GAB Decision 377
January 27, 1983 Colorado Department of Social Services Docket No.
82-105-CO-HC Garrett, Donald; Settle, Norval Ford, Cecilia
The Colorado Department of Social Services (State) appealed a
disallowance by the Health Care Financing Administration (Agency) of
federal financial participation (FFP) under Title XIX (Medicaid) of the
Social Security Act. The disallowance arose from the Agency's
implementation of Board Decision No. 187. Applying the precepts set
forth by the Board in that decision, the Agency reduced by $647,667 its
disallowance of $1,465,592 FFP claimed by the State for Medicaid
services at certain nursing facilities. The disallowed amount was thus
adjusted to $817,925 FFP.
The major issue is whether the State has presented convincing
arguments that the Board should reconsider the basis for its holding in
Decision No. 187. For reasons stated below, we decline to reconsider
that decision.
There are no material issues of fact in dispute. We have determined,
therefore, to proceed to decision based on the record of Decision No.
187, the State's notice of appeal and brief, and the Agency's brief.
The State declined to submit a reply brief.
Factual Background
On May 31, 1981 the Board issued its decision in Colorado Department
of Social Services, Decision No. 187. This decision encompassed
thirteen separate appeals involving the disallowance of $1,465,592 FFP
for Medicaid services performed at eight nursing facilities in Colorado.
The facilities' provider agreements had been terminated or not renewed
by the State. The facilities appealed their decertifications under
Colorado law, and the question before the Board was the allowability of
FFP for services performed during the appeal process.
Briefly stated, the Board, relying on a previous decision, Ohio
Department of Public Welfare, Decision No. 173, April 30, 1981, found
that FFP was available to reimburse the State for payments made pursuant
to Colorado law during a provider appeal for a period no longer than 12
months following the nonrenewal or termination of a facility's Medicaid
certification. The Board then applied, on the basis of documentation
supplied by the State, the principles set forth in Ohio to each of the
nursing facilities. In addition, for Eventide of Durango, where there
was a question as to the documentation, the (2) Board directed the
Agency to examine the documentation in light of a Colorado district
court decision concerning the facility, and to apply the guidelines set
forth in the Board decision in order to determine if any disallowance
was warranted.
On February 25, 1982 the attorney for the Agency wrote the State
regarding the Agency's proposed implementation of Decision No. 187. In
that letter, the Agency, applying the Board guidelines, reduced the
disallowance for some of the facilities. As to Eventide of Durango, the
Agency found that the documentation, which the Board in its decision
directed the Agency to review, had no effect on the amount of the
disallowance for Eventide. Nor did the Agency find the Colorado
district court decision involving Eventide relevant to a determination
of the disallowance amount.
Because the State did not reply to the February 25, 1982 letter, the
Agency, on May 12, 1982, issued a notification of disallowance,
incorporating the findings contained in the February 25 letter. On June
14, 1982 the State appealed to the Board.
The State's Arguments
The State argued that Board Decision No. 187 was incorrect as a
matter of law because the Board misinterpreted an Agency policy
statement (MSA-PRG-11), the U.S. Court of Appeals decisions in the two
cases of Maxwell v. Wyman, 458 F. 2d 1146 (2d Cir. 1972) and 478 F. 2d
1326 (2d Cir. 1973), and a letter from an Agency official (the Weikel
letter) concerning the availability of FFP during a provider appeal.
The State requested the Board to reconsider its decision limiting FFP to
12 months after the termination or nonrenewal of a facility's provider
agreement. As to Eventide of Durango, the State argued that, under
Colorado law and by a 1982 Colorado Court of Appeals decision, the
facility's provider agreement was in effect throughout the appeals
process, and that, therefore, no disallowance of FFP for the facility is
warranted. Furthermore, the State argued that the implementation of
Decision No. 187 would lead to an unworkable Medicaid system.
Discussion
This case is technically a new appeal in the sense that the State has
sought Board review of a distinct Agency notification of disallowance.
Yet we believe that what the State is primarily requesting here is a
Board reconsideration of Decision No. 187. As noted above, the State
asked the Board "to reconsider its decision" (State's Brief, p. 3)
and
offered no new evidence for Board review other than the Colorado Court
of Appeals decision.
When Decision No. 187 was issued on May 31, 1981, there was no
explicit provision in the Board regulations for a Board reconsideration
of its (3) decisions. The Board Chair, however, had ruled that the
Board had inherent, discretionary authority to reconsider its decisions
in exceptional circumstances, considering factors such as the nature of
the alleged error or omission prompting the reconsideration request, the
length of time which had passed since the original decision was issued,
and any harm that might be caused by reliance on that decision. Ruling
of September 11, 1980, Florida Department of Health and Rehabilitative
Services, Decision No. 105; see also, Ruling of September 29, 1982,
Minnesota Department of Public Welfare, Decision No. 215. The Board's
current regulations, effective after the issuance of Decision No. 187,
explicitly provide that the Board has power to reconsider a decision
where a party promptly alleges a clear error of fact or law. 45 CFR
16.13 (1981).
Under either the inherent, discretionary authority or the Board's
current regulations, then, a party must allege some clear error or
omission in the decision in order for the Board to reconsider that
decision. It is not sufficient for the party merely to restate
arguments previously made. As explained below, we find that the State
has failed to present adequate grounds for the Board to reconsider the
legal analysis in Decision No. 187.
The State incorporated in this case all the arguments it made in the
appeals decided in Decision No. 187. The Agency argued that the State
is barred from relitigating these matters by the doctrine of res
judicata and that the instant disallowance involved only factual
computations, whose accuracy was uncontested by the State, concerning
the implementation of Decision No. 187.
All of the State's arguments concerning the proper interpretations of
MSA-PRG-11, the Maxwell decisions, and the Weikel letter were considered
by the Board in its deliberations over Decision No. 187. The Board
further examined its positions on MSA-PRG-11 and the Maxwell decisions
in Michigan Department of Social Services, Decision No. 290, April 30,
1982, and concluded that its analysis of these issues, developed in Ohio
and adopted in Decision No. 187, was correct. As the State has not
presented any new arguments on these issues, the Board is not prepared
to reconsider its position on these matters.
As to the State's argument that the implementation of Decision No.
187 would lead to an unworkable Mediciaid system, we agree with the
Agency that this is a policy, rather than a legal or factual, argument.
In any event, the Board would not have reached its decision on these
issues if the Board agreed that the results were inconsistent with the
requirements of the Medicaid program.
We also consider the State's action here untimely. As noted by the
Agency in its brief, the State has not contested the accuracy of the
Agency's calculations as to the amount of the disallowance for each of
(4) the facilities involved. Rather, the State has attacked the basic
holdings of Decision No. 187. The State, however, waited for over a
year from the issuance of Decision No. 187 to make its request for
reconsideration. The Agency is entitled to rely on the finality of
Board decisions; a losing party cannot be permitted an indefinite
period of time to request reconsideration of a Board decision.
Further, the State disputed the Agency's determination that no
adjustment of the disallowance for Eventide of Durango was required.
The State offered a copy of a March 11, 1982 Colorado Court of Appeals
decision involving that facility. The State argued that, since the
court ruled that the termination of Eventide's provider agreement was
improper, FFP should be available under the provisions of MSA-PRG-11.
This raises a new issue, appropriately addressed in this decision.
An examination of the court's opinion, however, reveals that the
basis for the holding that Eventide's provider agreement was improperly
terminated was a procedural finding that the State had violated Colorado
law by not filing for public inspection the regulations that were used
to terminate the agreement. Yet the court also found that Eventide's
decertification from the Medicaid program was proper because there were
numerous and substantial violations of Medicaid standards.
We agree with the Agency that when a decision is reversed for reasons
unrelated to a provider's compliance with Medicaid standards, the
exception in MSA-PRG-11, which authorizes FFP when a provider is upheld
on appeal, does not apply. The exception applies only when the alleged
deficiencies which were the basis for the provider's decertification are
found, on appeal, not to have existed. Here, the Colorado Court of
Appeals affirmed that serious deficiencies existed at Eventide. The
Medicaid regulations do not provide for FFP for services at a facility
with deficiencies which have not been the subject of a waiver or a plan
of correction.
Conclusion
For the reasons stated above we sustain the disallowance and reject
the State's request to have the Board reconsider Decision No. 187.
OCTOBER 22, 1983