SUBJECT:

Eden Park Community Health Center, Inc.,

Petitioner,

Centers for Medicare & Medicaid Services

DECISION

I decide that the Centers for Medicare & Medicaid Services ((CMS), formerly known as the Health Care Financing Administration (HCFA)) correctly terminated Eden Park Community Health Center's (Petitioner's) Medicare provider number as a federally qualified health center (FQHC), effective July 15, 1999.

I. Background

By letter dated June 30, 1999, CMS notified Petitioner that it was no longer eligible to receive medicare reimbursement under its provider number since its section 330 Public Health Service (PHS) grant was rescinded and that Petitioner's provider number as a FQHC was canceled, effective April 30, 1997. April 30, 1997 was the date that the Health Resources and Services Administration (HRSA) informed CMS that Petitioner's section 330 PHS grant was rescinded and that Petitioner no longer met the requirements for a FQHC . By letter dated August 13, 1999, CMS notified Petitioner that pursuant to 42 C.F.R. § 405.2436 ⁽¹⁾, the effective date of Petitioner's termination from the Medicare program would be July 15, 1999 rather than April 30, 1997. By letter dated September 30, 1999, Petitioner requested a hearing.

Petitioner submitted a Memorandum in Support of its Appeal accompanied by eight exhibits (P. Exs. 1 - 8). CMS submitted a filing in opposition and a motion for summary judgment with eleven accompanying exhibits (CMS Exs. 1 - 11). Neither party objected to any of the exhibits submitted. I admit into evidence CMS Exs. 1 - 11 and P. Exs. 1 - 8. I base my decision in this case on the law and the parties' submissions.

II. Applicable law and regulations

FQHCs provide both professional and ancillary health care services in rural and urban areas that are designated shortage areas or areas that have medically underserved populations and are also required to provide preventive health care services as mandated by their specific PHS grant. FQHCs are deemed to be suppliers not providers. 42 C.F.R. § 498.2. FQHCs are eligible to receive 100% reimbursement of all reasonable costs incurred as a result of their treatment of Medicare beneficiaries and Medicaid recipients. 42 C.F.R. § 405.501(b). Prospective FQHCs apply for FQHC status through HRSA. HRSA determines if an entity meets the PHS Act requirements, as either a FQHC or a "look alike" and also monitors PHS grantees to ensure their continued compliance with all statutory FQHC requirements. A FQHC is defined at 42 C.F.R.§ 405.2401(b) as:

an entity that has entered into an agreement with CMS to meet Medicare program requirements under § 405.2434 and -

(1) Is receiving a grant under section 329, 330 or 340 of the Public Health Service Act, or is receiving funding from such a grant under a contract with the recipient of such a grant and meets the requirements to receive a grant under section 329, 330 or 340 of the Public Health Service Act;

(2) Based on the recommendations of the PHS, is determined by CMS to meet the requirements for receiving such a grant;

(3) Was treated by CMS, for purposes of Part B, as a comprehensive federally funded health center (FFHC) as of January 1, 1990; or

(4) Is an outpatient health program of facility operated by a tribe or tribal organizations under the Indian Self Determination Act or by an Urban Indian organization receiving funds under title V of the Indian Health care Improvement Act.

Entities qualifying as FQHCs under subsection (2) above are known as FQHC "look alikes." See 42 C.F. R. § 405.2430(a)(i) and 405.2430(b)(1) - (2).

Once it has been determined that a prospective FQHC meets all requirements, the prospective FQHC enters into an agreement with CMS, by way of signing an attestation statement, that it agrees to remain in compliance with all FQHC requirements and that it agrees to inform CMS of any changes resulting in non compliance with the FQHC requirements. 42 C.F.R. § 405.2434(a).

When CMS terminates an agreement with a FQHC, CMS must notify the FQHC in writing of its intent to terminate the agreement at least 15 days before the effective date stated in the written notice. 42 C.F.R. § 405. 2436.

III. Issue, findings of fact and conclusions of law

A. Issue

The issue in this case is whether CMS properly determined to terminate Petitioner's participation as a FQHC, effective July 15, 1999.

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, as a separate 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 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.

I have looked closely at the parties' arguments to decide whether there are disputed issues of material fact. There are no disputed material facts in this case. Essentially, the parties are relying on the same facts and are making legal arguments based on those facts.

2. CMS properly determined to terminate Petitioner's participation as a FQHC, effective July 15, 1999.

Petitioner was a FQHC providing health care services in Baton Rouge, Louisiana. On or about April 29, 1991, Petitioner submitted an application for designation as a FQHC and, thereafter, on September 30, 1991, Petitioner obtained a section 330 PHS grant. By letter dated August 18, 1992, Petitioner was notified by CMS that it became a FQHC as of October 1, 1991. CMS Ex. 2. CMS's August 18, 1992 letter stated that Petitioner's signed attestation agreement will serve as the Medicare FQHC benefit agreement. The signed attestation statement provided that Petitioner agreed to remain in compliance with all FQHC requirements specified in 42 C.F.R. Parts 405 and 491, and also that Petitioner agreed to inform CMS of any changes resulting in noncompliance with these provisions. 42 C.F.R. § 405.2434(a).

By letter dated February 3, 1997, the Bureau of Public Health Care (BPHC) of the PHS notified Petitioner that it was not renewing Petitioner's section 330 grant application for funding based on Petitioner's failure to maintain compliance with the provisions of the PHS Act, as described in 42 C.F.R. § 405.2434(a). CMS Ex. 4. This BPHC letter listed the deficiencies found and also notified Petitioner that this was a preaward decision and therefore not subject to appeal under 42 C.F.R. Part 50, Subpart D. Id. The BPHC letter also notified Petitioner that its section 330 PHS grant would expire as of April 30, 1997. Id.

By letter dated April 8, 1997, HRSA notified CMS and the Louisiana State Medicaid Department that Petitioner's section 330 PHS grant would be terminated as of April 30, 1997 and that Petitioner would no longer meet FQHC requirements. CMS Ex. 5.

By letter dated October 29, 1997, in response to an inquiry by the State of Louisiana Medicaid Department, HRSA confirmed that Petitioner had its FQHC grantee status rescinded as of April 30, 1997 and that no application from Petitioner had been received for Medicaid FQHC look alike status. CMS Ex. 6. In Petitioner's Memorandum in Support of Appeal, at page 2, Petitioner admits that on or about November 10, 1997, the State of Louisiana notified Petitioner that it was no longer eligible to participate in the Medicaid program since it failed to maintain its FQHC status. By letter dated March 30, 1998, HRSA again notified Petitioner that the effective date of Petitioner's "termination of grantee/FQHC status" was April 30, 1997. CMS Ex. 7.

By letter dated June 30, 1999, CMS notified Petitioner its FQHC grantee status was rescinded on April 30,1997 and that in light of this, Petitioner's Medicare provider number had been canceled effective April 30, 1997. CMS Ex. 8. However, by letter dated August 13, 1999, CMS informed Petitioner that it had inadvertently stated that the effective date of Petitioner's Medicare termination was April 30, 1997 but that in accordance with the 15 day notification requirement of 42 C.F.R. § 405.2436, the Medicare termination would be effective July 15, 1999. CMS Ex. 9.

By letter also dated August 13, 1999, CMS confirmed that its determination to terminate Petitioner's Medicare agreement was appropriate and confirmed that Petitioner had not applied for FQHC look alike status since its removal on April 30, 1997. Enclosed with this confirmation letter was an application package for readmission into the Medicare FQHC program. CMS Ex. 10. Petitioner filed its request for hearing on September 30, 1999.

CMS is authorized to terminate an agreement with a FQHC if it finds that the FQHC either no longer meets the requirements specified under 42 C.F.R. § 405, subpart X, or is not in substantial compliance with either the provisions of the agreement, other applicable regulations of 42 C.F.R. § 405, subpart X, or any other applicable provisions of title XVIII of the Social Security Act. 42 C.F.R. § 405.2436(c). Here, CMS was authorized to terminate Petitioner's FQHC Medicare number, firstly, because Petitioner no longer met the requirements for a FQHC since its section 330 PHS grant was rescinded and, secondly, because it failed to notify CMS of a change that resulted in non-compliance with FQHC requirements.

Under the FQHC definition at 42 C.F.R. § 405.2401, Petitioner does not qualify as a FQHC under subsection (3) because it was not treated by CMS as a FFHC as of January 1, 1990, or under subsection (4) because it has not claimed to have any connection with an Indian tribal organization. In addition, it cannot qualify as a FQHC under subsection (2) because it has not applied for FQHC look alike status. CMS Exs. 6 and 10. Further, it can no longer qualify as a FQHC under subsection (1) because its section 330 PHS grant was rescinded as of April 30, 1997 and it has not regained a subsection 329, 330, or 340 PHS grant since that time. CMS Exs. 4 - 9. It is undisputed that Petitioner's section 330 PHS grant was rescinded and Petitioner has offered no evidence that such a grant was reinstated. Therefore, as of April 30, 1997, Petitioner no longer met the statutory definition of a FQHC. Although, CMS was notified by HRSA on March 30, 1998 that Petitioner no longer qualified as a FQHC, CMS did not act on this notification until its June 30, 1999 letter to Petitioner. Thereafter, in accordance to 42 C.F.R. § 405.2436(c), the effective date of Petitioner's termination became July 15, 1999. CMS Ex. 9.

Petitioner's signed attestation statement that evidenced its Medicare FQHC agreement required Petitioner to maintain compliance with FQHC requirements and to also promptly report any changes that result in non-compliance with any requirement. 42 C.F.R. §§ 405.2430, 405.2434. Petitioner did neither. Petitioner's loss of its section 330 PHS grant resulted in non-compliance under 42 C.F.R. § 405.2430 because it no longer met the statutory definition of a FQHC. 42 C.F.R. § 405.2401. In addition, Petitioner failed to promptly report its loss of its section 330 PHS grant in violation of its signed attestation statement even though it was aware of the loss of this grant since February 3, 1997. CMS Ex. 4. Petitioner continued to receive FQHC Medicare reimbursement to which it was not entitled from April 30, 1997 until its Medicare number was terminated effective July 15, 1999 when CMS discovered its error. Petitioner continued to receive monies to which it was not entitled because, in part, of Petitioner's failure to promptly report its loss of its PHS grant.

3. I do not have the authority to hear and decide the remaining arguments made by Petitioner.

Petitioner argues that it is entitled to a hearing prior to termination. Petitioner is not so entitled. In addition, Petitioner argues that it, its patients and its employees have suffered irreparable harm due to its termination. However, this is not relevant to my consideration concerning whether CMS properly terminated Petitioner's Medicare number.

Further, Petitioner argues that its FQHC Medicaid status was inappropriately terminated. This argument is not properly before me and must be addressed through an administrative appeal process established by the State of Louisiana.

Lastly, Petitioner argues that the termination violated its due process and equal protection rights under the United States Constitution. I do not have the authority to hear and decide these arguments. My authority in cases involving CMS 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 to hear and decide only cases involving specified initial determinations by CMS. Orchard Grove Extended Care Center, CR541 (1998).

FQHCs are deemed to be suppliers. 42 C.F.R. §§ 498.2. Petitioner may only appeal those initial determinations for which appeal rights have been granted to suppliers. 42 C.F.R. §§ 498.1(g); 498.3(b)(8); 498.5(e). Therefore, I am limited only to hearing the issue of whether or not CMS properly terminated Petitioner's FQHC Medicare number. I may not review BPHC's determination to decline the renewal of Petitioner's section 330 PHS grant. In addition, I may not hear and decide Petitioner's constitutional arguments. Also, I do not have authority to decide if CMS's determination was arbitrary and capricious. Lauderhill Community Mental Health Center v. HCFA, DAB CR652 (2000); Vermillion Behavioral Health Center, CR751 (2001). Further, I may not hear and decide whether Petitioner can be reinstated because denial of reinstatements are not appealable initial determinations but are administrative actions over which CMS has discretionary authority. Heartland Manor at Carriage Town, DAB No. 1664 at 4 (1998); Palm Grove Convalescent Center, CR858 (2002).

IV. Conclusion

I decide that CMS correctly terminated Petitioner's Medicare FQHC number, effective July 15, 1999.

Anne E. Blair

Administrative Law Judge

1. 42 C.F.R. § 405.2436(c)(2) provides that CMS notifies a FQHC of its intention to terminate the agreement at least fifteen days before the effective date of the termination.