SUBJECT:

Maher A. A. Azer (Florence Dialysis Center, Inc.)

Petitioner,

Centers for Medicare & Medicaid Services

DECISION

This matter is before me on the Centers for Medicare and Medicaid Services's (CMS's) Motion for Summary Judgment. The parties have submitted memoranda and exhibits in support of their positions and I have reviewed their pleadings carefully. Having done so, I find that no material facts remain in dispute and conclude that CMS's position is correct as a matter of law. Accordingly, I grant CMS's Motion and thus summarily affirm CMS's determination to approve Petitioner's participation as a supplier of dialysis services under the Medicare program effective May 23, 2001, but not earlier.

PROCEDURAL BACKGROUND

Petitioner, Maher A. A. Azer, M.D., is the President and Medical Director of Florence Dialysis Center, Inc., a medical facility located in Los Alamitos, California. The facility was licensed as a chronic dialysis clinic by the State of California on February 2, 2001, and was informed by CMS on September 25, 2001 that CMS had approved its participation in the Medicare End-Stage Renal Disease (ESRD) Program as a supplier of renal dialysis services effective May 23, 2001. This date corresponded to the completion of a compliance survey of the facility.

Petitioner responded to CMS's notification on October 10, 2001, by requesting that CMS reconsider its determination of the May 23, 2001 effective date. It was, and is, Petitioner's position that the facility was ready for its compliance survey in February 2001, and that the fact that the survey did not occur until May 2001 improperly delayed the approval of the facility, presumably to its financial detriment.

CMS replied to Petitioner's request on November 27, 2001 in a letter that acknowledged Petitioner's concern but declared CMS unable to agree to the earlier effective date. The letter also explained Petitioner's entitlement to seek appellate review of CMS's determination and outlined the basic procedures it must observe in perfecting such an appeal.

Petitioner timely sought review of CMS's determination in a letter of December 7, 2001. The sufficiency of Petitioner's hearing request has not been challenged and no other jurisdictional issues have been raised or become apparent to me. Petitioner's hearing request has not been proffered as an exhibit by either party, but I have included a copy of it in this record, identified as ALJ Ex. 1.

CMS filed its Notice of Issues for Which Summary Judgment Will Be Requested on or about May 14, 2002. By Order dated June 12, 2002, I granted a stay of these proceedings until August 31, 2002 to allow the parties to explore mediation of the dispute, but also established a schedule for motion practice and briefing in the context of summary disposition in the event mediation failed. The parties have been unable to reach a mediated resolution of the dispute, and briefing on CMS's Motion for Summary Judgment is now completed. Throughout these proceedings, Petitioner has appeared pro se.

CMS submitted three exhibits, CMS Exs. 1 - 3, with its Memorandum dated September 3, 2001. Petitioner has not objected to the admission of these exhibits, and I now admit CMS Exs. 1 - 3 into evidence. Petitioner submitted no exhibits per se with his Memorandum of September 9, 2001, but I have found items of correspondence and documentation from him in this file that amplify and clarify his position on appeal, and for that reason have admitted them into evidence as ALJ Ex. 1, identified above; ALJ Ex. 2, Petitioner's License, issued by the State of California on or about February 2, 2001; ALJ Ex. 3, Petitioner's February 12, 2001 letter to "LA Department of Health Sciences"; and ALJ Ex. 4, Petitioner's April 16, 2002 letter to CMS counsel. The record of this case as thus constituted reveals that there are no material facts in dispute.

Because I believe that CMS's Motion for Summary Judgment is supported by those settled material facts and by the well-established law of this forum, I grant CMS's Motion, and thereby sustain CMS's determination to approve Petitioner's participation in the Medicare ESRD Program effective May 23, 2001.

CONTROLLING STATUTES AND REGULATIONS

Medicare coverage for ESRD patients is extended pursuant to Section 1881 of the Social Security Act (Act), 42 U.S.C. §§ 1395rr. Although the statute establishes the general scheme by which participating individuals and facilities may qualify for and deliver services, the implementing regulations and details of the ESRD program are set out in 42 C.F.R. § 405, Subpart U, §§ 405.2100 - 405.2184.

Virtually all aspects of professional or institutional participation in the Medicare program are governed by the survey, certification, and enforcement procedures set out at 42 C.F.R. § 488, Subparts A - F. The regulation at 42 C.F.R. § 488.1 classifies most healthcare-delivery entities as "providers" or "suppliers." ESRD facilities are classified as "suppliers," but it has been held that they are subject to the application, survey, certification, and enforcement requirements applicable to "providers." Renal Services Group of El Centro, DAB CR482 (1997); SRA D/B/A St. Mary Parish Dialysis Center, DAB CR341 (1994).

Thus, in order to qualify as an approved supplier of Medicare services, an ESRD must be surveyed on-site in the same general fashion as if it were a provider of Medicare services, so that its compliance with the requirements of Subpart U can be assessed and certified. 42 C.F.R. § 489.10(a).

Generally, the earliest date on which an ESRD may be certified by CMS to participate in Medicare is established by 42 C.F.R. § 489.13(b):

(b) All federal requirements are met on the date of the survey.The agreement or approval is effective on the date the survey (including the Life Safety Code survey, if applicable) is completed, if on that date the provider or supplier meets all applicable Federal requirements as set forth in this chapter.

ISSUE

The legal issue before me is narrow. It is, simply, whether Petitioner is entitled to approval as an ESRD supplier effective as of any date prior to May 23, 2001?

FINDINGS OF FACT AND CONCLUSIONS OF LAW

I find and conclude as follows:

1. At all material times, Petitioner, Maher A. A. Mazer, was the President and Medical Director of Florence Dialysis Center, Inc., a medical facility located in Los Alamitos, California. CMS Ex. 1; ALJ Exs. 2 - 4.

2. At all material times, Petitioner sought to qualify Florence Dialysis Clinic for participation in the Medicare program as a supplier of ESRD services pursuant to Section 1881 of the Act, 42 U.S.C. § 1395rr, and 42 C.F.R. § 405, Subpart U, §§ 405.2100 - 405.2184.

3. Florence Dialysis Center, Inc., was issued a license to operate and maintain a chronic dialysis clinic by the California Department of Health Services on February 2, 2001. ALJ Ex. 2.

4. In order to qualify in the Medicare program as an ESRD supplier, Florence Dialysis Center was subject to the on-site survey requirements of 42 C.F.R. § 489.10(a).

5. Petitioner notified California health authorities that Florence Dialysis Center was "ready for re-inspection for final licensing and certification" on February 12, 2001. ALJ Ex. 3.

6. The State survey agency did not complete its survey of Florence Dialysis Center until May 23, 2001. CMS Exs. 2, 3; ALJ Ex. 4.

7. On September 25, 2001, CMS notified Petitioner that it had approved Florence Dialysis Center for participation in the Medicare program as an ESRD supplier with an effective date of May 23, 2001. CMS Ex. 1.

8. The earliest date on which Florence Dialysis Center was eligible to be certified by CMS as an ESRD supplier in the Medicare program was May 23, 2001. 42 C.F.R. § 489.13(b).

9. CMS was without authority or discretion to establish an earlier effective date for Florence Dialysis Center's certification and approval, and its action in determining May 23, 2001 to be the effective date was in all respects proper.

10. There are no remaining disputed issues of material fact in this appeal, and summary judgment is therefore appropriate in this matter.

DISCUSSION

The sequence of events leading to this appeal is relatively straightforward and brief. Only a few details are missing or unclear, and they neither alter nor have the potential for altering the analysis and result I announce here.

Petitioner obtained a State of California license as a 12-station dialysis clinic on February 2, 2001. ALJ Ex. 2. On February 12, 2001, Petitioner notified the California State health authorities that the facility was ready for "re-inspection for final licensing and certification." ALJ Ex. 3. Although neither party has explicitly said so, it appears that this reference to "certification" reflects Petitioner's pending application for certification and approval by CMS to participate in the Medicare program as an ESRD supplier.

The State health authorities did not conduct their survey of Petitioner's facility immediately. The record before me contains none of the survey documents or reports, but the parties do not contest that the survey was completed on or about May 23, 2001. No reason for the delay of somewhat more than three months appears in the record.

CMS eventually notified Petitioner that the facility had been approved for participation as an ESRD effective May 23, 2001, a date that corresponds with the completion of the survey. CMS Ex. 1. It is the period between early February and late May 2001 which lies at the center of this appeal. Petitioner asserted then, and still asserts, that the facility was ready for inspection in the form of an on-site survey in early February, and was entitled to a prompt inspection and certification. CMS Ex. 2. Implicit in Petitioner's assertion is the financial disadvantage it incurred as a consequence of ESRD services it provided between early February and late May 2001 being ineligible for Medicare reimbursement.

It is plain that CMS considered Petitioner's situation carefully, and it is just as plain that CMS understood that there were aspects of that situation which were less than satisfactory when experienced from Petitioner's point of view, perhaps even from a purely objective perspective. CMS Ex. 3. But CMS was bound by regulation to establish the effective date as the date on which the facility successfully "passed" the survey, and I am bound by regulation and recognized precedent to affirm that date.

The terms of 42 C.F.R. § 489.13(b) are unambiguous. "The agreement or approval is effective on the date the survey . . . is completed, if on that date the . . . supplier meets all applicable Federal requirements as set out in this chapter." 42 C.F.R. § 489.13(b). While it is true that another Administrative Law Judge (ALJ) has observed of this direct language that "[t]he governing regulations are essentially unforgiving," (Tenet HealthSystem Philadelphia, Inc., DAB CR663 at 7 (2000)), the regulation remains the touchstone in this debate. It establishes the success of the supplier in satisfying on-site surveyors of its compliance with all applicable Medicare requirements as the necessary condition for certification, and it does not contemplate retroactive satisfaction through some other mechanism.

Thus, the fact that State authorities issued a license to Petitioner's facility has no bearing on the effectuation, timing, or results of a Medicare-standards compliance survey, or on the evaluation of any such survey by CMS (Arbor Hospital of Greater Indianapolis, DAB No. 1591 (1996)); nor does the fact that in early February 2001 Petitioner believed his facility was in every way ready to undergo inspection successfully alter the imperative that the survey verify compliance. GranCare Home Health Service & Hospice, DAB CR464 (1997).

The near-categorical effect of the regulation was recognized in this forum as early as SRA D/B/A St. Mary Parish Dialysis Center, DAB CR341 (1994). In that case, a series of surveys and re-surveys took place against the background of the facility's insistence that it had corrected some identified deficiencies and that others did not in fact exist. The facility argued, inter alia, that the surveyors' alleged delay in reporting some of those deficiencies resulted in the facility's inability, through no fault of its own, to address and correct them. The facility went on to assert that the effective date of its certification ought not be delayed until the date of the final survey, since that survey itself was dilatory. That argument was directly considered and squarely rejected. After thoughtful analysis, the ALJ ruled that the date identified by 42 C.F.R. § 489.13(b) is the earliest date on which certification can be made, and that neither CMS (then the Health Care Financing Administration, or HCFA) nor an ALJ can apply principles of equity to make an earlier, retroactive, date effective.

The ruling in SRA provided the framework for one decision of the Departmental Appeals Board (DAB) and three subsequent ALJ decisions that are factually very similar to the instant case. An appellate panel of the DAB in Arbor Hospital, supra, emphasized that "the regulations require that the survey process must be utilized to examine a facility's compliance with the applicable program requirements," and went on to cite the specific regulation under discussion here and stated that "the regulation at 42 C.F.R. § 489.13(b) provides that a provider agreement may not become effective until a facility has been found to meet all federal health and safety conditions of participation. Thus, we conclude that in the absence of a survey to determine whether Petitioner was in compliance . . . HCFA lacked authority to give Petitioner an earlier effective date." Arbor Hospital at 7 - 8. The clear sense of the decision in Arbor Hospital is that while CMS or HCFA may legitimately make an effective date retroactive to the date of a "successfully-passed" survey, it must first have the completed survey to review and must then review it in light of its own statutory and regulatory mandates. Put another way, once SRA and Arbor Hospital had been decided, it was clear that CMS or HCFA could not certify a facility's effective date until it had reviewed a survey, that CMS or HCFA must review that survey with reference to the appropriate federal requirements, and that without the "successful" completion of a survey there was simply no evidence that a facility was in compliance. Also, SRA and Arbor Hospital announced as a corollary to that rule that even in circumstances where the survey had been substantially delayed through no fault of the facility, neither the doctrine of estoppel nor any other equitable remedy would entitle the facility to claim an earlier effective date. The central importance of CMS's review of the survey, and the unavailability of estoppel as a remedy for the effects of a delayed survey, were both re-emphasized by the Chief ALJ in Wells House, DAB CR714 (2000).

The doctrine and corollary laid down in SRA and Arbor Hospital were soon applied in circumstances remarkably like those before me now. The principles that dispose of the instant controversy are found in the trio of cases of GranCare Home Health Service & Hospice, DAB CR464 (1997); Renal Services Group of El Centro, DAB CR482 (1997); and Therapeutic Rehabilitation Centers, Inc., DAB CR531 (1998). In those three cases, one may find an amalgam of facts that mirror those at hand, and may find arguments based on those facts that are identical to Petitioner's here, all of which were rejected by the ALJ who heard them. Those three decisions leave no room for misunderstanding. Neither CMS nor an ALJ enjoys the authority to look behind the completion date of an on-site compliance survey and establish an effective approval date at some earlier time, even if the survey itself was delayed unreasonably, unconscionably, or yet, unlawfully; no doctrine related to or deriving from estoppel can compel or bind CMS to any other date.

On the facts before me, CMS correctly established the date of the completed survey, May 23, 2001, as the effective date of Florence Dialysis Center's approval as an ESRD supplier in the Medicare program. With the application of the rule I have discussed to these facts, there remains only one additional point to discuss.

Petitioner appears pro se, and for that reason that I have made certain to look through the correspondence and documents in this case with the intention of including anything in the record he may have overlooked to the detriment of his argument. I have also tried to construe his position in as liberal a fashion as fairness will allow, and in doing so note the following language from his one-page Memorandum of September 9, 2001:

I think this is an abuse of authority by government bureaucracy, arbitrarily creating and implementing its own timeline. It violates my constitutional right of being treated fairly by a government authority.

Whether precisely articulated or not, this is at least a colorable invocation of Petitioner's right to due process of law and to equal protection under that law. Inasmuch as it is, then I must acknowledge it, even if only to say that I cannot adjudicate it. Constitutional issues are not entrusted to ALJs for resolution. They lie well beyond my authority to decide, and insofar as Petitioner raises one or more constitutional questions here, I cannot consider them. Hermina Traeye Memorial Nursing Home, DAB No. 1810 (2002); Sentinel Medical Laboratories, Inc., DAB No. 1762 (2001); Salvacion Lee, M.D., DAB CR920 (2002).

CONCLUSION

For the reasons set forth above, I grant summary judgment in favor of CMS, and thereby affirm CMS's determination to approve Petitioner's participation as a supplier of ESRD services under the Medicare program effective May 23, 2001, but not sooner, pursuant to the terms of 42 C.F.R. § 489.13(b).

Richard J. Smith

Administrative Law Judge