University of Maryland St. Joseph Medical Center, D/B/A St. Joseph Rehabilitative Services, DAB CR6050 (2022)

DECISION

Petitioner, University of Maryland St. Joseph Medical Center, d/b/a St. Joseph Rehabilitative Services, is a rehabilitation agency, providing physical therapy, occupational therapy, and speech pathology services in Towson, Maryland. The Centers for Medicare & Medicaid Services (CMS) approved its application to participate in the Medicare program, effective January 10, 2020. Petitioner now challenges that effective date.  

Because the rehabilitation agency first demonstrated that it met all Medicare health and safety standards on the date of its federal survey, January 10, 2020, I affirm January 10, 2020 as the effective date for Petitioner’s Medicare enrollment. I have no authority to grant Petitioner’s request for equitable relief.

Background

In Maryland, hospital rates are regulated by an independent state body. All payers – including Medicare, Medicaid, private insurers, and self-pay – are charged the same rate for the same service at the same hospital. See Social Security Act (Act) § 1814(b) (exempting Maryland from Medicare reimbursement systems); Md. Code §§ 19-201

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through 227 (creating the hospital rate regulation system); Title 19 COMAR (Code of Maryland Regulations) § 10.37.  

Prior to August 12, 2019, St. Joseph was part of the University of Maryland St. Joseph Medical Center; it was situated on the medical center’s campus and was subject to the state’s regulated reimbursement rates.  When the rehabilitation agency moved from the hospital campus, it was no longer part of the state-regulated system. CMS Ex. 1. Like any other prospective provider of services, to participate in the Medicare program, it was required to enroll, which meant that it had to submit the appropriate application and demonstrate that it complied with all program requirements.  Act § 1866; 42 C.F.R. 42 C.F.R. § 424.510(a); 42 C.F.R. § 488.3.  St. Joseph submitted its enrollment application on June 21, 2019, asking for an enrollment date that would coincide with the date of its deregulation (August 12, 2019). CMS Ex. 2.

In a letter dated March 18, 2020, CMS advised St. Joseph that it approved the rehabilitation agency’s request to participate in the Medicare program, effective January 10, 2020. CMS Ex. 5. St. Joseph sought reconsideration, asking that its effective date be changed to August 12, 2019, “to coincide with the effective date of the de-regulation of services.” CMS Ex. 7.

In a reconsidered determination, dated May 22, 2020, a CMS hearing officer affirmed the January 10, 2020 effective date. CMS Reconsideration Request Decision, DAB E-file Dkt. C-20-661, Doc. No. 1(a). St. Joseph requested review by an administrative law judge.

Although the parties have filed cross-motions for summary judgment, I find that this matter may be decided on the written record, without considering whether the standards for summary judgment are satisfied. In my standing order, I instructed the parties to list any proposed witnesses and to submit their written direct testimony. Standing Order at 3, 5 (¶¶ 4, 8) (July 22, 2020). The order also directed the parties to indicate which, if any, of the opposing side’s witnesses the party wished to cross-examine and explained that an in-person hearing would be needed only if a party wishes to cross-examine the opposing side’s witness. Standing Order at 5-6 (¶¶ 9, 10). Neither party lists any witnesses. An in-person hearing would therefore serve no purpose, and I may decide this case based on the written record without considering whether the standards for summary judgment are met.

With its motion and brief (CMS Br.), CMS submitted seven exhibits (CMS Exs. 1-7). In the absence of any objections, I admit into evidence CMS Exs. 1-7.

Petitioner submitted a cross-motion and brief (P. Br.) with two exhibits. However, Petitioner did not submit these exhibits at the reconsideration level.

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Petitioner’s exhibits consist of: 

• P. Ex. 1: an August 29, 2019 letter from the Maryland state agency approving Petitioner’s request to enroll in the Maryland Medicaid Program, along with an August 9, 2019 email from St. Joseph staff reporting that Medicaid surveyors had been at the rehab center from 1:10 until 1:20 p.m. that day; and 
• P. Ex. 2: a series of emails, dated October 30, 2019, through March 16, 2020, discussing the steps Petitioner needed to take in order to enroll in the program and schedule the Medicare survey.  

CMS Reconsideration Request Decision, DAB E-file Dkt. C-20-661, Doc. No. 1(a) at 1-2 (listing all of the exhibits submitted at reconsideration).

Although CMS did not object to my admitting these documents, I am required to examine any new documentary evidence independently to determine whether the provider has good cause for submitting it for the first time at the ALJ level of review. If I find that good cause does not exist, I must exclude the evidence and may not consider it in reaching a decision. 42 C.F.R. § 498.56(e); see 42 C.F.R. § 405.803(e).

In advising Petitioner of its right to request reconsideration, the contractor also advised Petitioner that it could submit additional information, but warned:  

However, if you have additional information that you would like a Hearing Officer to consider during the reconsideration or, if necessary, an Administrative Law Judge (ALJ) to consider during a hearing, you must submit that information with your request for reconsideration. This is your only opportunity to submit information during the administrative appeals process unless an ALJ allows additional information to be submitted.

CMS Ex. 6 at 2 (emphasis added).  

Petitioner has not explained why it did not submit its exhibits at the reconsideration level. The documents were certainly available and in the Petitioner’s possession. Because no good cause justifies Petitioner’s failing to submit the documents at the reconsideration stage, I must exclude the evidence and may not consider it in reaching my decision. Mohammad Nawaz, M.D., & Mohammad Zaim, M.D., PA, DAB No. 2687 at 12-13 (2016), aff’d, Nawaz v. Price, No. 4:16CV386, 2017 WL 2798230 (E.D. Tex. June 28, 2017) (finding that the ALJ did not abuse his discretion when he did not find good cause to admit documents not offered at reconsideration because the regulation itself provided notice of the requirement to provide all documents on reconsideration).

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Discussion

1. Because Petitioner established that it first met all Medicare enrollment requirements on the date of its Medicare survey, January 10, 2020, January 10, 2020 is the effective date of its Medicare enrollment.1

Program requirements. A rehabilitation agency provides “an integrated interdisciplinary rehabilitation program” designed to upgrade the physical functioning of the disabled by bringing together specialized rehabilitation staff to function as a team. Its services must include at least physical therapy or speech-language pathology. 42 C.F.R. § 485.703.  It may participate in the Medicare program as a provider of services. 42 C.F.R. §§ 400.202, 424.500, 424.505; 489.2(b); see Act § 1861(p) and (u). Like all prospective providers, to enroll in Medicare, a rehabilitation agency must complete and submit an enrollment application.  42 C.F.R. §§ 424.510(a), 424.510(d)(1); see 42 C.F.R. § 498.2.  It must be surveyed and demonstrate that it meets all program requirements. 42 C.F.R. §§ 424.510(a), 485.707, 488.3(a).

If the rehabilitation agency meets all health and safety standards on the date of the survey, the effective date of its approval is the survey date.  42 C.F.R. § 489.13(b)(1).

The date St. Joseph first met all Medicare participation requirements.  On June 21, 2019, St. Joseph applied to enroll in the Medicare program by submitting to the Medicare contractor, Novitas Solutions, an application (Form CMS-855A) via PECOS (Provider Enrollment, Chain, and Ownership System), CMS’s electronic filing process. CMS Ex. 2.

In a letter to CMS, dated July 12, 2019, the contractor confirmed that it verified the application information and recommended that the application be approved. CMS Ex. 3.

The state agency surveyed St. Joseph on January 10, 2020, and determined that the agency complied with Medicare conditions of participation for rehabilitation agencies, 42 C.F.R. part 485, subpart H. CMS Ex. 4. Based on this survey, January 10, 2020 is the earliest possible effective date of approval. 42 C.F.R. § 489.13(b)(1).

Petitioner’s arguments. Petitioner insists that its effective date for Medicare participation should align with the date of its deregulation. But the date it was no longer regulated by Maryland’s hospital rate regulation system is irrelevant to the date it demonstrated that it met Medicare program requirements. From the time the rehabilitation agency separated from the hospital, it was in the same position as any other

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prospective provider. Until it established, by means of a Medicare survey, that it met all Medicare health and safety requirements, it could not enroll in the program.

Petitioner also points to the August 9, 2019 Medicaid survey and argues that it is entitled to Medicare enrollment based on the results of that survey.2 That a prospective provider underwent an arguably similar survey, but for a different purpose, does not establish that it met Medicare program requirements on an earlier date. See Manor of Wayne Skilled Nursing & Rehab., DAB No. 2249 (2009). Here, the record is effectively silent on the August 9 survey findings, and there is no evidence that they were submitted to CMS for its review in determining whether St. Joseph complied with Medicare requirements.3 Even if they were, CMS was not bound to accept them as adequate to establish Medicare compliance. Thus, in Manor of Wayne, the Board rejected the notion that earlier life safety code surveys satisfied the requirement that the facility meet federal LSC standards. DAB No. 2249 at 5, 10.

Petitioner complains about the delay in scheduling the Medicare survey. Petitioner’s complaints that it did not know what it had to do before a survey would be conducted (discussed below) suggest that it may have been at least partially at fault for the delay in scheduling a survey, but the question of fault is irrelevant. A prospective supplier may not appeal based on the contention that its survey should have been conducted earlier.  42 C.F.R. § 498.3(d)(15); Manor of Wayne, DAB No. 2249 at 12; Forest Glen Skilled Nursing & Rehab. Ctr., DAB No. 1887 at 10 (2003) (holding that the state survey agency’s delay in conducting a survey “is not a proper basis for appeal under 42 C.F.R. Part 498, nor do the regulations . . . permit an ALJ . . . to set an earlier effective date . . . based solely on equitable considerations . . ..”).

Petitioner asserts that neither CMS nor Novitas informed the rehabilitation agency that it needed a separate Medicare survey or that its billing date would be tied to that survey. Petitioner complains that it did not understand the application process and blames CMS for any “failure to comply with applicable rules.”  P. Br. at 7-8. It is well-settled that, as a prospective participant in the Medicare program, Petitioner was charged with knowing

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its governing regulations. Sunshine Haven Lordsburg, DAB No. 2456 at 20 (2012), citing Heckler v. Cmty. Health Servs. of Crawford Cty., 467 U.S. 51, 63, 64 (1984); Manor of Wayne, DAB No. 2249 at 10-11 (holding that the prospective provider had “constructive notice” of the regulations); Cary Health & Rehab. Ctr., DAB No. 1771 (2001) (finding that applicants are responsible for understanding what is required of them to be program participants).  

Finally, Petitioner asserts that I have the authority to grant equitable relief and should do so because the rehabilitation agency was fully open and operational as of August 12, 2019 and treated patients “in dire need” of its medical services. P. Br. at 9. No matter how compelling the circumstances, I have no authority to grant Petitioner an earlier effective date based on equitable or policy arguments. Howard M. Sokoloff, DPM, MS, Inc., DAB No. 2972 at 9 (2019); US Ultrasound, DAB No. 2302 at 8 (2010); see Manor of Wayne, DAB No. 2249 at 7 (rejecting a provider’s claim that it was entitled to an earlier effective date because of its “very unique circumstances”).  

Conclusion

Petitioner first met all Medicare participation requirements on the date of its Medicare survey, January 10, 2020, and CMS therefore properly approved its Medicare enrollment effective that date. 

1. I make this one finding of fact/conclusion of law.
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2. Petitioner faults CMS for not addressing the significance of this survey. However, it seems that Petitioner may have raised the issue, for the first time, at this level. Nothing in the reconsideration determination suggests that either party or the hearing officer discussed the issue. See, e.g., CMS Reconsideration Request Decision, DAB E-file Dkt. C-20-661, Doc. No. 1(a).
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3. Petitioner’s proposed exhibits, even if admitted, shed virtually no light on what the surveyors looked at or found during that state survey. Aside from establishing that the state approved St. Joseph’s Medicaid participation, they show that the surveyors spent ten minutes at the rehab center, which does not suggest that they assessed the center’s compliance with all Medicare requirements, 42 C.F.R. §§ 485.707- 485.729. P. Ex. 1.
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