Department of Health and Human Services DEPARTMENTAL APPEALS BOARD Civil Remedies Division |
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IN THE CASE OF | |
New LIfe Plus Center, CMHC, |
DATE: September 28, 2000 |
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Health Care Financing Administration
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Docket No.C-99-465
Decision No. CR700 |
DECISION | |
I enter summary disposition sustaining the determination
of the Health Care Financing Administration (HCFA) not to certify Petitioner,
New Life Plus Center, CMHC, to participate in the Medicare program as
a community mental health center (CMHC) providing partial hospitalization
services. I do so because Petitioner has failed to show that it is providing
screening services which comply with the requirements of federal law and
Florida State law. I. Background Petitioner is a for-profit corporation that is located
in Miami, Florida. Petitioner applied to participate in the Medicare program
as a CMHC providing partial hospitalization services. On September 23,
1998, HCFA notified Petitioner that it had determined that Petitioner
did not meet applicable certification requirements. On November 23, 1998,
Petitioner requested HCFA to reconsider its determination. On December
21, 1998, HCFA notified Petitioner that it had reviewed Petitioner's reconsideration
request and had determined that its initial denial of the request was
correct. Petitioner requested a hearing and the case was assigned
to Administrative Law Judge Mimi Hwang Leahy for a hearing and a decision.
HCFA moved for summary disposition. Petitioner opposed HCFA's motion.
HCFA submitted a brief (HCFA Br.) and nine exhibits (HCFA Ex. 1 - HCFA
Ex. 9) in support of its motion. Petitioner submitted a brief (P. Br.),
but did not submit any exhibits, in opposition to HCFA's motion. HCFA
submitted a reply brief (HCFA Reply Br.) and an additional exhibit, HCFA
Ex. 10. This case was subsequently transferred to me on March
3, 2000. I am receiving into evidence HCFA Ex. 1 - HCFA Ex. 10. II. Governing law
"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). A "community mental health center" is defined
by the Act to mean an entity:
Act, section 1861(ff)(3)(B)(i), (ii). Although the Act
refers to section 1916 of the Public Health Service Act, the section was
recodified as section 1913(c)(1) of the Public Health Service Act. Under
this section, the services that a CMHC must provide include the following:
Additionally, the Secretary of this Department has issued
a regulation which defines the term "community mental health center."
A CMHC is defined by the regulation to be an entity that:
42 C.F.R. � 410.2. HCFA has published policy guidelines which describe a
CMHC's obligations under section 1913(c)(1) of the Public Health Service
Act and the above-cited regulation. In a document that is entitled "All
States Letter 76-95" (All States Letter), HCFA states that a community
mental health center must provide all of the services that are listed
in the Public Health Service Act, either directly or under arrangements
with others. HCFA Ex. 1. The term "under arrangements" is defined in the
All States Letter to mean that a CMHC may arrange for those services described
at section 1913(c)(1) of the Public Health Services Act and partial hospitalization
services:
Id., at 3 (emphasis added). HCFA has elected to defer to the laws of the States in
order to determine what constitutes adequate screening for patients being
considered for admission to State mental health facilities pursuant to
section 1913(c)(1) of the Public Health Service Act. In a memorandum dated
August 21, 1998, HCFA stated that "screening":
HCFA Ex. 3, at 1 (emphasis in original).
Florida State law defines the entities that are authorized
to perform the procedures which are necessary prerequisites to admission
of individuals for treatment at a Florida State mental health facility.
Under the Florida Mental Health Act (Florida State Act), F.S.A. �
394.451, et. seq., only certain types of entities are authorized
to perform the necessary procedures. Specifically, these entities are
limited to those entities which are authorized to perform "transfer evaluations."
F.S.A. � 394.461(2). A "transfer evaluation" is defined under Florida
State law as being:
F.S.A. � 394.455(29). Under Florida State law, a "community mental health center
or clinic" is a:
F.S.A. � 394.455(6). III. Issues, findings of fact and conclusions
of law
This case is one of a series of cases that have been heard
and decided recently by administrative law judges of the Civil Remedies
Division involving the general issue of whether a CMHC meets certification
requirements for participation in Medicare. Many of these cases involve
CMHCs that are located in the State of Florida. Recent decisions which
address the participation status of Florida CMHCs include the following:
New Millennium CMHC, Inc., DAB CR672 (2000); Long Life Wellness
Center, DAB CR657 (2000); Charity Behavioral Services, Inc.,
DAB CR635 (1999); T.L.C. Mental Health Center, DAB CR636 (1999);
Psychstar of America, DAB CR645 (2000). These cases do not involve identical questions of law
and fact, but the issues raised by them are very closely related. As I
discuss above, at Part II of this decision, qualification to participate
in Medicare as a CMHC depends on application of both federal and State
laws. In order to qualify for participation, a CMHC must meet both federal
and applicable State requirements. What lies at the heart of this case
is that Petitioner is a for-profit entity which seeks to operate under
State laws which do not recognize for-profit entities as CMHCs. The specific issues in this case are whether:
I make findings of fact and conclusions of law (Findings)
to support my decision in this case. I set forth each Finding below, as
a separate heading. I discuss each Finding in detail.
A threshold question in this case is whether summary disposition
is appropriate. Summary disposition is appropriate either where: 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, where
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 Petitioner's arguments in order to decide whether
there exist any genuinely disputed issues of material fact I am assuming the facts that Petitioner asserts in its
brief to be true for purposes of deciding HCFA's motion for summary disposition.
I conclude that summary disposition is appropriate in this case notwithstanding
my decision to accept as true the facts alleged by Petitioner. As I explain
in detail in the Findings which follow, Petitioner has failed to make
a showing that it qualifies to participate in Medicare as a CMHC.
As I discuss above, at Part II.A. of this decision, in
order to be certified to provide partial hospitalization services - and
to satisfy the statutory definition of a CMHC contained at section 1913(c)(1)
of the Public Health Service Act - an entity must meet criteria which,
among other things, include the following:
HCFA asserts that Petitioner fails to meet these criteria
because Petitioner may not offer screening directly consistent with the
requirements of Florida State law nor has Petitioner shown that it has
entered into an acceptable arrangement with a third party for the performance
of screening.
In order to be able to perform directly the screening
services that are required under section 1861(ff)(3) of the Act and section
1913(c)(1) of the Public Health Service Act, Petitioner must be authorized
to perform transfer evaluations pursuant to Florida State law. Federal
law requires a CMHC to comply with applicable State requirements in order
to participate in Medicare. 42 C.F.R. � 410.2. Florida's law governing
a transfer evaluation by a CMHC is plainly applicable State law inasmuch
as a transfer evaluation is a process that is identical to screening.
Under federal law, screening is the clinical evaluation of a patient to
determine his or her suitability for hospitalization in a State mental
health facility. Under Florida State law, a transfer evaluation also is
a clinical evaluation of a patient to determine his or her suitability
for transfer to a State mental health facility. F.S.A. � 394.455(29). Petitioner cannot qualify to perform screening directly
because it cannot qualify pursuant to Florida State law to perform transfer
evaluations. Florida State law provides that a CMHC may perform a transfer
evaluation only if it is a not-for-profit publicly funded entity. F.S.A.
� 394.455(6). Petitioner is a for-profit facility which has not contracted
with DCF. See HCFA Ex. 5, at 4. It has not contested this fact
in its brief nor has it made any showing that it is a nonprofit, publicly
funded CMHC that is certified to perform transfer evaluations under Florida
State law. See HCFA Ex. 4.
In order to comply with federal participation criteria,
an arrangement between a CMHC and another entity must provide that the
CMHC retains overall supervision over the screening process. HCFA Ex.
1. It is not sufficient for the CMHC merely to refer a patient to another
entity for screening. The CMHC must directly supervise the basic functions
which the other entity performs that comprise screening. Id., at
3 - 4. I have evaluated Petitioner's arguments that it has established
a satisfactory arrangement with another entity for performing screening.
I find them to be unpersuasive. The evidence in this case does not show
that Petitioner has a screening arrangement with another entity which
complies with federal requirements. Petitioner argues that it satisfies the statutory requirements
for Medicare certification by providing services "under arrangements"
pursuant to its contract with Miami Behavioral Health Center, Inc. (Miami
Behavioral Health), which is a CMHC under Florida law. HCFA does not contest
the fact that Miami Behavioral Health can provide transfer evaluations
under Florida law. HCFA Br., at 10. However, HCFA asserts that Petitioner's contract ("Evaluation
and Screening Agreement") with Miami Behavioral Health fails on its face
to satisfy the criteria for performing screening through another entity.
See HCFA Ex. 8. HCFA argues that, for the agreement to meet federal
participation requirements, the agreement must recite that Petitioner
retains the necessary management responsibility or supervisory authority
over the screening process. HCFA alleges that Petitioner's contract provides
that Petitioner "will maintain overall management responsibility for the
evaluation and screening services provided under this agreement"and that
Petitioner "shall at all times retain and exercise control of the patient
candidates and all evaluations and screenings as described herein." HCFA
Ex. 8, at 1 and 4. However, HCFA states, these provisions are contradicted
by a subsequent clause that indicates that Miami Behavioral Health is
"at all times acting and performing its duties as an independent contractor"
and not as an agent of Petitioner. HCFA Ex. 8, at 1, 4. Following this
contractual language is a clause stating that Petitioner will supervise
the services described in the contract including but not limited to credentialing
all Miami Behavioral Health staff involved in the screening process, and
reviewing reports with and meeting with Miami Behavioral Health. HCFA
Ex. 8, at 4. In its brief, Petitioner makes the argument that the contractual
language is unambiguous and a plain reading of the contract clearly supports
a finding of compliance with the federal criteria. Petitioner argues that
the "overall management responsibility" provision quoted above, as well
as the section of the agreement relating to control and supervision, demonstrate
satisfactorily that Petitioner will be retaining management and supervisory
authority over the screening process. P. Br., at 2. Moreover, Petitioner
argues that the provisions relating to Petitioner's control and the status
of Miami Behavioral Health as an independent contractor are not inconsistent
with each other. I am not convinced by Petitioner's arguments. HCFA maintains
that Petitioner's agreement with Miami Behavioral Health, with its contradictory
terms, does not satisfy the federal criteria. I agree. The agreement clearly
states that Miami Behavioral Health functions as an independent contractor
and that the relationship with Petitioner is not that of principal
and agent. This clause contradicts the terms elsewhere in the contract
that state that Petitioner has "overall management responsibility" for
the screening services and has control and supervision over the screening
process. Such contradictory statements are inadequate to establish that
Petitioner will be providing the requisite supervision and control over
Miami Behavioral Health. Thus, I find that Petitioner's contract fails
to satisfy applicable federal criteria for the provision of screening
services "under arrangements." Moreover, I agree with HCFA's further argument that since
Petitioner is not qualified under State law to provide the screening services
itself, it cannot supervise the performance by an entity that is qualified
under the law to perform the transfer evaluations. HCFA points out that
the Assistant Secretary for Mental Health of DCF, John Bryant, has stated
in his Declaration that under Florida law, an entity which is not authorized
to perform a transfer evaluation is also not authorized to supervise,
evaluate, assume professional responsibility for, or otherwise control
the performance of such an evaluation by a CMHC or clinic. HCFA Ex. 4,
at 2. Because Petitioner would be prohibited under Florida law from supervising,
being responsible for, or otherwise controlling the manner in which Miami
Behavioral Health conducts a transfer evaluation, Petitioner could not
exercise the supervision and control necessary to satisfy the criteria
for the provision of services "under arrangements" discussed above.
Finally, HCFA alleges that Petitioner has not provided
any proof that Miami Behavioral Health has in fact ever provided screening
services on its behalf pursuant to the contract. As support for this contention,
HCFA asserts that, during an on-site visit on May 19, 1998, Petitioner
was asked to produce documentation substantiating the provision of screening
services, and the facility administrator stated that Petitioner had not
provided such services. HCFA Ex. 5, at 4. HCFA contends that Petitioner
has not alleged that Miami Behavioral Health has ever provided screening
services on its behalf pursuant to the terms of the agreement. The Act requires that a CMHC actually be providing screening
services - either directly or through an acceptable other arrangement
- in order to qualify for reimbursement for partial hospitalization services.
The statutory definition of a CMHC includes the statement that a CMHC
is an entity that is providing specified services. Act, section
1861(ff)(3)(B)(i). The Act does not define the term "providing." However,
the common and ordinary meaning of the term is that something is actually
being given. A capability to provide something is not synonymous with
the concept of "providing." Thus, the capability to provide screening
services is not enough to satisfy the Act's requirements. A CMHC will
not qualify to participate in Medicare if it establishes that it has the
capability to provide screening services but fails to establish that it
actually is providing such services. The language in the Act is not ambiguous. Moreover, HCFA
has interpreted and applied the Act consistent with its plain meaning.
In the All States Letter, HCFA poses and responds to the following question:
HCFA Ex. 1, at 1 (emphasis added). Petitioner has not challenged HCFA's statement that Petitioner
has never provided any screening services. Nor has Petitioner offered
any evidence that it is actually providing - or that it ever has provided
- screening services via its agreement with Miami Behavioral Health. During
the on-site visit on May 19, 1998, the facility's Administrator admitted
that it had not provided any screening services. Moreover, Petitioner
has not averred, nor offered any proof, that it has provided such services
through its agreement at any date subsequent to May 19, 1998. Therefore,
based on Petitioner's failure to prove that it is in fact providing screening
services, I find that HCFA is further justified in denying Petitioner
participation in Medicare.
Petitioner asserts that HCFA has treated it differently
from other CMHC applicants in violation of due process. According to Petitioner,
its agreement is similar to other entities' screening agreements that
were found to meet federal participation requirements by HCFA. P. Br.,
at 2. Petitioner argues that it had relied on HCFA's representations and
proceeded to provide the required services to the community at a great
deal of expense that HCFA is now attempting to avoid reimbursing. It is
Petitioner's contention that HCFA should not be permitted to induce applicants
to expend time, effort, and money in treating Medicare patients, and then
be allowed to avoid paying for the benefits by relying on its own advisory
opinion (i.e., the All States Letter). Petitioner is essentially arguing that HCFA should be
estopped from denying Petitioner's certification application because Petitioner
was led to believe that its certification application would be approved
based: (1) on past general practice where HCFA had previously accepted
other evaluation and screening agreements which conformed to Petitioner's
agreement with Miami Behavioral Health in the instant case; (2) Petitioner
relied on HCFA's representations and proceeded to provide the required
services to the community at a great deal of expense. P. Br., at 2 - 3. I do not have 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 the Department has delegated authority
for me to hear and decide. That authority is specified in 42 C.F.R. ��
498.3 and 498.5. The regulations authorize me only to hear and decide
cases involving specified initial determinations by HCFA. The regulations give me the authority to hear and decide
whether HCFA's determination that an entity fails to qualify as a provider
was made correctly. 42 C.F.R. �� 498.3(b)(1); 498.5(a)(2). In such a case,
I may decide whether HCFA applied applicable regulations and interpretations
of the law correctly to the facts of a case. I may also decide whether
HCFA's interpretation of a regulation is correct or incorrect.
I do not have authority to hear claims of estoppel against HCFA or the Secretary. It is well-established that I and other administrative law judges on this Board lack the authority to hear and decide estoppel arguments in cases involving the manner in which HCFA allegedly has processed applications for provider certification. GranCare Home Health Service & Hospice, DAB CR464 (1997); The Rivers HealthCare Resources, Inc., DAB CR446 (1996); SRA, Inc. D/B/A St. Mary Parish Dialysis Center, DAB CR341 (1994). Petitioner has offered no argument here which would give me reason to revisit the holdings in these decisions. |
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JUDGE | |
Alfonso J. Montano Administrative Law Judge |
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FOOTNOTES | |
1. In its response brief, Petitioner states that the "only issue on appeal" is whether "[Petitioner] has failed to satisfy the requirements for providing 24-hour-a-day emergency care services as set forth in 42 C.F.R. � 410.2(2)." P. Br., at 1. HCFA states in a footnote in its reply brief that it "presumes that this statement is a typographical error, for the agency has previously indicated that it is seeking summary disposition only on the issue of whether petitioner satisfies the screening requirement and not on the issue of whether petitioner is providing the emergency services described in Section 1913(c)(1) of the PHSA." HCFA Reply Br., at 1- 2, n.1 (citing to HCFA Br., at 2, n.1). Because Petitioner's brief does not address the issue of whether Petitioner is providing emergency services, I will also presume that Petitioner's statement in its brief is a typographical error. The issues in this case are those set forth above. | |