DEPARTMENTAL GRANT APPEALS BOARD
Department of Health and Human Services
SUBJECT: New York State Department of
Social Services
Docket No. 87-10
Decision No. 838
DATE: February 17, 1987
DECISION
The New York State Department of Social Services (State) appealed
the
disallowance of $48,539 in federal financial participation by the
Health
Care Financing Administration (HCFA) 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 June 30, 1986, on Medicaid funds withheld from providers
or
collected "from providers, from third party health insurers,
and
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 raised by the State 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 $33,679, 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 $14,860 in dispute, the State admitted that
this
appeal did not present any material issues of fact which
distinguished
it from the appeals considered by the Board in Decision Nos.
588 and
721. The State accordingly requested a summary decision in this
appeal
based upon those two decisions and their records. State's
January 14,
1987 letter to the Board. HCFA raised no objection to the
issuance of a
summary decision. HCFA's February 10, 1987 letter to the
Board.
We therefore sustain the disallowance in the reduced amount of
$14,860,
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 Member