GAB Decision 174
April 30, 1981 Nebraska Department of Public Welfare; Docket Nos.
79-79-NB-HC, 79-102-NB-HC, 79-107-NB-HC, 79-133-NB-HC, 79-223-NB-HC,
79-227-NB-HC, 80-16-NB-HC, 80-17-NB-HC, 80-112-NB-HC, 80-133-NB-HC,
80-164-NB-HC, 80-167-NB-HC, 81-42-NB-HC Ford, Cecilia; Gorrett, Donald
Settle, Norval
This decision encompasses thirteen appeals totalling $677,994. These
appeals are being considered jointly because, while they involve eight
different nursing facilities in Nebraska, they present common issues of
law. The Health Care Financing Administration (Agency) disallowed
Federal financial participation (FFP) claimed by Nebraska (State) under
Title XIX of the Social Security Act for facilities which were
delicensed under State law and decertified under federal law. Under the
provisions of State law, the facilities appealed the delicensing
decisions, and the State continued to reimburse the facilities during
the appeals process. The Agency refused to participate in the cost of
the services provided by facilities after they had been decertified.
Our decision is based on the written records of all thirteen appeals
which include the transcript of a conference held February 11-12, 1981
in which Nebraska and eight other states participated, the State's
post-conference brief, and a Board decision in a similar appeal,
Nebraska Department of Public Welfare, Decision No. 111, July 16, 1980.
We conclude that the disallowances should be upheld.
Factual Summary
Below is a summary of the pertinent facts pertaining to each
facility's delicensure and appeal.
Name Docket No. License Appeal Post-Revocation
Decision Actions Fowler
Manor 79-79 Dept. of Health & License voluntarily District
Ct. surrendered affirmed
revocation Gordon Good 79-107
Dept. of Health License reinstated after Samaritan 79-133
affirmed corrections made revocation Center
79-227 80-16 Maplewood 80-167 Dept. of Health
License reinstated after affirmed corrections made
revocation Mory's Haven 79-102
Dept. of Health License reinstated after 79-223 affirmed
corrections made revocation 80-17 80-112 Orchard Hill
79-79 Dept. of Health & Home closed District Ct.
affirmed revocation Orchard Hill
80-133 Dept. of Health License reinstated after 80-164
affirmed corrections made revocation
81-42 Prairie Park 79-79 *2*No hearing
because license voluntarily surrendered
*2* and new license issued under name of
Fowler Manor St. Vincent's 79-79
Dept. of Health License reinstated after affirmed
waivers obtained revocation Western
Nebraska 79-79 *2*After hearing continuances, license reinstated,
*2* but facility not recertified
(2) As can be seen from the summary, each facility's license was
revoked, and in five instances, was only reinstated after corrections of
deficiencies were made or waivers received.
Relevant Statutory and Regulatory Provisions
The Medicaid regulations have been recodified several times in recent
years, but have not changed substantively as far as is relevant here.
For convenience, we cite to the 1978 codification.
As was stated in our Decision No. 111, pages 3-4, the relevant
Medicaid regulations require that FFP in payments to a facility
providing skilled nursing and/or intermediate care services is available
only if the facility is certified as having met all the requirements for
participation in the Medicaid program as evidenced by an agreement
(provider agreement) between the single state agency and the facility
(42 CFR 440.40(a)(1)(ii) for skilled nursing services, 42 CFR
440.150(a)(2) for intermediate care services). The execution of the
provider agreement is contingent upon certification of the facility by
an agency designated as responsible for licensing health institutions in
the state (state survey agency). 42 CFR 442.12(a).
(3) In addition, 42 CFR 442.201(a) and 42 CFR 440.150(a)(1) require,
as one of the conditions for FFP, that skilled nursing and intermediate
care services respectively be provided in an institution which "meets
fully all requirements for licensure under State law." The State
statutory laws governing licensure, in particular, N.R.S. Sections
71-2023 and 71-2027 (1971), state, in pertinent part:
The Department of Health shall issue licenses for the operation of
institutions.... The Department of Health shall deny, or suspend or
revoke licenses.... The denial, suspension, or revocation shall become
final thirty days after the mailing of the notice, unless the applicant
or licensee, within such thirty-day period, shall give written notice of
desire for hearing. Thereupon the applicant or licensee shall be given
a fair hearing.... On the basis of such evidence the determination
involved shall be affirmed or set aside....
The decision shall become final thirty days after a copy thereof is
mailed, unless the applicant or licensee within such thirty-day period
appeals the decision under section 71-2027....
N.R.S. Section 71-2023 (1971)
and
Any applicant or licensee, who is dissatisfied with the decision of
the Department of Health as a result of the hearing provided in section
71-2023 may, after receiving a copy of the decision, appeal to the
district court of Lancaster County at any time within thirty days after
the mailing of such copy of the order....
N.R.S. Section 71-2027 (1971)
Discussion
In order to find for the State, we would have to determine that there
were valid certifications of the facilities during the appeals process.
The facts involved in these appeals, however, do not differ in any
substantive way from those involved in our previous Nebraska decision.
A Nebraska Attorney General's opinion, dated July 12, 1979, has held
that an appeal of a license revocation pursuant to N.R.S. Section
71-2023 suspends the effective date of license revocation until the
revocation is affirmed on appeal. Each facility's license revocation
was stayed during pendency of the appeal. The State has not shown, (4)
however, that certification (as opposed to licensing) continued in
effect during the appeal. As was stated in our Decision No. 111, page
8, the State law set out above, N.R.S. Section 71-2023, refers only to
license revocation procedures. There is no reference in this section to
a decertification procedure. State law could have provided for such a
procedure, but did not do so. Therefore, during the relevant time
periods, there was no State (or federal statutory) provision requiring
any sort of hearing procedure when a facility was found not to comply
with federal Medicaid standards. * There was no requirement for a
decertification hearing, therefore, there was no statutory provision
that the decertification decision be stayed pending appeal. Since the
decertifications remained in effect during the license appeals, the
State did not meet the conditions for FFP during those periods.
In addition, because the circumstances surrounding the facilities'
appeals do not fall under the exceptions in MSA-PRG-11 (which will be
described briefly below) as set out and discussed in Ohio Department of
Public Welfare, Decision No. 173, April 30, 1981, we conclude that the
disallowances should be upheld.
On December 20, 1971, the Commissioner of the Medical Services
Administration, Social and Rehabilitation Service (predecessor to HCFA)
set out two instances in which FFP would be allowable in payments by a
state to a facility even where the provider agreement has not been
renewed or has been terminated:
1) (If) State law provides for continued validity of the provider
agreement pending appeal; or
2) (If) the facility is upheld on appeal and State law provides for
retroactive reinstatement of the agreement.
PRG-11.
None of the factual circumstances presented here fit into the two
PRG-11 exceptions. Nebraska law provides for continued validity of
licenses pending appeal but is silent as to certification, and there
were no court orders of any kind requiring that the provider agreements
remain in effect. Also, since State law is silent as to certification
and possible retroactive reinstatement of the provider agreement, even
if a facility were upheld in its license appeal, this would not be a
basis for payment of FFP.
Maplewood
One of the appeals involves a facility providing both skilled nursing
and intermediate care services which was delicensed and decertified
after the effective date of new federal regulations providing for
certain appeal rights. In Docket No. 80-167-NB-HC, the facility
appealed both the ICF license revocation and decertification under
regulations promulgated (5) by HEW on February 15, 1979 (42 CFR Sec. 431
Subpart D (1979)) which requires states to make appeal proceedings
available to facilities whose participation in the Medicaid program is
being denied, terminated, or not renewed. These regulations are silent
as to whether FFP can be claimed during the appeals process, however.
PRG-11 might have afforded a basis for providing FFP during the appeals
process except that there was no State law providing for the
continuation of payments pending the certification appeal.
With regard to the SNF portion of the appeal, the facts show that the
SNF license revocation was upheld on appeal, and the SNF recertification
was denied on August 30, 1979. The facility was not recertified until
November 29, 1979 (when FFP was restored).
The facts presented in 80-167 do not provide any basis for
distinguishing it from the rest of the appeals in this decision as to
the availability of FFP during an appeals process.
Conclusion
The Board has previously found that FFP is not available during the
time that a facility appeals a delicensure. Furthermore, the Board has
found that PRG-11 is an expression of the only two exceptions to the
rule that FFP is not available during the time a facility is appealing
its loss of certification. In light of the fact that PRG-11 cannot be
applied to these appeals, and, furthermore, that the State has presented
no evidence to distinguish these appeals from the one which was the
basis of our Decision No. 111, we conclude that payments made by the
State to Fowler Manor, Gordon Good Samaritan Center, Maplewood, Mory's
Haven, Orchard Hill, Prairie Park, St. Vincent's, and Western Nebraska
are not eligible for FFP during the periods at issue because these
facilities had been decertified and there were no valid provider
agreements in effect. * On May 16, 1979, federal regulations went into
effect which required the states to provide decertification hearings.
These will be discussed below.
SEPTEMBER 22, 1983