GAB Decision 747
April 28, 1986
Idaho Department of Health and Welfare;
Docket No. 85-6
Ballard, Judith A.; Settle, Norval D. Garrett, Donald F.
The Idaho Department of Health and Welfare (State) appealed a
determination by the Health Care Financing Administration (HCFA or
Agency) disallowing $417,689.83 claimed for services provided in several
long-term care facilities under Title XIX (Medicaid) of the Social
Security Act (Act) during the first three quarters of 1984. The
disallowance was taken pursuant to section 1903(g) (1) (D) of the Act,
which provides for reduction of a state's federal medical assistance
percentage for amounts claimed for long-stay services for any calendar
quarter unless the state shows that during that quarter it had in
operation an effective program of medical review of the care of patients
"whereby the professional management of each case is evaluated at least
annually by independent professional review teams." /1/
During the course of this appeal, the Agency accepted
documentation
submi tted by the State which reduced the scope of the
disallowance.
The only part of the disallowance still at issue concerns
$95,210.64 in
federal funding disallowed for failure to review single
patients at each
of two intermiate care facilities (ICFs). For reasons
explained fully
below, we concluded that neither patient had to be reviewed
under the
requirements in effect and, accordingly, we reverse the remainder
of the
disallowance.(2)
Applicable Law
Section 1903(g) (1) (D) requires a showing that a state has, in
any
calendar quarter for which the state submits a request for payment
for
long-stay services, --
. . . an effective program of medical review of the care of
patients
. . . pursuant to section . . . 1902(a) . . . (31) whereby
the
professional management of each case is reviewed and evaluated at
least
annually by independent professional review teams.
Section 1902(a) (31) requires in pertinent part that a State
plan
provide:
(B) for periodic on-site inspections to be made in all . .
.
intermediate care facilities . . . within the State by one or
more
independent professional review teams . . . of (i) the care
being
provided in such . . . facilities to persons receiving assistance
under
the State plan, (ii) with respect to each of the patients receiving
such
care, the adequacy of services available. . . .
The implementing regulations are found at 42 CFR Part 456.
In
particular, section 456.652 provides that:
(a) . . . (in) order to avoid a reduction in FFP, the Medicaid
Agency
must make a satisfactory showing to the Administrator, in each
quarter,
that it has met the following requirements for each recipient;
* * * *
(4) A regular program of reviews, including medical evaluations,
and
annual on-site reviews of the care of each recipient. . . .
(b) Annual on-site review requirements. (1) An agency
meets the
quarterly on-site review requirements of paragraph (a) (4) of
this
section for a quarter if it completes on-site reviews of each
recipient
in every facility in the State, and in every State-owned
facility
regardless of location, by the end of the quarter in which a review
is
required under paragraph (b) (2) of this section.
(2) An on-site review is required in a facility by the end of
a
quarter if the facility entered the Medicaid program during the
same
calendar quarter 1(3) year earlier or has not been reviewed since
the
same calendar quarter 1 year earlier. If there is no Medicaid
recipient
in the facility on the day a review is scheduled, the review is
not
required until the next quarter in which there is a Medicaid
recipient
in the facility.
(3) If a facility is not reviewed in the quarter in which it
is
required to be reviewed under paragraph (b) (2) of this section, it
will
continue to require a review in each subsequent quarter until the
review
is performed.
* * * *
Other regulations are referred to as appropriate in the course of
this
decision.
I. Wood River Convalescent Center
The individual at issue in this facility had been a patient in a
different
ICF (Mountain View) in early 1982 and had been eligible for
Medicaid nursing
home payments while there. In March 1982 she was
transferred to a
"shelter home." Idaho contended that her eligibility
for nursing home
payments ended on the date of her discharge from
Mountain View (March 4,
1982). While at the shelter home, she received
Medicaid payments for
items such as drugs and physician's services, but
the shelter home did not
receive nursing home payments. The patient
entered the Wood River
Convalescent Center on November 14, 1983 and
applied for Medicaid nursing
home payments on December 1. The State
alleged that it found her
eligible Inspection of Care team reviewed the
Wood River facility on November
29, 1983. Idaho Brief, pp. 5-6; Idaho
Exhibit 6, Attachment 8.
/2/
We find HCFA's reading of the facts to be incorrect. In support of
its
allegations concerning the eligibility history of the patient,
Idaho
submitted the patient's "Certificate of Case Activity." According
to
Idaho, this document at line 4-1, block no. 4 shows a beginning date
for
nursing home eligibility while in Mountain View of January 4, 1982.
The
ending date as reflected on line 4-1, block no. 9 is March 4, 1982,
her
discharge date from Mountain View. Idaho maintained that nursing
home
payments could not be made for this patient after the ending
date
reflected in line 4-1, block no. 9, until a new eligibility action
was
taken. This same document also contains information showing
this
individual's admission to Wood River on November 14, 1983 and
an
effective date for nursing home payments of December 1,
1983.
Additionally, the State submitted a "Notice of Decision" for
this
patient dated 1/24/84 which clearly indicated that the patient was
found
eligible for nursing home payments effective December 1, 1983.
Idaho
contended that until that eligibility determination had been made,
the
patient was not eligible for nursing home payments while in Wood
River.
Idaho Response to the Order to Develop the Record, pp.
4-5; Idaho
Exhibit 6, Attachment 8. HCFA presented no evidence to
rebut the
State's documentation.
We conclude that the foregoing documentation demonstrates that the
patient
at issue was not eligible for Medicaid nursing home payments at
the time of
the IOC review, and that this patient therefore did not need
to be included
in the review.
In Kentucky Division of Medical Assistance, Decision No. 704, November
20,
1985, we addressed the issue of whether the section 1903(g) (1)
medical
review requirement is violated where a state did not include in
its on-site
medical reviews institutionalized individuals who had been
determined
eligible for Medicaid generally, but not determined eligible
for Medicaid
institutional benefits in particular at the time the review
was
conducted. We found --
References in the relevant statutory language on the issue of to
whom
the medical review requirement applies include the following in
section
1903(g) (1) of the Act: "an individual (who) has received care
as an
inpatient"(5) and "patients in mental hospitals, skilled
nursing
facilities, and intermediate care facilities;" and the following in
both
subsections (26) and (31) of section 1902(a) of the Act:
"persons
receiving assistance under the State plan," "patients receiving
such
care," and "patients receiving care in such facilities." Nothing in
this
language contradicts the State's reading that a
Medicaid-eligible
patient whose financial eligibility to receive
institutional benefits is
uncertain need not be reviewed. Nor is the
Board aware of anything in
the legislative history that would refute
this.
The regulatory provision for the medical review program states
at 42
CFR 456.652(a) (4) that "each recipient" must be reviewed, and
the
general regulations at 42 CFR 400.203, which sets out
definitions
applicable to all Medicaid programs, defines "recipient" as
an
"individual who has been determined eligible for Medicaid."
This
language is not conclusive, however, on the issue of whether
a
determination of general Medicaid eligibility is sufficient to deem
an
institutionalized person a "recipient" for purposes of the
medicil
review requirement. Within the context of the medical
review
requirement, which applies to institutionalized patients only, it
is
reasonable to construe this definition to include only those persons
who
are in fact eligible for Medicaid assistance in their
current
circumstances.
Id. at 7.
We conclude that the rationale of Decision No. 704 applies here as
well.
The evidence supports a conclusion that this individual's
eligibility
for Medicaid nursing home benefits terminated when she left the
Mountain
View ICF on March 4, 1982. Moreover, the evidence demonstrates
that the
patient's eligibility for Medicaid nursing home benefits was
not
re-established until after the annual review at the Wood River
facility.
Accordingly, we find that Idaho was not required to review this
patient
since she was not eligible for Medicaid nursing home benefits at
the
time of the facility's review.
II. Shoshone Living Center
The issue here is whether Idaho was required to review an individual
found
eligible for Medicaid nursing home benefits two days prior to the
IOC review
of this facility, but whose name had not been entered into
the State's
computer system, which generates the roster of Medicaid
patients requiring
review at each facility and effectively places the
patient in payment status
for benefits. (6)
The single patient not reviewed at Shosphone applied for Medicaid
nursing
home benefits July 7, 1983. Her application was approved on
July 26,
but her name was not entered into the State computer system
until August
3. The State inspection team reviewed this facility on
July 28, 1983.
The State argued that it was justified in not reviewing
this patient because
the IOC team had no way of knowing that this
patient was eligible for nursing
home payments prior to August 3. Idaho
Brief, p. 9.
Idaho noted that in this case the eligibility decision was made --
. . . two days prior to the actual arrival of the IOC team in
the
Shoshone Living Center. During this time period, the team was either
on
its way to the facility, which is located approximately 350 miles
from
Boise, or was conducting (another) on-site review. . . .
Letter from Idaho to HCFA Office of Quality Control April 8, 1985,
p.
2.
Idaho also provided an April 2, 1985 Memorandum from the IOC
team
supervisor which indicated that for the two days prior to the
Shoshone
review the IOC team was in fact conducting an on-site review at
another
facility. Id.. at Appendix B. Idaho insisted that prior
to the
patient's entry into the computer system it was impossible to
determine
if the patient was eligible for nursing home payments, as
that
information was not "practically available." Idaho Brief, pp. 6-8.
HCFA argued that it could not waive the deficiency in this
instance
because the patient was Medicaid eligible at the time of the
State's
inspection of this facility. HCFA argued that, "(the) basic
ingredient
in determining which individuals are to be included in the review
is
whether the patient has been determined Medicaid eligible as of
the
first day of the review, not whether the patient has been placed
in
payment status." HCFA Brief, p. 10.
In Idaho's eligibility determination process, if a patient is found to
be
medically eligible for nursing home placement, a proposed effective
date for
Medicaid payments for nursing home payment is calculated.
The
determination of eligibility and proposed effective date is sent to
the
State office responsible for determining financial eligibility.
After
determining financial eligibility, this office sets the effective
date
and enters this information into the State's central computer.
It
appears from the facts here(7) that the State ordinarily updated
its
computer system within a week or less of the date of the
eligibility
determination.
The relevant language of the statute and regulations is very little
Agency
guidance to assist a state in knowing how to formulate its list
of
patients. See, e.g., New York State Department of Social
Services,
Decision No. 744, April 21, 1983, p. 6. The Medical
Assistance Manual
(MSA-PRG-25, November 13, 1982) encourages state review
teams to prepare
in advance for the annual review. In Chapter 5-6-20,
the Manual
provides --
A current list of patients for whom payments are being made to
a
particular facility may be obtained from the unit in the
state
responsible for accounting for such payments.
Medical Assistance Manual, Part 5, p. 62.
"Current" is not defined. However, we note that the same chapter of
the
Manual contains a "Suggested Sequence of Medical Review Events"
which,
while not dictating a specific timetable for pre-review events, makes
it
clear that the basic preparation for the review should occur more
than
two days prior to the review.
There is nothing present in the facts here to indicate that
Idaho's
eligibility determination process did not operate efficiently
in
identifying this individual and entering her into its computer
system.
Further, there is nothing in the general description of Idaho's
process
which would cause us to reach any conclusion other than that the
system
was designed to operate in an efficient manner.
Under these circumstances, we conclude that the State could properly
rely
on the computer-generated list as a complete list of Medicaid
eligibles for
this facility and should not be penalized for the
non-inclusion of this
particular patient. Given the short delay that
occurred here, we think it
would have been unreasonable to expect the
State to have performed a followup
inquiry of all of its eligibility
caseworkers for the week preceding the
review solely to determine
whether new eligibility decisions had been made in
the interim. The
Agency's directives do not provide notice of the need
for such a
followup action particularly when the computer system itself
is
reasonably current and efficient. Rather, Agency guidance implies
that
the State is entitled to reasonable lead time to prepare its list
of
eligibles and to make other preparations for the review based on
that(
8) list. The ultimate purpose of the medical review requirement
in this
context is to insure that the State reviews all patients that the
State
could reasonably have determined to be eligible at the time of
the
review, not to penalize the State for unavoidable delays in
inputting
patient names in a computer system that was current and
efficient.
Finally, the facts of this case are distinguishable from other
recent
cases where a state's failure to review was not demonstrated to
be
unavoidable. The Board in West Virginia Department of Human
Services,
Decision No. 686, August 21, 1985 considered the failure to review
37
patients who had been determined to be eligible prior to the review
and
was not persuaded that West Virginia's procedures for
transmitting
eligibility information to its review team were in fact
reasonable. In
many cases several weeks and in some cases one or two
months elapsed
between the time the eligibility information should have been
entered
into the state's computer system and the time of the review of
the
particular facility. In North Carolina Department of Human
Resources,
Decision No. 728, March 18, 1986, the Board upheld a disallowance
for
failure to review two patients who had been determined to be eligible
at
least one month and possibly six months before the beginning of
the
review in the facility. The facts of both of these cases
are
distinguishable from the facts here where the single patient
not
reviewed was found to be eligible two days before the review began
and
the State's system appeared to be current and efficient.
Accordingly, we find that Idaho was not required to review the
single
patient it did not review in the Shoshone Living Center.
Conclusion
Based on our analysis, we reverse the disallowance taken for
Shoshone
Living Center and Wood River Convalescent Center. /1/
Amendments to
section 1903(g) (1)
as contained in section 2363 of the Deficit
Reduction Act (DEFRA) of 1984,
enacted July 18, 1984, Pub. L. 98-369,
have eliminated all utilization
control requirements other than the
medical review requirement as a basis for
reductions in federal
financial participation. Although section 2368 of
DEFRA also amended
the medical review requirement, those changes have no
substantive effect
on the issues
here. /2/ The State's original
copy of Exhibit 6,
Attachment 8, was illegible. The State later
submitted a legible copy.
(See State's submission of February 13, 1986.) HCFA
asserted that the
State's inspection of care (IOC) team was required to
review this
patient. HCFA contended that Idaho had failed to show that
there had
been a break in the patient's Medicaid eligibility between the time
she
left the Mountain View ICF in early 1982 and her entrance into
Wood
River. HCFA noted that it appeared that Medicaid assumed
financial
responsibility for the patient's medical services(4) at the
shelter
home, although not the patient's domiciliary services. HCFA
concluded
that the Agency finding should be sustained since Idaho had failed
to
verify that the patient was not Medicaid eligible at the time of
the
facility's review.