Disallowance of FFP to State Because State Fails to Follow Correct

3042 - Disallowance of FFP to State Because State Fails to Follow Correct Certification Procedures for Medicaid Providers (Rev. 1, 05-21-04) This process applies when a SA or SMA has failed to properly apply Federal requirements or procedures in surveying or certifying a facility or in entering into a provider agreement, as described in 42 CFR 442.30 and 431.610(g). The “look behind” regulation (42 CFR 442.30) referred to as “old look behind” provides a mechanism for testing the validity of a provider agreement for FFP purposes. If certification procedures are not followed, CMS does not accept the provider agreement between the State and the facility as evidence that the facility was properly certified. Whether a facility actually meets participation requirements is not the issue. The issue is that the State failed to adhere to Federal requirements in certifying and issuing an agreement to a facility. Therefore, CMS will discontinue FFP to the State for the facility, even though payments were made prior to the RO determination. When the RO invokes this aspect of “look behind,” it advises the SA and the SMA that the provider agreement cannot be accepted, and, for FFP purposes, the agreement is void from its inception. If the SA failed to adhere to certification procedures, the RO requests additional information. The RO advises the agency that in the absence of a satisfactory response, the provider agreement is invalid for FFP purposes that will result in a disallowance of FFP for the period in question. The RO requests an explanation or evidence that would contravene a finding that Federal requirements were not followed. The nature of the issue (i.e., a defect in the survey versus a defect in the issuance of the provider agreement) determines whether the RO notifies the SA or the SMA. Whichever agency is notified, the RO sends copies of all correspondence to both agencies. If unable to correct the difficulty through contact with the State, the RO contacts the Division of Medicaid regarding the problem. The RO recommends the disallowance of FFP for the State under the current provider agreement. A sample memorandum to the Medicaid Division is in Exhibit 186.