Texas Health and Human Services Commission, DAB No. 3066 (2022)

DECISION

Texas Health and Human Services Commission (Texas), the state agency that administers the Medicaid program in Texas, has appealed a determination of the Centers for Medicare & Medicaid Services (CMS) to disallow federal financial participation (FFP) for claims of direct medical services furnished to Medicaid-eligible children pursuant to Texas's School Health and Related Services (SHARS) program.  Based on its review of an audit conducted by the United States Department of Health and Human Services, Office of the Inspector General (OIG) for the period of October 1, 2010, through September 30, 2011 (federal fiscal year 2011), CMS determined that $16,287,695 in FFP were not allowable.  For the reasons explained below, we uphold the disallowance in its entirety.

Legal Background

Title XIX of the Social Security Act (Act) authorizes federal grants to states for medical assistance programs, known as Medicaid.  Act §§ 1901-1903; 42 C.F.R. § 430.0.  Medicaid furnishes medical assistance to low-income individuals and families as well as to blind and disabled persons.  Id.  Each state operates a Medicaid program in accordance with broad federal requirements and the terms of its federally approved "State plan for medical assistance."  Act § 1902; 42 C.F.R. §§ 430.10-430.16.  The State plan specifies the particular health care items and services the state's Medicaid program covers.  Act § 1902(a)(10); 42 C.F.R. Part 440.  States must cover certain categories of medical assistance specified in section 1905(a) of the Act and have the option to cover the remaining categories of medical assistance.  See Act § 1902(a)(10); 42 C.F.R. §§ 440.210-440.225.

One such required category of medical assistance consists of early and periodic screening, diagnostic, and treatment (EPSDT) services for eligible Medicaid beneficiaries under age 21 "to ascertain physical and mental defects, and . . . to correct or ameliorate defects and chronic conditions found."  42 C.F.R. § 441.50; Act §§ 1905(a)(4)(B), 1902(a)(10), (43).  The EPSDT benefit is "Medicaid's comprehensive and preventive children's health care program geared toward early assessment of children's health care needs through periodic examinations."  CMS Ex. 1 (Medicaid and School Health: A

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Technical Assistance Guide (August 1997)), at 11.  The EPSDT benefit includes comprehensive health screenings, as well as vision, dental, and hearing services and "[s]uch other necessary health care, diagnostic services, treatment, and other measures described in section 1905(a) to correct or ameliorate defects and physical and mental illnesses and conditions discovered by the screening services, whether or not such services are covered under the State plan."  Act § 1905(r)(5); see also 42 C.F.R. § 440.40(b)(2).  Because the EPSDT benefit is mandatory, even if the State plan does not cover certain optional benefits listed in section 1905(a) of the Act, the state must nevertheless cover any medically necessary and Medicaid-coverable services under the EPSDT benefit.  See 62 Fed. Reg. 47,896, 47,898 (Sept. 11, 1997) (discussing personal care services benefit and noting that, while coverage of that benefit is optional, coverage is mandatory for individuals eligible for the EPSDT benefit and for whom personal care services are medically necessary).

Personal care services are generally an optional Medicaid benefit, unless required under the EPSDT benefit category, as discussed above.  See Act § 1902(a)(10)(A).  Personal care services must be "authorized for the individual by a physician in accordance with a plan of treatment or (at the option of the State) otherwise authorized for the individual in accordance with a service plan approved by the State"; provided by a qualified individual who is not a member of the individual's family; and furnished in a home or other location.  Act § 1905(a)(24); accord 42 C.F.R. § 440.167.

States may provide and claim FFP—that is, federal matching funds—for medical assistance services listed in section 1905(a) of the Act, including EPSDT services, that are provided to Medicaid-eligible children in schools.  In addition to meeting the medical needs of Medicaid-eligible students, school-based health services may fulfill requirements of the Individuals with Disabilities Education Act (IDEA), 20 U.S.C. § 1400 et seq.  The IDEA requires states "to ensure that all children with disabilities [(regardless of Medicaid eligibility)] have available to them a free appropriate public education that emphasizes special education and related services designed to meet their unique needs[.]"  20 U.S.C. §§ 1400(d)(1)(A).  For each child three years and older identified as disabled, a school must develop an "individualized education program" (IEP), which, among other requirements, identifies the "special education and related services and supplementary aids and services . . . to be provided to the child."  20 U.S.C. §§ 1412(a)(1), 1414(d)(1)(A)(i)(IV).  Payment under Medicaid for covered services furnished to a child with a disability cannot be prohibited or restricted on the basis that the service is included in an IEP.  Act § 1903(c).  Thus, in Medicaid and School Health:  A Technical Assistance Guide, CMS stated that Medicaid will cover health-related services included in a child's IEP if all Medicaid requirements are met.  See CMS Ex. 1, at 15; N.J. Dep't of Hum. Servs., DAB No. 2415, at 2 (2011).

In addition, state Medicaid agencies must comply with the "Cost Principles for State, Local, and Indian Tribal Governments."  2 C.F.R. Part 225 (2010); 45 C.F.R. § 92.22(b)

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(2010).1   To be allowable, a cost must "[b]e necessary and reasonable for proper and efficient performance and administration of Federal awards."  2 C.F.R. Part 225, App. A, ¶ C.1.a.  Costs must conform to limitations in Part 225, federal laws, the terms and conditions of the federal award, or any other applicable regulations regarding the type or amount of costs.  Id. ¶ C.1.d.  Costs must also be adequately documented to be allowable.  Id. ¶ C.1.j.  In addition, costs must be allocable to the award.  Id. ¶ C.1.b.  "A cost is allocable to a particular cost objective if the goods or services involved are chargeable or assignable to such cost objectives in accordance with relative benefits received."  Id.  ¶ C.3.a.

If applicable federal requirements are met, a state Medicaid program is entitled to FFP for a percentage of the program's medical assistance expenditures, including expenditures for covered school-based health services.  Act §§ 1903(a), 1905(a); Tex. Health & Hum. Servs. Comm'n, DAB No. 2187, at 3 (2008).  "[O]nly those expenditures for medical assistance made by a state in accordance with the state plan are eligible for FFP."  Tex. Health & Hum. Servs. Comm'n, DAB No. 2176, at 3 (2008).

Texas State Plan

Texas provides Medicaid-covered services through its school-based health program, known as SHARS.  On November 17, 2006, CMS approved an amendment to the Texas State Plan (SPA 06-005) that concerned coverage and reimbursement of school-based health services, for incorporation into the Texas State Plan with an effective date of September 1, 2006.  Tex. Ex. 2, at 7, 8.2   The State Plan, as amended, provides for coverage of SHARS, under the EPSDT benefit, including, among other services, audiology and hearing services, occupational therapy, speech and language services, nursing services, transportation services, and personal care services.  Id. at 12.  As relevant here, the State Plan provides:

Personal Care Services

Definition:

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Personal care services outlined in this section of the state plan are available to Medicaid-eligible recipients under the age of 21 years, who are eligible for [the EPSDT] program and for whom services are medically necessary.

Services:
Medically necessary EPSDT services are health care, diagnostic services, treatments, and other measures to correct or ameliorate any defects and chronic conditions. . . .  Services must be authorized by a physician in accordance with a plan of treatment or (at the State's option) in accordance with a service plan approved by the State.

Medically necessary services include but are not limited to clients with a physical, cognitive, or behavioral limitation related to his or her disability or chronic health condition that inhibits the client's ability to accomplish activities of daily living (ADLs), instrumental activities of daily living (IADLs) or related health functions.

Personal care services may be provided in an individual or group setting.

Providers:
Personal care services must be provided by a qualified provider in accordance with 42 CFR § 440.167, who is 18 years or older and has been trained to provide the personal care services required by the client, e.g., bus monitor/aide when provided on a specially adapted school bus, special education teacher and special education teacher's aide.

Place of Service:
Personal care services are furnished in a home, and at the State's option, in another location, e.g. school.

Tex. Ex. 2, at 25, 40 (underlining changed to italics).

Case Background

Random Moment Time Study

Participating school districts in Texas submit claims to the Medicaid state agency for SHARS services on an ongoing basis.  Tex. Ex. 3, at 53, 60.  The state agency then reimburses the school districts for direct medical services on an interim basis and ultimately submits claims for FFP for those services on a quarterly basis.  Id.  To settle its costs for the SHARS program at the end of each fiscal year and reconcile its interim payments, Texas uses a statewide time study employing random moment sampling to determine the proportion of direct service time that is allowable and reimbursable under

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Medicaid.  Id. at 53.  A CMS-approved guide titled Texas Timestudy Implementation Guide for Direct Services and Medicaid Administrative Claiming (Claiming Guide) (CMS Ex. 2) sets out the policies and procedures for how school districts must perform and apply the applicable sampling methodology to receive Medicaid FFP reimbursement.

In accordance with the Claiming Guide, staff who perform Medicaid-related activities at schools participate in quarterly time studies that use CMS-approved Random Moment Time Study (RMTS) Methodology.  CMS Ex. 2, at 2-3.  "The RMTS method polls participants on an individual basis at random time intervals over a given time period and totals the results to determine work effort for the entire population of eligible staff over that same period."  Id. at 6.  Its purpose is to provide a "statistically valid means of determining what portion of the . . . participant[s'] workload is spent performing activities that" Medicaid will reimburse.  Id.  Each "moment" in the RMTS is "a specific one-minute unit of a specific day selected from the total pool of time study moments and is assigned to a specific  . . . participant."  Id. at 8.  "Sampled participants [are] notified of their [specific] moment three days prior to the . . . moment.  At the prescribed moment, each sampled participant is asked to record and submit his/her activity for that particular moment."  Id. at 10.  The moments are then coded based on the documentation the participants have submitted.  Id. at 8.  The Claiming Guide includes detailed guidance on how to code random moments.  Id. at 12-14, 21-32.

OIG Audit

In August 2017, the OIG issued a report, Texas Improperly Received Medicaid Reimbursement for School-Based Health Services (A-06-14-00002), concerning the findings of the audit it had conducted for the period of October 1, 2010, through September 30, 2011, and concluding that Texas had received almost $19 million in FFP for direct medical service costs provided through its SHARS program that were not reasonable, adequately supported, or otherwise allowable.  Tex. Ex. 3, at 49, 52, 54, 62.  The OIG reviewed all 3,161 random moments that had been coded as IEP-covered direct medical services and determined that 274 had been coded incorrectly.3   Id. at 62-63.  The audit report explained that "the activities performed did not qualify as IEP-covered direct medical services; alternative RMTS codes should have been selected.  Additionally, some of the responses did not capture what the participant did in their exact 1-minute moment."  Id. at 64.  Instead, the report explained, "the participants listed their daily job duties (what

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they do all day as opposed to what they did at their sampled 1 minute)."  Id.  The OIG determined that, based on the 274 incorrectly coded moments, Texas had received $18,925,853 in unallowable FFP for SHARS provided from October 1, 2010, through September 30, 2011.  Id. at 63.  Further, the audit report stated that Texas had not required supporting documentation for its RMTS participant responses.  Id. at 66.  The OIG estimated that, of the 3,161 random moments, approximately 94% were not supported by documentation.4   Id.

CMS's Disallowance, Reconsideration, and Appeal to the Board

After the OIG issued its report, CMS, through its Audit and Review Branch, worked with Texas to resolve the audit findings.  Tex. Ex. 4, at 87.  Based upon its own review, CMS ultimately determined that 238 of the 274 random moment samples the OIG had identified as improperly coded were not eligible for FFP, reducing the unallowable amount.  Id.  On June 23, 2021, CMS issued a disallowance notice identifying the revised amount of $16,287,695.  Id.  The notice informed Texas that the amount represented unallowable Medicaid claims Texas had submitted for federal fiscal year 2011 for SHARS that did not comply with federal and state Medicaid requirements.  Id.  The notice went on to explain that the disallowance was based on findings from the OIG's audit in which "[t]he OIG determined not all of the direct medical service costs that [Texas] claimed for SHARS were reasonable, adequately supported, or otherwise allowable in accordance with section 1905(a) of the . . . Act . . . and the CMS-approved Texas State Plan Amendment."  Id.  The notice informed Texas that it had the opportunity to either request reconsideration or appeal the disallowance to the Board.  Id. (citing Act § 1116(e)).

By letter dated August 23, 2021, Texas requested reconsideration.  Tex. Ex. 5.  In its reconsideration request, Texas asserted that the disallowed costs were indeed allowable as personal care services.  Id. at 92-93.  Texas explained that personal care services assist individuals to accomplish activities of daily living (ADLs) and instrumental activities of daily living (IADLs) in the home or another location.  Id. at 93-94.  Under the EPSDT benefit, personal care services are provided in the school setting and thus are reflective of student needs in that setting.  Id. at 95.  Texas asserted that personal care services in the school setting include, among other examples, the following:  "[b]eing or staying at the school, in the classroom, or on the playground with other children"; "[u]sing hands, writing implement, calculator, or other tools needed during the learning process"; and "[h]earing the instructions for an assignment or test."  Id. at 95-96.  Therefore, Texas

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requested that CMS reconsider and reverse the June 23, 2021 disallowance.  Id. at 96.  Texas did not submit any supporting documentation with its request or explain how the 238 random moment samples that CMS determined were miscoded, in fact, demonstrated that personal care services were provided at the sampled moment.  See Tex. Ex. 6, at 98.

On October 21, 2021, CMS denied reconsideration, explaining that Texas had not provided any additional or new information for CMS to consider.  Id.  "For these reasons, as well as those stated in the June 23, 2021 disallowance letter, CMS affirm[ed] its decision to disallow $16,287,695 [in] FFP."  Id.

Texas timely appealed the disallowance to the Board, filed an appeal brief, and submitted six exhibits, including SPA 06-005 with CMS's letter indicating approval of SPA 06-005, the OIG report, and Texas's request for reconsideration.  CMS submitted a response brief and four exhibits, including a spreadsheet listing the 238 random moment samples it determined were not eligible for Medicaid reimbursement and which formed the basis for the disallowed amount.  See CMS Ex. 3 (declaration of R. Spencer, Audit and Review Branch Chief, CMS), at ¶¶ 2, 5, 7; CMS Ex. 4 (spreadsheet).  The Board offered Texas an opportunity to file a reply brief, but Texas did not file a reply.  See Acknowledgment Letter at 2; 45 C.F.R. § 16.8(c).

Standard of Review

We review de novo an agency's decision to disallow costs charged to federal awards.  See, e.g., Delta Found., Inc., DAB No. 1710, at 25 (1999), aff'd, No. 4:00-CV-104-P-B (N.D. Miss. June 14, 2001) (adopting Magistrate's Report and Recommendations), aff'd, 303 F.3d 551 (5th Cir. 2002); Cmty. Med. & Dental Care, Inc., DAB No. 2556, at 4 n.1 (2014).  Specifically, we review de novo CMS's decision to disallow FFP for claims from a state Medicaid program.  Minn. Dep't of Hum. Servs., DAB No. 2122, at 25 (2007); Minn. Dep't of Hum. Servs., Ruling Denying Reconsideration of Decision No. 2122, Board Ruling No. 2008-3, at 2 (Feb. 15, 2008) ("The Board determines the facts de novo, based on the entire record before it, including evidence from both parties.").

Analysis

Texas urges the Board to reverse CMS's decision, asserting that the costs in question were "reasonable and allowable as [personal care services] under section 1905(a)(24) of the Act and SPA 06-005."  Tex. Br. at 7.  In so asserting, Texas takes the position that, in promulgating 42 C.F.R. § 440.167, CMS did not "codify" the specific types of services to be encompassed under the EPSDT benefit to allow states "maximum flexibility" in providing personal care services under the EPSDT benefit.  Id. at 1, 3, 7.  Texas maintains that, in view of the "maximum flexibility" it enjoys, it appropriately "relied on CMS' approval of SPA 06-005 and the [personal care services] requirements as outlined in the state plan and administrative rules" and thus properly claimed the subject costs for

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reimbursement.  Id. at 7.  Texas also makes statements concerning the parties' burden of proof.  Id. at 6-7.

CMS, however, asserts that Texas, which ultimately must prove that the disallowed amounts are eligible for reimbursement, "simply does not meet its burden of proof" inasmuch as it "does not make any pretense of substantiating" the random moment samples.  CMS Response Br. at 5 (CMS's emphasis).  According to CMS, under these circumstances, the Board may properly affirm the disallowance based solely on Texas's failure to meet its burden of proof.  Id. at 5-6 (citing N.J. Dep't of Hum. Servs, DAB No. 2415, at 16-17).  CMS maintains that, Texas's failure to carry its burden of proof aside, the 238 random moment samples identified in CMS exhibit 4 "were not for personal care services, as they could not credibly be ‘authorized by a physician in accordance with a plan of treatment' pursuant to the State plan [i.e., SPA 06-005][5 ] – and even if they somehow are, [Texas] has not provided documentation to establish these claims were healthcare related."  Id. at 8-9 (citing Tex. Ex. 2, at 40); id. at 6 ("Valid personal care services for an IEP student thus must have a healthcare related nexus . . . .").

We begin by discussing each party's respective burden in this appeal of a Medicaid disallowance:  CMS bears the initial burden to articulate the basis for the disallowance; and Texas bears the ultimate burden to prove that the disallowed costs were allowable.  We then discuss why Texas has not met its burden of proof.

I.  CMS has met its initial burden to articulate the basis for the disallowance; Texas has the burden to prove the allowability of its claimed costs.

In its brief, Texas describes the burden of proof as follows:

In a proceeding before the Board, it is the Appellant's responsibility to explain "why the respondent's final decision is wrong."  In the Appellate Division Practice Manual, the Board has dealt more specifically with burden of proof questions in disallowance cases.  The appellant has a general burden of proof of identifying, documenting, and justifying its claimed costs.  The federal agency has the burden to articulate clearly the basis of the disallowance and to include in the disallowance letter enough detail to enable the appellant to understand the issues and the respondent's position.  The federal agency also has an obligation to provide information showing how it calculated the disallowance, particularly where the amount is not identifiable in Appellant's records as a discrete category of costs.

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Tex. Br. at 6-7 (footnotes omitted) (citing Appellate Division Practice Manual (Practice Manual), "Who has the burden of proof in a case before the Board?").6

As we explain in section II below, we uphold the disallowance in full because Texas has not carried its burden to prove that the 238 random moment samples in question were properly coded as direct medical services eligible for reimbursement.  Given the primacy of Texas's burden in our analysis and decision, and because Texas's description of the parties' burdens as quoted above calls for clarification, we first discuss each party's burden in more detail.

In appeals to which the regulations at 45 C.F.R. Part 16 apply (such as Texas's appeal of a Medicaid disallowance), the Board has stated that the awarding federal agency first must articulate the basis for its decision such that the non-federal party can understand the issues raised by the agency's decision.  See, e.g., Mass. Exec. Off. of Health & Hum. Servs., DAB No. 2218, at 11 (2008) (citations omitted), aff'd, 701 F. Supp. 2d 182 (D. Mass. 2010); Me. Dep't of Health & Hum. Servs., DAB No. 2292, at 9 (2009) (citation omitted), aff'd, 766 F. Supp. 2d 288 (D. Me. 2011); Mo. Dep't of Soc. Servs., DAB No. 2994, at 6 (2020) (and cited cases).  If the federal agency meets that burden, which we have consistently described as minimal, then the non-federal party bears the burden to demonstrate that the federal agency's decision was wrong.  See Mass. Exec. Off. at 11 (citations omitted); see also Dr. Arenia C. Mallory Cmty. Health Ctr., Inc., DAB No. 2659, at 6-7 (2015) (citations omitted); N.J. Dep't of Hum. Servs., DAB No. 2328, at 4-5 (2010) (citations omitted); Gulf Coast Cmty. Action Agency, Inc., DAB No. 2670, at 3 (2015) (citation omitted) (The non-federal party "always bears the burden to demonstrate that it has operated its federally funded program" consistent with applicable authorities and the award's terms and conditions.); Friendly Fuld Neighborhood Ctr., Inc., DAB No. 2121, at 3 (2007) (citations omitted) (stating that the grantee bears the burden to show it has operated federally-funded programs consistent with grant terms and conditions and applicable regulations); Targazyme, Inc., DAB No. 2939, at 4 (2019) ("[I]n the kind of cases that come before the Board under 45 C.F.R. Part 16, the appellant always bears a general burden of proof."); Tuscarora Tribe of N.C., DAB No. 1835, at 10-11 (2002) (citation omitted) (stating that the grantee's burden would include the burden to show that the grantee spent award money in support of the award's objectives and in compliance with the award's terms and conditions).  Where the decision appealed involves an audit of the grantee, such as here, the grantee typically has the burden to show that the audit results are "legally or factually unjustified."  Mass. Exec. Off. at 11 (citations omitted).

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We are satisfied that CMS's June 23, 2021 disallowance notice was sufficient to meet CMS's initial burden.  As mentioned above, the notice explained that the disallowance was based on the results of the OIG's audit.  Tex. Ex. 4, at 87.  Indeed, the disallowance notice cited the OIG's findings that not all of the direct medical service costs claimed for SHARS were reasonable, adequately supported, or otherwise allowable.  Id.  The disallowance notice further explained that CMS had been working with Texas "to resolve the audit findings," and that CMS determined that 238 of the 274 random moment samples identified in the OIG audit were, in fact, ineligible for Medicaid reimbursement.  Id.  The Board has determined that federal agencies may meet their initial burden of proof in appeals of determinations arising from audit findings by sufficiently explaining in their decisions that the decisions were based on audit findings.  See Int'l Educ. Servs., Inc., DAB No. 3055, at 12 (2021) (rejecting the award recipient's argument that decisions issuing a disallowance and withholding a non-competing continuation award following an OIG audit were not sufficiently specific where the decisions "provided sufficient information about the bases for the decisions to enable [the award recipient] to respond during the appeal"), request for reconsideration docketed, Docket No. A-22-25 (Feb. 1, 2022); Ariz. Health Care Cost Containment Sys., DAB No. 2824, at 9 (2017) (concluding that CMS had carried its initial burden based on the discussion in the disallowance decision and the decision denying reconsideration, both of which explained that the disallowance was based on audit results), aff'd, No. CV-17-04462, 2020 WL 805235 (D. Az. Feb. 18, 2020), appeal voluntarily dismissed, No. 20-15598 (9th Cir. July 17, 2021); L.A. Cnty. Dep't of Pub. Health, DAB No. 2842, at 6 (2018) (stating that "[t]he [audit] findings that form the foundation of [the] disallowance determination are of record" and that the awarding agency "has carried its burden to sufficiently demonstrate the basis for its disallowance").  Thus, CMS met its minimal burden in this case, and Texas was notified of CMS's rationale for the disallowance.  At no point in its request for reconsideration or in this appeal did Texas assert that it was unable to discern the 238 random moment samples at issue or the rationale for the disallowance.

With CMS having met its initial, minimal burden, the question becomes whether Texas has borne its burden to prove that the disallowed costs were allowable.  Board review under the Part 16 procedures, which apply in this case, is generally limited to resolving disputes about material facts and deciding whether the appealed decision is consistent with applicable law and regulations.  The Board therefore must uphold a decision where it is authorized by law and the non-federal party has not disproved the factual basis for the decision.  See 45 C.F.R. § 16.14 (captioned "How Board review is limited" and stating that the Board is "bound by all applicable laws and regulations"); see also S.A.G.E. Commc'ns Servs., DAB No. 2481, at 5 (2012) (citations omitted) ("The Board must uphold a disallowance" when it is "authorized by law" and its "factual basis" has not been "disproved.").  As the Practice Manual Texas cited in pages 6-7 of its brief states, "Every appellant that appeals a disallowance has the burden of identifying, documenting, and justifying its claimed costs and hence establishing its defense to the respondent's disallowance.  Thus, in the kind of cases that come before the Board under

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45 C.F.R. Part 16, the appellant always bears a general burden of proof."  Practice Manual, "Who has the burden of proof in a case before the Board?"

Texas does not expressly assert that CMS failed to meet its initial burden7 ; nor did Texas use its opportunity to submit a reply brief in which it could have disputed CMS's position that Texas "simply does not meet its burden of proof."  CMS Response Br. at 5.  As we discuss below, Texas instead asserts that it appropriately claimed personal care services as direct medical costs in accordance with applicable authorities and SPA 06-005.  Tex. Br. at 1-2, 7.  We reject Texas's argument and explain why Texas has not shown that the disallowed costs are eligible for Medicaid reimbursement.

II.  Texas has not borne its burden to prove that its claimed costs are allowable.  

1. Texas failed to submit documentation to support the disallowed amount.

CMS submitted as its exhibit 4 a spreadsheet identifying 238 random moment samples that the OIG initially determined were ineligible for Medicaid reimbursement and which CMS states form the basis for the disallowance of $16,287,695.  CMS Response Br. at 7; CMS Ex. 3, at ¶¶ 5, 7; CMS Ex. 4.  The spreadsheet includes multiple columns setting out specific information, including the date and time of the sampled moment, the school district from which the moment was derived, CMS's reason why each moment was determined ineligible (set out under the column headed "CMS Notes"), and a description of the RMTS participant's activity in the sampled moment (set out under the column headed "Doing What").  The three most frequently cited reasons for finding the random moment samples insufficient to establish a medically necessary personal care service were that the sampled moment concerned an educational activity ("Education"), did not involve the delivery of a service ("Lacks a service"), or was not described sufficiently to enable CMS to determine the nature of the activity and, consequently, to determine

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whether the  service was eligible for reimbursement ("No specificity").8   See, e.g., CMS Ex. 4, at 1, 5, 9.

We are not able to determine from the parties' submissions whether CMS prepared the spreadsheet (CMS Ex. 4) for the purposes of this litigation or whether CMS prepared it earlier and gave it to Texas before it filed its appeal.  Whichever the case may be, we are confident that, since before this appeal, Texas has known of the substantive contents of the spreadsheet that identify the random moment samples at issue.  CMS represents, and Texas nowhere disputes, that "CMS provided [Texas] with multiple opportunities . . . during the OIG audit process, and during the reconsideration stage" to show that the disputed samples were properly coded.  CMS Response Br. at 5 (citing Tex. Ex. 3, at 829 ; Tex. Ex. 4, at 88; CMS Ex. 3, at ¶ 7).  Even assuming Texas was first notified of the 238 random moment samples that led to the disallowance during this appeal by CMS's submission of the spreadsheet (CMS Ex. 4), we would view CMS's spreadsheet as a means of clarifying or explaining in more detail the reasons for CMS's disallowance during the appeal process.  The Board has stated that a federal agency may amend or clarify the basis for the decision on appeal during the appeal process so long as the non-federal party is given adequate notice of the basis and an opportunity to respond.  See, e.g., Bd. of Educ. of Topeka Pub. Schs., Unified Sch. Dist. #501, DAB No. 2421, at 11 (2011) (determining that a Head Start grantee had an adequate opportunity to respond to ACF's basis for disallowance, including an amendment to the basis, during the appeal before the Board); Tex. Health & Hum. Servs. Comm'n, DAB No. 2404, at 10 (2011) (citation omitted) ("The Board has held . . . that a federal agency's legal justification for the disallowance may be clarified, revised, or supplemented during a Board proceeding if the non-federal party is given an adequate opportunity to respond.").  CMS, the respondent, thus met its responsibility to "supplement the appeal file" with "additional documents supporting [its] position" consistent with 45 C.F.R. § 16.8(b)(1).  Texas had an opportunity to respond to CMS's submission by filing a reply but did not do so.  See 45 C.F.R. § 16.8(c).

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Texas, as the non-federal party, "is required to document its costs."  Tex. Health & Hum. Servs., DAB No. 2187, at 4; see also 2 C.F.R. Part 225, App. A, ¶ C.1.j.  Texas, moreover, is in a better position to produce evidence to substantiate the disallowed costs.  See Gulf Coast at 3 (recognizing that, between the federal agency and the non-federal party, the latter "is clearly in a better position to establish that it did comply with applicable requirements than" the awarding agency "is to establish that it did not"); see also So. Del. Ctr. for Child. & Fams., DAB No. 2073, at 5-6 (2007) (stating that the grantee has the ultimate burden of persuasion to show compliance with program standards since it is in a better position to show compliance); Norwalk Econ. Opportunity Now, Inc., DAB No. 2002, at 7 (2005) (similar discussion).  In a similar vein, the Practice Manual ("Who has the burden of proof in a case before the Board?") provides:  "Each party in an appeal has a burden of going forward with evidence and arguments in response to that presented by the other party.  A party with knowledge of facts pertinent to the Board's decision-making, and peculiarly within that party's knowledge or control, has a burden of supplying the Board and the other party with that information."  Such information, and, as well, documentation, would include reliable source documentation.10  See, e.g., Pa. Dep't of Hum. Servs., DAB No. 2883, at 7-8 (2018); Pa. Dep't of Pub. Welfare, DAB No. 2653, at 5 (2015) (citing N.J. Dep't of Health, DAB No. 2497, at 4 (2013)).  In this case, source documentation would include, e.g., documentation that originated from the state's school districts whose selected personnel participated in the random moment time studies and furnished information about their activities, that could help establish that the 238 random moment samples at issue involved personal care services eligible for reimbursement.

We note, moreover, that the audit report stated that Texas had not required participants to maintain any documentation to support their responses in the RMTS in accordance with the Claiming Guide (CMS Ex. 2).  Tex. Ex. 3, at 66; CMS Ex. 2, at 11-12 (describing documentation requirements), 17-18 (describing records retention requirements), and 21-32 (Appendix A to Claiming Guide, setting out instructions on how to code claims properly to support reimbursement).  The audit recognized that Texas was required to validate the results from the RMTS with adequate documentation demonstrating that the sampled moments consisted of Medicaid-covered services.  Tex. Ex. 3, at 66.  However,

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the OIG found that approximately 94 percent of the sampled moments lacked supporting documentation.  Id.  The audit further identified that "the RMTS contacts at the various school districts State-wide either said they did not have supporting documentation for the moments or they were unaware that supporting documentation was required for the moments."  Id.  Although the OIG did not question the costs solely on the basis of inadequate documentation, the report did caution that "the use of random moment sampling without adequate documentation or an audit trail for the random moment participant responses may allow costs that are not allowable."  Id. at 66-67; see also CMS Ex. 2 (Claiming Guide), at 11-12 (documentation requirements for sampled moments).  Texas does not dispute before the Board the OIG's findings with respect to the failure of RMTS participants to properly document their activities.  Nor does Texas dispute CMS's representation that it had multiple opportunities to submit documentation to substantiate its claims for reimbursement even before the opportunities Texas has had in these proceedings.  See CMS Response Br. at 5.

As we explain below, Texas has not produced any documentation concerning the 238 random moment samples described in CMS exhibit 4.  Thus, with no documentation to support the eligibility for reimbursement relating to the 238 samples at issue, we conclude that Texas has failed to meet its burden to prove that the disallowed costs were in fact allowable.  See, e.g., Md. Dep't of Health & Mental Hygiene, DAB No. 2090, at 4 (2007) (discussing that, in upholding many of the error findings, the Board was not necessarily finding the claimed services were not provided but rather "that Maryland did not meet its obligation to document that the services were provided in accordance with the applicable requirements").

2. Texas has not shown that the disallowed costs were for "personal care services" eligible for Medicaid reimbursement under the applicable legal authorities and Texas State Plan.

Despite its failure to show that the 238 random moment samples in dispute are eligible for FFP, Texas argues that, nevertheless, it properly claimed FFP.  Texas writes:

CMS did not codify the specific assistance covered by the benefit in its definition of personal care services in federal regulations in order to give States maximum flexibility in providing the benefit.  Personal care services are an optional state plan Medicaid service and may be provided in a home or other location, such as a school. . . . [T]he Texas State plan defined [personal care services] for children under the EPSDT benefit as outlined above [and] . . . provided that [personal care services] can be furnished in a home or in another location, such as a school, and established the reimbursement methodology for [personal care services] provided in a school setting under the SHARS program.  SPA 06-005 was approved by CMS.  [Texas] relied on CMS' approval of SPA 06-005 and the [personal

Page 15

care services] requirements as outlined in the state plan and administrative rules.  The disallowed costs were reasonable and allowable as [personal care services] under section 1905(a)(24) of the Act and SPA 06-005.

Tex. Br. at 7 (our emphasis).

Earlier, within the "Factual Background" section of its brief, Texas, referring to SPA 06-005, stated, "Medically necessary services include but are not limited to clients with a physical, cognitive, or behavioral limitation related to his or her disability or chronic health condition that inhibits the client's ability to accomplish [ADLs], [IADLs] or related health functions."  Id. at 4.  According to Texas, the Texas Administrative Code (TAC) "defined" ADLs to include eating, toileting, personal hygiene, dressing, bathing, transferring, positioning, and locomotion or mobility, and IADLs, which "are more complex life activities," to include meal preparation, grocery or household shopping, light housework, laundry, telephone use or other communication, escort or assistance with transportation services, medication assistance, and money management.  Id. (citing 1 TAC § 363.602(1), (14)).  Texas further asserts that the lists of ADLs and IADLs included in the Texas Administrative Code are not exhaustive and thus ADLs and IADLs also include, for students in a school setting, the following activities, among others:  being or staying on the playground with other children; being or staying in a seat; using hands, writing implements, or other tools needed during the learning process; hearing the instructions for an assignment or test; staying focused on an assignment; and not engaging in self-injurious or disruptive behavior.11   Tex. Br. at 5.  Texas thus appears to argue that SPA 06-005 reasonably may be read as contemplating that any assistance with performing ADLs or IADLs, including ADL- or IADL-related assistance that is specific to the school setting, could be considered personal care services eligible for Medicaid reimbursement.

Page 16

Texas's argument disregards something important – that SPA 06-005 contemplates an element of medical necessity for personal care services.  As we explain in more detail below, many of the activity descriptions in CMS's spreadsheet (CMS Ex. 4) lack any indication of medical necessity.  Further, many of the activities described in the spreadsheet are educational, not medical, in nature; some do not even appear to concern the performance of an ADL or IADL.  Thus, the activities at issue here are not the types of services Texas asserts are eligible for Medicaid coverage as personal care services.  Moreover, other descriptions of moments that CMS questioned, citing the reason "No specificity," are so vague or incomplete that we are not able to decipher what activity was performed during the sampled moment.  If it is Texas's position that any such activity entailed reimbursable personal care services, Texas should have produced, but failed to produce, supporting documentation concerning the 238 random moment samples for us to determine whether any reimbursable services were provided.

Personal Care Services

As we referenced above in our discussion of the applicable legal authorities, the statutory and regulatory provisions concerning "personal care services," which provide the broad parameters for Texas's state plan, contain certain requirements and restrictions that apply to the delivery of personal care services rather than full definitions.  In order to qualify as "medical assistance" under the Act, personal care services must be authorized by a physician in a plan of care or, if the state elects, otherwise authorized in a state-approved service plan.  Act § 1905(a)(24).  The Act also requires that personal care services be furnished by a non-family member who is qualified to furnish the services and allows for such services to be furnished in the home or another location.  Id.  Finally, the statute prohibits coverage of personal care services furnished to inpatients or residents of certain types of hospitals or facilities.  Id.  The implementing regulation repeats the statutory requirements nearly verbatim.  See 42 C.F.R. § 440.167.

When the Health Care Financing Administration (HCFA), CMS's predecessor, issued the proposed regulation in 1996, it explained that "historically . . . , personal care services mean[] services related to a patient's physical requirements, such as assistance with eating, bathing, dressing, personal hygiene, activities of daily living, bladder and bowel requirements, and taking medications."  61 Fed. Reg. 9405, 9406 (Mar. 8, 1996).  HCFA further explained that "[t]hese tasks are similar to those that would normally be performed by a nurse's aide if the recipient were in a hospital or nursing facility."  Id.  HCFA stated that it "plan[ned] to publish a definition of personal care services in the State Medicaid Manual in the near future" and explained that, "[t]o provide States with maximum flexibility in providing personal care services, we are providing guidelines for this benefit in a manual issuance, rather than codifying it in the regulations."  Id.  In response to comments HCFA received concerning the proposed definition, including requests that the regulation list the types of services that would be covered under this benefit, HCFA explained in the final rule, "in order to more easily address changes that

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may occur in the definition and delivery of personal care services and to allow greatest State flexibility," it would "publish in a State Medicaid Manual instruction a definition that States may use.  As suggested by the commenter, we plan to define the services in terms of assistance with ADLs and IADLs."  62 Fed. Reg. at 47,898.

HCFA published section 4480 of the State Medicaid Manual (SMM), which provides:

Personal care services (also known in States by other names such as personal attendant services, personal assistance services, or attendant care services, etc.) covered under a State's program may include a range of human assistance provided to persons with disabilities and chronic conditions of all ages which enables them to accomplish tasks that they would normally do for themselves if they did not have a disability. Assistance may be in the form of hands-on assistance (actually performing a personal care task for a person) or cuing so that the person performs the task by him/her self.  Such assistance most often relates to performance of ADLs and IADLs.  ADLs include eating, bathing, dressing, toileting, transferring, and maintaining continence.  IADLs capture more complex life activities and include personal hygiene, light housework, laundry, meal preparation, transportation, grocery shopping, using the telephone, medication management, and money management.  Personal care services can be provided on a continuing basis or on episodic occasions.  Skilled services that may be performed only by a health professional are not considered personal care services.

SMM, Part 4, section 4480 ("Personal Care Services"), (C) ("Scope of Services").12

Texas's state plan includes, in similar language, the requirements and restrictions established by the Act (and regulation), including the requirement that the service must be authorized by a physician in accordance with a plan of treatment or a state-approved service plan.  See Tex. Ex. 2, at 25, 40.  In addition, SPA 06-005 explicitly and unambiguously requires that the personal care services be medically necessary.  The section within SPA 06-005 that addresses "Personal Care Services" begins with the following language, under the heading "Definition":

Personal care services outlined in this section of the state plan are available to Medicaid-eligible recipients under the age of 21 years, who are eligible for [EPSDT] program and for whom services are medically necessary.

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Id. (emphasis added).  Then, under the heading "Services," the state plan provides that "[m]edically necessary services include but are not limited to clients with a physical, cognitive, or behavioral limitation related to his or her disability or chronic health condition that inhibits the client's ability to accomplish [ADLs], [IADLs] or related health functions."  Within the context of school-based services, this means, then, that there must be some evidence that the services provided are necessary due to the student's physical, cognitive, or behavioral limitations related to the student's disability or health condition.  It is not reasonable to read the state plan language to mean that virtually any activity that could relate to ADLs or IADLs, without more, could qualify for reimbursement as personal care services.

Texas draws repeatedly on its assertion that it has "maximum flexibility" to provide personal care services.  See Tex. Br. at 1, 3, 7.  As we discussed above, HCFA referenced this notion in the Federal Register notices as its rationale for publishing guidelines for personal care services in a manual rather than in the regulations.  But while HCFA might have envisioned that states would enjoy "maximum flexibility" in providing personal care services, nowhere in the preamble did HCFA indicate that states may freely determine what personal care services may be provided without regard to the governing law or regulations, and, importantly, in contravention of the very terms of the state plan, here, in SPA 06-005, which CMS undisputedly approved and which plainly contemplates a medical necessity element for personal care services.  As CMS observes, "if [Texas's] logic were to be followed, virtually any services provided by schools to students with an IEP would be eligible for Medicaid reimbursement."  CMS Response Br. at 6.  Texas offers no specific argument or authority supporting its apparent position that Texas enjoys "maximum flexibility" to determine what personal care services it may provide notwithstanding language in SPA 06-005 that contemplates a medical necessity element to "personal care services."  "Maximum flexibility" cannot reasonably be understood to mean that Texas may claim for Medicaid reimbursement non-medical services ineligible for Medicaid coverage, such as educational instruction, or that Texas is relieved from applicable requirements, to include the requirement to substantiate any claim for FFP.

We next turn to the random moment samples at issue and the three main reasons CMS determined they were incorrectly coded as IEP-covered direct medical services.

Samples referring to educational services

The vast majority of the random moment samples CMS disputed lack any indication that the described services were necessary due to students' physical, behavioral, or cognitive limitations related to their disabilities or health conditions.  See CMS Ex. 4, at 1-5.  For example, in one moment the participant described:  "We were supervising (three persons) the students['] lunch time, which is also our lunch time."  Id. at 1.  In another moment the participant described, "I was monitoring special education and regular education students during their lunch time.  The monitoring took place in the school cafeteria.  If they

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needed assistance[,] I was there for them."  Id. at 3.  In another moment, the participant described, "Supervising recess on the playground."  Id. at 1.13  These descriptions fail to identify any specific physical, cognitive, or behavioral limitations for the students these participants were serving and, second, that any limitations were the result of those students' disabilities or chronic health conditions.  Nor is there any evidence that the supervision and monitoring in each moment was a service authorized by a physician in accordance with a plan of treatment or a state-approved service plan (as opposed to the routine monitoring and supervision provided for all students at recess and lunch).  Thus, these claimed activities, and those like them, fail to meet the medical necessity requirement for personal care services.14

Other activities denied with the reason "Education" clearly involved educational instruction and thus are not personal care services.  As we have previously recognized, there is a distinction between educational services, which the IDEA supports, and related health services, which Medicaid could cover.  N.J. Dep't of Hum. Servs., DAB No. 2415, at 16 (discussing importance of regulations ensuring that services are medically necessary by requiring prescription for physical, speech, and occupational therapy claims and noting that "[s]uch assurance is particularly important in the context of distinguishing educational services, which do not qualify for Medicaid coverage (but for which IDEA funds are made available), and the related services that qualify for Medicaid coverage").  For example, one participant described "reviewing Science skills that we had discuss[ed] in the day's lesson.  We had discussed inner planets.  I wa[s] summarizing and checking for understanding."  CMS Ex. 4, at 3.  Another participant described "working on Math skills in a group setting.  Students are working on numeral recognition, so using the TouchMath curriculum, we were reviewing numerals previously learned."  Id. at 3.  Various other moments describe activities that are educational or instructional in nature, e.g., teaching students how to write their names and how to count numbers, working on art activities, helping students with social studies and science lessons, and teaching adjective and pronoun usage.  Id. at 2, 4.  These descriptions incontrovertibly

Page 20

demonstrate that the participants were providing educational instruction at the sampled moment.  Moreover, these descriptions also lack any reference to individual student need based on a health condition or disability and thus they lack a basis for us to conclude that such services were medically necessary.  Thus, these and similar moments do not qualify as personal care services.

Of the 97 moments CMS identified as improperly coded because they were educational activities (CMS Ex. 4, at 1-5), only 14 moments even mentioned that the activities related to the students' IEPs (id. at 1-4).  However, the descriptions for some of those 14 moments reveal that the activities constituted educational instruction or preparation for educational instruction, not medically necessary personal care services provided to the students.  As examples, moment descriptions included the following:  "[s]howing student phonics as defined in IEP" (CMS Ex. 4, at 1); "working with a student on his IEP goals" (id. at 1); "giving student benchmark exam . . . according to the IEP" (id. at 2); reading a student's IEP (id. at 3); "working on academic objectives" for students with IEPs (id.); "[o]rganizing student files . . . and checking that current IEP is in file" (id. at 4); and "completing assignments based off of the objectives written in the IEP for the student in Math" (id.).  Aside from merely mentioning that students had IEPs, which tells us practically nothing about the nature of students' disabilities or their needs (including need for assistance with ADLs or IADLs), these descriptions do not identify any personal care services furnished to students due to physical, cognitive, or behavioral limitations resulting from disabilities or chronic health conditions.  Thus, we agree with CMS that these moments involved educational instruction, which is not eligible for Medicaid coverage.15   See N.J. Dep't of Hum. Servs., DAB No. 2415, at 16.

We discuss two other moments in which IEPs are mentioned because they warranted closer review to determine whether they could support reimbursement.  During these two moments, according to the descriptions, participants were administering tests orally to students whose IEPs indicated the students required such assistance.  See CMS Ex. 4, at 2, 3.16   One moment description specifies that the accommodation was required due to a

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reading disability:  "Doing oral administration for two special education students in math.  They were taking a test on place value.  This is an accommodation that is listed on the students['] IEP due to a reading disability."  Id. at 2.  It is reasonable to read this as meaning that the two students in question have a reading disability that is addressed in their IEPs.  However, the nature of the activity captured in the sampled moment failed to identify anything specific about the nature of the disability or what, if any, condition limited the students' ability to read.  Therefore, without any further information or supporting documentation from Texas, we simply do not have a sufficient basis on which to determine that the participant provided a medically necessary personal care service.  See Tex. Health & Hum. Servs. Comm'n, DAB No. 2235, at 10 (2009) (concluding that, even if educational diagnosticians were qualified to conduct the assessments at issue, because Texas provided no documentation of the assessments themselves, there was no basis in the record that the assessments conducted were the type approved in the state plan).

Similarly, the other description provides:  "I was administering the TAKS-Modified Science Benchmark test to eight students.  Their IEP, Individual Educational Plan, required that I orally read the test to the students."  Id. at 3.  That the IEPs required oral reading suggests the possibility that the students had a visual disability or some other condition affecting their ability to read that the participant needed to address when instructing the students.  However, this description says nothing specific about the students' disabilities and what limitations those students faced.  Moreover, the description indicates that the participant was "administering" a science examination, i.e., the activity was educational in nature.  So, without more information and evidence from Texas, we determine that this moment does not demonstrate a medically necessary personal care service eligible for FFP.

Samples lacking an identifiable service

The second main basis of ineligibility CMS has identified is "lacks a service."  CMS Ex. 4, at 5-9.  Several examples of descriptions provided for these moments include the following:  "I provide supervision and academic instruction with aid." (id. at 6); "I was working one-on-one with a student.  We were addressing her IEP goals and objectives." (id. at 5); "Managing my classroom with three of my students" (id.); "I assist the students with eating, changing, and also with washing their hands, I assist the students in learning how to be more independent.  I also assist in helping students with their Math, English and Social skills." (id. at 6); "Redirection and intervention for behavior; Health related functions through hands-on assistance, supervision and cueing." (id.); "I was assisting the student in their personal care individual education plan" (id. at 8).  The ultimate deficit with these descriptions is that, alone, they are too general and vague for a reviewer to decipher what, if any, service was furnished at the sampled one-minute moment.  For example, from a description that reads, "Redirection and intervention for behavior; Health related functions through hands-on assistance, supervision and cueing," we cannot

Page 22

determine what, if any, personal care service the participant was providing (or why it was medically necessary) at the sampled moment.  Similarly, a description merely that the participant was working with a student on an IEP elucidates nothing about what activity was being performed, nor does it include any indication that any service performed was a medically necessary personal care service.  Other descriptions (such as, "I assist the students with eating, changing, and also with washing their hands, I assist the students in learning how to be more independent.  I also assist in helping students with their Math, English and Social skills") are more specific as to the nature of services the participant regularly provides to students but fail to identify what service was provided in the moment sampled.  So, while services such as assistance with eating and changing, as they relate to ADLs or IADLs, are the types of services that are within the scope of the personal care benefit consistent with the State Medicaid Manual, the descriptions before us do not actually identify what services, if any, were provided at the sampled moments.

Samples having "no specificity"

The third most frequently cited basis of ineligibility was "no specificity."  CMS Ex. 4, at 9-11.  Moments determined to be ineligible for this reason were described by participants, for example, as follows:  "I assist students in toilet training as indicated in their IEPs.  I also assist in dressing and undressing as indicated in their IEPs." (id. at 9); "Feeding the students.  Put students on toilet.  Change student's clothes." (id.); "I am potty training four students in my classroom.  This is part of their IEP(s).  I also have to teach a student how to feed himself/herself." (id. at 10); "I provided transportation to and from the bus.  I helped with feeding.  Also I helped with diapering." (id.); "I have provided reading, writing and toileting and bathing." (id. at 11).  These descriptions, similar to many of the descriptions questioned based on the lack of a service, on their face are not sufficiently specific for us to determine what services were provided at the sampled moment.  While assistance with feeding and toileting, for example, certainly could be personal care services eligible for Medicaid coverage if they meet other requirements and are consistent with SPA 06-005, the descriptions provided do not make clear that those were the services the participant provided at the precise moment sampled.  Instead, the RMTS responses appear to be descriptions of the type of work the participants perform routinely in a typical day.  Thus, these descriptions do not reflect what, if any, personal care services were provided at the sampled moment and are insufficient to demonstrate a Medicaid-reimbursable cost.

Texas's Reliance on CMS Approval

Finally, we turn to Texas's statement that it has "relied on CMS's approval of SPA 06-005 and the [personal care services] requirements as outlined in the state plan and administrative rules."  Tex. Br. at 7.  Texas does not explain in any more detail what it means.  Of course, Texas should have "relied" on CMS's approval of SPA 06-005; there is no dispute that CMS approved SPA 06-005, which Texas itself proposed.  See Tex. Ex.

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2, at 7.  SPA 06-005 and the authorities discussed earlier govern the analysis of this case.  If Texas is suggesting that CMS did something Texas reasonably understood to mean that any of the 238 random moment samples would be eligible for FFP or that the costs or the random moments on which those costs were based comported with applicable authorities and SPA 06-005, Texas has not asserted that, let alone explained how and on what basis it is making such an assertion.17   Moreover, Texas does not specifically identify any language in SPA 06-005 that it asserts is ambiguous or reasonably could be read or understood more than one way.18   As discussed earlier, Texas claims that it properly coded the 238 random moment samples as personal care services in accordance with SPA 06-005, but Texas disregards important, unmistakable language in SPA 06-005 concerning medical necessity of personal care services and has not produced any supporting evidence.  Accordingly, Texas's mere assertion that it "relied" on CMS's approval of its state plan under these circumstances, ultimately, is of no consequence in our analysis.

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Conclusion

We uphold CMS's disallowance of FFP in the amount of $16,287,695.

1. These cost principles (formerly published in OMB Circular A-87) were previously codified at 2 C.F.R. Part 225 and made applicable to Medicaid disallowances by 45 C.F.R. § 92.22(b).  Effective December 26, 2014, the Uniform Administrative Requirements, Cost Principles, and Audit Requirements for HHS Awards published in 45 C.F.R. Part 75 superseded the Part 92 regulations as well as the codification of OMB Circular A-87 in Part 225.  See 79 Fed. Reg. 75,872, 75,875-76 (Dec. 19, 2014); 2 C.F.R. §§ 200.104; 200.110(a).  Because the disallowed costs at issue here were incurred in 2010 and 2011, before those regulatory changes, we cite to and apply the regulations at 2 C.F.R. Part 225 and 45 C.F.R. Part 92.  See Pa. Dep't of Hum. Servs., DAB No. 2835, at 3 n.2 (2017), appeal voluntarily dismissed, No. 1:18-cv-00182 (M.D. Pa. Nov. 28, 2018).
• back to note 1
2. Texas filed its appeal submission – brief, exhibit list, and exhibits 1 through 6 – as a single document.  While Texas did not paginate each of its exhibits, it added Bates numbering to all of its exhibits.  We cite to Texas's exhibits by their exhibit numbers and corresponding Bates number.
• back to note 2
3. The OIG also concluded that Texas's conduct of its random moment sampling did not fully comply with acceptable statistical standards for various reasons.  See Tex. Ex. 3, at 54, 55, 63.  However, CMS did not cite OIG's findings concerning the statistical validity of the random moment sampling as a reason for its disallowance decision.  And, neither party raises arguments about the sampling methodology itself or OIG's statistical validity findings as bearing on the basis on which CMS disallowed over $16 million, that is, incorrect coding of 238 random moments.  We therefore need not further discuss OIG's statistical validity findings.
• back to note 3
4. The OIG did not question costs based on this finding but noted that "the use of random moment sampling without adequate documentation or an audit trail for the random moment participant responses may allow costs that are not allowable."  Tex. Ex. 3, at 66-67.
• back to note 4
5. As noted earlier, SPA 06-005 states, in pertinent part:  "Services must be authorized by a physician in accordance with a plan of treatment or (at the State's option) in accordance with a service plan approved by the State."  Tex. Ex. 2, at 25, 40.
• back to note 5
6. The Practice Manual is available at:  https://www.hhs.gov/about/agencies/dab/different-appeals-at-dab/appeals-to-board/practice-manual/index.html (last visited June 24, 2022).
• back to note 6
7. As noted earlier, in describing the burden of proof, Texas wrote, "The federal agency also has an obligation to provide information showing how it calculated the disallowance, particularly where the amount is not identifiable in Appellant's records as a discrete category of costs."  Tex. Br. at 7.  This language was derived from the Practice Manual, which states that when an appellant "raises a question about the calculation of a disallowance" in its appeal, the respondent is obligated to show how it calculated the disallowance.  We do not read this statement by Texas as an argument that CMS failed to explain how it calculated the disallowed amount or that CMS failed to meet its initial burden.  Texas has not raised any question about the "calculation" of the disallowance in this appeal.  Instead, Texas is challenging CMS's determination that 238 of the 3,161 random moment samples Texas used to calculate and claim Medicaid reimbursement were improperly coded as direct medical services.  Texas is well-aware that the disallowed amount is directly attributable to the reduced number of random moment samples that can be used to claim Medicaid reimbursement based on the RMTS methodology.  Tex. Ex. 3, at 82-83 (reflecting no discussion that Texas was questioning how the unallowed reimbursement amount was calculated but indicating that it intended to provide clarification concerning the random moment samples the OIG determined were miscoded).
• back to note 7
8. Three moments were questioned for other reasons.  The first one was marked "Aged out" (CMS Ex. 4, at 1), which we presume means the beneficiary was not under 21 years old (see Act § 1905(a)(4)(B); Tex. Ex. 2, at 25, 40) and thus no longer eligible under the EPSDT benefit category.  The second one was marked "Impossible RMTS" (CMS Ex. 4, at 5), and the third one was marked "Not SHARS" (id. at 11).  Neither the second nor the third moment describes a reimbursable personal care service.  In any case, Texas has not produced anything about these moments to enable us to examine them to determine whether they could support a reimbursable personal care service, let alone raised any argument disputing the reasons CMS cited.  We need not further discuss these three moments because Texas did not specifically challenge them.  Below, we focus our discussion on the other 235 random moment samples CMS disputed, giving one of three reasons, "Education," "Lacks a service," and "No specificity."
• back to note 8
9. CMS's reference to Texas's exhibit 3, page 82, is to the first page of Texas's response to the OIG's draft audit findings and recommendation that Texas refund the federal government $18,925,853 based on the OIG's determination that Texas had improperly coded 274 random moments.  The draft audit report was sent to Texas by transmittal dated May 1, 2017; Texas's response to the draft audit report was dated May 31, 2017.  See Tex. Ex. 3, at 81.  The 238 random moment samples on which CMS subsequently decided to disallow $16,287,695 were included within the 274 random moment samples OIG had determined were improperly coded.
• back to note 9
10. A spreadsheet such as that in CMS exhibit 4 is not itself source documentation, though its contents presumably derive from the RMTS participants' responses, which would be examples of source documentation.  The spreadsheet itself may be more appropriately considered summary evidence, which, while admissible (and, in this case, provides notice of the basis for the disallowance), is not an adequate substitute for source documentation to support eligibility for Medicaid reimbursement.  See Ohio Dep't of Job & Fam. Servs., DAB No. 2643, at 33 (2015) (recognizing that summary evidence is not used in the ordinary course of business but is instead created for purposes of litigation and, while it may be admitted, it may not substitute for reliable source documentation).  Texas is not only in a better position to show that the claimed services are eligible for reimbursement, it must make that showing; yet, Texas has not produced any supporting source documentation.
• back to note 10
11. Texas cites to the regulations in Title 1, section 363.602 (of Part 15, Chapter 363) of the Texas Administrative Code for the non-exhaustive lists of ADLs and IADLs.  However, the sections within subchapter F, "Personal Care Services," were amended effective September 1, 2014, and thus the current versions were not in effect during the time period at issue in this case.  The versions of the provisions under subchapter F that were in effect during the period of time the audit covered specifically stated, "This subchapter does not apply to personal care services delivered through the School Health and Related Services program."  1 TAC § 363.601(d) (effective September 1, 2007).  Thus, we do not rely on the provisions of Title 1, Chapter 363 of the Texas Administrative Code.  Moreover, the current section 363.602 (though not exhaustive) does not include the ADLs and IADLs Texas asserts are relevant in the school setting; thus, we would find little support for Texas's position in this provision.  Similarly, Texas cites to the Children's Services Handbook of the Texas Medicaid Provider Procedure Manual to support its argument that personal care services include direct and indirect intervention (such as cuing).  Tex. Br. at 4.  The website to which Texas referred in citing to the Handbook (Table of Authorities, Tex. Br. at iii) only includes archived versions of the manual back to 2015 and does not include the version of the manual (if any) in effect during the relevant time period.  We note, however, that the State Medicaid Manual, section 4480, which we later address in the main text, lists ADLs and IADLs similar to those listed in section 363.602 and specifies that personal care services include hands-on assistance and cuing.  Accordingly, despite the concerns raised by Texas's references to the TAC and the Handbook, by considering the State Medicaid Manual language that identifies similar ADLs and IADLs to which Texas refers, we are fully considering Texas's argument.
• back to note 11
12. The State Medicaid Manual is accessible at:  https://www.cms.gov/Regulations-and-Guidance/Guidance/Manuals/Paper-Based-Manuals-Items/CMS021927.  The current version of the cited section was effective during the period at issue in this case.
• back to note 12
13. Some of these descriptions are not detailed or specific enough for us to readily determine that the activities in question were educational in nature.  For instance, one description states, "At 11:56 am I was in the café with the students.  Our lunch is from 11:30 am til 12:10 pm."  CMS Ex. 4, at 2.  If the participant performed an educational activity during lunchtime, the description does not bear that out.  Another description states, "It was a district work day.  There were no students in attendance."  Id. at 3.  If the participant performed some activity in furtherance of student education despite the absence of students that day, we cannot determine that based on the description.  In any case, Texas does not expressly dispute CMS's reason for rejection ("Education") as incorrect or inaccurate, and the descriptions come nowhere close to describing personal care services in accordance with applicable statutory and regulatory requirements and SPA 06-005.
• back to note 13
14. We do not conclude that supervision or monitoring of students, under any circumstances, could never be personal care services.  Rather, we find that the descriptions provided fail to show, as CMS aptly put it, any "healthcare related nexus" (CMS Response Br. at 6) between any supervision or monitoring and the students' medical condition and needs.
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15. CMS's Medicaid and School Health:  A Technical Assistance Guide (CMS Ex. 1) explains the important distinction between services that address health needs, which could be reimbursable, versus services that are educational, which are not reimbursable.  In the context of a discussion about medical evaluations or assessments, CMS stated, "[I]f medical evaluations or assessments are conducted to determine a child's health-related needs for purposes of the IEP . . ., payment for some or all of the costs may be available under Medicaid.  However, if the evaluations or assessments are for educational purposes, Medicaid reimbursement is not available.  Medicaid payment is only available for the part of the assessment that is medical in nature . . . .  In addition, reimbursement for non-medical services, such as special instruction, is not covered."  CMS Ex. 1, at 14-15 (CMS's emphasis omitted).
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16. The first moment was at 10:05 a.m. on October 1, 2010, in the Alief Independent School District.  CMS Ex. 4, at 2.  The second moment was at 2:55 p.m. on February 8, 2011, in the Mission school district.  Id. at 3.
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17. Texas does not state anything that could be construed as an argument that estoppel lies against CMS based on affirmative misconduct or misrepresentation by CMS on which Texas reasonably relied to its detriment with respect to the disputed claims.  In any event, the Board has held repeatedly that it has no authority to grant equitable remedies and, moreover, that equitable estoppel is not generally available against the government absent affirmative misconduct.  See, e.g., Mass. Exec. Off. at 32 n.23 (noting that the state appeared to be asserting that equitable estoppel should lie against CMS, but that the state did not allege necessary elements of estoppel and, "[i]n any event, the Board lacks authority to grant equitable relief").
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18. The Board has determined that, when state plan language is unambiguous, the Board "appl[ies] the clear language of the plan regardless of the interpretation urged by the state."  Ark. Dep't of Hum. Servs., DAB No. 1328, at 6 (1992).  If, however, the state plan provision in question is ambiguous or silent, then the Board will generally defer to the state's interpretation of the provision if it is reasonable in light of the purpose of the provision and program requirements, gives reasonable effect to the language of the plan as a whole, and, if lacking contemporaneous documentary evidence of intent, the state's interpretation is supported by consistent administrative practice.  W. Va. Dep't of Health & Hum. Res., DAB No. 2536, at 9 (2013) (and cited cases) (quoting S.D. Dep't of Soc. Servs., DAB No. 934, at 4 (1988)).  "The Board [has] developed this approach [to analyzing ambiguous state plan language] for circumstances in which a state has flexibility in what state plan provisions to adopt, particularly with respect to reimbursement methodologies."  La. Dep't of Health & Hosps., DAB No. 2350, at 9 (2010), aff'd, No. 11-76-BAH-CN (M.D. La. Feb. 7, 2013), aff'd, 566 Fed. App'x 384 (5th Cir. 2014).  "The importance of administrative practice is in part determining whether the state in fact was applying an official interpretation of a plan provision or has advanced an interpretation only as an after-the-fact attempt to justify acting inconsistently with or simply ignoring its plan."  S.D. Dep't of Soc. Servs. at 4.
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