DEPARTMENTAL GRANT APPEALS BOARD
Department of Health and Human Services
SUBJECT: California Department of Social Services
Docket Nos. 86�202 86�221 86�241 87�47
Decision No. 875
DATE: June 16, 1987
�
The California Department of Social Services (California)appealed
four
determinations by the Family Support Administration(FSA) that
California
erroneously charged the costs of certainactivities to the
income
maintenance program conducted byCalifornia under Title IV�A (Aid
to
Families with DependentChildren or AFDC) of the Social Security
Act
(Act). FSAdisallowed claims for federal financial participation
(FFP)
underTitle IV�A in these costs amounting to a total of $8,888,301
inFFP
for the period from October 1, 1983 to September 30, 1986.
The disputed amounts are based on FSA's estimate that 2.33% ofTitle
IV�A
eligibility worker time was related to a section ofthe Application
for
AFDC and Other Cash Aid Programs (CA 2application form) entitled
"Social
Services." FSA asserted thatthese costs were incurred in connection
with
the provision of asocial service described in section 2002(a)(l) of
the
Act (TitleXX), and that FFP was expressly precluded for such
costs
underthe Title IV�A program.
For the reasons discussed below, we reverse the disallowance.
Weconclude
that the activities involved in completing this sectionof the
CA 2
application form do not qualify as social servicesdescribed in
Title XX and
merely serve to inform AFDC applicantsof services for which
they would be
eligible, in compliance withthe AFDC statute and
regulations. Our
decision is based on thereasonableness of California's
interpretation of the
statutorydefinition of social services as applied
to the
particularcircumstances of this case and the absence of any FSA
directivein
regulations or policy guidance documents giving
Californianotice of a
contrary interpretation.
�General Background�
Title IV�A of the Act provides for grants to states for aid
tofamilies
with dependent children (AFDC). Until 1975, Title
IV�Aincluded both
income maintenance and social service components. Effective
October 1,
1975, Congress established a new Title XX ofthe Act to finance
social
services for low�income children andfamilies, including
families
receiving AFDC. Social ServicesAmendments of 1974, Pub. L.
93�647, 88
Stat. 2337 (1975). At thesame time as it created Title XX,
Congress
repealed most of the�j
Public Law 93�647 also contained a provision amending section403(a)(3)
of
Title IV�A. As amended, section 403(a)(3) providedfor FFP in Title
IV�A
administrative costs with the exceptionthat:
� .��..�no payment shall be made with respect to amountsexpended
in
connection with the provision of anyservice described in section
2002(a)
of this Act [TitleXX] . . .#/�.J�
The Board has found that this provision precludes payment of
FFPunder
Title IV�A for Title IV�A administrative costs which arealso within
the
definition of a social service under section2002(a) in Title XX.
�See�
Joint Consideration: Reimbursement ofFoster Care Services,
Decision No.
337, June 30, 1982(prohibition not limited to traditional
"social
services" and mayinclude services independently required under
Title
IV�A), �aff'd�,�Oregon v.� �Heckler�, 651 F. Supp. 6 (D. Or.
1984); New
York StateDepartment of Social Services, Decision No. 449, July
29,
1983,�aff'd�, ###�###�kStateD�#####�ment of Social� �Services v.
Bowen�,
Civ.Action No. 84�3620 (D. D.C. Nov. 21, 1986). �2�/ �
�
Certain exceptions to this clause, not relevant to
thiscase,
followed.
California argued that these cases were not
applicable##s#nce
the foster care program, with which the cases
weredirectly
concerned, was subsequently restructured by statute.
Wereject
those arguments because California presented no reason
whythe
principles involved would not be applicable to the
basicTitle
IV�A program which has not been restructured.
The preclusion in section 403(a)(3) for FFP under Title
IV�A
forexpenditures in connection with Title XX services is
not
merelydesigned to prohibit duplicative claims submitted to
bothprograms.
FFP in Title XX expenditures is capped at a maximumlevel for
each state
and, thus, expenditures for Title XXservices are eligible for FFP
only
if the cap has not beenreached. This provision was intended by
Congress
to contain thecosts of social services (caps had also been in effect
for
manysocial service programs when the programs were part of Title
IV�A).
�See� Decision No. 449, pp. 9�10. Section 403(a) preventsstates
from
avoiding the cap by shifting claims for socialservices to the
uncapped
Title IV�A program. �Id�.
Section 2002(a)(l) of the Act defines social services within theambit
of
Title XX as services directed at the goals of Title XX. The
section
contains a list of examples of Title XX services,including
"information,
referral, and counseling services." Thereare no current
regulations
which clarify the statutory�j
� .�information about services provided under Title XX andrelated
service
programs, brief assessment . . . tofacilitate appropriate
referral, and
referral to and follow�up with those community resources
which provide or
makeavailable such services . . . only when provided by
anagency that has
information and referral as a specificrecognized
function and that has a
staff with identifiabletasks relating to
information and�.J� referral.
_3/
�
�
�3�/ This regulation was originally codified at 45 CFR 228.64;later
the
regulation was shifted to 45 CFR 1396.64. 45 Fed. Reg.56682 (Aug.
25,
1980).
�Case Background�
The disputed costs are for AFDC eligibility worker time spentasking
the
following questions which appear at the end of the CA2 application
form,
after the signature of the applicant, in abox entitled
"Social
Services":
� .�The following services are free of charge, if you areeligible for
cash
aid. Your answers to these questions willnot affect
your
eligibility.�.J�
A.� .�Regular check�ups to help protect your
family'shealth
are available upon request through theChild Health and
Disability Prevention
Program(CHDP) for eligible members of your family
underage 21.�.J�
1.� .�Do you want more information
about
CHDPservices?�.J�
2.� .�Do you want CHDP medical or
dental
services?�.J�
B.� .�Do you want to talk to a social worker
or
wantinformation about services which may be availableto you or about
any
of the following:�.J� �j .��..��..�Discrimination, personal
adjustment,
other livingarrangements, alcoholism, drug addiction
ormental/emotional
problems, special services forblind or visually impaired
children and
adults,child care, etc.?�.J�
C.� .�Family Planning Services may be available to
helpyou
voluntarily limit family size, decide when youwant to have
children and
prevent unwantedpregnancies. Do you or any member of your
familywant
family planning information?�.J�
Ex. Q. These questions were part of the application prior to1975,
when
Title XX was enacted, and the associated costs havealways been
charged
as Title IV�A administrative costs. Ex. R.,p. 2.
The eligibility worker asks each applicant the questions in PartsA, B
and
C. If the applicant responds positively to Part A,concerning
medical
and dental services, the
applicant is told where to get additional information andservices from
the
Child Health and Disability Prevention Program(CHDP). The CHDP
is
California's vehicle for fulfilling TitleXIX (Medicaid)
requirements
that applicants be informed of andprovided with "early and
periodic
screening, diagnostic, andtreatment services." Section 1902(a)(43)
of
the Act. If theapplicant responds positively to Parts B or C,
the
applicant issent to a social worker who can respond to
the
applicant'srequest by determining what services are needed
and
actappropriately by making a referral to either a social worker
or
acommunity resource. Ex. R, p. 2. The eligibility worker
mayprovide a
brochure explaining where to find out about theservice, and
records the
referral in the applicant's case file. Ex. Q, p. 6; Ex. R, p.
2.#/
California claimed the costs of completing this section
asadministrative
costs of the Title IV�A program. Califor�nia citedthe
regulations
governing AFDC application procedures at 45 CFR206.10(a)(2)(i),
which
state that individuals must be giveninformation about
coverage,
conditions of eligibility, scope ofthe program and "related
services
available." Although not citedby California, section 402(a)(15) of
the
Act appears toindependently require an offer of the family
planning
servicesthat are the subject of Part C.
�Discussion�
1.� .̔The services qualify as Title
IV�A
administrative��act#vities�.�.J�
FSA did not deny that 45 CFR 206.10(a)(2)(i), cited byCalifornia,
created
an obligation under the Title IV�A program toadvise applicants
that related
medical and social service�j
�
�
4/ Although FSA alleged that the eligibility worker
also#completes
necessary documents to refer the AFDCapplicant/recipient to
the social
services unit," FSA did notexplain what it meant by this or
provide any
evidence of aseparate form or documentation that was completed
by
theeligibility worker. FSA Brief, p. 4.
the services themselves. #/ Thus, FSA appears to have concededthat
the
costs, for at least Parts B and C, would be allowableunder Title
IV�A
but for the preclusion provision in section403(a)(3).
FSA disputed, however, the connection with the Title IV�A programof Part
A
of the social services section, relating to medical anddental
programs.
FSA argued that, since Part A relates to aTitle XIX
(Medicaid) program
service, Part A should not qualifyas a Title IV�A
activity at all. This
position, however, ignoredthe regulation at 45
CFR 206.10(a)(2)(i) that
required Californiato provide information about
related services as part of
the AFDCapplication process. California was
complying with
thatrequirement in asking the questions in the first part
even
thoughCalifornia may have been independently required by Title XIX
toprovide
the same information. 6/ Thus, we conclude thatcompletion of
this part
quali#ies as a Title IV�A administrativeactivity.
It is of course significant that the statutory exception
forsocial
services, discussed below, does not apply to Title
XIXservices. The
exception precludes FFP under Title IV�A only forTitle
IV�A activities
which could also be Title XX socialservices. No similar
provision
applies to Title XIX (of course,California could not seek FFP under
both
programs for the samecosts, but FSA did not allege any
such
double�claiming). Furthermore, there is no clear financial incentive
to
shift thesecosts to one program or another, since, unlike the
Title
XXprogram, neither program is capped and, in California, the ratesof
FFP
are generally equal. Thus, we find that Part A of thesocial
services
section, like Parts B and C, qualifies as a TitleIV�A
administrative
activity.
� �
5# FSA stated generally that the social services section #id not"relate
to
the income maintenance functions of Title IV�A" andshould not be
considered a
Title IV�A activity. FSA Brief, p. 5. But FSA showed no
reason why the
activity did not fall within the�j
Additionally, FSA cited no Medicaid regulation or
policyguidance
which made the limited activities of Part
A
exclusivelyreimbursable under Title XIX.
2. �The activi�ties_____#####�:ot precluded
fromreimbursement�
� .̔under Title IV�A s#nce they are not social services
as��defined in
Title XX�.�.J�
FSA argued that the costs of completing the social servicessection of
the
CA 2 application form did not qualify for FFP,even if proper Title
IV�A
administrative costs, because section403(a)(3) of the Act precludes
FFP for
administrative costsexpended "in connection with the provision
of any
servicedescribed in section 2002(a) [Title XX of the Act]."
Thedisallowance
letter stated that the social services section, as
awhole, constituted an
"information and referral service" underTitle XX.
Alternatively, FSA argued
that, even if completion ofthe section was not
itself an information and
referral service,completion of the last two
parts was provided "in
connectionwith" the operation of an information
and referral service (bythe
social worker to whom the applicant was
sent). FSA Brief,pp. 6�7.
California contended that completion of the social servicessection was
an
integral part of the overall AFDC application anddid not amount to
the
operation of an information and referralservice. California
asserted
that, at most, completion of thesection could be viewed as
leading up to an
information andreferral service provided by social
workers or a social
servicesagency. California argued that this
activity did not
constitutea Title XX social service. California Brief,
p. 10.
At the outset, we believe that FSA reasonably questioned whetherthe
costs
of completing the application section should have beenclaimed as a
social
service, because the title of the sectionsuggests
that
characterization. But the title alone is not abasis for viewing
the
completion of the section as a Title XXservice when the substance of
the
activity does not fall clearlywithin the scope of the
statutory
definition of Title XX socialservices. In the Title XX list
of
qualifying social services,the three activities of
"information,
referral, and counselingservices" are grouped together as
though the
three activitiesconstitute one "social service." Thus, the
statutory
languagesuggests that Congress did not intend Title XX
to
includeisolated information components or referral activities
which
arein fact integral to the eligibility process of other programs.
Moreover, the regulations promulgated after Title XX became�j
about specific services and programs available in the communityand
refer
the individual to appropriate providers or serviceprograms.
The
regulations state that a provider of informationand referral
services
must have those tasks as specificrecognized functions, along with
a
staff with identifiable tasksrelating to those functions. They
also
suggest that a providermust have some specialization or expertise
in
those functions.
The activity before us here is substantively different from
theservice
contemplated by the Title XX regulation. The
eligibilityworker merely
advises the applicant as part of the AFDCeligibility
process that there
are other programs in addition toAFDC that may meet the
applicant's
needs. Rather than providethe individual with specific
information or a
referral to aparticular service provider that would respond
to an
identifiedproblem, the eligibility worker merely directs the
individual
toanother person or agency that makes the actual referral or
givesthe
necessary information. At most then, the process here is astep
that
precedes the actual social service of assessment,referral and
provision
of information.
We have no evidence to suggest that the eligibility workers
didanything
more than to read the language of the social servicessection,
obtain
responses, and give to applicants who respondedpositively the name of
a
social services agency that would makethe assessment and referral.
There
is no evidence that theprocess was anything other than routine or
that
eligibilityworkers had any training or expertise in the referral
process. If
the whole application process took two hours, the
completionof the social
services section, according to the FSA time
study,would take less than 3
minutes since it represented only
2.33percent of the eligibility workers'
total application time.
Theactivity appears to be sufficient only to satisfy
AFDCrequirements,
not to constitute an information and referralservice which
would be
sufficient to qualify for FFP under TitleXX.
Obviously, the completion of Parts B and C may have some eventualimpact
on
the provision of Title XX services, since someapplicants would be
sent to
social workers or social servicesagencies and would receive
services under
Title XX. ## But thisimpact is too attenuated to trigger
� �
7/ We have been provided with no evidence of the percentage
ofapplicants
who do, in fact, eventually (continued...)
the preclusive effects of section 403(a)(3) without clear�j
We should also note that California argued, in any event, thatPart A
of
the CA 2 application form (on medical and dentalservices) was not at
all
related to the Title XX program and,thus, the Title XX exception
cited
as the basis for thedisallowance does not, on its face, apply to
the
first section. FSA made no attempt to demonstrate how completion of
that
sectionqualified as a Title XX service in response
to
California'sargument.
Finally, it is significant that the circumstances in this caseare
unlike
those considered in prior Board decisions cited byFSA. Those
cases
involved the foster care program and the costsdisputed were
directly
identifiable as social services: fostercare placement,
development of
plans of care and similar servicesprovided by social
workers. In those
cases, the statesthemselves conceded that the
activities were within the
scope ofTitle XX social services and, in at least
one instance,
hadclaimed the activities interchangeably under different
programsto
maximize the FFP (precisely what Congress had intended topreclude
by
enacting section the 403(a)(3) exception). �See� NewYork,######.
In
this case, California provided unre######�#v#dence that it had
always
viewed these activities as an adjunctto the Title IV�A process and
had
always claimed the costs underTitle IV�A. Finally, in �
�
7/(...continued) #eceive Title XX services as a direct result of
the
completion ofthis section.
.. .
� 10 �
�j .��..�the earlier cases, the Office of Human
DevelopmentServices
specifically conceded that costs associatedwith the Title
IV�A
eligibility determination processwould be allowable under Title
IV�A.
�Id�., p. 1. Here,the activities are, by regulation, part of
that
veryprocess.�.J�
�Conclusion�
� .��..�For the above reasons, we conclude that thedisallowances
under
appeal, amounting to a total of$8,888,301, should be reversed.�.J�
##uo,#n
#.
#=''�.�
Alexander
G.
#er#z
######�#.
Garrett
Presiding
Board
Member