DEPARTMENTAL GRANT APPEALS BOARD
Department of Health and Human Services
SUBJECT: New York State Department of Social Services
Docket No. 86-231
Decision No. 827
DECISION
The New York State Department of Social Services (State) appealed
the
disallowance by the Health Care Financing Administration (HCFA)
of
$55,552 in federal financial participation claimed under Title
XIX
(Medicaid) of the Social Security Act. The disallowance represented
the
federal share of the amount of interest income earned by the
State,
during the quarter ending March 31, 1986, on Medicaid funds
withheld
from providers or collected "from providers, from third party
health
insurers, and from windfall activities." HCFA determined that
the
federal government is entitled to share in such interest, based
on
Office of Management and Budget Circular No. A-87 (incorporated
by
reference into HHS regulations at 45 CFR 74.171) and 45 CFR 74.47(a),
as
well as section 2555.2(E) of the State Medicaid Manual.
The Board addressed issues concerning such interest in New York
State
Department of Social Services, Decision No. 588, October 31, 1984,
where
the Board determined that such interest constituted an applicable
credit
which should have been used to reduce the State's claim for
Medicaid
expenditures. In New York State Department of Social Services,
Decision
No. 721, February 6, 1986, the Board rejected the State's
contention
that a federal court decision concerning the Food Stamp Program,
Perales
v. U.S., 598 F. Supp. 19 (S.D. N.Y. 1984), aff'd, 751 F.2d 95 (2d
Cir.
1984), required reversal of Decision No. 588.
In the course of this appeal, HCFA reduced the amount of the
disallowance
by $30,533, after verifying the State's claim that this
figure represents
interest on amounts the State had already credited to
HCFA as receivables in
accordance with HCFA guidelines.
As for the remaining $25,019 in dispute, the State admitted that
this
appeal did not present any material issues of fact which
distinguished
it from those issues considered by the Board in Decision Nos.
588 and
721. As an alternative to the normal Board briefing process,
the State
accordingly requested a summary decision in this appeal based upon
those
two decisions and their records. State's letter to the Board
dated
December 1, 1986. HCFA raised no objection to the issuance of a
summary
decision. January 16, 1987 Telephone Conference.
We therefore sustain the disallowance in the reduced amount of
$25,019,
based on Decision Nos. 588 and 721, which we incorporate by
reference
here.
_____________________________________ Norval D.
(John)
Settle
_____________________________________
Alexander G.
Teitz
_____________________________________ Judith
A.
Ballard Presiding Board