SUBJECT:

Oberry Community Mental Health Center,

Petitioner,

Centers for Medicare & Medicaid Services

DECISION

I enter summary disposition affirming the determination of the Centers for Medicare & Medicaid Services (CMS) ⁽¹⁾ not to certify Oberry Community Mental Health Center (Petitioner) 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 federal law and applicable state law.

BACKGROUND

Petitioner, located in Houston, Texas, applied in 1998 to be certified to participate in Medicare as a CMHC providing partial hospitalization services. By letter dated September 18, 1998, CMS's Regional Office in Dallas sent a letter to Petitioner notifying it that its application for certification to participate in Medicare was being denied because it failed to meet the statutory requirements to be certified as a CMHC. CMS Ex. 1 at 1. 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. The pertinent requirements for the State of Texas restrict those who may perform screening, and specifically preclude Petitioner from providing screening services. Id.

By letter dated October 4, 1998, Petitioner appealed CMS's initial determination. CMS Ex. 2. Petitioner opined that it "met the statutory requirements through a contractual agreement with a state mental health facility MHMRA [Mental Health and Mental Retardation Authority of Harris County]." Further, Petitioner contended that the statute did not indicate whether Petitioner had to comply with the screening requirement "directly or indirectly." Consequently, Petitioner elected to "meet the requirement indirectly as is in Home Health Care." Id.

By letter dated January 22, 1999, CMS denied Petitioner's request for reconsideration for essentially the same reasons as in the initial determination. CMS Ex. 3. Additionally, the letter in bold print informed Petitioner of its appeal rights to a hearing before an administrative law judge of the Department of Health and Human Services, Departmental Appeals Board (DAB), referencing the regulations at 42 C.F.R. §§ 498.40 et seq. and the 60-day time limit, from the receipt of CMS's letter, for filing its appeal with the DAB.

A letter from Petitioner's Administrator, Gloria Headley, R.N., date-stamped as received on April 19, 1999 (after the 60-day deadline for filing a hearing request had expired), by the Civil Remedies Division of the DAB, and acknowledged as Petitioner's request for hearing, explained that her main concern was "why all community mental health centers were not terminated. If wrong is wrong why did existing centers continue to exist?" Petitioner's (P.'s) Request for Hearing and CMS Ex. 4. Petitioner asks "[p]lease help me to understand." Id. Petitioner claims that it lost $60,000 because CMS told it "not to close" pending confirmation of "how operations were going to be handled." Id. Finally, Petitioner indicated that it looked to MHMRA as its portal because it was told that MHMRA was the only agency able to admit to state or county facilities.

The case was originally assigned to Administrative Law Judge (Judge) Mimi Hwang Leahy. On July 7, 1999, Judge Leahy conducted a telephone conference followed by an order for briefing the issue of the timeliness of Petitioner's hearing request. Petitioner was directed to file its brief (supporting why good cause existed for Judge Leahy to hear the case even though Petitioner's hearing request was untimely filed) by August 31, 1999; CMS was directed to file its response by September 30, 1999; Petitioner was directed to file its reply by November 1, 1999.

In its pleading filed on August 29, 1999, captioned "Motion To Excuse Delay," Petitioner claims that the incapacity of Ms. Headley, Petitioner's Administrator, resulting from an automobile accident constituted "good cause" for filing its appeal after the 60-day deadline had expired. Petitioner's exhibit (P. Ex.) 1. ⁽²⁾ In her affidavit, Ms. Headley claimed that there were no other staff in the office who had the knowledge to file the papers for appeal. P. Ex. 1 at 1.

On September 21, 1999, CMS filed its "Motion To Dismiss Pursuant to 42 C.F.R. § 498.70 (c) and Motion For Summary Judgment." CMS indicates in its brief that it requested additional information regarding Ms. Headley's accident on September 1, which it received on September 14, 1999. As a result of reviewing those documents, CMS concluded that the documentation was insufficient to support Petitioner's allegations of any incapacity of Ms. Headley's which would have rendered her incapable of submitting a timely appeal. Accordingly, CMS contends that Petitioner's appeal should be dismissed because Petitioner's April 1999 letter did not constitute an adequate hearing request. In the alternative, if the request is adequate, CMS maintains that Petitioner did not demonstrate "good cause" for filing the appeal beyond the 60-day deadline and that the appeal should be dismissed as untimely. Finally, should the April 1999 letter be deemed a timely appeal, CMS asserts that it is entitled to judgment as a matter of law on the undisputed facts because Petitioner is not designated to perform the necessary screening as required by state and federal law in order to participate in Medicare as a CMHC. Petitioner did not file a reply brief.

By letter dated December 10, 1999, CMS informed the DAB that it had not received any response or further correspondence from Petitioner since the filing of its September 21 Motion To Dismiss and Motion for Summary Judgment. Due to the absence of opposition from Petitioner, CMS requested that the case be dismissed or summary judgment granted. On January 31, 2000, this case was transferred to Judge Cynthia A. Josserand, and subsequently to me. The case is properly before me and I have jurisdiction.

Attached to CMS's "Motion To Dismiss Pursuant to 42 C.F.R. § 498.70 and Motion For Summary Judgment" were five exhibits, marked CMS Exs. 1 - 5. Attached to Petitioner's Motion To Excuse Delay was one exhibit. See footnote 2. In the absence of objection, I admit into evidence CMS Exs. 1 - 5 and P. Ex. 1.

APPLICABLE 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 provided pursuant to specified statutory criteria, and which 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 CMHC 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) ⁽³⁾;

(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 psychosocial 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 provides a definition for a CMHC. 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 (1998).

CMS published policy guidelines which describe a CMHC's obligations under section 1913(c)(1) of the PHSA, with a provision similar to that now codified at section 1861(ff)(3)(B)(i)(II) of the Act. In a July 24, 1995 document that is entitled "All States Letter 76-95" (All States Letter), CMS states that a CMHC must provide all of the services that are listed in the PHSA either directly or under arrangements with others. ⁽⁴⁾ 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 did not elect to offer the All States Letter as an exhibit in this case. However, the All States Letter is, nevertheless, applicable to this case. Therefore, for purposes of this decision, I take notice of the All States Letter. I note that the All States Letter may be found as an exhibit in other cases involving CMHCs which I have decided. See, e.g., National Behavioral Center, Inc., DAB CR695 (2000).

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.

Under Texas law, all patients seeking admission to a state mental health facility must first be screened to determine the most appropriate placement services. The Texas MHMR has the authority to designate which entities are authorized to perform screening services for individuals prior to admission to a state treatment facility.

MHMR has designated certain Mental Health Authority facilities (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 to serve designated areas. A single portal authority is defined as an MHA which has been designated by MHMR to serve as the agency responsible for delivering mental health services.

An MHA may request designation by MHMR as a single portal authority 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 Texas Administrative Code (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.

ISSUES, FINDINGS OF FACT, AND CONCLUSIONS OF LAW

The issues presented are:

1. Whether disposition on the written record is appropriate;

2. Whether Petitioner's request for hearing was untimely filed and, if so, did Petitioner show good cause for its untimeliness; ⁽⁵⁾ and

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

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 judgment, without the need for an in-person testimonial 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. Petitioner, on the other hand, has failed to respond to CMS's motion and has had no further communication with me regarding its purported appeal. I find that under the circumstances of this case, no testimony is necessary to resolve the legal issues and summary judgment is appropriate.

Summary judgment 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 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. Id.; see also Hillman Rehabilitation Center v. U.S. Dept. of Health and Human Services, No. 98-3789 (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. Instead, Petitioner 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 these undisputed facts.

2. Petitioner has shown good cause for its untimely filing.

CMS maintains that, if Petitioner's initial filing was determined to be an adequate hearing request, Petitioner's appeal should nevertheless be dismissed because the appeal was untimely, since Petitioner's appeal was filed approximately one month after the 60-day filing deadline specified in 42 C.F.R. § 498.40(a).

By notice dated January 22, 1999 (January 22 notice), CMS notified Petitioner that "[b]ased on our review of your reconsideration request dated October 4, 1998, we have determined that our initial denial of your application is correct." CMS Ex. 3 at 1. The notice also informed Petitioner that it had 60 days from receipt of the letter to request a hearing. Petitioner filed an undated appeal letter received by the Civil Remedies Division on April 19, 1999. On August 31, 1999, Petitioner, through its attorney, filed a "Motion to Excuse Delay" which stated, among other things, that Petitioner received CMS's January 22 notice "on or about January 30, 1999" and that Petitioner's administrator, Gloria Headley, was involved in an automobile accident on March 15, 1999, which prevented timely filing of this appeal. Petitioner's attorney also submitted an affidavit executed by Ms. Headley. Ms. Headley's affidavit asserted that she was "well aware to file [an] appeal by March 24, 1999." ⁽⁶⁾ Further, Ms. Headley's affidavit stated:

That on March 15, 1999, I was in an automobile accident . . . was under the care of a Medical Doctor from March 15, 1999 thru April 10, 1999. That there is no other staff in my office who has the knowledge to file the papers for our appeal.

P. Ex. 1 at 1.

I find that, while Petitioner's hearing request was untimely filed, Petitioner has shown good cause for its late filing. Petitioner subsequently secured counsel who provided CMS an affidavit and medical documentation that Petitioner's administrator was physically incapacitated as a result of an automobile accident and thus unable to actively pursue the appeal on behalf of Petitioner. While I note that Petitioner's medical documentation may not have been as complete as CMS would have liked, giving Petitioner every benefit of the doubt regarding its administrator's physical capabilities and capacities at the time, and the lack of prejudice to CMS, I determine that the most effective resolution of this matter for all concerned is to proceed to a decision on the merits of the case.

3. Petitioner did not meet the requirements for participation as a CMHC in the Medicare program.

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 PHSA - an entity subject to Texas 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. 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. PHSA, section 1913(c)(1). 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. Id.

Pursuant to the statutory requirement, CMS informs prospective participants 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 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 PHSA, Petitioner must be authorized to perform screening under Texas law. According to Texas law, screening for admission to state mental health facilities may only be performed by a entity such as an MHA designated as a single portal authority that has been specifically authorized to provide pre-admission screening.

An MHA may request designation by MHMR as a single portal authority 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 single portal authority. Petitioner has not offered any evidence to show that it provides pre-admission screening, and therefore it fails to satisfy all of the criteria necessary to be designated a single portal authority under Texas law. Therefore, Petitioner fails to qualify as a CMHC under section 1913(c)(1) of the PHSA.

Under Texas law, a patient shall not be admitted to a state treatment facility without receiving pre-admission screening. Pre-admission 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 documentation 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 maintains that all CMHCs were not terminated and that, while it received CMS's letter of denial for its reconsideration request, other CMHCs "continue to operate." P.'s Request for Hearing at 1. Further, Petitioner asserts that "this situation has not been treated fairly." Id. Finally, Petitioner alleges that it "lost $60,000 in our operation" because it was told not to close by a CMS representative. Id.

The issue before me is whether or not Petitioner has met both the federal and Texas requirements to qualify as a CMHC. Whether or not other facilities are operating without proper designation and what, if any, information was verbally provided to Petitioner are issues that are appropriately within CMS's jurisdiction and authority to investigate. However, they are not issues that are before me and, therefore, I cannot consider them. In any event, the arguments raised by Petitioner are equitable arguments, and I do not have the authority to hear and decide equitable 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, as set forth at 42 C.F.R. §§ 498.3 and 498.5. The regulations authorize me only to hear and decide cases involving specified initial determinations by CMS. I have no authority to award damages or fashion extraordinary relief.

CONCLUSION

Based on the foregoing analysis, I enter summary disposition in this case sustaining the determination of CMS not to certify Petitioner, Oberry Community Mental Health 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 & Medicaid Services. 66 Fed. Reg. 33,437 (2001). That final rule revised all references to "HCFA" to read "CMS," and provided that all references to the possessive "HCFA's" are revised to read "CMS's." Therefore, I will refer to all exhibits throughout this decision as "CMS" exhibits (Exs.).

2. Petitioner filed a nine page submission with its motion that it identified as "Exhibit 1," which consisted of three individual documents: an affidavit of Gloria Headley, R.N., Petitioner's administrator, (p. 1); a police accident report (pgs. 2 - 4); and a medical report regarding Ms. Headley (pgs. 5 - 9).

3. 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).

4. 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.

5. A preliminary issue raised by CMS was whether Petitioner, who had originally pursued its appeal pro se, filed an adequate hearing request. In light of Fairview Nursing Plaza, DAB No. 1715 (2000) and its progeny, I find a sufficient basis to determine that Petitioner filed an adequate hearing request.

6. It is unclear from the affidavit whether Ms. Headley purports that the 60-day deadline was March 24, 1999 or only that she was preparing to file the appeal on March 24, since the motion to excuse delay stated that Petitioner received CMS's January 22 notice "on or about" January 30, 1999. As acknowledged by CMS, Petitioner's deadline would have been March 31, 1999.