SUBJECT:

Family Health,

Petitioner,

Centers for Medicare & Medicaid Services.

DECISION

I grant the motion of the Centers for Medicare & Medicaid Services (CMS) for summary disposition.

I. Background

Petitioner is certified to participate in the Medicare program as a federally-qualified health center (FQHC). Its participation in Medicare is governed by federal regulations at 42 C.F.R. �� 405.2400 et seq. and at 42 C.F.R. �� 491.1 et seq.

Petitioner has been certified since October 1, 1991 as an FQHC at its address of 5735 Meeker, Greenville, Ohio. In May 2005, Petitioner submitted applications to CMS for certification at two additional locations: 828 Central Avenue, Greenville, Ohio; and 702 North Main Street, Arcanum, Ohio. ⁽¹⁾ On September 8, 2005, the Medicare Intermediary for Ohio, United Government Services (UGS), advised CMS that it had reviewed Petitioner's application and that it had found no basis for denying it. CMS then certified the two locations to participate in Medicare as FQHCs, effective September 8, 2005.

Petitioner requested reconsideration of CMS's determination, asserting that the two locations should be certified at an earlier date. CMS denied Petitioner's request. Petitioner then requested a hearing and the case was assigned to me for a hearing and a decision.

I issued a pre-hearing order on December 5, 2005. In that order, I directed the parties to file pre-hearing exchanges including briefs, proposed exhibits, and the written direct testimony of all proposed witnesses. CMS filed a pre-hearing exchange that included five proposed exhibits (CMS Ex. 1 - CMS Ex. 5). On June 5, 2006, CMS filed a motion for summary disposition. ⁽²⁾ On August 2, 2006, Petitioner filed a pre-hearing exchange that included a brief and 10 proposed exhibits (P. Ex. 1 - P. Ex. 10). Petitioner requested that its pre-hearing brief be considered as opposition to CMS's motion for summary disposition. Additionally, Petitioner listed two proposed witnesses but failed to file the written direct testimony of either of these individuals.

For purposes of establishing a record in this case, and in the absence of any opposition from the parties, I am receiving into the record CMS Ex. 1 - CMS Ex. 5, and P. Ex. 1 - P. Ex. 10.

II. Issue, findings of fact and conclusions of law

A. Issue

The issue in this case is whether there is a basis for me to issue summary disposition in favor of CMS.

B. Findings of fact and conclusions of law

I find that there are no disputed material facts that preclude the issuance of summary disposition in this case. CMS has established that, as a matter of law, it is entitled to summary disposition based on the undisputed material facts.

CMS's argument in support of its motion is as follows. First, it avers that, under applicable regulations each of the two facility addresses, 828 Central Avenue and 702 North Main Street, required independent certification by CMS in order to be qualified to participate in Medicare. The relevant regulation, according to CMS, is 42 C.F.R. � 491.5(a)(3)(iii), which states that:

If clinic or center services are furnished at permanent units at more than one location, each unit is independently considered for approval as an . . . FQHC.

Thus, according to CMS, Petitioner could not claim reimbursement for services provided at the 828 Central Avenue and 702 North Main Street sites pursuant to the certification it received originally for its site at 5735 Meeker. Petitioner would have to obtain certification independently for the 828 Central Avenue and 702 North Main Street sites if it wished to claim Medicare reimbursement for services provided at those sites.

Second, CMS argues that it could not certify either of the two sites to participate in Medicare until it accepted an agreement that each site met all federal requirements governing Medicare participation. In this case, according to CMS, that agreement consisted of UGS's certification to CMS on September 8, 2005 that the two sites met all federal participation requirements as of that date. Thus, the earliest date when CMS could have certified the sites to participate in Medicare was September 8, 2005, and that was, in fact, the date that CMS certified them.

Petitioner makes various arguments in opposition to CMS's motion. First, it argues that the two sites in question are not, in fact, separate from Petitioner's 5735 Meeker address. Petitioner argues that, under regulations governing FQHCs, a site may not qualify as a participating supplier unless it meets criteria that neither of the two sites possibly could meet. According to Petitioner, neither site could qualify because it did not have separate legal standing at law as an "entity." Petitioner argues also that as a matter of common sense, the two sites were not operated separately from the 5735 Meeker address, but were merely real estate used as offices for physicians who were provided under the direction and supervision of Petitioner. Therefore, according to Petitioner, there never was any reason in law that the two sites had to qualify separately as FQHCs.

Second, Petitioner suggests that, in fact, at least one of the sites did meet all federal requirements for participation years prior to the September 8, 2005-certification date. It avers that, effective November 11, 2002, Petitioner's grant pursuant to section 330 of the Public Health Services Act was amended to include the 828 Central Avenue site. P. Ex. 7. Petitioner argues that the prerequisite for certification consisted of having such a grant and, therefore, at least the 828 Central Avenue site should have been certified by CMS prior to September 8, 2005.

Finally, Petitioner makes arguments challenging the fairness of CMS's determination. It asserts that: it had operated the two sites for years, with CMS's implicit knowledge, without being required to obtain separate certification for them; it was misled into believing that what it was doing by way of claims filing for the two sites was authorized; and, that it is the victim of a bureaucratic maze of regulations and practices that is producing unintended and unfair consequences in its case.

As I read the applicable regulation, it clearly requires that an FHQC obtain separate certification for each permanent unit that is part of the FHQC's overall operation. That is the plain meaning of 42 C.F.R. � 491.5(a)(3)(iii). A "permanent unit" is defined in the regulation as follows:

The objects, equipment, and supplies necessary for the provision of the services furnished directly by the clinic or center are housed in a permanent structure.

42 C.F.R. � 498.5(a)(3)(i). Moreover, the regulation distinguishes between a permanent unit and a "mobile unit" which does not require separate certification. A "mobile unit" is defined as existing where:

The objects, equipment, and supplies necessary for the provision of the services furnished directly by the clinic or center are housed in a mobile structure which has fixed, scheduled location(s).

42 C.F.R. � 498.5(a)(3)(ii).

Both the 828 Central Avenue and the 720 Main Street sites are permanent units needing separate certification if they are permanent structures housing the objects, equipment, and supplies necessary for the provision of services. Here, the undisputed facts support a conclusion that both the 828 Central Avenue and 720 Main Street sites are permanent units and, therefore, Petitioner was required by law to obtain separate certification as an FQHC for each of the two sites. It is apparent from the record that these sites are permanent structures - not mobile in any sense of the term - that house offices out of which Petitioner provides services to eligible individuals. Petitioner has offered neither facts nor argument to deny that these sites are permanent structures as defined by regulation. Nor has it contended that these sites are mobile units not requiring separate certification.

Petitioner's argument - that neither of the sites is a legal "entity" - under common law misses the point that there is an explicit regulatory definition of the type of facility that must be certified separately in order to participate as an FQHC. Whether the two sites qualify as "entities" or not under Petitioner's analysis is simply irrelevant given that there is an explicit regulatory definition of what constitutes a permanent unit requiring separate certification.

Regulations establish the earliest date when an FQHC may be certified to participate as a supplier in Medicare:

For an agreement with a . . . (FQHC), the effective date is the date on which CMS accepts a signed agreement which assures that the . . . FQHC meets all Federal requirements.

42 C.F.R. � 489.13(a)(2)(i). In this case, then, the earliest date that CMS could have accepted either of the two sites as a participating FQHC was the date when CMS accepted a signed agreement verifying that each of the sites met all federal requirements. The undisputed facts establish that this date was September 8, 2005, the date which CMS determined was the effective date of participation. It was on that date that the Intermediary for FQHCs in Ohio, UGS, certified to CMS that Petitioner's two sites met all federal requirements. The certification from UGS was the "agreement" that CMS had to receive in order to certify the sites. CMS could not certify the sites prior to that date because it did not have an agreement prior to September 8 that the sites met all federal requirements.

Moreover, 42 C.F.R. � 489.13(a)(2)(i) vests non-reviewable discretion in CMS to decide when to certify an FQHC as meeting participation requirements. The regulation very plainly states that the effective date of certification is the date when CMS accepts an agreement that a supplier meets certification requirements. Nothing in the regulation suggests that I have the authority to look behind CMS's determination to accept an agreement effective a particular date and rule that CMS ought to have accepted the agreement at an earlier date.

The possibility that one of the two sites may have had a Public Health Service grant prior to September 8, 2005 does not alter my decision. CMS could not have certified the site at a date earlier than the date that UGS certified to CMS that the sites met all federal requirements even if, in fact, one of the sites may have actually met federal requirements at an earlier date. That is because CMS had to have an agreement from UGS certifying that the sites met federal requirements before it could certify them. That was not forthcoming until September 8, 2005. Moreover, inasmuch as CMS's discretion to accept the agreement from UGS is non-reviewable, I have no authority in any event to conclude that CMS - or UGS - ought to have found one of the sites to have met federal requirements at a date earlier than September 8, 2005.

Petitioner's equitable arguments are no basis for me to rule in its favor. My authority to hear and decide this case is bound strictly by the requirements of the governing regulations. I am not permitted to take into account equitable considerations in deciding whether CMS's determination of an effective date of certification is correct as a matter of law.

Steven T. Kessel

Administrative Law Judge

1. Without explanation the parties at times refer to the 828 Central Avenue address as 820 Central Avenue. I use the address of 828 Central Avenue to refer to this facility.

2. At page 5 of its motion CMS refers to an "Attachment A." However, the motion was submitted without an attachment.