DEPARTMENTAL GRANT APPEALS BOARD
Department of Health and Human Services
SUBJECT: Texas Department of
Human Services
Docket No. 86-145
Decision No. 830
DATE: January 27, 1987
DECISION
The Texas Department of Human Services (State/Texas)
appealed a determination by the Health Care
Financing Administration
(HCFA/Agency) disallowing $29,867.07 in federal funds claimed by the State
under the Medicaid program of the Social Security Act (Act) for the calendar
quarter ending September
30, 1985. The disallowance was taken pursuant
to section 1903(g) (1) of the Act which provides for the
reduction of a
state's federal medical assistance percentage of amounts claimed for a calendar
quarter
unless the state shows that during the quarter it had "an effective
program of medical review of the care of
patients . . . pursuant to
paragraphs (26) and (31) of section 1902(a) whereby the professional
management of each case is reviewed and evaluated at least annually by
independent professional review
teams."
Specifically, HCFA
found that Texas failed to conduct a satisfactory annual review at the Westwind
Care
Center (Westwind), an intermediate care facility (ICF). HCFA
alleged that the review of Westwind was
deficient because the State did not
review one Medicaid recipient residing in the facility during the annual
review.
For the reasons discussed below, we find that the
State was not required to review this patient and reverse
the disallowance.
Applicable Law
Section 1902(a)(31) requires in
pertinent part that a state plan provide:
(B) with
respect to each . . . intermediate care facility within the State, for periodic
onsite
inspections of the care being provided to each person receiving
medical assistance, by one or more
independent professional review teams . .
. .
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The regulations implementing this provision and section
1903(g) (1) are found at 42 CFR Part 456. In
particular, section
456.652 provides that:
(a) . . .
[i]n order to avoid a reduction in FFP, the Medicaid Agency must make a
satisfactory
showing to the Administrator, in each quarter, that it has met
the following requirements for each
recipient;
* ** *
(4) A regular program of reviews,
including medical evaluations, and annual on-site reviews of
the care of
each recipient . . . .
(b) Annual on-site review
requirements.
(1) An agency meets
the quarterly on-site review requirements of paragraph (a)(4) of this section
for a quarter if it completes on-site reviews of each recipient in every
facility in the State, . . . by the end of
the quarter in which a review is
required under paragraph (b) (2) of this section.
(2) An on-site review is required
in a facility by the end of a quarter if the facility entered the
Medicaid
program during the same calendar quarter 1 year earlier or has not been reviewed
since the
same calendar quarter 1 year earlier . . . .
(3) If a facility is not reviewed
in the quarter in which it is required to be reviewed under
paragraph (b)
(2) of this section, it will continue to require a review in each subsequent
quarter until the
review is performed.
* ** *
Other regulations are referred to as appropriate in the course of
this decision.
Background
I. Facts
The issue presented by this appeal is whether the State could have
reasonably identified, and thus have
been found responsible for the review
of, a patient who had been transferred under emergency
circumstances from
another ICF to Westwind 11 days prior to the start of the Westwind review.
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Under the Texas Medicaid program, when a patient is
transferred from one facility to another, the
discharging facility submits a
transaction notice (Form 3618) to the Texas Department of Health's Long
Term
Care Unit (LTCU).1/ The LTCU then forwards the transaction notice to the
Department of Human
Services' Nursing Home Billing Services section.
The billing section then sends a turnaround form (Form
3653) to the facility
receiving the patient to verify that the patient is a Medicaid
recipient. Texas Brief, pp. 3 and 6.
The patient at
issue had been admitted to the Terrace West Nursing Home on March 4, 1985 and
certified
for ICF care on March 11. Texas cancelled Terrace West's
Medicaid provider agreement effective May 1,
1985, however. As a
result of the State's action, Terrace West was responsible for transferring 95
Medicaid patients within a 30 day period (from the effective date of the
cancellation of its Medicaid
provider agreement) to facilities throughout
the State. The patient in question was admitted to Westwind
on May
9. The annual review of Westwind was conducted from May 20-23, 1985.
The LTCU did not
receive the transaction notice from Terrace West until May
23. Texas Brief, pp. 6-7; Texas Reply Brief,
pp. 4-5.
The patient in issue was not reviewed. Consequently, HCFA
assessed a disallowance for the quarter
ending September 30, 1985.2/
II. HCFA's basis for the disallowance
Citing
several prior Board decisions, HCFA argued that Texas was required to review
this patient since
the individual was eligible for Medicaid and a patient at
the facility on the first day of the review. HCFA
further
1/ The Texas Department of Health works in concert with the
Department of Human Services in running
the State's utilization control
program. The Department of Health provides the inspection teams which
conduct the annual reviews at Medicaid facilities.
2/ During a
December 11, 1986 telephone conference, HCFA indicated that although the review
in issue
occurred during the quarter ending June 30, HCFA officials were
performing a validation survey for the
September quarter when they found the
alleged deficiency. Under 42 CFR 456.652(b) (3) a facility with a
deficient review continues to require a review in succeeding quarters until
an adequate review is
performed.
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maintained that Texas did not have a reasonable excuse for
not reviewing this patient. HCFA noted that
in spite of the emergency
nature of the transfer from Terrace West, this patient had been discharged from
Terrace West and admitted at Westwind 11 days prior to the start of the
review at Westwind without a
break in Medicaid coverage.
The
Agency maintained that the patient's presence in the facility 11 days prior to
the start of the review
provided the facility ample opportunity to determine
that this individual was a Medicaid recipient and to
update its patient list
accordingly. HCFA also argued that since Texas was responsible for
terminating
Terrace West's Medicaid provider agreement, the State should
have been tracking the placement of the
transferred patients and in doing so
would have been able to identify this patient as a Medicaid recipient.
Finally, HCFA noted that the fact that the State had missed just one patient
out of those transferred from
Terrace West to Westwind (at least 38 patients
in all) suggests a flaw in the State's system for identifying
patients
requiring review.3/
Analysis
This Board has
frequently held that a state bears the ultimate responsibility for reviewing all
Medicaid
recipients in a facility at the start of a review.
Nevertheless, we have also concluded that a state may only
be held
responsible for reviewing those patients that the state could reasonably be
expected to identify as
Medicaid recipients. See Idaho Department of
Health and Welfare, Decision No. 747, April 28, 1986.
HCFA emphasized
the fact that 11 days elapsed from the patient's admission to the start of the
Westwind
review and argued that the facility (and consequently the State
review team) should have been able to
identify the patient as a Medicaid
recipient requiring review in this time.
Texas alleged, and we
agree, that the problem was the direct result of the delay of the facility
(Terrace
West) in submitting the patient transferral notice to the State's
LTCU. Texas asserted that this delay
prevented its Medicaid billing
section from submitting a timely turnaround document to Westwind
informing
the facility
3/ Texas indicated that 38 patients had been transferred from
Terrace West to Westwind in a four day
period. See Texas Notice of
Appeal, July 24, 1986, p. 2. However, neither party demonstrated that the
patient at issue was among this group.
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that the patient was still Medicaid eligible. Texas
noted that the transferral notice from Terrace West did
not reach the LTCU
until May 23, the final day of the Westwind review. Texas also contended
that, as a
practical matter, it could not reasonably be expected to conduct
any type of follow-up study on the patients
leaving Terrace West until the
end of the 30 day transfer period allowed by the regulation. Thus, we find
that the review team had no reasonable way of identifying this individual as
a Medicaid recipient, since no
State agency had knowledge of this patient's
placement at Westwind.
Texas indicated that inspection teams
compile their initial patient review list approximately 30 days prior
to a
review. The lists themselves are drawn from computergenerated facility
billing lists provided to the
facilities on a monthly basis. The
review teams update their lists upon arriving at the facility. Here the
State attempted to update its patient list just prior to the review but this
patient apparently was not added
to the list by the facility's staff, even
though, under the State's system, a facility generally would have
timely
information about the eligibility of a patient transferred from another
facility. The only failure that
occurred here was that of the
decertified facility (Terrace West) in not having submitted the transaction
notice to the LTCU in a timely fashion. As a result, the State was not
notified that this patient had been
transferred to Westwind prior to the
beginning of the review and the facility was not notified of the
individual's Medicaid eligibility status. The State took reasonable
efforts in preparing and updating its list
and there is no evidence in the
record that its system for verifying who should be included in the review
was deficient.
Additionally, contrary to HCFA's inference, we
do not find that the State's failure to perform individual
follow-up
inquiries regarding the placement of the Terrace West patients justified a
conclusion that the
State's system of medical reviews was faulty. The
State indicated that it did not participate in placement
of these
individuals once Terrace West's provider agreement was terminated, nor did it
have the available
personnel to perform daily inquiries as to the status of
the affected patients. The fact that the State missed
only one of a
large number of patients transferred to the facility under emergency conditions
within two
weeks of a review is not an indication of the ineffectiveness of
its system, in our view.
Based on the foregoing analysis, we find
that the State could not reasonably have been expected to identify
this
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recipient and, therefore, the State was not required to
include this individual in its review of Westwind.
Conclusion
We reverse the disallowance in full.
________________________________
Judith
A. Ballard
________________________________
Alexander G. Teitz
________________________________
Donald F. Garrett
Presiding Board Member