SUBJECT:

Lancaster Community Hospital Transitional Care Unit,

Petitioner,

Health Care Financing Administration

DECISION DISMISSING REQUEST FOR HEARING

I dismiss the hearing request filed on behalf of Lancaster Community Hospital Transitional Care Unit (TCU, Petitioner) pursuant to 42 C.F.R. § 498.70(b) because Petitioner does not have a right to a hearing. I find that Petitioner had no right to a hearing inasmuch as the Health Care Financing Administration (HCFA) made no adverse initial or reconsideration determination in this case concerning the Medicare certification status of the Petitioner. The determination that HCFA made involved the classification of the reimbursement status of the Petitioner. Moreover, HCFA did not consent to granting Petitioner a hearing in this matter.

I. Background and material facts

On February 7, 2000, Petitioner requested a hearing of the HCFA's December 8, 1999 reconsideration determination to sustain its denial of provider-based designation for Medicare payment purposes for Petitioner.

Lancaster Community Hospital (Hospital) is a Medicare certified acute-care hospital. In December 1996, a skilled nursing facility (SNF), known as the Lancaster Community Hospital Transitional Care Unit, began operating on the hospital grounds. TCU was licensed and separately certified as a Medicare SNF effective December 16, 1996. TCU ceased operations as a SNF on October 1, 1998. In August 1999, Petitioner asked HCFA to retroactively designate TCU as provider-based with the Hospital for the period TCU was in operation. By notice dated August 18, 1999, HCFA denied the application. Petitioner asked HCFA to reconsider its determination, but HCFA on December 8, 1999, confirmed the denial.

On September 13, 2000, I ordered the parties to submit briefs and show cause why this matter should not be dismissed pursuant to 42 C.F.R. § 498.70(b) because Petitioner does not have a right to a hearing. Both parties filed their responses.

II. Issues, findings of fact and conclusions of law

A. Issue

The issue in this case is whether I have the authority to hear and decide Petitioner's February 7, 2000 request for hearing, challenging HCFA's reimbursement classification determination that Petitioner is not a provider-based facility as Petitioner contends. Because I find that I do not have authority to hear and decide this case, I decline to address the substantive issue raised of whether Petitioner satisfies HCFA's criteria for provider-based reimbursement status.

B. Finding of fact and conclusion of law

I make the following finding of fact and conclusion of law to support my decision, set forth in bold below. I then discuss my finding in detail.

1. I do not have the authority to hear and decide this case.

This case raises the identical issue as has been heard and decided in Metropolitan Methodist Hospital, DAB CR574 (1999), aff'd, DAB No. 1694 (1999); Specialty Hospital of Southern California - La Mirada, DAB CR630 (1999), aff'd, DAB No. 1730 (2000), and most recently Comprehensive Mental Health Center of Baton Rouge , DAB CR709 (2000); Comprehensive Mental Health Center of Alexandria, DAB CR710 (2000); and Comprehensive Mental Health Center of Monroe (Comprehensive), DAB CR711 (2000), aff'd, DAB No. 1774 (2001). The findings and conclusions made there are equally applicable to this matter and I reach the same result.

Under the Medicare program, a "provider-based" reimbursement status may have important reimbursement implications for a participating facility. Essentially, a provider-based facility is one which has been found to be an integral part of another provider so that the other provider may claim reimbursement for the services that are provided by the integrated facility as if those services were given by the provider itself. Comprehensive Mental Health Center at 3. However, a determination made prior to January 10, 2001 by HCFA as to how to classify a provider for purposes of reimbursement is not a determination which gives a party dissatisfied with that determination hearing and appeal rights before me.⁽¹⁾

As was pointed out clearly in Comprehensive, the Social Security Act (Act) and implementing regulations which applied as of the date HCFA took its classification action against Petitioner allowed a prospective provider a right to a hearing to challenge only a determination as to whether it qualified to participate in Medicare as a provider of services. 42 C.F.R. § 493.3(b)(1). These regulations did not confer a hearing right on a provider dissatisfied with the way in which HCFA classified it for reimbursement purposes. Comprehensive at 6. The facts of this case are indistinguishable from the previous cases in that what is at issue here is the reimbursement classification status of Petitioner and not a determination of provider participation status. "Provider certification" is the act of determining whether a prospective provider meets the conditions of participation in Medicare which specify the requirements for the quality of care, health and safety of the facility's residents which each facility must meet in order to be certified. "Reimbursement classification" is the act of determining how a certified provider will be reimbursed for the services that it provides.

It is undisputed that Petitioner was at all times certified to participate in Medicare. The only issue in dispute involves whether HCFA should have considered it to be a "provider-based" facility.

As Judge Kessel pointed out in Comprehensive, an administrative law judge's authority to hear and decide cases is limited to that which has been delegated to her by the Secretary. Since the Secretary has not delegated authority to hear and decide reimbursement classification determinations that were made by HCFA prior to January 10, 2001, I may not hear and decide this case. The Departmental Appeals Board affirmed his determination. Comprehensive Mental Health Care Center of Baton Rouge, Comprehensive Mental Health Care Center of Alexandria; Comprehensive Mental Health Care Center of Monroe, DAB No. 1774 (2001). The appellate panel determined, inter alia, that an "initial determination" under section 498.3(b) refers to the matters provided for in that section of the regulations only. Id. at 8. The panel went further to conclude that the petitioners were not "dissatisfied with HCFA's determinations with respect to whether they qualify to provide services as [a skilled nursing facility], but are dissatisfied with the HCFA's determinations with respect to whether they are free-standing or provider-based, a matter not listed in section 498.3(b)." Id.

Based on the foregoing, I dismiss Petitioner's hearing request because I have no authority to hear and decide this matter.

Marion T. Silva

Chief Administrative Law Judge

1. Effective January 10, 2001, the regulatory definition of an "initial determination" was amended. Pursuant to that amendment, 42 C.F.R. § 498.3(b)(2) now provides that an initial determination by HCFA shall include:

[w]hether a prospective department of a provider, remote location of a hospital, satellite facility, or provider-based entity qualifies for provider-based status under § 413.65 of this chapter, or whether such a facility or entity currently treated as a department of a provider, remote location of a hospital, satellite facility, or a provider-based entity no longer qualifies for that status under § 413.65 of this chapter.

65 Fed. Reg. 58,919 (2000); 65 Fed. Reg. 18,434, 18,549 (2000). The final regulations specifically state that this provision is to be effective January 10, 2001 and do not provide for retroactive application.