Need To Establish Medicaid Standards for Intermediate Care Facilities for the Mentally Retarded

HRD-82-57: Published: Apr 16, 1982. Publicly Released: Apr 16, 1982.

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GAO reviewed the growth of small, community-based, intermediate care facilities for the mentally retarded (ICF/MR), primarily in New York State.

In certain circumstances, states can temporarily waive compliance with federal ICF/MR standards and can certify for Medicaid reimbursement facilities which do not meet all of the standards. With few exceptions, ICF/MR having 15 clients or fewer initially certified by New York State had major deficiencies, and more than half still had major deficiencies when recertified. The Health Care Financing Administration (HCFA) is attempting to recover about $7 million of federal Medicaid funds which it believes it inappropriately provided to those facilities since their initial certification. Medicaid payments for services in ICF/MR are authorized if the facility's primary purpose is to provide health or rehabilitation services for mentally retarded individuals, the facility meets HCFA standards, and individuals in the facility are receiving active treatment. Regulations allow termination of provider agreements based on recurring deficiencies. However, the regulations do not define when a facility's capacity to give adequate care is seriously limited or provide adequate guidance as to when a state should deny certification because of a lack of active treatment. Appropriate guidelines would ensure that clients receive adequate care, Medicaid funds are appropriately spent, and regional offices have guidelines to review state programs.

Recommendation for Executive Action

  1. Status: Closed - Implemented

    Comments: Proposed revisions to HCFA ICF/MR standards were published in the Federal Register on March 4, 1986. The Secretary of Health and Human Services forwarded the final regulations on April 1, 1988, to the Office of Management and Budget.

    Recommendation: The Secretary of Health and Human Services should direct the Administrator, HCFA, to establish which ICF/MR standards cannot be waived and must be met before a state can certify a facility as eligible for Medicaid reimbursement.

    Agency Affected: Department of Health and Human Services


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