New York State Dept. of Social Services, DAB No. 947 (1988)

DEPARTMENTAL GRANT APPEALS BOARD

Department of Health and Human Services

SUBJECT:  New York State Dept. of  Social Services

Docket No. 87-219
Decision No. 947

DATE:  April 13, 1988

DECISION

The New York State Department of Social Services (State) appealed the
decision of the Health Care Financing Administration (HCFA) disallowing
$5,509,923 claimed under title XIX of the Social Security Act (Act) for
the period January 1, 1986 through March 31, 1987.  (After the State
appealed, HCFA reduced the disallowance by $963,089 to $4,546,834.)  The
disallowed costs, which were included in the per diem rates for
hospitals, were incurred for supplemental malpractice insurance
purchased by the hospitals for their affiliated physicians and dentists.
The disallowance was taken on the ground that the costs were claimed
under proposed State plan amendments which were disapproved by HCFA.
Section 1903(a)(1) of the Act requires that costs be claimed under an
approved state plan in order to be eligible for reimbursement under
title XIX.

The State contended on appeal that the costs were allowable under the
proposed plan amendments.  It noted that it had requested pursuant to 45
C.F.R. Part 213 that HCFA reconsider its decision disapproving the
proposed plan amendments, and requested that the Board stay proceedings
in this appeal pending a final decision by HCFA.  Both parties
subsequently agreed that since the allowability of the costs depended
upon the approval of the plan amendments, it was appropriate for the
Board to issue a summary decision upholding the disallowance.  HCFA
stated that were it to later approve the plan amendments, it would
"certify restitution to the state of any funds previously withheld or
denied as a result of its initial disapproval."  Letter from Dusaniwskyj
to Settle dated January 19, 1988; Letter from Pardo to Settle dated
February 2, 1988.

Conclusion

Accordingly, we conclude that the disallowance was properly taken on the
ground that the costs were not claimed pursuant to an approved State
plan, and sustain the disallowance.  If the proposed plan amendments
under which the costs were claimed are subsequently approved by HCFA,
this decision would not preclude HCFA from carrying out its agreement to
pay the costs.

 

 

                            _____________________ Donald F. Garrett


                            _____________________ Alexander G. Teitz


                            ______________________ Norval D. (John)
                            Settle Presiding Board Member