New Century Spine and Outpatient Surgical Institute, LLC, DAB CR5694 (2020)

DECISION

Petitioner, New Century Spine and Outpatient Surgical Institute, LLC, is an ambulatory surgical center, located in Paramus, New Jersey.  The Centers for Medicare & Medicaid Services (CMS) approved its application to participate in the Medicare program, effective July 28, 2017.  Petitioner now challenges that effective date.  CMS moves for summary judgment, which Petitioner opposes. 

I grant CMS’s motion.  The undisputed evidence establishes that Petitioner first met all Medicare participation requirements on July 28, 2017, which is, therefore, the correct effective date of its enrollment.  

Background

In a letter dated September 25, 2017, CMS advised Petitioner that it approved its request to participate in the Medicare program with a July 28, 2017 effective date of coverage.  CMS Ex. 8 at 2; see CMS Ex. 9 (notice letter from Medicare contractor, Novitas Solutions, Inc.).  Petitioner sought reconsideration, asking that its effective date be changed to September 28, 2016, the date it submitted its enrollment application.  CMS

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Ex. 10 at 4-7.  In a reconsidered determination, dated January 31, 2018, a CMS hearing officer affirmed the July 28, 2017 effective date.  CMS Ex. 11. 

Petitioner appealed, and CMS now moves for summary judgment, which Petitioner opposes.

With its motion and brief, CMS submits 15 exhibits (CMS Exs. 1-15).  With its brief in opposition (P. Br.), Petitioner submits six exhibits (P. Exs. 1-6).

Petitioner has also asked that I subpoena four of the Medicare contractor’s employees, ostensibly to establish their “affirmative misconduct” in misleading Petitioner’s agent as to what Petitioner’s effective date of enrollment would be.  Petitioner also wants to question one employee about “her experience with provider enrollment specialists providing inaccurate effective dates to application” and remedial actions taken in previous cases.  Request for Issuance of a Subpoena at 2.  Petitioner is not entitled to subpoenas for these witnesses. 

I may subpoena a witness only if the requesting party establishes that the witness’s testimony is “reasonably necessary for the full presentation of a case.”  42 C.F.R. § 498.58(a).  As the following discussion shows, the evidence Petitioner hopes to glean from the witness testimony is irrelevant.  Here, no material facts are in dispute, and this matter will be decided based solely on the legal arguments.  Federal regulations, by which I am bound, dictate the effective date of Petitioner’s Medicare enrollment.  The testimony sought is thus not necessary for a full presentation of Petitioner’s case.  Indeed, it is not even admissible.  See 42 C.F.R. § 498.60(b) (authorizing the ALJ to receive in evidence testimony of witnesses that is material and relevant).

Discussion

CMS is entitled to summary judgment because the undisputed evidence establishes the Petitioner first met all Medicare participation requirements on July 28, 2017, which is, therefore, the correct effective date of its enrollment.1

Summary judgment.  To grant summary judgment, I must draw all reasonable inferences in the light most favorable to the non-moving party and find that the case presents no genuine issue of material fact and that the moving party is entitled to judgment as a matter of law.  Donald W. Hayes, D.P.M., DAB No. 2862 at 8 (2018);

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1866ICPayday.com, L.L.C., DAB No. 2289 at 2-3 (2009); Illinois Knights Templar Home, DAB No. 2274 at 3-4 (2009), and cases cited therein. 

Program requirements.  Medicare will pay for services furnished in connection with certain surgical procedures performed at a participating ambulatory surgical center.  Social Security Act § 1832(a)(2)(F).  An ambulatory surgical center is a distinct entity that 1) operates exclusively for the purpose of providing surgical services to patients not requiring hospitalization; 2) has an agreement to participate in the Medicare program; and 3) meets certain other conditions set forth in 42 C.F.R. Part 416, subparts B and C.  42 C.F.R. §§ 416.2, 416.25. 

An ambulatory surgical center may qualify for a Medicare participation agreement in one of two ways:  1) based on a survey by the state survey agency, CMS finds it in compliance with conditions for coverage; or 2) CMS “deems” it to be in compliance with conditions for coverage based on its accreditation by a national accrediting body that CMS has determined provides reasonable assurance that the conditions are met.  42 C.F.R. § 416.26(a) and (b).2   The effective date of its approval may not be earlier than “the latest of the dates on which CMS determines that each applicable Federal requirement is met.”  42 C.F.R. § 489.13(b).  If, on the date of the survey, all health and safety standards are met, the effective date is the date the survey is completed.  42 C.F.R. § 489.13(b).  On the other hand, if all health and safety standards are not met on the date of the survey (as occurred here), the effective date is the date on which the supplier meets all conditions for coverage, and CMS (or the state survey agency) receives an acceptable plan of correction for the lower-level deficiencies.  42 C.F.R. § 489.13(c)(2)3 ; see 42 C.F.R. §§ 424.520(a) (providing that the effective billing date for surveyed or accredited suppliers is specified in section 489.13); 488.28. 

The date Petitioner first met all Medicare participation requirements.  To enroll in Medicare, a prospective supplier (which includes an ambulatory surgical center) must first complete and submit an enrollment application.  42 C.F.R. §§ 424.510(d)(1), 498.2.  Here, Petitioner applied for enrollment on September 28, 2016, by submitting to the contractor Form CMS 855B.  CMS Ex. 1 at 65.  Over the next seven weeks, the contractor asked for additional development, and Petitioner complied.  CMS Exs. 2, 3, 4.

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In a letter dated November 17, 2016, the contractor advised Petitioner that it had forwarded Petitioner’s application to the state survey agency, with a copy to CMS’s regional office.  The letter explained that the “next step” in the process would be “a survey,” conducted by a state survey agency or a CMS-approved accrediting organization, to ensure that the surgical center complied with required conditions for participation.  When the CMS regional office confirmed that the conditions were met, the Medicare contractor would advise Petitioner of its decision.  CMS Ex. 7; P. Ex. 6; see 42 C.F.R. § 416.26.4

Petitioner arranged for its survey to be conducted by the Accreditation Association for Ambulatory Healthcare, Inc., an approved accrediting organization, which surveyed the center on June 28-29, 2017, and found multiple standard-level deficiencies.  CMS Ex. 12.  Petitioner submitted its plan of correction on July 28, 2017.  The Accreditation Association reviewed the submission and granted Petitioner full accreditation.  CMS Ex. 12 at 1.

In a letter dated September 25, 2017, CMS advised Petitioner that its request for Medicare approval was granted with a July 28, 2017 effective date.  CMS Ex. 8.

Thus, July 28, 2017 – the date Petitioner submitted an acceptable plan of correction – is the earliest possible effective date for Petitioner’s Medicare enrollment.  42 C.F.R. §§ 416.26(a)(1); 489.13(c)(2)(ii)(A). 

Petitioner seeks retrospective billing, but the regulations do not allow an ambulatory surgical center to bill retrospectively.  The regulations’ retrospective billing provisions apply to physicians, non-physician practitioners, physician and non-physician practitioner organizations, and ambulance suppliers only.  Moreover, in order to qualify, the supplier must have met all program requirements at the time the service was provided.  42 C.F.R. § 424.521.  Petitioner did not meet all program requirements until July 28, 2017.  

Petitioner’s arguments.  Petitioner disputes none of the facts discussed above.  P. Br. at 3-4.  However, it argues that it is entitled to an earlier effective date and retroactive reimbursement because it relied to its detriment on misleading instructions from the CMS-855B application and on representations from the contractor’s employees as to what its effective date of enrollment would be:

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CMS should be equitably estopped from enforcing an effective date where both the CMS Application and at least four representatives told New Century that the enrollment would be effective as of the application submission.  

P. Br. at 7.

With respect to the contents of the CMS-855B enrollment application, Petitioner confuses enrollment with a supplier’s agreement to accept assignment of benefits.  The instructions refer to the effective date of a participation agreement:  “The participation agreement will become effective on the date of filing, i.e., the date the participant mails (post-mark date) the agreement to the carrier or delivers it to the carrier.”  CMS Ex. 1 at 59.  A participation agreement is not an enrollment application; it is an already-enrolled supplier’s agreement to accept Medicare reimbursement as full payment for its services (referred to as accepting assignment).5

Petitioner also complains that the contractor’s employees assured its authorized representative that claims for services provided would be processed retroactively for up to 30 days prior to the date the contractor received its application.  For purposes of summary judgment, I accept this claim as true.  However, Petitioner is not entitled to an earlier effective dated based on the misrepresentations of a contractor’s employee.  The regulations are explicit, and neither the contractor nor its employees have the authority to change them – by providing misinformation or otherwise.  See Heckler v. Cmty. Health Servs. of Crawford Cnty., Inc., 467 U.S. 51, 63 (1984) (holding that those who participate in the Medicare program are supposed to understand its rules); Schweiker v. Hansen, 450 U.S. 785, 790 (1981) (holding that a Social Security employee’s erroneous advice – upon which an applicant for mother’s insurance benefits relied, to her detriment – did not estop the Secretary of Health and Human Services from denying her retroactive benefits for the period for which she was eligible for benefits but had not filed the required written application); Hartford HealthCare at Home, Inc., DAB No. 2787 at 8-9 (2017) (holding that purportedly misleading language in a state agency’s letters was not material where the regulations vest the Secretary and CMS, not the state agency, with the authority to impose remedies).

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Conclusion

I grant CMS’s motion for summary judgment.  The undisputed evidence establishes that Petitioner first met all Medicare participation requirements on July 28, 2017, and CMS therefore properly approved its Medicare enrollment effective that date.

1. I make this one finding of fact/conclusion of law.
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2. A condition represents a broad category of services.  Each condition is contained in a single regulation, which is divided into subparts called standards.  See 42 C.F.R. §§ 416.40 – 416.54.
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3. I have simplified this rather detailed regulation, referring solely to those provisions that apply here.
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4. CMS submits, as exhibits, copies of the letters sent to the state agency and the regional office, but these letters are confusing because they are addressed to Petitioner, and they refer to the wrong filing date.  CMS Exs. 5, 6.  Nevertheless, CMS assures us that copies were, in fact, sent to the state agency and to the regional office; Petitioner does not challenge that assertion.  CMS Br. at 3 n.2.
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5. Inasmuch as Petitioner makes this assertion for the first time at this level of review, it seems unlikely that it relied on this language at the time it submitted its application, but whether it did or not is not material.  See CMS Exs. 10, 12.
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