Oregon Department of Human Resources, DAB No. 729 (1986)

GAB Decision 729

March 20, 1986

Oregon Department of Human Resources; 
Docket Nos. 84-236, 85-100
Garrett, Donald F.; Tietz, Alexander G.  Ford, Cecilia Sparks

The Oregon Department of Human Resources (State) appealed two
disallowances by the Health Care Financing Administration (HCFA,
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 and training of skilled professional medical personnel
(SPMP) and support staff.  The Agency disallowed the portion of the
State's claims which exceeded the 50% rate generally applicable to
administrative costs for the Medicaid program.  The disallowed claims
were for 56 individual positions involved in the administration of the
Medicaid program during all or part of the time period in question
covering 35 different job titles.

Board Docket No. 84-236 involves $1,320,357 in FFP claimed for October
1, 1981 through June 30, 1984.  Board Docket No. 85-100 involves
$205,687 in FFP claimed for July 1, 1984 through December 31, 1984.
Both disallowances covered the same type of personnel costs and raised
the same substantive issues.  Pursuant to the State's request, the Board
considered the appeals jointly.

This Decision is based on an extensive written record, the transcript of
a telephone conference call held in September 1985 to permit the parties
a final opportunity to respond to two sets of written Board questions,
and a tape of a November 1985 conference call.

As explained more fully below, we have concluded that, based on
regulations in effect during 1981-1984 and the Medical Assistance Manual
(Manual), 9 of the positions for which FFP was disallowed are in fact
SPMP positions, 3 of the positions include some SPMP functions, 8 of the
positions are support positions, at least in part, and 14 of the
positions are not eligible for 75% FFP.  In addition, we have determined
that the categorization of 1 position was inconclusive from the existing
record and remand it to the Agency.  (See Appendix for chart summarizing
our findings.)(2)

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. /1/

Agency implementing regulations (1980), 42 CFR 432.50(b)(1) and 433.15(
b) (5), provide 75% FFP for skilled professional medical personnel and
support staff.  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."

The terms "skilled professional medical personnel" and "staff directly
supporting such personnel" are not defined in the Act.  Agency
regulations contain the following definitions 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.

   "Supporting staff" means secretarial, stenographic, clerical, and
other subprofessional staff whose activities are directly necessary to
the carrying out of the functions which are the responsibility of
skilled professional medical personnel. . . .(3)

   "Subprofessional staff" means persons performing tasks that demand
little or no formal education;  a high school diploma;  or less than 4
years of college.

The regulations are supplemented by Part 2-41-20 of the 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
"(implementation and interpretation of the regulation on Federal
financial participation in State expenditures for staffing of the
medical assistance program."

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.

   Support positions derive their eligibility for increased Federal
matching from their direct association with and supervision by skilled
professional medical personnel whether at the State or local level.

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

   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(4) 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 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.  Support positions claimed at 75 percent matching must directly
support skilled professional medical personnel functions.

   Support staff must be in work assignments related in an immediate way
to the direct completion of the work of such professional medical
personnel (e.g., secretaries, statistical clerks, administrative
assistants).

   To be eligible for 75 percent matching all such support personnel
must report directly to the skilled professional medical staff and be
supervised by such skilled staff members.  Support(5) functions not
related in such direct manner to skilled medical functions are eligible
only for 50 percent matching.

   Functional flow charts can provide documentation that support
positions claimed at 75 percent matching are in direct support of
skilled professional medical staff.

   d.  Where staff time is split among functions at different levels of
Federal matching, the portion of time in each function must be
documented.

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" for a position's
professional medical status.  This section also(6) provides for
consideration of "(job) 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.

The determination of whether a position is a skilled professional
medical one or support staff is not an exact science.  Rather, the
determination is based upon the examination of information about the
actual tasks performed by questioned personnel and a reasonable
application of the guidelines set out in the Manual, implementing the
statute and regulations.  We note that the Manual, at 2-41-20(B) (1)
(b), states that ("staffing) will normally include some employees
engaged in functions which are neither skilled professional medical
functions nor supportive of such functions."

II.  Oregon's Medicaid Personnel and this Disallowance

The Oregon Department of Human Resources (DHR) was the single State
agency responsible for the Medicaid program.  DHR consisted of eight
operating divisions.  Three of these divisions are involved in the
current appeals:  the Adult and Family Services Division (AFS), the
Senior Services Division (SSD), and the Mental Health Division (MHD).

The Medicaid program in Oregon was administered primarily by AFS.
Within AFS, there were several sections involved with the Medicaid
program.  The one reviewed by HCFA was the Health Services Section
(HSS).

HSS was the "designated medical assistance unit" as required by 42 CFR
431.11(b) for administration of the Medicaid program.  HSS was
responsible for the development, analysis, and evaluation of the Oregon
Medicaid program.  HSS's functions and responsibilities included:

   (1) providing a central point of responsibility for professional and
technical aspects of medical services and medically related programs of
DHR;

   (2) planning the scope, content, and priorities of the Medicaid
program;

   (3) participating in the development of methods to provide effective
health and related services and to maintain liaison with the providers
of services;

   (4) participating in the development and maintenance of standards
pertaining to the quality of health and medical care and to medical
eligibility factors;  (7)

   (5) participating in Medicaid program analysis and evaluation;

   (6) advising and assisting medical assistance personnel in local AFS
units and in other DHR divisions;

   (7) participating in the provision of in-service training to state
and local staff administering the Medicaid program;

   (8) providing leadership in the administration of an effective Early
and Periodic Screening, Diagnosis and Testing program;  and

   (9) developing and carrying out effective methods for control of
medical services utilization and costs.

   (State's Appeal Brief, p. 6)

All of the AFS personnel who the Agency disallowed as SPMP and support
staff worked in HSS.

The three units of HSS reviewed by the Agency were Health Program and
Policy, Fiscal and Research, and Program Operations.  The Agency
reviewed 47 positions and found 42 were ineligible for enhanced
reimbursement.  The five positions that were accepted were nurses in the
HSS Exceptional Claims subunit.

There were other units within HSS which were also essential to
administering the Medicaid program.  These included:

   (1) the Claims Processing Unit (received bills from medical providers
and processed them for payment);

   (2) the Information Systems and Project Management Unit (entered data
from medical bills into the agency's data processing system);

   (3) the Finance Unit (performed expenditure and general ledger
accounting and prepared the required Medicaid Quarterly Expenditures
Reports);

   (4) the Business Services Manager's Office (received and processed
Medicaid grant awards, drew Medicaid funds as appropriate, and prepared
required Medicaid Quarterly Expenditures Estimate Reports);

   (5) the Personnel Section;  and

   (6) the Administrative Services Unit.

   (Id., pp. 6-7)(8)

During the period covered by the disallowance, the State did not claim
as SPMP and support staff any personnel in any of these units.

Although AFS had primary responsibility for the administration of the
Medicaid program in the State, the MHD and the SSD also employed
personnel directly involved in administering the Medicaid program.
Under formal agreement with AFS, MHD administered the following:

   (1) Medicaid for individuals aged 65 and over in institutions for
mental diseases;

   (2) Inpatient psychiatric services for individuals under age 21 in
psychiatric facilities or programs;

   (3) Clinical services (Community Mental Health Program);

   (4) Intermediate care facility services for the mentally retarded;

   (5) Miscellaneous medical funds and out of institutional medical care
for eligible clients in state institutions;  and

   (6) Title XIX training for MHD administrative staff.

   (Id., pp. 7-8)

The review of MHD focused on the Audit and Fiscal Services Units.  The
Agency reviewed 44 positions claimed at 75% FFP and found eight were
ineligible.  The 36 positions that were accepted were nurses, medical
social workers, a physician, and related support staff.

SSD also had Medicaid program responsibilities.  Under formal agreement
with AFS, SSD administered the following Medicaid services to eligible
clients:

   (1) Skilled nursing facility services;

   (2) Intermediate care facility services;

   (3) Home health services;

   (4) Personal care services in a recipient's home;  and

   (5) Title XIX training for SSD administrative staff.

The review of SSD was limited to the Administrative Services Unit and
Program Operations Unit which were the units in which(9)

SPMP were claimed.  The Agency reviewed 12 positions and found six were
ineligible for 75% FFP.  The six positions that were accepted were
nurses.

III.  General Arguments

The State not only disputed the Agency's findings on individual
positions, but also made general arguments that we will analyze before
we address the positions in dispute.

   A. Use of Improper Standards

The State argued that the disallowance should be overturned because the
Agency based its individual findings on a proposed regulation /2/ and a
review guide which tracked the language of the proposed regulation, both
of which significantly narrowed the definition of SPMP and support staff
from the existing regulations and policies.  The Agency admitted that
its reviewers used the review guide in initially evaluating the
positions but asserted that both the disallowance and its arguments
before the Board were based on the statute, the regulations in effect
during the disallowance period, prior Board decisions, and the Manual.
The Agency also seemed to argue that the review guide did not represent
an Agency policy of restricting the types of positions that states could
claim as SPMP and support staff, but rather was a comprehensive
compilation of existing standards, although it did admit that one goal
was to "tighten up administration" of the statutory provisions (Agency
Response, pp. 21-22).

The "Title XIX Financial Management Review Guide for Identification of
Skilled Professional Medical Personnel" (Review Guide) was published in
July 1982 and was used by the Agency reviewers during their Oregon
review in 1983-1984.  The proposed regulations were published on June 4,
1984.  The Review Guide contains seven criteria for use in evaluating
positions.  These criteria were set out on worksheets and used as a
checklist to review each position at issue in Oregon.  For our purposes
the two significant criteria are:

   (2) An SPMP . . . has professional education and training in the
field of medical care.

   and

   (6) The work of supporting staff must be directly related to the
completion of the SPMP's responsibilities.(10)

The Review Guide explained that the second criteria would be met by (1)
"possession of a medical license or certificate," (2) a "degree in a
medical field issued by a (certified) college or university," or (3) "a
combination of education and work experience . . . at a professional
level, involving the exercise of judgment in non-routine aspects of a
program related to medical care or practice" other than work in the
Medicaid program.  Review Guide, pp. 5-6.  The Review Guide stated that
support personnel were clerical staff, meaning secretarial and
stenographic personnel, only.  The Review Guide specifically stated that
"other subprofessional staff" are not eligible for 75% match.

The portions of the Review Guide pertaining to criteria (2) and (6), as
well as other parts of the Review Guide, are repeated in substance in
the Preamble and the proposed regulations.  The Preamble noted that:

   Over the years, there has been diversity in interpreting and applying
the criteria used to determine what types of personnel and job functions
qualify for 75 percent FFP (as SPMP or support staff) . . .

   . . . .

   We propose to revise the regulations. . . .  We would clarify the
definitions of (SPMP) and 'supporting staff'.  (SPMP) would include only
professionals in the field of medical care.  "Supporting staff" would
include only . . . clerical (staff) . . .

   49 Fed. Reg. 23080 (1984)

The Preamble goes on to state both that the criteria would be applied
"prospectively beginning ninety days after publication of the final
regulations" and that the Agency expected "program cost savings" . . .
"attributable to the changes in the (definitions)" of $5 million in the
first full fiscal year that the regulations would be in effect.

There is no question that the proposed regulations, and in turn the
Review Guide, substantially narrow the standards used to evaluate a
position's status as SPMP or support.  We thus find no basis for the
Agency's argument that the Review Guide was only a "comprehensive
setting forth" of the currently applicable "standards and principles."
Agency Brief, p. 21.  Under the Manual provisions applicable during the
time period relevant here, a position's function is the "principal"
basis for determining the availability of enhanced FFP at 75%.  The
Manual definitions of "professional" and "medical" relate more to the
position's function than to the qualifications of the person in the
position.  Moreover, there is far more leeway in(11) the application of
the definitions in the Manual in that an individual with professional
experience gained on the job in the administration of the medical
aspects of the Medicaid program can serve as a SPMP.  Also support
personnel under the Manual can clearly include types of subprofessional
employees other than just clerical.

In this proceeding, the Agency has defended its disallowance using the
statutory, regulatory, and Agency guidance (such the Manual) which are
properly applied to evaluate SPMP or support positions during this time
period.  The Agency argued that the disallowance should be sustained in
light of these criteria.  Nevertheless, Oregon argued that the
disallowance was based on "new criteria and thus lacks a rational basis,
is arbitrary and capricious, and not otherwise in accordance with the
law." Oregon's Reply Brief, p. 2.  The State has overstated the
significance of the Agency reviewers' use of the Review Guide and
worksheets reflecting the narrower standards later stated in the
Preamble and proposed regulations.  While we agree that the Agency
reviewers may have used impermissible criteria in performing the review
that led to the disallowance, we disagree that that factor alone compels
the Board to reverse the disallowance.  Rather, the question the Board
ultimately must confront is whether the disallowance is proper based on
the program standards that were applicable.  The State has been given a
full opportunity to make arguments on whether its claims were consistent
with the applicable criteria during proceedings before this Board.

Our analysis of the individual positions is based solely on the statute
as interpreted by the regulations (1980 CFR) and the Manual.  The Review
Guide and proposed rules play no part whatsoever in our analysis.

   B.  Approval of Cost Allocation Plans and Medicaid Plans

The State made two interrelated arguments:  (1) for the years in
question, the federal Department of Health and Human Services
(Department) approved cost allocation plans (CAPs) and State Medicaid
Plans (and their amendments) which contained lists of the SPMP and
support staff to be claimed at 75% FFP (including the positions at issue
here) /3;/;  (2) the Agency specifically approved through an audit and
quarterly reviews the charging of these costs and provided 75%
reimbursement for these positions throughout the 1970s.  Thus,(12)
reasoned the State, the costs are allowable at 75%. /4/ We discuss the
first argument directly below;  discussion of the second argument begins
on p. 22.

   1.  Effect of Plan approvals

In making its arguments about the effect of Agency approvals, the State
tended to lump the two types of plans together.  We have not done so
because the provisions of the plans and of the governing regulations are
different.  Below we discuss first the actual Oregon CAPs, set out the
regulations governing them, and analyze the effect of approval of the
CAPs;  we then do the same for Oregon's Medicaid Plans.

   a.  Cost Allocation Plans

The State argued that under HCFA's own regulations, HCFA cannot disallow
the costs because the costs were set out in the approved CAPs (State's
Appeal Brief, p. 26).  The State cited 45 CFR 95.517 and 95.519 for the
proposition that "the only costs 'improperly' claimed are those that are
not claimed in accordance with the approval cost allocation plan."

In this proceeding, there were disputes as to whether the positions in
question were clearly identifiable in the CAPs, who in the Department
reviewed the CAPs, what concerns that review encompassed, and what the
consequences of approval of the CAP were.

   i.  What the CAPs actually said

The CAPs for 1981 through 1983 for AFS are in the record (State's
Exhibits 20-25).  They all are similar as far as listing units of HSS
and stating the FFP level.  We use 1981 as an example (State's Exhibit
22). The Plan is for administrative costs of the AFS Division.  At I.
f., it states that the "total costs" of a list of units and sections are
to be charged to "Title XIX Administration and Training at 75% FFP for
personal services, travel and training" and "Title XIX (13)
Administration at 50% FFP for all other costs" based on the rates of the
month's non-administrative expenditures.  The Department approval of the
CAPs each year all have a common caveat:

   The approval of the methodology for allocation of costs to the
various Federal programs should not be interpreted to mean that
allocable costs are also allowable costs.  Whether allocable costs are
allowable under a particular program is a subject of the appropriate
program regulations.

Each of the units and sections listed in the amendment is identified by
a name and cost center number.  We first note that a number of the HSS
units in dispute are not listed in the 1981 amendment (or in any of the
following years') at all:  Fiscal and Research Unit (cc 92-00), Program
Fiscal Analysis (cc 92-01), Hospital Audit (cc 92-02), and Utilization
Review (cc 92-03). /5/

We also note that MHD personnel were not included in any CAP (State's
Exhibit 76-2 revised).  Finally, the CAP for SSD that is in the record
for the period starting July 1, 1982 merely says that personal services,
travel, and training for nursing home auditor positions are to be direct
charged to Title XIX (State's Exhibit 76-38).  There is nothing that we
can see in the document provided that would put the Agency on notice
that the State was planning to charge at 75% FFP the SSD positions at
issue here.(14)

In summary, the record indicates that, at most, the State had indicated
in its CAPs for AFS that it would be claiming 75% FFP for only some of
the positions in dispute in these appeals.  It is also true that the
whole units were merely named and individual positions were not
identified, and that no descriptions of the units were provided in the
1981-1983 CAPs in the record.  There were no CAPs for MHD, and the CAPs
for SSD did not state that certain positions were to be claimed at an
enhanced reimbursement rate.

There was a disagreement between the parties as to who in the Agency
actually reviewed the CAP and what the scope of review was.  The Agency
asserted during the transcribed conference call that the Medicaid
program component of the Agency did not examine the CAP, but rather the
Division of Cost Allocation did.  In essence the Agency seemed to be
saying that the Department did not examine the amendments on
programmatic grounds but only on technical cost allocation grounds from
a fiscal and accounting standpoint.  The State argued during that call,
as well as presented an affidavit from a State employee (State's Exhibit
73), that Regional program people did indeed examine the CAPs and even
had to sign off on them before the Division "acts on them" (Transcript,
p. 75).  The affidavit from the State employee responsible for the CAP
portions in question from 1970-1977 states that information he received
from Regional officials indicated that, even after the establishment of
the Regional Division of Cost Allocation in late 1977, the CAP
amendments were still referred to the program offices where they are
reviewed and approved before approval by the Region.  We do not need to
resolve this factual dispute because even if we were to find that
Medicaid program people did review the CAP, we would still find that the
disallowance could not be overturned merely based on CAP approval.

   ii.  CAP regulations

The Medicaid regulation on CAPs in effect prior to April 23, 1982 was 42
CFR 433.34 (1981);  after this CAPs for Medicaid were governed by 45 CFR
95.501 et seq. n6 The Medicaid regulation provided that FFP was not
available unless claims were made in accordance with an approved CAP.
The regulation described in general what a CAP must contain, including
"(methods) and procedures for properly charging" administrative costs
(42 CFR 432.34(d)(1)) and "descriptions of (15) functions and activities
by organizational units" (42 CFR 432.34(d)(2).  45 CFR 95.501 et seq. is
a more comprehensive regulation covering many programs.  CAP is defined
as:

   a narrative description of the procedures that the State agency will
use in identifying, measuring and allocating costs under all the
applicable programs.

   45 CFR 95.505

One specific requirement is that the plan contain "(the) procedures used
to identify, measure, and allocate all costs to each benefitting program
and activity (including activities subject to different rates of FFP).
45 CFR 95.507(b)(4).  The CAP must be "compatible" with the State
Medicaid plan (45 CFR 95.507(a)(3)) and be certified as conforming to
OMB Circular A-87 (which states applicable CAP and cost principle
requirements) and certain other accounting requirements as well as
contain accurate and valid information.  Section 95.513 of 45 CFR
provided, in part, that if a CAP was disapproved, the State would
receive notice of the reasons and sufficient detail about the basic
changes required.  Section 95.517 of 45 CFR provided that a State must
claim FFP "only in accordance with its approved" CAP or a proposed CAP
amendment.  Section 95.519 of 45 CFR provided for the disallowance of
costs not so claimed.

   iii.  Effect of CAP approval

Approval under Part 95 does not mean that the costs "approved" are then
automatically allowable.  Part 95 says in order for costs to be claimed,
they must be in accordance with an approved CAP.  That does not mean
that costs allocated and claimed in accordance with an approved CAP are
per se allowable under programtic and grants management regulations.  In
reaching this conclusion, we specifically reject the State's argument
that the Agency had no authority to take this disallowance if costs were
claimed via an approved CAP.  The regulations clearly do not support
that position.

Moreover, we were unable to verify the State's argument that all the
positions in question had been listed in the plans and identified as
being reimbursable at 75% FFP.  In fact, less than half of the 56
individual positions in dispute were even mentioned in a CAP.

This case concerns the proper rate of FFP, in other words, whether the
difference between 50% and 75% reimbursement is allowable.  The caveat
to the Agency CAP approvals indicates that CAP approval is not
dispositive of the allowability of the costs claimed through the CAP.(
16)$% As the Board has stated in a number of cases, CAPs function
primarily to delineate proper cost allocation methods and procedures and
do not address the full range of substantive issues raised by the
Agency's programs.  Approvals of the plans cannot be viewed as policy
judgments on the part of the Agency about cost allowability.
Furthermore, the approvals are specifically limited and do not purport
to be approval of the allowability of particular costs.  See, e.g., New
York State Department of Social Services, Decision No. 449, July 29,
1983;  Michigan Department of Social Services, Decision No. 370 December
28, 1982;  Joint Consideration:  Reimbursement of Foster Care Services,
Decision No. 337, June 30, 1982.  Given the purpose of CAPs, we cannot
find that the State could reasonably rely on the Agency's approval as
being approval of allowability of the costs that were claimed in
contravention of the Agency's guidlines.

   b.  State Medicaid Plans

   i.  What the Medicaid plans actually said

The relevant portions of the State Medicaid plans for HSS for October 1,
1980 through sometime in 1984 (the last document was effective April 1,
1983) are in the record (State's Exhibits 11-19).  Part of the body of
the Plan is a pre-printed section with spaces to fill in names and
attachments.  There are two relevant pre-printed sections.  We will
indicate the Oregon typed-in parts through underlining:

   1.2(b) Within the State agency, the Health Services Section of Adult
& Family Services Division has been designated as the medical assistance
unit.  ATTACHMENT 1.2-B contains a description of the organization and
functions of the medical assistance unit and an organization chart of
the unit.

   (c) ATTACHMENT 1.2-C contains a description of the kinds and numbers
of professional medical personnel and supporting staff used in the
administration of the plan and their responsibilities.

Attachments 1.2-B are organization charts broken down into sections and
units with peoples' names, their job titles, and brief descriptions of
what they do in "bullet" format.  On pages 17 and 18 we reproduce two
charts from the 1982 Medicaid Plan Attachment 1.2-B for the Fiscal and
Research Unit in HSS:(17)

   FISCAL AND RESEARCH UNIT Manager Charles Bocci 8-2762

   Secretary

   Deborah Curran

   Office Manager 8-2263 Pat Welch

   Fiscal Analysis

   8-2762

   Hersh Crawford

   Systems Design

   Robert LeDoux

   Data Analyst

   Fran Reisdorf

   UTILIZATION CONTROL Supervisor Clifford Greenlick 8-2762

   Med Pay Analyst 8-2377 Ellen Gouthier

   Med Pay Analysts 8-2377 Vacant Jack Lathroup

   Med Pay Analysts 8-2377 Virginia Smith Don Still

   RESEARCH/AUDIT Supervisor Holt Bertleson 8-2762

   Auditor 8-2377 Don Lauritsen

   Auditor 8-2377 Helen Malby

   Approved:  October 12, 1982

   Effective:  July 1, 1982 (18)

   FISCAL AND RESEARCH UNIT

   Manager

   Charles Bocci

   Fiscal Analysis

   Hersh Crawford

   *MARS-Budget

   *Budgets

   *Cost Projections

   *Fiscal Analysis

   Systems Design

   Robert LeDoux

   *MMIS

   *SURS

   *Research

   *Plan Code

   *Secretary

   Deborah Curran

   *Central Files

   *Expenditure Reimburse Control

   *Employee Records

   *Work Schedule Control

   *Information/Appointments

   *Work Flow Control

   *Meeting Coordination

   *Reports Monitoring

   UTILIZATION CONTROL

   Cliff Greenlick

   *Fraud/Abuse Detect.

   *SURS

   *Over Payment Recoveries

   *Utilization Control

   OFFICE MANAGER

   Pat Welch

   *Personnel, Payroll

   *Admin. Budget

   *Word Processing

   RESEARCH/AUDIT

   Holt Bertelson

   *Research

   *Data Inventory/Analysis

   *Reports (Federal)

   *Data Presentations

   *Hospital Audits

   *Emergency Board Coordination

   *MARS-Reporting

   Approved:  October 12, 1982

   Effective:  July 1, 1982

   State's Exhibit 13-3 (19)

Attachments 1.2-C are headed "Description of Professional Technical and
Support Staff Used in Administration of the Plan." The positions are
listed under organizational units.  They are listed, however, not by
"working title" as used on the charts in Attachment 1.2-B, but by
Personnel Division "class title." For example, the "medical payment
analysts" on the organization charts in 1.2-B are called "administrative
assistant 3" in Attachment 1.2-C.  Beside each "class title" there is a
very brief description of function.  For example, the relevant portion
of 1.2-C corresponding to the unit for which we show the organization
charts states:

  FISCAL AND RESEARCH UNIT Program Executive D                     Unit
  Manager Clerical Specialist                     Secretary to Unit
  Manager Program Executive B                     Budget Specialist
  Research Analyst III (1)                Budget/Research Research
  Analyst III (1)                Budget/Research Administrative
  Assistant I (1)          Budget/Research Data Services Program
  Executive C                     Subunit Supervisor Fiscal Auditor 3
  (1) Fiscal AUditor 1 (1) Utilization Control Group Program Executive
  II                    Subunit Supervisor Administrative Assistant III
  (4)        Provider Fraud and Abuse Clerical Specialist
  Admin./Clerical Support Office Management Management Assistant C
  Office Manager (Coordinates budget, personnel and service and supply
                                          for section); Supervisor of
                                          clerical support staff Word
  Processors (3)                     Secretarial/Clerical Functions
  Clerical Specialist (1) Secretary (1)

% (State's Exhibit 18-1) (20)

We must admit that the matching of positions on the two attachments was
not self-evident, and the process of correlating the two was very
cumbersome.  The task was made easier by looking at position
descriptions in the record which contain both "titles." Also, the
descriptions on the charts did not provide a great deal of detail,
certainly not enough for the Board to decide whether or not all the
questioned positions were SPMP or support.

Furthermore, it still is not clear to us that everyone listed on
Attachments 1.2-C was claimed as SPMP or support.  As an addendum to the
initial appeal file, the State provided an Attachment 1.2-C from 1982 on
which it had typed in names by the "class titles" (State's Exhibit
76-4).  Names were not typed by all the titles, although we could figure
out some of the missing support personnel.  But there are some where we
still are not sure whether the positions were claimed at 75% and are
part of these appeals, for example, under the Program Operations
Unit--the "provider inquiry group" and the "provider enrollment group."

The State has not submitted the relevant pages of the pre-printed
portion of the Plan for the MHD so we do not know what it said about the
attachments to the Plan that we do have in the record.  The organization
chart for the audit unit (one of the units in question) has job titles,
names, and a very brief description of functions (State's Exhibit
76-23).  There is no description for three of the positions (Title XIX
Budget Specialist);  all there are on the organization charts are job
titles and names.  For the last position, the Mental Health Specialist,
it is not even clear where this position is on an organization chart.

The State also has not submitted the relevant pages of the pre-printed
portion of the plan for the SSD that make reference to the significance
of the organization charts.  One chart in the record (State's Exhibit
76-30) provides no description of functions but only "class titles" for
the SSD and another chart describes in short titles what the entire
"Administration Central Office" does, but it is not clear where the
positions in dispute are placed (State's Exhibit 76-31).

The State acknowledged that position descriptions were not submitted
with the Plan (Transcript, pp. 79-80).  According to the State, if the
Agency raised any questions about the contents of the Plan, it would
have communicated by letter and the State would have responded in
writing (Transcript, p. 86).

In summary, the picture is not as clear as the State would have us
believe as to what information was in the Medicaid Plans relating to the
positions in dispute.  For at least some (21) positions in HSS, the
conclusion can be drawn that positions in dispute were identified in the
Medicaid Plans as SPMP or support staff, and there is some general
description of job functions.  The task of correlating the positions on
different Attachments is not an easy one, accomplished by the Board only
with the use of position descriptions in the record (which were not
submitted to the Agency before Plan approval).  For the MHD and SSD,
there is much less information in the record--almost no job function
description and no indication of the significance of the Attachments.

   ii.  Medicaid Plan regulations

Section 201.2 of 45 CFR provides that:

   The State plan is a comprehensive statement submitted by the State
agency describing the nature and scope of its program and giving
assurance that it will be administered in conformity with the specific
requirements stipulated in the pertinent title of the Act, the
regulations in Subtitle A and this chapter of this title, and other
applicable official issuances of the Department.  The State plan
contains all information necessary for the Service to determine whether
the plan can be approved, as a basis for Federal financial participation
in the State program.

Section 201.3 of 45 CFR governs approval of State plans and provides, in
part, that (1) regional office review staff will "initiate discussion"
with the State to clarify "significant aspects of the plan which come to
their attention (during) review", (2) technical assistance on federal
policy questions is available from the central office, and (3) plans are
approved based on relevant statutes and regulations and "(Guidelines) .
. . furnished to assist in the interpretation of the regulations."

   iii.  Effect of Medicaid Plan approval

In contrast to a CAP, which is a fiscal document, the Medicaid Plan is a
programmatic document which the Agency reviews and approves.
Nevertheless, the Agency argued that the review it did before approving
a Medicaid Plan did not compare in scope and depth to an Agency review
or audit:  "We wouldn't look at position descriptions and go into the
qualifications of the incumbent and the other indifial" (Transcript, p.
71). According to the Agency, the Medicaid Plan was:

   a blueprint;  it's a roadmap for the carrying out of the program, and
it's an indication that that State is in a(22) position to meet the
essential statutory conditions for participation in the State program
that is Federally participated in.

   (Transcript, p. 72)

The Agency argued that its approval did not constitute a finding that it
had approved specific positions listed in the Medicaid Plan as
satisfying SPMP and support staff requirements.

For reasons that closely parallel our analysis of the effect of the CAP
approval, we agree with the Agency that approval of the Medicaid Plan
was not a guarantee of reimbursement of specific positions at an
enhanced level of FFP.

   * The Plan did not list all the positions at issue and even for those
listed, it was confusing.  Moreover, for all positions listed where
background information was necessary, the Plan contained insufficient
information for the Agency to know with certainty that a position would
qualify for enhanced funding under the applicable regulations and
guidelines.

   * The regulations governing Medicaid Plans indicate that their
purpose is to set out the structure and scope of a state's Medicaid
program.  Agency approval in the context here would indicate that the
Agency agrees that the State has the organizational structure and
personnel necessary to administer the program in accordance with
statutes, regulations, and guidelines.  The Medicaid Plan in and of
itself is not sufficiently detailed for the Agency to know on what basis
certain positions could be considered to be eligible for enhanced
reimbursement.  As our subsequent analysis makes clear, the ultimate
determination of whether the positions at issue would qualify for
enhanced FFP requires a careful examination of indicia of the tasks
performed in light of the regulations and guidelines.

   * We have no evidence in the record that the Agency customarily (or
in this instance) performed an exhaustive position-by-position analysis
sufficient for it to determine individual position eligibility for
enhanced FFP as part of the approval process.  Keeping track of numerous
positions within the State's program, the functions and qualifications
of the positions, and the actual work performed by the incumbents would
be a herculean task, indeed.  It certainly would be impractical and
unreasonable for the Agency to have to do so as part of the Plan
approval for this and all other states.(24)

   * Finally, as the Agency argued, with regard to this category of
costs, the Plan certainly must be viewed as a general blueprint of what
the State believes would be eligible for enhanced FFP.  If ultimately
the Agency performs an audit of these positions and the positions do not
qualify for enhanced FFP under the regulations and guidelines, Plan
approval alone, under the circumstances, cannot otherwise justify
reimbursement.

The Agency had to rely on the State to correctly categorize the
positions it wished to claim at 75% FFP in accordance with Agency
guidance.  Indeed, in most instances this occurred since, as we explain
in Part III of this Decision, most of the positions listed by the State
did qualify for enhanced reimbursement.  It would have been outside the
scope of Plan approval (and an unreasonable burden to place on the
Agency in any event) to require the Agency to request specific
documentation in support of each position at the time of Plan approval.
Without the necessary supporting documentation and the comprehensive
review of that documentation, Agency approval of the Medicaid Plan could
not commit the Agency to providing enhanced reimbursement of positions
not claimed in accordance with the regulations and Manual.

   2.  Approval and Payment of the Costs

The State argued that the Agency actually provided 75% reimbursement for
these positions throughout the 1970s and audited those costs and found
them allowable.

The State also argued that each Agency review of the State's Quarterly
Expenditure Reports (QERs) constituted approval of the SPMP costs on the
QERs.

The Agency argued that there is no evidence in the record (a) that the
positions in question were the same as those that had been claimed
during the past decade and (b) that these claims were approved and
reimbursed by the Agency.  In its Reply Brief, the State offered to
produce "this voluminous evidence" (p. 4) if necessary, but noted that
the Agency did not deny that it had approved and paid the claims. We
have not asked the State to submit that documentation because even if
all these positions had been claimed and paid in the past, those actions
do not mean that the claims at issue here are allowable.  The nature of
the fiscal relationship between the federal government and the states
has resulted in an advance payment system under which the states are
paid on the basis of cost estimated (in gross figures), and later
adjustments are made to those estimates based upon actual expenditures.
45 CFR 201.5.  The process does not lend itself to close examination of
individual items included in the quarterly claims.  Accord, New York
State Department of Social Services, Decision(24)

No. 449, July 29, 1983.  Prior reimbursement without formal review or
audit cannot be interpreted as a definitive Agency determination of
allowability.  We will note, in any event, that the State's sweeping
allegation with regard to the longstanding past reimbursement of such
claims seems to be overstated.  We are unable even to locate specific
mention of all the disallowed positions in the CAPs and Medicaid Plans
we have for the time period in dispute.  Moreover, it is also likely
that the State was undergoing at least some administrative
reorganization during the 1970s and 80s which would affect the types of
positions used in administration of the program.

The State argued that the Agency approved the State's charging of SPMP
costs in the 1970s, as evidenced by a 1972 audit report (State's Exhibit
73-10 through -27).  Although the audit related to administrative costs,
there is no indication in the report that the auditors examined
personnel costs in general and SPMP costs in particular.

   3.  Qualifications of People Filling Positions

Triggered by the Agency's emphasis in its initial brief on the actual
qualifications of the people filling the positions in question, both
parties focused much of their argument, when dealing with individual
positions, on incumbent qualifications.  The Board asked the parties
what role individual qualifications play in determining whether a
position is SPMP.  The State argued that individual qualifications play
absolutely no role in tha determination under the policies applicable
during the time period in question, citing to Section 2-41-20(B)(1)(a)
of the Manual which provides that "the function of a 'skilled
professional medical' position . . . is the principal basis for
determining eligibility for increased federal matching."

The Agency argued that qualifications should be examined unless the
written position responsibilities are for a (1) "physician, dentist,
nurse, psychiatric social worker, hospital administrator, or other
individual who is professionally trained in a field of medical care,"
/7/ or (2) have nothing directly to do with the "practice of a medical
care-related profession" (Agency's July 19, 1985 brief, pp. 2-3).  The
Agency argued that:

   With regard to a position where the paper indicia demonstrate that
the position involves the carrying out of at least some apparently
medical care-related functions (25) but where the incumbent possesses no
significant professional medical care training or experience, it is
difficult to preceive how the position -- insofar as its
responsibilities are actually being carried out on a day-to-day basis --
can be said to be a skilled professional medical personnel position.
For if the position's incumbent possesses no skilled professional
medical expertise, non can be exercised in carrying out the position
responsibilities, regardless of the words used in the position
description to describe those responsibilities.  (Emphasis in original)
(Id., p. 2)

The Agency did admit that qualifications encompass both formal training
and "solid experience" (Id., p. 3) and argued that the incumbent
qualifications may be more important than the paper indicia, at least
where the paper indicia are inconclusive - a "telling gloss on the paper
indicia" (Id., p. 4).  It is interesting that the Agency did not argue
that its rules clearly required such an examination of qualifications
but rather argued that nothing suggested that it would be inappropriate
for the Board to examine incumbent qualifications (Id.).

The Manual does state that function is the principal basis for
determining eligibility and that title of the position and the
organizational placement are subsidiary evidence (2-41-20(B)(1)(a)).
The Manual also states that because the position's function is the
primary determinant, the state's official position descriptions will
provide basic substantiation. /8/ Job announcements emphasizing
requirements at or above the college level in medical care and medical
care administration will also be considered.  Secondary indications will
be a handbook or dictionary of occupational titles and state manuals of
job classifications (2-41-20(B)(2)(b)).  The emphasis is clearly on
position function, not on incumbent qualifications.  There is one other
general mention of qualifications in the Manual:  "As a class, these
functions require knowledge and skills gained from professional training
in a health science or allied scientific field" (2-41-20(B)(2)(a)).  As
noted above, the Agency admitted that such training could be gained
through work experience.  We note, however, that the Agency's actual
analysis of the individual positions in question seemed to focus to some
extent on academic training to the exclusion of prior work experience.
/9/

While we believe that all information available should be considered, we
cannot develop a hard-and-fast rule as to when incumbent qualifications
should be examined.  While we do not think it is necessary to look at
qualifications in every instance, it is sometimes helpful.  Evidence of
incumbents' qualifications can provide corroboration of what is already
established by other evidence.  In addition, this type of evidence can
be of direct use in resolving the status of a position when this is not
clear from the position description, organizational statements, and
other evidence about the position or its functions.  This use of
qualification information is consistent with the Manual's treatment of
the subject:  in couching 2-41-20(B)(2)(a) in terms of a very general
characterization;  in providing a non-exclusive list of positions that
would qualify for enhanced reimbursement;  and in emphasizing expertise
in medical care delivery in an administrative setting rather than
requiring an academic degree or certificate.

In general here, where we found positions requiring the level of
expertise required by the Manual to be classified as SPMP, the
qualifications of the incumbents indicated that they were able to
exercise the required level of professional medical expertise, whether
gained in academia, work in the Medicaid program, or some combination of
the two.  For example, Exhibit 42 indicates that one of the Medical Data
Analysts had a college degree in economics, had been a lecturer in
health care economics at a number of universities and for a number of
associations, had been an assistant administrator of a hospital, and
managed several different areas (including health care economics) of the
Oregon Health Planning Development Agency.

Conversely, where we found positions not requiring that level of
expertise, in general the qualifications of the incumbents indicated
that they were not able to expertise professional(27) medical expertise.
For example, the information about the SSD Nursing Home Auditors reveals
business and accounting academic backgrounds and experience in doing the
type of auditing that does not appear to require medical care expertise.

   4.  Personnel Being Both SPMP and Support

With its initial brief, the State provided an affidavit and position
descriptions for a group of support staff (State's Exhibit 58). The
State argued conclusorily that these people qualified as either SPMP or
support staff.  The State later argued that for the people it classified
in its initial brief as SPMP, if not found by the Board to be SPMP,
should be considered support staff.

   a.  Support Staff as SPMP

The State argued that some positions in Exhibit 58, while SPMP, would at
least qualify as support if the Board considered incumbent
qualifications in evaluating the positions, even though the State
believed that such consideration would be improper.  The State seemed to
be under the impression that although it had not originally
differentiated between SPMP and support staff on its claims for FFP, the
Agency reviewers and divided the positions into the two categories.
There is no evidence of such categorization in the record, however. The
review report as well as the sheets filled out by the reviewers for each
individual do not make this distinction. /10/ The Board questioned the
State regarding Exhibit 58 since it appeared that in a few cases people
with the same job titles were split between the two groups (Transcript,
pp. 115-117).  The State's basic position (28) was that it considered
all positions to be SPMP positions, but if they were not found to be so,
they were at least support staff positions.

It was not clear whether the State was arguing that all of the people in
dispute should be considered SPMP or whether it is arguing that out of
27 positions included in Exhibit 58 as support, 17 could be categorized
as SPMP (as indicated by asterisks by their names on Exhibit 76-1
Revised).  We have assumed the latter is what the State is arguing since
we assume that the State would not argue that such positions such as
word processors, telephone receptionists, and secretaries are SPMP
positions.  With that understanding, we address the State's general
arguments here and leave the discussion of the individual positions to
the discussion of the organizational units in which they were situated.

This issue is different from the issue of whether the Board should
examine incumbent qualifications.  The regulations and Manual require
that a determination be made whether a position is "professional"
(defined in the Manual as meaning a college education or equivalent,
relating directly to non-routine aspects of the program requiring the
exercise of judgment) or support (defined in the regulations as
secretarial, stenographic, clerical, or other subprofessional staff
(defined as performing tasks demanding little or no formal education, a
high school diploma, or less than four years of college)).

The State argued that these provisions do not preclude "professionals or
quasi-professionals" who are performing support functions from being
claimed as support staff (Transcript, p. 126).  The question here,
however, is not whether the people filling the positions are
"over-qualified" but how does the State personnel system categorize the
positions and what are the position's tasks.  If the question is a close
one, an examination of the incumbent's qualifications may be a telling
double-check (see previous section).

   b.  SPMP as Support

The other issue, that any positions found not to be SPMP should then
always be evaluated as support staff, must also be rejected.  We
considered each position for indicia of professional or subprofessional
status.  Once professional status was found, but the position was not a
SPMP one, we did not evaluate the position for support staff status
because the regulations and Manual required that support staff must be
subprofessional positions.  The State cannot have it both ways;  either
a position is a professional one or it is a subprofessional one.(29)

III.  Individual Positions n11

Our consideration of the individual positions follows the order of the
Agency's Financial Management Review as set out in State's Exhibit 6.

   1.  Health Services Section

   1.  Office of the Section Manager

Section Manager and Assistant Section Manager.  Both the Section Manager
and the Assistant Section Manager are SPMP positions.  These positions
function as the State Medicaid director and deputy State Medicaid
director, responsible for managing all aspects of the program.

The Agency argued that the incumbent in the Section Manager position did
not have the requisite SPMP qualifications and that the tasks of the
Assistant Section Manager did not require "the exercise of any
significant quantum of professional medical care related expertise"
(Agency Brief, p. 14).  We are not persuaded by these arguments.  The
Manual at 2-41-20(C) specifically states that these two positions are to
be reimbursed at 75% FFP.  The clear implication of the Manual is that
the duties themselves are enough to qualify the position as SPMP.  The
Agency has not shown that the tasks performed by both positions were
anything other than those that would ordinarily accompany those job
titles.  Therefore, anyone in those positions would be deemed to be
SPMP.

Planning Coordinator.  The Planning Coordinator is not a SPMP.  The
State's description in its Reply Brief is somewhat at odds with the
position description and the affidavit by the Assistant Section Manager
about the position's functions.  When read together, it seems that the
person spends most of the time establishing and maintaining "reporting
processes" to monitor a number of Medicaid projects.  There is no
indication that the person gets substantively involved in the Medicaid
issues that he/she is coordinating.  It is solely a management/
coordination job.

Management Assistant.  The Management Assistant is a SPMP support staff
position.  This person provides direct secretarial and administrative
support to the Section Manager and Assistant Section Manager, both of
whom are SPMP.(30)$% The Medical Data Analyst.  The Medical Data Analyst
is a SPMP position. The auditors' summary of this position is:

   Select and analyze medical expenditure and utilization data for the
purpose of identifying trends and policy outcomes adverse to the
objectives of the Agency, and on the basis of the research, recommend
policy and procedural changes that will improve the distribution of
resources used in the Medical Assistance Program.  (State's Exhibit
6-11)

The Manual at 2-41-20(C)(6) states that medical economists who are
responsible for "research and evaluation concerning all aspects of the
delivery and economics of medical services" are SPMP.  This position
fits that "medical economist" description since the function involves
evaluating the services provided by Medicaid in the context of improving
the program.

In its July 19, 1985 response to the Board's questions (p. 17), the
Agency provided a brief elaboration (without any bolstering
substantiation) on what it believed a medical economist does:

   the placing of values on particular medical procedures, and the
weighing of the various economic and medical factors that appropriately
must be considered in assessing such values.

While this may indeed be an aspect of the job that a medical economist
generically does, the elucidation by the Agency was not helpful in
assisting us in determining what such a person does in the context of
administering the Medicaid program.  This indeed has been an overall
problem with the Agency's stance in this case, especially when it
appears that a position falls within the "Other (SPMP)" category of the
Manual (2-41-20(c)(6).  The Agency has failed to consider some of the
positions in dispute in the context that SPMP do not directly provide
medical services but administer the Medicaid program.  For example, in
the transcribed conference call, when asked, as an expansion on a
statement in its July 19, 1985 response, to describe what
"administrative duties are clearly and unmistakably those of a
physician, dentist, nurse, psychiatric social worker, hospital
administrator or other individual professionally trained in the field of
medical care" (Transcript, p. 94), the Agency could not describe any
except hospital administration (Transcript, pp. 95-97).

The Medical Data Analyst position, a SPMP in an administrative function,
is an exemplar of what was contemplated in the Manual to be an SPMP
under 2-41-20(C)(6).  (31)

Medical Policy Analyst.  The Medical Policy Analyst is a SPMP position.
/12/ At first glance, it might appear that this position is merely
involved with Medicare administration, not medical care administration.
The definition of "medical" in the Manual States in part:

   requires expertise in medical services care delivered, studying and
evaluating the economics of medical care, planning the program's scope .
. .

The position description states that the main function of the position
is to "develop statewide medical program policy and insure development
and implementation of procedures designed to monitor effectiveness of
policies as they impact on fiscal and medical resources and health of
AFS clients." The affidavits include descriptions of such tasks as
"assess the quality of care delivered by the HMO Prepaid Health Plan
(PHP)," "track services delivered to HMO/PHP enrollees," "develop
criteria to select PHP contractrors," "development of specification for
standard eyewear contract;  evaluation of proposals;" "selection of
vendor based on quality of product line and ability to supply broad
prescription needs," "assessment of the impact" of the inpatient
hospital pre-admission screening program.

In the same way as the Medical Data Analyst, this position also is the
type that requires knowledge of medical services, and uses that
expertise to administer the Medicaid program.

Office Manager and Word Processing Supervisor.  The Office Manager and
Word Processing Supervisor is a support staff position.  The position is
supervised by a SPMP, the Assistant Section Manager.  The position is
responsible for HSS's administrative budget, personnel administration,
purchasing, and general office management including supervising the word
processing personnel. In effect, this administrative assistant directly
assists the Section Manager and Assistant Section Manager in running the
Medicaid office.  As these two positions are considered SPMP positions
even though they involve many management tasks, so this position
directly supports them in carrying out those tasks.

Word Processor, Secretary, and Clerical Specialist.  The Word
Processors, Secretary, and Clerical Specialist are support staff
positions to the extent that they do the secretarial(32) work for SPMP
in the section. /13/ The functions performed by these people are
squarely on target with those contemplated by the Medical Assistance
Manual:  typing, xeroxing, filing, receptionist, telephone answering.
Although they are supervised by the Office Manager, a support position
itself, that fact does not disqualify the positions. As Action
Transmittal SRS-AT-76-66 (April 20, 1976) states:

   "(a) supervisory relationship on a day-to-day basis between the
skilled medical professional and support staff is not necessary and not
always relevant.  The critical factor determining direct support is that
the non-professional be responsible for performing functions directly
necessary for the carrying out of the professional's duties. .  . .

The parties should determine what portion of the personnel costs would
be allowable at 75%.  It seems that such a determination could be based
on the percentage of people in the Section who were SPMP or on the
percentage of work done which is for SPMP.  The Manual says that when
staff time is split among functions at different levels of FFP, the
portion of time spent in each function must be documented by the State.
If a dispute still remains, the parties can return to the Board.

   b.  Health Program and Policy Unit According to the Agency, this
office oversaw the planning, development, and direction of the Medicaid
program.Unit Manager.  The Unit Manager is a SPMP position.  The tasks
involve planning, developing, managing, and directing policy for a large
number of Medicaid areas (see list in affidavit,(33) State's Exhibit 40)
involving the delivery of medical services.  It is a combination of a
high level policy-making and administrative position plus elements of
the analyst positions discussed in the prior section that, in the
context of administering the Medicaid program, makes this position in
the policy-making area, a SPMP one.

Policy Analyst.  The Policy Analyst positions have been discussed in the
prior section and qualify as SPMP positions.

Rules and Policy Specialist.  Although we have less information about
the Rules and Policy Specialist positions, they appear to be the same
type of policy positions in the medical delivery field as the Policy
Analyst positions which we have just determined to be SPMP.  The tasks
involve writing, coordinating, and refining policy governing the program
and evlauating the application of the policy to ensure that it is being
applied as intended. These positions were initially characterized by the
State as support staff in Exhibit 58, but the State also argued that
they qualified as SPMP.  There is not as much information in the record
as for the positions the State initially characterized as SPMP, but the
conclusion is inescapable that it is a professional position because of
the task performed, e.g., presiding at public meetings, analyzing
administrative rules, and writing and refining program policies and
procedures.

Unit Secretary.  The Unit Secretary is a support staff position to the
extent that the people who gave her work were SPMP.

   c.  Fiscal and Research Unit

According to the Agency, this office was responsible for budgeting,
hospital auditing, medical claims auditing, and utilization review.

The Manual contains two sections pertinent for evaluating this unit,
2-41-20(c)(3) and (5):

   3.  Fiscal Section Staff - 50 percent FFP. Staff prepares financial
statements of expenditures and formulates budget.  The operation is
non-medically oriented and uses personnel with non-medical titles and
occupations.

   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(34) 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.

Unit Manager.  The Unit Manager is not a SPMP position.  The position is
primarily a fiscal and managerial one:  budget preparation and
expenditure tracking, devising budgeting systems, personnel work for the
Unit, directing hospital audits.  These functions, under the language of
the Manual, are not SPMP functions.  The position description and
affidavit (State's Exhibit 33) mention directing the utilization review
function.  Utilization review is mentioned in the Manual as an SPMP
function.  There is no indication in the record, however that the Unit
Manager actually did utilization review tasks; he seems merely to have
been in a managerial role.  The position description also mentions
directing "complex fiscal and statistical analyses of medical policy
proposals in day-to-day operation and the analysis of legislative
proposals for medical program fiscal impact." Even if it could be argued
that these analyses were a "medical policy analysis" function and not a
"fiscal" function, there is no indication that this position actually
performed the analyses.

S/URS-MARS Analyst (S/URS and MARS are two components of the State's
MMIS).  The S/URS-MARS Analyst is not a SPMP position.  Overall, the
position involved computer applications and did not require the exercise
of medical care expertise;  it also provided budget input.  While the
position's work would assist the people doing utilization review, there
is no indication in the record that the tasks involved actually making
judgments as to utilization;  rather, they involved feeding data to the
people who did the utilization work. /14/

Data Analyst.  The Data Analyst is not a SPMP position. Overall, the
functions are of a statistical nature, with 30% of the position's time
being spent on planning, organizing, and reviewing the monthly "Medical
Data Chart Book." There are also a number of budgeting functions.

This is one of the positions that the State originally asserted was a
support position (see discussion on pages 27 and 28 of this Decision).
We cannot find it to be so because (1) the position title is similar to
a title we have found to be professional:  the "medical data analyst" in
the Office of(35) the Section Manager;  (2) as stated in the position
description, the incumbent must "work independently with minimum
supervision. The position, therefore cannot be considered support for a
SPMP. /15/

Fiscal Auditor Supervisor.  Most of the functions of the Fiscal Auditor
Supervisor do not qualify as SPMP functions because they involve
management of auditing account tasks as well as calculating 270 interim
and final audit settlements per year based on hospital cost reports and
Medicare audit reports. There are also some budgeting tasks as requested
by the Unit Manager.  As will be discussed directly below, these
auditing tasks do not qualify as SPMP functions, so supervision of them
would not qualify.

The position description does mention one function that might qualify as
SPMP:  "conduct special studies of hospital cost, utilization and
accounting procedures in order to determine more effective methods of
hospital reimbursement" (State's Exhibit 29).  That description would
fit into the Medical Assistance Manual's inclusion of "research and
evaluation concerning all aspects of the delivery and economics of
medical services" in SPMP functions.  There is no indication in the
record, however, what percent of the position's time is given over to
that function.  The State needs to provide this information to the
Agency if it intends to pursue the argument that the position is
eligible for partial funding at 75% FFP.

Hospital Auditor.  The Hospital Auditor position is not a SPMP position.
/16/ The overwhelming amount of time is spent calculating final
settlement amount for hospitals by reviewing cost reports (for
completeness and accuracy), reviewing computer printouts (for
duplications and errors), resolving questions from reviewing printouts,
preparing adjustment schedules, and calculating settlement amounts. The
position description notes that "about 90% of the work is done in the
office reviewing financial statements, computer printouts invoices, and
using a calculator to determine settlements" and that "knowledge and
experience using generally accepted accounting principles and generally
accepted auditing standards" was required (State's Exhibit 38). /17/

(36)

While the State has attempted to draw a distinction between this
position's functions (which it asserts requires analysis of cost
effectiveness of medical care provided) and a position which does "claim
specific audits" (State's Reply Brief, p. 11), we do not see the
position description reflecting such a distinction.  The position's main
function is to determine hospital final cost settlements to ensure that
they only include costs that are allowable for Medicaid reimbursement
when reporting such costs for inclusion in the facility's Medicaid
reimbursement rate.  In this respect, the position is similar to one
discussed in New York State Department of Social Services, Decision No.
307, May 28, 1982. /18/

The State argued that routine audit staff who were in AFS's Business
Services Section were not claimed at the enhanced FFP rate.  The
implication was that the positions in question here (37) were
non-routine. /19/ We have examined the documents in the record and do
not find them to involve assessing the necessity for and adequacy of
care and services provided (as set forth in the Manual).

The information in the record details typical audit and accounting
functions.  Although performed for hospitals, there is nothing in the
record that indicates the functions substantially differ from the
accounting and auditing functions necessary for other types of
institutions or organizations.  In this situation we are dealing with a
"non-medical" discipline in amedical setting rather than a "medical"
discipline in an administrative setting, the latter of which
characterizes a SPMP position.

We note, in addition, that the Dictionary of Occupational Titles (DOT),
lists no occupations under medicine and health which involve auditing
and accounting.  In contrast, there are occupations in the accounting
division of the Dictionary which require the application of accounting
principles and the analysis of costs (see the Accountant (Cost) and
Auditor, Internal positions).  The State argued that the DOT is a "most
unreliable source for deciding issues in this appeal because it "does
not contain job descriptions which are relevant to the current appeal" .
. . (or) "delineate the functions which are disclosed in the evidence
before this Board" (State's Supplemental Brief, p. 10).  To bolster this
argument, the State provided an affidavit from a vocational expert who
stated that:

   The DOT has proven to be a useful reference source for the U.S.
Employment Service operations, for whom it was intended and developed.
The DOT does not fairly represent the entire U.S. labor market nor does
it attempt to comprehensively classify, catalog or define all jobs
performed in the economy. . . .

   (State's Exhibit 78, p. 2)

The expert asserted that there are "innumerable examples" of job roles
for which there is nothing in the DOT including robotics technicians,
IRA fund counselors, television(38) satellite receiver technicians, and
silicone wafer slicers, yet despite many omissions the DOT is still used
by many organizations as a definitive work.  The expert then asserted
that the auditors were SPMP positions based on discussions with State
staff and review of job descriptions, personnel manuals, affidavits, and
the Manual.  He found the title "auditor" to be not "sufficiently
sensitive to the actual work performed because it is a fiscal
connotation."

   In healthcare parlance, these SPMP's function more consistent with
the roles of health facilities surveyors, health policy surveyors and
investigators, quality health care assurance specialists, and healthcare
cost-benefit ratio factorers, none of which can be directly found in the
DOT.  (Id., p. 5)

We agree with both parties that we should not rely on the DOT as a
primary determinant of whether a specific position is SPMP or not, and
we have not done so here.  Rather, we have noted it as a one factor to
be considered in classifying the functions that are presented to us.

We too have not allowed ourselves to be hypnotized by job titles, but
there is no avoiding the fact that the auditors here were doing
financial cost settlements by analyzing hospital cost reports.  They
obviously have Medicaid program expertise, but they were applying an
auditing function to a health facility.  In our view, that is not what
the Agency contemplated as SPMP eligible for increased reimbursement
over the usual administrative costs rate.

Positions alleged to have utilization review functions.  The next five
positions are in a group dealing with fraud and abuse and utilization
control.  As quoted above, the Manual states that functions involving
assessing the necessity for and adequacy of medical care and services
provided are SPMP functions, and gives as an example "utilization
review."

The State characterized these positions as having "utilization review
functions." The Board specifically asked the Agency for information as
to what sort of positions the Agency typically reimburses at 75% in this
category and whether any of the Oregon positions qualified.  The
Agency's written answer stated merely that reimbursement would be proper
if (a) the "function is to assess the appropriateness of the medical
care received, and (b) whose incumbent has a degree or substantial
formal training in a health science or allied field. . . ." (Agency's
July 19, 1985 brief, p. 17)

In the transcribed telephone conference call, the Agency drew a
distinction between the Oregon Peer Review Organization (during the time
in question called PSRO (Professional(39) Standards Review Organization)
that determined the "type and level of care that is provided" and the
Utilization Review Group within the Unit which:

   are a bunch of people that sit in an office, read computer printouts
and determine whether a pharmacist is providing too many of certain
types of prescriptions or whether a doctor is performing too many of a
certain type of services or providing too many services to an individual
person.  That's all done by computer.  And then, they go after those
providers and talk to them.  (Transcript, pp. 103-104)

The State seemed to agree with the Agency that the Peer Review
Organization did such tasks as the inspections of care and physician
certifications and recertifications and that the Group did a
"cost-containment activity." (Transcript, p. 106) Personnel used the
data in the Surveillance and Utilization Review Subsystem of the MMIS
and looked at individual situations "to determine whether or not the
level of utilization was warranted in view of the medical situation."
(Transcript, p. 108) In effect, the State was arguing that the Agency's
definition of utilization review was too narrow in that it would seem to
encompass only activities in long-term care facilities assessing quality
and level of care.

The State's interpretation of the phrase "utilization review" goes
beyond the actions taken by medical professionals who actually go to
facilities to examine certifications and plans of care.  There is some
support for this position in the Social Security Act.  In addition to
Section 1903(g) which discusses the examination of utilization of
services in long-term care facilities (which seems to be what the Agency
is considering utilization review), the Act more generically states at
section 1902(a)(30) that a state plan must:

   provide such methods and procedures relating to the utilization of,
and the payment for, care and services under the plan (including but not
limited to utilization review plans . . . (required under Medicare for
hospitals and skilled nursing facilities) as may be necessary to
safeguard against unnecessary utilization of such care and services and
to assure that payments (including payments for any drugs provided under
the plan) are not in excess of reasonable charges consistent with
efficiency, economy, and quality of care.

"Utilization review" is given as an example in the Manual to illustrate
with somewhat more specificity the general language that precedes it.
That does not mean that the use of the phrase, either by a state or the
Agency, should blind us to search only for that phrase or for evidence
of medical(40) professionals inspecting records and patients at long
term care facilities.  The Manual describes a function broader than
that, and we see no reason why people analyzing provider and recipient
profiles, making judgments about the necessity and adequacy of care
provided or received, and making decisions about corrective actions are
not SPMP.

Supervisor.  The Supervisor of the Fraud and Abuse Unit/UC Group is not
a SPMP position, however, except for one limited function.  The tasks
were managerial and coordination ones and involved an element of claims
collection.  There is no indication that the position exercised any
judgments on necessity and adequacy of services. The position
description does mention:

   act as first level of appeal for provider who wishes to contest
agency actions by reviewing provider's rebuttal to our allegations in
order to determine the validity of our allegations.

   (State's Exhibit 35)

This describes substantive work involving utilization control, but there
is no indication in the record what percentage of the position's time
was spent on this task.  The State needs to provide this information to
the Agency if it intends to pursue the argument that the position is
eligible for partial funding at 75% FFP.

Information and Case Management Support Technician.  The Information and
Case Management Support Technician is partially a support staff
position.  It was a clerical position that provided administrative and
case management support to the group.  The majority of work directly
assisted the Medical Payment Analysts by pulling records, compiling data
into usable format, setting up and maintaining case files, sending
documents, contacting recipients for information verification, and
maintaining the information and case reporting control log.  In
addition, according to the position description, 15% of the position's
time was spent compiling quarterly reports "Federal and Inter-Agency."
There is nothing in the record to connect this task with a SPMP
function;  therefore, we cannot conclude that it is a support function.

Medical Utilization Analyst. The Medical Utilization Analyst is a SPMP
position.  The position required the use of professional nursing
experience to analyze data from the MMIS and other sources to identify
occurrences of overutilization and fraud and abuse.  The position also
recommended policy and procedural changes directed at preventing these
abuses.(41)

The Agency admitted that this position "would have qualified, in part,
for SPMP status had the State made a reasonable demonstration, by time
sheets, of the actual time she spent on utilization review activities"
(Agency's July 19, 1985 brief, p. 17).  It is true that the only
information in the record on this position is the auditors' description
(State's Exhibit 6-18) which was condensed from a position description
that the auditors saw (Telephone Conference Call, November 1985).
Unlike the other positions which are being claimed as SPMP, there are no
position description and affidavit in the record.  The description that
we have details a series of duties that can be characterized either as
utilization review or medical policy analysis, and since it is based on
a position description, we see no reason why the position should not be
classifed as 100% SPMP.

Medical Payment Analyst.  The Medical Payment Analysts are partially
SPMP positions.  Unlike the positions in question in New Jersey
Department of Human Services, Decision No. 688, August 26, 1985, the
work involved more than acting as a collection agency for identified
overpayments.  These people were taking raw data and after analysis,
making initial decisions as to questionable practices.  There is no
indication in the record that these people merely gathered data and
turned it over to medical consultants who made the decisions or that
cases had been screened and decisions requiring medical expertise
already made (cf. New Jersey decision).

There is an element of this position which is similar to those in the
New Jersey case and that relates to overpayment recovery actions:

   composing and mailing initial letter requesting reimbursement of the
overpayment, negotiation of the overpayment amount, method of recovery
and notification to the provider of his appeal rights if negotiation
fails.  These actions are via telephone, correspondence or personal
visits.  Instruct provider in correct methods to bill the agency and how
to correct billing deficiences and provider education via on-site
visits.

   (State's Exhibit 58-63)

There is no indication in the record what percentage of the position's
time was spent doing overpayment recovery tasks, which would not be
reimbursable at 75% FFP.  The State needs to provide this information to
the Agency so that a determination can be made as to the percentage of
costs that would be reimbursable at 75%. /20/

Unit Secretary.  The Unit Secretary is a support position to the extent
that she did work for the people found to be SPMP in the Fiscal and
Research Unit.

   d.  Program Operations Unit

There are several subunits of this Unit, and only positions in one, the
Exceptional Claims Subunit, are in dispute.  Five registered nurse (RN)
positions were found by the Agency to be SPMP positions.  We have very
little information in the record as to what this Subunit actually did.
In particular, we have no information about the RNs' duties, which is
essential since we assume that the State's original position as to the
Provider Payment Coordinator position was that it provided support for
the RNs.  The State originally claimed all the positions in question as
support personnel, but, in response to the discussion during the
transcribed conference call, suggested that they could perhaps be
classified as SPMP.  Below, we discuss why we believe they are neither.

Technical Supervisor.  The Technical Supervisor is neither.  The State's
summary says:

   From 10/1/81 to 8/31/82, this position functioned as reviewer of
hysterectomy provider billings for approvals or denials.  9-1-82 to
8-30-83, this position supervised audit, clerical and terminal entry
staff in Exceptional Claims Subunit.  From 9/1/83 to 12/31/83, this
position functioned as coordinator for family planning services, and
supervised MMIS medical coordinators.

   (State's Exhibit 58-2)

We will discuss the first function listed directly below in our
discussion of the Provider Payments Coordinator position.  We have no
position description for 9/1/82 to 8/30/83.  It appears from the State's
information that the position was (43) certainly not a SPMP one during
that time period, but a supervision of clerical and audit staff
position.  There is no indication that the position had clerical duties
itself.  The position description in the record was effective 8/25/83.
For the period 9/1/83 to 12/31/83, one task, "complete (Prior
Authorization) on elective abortion cases which comply with Federal and
State Administrative Rule" (State's Exhibit 58-77), is not a SPMP task;
it will be discussed directly below.  The second major task listed on
the position description is certainly not an SPMP one since it involves
clerical tasks.  Yet they may not be support tasks unless they directly
assist the RNs do their SPMP duties.  The tasks seem to be more general
however, relating to sending documents out of the Subunit.  The third
major task listed on the 1983 position description is coordination of
the quality control program.  There is no information in the record that
causes us to find that quality control is a SPMP function.  Conversely,
we have no information that these tasks were related in an immediate way
to direct completion by RNs of their work.

Provider Payments Coordinator.  The Provider Payments Coordinator
position is neither SPMP nor support because the tasks involve routine
claims processing tasks, similar to positions we evaluated in our
California decision, cited supra.  There are five separate position
descriptions in the record plus one more narrative statement of a
"claims auditor" that appears very similar to the position descriptions.
The documents contain some different functions, but there is a common
thread running through them all that comprises between 40% and 80% of
the time spent on the job -- the processing of provider billings
"suspended to ECU Subunit" including:

   a.  Analyze and evaluate the invoices to determine if codes are valid
for services provided.

   b.  Determine if part or all of the service should be denied.

   c.  Determine if medical procedures should be reviewed by nursing and
medical consulting staff.

There is nothing in the record to show that the tasks involved the
exercise of judgment directly relating to non-routine aspects of the
program.  There is no indication that they were doing anything other
than screening claims based on pre-determined standards, passing on
questionable claims to the "nursing and medical consulting staff" for
SPMP-type(44) judgments.  There is no indication that, in fact, there
were two levels of SPMP, one screening claims, the other examining some
subset of the same claims. /21/

Alternatively, there is nothing in the record to show that the tasks
were related in a direct and immediate way to the work of SPMP.
Although the result of the work of these positions may be to identify
those claims which require the attention of SPMP -- there is not a
sufficient nexus with the actual SPMP function to qualify the positions
as support.  In essence, we are applying a distinction between
administrative functions which precede or are simply related in general
to SPMP functions, such as were involved here, and subprofessional staff
activities that are incidental to the actual performance of SPMP
functions.  Only the latter qualify as SPMP support under the Manual.
We derive this distinction from the Manual's requirement that supporting
staff activities be related in an immediate and direct way to the
performance of SPMP functions and from the absence of any intent we can
find in the Manual to establish a large body of SPMP supportive
functions.

Other activities listed on the position descriptions taking 10% or less
time are also not SPMP, such as updating a desk manual, acting as
liaison with AFS branch staff on technical questions on prior
authorization, maintaining ECU file on active cases, identifying
policies that were being misinterpreted or inconsistently applied and
referring them on for clarification or correction.  These are indicative
of positions not evaluating or making medical policy but carrying out
Medicaid policies by doing an initial review of questionable claims.
We, therefore, cannot find the positions to be either SPMP or support.

Unit Secretary.  The Unit Secretary would be a support position to the
five RNs (e.g., doing their typing and copying, transcribing minutes of
their meetings).  Work done for the Subunit supervisor is not support
work since there is no indication that the supervisor does substantive
SPMP work.

2.  Senior Services Division

There were several units within the Division, but only two claimed 75%
FFP for SPMP:  the Program Operations Unit and the Administrative Unit.
The Agency found all reviewed positions within the Program Operations
Unit to be SPMP.  The positions in question were in the Administrative
Unit.(45)

Accounting Clerk.  The Accounting Clerk is not a SPMP position. /22/ We
note from the position description (State's Exhibit 56-3) that a number
of the tasks do not seem to relate to the Medicaid program at all but to
the commodity food program.  Any other functions are routine voucher
preparation tasks, again purely an administrative function with perhaps
some routine audit overtones.

Auditor.  The Auditors are not SPMP positions.  Rather than assessing
the necessity for and adequacy of services provided, these people
performed fiscal auditing tasks of nursing homes by examining revenues
and expenses, balance sheets, and patient census data.  They also did
desk audits of cost reports, examining for "completeness, mathematical
accuracy, and reasonableness of reported costs," and calculated interim
and settlement rates.  Our discussion of HSS's Hospital Auditor
positions is relevant here.  The people had Medicaid program expertise,
but the tasks are auditing ones in the context of health facilities.
Judgments as to medical care and services were not being made by these
people.

3.  Mental Health Division

Six operating Units and four State-owned institutions made up the
Division.  The Agency reviewed SPMP claims in all of the units and three
of the institutions and determined eight positions were not SPMP.

Chief, Audit Unit.  The Chief, Audit Unit is not a SPMP position.  The
major function was to manage the audit staff of the Unit which included
personnel work as well as assigning and reviewing auditors' work.  He
also developed audit guidelines, policies, and procedures and
administrative rules on auditing.  Establishing auditing policy is not
an SPMP function.

Fiscal Auditor.  The Fiscal Auditor positions are not SPMP for the same
reasons as the auditors in the Senior Services Division and the Health
Services Section.  The tasks involved conducting field and desk audits
of facilities.  Desk audits consisted of:

   1.  Reviewing financial reports for compliance with State and Federal
regulations;

   2.  Comparing current data with historic data for consistency;(46)$
T3.  Contacting providers in person, by phone, or letter as necessary to
resolve questions identified in the review process;  and

   4.  Preparing reports, consisting of adjustments and rate
calculations, which summarize the audit findings.

Field audits consisted of:

   1.  Evaluating internal controls as a basis for determining the scope
and extent of the audit;

   2.  Examining and analyzing supporting documents and books of
original entry to verify the accuracy of reported information;

   3.  Determining if financial information is presented in accordance
with generally accepted accounting principles;

   4.  Verifying accuracy and correct classification of financial
information;

   5.  Reconciling financial statements to federal tax returns where
appropriate;

   6.  Making reclassifications and adjustments to financial information
in accordance with applicable rules and regulations;

   7.  Verifying accuracy of patient census records where appropriate;

   8.  Preparing written audit reports consisting of an audit opinion,
adjustments, rate calculations where appropriate, and calculations of
over or underpayments where appropriate;  and

   9.  Preparing a management letter recommending charges in internal
controls and accounting procedures to improve the quality and accuracy
of financial statements.

   (State's Exhibit 52)

The functions encompass fiscal auditing tasks, not determining the
necessity and adequacy of medical services.

Title XIX Fiscal Analyst.  The Title XIX Fiscal Analyst is not a SPMP
position.  The position functioned as the Deputy Assistant Administrator
for the Office of Fiscal Services and the tasks were fiscal reporting
and payment tasks.  While they are Medicaid administrative tasks, they
involved fiscal expertise not medical care expertise, e.g. managing the
Medicaid budget, cash flow, and expenditure reporting.

Title XIX Budget Specialist.  The Title XIX Budget Specialist is also
not a SPMP position because the tasks required no medical care
expertise.  The tasks were centered around budget preparation and budget
expenditure reporting.  Both of these(47) positions fit into the
description at 2-41-20(c)(3) of the Manual stating that "fiscal section
staff" is reimbursed only at 50% FFP.

Resource Development Specialist.  The Resource Development Specialist
may be partially a SPMP position.  The tasks involving the preparation
of budget and statistical information needed for state plans and budgets
are not SPMP functions.  Other tasks described in the position
description are not as clear.  It appears from the position description
that there might be an element of evaluating care given, e.g., "direct
responsibility" for "review and approval" of program plans, which might
be SPMP tasks if they involve analysis of the services provided.  The
State needs to provide more specific information to the Agency if it
intends to pursue the argument that the position is eligible for partial
funding at 75% FFP.  If there is a dispute remaining after the Agency
examines any State submission, the parties can return to the Board.  We
note also that it appears that not all the tasks performed were
Medicaid-related so that only a portion of the position's costs would be
eligible for Medicaid reimbursement at all.

Training Coordinator.  The Training Coordinator is not a SPMP position.
The tasks involved developing, managing, and delivering training. There
is no indication in the regulation or Manual that such training
positions are to be considered SPMP and do not fall within the category
of planning or evaluating the services provided.  We also note that the
tasks did not benefit only the Medicaid program so that only a portion
of the position's costs would be eligible for Medicaid reimbursement at
all.

IV.  Conclusion

The Board applied the statute, regulations, and Manual applicable during
the time period in question and nine of the positions for which FFP was
disallowed are in fact SPMP positions, three of the positions include
some SPMP functions, eight of the positions are support positions, at
least in part, and fourteen of the positions are not eligible in whole
or in part for enhanced reimbursement.  We have remanded one(48)
position back to the Agency in order to make a substantive determination
based on additional information that the State may
provide.(49)$M04,50,05,10,10 *4*APPENDIX POSITION *3*ENHANCED
REIMBURSEMENT SPMP Support Partial HSS Section Manager Yes Assistant
Section Manager Yes Planning Coordinator No Management Assistant Yes
Medical Data Analyst Yes Medical Policy Analyst Yes Office Manager &
Word Processing Supervisor Yes Word Processor Yes Yes Secretary Yes Yes
Clerical Specialist Yes Yes Unit Manager, Health Program and Policy Unit
Yes Policy Analyst Yes Rules & Policy Specialist Yes Unit Secretary Yes
Yes Unit Manager, Fiscal and Research Unit No$X (50)$ M04,50,05,10,10
POSITION *3*ENHANCED REIMBURSEMENT SPMP Support Partial HSS S/URS- MARS
Analyst No Data Analyst No No Fiscal Auditor Supervisor Yes Yes Hospital
Auditor No No Supervisor, Fraud and Abuse Unit/UC Group Yes Yes
Information & Case Management Support Technician Yes Yes Medical
Utilization Analyst Yes Medical Payment Analyst Yes Yes Unit Secretary
Yes Yes Technical Supervisor, Program Operations Unit No No Provider
Payments Coordinator No No Unit Secretary Yes Yes SSD Accounting Clerk
No Auditor No$X (51)

                       POSITION                     SPMP Support  Parti
                         MHD Chief, Audit Unit
  No Fiscal Auditor                                     No Title XIX
  Fiscal Analyst                           No Title XIX Budget
  Specialist                        No Resource Development Specialist *
  ?               Y Training Coordinator
  No

F

   * Position for which there is inconclusive record for purposes of
making determination$E /1/ 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.         /2/ The final regulations
were published on November 12, 1985, effective February 10, 1986 (50
Fed. Reg. 46652).         /3/ Below, we will use the words "CAPs" and
"Medicaid Plans" to include the yearly amendments which actually
contained the substantive information that is in dispute.         /4/
The Agency argued that, in effect, the State was arguing that the Agency
should be estopped from making the disallowances based on past approvals
and payments.  The Agency asserted that a finding of estoppel cannot be
made in this case, citing Oregon v. Heckler, No. 83-1466 (D.OR. January
31, 1984).  The State insisted, however, that it was not relying on a
common law estoppel argument.  Rather, the State asserted that HCFA must
follow its own regulations at 45 CFR Part 95 and that those regulations
prohibit the disallowance.         /5/ The April 1983 CAP indicated that
beginning July 1, 1983, AFS would be using a methodology developed by
computer.  AFS was to submit a written CAP by January 1, 1985 (State's
Exhibit 25).  That new CAP is in the record at State's Exhibit 77. The
letter from the Agency announcing approval of the 1983 amendment is
dated May 10, 1985 but was effective as of July 1, 1983.  The caveat
states: This approval relates to the accounting treatment accorded the
costs of your program only, and nothing contained herein shall be
construed to approve activities. The composition of this CAP is very
different from the earlier ones. The only pages that seem to be relevant
are 77-43 and 44, which relate to HSS.  It is not at all clear that the
State put the Agency on notice through these pages that it was going to
be claiming certain positions within HSS at 75% FFP.         /6/ The
Medicaid regulation was amended after the implementation of 45 CFR
95.501 et seq. to simply refer to that regulation.  47 Fed. Reg. 17490
and 17509, April 23, 1982.         /7/ Although the Agency cited to the
listing in 42 CFR 432.2, we note that the Agency's list is incomplete
and misleading because the regulation says "other specialized personnel
in the field of medical care."         /8/ The State argued that
position descriptions should be considered at best a "secondary
indication" of functions "when the Board has evidence of the function
itself, the 'primary determinant'" (State's Supplemental Brief, p. 9).
The Manual states that the position description will provide "basic
substantiation." We did, however, analyze carefully the affidavits
provided by the State (which we assume was what the State was referring
to as "evidence of the function itself").         /9/ The new
regulations have significantly changed the provisions on education and
training, requiring that SPMP have "professional education and training
in a field of medical care or appropriate medical practice."
"Professional education and training" is specifically defined as
academic training under specific circumstances (See 42 CFR 432.50(d)(
1)(ii), 50 Fed. Reg. 46663).  The Review Guide's definition is not quite
as narrow although it represented a substantial narrowing of the Manual
provisions (see State's Exhibit 66-8 and -9).         /10/ The State
argued in the last telephone conference call that the Board was unfairly
placing a burden on the State to categorize the positions. The State
argued that the was the Agency's responsibility when it made the
disallowances.  We assume that the State did not make its initial claims
for FFP divided into the two categories.  The record indicates that the
Agency reviewers examined the positions for both SPMP and support staff
characteristics.  The Agency made determinations that the positions in
question were neither SPMP nor support staff and that, therefore, the
State could not claim 75% reimbursement.  It was the State's obligation,
when it came before this Board, to make its arguments as to the
allowability of its claims.  The State was free to characterize the
positions any way it wanted, but had the burden to provide sufficient
evidence and argument to support its characterizations.         /11/ In
evaluating the individual positions, we have assumed that the people in
them were qualified to perform the tasks of the position and were
performing satisfactorily.  For each position in question, we have
carefully examined all documentation in the record and arguments of the
parties.         /12/ There are also Health Policy Analyst positions in
the Health Program and Policy Unit.  The analysis that follows
encompasses this position also.         /13/ The State argued that the
important factor was not that a person claimed as support staff be
supervised by a SPMP but that the work directly support SPMP functions
(State's Supplemental Brief, p. 16).  The State correctly points out
SRS-AT-76-66 downplayed the importance of a supervisory relationship.
We have not made determinations based solely on who supervised alleged
support staff.  We have examined functions for a direct nexus with SPMP
functions (which would necessarily be performed by SPMP).  The Manual at
2-41-20(B)(2)(c) states that "(support) staff must be in work
assignments related in an immediate way to the direct completion of the
work of such professional medical personnel . . . " (see California
Department of Health Services, Decision No. 646, May 7, 1985).
/14/ While this position is not SPMP, it appears that it might qualify
for enhanced funding under the MMIS regulations (see 42 CFR 433.112 and
.113).  /15/ Even if we were to assume that the position was
subprofessional, the record does not show a connection in any direct or
immediate way to a SPMP function.         /16/ The following discussion
is also relevant to the Auditor positions in the Senior Services
Division.         /17/ The State initially asserted that one of the two
people filling the position was support staff, but revised its
contention in Exhibit 76-8 (Revised).  The State has provided no
information that it considered the position to be subprofessional and
detailing the connection between the auditor's tasks and the duties of a
SPMP.  We, therefore, cannot find it to be a support position.  /18/ We
        requested both parties to compare a number of the positions in
question here, including the auditors, with those in dispute in the New
York case.  The Agency argued that the auditor positions here were very
similar to the Medical Facility Auditor position series that we found
not to be SPMP in New York.  Besides arguing that the positions were not
similar, the State argued that it did not know "of any authority which
sanctions a determination of SPMP or support staff for FFP based upon a
comparison of other states' positions or position descriptions," and
that even if this were a proper procedure, the State know of "no
reasonable means" to compare Oregon positions with New York positions
(State's Supplemental Brief, p. 9).  The Board has been wrestling with
SPMP issues for over four years and has issued a number of decisions.
The question about New York was asked not for the purpose of trying to
fit Oregon circumstances into another state's situation but to (1) try
to get the parties to focus on concerns that we have had in dealing with
SPMP issues over the years, and (2) assist us in understanding the
Oregon Medicaid positions given that the operation of the program would
lead to every state's program containing certain functions in common.
/19/ The only narrative information in the record about the Business
Services Office is in the State's first brief.  In its entirety it says:
"receives and processes Medicaid grant awards, draws Medicaid funds as
appropriate, and prepares required Medicaid Quarterly Expenditures
Estimate Reports" (p. 7).  There is alos an organization chart that had
been submitted as part of the State Medicaid Plan which briefly and
generally describes different tasks performed (State's Exhibit 12-8).
/20/ There was some question in our minds as to the categorization of
these positions because the State(42) initially claimed one of the
people filling the position as SPMP but another two as support.  That
characterization was revised to categorize all three as SPMP (see
discussion on p. 27 and 28).  In addition, the organizational charts
that the State submitted to the Agency as part of its Medicaid Plan
shows separate boxes for the Medical Payment Analyst claimed as a SPMP
and those claimed as support (State's Exhibit 13-2, 14-3).  Even though
the record is not clear, we have found the positions to be professional
ones based on their functions, as described in the position descriptions
(which were all the same).         /21/ We note that the first task
enumerated is clearly not a SPMP one and is specifically mentioned in
the Manual as being routine audit work not eligible for SPMP
classification.         /22/ It is not clear from the substance of the
record whether the State wants this position evaluated as a SPMP one.
Since it is not listed as support by the State, we are considering it
for SPMP status.