Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD
Appellate Division
SUBJECT: New York State Department of Social Services
DATE: October 15, 1992
Docket No. A-92-117
Audit Control No. A-02-90-01029
Decision No. 1364
DECISION
The New York State Department of Social Services (State) appealed
a
determination by the Health Care Financing Administration
(HCFA)
disallowing $134,852 in federal financial participation (FFP) for
family
planning services provided under Title XIX (Medicaid) of the
Social
Security Act (Act). The amount appealed is a portion of a
disallowance
totalling $6,519,281, which resulted from an audit by the Office
of
Inspector General (OIG) of State claims for 90% FFP using a
scientific
sample of 105 inpatient and 105 ancillary services during the
audit
period (January 1, 1984 through August 11, 1989). The State did
not
question the sampling methodology, but disputed OIG's determinations
as
to eight cases out of 65 ancillary services deemed unallowable. In
its
brief, the State withdrew its objections as to two cases, leaving
six
cases in dispute which the State asserted would yield the amount
at
issue here when projected to the total audit universe. State
Brief
(Br.) at 1-2. (HCFA reserved the right to verify the accuracy of
this
calculation. HCFA Br. at 2, n.2.)
The State asserted that the six cases were properly claimed as
family
planning services, in that each claim contained an affirmative
notation
in a box entitled "family planning indicator." HCFA argued,
however,
that careful review of the procedures, diagnoses, and case records
made
clear that these notations were erroneous and that the services
provided
did not in fact relate to family planning. The State responded
that the
services provided could at times be associated with family
planning. In
cases where a procedure is possibly related to family
planning, the
State contended that the family planning indicator, rather than
the
diagnosis, should be determinative of whether family planning
was
involved in each specific case.
We find that a review of the claims alone does not demonstrate that
family
planning services were provided. Further, we find that the State
has
the burden of demonstrating that the claims were eligible for the
enhanced
rate of FFP (90%) paid for family planning services. 1/ We
also find
that the State failed to carry this burden, because the audit
demonstrated
that the family planning indicator is not reliable.
Therefore, we conclude
that the 6 claims were not eligible for enhanced
FFP and uphold the
disallowance.
Legal Authority
Section 1903(a)(5) of the Act provides that states with approved
state
plans receive FFP at the rate of 90 per cent (often called an
enhanced
rate) for expenditures "attributable to the offering, arranging,
and
furnishing . . . of family planning services and supplies."
Federal
regulations implement this payment provision without defining
"family
planning." 42 C.F.R. .. 433.10(c), 433.15(b)(2). The
parties agreed
that the applicable definition was in State regulations, which
state
that --
Family planning services mean the offering, arranging
and
furnishing of those health services which enable
individuals,
including minors who may be sexually active, to plan
their
families in accordance with their wishes, including the
number
of children and age differential, to correct infertility, and
to
prevent or reduce the incidence of unwanted pregnancies.
Such
services include professional medical counseling
services,
prescription drugs, non-prescription drugs and medical
supplies
. . . and sterilization. Family planning services do
not
include hysterectomy procedures.
18 NYCRR 505.13(a); see HCFA Brief (Br.) at 3, State Br. at 4.
Factual Background
The audit on which this disallowance was based, entitled "Review
of
Inpatient and Ancillary Services Billed as Family Planning Under the
New
York State Medicaid Program," tested the validity of the
claims
identified as family planning through the State's Medicaid
Management
Information System (MMIS) edit programs. HCFA Exhibit (Ex.)
1. The
claims selected had service dates from December 31, 1983 through
August
11, 1989 and involved a total of 16,238 inpatient services and
289,471
ancillary services (meaning practitioner, clinic, and
laboratory
services), after the auditors eliminated certain services subject
to
previous audits and other services which the auditors felt
were
specifically designated as or most likely to be family
planning
procedures. From the remaining universe, the auditors selected
105
inpatient and 105 ancillary claims for a detailed review.
The auditors found that the claims contained codes which MMIS used
to
identify family planning services. Certain procedures and
diagnoses
were classified as family-planning related. However, MMIS
also would
claim at an enhanced rate for any claim which had a "Y" (for yes)
in a
box designated as a "family planning indicator," regardless of
whether
the procedure or diagnosis was listed among those related to
family
planning. HCFA Ex. 1, at 9, 21. Furthermore, MMIS would
claim at an
enhanced rate for any claim submitted by a clinic identified as
having
family planning as its specialty by a code (906), even if the
family
planning indicator was marked "N" and the procedure and diagnosis
were
unrelated to family planning. Id. at 11, 21.
Except for two claims (not at issue here) classified as family
planning
due to clerical or programming errors, these two codes were the
basis
for the State's claims for enhanced funding in all of the 65
ancillary
services in the sample which the auditors determined were not
related to
family planning. In making their determination, the auditors
reviewed
all the information on the claim forms, as well as each
recipient's
history of other services. As noted above, the State
contested here
only six of the 65 determinations regarding ancillary
services.
In an earlier phase of this review (Audit Control No. CIN 02-88-01026)
all
inpatient claims of at least $10,000 during the same time period
(180 claims)
were examined, and disallowances (of the portion of FFP
resulting from the
claim of enhanced rates) were recommended relating to
all the claims.
One hundred and sixty-two claims were found to have no
relation to family
planning at all, and those disallowances were not
contested by the
State. The remaining cases involved sterilizations
performed during a
hospitalization for delivery of a baby (so the
auditors contended that only a
small part of the claim was attributable
to family planning) or performed
without required consent forms. The
State contested only eight of the
sterilization claims. We reversed the
disallowances of two claims
because the period during which the State
had to retain the consent forms had
expired. New York State Department
of Social Services, DAB No. 1284
(1991) (New York I). As to the six
sterilization/delivery claims, we
found that the State had no basis for
treating sterilization as the primary
procedure in those claims and had
"failed to reasonably distinguish costs for
family planning from costs
for other services." Id. at 7.
The Six Cases at Issue
The State argued that the facts of each of the six claims at issue
proved
that family planning services were delivered. Therefore, we
turn
briefly to the specifics of the claims, identifying each by the
case
number assigned by the auditors.
1. Case No. 10
In this case, the procedure code indicated a consultation for a
second
opinion on surgery, and the primary diagnosis was "vaginitis
and
vulvovaginitis, unspecified." HCFA Ex. 2. The family
planning
indicator was marked "Y." The State argued that this
consultation
"could have been conducted for a family planning reason, such
as
infertility." State Br. at 6.
2. Case No. 45
The claim form indicated a brief interview and evaluation, with a
primary
diagnosis of "venereal disease, unspecified" in a 17-year old
female, who had
been treated three months earlier for venereal disease
(and had an earlier
claim, not selected for the sample, for "allergic
rhinitis," which was also
claimed as family planning). HCFA Ex. 3. The
State argued that
the earlier history was irrelevant, since she may have
been treated for
venereal disease then and have "hypothetically" been
seeking treatment for
infertility in this consultation, perhaps
resulting from asymptomatic
venereal disease. State Br. at 7. Again
the family planning
indicator was affirmative.
3. Case No. 50
The procedure code indicated a "comprehensive service," with a
diagnosis
of "routine general medical examination." HCFA Ex. 4.
Nothing related
to family planning appeared on the claim form or in the
patient's
service history. However, the State argued that nothing on
the claim
form precluded family planning services having been provided, that
no
disease was indicated in the diagnosis, and again that an
affirmative
family planning indicator was decisive.
4. Case No. 53
The procedure listed was "comprehensive service," with a primary
diagnosis
of urinary tract infection. HCFA Ex. 5. The same claim
form
showed service on the same date of cervical cauterization for
"erosion
and ectropion of cervix," and prescription of medication for
"vaginitis
and vulvovaginitis." The State argued that the office visit
may have
involved family planning, "despite a diagnosis that is usually
not
associated with a family planning service," because it included the
two
other services, which the State contended must have been
family-planning
related since they were not disallowed. 2/
5. Case No. 66
The procedure listed was a urinalysis, with a diagnosis of
"unspecified
inflammatory disease of female pelvic organs and tissues."
HCFA Ex. 6.
3/ The auditors noted that "[a]ll claims from the
sample provider have
a `yes' indicator in the Family Planning box.
Diagnoses on the claims
include `Acute tonsillitis' (463), `Allergic
rhinitis' (4779), `Pain in
joint' (7194)." HCFA Ex. 6, at 2. 4/
HCFA argued that the provider's
pattern of regularly marking the "Y"
indicator further undermined the
reliability of the indicator. The
State argued that the patient's
history of diagnoses and other services was
irrelevant, and the family
planning indicator was decisive (even if other
claims may have been
marked inappropriately), since here it was possible that
the testing was
done due a complaint of infertility and the disease may have
been
discovered only after testing. State Br. at 13-14. 5/
6. Case No. 68
The claim was for a brief interview and evaluation in connection with
a
general medical examination performed at a clinic with a specialty
code
marked as "general medicine." HCFA Ex. 7. 6/ The auditors
reviewed the
patient's recent history, including diagnoses by the same
provider on
other dates of dysmenorrhea and abdominal pain not involving
genital
organs. They noted that "[a]ll but one of the claims submitted
by this
provider have a yes indicator in the Family Planning box." Id.
at 2.
The State argued that even if services on other dates were
inaccurately
marked as family planning, the legitimacy of this claim "should
be made
on its own merits, independently of the merits of other
claims." State
Br. at 16. Since neither the procedure nor the
diagnosis codes here
"contraindicate" family planning services or establish
treatment for a
disease not related to family planning, the physician's
judgment,
evidenced by the family planning indicator, must prevail, according
to
the State. Id.
Analysis
In all of these cases, the State argued that the procedures performed
or
services rendered and the diagnoses recorded were not inconsistent
with
the possibility of a family planning purpose. In such cases, which
the
State considered possibly related to family planning, the
State's
position was that a "Y" in the family planning indicator box should
be
deferred to as the medical judgment of the attending physician as to
the
purpose of the service.
The State cited to the Guide, which states that some procedures may
be
done for family planning reasons or not, "depending on the
situation,"
and gives the example of removal of scarring in fallopian tubes,
which
might be done to treat infertility or to relieve pelvic pain.
Guide at
7. The State argued that only the attending physician could
know if the
service was family planning-related in such situations, and that
the
physician's affirmative mark in the family planning
indicator
demonstrated that it was. This argument overlooks the fact
that the
Guide goes on to say that the "easiest way to identify the
90-percent
FFP reimbursable procedure is to look at the principal/primary
and
secondary diagnoses on the submitted claim" and that
"the
principal/primary diagnosis should indicate the reason the procedure
was
performed." Id. None of the diagnoses here demonstrates a
family
planning reason for the procedures performed.
The State did not claim that any of the procedure codes in these
cases
were among those identified by MMIS as family planning, but only
that,
under the Guide, they were within categories that could relate to
family
planning in certain circumstances. State Reply Br. at 4-5.
Similarly
in regard to the diagnoses, the State claimed only that "with
the
exception of Cases 50 and 68 [both medical examinations], one
can
clearly see a relationship to the diagnosis, the recipient's
medical
condition, and the possibility that family planning services
were
provided." State Reply Br. at 5 (emphasis added). The only
evidence
offered by the State to identify this possible relationship of
diagnoses
and illnesses to family planning was in the form of speculation,
such as
that a recipient "may" have sought treatment originally for
infertility,
or of reliance on the "Y" notation alone. See, e.g., State
Br. at 8,
13.
Essentially, what the State did was to program the MMIS to claim
the
enhanced rate whenever a claim contained any indication that
family
planning might be involved, based on the procedure code, the
diagnosis
code, the family planning indicator box, or the clinic
specialty. The
predictable result of this approach was that, whenever
these codes were
inconsistent, the State presumed without further
investigation that
family planning services occurred. However, as we
have long held, the
State bears the burden of justifying claims for enhanced
rates. See,
e.g., Florida Dept. of Health and Rehabilitative Services,
DAB No. 1303,
at 11 (1992); Missouri Dept. of Social Services, DAB No.
395, at 6
(1983). It is not enough that the claims could possibly
relate to
family planning, or that the diagnoses do not preclude such
a
determination. Rather, the State must affirmatively document that
the
services were sought for family planning reasons. This requirement
is
supported by the State Medicaid Manual, which provides that
"[o]nly
items and procedures clearly provided or performed for family
planning
purposes may be matched at the 90 percent rate." State
Medicaid Manual,
. 4270.B.2 (September 1988) (State Ex. 3, at Ex. F)
(emphasis added). 7/
As its only substantiation that these services were
provided for family
planning purposes, the State argued that the auditors
should not
"second-guess the judgment of physicians" by looking behind the
presence
of a "Y" in the family planning boxes on these claims. State
Br. at 6;
State Reply Br. at 6-8.
However, the "Y" indicator is not sufficient to make such a
determination
in view of the evidence to the contrary on the face of
these claims and in
the audit as a whole. Among the ancillary services
which were claimed
as family planning because the "Y" indicator was
marked, the auditors found
physician claims for an eight-year old with
an ear infection, for an infant
with a skin disorder, and for a simple
vaginal delivery. HCFA Br. at
9-10, HCFA Ex. 1, at 10-11. 8/ Among the
erroneous laboratory claims
marked with a "Y" indicator were tests
performed on pregnant women and on a
patient diagnosed with asthma. Id.
Similarly, among the inpatient
services marked with a "Y" indicator, the
auditors found claims for treatment
of pneumonia and for blackouts in an
82-year old. HCFA Br. at 11-12,
HCFA Ex. 1, at 9. All these services
are clearly unrelated to family
planning, and the occurrence of such
claims in the sample justifies the
auditors' conclusion that the "Y"
indicator is unreliable.
The State argued that any reference to these examples was improper
because
the State did not appeal them and they do not bear upon whether
the providers
erred in marking the indicator boxes in the cases at
issue. State Reply
Br. at 6-7. Further, the State contended that the
audit as a whole
demonstrated that the "Y" indicator was "more often
than not" accurate.
Id. at 7. The State calculated its accuracy at
75%, based on the
assumption that only 53 of the 210 sampled cases had
undisputed errors (not
including the six at issue). Also, the State
argued that the services
eliminated from the universe because the
auditors accepted the procedure or
diagnosis codes as related to family
planning "presumably" contained a high
number of accurate "Y"
indicators. Id. at 7-8.
We do not agree that evidence of the unreliability of the "Y" indicator
in
other claims reviewed in the audit is improperly considered. Cf.
New
York I, at 4. The State cannot select a few cases in which the
marking
is not wholly implausible, and then insist that we disregard
findings
that the indicator is not consistently reliable, based on many
other
clearly erroneous cases which are not appealed. Furthermore,
the
State's calculation of 75% reliability does not reflect the actual
audit
findings. Of the 210 sampled services, both inpatient and
ancillary,
133 were not allowable as claimed, and 73 of those were found to
be
totally unrelated to family planning, most of them despite a
"Y"
indicator. Thus, the family planning indicator box wholly failed
to
distinguish non-related services about 35% of the time, and caused
some
of the 41 "mixed" delivery/sterilization cases to be entirely claimed
as
family planning. In addition, the auditors noted that some of
the
providers represented in the sample marked all of their claims with
"Y"
indicators, undercutting further the credibility of their markings
in
the sampled services.
Furthermore, we do not accept the State's presumption about how the
claims
eliminated from the universe (because the auditors accepted that
the
procedures were clearly related to family planning) were marked. It
is
perfectly possible that a significant number were marked with
inaccurate "N"
indicators, but were claimed as family planning
nevertheless, because of the
procedure, diagnosis or clinic codes. Even
if they were all accurately
marked with "Y", the family planning
indicator box is relevant only when a
procedure or diagnosis is not
always related to family planning, in order to
identify those which were
performed for a family planning reason. The
auditors found that it
failed to serve its intended purpose of identifying
those cases in which
the purpose was family planning.
We have examined the State's reliance on the Y indicator before in
New
York I, where we rejected the argument that the auditors
were
"second-guessing" physicians. Once the audit demonstrated that
the
provider error resulted in wholly unrelated services being claimed
as
family planning (such as, we noted there, services for appendicitis
or
schizophrenia), the auditors were not required to defer to a method
of
identifying family planning services "based on implausible
factual
assertions." Id. at 4-6. Similarly, here, the auditors
were justified
in looking behind the "Y" indicator once they found evidence
that
providers marked the box in error in a substantial number of cases.
Since the family planning indicator has been demonstrated to be
an
unreliable indication of whether services were provided for a
family
planning service, the State was required to substantiate the
eligibility
of these claims for enhanced funding by other evidence of their
relation
to family planning. The State failed to do this, and therefore
the
disallowance is sustained.
Conclusion
For the reasons explained above, the disallowance is sustained.
___________________________
Cecilia
Sparks
Ford
___________________________
Norval
D. (John)
Settle
___________________________
Donald
F.
Garrett
Presiding
Board
Member
1. The disallowances which the auditors recommended generally
reflected
only the difference between the enhanced rate of 90% and the
State's
normal medical assistance rate of 50%, except in a few instances
where
abortion-related services were determined to be ineligible for any
FFP.
HCFA Br. at 8, n.5; HCFA Ex. 1, at 7.
2. The State argued as to this case that these two additional
services
were not disallowed, so they must have been accepted as related
to
family planning, and that it was possible that the
"comprehensive
service" was an office visit which was required for the
services allowed
as family planning-related. In that case, the State
contended, it would
be impossible to determine how much of the single
procedure to allocate
to family planning. However, this argument fails
because the other two
services were never accepted by the auditors as family
planning-related;
they simply were not in the sample that the auditors
reviewed, which was
selected by service item so that not every item on a
claim form was
included. HCFA expressly denied that these items would
be reimbursable
as family planning, any more than the sampled item.
HCFA Br. at 18.
3. The auditors noted two other services performed by the same
provider
on the same day, a pelvic examination under anesthesia and
an
"intermediate service," both of which were also claimed as
family
planning. The State called the disallowance of the urinalysis,
but not
the other two services, inexplicable, but the same response discussed
in
the footnote above accounts for it, as the other two services were
not
in the sample. Compare State Br. at 12 with HCFA Br. at 18-19.
4. The State apparently misread this notation, since the State
refers
to the auditors finding all claims from the sample "period" (instead
of
"provider") having been marked as family planning, and argues that
a
different physician may have been involved. State Br. at 12-13.
5. The State argued that even if a medical condition
requiring
treatment is identified by a test, enhanced funding is still
available
if the testing was originally done for a family planning
reason. State
Br. at 13. The State relied on HCFA's Financial
Management Review Guide
for Family Planning Services (Guide), which states
that screening tests
such as chemistry and microbiology "would be covered at
90-percent FFP
when performed routinely as part of an initial or regular
follow-up
visit/examination for family planning purposes . . . ." Guide
at 8
(emphasis in original) (State Ex. 3). Both parties treated the
Guide as
the relevant expression of HCFA policy. State Br. at 5, HCFA
Br. at 20.
However, the Guide also states that "[s]creening tests/services
not done
for a family planning purpose would not be eligible for 90-percent
FFP."
Guide at 8. Therefore, we are left with the question of whether
any
family planning purpose has been documented for the urinalysis in
this
case. Since we find no adequate documentation of such a purpose,
we
need not consider the additional requirement that such tests
be
routinely performed at family planning visits to be reimbursable
at
enhanced rates.
6. In Case No. 68, the State argued that the code indicating that
the
clinic specialty was general medicine should not have carried any
weight
in determining the nature of the services provided. State Br. at
16.
HCFA agreed that the clinic specialty was not decisive, noting that
the
audit also found improper claiming by the State due to reliance
on
clinic claims showing a family planning specialty. Nevertheless,
HCFA
argued, the auditors did not err in considering this element as part
of
determining whether the claim is correctly coded. HCFA Br. at 21,
n.9.
We see nothing improper in considering all the information
available
relating to a claim in ascertaining whether it does or does not
relate
to family planning, although we agree that the specialty of a
clinic
bears little weight in that effort.
7. Both parties treated this revision of the State Medicaid
Manual
provision as governing, although its date fell within the audit
period.
8. It is uncontested that pregnancy and delivery are unrelated
to
family planning, although some portion of the costs of
the
hospitalization may be family planning related when a
sterilization
occurs at the same time. In addition, the auditors found
claims marked
"Y" for abortion-related services, which the State does not
dispute are
ineligible for any federal reimbursement, as well as being
excluded from
family planning