GAB Decision 140
December 24, 1980
New Jersey Department of Human Services, The Matheny School, A Special
Hospital; Docket No. 80-8-NJ-HC
Ford, Cecilia; Garrett, Donald
Settle, Norval
The New Jersey Department of Human Services (New Jersey) appealed
the January 8, 1980 disallowance by the Deputy Administrator, Health
Care Financing Administration (Agency) of $239,123 claimed by New
Jersey as Federal financial participation (FFP) under Title XIX of the
Social Security Act. The claim was based on services provided to
Medicaid recipients by the Matheny School during the period January 1,
1971 to July 8, 1976.
By letter dated March 9, 1977, a program officer in the Bureau of
Health Insurance of the Social Security Administration notified the
Director of the New Jersey Class C Special Hospital titled The Matheny
School (Matheny) that it had been approved as a Medicare provider,
retroactive to July 9, 1976. In an April 14, 1977 letter the Regional
Commissioner of the Social and Rehabilitation Service advised the
Director of the Division of Medical Assistance and Health Services of
the New Jersey Department of Institutions and Agencies that FFP would
not be available for claims by Matheny for FFP prior to July 9, 1976.
That determination was made official in an August 12, 1977 letter from
the Acting Assistant Director for Financial Management, HCFA, to the
Commissioner of the New Jersey Department of Human Services. HCFA
upheld the disallowance and New Jersey filed an Applicaton for Review
by the Board under 45 CFR Part 16.
By letter dated March 21, 1980, the Board directed specific
questions to both parties and asked HCFA also to respond to the
Application for Review. On May 28, 1980, HCFA responded, after
extensions of time. On November 6, 1980, New Jersey filed its reply, a
revised Application for Review. On November 21, 1980, the Board issued
an Order directing New Jersey to show cause why its appeal should not
be:
(1) Denied because the State has not shown that it has complied with
the requirement that FFP is available only for certified providers;
(2) Denied because that State has not shown that the Matheny School
was exempt from the requirement of certification.
New Jersey responded on December 16, 1980.
As set forth in 45 CFR Sec. 249.10(b)(1) (1976), FFP is available
for inpatient hospital services to Medicaid recipients in an
institution qualified to participate in the Medicare Program. New
Jersey admits that Matheny was not certified as meeting Medicare
standards until July 9, 1976, when the State accepted the School's plan
of correction for eliminating deficiencies. These were Life Safety
Code deficiencies identified by the State survey agency in July 1976.
New Jersey admits that deficiencies existed prior to certification,
but argues that the Agency has not shown that these deficiencies
existed from 1971. New Jersey also maintains that because the Agency
allegedly failed to specifically alert the State to the requirement
that Matheny be certified, the Agency should not be entitled to
reimbursement of payments made for services rendered over a five year
period.
These arguments are not persuasive. For its part, New Jersey has
not shown and admittedly cannot show that Matheny was free of
disqualifying deficiencies during the period. Instead, New Jersey
argues that had it known it was necessary to do so it would have
corrected the deficiencies.
New Jersey also has not shown that mailing the 1972 directory,
listing Matheny as a special hospital, to the regional office actually
put the responsible officials in the Agency on notice that Matheny was
not certified.There are mechanisms for states to use in seeking the
advice and guidance of the Agency but the State has not shown here that
it sought such assistance. New Jersey is responsible on its own for
learning what the requirements for FFP are and for demonstrating that a
facility has met them.
Conclusion
We find that New Jersey failed to show that it was entitled to FFP
for services to Medicaid recipients by Matheny during a period when
that facility was not a qualified provider.
OCTOBER 04, 1983