.ÌÌ..Ì DEPARTMENTAL GRANT APPEALS BOARD
Department of Health and Human Services
SUBJECT: Missouri Department of Social Services
Docket No. 87©164
Decision No. 935
DATE: February 5, 1988
Ã
The Missouri Department of Social Services (Missouri/State)appealed
a
determination by the Health Care FinancingAdministration
(HCFA/Agency)
disallowing $36,007 in federal fundsclaimed by the State under
the
Medicaid program of the SocialSecurity Act (Act) for the
calendar
quarter ending June 30, 1987. The disallowance was taken pursuant
to
section 1903(g)(l) of theAct, which provides for reduction of a
state's
federal medicalassistance percentage of amounts claimed for a
calendar
quarterfor long©stay services unless the state shows that
during
thequarter it had "an effective program of medical review of thecare
of
patients . . . whereby the professional management ofeach case
is
reviewed and evaluated at least annually byindependent
professional
review teams."
HCFA alleged that Missouri failed to conduct a timely annualreview at
one
long©term care facility, the Regency Care Center ofWebb City
(Regency Care),
which was certified as both anintermediate care (ICF)
and a skilled nursing
(SNF) facility. While the statute provides certain
limited exceptions to
theannual review requirement, HCFA asserted that
the exceptionscould not
apply here because the State did not satisfy
therequirements for a written
quarterly showing. Further, HCFAalleged
that Missouri's explanation of
its failure to reviewwould not qualify as
an exception to the annual
reviewrequirement. Generally, Missouri
argued that the
regulationimplementing the quarterly showing requirement
at 42 C.F.R.456.654
was invalid and that the exceptions should apply
toexcuse the deficiency in
its showing.
Based on the following analysis, we sustain the disallowance
inits
entirety.
”Applicable Law•
Section 1903(g)(l) of the Act establishes the requirement that astate
make
a quarterly showing that it has an effective programof annual
medical review
of the care of
each Medicaid recipient in a long©term care facility. The
annualreview
requirements applicable to ICFs and SNFs are in
sections1902(a)(31)(B)
and (C) of the Act. The Act further provides,
atsection 1903(g)(4)(A)#
that a state must submit its quarterlyshowing within
30 days of the
close of the quarter, unless theSecretary finds good cause for
missing
that deadline. SectionÜj
Ì .Ì. . . if the showing demonstrates that the State hasconducted such
an
onsite inspection during the 12©monthperiod ending on the last date
of the
calendar quarter ” •Þ.JÞ Ì .ÌÌ..Ì (i) in each of not less than
98
per centum of thenumber of such hospitals and facilities
requiring
suchinspection, andÞ.JÞ Ì .ÌÌ..Ì (ii) in every such hospital
or
facility which has200 or more beds,Þ.JÞ Ì .Ìand that, with respect
to
such hospitals and facilities notinspected within such period, the
State
has exercised goodfaith and due diligence in attempting to
conduct
suchinspection, or if the State demonstrates to the satisfactionof
the
Secretary that it would have made such a showing butfor failings of
a
technical nature only. ”See• ”also• 42 C.F.R.456.653, and
”Pennsylvania
Dept. of Public• ”Welfare•, DGAB No.746 (1986).Þ.JÞ
The requirements for the content of a state's showing andprocedures
for
submitting the showing are set out at 42 C.F.R.456.654. In
pertinent
part that regulation provides that ” •
(a) An agency's showing for a quarter must ” •
Ì .Ì (1) Include a certification by the agency
that therequirements
of section 456.652(a)(l) through (4) were metduring the
quarter for each
level of care or, if applicable,a certification of the
reasons the
annual on©site reviewrequirements of section 456.652(a)(4) were
not met
in anyfacilities;Þ.JÞ
Ì .Ì (2) For all . . . skilled nursing
facilities,intermediate care
facilities, . . . participating inMedicaid any
time during the 12©month
period endingÞ.JÞ
”
.. .
ª©__©•
Ì .Ìon the last day of the quarter, list each facility by levelof
care,
name, address and provider number;Þ.JÞ
Ì .Ì (3) For each facility entering or leaving
the programduring
the 12©month period ending on the last day of thequarter,
list the
beginning or ending dates of the providerÜj
* * *
Ì .Ì (5) List all dates of on©site reviews
completed byreview teams
anytime during the 12©month period ending onthe last
day of the
quarter;Þ.JÞ
Ì .Ì (6) For all facilities in which an on©site
review wasrequired
but not conducted, list the facility by name,address and
provider
number;Þ.JÞ
* * *
Ì .Ì (b) The quarterly showing must be in the
formprescribed by the
Administrator.Þ.JÞ
The Agency also issued to states participating in Medicaid
HCFAAction
Transmittal 79©61, July 2, 1979, which provides
explicitlythat
facilities reviewed within 30 days after the close of aquarter
must be
included in the showing on the list of facilities”not
reviewed•.
Moreover, states are to attach a full explanationof the
circumstances
for any missed facility review. If a statebelieves that
the exception
clauses of section 1903(g)(4)(B)apply, "the state must explain
its
attempts to perform the reviewand attach a copy of its original
review
team schedule showingthe planned dates of review." HCFA
Action
Transmittal 79©61, atparagraphs V and VI.
Section 1903(g)(l) of the Act provides that a state's
quarterlyshowing
must be "satisfactory" or the state's federal funding
forexpenditures
incurred in connection with long©stay services willbe
decreased
according to the formula at section 1903(g)(5) ofthe Act.
”Background•
Regency Care was due for annual review by the close of thequarter
ending
June 30, 1987. Missouri submitted its showing forthis quarter on
July
21, 1987. The showing containedcertifications regarding the
performance
of annual reviews atvarious facilities. The showing
also
included a list, as required by regulation, noting thosefacilities
where
no reviews were required (either because of theabsence of patients at
a
particular level of care, in duallyªcertified facilities, or the
absence
of any Medicaid patients atall). The roster of facilities was a
47©page
alphabeticallisting set out in columns. The first column
identified
thefacility and the last identified the type of care offered
by
thefacility. The five intervening columns were reserved
for
otherinformation, such as, the date on which the facility
wasreviewed,
the team leader, etc. Column II listed the beginningdate
of the
provider agreement for facilities that entered theÜj
Although Regency Care was listed with the other facilities,
noinformation
relevant to the review process or the facility'sprovider
status was contained
in the listing. The roster simplygave the
facility's name in Column I
and the type of careprovided in Column VII.
Regency Care was the only
facility onthe roster for which there was no
other information.
MissouriTab D, p. 35 of 47. The showing did not
contain a
separatelisting indicating that Regency Care had not been
reviewed,
andstating the reasons why.
The State conducted its annual review at Regency Care on July
29,1987.
Missouri Tab F. On August 4, HCFA notified Missouri thatits
quarterly
showing was deficient. Responding to HCFA'sinquiry, the State
explained
that there had been an error inrecording the effective date for
Regency
Care entry into theMedicaid program. Regency Care was approved
for
entry intoMedicaid ”effective• June 30, 1986. Thus, a review
was
required byJune 30, 1987. However, a State employee
inadvertently
wrotedown the effective date as August 22, 1986, the date
thefacility's
name change was effective, so that the facility'sannual medical
review
was scheduled for the quarter endingSeptember 30, 1987. In fact,
the
July 1987 review at RegencyCare was based upon this error.
Missouri
Br., pp. 2, 9; MissouriTabs G and K.
Before the Board, Missouri argued that section 1903(g) of the Actdoes
not
provide the Secretary with the express authority topromulgate
regulations
which "would affect the exceptions" to theannual review
requirement.
The State contended that 42 C.F.R.456.654 was based only
upon
the Secretary's "general authority to regulate," and since
theregulation
acts to destroy the exceptions at section1903(g)(4)(B),
Missouri
reasoned, the regulation is invalid. Missouri Br., pp. 7©9.
Further,
Missouri asserted that, since itsatisfied the 98 percent/200
bed
standard and exercised goodfaith and due diligence in attempting
to
review Regency Care,having in fact conducted a review within 30 days
of
the close ofthe quarter in which the review was originally
required,
thisdisallowance should be excused under the statutory exceptions
tothe
annual review requirement. Missouri Br., pp. 3©7.
”Analysis•
This case is similar to the appeal decided by the Board in
Ohio#ª©###”pt.
of Human Services•, DGAB No. 824 (1987). There,
##iosubmitted a
quarterly showing in which a facility reviewed twoweeks
after the close of
the quarter was listed among theÜj
In determining that Ohio's showing was unsatisfactory, wepresented
an
analysis of the showing requirement which applies tothe facts here
as
well. We repeat that analysis below and thenaddress
Missouri's
arguments.
In ”Ohio• the Board found that ” •
Ì .ÌSection 1903(g) provides that a showing must demonstrateeither
full
compliance with the medical review requirementsor compliance with
the
exception provisions of section1903(g)(4)(B). Moreover,
section
1903(g)(4) precludes theSecretary from finding a state's showing to
be
satisfactoryif it is not submitted within 30 days of the
calendarquarter
in question unless the state demonstrates good causeÞ.JÞ
Ì .Ìfor not meeting the deadline. ”Thus, the statute•
”providesnotice
that a penalty will be imposed if a• ”state fails tomeet
the
requirements relating to the• ”showing notificationitself•.
The
regulations require that the state mustinclude, as part of the
"content"
of the showing, acertification that it has completed on©site
reviews of
eachrecipient in every facility in the state by the end of
thequarter in
which a review is required. If the state failsto complete
reviews in
any such facility, the State mustprovide a certification of the
reasons
the reviewrequirements were not met in the facility. 42
C.F.R.
456.654(a)(l). In addition to the certifications, the statemust
provide
a list of all facilities participating inMedicaid
(section
456.654(a)(2)); a list of all dates of onªsite reviews completed
by
review teams any time during the12©month period ending on the last
day
of the quarter(section 456.654(a)(5)), and for all facilities in
which
anon©site review was required but not conducted, a list of
thefacilities
by name, address, and provider number. Finally,the
regulations require
that the showing must be in the formprescribed by the
Agency.Þ.JÞ
”Ohio•, pp. 3©4 (emphasis added).
With regard to this analysis in ”Ohio•, the Board also noted that,Üj
In light of the above analysis, we concluded in ”Ohio• that at
aminimum,
the quarterly showing must include identification of anyfacilities
not
reviewed as well as the reasons for any missedreviews. We found
that,
absent the appropriate certification andaccompanying lists,
the
Secretary would not be able to determineif the state had satisfied
the
showing requirements or qualifiedfor the exceptions. If the
Secretary
did not perform acomprehensive validation survey and the state's
showing
did notidentify the unreviewed facilities and provide the
reasons for the failures to review, the Secretary would not
havea
sufficient basis to determine whether a disallowance wasrequired
by
statute. Further, the showing requirement satisfiesan important
program
purpose in that it requires contemporaneousexplanations for failures
to
review, not justification providedonly after Agency inquiries.
”See•
”Ohio•, p. 5.
In spite of Missouri's argument concerning the Secretary'sauthority
to
promulgate 42 C.F.R. 456.654 and its allegations asto the
regulation's
effect on the statutory exceptions, the Statehas not convinced
us that
our analysis of the interrelationbetween the statutory
showing
requirement and its regulatorycounterpart presented in ”Ohio•
was
incorrect. Rather, we findthat the regulation properly complements
the
statutory standardby providing for a meaningful and efficient way
of
meeting theshowing requirement. Section 1102 of the Act
empowers
theSecretary to "make and publish such rules and
regulations,
notinconsistent with this Act, as may be necessary to
the
efficientadministration of . . . this Act." Here, the Act
requires
theState to demonstrate certain things to the satisfaction
of
theSecretary in its showing. The showing itself is
important
inpromoting the administration of the program. Thus, there is
nobasis
for us to conclude that the regulation goes beyond
theSecretary's
authority to regulate.
Missouri's showing did not demonstrate compliance with the
annualreview
requirements, or explain the State's failure to comply
andrequest
application of the statutory exceptions. Regency Carewas
listed among
the other facilities which had been timelyreviewed or required
no
review, without any indication as to itsstatus. Also, there was
no
separate listing of this facility ashaving not been timely reviewed,
nor
was there a certification ofÜj
Further, as in ”Ohio•, the situation here is distinguishable
fromother
cases where a state was unaware of potential violationsuntil well
after
its quarterly showing and thus could not haveincluded in its showing
a
list of deficiencies and reasons fornot meeting the requirements.
”See•
”Delaware Dept. of Health andSocial Services•, DGAB
No. 732 (1986).#/ In ”Delaware•, the Board was faced with asituation
in
wh#ch state reviewers missed a total of fivepatients during reviews
in
three long©term care facilities. Thissituation was brought
to
Delaware's attention after it submitteda quarterly showing in which
it
certified that annual reviews hadbeen timely conducted in the
three
facilities. Here, Missourimissed an entire facility. This
error went
entirely unnoticed byState officials, although it was obvious on
the
face of theshowing that there was a possible problem with this
facility.
Even a cursory examination of the quarterly showing would
reveal”no•
information entered for Regency Care even though
appropriateinformation
was given for all other facilities. We can
onlyconclude that the
State's showing was submitted without asufficient
review of its
contents. As is clear from our analysisabove, the
statutory and
regulatory showing requirements are morethan mere paper
pushing
exercises. State officials should havenoticed the obvious
absence of
information for Regency Care priorto submission of the
showing. At that
point the State could havedetermined whether there had
been a review or,
in the absence ofa review, how this facility should be
listed. The
State couldcertainly have complied with the requirement to
identify
thisfacility, and the reasons it was not reviewed, had it
takengreater
care in the review and submission of its showing. Although the
State
blamed this situation on the confusionregarding the effective date
of
the facility's entry into theprogram, this is not significant here
given
the obvious absenceof information for Regency Care in the
quarterly
showing. TheState did not identify this facility as entering
the
programduring the reporting period and include a copy of
its
provideragreement, as it did for other new providers.
Indeed,
thefailure to list an entry date for this facility calls
intoquestion
the later explanation that misidentification of theentry date
caused the
late review.
The State attempted to downplay the late review of Regency Carein light
of
the fact that the facility was actually reviewed inJuly. The
July
review had been scheduled to meet the reviewrequirement for the
next
quarter, ending September 30, 1987. Although the State would have
us
conclude that the July reviewunderscores the efficiency of its
program
of annual reviews andminimizes its error, closer examination of
the
facts reveals thecoincidental nature of the proximity of that review
to
the closeÜj
”
•
This decision was recently overturned on other
grounds.
”See•”Delaware Division of Health and Social• ”Services v.
U.S.
Dept. o#Health and Human Services•, 665 F. Supp. 1104 (D.
Del.
1987).
Based on our analysis in ”Ohio•, which we affirm here, and thefacts
of
this case, we find that Missouri failed to comply torequirements for
a
satisfactory showing in regard to RegencyCare. In view of our
finding,
we do not address the question ofwhether, had Missouri identified
this
facility and its reasons inits showing, the statutory exceptions to
the
annual review requirements wouldapply to excuse the State's failure
to
review the facility.
”Conclusion•
For the reasons discussed above, we uphold the entiredisallowance
of
$36,007.
” ,#
.
.
...
•
/##dith A.
Ballard
”
•
Donald
F. Garrett
Cecilia Spar### Ford
Presiding
Board Member