CASE | DECISION | JUDGE

Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD
Appellate Division
IN THE CASE OF  


SUBJECT: New Jersey Department of Human Services

DATE: June 13, 2001

            

 


 

Docket No. A-01-70
Decision No. 1773
DECISION
...TO TOP

DECISION

The New Jersey Department of Human Services (New Jersey) requested reconsideration of the Board's decision in New Jersey Dept. of Human Services, DAB No. 1773 (2001). In that decision, the Board upheld the determination by the Administration for Children and Families (ACF) to disallow $75,447 in federal financial participation representing adjusted indirect costs incurred by Cape May County. The Board found that the disallowed claim was filed beyond the two-year filing period provided by section 1132(a) of the Social Security Act and that the claims did not qualify for any of the exceptions, specifically the exception for adjustments to prior year costs, to the two-year filing requirement.

The Board's regulations permit the Board to reconsider a decision where a party promptly alleges a clear error of fact or law. 45 C.F.R. § 16.13. New Jersey did not allege any errors of fact in the Board's decision. Rather, New Jersey asserted that the Board unreasonably interpreted section 1132(a) by setting time limits for claims that qualify under an exception permitted by the statute.

New Jersey contended that the congressional purpose in enacting section 1132(a) of the Act was to preclude states from submitting newly identified and previously unclaimed costs years after the costs were incurred. As the claims at issue were not newly identified or previously unclaimed, New Jersey insisted that the congressional purpose was satisfied here. New Jersey argued that, as long as its claim met the regulatory definition of one of the exceptions, Congress mandated that payment cannot be denied. According to New Jersey, because Congress placed no time limitation on the submission of a claim that falls under the statutory exceptions, Congress' "intent was unmistakable: no payment with respect to any expenditure can be denied." Request for Reconsideration at 4 (emphasis in original).

In its decision, the Board referred to language in the preamble to the regulations, 45 C.F.R. Part 95, Subpart A, promulgated to implement section 1132(a) that the exception for adjustments to prior year costs should be construed narrowly, with adjustments to interim rates allowable when they were "unforeseen and unavoidable." New Jersey argued that the Board's reliance on the preamble language as a factor in upholding the disallowance was incorrect, in that the only reasonable interpretation of the preamble's wording is that rate adjustments based on interim rates by their very nature are "unforeseen and unavoidable." New Jersey further questioned ACF's reliance on this interpretation in its disallowance determination, contending that ACF had the obligation to explain in the preamble that it intended to allow adjustments to interim rates only when they were "unforeseen and unavoidable" and to further define what "unforeseen and unavoidable" meant. New Jersey concluded that the "interpretative rule" which the Board found "reasonable" in its decision was never contemplated by ACF and never announced by ACF, thus depriving New Jersey of adequate notice of this interpretation. Request for Reconsideration at 9.

We find no merit whatsoever in New Jersey's arguments. For the most part, New Jersey's contentions are iterations of arguments already considered and rejected by the Board in its decision. For its assertion that the congressional intent behind the enactment of section 1132(a) was that there is to be no time limitation placed upon the submission of an adjusted claim, New Jersey pointed to nothing, in the legislative history or in court decisions or elsewhere, to support its position. In fact, New Jersey's position flies in the face of what was the clear purpose of section 1132(a), to facilitate the Department's ability to plan and administer its budget. See Connecticut v. Schweiker, 684 F.2d 979 (D.C. Cir. 1982), cert. denied, 459 U.S. 1207 (1983). Under New Jersey's theory that there are no time limits on the submission of adjusted claims, a state could theoretically delay the submission of an adjusted claim indefinitely and still demand that the claim be honored, thus frustrating the Department's ability to budget and expend its resources. New Jersey's reading of section 1132(a) is the exact opposite of the purpose of the statute and gives a demonstrably overly broad interpretation of the exceptions to the timely claims requirement. A state would have no incentive to expeditiously submit its claims for reimbursement if it knew that there would be no penalty for procrastination.

Furthermore, New Jersey's argument that ACF and the Board incorrectly interpreted the "unforeseen and unavoidable" language of the preamble is equally unpersuasive. As the Board said in its decision, ACF's interpretation in the preamble of the "adjustment to prior year costs" exception "is clearly reasonable in light of the purpose of section 1132(a) that claims be made in a timely manner in order to ensure an efficient budgetary process." DAB No. 1773, at 6. The suggestion by New Jersey that ACF was somehow derelict in failing to explain more fully in the preamble exactly what it meant by "unforeseen and unavoidable" is not convincing in that these are plainly words of limitation on the availability of the exception for an adjustment to prior year costs, a limitation consistent with other language of the preamble that the exception should be construed narrowly. New Jersey appears to be under the impression that an agency in promulgating a regulation must explain what it means for every term used. It is clearly unreasonable to expect an agency to give definitions of commonly accepted phrases and to delineate every possibility that may occur.

Moreover, it bears repeating that the claims at issue were incurred in calendar year 1994, and were finalized in a document dated March 27, 1998, but were not submitted by New Jersey for reimbursement until May 1, 2000. We consider it noteworthy that New Jersey, even with the knowledge that the Board found this sequence of events problematic, still has not proffered any explanation, let alone a credible explanation, for its delay in submitting the claims in question. The failure to even offer an explanation leads to the reasonable conclusion that the delay was anything but "unavoidable."

Conclusion

On the basis of the analysis above, we affirm the conclusions in DAB No. 1773, and therefore deny the request for reconsideration.

 

JUDGE
...TO TOP

Cecilia Sparks Ford

M. Terry Johnson

Marc R. Hillson
Presiding Board Member

CASE | DECISION | JUDGE