New York State Department of Social Services, DAB No. 1101 (1989)

DEPARTMENTAL APPEALS BOARD

Department of Health and Human Services

SUBJECT: New York State DATE: September 20, 1989 Department of
Social Services Docket No. 89-183 Decision No. 1101

DECISION

The New York State Department of Social Services (State) appealed a
determination by the Health Care Financing Administration (Agency)
disallowing federal financial participation (FFP) in the amount of
$2,470,961 claimed under title XIX of the Social Security Act for the
quarter ended June 30, 1987. The costs claimed represented amounts
originally paid under the State- funded medical assistance program which
the State later claimed as payments for individuals eligible for
Medicaid. The State's claim was made using statistical sampling
procedures, that is, the State estimated the amount paid to Medicaid
eligibles based on its review of the case records for a sample of
recipients of State- funded medical assistance during the period in
question. Some of the cases involved individuals who were eligible for
Medicaid on the basis of disability, while other cases involved
individuals who were eligible for Medicaid on some other basis.
Proceedings concerning the non- disability-based claims are currently
pending before the Board. However, the State requested a summary
decision upholding the disallowance of the disability-based claims based
on New York State Dept. of Social Services, DAB No. 1012 (1989). A
similar summary decision has already been issued by the Board. New York
State Dept. of Social Services, DAB No. 1052 (1989).

In DAB No. 1012, the Board held that the State was not authorized to use
statistical sampling as a basis for claiming Medicaid funds payable on
behalf of disabled individuals. The Board found that sampling was
impermissible because it was used in lieu of making the disability
determinations which the regulations, reasonably interpreted, require in
each case for which payment is made. Accordingly, the Board sustained
disallowances for the period July 1, 1985 through June 30, 1986 to the
extent that they represented extrapolations from cases in the sample
involving individuals eligible for Medicaid based on disability. The
Board remanded that part of the disallowances pertaining to the cases in
the sample to determine whether the disability determination in each
case was properly made.

The Agency stated that it agreed to the issuance of a summary decision
here based on DAB No. 1012. Letter from Novinski to Settle dated
9/8/89. 1/

Conclusion

Accordingly, based on the analysis in DAB No. 1012, we uphold the
disallowance to the extent that it represents disability-based claims
calculated by extrapolation from a statistical sample. As in that
decision, we remand to the Agency that part of the disallowance which
pertains to the cases in the sample to determine whether the disability
determination in each case was properly made so that FFP is allowable.
2/ The State may appeal the Agency's determination in the sample cases
pursuant to 45 C.F.R. Part 16.


________________________ Donald F. Garrett


________________________ Alexander G. Teitz


________________________ Norval D. (John)
Settle Presiding Board Member

1. In DAB No. 1052, supra, the Board specifically stated, at the
Agency's request, that the decision did "not preclude the Agency from
raising, in the context of some other proceeding, any objection to the
validity of the statistical procedures used by the State nor from
arguing that the amount which the State identified as subject to this
decision is incorrect because it was based on invalid statistical
procedures." Although no request for a similar statement was made here,
it is clear that the effect of this decision is limited in the same
fashion.


2. In some related cases now pending before the Board, the Agency
asserted, and the State did not dispute, that claims for the
expenditures made on behalf of the individuals in the sample cases were
not included in the amounts in dispute. Docket Nos. 89-51, 89-86 and
89-87, Agency's brief dated June 1, 1989, p. 5. If the same is true
here, there would of course be no need for further Agency