Department of Health and Human Services DEPARTMENTAL APPEALS BOARD Civil Remedies Division |
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IN THE CASE OF | |
Comprehensive Mental Health Center of Baton Rouge, |
DATE: November 3, 2000 |
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Health Care Financing Administration
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Docket No.C-00-145 Decision No. CR709 |
DECISION | |
The three cases that I decide here arise from separate
hearing requests. I did not consolidate them inasmuch as a different Petitioner
requested a hearing in each case. However, I am electing to issue consolidated
decisions for three reasons: first, the three Petitioners are closely
related entities; second, the jurisdictional facts are identical in all
three cases; and third, the outcome of all three cases depends on resolving
a common legal issue. I dismiss the hearing request in each of the three cases.
I find that these Petitioners have no rights to hearings inasmuch as the
Health Care Financing Administration (HCFA) did not make determinations
affecting any Petitioner that gave that Petitioner a right to a hearing.
Specifically, I find that HCFA made no adverse initial or reconsideration
determination in any of the three cases concerning the Medicare certification
status of any Petitioner. The determinations that HCFA made involved classification
of the reimbursement status of the three Petitioners. Moreover, HCFA did
not consent to granting Petitioners hearings. I. Background and Undisputed Material Facts The facts that I recite here are not disputed. I base
my recitation of the facts on the exhibits that Petitioners attached to
their motions for summary disposition. Each Petitioner submitted 21 proposed
exhibits in support of its motion for summary disposition, and an additional
exhibit as part of its reply to HCFA's cross motion for summary disposition,
for a total of 22 exhibits from Petitioner in each case. Each of Petitioner's
sets of exhibits is numbered sequentially along with that case's docket
number. For example, in the case of Comprehensive Mental Health Center
of Alexandria, Petitioner submitted 22 proposed exhibits which are
designated as P. Ex. 1 - P. Ex. 22. Each of the 22 proposed exhibits also
is designated with the case's docket number of C-00-146. I am receiving
into evidence the 22 proposed exhibits that each Petitioner submitted.
In these decisions when I refer to an exhibit, I refer to that exhibit
by the docket number of the case in which it has been admitted as well
as by its exhibit number. Petitioners, Comprehensive Mental Health Center of Baton
Rouge (Petitioner Baton Rouge), Comprehensive Mental Health Center of
Alexandria (Petitioner Alexandria), and Comprehensive Mental Health Center
of Monroe (Petitioner Monroe) are all community mental health centers.
Each of the Petitioners is incorporated as a wholly-owned subsidiary of
Comm-Care Corporation (Comm-Care). C-00-145, P. Ex. 1; C-00-146, P. Ex.
1; C-00-147, P. Ex. 1. Each Petitioner is certified to participate in the Medicare
program as a community mental health center (CMHC) providing partial hospitalization
services. C-00-145, P. Ex. 11; C-00-146, P. Ex. 11; C-00-147, P. Ex. 11.
A CMHC is defined by section 1861(ff)(3)(B) of the Social Security Act
(Act) and by section 1913(c)(1) of the Public Health Service Act to be
an entity that provides specified mental health services. These services
include specialized outpatient services for children, the elderly, individuals
with serious mental illnesses, and residents of a CMHC's service area
who have been discharged from inpatient treatment at a mental health facility.
The services also include 24-hour-a-day emergency care services, day treatment
or other partial hospitalization services, and screening for patients
being considered for admission to State mental health facilities to determine
the appropriateness of such admission. The three Petitioners were established originally and
were certified to participate in Medicare as free-standing clinics in
Baton Rouge, Alexandria, and Monroe, Louisiana. C-00-145, P. Ex. 11 at
1; C-00-146, P. Ex. 11 at 1; C-00-147, P. Ex. 11 at 1. With the passage
of time and for efficiency purposes, Comm-Care relocated each of the three
Petitioners to the premises of a long-term care facility that was owned
and operated by Comm-Care. Petitioner Alexandria was relocated to the
premises of Comm-Care's Tioga Manor Nursing Center, Petitioner Baton Rouge
was relocated to the premises of Comm-Care's Community Care Center of
Baker, and Petitioner Monroe was relocated to the premises of Comm-Care's
Ridgecrest Nursing Home. C-00-145, P. Ex. 11 at 1 - 2; C-00-146,
P. Ex. 11 at 1 - 2; C-00-147, P. Ex. 11 at 1 - 2. Each of the long-term care facilities to which a Petitioner
was relocated is separately certified from the Petitioner to participate
in the Medicare program as a skilled nursing facility. Section 1819(a)
of the Act defines a skilled nursing facility to be an entity which is
primarily engaged in providing to residents skilled nursing care and related
services for residents who require medical or nursing care, or rehabilitation
services for the rehabilitation of injured, disabled, or sick persons,
and which is not primarily established for the care and treatment of mental
illnesses. Petitioners contend that, in their initial requests for
certification as Medicare participants, which they made in 1995 and 1996,
they asked that they be classified as being provider- based for purposes
of reimbursement. Petitioners' reply brief at 2 - 4; C-00-145, P. Ex.
6; C-00-146, P. Ex. 6; C-00-147, P. Ex. 6. Under the Medicare program,
a "provider-based" reimbursement status may have important reimbursement
implications for a participating facility. Essentially, a provider-based
facility is one which has been found to be an integral part of another
provider so that the other provider may claim reimbursement for the services
that are provided by the integrated facility as if those services were
given by the provider itself. HCFA Program Memorandum A-96-7. If a facility
is accorded provider-based reimbursement status, it may mean that the
provider with which the facility is integrated may be able to claim reimbursement
from Medicare for certain of the integrated facility's costs. Such costs
may not be reimbursable, either to the facility or to the provider with
which it asserts to be integrated, if the facility is not accorded provider-based
status. Thus, in some circumstances, Medicare may effectively pay more
for the services of a provider-based facility than it would pay if the
facility were determined to be a free-standing facility. However, although Petitioners sought provider-based reimbursement
classification, HCFA did not accord them that status. HCFA determined
that Petitioners were free-standing facilities. C-00-145, P. Ex. 8; C-00-146,
P. Ex. 8; C-00-147, P. Ex. 8. It is unclear from the record of these cases
if or how HCFA communicated these initial reimbursement classifications
to Petitioners or to Comm-Care. In any event, Petitioners claimed reimbursement
from HCFA's Medicare intermediary as if they were provider-based facilities.
Petitioners' briefs at 3. On February 9, 1998, the intermediary notified Comm-Care
that it would have to re-file its December 12, 1997 Medicare cost report.
C-00-145, P. Ex. 10; C-00-146, P. Ex. 10; C-00-147, P. Ex. 10. The intermediary
advised Comm-Care that Petitioners had been reported incorrectly on Comm-Care's
cost report as if they were provider-based facilities when, in fact, they
were free-standing entities. Ids. Comm-Care then requested HCFA to classify Petitioners
as provider-based facilities, effective from June 1, 1996 forward. C-00-145,
P. Ex. 11 - P. Ex. 13; C-00-146, P. Ex. 11 - P. Ex. 13; C-00-147, P. Ex.
11 - P. Ex. 13. On or about March 1, 1998, HCFA notified Comm-Care by
telephone that HCFA had determined that the three Petitioners all were
free-standing facilities and were not provider-based. C-00-145, P. Ex.
9; C-00-146, P. Ex. 9; C-00-147, P. Ex. 9. On March 19, 1998, Comm-Care
requested reconsideration from HCFA. C-00-145, P. Ex. 14; C-00-146, P.
Ex. 14; C-00-147, P. Ex. 14. On July 9, 1998, HCFA advised Comm-Care orally
that it had denied the reconsideration requests. C-00-145, P. Ex. 9; C-00-146,
P. Ex. 9; C-00-147, P. Ex. 9. Petitioners requested hearings before the Provider Reimbursement
Review Board (PRRB) to challenge HCFA's classification of their reimbursement
status. The PRRB concluded that it lacked jurisdiction to hear these challenges.
C-00-145, P. Ex. 18; C-00-146, P. Ex. 18; C-00-147, P. Ex. 18. Petitioners
filed requests for reconsideration with the PRRB, which were denied. C-00-145,
P. Exs. 19, 20; C-00-146, P. Exs. 19, 20; C-00-147,
P. Exs. 19, 20. On November 3, 1999, Petitioners filed requests for hearing
seeking hearings before an administrative law judge in order to challenge
HCFA's determinations as to their reimbursement classification status.
The cases were assigned to me for hearings and decisions. Petitioners
filed motions seeking summary disposition in their favor. HCFA cross-moved
for summary disposition in each case. II. Issues, Findings of Fact and Conclusions of
Law
The issue in these cases is whether I am authorized to
hear and decide Petitioners' challenges to HCFA's reimbursement classification
determinations that Petitioners are free-standing facilities, and not
provider-based facilities as Petitioners contend. Because I find that
I do not have authority to hear and decide these cases, I decline to address
other issues that the parties have raised. These other issues are: whether
Petitioners timely filed their hearing requests; assuming Petitioners
did not timely file their hearing requests, whether they established good
cause for not having done so; and whether Petitioners satisfy HCFA's criteria
for provider-based reimbursement status.
I make findings of fact and conclusions of law (Findings)
to support my decisions in these cases. I set forth each Finding below
as a separately numbered heading. I discuss each Finding in detail.
These cases address the identical issue that was heard
and decided in Specialty Hospital of Southern California - La Mirada,
DAB CR630 (1999), aff'd DAB No. 1730 (2000), and in Metropolitan
Methodist Hospital, DAB CR574 (1999), aff'd DAB No. 1694 (1999).
Those cases reach the same result that I reach here. Under the regulations
which govern these cases, a determination by HCFA as to how to classify
a provider for purposes of reimbursement is not a determination which
gives a dissatisfied party hearing and appeal rights. I do not have the
authority to hear and decide a case in which the issue is reimbursement
classification status absent consent from HCFA for me to hear and decide
it. As the Departmental Appeals Board explained in its La Mirada
decision, parties who seek to contest actions taken by HCFA have rights
to hearings only in those limited circumstances where the Act or regulations
confer hearing rights. La Mirada, DAB No. 1730 at 7 - 9. In the regulations which applied to these cases as of
the dates that HCFA took its classification actions concerning Petitioners,
a prospective provider had a right to a hearing to challenge a determination
as to whether it is qualified to participate in Medicare as a provider
of services. 42 C.F.R. � 498.3(b)(1). Hearing rights have been conferred
in other specifically defined circumstances. La Mirada, DAB No.
1730 at 8 n.8. However, the regulations which apply to these cases did
not confer a hearing right on a provider that is dissatisfied with the
way in which HCFA classified it for reimbursement purposes. Petitioners do not have a right to a hearing to challenge
their reimbursement classifications. The facts of these cases show that
what is at issue here are reimbursement classifications and not determinations
of provider participation status. Under Medicare, a provider certification
has a very different meaning than does a reimbursement classification.
"Provider certification" is the act of determining whether a prospective
provider meets the terms and conditions of participation in Medicare.
Essentially, these terms and conditions address issues pertaining to quality
of care, health, and safety. "Reimbursement classification" is the act
of determining how a certified provider will be reimbursed for the services
that it provides. Petitioners are certified to participate in Medicare as
are the skilled nursing facilities with which they are associated. HCFA
never determined that Petitioners failed to qualify as providers of services
nor has it determined to terminate their status as providers. The sole
point of dispute between Petitioners and HCFA is the methodology by which
Medicare reimburses for the services that Petitioners provide. The issue in these cases is clear, as is the law on which
I base my rulings. The outcome is clear as well. Petitioners have no rights
to hearings because they are challenging their reimbursement classifications
and not their certification status. To some extent, however, the waters of these cases have
been muddied by the inconsistent positions that HCFA has taken in other
cases which involve reimbursement classification issues. In the cases
that I discuss above, HCFA has argued - correctly - that administrative
law judges do not have the authority to hear and decide reimbursement
classification issues. However, on other occasions, HCFA has advocated
that facilities be given hearings to contest reimbursement classifications.
That was the position that HCFA took in Johns Hopkins Health Systems,
DAB CR598 (1999), aff'd DAB No. 1712 (1999); in The Memorial
Hospital at Easton, DAB CR634 (1999); and, most recently, in Baylor
University Medical Center, DAB CR701 (2000) and Baylor Medical
Center at Richardson, DAB CR702 (2000) (in the Johns Hopkins
case, HCFA had a change of heart and argued that I had no authority to
hear and decide the case after it had advocated that I hear and decide
it and after I had ruled that I would hear and decide the case). I elected to hear and decide the Johns Hopkins,
Easton, Baylor, and Baylor at Richardson cases because,
in each of those cases, HCFA advocated that I hear and decide it. As the
Departmental Appeals Board noted in its La Mirada decision:
DAB No. 1730 at 12 n.12 (emphasis in original). However,
my decisions to hear and decide these cases in no way suggests that I
- unlike HCFA - have been inconsistent in my analysis of when I have authority
to hear and decide a case. I have held consistently that I do not have
the authority to hear and decide a classification issue when that issue
has been presented to me for a decision. I can discern no principled distinction between those
cases in which HCFA has argued that administrative law judges have the
authority to hear and decide reimbursement classification issues and those
cases in which HCFA has argued that administrative law judges lack the
authority to hear and decide reimbursement classification issues. Arguably,
there may exist an instance where there are both provider certification
and reimbursement classification issues at stake. In that circumstance,
the administrative law judge would have the authority to hear and decide
the certification issue. But, under no circumstance do the regulations
that were in effect at the time of the Johns Hopkins, Easton,
Baylor, or Baylor at Richardson decisions authorize an administrative
law judge to hear and decide a reimbursement classification issue, even
by bootstrapping that issue on to a certification issue. Petitioners in these cases argue that, in fact, they are
challenging the initial determinations that HCFA made concerning their
participation status. They assert that they are challenging HCFA's initial
determinations that they are free-standing and not provider-based facilities
which, according to Petitioners, were made as part of HCFA's determinations
that they qualified to participate in Medicare as CMHCs. Thus, according
to Petitioners, they have hearing rights in these cases inasmuch as the
determinations that Petitioners were free-standing facilities are inextricably
bound to the determinations that they qualified to participate as CMHCs.
Petitioners' reply brief at 2 - 4; see C-00-145, P. Ex. 8; C-00-146,
P. Ex. 8; C-00-147, P. Ex. 8. However, as I explain above, no hearing rights exist to
challenge a reimbursement classification determination, even where that
determination is made as an aspect of a determination concerning whether
a facility meets participation criteria. Reimbursement classification
and participation are entirely separate concepts. Petitioners
gain no hearing rights here from HCFA's original determinations to approve
their participation and simultaneously to classify them as free-standing
entities. Petitioners note that the regulations governing hearings
were amended effective October 10, 2000. The new regulation, which is
to be codified at 42 C.F.R. � 498.3(b)(2), provides that an initial determination
by HCFA shall include:
65 Fed. Reg. 18,434, 18,549 (2000). The new regulation
gives a provider the right to a hearing to challenge a determination as
to whether it is a provider-based facility. Arguably, Petitioners would
have had hearing rights in these cases to challenge HCFA's determinations
that they were free-standing and not provider-based facilities had this
regulation been in effect on the dates that HCFA made its determinations.
However, this regulation was not in effect prior to October 10, 2000,
and the determinations in these cases were made prior to that date. There
is nothing in the regulation or in the Federal Register that states or
suggests that the Secretary intended that this regulation have retroactive
effect. I do not find that the regulation was intended to apply retroactively
absent a clear statement of intent by the Secretary to apply it retroactively. Finally, Petitioners argue that, if they are denied hearings,
they will be without recourse in this Department to challenge their reimbursement
classifications. They point out that the PRRB has previously refused to
hear and decide the challenges that Petitioners raised before that Board.
Petitioners argue that they will be denied due process if no entity within
this Department will hear their cases. I am not unmindful of the due process concerns raised
by Petitioners. However, my authority to hear and decide cases is limited
to that which has been delegated to me by the Secretary. The Secretary
has not delegated to me the authority to hear and decide reimbursement
classification determinations that were made by HCFA prior to October
10, 2000. Therefore, I may not hear and decide these cases.
I observed at Part II.A. of these decisions that the parties have raised three issues which I am declining to hear and decide. I do so because these issues are made moot by the absence of authority for me to hear and decide these cases. |
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JUDGE | |
Steven T. Kessel Administrative Law Judge |
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