GAB Decision 384
January 31, 1983 Ohio Department of Public Welfare; Docket No.
82-27-OH-HC Ford, Cecilia; Teitz, Alexander Garrett, Donald
The Ohio Department of Public Welfare (ODPW, State) appealed a
decision by the Health Care Financing Administration (HCFA, Agency)
disallowing $1,558,070 of federal financial participation (FFP) in
payments for services to Medicaid recipients under Title XIX of the
Social Security Act. The $1,558,070 had been paid to the State based on
expenditure reports for the quarters ended September 30, 1977 through
June 30, 1981, and represented the federal share of payments for
services rendered by three nursing homes -- Lincoln Avenue Home for the
Aged (Lincoln), Taylor'd Health Care (Taylor), and Windsor House No. 4
(Windsor).
Title XIX authorizes FFP in payments to nursing homes which have been
certified by the State as meeting the requirements for participation as
a provider of services to Medicaid recipients. In Ohio Department of
Public Welfare, Decision No. 173, April 30, 1981, the Board made
findings on the effect of 45 CFR 205.10 (b)(3) and a December 1970
Program Regulation Guide (PRG-11). The Board held that FFP was
available where a nursing home sought judicial or administrative review
of a state's cancellation or nonrenewal of its certification, and the
state was required by a court order or other state law to continue
payments to the home pending that review. The Board also held that FFP
for such payments was limited to a maximum of 12 months from the date
certification was cancelled or expired. These holdings have been
followed by the Board in the 22 other decisions dealing with these
issues since Ohio.
In this case the nursing homes sought judicial review of the State's
nonrenewal of their certifications and obtained court orders requiring
the State to continue payments pending review. The Agency allowed FFP
for the period from the date of the court order to the end of the 12
month period following the expiration of certification, plus any
properly documented extension. (2) The issues are (1) whether FFP is
available for services rendered during any period prior to the date of a
court order or subsequent to the end of the 12 month period, and (2)
whether the State had adequate documentation to support its claim that
it properly extended the certification of Taylor for two months, which
would have made FFP available for an additional two months during
judicial review. Consistent with Ohio Department of Public Welfare,
Decision No. 368, December 20, 1982, (Ohio II) we hold that FFP is
available in payments made pursuant to court orders for services
rendered prior to the dates of those orders but, in any event, not for
services prior to the dates on which the State notified the homes that
their certification would not be renewed.We also uphold HCFA's finding
that the State did not adequately document its alleged two month
extension of Taylor's certification. Our decision is based on the
parties' submissions and the telephone conferences of December 13, 1982;
January 24, 1983; and January 25, 1983.
The Three Facilities
1. Lincoln
The medicaid certification of Lincoln expired on March 31, 1977, but
was validly extended by the State to May 31, 1977. On December 28,
1977, the State notified Lincoln that its certification would not be
renewed. Lincoln sought judicial review of the adverse action in State
court and obtained a court order dated January 9, 1978, restraining the
State from ceasing payments. HCFA allowed FFP for services provided
from January 9 to May 31, 1978.
2. Taylor
The Medicaid certification of Taylor expired May 31, 1977. On
February 24, 1978, the State notified Taylor that its certification
would not be renewed. Taylor sought judicial review of the adverse
action in State court and obtained a court order dated March 8, 1978,
which restrained the State from withholding payments. HCFA allowed FFP
for services provided from March 8 to May 31, 1978 /1./.
(3) 3. Windsor
The Medicaid certification of Windsor expired May 31, 1977. On
September 9, 1977, the State notified Windsor that its certification
would not be renewed. Windsor sought judicial review of the adverse
action in State court and obtained a court order dated October 6, 1977,
which restrained the State from suspending payments. HCFA allowed FFP
for services provided from October 6 to May 31, 1978.
Discussion
1. The State is entitled to additional FFP, but only from the date of
notification.
The State argued that FFP should be available in payments for
services rendered from the first day of the month preceding the issuance
of each of the court orders. Under the system by which the State
reimbursed nursing homes, claims were presented on the 15th of each
month for services rendered during the preceding month. Addressing an
identical situation, the Board held in Ohio II, supra, p. 9:
. . . FFP is available for all payments affected by a court order,
even payments for services rendered prior to the date of the order,
except where the State gave a facility notice of cancellation or
nonrenewal during the period covered by the order.Then FFP is available
only from the date of the notice.
The court orders here were entered prior to the 15th of the month and
the State paid the claim submitted pursuant to the court order, covering
services preceding the court order. However, the State had not given
notice of nonrenwal until after the beginning of the period in which
services were rendered. Under our reasoning in Ohio II, supra, FFP is
available only from the date of the notice.
2. The State failed to document an alleged two-month extension for
Taylor
HCFA allowed FFP for Taylor through May 31, 1978, on the basis that
this was 12 months after its certification expired. In its February 25,
1982 notice of appeal, the State contended that Taylor's certification
was extended for two months upon written notice from the State survey
agency, the Ohio Department of Health (ODH), and referred to its
"Exhibit I" in support. (4) Exhibit I was a largely illegible copy
of a
certification and transmittal form (C&T) for Taylor bearing the
signature of a "Louise P. Kauer" adjacent to the typed dateline
"11/30/77" in the space used by the signatory for ODH. It was also
signed by a "Priscilla L. Reeves 1/6/78" in the space used by ODPW.
Exhibit I certified the noncompliance of Taylor. Written in the space
for the expiration of certification is "7/31/77" and for the
termination, "2/28/78."
In its March 10, 1982 acknowledgment of the appeal, the Board noted
that Exhibit I was not legible and asked the State to submit
documentation of the alleged two month extension.
In its April 26, 1982 brief, the State offered "new Exhibit I,"
which
it described as the ODH file copy of the C&T whereby ODH notified ODPW
that Taylor met the necessary conditions for the extension. New Exhibit
I bears the signature of "Priscilla L. Reeves 6/ /77," in the ODPW
space
but no signature adjacent to a 5/30/77 dateline in the block used by
ODH.
In a telephone conference call on January 24, 1983, Ms. Reeves
admitted that she signed new Exhibit I after receiving the copy from ODH
in March 1982, not in June 1977. She said she recalled signing the
original sometime in June 1977, but did not know the exact date, and
backdated the copy so that it would resemble the original.
a. The parties' arguments
In its June 4, 1982 brief, HCFA argued that by regulation the survey
agency (ODH) must notify the single State agency (ODPW) of certain
findings in writing prior to the expiration of certification in order
for the State to authorize a two month extension. HCFA noted that when
the auditor examined the State's files in 1980, he could not find a C&
Tgiving Taylor a two month extension. Brief, p. 7. HCFA attached a
copy of the February 24, 1978 letter from the State to Taylor notifying
the facility that its certification would not be renewed, which contains
the statement that Taylor's certification expired July 31, 1977. HCFA
Exhibit 5. In the corner of the letter is a signed notation, dated
September 16, 1980, that "a two month extension was not part of the
provider or legal office file." (5) In his statement of December 20,
1982, the auditor identified the signed notation on the February 24,
1978 letter as his. He also testified that he asked Ms. Reeves if
there was any further documentation of the extension. As he recalled,
Ms. Reeves responded that any documentation would be in the files the
auditor had examined and if it was not there, ODPW did not have it.
On January 14, 1983, the State submitted affidavits by Priscilla
Reeves, Program Administrator, ODPW; by Louise Kauer, Certification
Administrator, ODH; and by Alan Curtis, Title XIX Coordinator, ODH.
Ms. Reeves did not affirm or deny the auditor's statement, but
recalled receiving a C&T for Taylor "on or before May 31, 1977."
/2/
According to her, the C&T granted Taylor the two month extension and was
signed by Ms. Kauer and Mr. Curtis. Ms. Reeves also stated that in 1978
"all records dealing with the certification of nursing homes were
committed to micro-fiche," and speculated that the original of the C&T
"apparently became lost . . . and was not copied." When confronted
at
the January 24, 1983 telephone conference with the information (supplied
by the HCFA auditor and not controverted) that the documents in the
Taylor file were microfiched in December 1980 (three months after the
auditor noted the absence of the C&T), Ms. Reeves suggested that perhaps
parts of the file had been microfiched at different times in 1979 and
1980. /3/
(6) The State also relied on the sworn statement of ODH officials Alan
Curtis and Louise Kauer, dated December 21, 1983.That statement
identified Ohio's "new Exhibit I" as "a true and correct copy"
of the
C&T submitted by ODH to ODPW on May 30, 1977, and declared that the
original was signed by Alan Curtis and Louise Kauer.
b. Our Analysis
We uphold HCFA's finding that the State has failed to document
adequately that a two month extension was properly conferred on Taylor.
Although the Board requested documentation as early as March 1982, the
State did not attempt to explain the absence of the original C&T until
January 1983. It had not even availed itself of the earlier opportunity
to file a brief in reply to the information in the June 1982 HCFA brief
that the original C&T was not in the file at the time of the audit in
1980.
The State relied heavily on the sworn statements of Priscilla Reeves
and the two ODH officials. Unlike HCFA's auditor, whose recollection of
the more recent events in 1980 is corroborated by a contemporary
notation, Ms. Reeves recall of having seen one of "thousands of other
certification documents" (her affidvait, p.2) in 1977 is not
corroborated by any contemporaneous written information. Her
explanation that a part of the file which was chronologically in the
middle may have been out to be microfiched in September 1980 was weak.
Her backdating of the State's key document, new Exhibit I, without
informing the Board or the opposing party until asked, was misleading
and did not enchance her credibility.
The sworn affidavit by the ODH officials that new Exhibit I (with the
backdated signature) was a "true and correct copy" of the C&T
which ODH
allegedly transmitted to ODPW on May 30, 1977 was also inadequate as
documentation for approval of the extension. The affidavit did not
explain the circumstances surrounding the retention and production of
the alleged copy, how the affiants knew it was a "true and correct"
copy, or why the copy lacked the requisite signatures. Further,
although the State had almost a year to present any additional
corroborating evidence to the Board, it did not do so. Also, Ms.
Reeves' signature could not have been on the copy which ODH allegedly
retained in its files in May 1977, because that copy was not in her
possession until March 1982. (7) We do not know whether the State did
or did not extend Taylor's certification. We assume that the State's
affiants sincerely believe that it did. What the State has not done is
to provide HCFA with the documentation it rightfully feels it must have
in order to determine whether the extension, if granted, was proper, and
we uphold HCFA in its decision to disallow FFP for the alleged
extension.
3. The State is not entitled to FFP after the 12 month period
following decertification.
As noted above, in Ohio I the Board held that FFP in payments for
services during a provider appeal is limited to a maximum of 12 months
following the expiration of a facility's certification. The State
contended here it was entitled to FFP for any payments made under court
order, even after the 12 months, although it agreed that Ohio I held
otherwise. ODPW submission of February 25, 1982.
In Ohio I, the Board found that both PRG-11 and 45 CFR 205.10(b)(3)
were limited by statutory and regulatory provisions which make FFP
available during a provider appeal for no more than 12 months following
nonrenewal or until the next survey/certification cycle, whichever comes
first. If the State had certified the facility, the new term could not
have been longer than 12 months and thus a court order could not give
constructive certification greater effect than regular certification.
Ohio I, supra, pp. 8, 12. See also Michigan Department of Social
services, Decision No. 290, April 30, 1982, pp. 8-12; Tennessee
Department of Public Health, Decision No. 267, March 25, 1982; and
Colorado Department of Social Services, Decision No. 377, January 27,
1983. Except as noted above, the State gave no reason why we should not
follow our previous holdings here. the 12 month limitation merely
treats decertified facilities on appeal the same as certified
facilities. To do otherwise would be arbitrary. Michigan, supra, p.
11. Accordingly, we hold here also that the State is not entitled to
FFP in court-ordered payments for services rendered after the 12 months
following decertification. (8) Conclusion
Based on the foregoing discussion, we uphold the disallowance in part
and reverse it in part. In addition to the FFP already allowed by HCFA,
the State is entitled to FFP for services provided by Lincoln for the
period December 28, 1977 to January 9, 1978; by Taylor for the period
February 24, 1978 to March 8, 1978; and by Windsor for the period
September 9 to October 5, 1977. /1/ The disallowance letter gave March
9 as the date of the court order and allowed FFP from that date.
HCFA corrected this to March 8 in its brief and presumably also would
pay FFP from March 8. /2/ Ms. Reeves did not refer to the auditor's
statement in her affidavit, but when questioned during the
January 24, 1983 telephone conference, she said she could not affirm or
deny that such a conversation took place. She indicated that the
usually was not aware which file the auditor was examining at any
particular time. /3/ Ms. Reeves also asserted during the January 241
conference call that a copy of the C&T with both ODH and ODPW signatures
would have been sent to HCFA in Chicago in 1977. In a telephone
conference on January 25, 1983, HCFA's lawyer reported that the chief
auditor recalls checking the HCFA file in 1980 and not finding the C&T.
Those records no longer exist. Ms. Reeves also recalled sending a letter
to Taylor notifying it of the extension, but reported on January 25 that
she could not locate a copy of such a letter.
OCTOBER 22, 1983