SUBJECT:

Health & Safety Training Center,

Petitioner,

Centers for Medicare & Medicaid Services

DECISION

I enter summary disposition affirming the determination of the Centers for Medicare and Medicaid Services (CMS) ⁽¹⁾ not to certify Petitioner, Health & Safety Training Center, to participate in the Medicare program as a community mental health center (CMHC) providing partial hospitalization services. Summary disposition is appropriate as there are no genuine issues of material fact in dispute and the controlling issues may be resolved as a matter of law. My decision is based on Petitioner's failure to meet the criteria for certification as a CMHC providing partial hospitalization services under applicable federal and state law.

BACKGROUND

Petitioner, located in Houston, Texas, applied on February 12, 1998, to be certified to participate in Medicare as a CMHC which provides partial hospitalization services. By letter dated September 11, 1998, CMS denied Petitioner's application for certification to participate in the Medicare program as a CMHC because Petitioner failed to meet the statutory requirements to be certified as a CMHC. CMS specifically informed Petitioner that the requirements of Texas law clearly precluded participation by entities such as Petitioner because they did not, and could not, legally perform screening for patients being considered for admission to state mental health facilities.

By letter dated October 10, 1998, Petitioner appealed CMS's initial determination. CMS, in a letter dated September 23, 1999, denied Petitioner's request for reconsideration for the same reason it denied the initial request and informed Petitioner of its right to appeal. By letter dated September 28, 1999, Petitioner requested a hearing regarding denial of its application to participate in Medicare. In part, Petitioner stated "I am not designated by the Board [Texas Mental Health and Mental Retardation Board] to serve as a single portal authority in [Texas] because I am an average social worker whose best interest has been providing care for mentally ills for last eighteen years."

The case was originally assigned to Administrative Law Judge (ALJ) Marc R. Hillson. On October 7, 1999, ALJ Hillson issued an order to the parties to file written statements within 60 days expressing their view as to how this case should proceed. On December 6, 1999, CMS filed a motion for summary judgement and dismissal. CMS claimed that Petitioner failed to file a proper hearing request. Alternatively, CMS argued that Petitioner did not meet the statutory requirements for certification as a CMHC. By letter dated November 11, 1999, Petitioner responded to ALJ Hillson's Order stating that it was, "not in position to get in a legal issue with HCFA. . . . " Further, Petitioner indicated it was requesting an opportunity to participate in the program. Finally, Petitioner indicated that it "would like to schedule this hearing . . . in Houston, Texas, so [he] will have an opportunity to present few mental health professionals who will speak from treatment point of view for mentally ills." The record does not indicate that Petitioner sent a copy of this document to CMS.

On January 11, 2000 ALJ Hillson issued an "Order To Show Cause" stating that because Petitioner had failed to file timely any document described in his Order of October 7, Petitioner's actions suggested that it may have abandoned its request for a hearing. Petitioner responded by letter dated January 14, 2000 claiming that it had "followed all the orders required and requested by [the Judge's] office since October 7, 1999." Petitioner claimed that the Texas Board "does not have authority to screen patients for State Mental Institution without patient's consent, clinical psychiatric evaluation by a psychiatrist and/or order from the Judge." Petitioner further indicated that it had licensed health care professionals ready to provide treatment and reiterated its desire to participate in the Medicare program. It does not appear that Petitioner sent a copy of this document to CMS.

On May 3, 2000 the case was transferred to me for hearing and decision. The case is properly before me and I have jurisdiction. On June 29, 2000 CMS moved to dismiss for abandonment. On March 14, 2001 I denied CMS's motion and ordered the parties to file written briefs and exhibits in support of their respective arguments no later than March 30, 2001. I also indicated that the parties should state specific reasons why they believed an in-person hearing was or was not necessary. CMS timely filed its brief and six exhibits. CMS renewed its request to dismiss the case on the basis of an inadequate hearing request, or alternatively, for summary judgment because Petitioner is not authorized under Texas law to provide screening services and therefore does not meet the statutory requirements to be certified as a CMHC in the Medicare program.

On April 13, 2001 Petitioner responded that it did not receive my letter ordering a response by March 30, 2001 until April 13, 2001. Petitioner included a photocopied envelope with a postmark of March 30, 2001. I note, however, that the return address on the envelope is the Office of the General Counsel in Dallas, Texas. Thus, I conclude the envelope copy enclosed is most likely the envelope containing CMS's copy of its March 30 motion, rather than my order mailed March 14, 2001. Petitioner reiterated its previous concerns that only state hospitals and facilities, not private ones, are designated to provide services to the mentally ill.

Petitioner further stated that "as a citizen of the United SA\[sic] [stet] of America, Federal government should not discrimate against race, religion, nationalities or other forms of laws set forth by the Government for the people." Petitioner expressed a belief that it was "being singled out because I am not rich, unable to hire an attorney and have no political connection." Petitioner also indicated that it would "like an in-person hearing, but [he had] not been able to arrange for these services through HCFA."

In Petitioner's submission (P. Sub.) of April 13, 2001 Petitioner filed one proposed exhibit, which I have identified as Petitioner's Exhibit (P. Ex.) 1. In CMS's brief (CMS Br.) of March 30, 2001 CMS filed six proposed exhibits. I have identified these exhibits as CMS Exhibits (CMS Exs.) 1 - 6. The parties did not object to each other's proposed exhibits. Therefore, I admit into evidence P. Ex. 1 and CMS Exs. 1 - 6.

APPLICABLE LAW

A. Federal Law

"Partial hospitalization services" are services that are reimbursed by the Medicare program pursuant to section 1861(ff) of the Social Security Act (Act) (as amended) (42 U.S.C. § 1395x). "Partial hospitalization services" consist of services that are prescribed by a physician and are provided pursuant to specified statutory criteria. They include: individual and group therapy with physicians or 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 items and services as the Secretary of Health and Human Services (Secretary) 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 by a CMHC. Act, section 1861(ff)(3)(A). A "community mental health center" is defined by the Act to be an entity that:

(i) (I) provides the mental health services described in section 1913(c)(1) of the Public Health Service Act; PHSA or (II) in the case of an entity operating in a State that by law precludes the entity from providing itself the service described in subparagraph (E) of such section, provides for such service by contract with an approved organization or entity (as determined by the Secretary); ⁽²⁾

(ii) meets applicable licensing or certification requirements for community mental health centers in the State in which it is located; and

(iii) meets such additional conditions as the Secretary shall specify to ensure (I) the health and safety of individuals being furnished such services, (II) the effective and efficient furnishing of such services, and (III) the compliance of such entity with the criteria described in section 1931(c)(1) of the Public Health Service Act.

Act, section 1861(ff)(3)(B) (footnote omitted).

Pursuant to section 1913(c)(1) of the PHSA (currently codified at 42 U.S.C. § 300x-2(c)(1)), the services that a CMHC must provide include the following:

(A) services principally to individuals residing in a defined geographic area (hereafter in this subsection referred to as a "service area");

(B) outpatient services, including specialized outpatient services for children, the elderly, individuals with a serious mental illness, and residents of the . . . [CMHC's] service area who have been discharged from inpatient treatment at a mental health facility;

(C) 24-hour-a-day emergency care services;

(D) day treatment or other partial hospitalization services, or psycho social rehabilitation services; and

(E) screening for patients being considered for admission to State mental health facilities to determine the appropriateness of such admission.

Additionally, the Secretary has issued a regulation which defines the term "community mental health center." A CMHC is defined by the regulation to be an entity that:

(1) Provides outpatient services, including specialized outpatient services for children, the elderly, individuals who are chronically mentally ill, and residents of its mental health service area who have been discharged from inpatient treatment at a mental health facility;

(2) Provides 24-hour-a-day emergency care services;

(3) Provides day treatment or other partial hospitalization services, or psychosocial rehabilitation services;

(4) Provides screening for patients being considered for admission to state mental health facilities to determine the appropriateness of such admission;

(5) Provides consultation and education services; and,

(6) Meets applicable licensing or certification requirements for CMHCs in the State in which it is located.

42 C.F.R. § 410.2.

CMS published policy guidelines on July 24, 1995 that describe a CMHC's obligations under section 1913(c)(1) of the PHSA and expressly allowed for contracting for services to meet the requirements of section 1913(c)(1), with a provision similar to that now codified at section 1861(ff)(3)(B)(i)(II) of the Act. In the "All States Letter 76-95," CMS stated that a CMHC must provide all of the services that are listed in the Public Health Service Act, either directly or under arrangements with others. CMS Ex. 1. ⁽³⁾ The phrase "under arrangements" is defined in the All States Letter to mean that a CMHC may arrange for those services described at section 1913(c)(1) of the PHSA and partial hospitalization services:

under a written arrangement, agreement or contract with other agencies, organizations, or individuals who are not CMHC [community mental health center] employees, and for which the CMHC maintains overall management responsibility. The written agreement includes at least the identification of the services to be provided and the manner in which the contracted services are coordinated, supervised, and evaluated by the CMHC . . .

CMS Ex. 1, at 3.

CMS also issued policy guidance in All States Letter 80-98, which provides that a CMHC must actually provide the core services required by the Act and not merely have the capacity to provide the services. All States Letter 80-98 further provides that a CMHC's provider certificate may be terminated, if after certification, it does not provide all the core services. CMS Ex. 2.

Congress, in section 1861(ff)(3)(B)(ii) of the Act, incorporates state law requirements for CMHCs by specifying that any CMHC under the federal statute must meet licensing and certification requirements of the state. CMS logically relies upon the appropriate state law in order to determine what constitutes adequate screening for patients being considered for admission to state mental health facilities pursuant to section 1913(c)(1)(E) of the PHSA.

CMS issued additional interpretive guidance on August 21, 1998, setting forth the types of services a CMHC must be able to provide so that it can be considered to be performing the screening services described in section 1913(c)(1) of the PHSA. "Screening" is specifically described as:

the performance of at least one of the steps in a process by which an individual is clinically evaluated, pursuant to State law, for the appropriateness of admission to a State mental health facility by an entity that has both the appropriate clinical personnel and authorization under State law to perform all of the steps in the clinical evaluation process except those required to be provided by a 24-hour facility.

CMS Ex. 2, at 1 (emphasis in original).

B. State Law

Under Texas law, (Texas Administrative Code or TAC) all patients seeking admission to a state mental health facility must first be screened by the appropriate Mental Health Authority (MHA) to determine the most appropriate placement services. The Texas Department of Mental Health and Mental Retardation (MHMR) has the authority to designate which entities are authorized to perform screening services for individuals prior to admission to a state treatment facility. 25 TAC § 402.57.

MHMR has designated certain MHAs as the entities charged with the responsibility of coordinating services to mentally ill persons. MHMR has determined that certain MHAs shall act as single portal authorities (SPAs) to serve designated areas. An SPA is defined as an MHA which has been designated by MHMR to serve as the agency responsible for delivering mental health services. 25 TAC § 402.3

An MHA may request designation by MHMR as a SPA if it:

(1) provides or contracts for an appropriate array of core services;

(2) serves its priority population; and

(3) is in compliance with terms of its performance contract with the department.

25 TAC § 402.4(a).

Texas law does not allow a non-designated private facility to perform pre-admission screening. Thus, only entities specifically designated by MHMR may perform screening services for admission to a state treatment facility. 25 TAC § 402.57.

ISSUES

The issues presented are:

1. Whether disposition on the written record is appropriate; and

2. Whether Petitioner met the requirements of providing screening for patients being considered for admission to state mental health facilities to determine the appropriateness of such admission.

FINDING OF FACT AND CONCLUSIONS OF LAW

I make findings of fact and conclusions of law (Findings) to support my decision in this case. I set forth each Finding below as a separately numbered heading. I discuss each Finding in detail.

1. Summary disposition based on the written record is appropriate.

CMS has asked that this case be decided by summary disposition, without the need for a hearing, because there are no disputed issues of material fact and the only questions presented for adjudication involve the application of law to these undisputed facts. ⁽⁴⁾ Petitioner, on the other hand, has requested an in-person hearing in Houston. Regarding the necessity of a hearing, I advised Petitioner in my Order of March 14, 2001, that it should state specific reasons why such a hearing was necessary. Petitioner's April 13, 2001 letter stated only that it would "like an in-person hearing." In the only other reference to a hearing, Petitioner said in his original appeal that he wanted a hearing in Houston so that he could present a few mental health professionals to speak from a treatment point of view for the mentally ill. I find that under the circumstances of this case, such testimony is not necessary to resolve the legal issues in this case and summary disposition is appropriate.

Summary disposition is appropriate in instances in which there are no disputed issues of material fact and the only questions presented for decision involve the application of law to the undisputed facts, as well as in instances where the moving party is entitled to prevail as a matter of law even if all factual disputes are not resolved in favor of the nonmoving party. New Millennium CMHC, DAB CR672 (2000); New Life Plus Center, DAB CR700 (2000).

Further, in matters involving the denial of an applicant's request for Medicare participation as a CMHC, CMS must present evidence to establish a prima facie case that the applicant has failed to supply affirmative evidence which demonstrates compliance with those requirements. Psychstar of America, DAB CR645 (2000). Petitioner bears the burden of rebutting, by a preponderance of the evidence, any prima facie case of noncompliance established by CMS, as well as the burden of affirmatively establishing that it satisfied the requirements for Medicare participation as a CMHC. [See Hillman Rehabilitation Center, DAB No. 1611 (1997), aff'd, Hillman Rehabilitation Center v. U. S. Dept. of Health and Human Services, Health Care Financing Administration, No. 98-3789 (GEV), slip op. at 25 (D.N.J. May 13, 1999).]

The material facts are not disputed in this matter. Petitioner does not dispute that it cannot, under Texas law, provide the necessary screening services but rather offers equitable arguments why it should nonetheless be certified. Since there are no facts in dispute, the case may be resolved by applying the law to those undisputed facts.

2. Petitioner did not satisfy participation criteria for a community mental health center providing partial hospitalization services because it has not established that it provides requisite screening services for patients who are candidates for admission to state mental facilities.

In order to be certified to provide partial hospitalization services - indeed, in order to fall within the statutory definition of a CMHC contained at section 1913(c)(1) of the Public Health Service Act - an entity subject to Texas State jurisdiction must meet the following criteria which govern screening of patients being considered for admission to state mental health facilities:

1. It must provide all of the services that are listed in section 1913(c)(1) of the Public Health Service Act. Act, section 1861(ff)(3)(A). Those services must include screening for patients being considered for admission to State mental health facilities to determine the appropriateness of such admission.

2. It must provide screening for patients either directly or under arrangement with others. All States Letter. If it elects to provide screening under arrangement with others, that arrangement must be via a written agreement which vests overall management responsibility in the CMHC. Furthermore, the agreement must specify
the services to be provided and the manner in which the contracted services are coordinated, supervised, and evaluated by the community mental health center. PHSA, section 1913(c)(1)

The record in this case does not show that Petitioner provided the requisite screening services, either directly, or under arrangement with others.

3. Petitioner was not authorized under Texas State law to provide screening directly and, therefore, did not provide screening directly to others within the meaning of applicable participation criteria.

CMS has determined that in order to be certified for Medicare participation as a CMHC, an entity must provide screening for patients being considered for admission to state mental health facilities to determine the appropriateness of such admission. CMS Ex. 1. CMS has elected to defer to the states to determine what constitutes appropriate screening for admission of patients to state mental health facilities. See CMS Ex. 1.

Under Texas State law, in order to be able to perform directly the screening services that are required under section 1861(ff)(3)(A) of the Act and section 1913(c)(1)(iv) of the Public Health Service Act, Petitioner must be authorized to perform screening by the State of Texas. According to Texas State law, screening for admissions to state mental health facilities may only be performed by a entity such as an MHA or a SPA that has been specifically designated to provide pre-admission screening.

An MHA may request designation by MHMR as a SPA if it:

(1) provides or contracts for an appropriate array of core services;

(2) serves its priority population; and

(3) is in compliance with terms of its performance contract with the department.

25 TAC § 402.4(a).

An MHA which provides core services, which includes pre-admission screening, and meets the other criteria may be designated as a SPA. Petitioner has not offered any evidence to show that it provides pre-admission screening, and therefore fails to satisfy all of the criteria necessary to be designated an SPA under Texas State law. Consequently, Petitioner fails to qualify as a CMHC under section 1913(c)(1) of the PHSA.

In sum, under Texas Law, a patient shall not be admitted to a state treatment facility without receiving preadmission screening. Preadmission screening may only be performed by a single portal authority, and if there is no such authority designated for the area, by the appropriate state treatment facility. Since Petitioner submitted no evidence indicating that it had been designated to serve as the agency with responsibility for coordinating and facilitating the delivery of mental health services to persons committed to state mental health facilities in its local service area, and since Petitioner has not been designated to serve as a single portal authority under Texas law, CMS properly determined that Petitioner did not meet the statutory requirements for a CMHC as they relate to providing screening for patients being considered for admission to state mental health facilities. The ability to perform screening is a requirement for certification as a CMHC.

Petitioner argues that none of the private facilities in Texas are designated by MHMR to deliver services in the area, but other facilities, "are operating, and are being funded by HCFA even though they are not designated by the [B]oard to provide services in our area." P. Sub.

The issue before me, however, is whether or not Petitioner has met both the federal and state requirements to qualify as a CMHC. Whether or not other facilities are operating without proper designation is an issue that is not before me, and therefore I cannot consider it; nor would it be relevant to my decision.

Petitioner further argues that he is being treated unfairly by CMS because he is not rich, unable to hire an attorney, and has no political connections.

Similarly, I do not have the authority to hear and decide Petitioner's equitable arguments. My authority in cases involving CMS is limited to hearing and deciding those issues which the Secretary has delegated authority to me to hear and decide. However, Petitioner is free to pursue these arguments in another forum.

CONCLUSION

Based on the foregoing analysis, I enter summary disposition in this case sustaining the determination of CMS not to certify Petitioner, Health & Safety Training Center, to participate in the Medicare program as a CMHC providing partial hospitalization services.

Marion T. Silva

Chief Administrative Law Judge

1. Effective July 5, 2001, the Health Care Financing Administration (HCFA) was renamed the Centers for Medicare and Medicaid Services. (66 Fed. Reg. 33,437 (2001). For the sake of clarity and consistency, even though CMS's exhibits were submitted prior to its name change and therefore identified as "HCFA" exhibits, I will refer to said documents as "CMS" exhibits and not "HCFA" exhibits throughout this decision.

2. Section 1861(ff)(3)(B)(i)(II) was added by the Medicare, Medicaid, and State Children's Health Insurance Program Benefits Improvement and Protection Act of 2000 (BIPA), Pub. L. No. 106-554 (2001) .

3. The All States Letter refers to section 1916(c) of the PHSA which was recodified as section 1913(c) of the PHSA after the All States Letter was issued.

4. A preliminary issue raised by CMS was whether Petitioner, who has indicated he is proceeding pro se, filed an adequate hearing request. In light of Fairview Nursing Plaza, DAB No. 1715 (2000) and its progeny, I find sufficient basis to proceed to the merits.