GAB Decision 665
June 28, 1985
California Department of Health Services;
ACN 10215-09 Ballard, Judith A.; Settle, Norval D. (John) Garrett, Donald F.
Docket No. 84-161;
DECISION
The California Department of Health Services appealed a decision of the
Health Care Financing Administration (HCFA or Agency) disallowing
$3,658,927 in federal financial participation (FFP) claimed under the
Medicaid program (Title XIX of the Social Security Act). The
disallowance related to abortions which had been paid for during the
year ending June 30, 1978 and performed prior to August 5, 1977, the
effective date of the first "Hyde Amendment" restricting the use of
appropriated funds for performing abortions. The Medicaid rules
applicable to the claimed services permitted 90% FFP for family planning
services, including abortions for family planning purposes, and 50% FFP
for other covered services in California. The specific issue on appeal
here is whether 66 of the 500 sampled abortion episodes representing the
universe of episodes covered by the disallowance were documented as
being for family planning purposes. We conclude after a thorough review
of each case that 65 out of 66 of the cases were for family planning.
The probable effect of our decision on the amount of the disallowance is
discussed in detail below.
Background
When the State made its original claim to HCFA for abortion services
during 1977 and 1978, it mistakenly lumped together all of the services,
whether they were for family planning or not, and claimed them at the
90% level. The State's claiming error originated in procedures
developed by the State's fiscal intermediary and was discovered during
the audit that gave rise to this disallowance. State's brief, p. 2.
Since the State had not correctly separated out the abortions which were
entitled to an additional 40% FFP and those which were not, the Agency
disallowed the claimed additional 40% for all of the abortions involved.
Subsequent to the disallowance, the parties attempted to resolve the
case first by themselves and then with the assistance of a mediator
provided by the Board. They eventually reached agreement on a
methodology for separating out the family planning abortions. The
methodology called for sampling 500 abortion episodes from the (2)
universe claimed. After reviewing each case in the sample, HCFA agreed
that 346 sample cases were for family planning purposes and the State
agreed that 88 sample cases were not shown to be for family planning
purposes. No agreement could be reached concerning the remaining 66
cases representing approximately 13% of the sample. Depending on how
the parties extrapolate these cases to the universe, which was not an
issue before the Board, the remaining cases in dispute would probably
represent about $500,000 of the $3,658,927 disallowance, so that only
about this amount presently remains in dispute. /1/
The issue in this case then is purely one of documentation: whether the
State has documented that each of the disputed abortion episodes was for
family planning purposes. The Agency cited previous Board decisions in
which the Board held that where a state claims a special, higher rate of
FFP, the state has the burden to both document the costs and show that
the claim for higher reimbursement is proper. See, e.g., Missouri
Department of Social Services, Decision No. 395, February 28, 1983, page
6, citing New York Department of Social Services, Decision No. 204,
August 7, 1981.
The State has submitted, as support for the higher level of FFP, all
available claims documents that are associated with each abortion
episode in dispute. These generally included the physician's claim, the
hospital or out-patient clinic claim, and the anesthesiologist's claim
and sometimes included as well treatment authorization requests,
pathology reports, and claims for lab tests and medication. These
documents indicated the nature of the primary services performed (in all
of the disputed cases it was clear that the primary service was an
abortion), the date and type of initial examination, a list of other
services including tests with dates, the name of the physician,
facility, anesthesiologist, the diagnosis giving rise to the service
(while "intrauterine pregnancy" was the response most commonly used,
some of the forms referred to a psychological condition or to
"illness"), whether the illness was "new," whether emergency
services
were provided, information relating to Medicaid eligibility, and a
variety of information about the patient.
(3) The physician and facility forms associated with most of the
episodes contained the inquiry "Family Planning Services?" with boxes
to
check "no" or "yes." In a large number of disputed cases,
neither the
physician nor the facility had checked either box. In several cases,
one form contained a "no" box checked and another form a "yes"
box
checked or an equivalent affirmative statement written out elsewhere on
the forms. Also, in several cases, just the "no" box was checked on
one
of the forms. Finally, in one case, the "yes" box was checked on the
facility's form but neither box was checked on the physician's form.
In addition to all claim forms associated with a particular abortion
episode, the State provided all claim forms for any additional services
both before and after the abortion episode that might possibly shed some
light on the episode. The State asserted that it had gone to great
lengths to find all related claims billed to the State Medicaid program
and that the Agency auditor participated with the State in verifying
that all related claims had been identified for consideration. Hearing
Transcript (Tr.), p. 131.
It is undisputed that all of the abortions in question must fall within
one of three categories: "spontaneous" abortions (miscarriages),
abortions for medical necessity and abortions for family planning. A
spontaneous abortion involves a wanted pregnancy that the mother loses
involuntarily and without warning. A medically necessary abortion also
involves a wanted pregnancy. The mother must give up the pregnancy
against her wishes because it places her health or indeed her life into
serious jeopardy. Family planning abortions involve pregnancies that
are not wanted by the mother. The mother decides to terminate the
pregnancy based on family planning considerations. Only services
relating to abortions for family planning qualified for 90% FFP during
the period in question. /2/
The Agency's position concerning the 66 disputed cases rested
essentially on two grounds. See Agency's post-hearing brief. The
Agency argued that the absence of any check on the family planning
indicator in claim forms associated with an abortion episode or a (4)
check "no" on either the physician or facility form associated with
an
episode, created sufficient doubt about the reason for the abortion that
the State failed to meet its burden to document the service as
reimbursable at the 90% level. The Agency also argued that, whenever
the physician attributed the abortion to a mental condition of the woman
or to illness generally, these attributions served as evidence in favor
of finding the abortion to be medically necessary or at a minimum raised
sufficient doubt to make the claims non-reimbursable as family planning.
While we very well might agree with the Agency's analysis in the absence
of further evidence about the abortions in question, the record as
developed here contains information sufficient to rebut the Agency's
presumptive findings in 65 of the cases.
At the outset, we wish to emphasize that the Agency properly identified
the State's burden in this appeal. The State must demonstrate at least
to a reasonable certainty that the services involved were for family
planning purposes and thus were entitled to the higher 90% FFP. We here
conclude that the State has met its burden with the documents relating
to the 65 abortion episodes and with additional documents pertaining to
any related services occurring before or after the episodes. The Agency
places great weight on the family planning indicator filled in by
physicians or facilities rather than the more comprehensive information
provided by the claims documents as a whole. In many ways, however,
these documents give us a more reliable picture of the kind of procedure
and its underlying purpose than the indicator. As we discuss in greater
detail below, we agree with the State that the documents demonstrate to
a virtual certainty that the procedures were not for spontaneous
abortions or for medically necessary abortions. Moreover, the documents
present extensive information that is wholly consistent with a family
planning procedure. The vast majority indicate a low level physical
examination (not consistent with serious medical problems), a pregnancy
test and a minimal number of additional tests, a diagnosis of
"pregnancy" and an abortion usually within days of the examination.
The
planned quality of the procedure and its proximity to the physical
examination and testing provides compelling evidence to rule out a
miscarriage. The total picture from the claims documents leaves no
realistic doubt as to the purpose of the procedure. /3/
(5) In view of the foregoing, we think the Agency focused too much on
the effect of the indicator per se. As the State pointed out, a family
planning indicator per se was not a federal requirement. Moreover, the
State provided convincing reasons, generally unrebutted, why the
indicator was not filled out on some of the forms and why in other
instances it may have been unreliable. These factors, while not
evidence in and of themselves, form a context which it is important to
keep in mind while weighing the significance of the indicator against
the documentary evidence as a whole. The factors, then, are as follows:
* The pervasive legal and moral controversy surrounding family planning
abortions may have made some of the providers and physicians hesitant to
place a precise label on what was occurring when in fact a family
planning abortion was performed. Indeed, part of the unreliability of
the indicator may also be explained by preferences of patients who did
not want to confront the decision of aborting an unwanted fetus.
State's brief, pp. 6-7.
* The family planning indicator existed on all claim forms for physician
or facility services. Since it frequently was not relevant to the vast
array of services covered by the program, providers or physicians
frequently left it unchecked, and may have left it unchecked in cases
here out of habit.
* The State argued and provided evidence to demonstrate that certain
providers misunderstood what the term "family planning" meant and
would
not classify an abortion as family planning. Instead, these providers
viewed only birth control services as family planning. The State's
medical witness testified as follows:
The only comment I would make on (the indicator) is that (it) was of
very little value at all in determining what, in fact, was done.
Physicians were very unskilled or very uninformed in the use of (it).
They did it almost haphazardly it seemed. So we really couldn't learn
very dispositively when they checked or when they didn't check it that
they had understood what they were doing.
The tendency was to perceive family planning as the description of
birth control pills, counseling on birth control methods, the insertion
of an IUD, or something very specifically in the line of contraception
as opposed to termination of conception. So they didn't see it as
family planning. Tr., p. 126. (6) Patients may have had similar
misunderstandings about the meaning of family planning services when
inquiries were made by the physician or facility.
* Providers and physicians may have left the indicator unchecked because
they had no financial incentive to check it. While family planning has
significance in the level of federal reimbursement, it had no
significance in the level of reimbursement from the State to the
provider.
* A limited number of forms in question here predated use of the
indicator and therefore did not even contain an indicator to be checked.
The State never denied that the family planning indicator was generally
useful and in a majority of instances could serve as conclusive evidence
along with the other documents associated with an episode. The State
argued, however, that for the cases remaining in dispute, the family
planning indicator should not be viewed as decisive. The State argued
the claims documents for each episode demonstrate to a reasonable
certainty that the abortions were for family planning. Although, in
fact, the State's responsibility here was to demonstrate that its claim
was proper through unambiguous and persuasive evidence, no federal law,
regulation or guidance document limited what form that evidence had to
take. /4/ We conclude that the absence of a check in the family planning
indicator or indeed a check "no" on one form does not make a claim
fatally ambiguous and can be overcome if the documents as a whole leave
no reasonable doubt as to the purpose of the abortion.
No Evidence in Any Case of Medical Necessity or of Miscarriage
The strongest factor favoring the State here is the total lack of actual
evidence on claim forms relating to any of the 65 episodes that the
abortions were medically necessary or spontaneous.
The State noted that induced abortions for medical reasons are extremely
rare. Of the 434 sample cases for which the parties (7) had reached
agreement, only one case seemed to fit that classification. /5/ The
State argued that any serious medical condition would appear on the
medical records as the primary (or at the very least as a related or
secondary) diagnosis. Additional and more complicated physical
examinations and laboratory tests would accompany the abortion, and the
abortion procedure itself might be more complicated. There might
reasonably be evidence of medical efforts to save the pregnancy.
Finally, additional medical services would almost certainly be required
before or after the abortion to respond to the underlying condition.
State's brief, pp. 10-11; Tr., pp. 20-21.
The State added that physicians had definite financial incentives to
identify a more serious diagnosis since the diagnosis could justify a
higher charge and additional examinations, tests, etc. Furthermore, if
in fact the abortion had been medically induced, there would be less of
a moral or legal incentive to obfuscate the underlying diagnosis or the
procedure.
The State emphatically denied that terminology on some claim forms
indicating that the abortion resulted from a mental condition or
"illness" or that it was "therapeutic" in fact demonstrated
that the
abortion was medically necessary. /6/ The State argued that these
references suggested an effort on the part of either the patient or the
medical community to rationalize the abortion for legal or social
reasons. /7/ The State argued without contradiction by the Agency that
many physicians who performed abortions for elective reasons had used
the mental health of the mother -- (8) as the device or mechanism or
excuse or whatever word you want to choose for justifying an abortion.
That sort of thinking and that sort of terminology has been retained to
some extent. . . . It might still be used by physicians who were
uncomfortable for moral reasons . . . with doing abortions. Tr., pp.
116-17.
The State's medical expert emphasized that it is contradictory to abort
a wanted fetus in response to a psychological condition. The following
testimony was not rebutted by any evidence presented by the Agency and
we found it highly convincing:
Q. Would you consider an abortion done because the mother is
depressed about an unwanted pregnancy to be an abortion for medical
indications?
A. No. I think the key factor is that it is unwanted and the
depression is the result of the unwantedness and the measures that might
be necessary to relieve that problem.
Q. If you had a mother who suffered from depression who had a wanted
pregnancy, would it ever be medically indicated to treat the depression
by aborting the wanted pregnancy?
A. No. I would certainly think not.
* * *
. . . I would think that . . . the woman in question has two
problems: one is she has a psychiatric problem of depression; and two,
she is pregnant and wants that baby. (I)t would seem to me it would
make her even more depressed to take away the baby that she wanted. The
baby might very well be a saving factor in improving her mental status.
Give her something to relate to, something to believe in and something
that she wanted. . . .
You would not treat that case with an abortion.
Tr., pp. 117-18.
The State witness subsequently contrasted patients with depressions and
acute anxieties, as indicated on the claims forms here, with an
individual with a psychosis who is "manic" or "a danger to self
or
others, who during (a) paranoid phase might very well do harm to herself
or to the fetus." Tr., p. 119. Such an individual's (9) mental
condition could conceivably serve to justify a medically necessary
abortion. There is absolutely no evidence that any of the individuals
here had such a mental condition, however.
Consequently, we agree with the State that none of the claims documents
associated with each episode give any real indication of a medical
condition that would necessitate an abortion. We would expect some
indication at the very least in view of the seriousness of any medical
condition that would necessitate a mother giving up a pregnancy she
wished to keep.
We also conclude that there is a similar lack of evidence on any of the
forms indicating a spontaneous abortion. These abortions can be
expected to show up clearly on the claims because the medical services
in question are not the provision of the abortion itself, but services
to cope with the event after the fact, usually to stop bleeding or
remove retained tissue. State's brief, p. 12. Furthermore, the timing
of spontaneous abortion is clearly different from the timing of family
planning abortions. Spontaneous abortion do not generally follow a
particular routine by occurring just a few days after the examination
and tests that verify the pregnancy. See Tr., p. 136. Also, the Agency
did not point to any moral or legal considerations which might prevent
providers from classifying an abortion as a miscarriage if that is what
it truly was. Finally, the fact that many of the abortions in question
here were performed on an outpatient basis and few, if any, were
performed in emergency rooms or as an emergency service is further
evidence that they were not spontaneous.
Affirmative Evidence of Family Planning
In addition to the absence of evidence of any actual medical necessity
or of a spontaneous abortion on the claims forms associated with each
episode, there is extensive, affirmative evidence on the claims forms
which supports the finding of family planning.
* Tests preceding abortion were routine for family planning abortions or
gynecological examinations. They were limited in number and none
indicated diagnosis of serious medical condition.
* Abortion procedures almost always followed within days of initial
examination and positive pregnancy test.
* Procedures were either outpatient or elective inpatient rather than
hospital emergencies; procedures were not identified as "emergency"
services although there was a heading for such services on the claims
form.
(10) * Patients very frequently were identified as "new" which is
not
consistent with having serious underlying problem necessitating
abortion. Those patients identified as not "new" had no claims of
related services to treat a serious medical problem.
* In the vast majority of instances, the individual's only covered
service at the time in question was the abortion. To the extent that
any claim for other related services was uncovered, none indicated a
condition that could have necessitated an abortion.
* No forms contained any evidence whatsoever of any medical efforts to
save the pregnancy.
* Patients were quite young in a large majority of cases with only
one-time entries into Medicaid system.
* Many forms used terminology such as "abortion induced" or "therapeutic
abortion requested" or used procedure codes that would be inconsistent
with spontaneous abortions.
* In the few cases where the abortions were in any way non-routine,
there were compelling family planning indications specifically related
to the case. See, e.g., State's brief, p. 11.
Obviously some of these factors have greater significance than others in
supporting the conclusion of a family planning abortion. Nevertheless,
each of the 65 cases had several significant indicators which, when
placed along side the complete absence of evidence of an actual medical
necessity or a miscarriage, enable us to conclude that these abortions
were for family planning purposes.
The sole episode for which we found the documents to be insufficient
raised the possibility of a spontaneous abortion (or miscarriage). See
Case No. 2 involving W.A., State's Appeal File. The outpatient claim
for the hospital identified the nature of the illness as "Spontaneous
Abortion - probably Complete - 6 weeks pregnant." The State argued that
the episode should be viewed as family planning for the following
reason:
This patient had a family planning abortion on 4/21/77. She then
came in on 6/21/77 for what was described as a "spontaneous abortion".
However, the provider checked family planning "yes", which may well
be
an indication that this was not a new abortion, but an expulsion of
tissue related to the 4/21 family planning abortion. This claim should
be considered to relate to a complication of a family planning abortion,
since there was unlikely to have been a new pregnancy advanced enough to
require emergency room treatment upon spontaneous abortion within 2
months of an induced abortion.
Summary of Disputed Cases, State's Appeal File, item 11.
(11) At the hearing, however, the State's medical expert could not rule
out the very unlikely possibility that this patient had become pregnant
and experienced a miscarriage within two months of a previous abortion.
Tr., pp. 122-25. Based on that testimony and the hospital's
classification, we cannot rule out that possibility either and conclude
that this episode was not documented as for family planning.
Conclusion
The meticulous review of all claim documents associated with an abortion
episode was clearly a more time-consuming and onerous process for the
parties and for the Board than simply referring to a family planning
indicator. Nevertheless, federal law did not require any particular
form of documentation and these documents provide a comprehensive and
almost certainly more reliable picture of the underlying reasons for a
medical procedure than a single check box indicator could. The
documents for each episode demonstrate to a reasonable certainty that 65
of 66 episodes were for family planning purposes. This decision should
enable the parties to complete the sampling procedures they have agreed
upon and determine how much of the original disallowance remains.
Accordingly, for the reasons stated above, we conclude that the
disallowance must be upheld to the extent that it is based on an
extrapolation from the sample of the 88 sample cases conceded by the
State (see page 2) and the single additional case we identify above.
Additional adjustments may be necessary in view of the State's improper
claim of certain supporting services as identified in footnote 2. /1/
Since, however, the results in this case will also be applied to
an earlier period, see California Department of Health Services,
Decision No. 666, June 28, 1985, this decision will ultimately affect
approximately $5,000,000 of claims covering an earlier period.
/2/ The abortion procedure itself as well as necessary attendant
services qualified for the higher level of FFP. With respect to a small
number of episodes, the State conceded that some of the supporting
services claimed such as chest x-rays were not necessary attendant
services of the abortion. The parties agreed to resolve between
themselves the effect of this subsidiary issue on the overall results of
the sampling process. /3/ This assessment was supported by
highly credible testimony at a hearing from a physician and a medical
claims expert on behalf of the State. Although the Agency disagreed
with the witnesses' evaluation of the claims documents, the Agency
presented no evidence from the medical community either at the hearing
or in the form of affidavits to contradict any aspect of that
evaluation. /4/ Thus, contrary to what the Agency argued, this
case does not raise the issue considered by the Board in Tennessee
Department of Health, Decision No. 353, September 30, 1982. That case
dealt with a sterilization consent form which by regulation was the only
permissible means of demonstrating an "informed consent." The Board
concluded in Tennessee that there could be no basis for finding an
informed consent from the consent form if critical elements of the form
had not been completed. /5/ See State's brief, pp. 10-11.
Examples of medical conditions requiring a mother in child-bearing age
to abort a wanted child are: Stomach disease that is far-reaching;
heart disease, cardiovascular disease, diabetes, something where the
life of the mother and the continued well-being of the fetus are, in
fact, threatened by her physiologic imbalance. Tr., p. 120. /6/
In addition to listing "pregnancy" as the illness and "therapeutic"
abortion as a procedure, the forms used diagnostic language such as
"acute mental depression," "situational anxiety," severe
depressive
reaction," "adult situation reaction," "pregnancy detrimental
to mental
health." /7/ The State added that "therapeutic abortion" had
become a term of art in California representing any elective abortion
permitted by the State abortion statute. Tr., pp. 114-17.
OCTOBER 04, 1985