Department of Health and Human Services DEPARTMENTAL APPEALS BOARD Civil Remedies Division |
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IN THE CASE OF | |
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DATE: January 28, 2002 |
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Centers for Medicare & Medicaid
Services
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Docket No. C-00-684 Decision No. CR861 |
DECISION | |
DECISION I find that Petitioner, Green Oaks Hospital's, Medicare
provider agreement was not effective until the date of the State survey
on March 17, 2000. Therefore, I deny Petitioner's motion for summary judgment
and grant the Centers for Medicare & Medicaid Services' (CMS, formerly
know as the Health Care Financing Administration) motion for summary judgment. I. Background Petitioner timely requested a hearing. The case was assigned
to me from Administrative Law Judge Jill S. Clifton. Prior to the case's
transfer to me, Judge Clifton determined, and the parties agreed, that
the issues raised in this appeal were suitable for disposition on motions
for summary judgment, and she directed the parties to submit their motions
and supporting briefs and exhibits according to a schedule set out in
her Order of November 28, 2000. Petitioner filed its Motion for Summary Judgment and its
Memorandum of Points and Authorities on December 15, 2000. The Memorandum
contained an addendum of seven exhibits, Petitioner's Exhibits (P. Exs.)
1-7, which I here admit into the record of these proceedings. CMS responded
on March 27, 2001, in its pleading entitled, "Respondent's
Response to Petitioner's Motion for Summary Judgment and Motion for Summary
Judgment for Respondent Thereon." This pleading included two attached
exhibits, CMS Exs. 1-2, which I here admit into the record. Green Oaks
replied to CMS's pleading on April 17, 2001 with its "Reply to HCFA's
[CMS's] Response to Green Oaks Hospital's Motion for Summary Judgment
and Motion for Summary Judgment for HCFA [CMS] Thereon." This pleading
also contained, as an attachment designated Appendix A, copies of pages
4-7 of its December 15, 2000 pleading. Because of the potential for confusion
in referring to the pleadings by their very lengthy titles, I shall hereafter
refer to Petitioner's December 15, 2000 pleading as Petitioner's Motion,
and to CMS's March 27, 2001 pleading as CMS's Motion. I shall describe
Petitioner's April 17, 2001 pleading as Petitioner's Reply. No material facts remain in dispute, and the case is indeed
suitable for disposition on what amounts to the parties' cross-motions
for summary judgment now before me. I shall set out the controlling material
facts in detail presently. The legal question raised by those settled
facts, and the question dispositive of this appeal, is this: does the
"Special Rule" set out in 42 C.F.R. � 489.13(d)(2) allow Petitioner, a
free-standing psychiatric hospital, to claim the date of its accreditation
as the effective date of its Medicare provider agreement, or do the terms
of 42 C.F.R. � 489.13(d)(1)(i) require that such a facility's Medicare
provider agreement is not effective until it is both accredited and the
subject of a satisfactory State survey? From on or about December 1, 1996 until late in 1999,
Petitioner was operated as a subprovider psychiatric facility under the
Medicare certification of Medical City Dallas Hospital, a Medicare-certified,
general acute-care hospital located in Dallas, Texas. Petitioner had operated
independently as a psychiatric hospital for slightly over 12 years prior
to its consolidation with Medical City Dallas. On November 1, 1999, Petitioner
applied to participate again in the Medicare program as a free-standing
psychiatric hospital. While it had operated as a subprovider of Medical City
Dallas, Petitioner had been accredited by the Joint Committee on Accreditation
of Healthcare Organizations (JCAHO). If a hospital is accredited by JCAHO,
it is, in most cases, deemed to meet standards for participation in the
Medicare program, and, accordingly, Petitioner made timely application
for JCAHO accreditation. The JCAHO accreditation process was soon completed,
and JCAHO awarded certification to Petitioner, effective January 1, 2000. In its most basic terms, it is Petitioner's position here
that its eligibility as a Medicare provider should be established as of
that date, and that it should be entitled to payment for services provided
to Medicare patients beginning on January 1, 2000. CMS did not, and does not, regard the JCAHO accreditation
process as the final step in Petitioner's qualification process. Although
the exact date remains uncertain, it is clear that by mid-February, 2000,
HCFA had determined that a compliance survey, conducted on its behalf
and on its authority by the Texas Department of Health (TDH), would be
required before Petitioner's application could be approved. Petitioner
has asserted that it urged CMS and TDH to expedite the survey process
because it was at the time already caring for over 100 Medicare patients
and feared that any period of ineligibility would result in serious financial
losses to the facility. TDH completed its survey on March 17, 2000, and
found Petitioner in compliance with all Medicare requirements. On April
14, 2000, CMS announced that Petitioner was entitled to Medicare provider
status effective with the successful survey completion, March 17, 2000. II. Applicable law, findings of fact and conclusions
of law, and discussion I make findings of fact and conclusions of law (Findings) to support my decision in this case. I set forth those Findings in italics and discuss them below.
This 10-week period of ineligibility is the practical
manifestation of the legal question I have set out earlier, and my resolution
of that legal question has the practical effect of denying not only Petitioner's
Motion, but its right to receive payment for services it may have provided
to Medicare patients between January 1, 2000 and March 16, 2000. According
to Petitioner's estimate, the total "lost" reimbursement may be approximately
$400,000. Regrettable though this loss may be, the particular standards
demanded of a free-standing psychiatric hospital required that Petitioner
not only receive JCAHO accreditation, but that it pass the TDH survey
as well. CMS's determination of March 17, 2000 as the effective date of
Petitioner's agreement awarded that status at the earliest date for which
Petitioner was eligible, and was correct. In general, a hospital or other provider of medical services can meet the requirements of participation in the Medicare program upon accreditation by a national accrediting organization. 42 C.F.R. � 489.13(d)(1). Neither of the parties to this appeal challenge the status of JCAHO as a national accrediting organization empowered to confer accredited status. But the same regulation that establishes JCAHO as an authorized accrediting organization in general adds an explicit caveat. 42 C.F.R. � 488.5(a) cautions that JCAHO accreditation is "deemed to meet all of the Medicare conditions for participation of hospitals, except--(emphasis added):
42 C.F.R. � 488.5(a)(2). Petitioner is a psychiatric hospital, and its separation
from Medical City Dallas means that it is a free-standing institution
whose Medicare provider agreement must be assessed on its own terms. Petitioner
concedes as much in its memorandum, and does not contest what the regulations
plainly say: that, as operated at all relevant times, it was within the
definition of a "psychiatric hospital" set out in 42 U.S.C. � 1395x(f)
and 42 C.F.R. � 482.60, and was therefore subject to the "additional special
staffing and medical records requirements" the details of which appear
in 42 C.F.R. �� 482.61 and 482.62. Although the parties generally agree that the statutory provisions and regulatory schemes just set out apply to Petitioner's operation, it is over their interaction as applied that the parties disagree, and the 10-week period of non-eligibility arises. That disagreement is in turn generated by the parties' differing interpretations of yet another regulation, 42 C.F.R. � 489.13(d)(1) and (d)(2). Set out in full, the regulation states:
42 C.F.R. � 489.13(d). Petitioner's interpretation of the regulation is summarized
simply and clearly in its submission:
Petitioner's Motion at 10. CMS's view of the regulatory scheme is quite different,
and it is summarized at Page 11 of its motion:
CMS Motion at 11. I believe that this latter interpretation is the correct
one, since it is supported both by explicit statements of intent when
the regulation containing the "Special Rule" was promulgated and by the
notion, urged vigorously by both sides in this dispute, that the instant
regulatory scheme should be viewed and analyzed as a whole. When the language of the "Special Rule" was promulgated,
the discussion in the Federal Register included an explicit response
to two commenters' concerns about the availability of retroactive approval
for Medicaid providers who had been accredited. The authors of the regulation
responded:
62 Fed. Reg. 43,933 (Aug. 18, 1997). The plain meaning
of this language needs no paraphrase, but, if it did, it could be fairly
paraphrased thus: if all federal requirements can be satisfied by the
fact of accreditation, then no more is required and the provider agreement
may be given retroactive effect if accreditation is established. The inclusion
of the language "all federal requirements" can have had no other purpose
than to make clear that "all federal requirements" and accreditation mean
exactly the same thing in this special context, and that this special
context is an explicit condition for invocation of the "Special Rule."
CMS correctly notes, moreover, that there is little in the history of
the "Special Rule" language that would support its application outside
the Medicaid program. But the entire text of 42 C.F.R. � 489.13, not solely
section 489.13(d)(2), addresses the method by which the effective dates
of Medicare provider agreements must be calculated. Both parties agree
that the regulation must be read so as to give all its parts effect, and
they are, of course, correct. In re Surface Mining Regulations Litigation,
627 F.2d 1346 (D.C. Cir. 1980). In applying the terms of 42 C.F.R. � 489.13,
I must keep in mind the other provisions that bear on the status and approval
of a provider agreement, including the survey requirements outlined in
section 489.10(d). And, in doing so, I am led to the conclusion that Petitioner's
interpretation of the "Special Rule" would, if adopted, render entirely
nugatory the whole body of 42 C.F.R. � 489.13(d)(i) and effectively expunge
it as a qualifying provision to the so-called "General Rule" governing
effective dates. The "General Rule" set out in 42 C.F.R. � 489.13(d)(1)
is that the effective date "depends on whether the provider . . . is subject
to requirements in addition to those included in the accrediting organization's
approved program." The immediately-following subsections, (d)(1)(i) and
(d)(1)(ii), attend to the two alternative and mutually-exclusive possibilities:
providers subject to "requirements in addition" are addressed in subsection
(d)(1)(i). I repeat here that Petitioner does not deny that it "is subject
to requirements in addition" as that term is employed here, and I note
that there is no assertion from Petitioner that the JCAHO accreditation
amounted to either a de facto or de jure satisfaction
of the "requirements in addition." Given that the two categories of providers contemplated
by the "General Rule" are defined as those subject to additional requirements
beyond accreditation and those not subject to additional requirements,
and given that Petitioner is a psychiatric hospital and therefore subject
to additional requirements, it follows that the alternative crafted for
"additional-requirements" providers in the "General Rule" governs Petitioner's
situation. That alternative is explicit in linking the effective date
of the agreement to "the date on which the provider . . . meets all requirements,
including the additional requirements." One might argue that the regulation's
terms were clear enough in demanding that "all requirements" be met, but
the inclusion of the language "including the additional requirements"
emphasizes the importance of the additional requirements in the starkest
possible fashion. In this case, the additional requirement is compliance
with the terms of 42 C.F.R. �� 482.61 and 482.62, as demonstrated by a
satisfactory survey, and the date of that survey is the earliest date
on which an "additional-requirements" provider can claim an effective
agreement. Any other reading of the "General Rule" would render it virtually
meaningless, as such a reading would erase the regulatory distinction
between those described in subsection (d)(1)(i) and those described in
subsection (d)(1)(ii). Put another way, the distinctions set out in 42 C.F.R.
� 489.13 create two classes of potential providers. The first class is
made up of providers whose agreements can be effective only after survey.
The second class is made up of providers whose agreements may be based
on accreditation, and that second class is divided in a straightforward
way into two groups: first, providers for which accreditation is sufficient;
and second, providers for which survey-established compliance with additional
requirements is necessary. An accredited provider which is subject to
additional requirements is within the ambit of subsection (d)(1)(i), and
"meets the requirements of paragraphs (d)(1) and (d)(1)(i)" only when
it has satisfied "the additional requirements." Thus, the "Special Rule" relied on by Petitioner is simply
unavailable to it, because any retroactivity the "Special Rule" might
confer is premised on the provider's having fully complied with the demands
of subsection (d)(1)(i). And, because the "Special Rule" cannot be relied
on at all by Petitioner on these facts, there is little need to discuss
the argument directed at CMS's failure to exercise its discretion and
invoke the "Special Rule" in amelioration of Petitioner's situation. The
operation of the "Special Rule" is not discretionary, and CMS cannot be
faulted for failing to exercise discretion it did not enjoy. Finally, Petitioner has raised challenges to broader aspects
of the history of its relationship with CMS. Petitioner asserts that CMS's
interpretation of the regulations amounts to "an attempt to promulgate
a new regulation without following . . . the rule-making requirements
of the APA (the Administrative Procedures Act, 5 U.S.C. � 522(a)(1) et
seq.)." That argument may be pursued in another forum, but this one
is not empowered to consider it and I must disregard it. Lauderhill
Community Mental Health Center, DAB CR652 (2000); Beverly Health
& Rehabilitation, Springhill, DAB No. 1696 (1999); Orchard
Grove Extended Care Center, DAB CR541 (1998). Similar well-established
precedent bars my consideration of Petitioner's claim that CMS's action
"violates fundamental principles of fair procedures" and "produces an
inequitable result." National Behavioral Center, DAB No. 1760 (2001).
III. Conclusion Accordingly, I grant CMS's motion and deny Petitioner's. I affirm CMS's determination that the effective date of Petitioner's Medicare provider agreement, is March 17, 2000. |
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JUDGE | |
Richard J. Smith Administrative Law Judge
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