Department of Health and Human Services DEPARTMENTAL APPEALS BOARD Civil Remedies Division |
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IN THE CASE OF | |
Counseling and Therapeutics Center, L.L.C., |
DATE: August 31, 2000 |
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Health Care Financing Administration
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Docket No.C-99-406 Decision No. CR696 |
DECISION | |
I decide that Petitioner, Counseling and Therapeutics
Center, L.L.C., failed to establish that it is providing all of the services
that must be provided by a community mental health center (CMHC) in order
to qualify for participation in the Medicare program. I sustain the determination
of the Health Care Financing Administration (HCFA) to deny certification
to Petitioner to participate in Medicare as a CMHC. I. Background facts and governing law
Petitioner is a corporation that is located in Baton Rouge,
Louisiana. Petitioner applied to be certified to participate in Medicare
as a CMHC. In a letter dated October 1, 1998, HCFA informed Petitioner
that HCFA had determined that Petitioner did not meet the criteria for
participation in Medicare as a CMHC. HCFA concluded that Petitioner was
not providing services that a CMHC must provide in order to be eligible
to participate in Medicare. By letter dated November 2, 1998, Petitioner
requested HCFA to reconsider its determination. HCFA did so and concluded
again that Petitioner failed to satisfy participation requirements. HCFA
notified Petitioner of its reconsideration determination by letter dated
March 11, 1999. Petitioner then requested a hearing and the case was assigned
to me for a hearing and a decision. Petitioner moved for summary disposition and HCFA cross-moved
for summary disposition. Each party submitted proposed exhibits with its
motion. Petitioner submitted 12 proposed exhibits (P. Ex. 1 - P. Ex. 12).
HCFA submitted eight proposed exhibits (HCFA Ex. 1 - HCFA Ex. 8). I am
receiving into evidence P. Ex. 1 - P. Ex. 12 and HCFA Ex. 1 - HCFA Ex.
8.
A CMHC must be certified to participate in the Medicare
program in order to be able to claim, and to receive reimbursement for,
services that it provides to Medicare beneficiaries. If a CMHC is certified
to participate in Medicare it will be eligible to be reimbursed for services
known as "partial hospitalization services" that it provides to Medicare
beneficiaries. See Social Security Act (Act), section 1861(ff)(3)(A). The term "partial hospitalization services" is explained
at section 1861(ff) of the Act. Partial hospitalization services consist
of services that are prescribed by a physician and are 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 Act defines a CMHC to be an entity that is:
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. In order to be certified to participate in Medicare, a
CMHC must be providing all of the services that are described
in section 1913(c)(1) of the Public Health Service Act and at 42 C.F.R.
� 410.2. HCFA Ex. 1 at 1 - 2. A CMHC will not satisfy participation requirements
if it is providing some of the described services - such as partial hospitalization
services - but not all of them. Id. A CMHC may provide its services either directly or through
an arrangement with an individual or entity. Services that are provided
"directly" include those services that are provided by a CMHC's employees
during the course of their duty hours. HCFA has explained what it means
by services that a CMHC provides via an arrangement:
HCFA Ex. 1 at 3 - 4. Supervision of arranged-for services
requires a CMHC to apply many of the same quality controls to arranged-for
services that it applies to services that are furnished directly. HCFA
Ex. 2 at 1 - 2. HCFA has explained that, in an arranged for service, a
CMHC must:
Id. at 2. II. Issue, findings of fact and conclusions of
law
The issue in this case is whether Petitioner satisfied
the requirements for participation of a CMHC in the Medicare program.
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.
Neither party to this case requested to present testimony
in person. Both HCFA and Petitioner have moved to have this case decided
based on written submissions. Therefore, I conclude that it is appropriate
to decide the case based on the parties' written submissions.
As I discuss above, at Part I.B., the Act and implementing
regulations specify the services that a CMHC must provide in order to
qualify to participate in the Medicare program. A CMHC must provide all,
and not just some, of these services in order to qualify to participate.
Moreover, it is not sufficient for a CMHC merely to demonstrate that it
has the capacity or capability to provide the requisite services. In order
to qualify to participate in Medicare, a CMHC must demonstrate that it
actually is providing the requisite services. Psychstar of America,
DAB CR645 at 6 (2000). HCFA determined that Petitioner did not establish that it was providing several of the services that a CMHC is required by law to provide in order to qualify for Medicare reimbursement. These services consisted of the following:
HCFA Ex. 3 at 1 - 2. I have considered the evidence that
the parties - and, in particular, Petitioner - submitted in order to decide
whether, in fact, Petitioner was providing these services. I conclude
that Petitioner has not shown that it was providing these services, either
directly or under an acceptable arrangement.
In its initial determination, HCFA made specific findings
about the absence of proof that Petitioner was providing all required
services. At an onsite review of Petitioner's operation that was conducted
on September 24, 1998, Petitioner's Director was asked by HCFA to provide
evidence to show that Petitioner was providing specialized outpatient
services for children and elderly individuals. Petitioner produced records
to show that, in the period running from January to May, 1997, Petitioner
provided counseling services to children. HCFA Ex. 3 at 3. However, Petitioner
produced no records to show that it provided services after that date.
Id. Petitioner produced no evidence to show that it was providing
services for elderly individuals. Id. Petitioner was also asked at the September 24, 1998 review
to establish that it was providing 24-hour emergency service. HCFA Ex.
3 at 3. Petitioner produced no evidence to show that it was providing
that service. Id. Finally, Petitioner was asked to establish that
it was providing screening for patients being considered for admission
to State mental health facilities to determine the appropriateness of
such admissions. Id. at 4. Once again, Petitioner did not produce
evidence to show that it was providing that service. Id. On February 14, 2000, counsel for Petitioner and HCFA
stipulated that Petitioner was not contending that it provided outpatient
services for children or the elderly, 24-hour-a- day emergency service,
or screening for patients for admission to State mental health facilities
directly. Petitioner reiterated this stipulation in its motion for summary
disposition. Petitioner's Initial Brief on Summary Disposition at 1 -
2.
Petitioner relies on a clinical services management agreement
between itself and CPHC Behavioral Health Management LLC (CPHC) as proof
that it is offering all required services via an arrangement with another
entity. P. Ex. 1. I have looked closely at this agreement. I conclude
that it does not establish that Petitioner has an acceptable arrangement
with another entity to provide all required services. I reach this conclusion
for the following reasons.
There is no language in the management agreement which
either states directly or which suggests that CPHC will provide all of
the services that a CMHC must provide in order to qualify to participate
in Medicare but which Petitioner is not providing directly. In particular,
the management agreement does not cover the provision of specialized outpatient
services to children or elderly individuals nor does it assure that CPHC
will provide 24-hour per day emergency services. The specific wording of the management agreement obligates
CPHC only to provide partial hospitalization services. The management
agreement contains a schedule (Schedule B) which enumerates the services
that CPHC will provide for Petitioner. P. Ex. 1
at 11 - 13. Schedule B states that CPHC will provide "all necessary partial
hospitalization services . . . ." Id. at 12. It does not state
that CPHC will provide specialized outpatient services for children and
elderly individuals. See Id. Nor does it state that CPHC
will provide 24-hour per day emergency services. Furthermore, there is nothing in the management agreement
from which I could infer reasonably that the parties intended that CPHC
would provide the required specialized outpatient services or emergency
services. The fact that the agreement expressly mentions partial hospitalization
services and does not mention the other required services is strong grounds
for me to infer that the agreement does not require CPHC to provide
the other required services. Moreover, the statutory definition of "partial
hospitalization services" plainly does not cover specialized outpatient
services to children or the elderly nor does it encompass emergency services.
Act, sections 1861(ff)(1); 1861(ff)(2)(A) - (I). In the absence of some
special definition of the term "partial hospitalization services" in the
management agreement, it is reasonable to assume that the parties to the
agreement intended to give the term its statutory meaning.
Petitioner seems to be arguing in its motion for summary
disposition that CPHC is in fact providing all required services even
if the agreement between Petitioner and CPHC does not specifically refer
to all of these services. Petitioner contends that P. Ex. 2 - P. Ex. 8
establish that these services are being provided. HCFA objects to Petitioner's contention on the ground
that Petitioner did not assert, either in its request for reconsideration,
or in its hearing request, that it actually was providing all covered
services via an arrangement with CPHC. Although I agree with HCFA that
Petitioner is raising an issue that it did not raise previously, I have
decided to hear and decide the issue. 42 C.F.R. � 498.56(a). However, I do not find that Petitioner's exhibits offer
persuasive evidence that Petitioner is providing all required services
via an arrangement with CPHC. First, none of the exhibits suggest that
either Petitioner or CPHC is offering specialized outpatient services
for children. P. Ex. 2 - P. Ex. 8 are excerpts from patient treatment
records. None of the patients whose records Petitioner supplied appear
to be children. See Ids. Second, the exhibits do not establish that either Petitioner
or CPHC is offering 24-hour per day emergency services. Petitioner contends
that the provision of such services is established by P. Ex. 7 and P.
Ex. 8. These exhibits, which are identical copies of the same treatment
record, show that, on October 13, 1998, at 4:30 a.m., a patient presented
to Concord Hospital for assessment and admission. The patient is described
in the record as having suicidal ideation. An assessment was performed
at Concord Hospital by Dr. Rama Kongar. These exhibits establish, at most, that Petitioner or
CPHC may have referred a patient to Concord Hospital. They say nothing
about the services that Petitioner provided to the patient. They do not
suggest that Petitioner or CPHC actually provided emergency services to
the patient. Indeed, all of the services that are described in the exhibits
were performed by Concord Hospital. Third, the exhibits do not establish that either Petitioner
or CPHC is providing specialized outpatient services for elderly individuals.
Petitioner contends that the provision of such services is established
by P. Ex. 2. This exhibit is a treatment record for an individual, born
December 23, 1934, who was provided care at Petitioner's facility. I agree that the individual whose record Petitioner supplied
is an "elderly individual." The record documents that this individual
received outpatient services from Petitioner. P. Ex. 2 at 3 - 7. Services
appear to have included group therapy. Id. However, the record
also documents that all of the services were provided to this individual
during a period that ran from August 13, 1996 through August 15, 1997.
Id. No outpatient services are documented as having been provided
to this individual, or to any other elderly individual, after August 15,
1997. The evidence that Petitioner offered to show that it is
providing outpatient services to elderly individuals addresses services
that were provided in the remote past and not the services that Petitioner
was providing at the time that it applied for participation. The evidence
that Petitioner offers to establish that it is providing outpatient care
to elderly individuals shows only that Petitioner gave outpatient care
to a single elderly patient during a period of time that is between one
and two years previous to the onsite certification review that HCFA conducted
of Petitioner to ascertain Petitioner's compliance with participation
requirements. HCFA Ex. 3 at 1. As I discuss above, at Part I.B. of this
decision and at the beginning of this Finding, a CMHC must be providing
all required services in order to qualify for participation in Medicare.
The fact that a CMHC may have provided a service at some point in the
remote past does not establish that the CMHC is providing such service
now.
As I discuss above, at Part I.B., HCFA has determined
that an agreement between a CMHC and another individual or entity to provide
services by an arrangement will not satisfy participation requirements
- even if it assures that required services will be provided - if it does
not vest in the CMHC the requisite degree of management and supervisory
authority. The agreement between Petitioner and CPHC plainly does not
give Petitioner the requisite management and supervisory authority. A CMHC must manage closely and supervise any services
that are provided via an arrangement. HCFA Ex. 2 at 1 - 2. Indeed, a CMHC
must exercise the same degree of management and supervision over the services
that are provided by arrangement as it would exercise if it performed
the services directly. A primary object of certification to participate
in Medicare is to assure beneficiaries that the certified provider is
conforming with applicable standards which govern quality of care. That
purpose would be defeated if a CMHC were able to delegate covered services
to another entity without subjecting those services to the same degree
of control as it exercises over services that it provides directly. The management agreement between Petitioner and CPHC is
deficient when it is measured against this standard. The agreement does
not provide for close management or supervision of CPHC by Petitioner.
To the contrary, it establishes CPHC as an independent contractor which
provides services free from Petitioner's management or supervision. The management agreement identifies CPHC as "the Manager."
P. Ex. 1 at 1. It delegates to CPHC the authority to "establish, manage,
and operate" a partial hospital psychiatric program. P. Ex. 1 at 1. It
contains no provision which gives Petitioner the authority to manage and
supervise these delegated services. See Id. at 1 - 9. Moreover,
it expressly states that CPHC is to operate as an independent contractor.
The independent contractor clause, on its face, exempts CPHC from close
management control and supervision by Petitioner. The agreement states
that:
Id. at 5. There is nothing in the management agreement to suggest
that Petitioner and CPHC intended to give the term "independent contractor"
a meaning other than its plain meaning. An independent contractor is,
under common law, exempt from the close supervision and control that an
employer has over its employee. Black's Law Dictionary 770 (6th
Ed. 1990), citing Restatement (Second) of Agency, � 2. III. Conclusion For the reasons stated, I sustain HCFA's determination to deny certification to Petitioner to participate in Medicare as a CMHC. |
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JUDGE | |
Steven T. Kessel Administrative Law Judge |
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