October 10, 1979
Subject:
Social Services; Medicaid; Mental Health; Hospitals
Requested By:
Dr. Sarah T. Morrow, Secretary North Carolina Department of Human Resources
Question:
Under the 1979 Appropriations Act, may mental and specialty hospitals in North Carolina be reimbursed by the Medicaid program for an unlimited number of administrative days?
Conclusion:
Yes.
Under Section 23 of the 1979 Appropriations Act for the State of North Carolina (Chapter 838 of the 1979 Session Laws), the Medicaid program will pay on behalf of its recipients allowable costs for all hospital in-patient care rendered, subject to the exception that all payment for administrative days shall be limited to a maximum of three days for any period of hospitalization. It is our understanding that administrative days are days during which alternative placement of a patient is planned and effected and for which there is no medical necessity for hospital in-patient care. In essence, these days constitute a grace period for the orderly placement of a Medicaid patient into a lesser level of care or home setting. The apparent intent of the General Assembly in enacting the provision relating to administrative days was to provide a financial disincentive to allowing Medicaid patients to linger in hospitals when the medical necessity for hospitalization had expired. By imposing the aforementioned limitation on Medicaid payment for administrative days, it appears that it was the expectation of the General Assembly that hospitals would act in their own best financial interest by providing for the timely and appropriate discharge of Medicaid patients who no longer require hospitalization.
On the other hand, the Medicaid payment basis for mental and specialty hospital services under Section 23 of the 1979 Appropriations Act is not subject to any limitation on allowable costs. Hence, the indisputable answer to the question posed is that under the 1979 Appropriations Act for the State of North Carolina mental and specialty hospitals may be reimbursed by the Medicaid program for an unlimited number of administrative days. The absence of any limitation on Medicaid payment for administrative days with respect to mental and specialty hospitals is probably founded on the rather substantial difficulty in making alternative placement arrangements for mentally and physically handicapped patients.
It should be noted that this Opinion addresses a narrow question relating exclusively to the State Appropriations Act. We have neither been asked for nor offer our opinion on whether the difference in payment basis between regular hospital in-patient care and mental and specialty hospital care may conflict with federal law or regulations or constitutional mandates.
Rufus L. Edmisten Attorney General
William Woodward Webb Special Deputy Attorney General