Department of Health and Human Services DEPARTMENTAL APPEALS BOARD Civil Remedies Division |
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IN THE CASE OF | |
Midtown Community Mental Health Clinic |
DATE: July 24, 2000 |
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Health Care Financing Administration
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Docket No.C-99-509 Decision No. CR689 |
DECISION | |
I decide that the effective date of participation
in the Medicare program of Petitioner, Midtown Community Mental Health Care
Clinic, is August 7, 1997. I. Background and governing law
Petitioner is a community mental health clinic (CMHC)
providing partial hospitalization services for Medicare beneficiaries.
On September 6, 1996, Petitioner applied to be certified to participate
in the Medicare program. On August 5, 1997, the Health Care Financing
Administration (HCFA) denied Petitioner's application. On August 8, 1997,
Petitioner applied to HCFA for reconsideration of its determination. On
October 3, 1997, HCFA notified Petitioner that Petitioner had been approved
to participate in Medicare effective August 7, 1997. Petitioner disagreed with the reconsidered determination
insofar as it established an effective date of participation of August
7, 1997. Petitioner contended that it should have been certified to participate
in Medicare effective September 6, 1996, the date of its initial application
to participate in Medicare. Petitioner requested a hearing before an administrative
law judge to contest the effective date of its participation in Medicare.
The case was assigned to me for a hearing and a decision. HCFA moved for summary disposition. Petitioner opposed
the motion. I held a prehearing conference at which I identified issues
that required additional briefing. The parties submitted supplemental
briefs. HCFA submitted 10 proposed exhibits (HCFA Ex. 1 - HCFA Ex. 10)
with its motion for summary disposition. Petitioner submitted 11 proposed
exhibits (P. Ex. 1 - P. Ex. 11) in opposition to the motion and in support
of its contention that it should have been certified to participate in
Medicare effective September 6, 1996. I note that some of Petitioner's
proposed exhibits duplicate some of HCFA's proposed exhibits. However,
I am admitting into evidence all of the parties' proposed exhibits. I
hereby admit into evidence HCFA Ex. 1 - HCFA Ex. 10 and P. Ex. 1 - P.
Ex. 11.
"Partial hospitalization services" are services which
are described at section 1861(ff) of the Social Security 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 Services 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 services 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 issued additional guidance explaining the meaning
of the term "under arrangements. The Medicare Intermediary Manual (MIM)
explains, at section 3007, that it is not HCFA's intent that a provider
providing services under arrangements with another entity not function
merely as a billing agent for that entity:
HCFA Ex. 2 at 1 - 2.
In order to be certified to participate in Medicare, a
CMHC must apply to participate in Medicare. The CMHC must be inspected
by or on behalf of HCFA and HCFA must certify that the CMHC satisfies
applicable participation requirements. Prior to September 17, 1997, the regulation that governed
the effective date of participation of a CMHC was 42 C.F.R. � 489.13(c)(2)
(1995). That regulation provided that, for requests for Medicare participation
received after June 30, 1992:
42 C.F.R. � 489.13(c)(2) (1995). That regulation was changed effective September 17, 1997.
On that date, the relevant regulation governing the effective date of
participation of a CMHC was codified as 42 C.F.R. � 489.13(a)(2)(i). This
regulation specifies that the effective date of a participation agreement
with a CMHC:
42 C.F.R. � 489.13(a)(2)(i). II. Issue, findings of fact and conclusions of
law
The issue in this case is the date on which Petitioner's
participation in the Medicare program became effective.
I make findings of fact and conclusions of law (Findings) to support my decision. 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 the parties' arguments to decide
whether there are disputed issues of material fact. There are no disputed
material facts in this case. Essentially, the parties are relying on the
same facts and are making legal arguments based on those facts.
As I discuss above, at Part I.B. of this decision, a CMHC
will satisfy federal participation requirements for services that it provides
"under arrangement" with another entity only if it retains and exercises
overall management responsibility for such services. HCFA Ex. 1 at 3;
HCFA Ex. 2 at 1 - 2. Petitioner did not establish that it satisfied federal
participation requirements for providing services "under arrangement"
until August 6, 1997. Prior to that date, the arranged-for services that
Petitioner provided were being provided without Petitioner having the
requisite management control and supervisory authority over those services. On September 6, 1996, Petitioner entered into a contract
with Dr. Vladimir Einisman to provide arranged-for services which included
specified outpatient services and 24 hour per day emergency services.
HCFA Ex. 8 at 1. The services which were provided by Dr. Einisman were
among those services that a CMHC must provide as a prerequisite to participating
in Medicare. However, under the terms of the September 6, 1996 agreement,
those services were not being provided in a manner which satisfied federal
participation requirements. The agreement between Petitioner and Dr. Einisman
failed to provide for any management or supervision of Dr. Einisman's
services by Petitioner. Id. Nor did there exist collateral agreements between Petitioner
and Dr. Einisman which gave Petitioner the requisite management authority
over or supervision of Dr. Einisman's services. Dr. Einisman served as
Petitioner's medical director. On September 4, 1994, he signed a contract
with Petitioner which governed his services as Petitioner's medical director.
HCFA Ex. 5. The contract appoints Dr. Einisman to serve as Petitioner's
medical director. Id. at 1. It describes Dr. Einisman's duties
as medical director. Id. at 1 - 2. However, the contract does not
provide for any supervision of Dr. Einisman's performance of his duties.
Id. at 1 - 5. Petitioner ultimately assumed management responsibility
for and supervisory control over the arranged-for services that were provided
by Dr. Einisman. When Petitioner did so it satisfied federal participation
requirements for arranged-for services. However, it did not assume that
authority until August 6, 1997. On that date, Petitioner and Dr. Einisman
agreed that Petitioner would provide management and supervision of those
arranged-for services consistent with federal participation requirements
which govern CMHCs. HCFA Ex. 8 at 3.
As I discuss above, at Part I.B.2. of this decision, the
language of the regulation which governs the effective date of participation
in Medicare of a CMHC changed on September 17, 1997. Prior to that date,
42 C.F.R. � 489.13(c)(2) provided that the effective date of participation
of a CMHC was the date that the CMHC met all federal participation requirements,
but, not prior to the date that the CMHC applied for participation. Beginning
with September 17, 1997, the revised 42 C.F.R. �
489.13(a)(2)(i) provides that the effective date of participation of a
CMHC will be the date on which HCFA accepts a participation agreement
from the CMHC. Arguably, the two versions of the regulations might operate
to produce different consequences in cases involving identical facts.
The pre-September 17, 1997 version of the regulation allows a CMHC to
participate on the date that it demonstrates compliance with participation
requirements. Under the pre-September 17, 1997 version, a CMHC might establish
that it meets participation requirements either as of the date it applies
for participation or on some date that is in between the date it applies
to participate and the date on which HCFA evaluates Petitioner's application.
Under that version, the effective date of participation would be the date
on which Petitioner is in compliance with participation requirements even
if HCFA completed its evaluation of the evidence which establishes compliance
at a later date. The current version of the regulation appears to vest
discretion in HCFA to decide the date on which a CMHC qualifies to participate.
Under the current version, it appears that HCFA may determine to certify
a CMHC to participate at a date which is as late as the date that HCFA
completes its evaluation of a CMHC's application even if the evidence
of compliance that is submitted to HCFA by the CMHC demonstrate compliance
at an earlier date than the evaluation date. Petitioner argues that its certification is governed by
the pre-September 17, 1997 version of the regulation. It avers that the
version which became effective on September 17, 1997 is inapplicable here
inasmuch as Petitioner applied prior to September 17, 1997 both for certification
and for reconsideration of HCFA's initial determination denying certification.
Petitioner asserts that it would be an impermissible retroactive application
of the September 17, 1997 regulation if that regulation were to govern
Petitioner's application for participation. Petitioner asserts that it attained compliance with participation
requirements on September 6, 1996, the date of its agreement with Dr.
Einisman to provide arranged-for services. It argues that, under the pre-September
17, 1997 version of 42 C.F.R. � 489.13, it should be certified to participate
as of September 6, 1996 inasmuch as September 6, 1996 is the date that
Petitioner met all federal participation requirements. HCFA argues that the version of 42 C.F.R. � 489.13 which
became effective on September 17, 1997 governs here. It asserts that the
regulation is not being applied retroactively inasmuch as HCFA made its
final determination to certify Petitioner on October 3, 1997, after the
effective date of the regulation. Moreover, it asserts that the September
17, 1997 version governs, even if Petitioner might have established an
earlier effective date of participation under the version of the regulation
that was in effect prior to September 17, 1997. Resolving the issue of which version of the regulation
governs might be significant in a case where a CMHC establishes that it
complied with all participation requirements on a date that precedes the
date on which HCFA accepts the CMHC's application for participation. Here,
however, the dispute as to which version of the regulation governs is
academic. That is because Petitioner did not establish that it complied
with all participation requirements until August 6, 1997. Under either version of the regulation, Petitioner would
not have been eligible to participate in Medicare prior to August 7, 1997.
The pre-September 17, 1997 version of the regulation enabled Petitioner
to participate as of the date it attained compliance with participation
requirements. But, Petitioner did not execute the addendum to its agreement
with Dr. Einisman governing services provided "under arrangement" until
August 6, 1997. It was not in compliance with participation requirements
at any time prior to August 7, 1997. Therefore, under the pre-September
17, 1997 version of the regulation, the date that Petitioner established
that it was in compliance with participation requirements was, effectively,
August 7, 1997. That is the date on which HCFA certified Petitioner to
participate in Medicare. The current version of the regulation gives HCFA
greater flexibility in determining the effective date of participation
of a CMHC. However, even under the current regulation, the earliest
date that a CMHC may be certified to participate is the date that it attains
compliance with all federal participation requirements. In this case,
that date was August 7, 1997, the date on which HCFA certified Petitioner
to participate. I note that the addendum to Petitioner's agreement with Dr. Einisman is dated August 6, 1997 and that HCFA certified Petitioner to participate effective August 7, 1997. I do not conclude that HCFA should have certified Petitioner to participate effective August 6, 1997. Evidently, HCFA assumed that Petitioner's supervision of Dr. Einisman would not begin until August 7, 1997, the day after the date of the addendum. That is not an unreasonable assumption for HCFA to have made. |
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JUDGE | |
Steven T. Kessel Administrative Law Judge |
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