The Administrative Law Judge (ALJ) issued a decision dated October 17, 2003, and an amended decision dated March 2, 2004. The appellant has asked the Medicare Appeals Council to review this action. We find good cause to extend the time for filing. ⁽¹⁾ The Council grants the request for review because there is an error of law. See 20 C.F.R. �� 404.967 and 404.970, incorporated by reference in 42 C.F.R. � 405.724.

We have considered the record before the ALJ and the appellant's further submissions dated April 5, 2004, and May 4, 2004. We deny the request for oral argument, finding the voluminous briefing throughout this case sufficient to reach a decision.

This case concerns whether the appellant billed for inpatient hospitalizations covered by Medicare Part A Hospital Insurance when it should have instead billed for outpatient services covered by Medicare Part B Supplemental Medical Insurance. The chain of events that led up to this decision began on April 23, 1998, when the intermediary requested the files for a sample of 20 beneficiaries whose inpatient hospitalizations were initially paid by the intermediary between January 13, 1993, and February 26, 1997. Exh. 4. The intermediary apparently reviewed these claims, and concluded that many services were incorrectly billed. Rather than notifying the appellant of an overpayment, the intermediary instead referred these claims to the Office of the Inspector General (OIG) of the United States Department of Health and Human Services for consideration under the authorities for which that office had jurisdiction. ⁽²⁾ The OIG apparently initially informed the appellant that it was overpaid about $2,390,000 for 347 claims with dates of service from 1992 through 1998. ⁽³⁾ This prompted the appellant to initiate its own examination, which indicated the appellant was overpaid no more than $741,386. See Exhs. 6, 8, and 11. The OIG then requested from the appellant the hospital records for 209 beneficiaries whose inpatient claims were paid between January 1, 1992, and September 30, 1998. After receipt of these records, the OIG engaged the services of the New Jersey Peer Review Organization (PRO) to review a sample of 48 cases with admissions between July 1992, and June 2, 1998. Exh. 21 at 126 - 133. Based on that review, the OIG informed the appellant that it was overpaid about $1,179,000. The appellant and the OIG then engaged in lengthy negotiations over a period of years regarding any possible overpayment. The end result was that the OIG did not collect any overpayment or pursue litigation. Instead, the OIG returned the matter to the intermediary for further administrative action.

On February 25, 2002, the intermediary began a new post-payment review and requested the records for 205 beneficiaries who were hospitalized between February 6, 1996, and August 7, 1998. ⁽⁴⁾ Exh. 15, at 5. Only 31 of these 205 beneficiaries had been included in the OIG's previous request for records. Exh. 21 at 9 - 10, and 156 - 157. On June 24, 2002, the intermediary issued a determination that the appellant was overpaid $1,769,620.96.

The intermediary found that no payment was due for 183 of the beneficiaries because they should not have been admitted as inpatients. Exh 17. The intermediary stated in the determination that:

All claims were denied in their entirety, as is the usual procedure for claims that have been incorrectly billed as inpatient admissions. Note, however, that some degree of covered services were provided in all cases but compensation is not made to account for these services, again in accordance with usual procedures. ⁽⁵⁾

The intermediary later issued a revised determination on July 23, 2002, to correct an administrative error. The revised overpayment total was $1,757,626.76, for 182 beneficiaries. Exh. 18. Following several rounds of letters between the appellant and intermediary, the appellant requested an ALJ hearing on January 3, 2003, with respect to 169 beneficiaries. Exhs. 21 through 29.

Before the ALJ, the appellant conceded that no inpatient services were required or rendered for 137 of these beneficiaries. Appellant asserted, however, that 32 beneficiaries were correctly admitted for inpatient services. The ALJ found that all of the admissions were for outpatient services. The ALJ further found that no payment was due for outpatient services because no further billing was permissible. As to reopening, the ALJ concluded that all claims at issue were properly reopened in 1998 within four years of the date of the initial determination because of new and material evidence, or in the alternative, because the intermediary could have reopened for fraud or similar fault. ALJ Dec. at 9. Finally, the ALJ found that the appellant was not entitled to limitation on liability under section 1879 of the Act or waiver of recovery under section 1870 of the Act.

The appellant requested review only of two legal issues. The first issue is the proper date of reopening under 42 C.F.R. � 405.750(b). The second issue is whether a hospital is entitled to payment for outpatient services if the intermediary denies the claim for inpatient services. Under authority of 20 C.F.R. � 404.976(a), we limit our review to these two issues. We affirm and incorporate herein by reference the ALJ's decision finding that the inpatient services billed are not covered, and that the appellant is not entitled to limitation on liability under section 1879 of the Act, or waiver of recovery under section 1870 of the Act. As set forth below, we find in the appellant's favor with respect to the two issues raised on appeal.

The cases now before us arose directly out of a February 25, 2002, request for medical records on 205 cases with admission dates between February 6, 1996, and August 7, 1998. Exh. 15. The intermediary issued a revised determination on these cases on June 24, 2002. Exh. 17. The ALJ concluded that the cases were reopened at an unspecified date in 1998, when the intermediary began a post-payment investigation of 20 different cases paid between January 13, 1993, and February 26, 1997. ⁽⁶⁾ Exh. 4. We find the ALJ erred in concluding that the reopening of the cases at issue occurred in 1998. We find instead that these cases were reopened and revised in the notice dated June 24, 2002.

Since the inception of the Medicare program, the Medicare Part A regulations on reopening have incorporated the Social Security regulations in 20 C.F.R. part 404, subpart J, except to the extent that specific provisions on reopening are contained in 42 C.F.R. part 405, subpart G. See 42 C.F.R. � 405.701(c). The regulations at 42 C.F.R. � 405.750(b) provide that an otherwise final initial determination may be reopened within four years of the date of notice of the initial determination for good cause. As pertinent herein, 20 C.F.R. � 404.989(a)(1) provides that good cause exists if new and material evidence is furnished.

Medicare Intermediary Manual section 3799.7 in effect from November 1989 through September 2003, ⁽⁷⁾ states that the decision to conduct a sample study of claims does not necessarily constitute a reopening of all determinations in the population from which the sample is drawn. However, if the results disclose evidence of an overpayment, there would then be new and material evidence to use as grounds for reopening. A peer review (PRO) recommendation which questions a previous determination constitutes a basis for reopening within four years only if the recommendation is based on new and material evidence. The determination is reopened as of the date that the intermediary decides to accept the recommendation, rather than as of the date of an action by the peer review group.

The regulations further provide that a determination may be reopened after the applicable four year time period has passed if an investigation began before expiration of that period and the investigation was diligently pursued to its conclusion. Diligent pursuit is presumed if the investigation is concluded within six months after it began. If the investigation was not diligently pursued, a determination will not be revised in an unfavorable manner. 20 C.F.R. � 404.991a. The notice of the revised determination will state the basis for the revised determination and the effect of the revision. 20 C.F.R. � 404.992. ⁽⁸⁾

In this case, the intermediary's 1998 actions did not lead to any reopened and revised determination of noncoverage and overpayment for the 20 cases it reviewed. Instead, the intermediary referred the matter to the OIG. The OIG ultimately asked the PRO to conduct a different sample of 48 cases. Based on PRO sample, the OIG did not collect any overpayment or pursue litigation. The intermediary did not accept the PRO recommendation of overpayment and conducted yet another different review of 205 admissions.

Thus, the PRO and OIG actions cannot serve as a reopening and revision of a Medicare claims payment determination. We also note, for the record, that the OIG does not have adjudicative responsibilities under the Medicare program. In addition, the June 24, 2002, reopened and revised overpayment determination arose out of a request for a different sample of claims in February 2002, than any previously considered. That determination was also more than six months after the 1998 actions. Thus, it does not reflect diligent pursuit of any action that was taken in 1998 to reopen any claims, as that term is defined in the regulations. ⁽⁹⁾ We therefore conclude that the 1998 request for records, and any subsequent actions by the PRO and OIG, do not, and cannot, serve to reopen the claims at issue.

The intermediary's February 25, 2002, request for records for 205 beneficiaries is the first action by an adjudicator that resulted in reopening and revising to an overpayment the initial claims determinations at issue. That request stated that records were being requested for the purpose of conducting a post-payment review of the billed services. The records submitted provided new and material evidence to reopen and revise the initial determinations on the claims at issue. Based on the review of the 205 claims, the intermediary then advised the appellant that the initial determinations for 182 claims were included in the reopened and revised determination of June 24, 2002, as corrected on July 23, 2002. ⁽¹⁰⁾ We accordingly find that the 182 claims were reopened and revised by the intermediary on June 24, 2002, and that the basis of the reopening was new and material evidence arising from the February 25, 2002, request for records. ⁽¹¹⁾

The ALJ found, in the alternative, that the intermediary could have reopened pursuant to 42 C.F.R. � 405.750(b)(3)(ii) under the unlimited time frames for fraud or similar fault. In fact, however, we find no evidence in the record of any contemporaneous documentation that the intermediary actually invoked this basis for reopening, or gave notice to the appellant that it was reopening and revising on the basis of fraud or similar fault.

Until 1977, the agency now known as the Centers for Medicare & Medicaid Services (CMS) was the Bureau of Health Insurance in the Social Security Administration (SSA). Both the CMS and the SSA were part of the Department of Health and Human Services until 1995, when the SSA became an independent agency. ⁽¹²⁾ As noted above, the Medicare regulations at 42 C.F.R. �� 405.701(c) and 405.750(b) have always expressly incorporated the Social Security regulations on reopening. In light of this history, the Social Security manual sections and policy concerning reopening and revision are entitled to weight as an interpretation of the governing regulations.

SSA Programs Operations Manual Systems (POMS) section GN 04001.050 states that in order to reopen a determination the agency must take some affirmative action in writing within the applicable time period which questions the correctness of the determination. If the agency finds that fraud or similar fault exists, the revised notice should specifically state that. The notice should also specify what evidence supports this finding. See POMS section GN 04020.010(D.)(3). The POMs further cautions that it is "incumbent on SSA adjudicators to make sure that when a case is reopened on the basis of fraud or similar fault, the folder is well documented. That is, we should not think, suppose, suspect, or speculate that fraud or similar fault exists; we should be able to prove it."

The Commissioner of Social Security also publishes precedent final opinions and orders, and statements of policy and interpretations as Social Security Rulings (SSR). By regulation, SSRs are binding on all components of the SSA, including ALJs. See 20 C.F.R. � 402.35(b)(1). As pertinent herein, the regulations on reopening for Title II of the Act (Social Security benefits) at 20 C.F.R. �� 404.987 - .993 are generally substantially the same as the regulations on reopening for Title XVI (Supplemental Security Income (SSI)) at 20 C.F.R. �� 404.1487 - .1493. In particular, the regulations at 20 C.F.R. � 404.988(c)(1) expressly refer to 20 C.F.R. � 416.1488(c) for the factors to be taken into account in determining fraud or similar fault. SSR 85-23, addresses the standards for Reopening Supplemental Security Income Determinations at any Time for Similar Fault. The Ruling states that an SSI recipient will be notified when a similar fault determination is made, and that the notice will describe the evidence used to arrive at a similar fault determination.

Under these authorities, the right to reopen and revise cases, although not unlimited, is highly discretionary with the intermediary. More specifically, a decision not to reopen a determination is not an initial determination which confers administrative appeals rights. See 20 C.F.R. � 404.903(l). Nor is a determination to reopen listed as an initial determination that may be appealed. 20 C.F.R. � 404.902. The responsibility for reopening and revising the initial determinations in this case lay solely with the intermediary. Of necessity, we and the ALJ must review the record to determine the actions the intermediary actually took, not actions that it could have taken but did not. We find no written documentation through June 24, 2002, that the intermediary advised the appellant that it was reopening and revising on the basis of fraud or similar fault.

In summary, we find that the intermediary reopened and revised the initial determinations on these claims on the basis of new and material evidence. We find no evidence that the intermediary specified at the time that its action was based on fraud or similar fault. We further find that the intermediary gave notice of the reopening and revision in the notice dated June 24, 2002. Accordingly, the purported reopening of any claims with a date of service more than four years prior to this date is of no effect, and is set aside. The appellant is overpaid only for claims with a date of service on or after June 24, 1998, four years prior to the date of notice of the reopening and revision.

The intermediary and ALJ found that the inpatient admissions billed were not medically reasonable and necessary, because the care could have been rendered on an outpatient basis. The appellant's request for review does not contest this issue. On review, the appellant instead seeks payment for outpatient services. The ALJ found that it was not permissible to offset, or "downcode," the Part A overpayment against any Part B payment that may have been due if the services had been initially billed as outpatient services. The ALJ found persuasive the testimony of Dr. Daniel Duvall, the intermediary medical director, that no such offset was permissible under the terms of Medicare Hospital Manual (HM) section 210 (MIM � 3101), and MIM section 3664. ⁽¹³⁾ The ALJ further accepted the testimony of Dr. Duvall that the appellant may not now submit a part B claim for these services, because a claim would be time-barred under 42 C.F.R. � 424.44.

Appellant asserts that offset is proper as provided in HM section 489, which is the same as MIM section 3709.1. Appellant further cites MIM section 3305.1 for the proposition that the original bill operates as a proper claim, even if there was a mistake, so long as it is clear or can be established that the provider was claiming reimbursement for the item or service. We find the appellant's position persuasive, and conclude that the interpretation of MIM section 3101 advanced by Dr. Duvall and the ALJ is inconsistent with the interpretation of the regulatory and statutory scheme set forth in the CMS manuals.

MIM section 3101, dated June 1983, introduced the concept of the hospital prospective payment system (PPS), which came into effect beginning with hospital cost reporting periods occurring on or after October 1, 1983. That section explains, in relevant part:

Under PPS, Medicare will pay a fixed amount for a case. That amount is determined by the Diagnosis Related Group (DRG) into which the case falls. This means that a given all or nothing Medicare payment will be made for a case, based on the DRG assigned, so long as the admission is medically necessary and appropriate. Furthermore, under PPS, if an appropriately admitted case results in an extraordinarily long stay (i.e., becomes a day outlier) or results in the expenditure of extraordinary resources (i.e., becomes a cost outlier) additional money, known as outlier payment, is added to the regular Medicare prospective payment amount for the particular DRG.

Therefore, in PPS hospitals, coverage restrictions continue but noncovered care can have only three effects: (1) lead to denial of an admission; (2) in appropriately admitted cases where a noncovered procedure was performed, result in payment of a different DRG (i.e., one which excludes payment for the noncovered procedure); or (3) in appropriately admitted cases that become day or cost outlier cases, lead to denial of some or all of an outlier payment. The following examples illustrate this principle. If care is noncovered because a patient does not need to be hospitalized, deny the admission and make no Part A (i.e., PPS) payment unless paid under waiver of liability. If a patient is appropriately hospitalized but receives (beyond routine services) only noncovered care (e.g., acupuncture), deny the admission. (Note: Do not deny an admission so long as inpatient hospital care was medically necessary and covered services required for the adequate treatment and/or diagnosis of the patient's illness were provided, even if noncovered care was also rendered. Under PPS, Medicare assumes that it is paying for only the covered care rendered whenever covered services needed to treat and/or diagnose the illness were in fact provided.) If a noncovered procedure is provided along with covered nonroutine care, a DRG change rather than an admission denial might occur. If noncovered procedures such as acupuncture are elevating costs into the cost outlier category or prolonging the patient's stay into day outlier status, outlier payment is denied in whole or in part.

Underlining in original. Italics added.

Dr. Duvall and the ALJ relied on the one sentence italicized above to support their conclusion that no Part B payment could be made for the items and services at issue. In the context of the entire discussion, however, it is clear that this language refers only to part A payments under PPS. Nothing in this language mandates a denial of Part B payment if no Part A payment is due.

In contrast, just a few short sections later in MIM section 3110, CMS has expressly stated that Part B payment may be made if

Part A payment is denied.

3110. MEDICAL AND OTHER HEALTH SERVICES FURNISHED TO INPATIENTS OF PARTICIPATING HOSPITALS.

Payment may be made under Part B for the following medical and other health services (i.e., when they are reasonable and necessary) when furnished by a participating hospital (either directly or under arrangements) to an inpatient of the hospital, but only if payment for these services cannot be made under Part A. In PPS hospitals, this means that Part B payment could be made for these services if:

- no Part A prospective payment is made at all for the hospital stay because of patient exhaustion of benefit days before admission,

- the admission was disapproved as not reasonable and necessary (and waiver of liability payment was not made),

- the day or days of the otherwise covered stay during which the services were provided were not reasonable and necessary (and no payment was made under waiver of liability),

- the patient was not otherwise eligible for or entitled to coverage under Part A (See � 3101.14 for Services Related to and Required as a Result of Services Which are Not Covered Under Medicare); or

- no Part A day outlier payment is made for one or more outlier days due to patient exhaustion of benefit days after admission but before the case's arrival at outlier status or because outlier days are otherwise not covered and waiver of liability payment is not made.

Part B payment may be made for the following medical and other health services furnished at any time during the stay if no Part A payment is made. However, if only day outlier payment is denied under Part A, Part B payment may be made for only the services furnished on the denied outlier days.

.... ⁽¹⁴⁾

- Diagnostic X-ray tests, diagnostic laboratory tests, and other diagnostic tests;

- X-ray, radium, and radioactive isotope therapy, including materials and services of technicians;

- Surgical dressings, and splints, casts, and other devices used for reduction of fractures and dislocations;

- Prosthetic devices (other than dental) which replace all or part of an internal body organ (including contiguous tissue), or all or part of the function of a permanently inoperative or malfunctioning internal body organ, including replacement or repairs of such devices;

- Leg, arm, back, and neck braces, trusses, and artificial legs, arms, and eyes including adjustments, repairs, and replacements required because of breakage, wear, loss, or a change in the patient's physical condition;

- Outpatient physical therapy, outpatient speech pathology services, and outpatient occupational therapy (see �� 3147ff); and

- Ambulance services.

....

In order to be covered under Part A or Part B, a hospital must furnish nonphysician services to its inpatients directly or under arrangements. A nonphysician service is one which does not meet the criteria defining physicians' services specifically provided for in regulation at 42 C.F.R. � 405.550(b). Services "incident to" physicians' services (except for the services of nurse anesthetists employed by anesthesiologists) are nonphysician services for purposes of this provision. This provision is applicable to all hospitals participating in Medicare, including those paid under alternative arrangements such as State cost control systems, and to emergency hospital services furnished by nonparticipating hospitals.

In all hospitals, every service provided to a hospital inpatient (other than the three discussed below) must be treated as an inpatient hospital service to be paid for under Part A, if Part A coverage is available for the stay and the beneficiary. This is the case since, as noted above, every hospital must provide directly or arrange for any nonphysician service rendered to its inpatients, and a hospital can be paid under Part B for a service provided in this manner only if Part A coverage does not exist.

This manual section clearly indicates that payment may be made for covered hospital services under Part B, if a Part A claim is denied for any one of several reasons.

Similar language permitting payment up to the limits of coverage appears in MIM section 3110:

If a patient received items or services in excess of, or more expensive than, those for which payment can be made, payment will be made only for the reasonable cost of the covered items or services or for only the appropriate prospective payment amount. This provision applies not only to inpatient services but to all hospital services under Parts A and B of the program.

An intermediary processes both Part A and Part B claims from providers. Section 1816 of the Social Security Act and the implementing regulations recognize that not all claims are "clean claims" that will be paid promptly as billed. The regulations at 42 C.F.R. � 421.100(a)(2), provide that:

The intermediary takes appropriate action to reject or adjust the claim if--

(i) The intermediary or the QIO determines that the services furnished or proposed to be furnished were not reasonable, not medically necessary, or not furnished in the most appropriate setting; or

(ii) The intermediary determines that the claim does not properly reflect the kind and amount of services furnished.

The MIM recognizes that additional action may be necessary by both the intermediary and provider to properly adjust, or offset, the amount due under Part B against a Part A overpayment.

3709.1 Offset of Overpayments Against Other Benefits Due.--

Benefits Payable Under Part B.--Where you determine that a Part A overpayment has been made to a provider on behalf of a beneficiary, ascertain whether the beneficiary is entitled to any Part B payment for the services in question. (See � 3110.) If it appears that Part B benefits are payable, arrange for billings under Part B. Use any Part B benefit as an offset against the Part A overpayment.

The Medicare Carrier Manual (MCM) also recognizes that although suppliers may sometimes bill for services that are not covered as billed, they are nonetheless entitled to the correct payment.

Section 12009.3 of the MCM is captioned "Claims Where There Is Evidence that Items or Services Were Not Furnished or Were Not Furnished as Billed." That section instructs carriers to deny or downcode payment, as appropriate.

Dr. Duvall and the ALJ reasoned that any Part B bill in these cases was time barred at this point, citing the following language in MIM section 3664: "If a provider fails to include a particular item or service on its initial bill, an adjustment bill(s) to include such an item(s) or service(s) is not permitted after the expiration of the time limitation for filing a claim."

Dr. Duvall and the ALJ erred, however, in not also giving effect to the next sentence in that paragraph, which states: "However, to the extent that an adjustment bill otherwise corrects or supplements information previously submitted on a timely claim about specified services or items furnished to a specified individual, it is subject to the rules governing administrative finality, rather than the time limitation for filing."

In this case, the provider submitted timely claims for items and services which were paid under Part A. These claims were submitted via form HCFA-1450, which is used by providers for all Part A and Part B claims. The claims itemized the items and services provided by revenue code (field locator (FL) 42), narrative description (FL 43), and charges (FL 47). Dr. Duvall correctly noted that Part B claims solicit somewhat different information about the item or service, such as the Health Care Common Procedural Coding System (HCPCS) code. Before the HCFA/CMS 1450 form was developed as the single billing mechanism for all provider claims, inpatient claims were submitted on a form SSA-1453, and outpatient claims were submitted on a form SSA-1483. See 20 C.F.R. � 422.510(b). MIM section 3305.12, captioned "Definition of a Claim for Payment," states that:

A provider has filed a claim for an item or service reimbursable on a cost basis if it submits to its intermediary an SSA billing form that includes the item or services. The fact that the item or service is shown on the wrong form (e.g., Part B ancillary services on an SSA 1453 rather than SSA-1483), or under the wrong item of the form, (e.g., a blood processing service under "blood") is immaterial if it is clear or can be established that the provider was claiming reimbursement for the item or service.

When the intermediary reopened the determinations on the initial claims at issue here, it had the same plenary authority to process and adjudicate each claim as it did when that claim was first presented and paid. The intermediary needed only supplementary information in order to process a Part B claim for the very same items and services identified with specificity on the original Part A claim. As specified in the MIM, the intermediary should have undertaken any necessary actions needed to process a claim under Part B rather than Part A, and thus offset any Part A overpayment. ⁽¹⁵⁾

The June 24, 2002, revised determination stated that "some degree of covered services were provided in all cases." Exh. 17. Dr. Duvall later stated that: "There is no issue surrounding the necessity of the service or the way in which the physician or facility provided it. Had these claims been appropriately ordered, performed and billed as outpatient, they would have been paid." Exh. 31. Dr. Duvall made the same point during the hearing. June 13, 2003, transcript at 109 - 110. CMS previously estimated the amount that the appellant would have been paid for each case if it had billed each claim on an outpatient basis. See Exh. 35. In this regard, we note that the intermediary has calculated that the appellant will receive more money in some cases under Part B, than it would under Part A. See, e.g., Exh. 35, beneficiary 180, July 17, 1998 admission (Part B payment of $8,522.04 would be due to offset a Part A overpayment of $5,587.66). We direct the intermediary to take any further actions necessary to calculate the amount of any Part B benefits due for the few claims with date of service on or after June 24, 1998. The intermediary shall offset these sums against the Part A overpayment.

DECISION

It is the decision of the Medicare Appeals Council that the intermediary properly reopened and revised the initial determinations on these claims on the basis of new and material evidence. The intermediary did not specify at the time that its action was based on fraud or similar fault. The intermediary gave notice of the reopening and revision in the notice dated June 24, 2002. The purported reopening of any claims with a date of service more than four years prior to this date is of no effect, and is set aside. The appellant is overpaid only for claims with a date of service on or after June 24, 1998, four years prior to the date of notice of the reopening and revision.

It is the further decision of the Medicare Appeals Council that the appellant is due no Part A inpatient payment for these services, but is due Part B payment for outpatient services rendered. The appellant is not entitled to limitation on liability under section 1879 of the Act, or waiver of recovery under section 1870 of the Act.

Date: March 14, 2005

Clausen J. Krzywicki
Administrative Appeals Judge

Cecilia Sparks Ford
Administrative Appeals Judge
and Chair, Departmental Appeals Board

1. Although the record is not clear on this point, the ALJ apparently issued an amended decision only because the appellant did not receive the original decision.

2. See Exh. 35. However, the record does not disclose the date or manner of the referral.

3. The OIG's internal records were not entered into evidence. We rely instead primarily on fragmentary notes from the intermediary in the file, on the appellant's summary of events in Exhibits 21 and 34, and on the intermediary's summary in Exhibit 35.

4. The intermediary did not document the record with the date of the initial determination to pay each of these claims. In the proceedings below the date of the hospitalization has been assumed to be the date of the initial determination for reopening purposes, in lieu of ascertaining the exact date of the initial determination. We will also use this assumption in this decision.

5. The determination does not reference any authority for these "usual procedures."

6. The MFU (Medicare Fraud Unit) Investigation Case Form indicates that the investigation began on April 23, 1998. Exh. 32. The dates of service and initial determinations in some of the claims now at issue occurred after April 23, 1998. Clearly, the intermediary must first make an initial determination before that determination can be subsequently reopened and revised.

7. On October 1, 2003, CMS moved to an Internet based manual system. See http://www.cms.hhs.gov/manuals.

8. The Medicare Intermediary Manual (MIM) section 3799.14 similarly states that the notice will give the reasons for the revision, including applicable law, a summary of the additional evidence and rationale, and the specific revision.

9. Contrary to the regulations, the ALJ agreed with Dr. Duvall that there is no time limit on how long a case could "stay open" after it was reopened. ALJ Dec. at 8.

10. The amended revised determination dated July 23, 2002 corrected an error in the June 24, 2002, letter, in order to indicate that only 182 determinations were in fact reopened and revised. Exh. 17. Thus, the intermediary did not reopen and revise the initial determinations for 23 (of the 205) claims, because it concluded they were correctly decided.

11. As noted above, the appellant requested a hearing only with respect to 169 claims.

12. See http://www.cms.hhs.gov/about/history/whybalto.asp for a concise history.

13. The ALJ, intermediary, and appellant have variously referred to the Medicare Hospital Manual, the Medicare Intermediary Manual, and the Medicare Financial Management Manual. To the extent that similar provisions appear in more than one manual, for consistency we refer herein only to the Medicare Intermediary Manual (MIM).

14. UMDNJ is a PPS hospital. The redacted text pertains to non-PPS hospitals, but is of like effect:

In non-PPS hospitals, Part B payment may be made for the following covered services delivered on any day for which Part A payment is denied (i.e., because of patient exhaustion of benefit days, patient or services were not at the hospital level of care, patient was not otherwise eligible or entitled to payment under Part A).

15. We note also that the OIG was apparently willing to offset the Part A overpayment by any Part B payment that would have been due. See Exh. 21 at 126 - 130.