GAB Decision 709
November 27, 1985
Washington State Department of Social and Health Services;
Settle, Norval D.; Teitz, Alexander G. Ballard, Judith A.
Docket No. 85-101
The Washington State Department of Social and Health Services (State)
appealed a determination of the Health Care Financing Administration
(Agency) disallowing $188,369 claimed by the State under Title XIX
(Medicaid) of the Social Security Act (Act) for federal financial
participation (FFP) for services provided in institutions for mental
diseases (IMDs) between June 1980 and June 1982. The State claimed that
FFP should be available for the services in question because they were
provided during the partial months of patients' admission to or
discharge from IMDs and were separately covered by provisions of its
Medicaid State Plan.
Board precedents
Services in IMDs to individuals aged 22 to 64 are generally excluded
by
section 1905 (a) of the Act from the types of medical assistance
for
which FFP is available. However, 42 CFR 435.1008 (b) delineated
an
exception to this general rule:
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. /1/
Under this regulation FFP was available for a partial month of
services
in an IMD during the month in which the patient was admitted to
or
discharged from the IMD.
In IMD Admission/Discharge Issue, Decision No. 436, May 31, 1983,
the
Board held that this regulatory exception to the(2) general
prohibition
did not authorize FFP for the full per diem rates for services
provided
in IMDs, but, rather, auithorized FFP only for services
separately
covered in a Medicaid State Plan. This rule was reaffirmed
by the Board
in Washington Department of Social and Health Services, Decision
No.
490, December 30, 1983, concerning the instant appellant, and also
in
illinois Department of Public Aid, Decision No. 517, February 29,
1984.
The result in the latter case was affirmed by the U.S. District
Court
for the Northern District of Illinois in Illinois b. Heckler, No.
84 C
6343, May 23, 1985. The holding of Decision No. 436 was later
amplified
by Petition for Clarification of Decision No. 436, Decision No.
535, May
9, 1985, in which the Board held that section 435.1008 (b)
authorized
FFP even for those IMD services which are "integral to
inpatient
psychiatric services," so long as the services are separately
covered
under the Medicaid State Plan. Decision No. 535 also emphasized
that no
IMD service could be considered to be separately covered under the
State
Plan unless all of the conditions for coverage of the service are
met.
Statement of facts
The original disallowance determination leading to this appeal was made
in
March 1983. At that time the Agency notified the State that it
was
disallowing $1,520,968 in FFP claimed for services provided in
IMDs.
The disallowance was appealed to this Board which, in Decision No.
490,
upheld the disallowance, subject to reduction to the extent the
State
could show that the services provided were separately covered by
the
Medicaid State Plan. In August 1984 the State submitted its claim
to
the Agency for $420,670 in FFP for services in IMDs during the
period
covered by Decision No. 490. The Agency agreed in May 1985 that
certain
services listed in the State's submission were separately covered by
the
State Plan, including psychologist, physician, laboratory,
radiology,
optometry, hearing, physical therapy, inhalation therapy,
speech
therapy, occupational therapy, and patient transportation. FFP
for
these services totalled $38,144. However, the Agency maintained
that
certain other services were not covered by the State Plan.
Of the remaining disallowance, the State appealed $188,369 in the
instant
case. The State argued here that several services not allowed
by the
Agency are separately covered by provisions of its State Plan,
including:
- nursing services
- social work services
- pharmacy services
- medical clinic
- therapy supervision staff
- industrial therapy.(3)
Discussion
In the instant case the State argued vigorously that language in
Decision
No. 535 that "the institutional status of an individual is
disregarded
because of the partial month exception . . ." means that, in
determining
whether a State Plan provision separately covers a service
provided during
partial months in an IMD, it is irrelevant whether the
State Plan hprovision
limits the service to outpatients. This language,
however, concerned
the issue of individual eligibility only. It
restated the substance of
42 CFR 435.1008 (b), which allowed an
individual otherwise ineligible for
Medicaid assistance while in an IMD
to be considered eligible during the
partial months of admission and
discharge. The basis of our holding in
Decision No. 436, however, was
that the regulation does not authorize the
extension of FFP to services
not covered in a State Plan. Thus, where a
State Plan provision
includes as a condition of coverage that the service
must be provided in
a noninstitutional setting or to outpatients only, the
provision cannot
cover services provided to an inpatient in an IMD.
Below we analyze each service at issue here and whether it is
separately
covered by the State's Medicaid State Plan.
1. Nursing Services. The State argued that nursing
services are
covered by four provisions of its State Plan. The first
provides for
agreements with nurse practitioner clinics. However, the
State provided
no evidence that any of the nurses involved here actually
qualified as
nurse practitioners. Moreover, "Clinic Services" is
defined for
purposes of the Medicaid program at 42 CFR 440.90 (b) as
follows:
"Clinic services" means . . . items or services that -- (a)
Are
provided to outpatients; (b) Are provided by a facility that is
not
part of a hospital but is organized and operated to provide medical
care
to outpatients. . .
. . . .
Thus, any State Plan section which provides for clinic services
applies
only to outpatients and does not cover a service provided to
inpatients
in IMDs. Therefore, the nursing services at issue here are
not
separately covered by the State Plan provision for agreements with
nurse
practitioner clinics because not all the conditions of coverage are
met.
The second State Plan provision claimed by the State to cover
nursing
services is section 7A, Home Health Care(4) Services. "Home
Health
Services" is defined at 42 CFR 440.70 (a) as services provided at
the
recipient's residence, and 440.70 (c) specifically states that
the
residence may not be a hospital. Thus section 7A of the State Plan
does
not cover IMD services because the condition of coverage that
the
services be provided at the patient's residence is not met.
The third State Plan provision claimed by the State to cover
nursing
services is section 8, Private Duty Nursing Services. This
provision
allowe coverage of private duty nursing for inpatients until July
1981,
when it was limited to non-institutional patients. The Agency
agreed
that this service is separately covered by section 8 of the State
Plan
for the period before July 1981 and therefore allowable to the
extent
that the State can document the amount of private duty nursing
provided.
The fourth provision of its State plan claimed by the State to
separately
cover nursing services provided in IMDs is section 9, Clinic
Services.
As explained above, no State Plan provision which includes as
a condition of
coverage that the service provided be a clinic service
may cover impatient
services provided in an IMD, since "clinic services"
are defined at 42 CFR
440.90 as services provided to outpatients.
We conclude that nursing services in IMDs are not separately covered
by
the State's Medicaid State Plan, except to the extent that the State
may
document to the Agency the provision of private duty nursing
services
meeting all the conditions of coverage in the State Plan.
2. Social work services. The provision of the State
Plan claimed by
the State to separately cover social work services is section
9, Clinic
Services. As explained above, the State Plan section
providing for
coverage of clinic services cannot separately cover any service
provided
to inpatients in an IMD.
3. Pharmacy services. Section 12 of the State Plan
covers
prescribed drugs. However, between June 1980 and June 1982, the
time
period with which this appeal is concerned, the State Plan, by its
own
terms, limited Section 12 to "outpatient drugs only." Thus section
12
does not cover pharmacy services in an IMD.
4. Medical clinic. The State argued that section 9 of its
State
Plan, Clinic Services, covers services provided in the medical
clinic
operated at each IMD. The State contended that these medical
clinics
operate like clinics which are outside institutional settings, in
that
the clinics are open(5) during business hours only and the patients
come
to the clinic for treatment of minor illnesses and physical
complaints.
However, the definition of "Clinic Services" at 42 CFR 440.90
limits
clinic services to those provided to outpatients and, further, to
those
provided by a facility that is not part of a hospital. Thus,
section 9
does not cover the medical clinic services provided in IMDs.
5. Therapy supervision staff. The State argued that
therapy
supervision staff services may be covered by three State
Plan
provisions, sections 5, 9, and 13. Section of the State Plan
covers
physicians' services. "Physicians' Services" is defined for
purposes of
the Medicaid program at 42 CFR 440.50 (b) as services provided
--
(b) By or under the personal supervision of an individual
licensed
under State law to practice medicine or osteopathy.
In Ohio Department of Human Services, Decision No. 659, June 18, 1985,
p.
4, in which Ohio argued that nursing services were provided under
the
direction of physicians, we stated that "(we) are not inclined
to
conclude lightly that 'at the direction of' means the same thing
as
'under the personal supervision of' . . ."
To conform with the regulatory definition of physicians' services,
a
service provided by an individual other than a physician is
covered
under State Plan section 5 only if it is clearly shown that
the
individual is in fact acting under a physician's personal
supervision.
The State acknowledged that in most instances the direct
supervisors of
the therapy supervision staff are licensed psychologists,
not
physicians. (State's brief, pp. 9-10) The State presented no
evidence
of particular instances of personal supervision by physicians.
Thus, we
must conclude that the therapy supervision staff services are
not
covered by the State Plan provision for physicians' services.
The second State Plan provision claimed by the State to cover
therapy
supervision staff services is section 9, Clinic Services. This
section
does not cover any services to inpatients such as those in IMDs,
as
explained above.
The third State Plan section claimed by the State to cover
therapy
supervision staff services is section 13, which covers several types
of
services including Adult Day Health Services, which the State
argued
covers the therapy services at issue here. (State's brief, p.
10)
The State did not further describe the nature of adult day health
services
despite its obligation to show that any services for which FFP
is claimed
fall within the cited(6) State Plan provision. Therapy
supervision is
not necessarily included within the ambit of adult day
health services.
In addition, the State did not show that the therapy
supervision services
were provided only during the day. Indeed, the
term "day" implies that
this State Plan provision applies only to
services provided to persons who do
not reside at the same location
where such services are provided. Thus,
the State has not given us a
sufficient basis to conclude that the State Plan
provision for adult day
health services covers therapy supervision for
inpatients at an IMD.
6. Industrial therapy services. The Agency agreed to
allow FFP for
physical therapy and occupational therapy are explicitly
covered by
section 7d of the State Plan. However, the Agency did not
allow the
State's claims for industrial therapy. The State asserted
that
industrial therapy is part of a package of rehabilitative
services
together with physical and occupational therapy, but presented
no
evidence that industrial therapy in particular conforms to
the
conditions of coverage of section 7d. Therefore, we must conclude
that
industrial therapy services to IMD patients are not separately
covered
by section 7d.
The State also argued that section 11 of its State Plan covers
industrial
therapy services. Section 11, like section 7d, covers
physical and
occupational therapy but not industrial therapy. Thus, we
must conclude
that section 11 does not separately cover industrial
therapy services for the
same reasons as section 7d.
The State further claimed that industrial therapy is covered by section
13
of its State Plan. The State did not provide a copy of section 13 but
the
Agency's brief indicates that it is entitled "Other diagnostic,
screening,
preventive, and rehabilitative services" and that it includes
six categories
of service: rabies shots, alcohol detoxification,
chemotherapy, adult
day health, and diagnostic and physical medicine.
(Agency's brief. p. 10) The
State, in its reply brief, did not
contradict this description of section
13.
The State acknowledged that section 13 does not explicitly
cover
industrial therapy but merely "contains no exclusion for this type
of
service . . ." (State's brief, p. 11) The State argued that section
13
covers industrial therapy because it is based on 42 CFR 440.130
(d)
which defines "rehabilitative services" as follows:
(d) "Rehabilitative services," except as otherwise provided
under
this subpart, includes any medical or remedial services recommended by
a
physician or other(7) licensed practitioner of the healing arts,
within
the scope of his practice under State law, for maximum reduction
of
physical or mental disability and restoration of a recipient to his
best
possible functional level.
Section 440.130 (d) conceivably could encompass industrial
therapy
services, if the services were recommended by a physician and
otherwise
met the requirements of the regulation. The issue here,
however, is
whether the service is covered by the State plan, nbot whether it
is
covered by the regulation. Although the State Plan may not
provide
services not permitted by the regulations, it need not cover
everything
permitted by the regulations.
Even assuming that the State Plan provision covered
rehabilitative
services to the extent allowed by the regulation, the State
presented no
showing that the requirements of the regulatory language were
met.
Further, from the list of specific section 13 services in the
Agency's
brief, it seems that subsection 13d, the subsection relied on here
by
the State, is the subsection which provides for adult day
health
services. If so the subsection cannot be relied upon the State
to
support coverage of industrial therapy for the reasons explained
above
relative to therapy supervision staff services.
Because the State did not make clear the conditions of coverage
under
section 13, nor present a showing that industrial therapy services
fit
within the limits of "rehabilitative services" as defined by
the
regulation, we must conclude that industrial therapy in an IMD is
not
separately covered by the State Plan.
Conclusion Based on the analysis above, we uphold the disallowance
of
$188,369 except to the extent the State can provide a sufficient
showing
to the Agency concerning the provision of private duty nursing
services
(see discussion on p. 4). /1/ 42 CFR 435.1008 (b) was later
amended to
prohibit FFP for IMD
services to persons aged 22-64 during the
partial months of admission and
discharge. 50 Fed. Reg. 13,199 (1985).
MARCH 28, 1987