SUBJECT: Mira Vista Care Center, Inc.,

Petitioner,

Health Care Financing Administration

FINAL DECISION ON REVIEW OF

ADMINISTRATIVE LAW JUDGE DECISION

Mira Vista Care Center, Inc. (Mira Vista) appealed the June 6, 2001 decision of Administrative Law Judge (ALJ) Marion T. Silva dismissing this case on the ground that she did not have authority to hear and decide it. Mira Vista Care Center, Inc., DAB CR777 (2001) (ALJ Decision). Mira Vista, a skilled nursing facility (SNF), requested an ALJ hearing to review the determination of the Health Care Financing Administration (HCFA) denying provider-based status sought by Mira Vista for 30 beds it had relocated to the campus of United General Hospital (UGH). (Although HCFA has been renamed the Centers for Medicare & Medicaid Services (CMS) (see 66 Fed. Reg. 35437 (July 5, 2001)), we continue to use "HCFA" below since that acronym was used to refer to the agency at the time that the actions at issue here were taken.)

The ALJ made a single numbered finding of fact and conclusion of law (FFCL) to support her decision to dismiss the case: "I do not have the authority to hear and decide the case" (FFCL 1). ALJ Decision at 3. The basis for this FFCL was that HCFA's denial of Mira Vista's request for provider-based status for its UGH campus was not a determination that the UGH campus was not a provider or did not qualify as a provider, which would give rise to the right to a hearing under section 1866(h)(1) of the Act and section 498.3(b)(1) of 42 C.F.R. According to the ALJ, HCFA's determination affected only the manner in which Mira Vista's UGH campus was reimbursed for services. The ALJ cited several Board decisions, including Comprehensive Mental Health Center of Baton Rouge, et al., DAB No. 1774 (2001), for the proposition that she lacks authority to hear and decide a case in which the sole issue is reimbursement classification status.

On appeal, Mira Vista challenged the ALJ's conclusion that the case involved solely a reimbursement dispute. Mira Vista argued that the ALJ inaccurately characterized the facts on which that conclusion was based. Mira Vista also argued that Comprehensive was distinguishable on the basis of differing facts, that the facts in its case were similar to those in another case where the ALJ provided a hearing, and that the ALJ Decision was contrary to the holding in a third case that the determination whether a provider qualifies for provider-based status is a certification decision. Mira Vista further disputed the ALJ's conclusion that an amendment to section 498.3(b) permitting an appeal of a determination whether an entity qualifies for provider-based status was inapplicable prior to the effective date of the amendment.⁽¹⁾

Our standard of review on disputed issues of fact is whether the ALJ Decision is supported by substantial evidence on the record as a whole. See, e.g., Lake Cook Terrace Nursing Center, DAB No. 1745 (2000). Our standard of review as to disputed issues of law is whether the ALJ Decision is erroneous. Id.

Based on the rationale discussed below, we conclude that FFCL 1 is not erroneous. Accordingly, we sustain the ALJ's dismissal of Mira Vista's request for hearing.

A principal basis for Mira Vista's appeal is that the ALJ inaccurately characterized the facts based on which she concluded that this case involves solely a reimbursement dispute as to which there is no hearing right. According to the ALJ--

• In 1998, Mira Vista applied for certification of its UGH campus to participate in Medicare and Medicaid;
• On January 19, 1999, HCFA notified Mira Vista that, effective December 8, 1998, its UGH campus was certified as an SNF with a separate provider number;
• On July 5, 1999, Mira Vista requested that HCFA redesignate its UGH campus as a provider-based facility;
• On October 1, 1999, HCFA denied Mira Vista's July 5 request; and
• On October 21, 1999, HCFA confirmed its denial of Mira Vista's July 5 request.

ALJ Decision at 1-2.⁽²⁾ Mira Vista argued, however, that it had requested provider-based status at the same time it applied for certification of its UGH campus, and that HCFA responded on January 19, 1999 with a single determination certifying the UGH campus as a Medicare provider and denying provider-based status.⁽³⁾

Although the same argument was raised before the ALJ, the ALJ Decision contains no indication that there were any disputed issues of fact. The ALJ's failure to address the disputed issues of fact constitutes harmless error, however. Even if Mira Vista requested provider-based status at the time it applied for certification of its UGH campus as a Medicare provider, instead of at a later date, this would not lead to the conclusion that Mira Vista had a right to a hearing.

In Comprehensive, petitioners similarly argued that they were "prospective providers" who were entitled to a hearing under section 498.3(b)(1) because their requests for provider-based status were made in their initial requests for Medicare certification. The Board rejected this argument, finding that "[n]othing in the scope provisions in section 498.3 suggests that merely because a prospective provider has requested a determination on one of the matters listed in section 498.3(b), an entity is entitled to a hearing on any other matter addressed at the same time which was not listed." Comprehensive at 8.

Furthermore, the Board found that because petitioners were already certified to provide services they could have provided irrespective of whether they were free-standing or provider-based, petitioners were not seeking review under section 498.3(b)(1) of a determination about whether a facility qualified as a provider of services, but rather of HCFA's determination that they were not provider-based, a matter not listed in section 498.3(b). Similarly, Mira Vista applied for certification of its UGH campus to provide SNF services, the same type of services provided by Mira Vista prior to the relocation of the 30 beds to the UGH campus. Thus, even assuming that HCFA both certified Mira Vista's UGH campus to participate in Medicare as an SNF and denied it provider-based status in one determination letter, this would not alter the fact that Mira Vista does not seek review of the certification of the UGH campus; rather, Mira Vista seeks review of HCFA's denial of provider-based status for the UGH campus, a matter not listed in section 498.3(b).

Mira Vista nevertheless attempted to distinguish Comprehensive on the ground that, unlike the facilities there, "the UGH campus opened with the full intent to be an adjunct provider-based facility and was never intended to qualify as an independent provider . . . ." P. Br. dated 7/31/01, at 4-5; see also P. Br. dated 8/17/01, at 9. This has no bearing on the jurisdictional question before us, however, but goes instead to the merits of whether HCFA properly determined that Mira Vista's UGH campus was not provider-based.⁽⁴⁾

Mira Vista argued in addition that the facts in its case were similar to those in Homelife Nursing, Inc., DAB CR417 (1996), in which the ALJ ruled on the merits of HCFA's denial of a home health agency's request to change the designation of one of its offices from a subunit to a branch after denying HCFA's motion to dismiss for lack of jurisdiction. However, the home health agency regulations, unlike the regulations applicable to SNFs, establish that a home health agency subunit must independently meet the Medicare conditions of participation for home health agencies. 42 C.F.R. � 484.2. Thus, Homelife is inapposite here.

Moreover, contrary to Mira Vista's assertion, Johns Hopkins Health Systems, DAB No. 1712 (1999), does not hold that the determination whether a facility qualifies for provider-based status is necessarily a certification decision. As the Board later explained, Johns Hopkins raised the issue of whether a facility seeking provider-based status was properly included within a hospital's certification for purposes of providing particular types of hospital services which it could not otherwise provide. Thus, the ALJ properly heard the case under section 498.3(b)(1). See Comprehensive, at 8-9. In contrast, the type of services Mira Vista could provide would remain the same whether or not it obtained provider-based status, so that how services should be reimbursed is the only issue.⁽⁵⁾

Mira Vista's argument that it was entitled to a hearing under section 498.3(b)(2) is also without merit. The Board addressed a similar argument in Comprehensive. The Board found that HCFA did not consider the amended regulation as clarifying that there was a pre-existing statutory right to a hearing under section 1866(h)(1), but rather as creating a new right to a hearing which was not intended to apply retroactively. Comprehensive at 11. Moreover, even if the amended regulation could be applied retroactively, it appears that it would not be applicable here. Section 498.2 defines the term "provider-based entity" as--

. . . a provider of health care services . . . that is either created by or acquired by, a main provider for the purposes of furnishing health care services of a different type from those of the main provider . . . .

(Emphasis added.) As indicated above, Mira Vista's UGH campus was not created for the purpose of furnishing health services of a type different from the SNF services provided at Mira Vista's original location. Thus, HCFA's determination may not be a determination that Mira Vista's UGH campus did not qualify for provider-based status within the meaning of section 498.3(b)(2) as amended.

Conclusion

For the reasons stated above, we uphold the ALJ's dismissal of Mira Vista's request for hearing.

Donald F. Garrett

M. Terry Johnson

Judith A. Ballard
Presiding Board Member

1. The amended regulation was published on April 7, 2000 with an effective date of October 10, 2000. 65 Fed. Reg. 18549. The effective date was later delayed until January 10, 2001. 65 Fed. Reg. 58919 (Oct. 3, 2000).

2. This sequence of events is arguably at odds with the ALJ's later statement that "HCFA determined that [the provider-based] classification was not allowed and therefore assigned the separate provider number." ALJ Decision at 5. However, as discussed below, it is unnecessary to determine the precise sequence of events.

3. Mira Vista's contention that it had requested a hearing as to a determination made by HCFA on January 19, 1999 raises the further question whether Mira Vista's appeal was timely. Since the ALJ properly dismissed the hearing request on other grounds, however, she need not have reached this issue.

4. Mira Vista also contended that Comprehensive, unlike its case, entailed two separate decisions by HCFA--a certification decision and a reimbursement decision--that were at least a year apart. The Board noted in Comprehensive, however, that "HCFA did not appeal the ALJ's finding that Petitioners requested provider-based status in their initial requests for certification." Comprehensive at 3, n.2.

5. Mira Vista asserted that all of the determinations listed in section 498.3(b) are reimbursement determinations, so the fact that HCFA's determination of provider-based status "may have a secondary reimbursement effect" should not be determinative of whether Mira Vista has a right to a hearing. P. Br. dated 8/17/01, at 5. As indicated above, however, the only effect of HCFA's determination in its case was on the level at which services provided at Mira Vista's UGH campus would be reimbursed, while the listed determinations affect the provider's (or supplier's) right to any Medicare or Medicaid reimbursement for particular services.