GAB Decision 228
November 30, 1981 West Virginia Department of Welfare; Docket No.
80-183-WV-HC Garrett, Donald; Ford, Cecilia Settle, Norval
This appeal concerned a disallowance by the Health Care Financing
Administration (Agency) of $45,544 claimed by the State under Title XIX
of the Social Security Act for 220 abortions.
The Board issued an Order to Show Cause (which is incorporated in
this decision) containing the following proposed findings and
conclusions: that the portion of the disallowance dealing with three of
the abortions during the period April, 1978 - June, 1978 should be
upheld, and that while the disallowance for the remaining 217 abortions
was correct in principle the record was insufficent to support the
amount disallowed, because the record was unclear concerning whether
rules applicable during various time periods were accurately applied to
abortions during those time periods. The Order, in effect, suggested
that the Agency redetermine the amount of the disallowance for the 217
abortions.
By letter dated October 27, 1981, the Agency responded that a
redetermination was "unnecessary", arguing essentially that the State
had only pursued the legal issue in the case, and had not argued that
the requirements were improperly applied. The Agency said:
West Virginia has never asserted that any of the documentation
supporting the 217 abortion claims is adequate to meet these
requirements. Moreover, it is the agency's understanding that it was
the State itself that originally identified these abortions as not
meeting the requirements for federal financial participation . . . .
By letter dated November 21, 1981, the State responded to the Board's
Order and the Agency's letter quoted above, stating:
This letter constitutes the state's response to the October 13, 1981,
Order to Show Cause from the Board. The state refers the Board to its
brief submitted on July 9, 1981, on these issues as it believes said
brief sets forth the reasons why the Board should not act in accordance
with the discussion set forth in its Order to Show Cause.
In response to the response of the agency, the state welcomes an
informal conference preferably in the form of a conference telephone
call.
(2) The Presiding Board Member for this case conducted a telephone
conference on November 24, 1981. Counsel for both parties participated,
and an official of the West Virginia Department of Welfare also
participated.
The State representatives agreed in the telephone conference that the
Agency statement quoted above was correct. The State offered no further
comments or argument.
The Board adopts the findings and conclusions in the Order, except
for the portion proposing a redetermination of the amount of the
disallowance for the 217 abortions. Such a redetermination is
unnecessary.
CONCLUSION
Based on the foregoing, and the analysis in the incorporated Order to
Show Cause, the disallowance is upheld in the amount of $45,544.
(3) DATE: October 13, 1981
ORDER TO SHOW CAUSE
I. Introduction.
By letter dated December 15, 1980, the West Virginia Department of
Welfare (State) appealed from a November 17, 1980 disallowance by the
Health Care Financing Administration (Agency) of $45,544 in Federal
financial participation (FFP) claimed by the State for 220 abortions
under Title XIX of the Social Security Act. The disallowance stated
separate grounds for each of two portions of the State's funding claim:
the Agency said that 217 of the abortions (representing $44,935 FFP)
performed during August, 1977 - January, 1978 were unsupported by
required certifications and documentation; and that 3 (representing
$609 FFP) performed during April, 1978 - June, 1978 were performed only
to avoid "emotional" damage to the mother, rather than the "physical
health damage" required for eligibility.
II. The two relevant statutory provisions, and how the Agency
implemented them.
A. The Hyde Amendment.
Section 209 of the Labor-HEW Appropriations Act of 1977 (Pub. Law
94-339, enacted September 30, 1976), popularly known as the Hyde
amendment, stated "none of the funds contained in this Act shall be used
to perform abortions except where the life of the mother would be
endangered if the fetus were carried to term." Shortly after passage and
before implementation of the amendment, the Department was enjoined from
enforcing it by a Federal District Court. The injunction was dissolved
on August 4, 1977, and the Department published a notice on August 10,
1977 which made FFP in abortion costs available "only were the attending
physician, on the basis of his or her professional judgment, has
certified that the abortion is necessary because the life of the mother
would be endangered if the fetus were carried to term" 42 Fed. Reg.
40486. A succeeding appropriation act was not passed until December 9,
1977 (Public Law 95-205, discussed below); during the interim, two
resolutions continued funding through November 30, 1977, subject to the
Hyde amendment. /1/ Throughout this period, the Agency had no regulation
implementing Section 209; it relied on the August 10, 1977 notice in
the Federal Register, and on two other actions: a mailgram (4) sent to
the States on August 4, 1977 which the Agency, without contradiction
from the State, alleges states essentially what the Federal Register
notice stated (there is no copy in the record), and an "Action
Transmittal" dated August 31, 1977 and sent to the State and others
(HCFA-AT-77-84 (MMB); a copy was submitted by the State with its
request for reconsideration). The Action Transmittal contained verbatim
the language quoted above from the Federal Register notice, and stated
in addition that "the sole evidence required by the Department to
support (a State's FFP claim) will be the physician's certification that
the life of the mother would be endangered if the fetus were carried to
term." /2/ The Action Transmittal made these requirements applicable to
abortions performed after August 4, 1977 (the Federal Register notice
did not specify a date).
B. The subsequent Joint Resolution.
Unable to agree on an appropriation bill for fiscal year 1978,
Congress kept the Department running by passing a Joint Resolution on
December 9, 1977 (Pub. L. 95-205) which appropriated funds in the second
paragraph of Section 101 to be used in accordance with a pending
appropriation bill, subject to the following restriction:
. . . Provided, that none of the funds provided for in this paragraph
shall be used to perform abortions except where the life of the mother
would be endangered if the fetus were carried to term; or except for
such medical procedures necessary for the victims of rape or incest,
when such rape or incest has been reported promptly to a law enforcement
agency or public health service; or except in those instances where
severe and long-lasting physical health damage to the mother would
result if the pregnancy were carried to term when so determined by two
physicians.
Section 102 required the Secretary to "promptly issue regulations and
establish procedures to ensure that the provisions of this section are
rigorously enforced." Section 102 also specified that the funds
appropriated under the Joint Resolution (commonly called a "continuing
resolution") were available retroactively from December 1, 1977.
The Agency implemented P.L. 95-205 in regulations published on
February 2, 1978; see, in particular, the amendments to 42 C.F.R. Part
449 (pp. 4580-4581), effective February 14, 1978.
(5) P.L. 95-205 repeated verbatim the earlier exception of the Hyde
amendment (i.e., "where the life of the mother would be endangered if
the fetus were carried to term"), and added two other exceptions for
rape and incest victims and for potential severe physical health damage.
For the first exception, the Agency's regulation specified the same
physician's certification already required by the Agency under the Hyde
amendment; a new added element was that the certification had to be "in
writing to the applicable State agency." 42 C.F.R. 449.103.
Docuumentation/certification requirements were implemented for the two
new statutory exceptions also: two physicians' written certifications
were required for a finding of potential severe physical health damage
(449.104), and certain specific documentation from a law enforcement or
public health agency for abortion-related rape and incest (449.105). In
all three instances, FFP was made unavailable "if the State agency has
paid without first having received the certifications and documentation
. . . ." (449.106).
C. The Agency's effort to relate the Hyde amendment and the Joint
Resolution.
The regulations were supplemented by another Action Transmittal
HCFA-AT-79-26(MMB)), dated March 14, 1979 (a copy was submitted by the
Agency with its August 7, 1981 response to the Board's Invitation to
Brief). This Action Transmittal appears designed to clarify how
abortions performed during the same period can be subject to different
documentation/certification standards, depending on the source of funds
for FFP, as follows:
- Abortions performed after August 4, 1977 (when paid for from fiscal
year 1977 funds and funds appropriated under continuing resolutions
through December 1, 1977) are controlled by the Hyde amendment and its
implementing regulation (see II.A above).
- Abortions performed after August 4, 1977 and before February 14,
1978 (when paid for from P.L. 95-205 and certain subsequent funds) are
controlled by three rules which vary slightly from the regulations: the
first rule repeats the Hyde amendment rule but adds that the
certification must be "in writing" (although it omits the requirement
of
section 449.103 that the written certification must be "to the
applicable State agency"); and the second and third rules repeat
virtually verbatim the second and third provisions of P.L. 95-205,
without the Agency's additional specification in sections 449.104 and
449.105 of a written certification to the appropriate State agency.
This portion of the Action Transmittal ends by stating that the
Department will accept any reasonable interpretation of the three
slightly anamolous provisions applicable to abortions performed after
August 4, 1977 and before February 14, 1978.
(6) The Action Transmittal further sets forth rules for abortions
performed from February 14, 1978 through the end of the period of
relevance here, which are virtually identical to the regulations in Part
449.
In its brief of July 9, 1981, the State that it "concedes that the
statute, mailgram, publication of policy at 42 Fed. Reg. 40486, and
Action Transmittal of August 31, 1977, provide notice that federal
financial participation for abortions would be limited in certain
circumstances." The State goes on to make the argument that "the agency
could not enforce that limitation until it promulgated valid
regulations."
III. Discussion.
A.The abortions performed during August, 1977 - January, 1978.
The Agency based the disallowance for abortions performed during the
August, 1977 - January, 1978 period on all the foregoing materials --
both laws, both sets of regulations, both action transmittals, and the
mailgram. The Agency's disallowance letter states in part:
. . . even though Federal regulations were not effective until
February 14, 1978, P.L. 94-439 and 95-205 were in effect and prohibited
Federal funding of abortions without the required certifications and
documentation. All State agencies were specifically informed of this
fact . . . Since your claim . . . is for 217 abortions unsupported by
the certifications and documentation required by P.L. 94-439 and 95-205,
it is necessary to disallow this claim.
The disallowance letter indicates that it was prompted by an
"Abortion Validation Review" dated July 17, 1979, which is set forth
as
Exhibit A to the Agency's Response. The Abortion Validation Review
reaches virtually the same conclusions as those described in the
disallowance letter, but appears to have been based only on P.L.
95-205, the February, 1978 regulations, and the 1979 action transmittal
(see "I. Background," "IV. Results of Review/Recommendations,"
and "V.
Comments").
One difficulty with the disallowance letter, and the Abortion
Validation Review on which it was based, is that they do not clearly
sort out which rules were applicable when and to which abortions;
instead, they ambiguously base the disallowance on the whole panoply of
laws and rules which came into being during and shortly after the period
in question. The key element which the Review does not clarify is which
funds were used to pay for an abortion; the matter of when the abortion
was performed appears better considered only a coincidental red herring.
In simple terms, it appears that an abortion performed with P.L. 94-399
funds, regardless of when performed, was subject (7) to the single
limitation of the Hyde Amendment and its implementing rules; and an
abortion performed with P.L. 95-205 funds, regardless of when performed,
was subject only to the more generous albeit more complex) rules in and
implementing P.L. 95-205.
Thus, the only certification required for abortions performed with
P.L. 94-339 funds (and funds made available under the two subsequent
resolutions until November 30, 1977) was a single physician's
certification that the life of the mother would be endangered if the
fetus were carried to term. The record does not indicate that any
additional requirement is applicable to these funds. The other
exceptional circumstances in P.L. 95-205, and the administrative
certification and documentation requirements attending them, ahve
nothing to do with abortions performed with P.L. 94-339 funds. The
record does not indicate whether P.L. 94-339 funds were available for
expenditure after November 30, 1977, but if such funds were available,
abortions performed with those funds would appear to be subject only to
the simple, single Hyde Amendment certification requirement, regardless
of when performed. Thus, to the extent the disallowance letter and the
Validation Review imply that some further certification requirement was
applicable to such abortions, they appear to be incorrect.
By the same token, the State was equally bound to the Hyde Amendment,
and this Board has no authority to overturn a specific requirement of
law. See Section 16.14, 46 Fed. Reg. 43820 (August 31, 1981) 45 CFR
Sec. 16.8 as applicable prior to September 30, 1981. The State argues
that since the Agency had no implementing regulations during much of
this period, the State cannot be bound by the Hyde Amendment and the
requirement of a physician's certification. But this overlooks two
factors. The State clearly was on notice of the Hyde Amendment's
applicability and the certification requirement; the delay in
promulgation of regulations is not per se fatal where there is other
notice. Applachian Power Co. v. Train, 566 F.2d 451 (4th Cir. 1977);
Rodway v. U.S.D.A., 514 F.2d 809 (D.C. Cir. 1975). Perhaps more
important here, the only administrative embellishment the Agency added
to the law was a requirement that a physician certify that life was
endangered. Since it would be practically impossible otherwide to
determine whether life was endangered, we view the physicianhs
certification requirement as a condition which one may reasonably infer
from the face of the statute. The statutory language gives rise to the
obvious inference that there must be some authoritative means of
establishing life endangerment, and the only practical means would be by
evidence of a physician's "certification" (i.e., some evidence that
a
physician had determined life would be endangered by continuing the
pregnancy).
Analysis of the disallowance as it relates to P.L. 95-205 funds is
more complex but yields a similar result. The funds appropriated by P.
L. 95-205, (8) available retoractively from December 1, 1977, /3/ could
only be spent on abortions which met one of the three exceptional
conditions of the provision in Section 101. Again, as discussed above,
Congress placed limitations on the use of a specific "pot" of funds.
The limitations were actually an expansion of the limitation applicable
to P.L. 94-399 funds, permitting the use of P.L. 95-205 funds in
circumstances where P.L. 94-399 funds could not be used. The period of
such use in question in this disallowance is the period from December 1,
1977, to the end of January, 1978; the record does not clearly indicate
whether there may have been some overlapping use of P.L. 94-399 funds
during this period. Be that as it may, it is clear that P.L. 95-205
permitted the use of its funds for abortions where the life of the
mother was endangered, in cases of properly reported rape or incest, and
where severe health damage would result as determined by two physicians.
The Agency implemented the law by regulations published on February
2, 1978, effective February 14, 1978. The regulations embellished the
bare language of the statute with certain specific reporting and
certification requirements, and precluded FFP if the State paid "without
first having received the certifications and documentation." 42 C.F.R.
449.106.
The preamble to the regulations appears to make it clear that the
additional reporting and recordkeeping procedures established by the
regulations themselves were not applicable prior to February 14. The
preamble stated that "a 12 day lead time is sufficient" to "make
adjustments to comply with the reporting and recordkeeping procedures."
43 Fed. Reg. 4580. The disallowance appears to make it clear that this
portion of the disallowance (i.e., that dealing with 217 of the
abortions) pertained only to abortions performed "through January,
1978." (Page 2 of the disallowance letter.) Therefore, the February,
1978 regulations apparently were not applicable to the disallowance in
question. The HCFA Action Transmittal issued over a year later
(HCFA-AT-79-26 (MMB)) did purport to be applicable to this period and
stated less stringent rules than the regulations for the use of P.L.
95-205 funds prior to Febuary 14, 1978; with one exception, the rules
essentially only repeat the statutory language. The one exception is
that the reporting requirement for the old Hyde-type element was stated
to be that a physician was required to certify (9) "in writing" that
the
abortion was necessary because of life endangerment. Even with this
minor modifcation, the Action Transmittal stated that "the Department
will accept any reasonable interpretation." Thus, while we do not
suggest that a March, 1979 guidance document would either take
precedence over an earlier published regulation or, indeed, be binding
on actions of the Grantee taken over a year earlier, we would point out
that the "rules" applicable to P.L. 95-205 funds during the disallowance
period in question here were, generally, no more than the statute itself
required, and in any event, were subject to a rule of reason. While we
tentatively conclude that the March, 1979 action transmittal was not
applicable here anyway, we cannot discern from the record whether the
failures in certification and documentation related to this requirement
or the Agency's "reasonable interpretation" of what was required.
In short, for abortions performed with P.L. 95-205 funds from
December 1, 1977 through January 31, 1978, we tentatively conclude that
the applicable requirements were simply those stated in Section 101 of
P.L. 95-205, with one addition: for life-endangerment abortions, the
Agency could reasonably have required (and the State reasonably could be
expected to have anticipated requirement of) evidence of a "physician's
certification." The other requirements set forth in the February, 1978
regulations are not applicable by their own terms, and the additional
embellishment of HCFA-AT-79-26 (MMB), unpromulgated and issued well over
a year later, cannot reasonably or fairly be applied (and even if they
were, would appear probably to make little difference).
While we tentatively conclude that the State was subject to the
distinctive requirements of the two statutes for abortions funded under
each of them, and that it was reasonable for the Agency to have required
some evidence of a physician's certification of life endangerment in
order to implement both statutes, we believe the State must be given an
opportunity to have its claim re-examined. The disallowance and the
material on which the disallowance was based are too ambiguous for
either the State or the Board to determine whether the proper rules were
applied to the abortions in question. At best, the disallowance
generalizes distinctive requirements across two time periods without
indicating which requirements were not met for which abortions; at
worst, the disallowance may be applying requirements only applicable
during a later time period to an earlier one. While the Agency has a
tenable position concerning the applicability of certain restrictions in
this case, it appears that the Agency's evidence concerning how those
restrictions were applied is insufficient to support the disallowance
and, indeed, implies enough confusion that it appears likely there was
some error.
(10) B. The abortions performed during April, 1978 - June, 1978.
FFP for three abortions was disallowed because the documentation
submitted showed only emotional damage would result from birth, not the
"severe and long lasting physical health damage" required by the
regulation applicable to these particular abortions (42 CFR 449.104).
The State's position is that the documentation submitted showed more
than emotional damage, and that this matter was a matter of medical
judgment rather than non-professional opinion. The Agency argues
persuasively that the clear wording of both the applicable law (i.e.,
P.L. 95-205) and regulations require physical health damage, and that
while physical damage may result from emotional causes, the use of the
term "physical" reasonably must be read to preclude emotional illness
as
a basis for a fundable abortion, however otherwise compelling. Thus, the
question is whether the evidence of physical health damage is adequate.
The Agency points out that "in two of the cases at issue here there was
only one physician certification of both mental and physical damage; in
each instance the second certification referred only to mental and/or
emotional damage. In the third case, there was only one physician
certification." Agency Response to Invitation to Brief, p. 3. The State
responded to the Board's request for the certifications by providing
documents from three physicians in two of the cases, and two in the
third case. Our review indicates the following (we have used initials
as identifying data rather than the name of the patients):
For patient J.A.F., two physicians' statements indicate that the
abortion was recommended "for psychological reasons" and for the
patient's "emotional and mental health." The third physician's statement
was simply that an abortion was "necessary in light of the following
factors: physical, emotion, psychological, familial, and age." Clearly,
for patient J.A.F., there has been no certification by two physicians of
"severe and long lasting physical health damage" if pregnancy were
carried to term.
For patient M.R.M., one of the certifications was verbatim the same
as that quoted above from the third physician for patient J.A.F., which
on its face is not sufficient to indicate long lasting physical health
damage potential. Another certification says only that pregnancy should
not continue because of the patient's "emotional status." The third
letter, from a psychologist, states that "there is no behavioral
evidence of organic impairment" and that abortion was "warranted"
because the patient was "unlikely to meet the emotional and adjustmental
demands of everyday life and parenting if forced to bring this pregnancy
to full-term." Clearly, for patient M.R.M., there has been no
certification of "severe and long lasting physical health damage"
if
pregnancy were carried to term.
(11) Two "certifications" were submitted for patient G.E.G. One,
an
"authorization and invoice for service," shows absolutely nothing
other
than that the patient was given a physical, a pap smear, and a saline
injection. The other, a "psychiatric consultation" submitted by a
psychiatrist, indicates he or she found "anxiety and depression"
associated with the pregnancy, and stated "I do not feel it would be in
the best interest of this individual" for the pregnancy to continue.
This presentation was the only one mentioned in the argument of the
State submitted in response to the Board's Invitation to Brief, in which
the State pointed out that the Psychiatrist's examination revealed that
the patient couldn't eat when she was upset and "attempted self-harm
during her first pregnancy" (the letter goes on to say "however, since
that time her depression has improved"). We do not find that this
letter constitutes persuasive evidence of any "severe and long lasting
physical health damage" and, in any event, is not accompanied by the
required second certification of any such health damage potential.
Based on the foregoing, we tentatively uphold the disallowance
related to the three abortions performed during the period April, 1978 -
June, 1978.
IV. Order.
For the abortions performed during August, 1977, through January,
1978, the Agency is directed to show cause in writing, within 30 days
after receipt of this Order, why the Board should not overturn the
disallowance on the bases set forth above, identifying the respects, if
any, in which the foregoing is materially incomplete or inaccurate. In
the event the Board so held, it would also require the State to
facilitate a redetermination by the Agency by providing additional data
the Agency might reasonably require.
The State is directed to show cause in writing, within 30 days after
receipt of this Order, why the Board should not uphold an interpretation
of laws, regulations and guidance, as set forth above, which would
permit the Agency to re-examine the claim for FFP and modify the
disallowance, or issue a new disallowance, as appropriate in accordance
with the discussion above. At the same time, the State is also directed
to show cause in writing why the Board should not uphold the
disallowance for the abortions performed during April, 1978 through
June, 1978, on the basis set forth above.
The parties are encouraged to consider the possibility of cooperating
in a re-examination of the claim in view of the analysis set forth
above. /1/ This and other information about the abortion controversy
can be found in the preamble to later regulations published February 2,
1978 at 43 Fed. Reg. 4571-4580 (the package was republished in its
entirety on February 3, 1978). /2/ The Action Transmittal also
said that abortions for rape and incest victims qualified for FFP "only
under the same criteria as all abortions -- i.e., if the physician
certifies that the life of the mother would be endangered if the fetus
were carried to term." /3/ The record indicates there may be
some confusion arising from this. It is important to note that P.L.
95-205 did not apply new conditions retroactively per se; it made new
funds available retroactively, and attached certain conditions to the
use of those funds. These conditions did not attach to the use of P.L.
94-399 funds.
OCTOBER 22, 1983