DEPARTMENTAL GRANT APPEALS BOARD
Department of Health and Human Services
SUBJECT: Minnesota Department of
Human Services
Request for Reconsideration of Decision No. 831
DATE: April 9, 1987
RULING ON REQUEST FOR RECONSIDERATION
By motion dated March 5, 1987, the Health Care Financing
Administration
(HCFA) requested reconsideration of the Board's decision in
Minnesota
Department of Human Services, Decision No. 831, January 27,
1987. That
decision addressed the question of whether three Minnesota
facilities
were institutions for mental diseases (IMDs), during the period
July 1,
1977 to June 30, 1978, so that Medicaid funding for services provided
to
residents of the facilities under 65 years of age was
properly
disallowed. The Board found that one facility (Andrew Care
Home) had
the requisite overall character of an IMD, but that two
facilities
(Birchwood Care Home and Hoikka House) did not.
Under 45 CFR 16.13, the Board has the power to reconsider its own
decision
"where a party promptly alleges a clear error of fact or law."
Here, HCFA
pointed to the following statement in the Board's decision
regarding HCFA's
review of the facilities (performed by HCFA after
findings in an earlier
review had been overturned by the U.S. Court of
Appeals for the Eighth
Circuit):
HCFA did not determine the degree of treatment
required by the
patients' physical disorders (i.e.,
did not determine the reason
for
institutionalization in the facilities).
This statement related to the Board's finding that the record did
not
support HCFA's allegation that its reviewers had considered both
the
physical and mental disorders and determined, in accordance with
HCFA
guidelines, that the mental disorders were the reason for
placement.
Instead, the Board found, the record showed that the scope of the
review
and the factors actually examined were more narrowly directed
at
determining the treatment required or received for the mental
disorders.
HCFA asserted in its motion that "contrary to the Board's finding,
the
sole objective of the entire Second Audit was to determine the
primary
reason for each patient's institutionalization in a facility" and
that
the reviewers had in fact determined the reason. Motion
for
Reconsideration, p. 1.
HCFA did not allege that the Board failed to consider evidence
presented
by HCFA during Board proceedings, or that HCFA had discovered
new
evidence not available to it during Board proceedings. Rather,
HCFA
stated in its motion that the documents submitted to the
Board
concerning HCFA's second review "clearly did not provide an
accurate,
complete description of the process that was undertaken."
Motion for
Reconsideration, p. 2. HCFA requested the Board to reopen
the record
for the limited purpose of receiving testimony from the
psychiatric
nurse who was on the team which conducted the second
review. According
to HCFA, this testimony would show, among other
things, the process that
occurred in weighing the patients' mental and
physical disorders to
determine the primary reason for placement and why some
medical
conditions and treatments were not listed on the summary sheets
prepared
by the review team. HCFA stated that the Board's decision was
the first
to clarify in detail what the Board considers to be the standard
of
proof that must be met in an IMD audit to meet requirements
enunciated
by court decisions on IMDs, which have emphasized differing
factors
which the courts believe are dispositive in determining IMD
status.
Minnesota sought and received an opportunity to comment on HCFA's
Motion
for Reconsideration. The State cited various court cases for
the
propositions that the power to grant a motion for reconsideration
is
discretionary and that it is proper to refuse to reconsider a case
based
on evidence which is cumulative, or which was in existence,
available,
and known at the time of the original proceeding, where no valid
reason
exists for failure to present the evidence. The State alleged
that the
Board's finding that HCFA did not consider the degree of
treatment
required by the patients' physical disorders is supported by
the
evidence. The State said that HCFA had provided no valid reason for
its
failure to present more extensive evidence on the review process
and
that the evidence HCFA now seeks to present could have been presented
in
the original proceeding. The Board's requirements, the State said,
were
foreseeable from the Board's decision in Washington Department of
Social
and Health Services, Decision No. 785, September 8, 1986, and from
the
Eighth Circuit's decision in Minnesota v. Heckler, 718 F.2d 852
(8th
Cir. 1983). The evidence HCFA now seeks to present, the State
alleged,
would be merely cumulative and would not change the outcome of the
case,
but would simply delay final resolution of this case, which has
twice
been considered by the Board.
We deny HCFA's motion for reconsideration. Contrary to what
HCFA
alleged, HCFA clearly knew that this case involved the issue of
whether
HCFA's review had evaluated the primary reason for the
patients'
placement in the facilities. This was clear not only from the
Board's
Washington decision and the Eighth Circuit's Minnesota decision,
but
from HCFA's own guidelines concerning IMDs. The Washington
decision
found flaws with the audit process used there based in part on
HCFA's
guidelines on IMDs, which instruct reviewers to classify patients not
on
diagnosis alone, but on whether "each patient's need
for
institutionalization results from a mental disease." See, e.g.,
pp.
16-17. The Minnesota decision stated that the key factor in
determining
IMD status was the degree of care and treatment required by the
mental
or physical conditions of the patients, indicating that mere
treatment
for a mental disease was insufficient.
Moreover, during Board proceedings in this case, the primary point
raised
by the State was that HCFA had failed in its review to consider
physical
disorders which the patients had and which the State alleged
were the primary
reason for their placement in the facilities. HCFA
repeatedly asserted
in contesting this point that its reviewers had
evaluated the primary reasons
the patients were in the facilities.
Thus, HCFA's failure to provide evidence
to substantiate this allegation
cannot be fairly attributed to any lack of
clarity in what standard the
Board would apply.
More importantly, we agree with the State that the evidence which
HCFA
seeks to present simply would not change the outcome of this
case.
Testimony by the psychiatric nurse would not be credible in light of
the
documentary evidence presented by HCFA previously. That
evidence
includes the following:
o Two affidavits by the same psychiatric nurse specifically
stating
that the objective of the HCFA review was "to determine whether
the
patients required and/or were receiving treatment for mental
diseases."
Appeal file, Ex. V; HCFA's reply to Minnesota's November 7,
1986
response to the Board's request for additional information, Ex. A.
o The summary sheets prepared by the reviewers, which lack
any
indication that the reviewers examined the reasons for placement
and
which are consistent with the Board's finding (and the statement in
the
affidavits) that the purpose of the medical records review was
more
narrow, i.e., to determine whether patients diagnosed as having
mental
diseases were receiving psychotropic drugs and were under the care of
a
psychiatrist.
o The report of the review, which also indicates that the review
was
more narrow in scope and that the reviewers examined the
patients'
medical records to determine the treatment for their mental
diagnoses.
(The review report states that the medical experts on the team
discussed
what factors would establish whether a patient diagnosed as having
a
mental disease was receiving the care and services he or she
required,
but gives no indication that these factors would be considered
relevant
for determining the primary reason for a patient's placement in
the
facility, as HCFA alleged in its motion.)
The fact that the second of the two affidavits by the psychiatric
nurse,
submitted during prior proceedings, repeated her statement from
her
first affidavit about the objective of the review is
particularly
significant. HCFA submitted the second affidavit to
respond to
questions raised in a telephone conference call held by the Board
on
October 24, 1986. HCFA offered the affidavit to show how the
review
team operated and what kind of interaction occurred between the
medical
and non-medical personnel on the team. A review of the tape of
the
conference call shows that this question arose in the context of
a
discussion about the scope of the review in which HCFA asserted that
the
objective of the review was to determine the primary reason for
the
patients' placement in the facilities. The State disputed
this,
pointing out that this was not indicated on the summary sheets
prepared
by the review team and that the State's review showed that the
patients
had physical disorders which necessitated placement in the
facilities.
HCFA asserted that the review team, while not listing every
physical
ailment the patients may have had, had in fact engaged in a process
of
weighing the mental and physical disorders to determine the reason
for
placement. The State challenged whether non-medical personnel
could
properly make such evaluations. The second affidavit addresses
the
objective of the review but merely reiterates the statement from
the
first affidavit, rather than affirming HCFA's assertion in the call
that
the objective was to evaluate reasons for placement. In describing
how
the psychiatric nurse and psychiatrist instructed the
non-medical
members of the team prior to the review and supervised the team
during
the review, the affidavit makes no mention of a weighing process
or
determining reasons for placement.
We also note that, as the State pointed out, the psychiatric nurse was
not
the only team member who reviewed patients in Hoikka House (which
appears to
be the only facility for which HCFA is seriously contesting
the Board's
decision). While testimony from the psychiatric nurse would
normally be
sufficient to show the process that the review team used, we
think that here,
in light of the previous statements which the nurse
made concerning the
process, HCFA could have supported its motion by
offering to substantiate her
testimony through testimony of other team
members. Instead, HCFA seeks
to reopen the record for the limited
purpose of presenting testimony from the
psychiatric nurse, which we
find would simply be insufficient to establish
that the Board erred in
finding the facts about HCFA's review.
Accordingly, we deny HCFA's motion for reconsideration and affirm
the
results in Decision No. 831.
________________________________ Donald F. Garrett
________________________________ Norval D. (John)
Settle
________________________________ Judith A.
Ballard
Presiding Board