DEPARTMENTAL APPEALS BOARD
Department of Health and Human Services
SUBJECT: New York State Department DATE: June 26, 1989 of Social
Services Docket No. 89-83 Decision No. 1064
DECISION
The New York State Department of Social Services (State) appealed a
decision by the Health Care Financing Administration (HCFA) disallowing
$160,692 in federal financial participation (FFP) for the quarter ended
September 30, 1988. The disallowance represented the difference between
the 75 percent enhanced funding rate for costs attributable to the
operation of the State's Medicaid Management Information System (MMIS)
under Title XIX of the Social Security Act (Act), and the 50 percent FFP
rate generally available for Medicaid administrative costs. HCFA
disallowed a portion of the State's claim for statewide and
department-wide overhead costs allocated to the operation of State's
MMIS.
Arguing for a reversal of the disallowance, the State asserted that the
costs at issue are reimbursable at the 75 percent FFP rate. The State
contended that the issue of the reimbursement rate for indirect costs of
the MMIS was settled by DAB No. 648, and that, as noted in DAB No. 648,
section 1903(a)(3)(B) of the Act provides for a 75 percent reimbursement
rate for costs "attributable to the operation of [MMIS] systems."
Further, the State contended that HCFA is attempting to avoid the clear
and proper application of a statute, the pertinent regulations, and the
holding in a Board decision by resurrecting as "New Policy" the Medicaid
Manual amendments rejected by the Board in DAB No. 648.
The State acknowledged that these identical issues were addressed and
decided in New York State Dept. of Social Services, DAB No. 1023 (1989).
In New York, the Board found that it was within the Agency's discretion
to establish a policy that distinguishes between indirect costs of a
state's Medicaid agency that would qualify for the enhanced funding rate
and statewide and department-wide indirect costs which would qualify for
only the 50 percent rate. The State requested that the Board issue a
summary decision consistent with the findings and determinations we made
in DAB No. 1023. HCFA agreed to this course of action.
We therefore sustain the disallowance of $160,692 based on DAB No. 1023,
the record of which we incorporate by reference.
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Norval D. (John) Settle
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Alexander G. Teitz
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Cecilia Sparks Ford Presiding
Board