New York State Department of Social Services, DAB No. 1105 (1989)

DEPARTMENTAL APPEALS BOARD

Department of Health and Human Services

SUBJECT: New York State DATE: September 26, 1989
Department of Social Services Docket No. 89-189 Decision No. 1105

DECISION

The New York State Department of Social Services (State) appealed the
decision of the Health Care Financing Administration (HCFA) disallowing
$15,389,366 claimed under title XIX of the Social Security Act (Act) for
the quarter ended March 31, 1988. The disallowed costs, which were
included in the per diem rates for hospitals, were incurred for
supplemental malpractice insurance purchased by the hospitals for their
affiliated physicians and dentists. The disallowance was taken on the
ground that the costs were not claimed pursuant to the approved State
plan. Section 1903(a)(1) of the Act requires that costs be claimed
under an approved state plan in order to be eligible for reimbursement
under title XIX. The costs in question here were claimed under the
authority of proposed State plan amendments on which HCFA has not yet
taken final action or which HCFA has disapproved.

On appeal, the State requested that the Board issue a summary decision
in this case based on New York State Dept. of Social Services, DAB No.
947 (1988). That decision involved a disallowance of similar costs
incurred during prior quarters. Both parties had agreed that since the
allowability of the costs depended upon the approval of amendments to
the State plan which had been disapproved by HCFA, the Board was
required to uphold the disallowance. While upholding the disallowance,
the Board noted that HCFA had agreed to pay the costs if the proposed
plan amendments under which the costs were claimed were subsequently
approved by HCFA.

HCFA agreed that a summary decision upholding the disallowance was
appropriate in this case as well. Letter from Dusaniwskyj to Settle
dated 9/13/89.

Conclusion

Accordingly, we conclude that the disallowance was properly taken on the
ground that the costs were not claimed pursuant to an approved State
plan, and sustain the disallowance. If the proposed plan amendments
under which the costs were claimed are subsequently approved by HCFA,
this decision would not bar any obligation by HCFA to pay the costs.


_____________________________
Donald F. Garrett

_____________________________
Alexander G. Teitz

______________________________
Norval D. (John) Settle
Presiding Board