DEPARTMENTAL GRANT APPEALS BOARD
Department of Health and Human Services
SUBJECT: Florida Department of Health and Rehabilitative Services
Docket No. 87-35
Decision No. 942
DATE: March 23, 1988
DECISION
The Florida Department of Health and Rehabilitative Services
(Florida,
State) appealed a determination by the Health Care
Financing
Administration (HCFA, Agency) disallowing $331,116 claimed by the
State
as federal financial participation (FFP) under Title XIX of the
Social
Security Act. The claim was for services provided during the
period May
30, 1985 to November 14, 1985, to Medicaid recipients by Avon
Park
Cluster, an intermediate care facility for the mentally
retarded
(ICF/MR).
HCFA determined that the State had failed to follow federally
required
procedures when it continued Avon Park's certification during the
period
in question. Based on our analysis below, we uphold the
disallowance in
full, for the following reasons:
o The recipients were relocated
from the Avon Park
cluster
buildings to
rental space in a hospital but the State did
not
determine that the
rental space met building-specific
and
related ICF/MR
standards.
o The State did not ascertain, at
the time that the
recipients
were
returned to the cluster buildings, whether
those
buildings met
building-specific and related ICF/MR standards.
o The State did not ascertain
whether Avon Park had
corrected
deficiencies
in physical therapy and nursing services as
of
the completion date
in the plan of correction.
o The State improperly granted a
two month extension of
Avon
Park's period of
certification.
HCFA argued also that the disallowance should be upheld because
the
recipients did not receive active treatment during the period
in
question. We do not reach the active treatment issue in view of
our
findings concerning the lack of proper certification.
Factual Background
Avon Park was initially certified from November 1984 through April
1985,
based on a plan of correction; resurveys were scheduled for February
and
July 1985. HCFA Ex. A. The first resurvey was performed in
January
1985 and resulted in the continuation of certification based on a
new
plan of correction. Most of the corrections were completed at the
time
of a March 1985 revisit. HCFA Ex. D. Following the revisit,
the State
certified Avon Park for the period May 1, 1985 through October 31,
1985.
HCFA Ex. E.
A health problem caused by inadequate ventilation in the cluster
buildings
occupied by Avon Park resulted in the evacuation of the
recipients and their
relocation to Walker Memorial Hospital on May 30,
1985. State Ex. 5,6;
1/ HCFA Ex. F. The Avon Park staff continued to
serve the recipients at
Walker Memorial and occupied offices in the
rental space there. The
State was "in touch with Avon Park on a weekly
basis" during the time the
recipients were at Walker Memorial and made
an "appraisal visit" to that site
on August 29-30, 1985. 2/ State
Response to Order to Develop the
Record, p. 3; HCFA Ex. H. The
recipients were returned to the cluster
buildings on October 1, 1985.
HCFA Ex. H, I.
The State conducted a full survey on October 7-9, 1985, and found a
number
of deficiencies. HCFA Ex. K, L. In a revisit on November
13-14,
1985, the State found most of the deficiencies had been corrected
and
the facility was recertified. HCFA Ex. M; HCFA Brief, pp. 9-10.
Analysis
I. Avon Park's certification was no longer valid after the
relocation
of the recipients since the State
did not determine that the
rental space at
Walker Memorial and later the reoccupied
cluster
buildings met building- specific and
other related ICF/MR
standards.
As we noted in our background narrative, the State had certified Avon
Park
for the period May 1 through October 31, 1985 (later extended to
December 31,
1985). However, on May 29, 1985, Avon Park relocated the
recipients to
rental space at Walker Memorial because the cluster
buildings were found to
be a health hazard. The recipients were returned
to the cluster buildings on
October 1, 1985. Neither at the time of the
relocation to Walker
Memorial nor the return to the cluster buildings
did the State make a
specific determination that the facilities housing
the recipients met the
building-specific and other related standards for
an ICF/MR.
A. The period at Walker Memorial May 29-September 30, 1985
HCFA argued that the certification of Avon Park had to
be
building-specific and could not be a basis for FFP for services to
the
recipients during a time when they were housed in a building which
the
State had not surveyed and shown to be certifiable under
the
building-specific standards for an ICF/MR.
The State argued that Avon Park's certification moved with it to the
space
it occupied temporarily at Walker Memorial, just as did the
recipients, the
staff, the program of care, and the equipment. The
State alleged that
in the past when recipients were relocated in an
emergency, the State
determined that the building to be occupied during
the emergency met Life
Safety Code standards. The State contended that
it was unnecessary to
do that here because Walker Memorial had been
certified as an acute care
hospital under the Medicaid program and this
meant that the hospital building
complied with Life Safety Code
standards.
The State's position, however, conflicts with the regulations. Many of
the
ICF/MR standards are building-specific and consequently the State
was obliged
to visit Walker Memorial as soon as possible after the
relocation of the
recipients to ascertain whether the space occupied at
Walker Memorial could
have met those and related standards. 3/ Even if
some of those
standards were the same as those of an acute care
hospital, the State could
not reasonably rely on the hospital
certification since how the space is
being used may affect compliance
with the standards. See, e.g., 42
C.F.R. 442.254(b) (1984) (which
requires a hospital already participating in
Medicaid to meet ICF/MR
standards if the hospital is also a provider of
ICF/MR services).
The State visited Avon Park at Walker Memorial only once, for an
"interim
appraisal" on August 29-30, 1985. On that occasion, the State
found
"unsafe" conditions in the rooms and central hall rented from
Walker
Memorial. The rooms were in a disorganized condition and crowded
with
equipment and furniture. The central hall, which led to the exits,
was
crowded with work tables, chairs, medication carts, a laundry cart,
and a
canvas laundry hamper. The State official recommended a visit by
the
Fire Safety Consultant "as soon as possible." HCFA Ex. H.
Thus,
the State here simply did not make the required determinations
about
whether Avon Park's operations in the Walker Memorial rental space
met
the ICF/MR standards. If anything, the observations of the
State
official indicate strongly that the standards were not met.
The State contended that the emergency caused by the health threat at
the
cluster justified Avon Park's "reasonable and prudent" move to
Walker
Memorial. In its reply brief (p. 4), it alleged that in a
previous
similar crisis a high number of patient deaths occurred
following the move of
136 developmentally disabled people with physical
handicaps and special
medical needs. This experience allegedly prompted
a study and a report,
The Hodges Report, which emphasized the importance
of "life preservation"
requirements. Reply Brief, pp. 5-6; State Ex.
18.
HCFA did not dispute that Avon Park had good reason -- indeed
was
compelled -- to move the recipients out of the cluster buildings.
That
is not an issue. The issue is whether the State is entitled to FFP
if
the recipients are housed in quarters which are not certified for
ICF/MR
use. Many of the building-specific standards (such as the Life
Safety
Code standards) that must be met for FFP to be available are truly
"life
preservation" requirements. As we discussed above, the space
rented by
Avon Park at Walker Memorial was not certified for use as an ICF/MR
and
the State was not entitled to FFP for the time that the recipients
were
located there.
B. The period following the return to the cluster
buildings on
October 1, 1985
As had been anticipated, the recipients were returned to the
cluster
buildings on October 1, 1985. Prior to their return, on
September 25,
1985, the State's Medical Program Administrator for Preventive
Health
Services determined that the inadequate ventilation which caused
the
health problem had been corrected. Nevertheless, here again the
State
had an affirmative duty to determine whether the buildings housing
the
recipients met the ICF/MR standards.
The State had determined that the cluster buildings met the
ICF/MR
standards as of the March 1985 revisit, but in the meantime
the
buildings had been found to be a health hazard and were not occupied
for
four months. The State administrator's determination that the
health
problem had been resolved was not sufficient to establish that
the
buildings still met other ICF/MR standards, and the State could
not
reasonably assume that nothing had changed in the buildings since
the
March revisit. To the contrary, where there is a compliance
question,
as there was here, the State is required to conduct on
onsite
inspection. 42 C.F.R. 431.610(g)(3). The State surveyed
Avon Park on
October 8- 9, 1985, but did not make a determination on
certification
until after a revisit on November 13-14, 1985.
Thus, the State did not determine that the cluster buildings met
ICF/MR
standards during the period after the recipients were returned
there,
from October 1 to November 14, 1985. In the absence of
that
determination, the certification remained invalid and the State is
not
entitled to FFP. II. Avon Park also was not
validly certified
during the period in question because the State did not
ascertain the
status of the plan
of correction as of May 31, 1985.
There is another reason why Avon Park was not validly certified
during
most (all but two days) of the period in question. As noted
above, the
State certified Avon Park through October 31, 1985, following the
March
20, 1985 revisit. However, the survey report on that revisit
noted
several deficiencies and established a plan of correction with
a
completion date of May 31, 1985 for correcting those deficiencies.
The State did not revisit or otherwise communicate with Avon Park
to
ascertain whether the plan of correction had been accomplished.
The
State did not conduct a survey scheduled for July 1985 and
subsequently
(on August 28, 1985) rescheduled the survey so that it occurred
after
the recipients had been moved back to the cluster buildings from
Walker
Memorial.
HCFA argued that the State had not followed the prescribed
procedure
because it had not ascertained whether the plan of correction had
been
accomplished by May 31, 1985. Exercising its "procedural look
behind"
authority under 42 C.F.R. 442.30(a) and (c), HCFA retroactively
declared
Avon Park's certification invalid as of June 1, 1985 and contended
FFP
should be disallowed on that basis also.
The State objected that HCFA had not cited this argument as a reason
for
the disallowance until HCFA's brief on appeal. In an Order to
Develop
the Record, the Board tentatively held that this issue was
properly
before the Board, citing several factors. The State made no
further
arguments in support of the objection in its response to the Order,
and
consequently we find that the issue is properly before us.
On the substantive issue, the State contended that a revisit to
ascertain
that the plan of correction had been carried out was not
necessary because
the deficiencies to be corrected were only "elements"
and not "standards" or
"conditions." 4/ The State relied on an excerpt
from HCFA's State
Operations Manual, which states that in some instances
a mail or telephone
contact may suffice in lieu of an onsite visit. 5/
State Ex. 25. The
State suggested that it did not conduct an onsite
visit because none was
required.
The regulations require that a facility meet all requirements
for
certification, but permit a state to certify a facility
with
deficiencies if there is an acceptable plan of correction, as
here. 42
C.F.R. 442.105. The regulations do not mention
"elements" and do not
distinguish between requirements; a failure to meet any
requirement is a
deficiency in need of correction. The plan of correction for
the survey
conducted January 29, 1985 had one "standard not met": a
deficiency
described as "lack of physical therapy services." HCFA Ex.
C. The
survey on March 20, 1985 found that part of that deficiency
still
remained to be corrected. HCFA Ex. D. A physical therapist
was
employed March 1, 1985, but the surveyor found that the therapist
needed
two additional months (to May 31, 1985) to complete evaluations of
the
recipients' needs. In addition, the deficiency relating to lack
of
documentation that physical therapy needs were being addressed was
also
not corrected as of March 20, 1985. 6/ Id. No reference to
"elements"
appears in either the January or the March documents, so we
cannot
determine whether the remaining deficiencies constituted more than
not
meeting "elements." In any event, it has no bearing on the issue
here;
what does matter is that the State found deficiencies and required
a
plan of correction. Thus, there was a compliance question requiring
an
onsite visit or other suitable means of ascertaining that
the
deficiencies had been corrected. 42 C.F.R. 431.610(g)(3).
The State did not show that it had conducted any follow-up on the plan
of
correction due to be completed May 31, 1985. Even the
State's
"appraisal visit" in August 1985 did not address the cited
deficiencies.
The full survey in October 1985 found the standard for physical
therapy
services "not met" and cited as a deficiency that a sample showed
only
one of the recipients had a developmental goal and it was not
offered
until July 1985. HCFA Ex. K. Moreover, HCFA's procedures
require that
a follow-up contact or visit be documented on a specified
form. State
Ex. 25. The State did not produce or offer to produce
such an executed
form, nor did it even allege that it had made the required
follow-up.
Thus, the State did not follow the required procedures and
the
certification of Avon Park was no longer valid after May 31, 1985.
III. The State's two extensions of Avon Park's certification also
were
not valid.
The State certified Avon Park for the period May 1, 1985 through
October
31, 1985 based on an acceptable plan of correction which designated
May
31, 1985 as the date for completing the correction of
deficiencies.
HCFA Ex. E, D. Subsequently, the State extended Avon
Park's
certification to December 31, 1985 so that the survey for another
period
of certification could be performed after the recipients were
returned
to the cluster buildings. HCFA Ex. G.
Even aside from the effect on certification of the move to
Walker
Memorial, we do not find that the State validly could have
certified
Avon Park beyond July 30, 1985. A state may certify a
facility on the
basis of a plan for correcting deficiencies "for a period
that ends no
later than 60 days after the last day for correcting
deficiencies." 42
C.F.R. 442.111(b). Here, that day was May
31. Thus, under the
regulation, the State was authorized to certify
Avon Park only to July
30, 1985, 60 days after the May 31 deadline. Of
course, as we discussed
above, the certification became invalid after May 29,
1985, because of
the move to Walker Memorial, in addition to the failure of
the State to
ascertain the status of the plan of correction on May 31,
1985.
Even assuming, arguendo, that the State's certification might have
been
valid until October 31, 1985, the extension to December 31, 1985 was
not
valid. The State argued that it granted the extension because it
was
impracticable to determine, prior to October 31, 1985, whether Avon
park
met certification standards, citing 42 C.F.R. 442.16. HCFA
contended
that the State had not made a finding that the extension would
not
jeopardize the recipient's health and safety, required by the
cited
regulation as a prerequisite for an extension. The State
contended that
the approval of the extension itself met the regulatory
requirement; if
not the approval, then the October 8- 9, 1985 survey met
the
requirement.
The State's reliance on the approval and the survey is misplaced.
Neither
constitutes the required notice expressing the specific
determination that
the extension would not jeopardize the recipients'
health and safety.
The required notice cannot be implied from the mere
fact of approval of the
extension; such an interpretation would make the
requirement of a specific
determination meaningless. The omission also
was not rectified by the
survey action in October. That survey found
"critical standards not
met;" it made no general finding about the
health and safety of the
recipients, and certainly no finding concerning
the effect of an extension to
December 31. In fact, in October Avon
Park was given only 30 days to
correct the specified deficiencies. Thus
the State did not comply with
42 C.F.R. 442.16 and the extension was
not valid.
IV. It is not necessary for the Board to resolve other issues.
HCFA also based the disallowance on its determination that the
recipients
had not received active treatment during the period in
question. It is
not disputed that an ICF/MR must provide recipients
with active treatment as
defined in 42 C.F.R. 435.1009. The Board has
dealt with the
subject of active treatment in other cases, most notably
Connecticut Dept. of
Income Maintenance, DGAB No. 562 (1984), where we
had the benefit of expert
testimony on that complex issue. However, we
do not need to reach that
issue here because we determine that the
ICF/MR services were not provided in
a facility that was properly
certified to meet ICF/MR standards.
Conclusion
For the reasons stated above, we uphold the disallowance in full.
________________________________ Judith
A.
Ballard
________________________________
Cecilia
Sparks Ford
________________________________ Donald
F.
Garrett Presiding Board Member
1. The State described its exhibits as
"attachments" (to its Brief).
In this Decision, we refer to the documents
submitted by both parties as
exhibits, abbreviated Ex.
2. The State executed a certification form on August
28, 1985,
noting that an "interim appraisal visit" was scheduled and also
that the
return to the cluster was anticipated September 30, 1985. This
form
extended Avon Park's certification to December 31, 1985, so that
the
resurvey, originally scheduled for July 1985, could be performed
after
the return to the cluster. HCFA Ex. G.
3. For example, the ICF/MR standards include the Life
Safety Code
requirements of the Fire Protection Standard, (42 CFR 442.508);
Rated
Capacity of the Building (442.420); Grouping and Organization of
Living
Units (442.444); Resident Living Areas (442.446); Resident
Bedrooms
(442.447 and 448); Storage Space (442.449); Bathrooms (442.450);
Heating
and Ventilation (442.451); Floors in Living Units (442.452);
Emergency
Lighting (442.453); as well as related requirements, such as a
staff
organization plan and procedures for emergencies and
practice
implementing the plan through evacuation drills (442.505, 506).
4. An Agency "All-State Letter" dated May 15,
1975 describes a
procedure for conducting a survey which employs a three-tier
sequence of
"conditions," which consist of "standards," which in turn consist
of
"elements." State Ex. 24. The Letter states that it is
possible to
find a standard "met" even though one or more elements of the
standard
are not met; similarly a condition may be found "met" even though
one or
more standards are not met. It depends upon "a judgment of the
manner
and degree to which the provider satisfies the various standards"
(or
conditions). Id.
5. The example given where a mail or telephone
contact might suffice
is where a facility agreed to amend its bylaws or
written policies.
Verification of correction of the type of deficiencies
described herein
might more appropriately be done by an onsite visit,
however.
6. Another deficiency, absence of documented
developmental goals in
nursing service plans, was given an additional two
months for evaluation
(to May 31, 1985) because although developmental goals
had been
developed by the time of the March revisit, developmental programs
had
not been