Virginia Department of Medical Assistance Services, DAB No. 1108 (1989)

DEPARTMENTAL APPEALS BOARD

Department of Health and Human Services

SUBJECT: Virginia Department DATE: October 10, 1989 of Medical
Assistance Services Docket No. 88-242 Decision
No. 1108

DECISION

The Virginia Department of Medical Assistance Services (Virginia/State)
appealed a determination by the Health Care Financing Administration
(HCFA/Agency) disallowing $166,098.05 in federal funds claimed by the
State under Title XIX (Medicaid) of the Social Security Act (Act) for
the calendar quarter ending March 31, 1988. 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 (26) and (31) of section 1902(a)
whereby the professional management of each case is reviewed and
evaluated at least annually by independent professional review teams."

Specifically, HCFA found that Virginia failed to conduct a satisfactory
annual medical review at the Camelot Hall-Chesapeake Nursing Home
(Camelot Hall). HCFA alleged that the review of Camelot Hall was
deficient because the State did not review two Medicaid recipients, who
required intermediate care facility services, residing in the facility
during the annual review.

Based on the following analysis, we find that the State was not required
to review these patients, and we, therefore, reverse the disallowance.

Statutory Authority

Section 1902(a)(31)(B) requires in pertinent part that a state plan
provide:

[W]ith 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 C.F.R. 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.

(2) An on-site review is required in a facility by the end of a
quarter if the facility entered the Medicaid program during the
same calendar quarter 1 year earlier or has not been reviewed
since the same calendar quarter 1 year earlier . . . .

Background

Virginia's Long Term Care Information System (LTCIS) Section operates
the Medicaid Management Information System (MMIS), which produces the
patient lists used by the inspection of care review (review) teams to
identify patients in intermediate care facilities. The LTCIS Section
obtains a copy of the first medical assessment document, a MAP-95 form,
completed for a Medicaid recipient upon entry of that person into a
nursing home. State's Ex. 5, par. 5. However, because the State's
process is a 3-part system, several steps are required prior to the
LTCIS Section's receipt of this document. The first part begins when a
local social services agency makes an eligibility determination for an
applicant and completes a MAP-122 form. The local social services
agency then sends the MAP-122 form, which contains eligibility
information essential to the completion of the MAP-95 form, to the
appropriate facility. Once a facility receives this information, it
must complete the second part of the process. Prior to submitting the
first billing documents to the State, the facility must confirm the
patient's residency and provide information showing it has a sufficient
number of certified beds and that the patient is receiving the
appropriate level of care. Within five days of receiving the MAP-95
form, the LTCIS Section completes the third part of the process. The
LTCIS Section reviews the information from the form to ensure that the
patient is properly admitted to a Medicaid certified bed at an
appropriate level of care in the facility and inputs this information
into the computer system. See State's Ex. 5, paragraphs 6 and 7.

The State noted that not until the information from the MAP-95 is
entered into the computer is it available to the State's 14 review teams
through the State's fiscal agent, The Computer Company (TCC).

Prior to the beginning of each month, the review teams submit requests
to TCC for current patient information data for each facility to be
reviewed in that month. State's brief, p. 4. TCC then generates an
"Advanced Recipient Notification List" (advance list) for each facility
to be reviewed. The advance list contains information current as of the
19th of the month preceding the review. TCC then simultaneously sends
the advance list to the review teams and to each Medicaid-certified
facility in Virginia. Id. When a team arrives at a facility, it shows
the facility its advance list, explains that the list is identical in
content to the advance list which was previously sent to the facility by
TCC, and the review team asks the facility's staff to indicate if: (1)
the facility has admitted any new Medicaid patients; (2) any previous
"private-pay" patients have become Medicaid patients or have Medicaid
applications pending; or (3) any Medicaid patients have left the
facility. The State explained that throughout the course of the review,
the team repeats its requests for such information.

Camelot Hall was reviewed from March 7 through March 17, 1988. The
State noted that, in addition to the advance list, the review team also
sought and received a list of all patients in the facility identifying
which patients were private-pay and which were Medicaid recipients. The
names of the two patients at issue here, Patient C.E.B. and Patient
C.O.H., appeared on the facility's list but were identified by the
facility as private-pay patients. State's brief, p. 5.

The pertinent facts in this case are undisputed. Patient C.O.H. was
found eligible for Medicaid generally, and a MAP-122 form completed, by
the Virginia Beach Department of Social Services (DSS) on February 18,
1988. The State's LTCIS Section final review and approval process of
the MAP-95 form, which confirmed facility residency and appropriate bed
certification and level of care placement, for this patient was not
completed and entered into the computer until March 4, 1988, however.
Patient C.E.B. was found eligible for Medicaid generally, and a MAP-122
form completed, by Chesapeake DSS on February 22, 1988 and entered into
the local computer system two days later. The State's LTCIS Section did
not complete the final review and approval process of the MAP-95 form
submitted by Camelot Hall for this patient and enter the information
into the MMIS until March 16, 1988.

Analysis

The Board has found that a state bears the ultimate responsibility for
identifying patients subject to the annual review requirement.
Washington State Dept. of Social and Health Services, DAB No. 940
(1987). Further, the Board has found since the State bears the ultimate
responsibility for identifying patients requiring review, the State
cannot rely solely on facility lists without taking "reasonable efforts
to insure their completeness." Washington, supra, at p. 6. However,
the Board has also stated:

[A] state may only be held responsible for reviewing those
patients that the state could reasonably be expected to
identify as Medicaid recipients. See Idaho Department of
Health and Welfare, DAB No. 747 (1986) . . . . Texas Dept.
of Human Services, DAB No. 830 (1987), p. 4; see also Oregon
Dept. of Human Resources, DAB No. 895 (1987).

HCFA argued that the State's system for identifying recipients was
inadequate. HCFA pointed to the State Medicaid Manual provision at
section 9155 (effective February 10, 1988), entitled "A REASONABLE STATE
SYSTEM FOR IDENTIFYING RECIPIENTS FOR REVIEW," which provides, in
relevant part:

The law and regulations require an inspection of the
care provided to each Medicaid recipient in every
long-term care facility at least annually. To ensure
compliance with this requirement, develop a system for
keeping IOC teams apprised of eligibility determinations
for institutionalized recipients. This assures that the
inspection team is given an updated listing of all
residents in the facility who had been determined
eligible, providing their eligibility was determined no
less than 7 calendar days prior to the start of the
review on the day preceding its review of a facility.
(You are responsible for identifying recipients for
review, therefore do not rely solely on eligibility
input from the facility.) (Emphasis added)

HCFA argued that the State should have had its review team seek more
timely eligibility determination information from the local social
services agencies, rather than relying on facility information.

The flaw in HCFA's argument is that it is based on the premise that in
Virginia the determination by the local social services agency that an
individual is eligible generally for Medicaid is the critical
determination for purposes of identifying who is a recipient who must be
reviewed. This Board has previously held, however, that individuals
must not only be determined eligible for Medicaid generally, but must
also be determined eligible for Medicaid institutional benefits in
particular. In Kentucky Division of Medical Assistance, DAB No. 704
(1985), the Board stated:

References in the relevant statutory language on the issue
of to whom the medical review requirement applies include
the following in section 1903(g)(1) of the Act: "an
individual (who) has received care as an inpatient" and
"patients in mental hospitals, skilled nursing facilities,
and intermediate care facilities;" and the following in both
subsections (26) and (31) of section 1902(a) of the Act:
"persons receiving such care," and "patients receiving care
in such facilities." Nothing in this language contradicts
the State's reading that a Medicaid-eligible patient whose
financial eligibility to receive institutional benefits is
uncertain need not be reviewed. Nor is the Board aware of
anything in the legislative history that would refute this.

The regulatory provision for the medical review program
states at 42 CFR 456.652(a)(4) that "each recipient" must be
reviewed, and the general regulation at 42 CFR 400.203,
which sets out definitions applicable to all Medicaid
programs, defines "recipient" as an "individual who has been
determined eligible for Medicaid." This language is not
conclusive, however, on the issue of whether a determination
of general Medicaid eligibility is sufficient to deem an
institutionalized person a "recipient" for purposes of the
medical review requirement. Within the context of the
medical review requirement, which applies to
institutionalized patients only, it is reasonable to
construe this definition to include only those persons who
are in fact eligible for Medicaid assistance in their
current circumstances.

Id. at p. 7.

This holding is now reflected in the State Medicaid Manual section
9150.1, which provides that a state must review "all
recipients/residents in the facility who have been determined Medicaid
eligible; i.e., both eligible for Medicaid services and eligible for
payments to the facility on their behalf . . . ."

While both patients were found generally eligible for Medicaid in
February 1988, the entire review of facility residency, appropriate bed
certification and level of care was not completed for Patient C.O.H.
until March 4, 1988 (three days prior to the start of the review), and
not completed for Patient C.E.B. until March 16, 1988 (during the
review). The State has a 3-part system with the local social services
agencies, the facilities and the LTCIS Section working together to
assure complete and correct information necessary before LTCIS can
authorize payment under Medicaid. Contrary to what HCFA argued,
obtaining information from the local social services agencies is not an
option for the State since it is LTCIS which completes the eligibility
determination process and authorizes payment.

While the State's system could perhaps be improved if the review team
obtained its list closer to the start of the review, we do not agree
with HCFA that the failure to review these patients shows that the
State's system for identifying recipients was inadequate. Section 9155
of the State Medicaid Manual recognizes that a review team cannot
reasonably be expected to identify recipients who were determined
eligible less than seven calendar days prior to the start of the review.
Given our finding that the entire eligibility determinations for
patients C.O.H. and C.E.B. were not completed until March 4, and March
16, 1988, respectively, we conclude that the State was not required to
review these patients.

Conclusion

Based on the foregoing, we reverse the Agency's disallowance.

_____________________________
Cecilia Sparks
Ford


_____________________________
Norval D. (John)
Settle


_____________________________
Judith A.
Ballard
Presiding Board