Florida Department of Health and Rehabilitative Services, DAB No. 942(1988)

DEPARTMENTAL GRANT APPEALS BOARD

Department of Health and Human Services

SUBJECT:    Florida Department of  Health and Rehabilitative Services

Docket No. 87-35
Decision No. 942

DATE:  March 23, 1988

DECISION

The Florida Department of Health and Rehabilitative Services (Florida,
State) appealed a determination by the Health Care Financing
Administration (HCFA, Agency) disallowing $331,116 claimed by the State
as federal financial participation (FFP) under Title XIX of the Social
Security Act.  The claim was for services provided during the period May
30, 1985 to November 14, 1985, to Medicaid recipients by Avon Park
Cluster, an intermediate care facility for the mentally retarded
(ICF/MR).

HCFA determined that the State had failed to follow federally required
procedures when it continued Avon Park's certification during the period
in question.  Based on our analysis below, we uphold the disallowance in
full, for the following reasons:

       o  The recipients were relocated from the Avon Park cluster
          buildings to rental space in a hospital but the State did not
          determine that the rental space met building-specific and
          related ICF/MR standards.

       o  The State did not ascertain, at the time that the recipients
          were returned to the cluster buildings, whether those
          buildings met building-specific and related ICF/MR standards.

       o  The State did not ascertain whether Avon Park had corrected
          deficiencies in physical therapy and nursing services as of
          the completion date in the plan of correction.

       o  The State improperly granted a two month extension of Avon
          Park's period of certification.

HCFA argued also that the disallowance should be upheld because the
recipients did not receive active treatment during the period in
question.  We do not reach the active treatment issue in view of our
findings concerning the lack of proper certification.

                       Factual Background

Avon Park was initially certified from November 1984 through April 1985,
based on a plan of correction; resurveys were scheduled for February and
July 1985.  HCFA Ex. A.  The first resurvey was performed in January
1985 and resulted in the continuation of certification based on a new
plan of correction. Most of the corrections were completed at the time
of a March 1985 revisit.  HCFA Ex. D.  Following the revisit, the State
certified Avon Park for the period May 1, 1985 through October 31, 1985.
HCFA Ex. E.

A health problem caused by inadequate ventilation in the cluster
buildings occupied by Avon Park resulted in the evacuation of the
recipients and their relocation to Walker Memorial Hospital on May 30,
1985.  State Ex. 5,6; 1/ HCFA Ex. F.  The Avon Park staff continued to
serve the recipients at Walker Memorial and occupied offices in the
rental space there.  The State was "in touch with Avon Park on a weekly
basis" during the time the recipients were at Walker Memorial and made
an "appraisal visit" to that site on August 29-30, 1985. 2/  State
Response to Order to Develop the Record, p. 3; HCFA Ex. H.  The
recipients were returned to the cluster buildings on October 1, 1985.
HCFA Ex. H, I.

The State conducted a full survey on October 7-9, 1985, and found a
number of deficiencies.  HCFA Ex. K, L.  In a revisit on November 13-14,
1985, the State found most of the deficiencies had been corrected and
the facility was recertified.  HCFA Ex. M; HCFA Brief, pp. 9-10.

                            Analysis

I.    Avon Park's certification was no longer valid after the relocation
      of the recipients since the State did not determine that the
      rental space at Walker Memorial and later the reoccupied cluster
      buildings met building- specific and other related ICF/MR
      standards.

As we noted in our background narrative, the State had certified Avon
Park for the period May 1 through October 31, 1985 (later extended to
December 31, 1985).  However, on May 29, 1985, Avon Park relocated the
recipients to rental space at Walker Memorial because the cluster
buildings were found to be a health hazard. The recipients were returned
to the cluster buildings on October 1, 1985.  Neither at the time of the
relocation to Walker Memorial nor the return to the cluster buildings
did the State make a specific determination that the facilities housing
the recipients met the building-specific and other related standards for
an ICF/MR.

A.    The period at Walker Memorial May 29-September 30, 1985

HCFA argued that the certification of Avon Park had to be
building-specific and could not be a basis for FFP for services to the
recipients during a time when they were housed in a building which the
State had not surveyed and shown to be certifiable under the
building-specific standards for an ICF/MR.

The State argued that Avon Park's certification moved with it to the
space it occupied temporarily at Walker Memorial, just as did the
recipients, the staff, the program of care, and the equipment.  The
State alleged that in the past when recipients were relocated in an
emergency, the State determined that the building to be occupied during
the emergency met Life Safety Code standards.  The State contended that
it was unnecessary to do that here because Walker Memorial had been
certified as an acute care hospital under the Medicaid program and this
meant that the hospital building complied with Life Safety Code
standards.

The State's position, however, conflicts with the regulations. Many of
the ICF/MR standards are building-specific and consequently the State
was obliged to visit Walker Memorial as soon as possible after the
relocation of the recipients to ascertain whether the space occupied at
Walker Memorial could have met those and related standards. 3/  Even if
some of those standards were the same as those of an acute care
hospital, the State could not reasonably rely on the hospital
certification since how the space is being used may affect compliance
with the standards.  See, e.g., 42 C.F.R. 442.254(b) (1984) (which
requires a hospital already participating in Medicaid to meet ICF/MR
standards if the hospital is also a provider of ICF/MR services).

The State visited Avon Park at Walker Memorial only once, for an
"interim appraisal" on August 29-30, 1985.  On that occasion, the State
found "unsafe" conditions in the rooms and central hall rented from
Walker Memorial.  The rooms were in a disorganized condition and crowded
with equipment and furniture.  The central hall, which led to the exits,
was crowded with work tables, chairs, medication carts, a laundry cart,
and a canvas laundry hamper.  The State official recommended a visit by
the Fire Safety Consultant "as soon as possible."  HCFA Ex. H.  Thus,
the State here simply did not make the required determinations about
whether Avon Park's operations in the Walker Memorial rental space met
the ICF/MR standards.  If anything, the observations of the State
official indicate strongly that the standards were not met.

The State contended that the emergency caused by the health threat at
the cluster justified Avon Park's "reasonable and prudent" move to
Walker Memorial.  In its reply brief (p. 4), it alleged that in a
previous similar crisis a high number of patient deaths occurred
following the move of 136 developmentally disabled people with physical
handicaps and special medical needs.  This experience allegedly prompted
a study and a report, The Hodges Report, which emphasized the importance
of "life preservation" requirements.  Reply Brief, pp. 5-6; State Ex.
18.

HCFA did not dispute that Avon Park had good reason -- indeed was
compelled -- to move the recipients out of the cluster buildings. That
is not an issue.  The issue is whether the State is entitled to FFP if
the recipients are housed in quarters which are not certified for ICF/MR
use.  Many of the building-specific standards (such as the Life Safety
Code standards) that must be met for FFP to be available are truly "life
preservation" requirements.  As we discussed above, the space rented by
Avon Park at Walker Memorial was not certified for use as an ICF/MR and
the State was not entitled to FFP for the time that the recipients were
located there.

B.     The period following the return to the cluster buildings on
       October 1, 1985

As had been anticipated, the recipients were returned to the cluster
buildings on October 1, 1985.  Prior to their return, on September 25,
1985, the State's Medical Program Administrator for Preventive Health
Services determined that the inadequate ventilation which caused the
health problem had been corrected. Nevertheless, here again the State
had an affirmative duty to determine whether the buildings housing the
recipients met the ICF/MR standards.

The State had determined that the cluster buildings met the ICF/MR
standards as of the March 1985 revisit, but in the meantime the
buildings had been found to be a health hazard and were not occupied for
four months.  The State administrator's determination that the health
problem had been resolved was not sufficient to establish that the
buildings still met other ICF/MR standards, and the State could not
reasonably assume that nothing had changed in the buildings since the
March revisit.  To the contrary, where there is a compliance question,
as there was here, the State is required to conduct on onsite
inspection.  42 C.F.R. 431.610(g)(3).  The State surveyed Avon Park on
October 8- 9, 1985, but did not make a determination on certification
until after a revisit on November 13-14, 1985.

Thus, the State did not determine that the cluster buildings met ICF/MR
standards during the period after the recipients were returned there,
from October 1 to November 14, 1985.  In the absence of that
determination, the certification remained invalid and the State is not
entitled to FFP.  II.     Avon Park also was not validly certified
during the period in question because the State did not ascertain the
        status of the plan of correction as of May 31, 1985.

There is another reason why Avon Park was not validly certified during
most (all but two days) of the period in question.  As noted above, the
State certified Avon Park through October 31, 1985, following the March
20, 1985 revisit.  However, the survey report on that revisit noted
several deficiencies and established a plan of correction with a
completion date of May 31, 1985 for correcting those deficiencies.

The State did not revisit or otherwise communicate with Avon Park to
ascertain whether the plan of correction had been accomplished.  The
State did not conduct a survey scheduled for July 1985 and subsequently
(on August 28, 1985) rescheduled the survey so that it occurred after
the recipients had been moved back to the cluster buildings from Walker
Memorial.

HCFA argued that the State had not followed the prescribed procedure
because it had not ascertained whether the plan of correction had been
accomplished by May 31, 1985.  Exercising its "procedural look behind"
authority under 42 C.F.R. 442.30(a) and (c), HCFA retroactively declared
Avon Park's certification invalid as of June 1, 1985 and contended FFP
should be disallowed on that basis also.

The State objected that HCFA had not cited this argument as a reason for
the disallowance until HCFA's brief on appeal.  In an Order to Develop
the Record, the Board tentatively held that this issue was properly
before the Board, citing several factors.  The State made no further
arguments in support of the objection in its response to the Order, and
consequently we find that the issue is properly before us.

On the substantive issue, the State contended that a revisit to
ascertain that the plan of correction had been carried out was not
necessary because the deficiencies to be corrected were only "elements"
and not "standards" or "conditions."  4/  The State relied on an excerpt
from HCFA's State Operations Manual, which states that in some instances
a mail or telephone contact may suffice in lieu of an onsite visit. 5/
State Ex. 25.  The State suggested that it did not conduct an onsite
visit because none was required.

The regulations require that a facility meet all requirements for
certification, but permit a state to certify a facility with
deficiencies if there is an acceptable plan of correction, as here.  42
C.F.R. 442.105.  The regulations do not mention "elements" and do not
distinguish between requirements; a failure to meet any requirement is a
deficiency in need of correction. The plan of correction for the survey
conducted January 29, 1985 had one "standard not met": a deficiency
described as "lack of physical therapy services."  HCFA Ex. C.  The
survey on March 20, 1985 found that part of that deficiency still
remained to be corrected.  HCFA Ex. D.  A physical therapist was
employed March 1, 1985, but the surveyor found that the therapist needed
two additional months (to May 31, 1985) to complete evaluations of the
recipients' needs.  In addition, the deficiency relating to lack of
documentation that physical therapy needs were being addressed was also
not corrected as of March 20, 1985. 6/  Id. No reference to "elements"
appears in either the January or the March documents, so we cannot
determine whether the remaining deficiencies constituted more than not
meeting "elements."  In any event, it has no bearing on the issue here;
what does matter is that the State found deficiencies and required a
plan of correction.  Thus, there was a compliance question requiring an
onsite visit or other suitable means of ascertaining that the
deficiencies had been corrected.  42 C.F.R. 431.610(g)(3).

The State did not show that it had conducted any follow-up on the plan
of correction due to be completed May 31, 1985.  Even the State's
"appraisal visit" in August 1985 did not address the cited deficiencies.
The full survey in October 1985 found the standard for physical therapy
services "not met" and cited as a deficiency that a sample showed only
one of the recipients had a developmental goal and it was not offered
until July 1985.  HCFA Ex. K.  Moreover, HCFA's procedures require that
a follow-up contact or visit be documented on a specified form.  State
Ex. 25.  The State did not produce or offer to produce such an executed
form, nor did it even allege that it had made the required follow-up.
Thus, the State did not follow the required procedures and the
certification of Avon Park was no longer valid after May 31, 1985.

III.   The State's two extensions of Avon Park's certification also were
       not valid.

The State certified Avon Park for the period May 1, 1985 through October
31, 1985 based on an acceptable plan of correction which designated May
31, 1985 as the date for completing the correction of deficiencies.
HCFA Ex. E, D.  Subsequently, the State extended Avon Park's
certification to December 31, 1985 so that the survey for another period
of certification could be performed after the recipients were returned
to the cluster buildings. HCFA Ex. G.

Even aside from the effect on certification of the move to Walker
Memorial, we do not find that the State validly could have certified
Avon Park beyond July 30, 1985.  A state may certify a facility on the
basis of a plan for correcting deficiencies "for a period that ends no
later than 60 days after the last day for correcting deficiencies."  42
C.F.R. 442.111(b).  Here, that day was May 31.  Thus, under the
regulation, the State was authorized to certify Avon Park only to July
30, 1985, 60 days after the May 31 deadline.  Of course, as we discussed
above, the certification became invalid after May 29, 1985, because of
the move to Walker Memorial, in addition to the failure of the State to
ascertain the status of the plan of correction on May 31, 1985.

Even assuming, arguendo, that the State's certification might have been
valid until October 31, 1985, the extension to December 31, 1985 was not
valid.  The State argued that it granted the extension because it was
impracticable to determine, prior to October 31, 1985, whether Avon park
met certification standards, citing 42 C.F.R. 442.16.  HCFA contended
that the State had not made a finding that the extension would not
jeopardize the recipient's health and safety, required by the cited
regulation as a prerequisite for an extension.  The State contended that
the approval of the extension itself met the regulatory requirement; if
not the approval, then the October 8- 9, 1985 survey met the
requirement.

The State's reliance on the approval and the survey is misplaced.
Neither constitutes the required notice expressing the specific
determination that the extension would not jeopardize the recipients'
health and safety.  The required notice cannot be implied from the mere
fact of approval of the extension; such an interpretation would make the
requirement of a specific determination meaningless.  The omission also
was not rectified by the survey action in October.  That survey found
"critical standards not met;" it made no general finding about the
health and safety of the recipients, and certainly no finding concerning
the effect of an extension to December 31.  In fact, in October Avon
Park was given only 30 days to correct the specified deficiencies.  Thus
the State did not comply with 42 C.F.R.  442.16 and the extension was
not valid.

IV.    It is not necessary for the Board to resolve other issues.

HCFA also based the disallowance on its determination that the
recipients had not received active treatment during the period in
question.  It is not disputed that an ICF/MR must provide recipients
with active treatment as defined in 42 C.F.R.  435.1009.  The Board has
dealt with the subject of active treatment in other cases, most notably
Connecticut Dept. of Income Maintenance, DGAB No. 562 (1984), where we
had the benefit of expert testimony on that complex issue.  However, we
do not need to reach that issue here because we determine that the
ICF/MR services were not provided in a facility that was properly
certified to meet ICF/MR standards.

                           Conclusion

For the reasons stated above, we uphold the disallowance in full.

 

 

                            ________________________________ Judith A.
                            Ballard

 

                            ________________________________ Cecilia
                            Sparks Ford

 

                            ________________________________ Donald F.
                            Garrett Presiding Board Member

 

 


1.     The State described its exhibits as "attachments" (to its Brief).
In this Decision, we refer to the documents submitted by both parties as
exhibits, abbreviated Ex.

2.     The State executed a certification form on August 28, 1985,
noting that an "interim appraisal visit" was scheduled and also that the
return to the cluster was anticipated September 30, 1985.  This form
extended Avon Park's certification to December 31, 1985, so that the
resurvey, originally scheduled for July 1985, could be performed after
the return to the cluster. HCFA Ex. G.

3.     For example, the ICF/MR standards include the Life Safety Code
requirements of the Fire Protection Standard, (42 CFR 442.508); Rated
Capacity of the Building (442.420); Grouping and Organization of Living
Units (442.444); Resident Living Areas (442.446); Resident Bedrooms
(442.447 and 448); Storage Space (442.449); Bathrooms (442.450); Heating
and Ventilation (442.451); Floors in Living Units (442.452); Emergency
Lighting (442.453); as well as related requirements, such as a staff
organization plan and procedures for emergencies and practice
implementing the plan through evacuation drills (442.505, 506).


4.     An Agency "All-State Letter" dated May 15, 1975 describes a
procedure for conducting a survey which employs a three-tier sequence of
"conditions," which consist of "standards," which in turn consist of
"elements."  State Ex. 24.  The Letter states that it is possible to
find a standard "met" even though one or more elements of the standard
are not met; similarly a condition may be found "met" even though one or
more standards are not met. It depends upon "a judgment of the manner
and degree to which the provider satisfies the various standards" (or
conditions).  Id.

5.     The example given where a mail or telephone contact might suffice
is where a facility agreed to amend its bylaws or written policies.
Verification of correction of the type of deficiencies described herein
might more appropriately be done by an onsite visit, however.

6.     Another deficiency, absence of documented developmental goals in
nursing service plans, was given an additional two months for evaluation
(to May 31, 1985) because although developmental goals had been
developed by the time of the March revisit, developmental programs had
not been