GAB Decision 611
December 19, 1984
Nevada Department of Human Resources;
Garrett, Donald; Teitz, Alexander Ford, Cecilia
Docket No. 84-142
The Nevada Department of Human Resources (State) appealed a decision
by the Health Care Financing Administration (Agency) disallowing
$15,355.66 in federal financial participation (FFP) claimed under Title
XIX of the Social Security Act (Act) for the quarter ending September
30, 1983. The disallowance was taken under section 1903(g) of the Act
based on the Agency's determination that the utilization control
requirements of that section had not been met for nine patients at six
skilled nursing facilities (SNFs) within the State, some of which were
also certified as intermediate care facilities (ICFs). As explained
more fully below, the State accepted some of the Agency findings and
limited its appeal to seven patients at five facilities. Based on its
limited appeal, the State determined that the amount in dispute was
$14,406.03. /1/
This appeal was handled under the Board's expedited process (45 CFR
16.12). The record includes briefs and documentary evidence from both
parties as well as the tape of telephone conferences held November 5,
1984 and November 27, 1984. For the reasons set out below, we uphold
the disallowance in part and reverse it in part.
Pertinent Statutes and Regulations
Section 1903(g) of the Act requires that the state agency responsible
for the administration of a State's Medicaid plan under Title XIX of the
Act show to the satisfaction of the Secretary that the State has an
"effective program of control (2) over utilization" of long-term
inpatient services in certain facilities, including SNFs. This showing
must be made for each quarter that the federal medical assistance
percentage (FMAP) is requested with respect to amounts paid for such
services for patients who have received care for 60 days in SNFs or the
FMAP will be reduced according to the formula set out in section
1903(g)(5). Specifically, sections 1903(g)(1)(A) and (B) provide that
the State "must" show that--
(A) in each case for which payment is made under the State plan, a
physician certifies at the time of admission . . . (and recertifies,
where such services are furnished over a period of time, in such cases,
at least every 60 days . . .) that such services are . . . required to
be given on an inpatient basis because the individual needs . . . such
services; and
(B) in each such case, services were furnished under a plan
established and periodically reviewed and evaluated by a physician . .
.
These statutory requirements are implemented for SNFs by 42 CFR
456.260 (1982), which states in part that a physician must certify "at
the time of admission" that a patient needs skilled nursing care; and
42 CFR 456.280 (1982), which describes the elements of a plan of care
and states that the "physician must establish a written plan of care"
for each skilled care patient before admission to a SNF.
General Background
The Agency determined utilization control violations existed at the
following facilities:
1. Beverly Manor Convalescent Center - 1 patient 2. Carson
City Convalescent Center - 2 patients 3. Hillhaven
Convalescent Center - 2 patients 4. Riverside Hospital
- 1 patient 5. Sierra Convalescent Center - 2
patients 6. White Pine Care - 1 patient
The State conceded the violation at Riverside Hospital and one of the
two at Sierra Convalescent. Therefore, our review is limited to seven
patients at five facilities.
The Agency found plan of care violations at three facilities (four
patients) and recertification violations at two facilities (three
patients). We will first address the plan of care (3) issue and then
the recertification issues.
I. Plans of Care
A. Background
The SNFs involved here are Beverly Manor (one violation), Hillhaven
(two violations), and White Pine Care Center (one violation).
The Agency based its decision to assess a disallowance against these
facilities on 42 CFR 456.280(a) which provides:
Before admission to a SNF or before authorization for payment, the
attending physician must establish a written plan of care for each
applicant or recipient in a SNF.
The Agency determined the plans of care for each of the cited
patients at these three facilities were invalid because the attending
physicians had not signed and dated the plans of care until sometime
after each patient's admission.
The State presented three arguments in favor of overturning this
aspect of the disallowance. First, the State contended that it did not
have sufficient notice of a requirement that the plan of care must be
signed and dated by the physician on the date of admission to apply that
requirement to these facilities. In support of its position, the State
pointed to Decision No. 471, Nevada Department of Human Resources,
October 31, 1983, in which we overturned a similar disallowance holding
that the requirement that the physician actually sign and date the plan
of care on (or before) the date of admission is not so obvious an
extension of the statutory and regulatory provisions that it applies
without notice. Nevada noted that it received Decision No. 471
subsequent to the quarter in question; therefore, notice could not be
imputed from that Decision. Nevada admitted that the Agency did provide
formal notice of the physician signature and dating requirement (Action
Transmittal 84-2 (AT 84-2), State Exhibit 9), but indicated that it did
not receive AT 84-2 until January 1984, again after the quarter in
question.
In its second argument on this point, the State contended that the
Agency could not simply decide to impose a dated signature requirement.
The State argued that this requirement was not evident in the statute or
regulation. Therefore, the State concluded, the Agency was attempting
to change the laws applicable to Medicaid without following the notice
and comment rule-making provisions of the Administrative Procedure Act
or the traditional legislative process.
(4) Finally, the State noted that the Agency's Regional Letter 84-1
(RL 84-1) (April 1984) (State Exhibit 10), pertaining to a validation
survey of ICFs in a later quarter, contradicted the Agency position
here. The State cited page 8 of that document which provided various
examples of acceptable methods of establishing a plan of care including:
(4) phoning or verbally giving orders . . . to a nurse who records
them. All plans of care must be timely; i.e., dated on or before
admission or authorization and every 90 days thereafter.
The State argued that RL 84-1 established a new policy which in
effect also constituted an admission that the more stringent policy
relating to a dated physician's signature was unsupported by law and
could not be imposed. The State also noted that the plans of care in
dispute had been established by means of telephone orders from physician
to nurse, which were subsequently signed and dated by the physician.
The Agency argued that Decision No. 471 was inapplicable to this
case. The Agency contended that, unlike the circumstances presented in
Decision No. 471, the State had been given adequate notice of the dated
physician's signature requirement. The Agency noted that, in August
1982, in order to prepare the State for a utilization control survey for
the quarter ending June 30, 1982, it had sent the State a copy of
Medicaid Action Transmittal No. 82-18 (AT 82-18) (Agency Exhibit 1)
which provided the State with knowledge of the Agency's plan of care
requirements. AT 82-18, section III, stated:
2. a physician's plan of care meeting the requirements of 42 CFR
456.280 and 456.281.
These sections require that a physician's plan of care must be
established on, or not more than 60 days prior to, the date of admission
or authorization for Medicaid payment as well as periodically updated
every 60 days thereafter. The plan of care must also be manually signed
or initialed and dated by a physician.
The Agency contended that this language could reasonably be read "to
require a physician's signature or initials and date on the date of
admission as part of the procedure for a 'physician's plan of care (to)
be established.'" (Agency Brief, p. 9) The Agency concluded that given
this timely notice, the rationale of Decision No. 471 is not applicable
to the plan of care issue for this particular quarter.
The Agency disputed the State's assertion that the signature/date
requirement for plans of care was both an unreasonable (5)
interpretation of the law and an attempt to circumvent the legislative
process. The Agency argued that this requirement was reasonable in that
it provided proof that the attending physician established the plan of
care on or before the date of admission. The Agency classified the
signature/date requirement as an interpretive rule, which is not subject
to notice and comment requirements of the rule-making process and would
not circumvent the legilative process.
B. Analysis
We believe that the State did not have proper notice of a signature/
date requirement for plans of care. AT 82-18 does not, in and of
itself, provide the State with clear notice of this requirement. As we
noted in Decision No. 471, the statute and regulation require simply
that care be furnished under a plan of care established by a physician
(statute) and that there be a written plan of care before admission
(regulation). (Nevada, p. 9) AT 82-18 does no more than reiterate the
language of the statute and regulation. While AT 82-18 does state that
a physician must sign or initial and date a plan of care, it does not
clearly require a physician's dated signature at the time of, or before,
admission.
Here, as in Decision No. 471, we cannot find that there were
violations of the plan of care requirements where the State had no
notice of the signature/date requirement and the evidence submitted for
the four patients shows that there was a written plan of care
established pursuant to physicians' orders when the patient was admitted
to the SNF level of care. Under these facts, we believe the State could
reasonably conclude that it met the statutory and regulatory
requirements for plans of care. As we did in Decision No. 471, we
conclude that the plans of care were timely since the requirement that
the physician sign and date the plan of care on (or before) the date of
admission is not so obvious an extension of the statutory and regulatory
provisions that it applies without notice. Given this conclusion, we
need not address the remaining arguments raised by the State with regard
to the plan of care issue.
For the reasons discussed above, we conclude that the plan of care
violations for Beverly Manor, Hillhaven, and White Pine Care Center
should be reversed.
II. Certification and Recertification
The Agency determined that two patients at Carson Convalescent Center
had been improperly recertified, one each at the ICF and SNF levels.
Additionally, the Agency concluded that one patient at Sierra
Convalescent Center had maintained dual certification (ICF and SNF)
during this quarter.
(6) A. Carson Convalescent Center
For the two violations at Carson Center, the Agency relied on the
recertification regulations for ICFs at 42 CFR 456.360(b)(2)(ii) and
SNFs at 42 CFR 456.260(b)(2); both regulations require a
recertification at least every 60 days after certification for a
particular level of care.
1. ICF level violation
In the case of the patient at the ICF level, the Agency found that
this individual had been certified for ICF care on May 16, 1983 and
recertified on July 16, 1983, a period of 61 days, and, thus, outside
the regulatory 60 days time-frame. The State contested this violation
arguing that the time period for the patient's recertification (5/16/83
to 7/16/83) was outside the survey period. The State also pointed out
that Medicaid Transmittal 83-12 announcing the utilization control
survey for this quarter merely indicated that the survey would address
SNF care. The State contrasted the language of Medicaid Transmittal
83-12 with that of Medicaid Transmittal 84-5 (State Exhibit 10) which
announced that the utilization control survey for the final quarter of
1983 would not necessarily be limited to the level of review "enunciated
in this transmittal." The State recognized that the Board had previously
ruled that the Agency is bound to impose a disallowance when it finds a
violation even if that violation was at a level of care other than that
for which the survey was being conducted (New York State Department of
Social Services Decision No. 531, April 23, 1984; Michigan Department of
Social Services, Decision No. 518, February 29, 1984), but argued that
the "equities" prevented imposition of the disallowance.
Analysis
This patient's recertification due date was July 15, 1983. The
quarter under review was July 1 - September 30, 1983. Thus, the
recertification was properly a subject of this utilization control
survey. The State's argument to the contrary is meritless.
The regulation at 42 CFR 456.360(b)(2)(ii) clearly requires that
recertifications for the ICF level of care occur at least every 60 days.
The State admitted that more than 60 days elapsed before the
recertification of this ICF patient. Thus, there is clearly a violation
of the utilization control requirements at the ICF level of care.
Additionally, based on our past consideration of the issue, the
State's argument that an ICF violation cannot be taken during the course
of a survey scheduled to cover only SNFs (7) is not persuasive; as the
State has recognized, we have previously addressed the question of the
validity of a disallowance based on utilization control violations taken
at levels of care other than those for which the utilization control
survey was announced. In both the Michigan and New York decisions, we
upheld the legitimacy of disallowances taken under these circumstances,
finding that since a reduction is required by statute for each level of
care for which the requirements have not been met, the Agency is clearly
authorized to recognize violations no matter on what level they occur.
See Michigan, pp. 4-5. Given that the applicable statute and regulation
require the Agency to take a disallowance where it finds a violation and
that the State has admitted the facts leading to the Agency's decision,
we uphold the Agency finding of a violation for this individual.
2. SNF level violation
The SNF patient provided a more complex fact pattern. The Agency
noted that the patient had been admitted at the SNF level on June 6,
1983.The Agency further found that the patient was then improperly
recertified for SNF care on July 4, 1983 because someone other than the
physician had dated the recertification. The Agency contended the next
certification/recertification action took place on August 25, 1983 when
the patient was improperly certified for the ICF level (certification
not signed until the day after admission). The Agency argued that even
if the August 25 certification had been valid, it occurred more than 60
days after the valid certification of June 6, 1983, so that there was a
violation of 42 CFR 456.260(b)(2).
The State, however, argued that this patient was never at the SNF
level long enough to require recertification. The State offered
documentation (State Exhibit 6, State Evidentiary Submission, November
5, 1984) to show the following pattern of valid certifications:
Admitted to SNL June 6, 1983 Admitted to ICF III
August 4, 1983 Admitted to SNL August 8, 1983
Admitted to ICF III August 25, 1980 n2
The State maintained that these certifications complied with the
utilization control guidelines as established by the statute and
regulations as there was not a 60 day span between any two consecutive
actions.
(8) Analysis
After reviewing the documentation submitted by the State for this
patient we determined that there appeared to be merit to the State's
position that this individual was properly certified during the quarter
in question and was not at the SNF level long enough to require
recertification. Our finding was based on the fact that the Agency had
apparently been unaware that the patient had been validly certified for
ICF care on August 4, 1983. /3/ Instead, the Agency appears to have
simply overlooked the existence of a valid certification for ICF care on
August 4, 1983.
When considering the certification documentation for this patient,
the Agency conceded that the facts did not appear to warrant a finding
of a violation for this patient. Accordingly, we reverse the finding of
a violation for the SNF patient at the Carson facility. However, the
existence of even a single individual violation at a facility mandates
inclusion of that facility in a utilization control disallowance. See
Michigan, p. 6. Therefore, although we have eliminated the SNF
violation under consideration, the Carson facility must still be
included in the utilization control penalty calculation based upon the
existence of the ICF violation at that facility.
B. Sierra Convalescent Center
The Agency argued that the patient cited for a violation at this
facility was simultaneously certified for both SNF and ICF care during
the quarter in question. The Agency argued that dual certification was
unacceptable under section 1903(g)(1) of the Act because it prevented
the Agency from determining that the patient was receiving an
appropriate level of care as required under the utilization control
program. The Agency indicated that this patient was certified for ICF
care from May through December 1983, and also certified for SNF care
from August through December 1983.
The State indicated that this patient had originally been admitted to
ICF care, but that review of his records and medical history determined
that he was receiving, and required, SNF care. The State indicated that
although the (9) the patient was continuously receiving SNF care from
August 17th on, certifications for both levels of care erroneously
remained on the patient's chart. Further, the State offered evidence to
prove that Medicaid had authorized payment for the SNF level from August
17, 1983 through December 20, 1983. (State Exhibit 7)
Analysis
Our review of the documentation provided for this patient revealed:
Certification ICF - 6/16/83 Recertification
ICF - 8/12/83 Certification SNF - 8/17/83
Recertification SNF - 9/16/83 Recertification
ICF - 10/10/83 Recertification SNF - 10/16/83
Thus, at least for the quarter in question (7/1/83 - 9/30/83), there
is an uninterrupted, apparently valid, chain of certification and
recertification determinations, albeit with a change in the level of
care. The first time a question arises regarding the possibility of
simultanenous certification at different levels of care is in October
1983, which is outside the quarter in review. In the November 27
telephone conference, the Agency conceded that, based on this analysis,
there did not seem to be a violation for this patient during the quarter
in question. Therefore, we reverse the Agency finding of a violation
for this patient at Sierra Convalescent Center. However, since the
State has conceded one of the two violations originally taken by the
Agency for Sierra Convalescent, this facility, like Carson, must remain
in the disallowance calculation.
Conclusion
Based on our analysis above, we reverse the disallowances for Beverly
Manor Convalescent Center, Hillhaven Convalescent Center, and White Pine
Care. We reverse the Agency's finding of a SNF violation at Carson City
Convalescent Center, but we uphold the finding of an ICF violation
there. We reverse the finding of a violation with regard to the one
patient at Sierra Convalescent for which the State appealed, but that
facility remains in the penalty calculation based on the State's
concession of another violation there. The Agency (10) should
recalculate the disallowance in accordance with this decision. /1/ The
Agency did not definitely confirm that this is the amount in
dispute. However, the Agency did indicate that this appeared to be an
accurate figure. See Telephone Conference, November 5, 1984. /2/ At
page 6 of its Brief, the State indicated that this patient had
been admitted to the ICF level on August 24, 1983. However, the State's
November 5th submission contains an ICF admission and physician's
certification document dated August 25, 1983. /3/ During the
course of the November 27 telephone conference, we discussed the
possible validity of the July 4, 1983 SNF recertification. However, our
finding that the August 4 certification for ICF care was valid and
occurred within 60 days of the June 6 certification, rendered moot any
need to further consider whether the July 4 recertification was valid.
MARCH 19, 1985