GAB Decision 672
July 10, 1985
Oklahoma Department of Human Services;
Ford, Cecilia Sparks; Garrett, Donald F. Ballard, Judith A.
Docket No. 84-224
DECISION
The Oklahoma Department of Human Services (Oklahoma) appealed a decision
by the Health Care Financing Administration (HCFA) disallowing
$232,567.49 in federal funds claimed by Oklahoma under the Medicaid
program for the quarter ending December 31, 1983. HCFA based this
disallowance on its determination that, during this quarter, Oklahoma
was not operating an effective program of utilization control at 10
intermediate care facilities (ICFs). Oklahoma challenged the
disallowance alleging that: HCFA's initial findings did not support a
disallowance in all 10 ICFs; the State's procedures regarding the
execution of physicians' signatures and dates on various utilization
control documents met statutory requirements; and the reduction in
Medicaid funding resulting from this disallowance was arbitrary and
capricious.
For the reasons set out below, we uphold this disallowance in part and
reverse it in part. Our decision is based on the parties' briefs and
documentary evidence.
Background
I. The Statute and Regulation
Under Title XIX of the Social Security Act, states which have an
approved Medicaid state plan receive federal financial participation in
expenditures for medical services to needy individuals. Services which
qualify as "medical assistance" under section 1905(a) of the Act,
including ICF services, are reimbursed generally at the federal medical
assistance percentage (FMAP) rate. Sections 1903(a)(1); 1905(b).
However, section 1903(g)(1) of the Act, as in effect during the time
period in question here, provided that, with respect to amounts paid for
certain "long-stay services," the FMAP "shall be decreased .
. . unless
the State . . . makes a showing satisfactory to the Secretary that there
is in (2) operation in the State an effective program of control over
utilization of such services . . . ." Section 1903(g)(1) further
provided:
. . . such a showing must include evidence that --
(A) in each case for which payment is made under the State plan, a
physician certifies at the time of admission, or, if later, the time the
individual applies for medical assistance under the State plan (and the
physician, or a physician assistant, or nurse practitioner . . .
recertifies, where such services are furnished over a period of time, in
such cases, at least every 60 days, and accompanied by such supporting
material, appropriate to the case involved, as may be provided in
regulations of the Secretary), 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 case, such services were furnished under a plan
established and periodically reviewed and evaluated by a physician; /1/
* * *
The statutory provisions for certifications and recertifications for
residents of ICFs were implemented by federal regulation at 42 CFR
456.360, which provides:
(a) Certification. (1) A physician must certify for each applicant
or recipient that ICF services are or were needed.
(2) The certification must be made at the time of admission or, if an
individual applies for assistance while in an ICF, before the Medicaid
agency authorizes payment.
(b) Recertification. (1) A physician, or physician assistant or
nurse practitioner (as defined in Sec. 481.2 of this chapter) acting
within the scope of practice as defined by state law and under the
supervision of a physician, must recertify for each applicant or
recipient that ICF services are needed.
(3) (2) Recertification must be made at least --
* * *
(ii) Every 60 days after certification in an ICF other than a public
institution for the mentally retarded or persons with related
conditions.
The regulations governing plans of care are found at 42 CFR 456.380 and
provide in part:
(a) Before admission to an ICF or before authorization for payment, a
physician must establish a written plan of care for each applicant or
recipient.
* * *
(c) the team must review each plan of care at least every 90 days.
II. The Facts and Issues
Federal surveyors, assessing Oklahoma's compliance with utilization
control requirements, reviewed the records of Medicaid patients in 10
ICFs. In the Notice of Disallowance, HCFA alleged a variety of
utilization control violations at each facility. The violations
included invalid certifications, invalid and untimely recertifications,
and invalid plans of care. See Oklahoma Exhibit A.
Oklahoma did not contest the disallowance by attempting to refute each
alleged violation. Rather, Oklahoma presented three general arguments
and limited evidence regarding certain individual violations.
First, Oklahoma maintained that HCFA's initial finding did not include
violations subsequently identified in the Notice of Disallowance.
Oklahoma noted that the Regional Office recommendations to HCFA
regarding this survey indicated that two of the ICFs reviewed (Lexington
Nursing Home and Southern Hills Nursing Home) were in compliance with
the utilization control requirements. See Oklahoma Exhibit B. However,
the disallowance alleged violations at all 10 facilities. Oklahoma
cited the applicable survey instructions, Medicaid Action Transmittal
84-5 (AT-84-5), which provided that states subject to review would have
an opportunity to rebut HCFA's initial findings and a final
determination would be made after HCFA's consideration of the rebuttal
evidence. Oklahoma argued that HCFA's failure to follow its own
procedures prevented Oklahoma from rebutting that portion of the
disallowance pertaining to the Lexington and Southern Hills facilities.
Thus, Oklahoma contended, that aspect of the disallowance was arbitrary
and capricious. Oklahoma also argued that, prior to the actual
disallowance, it had (4) successfully rebutted some of HCFA's
preliminary findings, yet those patients for whom evidence was submitted
still appeared among those cited for violations.
Oklahoma's second argument focused on its procedure for executing
recertifications. HCFA found various recertifications invalid where a
person other than the attending physician had executed the physician's
signature on the recertification document. Oklahoma admitted that it was
common practice for individuals authorized by the attending physician to
execute the recertifications. The Board previously found this practice
unacceptable in Oklahoma Department of Institutions, Decision No. 318,
June 28, 1982. However, Oklahoma reasserted here its position that the
practice itself was lawful and, therefore, satisfied utilization control
requirements.
Oklahoma also attacked HCFA's determination that recertifications in
which the dates accompanying the physician's signature were either
stamped or written by someone other than the physician were invalid.
Oklahoma argued that the physician's signature itself attests to the
date's accuracy. Further, Oklahoma contended that neither the statute
nor regulations supported HCFA's position. Oklahoma Brief, p. 5.
In its third general argument, Oklahoma maintained that HCFA's current
administration of the utilization control program was at odds with the
purposes for which Congress created the program. Oklahoma contended
that HCFA's pursuit of disallowances had shifted HCFA's focus from
patient welfare to the recovery of federal money. Oklahoma asserted
that, in spite of the numerous alleged violations, HCFA had failed to
identify any patients who were receiving unnecessary medical care, and,
thus, the entire disallowance was arbitrary and capricious. In
summation, Oklahoma referred the Board to the recent amendments to the
utilization control program contained at section 2363 of the Deficit
Reduction Act of 1984 (DEFRA), Pub. L. 98-369, which, among other
changes, liberalized the recertification requirements. Oklahoma
maintained that the DEFRA amendments were clear evidence that Congress
no longer favors strict application of utilization control penalties,
and this attempt to infuse "common sense" into the program's application
required a reversal of this disallowance. Oklahoma Brief, pp. 6-7.
Analysis
I. Scope of the Disallowance
We do not believe that the broader scope of the findings in the Notice
of Disallowance compared to the preliminary (5) findings justifies
reversing any part of this disallowance. /2/ The Notice of Disallowance
contained a list of patients cited for utilization control violations.
Additionally, after this case reached the Board, HCFA provided Oklahoma
with more detailed information about the violations shown on that list.
Oklahoma Exhibit B. Thus, even though Oklahoma initially may have been
unaware of HCFA's concerns regarding the Lexington and Southern Hills
ICFs, Oklahoma has had every opportunity, consistent with our process,
to present evidence to the Board relevant to the violations alleged at
these two ICFs. Oklahoma did not allege that any documentation relevant
to the issues here was destroyed in reliance on the fact that HCFA's
Regional Office found no violations for these ICFs. We do not agree
that what happened here was a failure by HCFA to follow its procedures.
The procedures contemplate initial findings by the Regional office and
the opportunity to present rebuttal evidence; this occurred here. The
procedures do not preclude revised findings that go beyond the scope of
the initial findings. /3/ In any event, we conclude that Oklahoma was
not prejudiced by HCFA's action in view of Oklahoma's subsequent
opportunities to rebut the alleged violations during the proceedings
before the Board.
(6) We have held that in the face of a disallowance by HCFA, a state is
obliged to demonstrate compliance with utilization control requirements.
Ohio Department of Public Welfare, Decision No. 191, June 24, 1981;
Georgia Department of Health, Decision No. 207, August 28, 1981;
Virginia Department of Health, Decision No. 208, August 28, 1981; Idaho
Department of Health and Welfare, Decision No. 250, January 28, 1982;
North Carolina Department of Human Resources, Decision No. 273, March
31, 1982; Kansas State Department of Social and Rehabilitation
Services, Decision No. 312, June 21, 1982; Washington Department of
Social and Health Services, Decision No. 487, December 17, 1983;
Georgia Department of Medical Assistance, Decision No. 508, January 31,
1984.
HCFA found plan of care violations for eight patients at the Southern
Hills and Lexington facilities. /4/ Oklahoma has offered no evidence to
rebut HCFA's findings regarding the violations. Given that there is
nothing in the record to show that HCFA's findings of plan of care
violations were wrong, we uphold the plan of care violations for these
two facilities.
II. Execution of Physicians' Signatures and the Individual Violations
As noted above, we previously concluded that Oklahoma's practice of
allowing an individual other than the attending physician to execute the
recertifying physician's signature was unacceptable. Oklahoma did not
argue that the basic facts of this case varied in any way from those
addressed in Decision No. 318. Oklahoma merely reiterated that "under
Oklahoma law and generally accepted legal principles, the execution of a
signature by a second person authorized by the physician to do so is
lawful and therefore meets the requirement that a signature be executed
by the physician." (citation omitted) Oklahoma Brief, p. 5.
In Decision No. 318, we determined that the issue was not whether the
person signing was authorized but whether a signature by someone other
than the physician could constitute a proper recertification.
Oklahoma's position was predicated on its assertion that the individuals
affixing the physicians' signatures were engaged in purely ministerial
acts and that it was the physician who was attesting that the services
were required, even though the person signing was the one reviewing the
patient's care. However, we concluded (7) that, even if the physician
set forth explicit review criteria to guide them, the individuals
executing the physician's signature would have to exercise some
independent judgment in order to apply those criteria to the facts of a
particular case. Id. at 5.
Here, Oklahoma has not denied that the basic facts and procedures in
dispute are essentially the same as those present in Decision No. 318.
Accordingly, we conclude that the rationale of Decision No. 318 should
apply here as well. Indeed, this case is even stronger than the
previous one. Not only do we conclude that Oklahoma's interpretation
that a signature by someone other than the physician would be adequate
was unreasonable in light of the statutory requirements, but we further
conclude that Oklahoma had explicit notice through our previous decision
that the physician himself (herself) had to actually sign. /5/
HCFA found this practice at five facilities: United Cerebral Palsy
Center, Bixby Manor Nursing Home, Black's Nursing Home, Lackey Manor
Nursing Home and Morning Star Nursing Center. /6/ Thus, we uphold the
inclusion of these five facilities in the disallowance.
Oklahoma also challenged HCFA's finding that recertification dates which
were either stamped or written by individuals other than the
recertifying physician were unacceptable. HCFA found violations based
on this practice in three ICFs: Senior Citizens Nursing Home,
Convalescent Center Inc., and Stroud Nursing Care Center.
We have recently addressed this issue in Minnesota Department of Human
Services, Decision No. 615, December 24, 1984. In (8) Minnesota, we
analyzed whether typewritten dates were sufficient under Medicaid Action
Transmittal AT-80-68 (October 1, 1980). We found:
Action Transmittal AT-80-68 . . . was promulgated to clarify what
constitutes a valid certification and recertification, . . . The
statutory and regulatory provisions specify who must certify or
recertify and when they must do so, but do not specify how this must be
documented. Since the Secretary must be able to verify that the
requirements are met, however, the Board has held that action
transmittal provisions clarifying that a certification or
recertification must be in writing and signed by the appropriate person
were a logical extension of the statutory and regulatory requirements.
Social Service Board of North Dakota, Decision No. 166, April 30, 1981.
We have also said that a requirement for dating may be viewed as an
interpretation of what is a timely and verifiable certification. Maine
Department of Human Services, Decision No. 516, February 29, 1984.
However, we do not think that, where there is other persuasive evidence
of timeliness, HCFA can reasonably apply AT-80-68 to require a finding
of a violation simply because the physician has not manually dated the
certification or recertification document, particularly where, once a
violation is found, a disallowance must be taken.
Some of the examples of acceptable certifications and
recertifications given in AT-80-68 refer to documents "signed and dated
by a physician," but other examples refer merely to "signed and dated"
orders or notes. In general, AT-80-68 states: "The certification must
be dated at the time it is signed by the physician." (AT-80-68, p. 3.)
Although the illustrations imply that HCFA expects the date to be
entered by the physician, AT-80-68 does not explicitly state that a
violation will be found if the physician has not dated the certification
by hand or the date does not appear next to the signature. Id. at 5-6.
/7/
Thus, the fact that the physician may not have personally dated the
recertification document does not, in and of itself, invalidate the
recertification. HCFA has challenged (9) the recertifications of
several patients in each facility based solely on its determination that
the recertification dates were not affixed by the physician. We do not
believe that this fact standing by itself necessitates citing a facility
for a utilization control violation. HCFA has not alleged that the
dates were altered to comply with the 60-day requirement, nor alleged
that the physicians had failed to perform the acts comprising a valid
recertification in a timely fashion. We do not believe that the fact
that a physician may not have manually dated a recertification is, by
itself, a sufficient basis for invalidating the recertification. As we
noted in Minnesota, the statute and regulations specify who must
recertify and when, but do not specifically require that the person
signing also date his or her signature. The mere fact that the date may
have been mechanically affixed or written by another does not, in our
view, warrant a wholesale rejection of the recertification.
HCFA based its findings relative to the Stroud Nursing Care Center and
the Senior Citizens Nursing Home on the manner in which recertification
documents were dated. Given our analysis, we conclude that HCFA had an
insufficient basis for the recertification violations. Accordingly, we
reverse HCFA's findings for these facilities.
In the Convalescent Center Inc., HCFA found 25 violations. In 24
instances, HCFA alleged the recertification dates were affixed by
someone other than the physician. Given our analysis above we reverse
HCFA's findings with regard to these 24 patients.
In regard to the 25th patient, there is no dispute that the patient was
properly certified for ICF care on October 13, 1983. Thus,
recertification would be due by December 12, 1983. Oklahoma provided
documentation apparently designed to show a valid recertification for
this patient during the final quarter of 1983. See Oklahoma Exhibit D.
This documentation consists primarily of a patient discharge summary and
a series of forms titled "Medical Evaluation Report," or "Medical
Social
Summary." Oklahoma has not offered any specific argument as to how this
documentation should be interpreted. From our review of this material,
the only document that could possibly be offered as proof of a timely
recertification during this quarter is a Medical Evaluation Report
signed by a medical review team physician and dated December 8, 1983.
However, we do not think that this document is valid proof of a
recertification of the patient's continued need for ICF care. In its
section II, the document is clearly denoted as an "Application" for
ICF
care. In section IV D, ICF nursing services are approved "Effective
10-13-83." The physician's signature dated December 8th follows.
Oklahoma has provided no evidence that, under its system, this document
means that the medical review team evaluated the patient's need for
continued ICF (10) care in December. Rather, the context of the
document indicates that the physician may have merely been approving the
initial placement of the patient at the ICF level on October 13, 1983.
This conclusion is buttressed by the Medical Social Summary which
follows this document. The summary was prepared October 19, 1983 and
requests: "May we please have your decision for medical assistance
requiring ICF to be effective 10-13-83?" Further, we note that Oklahoma
has also provided another Medical Evaluation Report dated March 29,
1983, in which ICF care was retroactively approved "through 1-7-84",
the
date of the patient's death. This indicates that the December 8th
document was not intended to be a recertification adequate to attest to
the patient's need for continued ICF care for the 60-day period
beginning December 8, 1983, but represented a retroactive determination
only. Accordingly, we conclude that HCFA's finding of a recertification
violation for the patient at this facility was proper, and we sustain
the inclusion of this facility in the disallowance.
III. Applicability of the DEFRA Amendments
Oklahoma was one of several states to have raised the DEFRA amendments
as a defense to HCFA's finding of utilization control violations in
appeals recently before the Board. The applicability of the DEFRA
amendments to the utilization control program in Oklahoma and those
other states was resolved in Board Decision No. 655, June 7, 1985. We
concluded that the DEFRA amendments applied only to showings made on or
after October 1, 1984.
We also are not convinced by Oklahoma's argument that the disallowance
was arbitrary and capricious because HCFA took it without identifying
any patients who were receiving unnecessary medical care. The statute,
as in effect during the quarter here, requires HCFA to reduce a state's
Medicaid funding if the state does not make a satisfactory utilization
control showing and specifically provides that that showing must include
evidence that the certification, recertification, and plan of care
requirements were met. HCFA is not required to find that unnecessary
medical care has, in fact, been given. The statute presumes that, if a
state has failed to meet the utilization control requirements, its
system is not effective. Congress provided for the protection of the
patients and of the federal fisc by specifying what requirements had to
be met. That any individual violation of those requirements may not
have resulted in unnecessary or inappropriate medical care is therefore
irrelevant. Thus, we do not think that HCFA's action here is in any way
inconsistent with Congressional intent; to the extent Oklahoma failed
to provide evidence that it had met the requirements, the disallowance
is proper.
(11) Conclusion
Based on the foregoing analysis, we reverse HCFA's findings relative to
Senior Citizens Nursing Home, and Stroud Nursing Care Center. We uphold
HCFA's findings for Lexington Nursing Home, United Cerebral Palsey
Center, Bixby Manor Nursing Home, Blacks Nursing Home, Southern Hills
Nursing Center, Lackey Manor Nursing Home, Morning Star Nursing Center,
and the Convalescent Center, Inc. HCFA should recalculate the funding
reduction accordingly. /1/ In its brief, HCFA cited part of the
legislative history of section 1903(g) in an effort to
underscore the need for Oklahoma's compliance with utilization control
requirements. See HCFA Brief, pp. 5-6. We do not rely on this
legislative history since it pertains to the utilization review
requirements of section 1903(g)(1)(C), not the requirements of sections
1903(g)(1)(A) and (B) at issue here. /2/ We note that Oklahoma had
received a copy of the survey instructions prior to the survey itself.
HCFA has provided those instructions as its Exhibit 2. In the
instructions at page 9, under a heading titled SPECIAL NOTE, surveyors
are advised: It is important that no facility or State Agency is told
that a disallowance will be issued for those problems since final
determination is not made for several months. (Emphasis in original.)
Further, the Regional Office's preliminary report upon which Oklahoma
would have us rely in reversing disallowances at two facilities clearly
indicates that it will be followed by final findings. Although an
internal memorandum from the Regional Office to the Central Office of
HCFA referred to the Regional Office findings as final, in context this
clearly meant merely that these were the final findings of the Regional
Office. Oklahoma Exhibit B. Thus, we think that Oklahoma was aware of
the preliminary nature of the initial findings. /3/ We note that
time constraints are imposed on HCFA by section 1903(g)(3)(A)(iv). As a
practical matter, this may limit the number of times HCFA can ask a
state for rebuttal evidence. /4/ HCFA also alleged
recertification violations at Lexington Nursing Home for the four
patients with plan of care violations, plus an additional individual.
See Oklahoma Exhibit A. /5/ The statute and regulations permit someone
other than a physician to recertify if that person is a
"physician assistant or nurse practitioner under the supervision of a
physician." Section 1903( g)(1)(A); 42 CFR 456.360(b). The State did
not allege that the individuals signing for the physicians met these
qualifications. /6/ Oklahoma alleged that even though it provided
satisfactory rebuttal evidence with regard to certain patients
cited for violations in the other facilities, those patients remained on
HCFA's list of violations. Oklahoma cited specific examples at the Bixby
Manor and Morning Star facilities. Oklahoma Brief, p. 3. HCFA did not
respond to this allegation, nor did the State provide the actual
documentation to us. We note that, even if these two patients are
eliminated from the list of violations, there remain several other
unrebutted violations at each of these facilities. /7/ In
Minnesota, supra at 6, n. 3, we also noted that use of the phrase "at
the time" does not necessarily imply that the date must be entered
simultaneously with the signature. HCFA has interpreted the phrase "at
the time of admission" in section 1903(g) to mean on the date of
admission (AT-75-122), so a state could reasonably conclude that a
certification was satisfactory if it was dated on the day it was signed.
OCTOBER 04, 1985