Borgess Medical Center, DAB CR5185 (2018)

DECISION

Petitioner, Borgess Medical Center, has not shown that prior to October 2, 2015, three off-campus family practice locations, which it claims were its outpatient departments, met the provider-based status requirements of 42 C.F.R. § 413.65, specifically the public awareness requirement of 42 C.F.R. § 413.65(d)(4).1   However, Petitioner has shown that it achieved compliance with the public awareness requirement of 42 C.F.R. § 413.65(d)(4) as of October 2, 2015.  The Centers for Medicare & Medicaid Services (CMS) has identified no other provider-based status requirements unmet by Petitioner as of October 2, 2015.  Accordingly, Petitioner met all requirements for provider-based status on October 2, 2015, and that is the effective date of provider-based status pursuant to 42 C.F.R. § 413.65(o).

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I.  Background

Petitioner is a general acute care hospital located in Kalamazoo, Michigan.  Petitioner is part of the Borgess Health network, which includes hospitals, clinics, ambulatory care facilities, and a nursing home.  Joint Stipulations of Fact (Jt. Stip.) ¶¶ 1-3; Petitioner’s Exhibits (P. Exs.) 10, 24.  Petitioner had treated two of its facilities at issue in this case as provider-based since 2009 and the third facility since 2010 and was billing Medicare for services provided to Medicare-eligible beneficiaries at the three off-campus locations as though they were departments of Petitioner.  Jt. Stip. ¶ 7.  The locations at issue before me are in Mattawan, Michigan (Mattawan), Richland, Michigan (Richland), and Three Rivers, Michigan (Three Rivers).  Jt. Stip. ¶ 14.

On September 19, 2014, CMS issued an initial determination.  In that determination, CMS declared that four of Petitioner’s off-campus facilities, including the three that remain at issue before me, did not satisfy the provider-based status requirements established by 42 C.F.R. § 413.65(d)(4) and (g)(7).  The initial determination advised Petitioner that CMS would recover overpayments caused by Petitioner treating the facilities as provider-based.  Jt. Stip. ¶¶ 4-6; CMS Ex. 2.

Petitioner requested reconsideration by letter dated December 4, 2014.  Jt. Stip. ¶ 8; CMS Ex. 32.  On June 5, 2015, CMS issued a “partially unfavorable” reconsidered determination.  CMS upheld on reconsideration the initial denial of provider-based status for three of four locations, the Mattawan, Richland, and Three Rivers locations, for failure to meet the public awareness requirement at 42 C.F.R. § 413.65(d)(4).  CMS determined that the fourth location met the public awareness requirement of the regulations.  CMS also determined that all four sites met the patient financial liability notice requirement of 42 C.F.R. § 413.65(g)(7), the second ground cited by the initial determination for denial of provider-based status.  Jt. Stip. ¶¶ 8, 10-13; CMS Ex. 1.

Petitioner requested a hearing by an administrative law judge (ALJ) on July 31, 2015.  On August 25, 2015, the case was assigned to me for hearing and decision and an Acknowledgement and Prehearing Order (Prehearing Order) was issued at my direction.  On January 4, 2016, the parties filed a joint status report in which both waived oral hearing and agreed to a decision on the briefs and documentary evidence.  On January 6, 2016, I accepted the parties’ waiver of oral hearing and set a briefing schedule.

On February 5, 2016, the parties filed opening briefs (CMS Br. and P. Br., respectively).  On March 6, 2016, CMS filed its reply brief (CMS Reply).  On March 7, 2016, Petitioner filed its reply brief (P. Reply).  CMS filed CMS Exs. 1 through 40 and Petitioner filed P. Exs. 1 through 24.  Petitioner did not object to my consideration of CMS Exs.1 through 40, and they are admitted and considered as evidence.  CMS did not object to my consideration of P. Exs. 1 through 7, 9 through 11, and 15 through 24, and they are admitted and considered as evidence.  On February 12, 2016, CMS objected to my

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consideration of P. Exs. 8, 12, 13, and 14.  On March 3, 2016, Petitioner withdrew P. Ex. 8 and it is not admitted or considered as evidence.  Petitioner also opposed CMS’s objections to P. Exs. 12, 13, and 14.  CMS argues that P. Exs. 12, 13, and 14 depict new signs that Petitioner installed on about October 2, 2015, at Mattawan, Richland, and Three Rivers.  CMS argues that this evidence is irrelevant because it post-dates CMS’s June 5, 2015 reconsidered determination denying provider-based status to these locations and because at most, it shows only that these locations complied with a single requirement for provider-based status no earlier than October 2, 2015.  As I explain in more detail hereafter, P. Exs. 12, 13, and 14 are highly relevant to demonstrate that Petitioner was in compliance with all requirements for provider-based status as of October 2, 2015.  Therefore, I overrule CMS’s objections to P. Exs. 12, 13, and 14 and admit them as evidence.

II.  Discussion

A.  Issue

Whether Petitioner’s remote locations, Mattawan, Richland, and Three Rivers, meet requirements for provider-based status.

B.  Applicable Law

Petitioner, a hospital, is a “provider of services” (provider) under the Social Security Act (Act).  Act § 1861(u); 42 C.F.R. § 400.202.  Under Medicare Part A, a provider is entitled to reimbursement from Medicare for certain medical care and services provided to Medicare eligible beneficiaries.  Act §§ 1811-12, 1814-15.  Since the beginning of Medicare, “main providers” have owned and operated other facilities, whether on the same campus as the main provider or remote from the main provider, which have been treated under Medicare as being “provider-based.”  Provider-based status is not mentioned in the Act.  In 1983, provider-based status became more important to main providers due to the more favorable Medicare reimbursement available to provider-based entities versus that available to free-standing facilities.  For example, Medicare reimbursement for a hospital outpatient clinic visit with a doctor includes a component for the facility and the professional services of the physician, while reimbursement for a physician visit in a physician’s office, a free-standing facility, does not include a component for the facility.  The Health Care Financing Administration (HCFA), the predecessor to CMS, proposed a new regulation, 42 C.F.R. § 413.65, to gain some control over provider-based status.  63 Fed. Reg. 47,552, 47,587-92 (Sept. 8, 1998).  The final rule establishing 42 C.F.R. § 413.65 was issued on April 7, 2000.  65 Fed. Reg. 18,434, 18,504-22, 18,538-41 (Apr. 7, 2000), as amended at 65 Fed. Reg. 58,919, 58,919‑20 (Oct. 3, 2000) (delaying the effective date of the regulation); CMS Br. at 5-6.

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A main provider, such as Petitioner in this case, must show that the requirements for provider-based status established by 42 C.F.R. § 413.65 are met in order to receive reimbursement at the provider-based rate for qualified medical care and services delivered to Medicare-eligible beneficiaries at its remote location.  The regulation provides the following definitions pertinent to this case:

Department of a provider means a facility or organization that is either created by, or acquired by, a main provider for the purpose of furnishing health care services of the same type as those furnished by the main provider under the name, ownership, and financial and administrative control of the main provider, in accordance with the provisions of this section.  A department of a provider comprises both the specific physical facility that serves as the site of services of a type for which payment could be claimed under the Medicare or Medicaid program, and the personnel and equipment needed to deliver the services at that facility.  A department of a provider may not by itself be qualified to participate in Medicare as a provider under [42 C.F.R.] § 489.2 . . . , and the Medicare conditions of participation do not apply to a department as an independent entity.  For purposes of this part, the term ‘department of a provider’ does not include an RHC [rural health clinic] or, except as specified in paragraph (n) of this section, an FQHC [federally qualified health center].

Free-standing facility means an entity that furnishes health care services to Medicare beneficiaries and that is not integrated with any other entity as a main provider, a department of a provider, remote location of a hospital, satellite facility, or a provider-based entity.

Main provider means a provider that either creates, or acquires ownership of, another entity to deliver additional health care services under its name, ownership, and financial and administrative control.

* * * *

Provider-based status means the relationship between a main provider and a provider-based entity or a department of a provider, remote location of a hospital, or satellite facility, that complies with the provisions of this section.

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42 C.F.R. § 413.65(a)(2) (emphasis in original).  A facility that does not meet provider‑based status requirements is treated as a free-standing facility.  42 C.F.R. § 413.65(a)(2), (b).

The regulation provides that an entity is not entitled to be treated as provider-based simply because the main provider believes the entity is provider-based.  42 C.F.R. § 413.65(b)(1).  Facilities for which provider-based status is sought that are on the same campus as the main provider are treated differently than facilities that are remote from the main campus.  42 C.F.R. § 413.65(b)(2)-(4).  All entities for which provider-based status is sought must meet the requirements of 42 C.F.R. § 413.65(d).  An off-campus facility must meet the additional provider-based requirements in 42 C.F.R. § 413.65(e) and (h).  Provider-based status related to a hospital triggers the additional requirements of 42 C.F.R. § 413.65(g).

Determinations by CMS pursuant to 42 C.F.R. § 413.65 that a facility qualifies for provider-based status or that a facility no longer qualifies for such status are initial determinations subject to the right to request reconsideration and review by an ALJ and the Departmental Appeals Board (the Board).  42 C.F.R. §§ 498.3(b)(2), 498.22, 498.82; Union Hospital, Inc., DAB No. 2463 at 2 (2012).  Procedures applicable to ALJ review and Board appeals of CMS determinations affecting participation in Medicare are established by 42 C.F.R. pt. 498.  The procedures of 42 C.F.R. pt. 498 do not address the allocation of the burden of production (burden of coming forward with the evidence), the burden of persuasion,2 or the evidentiary standards or quantum of evidence necessary to satisfy the burdens.  In the absence of adequate regulations, the Board has found it necessary to adopt interpretive rules addressing the burden of proof and the evidentiary standard.  Because the Board’s decisions are only interpretative rules applicable in the individual case being adjudicated and not substantive rules of general application, it is necessary to analyze in each case subject to 42 C.F.R. pt. 498 the appropriate allocation of the burden of proof and the evidentiary standard to be applied.  I find that the Board’s analysis is persuasive and appropriately applied to this case.  The hearing before an ALJ is a de novo proceeding, i.e., “a fresh look by a neutral decision-maker at the legal and factual basis for” the CMS action.  See Life Care Ctr. of Bardstown, DAB No. 2479 at 32 (2012) (citation omitted); The Residence at Salem Woods, DAB No. 2052 (2006); Cal Turner Extended Care Pavilion, DAB No. 2030 (2006); Beechwood Sanitarium, DAB No. 1906 (2004); Emerald Oaks, DAB No. 1800 at 11 (2001); Anesthesiologists

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Affiliated, DAB CR65 (1990), aff’d, Anesthesiologists Affiliated v. Sullivan, 941 F.2d 678 (8th Cir. 1991).3  The standard of proof and quantum of evidence required to prove a fact is a preponderance of the evidence.  CMS has the burden of coming forward with the evidence and making a prima facie showing of a basis for its action denying provider‑based status.  Petitioner bears the ultimate burden of persuasion to show by a preponderance of the evidence that it met regulatory requirements for provider-based status.  See Batavia Nursing & Convalescent Inn, DAB No. 1911 (2004); Batavia Nursing & Convalescent Ctr., DAB No. 1904 (2004), aff’d, Batavia Nursing & Convalescent Ctr. v. Thompson,129 F. App’x 181 (6th Cir. 2005); Emerald Oaks, DAB No. 1800; Cross Creek Health Care Ctr., DAB No. 1665 (1998); Hillman Rehab. Ctr., DAB No. 1611 (1997) (remand), DAB No. 1663 (1998) (aft. remand), aff’d, Hillman Rehab. Ctr. v. United States, No. 98-3789 (GEB), 1999 WL 34813783 (D.N.J. May 13, 1999).

C.  Findings of Fact, Conclusions of Law, and Analysis

My conclusions of law are set forth in bold text followed by my findings of fact and analysis.  I have carefully considered all the evidence and the arguments of both parties, though not all may be specifically discussed in this decision.  I discuss in this decision the credible evidence given the greatest weight in my decision-making.4   I also discuss any evidence that I find is not credible or worthy of weight.  The fact that evidence is not specifically discussed should not be considered sufficient to rebut the presumption that I considered all the evidence and assigned such weight or probative value to the credible evidence that I determined appropriate within my discretion as an ALJ.  There is no requirement for me to discuss the weight given every piece of evidence considered in this case, nor would it be consistent with notions of judicial economy to do so.  Charles H. Koch, Jr., Admin. L. & Prac. § 5:64 (3d ed. 2013).

The specific issue before me is narrow.  The September 19, 2014 CMS initial determination letter notified Petitioner of only two grounds for denying deny provider‑based status:

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• The remote locations did not meet the provider-based requirement of 42 C.F.R. § 413.65(d)(4), referred to as the public awareness requirement; and
• The remote locations did not meet the requirement of 42 C.F.R. § 413.65(g)(7), the beneficiary potential financial liability notice requirement.

CMS Ex. 2.  The alleged failure to satisfy the requirement of 42 C.F.R. § 413.65(g)(7) cited in the initial determination was not upheld on reconsideration by CMS.  The CMS reconsidered determination makes clear that Petitioner was not denied provider-based status for the Mattawan, Richland, and Three Rivers locations due to failure to meet the requirement of 42 C.F.R. § 413.65(g)(7).  Therefore, that ground for denial of provider-based status is not before me and not discussed further.

The CMS initial determination letter explained in detail the CMS determinations regarding the public awareness requirement of 42 C.F.R. § 413.65(d)(4).  Based on its review of the Mattawan, Richland, and Three Rivers locations, CMS concluded that the locations were not sufficiently identified to permit the public and patients to identify the locations as departments of Borgess Medical Center in Kalamazoo, Michigan.  CMS explained that the signs indicating these locations were “ProMed Physicians” and “Borgess Health” indicate only that the locations “are associated with the Borgess Health system,” not Borgess Medical Center, and “[t]he Borgess website . . . does not help to clarify that the ‘ProMed Physicians’ locations are departments of a hospital [Borgess Medical Center].”  CMS Ex. 2 at 2; P. Ex. 2 at 2.

The denial of provider-based status for the remote location was upheld on reconsideration for failure to satisfy the public notice requirement of 42 C.F.R. § 413.65(d)(4).  CMS Ex. 1; P. Ex. 1.  The notice of the reconsidered determination dated June 5, 2015, notified Petitioner that the denial of provider-based status for the Mattawan, Richland, and Three Rivers locations was based only upon their failure to meet the public awareness requirement of 42 C.F.R. § 413.65(d)(4).  The CMS official that issue the reconsidered determination focused on the signage and website for the three locations in reaching his conclusion.  CMS Ex. 1 at 3-5; P. Ex. 1 at 3-5.

Based on the reconsidered determination, CMS determined that Petitioner met all requirements for provider-based status other than the public awareness requirement of 42 C.F.R. § 413.65(d)(4).  CMS is bound by its reconsidered determination.  See, e.g., Neb Group of Arizona LLC, DAB No. 2573 at 7 (2014).

1.  Prior to October 2, 2015, Petitioner’s Mattawan, Richland, and Three Rivers locations did not meet the public awareness requirement of 42 C.F.R. § 413.65(d)(4).

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The public awareness requirement of 42 C.F.R. § 413.65(d)(4) is:

(4) Public awareness.  The facility or organization seeking status as a department of a provider, a remote location of a hospital, or a satellite facility is held out to the public and other payers as part of the main provider.  When patients enter the provider-based facility or organization, they are aware that they are entering the main provider and are billed accordingly.

42 C.F.R. § 413.65(d)(4) (emphasis added).  The plain language of this regulation is incontrovertible.  The regulation requires that as they “enter the provider-based facility or organization,” patients must be “aware that they are entering the main provider . . . .”  Id.  If patients are not aware that they are entering the main provider as they enter the facility or organization, the facility or organization does not meet the public awareness requirement of 42 C.F.R. § 413.65(d)(4).  Petitioner has the burden to show only that it meets the public awareness requirement of 42 C.F.R. § 413.65(d)(4).  42 C.F.R. § 413.65(b).

It is necessary to consider what a patient or the public could have known about the three facilities upon entering them.  The signs for the Mattawan, Richland, and Three Rivers locations, shown in photographs taken around August 2014, contain no reference to “Borgess Medical Center.”  CMS Exs. 3-5, 8.  The sign at the Mattawan location door lists “ProMed Physicians” and “Borgess Health” and another sign lists “ProMed Physicians” and “Borgess.”  CMS Exs. 3, 8 at 2.  The signs for the Richland and Three Rivers locations list “ProMed Physicians” and “Borgess Health Alliance.”  CMS Exs. 4, 5, 8 at 1.  Based on the exterior signs, I conclude it was not possible for the public or a patient to determine upon entering the facilities that the main provider was Petitioner.

Petitioner argues that it complied with the public awareness requirement of 42 C.F.R. § 413.65(d)(4) and attempts various analyses in support of its position.  Petitioner urges me to consider other evidence.  The evidence offered by Petitioner shows that there is a relationship among “ProMed Physicians,” “Borgess Health” and “Borgess Health Alliance,” the entities listed on the signs at Mattawan, Richland, and Three Rivers.  Richard Felbinger, the chief financial officer of Borgess Health, provided two declarations for my consideration.  P. Exs. 10, 24.  Mr. Felbinger testified, consistent with records from the Michigan Department of Licensing and Regulatory Affairs (MDLRA) and records of the Internal Revenue Service (IRS), that Borgess Health Alliance, Inc. is a corporate entity and Borgess Medical Center is a wholly-owned subsidiary.  P. Exs. 11, 24 at 2 ¶ 4; CMS Ex. 14; CMS Ex. 17 at 6, 43.  Mr. Felbinger also testified, consistent with IRS records, that ProMed Healthcare is also a subsidiary of Borgess Health Alliance, Inc.  P. Ex. 24 at 2 ¶ 5; CMS Ex. 18 at 6, 34-36.  MDLRA

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records show that Petitioner and ProMed Physicians are associated but with separate Michigan corporate ID numbers.  CMS Exs. 14, 15.  I accept that the entities are all related but that does nothing to resolve this case.  There is no evidence to suggest and it is not reasonable to infer that the public or a patient bothers to research corporate or tax regulations to determine the true main provider prior to entering a facility for care or treatment.

The regulation requires that when a patient enters the provider-based facility, they must be aware that they are actually entering the main provider.  42 C.F.R. § 413.65(d)(4).  Petitioner has not disputed that the main provider in this case is, in fact, Borgess Medical Center and not Borgess Health Alliance, Inc., ProMed Healthcare, ProMed Physicians, or Borgess Health.5   The signs for the Mattawan, Richland, and Three Rivers locations circa August 2014, do not list Petitioner, Borgess Medical Center.  Rather, the signs refer to “ProMed Physicians” and “Borgess Health” or “Borgess Health Alliance.”  A single sign for the Mattawan location lists “Borgess,” but a sign at the door of the Mattawan location lists “Borgess Health.”  Patients entering the Mattawan location could not determine based on either sign, the Mattawan location’s connection with Petitioner.  Nothing in the record suggests that, prior to entering the Mattawan location, patients were given information clarifying the apparent discrepancy between the two signs at the location.  Petitioner admits that it did not change the signs to list its name at the Mattawan, Richland, and Three Rivers locations until October 2, 2015.  P. Br. at 8; P. Exs. 12-14.  Based on the evidence, I find it more likely than not that patients entering the Richland location or the Three Rivers location prior to October 2, 2015, would be aware only that they were entering an office of ProMed Physicians and that the office was a part of the Borgess Health Alliance, not that they were entering a facility operated by Petitioner, the main provider.  I also find it more likely than not that patients entering the Mattawan location at best would be confused whether that location was associated with Petitioner or Borgess Health, as the sign on the door prominently indicated.  CMS Ex. 3 at 1.

The parties attribute some significance to information found on Petitioner’s website.  CMS Ex. 1 at 4-5; P. Ex. 1 at 4-5; CMS Br. at 12, 14-15, 18-19; CMS Reply at 1‑2, 10, 14-15; P. Br. at 17-19; P. Reply at 7-8.  However, I have no evidence that any of Petitioner’s patients at the Mattawan, Richland, or Three Rivers locations, check Petitioner’s website to learn that those locations are operated by Petitioner so that they are aware of that fact upon entry.  While the evidence related to the website may be credible and relevant, I must conclude that it has little probative value related to the issue of whether Petitioner’s patients were aware on entering any of the three locations that those locations were operated by Petitioner.

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Petitioner argues that all available evidence must be considered to determine whether the Mattawan, Richland, and Three Rivers locations met the public awareness requirement.  Petitioner derives this approach from the ALJ decision in Johns Hopkins Health Systems, DAB CR598 (1999), the Board’s decision in Johns Hopkins Health Systems, DAB No. 1712 (1999), and program guidance from CMS.

Petitioner argues that the CMS program guidance shows that the relationship between the main provider and the provider-based facility may be shown by various kinds of evidence.  P. Br. at 12-17; P. Reply at 3-7, 10-14.  I agree with Petitioner’s reading of the program guidance, which states:

4.  Public Awareness

The facility or organization seeking status as a department of a provider, a remote location of a hospital, or a satellite facility is held out to the public and other payers as part of the main provider.  When patients enter the provider-based facility or organization, they are aware that they are entering the main provider and are billed accordingly.

As documentation, the provider may maintain examples that show that the facility is clearly identified as part of the main provider (i.e., a shared name, patient registration forms, letterhead, advertisements, signage, Web site).  Advertisements that only show the facility to be part of or affiliated with the main provider’s network or healthcare system are not sufficient.

CMS Ex. 19 at 6.  Petitioner presented evidence to show that it attempted to inform patients at the Mattawan, Richland, and Three Rivers locations that those locations were departments of Petitioner using several methods.  For example, posted in the interior of the Mattawan, Richland, and Three Rivers locations was an “Important Notice” stating, among other things that “Borgess Medical Center owns and operates this physician office” and explaining that patients would receive “two separate bills,” one “for the physician and another bill for the facility.”  CMS Ex. 32 at 73; P. Exs. 3, 4, 5 (emphasis in original); P. Ex. 10 at 3 ¶¶ 9-10.  According to Mr. Felbinger, each of the locations also contained pamphlets, available to patients, entitled “Provider-Based Medicare Billing,” which state that patients would “receive bills from Borgess Medical Center and [their] physician office.”  P. Ex. 10 at 3 ¶ 11; CMS Ex. 32 at 71-72.  Mr. Felbinger also explained that patients at each location were asked to read and sign a treatment consent form and privacy notice, both of which contained the “Borgess wordmark.”  P. Ex. 10 at 3-4 ¶¶ 12-13; CMS Ex. 32 at 69-70; P. Ex. 6.  Petitioner urges me to accept this evidence

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as sufficient proof that Petitioner met the public awareness requirement for the three locations.  The fallacy in Petitioner’s argument is clear given the plain language of the regulation.  The regulatory requirement is that upon entering a provider-based facility the patient is aware of the identity of the main provider so they can know that they will be billed as if at the main provider’s campus.  The CMS program guidance establishes no rule, but merely provides some examples of evidence that may be considered in concluding a facility may or may not meet the public awareness requirement.  In this case, the documents described by Mr. Felbinger were only available to a patient after they entered the facility.  The documents and any interior signage would not give a patient notice that Petitioner was the main provider until after the patient entered, which does not satisfy the requirement of 42 C.F.R. § 413.65(d)(4).

Petitioner cites language from the preamble of the rulemaking that created the public awareness requirement, which indicates that the purpose of the regulation is to “ensure that beneficiaries are protected from unexpected deductible and coinsurance liability.”  65 Fed. Reg. 18,434, 18,522 (Apr. 7, 2000); P. Br. at 10.  According to Petitioner, this purpose of the regulation is satisfied so long as a beneficiary is notified of the identity of the main provider prior to receiving care.  P. Br. at 10.  Petitioner asserts that, measured by this standard, it met the public awareness requirement of 42 C.F.R. § 413.65(d)(4).  P. Br. at 11-12; P. Reply at 2-7.  However, Petitioner is clearly in error.  The language of the regulation clearly requires that a patient be aware upon entry of the relationship between the main provider and provider-based facility.  Because the regulatory language is clear, there is no need to resort to tools for interpreting that language to mean something different from what it says.  The rules of statutory or regulatory construction are only used when the intent of the statute or regulation is unclear or ambiguous.  See 82 C.J.S. Statutes § 365 (2018).

The Board’s decision in Johns Hopkins does not cause me to look beyond the plain language of the regulation.  In that case, a review of an ALJ decision favorable to Johns Hopkins, the Board was interpreting the criteria for provider-based status set forth in a program memorandum issued by HCFA, not a regulation.  Johns Hopkins, DAB No. 1712.  The facts of Johns Hopkins also limit the persuasive value of the Board’s 1999 decision in the context of the case before me.  This case involves the regulation promulgated after the Board decided Johns Hopkins.  65 Fed. Reg. 18,434, 18,504-22, 18,538-41 (Apr. 7, 2000), as amended, 65 Fed. Reg. 58,919, 58,919-20 (Oct. 3, 2000).  In Johns Hopkins, the Board observed that the program memorandum it reviewed included multiple criteria for assessing whether an entity qualified for provider-based status.  DAB No. 1712.  After analyzing the program memorandum, the Board held that “the criteria are best viewed as evidentiary factors to be considered as a whole in making a determination about whether common ownership and operational integration in fact exist” such that provider-based status was appropriate.  Id.  In other words, it was not necessary for the Johns Hopkins facility to demonstrate that it satisfied the public awareness criterion specified by the program memorandum if it made a sufficient

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showing that it satisfied enough of the other criteria.  The Board even commented that had it found that the ALJ incorrectly concluded that the public awareness requirement was met, the Board would nevertheless have concluded it was harmless error.  Id.  A similar approach cannot be sustained under the very specific language of 42 C.F.R. § 413.65(d), which requires that “[a]ny facility or organization for which provider-based status is sought . . . must meet all of the . . . requirements” set forth in that subsection.

Even if I were inclined to overlook the distinguishing features of the ALJ and the Board’s Johns Hopkins decisions, there is a crucial difference between the public awareness criterion found applicable in those cases  and the public awareness requirement of 42 C.F.R. § 413.65(d)(4).  The program memorandum analyzed by the Board in Johns Hopkins stated the public awareness criterion as follows:  “The entity is held out to the public as part of the provider where it is based (e.g., patients know they are entering the provider and will be billed accordingly).”  Id. (quoting HCFA Program Memorandum A-96-7).  The language of this requirement is materially different from the wording of 42 C.F.R. § 413.65(d)(4).  Specifically, the regulation specifies that it is “[w]hen patients enter the provider-based facility” that they must be “aware that they are entering the main provider . . . .”  42 C.F.R. § 413.65(d)(4).  The program criterion in the outdated HCFA program memorandum involved in the Johns Hopkins cases does not specify when patients must know that they are entering the main provider.  The wording, “patients know they are entering the provider,” certainly suggests that they should know when they enter the facility, but given the ambiguity in the wording, it would not be unreasonable to take the position that information provided after entering the facility was relevant to determining whether patients knew they were entering the main provider.  Indeed, HCFA took that position before the ALJ, arguing “that copies of bills which the [facility at issue in that case] sent to patients for services that it provided to those patients do not recite that the bills are being sent to the patients from the Hospital.”  Johns Hopkins, DAB CR598.  For these reasons, I conclude that Petitioner’s reliance on the Johns Hopkins decisions is misplaced.  I further conclude that the evidence of information provided to patients at the Mattawan, Richland, and Three Rivers locations after they entered the locations is insufficient to show that patients were aware upon entering the three provider-based facilities that Petitioner was the main provider.

Petitioner also argues that use of the “Borgess” wordmark on signs for the Mattawan, Richland, and Three Rivers locations, even when used in connection with “Health” or “Health Alliance” is sufficient, for purposes of the public awareness requirement of 42 C.F.R. § 413.65(d)(4), to connect those locations to Petitioner in the public’s mind.  P. Br. at 19-20; P. Reply at 3, 12-13.  In support of this argument, Petitioner submitted a partial report of a “Consumer Image & Reputation Study,” testimony from Mr. Felbinger, and a few patient testimonials from Petitioner’s website.  Petitioner also relies on the Johns Hopkins decisions for support.  P. Br. at 15, 20; P. Reply at 3, 11-14.

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As already noted, neither the ALJ decision nor the Board’s decision in Johns Hopkins should be applied in this case.  To the extent Petitioner relies on the Johns Hopkins decisions to argue that the public may know an entity by a well-established nickname, I accept that position.  Petitioner need not rely on either Johns Hopkins decision for this proposition, as common sense and experience support the notion that an individual or entity can assume any number of names that may not appear on any legal paperwork.  Reliance on the Johns Hopkins decisions to establish anything further, however, is again misplaced.  In addition to the material differences between this case and the Johns Hopkins decisions that I noted above, the ALJ’s and the Board’s finding that use of the term “Johns Hopkins” signified a connection with “Johns Hopkins Hospital” was based on a fact-bound assessment that took into account evidence that they found relevant under the program memorandum criterion but that simply is not relevant or probative under the regulation.  DAB CR598; DAB No. 1712.  Put simply, neither Johns Hopkins decision binds me in my independent review of the evidence of record in this case, and their persuasive value is extremely limited when conducting my review.

Regarding Petitioner’s “Consumer & Image Reputation Study,” Petitioner provided me neither the underlying data nor expert testimony explaining the study, which makes it nearly impossible to assess how much weight to accord the study.  Petitioner submitted only an incomplete slideshow presentation with a title slide, a map, and two incomplete charts summarizing some study data.  P. Ex. 9.  Moreover, the study provides no information about how many respondents associated the terms “Borgess Health” or “Borgess Health Alliance” with Petitioner.  At most, the data summaries shown on the charts indicate that, when asked about “the first hospital or medical center in southwest Michigan that comes to mind” and about which hospital they used more recently respondents in the study were more likely to name Petitioner than either of Petitioner’s affiliate hospitals, Borgess Pipp Hospital and Borgess Lee Memorial.  P. Ex. 9 at 3-4.  Even accepting these facts as true would not enable me to draw any inferences about what the general public or patients entering the Mattawan, the Richland, or the Three Rivers locations for treatment might think when they saw the words “Borgess Health” or “Borgess Health Alliance” on the signs for those locations, rather than “Borgess Medical Center.”  Indeed, seventy-nine percent of respondents did not name any Borgess facility as the first hospital or medical center in southwest Michigan that came to mind or as the most recent hospital they had used.  P. Ex. 9 at 3-4.  Petitioner submitted no evidence suggesting that patients at the Mattawan, Richland, and Three Rivers locations came exclusively from a population that was familiar with Petitioner.  Given that almost four in five study respondents apparently were unfamiliar with any Borgess hospital, I find it extremely unlikely that all, or even most, patients at the Mattawan, Richland, and Three Rivers locations would identify “Borgess Health” or “Borgess Health Alliance” as Petitioner, especially considering Borgess Health Alliance, Inc. was a separate entity that had existed for over 30 years at the time CMS issued its initial and reconsidered determinations.  P. Br. at 2.  The fact that no respondents named “Borgess Health” as the first hospital or medical center to come to mind (P. Ex. 9 at 3) offers no additional

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insight, because “Borgess Health” is “a tradename used by Borgess Health Alliance,” which is neither a hospital nor a medical center but merely a “holding corporation” that “owns hospitals, clinics, ambulatory care facilities and a nursing home.”  P. Br. at 2-3 n.2, 4.  In sum, the study simply does not support a conclusion that anyone associated the terms “Borgess Health” or “Borgess Health Alliance” with Petitioner.

Mr. Felbinger’s testimony and the patient testimonials on which Petitioner relies provide no additional support for any connection between “Borgess Health” or “Borgess Health Alliance” and Petitioner.  The study data do not support Mr. Felbinger’s testimony that, “as the [s]urvey [r]esults demonstrate, an overwhelming majority of the general public thinks of Borgess Medical Center when they hear the word ‘Borgess,’ ‘Borgess Health,’ or ‘Borgess Health Alliance.’”  P. Ex. 10 at 7 ¶ 24.  Consequently, I give no weight to this testimony.  The patient testimonials make no reference to “Borgess Health” or “Borgess Health Alliance.”  P. Ex. 16.  Further, they come from individuals who had already received treatment from Petitioner, so they do not represent the views of the general public or new patients.  Also, one need not take a class on statistics to know that three patients do not constitute a representative sample.  Finally, two of the three patients refer to “Borgess Medical Center” before they refer to “Borgess” alone, which could indicate that later in the testimonial, they were just using “Borgess” as shorthand rather than specifically indicating they thought of Petitioner simply as “Borgess.”  Thus, the testimonials are of limited probative value even to establish a connection between stand‑alone use of “Borgess” and Petitioner, and they have no probative value in establishing a connection between “Borgess Health” or “Borgess Health Alliance” and Petitioner.

Petitioner’s evidence reveals little about a possible connection between the use of the word “Borgess” and Petitioner in the minds of the general public.  P. Ex. 10 at 2 ¶ 5.  But CMS does not dispute that the connection exists.  CMS Ex. 1 at 3; P. Ex. 1 at 3; CMS Br. at 14, 22; CMS Reply at 9.  The dispute centers on the signs for the Mattawan, Richland, and Three Rivers locations reading “Borgess Health” or “Borgess Health Alliance,” both of which are associated with a separate entity that owns far more than just Petitioner.  Petitioner has failed to show that the use of “Borgess Health” or “Borgess Health Alliance” on those signs, even when the word Borgess is printed using the “Borgess” wordmark, actually connects the Mattawan, Richland, and Three Rivers locations to Petitioner sufficiently to notify patients upon entry that they are entering Petitioner.6

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Petitioner has not established by a preponderance of the evidence that patients or the general public would understand that “Borgess Health,” “ProMed Healthcare,” “ProMed Physicians,” “Borgess Health,” “Borgess,” or “Borgess Health Alliance” referred to Petitioner.  Accordingly, I conclude that prior to October 2, 2015, Petitioner and the Mattawan, Richland, and Three Rivers locations did not meet the public awareness requirement of 42 C.F.R. § 413.65(d)(4).

2.  As of October 2, 2015, Petitioner and the Mattawan, Richland, and Three Rivers locations met the public awareness requirement of 42 C.F.R. § 413.65(d)(4).

Before October 2, 2015, the signs at the Mattawan, Richland, and Three Rivers locations did not give the general public and patients adequate notice of the fact those facilities were operated by Petitioner.  Petitioner also failed to show it more likely than not that other evidence provided the general public and patients adequate notice upon entry of the three facilities.  Therefore, Petitioner did not meet the public awareness requirement of 42 C.F.R. § 413.65(d)(4).  However, the signs Petitioner installed at each location by October 2, 2015, clearly satisfy the public awareness requirement.  Each sign contains a stand-alone use of the “Borgess” wordmark and, more importantly, specifically lists “Borgess Medical Center.”  P. Exs. 12 at 2-3; 13 at 3-5; 14 at 3-4.  Based on this evidence, I find it more likely than not that as of October 2, 2015, patients at the Mattawan, Richland, and Three Rivers locations would, upon entering the locations, be aware that they were entering a facility for which Petitioner was the main operator.  Accordingly, I conclude that as of October 2, 2015, Petitioner and the Mattawan, Richland, and Three Rivers locations met the public awareness requirement of 42 C.F.R. § 413.65(d)(4).

3.  As of October 2, 2015, Petitioner and the Mattawan, Richland, and Three Rivers locations met the requirements for provider-based status.

In its September 19, 2014 initial determination, CMS cited only two requirements for provider-based status that it determined Petitioner and the Mattawan, Richland, and Three Rivers locations did not meet – 42 C.F.R. § 413.65(d)(4) and (g)(7).  CMS Ex. 2 at 1-3; P. Ex. 2 at 1-3.  In its June 5, 2015 reconsidered determination, CMS determined that Petitioner and its locations did meet the requirement of 42 C.F.R. § 413.65(g)(7), but did not meet the other, 42 C.F.R. § 413.65(d)(4).  I infer from these determinations that Petitioner and the Mattawan, Richland, and Three Rivers locations met all other applicable requirements for provider-based status as of the date of the reconsidered determination.  I have concluded that as of October 2, 2015, Petitioner and the Mattawan, Richland, and Three Rivers locations met the public awareness requirement of 42 C.F.R. § 413.65(d)(4).  It follows, then, that as of October 2, 2015, Petitioner and the Mattawan, Richland, and Three Rivers locations met the requirements for provider-based status.

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CMS argues that even if the new signs Petitioner installed in October 2015 satisfy the public awareness requirement of 42 C.F.R. § 413.65(d)(4), “at most they would be evidence of compliance with that one requirement and no earlier than the installation date, which cannot show error with CMS’s determination on review here.”  CMS Reply at 10 n.1.  I am not limited to reviewing CMS’s reconsidered determination to decide whether it was in error.  I am required to conduct a de novo review of the evidence to determine if and when Petitioner met the provider-based requirements for the three facilities in issue.  42 C.F.R. § 498.3(b)(3) (the CMS determination subject to ALJ review is whether a provider-based entity does or does not qualify for provider-based status under 42 C.F.R. § 413.65(d)).  CMS is bound by its prior initial and reconsidered determinations that strongly support the inference that CMS determined that Petitioner met all provider-based requirements other than 42 C.F.R. § 413.56(d)(4).7   Thus, my conclusion that Petitioner and the Mattawan, Richland, and Three Rivers locations have shown that they met the requirement of 42 C.F.R. § 413.56(d)(4) as of October 2, 2015, establishes that Petitioner and the Mattawan, Richland, and Three Rivers locations met all requirements for provider-based status as of that date.8   CMS is required to give Petitioner notice of its reasons for denial of provider-based status in both the initial and reconsidered determination.  42 C.F.R. §§ 498.20(a)(1), 498.25(a)(2).  I do not accept the suggestion by counsel for CMS that CMS failed to faithfully execute its regulatory duty to give the required notices.  Based on the reconsidered determination and my findings and conclusions, Petitioner satisfied all provider-based requirements for which CMS gave Petitioner notice it failed to meet.

Accordingly, I conclude that as of October 2, 2015, Petitioner and the Mattawan, Richland, and Three Rivers locations met the requirements for provider-based status.  The effective date of provider-based status is accordingly, October 2, 2015.  42 C.F.R. § 413.65(o).

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III.  Conclusion

For the foregoing reasons, I conclude that, prior to October 2, 2015, Petitioner and the Mattawan, Richland, and Three Rivers locations did not meet all requirements for the Mattawan, Richland, and Three Rivers locations to be granted provider-based status.  I conclude further that on October 2, 2015, Petitioner and those locations met all requirements for provider-based status.

1. Citations are to the 2014 revision of the Code of Federal Regulations (C.F.R.), which was in effect at the time of the June 5, 2015 reconsidered determination, unless otherwise stated.
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2. The burden of production and the burden of persuasion are, together, referred to as the burden of proof. Black’s Law Dictionary 209 (8th ed. 2004).
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3. Petitioner complains that CMS selectively reviewed the evidence in denying provider based status to the Mattawan, Richland, and Three Rivers locations. P. Reply at 7-10. Whether or not Petitioner’s assertion is correct is not pertinent, as I provide Petitioner de novo review.
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4. “Credible evidence” is evidence that is worthy of belief. Black’s Law Dictionary 596. The “weight of evidence” is the persuasiveness of some evidence compared to other evidence. Id. at 1625.
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5. Mr. Felbinger does not indicate in his declaration that ProMed Physicians or Borgess Health are legal entities. P. Ex. 24.
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6. If anything, the use of the “Borgess” wordmark in connection with “Health” and “Health Alliance” muddies the connection between the wordmark and Petitioner, given that “Borgess Health Alliance” is a distinct entity that encompasses far more than Petitioner and “Borgess Health” is a trade name of that entity.
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7. CMS provided Petitioner informal advice by letter dated June 8, 2015, which stated that proposed signage for the three locations in issue appeared to be similar to the signage at the facility approved on reconsideration as a provider-based facility. However, rather than reopen and revise the reconsidered determination, CMS declined to take action without submission of a new certification by Petitioner. P. Ex. 19. The initial determination occurred on September 19, 2014; therefore, CMS was within the 12-month window for reopening and revising the reconsidered determination. 42 C.F.R. § 498.30. CMS effectively waived the opportunity to take action, leaving the issue to me for resolution.
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8. CMS has broad discretion under 42 C.F.R. § 413.65 to review and deny provider-based status at any time.
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