GAB Decision 497
Docket No. 83-152
January 31, 1984
Maryland Department of Health and Mental Hygiene;
Ballard, Judith; Garrett, Donald Teitz, Alexander
The Maryland Department of Health and Mental Hygiene (appellant,
State) appealed a decision by the Health Care Financing Administration
(respondent, Agency) to disallow $1,213,795.96 in federal financial
participation (FFP) claimed under Title XIX of the Social Security Act
(Act) for the quarter ended September 30, 1982. The disallowance, taken
under section 1903(g) of the Act, was based on the respondent's
determination that the utilization control requirements of section
1903(g) were not met in five of ten intermediate care facilities for the
mentally retarded (ICFs/MR).
The appellant disputed the violations, but argued that even if the
cited violations existed, HCFA had miscalculated the appropriate FFP
penalty. The appellant also filed a supplementary brief, giving an
additional argument for recalculation of the penalty. Since the Agency
found that the documentation submitted for one facility was adequate for
the Agency to find no violation there (Crownsville State Hospital), the
penalty will in any event have to be recalculated. Based on our
analysis below we uphold the disallowance based on violations in the
other four facilities. We remand to the parties to determine the
correct recalculation of the penalty. This decision is based on the
briefs of the parties and telephone conferences. /1/
Pertinent Statutes and Regulations
Section 1903(g) of the Act requires that the state agency responsible
for the administration of the State's Medicaid plan under Title XIX of
the Act show to the satisfaction of the Secretary that there is an
"effective program of control over (2) utilization" of long-term
inpatient services in certain types of facilities, including ICFs, for
each quarter that federal medical assistance is requested for such
services, or the federal medical assistance percentage (FMAP) must be
decreased by an amount determined pursuant to the formula set out in
section 1903(g)(5). The State "must" show that --
(A) in each case for which payment is made under the State plan, a
physician certifies . . . (and recertifies, where such services are
furnished over a period of time, in such cases, at least every 60 days,
. . .) that such services are or were required to be given on an
inpatient basis because the individual needs or needed such services;
and
(B) in each such case, such services were furnished under a plan
established and periodically revised and evaluated by a physician;
(Sections 1903(g)(1)(A) and (B))
The Agency has implemented these statutory provisions for ICFs at 42
CFR 456.360 and 456.380 (1981). Section 456.360(a)(1) requires that a
physician "must certify for each applicant or recipient that ICF
services are or were needed." Section 456.380(c) provides that a plan of
care for each patient in an ICF must be reviewed "at least every 90
days." The State must make a satisfactory showing, in each quarter, that
it has met these requirements for each recipient in order to avoid a
reduction in FFP under 42 CFR 456.652(a).
The penalty prescribed by section 1903(g) takes the form of a
reduction of a State's FMAP which results in a reduction of federal
funds received by the State. Section 1903(g)(5) specifies the method of
calculating the reduction. This provision was implemented at 42 CFR
456.657.
A. Background
1. Highland Health Facility
The Agency found a deficiency at this facility for one patient for
whom there was an "(i)nvalid initial physician's certification, and no
plan (of care) established." Disallowance letter, attachment. The
Doctor's Progress Notes dated 8/9/82, stated: "Admitted for respite
care. Is healthy. . . ." Exhibit 3, p. 1. The notes also indicate the
patient had a physical examination, and the Physician's Order Sheet (p.
2) included a plan of care. The (3) Admission Summary (p. 3) prepared
by a social service worker indicated that the reason for the admission
was "foster parents vacation." Under both "current medical problems"
and
"present medication" appears the word "none." The summary
states that
patient feeds himself, and dresses and undresses himself, although he
needs assistance in bathing.
2. Crowsville State Hospital
During the appeal, after reviewing the State's documentation, the
Agency found that the plan of care requirements for the one patient in
question were met. The Agency deleted this facility from the
disallowance.
3. Great Oaks Center
Deficiencies initially found by the Agency in this facility, as
listed on the attachment to the disallowance letter were as follows:
Patients RG and IS /2/ - "Invalid initial physician's certification."
Patients MT and DW - "Untimely update of plan of care."
The Agency found documentation submitted during the appeal adequate
for DW and deleted her from the deficiencies at this facility.
4. Joseph D. Brandenburg Center
Deficiencies initially found by the Agency as listed on the
attachment to the disallowance letter:
Patient MH - "No update of plan of care."
Patients DC, PN, GS, and DT - "Untimely update of plan of care."
The Agency found the documentation submitted during the appeal
satisfied the plan of care requirements for patient MH and deleted her
from the deficiencies.
(4) 5. Potomac Center
The Agency found that for three patients at this facility no
certification or plan of care was established at time of admission.
Appellant did not contest the inclusion of this facility in those not
meeting requirements.
B. The Positions of the Parties
Highland Queen - patient BQ
Appellant contended that there was a valid physician's certification
of admission for respite care and the establishment of a plan of care.
Respondent's position was that certification for "respite care"
did
not show need of inpatient ICF/MR services as required by the Act and
Medicaid regulations.
Great Oaks Center
Patients RG and IS:
Appellant claimed these patients were seen by a physician at each
admission and a physician approved admission for respite care.
Respondent's position was that certification for respite care did not
meet the regulatory requirements.
Patient MT:
Appellant claimed plan of care reviewed more often than 90 days, as
shown by records.
Respondent claimed no physician update within 90 days.
Joseph D. Brandenburg Center
Appellant admitted that "updates were not performed uniformly every
90 days" for the plans of care. However, the lapse was never in excess
of one or two days and came within a three month period, even though not
within the 90 day requirement, so the penalty should not be imposed.
(5) The Agency reply was that the requirement of the regulation for a
90 day update was a strict requirement and did not give the Agency any
discretion to waive it.
Analysis
There are two legal issues in this dispute:
Does a certification for admission for "respite care" meet the
requirements of the statute?
Does a review of a plan of care for a patient at least every three
months meet the requirements of the regulation for a review at least
every 90 days?
The only factual dispute is to patient MT in Great Oaks Center. The
Agency claimed that the reviews of the plan of care for this patient
were on June 8, 1982 and September 8, 1982, more than 90 days apart.
(See brief of appellant, n. 2) In addition to the argument that an
update within three months met the 90 day requirement of the regulation
(as discussed below), the State claimed that there was a review of the
plan of care on June 30, 1982, clearly within the 90 day period. This
was based on Exhibit 7. The first page of this exhibit is a form dated
June 30, 1982 headed "Individual Program Plan: Plan of Care", giving
the details of a staffing meeting. This would clearly meet the
requirements for a review, except that it is not signed by a physician.
The second page headed "Attendance Register" is signed by a physician
but is dated June 9, 1982. The Agency's position (in its letter to the
State dated November 2, 1983, attached to the Agency brief) is that the
first document, showing a staffing date of June 30, 1982, "contains no
signatures for that particular staff meeting"; the second document
dated June 9, 1982 "provides a physcian signature but does not show any
plan of care instructions." The State's position, although not too
clearly spelled out, is that the two documents are one and the correct
date is June 30th. This is reasonable, because the two documents
clearly go together. The second page is headed "Attendance Register"
for the staffing meeting. Support for the correct date being June 30th,
rather than 9th, comes from the nurse's notes in Exhibit 7 which state
for 6-30-82 "annual staffing held." We find that the plan of care
for
patient MT was updated on June 30, 1982, within the 90 days required.
It is actually unnecessary to resolve this factual issue as to
patient MT because it would not affect the outcome. The regulation
which spells out the method of computing the penalty uses as the (6)
numerator of the fraction either the number of facilities which did not
meet the utilization control requirements, or, if available, the total
number of patients in these facilities. If even one patient in a
facility under review fails to meet the requirements, that facility is
treated the same as if every patient in it failed the tests. Since, as
we indicate below, two patients in the Great Oaks Center clearly did not
meet the requirements, it would not affect the penalty if patient MT did
meet the requirements. See, North Carolina Department of Human
Resources, Decision No. 273, March 31, 1982, p. 4; California
Department of Health Services, Decision No. 326, June 30, 1982, n. 1.
Respite Care
The only patient at issue in Highland Queen, and two patients in
Great Oaks Center, were certified for admission for respite care. The
appellant argues that their medical records (Exhibits 3, 5, and 6)
indicate that they were seen by a physician at their admissions, who
certified them for respite care, and set out a plan of care for them.
The question is not whether they were certified by a physician for
respite care, but whether admission for respite care meets all the
requirements of section 1903(g)(1)(A) of the Act. This includes the
requirement that the physician certify at the time of admission "that
such services are or were required to be given on an inpatient basis
because the individual needs or needed such services."
The appellant overlooks this requirement, that the physician must
certify at admission that the patient needs "such services," i.e.,
such
services as are given in an intermediate care facility for the mentally
retarded. The appellant assumes that admisson for "respite care" is
adequate, and gives no explanation of what such care is.
The disallowance letter, in its attachment, identifies the violation
merely as "invalid initial physician's certification."
The Agency gives its own opinion of respite care in its brief (p.
1), setting out the explanation given in its November 2, 1983 letter to
the appellant.
Respite care is generally for a short period of time in order to give
the patient's parents or guardian a rest. The patient otherwise lives
at home.
The respondent goes on to say that:
(7) It is the Agency's position that such care, which is similar to
custodial care, does not qualify for Medicaid reimbursement.
The correctness of the Agency's characterization of what respite care
entails is brought out clearly in the case of patient BQ at Highland
Queen. On the first page of Exhibit 3, the admitting physician says:
"Admitted for respite care. Is healthy." His admission summary (Exhibit
3, p. 3) states the reason for admission: "Foster Parents Vacation."
It
may be desirable that those who have someone living with them, who may
require only custodial care, have an opportunity for a vacation. But
that does not mean that during those vacations the person in their care
needs inpatient ICF/MR services.
So with the other patients admitted for respite care, there was no
indication that they belonged in an ICF/MR /3/ if their foster parents,
or whoever had them in their charge, could take care of them adequately
except for some relief for a vacation. The physician in these cases did
not certify that "ICF services are or were needed," as required by
42
CFR 456.360. In fact, the physician certified only that "respite care"
was needed for these patients. The mere need for respite care does not
signify that ICF services were needed. All it signifies is that those
taking care of them needed a "respite."
Plan of Care Review - 90 Days or Three Months
There is a substantive difference in the underpinning of authority
giving time schedules for physician certification and recertification
and the time limits for review of a plan of care. The certification and
recertification schedules are specifically stated in the statute; the
review of a plan of care requirement has a time limit only in a
regulation.
(8) Section 1903(g)(1) of the Act provides in substance in (A) that
in each case a physician must certify at the time of admission, and must
recertify "at least every 60 days", that such services were required.
The plan of care review requirement in 1903(g)(1)(B) requires only
that the services were furnished under a plan "established and
periodically reviewed and evaluated."
The time requirement for the plan review appears in the regulations.
The disallowance letter (June 27, 1983) cites to 42 CFR 456.652(a)(2).
This regulation requires that a state must show that a plan of care was
"established and periodically reviewed" as specified in several sections
cited, which refer to various forms of institutions. The regulatory
reference for ICFs in section 456.380 provides in (c) that there must be
a review of each plan of care "at least every 90 days."
The appellant argued that reviews "performed every 91 or 92 days"
certainly met the statutory requirement that services be "furnished
under a plan established and periodically reviewed and evaluated by a
physician." Appellant's Brief, p. 5. The appellant further argued that
it could not have been the intent of Congress to penalize states large
sums of money "when the statutory requirements for UC (utilization
control) have been met." Id., p. 6.
The State went on to say that in imposing a statutory penalty based
upon a regulation which "arbitrarily and improperly goes far beyond the
legislation," HCFA has acted "inappropriately, illegally, and to the
detriment of the policies to be served by Sec. 1903(g)." Id., p. 7.
The State did not deny the technical violations of the 90 day
regulatory requirement. It admitted that "updates were not performed
uniformly every 90 days." Brif, p. 5. However, it stated that in no case
was there a lapse in excess of one or two days. Since the reviews were
performed every three months, the State argued, they met the statutory
requirement and it would be contrary to legislative intent to impose a
penalty for the technical violations. (The Agency characterized
appellant's argument as "de minimis" violations, although the State
did
not use that term.) Therefore, said the State, the Agency should waive
imposing a penalty.
The Agency countered that it had no authority to grant such a waiver,
no matter how minor the violation, and cited two prior Board decisions:
North Carolina Department of Human Resources, (9) Decision No. 273,
March 31, 1982, and Oaklahoma Department of Institutions, Decision No.
318, August 12, 1982.
The prior Board decisions cited by the Agency are not directly on
point on the particular issue raised by the State. Oklahoma discusses
the contention of the states in many 1903(g) cases that the violations
are frequently so technical and so minor that they are "de minimis",
and
should be disregarded. The Board decided, as it had in prior cases,
that the statute was reasonably interpreted as not permitting a waiver.
Here the violation is of a regulation and not the statute itself, and
therefore Oklahoma is not a direct holding supporting the Agency's
position. The same analysis applies to North Carolina, where we stated
that the Agency had consistently interpreted the statute as not
permitting a waiver, and that the Agency's interpretation must be
accorded some deference by the Board. We also referred to the
Comptroller General's Opinion, cited in many 1903(g) cases cited in
North Carolina. This opinion stated that the Secretary had no
alternative but to consider a state's showing unsatifactory or invalid
"if the requirements of Section 1903(g) are not met in every case".
North Carolina, p. 6. /4/
That is not the exact issue here. It is certainly a reasonable
argument that the statutory requirement for a review of a plan of care
"periodically" is met as well by a review every three months as well
as
every 90 days.
The issue here is whether a review every three months meets the clear
regulatory requirement that the review be every 90 days; in other
words, does three months equate with 90 days?
The State argued that the Agency imposed a penalty based upon "a
regulation which arbitrarily and improperly goes far beyond the
legislation." Appellant's brief, p. 7. This contention seems incorrect
on its face. Section 1102 of the Act gives the Secretary the power "to
make and publish such rules and regulations, not inconsistent with this
Act, as may be necessary to the efficient administration of the
functions with which (she) is charged under this Act." Clearly a time
limit defining "periodically" in the regulation was an appropriate
implementation of the statute. Just as clearly, 90 days is a reasonable
time limit. The State did not even argue that the time interval was
unreasonably short or long.
(10) Of course the Secretary could have as well put "three months"
in
the regulation as "90 days", and it would have been just as reasonable.
Probably the "90 days" was selected to match up with the "60
days" for
recertification in the statute. We consider it reasonable to have a
regulation which has a 90 day interval for review of plans of care. The
regulation clearly does not arbitrarily and improperly go far beyond the
legislation, as the State contends. The real issue is whether a review
of a plan of care within three months meets the regulatory requirement
of 90 days.
Technically it is not the same, except for the first three months of
the calendar year. There is an argument of administrative convenience,
since generally using a three month interval is simpler to track than to
have to compute actual number of days. /5/ A busy doctor could
presumably keep track more easily of having a review the same day of the
month, every three months, rather than count 90 days. For example, the
doctor in the case of patient DT in the Brandenburg Center (Exhibit 10)
had one review on 4/1/82 and the next on 7/1/82. It can be argued that
he would know right away that the next review was due on 10/1/82, rather
than have to count days to find it was due on 9/29. /6/
The actual issue here, whether 90 days and three months are in effect
the same, has never been considered by the Board. /7/ The (11) similar
question of whether 60 days in the statute is the same as two months has
been considered in at least one Board decision, Virginia Department of
Health, Decision No. 208, August 28, 1981. There the State argued that
construing the language of the statute (requiring recertification at
least every 60 days) to mean "every two months" was reasonable. We
said
that the legislative history of section 1903(g) did not suggest that the
statutory language should be construed in any way "except as the plain
words provide." Virginia, p. 3.
The State has also made here what is in effect a "de minimis"
argument on this issue, although it has not used the term. In effect,
the argument is that the violation is so slight that it should be
disregarded. The Board considered the "de minimis" argument as to
1903(g) penalty cases at some length in Oklahoma department of Human
Resources, both in Decision No. 318 dated June 28, 1982, and in the
Reconsidered Decision No. 318 dated August 12, 1982. Our decision
upheld the Agency's position that the Secretary lacks the discretion to
waive the penalty for even minor violations of the statute.
Our decision here regarding the de minimis argument for violation of
the 90 day regulation is based on the following analysis: The
regulation for 90 days is a reasonable implementation of the statute.
The regulation is clear on its face when it says "90 days". If it
said
"three months" it would also be reasonable, but it does not. There
is
nothing unreasonable about the regulatory requirement. By its own
admission the State did not comply with the 90 day requirement. We
cannot say that almost complying with a 90 day requirement is
sufficient. Our own regulation states that we "shall be bound by all
applicable laws and regulations." 45 CFR 16.14. We therefore hold that
a failure to review a plan of care in 90 days is a violation of the
regulation, giving rise to the penalty provided in the statute. /8/
(12) We therefore uphold the violations for those facilities where
plans of care were not reviewed within 90 days, whether or not they were
reviewed within three months.
Conclusion
We uphold the disallowance for four facilities, based on our analysis
above. The amount of the disallowance is to be determined by the
parties. If the parties are unable to reach an agreement, the State may
again appeal to the Board solely on the amount. /1/ Appellant first
requested a hearing, but later withdrew this request. Appellant
also waived filing a reply brief. /2/ To avoid unnecessary
invasion of personal privacy, we use only the initials of patients where
they need to be identified. /3/ "Intermediate care facility" is
defined in section 1905(c) of the Act as an institution licensed to
provide health-related care and services to individuals who do not
require care in a hospital or skilled nursing facility "but who because
of their mental or physical condition require care and services (above
the level of room and board) which can be made available to them only
through institutional facilities. . . ." (emphasis supplied) Section
1905(d) provides that the term "intermediate care facility" may include
services in a public institution for the mentally retarded if certain
conditions are met. /4/ In Oklahoma we pointed out that North Carolina
did not say the Comptroller General's Opinion compelled the
Board's conclusion but rather supported it. (p. 11) /5/ Of
course, there are compensating problems with using three months. It is
not immediately apparent when an update of a plan of care three months
after one performed on November 29 or 30 would be due (assuming no leap
year). /6/ This particular doctor knew that the requirement was for 90
days, since his notes state to "renew orders for 90 days." (Exhibit
10)
The State's argument would be more convincing if his notes read "renew
orders for three months." /7/ There are almost no decided cases
in the courts on whether a 90 day requirement can be equated with three
months. This is particularly surprising, since the 90 day provision is
common in areas of the law, i.e., the IRS 90 day deficiency letter, and
the normal time within which to file a petition for certiorari to the
Supreme Court in civil cases. The case of Ash v. United States, 37 F.
Supp. 464 (D. Mass. 1941) involved a statutory provision giving a
claimant for veteran's insurance 90 days in which to file suit after
administrative denial of his claim. The court said it could not enlarge
the statutory provision for 90 days (to cover three months) even though
a statute pertaining to veterans' claims should be given a liberal
construction. /8/ We express no opinion on whether the Agency
could, if it chose, waive the 90 day requirement in the regulation,
particularly if it thought there was a good-faith belief at a facility
that three months was the same as 90 days. The Comptroller General's
opinion discussed above refers to a violation of a specific provision of
1903(g), that of the 60 day recertification requirement.
NOVEMBER 14, 1984