State of Colorado Failure To Satisfy the Utilization Control Provisions of the Medicaid Program

The Secretary of Health, Education, and Welfare (HEW) requested an opinion as to whether under the circumstances presented must the payments made to the State of Colorado be reduced as a result of the State's failure to satisfy the utilization control provisions of the Medicaid program set forth by Social Security legislation. It is the requirement for an annual review and evaluation which gives rise to the instant problem. In order to satisfy the statutes an annual on site evaluation by the State is required. Even though the State may have complied with the other requirements, the Secretary has no authority to grant it a waiver of reductions since the State's compliance with evaluation clauses is not validated. Therefore, on the basis of the statute and the legislative history, the Secretary must make all the statuatory reductions if the State did not complete all the required reviews during the calendar year. The State does not qualify for the waiver of previously addressed reductions if it was not in compliance by the calendar year end. The Secretary's question is answered in the negative.