Park Valley Inn Health Center, DAB CR5733 (2020)

DECISION

I sustain the reconsidered determination to grant Petitioner, Park Valley Inn Health Center, a skilled nursing facility, an effective participation date in the Medicare program of December 11, 2019. 

I. Background

The Centers for Medicare & Medicaid Services (CMS) moved for summary judgment.  Petitioner answered the motion.  It contended that the reconsidered determination at issue in this case is incorrect and that it should be assigned an effective Medicare participation date of September 1, 2019 or, at the latest, September 13, 2019. 

Neither CMS nor Petitioner requested to cross examine witnesses.  For that reason, I do not address the criteria for granting summary judgment in this decision.  I decide the case based on the parties’ written exchanges of evidence and on the parties’ arguments as to the merits.

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CMS filed 54 exhibits that it identified as CMS Ex. 1-CMS Ex. 54.  Petitioner filed two exhibits that it identified as P. Ex. 1-P. Ex. 2.  I receive the parties’ exhibits into the record.

II. Issues, Findings of Fact and Conclusions of Law

A. Issue

The issue is whether, on reconsideration, a Medicare contractor properly assigned to Petitioner an effective Medicare participation date of December 11, 2019.

B. Findings of Fact and Conclusions of Law

The operative facts are as follows. 

A predecessor limited liability company owned Petitioner’s skilled nursing facility.  Petitioner acquired the facility from that entity, closing the sale on September 1, 2019.  CMS Ex. 40. 

Petitioner elected to obtain new Medicare enrollment for its facility in lieu of continuing to operate the facility under assignment of the previous owner’s provider number and agreement.  To that end, it filed a change of ownership enrollment application with a Medicare contractor on August 21, 2019.  Discussions ensued between the contractor and/or CMS concerning the correctness and completeness of Petitioner’s application.  Petitioner filed corrected applications on at least September 4 and September 12, 2019.  CMS Ex. 35; CMS Ex. 38.

The contractor recommended approval of Petitioner’s application for Medicare participation on October 2, 2019.  CMS Ex. 27. 

The Texas Health and Human Services Commission (commission) surveyed Petitioner twice for compliance with Medicare participation requirements.  It surveyed Petitioner on October 31, 2019 for compliance with the Life Safety Code.  It surveyed Petitioner again on December 10, 2019, for compliance with Medicare participation requirements governing skilled nursing facilities.  CMS Ex. 25; CMS Ex. 26.

The commission found two Life Safety Code deficiencies.  CMS Ex. 26.  Petitioner filed a plan of correction with CMS on December 12, 2019, addressing these deficiencies.  CMS Ex. 24.  The commission found no deficiencies at the survey addressing compliance with Medicare participation requirements.  CMS Ex. 25.

CMS determined that Petitioner was in compliance with Medicare participation requirements and certified it for participation in Medicare.  CMS Ex. 12 at 1.  Initially,

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CMS assigned Petitioner an effective participation date of January 8, 2020.  Petitioner requested that CMS reconsider its determination, asserting that its effective date of participation should be September 1, 2019.  CMS Ex. 5.  CMS issued a reconsidered determination on May 1, 2020, adjusting the effective date of participation to December 11, 2019, and declining Petitioner’s request to establish an effective participation date of September 1, 2019.  CMS Ex. 1.

The effective date of participation of a Medicare provider consists of the date when CMS or its contractor finds the provider to be in compliance with all applicable participation requirements.  42 C.F.R. § 489.13(b); Community Hosp. of Long Beach, DAB No. 1938 (2004).  The regulation is explicit:

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] meets all applicable Federal requirements as set forth in this chapter . . . .  However, the effective date of the agreement or approval may not be earlier than the latest of the dates on which CMS determines that each applicable Federal requirement is met.  Federal requirements include, but are not limited to-

*  *  *  *

(3) The applicable Medicare health and safety standards, such as the applicable conditions of participation, the requirements for participation, the conditions of coverage, or the conditions for certification.

42 C.F.R. § 489.13(b) (emphasis added).

In order to participate in Medicare, Petitioner had to comply with Life Safety Code requirements and with the Medicare participation requirements governing skilled nursing facilities.  Compliance with one set of requirements without compliance with the other does not suffice to qualify a facility for participation.  Forest Glen Skilled Nursing & Rehab. Ctr., DAB No. 1887 (2003).  In this case, CMS determined that Petitioner met all applicable requirements for participation (including compliance with the Life Safety Code and Medicare participation requirements) effective December 11, 2019.  That is Petitioner’s correct effective Medicare participation date.

I have considered Petitioner’s arguments for an earlier effective participation date, and I find them to be without merit.

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Petitioner contends that it should have been assigned an effective date of either September 1 or September 13, 2019, because “other than completion of the health and life safety code surveys, [Petitioner] met all other applicable Enrollment Requirements no later than September 13, 2019.  [Petitioner] was also survey ready and in substantial compliance with survey requirements as of September 1, 2019.”  Petitioner’s brief at 5-6. 

This argument misstates the test for certification.  First, the regulation makes it plain that compliance with “enrollment requirements” is not sufficient to establish a basis for certification.  CMS may not certify a skilled nursing facility until it determines that the facility meets all applicable requirements.  Completion of Life Safety Code and participation requirements surveys to CMS’s satisfaction is an essential element of the requirements for qualifying as a Medicare participant.

Second, as is made clear by the regulation, the effective date of participation is not the date when a facility asserts that it is in compliance with requirements but is the date when CMS determines that the facility complies.  That date will either be the date of a survey of a facility for compliance or the date when CMS certifies that the facility has corrected any deficiencies found at a survey.  Here, Petitioner was not surveyed for compliance with general Medicare participation requirements until December 10, 2019 and did not file a plan of correction to address Life Safety Code deficiencies until December 12, 2019.  CMS determined that Petitioner was in full compliance with all requirements (including Life Safety Code requirements) as of December 11, 2019. 

Petitioner’s argument is, in part, an assertion that CMS is obligated to accept Petitioner’s word that it complied with Medicare participation requirements on all dates prior to CMS’s survey.  CMS is under no such obligation.  The point of a survey is to scrutinize a facility for compliance with participation requirements.  CMS is obligated to assure that a facility is complying.  It is under no duty to accept a facility’s assertion that it was complying on dates prior to the survey date.

Petitioner argues additionally it is being unfairly penalized by CMS because it opted to apply for a new provider certification in lieu of continuing to operate its facility under the provider certification that CMS made for the facility’s previous owner.  Petitioner argues: 

It is . . . unfair, unreasonable, arbitrary and capricious for the Medicare program to be administered in a manner that treats similarly situated nursing home residents adversely different simply because a facility operator chooses not to accept financial responsibility for a prior operator’s liabilities through an assignment of the Medicare provider agreement, obligations that can be financially catastrophic to the new facility operator.

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Petitioner’s brief at 8.

That argument ignores the reality that the rules for participation established by CMS explicitly require a facility owner to obtain a new certification determination if it chooses to operate the facility pursuant to a new provider agreement.  Those are the rules of the game, and Petitioner certainly was well aware of them when it opted to file for a new provider agreement.  It made a business decision not to continue operating the facility under its prior owner’s provider agreement.  It had the option of doing that, but presumably to do so presented a financial risk to Petitioner that it did not wish to assume.  Having made the choice not to proceed in that manner, it had to live with the consequences of it.  CMS is not obligated to contravene its regulations for Petitioner’s convenience or financial gain.

Finally, Petitioner makes an equitable argument, asserting that it was unfairly penalized, allegedly suffering financial loss, as a consequence of CMS’s certification process.  Petitioner contends that it was “economically punished by substantial delays in the effective date of the new provider agreement . . . .”  As a second iteration of that argument, Petitioner asserts that residents of its facility were effectively denied Medicare coverage because of the delays in certifying Petitioner.  Petitioner’s brief at 9. 

I note that Petitioner has not alleged that it was injured by misconduct by CMS or its contractor.  The gravamen of its argument is that the survey process is inherently unfair because it inevitably will cause a facility such as Petitioner’s to experience a period of time during which it will not receive reimbursement for services provided to Medicare beneficiaries.  I do not have authority to hear and decide an equitable argument of this nature.  US Ultrasound, DAB No. 2302 (2010). 

However, I am not persuaded that there is any evidence that the process of certification operated unfairly in this instance.  Petitioner certainly knew that surveys would not take place instantaneously when it applied for a new provider agreement.  Inevitably, there would be a period of time between Petitioner’s application and the completion of surveys to determine Petitioner’s compliance.  Yet, and despite that knowledge, Petitioner went ahead and applied to operate under a new provider number and agreement.  Having made that choice Petitioner cannot now complain about it.

Furthermore, Petitioner has established no equities pertaining to its care of Medicare beneficiaries.  It offered nothing to prove that any beneficiary failed to receive services.  It offered nothing to show that it even had Medicare beneficiaries on its resident roster during this period.  However, had Petitioner accepted Medicare beneficiaries for care during the period when its application was pending and refused to provide care on the

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premise that it might not be reimbursed, that would have been a violation of participation requirements that would have absolutely precluded Petitioner from becoming certified.