not result in settlement, it is heard by
an administrative law judge.

There is also a letter from an administrative action unit MRA which
makes a claim against a provider for excess Medicaid payments and
explains the basis for the State's claim as separate billings for tests
actually included as part of other procedures that also had been billed
for.

III. Analysis

Whether federal matching is available at all is not at issue here.
Rather, the question is whether even a portion of the duties performed
by the SMRAs and MRAs qualify for FFP at the 75% rate as opposed to the
50% rate generally available for expenditures "necessary . . . for . .
. administration" under 1903(a)(7). /5/ Since section 1903(a) of the Act
does not elaborate on the meaning (12) of "skilled professional medical
personnel," we must look to the regulations and to the implementing
Manual provisions in order to determine whether 75% matching is
available. The definition of this term at 42 CFR 432.2 includes "other
specialized personnel in the field of medical care." The definition
specifically mentions personnel such as physicians, nurses, and nursing
home administrators. Neither this regulation nor the Manual
specifically mentions positions responsible for actually taking action
to recover Medicaid costs from liable third parties, overpayments, or
other monies or to exclude providers from the program. The question
then is whether 75% matching can be based on the general principles set
forth in the Manual for the assessment of such claims. Both the State
and the Agency argue strenuously that application of the Manual
principles supports their respective position concerning the
availability of 75% matching. /6/


Under the above quoted Manual provisions it is the function of a
position that determines whether 75% matching is proper. (2-41-20(B)(
1)(a) and (B)(2)(a)). The official position description, organizational
placement, job announcement, and a listing in a handbook of occupational
titles under a medical classification (13) are the basis for a
determination that a position's function is in fact a skilled
professional medical function. (2-41-20(B)(1)(a) and (B)(2)(b)) Only
"professional" positions requiring "medical subject area expertise" are
matched at the 75% rate. The manual defines both "professional" and
"medical." To be "professional" a position must be non-routine and
require a college education or its equivalent. "Medical" functions are
"peculiar to medical programs." (2-41-20(B)(2)( a)) The Manual
specifically provides, however, that not all administrative personnel
would be eligible for 75% matching. (2-41-20( B)(1)(b)) The Manual
further provides that these functions as a class require "professional
training in a health science or allied field." (2-41-20(B)(2)(a)) As was
emphasized in New York State Department of Social Services, Decision No.
204, August 7, 1981, the State has the burden to provide documentation
sufficient to show that its claim for 75% FFP for the costs of SPMP and
support personnel was proper.

The Agency urged the Board to conclude that the SMRA and MRA positions
have no SPMP duties, arguing that these positions are administrative
requiring Medicaid expertise not medical expertise. The heart of the
parties' arguments concerned whether these positions were "professional"
and "medical" within the requirements of the Manual.

The Agency asserted that these positions do not require "professional
training in a health science or allied scientific field," and that the
SMRA's certification was not evidence of independence with regard to
"professional level medical decisions" since the SMRA relied on medical
consultants (SPMPs). The Agency further argued that the MRA's
certification evidenced duties "which consist almost entirely of culling
information from medical records (such as) initial diagnosis, treatment,
and litigation dates. . . . There is no indication that (the MRA)
herself is required to make independent decisions . . . ." The Agency
considered as irrelevant the fact that many of these positions are held
by registered nurses. Agency's April 8, 1985 submission, pp. 1, 6, and
7. The Agency argued:

The knowledge and abilities required for both MRA positions, as
reflected in the position descriptions, pertain almost entirely to
legal, organizational, administrative, investigative, and insurance
matters. . . . The only medical knowledge required is decribed as
"Basic knowledge and familiarity with medical information, medical and
legal terminology, common symptoms and diagnoses, health service
personnel, and medical facilities and health regulations" (emphasis
added) . . . Such(14) general knowledge would be common to numerous
kinds of workers engaged in capacities similar to MRAs, including, it
may be said, any lawyer with a health-related practice. Such on-the-job
familiarity with medical matters is not sufficient to transform a lawyer
into a doctor or to turn a Medicaid investigator into a medical
professional, such as a doctor or nurse functioning in her professional
role.

Agency's April 8, 1985 submission, p. 7.

The State argued that the SMRAs and MRAs were professionals making
independent medical decisions which were largely unreviewed by the
responsible medical consultants. The State relied on its documentary
submissions to establish the availability of 75% FFP. /7/ Specifically,
the State asserted that these positions were professional "in the sense
of those with a college degree or equivalent" and that their duties
involved the "exercise of independent judgments on matters uniquely
involved in the medical service." Telephone Conference, Tr., pp. 49-50,
Vol. I.

With regard to the AAU MRAs, the State asserted that the MRAs make "the
initial judgments" then discuss these judgments with the medical
consultants, who generally agree. Telephone Conference, Tr., p. 55,
Vol. I.

We conclude that the overwhelming weight of the evidence shows that the
primary function of the units in question is to take the administrative
and legal actions necessary to recover money or take action against
aberrant providers. As we discuss more fully(15) below, while it is
possible that certain of the SMRA and MRA duties may be SPMP duties, the
evidence is insufficient for us to overturn even a portion of the
disallowance.

Specifically, it appears that the RU SMRA/MRA duties with regard to
determining which medical services are to be included within a Medicaid
claim may involve more than routine analysis of billed charges,
matchable at 50%. Manual 2-41-20C.5. This is true too of the duties
outlined in the certification for the SMRA in the Administrative Action
Unit. Decision, p. 10. We cannot conclude, however, that these duties
should be reimbursed at 75%. The record does not show to what extent
(1) cases have been screened and decisions requiring medical expertise
already made, before being referred to these two units, and (2) the
SMRAs and MRAs rely on conclusions already reflected in the medical
records or on the medical consultants. Moreover, there is no basis to
conclude what percentage of their time is spent on such duties.

Although the certifications and State arguments stress the functions
which the State argued give these positions SPMP status, the SMRA and
MRA position descriptions, which under the Manual are the "basic
substantiation" for SPMP status, emphasize fiscal, management,
accounting, and investigative functions and skills. In light of the
emphasis in the position descriptions, given that the role of the
medical consultants or other case reviewers is unclear, we conclude is
that the record shows only that these functions are related to those
performed by SPMP, such as determining necessity and quality of care.

From the "Promotional Job Analysis" for a RU SMRA, we see that the
review, analysis, and identification of medical diagnoses is only one of
the items making up 25% of the RU SMRA duties. Decision, p. 8. For the
RU SMRAs, then, we can conclude only that if there are SPMP duties in
these two positions they are less than 25% of the position duties.
There is no information for the other SMRA or the MRA positions that
permit even a rough guess as to the percentage of time spent on those
types of duties.

In addition, the State cannot rely on the purported 1978 federal
reviewers' conclusions to support an aggregate rate of 62.5% since the
regulation specifically makes 75% FFP available only for "those portions
of the individual's working time that are devoted to the kinds of
positions or duties that qualify for those rates." /8/ We(16) have no
idea on what bases the Agency made its conclusion in 1978 and do not
regard it as relieving the State's obligation to document its claim for
enhanced reimbursement on an ongoing basis or to submit supporting
evidence before the Board. Not only does the evidence before the Board
not show that these positions involved SPMP functions, but also, the
State submitted no specific time or other records to show how much time
the SMRAs and MRAs spent on any specific job duties.


We now discuss our more specific conclusions about whether these
positions are "professional" or "medical" as those terms are defined by
the Manual.

We regard the Agency's construction of the Manual provision defining
"professional" to be unduly narrow. It is clear that the Manual
includes as "professional" positions requiring a college degree or
equivalent, so that SPMPs are not necessarily limited to those with
college degrees in a medical specialty. Moreover, the job functions at
issue are not routine. The record shows that for each case the RU and
AAU personnel make judgments about whether and how to pursue the State's
claims. Thus, we regard the SMRAs and MRAs to be professionals.

Nevertheless, the weight of the evidence concerning the functions of the
positions at issue supports a conclusion that the duties are
administrative not medical, covering the range of tasks necessary to
recover and pursue claims and monitor provider activities. We believe
such activities are properly characterized as "the application of
administrative practices and procedures unrelated to the specialized
field of medical care management." Manual 2-41-20 B.2.a. As indicated
above, there is only a mere possibility of SPMP duties for these
positions. Accordingly, the evidence does not support a conclusion that
the positions require "professional training in a health science or
allied scientific field." The education requirements are very general
and are more related to administrative and management skills than to
specific medical training or expertise. Also, we cannot say
conclusively that these positions require the use of professional
medical skills developed in the course of professional work experience.
On this point, the Agency's analysis, discussed on pages 13 and 14, is
persuasive.(17)

Furthermore, we conclude that the correspondence and memorandum in the
record do not evidence SPMP functions for the MRAs. Decision, pp.
8-11. These documents give the basis for the State's claims against the
providers involved, but do not show that the MRAs independently made the
underlying medical judgments. For example, the third-party liability
claim (RU) rests on an "expert testimony report" from a physician and
the excess billings claim (AAU) simply identifies tests billed
separately but actually included as part of other billing codes. These
documents do not show the exercise of medical expertise; rather, they
show the types of administrative, investigative, or related skills
emphasized in the position descriptions.

The duties stated in the SMRA and MRA position descriptions are mostly
related to how to recover monies due or to other types of non-medical
activities. We do not regard these duties to be "providing liaison on
professional medical matters, medical services program development,
medical care assessments, and research and evaluation . . . of delivery
and economics"--the functions listed under "Other" SPMP in the Manual.
Manual 2-41-20 C.6. In addition, although the AAU SMRA and MRA duties
may be related to utilization review, the record shows that the
Administrative Action Unit is dependent on others to refer cases to it.
Although the SMRA certification emphasizes duties which we earlier noted
were possibly medical, given the description of the functions of that
unit, this certification alone is insufficient to support 75% FFP.
Decision, pp. 10-11. For the RU as well, the function is simply that of
an administrative claims collection agency.

Although many of the SMRAs and MRAs are nurses, we do not find this
factor of much weight. The State did not provide evidence, such as an
entry in a dictionary of occupational titles, to show that the functions
performed here fall within those generally performed by the nursing
profession. Also, a nursing degree was not required by the position
description.

The activities in question undoubtedly play a major part in the
administration of the Medicaid program. Since the record here does not
show that the Manual provisions clearly include these functions, they
are excluded and hence appropriately matched at 50% as opposed to 75%.(
18)$% IV. Conclusion.

50% FFP is the rate generally allowable for administrative expenditures.
The State bears the burden of showing how a position qualifies for a
higher rate but has not provided sufficient information to support a
determination that it is entitled to anything other than the 50% rate.
The disallowance must therefore be upheld. /1/ Each disallowance was
comprised of salary, fringe benefits, and training costs. Since
the State ultimately pursued its appeal only for the positions in the
Bureau of Administrative Control, only those salary and fringe benefit
costs remain in dispute. The costs in dispute for Cost Center 532 are:
Docket No. 84-61: $19,240 + fringe benefits at 19.76% Docket No.
84-216: $66,302 + fringe benefits at 19.76% and 20.59% /2/ In
paragraphs (1), (3), (4), (5) and (6), section 1903(a) sets the rate of
FFP for other types of expenditures for the Medicaid program.
/3/ State Brief, Ex. C, is a handwritten document which is several pages
long and appears to be a summary of a 1978 federal review of the
availability of the 75% SPMP rate. The paragraph headed "Ofc of Program
Integrity - Bureau of Administrative Control" states in part: their
major function was the implementation of the fiscal recovery programs
involving third party liability, other insurance, or other resources,
and the monitoring of aberrant providers and recipients. These functions
do not require full medical skills and we have continued a mixed FFP
matching rate . . . . /4/ We will note, however, that the
State's brief addresses support staff for this unit and states: Support
staff for this unit consists of clerical staff and one statistician.
Both clerical and statistical staff are directly necessary to the
functioning of the Administrative Control Bureau. The clerical staff
process all documents and attend to all clerical duties of the Bureau.
The statistician compiles data and prepares such calculations as
interest and penalties on program overpayments, all of which is
necessary to the operation of the Bureau of Administrative Control.
State Brief, pp. 11 and 12. The State submitted no supporting documents
and made no other statements concerning 75% FFP for support staff. The
availability of 75% FFP for a support staff position depends on the
position's association with SPMP. To the extent we later determine that
the SMRA and MRA positions are eligible, at least in part, for 75% FFP,
then there may well be some eligible support staff. We can do no more
than simply point this out since the record contains no information
which would enable us to address FFP for support staff any further.
/5/ There was some confusion during the telephone conference about
whether the issue concerned the availability of 75% FFP for these
positions in toto rather than just for a portion of the position duties.
It is clear from the parties' briefs, however, that the question
presented is whether these positions qualify in part for 75% FFP.
/6/ Noting that its purpose was to "elucidate fully the regulatory
context of this case," the Agency submitted a copy of the proposed
regulations governing 75% FFP for SPMP at 49 Fed. Reg. 23078, June 4,
1984. The Agency stated that the proposed rules reiterated points
already made by the Agency in this case, and referred specifically to a
statement of statutory intent as reimbursement at the enhanced rate for
"professional medical personnel" not "professional Medicaid personnel."
Agency's July 30, 1985 submission. The State responded and pointed out
that the proposed rules provide for prospective application "beginning
90 days after publication of the final regulations." The State argued
that the proposed rules contain new "limiting" criteria which actually
bolster the State's claim of SPMP status for the positions at issue.
State's August 6, 1985 submission. We do not discuss the proposed rules
in our analysis; the disallowance letters and the parties' earlier
briefs cite only the statutory, regulatory, and Manual provisions which
the Board has cited. The proposed rules were published while the first
of the joined appeals was pending before the Board and there is no
indication that the criteria as stated in the proposed rules played any
part in the Agency's decisions to take these disallowances.
Consequently, we see no reason to delve into the requirements as stated
in the proposed rules. /7/ One of the three assistant directors
of the State's Medicaid agency participated in the telephone conference.
This official is responsible for program integrity. The Bureau of
Administrative Control is one of three bureaus that report to him. (The
other bureaus are the Bureau of Medical Care and Surveillance "which
handles the fraud and abuse investigations" and the Quality Control
Bureau. Conference Call Tr., p. 16, Vol. I.) The assistant director
discussed, in general, the position duties of the SMRAs and MRAs. The
Agency objected to the State's further augmenting the record at that
stage in the appeal with information and opinion from the assistant
director since the State had chosen not to pursue its request for a
hearing. The Board ruled that the information provided during the call
was of little weight unless supported by contemporaneous documentation.
/8/ During the Telephone Conference the Board asked what weight and
significance it should give the reviewers' conclusions, but did not
receive a clear-cut response from either party during the discussion
that ensued. Telephone Conference, Tr., pp. 31-32 and 41-42, Vol. I.

JANUARY 14, 1986