GAB Decision 486
Docket No. 83-201
December 13, 1983
Ohio Department of Public Welfare;
Ford, Cecilia; Garrett, Donald Settle, Norval
The Ohio Department of Public Welfare appealed a determination by the
Health Care Financing Administration disallowing $1,261,871 in federal
financial participation (FFP) claimed by the State under Title XIX of
the Social Security Act for the quarters ended March 31, 1982, to
December 31, 1982, inclusive. The State's claim was for the per diem
rates paid for inpatient psychiatric services provided by State
institutions for mental diseases (IMDs) to Medicaid patients aged 22 to
64. Services to individuals in this age group in IMDs are generally
excluded from the definition of "medical assistance" in which federal
Medicaid funding is available. Section 1905(a) of the Act. The State's
position here is that FFP was nonetheless available for these services
because they were provided during the months the patients were admitted
to the IMDs. An Agency regulation stated that "FFP is available in
expenditures for services furnished to eligible individuals during the
month in which they become . . . patients in an institution for . . .
mental diseases." 42 CFR 435.1008(b). This regulation reflected a
policy of permitting states to consider a person eligible for any part
of the month, as a matter of administrative convenience. The State
contended that the Agency's longstanding interpretation of this
regulation was to permit FFP in the claims here. The Agency determined
that this regulation could not be read to overcome restrictions in the
State plan concerning what services were covered. Therefore, the Agency
concluded, there was no FFP in that portion of the per diem rates which
represented "institutional services" provided by IMDs to this age
group
because these services were not covered in the State plan.
The primary issues in this appeal were addressed by the Board in
Joint Consideration: IMD Admission/Discharge Issue, Decision No. 436,
May 31, 1983. There, the Board upheld disallowances taken against five
States, including Ohio, concluding that the Agency's interpretation that
the IMD exclusion limits covered services was supported by the statutory
scheme as a whole and by the Agency's regulatory scheme. The Board
further concluded that the Agency had no longstanding interpretation
permitting the States to ignore these limitations during partial months
in IMDs and that the (2) States did not show otherwise that the Agency
should be precluded from taking the disallowances.
In Decision No. 436, the Board examined, among other documents, a
December 4, 1979 letter from a regional official to Ohio. The Board
pointed out that this was not an official policy issuance. The Board
questioned whether this letter in fact showed concurrence in Ohio's
position that the costs were allowable, concluding that, even if it did,
any concurrence was conditioned on Ohio submitting a plan amendment.
The Board further found that State plan transmittals, submitted by Ohio
and approved by the Agency, did not have the effect of amending the Ohio
State plan to cover inpatient psychiatric services to individuals aged
22 to 64 during the months of admission to IMDs. /1/
The procedures used here.
Upon receiving the notice of appeal, the Board consulted with the
parties about whether separate proceedings in this case were necessary.
The State indicated that it did not think it was necessary to repeat
arguments already made, but that it wished to supplement the record made
in the earlier proceedings.
By letter dated November 25, 1983, the State submitted three new
documents to be considered in this appeal: two agreements between the
Ohio Department of Public Welfare (ODPW) and the Ohio Department of
Mental Health (ODMH), submitted and approved as State plan transmittals
(Nos. 82-11 and 82-21), and a letter dated August 10, 1982, from the
Regional Administrator of the Health Care Financing Administration
(HCFA) to an Ohio Congressman. The State agreed to a decision being
issued based on the record in Decision No. 436, as supplemented by the
November 25 submission, with the understanding that the State did not
agree with Decision No. (3) 436 and would incorporate any Board decision
upholding the disallowance here with the State's pending appeal of
Decision No. 436. Ohio Department of Public Welfare v. Heckler, United
States District Court for the Southern District of Ohio, No.
C-2-83-2083. The State also reserved the right to reopen the case
should this procedure be deemed a failure to exhaust administrative
remedies.
The Board asked the Agency whether it wished to comment on the
State's submission. The Agency informed the Board that it did not.
The State plan transmittals.
We have considered the State plan transmittals submitted by the State
here. Like those we considered in Decision No. 436, these transmittals
were agreements between ODPW and ODMH for coordinating Medicaid
services. These agreements merely specified among other things that the
ODPW had the duty to "(include) in the state plan provision to allow
Medicaid payment for services rendered during the month of admission to
a certified ODMH institution for persons who are Medicaid eligible."
Paragraph II, A., 4., of the agreements. As we noted in Decision No.
436, this language implies that ODPW will take some further action to
include a coverage provision, not that the agreement itself allows the
payments in question. Moreover, the statement in the agrements refers
merely to "services rendered during the month of admission," and does
not specifically address the allowability of the per diem rate for
inpatient psychiatric services provided to individuals aged 22 to 64.
Thus, we do not think that the Agency's approval of ODPW/ODMH agreements
containing this statement can be viewed as approval of the type of
claims submitted here. For further discussion, see Decision No. 436,
pp. 27-28.
The Regional Administrator's letter.
The State did not explain why it submitted a copy of the Regional
Administrator's letter to an Ohio Congressman. Presumably, the State
thought that the letter supported its position that the Agency's
longstanding interpretation was that the costs here were allowable. The
Regional Administrator states in the letter that HCFA developed a policy
in 1979 regarding payment for inpatient psychiatric care and services
provided to persons aged 22 through 64 for partial month coverage in
IMDs and that "Ohio was informed of HCFA's 'partial month' policy
interpretation by letter dated December 4, 1979." At most, this suggests
that the December 4, 1979 letter reflected Agency policy, even though it
was merely an informal letter sent to one state.
(4) However, as we discussed in Decision No. 436, the problem with
the State's argument that it relied on the December 4 letter is that
that letter stated an understanding that Ohio would submit a State plan
amendment. Thus, to the extent it implied that coverage of these IMD
services was permissible, it conditioned allowability on Ohio including
such coverage in its State plan. The Regional Administrator's letter
noted: "The State was requested, however, to submit an amendment to its
Medicaid State Plan if it chose to provide such coverage to that age
group in IMD-TB's. The State never submitted such a plan amendment."
Absent such an amendment, the costs for inpatient services at the per
diem rate are simply not covered in the State plan. See discussion in
Decision No. 436, pp. 5-16.
Conclusion
Accordingly, for the reasons stated above and for the reasons stated
in Decision No. 436 (which is incorporated here by reference), we uphold
this $1,261,871 disallowance, subject to reduction under the same
conditions as the disallowances in Decision No. 436. /2/
/1/ Ohio, like the other States, did not deny that its State
plan provisions covering inpatient hospital services, skilled nursing
facility (SNF) services, and intermediate care facility (ICF) services
limited this coverage to services "other than" services in an IMD
and
that provisions covering inpatient hospital, SNF, and ICF services in
IMDs to individuals aged 65 or over or inpatient psychiatric facility
services to individuals under age 21 contained the age limitations as
part of the service descriptions. See section 1905(a) of the Act. The
result of these limitations is the absence of any provision for
individuals aged 22 to 64 covering what the Agency referred to as
"institutional services," e.g., room and board. /2/ The Agency
admitted that FFP was available during partial months in an IMD for some
services covered in the State plan and included in the per diem rates.
Decision No. 436 directed the Agency to provide the States an
opportunity to show what portion of the rates were for the costs of
services separately covered in the State plans and to reduce the
disallowances accordingly.
NOVEMBER 14, 1984