DEPARTMENTAL GRANT APPEALS BOARD
Department of Health and Human Services
SUBJECT: New Hampshire Department of
Health
and
Human Services Docket No. 86-191 Decision No. 841
DATE: February 26, 1987
DECISION
The New Hampshire Department of Health and Human Services
(State/New
Hampshire) appealed a determination by the Health Care
Financing
Administration (HCFA/Agency) disallowing $43,149.83 in federal
funds
claimed by the State under the Medicaid program of the Social
Security
Act (Act) for the calendar quarter ending March 31, 1986.
The
disallowance was taken pursuant to section 1903(g)(1) of the Act
which
provides for the reduction of a state's federal medical
assistance
percentage of amounts claimed for a calendar quarter unless the
state
shows that during the quarter it had "an effective program of
medical
review of the care of patients . . . pursuant to paragraphs . . .
(31)
of section 1902(a) whereby the professional management of each case
is
reviewed and evaluated at least annually by independent
professional
review teams."
HCFA found that New Hampshire failed to conduct a satisfactory
annual
review at the Laconia State School (Laconia), an inter- mediate
care
facility for the mentally retarded (ICF/MR). Specifically, HCFA
alleged
that the annual review of Laconia was deficient because the State
did
not review two Medicaid recipients residing in the facility. During
the
course of these proceedings, HCFA withdrew its finding for one
patient
as a basis for the disallowance.
For the reasons discussed below, we reverse the disallowance.
Applicable Law
Section 1902(a)(31) requires in pertinent part that a state
plan
provide:
(B) with respect to each . . .
intermediate care facility
within
the
State, for periodic onsite inspections of the care
being
provided to each person receiving medical assistance, by
one
or
more independent professional review teams . . . .
The regulations implementing this provision and section 1903(g)(1)
are
found at 42 CFR Part 456. In particular, section 456.652 provides
that:
(a)
. . . [i]n order to avoid a reduction in FFP,
the
Medicaid Agency must make a
satisfactory showing to the
Administrator, in each quarter, that it has met the
following
requirements for each
recipient:
* * * *
(4) A regular program of reviews, including
medical
evaluations, and annual on-site
reviews of the care of each
recipient .
. . .
(b) Annual on-site review requirements.
(1) An agency meets the quarterly on- site
review
requirements of paragraph (a)(4)
of this section for a quarter if
it
completes on-site reviews of each recipient in every
facility
in the State, . . . by the end
of the quarter in which a review
is
required under paragraph (b)(2) of this section.
* * * *
The Act contains two exceptions to the annual review requirement.
Section
1903(g)(4)(B) provides --
The Secretary shall find a showing . . .
to be satisfactory . . .
if the showing
demonstrates that the State has conducted such
an
onsite inspection during the 12-month
period ending on the last
date of the
calendar quarter --
(i)
in each of not less than 98 per centum of the number
of
such
hospitals and facilities requiring such inspection, and
(ii)
in every such hospital or facility which has 200
or
more
beds,
and that, with respect to such hospitals
and facili- ties not
inspected within
such period, the State has exercised good
faith
and due diligence in attempting to
conduct such inspection, or if
the State
demonstrates to the satisfaction of the Secretary
that
it would have made such a showing
but for failings of a technical
nature
only.
The statutory exceptions are implemented by 42 CFR 456.653
which
provides in pertinent part:
The Administrator will find an agency's
showing satisfactory,
even if it failed
to meet the annual review requirements
of
section 456.652(a)(4), if - -
(a) The agency demonstrates that --
(1)
It completed reviews by the end of the quarter in
at
least
98 percent of all facilities requiring review by
the
end of
the quarter;
(2)
It completed reviews by the end of the quarter in
all
facilities with 200 or more certified Medicaid
beds
requiring review by the end of the quarter; and
(3)
With respect to all unreviewed facilities, the
agency
exercised good faith and due diligence by attempting
to
review
those facilities and would have succeeded but
for
events
beyond its control with it could not have
reasonably
anticipated; or
(b) The agency demonstrates that
it failed to meet the standard
in
paragraph (a)(1) and (2) of this section for
technical
reasons, but met the standard
within 30 days after the close of
the
quarter. Technical reasons are circumstances within
the
agency's control.
Facts 1/
The Laconia facility consists of eight residential buildings,
containing
more than 200 certified Medicaid beds. Laconia was the only
facility
requiring review for the quarter ending March 31, 1986. See
New
Hampshire Brief, p. 2; New Hampshire Ex. E, p. 2. State
personnel
reviewed recipients in the Speare
Building on January 16-17, 21, 24, and 27, 1986. 2/ Patient
J.P., was
transferred from the King Building to Speare on January 29, 1986,
two
days after the conclusion of the Speare review. The King Building
was
reviewed March 14-20, 1986. J.P. was not included in the King review
as
he was no longer a resident of that building, although he was still
in
the same facility in Speare. New Hampshire caught and corrected
this
omission within 14 days after the close of the March 31 quarter.
New
Hampshire Brief, pp. 2-3. New Hampshire asserts that the
circumstances
surrounding patient J.P. qualify as technical failings, thereby
excusing
his untimely review.
Argument
HCFA maintained that the circumstances surrounding patient J.P. did
not
qualify as a technical failing. Citing our analysis in
Delaware
Department of Health and Social Services, Decision No. 732, March
21,
1986, HCFA argued that patient J.P. was not reviewed due to
poor
administration which could not be considered a technical failing.
HCFA
Brief, pp. 1-2.
From the State's perspective, the only issue was whether its failure
to
review this individual qualified as a technical failing. New
Hampshire
asserted that the circumstances leading to its failure to review
patient
J.P. were within its control and that it had performed the review
within
30 days of the close of
the quarter. The State argued that its failure to review this
patient
stemmed from extraordinary coincidences occurring in an
inherently
complex procedure, the annual review. The State noted that
in spite of
the complexity of the annual review process, its system was still
able
to pick up this omission and correct it in a timely fashion.
Therefore,
New Hampshire reasoned, contrary to HCFA's assertion,
these
circumstances reflect very good program administration. New
Hampshire
Brief, pp. 6-10.
Analysis
In past decisions we have analyzed the technical failings exception to
the
annual review requirement. See Delaware, supra; and
Pennsylvania,
supra. Admittedly, there is little guidance given about
what is
properly regarded as a technical failing. From the legislative
history
we know only that the "technical failings" exception would cover
the
situation where a state had conducted reviews in most but not
all
facilities by the close of the showing quarter, and completed
the
remaining reviews within "several weeks." See 44 Fed. Reg.
56336,
October 1, 1979. We have agreed with the general principle that
poor
administration or bad record keeping should not be considered
a
technical failing. Similarly, we have not found either an
unexcused
failure to attempt a review or a review deficient for no apparent
reason
to be a technical failing. See Pennsylvania Department of
Public
Welfare, Decision No. 840, February 20, 1987. While we have
agreed with
HCFA that poor administration or bad record keeping should not
be
considered a technical failing, we did not mean to suggest that
any
failure by a state could be considered poor administration or bad
record
keeping.
In the absence of any formal policy guidance from the Agency
specifying
what constitutes acceptable technical reasons, we find that
the
circumstances here logically fall within a reasonable reading of
the
regulation. There is no evidence that patient J.P. was transferred
in
an attempt to subvert the review process, or that in general the
State
conducted the review of Laconia in a haphazard manner.
Moreover, we
find no evidence of poor administration by the State.
While as the
State asserted, this patient's transfer from King prior to the
review
was purely coincidental, the State itself controlled the timing
and
scheduling of the reviews. Patient J.P. was missed as a direct
result
of the scheduled sequence of reviews for the buildings in Laconia,
not
due to any overt act which could reasonably be characterized as
poor
administration. There is no evidence that New Hampshire's system
for
identifying Medicaid recipients prior to this annual review
was
inadequate. The concepts of poor administration and bad record
keeping
connote a systemic problem resulting in a failing in the system on
a
regular basis, or at least more than a singular occurrence. There is
no
evidence that these circumstances could be viewed as recurring.
Simply,
patient J.P. was not a resident of the King Building when it
was
reviewed. Had the King Building been reviewed during the period
when
the Speare Building was reviewed, this situation would not have
arisen.
Finally, the prompt discovery and review of this patient shortly
after
the close of the showing quarter supports a finding that this is not
an
instance of poor program administration.
Conclusion
Our analysis of the facts and applicable law leads us to conclude that
the
State has presented acceptable technical reasons why this patient
was not
reviewed until shortly after the showing quarter. Accordingly,
we
reverse the disallowance.
________________________________
Judith
A. Ballard
________________________________
Cecilia
Sparks Ford
________________________________
Alexander G. Teitz Presiding
Board
Member
1. The patients are identified by their initials
to protect their
privacy.
2. During the course of the Speare review one
resident's name, C.C.,
was incorrectly coded on a computer print-out, and
thus she was not
identified as a resident of Speare. Further, on the
date Speare
patients whose last names began with "C" were reviewed, this
patient was
out of the facility for a physical examination. HCFA noted
that in
Pennsylvania Department of Public Welfare, Decision No. 746, April
28,
1986, we found that there was no requirement to review a
recipient
hospitalized at the start of a review. HCFA questioned
whether our
holding in Pennsylvania should be applied here. However,
HCFA stated
that it was --
. . . willing to agree that the
disallowance determination should
not
turn upon the case of the client who was out of the
building
undergoing a medical
examination at the time of the . . . review.
HCFA Brief, p. 1.
In light of this, we do not need to address the circumstances
surrounding
that