$05:Civil Money Penalty
Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD
Civil Remedies Division
In the Case of: SRA, Inc., D/B/A St. Mary Parish Dialysis Center, Petitioner,
- v. -
Health Care Financing Administration.
DATE: November 3, 1994
Docket No. C-94-302
Decision No. CR341
DECISION
On November 16, 1993, the Health Care Financing Administration
(HCFA) advised Petitioner that it had determined that Petitioner
would be certified as an end-stage renal disease (ESRD) facility.
HCFA advised Petitioner that, pursuant to the requirements of 42
C.F.R. 489.13, the effective date of certification would be
October 1, 1993. Petitioner appealed this determination. In its
appeal, Petitioner contends that it should have been certified
effective either July 1, 1993, July 29, 1993, or August 30, 1993.
The case was assigned to me for a hearing and a decision. The
parties agreed that there was no need for an in-person hearing.
They agreed that the case could be decided based on exhibits and
briefs. The parties have submitted their proposed exhibits and
briefs. They have not objected to the admission into evidence of
any exhibits. I have received into evidence all of the parties'
proposed exhibits. 1/
I have considered the parties' exhibits and arguments and the
applicable law. I conclude that the effective date for
certification of Petitioner as an ESRD facility is October 1, 1993.
I sustain HCFA's determination.
I. Issues, findings of fact, and conclusions of law
The central issue in this case is the correct date for certifying
Petitioner as eligible to receive reimbursement from Medicare for
supplying ESRD services. In deciding that HCFA correctly certified
Petitioner as eligible to receive reimbursement from Medicare
effective October 1, 1993, I reach findings of fact and conclusions
of law which are set forth as follows. After each finding or
conclusion, I cite to the pages in this decision at which I discuss
the law and evidence which supports that finding or conclusion.
1. Although an ESRD facility is defined to be a "supplier" of
services to Medicare beneficiaries, it is subject to the
certification requirements which govern "providers" of services.
Pages 3 - 4.
2. An ESRD facility meets all requirements for certification
when it satisfies HCFA that it meets all of the conditions,
standards, and elements of certification which govern ESRD
facilities. Pages 4 - 5.
3. Under regulations governing certification, an ESRD
facility becomes eligible to receive Medicare reimbursement for its
services as of the date that it is surveyed for compliance, if, on
the date that it is surveyed, it meets all conditions for
certification and any other requirements imposed by HCFA, including
standards and elements of certification. Pages 4, 17 - 18.
4. Under regulations governing certification, an ESRD
facility not meeting certification requirements on the date that it
is surveyed becomes eligible for reimbursement on the date that it
meets all requirements, or on the date it submits a plan of
correction which is acceptable to HCFA, whichever date is earlier.
Pages 4 - 5, 19 - 21.
5. Under regulations governing certification, the burden is
on the entity requesting to be certified to prove that it meets
certification requirements. Page 5.
6. Petitioner did not prove that it satisfied certification
requirements before October 1, 1993. Pages 6 - 16, 21.
7. Petitioner is not entitled to be certified prior to
October 1, 1993 based on allegedly untimely notices of
deficiencies. Pages 18 - 19.
II. Governing law
The Medicare program provides for reimbursement for services
provided to ESRD patients. Social Security Act (Act), section
1881. The Act provides that the Secretary of the Department of
Health and Human Services (Secretary) may make payments to
facilities which provide renal dialysis services to Medicare
beneficiaries, pursuant to agreements entered into between such
facilities and the Secretary. Id. at section 1881(b). The Act
authorizes the Secretary to establish regulations governing
institutional dialysis services. Id.
Regulations published by the Secretary establish both the
substantive conditions which providers and suppliers of services
must meet in order to qualify to receive Medicare reimbursement for
their services, and the procedures by which providers and suppliers
satisfy HCFA that they meet applicable conditions and standards.
Regulations contained in 42 C.F.R. Part 405, Subpart U, establish
the conditions and standards which ESRD facilities must satisfy to
qualify as Medicare suppliers.
The procedures by which providers and suppliers satisfy HCFA that
they meet applicable conditions and standards for reimbursement are
contained in 42 C.F.R. Part 489, Subpart A. These regulations
apply specifically to "providers" of health care services,
including hospitals, skilled nursing facilities, home health
agencies, clinics, rehabilitation agencies, public health agencies,
comprehensive outpatient rehabilitation facilities, and hospices.
42 C.F.R. 489.2(b). An ESRD facility is a "supplier" of
services, rather than a provider. 42 C.F.R. 488.1. HCFA has
determined that the regulations governing the procedures for
qualification of providers govern also the procedures for
qualification of suppliers. HCFA Ex. 12. Petitioner agrees with
this determination. Petitioner's Brief at pages 6-7, fn 1.
HCFA's application of the provider certification regulations to
govern the manner in which suppliers become certified, including
ESRD facilities, is consistent with the Secretary's purpose in
establishing a regulatory framework for certification. It is
consistent also with Congress' decision that ESRD facilities be
treated as "providers" for purposes of resolving certain
reimbursement disputes between such facilities and fiscal
intermediaries or the Secretary. Act, section 1881(b)(2)(D); see
Act, section 1878.
The procedural regulations provide for the determination of an
effective date for a provider agreement. An agreement between a
provider or a supplier and HCFA becomes effective on the date that
HCFA completes an on site survey of the provider or supplier, if,
on that date, the provider or supplier meets all conditions for
certification and any other requirements imposed by HCFA. 42
C.F.R. 489.13(a). As of the effective date of the agreement,
the provider or supplier will become eligible to receive Medicare
reimbursement for its services.
However, if the provider or supplier fails to meet any of the
requirements established by HCFA for certification on the date that
the survey is completed, then the agreement becomes effective, and
the provider or supplier becomes eligible to receive Medicare
reimbursement for its services, on the earlier of two dates. These
are: (1) the date on which the provider or supplier meets all HCFA
requirements, or (2) the date on which the provider or supplier
submits a plan of correction to HCFA which HCFA accepts, or an
approvable waiver request, or both. 42 C.F.R. 489.13(b)(1) and
(2).
The regulation does not define what is meant by "other
requirements" as stated in 42 C.F.R. 489.13(a). However, it is
apparent from the context of the regulation that this word means
all conditions, standards, and elements established as
prerequisites for certification. 2/ This interpretation accords
with a prior interpretation of "other requirements" made on behalf
of the Secretary. River North Treatment Center v. Health Care
Financing Administration, OHA Appeals Council Docket No.
000-61-7052 (1993); HCFA Ex. 13. Thus, HCFA will accept an ESRD
facility's agreement on the date when HCFA determines that all
conditions, standards, and elements established under governing
regulations have been met. See 42 C.F.R. Part 405, Subpart U.
It is apparent also from the language and context of the regulation
that it is a provider or supplier's burden to satisfy HCFA that it
meets all requirements for certification. An ESRD facility will
qualify for Medicare reimbursement for its services if it satisfies
HCFA as of the date of the certification survey that it meets all
of HCFA's requirements for certification. 42 C.F.R. 489.13(a).
If it fails to do that, then it will qualify either on the date
that it proves that it meets all of HCFA's requirements, or on the
date that it provides HCFA with a plan of correction that HCFA
accepts, whichever is earlier. 42 C.F.R. 489.13(b)(1) and (2).
III. Relevant facts
Petitioner is an ESRD facility. 3/ Its chief executive officer and
medical director is Saeed Ahmed, M.D. HCFA Ex. 1, page 1; HCFA Ex.
8, page 2. Dr. Ahmed is an internist and a nephrologist. HCFA Ex.
7, page 1.
In early 1993, Petitioner applied to be certified to receive
reimbursement from Medicare for ESRD services. HCFA Ex. 11, page
1. On July 1, 1993, Petitioner was surveyed by the State of
Louisiana Department of Health and Hospitals (State agency) on
behalf of HCFA, in order to determine whether Petitioner met
applicable HCFA requirements for certification as an ESRD facility.
HCFA Ex. 1. The surveyors found that Petitioner met the conditions
for certification established by the regulations. HCFA Ex. 11,
page 2. However, they found also that Petitioner failed to meet
several standards and elements governing ESRD facilities. HCFA Ex.
1. 4/
Among the standards which were found not to have been met is the
standard governing the qualifications of the physician-director of
an ESRD facility. HCFA Ex. 1, pages 5 - 6; 42 C.F.R.
405.2161(a); 42 C.F.R. 405.2102(e) ("Physician-director"). The
standard defines a physician-director to be a physician who is
board-certified or board-eligible in internal medicine or
pediatrics, having at least 12 months experience or training in the
care of patients at an ESRD facility. 42 C.F.R. 405.2102(e)
("Physician-director"). The standard provides further that, if a
physician who meets the definition of a physician-director is not
available to direct the ESRD facility, then a back-up physician may
direct the facility subject to the Secretary's approval. Id.
The surveyors found that the facility failed to meet the standard
for physician-director because there was no proof that Dr. Ahmed
was currently board-eligible or that he had a current medical
license. Also, Dr. Ahmed worked in a city approximately two hours
distant from Petitioner and was not readily available. HCFA Ex. 1,
pages 5 - 6. The surveyors found, additionally, that the
designated back-up physician for Dr. Ahmed, Dr. Metz, did not
qualify under the applicable standard as a replacement for Dr.
Ahmed. Id. They found that Dr. Metz was a full-time emergency
room physician who lacked the requisite training to direct an ESRD
facility. Id.
Additional standards for certification were found not to have been
met as of the July 1, 1993 survey. These included standards
governing: objectives and policies under which Petitioner
operates, personnel policies and procedures, supervision of patient
care, designation of a qualified physician as facility director,
and direction of social services at the facility. HCFA Ex. 1,
pages 1 - 7; 42 C.F.R. 405.2136(b), 405.2136(d), 405.2136(g),
405.2136(h), and 405.2163(c).
In addition to finding that standards of certification had not been
met by Petitioner, the surveyors found that elements of
certification had not been met. These included elements relating
to: personnel policies governing qualifications of staff members,
maintenance of a roster of physicians who are available to treat
emergencies, maintenance of a fully equipped emergency tray
containing drugs needed to treat emergencies, and training of
personnel. HCFA Ex. 1, pages 1 - 6. The surveyors found
specifically that Petitioner had designated a licensed practical
nurse to perform duties that should have been assigned to a
registered nurse. HCFA Ex. 1, page 2. They found also that the
emergency tray contained outdated drugs. HCFA Ex. 1, pages 4 - 5.
On or about July 30, 1993, Petitioner presented a plan of
correction that addressed the deficiencies which were identified at
the July survey of Petitioner's facility. HCFA Ex. 1; P. Ex. 1 -
3. 5/ One deficiency addressed by the plan was the surveyors'
finding that Petitioner had not designated an adequately
credentialed back-up physician. Petitioner stated that Dr. Uribe,
a nephrologist, would be on call. HCFA Ex. 1, pages 5 - 6.
Another deficiency addressed by the plan was the surveyors' finding
that Petitioner had assigned duties to a licensed practical nurse
which, under the applicable element, ought to have been assigned to
a registered nurse. Petitioner pledged that, effective
immediately, those duties would be performed by a registered nurse.
HCFA Ex. 1, page 2.
On August 2, 1993, surveyors again visited Petitioner's facility.
On this visit, the surveyors found that some previously identified
deficiencies persisted. HCFA Ex. 2. They found also some
additional deficiencies. Id. Petitioner was found to be out of
compliance with the standard governing patient environment. HCFA
Ex. 2, pages 3 - 4; 42 C.F.R. 405.2140(b). Specifically, the
surveyors found that Petitioner was not disposing of its medical
waste properly. Id. Petitioner was again found to be out of
compliance with the standard governing the qualifications of a
replacement physician-director. HCFA Ex. 2, page 4; 42 C.F.R.
405.2161(a). Specifically, the surveyors found that Dr. Metz
continued to be designated as the back-up physician. Id.
The surveyors found that Petitioner failed to meet the standard
governing the full-time registered nurse responsible for
supervising dialysis. HCFA Ex. 2, pages 4 - 5; 42 C.F.R.
405.2162(a). They found that Ms. Gros, the registered nurse
assigned to supervise dialysis, lacked documented training in
dialysis. Id. at 5; see id. at 2. 6/ Also, the licensed practical
nurse on duty lacked documentation of medical clearance, training,
and skills. Id. at 5. The surveyors found, furthermore, that on
July 2, 1993, the day after the July 1, 1993 inspection, the
licensed practical nurse had dialyzed a patient without the
presence of a registered nurse. Id. The surveyors found also that
Petitioner continued to fail to meet the element governing posting
of a roster of physicians who are available to treat emergencies.
Id. at 3.
On August 16, 1993, the State agency, acting on HCFA's behalf,
returned Petitioner's July 30, 1993 plan of correction to
Petitioner. HCFA Ex. 3. It advised Petitioner that the plan of
correction was unacceptable in two respects. First, it found that
Petitioner had failed to provide adequate documentation of Dr.
Uribe's credentials. Id. Second, it found that Petitioner had not
provided adequate documentation as to the credentials of the social
worker employed by Petitioner. Id.
On August 30, 1993, HCFA advised Petitioner that it had determined
that Petitioner did not meet the criteria for certification as an
ESRD facility. HCFA Ex. 6. HCFA informed Petitioner that it was
basing its determination on the surveys performed of Petitioner's
facility and on the recommendation of the State agency. Id.
On August 30, 1993, Petitioner faxed additional documents to HCFA.
P. Ex. 5. These included the curriculum vitae of Dr. Uribe. They
included also a letter signed by Dr. Ahmed which stated that:
Miss June Gross RN did participate in Acute Hemodialysis in
Lakewood Hospital with the LP Jonie Rochell and Debbie Nichol RN
for at least six months in 1980-1982.
Id. at 5. 7/
On September 2, 1993, the State agency sent a letter to Dr. Ahmed.
HCFA Ex. 4. It advised Dr. Ahmed that it had learned that Ms.
Trina Granger, the individual whom the State agency found that Dr.
Ahmed had designated as the registered nurse in charge of
Petitioner at the time of the July 1, 1993 survey, was in fact
employed as a full-time registered nurse at another facility
operated by Dr. Ahmed. HCFA Ex. 4, page 1. Dr. Ahmed was advised
that, had the survey team known that the designated registered
nurse was in fact employed elsewhere on a full-time basis, then the
surveyors would have cited this as an additional finding that
Petitioner was deficient under the standards governing ESRD
facilities. Id.
On September 17, 1993, Dr. Ahmed wrote to HCFA requesting
reconsideration of HCFA's August 30, 1993 determination that
Petitioner did not meet certification requirements. HCFA Ex. 7; P.
Ex. 8. In that letter, Dr. Ahmed asserted that HCFA had probably
failed to take into consideration documents which he had faxed
previously to HCFA. Although not stated expressly, this reference
appears to be to the documents which Dr. Ahmed had faxed on August
30. Dr. Ahmed stated further that "I am enclosing another set of
documents which will prove that the nurse who was there, when the
state survey went the second time on August 2, 1993, did have
enough experience in Dialysis to be considered as the in charge
nurse." HCFA Ex. 7, page 1; P. Ex. 8. He attached to the letter
a version of the letter which he had faxed to HCFA on August 30,
1993, concerning the experience of Ms. Gros. HCFA Ex. 7, page 2;
see P. Ex. 5, page 5. 8/
Petitioner was again surveyed on behalf of HCFA on October 1, 1993.
On this occasion, the surveyors found only that Petitioner was
deficient in the element governing personnel policies and
procedures. HCFA Ex. 8, page 4. Specifically, the surveyors found
that the personnel file for the technician responsible for
equipment and water quality lacked information concerning that
employee's qualifications, certification, health status, and
contract. Id. On October 25, 1993, the State agency received a
signed plan of correction from Petitioner, dated October 9, 1993.
Id.; HCFA Ex. 11, page 9. In a letter dated November 16, 1993,
HCFA certified Petitioner to receive reimbursement from Medicare
for the services it provided, effective October 1, 1993. HCFA Ex.
10.
IV. Petitioner's contentions of fact and arguments
Petitioner contends that some of the findings the surveyors made
based on their July 1, 1993 survey are erroneous. Specifically,
Petitioner contends that Dr. Uribe, and not Dr. Metz, was at all
times the back-up physician for Petitioner. Secondly, Petitioner
contends that Ms. Gros had sufficient training and experience to
serve as the registered nurse in charge of dialysis at Petitioner.
Petitioner argues also that the plan of correction which it
submitted on or about July 30, 1993, established that any
deficiencies identified by the surveyors had been corrected by
Petitioner. Therefore, according to Petitioner, it complied with
HCFA certification requirements on July 1, 1993, and ought to be
certified effective that date.
Petitioner argues that, under applicable regulations, it was
required to meet only the conditions for certification established
by the regulations. Petitioner asserts that, as State agency
surveyors found that Petitioner met all conditions for
certification on July 1, 1993, it ought to have been certified
effective that date. Implicit in this argument is Petitioner's
assertion that it was not required to meet standards and elements
of certification in order to qualify for certification.
Petitioner argues also that, even if it was not in full compliance
with certification requirements as of July 1, it was in
"substantial compliance" with them. According to Petitioner, it
was not obligated to comply fully with HCFA's certification
requirements in order to be certified. Rather, it was obligated to
comply only with those requirements governing patient health and
safety. Petitioner contends that it met those requirements
effective July 1, 1993.
Petitioner argues additionally that, even if it was not in
compliance with HCFA's certification requirements on July 1, 1993,
it was effectively prevented from satisfying HCFA's requirements by
the surveyors' failure to leave a statement of deficiencies with
Petitioner at the completion of the July 1, 1993 survey and by
subsequent delays in receiving notification from HCFA as to whether
Petitioner was in compliance with certification requirements.
Finally, Petitioner asserts that if it did not meet certification
requirements on July 1, 1993, then it ought to have been certified
by HCFA either on July 29, 1993 or on August 30, 1993.
Petitioner's Brief at 5, 13. Petitioner has offered no
satisfactory explanation as to why either of these alternative
dates should be the certification date.
V. HCFA's arguments
HCFA argues that the facts of this case do not establish that
Petitioner complied with certification requirements on July 1,
1993. Rather, according to HCFA, Petitioner cured deficiencies at
dates after July 1, 1993. Therefore, Petitioner has not shown that
it was in compliance on July 1, 1993.
HCFA argues, additionally, that Petitioner would have HCFA certify
it "retroactively" effective July 1, 1993, based on evidence
submitted by Petitioner after that date relating to conditions
pertaining on July 1, 1993. According to HCFA, the regulations
which govern certification do not permit retroactive certification
of a facility.
VI. Analysis of the parties' contentions and arguments
As I hold above, Petitioner has the burden of proving that it meets
HCFA's certification requirements. I conclude that Petitioner has
not offered credible evidence to prove that it complied with HCFA
certification requirements before October 1, 1993.
A. Petitioner's failure to prove that it met certification
requirements prior to October 1, 1993
The remedial actions Petitioner undertook, prior to October 1,
1993, to cure deficiencies identified by State agency surveyors
ameliorated some of the deficiencies which the surveyors
identified. However, the evidence in this case establishes that at
no time prior to October 1, 1993 did Petitioner meet all
certification requirements. 42 C.F.R. 489.13(a) and (b).
Petitioner's efforts, prior to October 1, 1993, to resolve
deficiencies identified by the State agency surveyors were not
complete, nor did they account for additional deficiencies which
were identified by surveyors at follow-up surveys.
I summarize the surveys, findings of deficiencies, and Petitioner's
corrective actions as follows:
The State agency surveyors concluded, based on the July
1, 1993 survey, that Petitioner was deficient in meeting both
standards and elements governing certification. Those deficiencies
included findings that Petitioner's back-up physician was not
qualified to serve in that capacity, and that Petitioner did not
have a full-time registered nurse to supervise its dialysis
operations. The surveyors included also numerous additional
findings of deficiencies in other areas. HCFA Ex. 1.
The plan of correction which Petitioner submitted on or
about July 30, 1993 attempted to address the deficiencies which
were identified by the surveyors at the July 1, 1993 survey. Among
the remedial steps which Petitioner pledged to undertake was the
hiring of a full-time registered nurse and the designation of Dr.
Uribe to serve as the back-up physician. HCFA Ex. 1; P. Ex. 1 - 3.
However, the plan of correction did not establish that
Petitioner met all federal requirements for certification. Among
the issues that were not resolved by the plan of correction was the
issue of Dr. Uribe's qualifications to serve as the back-up
physician. P. Ex. 4; HCFA Ex. 3.
When the State agency surveyors revisited Petitioner on
August 2, 1993, they identified a problem with the qualifications
of Ms. Gros, the individual whom Petitioner had hired as the
facility's full-time registered nurse. HCFA Ex. 2, pages 4 - 5.
See id. at 2. The surveyors found other deficiencies at this visit
as well, including the way in which Petitioner handled medical
waste and Petitioner's continuing failure to post a roster of
physicians who were available to respond to emergencies.
Petitioner did not respond to HCFA's questions about
the credentials and qualifications of Dr. Uribe and Ms. Gros until
August 30, 1993, when Dr. Ahmed faxed these individuals'
credentials and qualifications to HCFA. Dr. Ahmed addressed also
an unresolved deficiency concerning the qualifications of the
social worker, Ms. Reed, by stating that a board-certified social
worker would supervise her. P. Ex. 5.
Evidently, HCFA found this evidence to be acceptable,
inasmuch as there is no evidence to suggest that HCFA continued to
question the qualifications of Dr. Uribe, Ms. Gros, or Ms. Reed.
However, Petitioner's submission did not address the other
deficiencies found at the August 2, 1993 survey, including the
questions of how Petitioner disposed of medical waste and its
failure to post a roster of physicians available to deal with
emergencies. 9/
When the State agency conducted a third survey of
Petitioner's facility on October 1, 1993, the surveyors evidently
were satisfied that all of the previously identified deficiencies
had been resolved. However, on that occasion they identified an
additional deficiency relating to the maintenance of the personnel
file of a technician. HCFA Ex. 8, page 4.
Petitioner resolved this final deficiency in its
October 9, 1993 plan of correction. HCFA Ex. 8, page 4.
Even if correct, Petitioner's assertion that the surveyors erred in
their findings based on the July 1, 1993 survey addresses only two
of the deficiencies which the surveyors identified at that survey.
These alleged errors concern the surveyors' conclusions as to who
was the back-up physician, and the surveyors' finding that a
full-time registered nurse was not present to supervise dialysis at
Petitioner's facility. There were several other deficiencies found
during the July 1, 1993 survey. Petitioner has not asserted that
the surveyors' findings of these additional deficiencies were
incorrect. Petitioner did not offer HCFA any proof that these
deficiencies had been cured until it submitted its July 30, 1993
plan of correction to HCFA.
Thus, Petitioner did not produce evidence prior to July 30, 1993
that it had addressed the deficiencies which the surveyors
identified in their July 1, 1993 survey. The information which
Petitioner supplied in its July 30, 1993 plan of correction did not
establish that any of the deficiencies had been resolved prior to
July 30, 1993.
Furthermore, I am not satisfied by the evidence in this case that
Petitioner proved that any of the findings by the surveyors which
it now asserts to have been erroneous were, in fact, erroneous.
Contrary to Petitioner's present assertions, Petitioner had neither
an acceptable back-up physician nor a full-time registered nurse to
supervise dialysis as of July 1, 1993. Petitioner did not prove
that these deficiencies were corrected earlier than the end of July
1993.
Based on the information which Petitioner imparted at the July 1,
1993 survey, the surveyors found that Petitioner's back-up
physician was Dr. Metz. Dr. Metz did not meet the criteria for
serving as a back-up physician. HCFA Ex. 1, pages 5 - 6. The plan
of correction which Petitioner submitted on July 30, 1993 does not
deny that, as of the July 1, 1993 survey, Dr. Metz had been
designated as the back-up physician. Rather, in the plan of
correction, Petitioner designates Dr. Uribe as the back-up
physician. HCFA Ex. 1, page 5.
I do not infer from the survey reports and Petitioner's plan of
correction that the surveyors misidentified Dr. Metz as the back-up
physician. The more reasonable inference is that Petitioner
selected Dr. Uribe as the back-up physician when it learned that
HCFA would not accept Dr. Metz as the back-up physician. Thus,
Petitioner's notification to HCFA that Dr. Uribe would serve as a
back-up physician is evidence of a correction of a deficiency
implemented after July 1, 1993, and not proof of an error by the
surveyors.
Based on their July 1, 1993 survey, the State agency surveyors did
not conclude erroneously that Petitioner lacked a full-time
registered nurse to supervise dialysis. I conclude that their
finding that Petitioner had designated a licensed practical nurse
to supervise dialysis is supported by the evidence of record.
Petitioner did not correct this deficiency until nearly a month
later, when it retained the services of Ms. Gros.
Petitioner's July 30, 1993 plan of correction states that a
registered nurse had been designated to assume the duties formerly
assigned to a licensed practical nurse. HCFA Ex. 1, page 2. The
plan of correction is an admission that Petitioner did not have on
staff a registered nurse to supervise dialysis at the time of the
July 1, 1993 inspection.
Petitioner did not present satisfactory documentation of Dr.
Uribe's and Ms. Gros' qualifications until August 30, 1993. 10/
These qualifications evidently were acceptable to HCFA. Had there
been no other outstanding deficiencies identified, HCFA could have
determined that Petitioner's August 30 submission to HCFA
documented the qualifications of Dr. Uribe and Ms. Gros as of July
30, 1993, and could have certified Petitioner as of that date. 11/
What precluded certification of Petitioner as of the end of July
1993 was the presence of additional deficiencies that Petitioner
had not corrected.
As is evident from the record of this case, the State agency
surveyors found additional deficiencies at Petitioner's facility
when they conducted their second survey on August 2, 1993. 12/
Petitioner has not denied the existence of these deficiencies. I
conclude that these deficiencies were corrected by October 1, 1993,
because they were not identified as continuing deficiencies by the
surveyors who conducted the October 1, 1993 survey. But Petitioner
furnished no proof prior to the October 1, 1993 survey that these
deficiencies had been corrected at any date previous to October 1,
1993, and, therefore, I cannot find that they were corrected
earlier than October 1, 1993.
B. Petitioner's argument that it was required only to meet
conditions for certification
In its reply brief, Petitioner argues that an entity qualifies for
certification once it meets all conditions for certification
established by the regulations. Petitioner implies, without
explanation, that an entity need not meet other certification
requirements established by HCFA, including applicable standards
and elements, so long as it satisfies the conditions for
certification established in the regulations. Petitioner asserts
further from this argument that it should have been certified
effective July 1, 1993, the date when the State agency surveyors
concluded that Petitioner was "in compliance with all conditions of
coverage." Petitioner's Reply Brief at page 5; see HCFA Ex. 11 at
2.
I do not agree with Petitioner's interpretation of the law. As I
discuss in Part II of this Decision, and as is evident from the
regulations governing certification, an entity must meet all
requirements for certification established by HCFA, in addition to
conditions for certification, in order to be certified. 42 C.F.R.
489.13(a). Applicable requirements plainly include standards set
forth in the regulations and elements of certification established
by HCFA.
Thus, the fact that State agency surveyors found that, as of July
1, 1993, Petitioner met all conditions for certification is not a
basis for me to conclude that Petitioner ought to have been
certified effective that date. The State agency surveyors found
that Petitioner had failed to meet standards and elements governing
certification. Because these certification requirements were not
met as of July 1, 1993, Petitioner could not be certified effective
July 1, 1993.
C. Petitioner's assertion that it was in "substantial
compliance" with certification requirements on July 1, 1993, and
ought to have been certified effective that date
Petitioner asserts that it should have been certified as of July 1,
1993, because it was in "substantial compliance" with certification
requirements on that date. 13/ Although Petitioner does not
explain precisely what it means by the term "substantial
compliance," it appears that Petitioner is arguing that it should
have been certified as of the date when it met nearly all of the
certification requirements, or at least as of the date when it met
all requirements which pertain to patients' health and safety.
Petitioner's Reply Brief at 7 - 8.
I do not accept the premise of Petitioner's argument, that a
facility may be certified even where it does not comply with all
certification requirements, so long as it complies substantially
with those requirements. The regulations do not provide for
certification of a facility where the facility meets most, but not
all, certification requirements, or where a facility falls just
short of meeting all certification requirements. The regulations
provide expressly that a facility will be certified as of the date
when it meets all requirements for certification established by
HCFA. 42 C.F.R. 489.13(a). 14/
Furthermore, I do not agree with Petitioner's implicit assertion
that some of the certification requirements (including, apparently,
those which Petitioner did not comply with) do not relate to the
health and safety of patients. The standards and elements which
are at issue here on their face all relate to the health and safety
of patients. The deficiencies which the surveyors found to be
present at Petitioner related to patient health and safety. For
example, a continuing deficiency which Petitioner did not provide
evidence of having remedied prior to October 1, 1993, was its
failure to post a roster of physicians available to handle
emergencies.
D. Petitioner's assertion that it was prevented from
correcting deficiencies by allegedly untimely notices from the
State agency or HCFA
The basis for certification is compliance with certification
requirements. A provider or supplier is not entitled to be
certified based on a State agency's or HCFA's failure to notify it
timely of findings of deficiencies, if, in fact, deficiencies
exist. There is nothing in the regulations which establishes a
basis for certifying a provider or supplier where a State agency or
HCFA fails to evaluate information within a prescribed period of
time. Thus, even had the State agency or HCFA delayed sending
their notices to Petitioner, as Petitioner alleges, this would not
be a basis to certify Petitioner at a date earlier than the date
when Petitioner met all requirements for certification.
However, I do not find that HCFA or the State agency delayed
notifying Petitioner of their findings. Petitioner asserts that,
on or about July 22, 1993, it received notice of the deficiencies
which the State agency identified at its July 1 survey of
Petitioner. 15/ If this is true, I do not find a three-week span
of time between the survey and the notification to be unreasonable,
given the number and nature of the deficiencies which were
identified by the surveyors.
Nor do I find the additional notices which were sent to Petitioner
to have been delayed. The State agency sent notification of its
findings of the August 2, 1993 survey to Petitioner on August 16,
1993. See HCFA Ex. 4, page 1. Also, on August 16, 1993, it
advised Petitioner that Petitioner's July 30, 1993 plan of
correction was inadequate. P. Ex. 4, page 1. Both of these
actions by the State agency were accomplished approximately two
weeks after the State agency received information to evaluate. I
do not find it to be unreasonable for the State agency to have
taken two weeks to evaluate the information it received. 16/
In some respects, Petitioner's argument that it was prevented from
qualifying for certification by untimely notices from the State
agency or HCFA is an "estoppel" argument that ignores the purpose
of the certification regulations. The certification regulations
are intended to protect the welfare of Medicare beneficiaries by
assuring that only providers and suppliers who comply with
applicable criteria governing the delivery of services are
reimbursed for those services. It would serve no public purpose to
permit a provider or supplier who does not comply with applicable
criteria to qualify for reimbursement simply because a State agency
or HCFA did not provide it with timely notice of deficiencies.
E. HCFA's "retroactivity" argument
HCFA asserts that a provider or supplier may not be certified
retroactively as of the date of a survey if deficiencies are
identified at the survey and if the provider or supplier does not
cure those deficiencies until a later date. I agree with that
analysis. The regulations provide plainly that, where a provider
or supplier fails to meet certification requirements at the date of
the inspection, it will be found to satisfy those requirements
either on the date when it actually meets the requirements or on
the date that it submits a plan of correction acceptable to HCFA,
whichever comes first. 42 C.F.R. 489.13(a) and (b). Thus, a
provider or supplier cannot be certified effective the date of
survey where: (1) deficiencies are found to exist as of the survey
date, and (2) the deficiencies are not corrected (or an acceptable
plan of correction is not submitted by the provider or supplier)
until a subsequent date.
The regulations do not permit HCFA to certify a provider or
supplier "retroactively" based on a plan of correction, unless the
plan of correction establishes that outstanding deficiencies had
been cured at a date earlier than the date of the plan of
correction. Thus, a plan of correction that states that a provider
or supplier intends to implement protocols to remedy deficiencies
cannot be a basis for certifying that provider or supplier at an
earlier date.
In this case, Petitioner presented its first plan of correction on
July 30, 1993. That plan was found to be insufficient. However,
it would not have justified certification of Petitioner as of July
1, 1993, even if it had addressed adequately all of the
previously-identified deficiencies. That is so because the
deficiencies were not shown to have been corrected at any date
prior to July 30, 1993. For example, the July 30, 1993 plan of
correction did not establish that Petitioner had obtained the
services of a qualified back-up physician at a date earlier than
the date of the plan. Nor did it establish that it had cured other
deficiencies identified by the surveyors at dates earlier than the
date of the plan of correction.
However, the regulations do not preclude a provider or supplier
from providing evidence to HCFA that it met certification
requirements at a date earlier than the date of its submission of
proof that it met requirements. The regulations establish that the
date of certification can be the date that a provider or supplier
actually meets certification requirements. Id. For example, in
its July 30, 1993 plan of correction, Petitioner stated that it had
designated Dr. Uribe as its back-up physician and that it had
retained the services of a full-time registered nurse to supervise
dialysis. The State agency found these corrections to be
inadequate because Petitioner did not supply the credentials of Dr.
Uribe. Subsequently, the State agency found also inadequate the
documentation of Ms. Gros' qualifications. The record shows that
Petitioner presented HCFA with proof of these individuals'
credentials and qualifications on August 30, 1993. This
information was accepted by HCFA.
The information which Petitioner provided to HCFA on August 30,
1993, established that a qualified back-up physician and a
qualified full-time registered nurse had been retained by
Petitioner by July 30, 1993. Had there been no other outstanding
deficiencies at Petitioner, then, under the regulations, HCFA could
have certified Petitioner effective July 30, 1993. 17/ HCFA was
not obligated to certify Petitioner as of July 30, 1993, only
because there existed other deficiencies which Petitioner did not
prove that it had corrected prior to the October 1, 1993 survey.
VII. Conclusion
I conclude that Petitioner has not proven that it complied with all
certification requirements for an ESRD facility prior to October 1,
1993. Therefore, I sustain HCFA's determination to certify
Petitioner effective October 1, 1993.
________________________
Steven T. Kessel
Administrative Law Judge
1. Petitioner submitted 10 exhibits, which it designated as P.
Ex. 1 through P. Ex. 10. I have received all of these exhibits
into evidence.
HCFA submitted three appendices to its brief, which it labeled as
Appendices "A," "B," and "C." Appendix "B"
is the affidavit of
Judy Brown, with 10 numbered exhibits (HCFA Ex. 1 - 10) attached.
HCFA also submitted HCFA Ex. 1 - 10 separately as proposed
exhibits. Ms. Brown's affidavit was not identified by HCFA as a
proposed exhibit, although it is apparent that HCFA intends that
the affidavit, along with the attached exhibits, be received into
evidence. I have identified Ms. Brown's affidavit as HCFA Ex. 11
and have received it into evidence with HCFA Ex. 1 - 10.
Appendix "A" is an excerpt from an internal HCFA document which
sets forth HCFA's policies concerning certification of suppliers
for Medicare reimbursement. Appendix "C" is a decision from the
Office of Hearings and Appeals, Appeals Council. Appendices "A"
and "C" are policy statements or legal interpretations. While it
is not, strictly speaking, necessary for me to admit these
attachments into evidence in order for me to consider them, I have
done so in order to simplify their incorporation into the record of
this case. I have identified Appendix "A" as HCFA Ex. 12. I have
identified Appendix "C" as HCFA Ex. 13. I have received both of
these exhibits into evidence.
2. The regulations establish both "conditions" and "standards"
of certification. For example, a condition for certification of an
ESRD facility is that treatment provided at the facility be under
the general supervision of a director who is a physician. 42
C.F.R. 405.2161. A standard governing the qualifications of an
ESRD facility director requires that the director be a physician
who is board eligible or board certified in internal medicine or
pediatrics and has had at least 12 months experience or training in
patient care at ESRD facilities. 42 C.F.R. 405.2102(e)
("Physician-director"). "Elements" of certification consist
of
additional certification requirements prescribed by HCFA.
3. In many of the exhibits, Petitioner is referred to as "St.
Mary Parish Dialysis Center." For example, HCFA Ex. 2, page 1;
HCFA Ex. 9, page 1.
4. HCFA represents that Petitioner was found to be in
"compliance with all conditions of coverage." HCFA Ex. 11, page 2;
HCFA's Brief at 7. As I conclude above, a facility does not
qualify for certification by meeting conditions for certification
if it does not meet the applicable standards and elements as well.
5. Petitioner's proposed corrective actions are expressed as
handwritten notations in the right column of each page of HCFA Ex.
1. P. Ex. 2 duplicates HCFA Ex. 1. P. Ex. 3 consists of a copy of
Dr. Ahmed's license to practice medicine in Louisiana, his
curriculum vitae, and the credentials of Ms. Lucy Reed, the social
worker employed by Petitioner. To the extent that there is any
dispute that the documents contained in P. Ex. 3 were submitted by
Petitioner as part of its plan of correction, I resolve that
dispute in favor of Petitioner.
6. Evidently, Ms. Gros had been hired to respond to the
surveyors' previous finding that dialysis was being supervised by
a licensed practical nurse. The surveyors referred to Ms. Gros as
Ms. "Grow." Other exhibits in evidence refer to her as Ms. "Gros"
and Ms. "Gross." P. Ex. 4, page 2; P. Ex. 5, page 5. In this
Decision, I refer to her as Ms. Gros.
7. The statement concerning Ms. Gros' qualifications is
similar, but not identical, to a letter which Dr. Ahmed attached to
a submission to HCFA dated September 17, 1993. HCFA Ex. 7, page 2.
I discuss that submission below.
8. There are obvious and unexplained differences between the
two letters. The letter which was faxed on August 30 is undated.
P. Ex. 5, page 5. The letter which Petitioner sent on September
17, 1993 bears a typewritten date in the upper left hand corner of
September 16, 1993. The word "September" has been crossed out and
the word "August" has been handwritten above it. HCFA Ex. 7, page
2. Ms. Gros' name is spelled differently in the two letters.
9. A problem with the record in this case is that neither HCFA
nor Petitioner has been precise in identifying and addressing the
deficiencies found at Petitioner or the remediation of those
deficiencies. Petitioner's failure to provide HCFA with complete
and accurate documentation of its attempts to remedy the
deficiencies which State agency surveyors identified contributed to
the delays in completing the certification process. However, HCFA
never provided Petitioner with precise explanations of which
deficiencies had been corrected or had not been corrected. For
example, nowhere in the record of this case is there a statement by
HCFA indicating that it was satisfied that Dr. Uribe and Ms. Gros
were credentialed sufficiently to meet HCFA's certification
requirements.
10. On September 17, 1993, Petitioner resubmitted to HCFA
documentation concerning Ms. Gros' qualifications. See P. Ex. 8.
11. I discuss HCFA's arguments as to "retroactive"
certifications at Part VI E of this Decision.
12. The State agency surveyors found these deficiencies to
exist before Petitioner provided HCFA with satisfactory evidence
that it had cured the deficiencies found at the July 1, 1993
survey. Thus, there is no point in time between July 1, 1993 and
October 1, 1993 at which HCFA had evidence that Petitioner had
cured all outstanding deficiencies.
13. HCFA used the term "substantial compliance" in advising
Petitioner that it did not comply with certification requirements.
HCFA Ex. 6, 9.
14. It is unclear to me what HCFA meant by its use of the term
"substantial compliance." See HCFA Ex. 6. Notwithstanding HCFA's
use of the term, however, the criterion for certification is full
compliance with certification requirements.
15. Petitioner stated that it received notice of the
deficiencies on July 16, 1993. Petitioner's Reply Brief at 7.
16. The notices which the State agency and HCFA sent to
Petitioner were not exactly models of clarity. I can understand
Petitioner's apparent frustration in attempting to resolve the
deficiencies which HCFA identified, and to complete the
certification process. Nonetheless, there were deficiencies at
Petitioner which precluded certification, and there is no proof in
this case that Petitioner corrected them fully prior to October 1,
1993.
17. Indeed, HCFA certified Petitioner effective October 1,
1993, based on information which Petitioner supplied to HCFA after
October 1, 1993, and which HCFA did not receive until October 25,
1993.