DEPARTMENTAL GRANT APPEALS BOARD
Department of Health and Human Services
SUBJECT: New York State Department of Social Services
Docket No. 87-61
Decision No. 865
DATE: May 1, 1987
DECISION
The New York State Department of Social Services (State) appealed
the
disallowance of $23,516 in federal financial participation by the
Health
Care Financing Administration (HCFA) under Title XIX (Medicaid) of
the
Social Security Act. The disallowance represented the federal share
of
the amount of interest income earned by the State, during the
period
July 1, 1986 through September 30, 1986, on Medicaid funds withheld
from
providers or collected "from providers, from third party
health
insurers, and from windfall activities." HCFA determined that
the
federal government is entitled to share in such interest, based
on
Office of Management and Budget Circular No. A-87 (incorporated
by
reference into HHS regulations at 45 CFR 74.171) and 45 CFR 74.47(a),
as
well as section 2555.2(E) of the State Medicaid Manual.
The Board addressed this same issue concerning interest in New York
State
Department of Social Services, Decision No. 588, October 31, 1984,
where the
Board determined that such interest constituted an applicable
credit which
should have been used to reduce the State's claim for
Medicaid
expenditures. In New York State Department of Social Services,
Decision
No. 721, February 6, 1986, the Board rejected the State's
contention that a
federal court decision concerning the Food Stamp
Program, Perales v.
U.S., 598 F. Supp. 19 (S.D. N.Y. 1984), aff'd, 751
F.2d 95 (2d Cir. 1984),
required reversal of Decision No. 588.
The State admitted that this appeal did not present any material issues
of
fact which distinguished it from those issues considered by the Board
in
Decision Nos. 588 and 721. The State accordingly requested a
summary
decision in this appeal based upon those two decisions and
their
records. State's letter to the Board dated April 6, 1987.
HCFA raised
no objection to the issuance of a summary decision. HCFA's
letter to
the Board dated April 27, 1987. .We therefore sustain the
disallowance
of $23,516, based on Decision Nos. 588 and 721, which we
incorporate by
reference here.
________________________________ Norval D. (John) Settle
________________________________ Alexander G. Teitz
________________________________ Judith A. Ballard Presiding
Board
Member