GAB Decision 233
November 30, 1981 Missouri Department of Social Services; Carlson
Towers Geriatric Center; Board Docket Nos. 80-79-MO-HC, 80-153-MO-HC,
81-8-MO-HC, 81-35-MO-HC, 81-95-MO-HC Ford, Cecilia; Settle, Norval
Garrett, Donald
These are five appeals by the Missouri Department of Social Services
(Missouri, the State) from disallowances by the Health Care Financing
Administration (HCFA, the Agency) of Federal financial participation
(FFP) in the cost of nursing hom services to Medicaid recipients under
Title XIX of the Social Security Act. The services were rendered by the
Carlson Towers Geriatric Center (Center) as both a skilled nursing
facility and an intermediate care facility. FFP claimed in reports for
the quarters indicated was disallowed in the following amounts:
Docket No. Amount Quarters Ended 80-79 $222,7846-30-79
and 9-30-79 80-153 281,5329-30-79 and 12-31-79 81-8
255,6703-31-80 81-35 72,9406-30-80 81-95
64,9999-30-80 Total $897,925
The issue is whether Missouri law provided for the continued validity
of a provider agreement between the State and the Center during the
period May 11, 1979 - February 29, 1980, pending the Center's appeal
from the State's decision not to renew the provider agreement. We
decide here that Missouri law did so provide and thus FFP is available
on that basis.Our decision is based on:
1) the appeals and Agency responses;
2) the Board's Order to Show Cause dated October 16, 1980 in these
and appeals from eleven other states;
3) the transcript of an informal conference held February 11-12, 1981
between HCFA and Missouri and seven of the eleven states;
(2) 4) the parties' pre-conference submissions and HCFA's
post-conference submission (Missouri did not file a post-conference
brief);
5) the Board's September 18, 1981 Invitation to Brief the state law
question;
6) Missouri's response, dated October 26, 1981 (HCFA had briefed the
issue in an August 31, 1981 response in 80-95).
Background
The Social Security Act and implementing regulations require a state
to have an agreement (provider agreement) in effect with a facility
serving Medicaid recipients in order for the state to claim FFP in the
cost of those services. Section 1902(a)(27) of the Act, 42 USC Sec.
1396a(27); 42 CFR Sec. 431.107 (1978). The term of a provider
agreement is no more than 12 months, but the agreement can be continued
in effect for a longer period under certain circumstances. 42 CFR Sec.
442.15 (1978), 42 CFR Sec. 442.16 (1978), MSA-PRG-11 (1971). /1/
In September 1978 the State re-executed a provider agreement with the
Center. Agency response to 80-79 appeal, p. 3. That agreement was due
to expire on March 31, 1979, but the State continued the agreement to
May 10, 1979. Id. at 4. On April 9, 1979, the Department of Social
Services notified the Center that the provider agreement would not be
renewed.Notification of Disallowance in 80-79, Exhibit B. By letter
dated April 16, 1979, the Center appealed the "decision... not to
renew." Ibid., Exhibit D.
The State heard the appeal in July 1979, but final disposition was
delayed by the death of the State employee who transcribed the
proceeding. Appeal in 80-79, p. 2. While a decision was still pending,
the State executed a new provider agreement with the Center, allegedly
effective March 1, 1980. Id. at 2.
The certifications underlying the new provider agreement were for a
period commencing March 21, 1980. Attachments to appeal in 81-95. HCFA
originally disallowed FFP for a 20-day period prior to March 21, 1980
because it alleged that the new agreement did not become effective
before that. Notifications of Disallowance in 81-35 and 81-95.
However, when Missouri submitted a copy of a May 29, 1975 letter signed
by two HCFA officials permitting the State to use the (3) first of the
month as the effective beginning date of certification, /2/ the Agency
announced it would withdraw the disallowance for the period March 1 -
20, 1980. Missouri's August 7, 1981, Additional Submission in 81-95;
HCFA's August 31, 1981, Response in 81-95, p. 10.
Discussion
In Ohio Department of Public Welfare, Decision No. 173, April 30,
1981, the Board concluded that a 1971 Agency issuance (PRG-11)
concerning FFP during provider appeals was still in effect. PRG-11
establishes the availability of FFP pending an appeal by a provider from
the non-renewal or termination of its agreement with the state, if state
law continues the validity of the provider agreement pending appeal.
/3/ In Georgia Department of Medical Assistance, Decision No. 192, June
30, 1981, the Board held that a combination of provisions from state
statutes and regulations met the state law prerequisite for the
application of PRG-11.
1. Missouri law
Missouri asserts that a regulation of the Division of Family
Services, a subagency of the Department of Social Services, authorities
the continued validity of the provider agreement here. The regulation
is set out in its entirety as Exhibit 10 to the Agency's September 22,
1980 response in 80-79, but the parts pertinent to this case are:
(4) (2) Any provider may within thirty (30) days of the date of
notice of the determination by the division, appeal the following
determinations for review by the director:
(A) A decision by the division to deny a provider participation in
the program, which includes terminations or suspensions from
participation.
(B) A determination to deny in whole or in par the claim of a
provider for services provided that the amount of the claim exceeds one
hundred dollars ($100.00).
(C) Determination as to the amount which a provider is reimbursable
under the provisions of 13 CSR 40-81.080.
(D) A determination by the division to terminate or suspend a
provider from participation shall not be effective under thirty days
after the date of written notice to the provider. If the provider
appeals the divisions's determination, the provider shall continue to
participate until a final decision by the director. All other
determinations which are appealable to the director shall be in effect
until overruled by the director. /4/
13 CSR 40-81.140.
2. The parties' contentions
HCFA contends that while the regulation continued the participation
of a provider which is terminated prior to the expiration of its
agreement, the regulation did not continue participation in the case of
a nonrenewal. The Center was terminated upon the expiration of its
agreement, not before. HCFA argues that the regulation did not
explicitly provide that a renewal is the same as a termination. In
support of its argument, HCFA cites Rockhill Care Center, Inc. v. State
of Missouri Department of Social Services, a November 6, 1980 decision
by the Missouri Administrative Hearing Commission, and also a comment by
the Department of Social Services that 13 CSR 40-81.140 (5) was being
rescinded because it was "no longer necessary." August 31, 1981 response
in 81-95-MO-HC, pp. 7-8. /5/
In an Invitation to Brief dated September 18, 1981, the Board called
upon the State to comment on the final sentence in 13 CSR 40-81.140(2)(
D), the Rockhill decision, and the rescission statement. It its October
26, 1981 reply, Missouri pointed out that HCFA did not deny that
Missouri law in effect at the time of the Center's appeal required
continued participation where there was a termination or suspension.
The State argued that "the meaning, cause, and effect" of termination
and a refusal to renew asre the same and the State in actual practice
continued participation during provider appeals in both instances.
The State distinguished Rockhill on the basis that the decision,
denying the provider's request for a stay of its nonrenewal, did not
define any differences between termination and nonrenewal. The State's
reply did not mention the final sentence in 13 CSR 40-81.140(2)(D) or
the rescission statement.
Our analysis
We find that the Agency's reliance on Rockhill and the rescission
statement is misplaced. As the Agency's brief shows, the Missouri law
in effect at the time of Rockhill did not mention continued
participation, even for appeals from terminations and suspensions.
Similarly, the reference to the appeal regulation as being "no longer
necessary" in light of section 208.156 would apply to continued
participation for appeals from terminations and suspensions as well as
other determinations.
Moreover, the Agency does not deny that continued participation
previously was required pending appeals from terminations and
suspensions and has not shown that either Rockhill or the rescission
statement distinguish nonrenewals from terminations and suspensions.
Accordingly, these authorities do not support the Agency's contention
that under Missouri law nonrenewals are treated differently from
terminations or suspensions.
Although the State failed to show us any support for its proposition
that nonrenewals and terminations are the same under 13 CSR 40-81.140,
the Agency submitted a copy of an April 27, 1979 letter from a Special
Assistant (Nursing Homes - Aging) to the Director, Department of Social
(6) Services, to the St. Louis City Family Services Office in which the
writer states that the Center is appealing its "termination" and "in
accordance with 13 CSR 40-81.140... is entitled to continue
participation until a final decision is rendered by the Director...."
Agency response in 80-79, Exhibit 9. /6/ The State did not comment on
the letter or refer to it but the letter speaks for itself in supporting
the State's claim that its practice was to continue participation
pending provider appeals from nonrenewals. That the subject of the
letter was the Center's appeal from the nonrenewal involved here makes
the State's claim even more convincing.
The State regulation at issue here provides that all determinations
go into effect immediately except in two instances, denials of
participation in the program by either termination or suspension. A
decision to terminate or suspend is stayed pending an appeal to the
Director of the Department.
The reference to "all other determinations" being in effect until
overruled in 13 CSR 81-140(2)(D) certainly included the determinations
listed in (B) and (C), and arguably might have included a nonrenewal, as
a decision to deny a provider participation in the program. However, the
State urges that a nonrenewal was considered a "termination." Since
the
regulation contains an ambiguous reference to "terminations," we are
compelled, in the absence of a convincing argument by HCFA to the
contrary, to give that term as broad a meaning as the State does. Where
the language of the regulation reasonably encompasses the meaning the
State attributes to it, the Board will not substitute its interpretation
for that of the State, absent substantial evidence that the State's
interpretation is unsupportable. California Department of Health
Services, Decision No. 182, May 29, 1981, p. 12. In the Board's previous
decisions holding that state laws did meet the PRG-11 requisite for FFP
during provider appeals, the nonrenewals have been treated like other
terminations. See Colorado Department of Social Services, Decision No.
187, May 31, 1981 and Decision No. 225, October 30, 1981; Georgia
Department of Medical Assistance, Decision No. 192, June 30, 1981;
Minnesota Department of Public Welfare, Decision No. 215, September 24,
1981; and Pennsylvania Department of Public Welfare, Decision No. 217,
September 30, 1981. Our decision here, like those of other cases, is
based on the narrow circumstances (7) of the language in the pertinent
State (Missouri) law governing provider appeals.
Conclusion
Based on the foregoing, we reverse the disallowance. If HCFA has
already made a partial withdrawal as it had indicated, this reversal
applies only to the balance remaining. /1/ PRG-11 is a Program
Regulation Guide issued in December 1971 by the Medical Services
Administration of the Social and Rehabilitation Service, a predecessor
to HCFA. The terms of the program guide are discussed in the text
below. /2/ The letter states that the Agency has defined the
date of certification "to be the first day of the month in which the
survey agency has certified to the single state agency that the
standards for health and safety are met." In the margin of the copy
attached to the State's submission there is this hand written note:
"used until 7/3/80". The letter describes as "appropriate"
the State's
procedure for establishing the effective date of provider agreements on
the first day of the month in which the facility was certified. HCFA
alleged that this interpretation was intended only for newly-certified
facilities and not those which had been decertified for noncompliance
with Medicaid standards and were being recertified. HCFA agreed to
withdraw the 20-day part of the disallowance on the grounds that the
State was not aware of the distinction and relied on the letter for all
certifications. /3/ The Board also held in Ohio that the availability
of FFP pending a provider appeal was limited to 12 months from the
termination or nonrenewal of the provider agreement. /4/ On
September 28, 1979, state legislation created a right of a provider to
appeal a denial of participation to the Administrative Hearing
Commission. Section 208.156, Vernon's Annotated Missouri Statutes.See
also Sec. 161.274, which describes the procedure before the Commission.
On January 2, 1981, the regulations at 13 CSR 40-18.140 were rescinded.
August 31, 1981 HCFA response in 81-95-MO-HC, footnotes 6 and 7, pp. 5,
the time of Rockhill refer to a right to continued participation pending
appeal. /6/ As explained in the response, Exhibit 9 was included
primarily to show that the State had accepted the Center's appeal.
Response, p. 5. In that same response, dated September 22, 1980, the
Agency appeared to agree that under 13 CSR 40-81.140 the Center was
entitled to continue to participate. The Agency relied on its pre-Ohio
argument that the State was not entitled to FFP. Response, p. 9.
SEPTEMBER 22, 1983