DEPARTMENTAL GRANT APPEALS BOARD
Department of Health and Human Services
SUBJECT: Massachusetts Department of Public Welfare
Docket No. 87-32
Decision No. 878
DATE: June 25, 1987
DECISION
The Massachusetts Department of Public Welfare (State) appealed
a
determination by the Health Care Financing Administration
(HCFA)
disallowing $1,436,508 in federal financial participation (FFP)
claimed
by the State under title XIX of the Social Security Act (Act).
HCFA
disallowed the costs of an increasing adjustment made to the per
diem
reimbursement rate for Westborough State Hospital, a mental
health
hospital, for the period July 1, 1982 to June 30, 1983 (FY
1983). The
rate adjustment was granted by the Massachusetts Rate
Setting Commission
(RSC) based on 114.1 CMR 5.09(1)(i), a provision of the
RSC regulations.
HCFA found that this provision was not contained in the
State's Medicaid
plan and that the increased costs based on the rate
adjustment were
therefore unallowable under section 1903(a)(1) of the Act,
which
provides for FFP in amounts expended "under the State plan. . . ."
Proceedings in this case were stayed pending the Board's issuance of
a
decision in a related appeal filed by the State,
Massachusetts
Department of Public Welfare, Decision No. 853, March 30,
1987. The
State subsequently requested that the Board issue a summary
decision
based not only on Decision No. 853 but also on a later decision by
the
Board in another appeal filed by the State, Massachusetts Department
of
Public Welfare, Decision No. 867, May 7, 1987.
Decision No. 853 involved the disallowance of increased costs
resulting
from a rate adjustment requested under the same provision of the
RSC
regulations for the same fiscal year at issue here. The Board
there
sustained the disallowance, rejecting the State's arguments that
section
5.09(1)(i) was implicitly included in the State plan and that
the
adjustment was independently authorized by a State plan provision
not
related to 5.09(1)(i). Although that decision pertained to
intermediate
care facilities for the mentally retarded, while the appeal
before us
here pertains to a mental health hospital, the same State
plan
provisions and RSC regulations applied to both types of facilities.
Decision No. 867, like the instant case, involved the disallowance
of
costs resulting from rate adjustments requested under section
5.09(1)(i)
for mental health hospitals; however, the costs in question were
claimed
for FY 1982. The State plan provisions governing rate
adjustments in FY
1983 were different from those in effect in FY 1982.
Thus, the Board's
holding in Decision No. 867 that section 5.09(1)(i) was not
subsumed in
the State plan is not germane here. That decision is
relevant, however,
to the extent that it finds that the adjustment was not
authorized under
the terms of section 5.09(1)(i) itself. The Board's
holding in Decision
No. 867 that the disallowance is not inconsistent with
certain
amendments to the Act also applies here. See Decision No. 867,
pp.
13-15.
Accordingly, based on the analyses set out in Decision No. 783, and
in
Decision No. 867 to the extent applicable, we sustain the
instant
disallowance.
_____________________________ Norval
D.
(John) Settle
_____________________________ Charles
E.
Stratton
_____________________________ Judith
A.
Ballard Presiding Board Member