DEPARTMENTAL GRANT APPEALS BOARD
Department of Health and Human Services
SUBJECT: Missouri Department of Social Services
Docket No. 86-84
Decision No. 801
DATE: November 3, 1986
DECISION
The Missouri Department of Social Services (State) appealed
a
determination by the Health Care Financing Administration (HCFA
or
Agency) disallowing $115,572.73 claimed for intermediate care
facility
(ICF) services under Title XIX of the Social Security Act (Act) for
the
quarters ending June 30, 1985 and September 30, 1985. The
disallowance
was taken pursuant to section 1903(g)(l) of the Act, which
provides for
the reduction of a state's federal medical assistance percentage
of
amounts claimed for a calendar quarter unless the state shows
that
during the quarter it had "an effective program of medical review of
the
care of patients . . . whereby the professional management of each
case
is reviewed and evaluated at least annually by independent
professional
review teams." 1/ Based on a validation survey, the Agency
found that
the State failed to include in its annual medical reviews two
Medicaid
patients in one ICF facility for the two quarters in question, and
one
patient receiving ICF services in a dually certified facility for
the
quarter ending September 30, 1985.
Our decision below is based on the parties' written submissions.
We
conclude that none of the three patients was required to be
reviewed
and, accordingly, we reverse the disallowance.
1/ Amendments to section 1903(g) as contained in section 2363 of
the
Deficit Reduction Act (DEFRA) of 1984, enacted July 18, 1984, Pub.
L.
98-369, 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 revised
the
medical review requirement, those changes are not relevant to
our
decision here..- 2 -
Statutory and regulatory framework
Section 1903(g)(l) of the Act requires the state agency responsible
for
the administration of a state's Medicaid plan to submit a
written
quarterly showing demonstrating that--
[it] has an effective program of medical review of
the care of
patients in . . . intermediate care
facilities [ICFs] pursuant to
paragraphs . . . (31)
of section 1902(a) whereby the professional
management of each case is reviewed and evaluated at least
annually
by independent professional review
teams. (Emphasis added)
A state's showing for each quarter must be "satisfactory" or FFP paid
to
the state for expenditures for long-stay services will be
decreased
according to the formula set out in section 1903(g)(5).
Section 1902(a)(31)(B) requires in pertinent part that a state
plan
provide:
with respect to each . . . intermediate care
facility within the
State, for periodic on-site
inspections of the care being provided
to each
person receiving medical assistance, by one or more
independent professional review teams . . . including with
respect
to each such person (i) the adequacy of the
services available. . .
.
Regulations implementing the statutory utilization control
requirements
are found at 42 CFR Part 456 (1984). In particular,
section 456.652
provides that:
(a) . . . [i]n 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.
. . .
(Emphasis added)
As used in the Medicaid regulations, the term "recipient" means
an
individual "who has been determined eligible for Medicaid," but
this
definition is qualified by the phrase "unless the context
indicates
otherwise." 42 CFR 400.203 (1984).
In a series of previous decisions, this Board has upheld HCFA's
position
that, if a state has failed to include in a facility review one or
more
patients who should have been - 3 -
reviewed, the state's review cannot be considered to meet the
statutory
and regulatory standard for a medical review and the provisions
of
section 1903(g) apply as though the state had performed no review
at
all. See, e.g., Delaware Department of Health and Social
Services,
Decision No. 732, March 21, 1986. The Board has also upheld
HCFA's
interpretation that the mere fact that a facility has not yet
actually
received a Medicaid payment for services rendered to a patient does
not
mean that that patient is not a "person receiving medical
assistance"
within the meaning of section 1902(a)(31)(B). West Virginia
Department
of Human Services, Decision No. 686, August 21, 1985, p. 5.
(Missouri
disputed this conclusion, but we do not need to reach this issue
here
since we find for the State on other grounds.)
As we discuss more fully below, however, the Board has not adopted
the
view advanced by HCFA here that a violation must be found if a state
did
not review every patient who had been determined eligible for
Medicaid
prior to the review. The Board has upheld HCFA's finding of a
violation
where a state has failed to review patients who reasonably should
have
been identified as Medicaid eligibles present in the facility.
The
Board has not upheld a finding of a violation, even if the review
team
missed one or more patients who had been determined eligible, if
the
evidence showed that the state followed a system reasonably designed
to
ensure that all Medicaid eligibles in the facility would be reviewed
in
a timely manner. This result is consistent with the statutory
purposes,
HCFA'.a guidance on the medical review requirement, and a
recognition of
the practical difficulties of administering a medical review
program.
We next discuss the facts of this case and why we find that there was
no
violation of the medical review requirement here.
What the record shows here
The Agency assessed a disallowance for two quarters for the
Kendallwood
Trails ICF on the ground that the State did not include in the
review
conducted from June 13 through June 18, 1985 patients B.G. and W.D.
2/
These patients had been determined eligible for Medicaid prior to
the
review and were present in the facility throughout the
review.
Similarly, the Agency assessed a disallowance for the Hamilton
Hillcrest
facility for one quarter because the review team failed to
review
patient P.M. during the review conducted July 15 and
2/ The patients are identified by their initials to protect
their
privacy. - 4 -
16, 1985. Patient P.M. had been determined eligible prior to the
review
and was present in the facility throughout the review.
During Board proceedings, the State presented affidavits from
individuals
involved at various stages of the State's eligibility
determination, data
processing, and medical review processes, each
detailing specific information
concerning how that aspect of the system
worked and what the limitations in
its capabilities were. The
affidavits were supported by documentary
evidence substantiating the
statements made in the affidavits about the
particular patients at issue
here. State's Exhibits (Exs.) A-D.
HCFA did not dispute the State's
evidence regarding the particular patients
or the State's system, but
argued that the facts were not distinguishable
from previous cases where
the Board has upheld disallowances and also
contested the State's
position that the review teams did not have a readily
accessible means
of identifying these patients at the time of the
reviews.
The undisputed facts are as follows. Patient B.G. was
determined
eligible to receive Medicaid benefits for ICF care on May 23, 1985
and
patient W.D. was determined eligible to received Medicaid benefits
for
ICF care on May 28, 1985. These patients were not reviewed during
the
June review at Kendallwood Trails because the information used by
the
review team to determine which patients to review did not identify
them.
The State's Medical Review Unit conducted the inspections of care
using
a particular computer report, generated monthly, which
indicated
Medicaid recipients in each facility who had been entered into
the
Income Maintenance data base. The review team supplemented this
report
by using a list of recent eligibility determinations and
pending
Medicaid applications for facility residents. This list was
obtained
from the facility at the time the team members began their
inspection.
For the June 13 through 18, 1985 review at Kendallwood Trails, the
review
team used the monthly report dated May 25, 1985. The closing
date for
including new information in the Income Maintenance data base
prior to
running this monthly report was May 23, 1985. The
eligibility
information regarding patients B.G. and W.D. was not entered into
the
data base until June 5, 1985, and June 7, 1985, respectively. As
a
result, this information did not appear on the May 25, 1985 report
used
by the review team but on the next report run on June 23, 1985.
The
delay between the date the patients were determined eligible and
the
date when this information was included in the data base was due to
the
fact that the county caseworkers had to complete by hand the
forms
approving the patients as eligible and transmit the forms by mail to
the
Division of - 5 -
Data Processing in Jefferson City, Missouri, where the information
was
entered by data processors into the computer data base.
The inspection of Hamilton Hillcrest was conducted July 15 and 16,
1985.
Patient P.M. was approved as eligible on June 28, 1985.
This
information was entered into the data base on July 5, 1985. The
closing
date for including new information in the data base for the
monthly
report dated June 23, 1985 used by the review team was June 20,
1985.
Consequently, patient P.M. was not included on the monthly report
used
by the review team. This patient was also not named by the
facility as
a pending application or a new eligible.
At the time the caseworkers determined these patients were eligible,
a
letter of notification was sent to each patient, to the
patient's
relative, and to the facility. While the facilities should
have
therefore had information regarding these patients' eligibility,
the
facilities failed to include the names of these patients on the
lists
the review team used to supplement the monthly computer reports.
Our evaluation of the State's system
As the Board explained in Idaho Department of Health and Welfare,
Decision
No. 747, April 28, 1986, there is very little Agency guidance
to assist a
state in knowing how to formulate a list of patients to be
included in a
medical review. While Agency guidance suggests that a
state should
obtain a "current" list, that guidance also implies that a
state is entitled
to reasonable lead time to prepare its list of
eligibles and to make other
preparations for the review based on that
list. In Idaho, the Board
concluded that that State could reasonably
rely on its computer-generated
list under the circumstances there, where
nothing indicated that the State's
system was not current or was
operated inefficiently. The Board
stated:
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. Idaho, p. 8.
Here, the uncontroverted evidence shows that there was no lack of
effort
on Missouri's part to keep its system current. The review team
used a
report which was generated monthly. New information which had to
be
entered into the data base for - 6 -
that report was "inputted" in a timely manner. As the State has
shown,
the largest gap of time between when a recipient was determined
eligible
by the county caseworker and when that information was entered into
the
data base was about a week. The reason for this delay was that
the
caseworker had to send the notice by hard copy through the mail to
the
State's data processing office, where it had to be processed manually
by
the data processing division and then entered into the computer
data
base. State's Ex. A. Moreover, the State here did not rely
solely on
the monthly reports. The review team also sought information
from each
facility at the beginning of the review. It requested a list
of any
patients who had recently been determined eligible for Medicaid
benefits
as well as any patients for whom an application for benefits
was
pending. The State's evidence shows that even patients with
pending
Medicaid applications were reviewed when the facility was
inspected.
While the State was not required by regulation or statute to
inspect a
patient for whom an application was pending, the State indicated it
did
so to avoid the possibility of any eligible recipient "slipping
through
the cracks." State's Brief, p. 13.
Under the circumstances here, we think it was reasonable for the State
to
expect the facilities to give the review team accurate information of
those
patients who had been recently determined eligible. The
State's
practice was to send not only a copy of the eligibility letter to
each
recipient but to the facility as well. Unlike in previous cases
before
the Board, we do not have a situation where the State was relying
solely
on the facility's information or on its own out-of-date
information.
See, e.g., New Hampshire Department of Health and Welfare,
Decision No.
756, May 30, 1986; North Carolina Department of Human
Resources,
Decision No. 728, March 18, 1986; and West Virginia Department of
Human
Services, Decision No. 686, August 21, 1985.
The Agency argued that this case is similar to the circumstances
presented
in Arkansas Department of Human Services, Decision No. 735,
March 28,
1986. We disagree. In that case, Arkansas admitted that it
could
take up to two months after an eligibility determination for a
patient's name
to show up on the report used for the reviews. 3/
Moreover, Arkansas failed
to give any reason why its system was not
updated. Missouri,
3/ In that case, the State of Arkansas indicated that the
patient's
name would not appear on the monthly report used by the review team
nor
on the subsequent month's report. Here, the State showed that
the
patients' names would appear on the next report. - 7 -
however, explained why it would not be feasible to generate and
distribute
its computer report more often than once a month. The report
is
lengthy, encompassing 300 ICFs as well as other facilities in the
State, and
the printout had to be sent to the central office of the
Medical Review Unit
where it was broken down into separate lists by
facility; then the lists had
to be sent to the appropriate one of the
seven regional offices of the
Medical Review Unit. State's Exs. B and
C. No procedure existed
in the State whereby a review team member could
access on a computer an
updated recipient list. State's Ex. B.
The State also effectively rebutted the Agency's suggestions contained
in
an affidavit made by a HCFA official involved in surveying states'
compliance
with the medical review requirements. HCFA's Ex. H. She
stated
that, based on her experience, her opinion was that material was
available to
the review team other than the computer report. She stated
that the
review team could contact the county welfare offices before
reviewing a
facility and request names of any recently approved
recipients; that the
review team could request copies of the facility's
daily census; and that the
review team could request the turnaround
document (TAD) from the prior and
current month. The State's
affidavits, made by officials, with working
knowledge of the State's
program, state the following:
-- that it was too onerous and
unmanageable to have the county
caseworkers keep a
log of newly determined eligibles (State's Ex.
H);
4/
-- that the practice in the State was to
discourage indicating on
the daily census of a
facility that a patient was Medicaid
eligible, in
order to prevent discrimination against such
patients
by the staff (State's Ex. I); and
-- that neither the prior nor current
TAD would be helpful to the
review team because they
would be available at or around the same
time the
monthly report currently used by the review team was
issued (State's Ex. G).
4/ A State official who supervised Income Maintenance staff
making
eligibility determinations stated her opinion that it was not
feasible
for the 114 county offices plus the City of St. Louis to maintain
some
sort of manual record solely for the purpose of providing
accurate
information to review teams about recent Medicaid
eligibility
determinations for nursing home residents. - 8 -
In response, HCFA submitted another affidavit from the same HCFA
official,
but emphasized that her previous statements had been "merely
suggestions."
HCFA response to reply brief, p. 1. The second affidavit
does not
dispute the facts attested to in the State's affidavits, but
expresses the
opinion that the State review team could use a facility's
daily census as a
basis for review with the facility administrator or
bookkeeper or request
information from the person designated by the
facility to generate an updated
TAD or to inform the facility's biller
of newly certified persons.
HCFA. Ex. I. This is substantially
different from saying that the
State itself could have easily obtained
the information directly from the
census or TAD documents. Moreover, we
have no basis for finding here
that the State did not ask an appropriate
person within the facility for
updated information. Indeed, we have no
reason to believe that the
affiant's suggestions are any different or
better than what the State
actually did.
Consequently, this case is distinguishable from Arkansas where no
evidence
was presented to show that updated information was not readily
accessible to
the review teams.
The Board has cautioned in previous decisions that, in upholding some
of
the disallowances, the Board was not implying that the
retrospective
identification by the Agency of one or more patients omitted
from a
medical review is necessarily always a proper basis for a finding that
a
state violated the on-site medical review requirement. See
Arkansas,
note 8, at p. 9. The requirement is for annual reviews of a
patient's
care. In recognition of the practical administrative
difficulties of
tracking individual patients, however, HCFA implemented this
requirement
through an approach tracking reviews of facilities, making
a
facility.review due by the end of the quarter in which the
previous
year's review was performed. Thus, not including a patient
determined
eligible shortly before the facility review means at most that
the
patient will not be reviewed until the next facility review, which
will
be about a year after the eligibility determination. The states
still
must aim to identify all such patients. But, where a state could
not
have guaranteed identification of such a patient
without
disproportionate effort and cost, a section 1903(g) disallowance is
not
warranted.
Accordingly, we find the State was not required to review the two
patients
in the Kendallwood Trails facility and the one patient in the
Hamilton
Hillcrest facility. 5/
5/ Given our findings here, it is unnecessary to address the
other
arguments advanced by the State. - 9 -
Conclusion
Based on our analysis, we reverse the disallowance of $115,572.73
taken
for Kendallwood Trails and Hamilton Hillcrest.
________________________________ Cecilia Sparks Ford
________________________________ Donald F. Garrett
________________________________ Judith A. Ballard
Presiding
Board