SUBJECT:

Harriett Cohn Center,

Petitioner,

Centers for Medicare & Medicaid Services

DECISION

I decide that the Centers for Medicare & Medicaid Services (CMS) correctly determined to certify Petitioner, Harriett Cohn Center, to participate in the partial hospitalization program as a community mental health center (CMHC), effective December 14, 1998.

I. Background

Petitioner is a provider of mental health services located in Clarksville, Tennessee. Petitioner submitted an initial request for Medicare participation as a CMHC on October 2, 1997.⁽¹⁾ By letter dated December 14, 1998, CMS certified Petitioner to participate in the partial hospitalization program as a CMHC, effective December 14, 1998. Petitioner disagreed with CMS's certification and requested a hearing, contending that it should have been certified at an earlier date, March 18, 1998, the date it alleges it first began providing partial hospitalization services to Medicare beneficiaries. The case was originally assigned to Administrative Law Judge Mimi Hwang Leahy and was reassigned to me on January 21, 2000.

On October 19, 2000, I ruled on Petitioner's motion to specify new issues in the case. I noted the issues Petitioner specified in its hearing request: whether CMS's new rule governing CMHCs was properly promulgated; whether CMS improperly deviated from its prior practices; and whether CMS improperly applied newly-published procedures in the State Operations Manual (SOM) that specified certain certification procedures. I then agreed to consider Petitioner's four new issues, including: whether CMS's processing of Petitioner's application for certification was unduly delayed, based in part on an alleged violation of the Paperwork Reduction Act (PRA) by CMS; whether CMS's SOM is consistent with the newly-enacted CMHC exception in the regulations; whether the SOM misled Petitioner concerning certification procedures and the effective dates of certification for CMHCs; and whether CMS's application forms misled Petitioner regarding certification procedures and the effective date of certification.

In my October 19, 2000 Ruling, although I agreed to consider the issues raised by Petitioner, I also informed the parties that my authority to decide issues in a case is limited by the Social Security Act (Act) and regulations. I noted that the regulations governing this case give me the authority to hear and decide whether CMS's initial determination regarding Petitioner's certification date was made correctly. 42 C.F.R. §§ 498.3(b)(1), 498.5(a)(2). I noted that I may decide whether CMS correctly applied to the facts of a case applicable regulations or official interpretations of law. I noted that I may also decide whether CMS's interpretation of law is correct. I informed the parties that I lack the authority to decide whether a regulation or an amendment to a regulation was promulgated contrary to the Administrative Procedure Act (APA) or whether certain SOM provisions are non-binding legal authority because the provisions at issue clarify an "invalid" regulation. I also informed the parties that I have no authority to require certification of a CMHC under the principles of equitable estoppel, and that I would be evaluating the issues raised by Petitioner under these limitations to my authority.

During a telephone conference call on December 7, 2000 (as memorialized in a letter dated December 11, 2000), I set a schedule for the parties to brief the issues in this case. On January 22, 2001, Petitioner asked me to reopen and vacate the briefing schedule in order to schedule an in-person evidentiary hearing. I denied Petitioner's motion in my Ruling dated January 29, 2001. In it, I informed the parties that the briefing schedule was ordered in part to help me determine whether any issues of disputed material fact existed in the case which would necessitate an in-person evidentiary hearing.

CMS submitted a motion for summary disposition (CMS Br.) accompanied by seven exhibits (CMS Exs. 1 - 7). Petitioner submitted a response (P. Br.), to which CMS replied (CMS Reply Br.). In the absence of objection, I am admitting CMS Exs. 1 - 7 into evidence.

II. Applicable law and regulations

"Partial hospitalization services" are services which are described at section 1861(ff) of the Social Security Act (Act) and which are reimbursed by the Medicare program. "Partial hospitalization services" consist of services that are prescribed by a physician and provided, pursuant to specified statutory criteria, and which include: individual and group therapy with physicians and psychologists; 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; individualized activity therapies; family counseling; patient training and education; diagnostic services; and such other services as the Secretary of this Department may determine to be reasonable and necessary. Act, sections 1861(ff)(1), 1861(ff)(2)(A) - (I). The Medicare program will reimburse for partial hospitalization services that are provided by either a certified hospital or a CMHC. See Act, section 1861(ff)(3)(A).

In order to be certified to participate in Medicare, a CMHC must apply to participate in Medicare. The CMHC must be inspected by or on behalf of CMS and CMS must certify that the CMHC satisfies applicable participation requirements.

The relevant regulation governing the effective date of participation of a CMHC is codified as 42 C.F.R. § 489.13(a)(2)(i). This regulation specifies that the effective date of a participation agreement with a CMHC:

is the date on which [CMS] accepts a signed agreement which assures that the CMHC . . . meets all Federal requirements.

42 C.F.R. § 489.13(a)(2)(i).

III. Issue, findings of fact and conclusions of law

A. Issues

The ultimate issue in this case is whether CMS properly determined to certify Petitioner's participation as a CMHC, effective December 14, 1998.

In its response, Petitioner asserts that I should deny CMS's motion for summary disposition because: (1) CMS did not properly apply 42 C.F.R. § 489.13 to this case and instead improperly applied CMS's then newly published procedure in the SOM for determining the effective date of provider agreements; (2) CMS's processing of Petitioner's application for Medicare certification was unduly delayed; and (3) there remain issues of fact in controversy which cannot be decided on the application of law alone. P. Br. at 1.⁽²⁾ I discuss these issues below.

B. Findings of fact and conclusions of law.

I make findings of fact and conclusions of law (Findings) to support my decision. I set forth each Finding, below, in italics and as a separate heading. I discuss each Finding in detail.

1. Summary disposition is appropriate in this case.

Summary disposition is appropriate where either: 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, 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. Petitioner argues that an in-person evidentiary hearing is necessary in this case and that summary disposition is inappropriate.

I have looked closely at the parties' arguments to decide whether there are disputed issues of material fact. I find that even if I construe all disputed facts in Petitioner's favor, CMS must prevail.

Petitioner asserts in its brief that I should hear in-person testimony regarding arguments it made concerning the Administrative Procedure Act (APA) and equitable estoppel, including Petitioner's allegations regarding: the arbitrary and capricious nature of the SOM § 2004; a lack of notice regarding the promulgation of the CMHC exception; and the misleading nature of CMS's SOM and application materials. P. Br. at 15 - 16.

As I stated above, however, at Part I, and discussed at Part III.A., my authority in these cases is limited to hearing and deciding the issues which the Secretary of this Department has delegated me to hear. 42 C.F.R. § 498.3, 498.5. The regulations authorize me to hear and decide only cases involving specified initial determinations by CMS. I may decide whether CMS's interpretation of a regulation is correct or incorrect. However, I lack the authority to decide whether CMS or the Secretary published an interpretation of law in violation of the APA. Vermillion Behavioral Health Center, DAB CR751, at 4 (2001); citing Lauderhill Community Mental Health Center, DAB CR652 (2000). Nor do I have the authority to hear and decide claims of estoppel against CMS or the Secretary. Vermillion, DAB CR751, at 4; citing GranCare Home Health Service & Hospice, DAB CR464 (1997); The Rivers Health Care Resources, Inc., DAB CR446 (1996); SRA, Inc. D/B/A St. Mary Parish Dialysis Center, DAB CR341 (1994); T.L.C. Mental Health Center, DAB CR636 (1999); Therapeutic Rehabilitation Centers, Inc., DAB CR531 (1998).

Petitioner also argues that I should hear testimony exploring CMS's alleged undue delay in processing Petitioner's hearing request and inquire into the circumstances behind how and when its provider agreement was accepted, specifically referring to an internal CMS e-mail.⁽³⁾ Petitioner argues that the e-mail shows CMS's acceptance was earlier than December 14, 1998, and was retroactive. Petitioner further argues that it doesn't know who actually signed the December 14, 1998 agreement or when the document was actually signed. P. Br. at 16. However, Petitioner's arguments are unavailing. As CMS notes in its reply brief, there is simply nothing in the Medicare statute or its regulations that Petitioner can point to requiring CMS to act on a prospective provider's application within a specified period of time. CMS Reply Br. at 3, n.1. Moreover, as I discuss below, the provider agreement on its face makes plain that it was accepted via countersignature by a CMS official, Eugene Grasser, the Associate Regional Administrator for the Division of Medicaid and State Operations, on December 14, 1998 (CMS Exs. 3, 4). Petitioner has given me no reason to infer, based on the e-mail or anything else, absent utter speculation, that the individual signing the provider agreement either did so at some time other than December 14, 1998 or was otherwise not authorized to do so.

Thus, as I find there are no disputed issues of material fact in this case, I am proceeding to decide the case on the basis of summary disposition.

2. CMS properly determined to certify Petitioner's participation as a CMHC, effective December 14, 1998.

I evaluate Petitioner's arguments in this case against my holding in the case of Vermillion Behavioral Health Center, DAB CR751. In that case I found that the plain meaning of 42 C.F.R. § 489.13(a)(2)(i) is that the effective date of the certification of a CMHC is the date that CMS accepts the CMHC's signed agreement. This regulation does not identify the signed agreement as a provider agreement. However, 42 C.F.R. § 489.13(a)(2)(i) is a regulation under Part 489 which is entitled "Provider Agreements and Supplier Approval" concerning matters related to provider agreements. In the context of Part 489, it is clear that the signed agreement referred to in 42 C.F.R. § 489.13(a)(2)(i) is a provider agreement. Additionally, it is CMS that must do the "accepting" under 42 C.F.R. § 489.13(a)(2)(i). The filing of a completed application does not amount to acceptance, nor is the date a survey is completed (even if a provider is found to meet all federal requirements), or the date a recommendation is made to CMS by a State agency. After a survey is completed and a recommendation is made to CMS, CMS makes an independent determination to either grant or deny the application. The regulation vests discretion in CMS to decide the date on which a CMHC qualifies to participate. CMS may determine to certify a CMHC to participate at a date which is as late as the date that CMS completes its evaluation of a CMHC's application even if the evidence of compliance that is submitted to CMS by the CMHC demonstrates compliance at an earlier date than the evaluation date. Vermillion, DAB CR751, at 5, citing Midtown Mental Health Clinic, DAB CR689 (2000). None of Petitioner's arguments causes me to change my holding on this issue.

Petitioner argues that SOM § 2004, which was effective after the promulgation of 42 C.F.R. § 489.13(a)(2)(i), was improperly applied in Petitioner's case causing CMS to give it an incorrect certification date. SOM § 2004 states, in relevant part, that "Since there are not any Medicare conditions for CMHCs . . ., the effective date is the date the RO signs the provider agreement, after determining that all Medicare requirements, including enrollment are met." Specifically, Petitioner argues that: 1) CMS did not properly apply 42 C.F.R. § 489.13 to its case and instead improperly applied CMS's then newly published procedure at SOM § 2004; 2) SOM § 2004 is not just a clarification or reasonable interpretation of 42 C.F.R. § 489.13; 3) the SOM and application materials in effect at the time of Petitioner's application support its interpretation of 42 C.F.R. § 489.13; and 4) SOM § 2004 does not apply to Petitioner's application because it was adopted after Petitioner submitted its application.

I need not reach Petitioner's arguments regarding SOM § 2004 to decide this case because the regulations are the governing law in this case, not the SOM. The plain meaning of 42 C.F.R. § 489.13(a)(2)(i) is that the effective date of the certification of a CMHC is the date that CMS accepts an entity's signed agreement. It is CMS that must do the "accepting" under 42 C.F.R. § 489.13(a)(2)(i). After a survey is completed, CMS affirmatively makes an independent determination that a prospective CMHC meets applicable federal requirements. CMS then decides whether to enter into a provider agreement with the provider, and, finally, signs the provider agreement. Nothing about the wording of 42 C.F.R. § 489.13(a)(2)(i) countenances the kind of retroactive acceptance of a provider's agreement which Petitioner asserts here. Moreover, 42 C.F.R. § 489.13(a)(2)(i) was in effect prior to the time that Petitioner's application for certification was filed with CMS. Whatever CMS's past practices were, I am bound by this regulation.

Thus, in looking at the evidence before me, I see that CMS signed the provider agreement in question as of December 14, 1998. CMS Exs. 3, 4. I have no authority under the governing regulations to change the effective date here.

3. I am without authority to certify Petitioner at any date other than December 14, 1998 based on Petitioner's argument that CMS unduly delayed its certification.

Petitioner argues that CMS's processing time in this case, approximately 15 months, was unreasonable on its face and also constitutes an improper penalty under the PRA. As I held above, however, the Act and the regulations do not require CMS to certify a provider within a specific period of time. Thus, whether or not CMS's processing time was unreasonable, I am without authority to order any relief. As I stated before, I have no equitable jurisdiction in this case. Even if I agreed with Petitioner that CMS's processing time should have been shorter, I cannot order the effective date changed. Only CMS has the authority to perform the task specified by the regulations. How long Petitioner or I might have taken or believe CMS should have taken is of no legal significance. Loxley Family Medical Center, DAB CR739 (2001).

Petitioner argues that the undue delay in this case was caused in part by CMS's repeated collections of information from Petitioner, which collections violate the PRA. P. Br. at 13. Petitioner cites the regulations implementing the PRA which provide that

Whenever an agency has imposed a collection of information as a means of proving or satisfying a condition for the receipt of a benefit or the avoidance of a penalty, and the collection of information does not display a currently valid OMB control number or inform the potential persons who are to respond to the collection of information, as prescribed in § 1320.5(b), the agency shall not treat a person's failure to comply, in and of itself, as grounds for withholding the benefit or imposing the penalty. The agency shall instead permit the respondents to prove or satisfy the legal conditions in any other reasonable manner.

5 C.F.R. § 1320.6(c).

Petitioner argues that the two informal surveys CMS subjected Petitioner to, consisting of written requests for information and on-site inspections, are such collections of information, which were not approved by the Office of Management and Budget until after Petitioner was certified. Thus, Petitioner asserts that it was a violation of the PRA for CMS to penalize Petitioner by withholding certification until the required information was submitted.

However, even if I found a PRA violation in this case, it does not follow that Petitioner would be entitled to an earlier effective date. The remedy available under 5 C.F.R. § 1320.6(c) is a narrow one - specifically that an agency must allow the aggrieved party to satisfy the condition in a manner other than that specified in the unapproved collection of information. Such an opportunity is unnecessary here, as CMS has determined that Petitioner met participation requirements and certified it as of December 14, 1998. I cannot order an earlier effective date in this case based on a violation of the PRA.

IV. Conclusion

I decide that CMS correctly determined to certify Petitioner to participate in the partial hospitalization program as a CMHC, effective December 14, 1998.

Alfonso J. Montano

Administrative Law Judge

1. Petitioner asserts that its application was filed on October 10, 1997. I note that CMS's Exhibit 2, the letter in which Petitioner apparently requested participation as a CMHC, is dated October 2, 1997. However, whether Petitioner's application was filed on October 2 or 10, 1997 is immaterial to my decision here.

2. Petitioner notes my Ruling of October 19, 2000 regarding other issues it raised in its hearing request and in its motion to specify new issues which fall outside of those issues which I am authorized by the Secretary's regulations to hear and decide, including: (1) whether the content of the proposed regulation found at 42 C.F.R. § 489.13(a)(2)(i) was sufficient to provide adequate notice to parties; (2) whether 42 C.F.R. § 489.13(a)(2)(i) is a logical outgrowth of the proposed regulation included in the notice of proposed rulemaking; and (3) whether 42 C.F.R. § 489.13(a)(2)(i) is arbitrary and capricious. See P. Br. at 1, n. 1. Petitioner asks me to make findings of fact regarding those issues. I will not make such findings. Petitioner cites no authority in support of its proposition that I am allowed to make such findings in the absence of any jurisdiction for me to do so and I am unaware of any such independent authority. Petitioner's arguments are, however, preserved should this case be heard by a court with such subject matter jurisdiction.

3. Petitioner asserts that the e-mail (allegedly from Fred J. Lingle of CMS to Richard A. James and Barbara N. Owens of CMS and dated December 9, 1998 at 10:39 a.m.), in relevant part, states, "If you remember we . . . met and discussed the outstanding applicants and for Harriet [sic] Cohn . . . [we] requested two additional pieces of info . . . if we received those then they would be certifiable. The material was sent and . . . [a]t this point I considered the situation to be complete. . . . I have told you more than once that I feel this office's actions with respect to CMHCs has been unconscionable. This provider came in and applied and met all the requirements at the time and was caught up in 'hold status' thru [sic] no fault of their own."