DEPARTMENTAL GRANT APPEALS BOARD
Department of Health and Human Services
SUBJECT: Arkansas Department of Human Services
Docket No. 87-192
Decision No. 959
DATE: May 26, 1988
DECISION
The Arkansas Department of Human Services (State) appealed a
determination
by the Health Care Financing Administration (HCFA or
Agency) disallowing
$405,552 in federal financial participation (FFP)
under the Medicaid program
for the State's alleged failure to properly
perform a "certification of need"
for individuals under age 21 receiving
inpatient psychiatric services during
the period July 1, 1985 through
December, 31, 1985. Section
1905(h)(1)(B) of the Social Security Act
(Act) requires that, in order to
establish eligibility for Medicaid
reimbursement, a team consisting of
physicians and other qualified
personnel must make a determination for each
psychiatric patient under
21 that services are necessary on an inpatient
basis and can reasonably
be expected to improve the patient's condition so
that inpatient
services will eventually no longer be necessary. The
Agency randomly
selected 39 patients from nine facilities in the State to
determine
whether the State had performed a valid certification for these
patients
and found that it had for only three of them. The State
appealed the
Agency's findings with regard to all 36 patients which the
Agency found
lacked valid certifications.
We uphold the disallowance in full. After considering the
State's
arguments and the documentation submitted in the State's appeal file,
we
conclude that the Agency's determination was correct concerning all
36
patients. For six of the 36 patients, the State offered
no
documentation whatsoever, despite its general position that it
disputed
the Agency's findings on all 36 patients. We therefore uphold
the
disallowance with regard to these six patients without
further
discussion. For the remaining patients, we find that the
State's
documentation is insufficient to establish that a team certified need
as
intended by the statute and regulations, contrary to the
State's
position that the compilation of notes and correspondence which
the
State submitted for those patients constituted proper
certification. We
treat in a separate section of this decision four
patients at the
Rivendell Hospital for whom the Agency had separate grounds
for
disallowing costs. We uphold the Agency's disallowance for the
patients
at Rivendell (even though generally appropriate certification forms
were
used for several of these patients) because the State did not
establish
that the forms were signed by an "independent team," as required by
the
regulations, and because there are other unexplained discrepancies
in
the documentation.
Statutory and Regulatory Background
Section 1905(a)(16) of the Act authorizes Medicaid payments for
"inpatient
psychiatric hospital services for individuals under age 21,"
defined in
section 1905(h) as requiring, in part, that:
a team, consisting of physicians and other personnel
qualified to
make determinations with respect to
mental health conditions and
the treatment thereof,
has determined [that psychiatric services]
are
necessary on an inpatient basis and can reasonably be
expected
to improve the condition, by reason of
which such services are
necessary, to the extent
that eventually such services will no
longer be
necessary. . . .
Section 1905(h)(1)(B)(ii). Implementing regulations describe
more
specifically the required determinations which must be made and
the
composition of the specialized team which makes the determination.
The
regulation at 42 C.F.R. 441.152 provides:
(a) A team specified in section
441.153 must certify that -- (1)
Ambulatory care resources available in the community do not
meet
the treatment needs of the recipient; (2)
Proper treatment of the
recipient's
psychiatric condition requires services on an
inpatient basis under the direction of a physician; and (3)
The
services can reasonably be expected
to improve the recipient's
condition or prevent
further regression so that the services will
no
longer be needed. * * * * Section 441.153 specifies
the
teams which must perform the certifications under section 441.152.
The
composition of the certifying team varies depending on when the
patient
starts receiving Medicaid coverage:
(a) For an individual who is a
recipient when admitted to a
facility or program,
certification must be made by an independent
team
that -- (1) Includes a physician: (2) Has competence
in
diagnosis and treatment of mental
illness, preferably in child
psychiatry; and
(3) Has knowledge of the individual's situation.
(b) For an individual who applied
for Medicaid while in the
program, the certification
must be -- (1) Made by the team
responsible for the plan of care as specified in section
441.156;
and (2) Cover any period before
application for which claims are
made.
(c) For emergency admissions, the
certification must be made by
the team responsible
for the plan of care (section 441.156) within
14
days after admission.
Section 441.156 requires development of an individual plan of care by
"an
interdisciplinary team of physicians and other personnel. . . ,"
whose
composition and purpose is defined in specific detail.
The Arkansas state Medicaid plan in effect during the period in
dispute
itself required a certification of need for individuals under
21
receiving inpatient psychiatric services, referencing sections 42
C.F.R.
441.152 and 441.153. Agency's Ex. A. The Agency also
submitted a
section of the Arkansas Medicaid Manual which essentially tracks
these
two regulatory provisions. Agency's Ex. B.
Analysis
A. The 26 patients other than those at Rivendell Hospital
The State submitted as its appeal file the documentation which it
relied
upon in arguing that it had complied with the certification of
need
requirements for each of the inpatient psychiatric patients under
age
21. For each child, the State included a "summary" page,
apparently
prepared for purposes of this appeal, as well as notes,
correspondence,
and other documentation for that child. Most of the summary
pages are
organized according to the three certification requirements of 42
C.F.R.
441.152(a): ambulatory care services in the community are
insufficient
to meet the patient's needs, proper treatment of the patient's
condition
requires inpatient services under the direction of a physician,
and
inpatient services can reasonably be expected to improve the
patient's
condition so that services will no longer be needed on an
inpatient
basis. For each of the three requirements, the State quoted
excerpts
from the attached documentation which, according to the
State,
demonstrate that each requirement has been satisfied. The State
thus
maintained that it fully met the regulatory requirements for
these
children. 1/
The Agency, on the other hand, maintained that such a compilation
of
documents could not meet the requirements of the statute
and
regulations. According to the Agency, the relevant legislative
history
and regulatory language require that "certification cannot be
inferred
from notes but should be an explicit, affirmative statement
that
Medicaid statutory and regulatory requirements are met."
Disallowance
letter, p. 2. The Agency also observed that the State's
documentation
provided no evidence that a team, as required by the statute
and
regulations, performed the certification.
We agree with the Agency that the State's documentation is insufficient
to
show that a "team" certified the need for the inpatient services in
question
here, as specifically required in the statute and regulations.
The Agency's view of what is required is supported by the
legislative
history of the certification requirement in section 1905(h) of
the Act,
which explicitly states that an "independent review team" must
formally
certify the patient's need for the services. The House
Conference
Report states:
Federal matching would not be available with respect
to any
otherwise eligible individual unless such
individual is formally
certified to be in need of
the institutional care and services
authorized under
the Senate amendment by an independent review team
consisting of medical and other personnel qualified to make
such
determination. . . .
H.R. Conf. Rep. No. 1605, 92nd Cong., 2nd Sess. (1972), reprinted in
1972
U.S. Code Cong. and Ad. News 5398 (emphasis added). The
Agency's
longstanding interpre- tation in its policy guidance is that to be
valid
a certification of need must be the result of a process through
which
the appropriate persons with knowledge of the case attest, in a
signed,
written statement, to a determination that an individual needs
a
specific level of institutional care. See Agency's Exs. D-F.
2/
Indeed, the State's own Medicaid Manual indicates that it understood
the
statute and regulations to require identification of a team which
would
be provided with information about the patient, make a decision
about
need, and notify the State about that decision. Agency's Ex.
B
(sections 213 to 220 of the Arkansas Medicaid Manual).
The State objected to the Agency's emphasis on the need for an
"explicit,
affirmative statement" on the apparent basis that this
approach was overly
formalistic and not specifically required by the
statute or regulations.
Whether or not the State used some particular
process or form to certify
need, however, the State still needed to have
the certification performed by
a team (including a physician), which
would make the requisite determination
and communicate the result of its
review in some explicit manner. Use
of the word "team" in the statute
and regulations, would, at a minimum,
suggest a discrete group of
individuals charged with evaluating the need for
inpatient services. An
obvious advantage of having a team perform the
review is that a team
would have the benefit of various professional opinions
and could
specifically evaluate the patient's condition according to each of
the
regulatory elements, avoiding the problem here of the State seeking
to
infer from notes and other documents whether the regulatory criteria
had
been met.
The State explained in its brief that:
The State of Arkansas made the management decision
to accept the
individual case plans in admission
documents of facilities for
psychiatric services
under 21 which meet the statutory and
regulatory
criteria requirements in the formalized team
referenced
in the regulations. If a hearing is
necessary in this matter,
testimony will be that
this decision was made on the basis of
monetary
considerations of setting up a team.
State's Brief, fifth page (unpaginated). While the State may
indeed
have been affected by "monetary considerations" which influenced
the
choice of whether to establish a qualified team, this would not
absolve
the State of its obligation to comply with the legal
requirements.
Neither the statute nor the regulations provide an exception
from the
certification of need requirements based on the State's
fiscal
considerations. Indeed, an apparent purpose of the
certification
requirement is to ensure that public funds are being prudently
expended
for hospital services which have been verified as necessary.
Even assuming that the State did not have to specifically designate a
team
to perform a certification of need, the State nevertheless would
still be
required to show that a group of professionals, including a
physician, had
considered the regulatory elements and determined that
inpatient psychiatric
services were needed. An examination of the
documentation submitted by
the State (with the possible exception of the
cases at the Rivendell Hospital
discussed separately below) shows not
only that the State failed to have a
qualified team perform a
certification for the patients, but that the
elements of 42 C.F.R.
441.152 were not satisfied.
Although most of the files were organized with a standard "summary"
sheet,
the underlying documents reflect no particular pattern that would
indicate an
effort to comply with the regulations, but instead appear to
include whatever
papers the State incidentally had in its files for the
children. None
of the documents indicate that their authors
specifically considered each of
the elements as required by the
regulation, nor do the documents' substance
show that the child's
situation met all the elements. While some
comments might incidentally
have addressed one or two of the required
elements, for none of the
children do they satisfy all three elements.
Most of the documents submitted by the State provide only a
general
diagnosis of the patient's condition, rather than an
unequivocal
statement of need for care in an inpatient psychiatric facility,
and
many of the documents bear no apparent relationship to the
specific
institution- alization and time period involved here. A few of
the
compilations include an evaluation signed by several
individuals
referred to as a treatment or counseling team, but these
evaluations do
not include a physician's signature and/or were performed as
much as
seven years prior to the disallowance period, with no
apparent
connection to the facility admission at issue here. See, e.g.,
State's
Exs. B-F. Others contain documents signed only by a physician,
with no
indication that the physician consulted with anyone else. Exs.
L, O.
In a few instances, there is a document signed by a physician as well
as
a document signed by another professional for the same child, but
their
recommendations for that child are unclear or even conflicting.
Exs. I,
J, and Q. The last nine of the files submitted (State's
Exhibits V -
DD) contain no source documents at all, but only a summary
sheet
relating various comments and recommendations concerning the
children
from persons apparently involved with their care.
In summary, for those patients other than those at Rivendell Hospital,
we
conclude that the documentation submitted by the State does not
satisfy the
statutory and regulatory requirement that a team certify the
need for
inpatient psychiatric services under the elements as described
in 42 C.F.R.
441.152.
B. The cases at the Rivendell Hospital
The Agency's disallowance treated separately seven cases at the
Rivendell
Hospital, where the Agency found there to be a specific form
signed by a
physician that specified each of the three certification of
need (CON)
elements. The Agency accepted certifications for three of
these patients, but
rejected the forms for the remaining four on the
basis that they "were
determined not to meet CON requirements since they
were non-emergency cases
admitted with Medicaid, requiring an
independent team (not the facility
staff) to complete the CON."
Disallowance letter, p. 2.
The State did not dispute the Agency's conclusion in the
disallowance
letter that 42 C.F.R. 441.153 requires a team other than
facility staff
to certify need. The State simply relied on its general
position that
the documentation it submitted was sufficient to show
proper
certification and on its specific summary statements for each
patient.
The Agency's interpretation that use of facility staff is precluded
for
non-emergency admissions is reasonable given the structure of
the
regulation, which mentions independent teams separately from plan
of
care teams. 3/ The Agency appears to have a legitimate concern
that
facility staff might be more inclined to find a prospective patient
to
be in need of inpatient services in their facility than a team which
was
independent of the facility. The State's own manual appears
to
contemplate a process for certifying need for non-emergency
patients
different from that used for emergency admissions and for patients
who
apply for Medicaid while in the facility. Agency's Ex. B. In any
event,
we find the State's documentation for the Rivendell patients to
be
insufficient for reasons in addition to the questioned status of
the
team. We discuss below the documentation submitted for these
four
cases, addressing the team status where relevant, as well as
our
additional reasons for rejecting the documentation as
proper
certification.
For one of the four individuals at Rivendell, Michelle S.
(State's
Exhibit T), the exhibit as submitted by the State contains no
signed
certification form at all; thus, we do not need to reach the question
of
which team performed the review. The case record presented for
this
child is deficient for reasons similar to those discussed in section
A.
The documentation consists of "progress notes" and a "discharge
summary"
from an organization called "Counseling Clinic, Inc.," all signed by
a
person giving his qualifications as "M.A." The State summary
alleged
that these notes showed that ambulatory care resources available in
the
community did not meet the recipient's treatment needs because
they
indicated that the mother thought that she and the daughter should
live
apart for awhile and the child had been threatening to run away.
The
regulation, however, clearly contemplates an evaluation of
placement
options by professionals with knowledge of community
resources. The
"M.A." indicated on the discharge summary that he was
"referring" the
child to Rivendell, but the progress notes do not indicate
that he
considered other alternatives; in fact, the notes suggest that
the
mother and child may have independently sought placement at
Rivendell.
Thus, we find that these documents do not meet the regulatory
criteria
for certification of need.
For two cases at the Rivendell Hospital, Birk N. (State's Exhibit R)
and
Donovan P. (State's Exhibit S), the files submitted by the State
contain
a form headed "Medicaid Under 21 --
Facility
Certification/Recertification of Need for Inpatient
Hospitalization."
(The form does not indicate whether it was designed by the
State itself
or by another authority.) The form tracks the requirements
of 42 C.F.R.
441.152, with a space to check off whether the child is
certified based
on the three elements of the regulation. Each of the
forms was checked
off in the designation for "[t]hese services are required
on a non-
emergency basis" i.e., that "the above-named individual's
psychiatric
condition requires inpatient services under the direction of
a
physician." At the bottom of the form are three signature lines
headed
by the statement "approved by team responsible for plan of
care." The
forms each contain signatures by the following facility
staff: the
admitting or attending physician (also identified as Medical
Director),
a psychologist, and another "mental health professional"
(also
identified as an "MSW"). The forms contain a space for
indicating
whether the patient has a valid Medicaid card on the day of
admission,
but these spaces are blank for each of the patients here.
Handwritten
notes on each of the forms indicate that the cases were
non-emergency
cases admitted with Medicaid. There is also a notation
indicating that
the forms were each signed "retrospectively" from 9-3-85
although Birk
N. was admitted to Rivendell on 6-5-85 and Donovan P. was
admitted on
7-5-85.
As indicated above, the State did not dispute the Agency's conclusion
that
these patients should have been certified by a team other than the
plan of
care team. The State also did not contest for these two
patients the
Agency's finding that they were eligible for Medicaid when
admitted on a
non-emergency basis. The handwritten notations on the
forms support the
Agency's findings on these points. Given these
findings, a question arises
not only about whether the appropriate team
certified need but also whether
they certified need at the appropriate
time. For patients admitted on a
non-emergency basis, certification
should occur on or before the date of
admission. 4/ Here, the forms
were apparently filled out two or three
months after admission.
For one of the cases at Rivendell Hospital, identified by the
State's
summary as Anthony P. (State's Exhibit U), the State did allege
the
following in its summary: "Anthony applied for Medicaid 9-12-85.
His
admission was certified by the team responsible for the plan of
care."
The documents submitted contain a number of unexplained
discrepancies,
however, and do not clearly support this assertion. All
but one of the
attached documents refers to a "Mark P.," rather than Anthony
P. (both
with the same surname.) One of the documents is a
certification form
like the ones for Birk N. and Donovan P., with the same
handwritten
notations (and a 7-10-85 admission date). The signatures
are also the
same, but the treatment plan for Mark P., which was also
submitted,
shows signatures for Medical Director and Social Worker which
are
different from those on the certification form. The last document
in
the file for Anthony P., a computer printout apparently submitted
to
show a date of application for assistance of 9-12-85, names a
"Bertha
S." with no explanation of Bertha's connection to either Anthony or
Mark
P. The address is the same as that given on the certification form
for
Mark P., and the Medicaid number appears to bear some relationship
to
the number listed after the patient's surname in an attachment to
the
disallowance letter, but the State provided no explanation of how
this
document showed that the patient was not eligible at the time
of
admission. The State also failed to explain why the certification
would
have been done retrospectively from 9-3-85 if the application date
was
9-12-85. In light of the numerous discrepancies, and the
complete
absence of any explanation by the State, we find that the State
has
failed to show that the proper certification was performed for
the
proper individual at the proper time.
Accordingly, we uphold the disallowance for all four patients
at
Rivendell, even though a form addressing the requisite elements
was
submitted for three of the patients.
We also note that the use of a standard certification form for
the
patients at the Rivendell Hospital, including the three case files
which
the Agency accepted, lends support to our conclusion above that
the
State failed to satisfy the regulatory requirements for the
other
children. If the State customarily used (or had its providers
use) a
form specifically designed to track the federal regulation in order
to
formally certify the child's need for inpatient services, this
indicates
that the State understood what it needed to do to comply with
the
statutory and regulatory requirements regarding certifications of
need.
Conclusion
For the reasons set forth above, we conclude that the State failed
to
perform a valid certification of need for the 36 children in
question
and therefore uphold the disallowance in full.
________________________________ Donald
F.
Garrett
________________________________ Alexander
G.
Teitz
________________________________ Judith
A.
Ballard Presiding Board Member
1. In the background section of its brief, the State offered
that, in
addition to the submitted documentation, "[a] hearing is requested
if
the Board considers it necessary." A Board staff attorney
informed
State counsel by telephone that, since the case appears to
concern
issues of documentation and the interpretation of the statute
and
regulations, the Presiding Board Member did not consider a
hearing
necessary. In this light, State's counsel withdrew the request
for a
hearing. The State also specifically declined to file a reply
brief,
relying on its original submission rather than providing a response
to
the Agency's analysis of the deficiencies in the State's
documentation.
2. These guidance documents refer to certifications required as
part
of a utilization control system. The specific
certification
requirements for inpatient psychiatric services for individuals
under
age 21 are more stringent, but were designed to satisfy the
utilization
control requirements as well. See 42 C.F.R. 441.152(b).
3. The regulation permits a plan of care team to certify need
within
14 days for patients admitted on an emergency basis. 42
C.F.R.
441.153(c). The State did not allege that this section
applied,
however, and the record supports the Agency's finding that these
were
non- emergency cases.
4. The regulations addressing inpatient psychiatric services
for
individuals under age 21 do not specifically state when the
initial
certification must be done for non-emergency cases, but they do refer
to
general certification of need regulations at 42 C.F.R. 456.160.
Those
regulations require that the initial certification be performed "at
the
time of admission," which the Agency has interpreted as being prior
to
or on the date of admission. See Agency's Exs.
E,