DEPARTMENTAL GRANT APPEALS BOARD
Department of Health and Human Services
SUBJECT: Utah Department of Health
Docket No. 86-157
Decision No. 843
DATE: March 2, 1987
DECISION
The Utah Department of Health (State, Utah) appealed a determination
by
the Health Care Financing Administration (HCFA, Agency)
disallowing
$28,144.14 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 Utah failed to conduct a satisfactory
annual
review at the Hillhaven Convalescent Center (Hillhaven), an
intermediate care
facility (ICF). HCFA alleged that the review of
Hillhaven was deficient
because the State did not review one Medicaid
recipient residing in the
facility during the annual review. Utah
admitted that this patient
should have been reviewed, but argued that
the omission of this patient from
review met the "technical failings"
exception to the annual review
requirement.
For the reasons discussed below, we find that the State's failure
to
review this patient was a "technical failing" and reverse
the
disallowance.
Applicable_Law
Section 1903(g)(1) of the Act requires the state agency responsible
for
the administration of a state's Medicaid
plan to submit a written quarterly showing demonstrating that--
[it] has an effective program of medical review of
the care of
patients in . . . intermediate care
facilities pursuant to
paragraphs . . . (31) of
section 1902(a) whereby the professional
management
of each case is reviewed and evaluated at least
annually
by independent professional review
teams.
A state's showing for each quarter must be "satisfactory" or FFP paid
to
the state for expenditures for long-stay services will be
decreased
according to the formula set out in section 1903(g)(5).
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 on-site inspections of the care
being
provided to each
person receiving medical assistance, by
one
or more
independent professional review teams . . . .
The regulations implementing this provision and section 1903(g)(1)
are
found at 42 CFR Part 456. In particular, section 456.652
provides--
(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.
Section 1903(g)(4)(B) provides two exceptions to the annual
review
requirement whereby--
[T]he Secretary shall find a showing . . . to be
satisfactory . . .
if the showing demonstrates that
the State has conducted such an
onsite inspection
during the 12-month period ending on the last
date
of the calendar quarter--
(i) in each of not
less than 98 per centum of the number
of
such hospitals and
facilities requiring such inspections, and
(ii) in every such
hospital or facility which has 200 or
more
beds,
and that, with respect to such hospitals and
facilities not
inspected within such period, the
State has exercised good faith
and due diligence in
attempting to conduct such inspection, or if
the
State demonstrates to the satisfaction of the Secretary that
it
would have made such a showing but for failings
of a technical
nature only.
Section 1903(g)(4)(B) is implemented by the regulation at 42 CFR
456.653,
titled, "Acceptable reasons for not meeting requirements for
annual on-site
review," which provides in pertinent part that--
The Administrator will find an agency's showing
satisfactory, even
if it failed to meet the annual
review requirements of section
456.652(a)(4),
if--
(a) The agency demonstrates that--
(1) It completed
reviews by the end of the quarter in
at
least 98 percent of
all facilities requiring review by the
end
of the
quarter;
(2) It completed
reviews by the end of the quarter in
all
facilities with
200 or more certified Medicaid beds
requiring
review by
the end of the quarter; and
(3) With respect
to all unreviewed facilities, the
agency
exercised good
faith and due diligence by attempting to
review
those
facilities and would have succeeded but for
events
beyond its
control which it could not have
reasonably
anticipated; or
(b) The agency demonstrates that it failed to
meet the standard in
paragraph (a)(1) and (2) of
this section for technical reasons, but
met the
standard within 30 days after the close of the
quarter.
Technical reasons are circumstances within
the agency's control.
Background
Facts
Utah performed the on-site medical review at Hillhaven on September 9,
10,
and 11, 1985. Under Utah's program for annual reviews, the review
team
used a computerized document generated monthly by the State's
Medicaid
Management Information System that lists the names of Medicaid
recipients in
the facility. The report used by the review team at
Hillhaven reflected
information current as of August 2, 1985 and bore a
"run date" of August 3,
1985. Upon arrival at the facility, the review
team contacted the
facility's business office to determine if there were
any new Medicaid
patients in the facility or whether any patients had
been discharged.
The nursing home administrator compared the report
with the facility's
patient listing and billing records to make certain
the review team's list
was complete.
The State indicated that, although patient Z.H. (who was eligible
for
Medicaid at the time of the review and present in the facility
during
the review) was listed on the report as of June 14, 1985, patient
Z.H
was not listed on the August 2, 1985 report. Patient Z.H.'s
omission
from the report was first noticed by Hillhaven when the claim for
June
services for patient Z.H. was denied on August 8, 1985. Thus,
the
omission was discovered after the "run date" of the report used by
the
review team. The apparent reason for patient Z.H.'s removal from
the
report was a key punch error which deleted patient Z.H.'s name from
the
computer as a discharged patient instead of a patient with the same
last
name who immediately preceded patient Z.H. on the computer list.
1/
The facility informed the State of the error some time around
September
10, 1985. The State corrected the error on the computer on
September
13, 1985. The facility, however, did not inform the review
team that
patient Z.H. was omitted from the monthly report and should
have been
reviewed.
As a further precaution to ensure all eligible patients in a facility
are
reviewed, the review team would proceed on its review in an orderly
manner
from room to room. This method acted as a back-up to the monthly
report
so that if a patient was not on the report and the facility
failed to give
the review team the information, the patient would be
discovered at this
point in the review. In the instant case, however,
while the review was
being conducted, patient Z.H. was transferred from
a room that had not been
reviewed yet to another room in the facility
which was in an area that had
already been reviewed by the review team.
The facility failed to make the
review team aware of patient Z.H.'s
transfer. Thus, patient Z.H. was
not reviewed.
HCFA's basis for the disallowance
HCFA claimed that while the State had met the threshold requirement
for
the "good faith and due diligence" and "technical failings"
exceptions
by inspecting 98 percent of the facilities due for review in the
quarter
and all facilities with 200 or more beds, the State did not satisfy
the
other requirements for these exceptions. HCFA contended that it did
not
consider the reasons for patient Z.H.'s omission from the computer
list
and for not being reviewed to be circumstances beyond the
State's
control. Thus, HCFA reasoned that the State could not claim the
good
faith and due diligence exception. HCFA alternatively contended
that
while these circumstances were within the State's control, they
would
not satisfy the technical failings exception because these
circumstances
amounted to nothing more than poor administration or bad record
keeping.
Analysis
The State asserted that its failure to review patient Z.H. could
be
excused under either the good faith and due diligence or
technical
failings exceptions to the annual review requirements. Since
we
determine below that the State has met the "technical
failings"
exception, we do not need to reach the arguments made by the
State
concerning the "good faith and due diligence" exception and
the
disallowance calculation.
In past decisions we have analyzed the technical failings exception to
the
annual review requirement. See Delaware Department of Health and
Social
Services, Decision No. 732, March 21,
1986; and
Pennsylvania Department of Public Welfare, Decision No. 746, April
28,
1986. Admittedly, there is little guidance about what is
properly
regarded as a technical failing. 2/ The regulation
relates the concept
of technical failings to the reasons for which the
reviews were missed.
The heading of 42 CFR 456.653 refers to "acceptable
reasons" and the
provision on the technical failings exception states a
requirement for
"technical reasons." Thus, we have stated that we
cannot condone either
an unexplained failure to attempt a review or a review
deficient for no
apparent reason. Also, we have agreed with the general
principle
underlying HCFA's position that poor adminis- tration or bad
record
keeping should not be considered a technical failing. We did not
mean
to suggest, however, that every failure on the part of the State can
be
considered poor administration or bad record keeping. This would
render
the regulation meaningless since a technical failing is defined as
a
"circumstance within the State's control."
Here, we believe that the State's key punch error does not amount to
poor
administration or bad record keeping by the State. The State
admitted
it made a key punch error which resulted in patient Z.H.'s name
being deleted
from the monthly report rather than another patient's
whose name immediately
preceded patient Z.H.'s on the computer list.
This was a one-time error and
one such error does not indicate that the
State poorly administered its
system or that the error was caused by bad
record keeping. The concepts
of poor administration and bad record
keeping connote a systemic problem
resulting in failings in the system
on a regular basis, or at least more than
singular occurrences. The
Agency here has not shown that the key punch
error in dropping patient
Z.H. from the monthly report was a recurring
problem. If the Agency
cannot deem a one-time key punch error as a
"technical failing," it is
difficult to fathom what would meet the
exception.
We further conclude that this is not poor administration
because,
ordinarily, notwithstanding such a key punch error, the State's
method
of going through a facility room by room would have discovered
this
patient's omission from the list. Here, the unique convergence of
two
events (the key punch error and the moving of the patient during
the
course of the review) caused a patient to be missed who would
ordinarily
have been reviewed. 3/
Absent formal policy guidance from HCFA specifying what constitutes
a
technical failing, we conclude that this is the singular type of
error
which can be reasonably considered a "technical failing" within
the
State's control. Thus, we find that the State has met the
technical
failings exception and no disallowance should be imposed for
the
Hillhaven facility.
Conclusion
We reverse the disallowance of $28,144.14.
_____________________________ Judith
A.
Ballard
_____________________________ Cecilia
Sparks
Ford
_____________________________ Norval D.
(John)
Settle Presiding Board Member
1. The facts here are undisputed except for the
State's
reconstruction of how the key punch error occurred which it supported
by
its records and conversations with persons involved. HCFA
characterized
this reconstruction as speculation but provided no evidence
to
contradict the State's version, which we find to be logical in light
of
the facts which are known.
2. From the legislative history we know only that
the "technical
failings" exception would cover the situation where the State
had
conducted reviews in most but not all facilities by the close of
the
showing quarter, but completed the remaining reviews within
"several
weeks." See 44 Fed. Reg. 56336.
3. The record also shows that the facility became
aware of the
problem with the computer list as early as August 8, 1985 when
patient
Z.H.'s claim for June services was denied. The record shows
that the
State was diligent in that as soon as it was made aware of the error
on
September 10, 1985, the error was rectified on the computer by
September
13, 1985.