SUBJECT:

Mira Vista Care Center, Inc.,

Petitioner,

Health Care Financing Administration

I dismiss the hearing requests filed on behalf of Mira Vista Care Center, Inc. (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 Petitioner's Medicare certification status. The determination that HCFA made involved the classification of the reimbursement status of the Petitioner.

I. Background and material facts

On December 7 and 17, 1999, respectively, Petitioner requested a hearing of HCFA's reconsideration determinations to sustain its denial of provider-based designation for Medicare payment purposes for Petitioner. The requests were docketed as C-00-149 and C-00-187. In my Order dated August 4, 2000, the aforementioned cases were consolidated and henceforth referenced as Docket No. C-00-149. Case Docket No. C-00-187 was therefore dismissed.

Petitioner is licensed to own and operate a 94-bed skilled nursing facility in Mount Vernon, Washington. Petitioner's Mount Vernon location was Medicare certified. In 1998, Petitioner moved 30 of the 94 beds to United General Hospital (UGH), an acute care hospital located in Sedro Woolley, Washington. In 1998, Petitioner filed an enrollment application for certification of the UGH facility to participate in Medicare and Medicaid. HCFA Ex. 2. By letter dated January 19, 1999, Petitioner was advised by HCFA that, effective December 8, 1998, Petitioner's UGH facility was certified by HCFA for participation in the Medicare program as a skilled nursing facility and was issued a separate provider number. HCFA Ex. 9. On July 5, 1999, Petitioner requested HCFA to issue a determination to redesignate the UGH location as a provider-based facility and not as a new Medicare provider. HCFA Ex. 11. By letter dated October 1, 1999, HCFA denied Petitioner's request for provider-based status. HCFA Ex. 13. Petitioner submitted a request for reconsideration of the HCFA determination. HCFA Ex. 12, at 4-5. On October 21, 1999, HCFA advised Petitioner of its decision to stand by its original determination. HCFA Ex. 14.

On August 4, 2000, I granted HCFA leave to file a Motion to Dismiss pursuant to 42 C.F.R. § 498.70(b) on the grounds that this forum lacked jurisdiction to entertain this matter and, therefore, Petitioner does not have a right to a hearing. HCFA submitted its Motion to Dismiss, supported by 19 proposed exhibits (HCFA Exs. 1-19), on September 8, 2000. Petitioner filed its response to HCFA's Motion to Dismiss, supported by seven proposed exhibits (P. Exs. 1-7), on September 26, 2000. The parties did not oppose the admission of the exhibits. I therefore accept into evidence HCFA Exs. 1-19 and P. Exs. 1-7. On October 5, 2000, HCFA filed a request for leave to submit a reply brief. Petitioner filed its opposition to HCFA's request for leave on October 11, 2000. On October 16, 2000, HCFA filed: (1) a response to Petitioner's opposition to HCFA's request for leave; and (2) its reply to Petitioner's response brief. Petitioner submitted its objection to HCFA's reply brief on October 27, 2000. In that Petitioner has not been afforded the opportunity to file a surreply regarding HCFA's Motion to Dismiss, out of fairness I deny HCFA's request for leave to file a reply to Petitioner's response to HCFA's Motion to Dismiss and reject its reply submission. I base my decision in this case on the law, the evidence, and the parties' arguments contained in HCFA's initial brief and Petitioner's response.

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 December 7 and 17, 1999 requests 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 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, DAB CR711 (2000), aff'd, DAB No. 1774 (2001). Under the regulations which governed the aforementioned cases, a determination by HCFA concerning classification of a provider for purposes of reimbursement is not a determination which gives a dissatisfied party hearing and appeal rights. Similarly, under those same regulations, I do not have the authority to hear and decide a case in which the issue is reimbursement classification status.⁽¹⁾

Under both the Social Security Act (Act) and implementing regulations, an individual or entity is entitled to a hearing before an administrative law judge (ALJ) concerning specified actions by HCFA which are defined to be "determinations." If an action by HCFA is not a determination about which a right to a hearing is conferred by the Act and the applicable regulations, then no right to a hearing exists. The relevant language in the Act, which governs an individual's or entity's right to a hearing with respect to an action taken by HCFA, is contained in section 1866(h)(1). That section states, in relevant part, that:

[a]n institution or agency dissatisfied with a determination by the Secretary that it is not a provider of services . . . shall be entitled to a hearing thereon . . .

The implementing regulation at 42 C.F.R. § 498.3(b) provides that HCFA makes initial determinations with respect to certain matters. These matters are defined to include:

[w]hether a prospective provider qualifies as a provider.

42 C.F.R. § 498.3(b)(1).

The question in this case is whether HCFA's denial of Petitioner's request for provider-based classification instead of the assignment of a separate provider number for the UGH facility is a determination that the UGH facility was not a provider of services or a determination that the facility did not qualify as a provider. HCFA did not determine that the UGH facility did not meet the qualifications for certification. HCFA's acceptance of Petitioner's request for certification and subsequent assignment of a separate provider number to the UGH facility effected only the manner in which Petitioner was reimbursed for services and not the provider's certification status.

This distinction is significant in determinating whether Petitioner has a right to a hearing. With exceptions that are not relevant here, hearing rights attach only to a determination of whether an entity qualifies as a provider. Generally, hearing rights do not attach to HCFA's classification of the type of reimbursement mechanism which governs an entity.

Under the regulations, certification is a process by which a facility establishes that it meets the criteria which governs Medicare participation. The certification process requires a survey of the facility by HCFA or on HCFA's behalf in order to determine whether participation requirements are met. 42 C.F.R. § 489.13. The certification process is designed to establish whether the facility meets the quality of care requirements that are contained in provider regulations that govern that type of facility.

Here, Petitioner's request for certification of the UGH facility was granted. The subsequent issue before HCFA was whether a satellite long-term care facility could be considered as "provider-based." HCFA determined that this classification was not allowed and therefore assigned the separate provider number. In short, these issues had nothing to do with whether Petitioner's UGH facility met certification requirements.

An appellate panel of the DAB recently issued a decision on an analogous matter. In a consolidated opinion, an appellate panel in Comprehensive Mental Health Care Center of Baton Rouge, Comprehensive Mental Health Care Center of Alexandria, and Comprehensive Mental Health Care Center of Monroe (Comprehensive), DAB No. 1774 (2001), upheld the ALJ's determination that he lacked the authority to hear and decide the issues before him. The petitioners in Comprehensive had been certified by HCFA to participate in the Medicare program and were classified by HCFA as free-standing facilities. The petitioners, in their initial requests for certification, sought "provider-based" status which was denied by HCFA. The ALJ in Comprehensive concluded that "HCFA's determinations that petitioners were free-standing rather than provider-based facilities involved classification of the reimbursement status of petitioners" and "that the regulations at 42 C.F.R. Part 498 do not confer a hearing right on a provider that is dissatisfied with the way in which HCFA classified it for reimbursement purpose." Comprehensive, at 4. 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 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, relevant sections of Title 42 of the Code of Federal Regulations were revised. Specifically, 42 C.F.R.§ 413.65(a)(2) now defines a "provider-based entity" as:

. . . a provider of health care services, or an RBC or an FQHC as defined in 405.2401(b) of this chapter, that is either created by or acquired by, a main provider for the purposes of furnishing health care services of a different type from those of the main provider . . .

The definition of an "initial determination" at 42 C.F.R. § 498.3(b)(2) was revised to include:

Whether 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 . . .

The amended regulations transferred authority to review provider-based decisions to the Departmental Appeals Board (DAB). However, all of the determinations made by HCFA in this case were made prior to the effective date of the aforementioned regulations. The amended regulations do not provide for retroactive application to matters initiated and determined prior to January 10, 2001 and are therefore inapplicable to the present matter before me.