SUBJECT:

National Behavioral Center, Inc.,

Petitioner,

Health Care Financing Administration

FINAL DECISION ON REVIEW OF

ADMINISTRATIVE LAW JUDGE DECISION

The National Behavioral Center, Inc., (Petitioner) appealed an August 31, 2000 decision by Administrative Law Judge (ALJ) Marion T. Silva summarily sustaining the determination by the Health Care Financing Administration (HCFA) not to certify Petitioner as a community mental health center (CMHC) providing partial hospitalization services. See National Behavioral Center, Inc., DAB CR695 (2000) (ALJ Decision). The ALJ found that Petitioner failed to meet the definition of a CMHC in the Public Health Service Act and in HCFA's implementing regulations and guidelines because Petitioner was not authorized under Florida law to provide screening services directly. The ALJ further found that Petitioner did not provide screening through arrangements with others because it did not enter into contracts with other entities to have screening performed within the meaning of federal requirements. The ALJ also concluded that she was "not authorized to hear and decide Petitioner's assertion that it was damaged by HCFA's alleged delay in processing of its certification application." ALJ Decision at 9.

The record here includes the record before the ALJ, the ALJ Decision, and the parties' submissions on appeal. Our standard of review on a disputed conclusion of law is whether the ALJ Decision is erroneous. Our standard of review on a disputed finding of fact is whether the ALJ Decision is supported by substantial evidence on the record as a whole. Guidelines for Appellate Review of Decisions of Administrative Law Judges Affecting a Provider's Participation in the Medicare and Medicaid Programs; see also Hillman Rehabilitation Center, DAB No. 1611 at 6 (1997), aff'd, Hillman Rehabilitation Center v. U.S. Dept. of Health and Human Services, No. 98-3789 at 21-38 (D.N.J. May 13, 1999).

The ALJ Decision contains a full discussion of the background, which we summarize here. ALJ Decision at 1 - 5. Petitioner, a not-for-profit corporation based in Hialeah Gardens, Florida, applied to be certified to participate in the Medicare program as a CMHC. One of the services that a facility must provide in order to be certified as a CMHC is screening for patients being considered for admission to state mental health facilities. Section 1861(ff) of the Social Security Act; 42 C.F.R. � 410.10. In order to qualify to provide partial hospitalization services under Medicare, an entity must also be "licensed or certified" as a CMHC under State law. Id. After HCFA made an initial determination that Petitioner was not providing the required screening services under Florida law, Petitioner entered into an agreement with Citrus Health Network, Inc. (Citrus Health), which Petitioner said qualified it as a CMHC because it was permitted to provide the screening services "under arrangements" with another entity. HCFA then determined that, under the agreement with Citrus Health, Petitioner failed to exercise the degree of supervision and control necessary to satisfy HCFA's and the State of Florida's criteria for provision of screening services through arrangements with another entity. HCFA accordingly denied Petitioner's request for Medicare participation as a CMHC. The ALJ sustained HCFA's determination.

On appeal, Petitioner did not specifically assert that it met the criteria applied by HCFA and the ALJ. See 42 C.F.R. � 498.82(b). Nor did Petitioner challenge the factual findings made by the ALJ regarding Petitioner's agreement with Citrus Health, including that 1) the agreement does not specify that Citrus Health will provide screening by arrangement for possible admission of patients to State mental facilities; 2) the agreement provides that each party maintains individual responsibility for accounting, billing, and collection for services provided; and 3) management responsibility for screening services is not vested with Petitioner. Rather, Petitioner alleged that: 1) it was discriminated against, in that other CMHCs in Florida remain in operation while not in compliance with the same interpretation of Florida law that was the basis for its non-certification as a CMHC; and 2) HCFA denied Petitioner due process and engaged in dilatory practices in processing its provider certification and in notifying Petitioner of its "new policy," causing Petitioner to incur expenses because HCFA required it to be operational during the certification process.

Petitioner contended that the ALJ should have reversed HCFA's determination and granted Petitioner Medicare certification. Specifically, Petitioner raised a "discrimination" issue, arguing that it should be "grandfathered in" because it met all the statutory requirements to the same degree that other cited CMHCs did which received Medicare certification and which had the same contract with Citrus Health as Petitioner did. October 10, 2000 Request for Appeal at third page. Petitioner also argued that its estoppel argument is "valid" and requested that, if its appeal is denied, the case be transferred to the Court of Claims where it can argue equity.

As noted above, the ALJ stated that she did not have the authority to address the issue of whether HCFA's alleged dilatory practice in processing Petitioner's CMHC certification caused Petitioner harm. ALJ Decision at 9 - 10, citing T.L.C. Mental Health Center, DAB CR636 (1999); Charity Behavioural Services, Inc., DAB CR635 (1999); GranCare Home Health & Hospice, DAB CR464 (1997); The Rivers Health Care Resources, Inc., DAB CR446 (1996); and SRA, Inc. D/B/A/ St. Mary Parish Dialysis Center, DAB CR341 (1994). We agree with the ALJ that, to the extent Petitioner is seeking a remedy in the nature of damages based purely on equitable grounds, the ALJ did not have the authority to grant that remedy. In this case, the inquiry before the ALJ ends once there is a legally and factually sound determination that Petitioner did not meet the statutory and regulatory requirements for CMHC certification.⁽¹⁾

Petitioner's other appeal argument was that several named CMHCs, some having agreements identical to that Petitioner had with Citrus Health, received Medicare CMHC certification from HCFA even though they were not authorized under Florida law to perform screening services. Petitioner alleged that its disparate treatment by HCFA was unfair; according to Petitioner, since HCFA had approved other similarly situated providers, it was obliged to approve Petitioner as well. While the ALJ did not specifically address this argument in her decision, we nevertheless find that this constituted harmless error.

Petitioner failed to provide any legal basis for its assertion that alleged disparate treatment from HCFA could provide a basis for certifying Petitioner despite its failure to meet the certification requirements that are clear in the statute and regulations of which Petitioner had timely notice. Petitioner's position suggests that HCFA could ignore a provider's failure to comply with statutory requirements because HCFA has yet to take action against other providers which may also have failed to meet the requirements. The Board has held that allegations of disparate treatment, even if true, do not prohibit an agency of this Department from exercising its responsibility to enforce statutory requirements.⁽²⁾ See, e.g., Edison Medical Laboratories, Inc., DAB No. 1713 (1999); Rural Day Care Association of Northeastern North Carolina, DAB No. 1489 (1994). This Board does not in any way find persuasive Petitioner's suggestion that since others may have "gotten away" with inappropriate attestations that they were CMHCs, Petitioner should also be excused, and even rewarded with Medicare certification as a CMHC, in spite of its failure to comply with statutory requirements.

Based on our review of the record before us, we therefore conclude that Petitioner did not raise any error of fact or law in the ALJ Decision. Accordingly, we affirm the ALJ Decision. In doing so, we affirm and adopt each FFCL.

Judith A. Ballard

Marc R. Hillson

M. Terry Johnson
Presiding Board Member

1. While Petitioner referred to HCFA's "new policy" and asserted that HCFA should have given Petitioner notice of that policy when HCFA was aware of it, Petitioner raised these points as part of a general argument that HCFA's process and delays were unfair. Thus, we do not view Petitioner's arguments on appeal as raising an issue of impermissive retroactive application of a new interpretation of an ambiguous requirement, without timely notice. The statute and regulations clearly provide that, to be a CMHC, an entity must be providing screening services and be licensed or certified as a CMHC under State law. Petitioner did not clearly contest the ALJ's findings that it was not providing screening either directly or under an arrangement, nor did Petitioner assert any legal and factual basis on which it could be determined to have been certified as a CMHC under Florida law as in effect during the relevant period.

2. We note that Petitioner did not provide any agreements that the named CMHCs had with Citrus Health or other entities that would establish that those providers received more favorable treatment from HCFA. We further note the record before the ALJ contained two decisions by another ALJ in which HCFA's refusal to grant CMHC certification was sustained on the basis of the provider's failure to meet the same provision of Florida law at issue here: T.L.C. Mental Health Center, DAB CR636 (1999); Charity Behavioural Services, Inc., DAB CR635 (1999). These cases disprove Petitioner's position that Petitioner was singled out by HCFA for disparate treatment.