DEPARTMENTAL GRANT APPEALS BOARD
Department of Health and Human Services
SUBJECT: Ohio Department of Human Services
Docket No. 86-111
Decision No. 824
DATE: January 14, 1987
DECISION
The Ohio Department of Human Services (State/Ohio) appealed a decision
by
the Health Care Financing Administration (HCFA/Agency)
disallowing
$101,956.44 in federal funds claimed by the State under the
Medicaid
program of the Social Security Act (Act) for the quarter ending
March
31, 1986. The Agency based the disallowance on its finding that
Ohio
did not make a satisfactory showing that it had "an effective program
of
medical review of the care of patients in mental hospitals . .
.
pursuant to paragraphs (26) and (31) of section 1902(a) [of the
Act]
whereby the professional management of each case is reviewed
and
evaluated annually by independent professional review teams."
Section
1903(g)(1) of the Act. Specifically, HCFA alleged that the
State's
quarterly showing failed to conform to the statutory and
regulatory
requirements because it did not properly indicate that State
reviewers
had failed to conduct a timely annual review at one mental
hospital, the
Millcreek Psychiatric Center for Children (Millcreek) nor
state the
reason for the failure. Further, HCFA
alleged that the reasons
subsequently provided by the State for missing this
review did not
comply with the established statutory exceptions.
Based on the following analysis, we uphold the disallowance subject
to
possible recalculation as discussed below.
Applicable Law
Section 1903(g)(1) of the Act requires that the state agency
responsible
for administration of the Medicaid program make a quarterly
showing that
the--
State has an effective program of
medical review of the care of
patients
in mental hospitals . . . pursuant to paragraphs
(26)
and (31) of section 1902(a) whereby
the professional management
of each case
is reviewed and evaluated at least annually
by
independent professional review
teams.
Under section 1902(a)(26), a state Medicaid program which
includes
inpatient mental hospital services must provide that--
(A) with respect to each patient
receiving such services, for a
regular
program of medical review (including medical
evaluation)
of his need for such
services, and for a written plan of care;
(B) for periodic inspections to be made
in all mental
institutions within the
state by one or more medical review
teams
(composed of physicians and other
appropriate health and social
service
personnel) of the care being provided to each
person
receiving medical assistance. . .
.
The statute also provides that the Secretary shall find a state to
have
satisfied the annual review requirements, even though it did
not
complete the required reviews by the close of the quarter, where
the
state reviewed not less than 98 percent of facilities requiring
reviews,
including all facilities with 200 or more Medicaid beds, and was
found
to have used "good faith and due diligence" in attempting to conduct
the
reviews or was prevented from reviewing facilities due to
technical
failings. See section 1903(g)(4)B) of the Act; 42 CFR
456.652. See also
Delaware Department of Health and Social Services,
Decision No. 732,
March 21, 1986; Pennsylvania Department of Public
Welfare, Decision No.
746, April 28, 1986.
Background
Millcreek was due for annual review by the end of the first
calendar
quarter of 1986 (March 31). On April 28, 1986, Ohio submitted
its
showing for all facilities due for review by March 31. The showing
form
was an alphabetical listing of 16 facilities. The date of
each
facility's annual review was listed in a column titled REVIEWS
COMPLETED
IN PRIOR 12 MONTHS. The Millcreek review dates were listed as
"3/14/85"
(for the previous annual review) and "4/12/86." See Ohio Ex.
D. Thus,
Millcreek was listed among those facilities with reviews
completed by
the close of the first quarter even though its review actually
took
place approximately two weeks late. The showing contained no
reason for
the late review, nor any indication that Ohio wished to take
advantage
of the statutory exceptions. Approximately two weeks after
Ohio
submitted its showing, HCFA notified the State that Millcreek did
not
appear to have been timely reviewed. In response, Ohio submitted
a
letter from the State survey agency, dated May 15, 1986, indicating
that
the review had been delayed past the anniversary date due to
"the
departure of a review team member at a time when it was
impossible
because of workloads, to reschedule other reviewers on short
notice."
Ohio Ex. E. Ohio did not further elaborate on the
circumstances
surrounding its failure to review Millcreek by the close of the
quarter
and did not then indicate that it wished to be excused for the
late
review under a statutory exception.
Before the Board, HCFA argued that Ohio's quarterly showing was
deficient
for the following reasons--
o Ohio's certification that the
annual review requirements
were
met for
facilities requiring review (42 CFR 456.654(a)(1))
was
defective because
Millcreek was listed as a facility
that
received a timely
review, even though it had not.
o Ohio did not submit a
certification of reasons why a
statutory
exception to
the annual review requirement should apply, nor
a
statement that it
intended to claim either exception.
Ohio admitted that its reviewers had failed to conduct a timely
annual
review at Millcreek. However, Ohio argued that since the
facility was
reviewed within two weeks of the close of the quarter the State
had
satisfied the statutory requirements. Ohio maintained that the
statute
itself does not establish a timetable for submitting the reasons for
a
late review and that no statutory purpose would be served by
sustaining
the disallowance since Millcreek was ultimately reviewed shortly
after
the close of the quarter. Further, Ohio argued that even if we
uphold
the Agency's findings concerning the missed review and the
deficient
showing, the amount of the disallowance should be recalculated.
Ohio
Brief, pp. 8-13.
Analysis
We conclude that Ohio's showing fell short of the statutory and
regulatory
requirements in the instant case. Section 1903(g) provides
that a
showing must demonstrate either full compliance with the medical
review
requirements or compliance with the exception provisions of
section
1903(g)(4)(B). 1/ Moreover, section 1903(g)(4) precludes the
Secretary
from finding a state's showing to be satisfactory if it is not
submitted
within 30 days of the calendar quarter in question unless the
state
demonstrates good cause for not meeting the deadline. Thus, the
statute
provides notice that a penalty will be imposed if a state fails
to meet the
requirements relating to the showing notification itself.
The regulations
require that the state must include, as part of the
"content" of the showing,
a certification that it has completed on-site
reviews of each recipient in
every facility in the state by the end of
the quarter in which a review is
required. If the state fails to
complete reviews in any such facility,
the State must provide a
certification of the reasons the review requirements
were not met in the
facility. 42 CFR 456.654(a)(1). 2/ In
addition to the certifications,
the state must provide a list of all
facilities participating in
Medicaid (section 456.654(a)(2)); a list of all
dates of on-site reviews
completed by review teams any time during the
12-month period ending on
the last day of the quarter (section
456.654(a)(5)), and for all
facilities in which an on-site review was
required but not conducted, a
list of the facilities by name, address and
provider number. Finally,
the regulations require that the showing must
be in the form prescribed
by the Agency. The Agency has issued an
action transmittal to states
participating in the Medicaid program which
provides explicitly that
facilities reviewed in the 30-day period after the
close of the quarter
must be included in the showing on the list of
facilities not reviewed.
Moreover, states are specifically directed to attach
a full explanation
of the circumstances for any missed facility review.
If a State
believes that the exception clauses of section 1903(g)(4)(B)
apply, "the
state must explain its attempts to perform the review and attach
a copy
of its original review team schedule showing the planned dates
of
review." HCFA Action Transmittal 79-61, July 2, 1979, at paragraphs
V
and VI.
On the basis of the plain meaning of the foregoing authorities,
we
conclude that the quarterly showing notification must include at
a
minimum specific identification of facilities not reviewed in
any
quarter as well as the reasons for the missed review. If a state
does
not provide the appropriate certification and accompanying lists,
the
Secretary would not be able to determine on the face of the
showing
whether the state was in compliance with the full requirements or
the
exceptions. If the Secretary did not perform a comprehensive
validation
survey and the showing itself did not fully identify the
deficiencies
and the reasons for the deficiencies, the Secretary would
have
insufficient basis upon which to consider whether a disallowance
was
justified and may be unable to detect instances where the statute
would
require imposition of a disallowance. Moreover, such a
requirement
furthers an important program purpose in that it obligates a
state to
give contemporaneous reasons for any review deficiency at the time
the
deficiency occurred, not a justification several months
after-the-fact
in response to Agency inquiries.
In the instant case, Millcreek was listed alphabetically with 15
other
facilities for which timely reviews had been performed. The review
date
for the facility, which was after the end of the quarter in which it
was
due, was set out in a column reserved for listings of timely
reviews.
The State did not specifically identify Millcreek as not having
been
reviewed on time either in a separate listing or in some other
manner.
Additionally, the State offered no reason on the showing why the
review
was late and did not claim that a statutory exception excused the
late
review. Thus, based on the showing alone HCFA could not
ascertain
whether an exception would apply. There is no indication in
the record
that, absent prodding from HCFA, the State ever intended to comply
with
the full showing requirements as they pertain to a statutory
exception.
Ohio's only attempt to explain the circumstances surrounding
the
Millcreek review came in response to HCFA's request for an
explanation
after HCFA realized that Millcreek was not timely reviewed and
before it
issued a disallowance. Indeed, this attempt exceeded the time
permitted
by 42 CFR 456.654(c) for late submissions of quarterly
showings
permitted for good cause shown. See HCFA Brief, p. 13; Ohio
Ex. C.
Finally, as noted earlier, Ohio's explanation was very general
providing
HCFA (and now this Board) with no explanation other than to say
that a
reviewer left State service at a point which made a timely
review
impossible. There was no attempt to explain when the review
was
originally scheduled, when the reviewer left State service, or
what
attempts, if any, were made to reschedule a timely review. Any
such
information relating to the missed review was available to the State
at
the time it submitted its quarterly showing on April 28.
This situation is distinguishable from other cases where a state
was
unaware of potential violations until well after its quarterly
showing
and thus could not have included in its showing the deficiencies and
the
reasons for not meeting the requirements. See Delaware,
supra. Ohio
knew that an entire facility had not been reviewed until
the month
following the quarter in which a review was due and that it could
not be
found to be in compliance unless it demonstrated that an
exception
applied. The regulations clearly establish a prescribed
course of
action under such circumstances which Ohio did not follow. Although
Ohio
completed its review of Millcreek within approximately two weeks of
the
close of the quarter and prior to its quarterly showing, Ohio was
still
required to include this facility in a list as an unreviewed
facility
and to provide a reason for not reviewing the facility on time.
Accordingly, we find that Ohio failed to meet the requirements for
a
satisfactory showing with regard to Millcreek. In view of our
findings
on this issue, it is unnecessary for us to address any of the
remaining
points raised by the Agency in support of the disallowance.
Calculation of the Disallowance
The State alleged that the data and methodology used in computing
the
penalty should be revised and agreed to submit pertinent data
if
necessary. HCFA generally agreed to consider such data. Accordingly,
we
remand the calculation issue to the parties for their
prompt
consideration. If the parties are unable to resolve this issue,
they
may return to the Board for our assistance on that limited matter.
Conclusion
Subject to any possible reduction which may result from recalculation
of
the disallowance, we uphold the disallowance in the amount
of
$101,956.44.
_________________________ Judith A. Ballard
_________________________ Alexander G. Teitz
_________________________ Donald
F.
Garrett Presiding Board Member
1. Section 1903(g)(4)(B) provides that the Secretary
shall find a
showing satisfactory "if the showing demonstrates" that the
98
percent/200 bed, good faith and due diligence standard is met.
The
section then continues "or if the State demonstrates . . . that
it
would have made such a showing but for failings of a technical
nature
only." While this latter language is not as clear in requiring
that the
showing demonstrate compliance where the technical failings
exception is
invoked, the Agency's longstanding interpretation is that a
state should
at least provide as part of its showing an identification
of
deficiencies and a statement of reasons.
2. The regulation specifically requires certification
of full
compliance or "if applicable," a certification of reasons. Although
the
State argued that the reference to "if applicable" gave it a degree
of
discretion in deciding whether to provide a certification of reasons,
we
find that the regulation means that a certification of reasons
is
applicable (and hence required) when a state is unable to provide
the
certification of full