DEPARTMENTAL APPEALS BOARD
Department of Health and Human Services
SUBJECT: New York State
DATE: June 5, 1990
Department of Social Services Docket No. 90-102
Decision No. 1164
DECISION
The New York State Department of Social Services (State) appealed the
decision of the Health Care Financing Administration (HCFA) disallowing
$5,181,819 claimed under title XIX of the Social Security Act (Act) for
the quarter ended December 31, 1989. 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 not claimed pursuant to the approved State
plan. 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 costs in question here were claimed under the
authority of proposed State plan amendments on which HCFA has not yet
taken final action.
On appeal, the State requested that the Board issue a summary decision
in this case based on New York State Dept. of Social Services, DAB No.
947 (1988). That decision involved a disallowance of similar costs
incurred during prior quarters. Both parties had agreed that since the
allowability of the costs depended upon the approval of amendments to
the State plan which had been disapproved by HCFA, the Board was
required to uphold the disallowance. While upholding the disallowance,
the Board noted that HCFA had agreed to pay the costs if the proposed
plan amendments under which the costs were claimed were subsequently
approved by HCFA.
HCFA agreed that a decision upholding the disallowance was appropriate
in this case as well. Letter from Healy to Settle dated 5/30/90.
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 bar any obligation by HCFA to pay the costs.
_____________________________ Donald F. Garrett
_____________________________ Alexander G. Teitz
______________________________ Norval D. (John)
Settle Presiding Board