GAB Decision 775
August 19, 1986
New York State Department of Social Services;
Docket No. 86-147
Settle, Norval D.; Teitz, Alexander G. Ballard, Judith A.
(1) The New York State Department of Social Services (State) appealed
the disallowance of $213,746 in federal financial participation by the
Health Care Financing Administration (HCFA) under Title XIX (Medicaid)
of the Social Security Act. The disallowance represented the federal
share of the amount of interest income earned by the State, during the
period January 1, 1985 through December 31, 1985, on Medicaid recoveries
"from providers' third party health insurance, fraud and abuse, and
windfall activities." HCFA determined that the federal government is
entitled to share in such interest, based on Office of Management and
Budget Circular No. A-87 (incorporated by reference into HHS regulations
at 45 CFR 74.171) and 45 CFR 74.47(a), as well as section 2555.2(E) of
the State Medical Manual.
The Board addressed this same issue concerning interest in New York
State
Department of Social Services, Decision No. 588, October 31, 1984,
where the
Board determined that such interest constituted an applicable
credit which
should have been used to reduce the State's claim for
Medicaid
expenditures. In New York State Department of Social Services,
Decision
No. 721, February 6, 1986, the Board rejected the State's
contention that a
federal court decision concerning the Food Stamp
Program, Perales v. U.S.,
598 F. Supp. 19 (S.D. N.Y. 1984), aff'd, 751
F.2d 95 (2d Cir. 1984), required
reversal of Decision No. 588.
The State admitted that this appeal did not present any material issues
of
fact which distinguished it from those issues considered by the Board
in
Decision Nos. 588 and 721. The State accordingly requested a
summary
decision in this appeal based upon those two decisions and
their
records. State's letter to the Board dated July 24, 1986.
HCFA raised
no objection to the issuance of a summary decision. HCFA's
letter to
the Board dated August 7, 1986.
(2) We therefore sustain the disallowance of $213,746, based on
Decision
Nos. 588 and 721, which we incorporate by reference here.