SUBJECT:

National Behavioral Center, Inc.,

Petitioner,

Health Care Financing Administration

I enter summary disposition in this case sustaining the determination of the Health Care Financing Administration (HCFA) not to certify Petitioner, National Behavioral Center, Inc., to participate in the Medicare program as a community mental health center (CMHC) providing partial hospitalization services. I premise this decision on my conclusions that: (1) Petitioner did not meet the criteria for certification as a CMHC providing partial hospitalization services; and (2) I do not have the authority to decide Petitioner's argument that it suffered damages as a consequence of HCFA's alleged delay in processing Petitioner's application for certification.

I. Introduction

Petitioner is a not-for-profit corporation based in Hialeah Gardens, Florida. Petitioner applied to be certified to participate in the Medicare program as a CMHC which provides partial hospitalization services. On September 14, 1998, HCFA denied Petitioner's application. On December 14, 1998, HCFA denied Petitioner's request for reconsideration of HCFA's initial denial. Petitioner requested a hearing and the case was assigned to me for a hearing and a decision. On August 2, 1999, the parties filed a Joint Notice of Issues for Summary Disposition in which they agreed that this case could be decided based on written submissions.

HCFA moved for summary disposition of the case. Petitioner replied to HCFA's motion and cross-moved for summary disposition. HCFA then replied to Petitioner's cross-motion.

HCFA submitted nine exhibits to support its motion and to respond to Petitioner's cross-motion (HCFA Exhibits (Exs.) 1 - 9). Petitioner submitted eight exhibits to respond to HCFA's motion and to support its cross-motion (P. Exs. A - H). In order to maintain internal consistency, I numerically redesignate Petitioner's exhibits as P. Exs. 1-8. Without objection, I hereby admit all these exhibits into evidence.

II. Governing law

A. Federal law

"Partial hospitalization services" are services which are defined in section 1861(ff) of the Social Security Act (Act) and reimbursed by the Medicare program. "Partial hospitalization services" consist of services that are prescribed by a physician and are provided pursuant to specified statutory criteria, which include: individual and group therapy with physicians or psychologists (or other mental health professionals authorized under state law); occupational therapy requiring the skills of a qualified occupational therapist; services of social workers, trained psychiatric nurses, and other staff trained to work with psychiatric patients; drugs and biologicals furnished for therapeutic purposes which cannot be self administered; certain individualized activity therapies; family counseling; patient training and education; diagnostic services; and such other items and services as the Secretary of this Department may determine to be reasonable and necessary. Sections 1861(ff)(1); 1861(ff)(2)(A) - (I) of the Act.

The Medicare program will reimburse for partial hospitalization services that are provided by either a certified hospital or by a CMHC. See section 1861(ff)(3)(A) of the Act. A "community mental health center" is defined by the Act to mean an entity:

(i) providing the services described in section 1916(c)(4) of the Public Health Service Act; and

(ii) meeting applicable licensing or certification requirements for community mental health centers in the State in which it is located.

Section 1861(ff)(3)(B)(i), (ii) of the Act. Although the Act refers to section 1916 of the Public Health Service Act, the section was recodified as section 1913(c)(1) of the Public Health Service Act. Under this section, the services that a CMHC must provide include the following:

(i) outpatient services, including specialized outpatient services for children, the elderly, the seriously mentally ill, and residents of the . . . [community mental health center's] service area discharged from inpatient treatment at a mental health facility;

(ii) 24-hour-a-day emergency care services;

(iii) day treatment or other partial hospitalization services or psychosocial rehabilitation services; and

(iv) screening for patients being considered for admission to State mental health facilities to determine the appropriateness of such admission.

Additionally, the Secretary of this Department has issued a regulation which defines the term "community mental health center." A CMHC is defined by the regulation to be an entity that:

(1) provides outpatient services, including specialized outpatient services for children, the elderly, individuals who are chronically mentally ill, and residents in its mental health service area who have been discharged from inpatient treatment at a mental health facility;

(2) provides 24-hour-a-day emergency care services;

(3) provides day treatment or other partial hospitalization services, or psychosocial rehabilitation services;

(4) provides screening for patients being considered for admission to State mental health facilities to determine the appropriateness of such admission;

(5) provides consultation and education services; and

(6) meets applicable licensing or certification requirements for CMHCs in the State in which it is located.

42 C.F.R. § 410.2.

HCFA has published policy guidelines which describe a CMHC's obligations under section 1913(c)(1) of the Public Health Service Act. In a document that is entitled "All States Letter 76-95" (All States Letter), HCFA stated that a community mental health center must provide all of the services that are listed in the Public Health Service Act, either directly or under arrangements with others. HCFA Ex. 1. The term "under arrangements" is defined in the All States Letter to mean that a CMHC may arrange for those services described at section 1913(c)(1) of the Public Health Service Act and partial hospitalization services:

under a written arrangement, agreement or contract with other agencies, organizations, or individuals who are not . . . [community mental health center] employees, and for which the . . . [community mental health center] maintains overall management responsibility. The written agreement includes at least the identification of the services to be provided and the manner in which the contracted services are coordinated, supervised, and evaluated by the . . . [community mental health center].

Id. (emphasis added).

HCFA has elected to defer to the laws of the States in order to determine what constitutes adequate screening for patients being considered for admission to State mental health facilities pursuant to section 1913(c)(1)(iv) of the Public Health Service Act. HCFA Ex. 3. HCFA defines "screening" to be:

the performance of at least one of the steps in a process by which an individual is clinically evaluated, pursuant to State law, for the appropriateness of admission to a State mental health facility by an entity that has both the appropriate clinical personnel and the authorization under State law to perform all of the steps in the clinical evaluation process except those required to be performed by a 24-hour facility.

HCFA Ex. 3 at 1 (emphasis in original).

B. Florida State law

Florida State law defines the entities that are authorized to perform the procedures which are necessary prerequisites to admission of individuals for treatment at a Florida State mental health facility. Under the Florida Mental Health Act (Florida State Act), F.S.A. § 394.451, et seq., only certain types of entities are authorized to perform the necessary procedures. Specifically, these entities are limited to those entities which are authorized to perform "transfer evaluations." F.S.A. § 394.461(2). A "transfer evaluation" is defined under Florida State law as being:

the process, as approved by the appropriate district office of the . . . [Florida Department of Children and Families], whereby a person who is being considered for placement in a state treatment facility is first evaluated for appropriateness of admission to the facility by a community-based public receiving facility or by a community mental health center or clinic if the public receiving facility is not a community mental health center or clinic.

F.S.A. § 394.455(29).

Under Florida State law, a "community mental health center or clinic" is a:

publicly-funded, not-for-profit center which contracts with . . . [the Florida Department of Children and Families] for the provision of inpatient, outpatient, day treatment, or emergency services.

F.S.A. § 394.455(6).

III. Issues, findings of fact and conclusions of law

A. Issues

This case is one of a series of cases that have been heard and decided recently involving the general issue of whether a CMHC meets certification requirements for participation in Medicare. Many of these cases involve CMHCs that are located in the State of Florida. Recent decisions which address the participation status of Florida CMHCs include the following: Charity Behavioural Services, Inc., DAB CR635 (1999); T.L.C. Mental Health Center, DAB CR636 (1999); Psychstar of America, DAB CR645 (2000); and New Millennium CMHC, Inc., DAB CR672 (2000).

These cases do not involve identical questions of law and fact, but the issues raised by them are very closely related. As I discuss above, at Part II of this decision, qualification to participate in Medicare as a CMHC depends on application of both federal and State laws. In order to qualify for participation, a CMHC must meet both federal and applicable State requirements.

The specific issues in this case are whether:

1. HCFA properly determined not to certify Petitioner to participate in Medicare as a CMHC providing partial hospitalization services; and

2. I have authority to hear and decide Petitioner's argument that it was affected adversely by HCFA's allegedly dilatory review of Petitioner's certification application.

I make findings of fact and conclusions of law (Findings) to support my decision in this case. I set forth each Finding below as a separately numbered heading. I discuss each Finding in detail.

1. Summary disposition is appropriate in this case.

A threshold question in this case is whether summary disposition is appropriate. Summary disposition is appropriate either where: there are no disputed issues of material fact and the only questions that must be decided involve application of law to the undisputed facts; or, where the moving party must prevail as a matter of law even if all disputed facts are resolved in favor of the party against whom the motion is made.

I am assuming the facts that Petitioner asserts in its brief and exhibits to be true for the purposes of deciding HCFA's motion for summary disposition. I conclude that summary disposition is appropriate in this case notwithstanding my decision to accept as true the facts alleged by Petitioner. As I explain in detail in the Findings which follow, Petitioner has failed to make a showing that it qualifies to participate in Medicare as a CMHC.

2. Petitioner did not satisfy participation criteria for a community mental health center providing partial hospitalization services because it has not established that it provides requisite screening services for patients who are candidates for admission to State mental facilities.

Petitioner does not satisfy participation criteria for a CMHC providing partial hospitalization services. Consequently, I grant HCFA's motion for summary disposition.

In order to be certified to provide partial hospitalization services - indeed, in order to fall within the statutory definition of a CMHC contained at section 1913(c)(1) of the Public Health Service Act - an entity subject to Florida State jurisdiction must meet the following criteria which govern screening of patients being considered for admission to State mental health facilities:

1. It must provide all of the services that are listed in section 1913(c)(1) of the Public Health Service Act. Act, section 1861(ff)(3)(A). Those services must include screening for patients being considered for admission to State mental health facilities to determine the appropriateness of such admission.

2. It must provide screening for patients either directly or under arrangement with others. All States Letter. If it elects to provide screening under arrangement with others, that arrangement must be via a written agreement which vests overall management responsibility in the CMHC. Public Health Service Act, section 1913(c)(1). Furthermore, the agreement must specify the services to be provided and the manner in which the contracted services are coordinated, supervised, and evaluated by the community mental health center. Id.

The record of this case shows that Petitioner did not provide requisite screening services, either directly, or under arrangement with others.

a. Petitioner was not authorized under Florida State law to provide screening directly and, therefore, did not provide screening directly to others within the meaning of applicable participation criteria.

Under Florida State law, Petitioner was not authorized to provide screening for patients being considered for admission to Florida State mental health facilities. Consequently, Petitioner was not able to provide screening directly as an alternative to having screening performed by others.

As I discuss above, at Parts II.A. and II.B. of this decision, HCFA has elected to defer to the States to determine what constitutes appropriate screening for admission of patients to State mental health facilities. See HCFA Ex. 3. Florida State law discusses screening as "transfer evaluations." F.S.A. § 394.455(29). Under Florida State law, the authority to perform a transfer evaluation for the purpose of determining whether a patient may be transferred to a State mental health facility may only be performed by a publicly funded, not-for-profit center which contracts with the Florida Department of Children and Families for the provision of inpatient, outpatient, day treatment, or emergency services. F.S.A. § 394.455(6).

In order to be able to perform directly the screening services that are required under section 1861(ff)(3)(A) of the Act and section 1913(c)(1)(iv) of the Public Health Service Act, Petitioner must be authorized to perform transfer evaluations pursuant to Florida State law. And, in order to be authorized to perform transfer evaluations, Petitioner must satisfy Florida's requirement that it be a publicly funded, not-for-profit center which contracts with the Florida Department of Children and Families for the provision of inpatient, outpatient, day treatment, or emergency services. As explained below, Petitioner has not offered evidence which shows that it met this requirement.

HCFA's December 14, 1998 reconsideration determination denied Petitioner's request for Medicare certification as a community mental health center. HCFA Ex. 7. There, HCFA asserted that Petitioner had not demonstrated that it was authorized under Florida law to perform all the steps in the process by which individuals are clinically evaluated for the appropriateness of admission to a State mental health facility. HCFA restated the requirement that community mental health centers providing services under arrangements with other entities must maintain overall management responsibility for the services. However, HCFA determined that since Petitioner was not a CMHC or clinic authorized to itself perform transfer evaluations under Florida law, it could not properly assume management responsibility over such evaluations. Id; see also HCFA Ex. 4.

Petitioner has not offered any evidence to prove that it was authorized to perform transfer evaluations under Florida law and thus be in a position to assume management responsibility over such evaluations performed on its behalf by other qualified entities.

b. Petitioner did not provide screening through arrangements with others because it did not enter into contracts with other entities to have screening performed within the meaning of federal requirements.

The undisputed material facts presented by HCFA establish that Petitioner did not arrange to have screening of patients performed in a manner which complies with governing criteria. Petitioner neither contracted for services required by law nor did it retain management responsibility over the services for which it did contract.

Petitioner asserted that it executed an agreement with Citrus Health Network, Inc. (Citrus Health), which constituted a valid "arrangement" to have screening services performed on Petitioner's behalf. HCFA Ex. 8. Close analysis of this agreement shows that it does not satisfy the criteria for screening via arrangements with another agency or organization.

Petitioner's agreement with Citrus Health does not provide that the contracting entities will provide screening services for admission of patients to State mental facilities. The agreement obligates Petitioner to screen patients to determine the mental health services appropriate to their needs and obligates Citrus Health to accept referrals and transfers from Petitioner where it is determined that Citrus Health can best meet the individual's needs. HCFA Ex. 8 at 2 - 3. But, it does not specify that Citrus Health will provide screening by arrangement for possible admission of patients to State mental facilities. Id. at 3. The agreement provides that each party maintains individual responsibility for accounting, billing, and collection for services provided. Id. at 4. Moreover, management responsibility for screening services is not vested with Petitioner. Rather, the agreement reaffirms that the parties are independent contractors and "shall neither have nor exercise any control or direction over the methods by which each shall accomplish its professional duties and objectives." Id. at 6.

3. I am not authorized to hear and decide Petitioner's assertion that it was damaged by HCFA's alleged delay in processing of its certification application.

Generally, Petitioner asserted that HCFA's review and approval process for Petitioner's application for certification as a Medicare provider of Community Mental Health Center Partial Hospitalization services was conducted in a manner which denied Petitioner due process. Petitioner alleged that it, as well as the community it served, suffered financial and psychological damage based on HCFA's intentional delay in acting upon Petitioner's application. Petitioner characterized HCFA's process as "affirmative misconduct" which went beyond "negligence." Petitioner's Motion for Summary Disposition at 4 - 7.

I do not have the authority to hear and decide these types of arguments. My authority in cases involving HCFA is limited to hearing and deciding those issues which the Secretary of this Department has delegated authority to me to hear and decide. That authority is specified at 42 C.F.R. §§ 498.3; 498.5. The regulations authorize me only to hear and decide cases involving specified initial determinations. I have the authority to hear and decide whether HCFA's determination that an entity fails to qualify as a provider was made correctly. 42 C.F.R §§ 498.3(b)(1); 498.5(a)(2). However, a dispute between an entity and HCFA concerning HCFA's alleged failure to process a certification application timely is not an initial determination over which I have hearing and decision authority.

Moreover, Petitioner's argument that it has been damaged by HCFA's alleged dilatory processing of its certification application reduces to an argument that some remedy should be imposed against HCFA based on principles of estoppel. It is well-established that I, or any other similarly situated administrative law judge, lack the authority to hear and decide estoppel arguments in cases involving alleged dilatory processing of applications for provider or supplier certification. T.L.C. Mental Health Center, DAB CR636 (1999); Charity Behavioural Services, Inc., DAB CR635 (1999); GranCare Home Health Service & Hospice, DAB CR464 (1997); The Rivers HealthCare Resources, Inc., DAB CR446 (1996); SRA, Inc. D/B/A St. Mary Parish Dialysis Center, DAB CR341 (1994). Petitioner has offered no argument here which would give me reason to revisit the holdings of those decisions.

IV. Conclusion

Based on the foregoing analysis, I enter summary disposition in this case sustaining the determination of HCFA not to certify Petitioner, National Behavioral Center, Inc., to participate in the Medicare program as a CMHC providing partial hospitalization services.

Marion T. Silva

Chief Administrative Law Judge