SUBJECT:

Ventura County Medical Center,

Petitioner,

Centers for Medicare & Medicaid Services

DECISION

The request for hearing of Petitioner, Ventura County Medical Center, is dismissed pursuant to 42 C.F.R. § 498.70(b), as Petitioner has no right to a hearing under statute or regulation, and I have no jurisdiction to hear and decide this case.

On June 11, 1999, Petitioner requested a hearing challenging the decision of Respondent, Centers for Medicare and Medicaid Services (CMS), ⁽¹⁾ to "terminate" the provider-based status of Ventura County's 43 ⁽²⁾ outpatient clinics, effective June 30, 1999. Request for Hearing dated June 11, 1999. On March 20, 2000, the parties cross-moved for summary judgment and the parties submitted briefs in opposition on April 19, 2000. Oral argument on the motions was heard by the administrative law judge (ALJ) previously assigned to this case on August 15, 2000. ⁽³⁾ Following oral argument, supplemental briefs and responses were submitted simultaneously by Petitioner and Respondent on October 4, 2000 and November 30, 2000. Petitioner and Respondent further supplemented their briefings by letters dated December 5, 2000 and December 12, 2000, respectively.

The facts pertinent to this dismissal decision are few and undisputed. Ventura County, California operates the Ventura County Medical Center (VCMC). Ventura County also operates 43 outpatient clinics. Some of the clinics are located on or near and others away from the VCMC campus. CMS specifically approved some of the clinics as "hospital-based" clinics as early as 1991. Whether or not specifically approved by CMS as "hospital-based," all the clinics submitted Medicare related claims through VCMC, rather than directly as individual providers until June 30, 1999. Petitioner's Motion for Summary Judgment (P. Motion) at 7.

In August 1998, Ventura County requested that CMS review a proposed memorandum of understanding (MOU) related to a reorganization involving VCMC. The letter by which the memorandum was sent to CMS does not specifically state why the MOU was submitted for CMS's review or what action CMS was requested to take. CMS's Motion for Summary Judgment (CMS Motion), Attachment 1. Subsequent correspondence indicates one or more meetings and conversations between representatives of CMS and Petitioner. CMS ultimately advised Petitioner by letter dated December 21, 1998, that the criteria for "provider-based" designation had changed and requested that all Ventura County clinics complete and return a questionnaire or be considered not "provider-based". CMS motion, Attachment 4. Petitioner initially refused to comply with the CMS request for completion of the questionnaires in a letter dated January 25, 1999. Id., Attachment 6. However, the CMS letter of April 13, 1999 reflects that questionnaires were received by CMS for all 43 clinics in March 1999. Id., Attachment 8; P. Motion Attachment 5. The April 13, 1999 CMS letter also indicates that CMS found that none of the 43 Ventura County clinics met the criteria for "provider-based" status and specified that "provider-based" treatment would cease effective May 21, 1999. ⁽⁴⁾ Petitioner requested a hearing before an ALJ by letter dated June 11, 1999. Petitioner states specifically that it challenges the CMS decision to "terminate the "provider-based" status of VCMC's 43 out patient clinics effective June 30, 1999."

The CMS letter of April 13, 1999 did not terminate VCMC's provider agreement. The letter did not deny any of the 43 Ventura County clinics a provider agreement with CMS. The letter did not terminate any existing provider agreement with any of the 43 clinics.

GOVERNING LAW

The Social Security Act (Act), section 1866(h)(1) (42 U.S.C. § 1395cc(h)(1)) provides a right to a hearing for an institution or agency dissatisfied with a "determination of the Secretary that it is not a provider of services." Section 1866(h) of the Act also provides for a hearing in the case of adverse determinations under section 1866(b)(2) (42 U.S.C. § 1395cc(b)(2)), which include determinations of the Secretary of the Department of Health & Human Services (Secretary) not to enter into an agreement with a provider or supplier, not to renew an agreement with provider or supplier, or to terminate an agreement with a provider or supplier.

The Secretary promulgated regulations at 42 C.F.R. Part 498 effectuating the provisions of section 1866(h)(1) of the Act. Appeal rights are set forth in the regulation by status as a prospective provider or supplier or as a current provider or supplier. A prospective provider is entitled to a hearing before an ALJ only after receiving an unfavorable reconsidered determination or unfavorable revised reconsideration determination that it does not qualify as a provider. 42 C.F.R. § 498.5(a). Providers are entitled to a hearing by an ALJ after receiving "an initial determination to terminate" the provider's provider agreement. 42 C.F.R. § 498.5(b)

42 C.F.R. § 498.3(b) lists initial actions that CMS takes which may be the proper subject of an appeal. There is no dispute that prior to January 10, 2001, section 498.3(b) made no reference to a determination by CMS regarding "provider-based" status. 42 C.F.R. § 498.3(b)(2) was added and became effective January 10, 2001. See 65 Fed. Reg. 18549 (2000); 65 Fed. Reg. 58919 (2000). Indeed, Petitioner has specifically stated that the amendment to the regulation does not apply retroactively by its terms and Petitioner has refused to agree to application of the amended regulation in this case. Petitioner's Brief Re: Jurisdiction of Departmental Appeals Board and Burden of Proof. (P.Br.), at 3, n. 2.

ISSUES, FINDINGS OF FACT, CONCLUSIONS OF LAW AND ANALYSIS

The threshold issue in this case is:

Whether Petitioner has a right to appeal the action of CMS?

The answer is no, for the reasons set forth in the following findings and conclusions.

1. CMS did not, by its action of April 13, 1999: (a) deny a provider agreement to Ventura County, VCMC, or any of Ventura County's clinics; (b) decline to renew a provider agreement with Petitioner or the County; or (c) terminate any provider agreement with any of these entities.

Petitioner does not allege that CMS overtly denied, refused to renew, or terminated a provider agreement. Rather, Petitioner argues that the CMS refusal to recognize the 43 Ventura County clinics as "provider-based" to VCMC was tantamount to a termination or refusal to renew. Petitioner asserts that the denial of "provider-based" status significantly limits VCMC's ability to do business. CMS argues that the issue of whether an entity may be considered "provider-based" has to do with reimbursement rather than whether an entity can participate in the Medicare program under a provider agreement and no right of appeal is provided by statute or regulation. ⁽⁵⁾

In fact, what occurred in this case is very straightforward and requires little reinterpretation. In 1991, a CMS official advised Ventura County that CMS recognized 23 outpatient clinics as part of the hospital for Medicare certification purposes. P. Motion, Attachment 9. VCMC then treated those clinics and others as "hospital-based" or "provider-based" until August 1998, when Petitioner asked CMS to review a reorganization of the hospital. CMS Motion Attachment 1. Petitioner's request provoked CMS to inquire as to the status of the 43 clinics then being treated as "provider-based" by Petitioner. Ultimately, CMS advised Petitioner that none of the 43 satisfied new "provider-based" criteria.

It is not disputed that the effect of the CMS action is to deny Petitioner the ability to submit Medicare claims for the county clinics and whatever favorable financial benefit derived from such procedure. However, the CMS action does not prevent the county clinics from dealing directly with CMS under the Medicare program and receiving reimbursement under individual provider agreements. The CMS action does not prevent Petitioner from participating in the Medicare program and obtaining reimbursement for services provided from within its walls or through approved "provider-based" clinics. Therefore, Petitioner's argument that the CMS action was tantamount to a denial of an agreement, renewal of an agreement, or a termination is without merit, because no Ventura County entity has been denied participation in the Medicare program.

2. Petitioner has no right to appeal or a hearing before an ALJ under the statute or the regulations based on the April 13, 1999 action of CMS and the request for hearing must be dismissed.

The Act does not provide a right to appeal a denial of "provider-based" status. Section 1866(h)(1) of the Act (42 U.S.C. 1395cc(h)(1)) provides a right to a hearing in only four instances: (1) when the Secretary refuses to recognize an institution or agency as a provider of services; (2) when the Secretary refuses to enter an agreement with a provider or supplier; (3) when the Secretary decides not to renew an agreement with a provider or supplier; or (4) when the Secretary decides to terminate an agreement with a provider or supplier. ⁽⁶⁾

42 C.F.R. § 498.5 implements the appeal rights specified by the Act. Section 498.5(a) provides prospective providers a right of appeal if upon reconsideration, the Secretary determines that the prospective provider does not qualify as a provider. The scenario contemplated by section 498.5(a) is not raised by the facts of this case as no prospective provider was denied provider status. The 43 county clinics were free to request provider status from the Secretary despite the April 13, 1999 CMS action. Section 498.5(b) provides appeal rights for a provider who is dissatisfied with an initial determination of the Secretary to terminate its provider agreement. Again, this is not the instant case as Petitioner's provider agreement was not terminated by the April 13, 1999 CMS action. Petitioner points to no other authority for the proposition that it has a statutory or regulatory right to appeal the April 13, 1999 CMS action.

Black's Law Dictionary 594 (6^th ed. 1991) provides many definitions for the term "jurisdiction," but all may be summarized as the authority by which a court or judge takes cognizance of and decides a case. The jurisdiction of an ALJ appointed, pursuant to 5 U.S.C. § 3105, to conduct proceedings in accordance with 5 U.S.C. §§ 556 and 557, is circumscribed by the appointing agency's enabling statutes and regulations. 5 U.S.C. § 556(c). In other words, I have no more jurisdiction or authority to hear and decide a case than the Secretary has under his enabling statutes, and my jurisdiction is further subject to limits imposed by the Secretary's regulations. In this case, Congress provided for no right to a hearing or appeal and the regulations created no such right at the time of the CMS action, thus I have no jurisdiction. My result is consistent with prior decisions of my peers and the Departmental Appeals Board (DAB). See Mira Vista Care Center, Inc., DAB No. 1789 (2001).

CONCLUSION

For the foregoing reasons, Petitioner's request for hearing must be dismissed.

Keith W. Sickendick

Administrative Law Judge

1. Effective July 5, 2001, Health Care Finance Administration (HCFA) was renamed the Centers for Medicare and Medicaid Services (CMS). 66 Fed. Reg. 35437.

2. The number of clinics involved in this appeal is subject to dispute, but that dispute need not be resolved for purposes of this decision.

3. I have carefully reviewed the transcript of the telephonic hearing of August 15, 2000.

4. The effective date was subsequently delayed to June 30, 1999. P. Motion, Attachment 6. CMS Motion, Attachment 9.

5. Petitioner argues that Respondent did not initially raise the issue of jurisdiction and waiver should apply. Whether or not Respondent raises the issue of jurisdiction, an ALJ must always determine as a threshold matter whether there is authority to adjudicate a case.

6. No other provisions of the Act granting appeals rights are applicable in this case. See 42 C.F.R. § 498.1 for a complete list.