GAB Decision 192
June 30, 1981 Georgia Department of Medical Assistant; Docket Nos.
79-235-GA-HC, 80-53-GA-HC Ford, Cecilia; Garrett, Donald Settle, Norval
These are two appeals by the Georgia Department of Medical Assistance
(Georgia, State) from disallowances by the Health Care Financing
Administration (HCFA, Agency) of Federal financial participation (FFP)
in the cost of services to Medicaid recipients under Title XIX of the
Social Security Act. Both disallowances cover claims submitted by
Georgia for the quarters ended September 30, 1977 through March 31,
1979. /1/
Docket No. 79-235-GA-HC involves the Briarcliff Haven Nursing Home
(Briarcliff). The November 21, 1979 disallowance is for $244,892 FFP.
Docket No. 80-53-GA-HC involves the Ansley Pavilion Nursing Home
(Ansley). The February 20, 1980 disallowance is for $443,074 FFP.
Issues
There are two issues in these appeals:
1) Whether Georgia law provided for continued validity of the
provider agreements pending appeals by Briarcliff and Ansley from the
expiration and nonrenewal of their provider agreements; and
2) If so, is the State entitled to FFP for payments to the facilities
during these appeals?
The Board here decides that Georgia law does effectively provide for
such continued validity and that the State is entitled to FFP for 12
months from the expiration of the respective provider agreements.
(2) This decision is based on the appeals; HCFA's responses;
documents filed by Georgia January 12, 1981 in No. 79-235 in response to
the Board's request of October 23, 1980; the Order to Show Cause issued
October 16, 1980 for these and related appeals; responses by Georgia
and HCFA to that Order; a transcript of an informal conference February
11-12, 1981; and HCFA's post-conference submissions.
Background
On May 31, 1977, provider agreements between Georgia and Briarcliff
and Ansley expired. Both facilities had been surveyed by the State in
January 1977, had been found to have deficiencies, and had submitted
plans of correction which had not been accepted by the State.
On May 5, 1977, Briarcliff sought administrative review of the
State's decision not to recertify. On May 24, 1979, the Georgia
Department of Human Resources (GHR) issued its "final administrative
decision" that Briarcliff "may not be recertified as a Medicaid
Provider." Appeal, Exhibit D, pp. II, V. Briarcliff then sought review
in the State Superior Court of Dekalb County. By order dated August 10,
1979, the court stayed the effective date of the GHR decision and
directed the State to continue medical assistance payments to Briarcliff
until final action by State courts.
Although Briarcliff was not certified, the State signed a "Nursing
Home Provider Agreement" with it on June 21, 1977; and on June 6, 1978,
a "Statement of Participation" in the Georgia Medical Assistance
Program. The former was to expire June 30, 1978; the latter, June 30,
1979. Appeal, Exhibits H and I.
On or about May 1, 1977, Ansley Pavilion also sought administrative
review of its decertification. As part of that review, Ansley received
a hearing August 12-16, 1977. The record was closed August 29, 1977,
and a decision rendered in favor of the State survey agency December
1978. On February 9, 1979, the Commissioner, GHR, overturned that
decision because it was not rendered within 30 days of the close of the
record as required by Georgia law. Georgia Administrative Procedure
Act, Georgia Code 3A118. Response of HCFA to appeal, Exhibits D and E.
The State executed provider agreements with Ansley in June 1977 and
June 1978, without the facility being certified. Notification of
Disallowance, P. 2. Ansley was resurveyed by GHR May 8-9, 1978, and
deficiencies found, but no certification determination made because GHR
saw "no point in processing another survey with essentially the (3) same
deficiencies (as January 1977)." Letter from the Director, Standards and
Licensure Section, GHR, to the Director, Division of Survey and
Certification, Bureau of Health Standards and Quality, HCFA, set out in
HCFA Response, Exhibit A, p. 2.
Discussion
HCFA contends that it is not authorized to pay FFP for the period
involved in these cases because even though the State executed provider
agreements with these facilities, those agreements were invalid because
they were not based on certification. Georgia does not dispute the
certification requirement but argues that it was met by operation of
State law keeping the prior certification in effect pending
administrative review of decertification.
MSA-PRG-11 (PRG-11), a December 1971 Program Regulation Guide issued
by the predecessor of HCFA, sets out the basic rule that FFP is not
available if a facility does not have a currently effective (i.e.,
valid) provider agreement, but notes two exceptions:
1. A facility is on appeal before an administrative agency and
"State law provides for continued validity of the provider agreement
pending appeal."
2. A facility is upheld on appeal and "State law provides for
retroactive reinstatement of the agreement."
Tab F, Order to Show Cause.
HCFA contends that even if the State is required to continue
payments, FFP is not authorized. However, in Ohio Department of Public
Welfare, Decision No. 173, April 30, 1981, the Board held (p. 14) that
PRG-11 had not been nullified, repealed, or amended, applying it there
to situations where a facility appeals and a court orders the state to
continue payments. In Colorado, supra, the Board concluded (p. 7) that
its Ohio holding also applied to an appeal under the Colorado
Administrative Procedure Act.
Georgia law provides for continued validity
These cases involve the first of these two PRG-11 exceptions.
Georgia argues that under State statutes and regulations allowing a
provider to appeal a threatened termination, the State may not deny
payments to the facility until after a hearing and a "final"
administrative decision (which may be stayed by judicial action).
79-235 Appeal, p. 3; 80-53
(4) Appeal, pp. 1-3. HCFA contends that the provision in Sec.
350-4-.01(1)(c) of the Rules of the Georgia Department of Medical
Assistance providing for a hearing "when a person or an institution...
has been terminated as a provider" means a post-termination rather than
a pre-termination hearing. HCFA also argues in Ansley, that the laws
and regulations cited by Georgia do not state, or even imply, that the
State is obligated to continue payments. HCFA response in 80-53, p. 6.
HCFA's argument conflicts with the position taken earlier by HEW in
Briarcliff Haven, Inc. v. Department of Human Resources, Georgia, 403 F.
Supp. 1355, 1360-61 (N.D. Ga. 1975) that a provider does have "an
opportunity for a pretermination hearing under the Georgia Medicaid
program." The court agreed with HEW (and Georgia) that Sec. 502 of the
Nursing Home Services Manual (GHR) requires a pretermination hearing.
Id. at 1363, 1364.
Further, in its response in 79-235 (Briarcliff), HCFA did not dispute
that "state law requires (Georgia) to continue making payments to the
nursing home." Response, p. 10, n. 11. In that case Georgia cited, in
addition, Sec. 3A-119 of its Administrative Procedure Act. That section
provides, in (b):
When a licensee has made timely and sufficient application for the
renewal of a license or a new license with reference to any activity of
a continuing nature, the existing license does not expire until the
application has been finally determined by the agency...
Georgia also cites a companion provision, Sec. 290-1-1-.01(k) of the
GHR Rules, defining license as "any Department permit, certificate,
approval, registration or similar form of permission with reference to
any activity of continuing nature..." Appeal, Exhibit B.
The Board dealt with provisions of Colorado law very similar to
Georgia's in Colorado Department of Social Services, Decision No. 187,
May 31, 1981, holding (pp. 6-7):
While the term "provider agreement" is nowhere mentioned in the
State's APA, we consider it significant that the APA, at 24-4-102(7),
specifically defines "license" as including any certificate issued
by a
State agency. From this we conclude that a Medicaid certification, the
basis for a provider agreement, falls within the APA definition (5) of
"license." In addition, the APA is used in Colorado for the purposes
of
appealing a Medicaid decertification. We thus find that, where Medicaid
certification is at issue, the Colorado APA meets the requirements of a
State law for the purposes of the first part of PRG-11. This case is
distinguishable from that decided in Nebraska Department of Public
Welfare, Decision No. 174, April 30, 1981. In that case the Board held
that the PRG-11 exceptions were not applicable to Nebraska law which
provides for the continued validity of licenses pending appeal, but is
silent as to certifications. The Nebraska appeals pertained solely to
specific state licensing requirements, and were not regarded as appeals
of Medicaid decertifications.
Looking at the Georgia statutory and regulatory scheme as a whole, we
conclude that it effectively continues Medicaid certification and the
provider agreement beyond the initial termination or expiration. Thus
provider appeals in Georgia meet the PRG-11 requirement for FFP because
State law provides for continued validity of the provider agreement
pending appeal.
Application of PRG-11
We find here that FFP is authorized, pursuant to PRG-11 and the
Georgia statutory and regulatory provisions discussed above, until May
31, 1978 -- 12 months after expiration and nonrenewal. In Ohio and
Colorado the Board held that the part of PRG-11 relevant here limited
the availability of FFP to no more than "12 months following nonrenewal
or termination or until the next survey/certification cycle, whichever
comes first." There being no earlier certification determination in
these cases, the full 12 months is available, but no more. /2/
Conclusion
In summary, we uphold the disallowances for June 1, 1978 through the
quarter ending March 31, 1979. We reverse the disallowances for the (6)
quarter ending September 30, 1977 through May 31, 1978. Because the
disallowances are based on quarterly claims and June 1 falls during a
quarter, HCFA will have to calculate the amounts. /1/ The 79-235
disallowance covers the March 31, 1979 quarter only through
January 31, 1979 (intermediate care services) and February 12, 1979
(skilled nursing services). /2/ As noted in the Background
statement, Ansley was surveyed May 8-9, 1978. A certification decision
was not made because the same deficiencies were found. Even if we
regarded this as constructively a decision not to certify, the letter
conveying that decision is dated September 14, 1978--beyond the 12-month
period. See HCFA response in 80-53, Exhibit A.
SEPTEMBER 22, 1983