SUBJECT:

Vermillion Behavioral Health Center,

Petitioner,

Health Care Financing Administration

I. Background

By letter dated March 11, 1999, HCFA certified Petitioner to participate in the partial hospitalization program as a CMHC, effective March 10, 1999. Petitioner disagreed with HCFA's determination, contending that certification should have been granted at an earlier date and requested a hearing. This case was assigned to me for a hearing and decision.

HCFA submitted a motion for summary judgment with five accompanying exhibits (HCFA Exs. 1 - 5). Petitioner submitted a motion for summary judgment accompanied by five exhibits (P. Exs. 1 - 5). HCFA submitted a brief in response accompanied by four exhibits, marked as HCFA Exs. 1 - 4. I have remarked these additional exhibits as HCFA Exs. 6 - 9, to comply with Civil Remedies Procedures. Petitioner submitted a brief in response accompanied by two exhibits, marked as P. Exs. 1 - 2. I have remarked these additional two exhibits as P. Exs. 6 and 7, to comply with Civil Remedies Procedures. HCFA submitted a statement in reply to Petitioner's response. Neither party objected to any of the exhibits submitted. I admit into evidence HCFA Exs. 1 - 9 and P. Exs. 1 - 7. I base my decision in this case on the law and the parties' submissions.

II. Applicable law and regulations

"Partial hospitalization services" are services which are described at section 1861(ff) of the Social Security Act (Act) and which are reimbursed by the Medicare program. "Partial hospitalization services" consist of services that are prescribed by a physician and provided, pursuant to specified statutory criteria, and which include: individual and group therapy with physicians and psychologists; occupational therapy requiring the skills of a qualified occupational therapist; services of social workers, trained psychiatric nurses, and other staff trained to work with psychiatric patients; drugs and biologicals furnished for therapeutic purposes; individualized activity therapies; family counseling; patient training and education; diagnostic services; and such other services as the Secretary of this Department may determine to be reasonable and necessary. Act, sections 1861(ff)(1); 1861(ff)(2)(A) - (I). The Medicare program will reimburse for partial hospitalization services that are provided by either a certified hospital or a CMHC. See Act, section 1861(ff)(3)(A).

In order to be certified to participate in Medicare, a CMHC must apply to participate in Medicare. The CMHC must be inspected by or on behalf of HCFA and HCFA must certify that the CMHC satisfies applicable participation requirements.

is the date on which HCFA accepts a signed agreement which assures that the CMHC . . . meets all federal requirements.

42 C.F.R. � 489.13(a)(2)(i).

III. Issue, findings of fact and conclusions of law

A. Issue

The issue in this case is whether HCFA properly determined to certify Petitioner's participation as a CMHC, effective March 10, 1999.

B. Findings of fact and conclusions of law

I make findings of fact and conclusions of law (Findings) to support my decision. I set forth each Finding below, as a separate heading. I discuss each Finding in detail.

1. Summary disposition is appropriate in this case.

A threshold question in this case is whether summary disposition is appropriate. Summary disposition is appropriate where either: 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 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.

I have looked closely at the parties' arguments to decide whether there are disputed issues of material fact. There are no disputed material facts in this case. Essentially, the parties are relying on the same facts and are making legal arguments based on those facts.

2. I do not have the authority to hear and decide the affirmative arguments made by Petitioner that were a basis for its Motion for Summary Judgment.

Petitioner makes two affirmative arguments as a basis for its Motion for Summary Judgment. These are that: (1) the regulation at section 489.13(a)(2)(i) is invalid because it was not published via a notice and comment rulemaking consistent with the requirements of the Administrative Procedure Act; and (2) HCFA is estopped from denying certification to Petitioner because Petitioner believed that certification would be approved based on the date the attestation statement was signed.⁽¹⁾

I do not have the authority to hear and decide these arguments. My authority in cases involving HCFA is limited to hearing and deciding those issues which the Secretary of this Department has delegated authority to me to hear and decide. That authority is specified at 42 C.F.R. �� 498.3; 498.5. The regulations authorize me to hear and decide only cases involving specified initial determinations by HCFA. I may decide whether HCFA's interpretation of a regulation is correct or incorrect. However, I lack the authority to decide whether HCFA or the Secretary published an interpretation of law in violation of the Administrative Procedure Act. Lauderhill Community Mental Health Center, DAB CR652 (2000). Nor do I have the authority to hear and decide claims of estoppel, an equitable argument, against HCFA or the Secretary. GranCare Home Health Service & Hospice, DAB CR464 (1997); The Rivers Health Care Resources, Inc., DAB CR446 (1996); SRA, Inc. D/B/A St. Mary Parish Dialysis Center, DAB CR341 (1994); T.L.C. Mental Health Center, DAB CR636 (1999); Therapeutic Rehabilitation Centers, Inc., DAB CR 531 (1998). Therefore, Petitioner's motion for summary judgment is denied.

3. HCFA properly determined to certify Petitioner's participation as a CMHC, effective March 10, 1999.

Petitioner is a CMHC providing partial hospitalization services for Medicare beneficiaries in Kaplan, Louisiana. On May 11, 1998, Petitioner submitted an attestation statement as part of a completed application packet to HCFA. Subsequently, two on-site surveys were conducted to confirm that Petitioner was complying with the federal requirements for participation. By letter dated March 11, 1999, HCFA notified Petitioner that it had been approved to participate in the partial hospitalization program as a CMHC, effective March 10, 1999. P. Ex. 1. By letter dated May 10, 1999, Petitioner requested reconsideration of the date of certification. HCFA denied this request for reconsideration.

Petitioner disagreed with the reconsidered determination insofar as it established an effective date of participation of March 10, 1999. Petitioner contended that it should have been certified to participate in Medicare effective May 11, 1998, the date of its initial application (which included the attestation statement) to participate in Medicare. Petitioner requested a hearing before an administrative law judge to contest the effective date of its participation in Medicare.

Petitioner argues that genuine issues of material fact exist which preclude summary judgment of this appeal for HCFA. Petitioner claims that the date that HCFA "accepted" Petitioner's signed agreement has not yet been determined. Petitioner argues, alternatively, that HCFA "accepted" Petitioner signed agreement on May 11, 1998, the date the attestation statement was signed as part of the completed application packet, via its agent the Louisiana Department of Health and Hospitals; on August 6, 1998, the date that Petitioner was first surveyed by Trispan (the fiscal intermediary), which determined that Petitioner met the federal participation requirements; on September 30, 1998, the date the state agency recommended to HCFA that Petitioner be approved as a CMHC; or, on February 18, 1999, the date the second survey was conducted by HCFA personnel, which determined that Petitioner met the federal participation requirements.

However, the plain meaning of section 42 C.F.R. � 489.13(a)(2)(i) is that the effective date of the certification of a CMHC is the date that HCFA accepts an entity's signed agreement. This regulation does not identify the signed agreement as a provider agreement. However, 42 C.F.R. � 489.13(a)(2)(i) is a regulation under Part 489 which is entitled "Provider Agreements and Supplier Approval" concerning matters related to provider agreements. In the context of Part 489, it is clear that the signed agreement referred to in 42 C.F.R. � 489.13(a)(2)(i) is a provider agreement.

The dates that Petitioner proposes as dates on which HCFA accepted a signed agreement are either the date of an application containing an attestation agreement, a date a survey was completed, or the date that a recommendation was made to HCFA from the state agency. None of the dates proposed by Petitioner as dates when HCFA accepted the signed agreement are dates of an acceptance of a signed provider agreement.

In addition, it is HCFA that must do the "accepting" under section 42 C.F.R. � 489.13(a)(2)(i). The filing of an a completed application does not amount to acceptance. The date a survey is completed, even if the provider is found to have met all federal requirements, is not the date of acceptance by HCFA. Neither is the date a recommendation is made to HCFA from a state agency a date of acceptance by HCFA. After a survey is completed and a recommendation is made to HCFA, HCFA makes an independent determination to either grant or deny the application for CMHC status. This determination is not made by Trispan, the fiscal intermediary (see P. Ex. 4) nor by the state agency (see P. Ex. 7), and Petitioner was so informed. In this case, that independent determination to grant the application for CMHC status was not made until March 10, 1999.

The regulation appears to vest discretion in HCFA to decide the date on which a CMHC qualifies to participate. HCFA may determine to certify a CMHC to participate at a date which is as late as the date that HCFA completes its evaluation of a CMHC's application even if the evidence of compliance that is submitted to HCFA by the CMHC demonstrates compliance at an earlier date than the evaluation date. Midtown Mental Health Center, DAB CR689 (2000).

4. I do not have the authority to hear and decide the argument made by Petitioner that HCFA actions were arbitrary and capricious.

Petitioner contends that its compliance was verified twice because two surveys were conducted, once by Tripan, a fiscal intermediary, and once by HCFA. Petitioner claims that this delay, by HCFA, in processing its application is arbitrary and capricious.

I do not have authority to decide if HCFA's determination to not certify a provider until a certain date is arbitrary and capricious. Lauderhill Community Mental Health Center, DAB CR652 (2000). Additionally, HCFA argues that its actions were reasonable and not arbitrary and capricious.⁽²⁾ I do not address HCFA's argument about reasonableness since I do not have authority to decide whether HCFA's determination to not certify a provider until a certain date is arbitrary and capricious.

Alfonso J. Montano

Administrative Law Judge

1. Petitioner stated that it relied on the fact that it would be certified on the date of the signed attestation statement based on HCFA's alleged past practice of backdating the effective date of certification to the date of the signed attestation statement and based on section 2252(E) of the State Operation Manuel (SOM). Even if I were authorized to hear claims of estoppel, I note that I am bound by the regulations, regardless of HCFA's past practices. I also note that the SOM merely offers guidelines to HCFA and that HCFA is not bound by the SOM.

2. During the time that Petitioner's application was being processed, there was an internal policy change that required HCFA personnel, rather than fiscal intermediary personnel, to conduct all the on-site visits to a CMHC. The reason for this policy change was to better insure that CMHCs that were being certified provided the necessary core services. The delay in processing Petitioner's application was due to the voluminous number of CMHC applications pending and the lack of HCFA personnel necessary to conduct on-site visits. HCFA Ex. 6.