Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD
Civil Remedies Division
Colonel Glenn Health & Rehab, LLC
Centers for Medicare and Medicaid Services
Docket No. C-17-787
Decision No. CR5222
Petitioner, Colonel Glenn Health & Rehab, LLC (Petitioner), appeals the April 14, 2017 reconsidered determination of the Centers for Medicare & Medicaid Services (CMS), that upheld an initial determination that Petitioner met the requirements for participation in the Medicare program effective July 22, 2016, the date CMS approved its provider agreement. I affirm the effective date assigned because Novitas Solutions (Novitas), a Medicare administrative contractor (MAC) acting on behalf of CMS, determined that Petitioner met all federal requirements for participation in the Medicare program on July 22, 2016, and therefore, the effective date of its provider agreement could not be earlier than the date Novitas determined all federal requirements were met.
I. Background and Procedural History
On April 26, 2016, Petitioner submitted a Medicare enrollment application (Form CMS‑855A) dated March 23, 2016 to enroll as a long-term care facility in the Medicare program.1 CMS Exhibit (Ex.) 1 (enrollment application stamped with a receipt date of the 117th day of the year, April 26, 2016); Petitioner (P.) Ex. 1 (FedEx confirmation of package acceptance on April 25, 2016 and delivery on April 26, 2016). Petitioner had
previously obtained a National Provider Identifier (NPI) on March 9, 2016 (CMS Ex. 2), and had submitted information to the Office for Civil Rights, including Form HHS 690 (Assurance of Compliance), that was dated March 23, 2016, and received April 5, 2016. CMS Ex. 3. The Arkansas Department of Human Services (state agency) had granted Petitioner a license on April 25, 2016. CMS Ex. 5 at 1.
On May 19, 2016, the state agency conducted a survey that determined Petitioner was in compliance with life safety from fire requirements. CMS Ex. 5 at 4; P. Ex. 4; see 42 C.F.R. § 483.70(a). On May 26, 2016, a state agency survey determined that Petitioner was “in compliance with 42 CFR part 483 requirements for Long Term Care facilities.” CMS Ex. 5 at 3; P. Ex. 4.
On July 21, 2016, apparently in response to a development request from Novitas, Petitioner provided additional information to Novitas via a 17-page fax that included section 13 of Petitioner’s enrollment application. CMS Ex. 1 at 12; see P. Br. at 8; P. Ex. 2. The fax header indicates that Petitioner sent the transmission from the same fax number it listed in section 13 of its enrollment application. CMS Ex. 1 at 12. The following day, on July 22, 2016, Novitas recommended approval of Petitioner’s Medicare enrollment application. CMS Ex. 6 at 1. That same day, CMS accepted Petitioner’s provider agreement. CMS Ex. 6 at 3.
In a letter dated October 20, 2016, CMS informed Petitioner that it met the requirements for participation in the Medicare program, effective July 22, 2016. CMS Ex. 7 at 1. In December 2016, Petitioner requested reconsideration of the provider agreement effective date, arguing that an earlier effective date of May 26, 2016, should have been assigned because “Novitas did not complete its assessment of the Medicare enrollment application until July 22, 2016, nearly three months after Novitas received it.” CMS Ex. 8 at 1. Petitioner further argued that “it appears that Novitas did not even begin development of the application until July 18, 2016.” CMS Ex. 8 at 1. Petitioner also explained that “[i]t was [its] understanding and expectation, based on 42 C.F.R. § 489.13 and on § 2780A in Chapter 2 of the State Operations Manual, that the facility’s Provider Agreement would have an Effective Date of May 26, 2016—the date that its onsite health and safety survey was completed without any cited deficiencies.” CMS Ex. 8 at 1.
On April 14, 2017, CMS denied Petitioner’s request for reconsideration of its provider agreement effective date. CMS explained that it was “bound by the regulation at 42 CFR 489.13 in determining the date of Medicare participation,” and that based on that regulation, the effective date of the participation agreement “may not be earlier than the latest of the dates on which CMS determines that each applicable Federal requirement is met.” CMS Ex. 9 at 1.
On June 12, 2017, Petitioner requested a hearing before an administrative law judge (ALJ). In accordance with my Acknowledgment and Pre-Hearing Order (Pre-Hearing
Order) issued on June 19, 2017, CMS timely filed a pre-hearing exchange, incorporating a motion for summary judgment and brief (CMS Br.), along with ten exhibits (CMS Exs. 1-10). Petitioner filed a pre-hearing brief (P. Br.), to include an opposition to CMS’s motion for summary judgment, and five exhibits (P. Exs. 1-5). In the absence of any objections, I admit CMS Exs. 1 through 10 and P. Exs. 1 through 5 into the evidentiary record.
Neither party submitted the written direct testimony of any witnesses. See Pre-Hearing Order, §§ 8-10; see, e.g., Lena Lasher, DAB No. 2800 at 4 (2017) (discussing that when neither party submits written direct testimony as directed, “no purpose would be served by holding an in-person hearing.”). Consequently, it is unnecessary to convene a hearing for the purpose of cross-examination of any witnesses. See Pre-Hearing Order, §§ 8-10. The record is closed, and the case is ready for a decision on the merits.2
Whether CMS had a legitimate basis to determine that the effective date of Petitioner’s provider agreement is July 22, 2016.
III. Findings of Fact and Conclusions of Law
1. Petitioner initially submitted a Medicare enrollment application (Form CMS‑855A) that was received on April 26, 2016.
2. On July 22, 2016, Novitas determined that Petitioner met enrollment requirements.
3. CMS correctly determined that the effective date of Petitioner’s provider agreement is July 22, 2016, because pursuant to 42 C.F.R. § 489.13(b), the effective date of Petitioner’s Medicare participation agreement can be no earlier than the date that CMS determines Petitioner satisfied enrollment requirements.
Section 1866(j)(1) of the Social Security Act (Act) requires that the Secretary of Health and Human Services (Secretary) implement regulations to establish an enrollment process for providers and suppliers. 42 U.S.C. § 1395cc(j)(1). Pursuant to 42 C.F.R. § 424.510(a)(1), “[p]roviders and suppliers must submit enrollment information on the applicable enrollment application,” and certain providers and suppliers must complete “a State survey and certification or accreditation process” prior to enrollment in the
program. “CMS determines, based upon its review and verification of the prospective provider’s or supplier’s enrollment application, the date on which enrollment requirements have been met.” 42 C.F.R. § 489.13(b)(1).
Section 489.13(b) was revised effective October 1, 2010, “to make explicit that the effective date of a provider agreement or supplier approval may not be earlier than the latest of the dates on which each applicable Federal requirement is determined to be met,” 75 Fed. Reg. 50,042, 50,402 (Aug. 16, 2010), and the current version of section 489.13(b) explicitly states that the applicable federal requirements include the “enrollment requirements established in [42 C.F.R.] part 424, subpart P.”3 At the time the Secretary revised section 489.13(b), she explained that “the intent of the existing regulations is to require that all applicable Federal requirements, including a determination of whether the enrollment requirements have been satisfied, must be met before a provider agreement or supplier approval may be effective.” 75 Fed. Reg. at 50,401. The Secretary considered a circumstance similar to the one presented here in which “a State survey precedes the CMS contractor’s review of the enrollment application of a prospective provider or supplier,” which might arise when “the application originally submitted to the CMS contractor is not complete or accurate, or both,” therefore requiring the applicant to “provide additional information to the CMS contractor to demonstrate compliance with the enrollment requirements.” Id. The Secretary explained, in such an instance, that “[i]t would not be consistent with our duty to protect the Medicare Trust Funds from unsupported claims against it to permit payment for services furnished by a health care facility after it has passed a State survey or been accredited, but before it has satisfied all other Medicare participation requirements, including enrollment requirements.” Id.
The parties dispute the date Petitioner submitted and/or Novitas received an enrollment application. CMS Br. at 3 (“On July 18, 2016, Novitas received Petitioner’s CMS-855A Medicare enrollment application.”); P. Br. at 1 (“[Petitioner] submitted its complete CMS-855A Medicare Provider Enrollment Application to Novitas . . . Novitas received this application on April 26, 2016 . . . .”); see CMS Ex. 1 (enrollment application dated March 23, 2016, and received on April 26, 2016); CMS Ex. 6 at 1 (letter from Novitas indicating it received the enrollment application on July 18, 2016); P. Ex. 1 (shipment tracking showing FedEx delivery on April 26, 2016). The date Petitioner submitted its enrollment application is not dispositive; rather, the date Novitas determined Petitioner met all federal requirements is the dispositive date here. 42 C.F.R. § 489.13(b). Nonetheless, the evidence demonstrates that Petitioner initially submitted an enrollment
application, dated March 23, 2016, on April 26, 2016. CMS Ex. 1; P. Ex. 1. However, the evidence also indicates that Petitioner supplemented its enrollment application several months later. CMS Ex. 1 at 12. Specifically, Petitioner submitted a 17-page fax to Novitas on July 21, 2016, and that submission included section 13 of the enrollment application. CMS Ex. 1 at 12. Regardless of when Petitioner submitted its complete enrollment application, Novitas determined, on July 22, 2016, that each applicable federal requirement was met. CMS Ex. 6 at 1; 42 C.F.R. § 489.13(b). Therefore, pursuant to section 489.13(b), July 22, 2016, is the earliest effective date of approval of Petitioner’s Medicare provider agreement.
Petitioner argues that a phrase in section 489.13(b), that “[t]he agreement or approval is effective on the date the State agency, CMS, or the CMS contractor survey (including the Life Safety Code survey, if applicable) is completed . . .” weighs in favor of an effective date of May 26, 2016, which is the date the state agency completed its certification surveys. P. Br. at 5-6. However, Petitioner fails to recognize that this language is followed by a clause later in the same sentence which qualifies that a provider agreement can be approved only if “the provider or supplier meets all applicable Federal requirements as set forth in this chapter.” 42 C.F.R. § 489.13(b). On May 26, 2016, Novitas had not yet determined Petitioner met all federal requirements, and Petitioner submitted additional information, apparently in response to a development request, on July 21, 2016. CMS Ex. 1 at 12; see P. Br. at 8; P. Ex. 2. Novitas determined the following day, on July 22, 2016, that Petitioner met all federal requirements, and CMS approved the provider agreement on July 22, 2016, in accordance with section 489.13(b).
Petitioner also argues that the language in section 489.13(b) setting the effective date of the provider agreement as the date CMS determines each federal requirement is met is “open to a number of interpretations,” and that “the express language of 42 C.F.R.
§ 489.13(b) indicates that CMS is free to designate May 26, 2016 as the effective date of billing privileges.” P. Br. at 9. Petitioner similarly asserts that “CMS enjoys some degree of flexibility in establishing the date of billing eligibility” in this instance. P. Br. at 9. Petitioner is mistaken; the regulation, on its face, does not afford such “flexibility” to CMS. 42 C.F.R. § 489.13(b) (stating the effective date “may not be earlier than the latest of the dates on which CMS determines that each Federal requirement is met.”). In addition to the plain language of section 489.13(b), the Secretary unambiguously explained, when she revised section 489.13(b), that she intended “to make explicit” that the “effective date of a provider agreement . . . may not be earlier than the latest of the dates on which each applicable Federal requirement is determined to be met.” 75 Fed. Reg. at 50,402 (emphasis added). In support of her discussion, the Secretary recognized that although enrollment verification would ordinarily precede a certification survey, there are instances in which the certification survey will take place prior to the contractor’s verification of enrollment and other requirements; the Secretary explained
that in such instances, the effective date of the provider agreement would not be based on the date of the certification survey.4 75 Fed. Reg. at 50,401-02.
Petitioner argues that the amount of time Novitas required to process, develop, and approve its application, totaling fewer than 90 days, was an “inexcusable” delay. P. Br. at 8. In support of this assertion, Petitioner submitted an internet-based document it obtained on October 27, 2016, that indicates its enrollment was “In Process” on April 28, 2016, and “In Development” on July 18, 2016. P. Ex. 2. The document included the following information: “Please note that it may take six (6) to nine (9) months (or longer) for you to obtain Medicare certification/billing privileges. Please note that Part A Institutional providers will receive a letter directly from the CMS [sic] with their certification date upon completion of the provider agreement.” P. Ex. 2. I do not share Petitioner’s opinion that there was an inexcusable delay in processing its application, and even if I did, Petitioner has cited no authority authorizing me to modify the effective date of the approval of its provider agreement for such a reason.
Petitioner also explained that after the state agency informed Petitioner that it complied with the requirements for participation contained in 42 C.F.R. pt. 483 (P. Ex. 4), it “reasonably understood the letter from the State Agency to indicate that [it] was eligible to bill for services as a Medicare Provider as of May 26, 2016,” and it “began admitting Medicare beneficiaries to its facility.” P. Br. at 2. Petitioner argues that it “reasonably relied” upon section 2003B of the State Operations Manual (addressing “Initial Certification ‘Kits’”) in determining that it would be reimbursed by Medicare for the beneficiaries it began admitting on May 26, 2016. P. Br. at 5. Petitioner points out that section 2003B, in addressing initial certification kits, directs that a state agency may not perform a survey until after the MAC has verified an enrollment application and recommended approval of the application. P. Br. at 5. However, in reaching this conclusion, Petitioner seemingly overlooked a far more relevant and instructive section of
the State Operations Manual, aptly titled “Effective Date of Provider Agreement, Form CMS-1561, and Supplier Approval,” which explains:
While the on-site initial certification survey is often the final Federal requirement that is met, this is not always the case. For example, when the applicant has not submitted required Office [for] Civil Rights documentation prior to the survey, the determination of compliance with the requirements of the Office [for] Civil Rights may be the final requirement that is met and thus be the effective date of the provider agreement or supplier approval. Another example may be if the MAC verification inadvertently occurred after the onsite survey was conducted or, for HHAs, when the second MAC review requires additional information for verification of the information, then the effective date would be on that date.
State Operations Manual, CMS Pub. 100-07, Ch. 2, § 2780 (eff. October 3, 2014). Thus, the section of the State Operations Manual specifically pertaining to effective dates of provider agreements clearly cautions that the effective date of a provider agreement is not based on the date of the certification survey and may be subsequent to the survey. The guidance in the State Operations Manual is consistent with the Secretary’s stated reason for revising section 489.13(b), which was to “make explicit that the effective date of a provider agreement . . . may not be earlier than the latest of the dates on which each applicable Federal requirement is determined to be met.” 75 Fed. Reg. at 50,402. And, at the time the Secretary revised section 489.13(b), the Secretary made it clear that, in a situation like this one, the date of approval of the provider agreement would be the date the contractor determined the provider met all enrollment requirements, even when the survey had already been completed. 75 Fed. Reg. at 50,401. Petitioner argues that its reliance on Section 2003A of the State Operations Manual caused it to suffer “financial harm through no fault of its own,”5 but the Secretary has made it clear, in the revised language of the regulation and through interpretive guidance,6 that the date of the
accreditation survey does not alone establish the effective date of a provider agreement. P. Br. at 6.
Novitas determined that Petitioner met all federal requirements on July 22, 2016. Pursuant to 42 C.F.R. § 489.13(b), the earliest effective date of Petitioner’s provider agreement is July 22, 2016.
Leslie C. Rogall Administrative Law Judge
1. Section 13 was received by facsimile message (“fax”) on July 21, 2016. CMS Ex. 1 at 12.
- back to note 1 2. As an in-person hearing to cross-examine witnesses is not necessary, it is unnecessary to further address CMS’s motion for summary judgment.
- back to note 2 3. In addition to meeting enrollment requirements, a provider must meet the requirements identified in 42 C.F.R. §§ 489.10 and 489.12, along with “applicable Medicare health and safety standards, such as the conditions of participation, the requirements for participation, the conditions for coverage, or the conditions for certification.” 42 C.F.R. § 489.13(b).
- back to note 3 4. In fact, the Secretary’s revision of section 489.13(b) was in direct response to a Departmental Appeals Board (DAB) decision involving the effective date assigned pursuant to section 489.13(b) in a similar circumstance in which the certification survey preceded the contractor’s enrollment approval. In Renal CarePartners of Delray Beach, LLC, DAB No. 2271 (2009), the state agency completed the certification survey on July 6, 2007, and the MAC did not recommend approval of the petitioner’s Medicare enrollment application until November 21, 2007. The DAB determined that the requirement for the MAC to verify and approve the application was a requirement for the contractor and not the petitioner, and the Board determined that the effective date of approval should have been July 6, 2007. Id. at 2, 5, 16; see 75 Fed. Reg. at 50,401 (“We disagree with the DAB’s reading of our existing regulations. We believe the intent of the existing regulations is to require that all applicable Federal requirements, including a determination of whether the enrollment requirements have been satisfied, must be met before a provider agreement . . . approval may be effective.”).
- back to note 4 5. Petitioner argues, without citation to supporting evidence, that it “provided approximately $579,204.22 in covered services to Medicare beneficiaries” between May 26 and July 22, 2016. P. Br. at 7.
- back to note 5 6. Additional interpretive guidance is found in CMS’s Medicare Provider Integrity Manual. CMS Pub. 100-08, Ch. 15, § 15.17.1 (eff. April 22, 2012) (“Although [state agencies] and accreditation organizations (AOs) are aware that—in accordance with Section 2003B of the State Operations Manual (SOM)—they should not perform a survey of a new facility until the Medicare contractor has made a recommendation for approval, circumstances do occur where the sequence is reversed . . . When the survey occurs prior to the enrollment verification activities, we believe it is essential that the provider agreement or supplier approval date be based on the later date, i.e., the date on which the contractor determined . . . the enrollment application verification.”).
- back to note 6