1999.02.11 DAB1678 Massachusetts Division of Medical Assistance v. Health Care Financing Administration (HCFA)

Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD
Appellate Division

DATE: February 11, 1999

SUBJECT: Massachusetts Division of Medical Assistance

Docket No. A-98-81
Decision No. 1678

DECISION

The Massachusetts Division of Medical Assistance (DMA) appealed a determination by the Health Care Financing Administration (HCFA) disallowing $14,773,817 in federal financial participation (FFP) claimed under title XIX (Medicaid) of the Social Security Act (Act). The claims covered expenditures for home or community-based services (HCBS) provided to individuals who were both blind and mentally retarded and whose eligibility for Medicaid was based on their eligibility for Supplemental Security Income (SSI) for the blind under title XVI of the Act. The services were provided from April 1, 1994 through June 30, 1996. During that period, DMA had a waiver, approved pursuant to section 1915(c) of the Act, authorizing FFP in the cost of HCBS provided to mentally retarded individuals who would otherwise require an intermediate facility level of care. HCFA determined that the individuals in question were not eligible for the waiver services because they were covered by the Medicaid State plan administered by the Massachusetts Commission for the Blind (MCB) rather than by the DMA Medicaid State plan. MCB did not have a HCBS waiver for the period in question.

For the reasons discussed in detail below, we uphold the disallowance. Since DMA's HCBS waiver was related to DMA's Medicaid State plan, the waiver could not authorize services to individuals not covered by that plan, which excluded individuals who were SSI blind. Moreover, the history of DMA's waiver request shows that it was intended to exclude services to individuals who were both blind and mentally retarded. The record also shows that, although the State agency for the blind had the ability to request a separate waiver that would have covered these individuals, it failed to do so. Furthermore, contrary to what DMA argued, the exclusion of such individuals from its HCBS waiver did not violate the statutory requirement that comparable services be provided to all categorically and medically needy recipients. Thus, HCFA properly determined that the SSI-blind individuals in question here were not covered by DMA's HCBS waiver.

Background

Title XIX of the Act offers federal funds to states providing medical assistance to needy individuals under an approved state plan. Section 1915(c) of the Act authorizes states by means of a "waiver" to provide a broad array of home or community-based services, not otherwise considered medical assistance, as an alternative to institutionalization. Section 1915(c) states in pertinent part:

(1) The Secretary may by waiver provide that a State plan approved under this title may include as "medical assistance" under such plan payment for part or all of the cost of home or community-based services (other than room and board) approved by the Secretary which are provided pursuant to a written plan of care to individuals with respect to whom there has been a determination that but for the provision of such services the individuals would require the level of care provided in a hospital or a nursing facility which could be reimbursed under the State plan. . . .

Section 1915(c)(3) of the Act provides that "[a] waiver granted under this subsection may include a waiver of the requirements of . . . section 1902(a)(10)(B) (relating to comparability) . . . ." The latter section provides that the medical assistance made available to any eligible categorically needy individual "shall not be less in amount, duration, or scope than the medical assistance made available to" any other categorically needy individual, or less in amount, duration, or scope than the medical assistance made available to medically needy individuals. See also 59 Fed. Reg. 37702, at 37706 (July 25, 1994) (preamble to final regulations).

Under the implementing regulations at 42 C.F.R. . 441.301, a waiver to provide HCBS must "[b]e limited to one of the following target groups or any subgroup thereof that the State may define: (I) Aged or disabled, or both. (ii) Mentally retarded or developmentally disabled, or both. (iii) Mentally ill."

Section 1902(a)(5) of the Act requires that a state plan for medical assistance must "provide for the establishment or designation of a single State agency to administer or to supervise the administration of the plan . . . ." Section 1902(a) further provides, however, that the state agency which administered or supervised the administration of the state plan for grants for aid to the blind under title X (or title XVI, insofar as it relates to the blind)--

may be designated to administer or supervise the administration of the portion of the State plan for medical assistance which relates to blind individuals and a different State agency may be established or designated to administer or supervise the administration of the rest of the State plan for medical a ssistance; and in such case the part of the plan which each such agency administers, or the administration of which each such agency supervises , shall be regarded as a separate plan for purposes of this title (except for purposes of paragraph (10)). . . .

Until October 1, 1996, the Medicaid program in Massachusetts was administered by two agencies: the Division of Medical Assistance (formerly the Department of Public Welfare (DPW)) and the Massachusetts Commission for the Blind (MCB). Each of these agencies had a separate Medicaid state plan document, which consisted of a pre-print provided by HCFA on which the agency checked boxes or filled in blanks as appropriate. In the section of the DMA Medicaid State plan captioned "Mandatory Coverage - Categorically Needy and Other Required Special Groups," under "Individuals receiving SSI," the categories "Aged" and "Disabled" were selected, while the category "Blind" was not selected. See e.g., HCFA Ex. C, at 1 (excerpt from plan effective 10/1/91). Conversely, in the MCB Medicaid State plan, under "Individuals receiving SSI," the category "Blind" was selected and the categories "Aged" and "Disabled" were not selected. See HCFA Ex. F at 6 (excerpt from plan effective 4/1/87).

On May 28, 1982, DPW requested approval of a HCBS waiver for the elderly and disabled. The requested waiver had three parts: Section A--services to the elderly as alternatives to ICF and SNF care; Section B--services to the mentally retarded as alternatives to ICF-MR care; and Section C--services to the legally blind as alternatives to SNF, ICF, and ICF-MR care. See HCFA Ex. I. Both sections provided for residential care, social habilitation training, adaptive environmental support and case management. Section B also provided for personal care services, respite care, specialized home care, early intervention and transportation, while Section C also provided for a personal emergency response system, homemaker services, orientation and mobility services, sign language training and family involvement services. See id., Executive Summary at 2. DPW also requested a waiver of section 1902(a)(10) of the Act. See id. at 3.
In response to DPW's request for a HCBS waiver, HCFA advised DPW that it should request separate waivers for services to the elderly as alternatives to SNF and ICF care and for services to the mentally retarded as alternatives to ICF-MR care. HCFA further stated that it was "dealing directly with [MCB]" on services to the legally blind as alternatives to SNF, ICF and ICF-MR care. HCFA Ex. W at 1. HCFA continued:

The Massachusetts Commission for the Blind has already requested that its proposal of July 21, 1982, which was a revised version of Section C "Services to the Legally Blind" of the May 28, 1982 proposal, be considered separate and apart from the May 28, 1982 submittal. Such a separate submittal was appropriate and necessary since the MCB is the single State agency in Massachusetts administering the separate Medicaid program for the legally blind (as authorized in Section 1902(a) of the Social Security Act . . . .) Thus, we have concluded that Part C of your May 28, 1982 waiver request is not sufficient and cannot be considered by HCFA. . . .

Id. By letter dated October 4, 1982, DPW submitted an amended waiver request that excluded Section C, noting that "[a]s a designated single state agency for administration of the Title XIX Program, [MCB] recently formally requested that Section C of the May 28 waiver submittal, services to the legally blind as alternatives to SNF, ICF, and ICF/MR care, be considered independently." HCFA Ex. J.

DPW's waiver request was approved and later renewed for five-year periods. The waiver effective beginning July 1, 1992 (which covered the period in question here) specified that the "target group of recipients" was limited to the "mentally retarded." DMA Ex. 1, at 3. See also, DMA Ex. 3, at 1. Services to be provided under this waiver were respite care, residential habilitation, transportation and day services. See id.

Although MCB submitted a request for a HCBS waiver prior to October 4, 1982, it failed to respond to a request by HCFA for additional information concerning that request. HCFA noted that "the State may have encountered some difficulties in documenting the costs reported in the waiver. There may also be a problem with insufficient staff at [MCB] to implement the waiver." HCFA Ex. Y. Thus, MCB had no approved HCBS waiver during the period in question. MCB received approval of a HCBS waiver for "individuals who are blind and mentally retarded, or who are blind deaf and mentally retarded" effective August 12, 1996. HCFA Ex. Q. DMA assumed responsibility for the conduct of this waiver as well as the DMA waiver which had been renewed on July 1, 1992 when, on October 1, 1996, DMA became the sole single state agency for title XIX. See HCFA Ex. R.

Throughout the period in question, mentally retarded individuals were screened by a third state agency, the Department of Mental Retardation (DMR), to determine their eligibility for HCBS. DMR supervised the provision of Medicaid services, including HCBS where appropriate, to such individuals without regard to the basis for their Medicaid eligibility or even whether they were eligible for Medicaid. The claims tape prepared by DMR showing the individuals who received HCBS was processed by the Medicaid Management Information System, which automatically assigned MCB client codes to the SSI-blind individuals in question here. MCB generally excluded the cost of HCBS services from its claims for services provided to these individuals, however, claiming only for services provided under the MCB Medicaid State plan. See DMA Br. dated 7/22/98, at 5; DMA response to Board Questions, dated 10/27/98, at 3.

The first claim for HCBS provided to SSI-blind individuals was filed by DMA for the quarter ended June 30, 1996 and covered services provided from April 1, 1994 to June 30, 1996. By letter dated April 28, 1998, HCFA disallowed DMA's claim. HCFA determined that these individuals were not covered by DMA's approved Medicaid State plan, which excluded individuals eligible for Medicaid as SSI blind. HCFA reasoned that these individuals were therefore not covered by DMA's approved HCBS waiver and that there was no other basis for payment of FFP since the dates of service preceded the effective date of MCB's approved waiver.

Analysis

This case presents the question whether individuals who were both blind and mentally retarded and whose eligibility for Medicaid was based on their status as SSI blind were covered by DMA's HCBS waiver. HCFA reserved the right, should the Board resolve this legal question in DMA's favor, to question DMA's claim for HCBS provided to such individuals on the ground that the individuals were not in fact eligible for Medicaid or were not provided qualifying services. See HCFA Br. dated 8/21/98, at 3; Transcript of 12/10/98 telephone conference (Tr.) at 50-53. For purposes of this decision, however, we accept DMA's assertions that the individuals in question were eligible for Medicaid and that FFP was claimed only for the types of services authorized under DMA's HCBS waiver.

For the reasons discussed below, we conclude that the individuals in question here were not covered by DMA's HCBS waiver. It should be emphasized that we do not conclude, nor did HCFA argue, that individuals who are both blind and mentally retarded could never be covered by a HCBS waiver. Rather, we simply conclude that they were not covered by DMA's HCBS waiver during the time period in question here. The Board has previously held that a state is generally bound by the provisions of its waiver request. See Nebraska Dept. Of Social Services, DAB No. 1354 (1992) and case cited therein. DMA did not advance any cogent reason why its waiver request should not be binding here.

1. DMA's HCBS waiver could not authorize services to individuals not covered by DMA's Medicaid State plan, which specifically excluded services to the SSI blind.

In support of the disallowance, HCFA relied primarily on the limits of coverage as stated in DMA's Medicaid State plan. There is no dispute that that plan on its face excluded the SSI blind from coverage. HCFA argued that these limits necessarily applied to DMA's HCBS waiver as well.

We agree that the limits on coverage in DMA's Medicaid State plan applied to its HCBS waiver. It is clear from the language of the Act and regulations that a HCBS waiver, even if it is not formally part of a state plan, exists only in relation to a state plan. Section 1915(c)(1) of the Act provides that "a State plan . . . may include as `medical assistance' under such plan payment for . . . home or community-based services." Similarly, the term "home or community based services" is defined in the regulations as "services, not otherwise furnished under the State's Medicaid plan," that are furnished under a waiver. 42 C.F.R. . 440.180(a). Thus, a HCBS waiver must be consistent with the state plan except to the extent that the waiver modifies the types of services authorized to be provided as medical assistance. Accordingly, in this case, consistent with the exclusion of the SSI blind from DMA's Medicaid State plan, DMA's HCBS waiver must be viewed as also excluding the SSI blind.

DMA nevertheless argued that SSI-blind individuals, while covered by MCB's Medicaid State plan, were also eligible to receive services, including HCBS, under DMA's Medicaid State plan because the MCB and DMA Medicaid State plans were actually parts of a single Medicaid State plan administered by different state agencies. This argument has no merit. Even if the two plans were indeed parts of a single plan, DMA did not explain how that justifies ignoring the fact that DMA's HCBS waiver related to the "part" of the plan--DMA's State Medicaid plan--that specifically excluded the SSI blind as a covered category.

Moreover, we are not persuaded by DMA's argument that the individuals in question should not be deprived of HCBS based on their status as SSI blind since they were not aware that this would be a consequence of electing to receive SSI cash assistance as SSI blind rather than SSI disabled. There was no allegation that any SSI-blind individuals failed to receive the types of HCBS provided for in DMA's Medicaid State plan; DMA simply alleged that it was improperly denied FFP in the cost of these services. In any event, since DMA selected the categories of individuals to be covered by its Medicaid State plan, it cannot reasonably complain that individuals in categories not covered by the plan are not covered by the HCBS waiver related to the plan.

2. The history of DMA's HCBS waiver shows that the waiver was not intended to cover services to the legally blind.
DMA's HCBS waiver--unlike DMA's Medicaid State plan document-- does not on its face exclude SSI-blind individuals from coverage, but simply provides for HCBS for mentally retarded individuals. Since the SSI-blind individuals in question here were also mentally retarded, DMA argued that they were covered by the waiver. This is not a viable argument in light of our finding, discussed above, that DMA's HCBS waiver could not authorize services to the SSI blind since those individuals were excluded from DMA's Medicaid State plan.

Even if DMA's HCBS waiver could somehow cover individuals excluded from DMA's Medicaid State plan, however, the history of the waiver shows that it was not intended to do so. As noted above, DPW's original waiver request had separate sections for the mentally retarded (Section B) and the legally blind (Section C). Section C provided comprehensive services for the blind and mentally retarded, while Section B simply provided services for the mentally retarded. DMA's resubmitted waiver request dropped Section C without making any changes in Section B. It follows that DMA's HCBS waiver, as initially approved and as later renewed, was intended to exclude individuals who were covered by Section C, i.e., individuals who were both legally blind and mentally retarded. (The disallowance appealed here pertained specifically to SSI-blind individuals; however, those individuals clearly fell within the broader category of the legally blind.) If for some reason DMA had thought at the time it resubmitted its waiver request that Section B now covered such individuals, it was incumbent on DMA to make this clear in its request.

It is of course true that, contrary to DMA's expectation when it dropped Section C, MCB never obtained a waiver from HCFA to provide services to individuals who were both blind and mentally retarded since MCB never completed the waiver application process. However, this does not change the fact that DMA's resubmitted waiver request was not intended to cover the legally blind. There is no basis for automatically enlarging the scope of the waiver approved pursuant to that request simply because MCB never obtained a waiver. The record indicates that MCB made a deliberate choice not to pursue its waiver request. In so doing, MCB forfeited the right of the Commonwealth of Massachusetts to claim federal funding for the cost of services that would have been covered had MCB obtained a waiver.

DMA nevertheless argued that its "contemporaneous interpretation" was that the SSI blind were eligible for services under DMA's HCBS waiver since these individuals "were at all times treated identically to waiver participants who were mentally retarded only and were provided the same scope of services at state expense." DMA Response to Board Questions, dated 10/27/98, at 4. However, the record shows that the SSI blind were coded as MCB clients and that DMA did not claim any FFP for HCBS provided to them from the time the waiver went into effect until 1996. Thus, it is not clear that DMA had a contemporaneous interpretation different from the interpretation that is apparent from the history of its HCBS waiver.

Finally, DMA attempted to shift the responsibility for the situation here to HCFA, arguing that HCFA's approval of DMA's resubmitted waiver request without a MCB waiver violated the comparability requirement in section 1902(a)(10)(B) of the Act. This argument lacks merit, as discussed below.

3. Section 1902(a)(10)(B) of the Act does not require HCFA to pay FFP in the cost of HCBS provided to the SSI blind.

DMA took the position that, even if DMA's HCBS waiver is limited to SSI-blind individuals, those limits should be disregarded because to do otherwise would violate the comparability requirement in section 1902(a)(10)(B) of the Act. Specifically, DMA argued that that section required it to offer HCBS under its waiver to all mentally retarded individuals who were otherwise eligible, including mentally retarded individuals who were also blind.

We find no merit in this argument. As noted earlier, section 1915(c)(3) of the Act provides that a HCBS waiver may include a waiver of the comparability requirement in section 1902(a)(10)(B). DMA requested and received, as part of its HCBS waiver, a waiver of the comparability requirement. Thus, the comparability requirement was simply not applicable here.

Moreover, section 441.301 of 42 C.F.R. provides that a HCBS waiver may be targeted at "the mentally retarded or developmentally disabled, or both," "or any subgroup thereof that the State may define." In this case, DMA requested and received a waiver for the subgroup of mentally retarded individuals who are not also SSI-blind. DMA did not point to anything in the regulations that indicates that this is an impermissible subgroup. Thus, DMA's HCBS waiver properly authorized services to only this limited subgroup.

DMA did cite a court decision, King v. Beye (Weil), C.A. #92 M 2409, (D. Colo. June 25, 1996), holding that barring individuals from participating in an approved state HCBS program because they have a disability in addition to the target disability of mental retardation violates both Title II of the Americans with Disabilities Act and Section 504 of the Rehabilitation Act of 1973. This holding is inapposite, however, since it does not address the unique provisions of the Social Security Act at issue here.

DMA also argued that the waiver of the comparability requirement meant only that HCBS need not have been provided to individuals outside of the target group of DMA's HCBS waiver and that such services must still have been provided to all members of the target group. This argument does not advance DMA's case, however, since it is predicated on the erroneous assumption that the target group of DMA's HCBS waiver was all mentally retarded individuals, when the target group in fact excluded mentally retarded individuals who were also SSI-blind.

Conclusion

For the foregoing reasons, we conclude that during the time period in question, individuals who were both blind and mentally retarded and whose eligibility for Medicaid was based on their status as SSI blind were not covered by DMA's HCBS waiver. Accordingly, we sustain the disallowance in full.

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Judith A. Ballard

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Donald F. Garrett

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Cecilia Sparks Ford
Presiding Board Member

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