Department of Health and Human Services
Departmental Appeals Board
QUALITY CONTROL REVIEW PANEL
SUBJECT: Tennessee Department of
Human Services
Docket
No. A-95-193
Decision
No. QC93
DATE: December 13, 1995
DECISION
The Tennessee Department of Human Services (Tennessee)
appealed the July
27, 1995 quality control (QC) review
determination by the Region IV Regional
Administrator of
the Administration for Children and Families (ACF).
The
Regional Administrator sustained the federal quality
control review
conclusion that an Aid to Families with
Dependent Children (AFDC) recipient
was overpaid $23 due
to Tennessee's failure to prorate the AFDC grant in the
initial month of assistance, September 1994. The
recipient was a
woman whose pregnancy was in the seventh
month in September 1994, thus
making her eligible to
receive AFDC benefits.
For the reasons discussed below, we sustain ACF's finding
that the
September 1994 AFDC payment should have been
prorated as the recipient's
application meeting all the
requirements for AFDC assistance was not
submitted until
September 8, 1994.
Statutory and Regulatory Background
Title IV, Part A of the
Social Security Act (Act)
established the AFDC program to provide assistance
to
certain needy children.
Under section 408(a) of the Act, the Secretary of the
Department of
Health and Human Services must operate an
AFDC QC system pursuant to which
the Secretary determines
the amount of any disallowance required to be
repaid due
to erroneous payments. Disallowances are based on the
amount by which a state's error rate for a given fiscal
year exceeds the
national average error rate. Section
408(f) of the Act.
In order to establish an error rate, a state reviews a
sample of AFDC
payments made during a designated review
period to determine the level of
erroneous payments.
Section 408(b)(1)(A) of the Act. The Act
then provides
for federal QC re-review of a subsample of the cases
which
were reviewed by the state. Section 408(b)(2) of
the Act.
QC reviews are conducted against permissible state
practice (PSP).
45 C.F.R. � 205.42(b). PSP is defined
as a state's "written rules and
policies that are in
accordance with existing, approved State plan
provisions." QC Manual, � 3130.
The regulations
concerning a pregnant woman's entitlement
to benefits provide that --
it must be medically verified that the child is
expected to be born
in the month such payments are
made or within the three-month period
following such
month of payment, and who, if such child had been
born
and was living with her in the month of
payment, would be eligible for aid
to families with
dependent children.
45 C.F.R. � 233.90(c)(2)(iv).
The regulations further require that, when an individual
applies for AFDC
assistance, a "decision shall be made
promptly, pursuant to reasonable
State-established time
standards not in excess of . . . 45 days. . .
." 45
C.F.R. � 206.10(a)(3). AFDC assistance is effective no
later than the earlier of (1) the date of authorization
of payment, or
(2) 30 days from the date of application,
provided that all the individuals
in the assistance unit
meet all the AFDC eligibility conditions. 45
C.F.R. �
206.10(a)(6)(i)(A). The regulations also provide that,
for purposes of federal financial participation, an AFDC
payment may be
as early as the date of application,
provided again that all the AFDC
eligibility conditions
have been met. 45 C.F.R. �
206.10(a)(6)(i)(C).
Factual Background
The client first went to the local agency on May 17,
1994, to apply for
assistance because she was pregnant
and no longer working. She was
asked to obtain
verification of pregnancy. On June 8, 1994, the client
returned to the local agency with verification of her
pregnancy.
The verification stated that the date of
conception was April 10, 1994, that
the approximate
starting date of her sixth month of pregnancy would be
September 4, 1994, and that her estimated date of
delivery would be
December 26, 1994. Also on June 8,
1994, the client completed and
signed the Tennessee form
"Application or Review of Eligibility for AFDC,
Food
Stamps, Medicaid." Tennessee Exhibit (Ex.) A. On
June
8, 1994, the local agency approved her for three
months of Food Stamps and
Medicaid, with a
recertification scheduled for September 1994. At that
time the client was not eligible for AFDC assistance
because she did not
meet the eligibility requirement that
she had to be in at least the last
trimester of her
pregnancy to receive AFDC benefits.
Tennessee explained that when the client was approved for
Medicaid for a
pregnant woman on June 8, the agency
computer set up an "alert" to be sent
to the case worker
for the month prior to the client's sixth month of
pregnancy, September, in order that AFDC assistance could
be authorized
upon a review of any changed circumstances
occurring in the interim between
June 8 and September.
When the client returned on September 8 and
again signed
the application form, according to Tennessee, the case
worker made a computer entry with a September 1, 1994
sign date being
used for AFDC purposes. Tennessee stated
that the September 1 date was
entered into the computer
system as the date for initial AFDC assistance to
commence because September 1 was the first day of the
month in which the
client reached her third trimester and
became eligible for AFDC assistance.
On September 8, 1994, the client returned to the local
agency for
recertification. At that time she again
completed and signed the form
"Application or Review of
Eligibility for AFDC, Food Stamps,
Medicaid." Tennessee
Ex. D. The local agency then determined
that the client
was eligible for AFDC under the pregnant-woman provision
and made her AFDC eligibility effective September 1,
1994.
The client received an AFDC cash assistance grant of $95
for the month of
September 1994.
The federal QC review found that the client was not
eligible for AFDC at
the time of the June 8 application,
but was eligible on September 8 when she
signed the
application/review of eligibility form. The federal
review determined that the client's September payment
should therefore
have been prorated reflecting the
September 8 eligibility date and that
Tennessee's payment
of a full month of AFDC benefits accordingly resulted in
a $23 overpayment to the client.
Analysis
The basic issue in this appeal is what date should be
considered the
effective date of the client's application
for AFDC assistance.
Tennessee claimed that June 8 should be considered the
date of the
client's application for AFDC benefits.
Tennessee asserted that the client
was entitled to a full
month of AFDC assistance in September because:
1) the
client did not receive payment for a period prior to the
date of
application, but received her initial payment
subsequent to the date of June
8 application; 2)
proration was inapplicable as the client received the
initial payment not in the month of application, but in
the month of
eligibility; and 3) neither state nor
federal regulation precluded the
client from applying for
AFDC assistance in advance of the last four months
of her
pregnancy.
Tennessee conceded the fact that the client was
ineligible for AFDC
benefits at the time of the June 8
application. Tennessee stated that
the "application was
promptly processed for the assistance immediately
ascertainable and assessed for future financial
assistance subject to
eligibility for cash assistance
remaining unchanged when the third trimester
was
reached." Reply Brief at 3. According to Tennessee,
there were no regulations precluding this procedure.
We reject Tennessee's arguments for the following
reasons. Under
federal regulations, Tennessee was
required to take action on the
recipient's application
within 45 days of receipt, July 23 in this
case. 45
C.F.R. � 206.10(a)(3). This decision had to be a
definitive finding on the application for AFDC benefits:
Each decision regarding eligibility or ineligibility
will be
supported by facts in the applicant's or
recipient's case record.
Under this requirement
each application is disposed of by a finding of
eligibility or ineligibility . . .
45 C.F.R. � 206.10(a)(8).
Further, assistance had to be effective no later than the
earlier of (1)
the date of authorization of payment, or
(2) 30 days from the date of
application.
We agree with ACF that the regulations require a state to
approve or deny
an application and do not provide for
some type of "suspended" status for
AFDC applications.
Consequently, Tennessee had to dispose of the June
8
application within 45 days. Since the client was not
eligible as
of June 8 or within 45 days of June 8, the
application had to be
denied. Therefore, the September 8
application constitutes a new
application and not merely
a review of eligibility as Tennessee
argued. As such,
under Tennessee's own PSP, the September benefits
must be
prorated from the September 8 date:
Assistance to eligible applicants begins with the
date of
application, provided that the person was
then eligible.
Tennessee State Plan, Section 2.1 B (Tennessee Ex. H).
Initial payments are made beginning with the date of
application,
if all other eligibility factors are
met at that time, or at the first of
the month in
which eligibility is achieved, whichever is later.
Tennessee Family Assistance Manual, 1240-1-4.23
(Tennessee Ex. I)
(emphasis added).
Tennessee did not directly address the federal
regulations discussed
above. Instead, Tennessee relied
on the following authorities.
Tennessee asserted that
its title IV-A State Plan specifically allows a
pregnant
woman to apply for and receive AFDC benefits:
Assistance is provided to a pregnant woman when it
has been
medically verified that the child is
expected to be born in the month such
payments are
made or within the three month period following such
month
of payment, and who, if such child had been
born and was living with her in
the month of
payment, would be eligible for aid to families with
dependent children.
Tennessee State Plan, Section 2.2 (Tennessee Ex. C).
Tennessee
further asserted that the client was not
precluded from applying for
assistance on June 8 in
advance of the last four months of her
pregnancy. In
support of its proposition that state and federal
regulations encouraged this permissible application
period for pregnant
women, Tennessee relied on two
bulletins it issued on the subject of
pregnant women and
AFDC benefits, Bulletin No. 130 (Tennessee Ex. E) and
Bulletin No. 96 (Tennessee Ex. F).* Bulletin No. 96 gave
local
offices instructions for processing cases involving
pregnant women. As
relevant here, it stated:
An unborn child is not eligible. However, a
pregnant woman
without AFDC eligible children may be
eligible for Medicaid Only upon
verification of
pregnancy and for cash payment as if there were an
eligible child during the last four months of
pregnancy.
Attachment A, C.
Bulletin No. 130 repeated these instructions and stated:
Federal regulations require that any pregnant woman
who applies and
would be eligible for AFDC except
that she is not in the last four months of
pregnancy
be deemed to be an AFDC recipient for purposes of
Medicaid
eligibility. Such applications should be
processed using all regular
AFDC requirements and
budgeting procedures. If the applicant meets all
technical and financial requirements of AFDC (except
that she is not in
the last four months of
pregnancy), the case should be approved for
AFDC-
Medicaid Only . . .
Tennessee asserted that it submitted
the bulletins for
federal review and comment, with no federal challenge to
them forthcoming. Tennessee asserted that in the case of
the
client it operated in compliance with the information
contained in the
bulletins which ACF had never
questioned.
Tennessee also relied upon comments made in the Federal
Register to
proposed changes in AFDC regulations required
by the Tax Equity and Fiscal
responsibility Act of 1982:
Comment. One commenter asked whether a State may
make
payments to a pregnant woman with no other
children beginning with the first
day of the month
in which the seventh month of pregnancy begins or
the
first day of the month in which she applies for
assistance, even though her
actual application date
is later.
Response. Although the
statute permits states to
make payments to pregnant women with no other
children beginning with any of the last four months
of pregnancy,
pregnant women are not exempt from the
requirement that payments not be made
for any period
prior to the date of application. However, there is
nothing to preclude the pregnant woman from applying
for assistance in
advance of the seventh month of
pregnancy, based on State procedures.
48 Fed. Reg. 28,398, at 28,399 (1983) (emphasis supplied
by
Tennessee).
The authorities cited by Tennessee do not support the
proposition that
the client's AFDC benefits should have
been effective September 1. The
cited provision of the
Tennessee State Plan merely parallels 45 C.F.R. �
233.90(c)(2)(iv) and does not address the question of
whether Tennessee
could base payment on the June 8
application.
Similarly, the bulletins provided by Tennessee do not
pertain to the
question at issue here of the effective
date of the application by a
pregnant woman for AFDC
benefits. Bulletin No. 96 was concerned with
disseminating the fact that a pregnant woman in the last
four months of
her pregnancy could be eligible for AFDC
benefits. Bulletin No. 130
stated that an applicant not
in the last four months of pregnancy should be
considered
for Medicaid benefits only, with no mention whatsoever
that
an application for AFDC benefits would be suspended
until the women reached
the last four months of her
pregnancy.
Likewise, the
cited commentary from the Federal Register
does not validate Tennessee's
position. The commentary
states that "pregnant women are not exempt
from the
requirement that payments not be made for any period
prior to
the date of application." The commentary
continues that a pregnant
woman may apply prior to the
seventh month of her pregnancy, but it is not
reasonable
to infer that such an application could be made that was
contrary to explicit regulations.
There is no basis here for
upholding Tennessee's claim
that the June 8 application remained a valid
application.
Under the circumstances of this case, the date when the
client again executed an application for AFDC benefits,
for which she
was eligible, was September 8 and any
payments made for a period prior to
that date were
unauthorized under the regulations.
Conclusion
For the reasons discussed above, we sustain ACF's finding
that there was
an overpayment of $23 in the September
1994 AFDC payment because of
Tennessee's failure to
prorate the payment.
___________________________
Sara Anderson
___________________________
Thomas D. Horvath
___________________________
Jeffrey A. Sacks
* * * Footnotes * * *
* Tennessee claimed that Bulletin No. 130 was
issued in 1991 and submitted for federal review in 1991.
The
Bulletin, however, bears the date November 16, 1981
and other designations
indicating that it was a 1981
publication.
(..continued)