GAB Decision 613
December 19, 1984
New York State Department of Social Services;
Ballard, Judith; Garrett, Donald Teitz, Alexander
Docket No. 84-175
The New York State Department of Social Services (State) appealed the
disallowance of $1,802,524 in federal financial participation (FFP) by
the Health Care Finacing Adminitration (Agency). The disallowance was
based on the quarterly statement of expenditures submitted by the State
dated March 8, 1984, which included local district supplemental claims
for expenditures made for prior periods. The grounds for disallowance
were that the claims were unallowable because they were not filed within
the limitations for timely filing of claims in certain statutes and
regulations.
The disallowance of $1,730,279 for expenditures in fiscal year (FY)
1979 and later was considered separately in Board Docket No. 84-174.A
decision on this portion of the disallowance, Decision No. 578, was
issued on October 11, 1984.
The remaining amount of $72,245 in claims for expenditures prior to
FY 1979 was disallowed because the claims were not filed within one year
of the expenditure. The Agency cited Pub. L. 97-92, Pub. L. 97-276,
and 45 CFR 95.11 as authority for this particular disallowance.
In its brief the State pointed out that in Board Docket No. 83-249
the State had briefed its arguments supporting its position that the
two-year limitation in section 306 of Pub. L. 96-272 is controlling.
The State went on to say that the Board had recently accepted its
arguments on this point when it held in Joint Consideration - Timely
Filing of Claims, Decision No. 576, October 5, 1984, that Pub. L.
97-92, Pub. L. 97-276, and 45 CFR 95.11 did not permanently bar
reimbursement of claims for pre-FY 1979 expenditures not claimed within
one year after the fiscal year in which the expenditures occurred.
The State admitted that the $72,245 in claims for pre-FY 1979
expenditures were not filed until March 8, 1984, and that on their face,
these claims would therefore in any event be time-barred by the two-year
limitation in section 306. The State argued, (2) however, that these
claims were exempt from the statutory filing limitations because they
involved "audit exceptions or adjustments to prior year costs," citing
section 1132(a) of the Social Security Act. In addition, the State
contended that the claims were timely filed, since the underlying
expenditures were not incurred until they were reclassified as being
eligible for federal funding under Title XIX. Finally, the State's
position was that the relevant statutory and regulatory limitation
provisions cannot be applied retroactively so as to bar payment of
claims which, in the view of the State, relate to expenditures incurred
prior to their effective date.
In its brief the State noted that it had put forward these same
arguments in Board Docket Nos. 83-170 and 180, and the Board "had
rejected these arguments in their entirety," when it issued Decision No.
521. (New York State Department of Social Services, March 6, 1984) The
State requested that the Board find the filing requirements of section
306 applicable to the present case and issue a summary decision as to
the $72,245 disallowance based upon the Board's holding in Decision No.
521.
The Agency's brief admitted that the Board had rejected the Agency's
ground for the disallowance in this case in Decision No. 576. However,
it was the Agency's position that the claims were in any event not
timely filed under section 306 of Pub. L. 96-272.
The claims are barred by section 306(b) of Pub. L. 96-272.
The State, in asking the Board to issue a summary decision based upon
Decision No. 521, in effect admitted that there are no material issues
of fact which distinguish this appeal from Board Docket Nos. 83-170 and
83-180. Therefore, based on Decision No. 521, we conclude that the
claims here are barred by statutory filing limitations.
The Board makes two observations in complying with the State's
request for a summary decision. The first is that the claims disallowed
here are not subject to the general two-year filing limitation of
section 306(a) of Pub. L. 96-272, codified as section 1132 of the Social
Security Act. Since the claims were pre-FY 1979, the time limit for
filing was not two years from the end of the quarter in which the
expenditures were made, but May 15, 1981. This limitation is based on
the January 1, 1981 date in section 306(b)(3) of Pub. L. 96-272, as
extended under the authority of section 306(b)(4). See 46 Fed. Reg.
3528, January 15, 1981. It makes no difference in this case whether (3)
the two-year or the May 15, 1981 filing requirement controls. If the
expenditures were made prior to FY 1979, the claims were clearly barred
by March 1984 when they were filed.
The other observation of the Board is in reference to the State's
repeated description of the time limitations in Pub. L. 96-272 as being
"retroactive" and therefore not enforceable to bar these claims. The
limitations are "retroactive" only in the sense that the State defines
the term, as barring payment of claims which "relate to expenditures
incurred prior to their effective dates."
It is true that the limitations in section 306 related in part to
claims for expenditures incurred prior to the effective date of the
statute, such as pre-FY 1979 claims. The statute, however, did not on
its effective date (June 17, 1980) bar any claims for past expenditures,
no matter how old, in the same way that the one-year limitations above,
as interpreted by the Agency, purported to do. As discussed in Decision
No. 521 (p. 5), the states had from June 17, 1980 to May 15, 1981 to
file any claims for expenditures made before October 1, 1979.
Therefore, the statute in that sense was not retroactive.
CONCLUSION
Based on New York State Department of Social Services, Decision No.
521, March 6, 1984 (which we incorporate here), we sustain the
disallowance of $72,245 FFP for claims for expenditures before FY 1979.
MARCH 19, 1985