New York State Department of Social Services, DAB No. 1057 (1989)

DEPARTMENTAL APPEALS BOARD

Department of Health and Human Services

SUBJECT: New York State Department DATE: June 5, 1989 of
Social Services Docket No. 89-84 Decision No. 1057

DECISION

The New York State Department of Social Services (State) appealed the
decision of the Health Care Financing Administration (HCFA) disallowing
$6,798,882 claimed under title XIX of the Social Security Act (Act) for
the period April 1, 1988 through September 30, 1988. 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 not claimed
pursuant to the approved State plan. 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 costs in question
here were claimed under the authority of proposed State plan amendments
on which HCFA has not yet taken final action.

On appeal, the State requested that the Board issue a summary decision
in this case based on New York State Dept. of Social Services, DAB No.
947 (1988). That decision involved a disallowance of similar costs
incurred during prior quarters. Both parties had agreed that since the
allowability of the costs depended upon the approval of amendments to
the State plan which had been disapproved by HCFA, the Board was
required to uphold the disallowance. While upholding the disallowance,
the Board noted that HCFA had agreed to pay the costs if the proposed
plan amendments under which the costs were claimed were subsequently
approved by HCFA.

HCFA agreed that a summary decision upholding the disallowance was
appropriate in this case as well. Letter from Dusaniwskyj to Ford dated
5/25/89.

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 bar any obligation by HCFA to pay the costs.

_____________________________ Donald F. Garrett

_____________________________ Alexander G. Teitz

______________________________ Norval D. (John)
Settle Presiding Board