Kentucky Cabinet for Human Resources, DAB No. 849 (1987)
DEPARTMENTAL GRANT APPEALS BOARD
Department of Health and Human Services
SUBJECT: Kentucky
Cabinet for Human Resources
Docket No. 86-207
Decision No. 849
DATE: March 17, 1987
DECISION
The Kentucky Cabinet for Human Resources (Kentucky)
appealed a determination by the Health Care
Financing Administration (HCFA),
disallowing $249,677 in claims for federal financial participation
(FFP)
under Title XIX (Medicaid) of the Social Security Act (Act). The disputed
claims were for the
proportion of Kentucky's costs of inspecting and
certifying ambulances which Kentucky argued was
related to ambulance usage
by Medicaid recipients.
The issue presented is whether FFP is
available under the Medicaid program in Kentucky for the costs of
inspecting
and certifying ambulances. The Medicaid program is a joint federal-state
program under
which FFP is available in certain costs of state-administered
health care programs for the needy. The
scope and amount of FFP
available is fixed by statutory and regulatory guidelines and a HCFA-approved
state plan. As we discuss below, we find that Kentucky has not
demonstrated that inspection and
certification of ambulances is within the
scope of costs for which the federal government has agreed to
make FFP
available to Kentucky.
Discussion
Kentucky alleged
that ambulance inspections and certifications were conducted pursuant to federal
Medicaid requirements and the state plan for administering the Medicaid
program. In its brief, Kentucky
cited the federal regulatory
requirement that the state plan designate a state authority, the survey agency,
to determine "for the Medicaid agency if institutions and agencies meet the
requirements for participation
in the Medicaid program." 42 CFR
431.610(e). The state Medicaid agency must have a written agreement
with the survey agency, delineating its responsibilities in determining that
institutions and agencies meet
the requirements for participation in the
Medicaid program. 42 CFR 431.610(f). Kentucky argued that
FFP is
available in expenditures for inspecting and certifying
- 2 -
ambulances because the expenditures were incurred by the
survey agency "to carry out its survey and
certification responsibilities
under the [written] agreement...." 42 CFR 431.610(h)(l).
In its
reply brief, Kentucky also cited the statutory authority of 42 U.S.C.
1396a(a)(33)(A) and (B) 1/.
These sections require that the state plan
provide (A) that the state survey agency shall give guidance to
the state
Medicaid agency, consistent with regulations prescribed by the Secretary, on the
appropriateness
and quality of care furnished to recipients of medical
assistance, and (B) shall determine for the state
Medicaid agency whether
"institutions or agencies meet the requirements for participation in the
[Medicaid] program."
HCFA argued that Kentucky claimed, in
error, costs which were not related to federal requirements and
for which
FFP is not available. HCFA argued that the costs were incurred to maintain
standards required
by state law, not by the federal Medicaid program.
Both the statute and the implementing regulations refer to the
responsibilities of the survey agency in
connection with "requirements for
participation in the Medicaid program." FFP is available only for
survey and
certification responsibilities related to the federal requirements for
participation in the
Medicaid program. 42 CFR 431.610(h)(2). Although
federal regulations contain requirements for
participation in the Medicaid
program for nursing homes and rural health clinics, for example, we know
of
no such requirements applicable to ambulance services. Cf. 42 CFR Parts 481 and
488.
In its arguments, Kentucky apparently confused federal
Medicaid requirements with independent state
requirements. Although
both types of requirements may apply to a provider of services under Medicaid,
FFP is only available for the expenses of surveying and certifying that
providers meet federal Medicaid
requirements. Although the survey form
indicates that some of the standards are participation
requirements of the
Kentucky Medical Assistance Program, the survey form indicates that almost all
of
these standards are
1/Although the authority was cited with a typographical
error, these sections appear to be the only
relevant provisions.
- 3 -
also required under other state regulations. Only the
record-keeping section, listing information which
must be in an ambulance
report form, appears to be based solely on Kentucky Medicaid Assistance
Program requirements, but Kentucky did not identify any specific federal
requirements on which that
section might have been based. See Ex. A,
p. 7. While these requirements may be related to some
federal
documentation requirements for allowable medical expenditures, the federal
requirements apply
only to individual claims, not to the survey and
certification process. If Kentucky has chosen to
incorporate
record-keeping requirements into the survey and certification process, it has
created
independent state standards.
Kentucky asserted that
there would be no state Medicaid requirements without a federal Medicaid
program and that, therefore, all Kentucky Medicaid requirements must be
related to the federal program.
Telephone Conference, March 10, 1987.
While we agree that Kentucky may not have drawn up an
integrated medical
assistance program without federal incentives, under the federal Medicaid
program
each state may design an individual medical assistance program as
long as it meets minimum federal
criteria. Here, it appears that the
Kentucky Medical Assistance Program went beyond the minimum
federal criteria
by integrating some state requirements concerning ambulance surveys.
The ambulance survey and certification process appears to have
concentrated on traditional state concerns
of vehicular safety and the
licensing of professionals who operate the vehicle. Ex. A. Neither
party
asserted that FFP is available for requirements related to the
condition and equipment of the vehicle;
vehicular licensing is an ordinary
state function. And neither the statute nor the regulations contemplate
that
the federal government will financially participate in the traditional state
activities of licensing
medical professionals. Indeed, the regulations
specify that FFP is not available for survey activities
required only by
state laws and regulations, at 42 CFR 431.610(h)(2):
FFP is not available in any expenditures
that the survey agency makes that are attributable to the
State's overall
responsibilities under State law and regulations for establishing and
maintaining standards.
Although federal regulations require that
certain professionals or other service providers hold licenses
from
state authorities to be eligible for payments made under the Medicaid
program, FFP is not available for
the state
licensing process. See,
e.g., 42 CFR 431.715; 42 CFR
- 4 -
440.10(a)(3)(ii). Licensing of medical professionals
is a traditional state responsibility.
.The evidence Kentucky
presented did not show that the ambu- lance survey and certification process was
outside of the ambit of traditional state licensing activities pursuant to
state requirements independent of
the Medicaid program. Kentucky
presented no federal Medicaid requirements related to ambulance
services. Although neither party introduced specific state laws and
regulations related to ambulance
services, Kentucky did not dispute that
state requirements existed and formed the basis of the ambulance
survey and
certification process.
Moreover, Kentucky did not cite any
provisions of the federally-required state plan which contained
certification requirements for ambulances. Although Kentucky asserted
that citations in the survey form
to the regulations of the Kentucky Medical
Assistance Program were identical to the requirements of the
state plan,
Kentucky provided no support for that statement, such as copies of the relevant
state plan
provisions. Telephone Conference, March 10, 1987.
Even if the state plan requires ambulance
certifications, those state
expenditures may not be eligible for FFP in light of the specific regulatory
provision denying FFP for ordinary state survey and certification
responsibilities. 42 CFR 431.610 (h)(2).
The Title XVIII
agreement between the survey agency and the Secretary of HHS, which Kentucky
submitted, does not reference ambulance certification. Ex. G.
Kentucky asserted that this agreement also
made the survey agency
responsible for Medicaid certification, and that the survey agency had revised
its
forms, subsequent to the execution of this agreement, to reflect federal
Medicaid requirements. But
Kentucky provided no evidence of how those
forms were revised, and what federal requirements were
involved. The
survey form appears to concentrate on state licensure requirements, rather than
any federal
Medicaid requirements. Ex. A. Although the survey
form states that it is partly based on "participation
requirements of the
Kentucky Medica
- 5 -
Assistance Program," the form does not indicate the
source of any such requirements. Ex. A, p. 1. 2/
Kentucky apparently alleged that its ambulance surveyors used the
federal forms designed for Medicare
and Medicaid certification of hospitals
and nursing homes, in addition to state forms, in the belief that this
was a
requirement of 42 CFR 431.610(f)(l). Exs. B, C, D and E. This
regulation requires that survey
agencies use federal standards, forms,
methods and procedures that the Administrator designates to
determine
provider eligibility and certification under Medicaid. It was not
reasonable for Kentucky
officials to believe that this regulation applied to
ambulance surveys and certification. As we discuss
above, neither
party presented any specific federal requirements that states certify
ambulances, and there
is nothing in the record to suggest that the
Administrator designated any forms to be used for ambulance
certification. Furthermore, the federal forms submitted by Kentucky
clearly were not designed for the
task; the forms reference several
categories of providers and suppliers but do not include ambulance
services. Moreover, information needed to complete those forms is
largely irrelevant to ambulance
services.
2/ The language of the survey form indicates that
Kentucky considered .the primary purpose of the
survey to be state
licensure. On the first page of the survey form, there are spaces for the
surveyor to
recommend the type of licensure. On the second page, the
following sentence prefaces the list of specific
requirements:
To be
issued a license designated as "conforming" the ambulance service complies with
the
following standards:
There are no
references on the form to federal requirements.
Kentucky specifically asserted that Item
VII on page 8 of the survey form reflected a federal Medicaid
requirement,
but did not state the source of that federal requirement. HCFA
specifically denied that there
was any relevant federal requirement.
Since Kentucky has had ample opportunity to support its assertion
and has
not done so, we must assume that there is no such requirement
- 6 -
We are cognizant that Kentucky officials may
have misin-
terpreted the regulations and may have erroneously believed that
the ambulance surveys were required by
federal law and that federal forms
had to be used, even if none had been designated. Kentucky surveyors
may have spent considerable time attempting to complete inappropriate
federal forms. But there is no
reason to make the federal government
participate in the costs of Kentucky's error.
Conclusion
For the reasons detailed above, we conclude that Kentucky failed
to justify its claim for the costs of
ambulance surveys and certifications,
and we uphold the disallowance in the amount of $249,677.
________________________________
Cecilia
Sparks Ford
________________________________
Donald F. Garrett
________________________________
Norval D. (John) Settle
Presiding Board Member
This is archived HHS content.