Decision No. CR658 Department of Health and Human Services DEPARTMENTAL APPEALS BOARD Civil Remedies Division |
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IN THE CASE OF | |||||
Ophthalmology Ltd. Eye Surgery |
DATE: Apr. 5, 2000 | ||||
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Health Care Financing Administration | Docket No.C-99-642 | ||||
DECISION | |||||
I decide that the Health Care Financing Administration
(HCFA) properly certified Petitioner, Ophthalmology Ltd. Eye Surgery Center,
as being qualified to participate in the Medicare program effective March
18, 1999. Background Petitioner is an ambulatory surgery center (ASC) which
is located in Sioux Falls, South Dakota. It applied to participate in
the Medicare program. On February 24, 1999, Petitioner was surveyed for
compliance with Medicare participation requirements by the South Dakota
Department of Health (South Dakota State survey agency). On April 7, 1999,
HCFA notified Petitioner that it had been certified to participate in
Medicare, effective March 18, 1999. Petitioner was dissatisfied with HCFA's
determination in that Petitioner contended that it should have been certified
to participate in Medicare effective February 24, 1999, the date of the
compliance survey. Petitioner requested HCFA to reconsider its determination.
On April 28, 1999, HCFA notified Petitioner that it was affirming its
initial determination. Petitioner then requested a hearing before an administrative
law judge. The case originally was assigned to Administrative Law
Judge Mimi Hwang Leahy for a hearing and a decision. The parties represented
to Judge Leahy that the case could be heard and decided based on their
written submissions. Judge Leahy established a schedule for the parties
to submit proposed exhibits and briefs. The parties complied with this
schedule. The case then was reassigned to me. HCFA submitted 15 proposed exhibits (HCFA Ex. 1 - HCFA Ex. 15) to support its contentions and arguments. Petitioner submitted nine proposed exhibits (P. Ex. 1 - P. Ex. 9). I admit into evidence HCFA Ex. 1 - HCFA Ex. 15 and P. Ex. 1 - P. Ex. 9.
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FINDINGS OF FACT AND CONCLUSIONS OF LAW | |||||
Issue The issue in this case is whether HCFA properly certified
Petitioner to participate in the Medicare program effective March 18,
1999. The parties have offered arguments which address this issue. HCFA argues that, when a prospective provider applies to participate in Medicare, the first date that HCFA may certify the prospective provider as being qualified to participate is the date of a compliance survey at which it is found to comply with all applicable participation requirements. 42 C.F.R. � 489.13(b). If a prospective provider fails to meet all participation requirements at the initial survey, then, according to HCFA, the earliest subsequent date that it may certify the prospective provider to participate is the date on which it submits to HCFA an acceptable plan of correction which explains how it will correct the deficiencies that were identified at the initial survey. 42 C.F.R. � 489.13(c)(2)(ii). HCFA contends that, in order to be certified for participation,
Petitioner was required to comply with the participation requirements
that govern an ASC and which are set forth at 42 C.F.R. Part 416. These
requirements include the requirement that an ASC comply with the provisions
of the Life Safety Code of the National Fire Protection Association (Life
Safety Code) that are applicable to an ASC. 42 C.F.R. �� 416.44(b)(1);
489.13(b). HCFA contends that Petitioner was found, at the initial compliance
survey, not to meet all Life Safety Code requirements. HCFA argues that,
consequently, it could not certify Petitioner to participate as of the
date of that survey. HCFA avers that Petitioner submitted an acceptable
plan of correction on March 18, 1999. HCFA certified Petitioner on that
date which, according to HCFA, is the earliest date that it could have
certified Petitioner to participate. Petitioner does not disagree with HCFA's general statement
of the law. Petitioner argues that, notwithstanding its failure to comply
with all the provisions of the Life Safety Code, HCFA should have certified
it to participate in Medicare effective February 24, 1999, the date on
which Petitioner was first surveyed for compliance with federal participation
requirements. See HCFA Ex. 4. Petitioner argues that HCFA is authorized
to waive the requirement that an ASC comply with all provisions of the
Life Safety Code. 42 C.F.R. � 416.44(b)(2). According to Petitioner, HCFA
should waive such requirements where Life Safety Code deficiencies are
minor and technical and where the deficiencies cause no significant risk
of harm to patients. Petitioner asserts that HCFA's failure to waive the
Life Safety Code compliance requirements in this case is an abuse of discretion
by HCFA. Petitioner characterizes the fire prevention and safety problems
that were identified at the February 24, 1999 survey as being "minor"
and "technical" in nature. Moreover, according to Petitioner, these problems
were situated in parts of the building in which Petitioner is located
that are outside of the premises that are operated and controlled by Petitioner.
Petitioner contends that the Life Safety Code deficiencies that were identified
on February 24, 1999 had no direct impact on the health and safety of
Petitioner's patients. Additionally, Petitioner asserts that it was, in fact,
in full compliance with Life Safety Code requirements as of February 24,
1999. Therefore, according to Petitioner, the findings of deficiency are
incorrect and Petitioner ought to have been certified as a Medicare participant
effective February 24, 1999. 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 each Finding below as
a separately numbered heading. I discuss each Finding in detail. 1. I do not have the authority
to compel HCFA Petitioner relies on 42 C.F.R. � 416.44(b)(2) as support for its assertion that HCFA should be directed to waive the requirement that Petitioner be in compliance with all the provisions of the Life Safety Code as a prerequisite to being certified to participate in Medicare. This section provides that:
Petitioner argues that, in this case, the Life Safety
Code was applied rigidly with resulting unreasonable hardship on Petitioner.
It argues that a waiver for the period between February 24, 1999 and March
18, 1999 would not have adversely affected the health and safety of Petitioner's
patients. Therefore, according to Petitioner, HCFA abused its discretion
by not waiving the requirement that Petitioner comply with the Life Safety
Code. I have no authority to hear and decide an issue where
no right to a hearing exists as to that issue. I do not have the authority
to decide whether HCFA ought to have waived the requirement that Petitioner
comply with every aspect of the Life Safety Code. HCFA's authority to
grant or deny a waiver pursuant to 42 C.F.R. � 416.44(b)(2) is discretionary
authority. HCFA's alleged failure to exercise its discretion to waive
a participation requirement is not an act which gives a prospective provider
a right to a hearing. The right of a prospective provider to a hearing in a
case involving a determination by HCFA as to certification is set forth
at 42 C.F.R. � 498.5(a)(2). That section provides that a prospective provider
that is dissatisfied with a reconsidered determination by HCFA is entitled
to a hearing. The only permissible subject matter for a reconsidered determination
in a case involving denial of certification to a prospective provider
is whether the prospective provider qualifies as a provider. 42 C.F.R.
� 498.5(b)(1). I have the authority in this case to hear and decide the
question of whether Petitioner satisfied participation requirements for
certification as an ASC during the period which ran from February 24,
1999 until March 18, 1999. HCFA determined that Petitioner qualified as
a provider effective March 18, 1999. Petitioner contends that HCFA should
have determined that Petitioner qualified as a provider effective February
24, 1999. HCFA's determination that Petitioner qualified as a provider
as of March 18, 1999 is, effectively, a determination that Petitioner
did not qualify as a provider prior to that date.
But, HCFA's decision to waive or not to waive the requirement
that an ASC satisfy all of the Life Safety Code requirements is separate
from, and not a part of, its determination whether the ASC satisfies all
participation requirements. A decision to grant a waiver from a compliance
requirement is not a determination that a prospective provider satisfies
participation requirements. Rather, it is a decision by HCFA to allow
a provider to participate despite HCFA's conclusion that in some minor
respect the provider does not satisfy all participation requirements.
Furthermore, the evidence does not establish that the
criteria for granting a waiver were present in this case. HCFA may waive
the requirement that an ASC meet all Life Safety Code requirements only
where a State survey agency recommends that the requirements be waived.
42 C.F.R. � 416.44(b)(2). Petitioner has not established that the South
Dakota State survey agency made such a recommendation to HCFA in this
case. 2. Petitioner did not prove
that it satisfied all of the Life Safety The surveyors who conducted the February 24, 1999 survey found that Petitioner failed in two respects to satisfy Life Safety Code requirements. The deficiencies are as follows:
HCFA Ex. 6 at 1 - 2. Petitioner does not deny the accuracy of the findings
that corridor doors were louvered and not smoke tight or that there was
no sprinkler at the top of the exit shaft. Nor does Petitioner deny that
these findings establish that the building in which Petitioner is located
did not, as of February 24, 1999, contain all of the fire prevention features
that are described in the Life Safety Code. Petitioner asserts, however,
that it was in compliance with the Life Safety Code for several reasons.
First, Petitioner argues that HCFA may not find that Life
Safety Code deficiencies were present - despite the unchallenged accuracy
of the surveyors' findings - because the building in which Petitioner
is located was maintained to the satisfaction of local fire safety officials.
Petitioner contends that, under the unique circumstances that pertain
to it, local fire safety officials have the authority to determine whether
the building in which it is located complies with the Life Safety Code.
Petitioner asserts that a determination by the local fire inspector that
the building met fire safety requirements divested HCFA of the authority
to determine Life Safety Code compliance. As authority for this argument Petitioner cites to Section 12-6.1.6.5 of the Life Safety Code. HCFA Ex. 11. This section states that:
When new ambulatory health care centers are located in
existing buildings, the authority having jurisdiction may accept construction
systems of lesser fire resistance than required . . . if it can be demonstrated
to its satisfaction that in cases of fire, prompt evacuation of the center
can be made or that the exposing occupancies and materials of construction
present no threat of fire penetration from such occupancy into the ambulatory
health care center or collapse of the structure.
Petitioner argues that the term "authority having jurisdiction" is defined in the Life Safety Code to mean the "organization, office, or individual responsible for 'approving' equipment, an installation, or a procedure." P. Ex. 7. Petitioner asserts that the term is explained further at Section A-3-2 of the Life Safety Code as follows:
Id. From this, Petitioner reasons that the "authority having
jurisdiction" in this case is not HCFA, but is in fact, the local fire
inspector. Petitioner asserts that the local fire inspector inspected
the building in which Petitioner is located and found it to be in compliance
with fire and safety requirements. See P. Ex. 6. Therefore, according
to Petitioner, the building in which Petitioner is located - and Petitioner
- were complying with Life Safety Code requirements as of February 24,
1999. I disagree with Petitioner's premise that HCFA is required
to defer to the judgment of local officials as to whether Petitioner is
in compliance with the Life Safety Code. Under 42 C.F.R. � 416.44(b) it
is HCFA - and not local officials - which must ultimately determine
whether an ASC is complying with the requirements of the Life Safety Code.
The provisions of the Life Safety Code that Petitioner
cites in support of its argument do not suggest that HCFA is divested
of its responsibility to make such a determination in this case. HCFA
has the responsibility for approving participation in Medicare of an ASC.
HCFA is an "approving official" for purposes of approving Petitioner's
request to participate. The fact that a local fire inspector may also
be an approving official for purposes of determining whether an entity,
including an ASC complies with local or even State laws does not divest
HCFA of its responsibility as an "approving official" for purposes of
determining whether an ASC satisfies participation requirements.
Additionally, there is no evidence that the local fire
inspector ever functioned as an "approving official" to determine Petitioner's
compliance with the Life Safety Code. Petitioner has not submitted anything
which shows that the local fire inspector inspected Petitioner's operations
and concluded that Petitioner operated as an ASC in compliance with Life
Safety Code requirements. The evidence that Petitioner submitted shows only that
the local fire inspector inspected the building in which Petitioner subsequently
became located, at some point prior to Petitioner becoming established
in that building, and found the structure to be in compliance with local
fire safety requirements. Petitioner was established after the
date of the local fire safety inspection on which Petitioner relies as
evidence of its asserted compliance with the Life Safety Code. The building
in which Petitioner is located was inspected for compliance with fire
safety requirements on June 1 - 3, 1998. P. Ex. 6. Petitioner did not
establish its facility in the building until sometime after June 3, 1998.
That is made evident by the fact that Petitioner submitted plans for its
facility to the South Dakota Department of Health on June 29, 1998. HCFA
Ex. 14. Petitioner's second argument is that it cannot be held
responsible for deficiencies which are not under its direct control. Petitioner
asserts that the Life Safety Code deficiencies that were identified at
the February 24, 1999 survey of Petitioner were found in parts of the
building in which Petitioner is located over which Petitioner exercises
no control. I am not persuaded by this argument. HCFA's responsibility
is to assure that providers operate in a manner which protects the safety
of Medicare beneficiaries. HCFA may not have the authority to direct the
owner of a structure to bring that structure into compliance with the
requirements of the Life Safety Code. But, HCFA may condition a provider's
participation in Medicare on that provider being located in a structure
that complies with Life Safety Code requirements whether or not the provider
is in control of the entire premises of that structure. A prospective
provider may not locate itself in a noncompliant building and then assert
that it is entitled to be certified to participate on the grounds that
the building's deficiencies are located in areas that are outside of the
prospective provider's control. Petitioner's third argument is that the South Dakota State
survey agency surveyors misread the Life Safety Code to require incorrectly
that all of the corridors in a building have fire resistant doors. Petitioner
asserts that the Life Safety Code should be read to require that only
those corridors which actually are used as exit corridors have fire
resistant doors. From this, Petitioner contends that the louvered doors
that were identified at the February 24, 1999 survey were not in violation
of the Life Safety Code inasmuch as the corridor in which the doors were
located is only one of three possible exit corridors from Petitioner's
facility. As support for this argument, Petitioner relies on Section
26-3.6.1 of the Life Safety Code which states that: "Where access to exits
is limited to corridors, such corridors hall be separated from use areas
by partitions having a fire resistance rating of at least 1 hour." HCFA
Ex. 10. Petitioner reads Section 26-3.6.1 to mean that, where access to
an exit is limited to a particular corridor, then that corridor
must be separated from use areas by doors which meet Life Safety Code
requirements pertaining to fire resistance. Under Petitioner's analysis
other corridors would be exempt from Life Safety Code requirements.
Petitioner misreads the requirements of the Life Safety
Code. Section 26-3.6.1 does not suggest that a corridor is exempt from
Life Safety Code requirements if alternate corridors may be used as exits.
I read the phrase "where access is limited to corridors" to mean, literally,
that where the only access to a facility consists of corridors, then all
of those corridors must have doors which meet fire resistance standards.
The section plainly is intended to distinguish the situation where a facility
opens directly to the outside from the situation where a facility opens
to interior corridors. It does not suggest that, where access is limited
to several corridors some, but not all of them, must have fire resistant
doors. Moreover, failure to comply with the fire resistance requirements
of Section 26-3.6.1 was not a basis for the Life Safety Code citation
in the report of the February 24, 1999 survey. The surveyors issued a
citation under Sections 12-3.6.3 and 13-3.6.3 of the Life Safety Code.
These sections address the need to make corridor doors smoke
resistant. A citation was issued because louvered doors would allow the
passage of smoke into corridors. Smoke may penetrate throughout a building
from a fire source. The fact that other corridors may not have had louvered
doors in them would not necessarily provide protection to patients who
are exposed to smoke which emanates from behind a louvered door in another
corridor. If patients were to attempt to exit the building through corridors
which did not have louvered doors they could be affected by smoke which
passed through louvered doors in another corridor.
Petitioner's final argument is that the louvered corridor
doors and the absent sprinkler affected parts of the building in which
Petitioner is located which are remote from Petitioner's operation. Petitioner
asserts that the Life Safety Code was not intended to apply to deficiencies
that are so remote from an ASC's operation as Petitioner contends these
to be. This argument rests on unsupported assertions. The record
of this case does not show that the deficiencies that were identified
by the South Dakota State survey agency surveyors were so remote from
Petitioner's operation as to have no significant potential effect on Petitioner
and its patients in the event of a fire. Nor has Petitioner identified
language in the Life Safety Code which may be read reasonably as saying
that the deficiencies that were identified in this case are so trivial
as to be inconsequential. 3. I am without authority
to decide that HCFA is estopped from Petitioner does not expressly make an estoppel argument.
However, many of its allegations come close to being an assertion that,
under principals of estoppel, HCFA should be directed to certify Petitioner
to participate in Medicare effective February 24, 1999. In effect, Petitioner
is arguing that the South Dakota State survey agency surveyors told its
representatives at the end of the February 24, 1999 survey that Petitioner
was in compliance with all participation requirements. Petitioner contends
that it relied to its detriment on these representations by beginning
to treat patients immediately thereafter. The issue of whether principles of estoppel apply to HCFA is one that I have addressed in several cases. In GranCare Home Health Service & Hospice, DAB CR464 (1997), I held that the regulations which govern provider certification do not authorize me to disregard or supersede their specific requirements based on principles of estoppel. I reached similar holdings in The Rivers HealthCare Resources, Inc., DAB CR446 (1996) and in SRA Inc., D/B/A St. Mary Parish Dialysis Center, DAB CR341 (1994). Petitioner has not offered anything here which would cause me to reconsider these holdings.
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JUDGE | |||||
Steven T. Kessel
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