New Jersey Dept. of Human Services, DAB No. 825 (1987)

DEPARTMENTAL GRANT APPEALS BOARD

Department of Health and Human Services

SUBJECT: New Jersey Department
of Human Services

Docket No. 86-239
Decision No. 825

DATE: January 14, 1987

DECISION

The New Jersey Department of Human Services (State) appealed the disallowance of $316,647 in federal
financial participation by the Health Care Financing Administration (HCFA) under Title XIX (Medicaid)
of the Social Security Act.  The disallowance was based on a review of interest collected by the State on
overpayments made to Medicaid providers recovered during the period February 1, 1983 to September 30,
1984.  The basis for the disallowance was that the State had not credited the federal government.for any
part of the "penalty interest" the State received when it recovered overpayments from providers of
Medicaid services.  HCFA contended that such interest constituted an applicable credit within the
meaning of Office of Management and Budget Circular A-87 and that, accordingly, the federal
government was entitled to its share of the interest.
 
The State acknowledged that this identical issue was addressed in Board Docket No. 83-115, decided in
New Jersey Department of Human Services, Decision No. 480, November 30, 1983.  The State appealed
Decision No. 480 in United States District Court, and appealed this case to preserve its rights in the event
Decision No. 480 should be reversed.  The State therefore requested that the Board issue a summary
decision in this appeal.  HCFA stated that it had no objection to the issuance of a summary decision.
 
After HCFA issued its disallowance, the United States District Court for the District of New Jersey upheld
Board Decision No. 480 on November 13, 1986 (Civil No. 84-2771).
 
 
We therefore sustain the disallowance of $316,647, based on Decision No. 480, which we incorporate
herein.
 
 
 ________________________________
 Donald F. Garrett
 
 ________________________________
 Norval D. (John) Settle
 
 ________________________________
 Alexander G. Teitz
 Presiding Board Member