DEPARTMENTAL GRANT APPEALS BOARD
Department of Health and Human Services
SUBJECT: New York State Dept. of Social Services
Docket No. 87-219
Decision No. 947
DATE: April 13, 1988
DECISION
The New York State Department of Social Services (State) appealed
the
decision of the Health Care Financing Administration (HCFA)
disallowing
$5,509,923 claimed under title XIX of the Social Security Act
(Act) for
the period January 1, 1986 through March 31, 1987. (After the
State
appealed, HCFA reduced the disallowance by $963,089 to
$4,546,834.) The
disallowed costs, which were included in the per diem
rates for
hospitals, were incurred for supplemental malpractice
insurance
purchased by the hospitals for their affiliated physicians and
dentists.
The disallowance was taken on the ground that the costs were
claimed
under proposed State plan amendments which were disapproved by
HCFA.
Section 1903(a)(1) of the Act requires that costs be claimed under
an
approved state plan in order to be eligible for reimbursement
under
title XIX.
The State contended on appeal that the costs were allowable under
the
proposed plan amendments. It noted that it had requested pursuant
to 45
C.F.R. Part 213 that HCFA reconsider its decision disapproving
the
proposed plan amendments, and requested that the Board stay
proceedings
in this appeal pending a final decision by HCFA. Both
parties
subsequently agreed that since the allowability of the costs
depended
upon the approval of the plan amendments, it was appropriate for
the
Board to issue a summary decision upholding the disallowance.
HCFA
stated that were it to later approve the plan amendments, it
would
"certify restitution to the state of any funds previously withheld
or
denied as a result of its initial disapproval." Letter from
Dusaniwskyj
to Settle dated January 19, 1988; Letter from Pardo to Settle
dated
February 2, 1988.
Conclusion
Accordingly, we conclude that the disallowance was properly taken on
the
ground that the costs were not claimed pursuant to an approved
State
plan, and sustain the disallowance. If the proposed plan
amendments
under which the costs were claimed are subsequently approved by
HCFA,
this decision would not preclude HCFA from carrying out its agreement
to
pay the costs.
_____________________ Donald F. Garrett
_____________________ Alexander G. Teitz
______________________ Norval D.
(John)
Settle Presiding Board Member