DEPARTMENTAL GRANT APPEALS BOARD
Department of Health and Human Services
SUBJECT: Mississippi Division of Medicaid
Docket No. 86-194
Decision No. 879
DATE: July 1, 1987
DECISION
The Mississippi Division of Medicaid (State) appealed a determination
by
the Health Care Financing Administration (HCFA, Agency)
disallowing
$96,215.51 in federal Medicaid funding claimed by the State under
title
XIX of the Social Security Act (Act) for the quarters ending
December
31, 1985 and March 31, 1986. HCFA based the disallowance on
its finding
that Mississippi failed to make a satisfactory showing that it
had a
system of annual reviews, as required by section 1903(g)(1) of the
Act.
HCFA found that the State did not review the quality of care for
all
patients in one intermediate care facility (ICF) and one skilled
nursing
facility (SNF). During the course of this appeal, HCFA
withdrew its
findings of violations at the one SNF and revised the
disallowance for
the remaining ICF to include only the quarter ending
December 31, 1985.
Thus, the amount in dispute is now $34,886.57.
The disallowance here relates to the State's alleged failure to
inspect
one patient in the ICF even though the State had performed
a
satisfactory review of that same facility six months earlier
in
accordance with the State's practice to perform inspection of
care
reviews every six months. HCFA alleged that the record shows that
the
State did not have a system which was reasonably designed to insure
that
all Medicaid eligibles in the facility would be reviewed in a
timely
manner.
Based on our analysis of the record and the statutory requirements,
we
find that Mississippi's system as it has been applied in
these
circumstances satisfies the annual review requirements.
Accordingly, we
reverse the remaining disallowance.
What the requirements are
Section 1903(g)(1) of the Act 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 at
least annually by an independent professional
review
team.
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 on-site inspections of the
care
being
provided to each person receiving medical
assistance,
by one or more independent professional review teams. . . .
Although the statute refers to each case being reviewed annually,
HCFA
implemented the on-site review requirement as a "facility-based"
system.
Under this system, inspections are considered timely if performed by
the
end of the calendar quarter in which the facility entered the program
or
the quarter in which the facility had been inspected the previous
year.
See 42 CFR 456.652(b)(2). The preamble to this regulation
explained--
Under this interpretation, States would
not be required to track
the length of
time each individual recipient was in a
facility,
and the review date would not
relate to the length of stay of any
individual recipient in that facility.
44 Fed. Reg. 56335 (October 1, 1979).
The issue in this case is whether the State met the statutory
and
regulatory requirements even though it did not include this patient
in
this one inspection, given that under the State's system of
semiannual
reviews the facility in question had already been reviewed during
the
twelve-month annual period. Below, we first discuss the State's
system
and HCFA's findings here. We then explain why we find that
the
requirements were met here and why we do not find HCFA's arguments
to
the contrary to be persuasive.
What the record shows here
The Agency assessed a disallowance for the quarter ending December
31,
1985 for the Golden Age Nursing Home on the ground that the State
did
not conduct an "annual patient review" during that quarter for
one
patient, M.I. 1/ Therefore, the Agency determined that the State
of
Mississippi failed to make a satisfactory and valid showing that
there
was in operation an effective program of control over the utilization
of
services.
The undisputed facts are as follows. The State conducts two
inspection
of care (IOC) reviews annually in each facility. The Golden
Age Nursing
Home was inspected on June 11, 1985, at which time all
Medicaid
recipients in the facility were reviewed, and inspected again
on
December 16, 1985, when M.I. was the only Medicaid recipient who was
not
reviewed. This patient was not reviewed during the December review
at
Golden Age because the information used by the review team to
determine
which patients to review did not identify this patient. The
IOC review
team conducted the inspection of care using a computer generated
billing
roster which is issued once a month to the nursing home listing
all
recipients designated on the nursing home master file as being
patients
at that particular facility. These billing rosters are created
from the
nursing home master file between the 20th and 25th of each
month. The
nursing home is required to note on the billing roster no
earlier than
after the last day of that month any new information, such as
patient
admissions, discharges, and leave days, and submit these changes by
the
5th day of the immediately following month. The State then takes
this
information and updates the nursing home master file. Thus, when
the
IOC team visits a facility for each of the inspections conducted
each
year, the team uses a copy of the most recent billing roster
as
submitted and updated by the facility. In addition, the team asks
the
nursing facility staff at the start of the review to identify
new
admissions, pending Medicaid applicants, hospitalized patients
and
patients on leave.
For the December 16, 1985 review at Golden Age Nursing Home the
review
team used the monthly report dated November 21, 1985 as updated by
the
facility with any new admissions after the end of the month of
November
and sent to the State by December 5, 1985. Although M.I. was
admitted as
a transfer to Golden Age Nursing Home on November 25, 1985,
and
therefore would not have been listed as a patient on the November
21,
1985 billing roster, this patient should have been on the
facility
updated billing roster as used by the team. The record
indicates that
patient M.I. was not listed by the facility as a new admission
on the
updated billing roster nor named by the facility at the start of
the
review as a new admission.
The record also indicates the following information relative to
patient
M.I. This patient was reviewed by the IOC team on May 27, 1985
when
that patient was residing at the Care Inn Nursing Home. This
patient
again was reviewed on November 5, 1985 while a patient at
Pemberton
Manor Nursing Home. The patient was then transferred to
Golden Age
Nursing Home on November 25, 1985. While a patient at Golden
Age,
patient M.I. was admitted to the hospital on December 7, 1985
and
remained there until December 12, 1985, at which time M.I. was
returned
to Golden Age. On January 9, 1986, M.I. was transferred again
to the
hospital and while at the hospital, patient M.I. died on January
15,
1986.
Our evaluation of the State's system
The Agency would impose a disallowance for the Golden Age facility
because
the State failed to review one patient during the semiannual IOC
review on
December 16, 1985. The Agency, however, does not deny that
the same
facility was reviewed on June 11, 1985 at which time all
recipients were
reviewed. Thus, the Agency's action here is directly
contrary to the
Agency's regulation at 42 CFR 456.652(b)(2). That
regulation specifies
that a state meets the on-site review requirements
as long as a review is
performed by the end of the calendar quarter in
which the facility had been
inspected the previous year. Here, the
record clearly shows that the
State performed a review on June 11, 1985
of Golden Age Nursing Home, which
was clearly before the end of the
calendar quarter in which the facility had
been inspected during the
previous twelve-month period, and that the
inspection included all
patients residing in the facility at the time of the
review.
The Agency nevertheless contended that the regulatory provision at 42
CFR
456.606, supported its position. That provision states:
The team and the [State Medicaid] agency
must determine, based on
the quality of
care and services being provided in a facility
and
the condition of recipients in the
facility, at what intervals
inspections
will be made. However, the team must inspect the
care
and services provided to each
recipient in the facility at least
annually.
The Agency here interprets this regulation to mean that if the
State
decides to require more frequent inspections than just once a year,
than
all the inspections required by the State's policy must be
complete.
This is essentially the same argument that the Agency made in
Maine
Department of Human Services, Decision No. 857, April 2, 1987, and
which
the Board found unsupportable. In that decision, we determined that
if
HCFA intended that reviews at more frequent intervals than once a
year
must include each recipient in the facility at the start of the
review,
then HCFA could have specified this. We concluded that, absent
such
guidance, HCFA could not impose a funding reduction for a system
which
in every respect is more than satisfactory. This is especially
true
where, in recognition of the practical administrative difficulties
of
tracking individual patients, HCFA, in what guidance is given, chose
to
implement this requirement through an approach tracking review
of
facilities.
Just as we determined in Maine, we do not find the Agency's
interpretation
here of 42 CFR 456.606 supportable. While the Agency
inferred here that
the Board somehow coined the phrase "annual review
requirement," the
regulatory provisions at 42 CFR 456.650 et seq., which
set forth what a state
must do to make a satisfactory showing under
section 1903(g),
continuously refer to "annual on-site reviews." For
example, 42 CFR
456.652(a)(4) specifies that in order to avoid a
reduction in FFP, a
state must meet the requirement of "annual on-site
reviews of the care of
each recipient." Moreover, subparagraph (b) of
that same section is
entitled, Annual on-site review requirements.
Similarly, 42 CFR 456.653 is
entitled, Acceptable reasons for not
meeting requirements for annual on-site
review. In light of HCFA's
repeated reference in the regulations to
only annual on-site reviews, it
would be incongruous to hold a state to a
stricter standard where that
state voluntarily chooses to implement a more
thorough system of
reviews. Thus, a more consistent interpretation of
42 CFR 456.606 is
that a State may choose to do more than one review in a
facility
annually, perhaps even choosing to review only certain patients in
the
facility, as long as the State performs at least one complete
annual
on-site review in the facility in or before the same calendar quarter
as
the last complete review in the previous year.
Furthermore, the Agency here completely misconstrued the Board's
findings
in the Maine decision. In fact, when the Board requested the
Agency's
comment on whether or not that decision should control here,
the Agency
contended that the Maine decision was distinguishable from
this case.
Maine "missed" patients because it followed its own system,
which
specifically excluded from review patients who became Medicaid
recipients
during the same month an IOC was conducted. The Agency
reasoned that
since a state has the responsibility under 42 CFR 456.606
to establish proper
intervals of reviews, HCFA then may hold a state to
its system. Thus,
HCFA reasoned, since Mississippi did not follow its
own system because it did
not make a full review on December 16, 1985,
it failed to make the required
showing that it had an effective system.
Even if the two cases are
distinguishable, as HCFA contended, the State
here should not be penalized
for having a system for more than one
review a year. We conclude that such a
result is not warranted in light
of clear statutory and regulatory provisions
indicating that only an
annual review is required.
Conclusion
Based on our analysis, we reverse the disallowance of $34,886.57 taken
for
Golden Age Nursing Home.
_____________________________ Donald Garrett
_____________________________ Norval
D.
(John) Settle
_____________________________ Alexander
G.
Teitz Presiding Board Member
1. The patient is identified by initials to
protect the individual's