DEPARTMENTAL GRANT APPEALS BOARD
Department of Health and Human Services
SUBJECT: New York State Department of Social Services
Docket No. 85-105
Decision No. 854
DATE: March 31, 1987
DECISION
The New York State Department of Social Services (State) appealed
the
disallowance by the Health Care Financing Administration (HCFA,
Agency)
of $162,990,954 in federal financial participation (FFP) claimed
under
title XIX (Medicaid) of the Social Security Act (Act). The
costs
claimed represented, for the most part, amounts originally paid
under
the State-funded medical assistance program to individuals whom
the
State later determined were eligible for Medicaid on the basis
of
disability. The costs were disallowed on the ground that, at the
time
the claims were filed, there were no disability determinations for
the
individuals involved. The State subsequently made individual
disability
determinations in some cases and provided the relevant
documentation to
the Agency, reducing its claims for FFP to the extent that
the
documentation supported a lower amount of allowable costs than had
been
claimed. The State also continued to claim FFP in expenditures in
cases
for which no disability determinations were made, based on a
projection
from a sample of cases for which such determinations were
made. This
also resulted in a reduction of the amount claimed since
some of the
individuals in the sample were determined not to be disabled. 1/
In
disallowing the claims, however, the Agency stated that no
disability
determinations made after the claims were filed were
properly
considered.
As discussed in detail below, we uphold the disallowance, except to
the
extent indicated on pp. 16-17 of the decision, on the ground that
the
claims as originally filed were not supported by adequate
documentation
and that the State's later attempts to document the claims were
untimely
under section 1132 of the Act. We do not adopt our tentative
finding, in
a draft decision sent to the parties, that the claims were
adequately
documented, in light of facts disclosed in the parties' responses
(in
written briefing and in a telephone conference call) to the
draft
decision (see, in particular, pp. 7-12 below.)
Background--Requirement for Disability Determination
Under the Social Security Act and implementing regulations, a state has
a
number of options with respect to classes of individuals it may cover
under
its title XIX Medicaid program. In New York, pursuant to 42 CFR
435.120,
recipients of Supplemental Security Income (SSI) benefits under
title XVI of
the Act--available to disabled individuals with limited
income and
resources--are automatically eligible for Medicaid.
Individuals who are
eligible for but not in receipt of SSI are eligible
for Medicaid as well
under 42 CFR 435.210. In addition, individuals who
are determined to be
disabled and who meet certain income and resource
requirements (less
stringent than the SSI requirements) are eligible for
Medicaid under 42 CFR
435.324. 2/ Section 435.540 requires that in
determining whether
an individual applying only for Medicaid is
disabled, "[t]he agency must use
the same definition of disability as
used under SSI. . . ."
Disability in the SSI program is defined at 20
CFR 416.905 as:
inability to do any substantial gainful
activity by reason of any
medically
determinable physical or mental impairment which can
be
expected to result in death or which
has lasted or can be
expected to last
for a continuous period of not less than
12
months.
A determination of disability for a Medicaid-only applicant must be
made
by a state or local disability review team in accordance with 42
CFR
435.541. This regulation provides in pertinent part:
(a) . . .
[T]he [Medicaid] agency must obtain a
medical
report and a social history for
individuals applying for Medicaid
on the
basis of disability. The medical report must include
a
diagnosis based on medical
evidence. The social history must
contain enough information to enable the agency to
determine
disability.
(b)
A physician and a social worker, qualified
by
professional training and experience,
must review the medical
report and
social history and determine on behalf of the
agency
whether the individual meets the
definition of disability.
* * * *
Facts
The costs claimed in this case were incurred by the State from
1980
through 1983 and were claimed by the State as increasing adjustments
on
ten separate quarterly expenditure reports (QERs). The claims
for
expenditures incurred from October 1980 through September
1981
(appearing on QERs for the periods August- September
1982,
October-December 1982, January-March 1983 and April-June 1983)
were
based on a State audit which sampled State public assistance
recipients
who had been denied SSI benefits. The New York City Disability
Review
Team found that 60% of the individuals in the sample (which consisted
of
60 public assistance recipients from one New York City welfare
office
who had been denied SSI in November and December 1981) were
disabled.
The State assumed that the disabled public assistance recipients in
the
sample would have been eligible for Medicaid since the
financial
eligibility requirements for the State's public assistance program
were
similar to those of the SSI program. It then applied the 60%
figure to
its medical expenditures for public assistance cases during fiscal
year
1981 to calculate the disputed Medicaid claims for that year.
A second audit conducted by the State was the basis for claims
for
expenditures incurred from October 1981 through March 1983 (appearing
on
QERs for July-September 1983, October-December 1983, January-March
1984,
April-June 1984, July-September 1984 and October-December 1984).
That
audit sampled New York City public assistance recipients during
the
years 1974-1978 who had large non-federally funded medical
expenditures.
The New York City Disability Review Team found a certain
percentage of
individuals at each of various expenditure levels to be
disabled. The
results were used to calculate the disputed Medicaid claims for
the
period beginning October 1981.
Following the submission of the claims, the State made
individual
disability determinations for 5,973 individuals covered by the
claims
and withdrew its claims to the extent that this documentation
supported
a lesser amount than originally claimed. The State also made
disability
determinations in an additional 283 cases in which expenditures
less
than a certain amount were incurred during the period covered by
the
last six claims and projected the results of its sample to support
those
claims in part. These disability determinations were submitted to
the
Agency beginning in early 1985 and ending sometime during the
pendency
of this appeal before the Board. The disability determinations
were
both made and submitted after the two-year filing deadline applicable
to
the claims to which they related had passed.
The State did not explain its failure to make disability determinations
in
the ordinary course of administering its program except to note that
the
Social Security Administration (SSA) was responsible for making
disability
determinations for SSI applicants. The State did not
indicate the
extent to which, if any, the claims in question here
included SSI
applicants. In any event, the Agency indicated that it
would be willing
to reverse the disallowance to the extent that SSA was
responsible for the
State's failure to document its claims with timely
disability
determinations. (See note 9 herein.)
The State originally represented that the disability determinations
were
based on case records in the local social services districts for
the
individuals in question which existed at the time that medical
services
were rendered to them. However, in response to the draft decision
issued
in this case dated November 4, 1986, which relied on
this
representation, 3/ the Agency asserted that the documents on which
the
disability determinations were based were not in the case records.
The
State conceded that not all such documents were in the case records
and
that, after the claims were filed, State auditors obtained
additional
documents from hospitals and other providers of medical services
which
were necessary to make the disability determinations. The review
team
made the disability determinations based on documents selected by
the
State auditors, which were accompanied by summaries prepared by
the
auditors. (The State alleged that the auditors prepared the summaries
in
conjunction with State social workers, but the Agency disputed this.)
4/
For purposes of this decision, the salient fact is that none of the
case
records contained all of the documents necessary to the
disability
determination when the claims were filed. We need not
determine whether
the case records were altogether lacking in such documents
as alleged by
the Agency.
Basis for Disallowance
The Agency agreed that all Medicaid eligibility requirements were met
for
the individuals covered by the claims with the exception of the
requirement
that they be determined disabled. Citing regulations
providing that FFP
is available only in expenditures for eligible
individuals, the Agency argued
that the State's original claims for
Medicaid expenditures based on
disability determinations made in the two
audit projects described above were
unallowable because the individuals
covered by the claims had not been
determined to be disabled, and thus
eligible for Medicaid. It further
contended that disability
determinations made after the claims were submitted
were not properly
considered because of limits established by the claiming
process,
including section 1132 of the Act. The Agency also argued that
the
methodology used by the State to calculate the original claims
was
statistically unreliable.
Issue Presented
Although multiple issues were raised by the disallowance, the
parties
initially agreed that the preliminary issue before the Board was
a
limited one: whether the disability determination for an
individual
must exist at the time that a claim for Medicaid services rendered
to
that individual under title XIX is filed or may be made subsequent
to
the filing of the claim. The State later stated that the
question
whether the State could properly file estimated claims was
also
presently before the Board. The simple answer to the question
posed by
the parties is that there is no requirement regarding the timing
of
disability determinations in the applicable statute, regulations
or
guidelines. To say that is not to resolve the case, however, since
the
interplay of other applicable requirements may have the effect in
this
case of precluding the consideration of disability determinations not
in
existence when the claims were filed. The Board has found in
prior
decisions, discussed later, that section 1903(a)(1) of the Act,
together
with certain regulatory requirements for fiscal record-keeping,
requires
that fully supportive documentation exist at the time that a claim
is
filed. (These authorities were also cited in the Agency's
disallowance
letter in this case.) If whatever documentation was
required in the
context of this case did not exist when the State filed its
claims, the
claims as originally filed would have been invalid. The next
inquiry is
whether the State's later submission of disability determinations
cured
its original failing or whether the submission of this
documentation
more than two years after the expenditures were made was
precluded by
section 1132 of the Act. The net effect may be to bar the
consideration
of disability determinations not in existence when the claims
were
filed. In our view, however, the fundamental question in this case
is
whether the claims when filed were properly documented. Since
we
conclude that the claims as originally filed were not
properly
documented and that the disability determinations came too late
under
section 1132, it is not necessary to decide whether or not the
claims
were prohibited as estimates. 5/
The State argued that consideration of the nature of the
documentation
which existed when the claims were filed would violate the
parties'
agreement limiting the scope of the proceedings. However, as
indicated
above, we cannot give a meaningful answer to the issue as presented
by
the parties without considering the nature of that
documentation.
Moreover, the documentation issue was directly raised in the
Board's
draft decision and in subsequent briefing and oral presentations by
the
parties.
Whether the Claims Were Properly Documented
The principal argument advanced by the State on appeal was that as long
as
facts which would support a disability determination existed in the
case
records of the individuals covered by its claims, the
disability
determinations themselves could be made at any time. The
State cited in
support of its position 42 CFR 435.913, which requires in
pertinent part
that:
[t]he [Medicaid] agency must include in
the applicant's case
record facts to
support the agency's decision on his application.
It asserted that, in accordance with this provision, the
disability
determinations submitted to the Agency were made based on facts in
the
case records at the time the medical services were rendered, and
argued
that the making of disability determinations pursuant to 42 CFR
435.541
was merely an "administrative task" which could be deferred until
after
a claim was made. (State's brief dated September 13, 1985, p.
21)
In the draft decision in this appeal issued on November 4, 1986, we
agreed
with the State's position that its claims as originally filed
were adequately
documented, 6/ finding that the absence of the
disability determinations was
not critical since all the review teams
did in making the disability
determinations "was look at--and
evaluate--these documents which were already
in each case record."
(Draft decision, p. 8) As indicated previously,
however, the State
later conceded that the local social services offices did
not have
sufficient information to make disability determinations at the time
the
claims were filed.
On these facts, we now conclude that the claims as originally filed
were
not properly documented and hence unallowable. The authorities for
this
conclusion include the general grant regulation for
"Financial
Management Standards," 45 CFR 74.61, which requires proper
accounting
records in subsection (b) and source documentation in (g).
General
provisions regarding maintenance and retention of records are also
found
in the Medicaid regulations at 42 CFR 431.17 and 42 CFR 433.32.
In
addition, 42 CFR 435.541, quoted earlier, deals specifically with
the
documentation which must support disability determinations
when
disability is the basis for Medicaid eligibility. Finally, section
1903
(a)(1) of the Act authorizes payments to reimburse states for a
portion
of amounts expended "as medical assistance under the State
plan. .
. ." The Board has previously held that the general
requirements for
fiscal record-keeping noted above, together with
section 1903(a)(1) of the
Act, support the principle that:
Only actual expenditures which are
supported by fiscal records
adequate to
assure that claims for FFP are in accord
with
applicable Federal requirements,
may be reported on the quarterly
statement of expenditures.
New York State Department of Social Services, Decision No. 537, May
30,
1984, p. 20. Following this principle, the Board then addressed
the
issue of what documentation is needed to support a claim, noting
that
the regulations require fully supportive documentation, although
they
"do not require an instantly available, final compilation of
the
required documentation." (Decision No. 537, p. 20) In New York
State
Department of Social Services, Decision No. 542, June 4, 1984, the
Board
further stated:
We do not mean that once the State
places a figure on the QER it
must have
assembled in one location every piece of paper,
every
receipt, that supports the
claim. On the other hand, the
State
must at least know where the
original documentation for the claim
is.
. . . (p. 12, emphasis in original)
The Board reaffirms this language. Documentation has to exist when
a
claim is filed. Clearly a state cannot file its claim at the
last
possible minute, in order to be timely, and then go out and develop
the
documentation constituting the very heart of the claim. Here, the
State
did just that. After the claims were filed, the State not only
made the
disability determinations but also assembled the medical reports
and
social histories on which these determinations were required to
be
based. The mere existence somewhere of the documents which
ultimately
would make up the medical report and social history is not in our
view
sufficient. This is so because the State did not, as Decision No.
542
requires, "know where the original documentation for the claim"
was.
This is not a subjective standard; the point is that a state must have
a
record-keeping system which assures that documentation supporting
a
claim is regularly maintained and can be easily (although
not
necessarily instantly) retrieved. That standard was not met
here.
The State acknowledged that its auditors had to sort through the
records
maintained by the providers for the individuals in question to
gather
the information to support the disability determinations. There
was no
medical report or social history which the auditors had merely
to
retrieve; instead, they had to piece together this
required
documentation from the assorted documents maintained by the
providers.
Thus, at the time it filed the claims, the State likely had no
idea
whether the records contained adequate information for a medical
report
and social history. In other words, there was no assurance at
the time
of filing that the documentation which serves as a basis for
a
disability determination even existed. It is irrelevant whether, as
the
State contended, the documents were maintained under the supervision
of
the State agency as required by 42 CFR 431.17(b) although
physically
located elsewhere. Having technical control of whatever
documents the
providers happened to maintain would not assure that
adequate
documentation to make disability determinations existed.
Accordingly,
the claims as originally filed were unallowable. (Those
claims with
respect to which the State never made disability determinations
were on
the same footing at the time of filing as the claims which were
later
documented, and were thus also unallowable.)
We note, moreover, that the State auditors prepared summaries of
the
documents which they selected. These summaries were also provided
to
the review team. According to the Agency, the summaries constituted
the
required social histories; the State implied that the social
histories
were composed of already existing documents and that the summaries
were
merely a guide to these documents. If the review team relied on
the
summaries, however, then documentation in support of the
disability
determinations was impermissibly created after the claims were
filed.
Effect of Section 1132 of the Act
Since the claims as originally filed were invalid consideration of
the
disability determinations made after submission of the State's claims
is
precluded by section 1132 of the Act. That section prohibits payment
of
a Medicaid claim not filed "within the two-year period which begins
on
the first day of the calendar quarter immediately following"
the
calendar quarter in which the expenditure was made unless
certain
exceptions not at issue here are applicable. 7/ The claims in
question
were filed by the statutory deadline, but the disability
determinations
were made later. Consideration of these later disability
determinations
would render the two-year filing deadline meaningless since
the State
would have more than two years to prepare and submit a valid
claim. In
this case, there was a four to five year gap between the time
the
expenditures were incurred and the time the disability
determinations
were made. The State took the position that there was no
limit at all
on the time it had to make disability determinations in support
of its
claims. To permit consideration of the later disability
determinations
would thus indefinitely delay the resolution of the
claims. This would
be contrary to the underlying purpose of section
1132 to make it less
difficult for HSS "to plan and administer the budget for
the various
Social Security Act programs. . . ." Connecticut v.
Schweiker, 684
F.2d 979, 982 (D.C. Cir. 1982), cert. denied, 459 U.S. 1207
(1983).
This is not a decision that section 1132 requires timely documentation
of
claims as well as timely filing. Instead, we find that, by virtue of
an
independent requirement for documentation, the claims as originally
filed
were unallowable. Section 1132 comes into play not with respect to
the
original claims, but to bar what were in effect the new claims for
the same
expenditures which were made when the State furnished
disability
determinations in support of the original claims. Thus, this
decision stands
for the proposition that a claim which is so
inadequately documented as to be
invalid when filed cannot be
resurrected after the statutory deadline has
passed through creation and
assembly of necessary documentation.
Other State Arguments
Relationship with SSI Program
The State argued that it properly obtained records from the
providers
since this is done by the Social Security Administration (SSA) in
making
disability determinations for purposes of the SSI program.
However, the
question here is not whether records maintained by third parties
may be
used in making a disability determination--a procedure which the
Agency
acknowledged was permissible--but whether the claims were
adequately
documented in view of the fact that the State acquired the
documents
after the claims were filed. 8/
The State also argued more generally that since later
disability
determinations are accepted where eligibility for Medicaid is
based on
SSI eligibility, they should be accepted in all cases. Specifically,
the
State noted that where an individual applies for Medicaid based on
SSI
eligibility, the case has to be referred to SSA to make the
disability
determination. The State asserted that the regulations
nevertheless
provide that FFP is available under title XIX for expenditures
incurred
prior to the time the disability determination is made. The
question
here, however, is whether the disability determinations had to be
made
before the claims were filed, not before the expenditures were
incurred.
Moreover, the Agency indicated that in cases where
disability
determinations are not made by SSA in time for a state to meet
the
statutory claiming deadline, there is a basis for a good cause waiver
of
the deadline. 9/ Thus, the wholesale acceptance of
disability
determinations made after the State's claims were filed is not
necessary
to ensure fair treatment of those cases where SSA has
responsibility for
making disability determinations.
Precedential Value of Decision No. 585
The State also argued that this case was governed by the Board's
holding
in New York State Department of Social Services, Decision No.
585,
November 16, 1984. The Board there held that the State's
retroactive
claim for FFP in payments to public assistance recipients whom
the State
later determined were eligible for AFDC did not violate the
requirement
that there be a determination at the time of payment that the
individual
to whom the payments are made meets the eligibility requirements
for
AFDC. The State relied on a statement in Decision No. 585 that
a
determination of "deprivation," an essential element of
AFDC
eligibility, made after payment could be considered in conjunction
with
an earlier determination that the individual met all other
eligibility
requirements to constitute a timely determination that the
individual
was eligible for AFDC. The State argued that, similarly, in
the instant
case, the later determination of disability could be considered
together
with the earlier determination that other eligibility requirements
for
Medicaid were satisfied to render the claims in question allowable.
The State's reliance on Decision No. 585 is misplaced. That
decision
dealt with the issue of what determinations with respect to
the
individual's eligibility must be made before the issuance of payments
to
the individual in order for FFP in such payments to be allowable.
It
did not present the issue of whether FFP would be allowable absent
a
determination at the time that a claim was made that all
requirements
for eligibility had been satisfied. Thus, that decision is
not relevant
here.
Inconsistent Treatment of Other States
The State also asserted that the Agency had paid estimated claims
for
Medicaid expenditures to the State of California and that
the
disallowance in this case was therefore arbitrary and
capricious.
Specifically, the State contended that Medicaid claims filed
by
California for which no supporting documentation existed were paid
based
on disability determinations made after the claims were filed and
the
two-year filing deadline had passed. The Agency denied that
the
disability determination used to support the California claims were
made
after the filing deadline had passed, asserting that they were
already
existing disability determinations located by the State after the
filing
deadline.
The State also contended that even if the disability determinations
were
actually made by California before it filed its claims, California
did
not have any record of the disability determinations when it filed
the
claims, so that there was no practical difference between that
situation
and the situation in New York, where no disability determinations
had
been made. The State also contended that its overall estimate
of
expenditures was in fact better than California's, asserting that it
was
closer to the amount ultimately claimed than was California's.
In
effect, the State questioned whether it serves any purpose to
prohibit
the filing of estimates without requiring that the
documentation
supporting a claim be immediately available.
We conclude that there is insufficient evidence to support the
State's
assertion that no documentation existed for the claims as
originally
filed by California. In response to the Board's request that
the State
identify those California cases which the Agency accepted
without
requiring disability determinations made before California claimed
FFP
in the expenditures, the State identified only 14 cases out of a
total
of 980 sampled by the Agency. Even assuming that the Agency did
not
question those 14 cases on the ground that they lacked
disability
determinations, they are so few in number that it is more logical
to
attribute this to oversight by the Agency than to a federal policy
to
accept such claims. Accordingly, we reject the State's argument
that
the Agency's action in this case was arbitrary and capricious.
10/
Effect of HB-IV-5521
The State also argued that special procedures issued in 1954
for
transferring certain disabled individuals from state assistance to a
new
program under title XIV of the Act made it clear that there was
no
requirement for a disability determination prior to the filing of
a
claim. These procedures, set forth at section 5521 of Part IV of
the
Handbook of Public Assistance Administration (HB-IV-5521),
permitted
such individuals to be transferred to the rolls of the new title
XIV
program based on medical evidence in the case record without the
review
of the record normally required to determine eligibility under
title
XIV. However, here the State admitted that the case record did
not
contain all the information on which the disability determination
was
required to be based. Moreover, our conclusion here regarding
the
allowability of the claims is ultimately based on the two-year
filing
deadline in section 1132 of the Act. Since this provision was
not
enacted until 1980 (Pub. L. 96-272), the procedure described
in
HB-IV-5521, which would have been effective only when title XIV
was
first implemented, does not reflect the impact of section 1132,
and
accordingly, has no bearing on this case.
Compliance with Other Medicaid Requirements
The State argued that the disability determination itself was
not
important since, under 42 CFR 435.1002(b), Medicaid covers
expenditures
incurred from the date of the onset of the disability, not from
when the
disability determination is made. This does not diminish
the
significance of the disability determination, however. The
availability
of Medicaid coverage from the date of onset does not mean that
Medicaid
payments must begin when an individual becomes disabled but rather
that
expenditures incurred from that time on must be paid on a
retroactive
basis once a disability determination is made.
The State also argued that it should be free to reclassify cases
as
eligible for Medicaid based on its own disability
determinations
whenever made since it complied with 42 CFR 435.911 in
granting
assistance under its own program to the individuals included in
the
claims. That regulation requires that the Medicaid agency
determine
eligibility within sixty days of the date of an application for
Medicaid
on the basis of disability unless there are "unusual
circumstances."
However, even if the State complied with this provision, that
does not
render moot the objection to the claims as improperly
documented.
Claims Not Covered by the Disallowance
The State alleged that some of its claims, primarily claims which
it
described as based on the United Harlem Drug Fighter's (UHDF)
Audit,
were related to individuals eligible for Medicaid on some basis
other
than disability. It withdrew from appeal the amount claimed based
on
the UHDF Audit. (State's letter dated June 13, 1986, p. 1)
It
maintained its appeal with respect to a small portion of the last six
of
ten quarterly claims covered by the disallowance, which it
contended
involved individuals whom it had identified during a different
audit as
eligible for Medicaid based on their receipt of title IV-A
(AFDC)
payments. The Agency asserted, however, that the audit on which
the
State's claims were based was intended to identify only
individuals
eligible for Medicaid based on disability. It contended
that
documentation involving individuals eligible for Medicaid based on
their
receipt of AFDC payments thus did not relate to the claims as
originally
filed and could not be used to support the claims.
We agree with the Agency. As indicated earlier in this decision,
the
amount claimed by the State was based on a projection of the
percentage
of disabled individuals in a sample of public assistance
recipients.
Thus, the claims could not logically have covered other than
disabled
individuals, although the State may also have identified
individuals
within the population sampled who were eligible for Medicaid on
other
bases, such as their receipt of AFDC payments. Accordingly,
the
documentation in question may not be used to support the claims.
However, the State's claims may have included expenditures for a
small
number of individuals who were determined to be disabled before
the
claims were filed. Specifically, it is possible that some or all of
the
36 (60% of 60) individuals sampled in the State's first audit who
were
determined to be disabled may have received payments included in
the
claims considered here, since the claims based on this audit
covered
expenditures incurred from October 1981 through March 1983 and
the
individuals in question were denied SSI in November and December
1981.
If this is the case, the disallowance should be reduced by the amount
of
expenditures claimed for these individuals. 11/ Therefore, as
regards
this issue only, New York may, within thirty days after it receives
this
decision (or within such longer period as the Agency allows)
submit
evidence or argument in support of a reduction of the
disallowance. If
the State makes no such submission, this portion of
the disallowance
shall be deemed upheld as well. If the State disputes
the Agency's
determination on this issue, it may return to the Board within
30 days
after receiving the Agency's determination.
Conclusion
For the foregoing reasons, we conclude that the State's claims
as
originally filed were unallowable since, when the claims were
filed,
there was no assurance that adequate documentation existed to make
the
disability determinations required by 42 CFR 435.541. We
further
conclude that consideration of the disability determinations made by
the
State after the claims were filed was precluded by section 1132 of
the
Act.
Accordingly, we sustain the Agency's disallowance (except as
discussed
above for individuals for whom disability determinations were made
on
time). In view of our conclusion, no further proceedings are
necessary
to address the issue whether the methodology used to develop the
claims
was statistically reliable, a substantial issue which
awaited
development had we determined that documentation was adequate
and
timely. It is also unnecessary to determine whether the
individual
disability determinations submitted after the claims were filed
were
made in accordance with the requirements of 42 CFR 435.541.
_____________________________ Donald
F.
Garrett
_____________________________ Alexander
G.
Teitz
_____________________________ Norval
D.
(John) Settle Presiding Board Member
1. The Agency alleged that the State had not
submitted documentation
fully representing the reduced amounts claimed by the
State. However,
it is not necessary to resolve this matter for purposes
of this decision
since we hold that the State did not submit a valid claim
and that
documentation submitted after the claim was not properly
considered.
2. A state is also required to provide Medicaid to
individuals
receiving AFDC. 42 CFR 435.110. This requirement is
pertinent to the
discussion in the section headed "Claims Not Covered by
the
Disallowance."
3. The Board relied on the following language in the
State's
discussion of the requirements for case documentation of 42 CFR
435.913,
on pages 20-21 of its opening brief:
This regulation requires case documentation to
include facts to
support a disability decision, not
the total eligibility decision
of whether to grant
benefits. It is not a requirement that
disability determinations (which are conclusions drawn from
facts)
be part of the individual case record.
In the instant case the
recipients case record
contained the required facts at the time the
State
expenditure of funds occurred. However the
administrative
task of reviewing those facts and
drawing conclusions was done
subsequent to the
submission of the claim. . . . (emphasis in
original)
4. The Agency alleged that the documents thus
assembled were not
reviewed by a team which included a social worker, as
required by 42 CFR
435.541(b). This goes to the adequacy of the
disability determinations,
an issue which need not be resolved in view of our
conclusion that the
disability determinations may not be used to support the
claims.
5. As indicated in the discussion of the basis for
the disallowance,
the Agency believed that payment of the claims would
violate the
regulation providing that FFP was available only in "expenditures
for
services provided to recipients who were eligible for Medicaid." 42
CFR
435.1002(b). Since we find that the claims were properly disallowed
on
other grounds, we need not reach this issue.
6. This is not to say that we agreed then or agree
now with the
State's characterization of the making of a disability
determination as
an administrative task. Section 435.541 requires that
both a medical
report and a social history be reviewed by a physician and a
social
worker to determine whether an individual meets the definition
of
disability. A process requiring the judgment of professionals in
two
fields is not properly characterized as a mere administrative task.
The
State's view of the disability determination process is
also
inconsistent with how that process has been viewed by the courts.
In
Featherston v. Stanton, 626 F.2d 591 (7th Cir. 1980), the
Seventh
Circuit characterized the physician and social worker responsible
for
making of disability determinations pursuant to section 435.541
as
"adjudicators." (Id., at 594) In Rousseau v. Bordeleau,
624 F. Supp.
355 (D. R.I. 1985), the District Court noted the parties'
agreement that
"due to the complexity of the matters involved and the
subjective
element involved in resolving close questions, two different
agencies
applying the same standards [for determining disability] may
reach
different results." (Id., at 357) The courts have thus
recognized that
the disability determination process involves the making of
a
substantive decision.
Accordingly, it is arguable that, absent the disability
determinations,
the claims were unallowable because such determinations do
not merely
reflect facts in the case record but are themselves
primary
documentation of Medicaid eligibility. We need not decide
this,
however, since the State not only made the disability
determinations
after the claims were filed, but also created at a later date
parts of
the case record on which the disability determination for
each
individual covered by the claims was required to be based.
7. During the proceedings before the Board in this
appeal, the State
submitted a written request to the Agency for a waiver
pursuant to 45
CFR 95.19(d). That provision states that the Secretary
may waive the
two-year time limit for filing claims for expenditures where
the
Secretary decides that there was good cause for the state's not filing
a
claim within the time limit. The Board denied the State's request
that
proceedings before the Board be stayed until the Agency ruled on
the
State's request for a waiver. (Ruling on Request to Stay
Proceedings,
dated April 28, 1986) As of this date, the waiver request
is pending.
8. A related argument made by the State was that
since the Agency
may disallow a claim based on third-party records, it was
appropriate
for the State to use such records to support its claims. As
noted
above, however, the Agency did not challenge the appropriateness
of
using such records but only the timing.
9. The State also noted that FFP was available in
those cases where
it was determined pursuant to an administrative appeal or
in court that
SSA had erroneously found an individual not disabled or no
longer
disabled too late to permit a state to file a timely claim. The
Agency
indicated that a waiver of the filing deadline would be warranted
under
45 CFR 95.19 in such cases as well.
10. Even if substantially different treatment of the
California
claims had been proven, the result in this case could well be the
same.
The issue then would relate to whether a disallowance should
be
overturned in one HHS region because of an approach used in
another
region which arguably was inconsistent with law or regulation.
This
Board has previously held that where there is a violation of
a
requirement which is unambiguous on the facts of the case, any
failure
by the Agency to enforce this requirement in another case is
irrelevant.
Vermont Department of Social and Rehabilitation Services,
Decision No.
546, June 27, 1984.
11. However, because the Agency never reviewed the
adequacy of the
disability determinations, the Agency would not be precluded
from taking
a new disallowance if it subsequently determined that the
disability
determinations were not made in accordance with 42 CFR
435.541.