GAB Decision 276
March 31, 1982 Wisconsin Department of Health and Social Services;
Docket No. 80-187-WI-HC Garrett, Donald; Settle, Norval Ford, Cecilia
The State of Wisconsin appealed the disallowance by the Health Care
Financing Administration (Agency) of federal financial participation
(FFP) claimed under Title XIX of the Social Security Act (Act) for
skilled nursing facility (SNF) services provided at three State
facilities. The Agency disallowed the claims on grounds that the
facilities did not have valid provider agreements in effect for the
relevant periods.
After the Board issued an Order to Show Cause, the State withdrew its
appeal with respect to all of the period in question for the first
facility and a portion of the period in question for the second. After
the State produced documentation, the Agency agreed to withdraw the
disallowance with respect to the remainder of the period in question at
the second facility. /1/ The only question remaining in dispute is
whether the third facility's appeal of the nonrenewal of its provider
agreement under the provisions of the Wisconsin Adminstrative Procedure
Act (APA) makes FFP available under a December 1, 1971 Agency Program
Regulation Guide (PRG-11), which allows FFP where state law provides for
the continued validity of a provider agreement pending appeal. The
Board finds that FFP is available and reverses the disallowance of
$21,356 in FFP for services provided at that facility, the Mount Carmel
Nursing Home.
This decision is based on the written record as supplemented by
conference calls which have been confirmed in writing and made part of
the record.
(2) FACTS
The Title XIX SNF provider agreement for Mount Carmel expired on
January 31, 1974. Subsequently, the State notified the facility that
its provider agreement would not be renewed on account of deficiencies,
and the facility appealed. By notice dated February 25, the State
infomred Mount Carmelhs attorney that a hearing would be held on May 30.
By letter dated February 26, a State hearing examiner informed the
facility's attorney that the hearing would be an administrative hearing
under Chapter 227 Wis. Stats. (Wisconsin's APA). By letter dated May
2, the hearing examiner notified the attorneys for both parties that the
May 30 hearing was adjourned and that instead a prehearing conference
would be held on that date.
The State conducted a survey of the facility on June 4-7, 1974. On
June 17 the facility submitted a plan of correction of deficiencies
(POC), and on June 26 the survey agency issued a certification
memorandum recommending to the single State agency that the facility be
issued a Title XIX SNF provider agreement effective June 17. The single
State agency signed such a provider agreement on July 25. There is
evidence in the record that sometime after July of 1974 representatives
of the parties advised the hearing examiner that the dispute had been
settled and that there was no need to proceed with the hearing.
The Agency disallowed the State's claim for $21,356 in FFP for the
period June 17 through 25, 1974 on grounds that the provider agreement
cannot be considered to be effective earlier than the date of
certification (June 26). /2/
PREVIOUS BOARD DECISIONS
This is one in a series of cases before the Board dealing with the
availability of FFP after a state terminates or refuses to renew a
facility's provider agreement and the facility appeals that decision.
In Ohio Department of Public Welfare, Decision No. 173, April 30, 1981,
the Board held that under PRG-11 and 45 CFR Section 205.10(b)(3), FFP is
available where the the facility appeals the adverse determination to a
state or federal court and the court orders the state to continue
payments because of that appeal, thereby effectively continuing the
provider agreement. In Ohio the Board further held that where the
facility is not upheld on appeal FFP would be available under PRG-11 for
up to 12 months from the expiration of the provider agreement which the
State terminates or does not renew or until completion of the next
survey/certification cycle, whichever is sooner.
(3) Colorado Department of Social Services, Decision No. 187, May 31,
1981, extended the Ohio holding to a case in which the facility brought
an administrative appeal under the Colorado APA. The Colorado result
was based on PRG-11 alone. PRG-11 sets out the basic rule that FFP is
not available if a facility does not have a currently effective provider
agreement, but notes an exception where "State law provides for
continued validity of the provider agreement pending appeal."
PENDENCY OF THE APPEAL
The State argued that the Wisconsin APA provides for the continued
validity of provider agreements pending appeal, and accordingly,
following Colorado, PRG-11 applies to make FFP available for the period
in question. The Agency did not challenge the State's position
regarding the Wisconsin APA, but rather argued that PRG-11 does not
apply here. /3/ The Agency argued that PRG-11 applies only where the
facility is engaged in seeking review of the State's nonrenewal action
rather than involved in a survey/certification process directed toward a
new provider agreement. The Agency pointed out that in this case the
record shows no steps being taken in the appeal after the May 2 notice
from the hearing examiner that a prehearing conference had been
scheduled in place of the May 30 hearing. The Agency would have the
Board view this case in terms of the facility's concern with becoming
recertified and on that basis receiving FFP rather than with
establishing that the prior nonrenewal action was improper -- concern
with current compliance rather than with the appeal. The important
facts, accepting the Agency analysis, would be the June 4-7 survey, the
June 17 plan of correction, the June 26 certification memorandum, and
the July 25 provider agreement. Under this approach, FFP would not be
available for the period June 17 through 25 since a provider agreement
can be retroactive only to the date that the facility is certified (June
26). (See Washington Department of Social and Health Services, Decision
No. 176, May 26, 1981.)
The Board, however, is not persuaded by the Agency's arguments. The
Board concludes that an appeal such as this which has been neither
abandoned nor withdrawn and is on a hearing examiner's docket is
"pending" within the meaning of PRG-11. The Agency's assertions that
the facility's major concern shifted from the appeal to current
certification are speculative and not sufficient to override the
uncontraverted fact that the appeal had been neither abandoned nor
withdrawn during the time in question. In addition, there is no
apparent reason why a facility could not pursue an appeal for a prior
period even though it is in current compliance and can enter into a
provider agreement.
(4)$UCONCLUSION
PRG-11's state law exception to the general rule that FFP is not
available without a currently effective provider agreement applies to
this case. Accordingly, the Board reverses the disallowance at Mount
Carmel for the period June 17 through June 25, 1974. /1/ The State
withdrew its appeal of $66,533 in FFP for services provided at
Boscobel Memorial Nursing Home during the period March 1 through July
30, 1974. The State also withdrew its appeal of the disallowance of FFP
for services provided at Prairie du Chien Convalescent Center (Prairie)
for the period October 1, 1974 foreward. The Agency agreed to withdraw
its disallowance of FFP for services provided at Prairie during the
period April 1, 1974 to October 1, 1974, thus resolving the entire
$137,007 Prairie disallowance for the period April 1 through December
31, 1974. /2/ The period February 1 through June 16 is not at
issue here since the Agency did not consider that period in the audit
which was the basis for this disallowance. /3/ In a brief dated March
4, 1982, the Agency stated that PRG-11 did not apply because the
appeal here was not being "actively pursued." In clarifying this term
during a March 15, 1982 conference call, the Agency attorney stated that
he did not mean to imply that the appeal had been abandoned or
withdrawn, but that the purpose of the appeal was to establish
compliance as of January 31, 1974 and the record revealed nothing being
done to further that purpose after May 2, 1974.
OCTOBER 22, 1983