SUBJECT:

Community HOspital of Long Beach,

Petitioner,

Centers for Medicare & Medicaid

DECISION

On July 29, 2002, the Centers for Medicare & Medicaid Services (CMS) filed a motion for summary judgment (CMS Motion), and on September 4, 2002, Community Hospital of Long Beach (Petitioner) filed its response in opposition to CMS's motion (P. Resp.). After carefully reviewing both parties' arguments, I find that the effective date for Petitioner's certification as a Medicare provider was correctly determined by CMS to be July 23, 2001, and I grant summary judgment to CMS.

I. Background

Upon Petitioner's application to participate as a provider of hospital services in the Medicare program, the California Department of Health Services (CDHS) performed an initial Medicare certification survey of Petitioner, which was completed on July 13, 2001. The survey results identified several standard-level deficiencies. Petitioner received the statement of deficiencies from CDHS on July 23, 2001, completed a plan of correction that same day and forwarded it to CMS. CMS received and accepted the plan of correction on July 23, 2001. By letter dated August 27, 2001 (Notice), CMS notified Petitioner that it was certified as a Medicare provider effective July 23, 2001. Petitioner then requested reconsideration of the effective date of the provider agreement. CMS notified Petitioner by letter dated December 11, 2001, that it was denying Petitioner's request for an earlier effective date, and that the effective date for Petitioner's provider certification remained July 23, 2001. Petitioner filed a timely appeal by letter dated February 12, 2002. Petitioner does not challenge the validity of the survey findings, rather, it appeals CMS's determination of the July 23, 2001 certification date. Petitioner argues that it should have been certified as of June 27, 2001, the day after it was issued a State of California license to provide hospital services and the same day it requested Medicare certification.

II. Issues, findings of fact and conclusion of law

A. The issues for my consideration are whether:

1. Summary judgement is appropriate in this case;

2. CMS accurately determined the effective date of Petitioner's Medicare certification to be July 23, 2001; and,

3. I have authority to adjudicate Petitioner's claim of entitlement to Medicare reimbursement for emergency services allegedly furnished prior to the July 23, 2001 certification date.

B. Findings of fact and conclusions of law

I make findings of fact and conclusions of law (Findings) to support my decision in this case. I set forth those Findings in bold and discuss them below.

1. Summary judgment is appropriate in this case.

Summary disposition is appropriate where there are no disputed issues of material fact and the only questions that must be decided involve application of law to the undisputed facts or, where the moving party must prevail as a matter of law even if all disputed facts are resolved in favor of the party against whom the motion is made. Although the Federal Rules of Civil Procedure are not strictly applicable to Departmental Appeal Board (DAB) proceedings, it is generally accepted that a party opposing summary disposition must allege facts and proffer evidence which would refute the facts relied upon by the moving party. See, e.g., Fed. R. Civ. P. 56(c). CMS filed a motion for summary disposition in this case indicating that there were no material facts at issue. Petitioner opposed. After reviewing the briefs in this case, I agree with CMS. No one is disputing what actually occurred in this case. The parties disagree on the legal import of the facts. Thus, summary disposition is appropriate.

2. CMS accurately determined the effective date of Petitioner's Medicare certification to be July 23, 2001.

a. Petitioner became eligible to participate in the Medicare program on July 23, 2001, when CMS received an acceptable plan of correction which established that Petitioner met all federal participation requirements.

The process by which a provider is certified to participate in Medicare is governed by regulations that are set forth at 42 C.F.R. Part 489. The regulations provide, with exceptions that are not relevant to this case, that the earliest date when a provider may be found to qualify for participation in Medicare is the date when a survey or surveys of that provider are completed which establish that the provider meets all federal participation requirements. The regulation governing the effective date of participation which applies to Petitioner as a provider of hospital services is codified at 42 C.F.R. � 489.13(b) and (c). This regulation specifies that if a provider meets all federal participation requirements on the date of the survey, then the Medicare provider agreement is effective on the date the survey is completed. 42 C.F.R. � 489.13(b). However, if the provider does not meet all federal participation requirements on the date of the survey then the effective date is the earlier of the following:

(i) The date on which the provider . . . meets all requirements.

(ii) The date on which a provider . . . is found to meet all conditions of participation or coverage, but has lower level deficiencies, and CMS or the State survey agency receives an acceptable plan of correction for the lower level deficiencies, or an approvable waiver request, or both. (The date of receipt is the effective date regardless of when CMS approves the plan of correction or the waiver request, or both.)

42 C.F.R. � 489.13(c)(2).

The regulatory scheme is that a provider must be inspected by or on behalf of CMS ⁽¹⁾ and CMS must certify that the provider satisfies applicable participation requirements. See, generally, 42 C.F.R. Part 489. The regulation plainly states that the earliest date that a provider may participate in Medicare is the date of completion of the initial certification survey, assuming that the provider satisfies all Medicare participation requirements as of that date, or the date which CMS receives an acceptable plan of correction.

Petitioner asserts that through no fault of its own, there was a delay in receiving the plan of correction. The facts recited by Petitioner are that on June 27, 2001, it was licensed by the Department of Health Services for the State of California to provide hospital services. On July 3, 2001, it opened its emergency room where Medicare and Medicaid beneficiaries were served. On July 9, 2001, it contacted CDHS and requested the scheduling of an expedited Medicare certification survey. P. Resp. at 2. Petitioner states that it was surveyed on July 13, 2001, with minor deficiencies noted which were corrected as of the date of the exit conference; and that at the exit conference it understood that the deficiency statement would be returned to it on July 16, 2001. However, due to a surveyor being on vacation, it was not until July 23, 2001 that Petitioner received the deficiency statement. On that same date Petitioner completed and returned the plan of correction. Thus, according to Petitioner, CDHS delayed sending Petitioner the deficiency statement until July 23, 2001, and Petitioner might have been certified at an earlier date than July 23, 2001 had it received the deficiency statement sooner. Petitioner further avers that the regulations permit CMS to provide for a certification date earlier than the date of completion of the certification survey and requests that it be certified on the date it requested certification, June 27, 2001.

The material facts of this case establish that it was not until July 23, 2001 that Petitioner completed, and CMS received, an acceptable plan of correction which confirmed that Petitioner complied with Medicare participation requirements for hospitals as stated at 42 C.F.R. Part 482. An on-site survey of Petitioner, made by CDHS on behalf of CMS, was completed on July 13, 2001, and addressed Petitioner's compliance with Medicare participation requirements. The results of the compliance survey showed that Petitioner did not meet all of the Medicare participation requirements. CDHS notified Petitioner of its lack of compliance and Petitioner then submitted a plan of correction on July 23, 2001, addressing the identified standard-level deficiencies.

Based upon the regulations as outlined in 42 C.F.R. � 489.13(c)(2), the earliest date when Petitioner could have been certified to participate in Medicare was the date when the on-site survey was completed of Petitioner's facility that established its compliance with all Medicare participation requirements at 42 C.F.R. Part 482. In this case though, the July 13, 2001 initial compliance survey of Petitioner revealed that it was not in compliance with all Medicare participation requirements.

b. A State agency's survey for state licensing is not determinative of, or equal to, a survey to certify a provider for Medicare participation.

Petitioner argues for an effective date earlier than July 23, 2001, on the ground that the very same State survey agency, here CDHS, who performed the on-site Medicare compliance survey of Petitioner's facility on July 23, 2001, had previously performed a state licensure survey on Petitioner's facility and found no deficiencies. Petitioner concludes that it met all the survey requirements during the state licensure survey, and thus, Petitioner argues that when CDHS performed an identical survey for Medicare participation, Petitioner was being "surveyed twice using the same criteria for certification." Petitioner argues further that it "should not have been subject to additional requirements on the second survey," and that it was in full compliance with all Medicare conditions of participation the day after being licensed to provide hospital services. Petitioner argues that the certification date should have been the date of its request for certification, June 27, 2001. P. Resp. at 4.

Petitioner is clearly mistaken in its assumption that a facility that meets state license requirements automatically meets all the federal requirements for Medicare participation.The appellate panel of the DAB has established that CMS cannot base Medicare certification on a state licensing survey or on the date a state license was issued. Arbor Hospital of Greater Indianapolis, DAB No. 1591 (1996). Under the regulations, CMS cannot grant Petitioner a Medicare provider agreement until, among other things, an on-site survey verified that Petitioner had finally achieved compliance with all the conditions of participation pertaining to hospitals. 42 C.F.R. � 489.13.

c. Petitioner does not qualify for the "Special rule" exception under 42 C.F.R. � 489.13 (d)(2) and (d)(1)(ii).

As authority for its position that it should have been certified at a date sooner than July 23, 2001, Petitioner cites to 42 C.F.R. � 489.13(d)(2) and (d)(1)(ii), stating that the "Special rule" identified in the regulation allows CMS to certify accredited providers at a date earlier than the completion of the certification survey. The regulation on which Petitioner relies provides:

If a provider or supplier meets the requirements of paragraphs (d)(1) and (d)(1)(i) or (d)(1)(ii) of [42 C.F.R. � 489.13], the effective date may be retroactive for up to one year to encompass dates on which the provider or supplier furnished, to a Medicare beneficiary, covered services for which it has not been paid.

42 C.F.R.� 489.13(d)(2)

I find Petitioner's reliance on the "Special rule" outlined in section 489.13(d)(2) of the regulations to be misplaced. Although Petitioner is correct that there are regulatory provisions which allow for an "accredited" provider to have the effective date of their Medicare provider agreement retroactive for up to one year; here, Petitioner has failed to establish that it met the regulatory requirements of 42 C.F.R. � 489.13, paragraphs (d)(1) and (d)(1)(i) or (d)(1)(ii) in order to qualify.

While section 489.13(d)(2) of the regulations permits a retroactive effective date of a provider agreement for some entities that are already accredited "by a national accrediting organization whose program had CMS approval at the time of accreditation survey and accreditation decision . . ." when they apply to participate, it does so only if there are no federal requirements that apply in addition to those included in the approved accreditation program, and, even then, the agreement may be retroactive only to the date on which participation was requested. See also 42 C.F.R. � 489.13(d)(1). The "General rule" set out in section 489.13(d)(1) of the regulations is that the effective date "depends on whether the provider . . . is subject to requirements in addition to those included in the accrediting organizations's approved program." Petitioner argues that the State agency that surveyed its facility for the state license to provide hospital services was the same agency that surveyed it for the Medicare initial compliance survey, and thus is a CMS-recognized accrediting body. Petitioner provided no support for a finding that CDHS is a "national accrediting organization" such as that contemplated by 42 C.F.R. � 489.13(d)(1).

The fact that state authorities issued a license to Petitioner's facility has no bearing on the effectuation, timing, or results of a Medicare compliance survey, or on the evaluation of any such survey by CMS. Arbor Hospital of Greater Indianapolis, DAB No. 1591 (1996). That Petitioner had a license from the State of California to provide hospital services is not a valid substitute or alternative to a Medicare compliance survey; CMS must verify compliance, it cannot base Medicare certification on a state licensing survey or on the date a state license was issued. GranCare Home Health Service & Hospice, DAB CR464 (1997); Wells House, DAB CR714, at 9 (2002); see, generally, Central Suffolk Hospital v. Shalala, 841 F. Supp. 492 (E.D.N.Y. 1994). The July 13, 2001 survey results indicated that prior to July 23, 2001, Petitioner did not meet the federal participation requirements necessary for CMS to certify Petitioner as a Medicare provider as evidenced by the deficiencies noted in the statement of deficiencies to which Petitioner does not dispute.

d. I have no authority, under equitable principles, to require CMS to reimburse Petitioner for all or a portion of the services it furnished to Medicare beneficiaries prior to the effective date of its certification, July 23, 2001.

My authority in cases involving CMS is limited to hearing and deciding those issues which the Secretary of Health and Human Services (Secretary) has delegated authority to me to hear and decide. My authority is limited to initial determinations that are described in 42 C.F.R. �� 498.3 and 498.5. My authority to hear and decide a case involving CMS does not extend to awarding money damages based on principles of estoppel. I may decide whether CMS's interpretation of a regulation is correct or incorrect. However, I lack the authority to hear and decide claims based on equitable argument, against CMS or the Secretary.

Petitioner makes an estoppel argument asserting that, because it was legally obligated to provide services to Medicare beneficiaries prior to July 23, 2001, the effective date of its provider agreement, it should be reimbursed for those services. Petitioner's arguments are without merit. Estoppel simply does not lie against the government in these types of cases. Office of Personnel Management (OPM) v. Richmond, 496 U.S. 414 (1990).

Other DAB cases are in accord with the principle that an ALJ has no authority to consider appeals based on equitable estoppel or, stated another way, no authority to require CMS to make payments to a supplier or provider for services provided prior to the effective date of the supplier's or provider's Medicare participation agreement. Tenet HealthSystem Philadelphia, Inc., DAB CR773 (2000); Opthalmology Ltd. Eye Surgery, DAB CR658 (2000); New Life Plus Center, CMHC, DAB CR700 (2000). Even when CMS was found to have contributed to the delay in a certification process, an ALJ does not have the authority to give an effective date to a Medicare participation agreement prior to a State survey agency finding that the facility was in compliance with all applicable federal requirements. GranCare Home Health Service & Hospice, DAB CR464 (1997).

As previously discussed, the regulations at 42 C.F.R. � 498.13 do not generally permit a provider to be certified at a date that is earlier than the date of completion of the initial survey of that provider; and if the provider does not meet all participation requirements as of that date, then the date in which CMS or the State survey agency receives an acceptable plan of correction. CMS cannot set an effective date for Medicare participation prior to the time a hospital meets all of the applicable federal requirements. 42 C.F.R. � 489.13. In this case, Petitioner did not meet the conditions of participation required for provider certification until July 23, 2001, when CMS received an acceptable plan of correction. As such, I have no authority to direct CMS to take an action that is not permitted under applicable regulations. Therapeutic Rehabilitation Centers, Inc., DAB CR531, at 3 (1998), citing Renal Services of El Centro, DAB CR482, at 7 (1997).

3. I do have authority to adjudicate initial determinations of entitlement to Medicare reimbursement for emergency services allegedly furnished to Medicare beneficiaries by non-participating hospitals.

Under certain conditions, hospitals that do not have an agreement to participate in the Medicare program may be reimbursed for the provision of emergency services to Medicare patients. 42 C.F.R. � 482.2. The Secretary's regulations at 42 C.F.R. � 482.2 state that:

(a) The services of an institution that does not have an agreement to participate in the Medicare program may, nevertheless, be reimbursed under the program if-

(1) The services are emergency services; and

(2) The institution meets the requirement of section 1861(e)(1) through (5) and (7) of the Act. Rules applicable to emergency services furnished by nonparticipating hospitals are set forth in subpart G of part 424 . . . .

42 C.F.R. � 482.2(a) (emphasis added).

The regulations do provide an opportunity for a non-participating hospital such as Petitioner was prior to July 23, 2001, to be reimbursed for the provision of emergency care services provided to Medicare beneficiaries. ⁽³⁾ The regulations codified at 42 C.F.R. Part 424, Subpart G, set forth the procedures and criteria used to determine whether Medicare will pay for emergency services furnished by a non-participating hospital.

The regulations at 42 C.F.R. � 424.103 outline the conditions for payment for emergency services. For purposes of this analysis we focus on section 424.103(a)(2) which states that one of the conditions is that "[t]he hospital has in effect an election to claim payment for all emergency services furnished in a calendar year in accordance with � 424.104." 42 C.F.R. � 424.103(a)(2) (emphasis added). Additionally, section 424.104 outlines the requirements for a hospital to elect to claim payment for emergency services furnished during a calendar year:

An election statement must be filed on a form designated by CMS, signed by an authorized official of the hospital, and either received by CMS, or postmarked, before the close of the calendar year of election.

42 C.F.R. � 424.104(a)(3)(b) (emphasis added).

The regulations are clear on their face as to the procedures a hospital must follow in order to claim payment for emergency services. However, Petitioner has failed to provide any evidence to substantiate that it had filed an election statement with CMS before the close of the 2001 calendar year for which it is now seeking retroactive reimbursement. I do not find the regulation to be ambiguous. If the Secretary intended there to be an exception to the rule of filing an election statement, then the Secretary would have indicated such in his regulations. There is no such exception. Additionally, the regulations are clear regarding a hospital's appeal process if it is dissatisfied with CMS's determination that it does not qualify for emergency services reimbursement:

Any hospital dissatisfied with a determination that it does not qualify to claim reimbursement shall be entitled to appeal the determination as provided in part 498 . . . .

42 C.F.R. � 424.104(a)(3)(d).

A non-participating hospital that is dissatisfied with an initial determination received by CMS does have a right to a hearing. Moreover, under 42 C.F.R. � 498.56(a)(2), an ALJ can add issues to a proceeding even if CMS has not made an initial determination on the issue. However, in this case, Petitioner has not provided any evidence for my review, which indicates that it filed an election statement in accordance with 42 C.F.R. � 424.104. To defeat CMS's motion for summary judgment, Petitioner needed to provide sufficient evidence in its response to CMS's motion to pose a dispute of material fact as to whether it fits within the provisions of 42 C.F.R. � 424, Subpart G, to allow reimbursement for emergency services for non-participating hospitals. Thus, in light of the failure of Petitioner to submit such an initial showing, I will not add a new issue. I find that, even if Petitioner were in a situation appropriate for reimbursement for emergency services, which Petitioner has not shown, Petitioner did not file an election statement as required by 42 C.F.R. � 424, Subpart G.

The uncontroverted facts of this case are that Petitioner was surveyed on July 13, 2001; standard-level deficiencies were found; and an acceptable plan of correction was received by CMS on July 23, 2001. Consequently, by law, the earliest available certification date for Petitioner was July 23, 2001. Under these circumstances, an ALJ does not have the authority to order an earlier effective certification date.

III. Conclusion

I have considered the parties' arguments, supporting exhibits, and the applicable law. For the reasons discussed earlier, I enter summary judgment sustaining the determination of CMS to certify Petitioner to participate in the Medicare program effective July 23, 2001.

Anne E. Blair

Administrative Law Judge

1. CMS has delegated to State survey agencies the authority to conduct surveys to determine if providers meet the Medicare conditions of participation. The statutory and regulatory authority which allows CMS to delegate survey responsibility can be found at section 1864(a) of the Social Security Act (Act) and 42 C.F.R. �� 488.10 and 489.10(d).

2. Petitioner was found not to be in compliance with patient restraint requirements as outlined in 42 C.F.R. � 482.13(f)(3)(ii)(D). CMS claims that these were standard-level deficiencies, and Petitioner does not dispute this. CMS Motion at 1; P. Resp. at 2.

3. Whether and the extent to which Petitioner provided services to Medicare beneficiaries in this case has not been proven.