GAB Decision 207
August 28, 1981 Georgia Department of Medical Assistant; Docket No.
81-91-GA-HC Ford, Cecilia; Teitz, Alexander Settle, Norval
The Georgia Department of Medical Assistance (State) appealed from a
penalty disallowance of $77,710.68 made by the Health Care Financing
Administration (Agency) pursuant to Section 1903(g) of the Social
Security Act (the Act) for 19 alleged violations of Medicaid utilization
control requirements during the quarter ending March 31, 1980. The
Agency determined, after it conducted a validation survey, that
physicians had not recertified in a timely fashion the need for care of
18 patients in seven skilled nursing facilities (SNFs), and that one
patient did not have a plan of care established in a timely fashion, as
required by Sections 1903(g)(1)(A) and (B). The State submitted, with
its appeal, documentation for six patients in three facilities; the
Agency examined it, accepted it as evidence of valid recertifications,
and reduced the disallowance to $44,406.10.
This decision is based on the State's application for review, the
Agency's letter notifying the Board of a reduction in the disallowance,
the Board's Order to Show Cause, the Agency's Response, and the State's
letter stating that it would offer no further arguments on its behalf.
The Board issued an Order to Show Cause on June 16, 1981, in which it
stated that the appeal file appeared to show that the violations of the
Act were clear because 12 patients were recertified between 61 and 64
days after the last prior recertification, rather than "at least every
60 days" (Section 1903(g)(1)(A), 42 CFR 456.260(c)).The Board's Order
noted the Agency's position with regard to other cases presently before
the Board, also involving violations of Section 1903(g)(1)(A). The
Board pointed to its recent decisions holding that the Agency has no
discretion under the Act to waive a penalty, once it is clear that
violations exist, no matter how minor or how few the violations are.
The Agency's response to the Order to Show Cause confirmed that the
recertifications for 12 patients were not made within 60 days, and
confirmed the Agency's position that it has no discretion under the
statute to waive or modify the 60-day requirement nor to waive the
penalty for minor violations.
(2) The State responded by simply stating that it wished to make no
further arguments (State Response to Order to Show Cause, July 27,
1981). Therefore, we uphold the reduced disallowance based on the
analysis set forth in the Board's Order to Show Cause dated June 16,
1981, incorporating it into this decision.
Conclusion
We conclude that the disallowance of $44,406.10 must be sustained on
the grounds that the violations of Section 1903(g) and its implementing
regulations were clear and that the State did not dispute that they were
violations, and that the Agency had no discretion under the Act to waive
such violations or the resulting penalty.
(3) DATE: June 16, 1981
ORDER TO SHOW CAUSE
The Georgia Department of Medical Assistance (State), applied for
review, on January 29, 1981, of a determination by the Health Care
Financing Administration (Agency) disallowing $77,710.68 for 19 alleged
violations of Sections 1903(g)(1)(A) and (B) of the Social Security Act
(the Act) during the quarter ending March 31, 1980. The Agency notified
the State of the disallowance on December 31, 1980 in a letter signed by
the Agency's Administrator. After a validation survey made in July,
1980 by Federal reviewers pursuant to Section 1903(g)(2) of the Act, the
Agency determined that 18 patients in seven skilled nursing facilities
(SNFs) did not have timely recertifications of the need for that level
of care and that one patient did not have a timely plan of care. After
examination of documentation submitted by the State for six patients in
three facilities, the Agency accepted the documentation as evidence of
valid recertifications and modified the disallowance to $44,406.10.
Pertinent Statutes and Regulations
Section 1903(g) of the Act required that the State agency responsible
for the administration of the State's Medicaid plan under Title XIX of
the Act show to the satisfaction of the Secretary that there is an
"effective program of control over utilization of" long-term inpatient
services in certain types of facilities, for each quarter that federal
medical assistance is requested for such services, or the federal
medical assistance percentage (FMAP) must be decreased by an amount
determined pursuant to the formula set out in Section 1903(g)(5). The
State "must" show that-
(A) in each case for which payment is made under the State plan, a
physician certifies . . . (and recertifies, where such services are
furnished over a period of time, in such cases, at least every 60 days,
. . .) that such services are or were required to be given on an
inpatient basis because the individual needs or needed such services;
and
(B) in each such case, such services were furnished under a plan
established and periodically reviewed and evaluated by a physician.
(Sections 1903(g)(1)(A) and (B))
(4) The Agency had implemented these statutory provisions for SNFs by
regulations at 42 CFR 456.260 and 456.280. Section 456.260(c) requires
that recertification "must be made at least every 60 days after
certification."
Discussion
The State submitted documentation in its application for review
allegedly showing compliance with the requirements for six patients.
This documentation was accepted by the Agency and these patients'
records are no longer in issue. The Agency also found one other
patient's records to be in compliance. The State alleged that the
recertifications for the other 12 patients were completed within 61-64
days of the last prior recertification and that such "minor
discrepancies" do not justify "such an extreme penalty." (Application
for Review, January 29, 1981, page 4.)
Thus, the sole issue in this appeal appear to be whether the Agency
has the discretion to waive the statutory and regulatory requirements
that recertifications be made for each recipient at least every 60 days
and whether the Agency has the discretion to waive a penalty for such
minor violations of the requirements.
The statutory and regulatory language refers to recertification at
least every 60 days and the State has pointed to nothing in support of
its argument that the Secretary may waive the specific requirement. The
Agency has interpreted the "at least" language to mean that it does
not
have discretion to allow recertifications to occur on any other time
frame. The Comptroller General has concluded, in Opinion #B-164031(3)
.154 (copy attached), that the Secretary does not have the discretion to
waive a penalty once a violation has been determined to exist. The
Comptroller General's Opinion has been submitted by the Docket Nos.
80-72-OH-HC, 81-16-VA-HC), as support for its position that it does not
have discretion to waive violations or reductions for even one
violation. Furthermore, the Board has recently concluded that the
Agency's position is reasonable in view of the statutory language
(Tennessee Department of Public Health Decision No. 167, April 30, 1981,
Colorado Department of Social Services, Decision No. 169, April 30,
1981).Although the Agency has not submitted a response to the legal
arguments raised by the State's application for review, this Board may
take official notice of such a position and of the existence of the
Comptroller General's Opinion, so long as the State is allowed an
opportunity to rebut the arguments. Therefore, it would appear that
there were violations for 12 patients for the quarter ending March 31,
1980, because the recertifications were not completed until 61-64 days
after the last prior recertification, in violation of Section 1903(g)(
1)(A) and 42 CFR 456.260(c). It would also tentatively appear that the
Agency has no discretion to waive either the violations or the penalty.
(5) Order
No material facts appear to be in dispute. It does not appear likely
that an evidentiary hearing will be required. It appears tentatively
that this case should be decided on a written record and argument.
Accordingly, it is directed that, within 30 days of the receipt of
this Order, the State show cause in writing why the Board should not
proceed to decision, identifying the respects, if any, in which the
foregoing summary is materially incomplete or inaccurate and the issues
of material fact, if any, which are in dispute. The State should show
cause why the modified disallowance should not be upheld on the grounds
that the records for 12 patients were in violation of the requirements
of Sections 1903(g)(1)(A) and 42 CFR 456.260(c), and that the Secretary
has no discretion to waive either the violations or the penalty
resulting therefrom.
All further submissions or correspondence should refer to the Board's
docket number shown above and should be filed in accordance with the
provisions of 45 CFR 16.53 in an original and two copies (note that this
is a modification of the Board's current rules). The original should be
accompanied by a certificate showing service on the other party.
OCTOBER 22, 1983