Utah Department of Health, DAB No. 887 (1987)

DEPARTMENTAL GRANT APPEALS BOARD

Department of Health and Human Services

SUBJECT: Utah Department of Health 

Docket No. 87-37
Decision No. 887

DATE:  August 5, 1987

DECISION

The Utah Department of Health (State) appealed a determination by the
Health Care Financing Administration (HCFA, Agency) disallowing
$31,403.36 in federal Medicaid funding claimed by the State under title
XIX of the Social Security Act (Act) for the quarter ending June 30,
1986.  HCFA based the disallowance on its finding that Utah failed to
make a satisfactory showing that it had a system of annual reviews, as
required by section 1903(g)(1) of the Act.  HCFA found that the State
did not review the quality of care for all patients in one intermediate
care facility (ICF) and one skilled nursing facility (SNF).  During the
course of this appeal, HCFA withdrew its findings of violations at the
one SNF.  Thus, the amount in dispute is now $29,207.19.

The disallowance here relates to the State's alleged failure to inspect
one patient in the ICF (identified here as patient L.F.).

Our decision is based on the parties' written submissions.  For the
reasons stated below, we reverse the remaining disallowance.

What the requirements are

Section 1903(g)(1) of the Act provides for the reduction of a state's
federal medical assistance percentage of amounts claimed for long-stay
services 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 . . . 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.  .Section 1902(a)(31) requires in
pertinent part that a state plan provide--

       (B)  with respect to each . . . intermediate care facility within
            the State, for periodic onsite inspections of the care being
            provided to each person receiving medical assistance, by one
            or more independent professional review teams. . . .

The regulations implementing this provision and section 1903(g)(1) are
found at 42 CFR Part 456.  In particular, section 456.652 provides--

       (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 had 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 review of each recipient in every facility in the State,
       . . . by the end of the quarter in which a review is required
       under paragraph (b)(2) of this section.

Background

The record demonstrates that the State has the following procedures for
conducting medical reviews.  Before beginning an on-site review of a
facility, the review team compares its computer-generated list of
Medicaid recipients with the facility's patient census and billing
information.  The State then uses a complete updated list as the basis
for its review. Upon completion of the patient reviews in the facility,
the review team checks the updated list against the completed Inspection
of Care forms to make sure it has a form for each patient on the list.
Next, the review team leader delivers the completed Inspection of Care
forms to the Department of Health where a secretary again checks the
forms to verify that each Medicaid identified patient in the facility
has a completed form. Thereafter, a second verification is made by a
State quality assurance inspector.  The review team and supervisor are
then notified of any discrepancies and they re-check their records and
return to the facility if necessary.  State's Brief, pp. 8-9; and
State's Reply Brief, p. 3.

In the instant case, the State conducted its on-site medical review at
Pioneer Memorial Nursing Home during the period May 27 through 29, 1986.
The review team leader, Lynn Probst, stated in an affidavit that patient
L.F.'s name did not appear on the computer generated list as a Medicaid
recipient but that her name did appear on the facility's list.  Mr.
Probst then recalled that he made a notation at the bottom of the
facility's list of patients which stated, "all residents of Pioneer
Memorial, 5-29-86, Per Facility."  Mr. Probst stated that when he
realized patient L.F.'s name did not appear on the State generated
report, he, in accordance with usual practice, filled out the
appropriate sections of the review form for patient L.F.  Mr. Probst
stated that to the best of his knowledge, the care given to patient L.F.
was reviewed in the usual manner by the review team.

The State said that immediately following the on-site review, the
Inspection of Care forms would be updated against the lists and that no
discrepancy was noted in this instance.  After the State performed its
second follow-up check, however, the quality assurance inspector could
not find a completed form for patient L.F.  As a result, the review team
was promptly notified and immediately returned to the facility and
conducted a review of patient L.F. on July 31, 1986.

The Parties' Arguments

The State argued that it satisfied the review requirements for patient
L.F.  It claimed that although it cannot now produce the Inspection of
Care form completed on patient L.F. during the original review, the team
leader's affidavit coupled with evidence of the State's system of
internal checks leads to the conclusion that the patient was reviewed.

Alternatively, the State argued that if the Board finds that the State
has not established that the State conducted the required review of
patient L.F. within the quarter, the State qualifies for statutory and
regulatory exceptions to the annual review requirement.  The State also
contended that should the Board find that the State does not qualify for
the exceptions, or that the patient was not reviewed, then the
disallowance must be recalculated because the formula used by the Agency
was inaccurate.

The Agency contended that the affidavit alone was insufficient to
establish that patient L.F. was reviewed.  While the Agency conceded
that the State met certain threshold requirements for exceptions which
the State argued applied, the Agency found the State did not satisfy the
other requirements for these exceptions.  The Agency also contended that
the disallowance was calculated in accordance with the formula set forth
in the statute except that, in accordance with the implementing
regulations, the Agency substituted an estimate for certain data where
the exact data necessary to compute the disallowance was not available.
The Agency indicated that the State could supply the patient data needed
so that an estimate of that data would not be necessary to compute the
disallowance.

Analysis

The Agency would impose a disallowance for Pioneer Memorial Nursing Home
because the State allegedly failed to review one patient.  The State,
however, has presented testimony by affidavit to support the position
that this patient was reviewed but that the documentation to
substantiate the review was lost. The review team leader stated that he
compared the computer generated list of patients from the Department of
Health with the facility's own list and noted on the facility list that
it was the complete list of all patients.  This list contained the
patient in question and according to the State would have been the list
used during the on-site review and in the follow-up checks.  The review
team leader also specifically recalled entering the patient's name on a
Inspection of Care form.  This presumably increased the likelihood that
the patient was reviewed since that form is the one used for the review
itself.  Having the patient's name at the top would have served as a
reminder (along with the list) that this patient needed to be reviewed.
It is also significant that there is unrebutted evidence that this State
customarily performs follow-up checks upon completion of the on-site
review, during which it compares the completed forms with the patient
list.  If the patient at issue here had not been reviewed, that failure
apparently would have been picked up at that time.

While the review team leader's affidavit alone might not be sufficient
to prove that the patient was actually reviewed, the affidavit
considered together with the evidence of the State's usual and customary
practices in performing its annual review leads us to conclude that the
record shows the review was performed.  The State has clearly shown that
in performing the required reviews for the quarter ending June 30, 1986
it was aiming for and thought it achieved 100 percent compliance.  In
fact, the Agency conceded that the State performed facility-wide reviews
in all facilities requiring review.  Moreover, as the record shows, the
State had no reason to believe that there might be a question about the
review at this facility until such time as the State's second follow-up
indicated that the documentation on patient L.F. was missing.  It was
the State's own system, and not the Agency's validation survey, which
discovered that the documentation was missing.  The fact that the State
shortly after the end of the quarter sent the review team into the
facility to perform another review on this patient further demonstrates
the conscientious efforts of the State's system in performing the annual
on-site reviews.  Finally, the Agency has not disputed the State's
account of how its system worked or the efficacy of the State's usual
and customary practices in performing its reviews. Moreover, we have no
reason to think that the State's system was operated here in any manner
other than what was described as the usual and customary practice.

Thus, it is reasonable to conclude that this patient was in fact
reviewed and that there was no violation of the annual review
requirement for this facility.  Accordingly, we reverse the disallowance
for Pioneer Memorial Nursing Home. 1/ .Conclusion

For the reasons indicated above, we reverse the disallowance for Pioneer
Memorial Nursing Home in the amount of $29,207.19.

 


                            _____________________________ Judith A.
                            Ballard


                            _____________________________ Norval D.
                            (John) Settle


                            _____________________________ Donald Garrett
                            Presiding Board Member

 

1.     Since we have found no violation of the annual review
requirement, it is unnecessary for us to consider the parties' other
arguments.