Nationwide Children’s Hospital Toledo, DAB LLC, CR6392 (2023)

DECISION

The effective date of Petitioner’s provider agreement, enrollment in Medicare, and Medicare billing privileges is May 12, 2022. 

I. BACKGROUND AND UNDISPUTED FACTS

Petitioner is a wholly owned subsidiary of Nationwide Children’s Hospital, a nonprofit pediatric hospital located in Columbus, Ohio.  Joint Statement of Stipulated Facts (Jt. Stip.) ¶ 1.  Petitioner’s facilities involved in this case are all in Toledo, Ohio.  Centers for Medicare & Medicaid Services (CMS) Exhibits (Exs.) 1 at 3-11; 6 at 1; 11 at 1. 

On December 13, 2021, Petitioner filed its application to enroll in Medicare as a new hospital.  Corrections to the application were received by CGS Administrators, LLC, the Medicare administrative contractor (MAC) on January 13 and 20, 2022.  CMS Ex. 1; Jt. Stip. ¶ 3.  The MAC informed Petitioner on December 21, 2021, that its application was filed too early.  However, according to CMS the MAC subsequently reopened the application following a CMS policy change on the timing of applications.  CMS Motion

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for Summary Judgment and Memorandum in Support Thereof (CMS Br.) at 4.  On February 8, 2022, the MAC informed Petitioner that it had forwarded Petitioner’s Medicare enrollment application to CMS.  Jt. Stip. ¶ 4; CMS Ex. 3. 

The Joint Commission is a national accreditation organization approved by CMS to accredit hospitals for participation in Medicare and Medicaid.¹  From March 1 through 4, 2022, The Joint Commission conducted an unannounced full accreditation survey of Petitioner to determine whether Petitioner met accreditation standards.  The Joint Commission issued a final accreditation report on March 8, 2022.  Jt. Stip. ¶¶ 2, 5, 6; CMS Ex. 4; Petitioner’s motion for summary judgment and supporting brief (P. Br.) at 11.  The Joint Commission report shows that the surveyors found 14 standard‑level violations and no condition-level violations of the Medicare conditions of participation for hospitals established by 42 C.F.R. pt. 482.²  The Joint Commission report shows that Petitioner was to submit “Evidence of Standard Compliance” within 60 calendar days of the report.  CMS Ex. 4 at 4-5.  On March 17, 2022, Petitioner submitted its evidence of standards compliance to The Joint Commission.  Jt. Stip. ¶ 7; CMS Ex. 5; Petitioner’s Exhibits (P. Exs.) 4-8; P. Br. at 11.  Based on Petitioner’s March 17, 2022 submission, The Joint Commission granted Petitioner an accreditation decision of “accredited” effective March 17, 2022.  The Joint Commission advised Petitioner that it would recommend to CMS that CMS grant Medicare certification for Petitioner effective March 17, 2022.  However, The Joint Commission advised Petitioner that CMS makes the final determination regarding Medicare participation and the effective date of participation under 42 C.F.R. § 489.13.  Jt. Stip. ¶ 8; CMS Ex. 6 at 1; P. Br. at 11, 15-16. 

On March 31, 2022, Pamela Para, a registered nurse (RN) in the Chicago regional office of CMS sent Petitioner an email.  RN Para advised Petitioner that CMS had concerns about The Joint Commission’s survey findings and indicated that CMS regional officials would recommend denial of an initial certification of compliance for Petitioner’s provider

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agreement and Medicare enrollment and billing privileges.  Jt. Stip. ¶ 9.  RN Para lists in her email and describes in detail the specific issues or matters of concern identified by staff at the CMS regional office based on review of The Joint Commission survey.  RN Para’s email indicates that CMS considered some of the noncompliance identified by The Joint Commission as more serious violations of conditions of participation.  RN Para invited Petitioner to advise her if Petitioner had additional information or clarification addressing the concerns identified by the CMS regional office staff.  CMS Ex. 8. 

No validation survey by the state survey agency or CMS was conducted at Petitioner.  P. Br. at 11-12.  There is also no evidence Petitioner requested a validation survey by the state agency.  

CMS notified Petitioner by letter dated April 13, 2022, signed by RN Para, that Petitioner did not meet requirements for participation in Medicare.  CMS advised Petitioner that it was not in compliance with conditions of participation established by 42 C.F.R. §§ 482.25, 482.42, and 482.57.  CMS also advised Petitioner of the right to request reconsideration.  CMS Ex. 9; P. Br. at 12. 

On May 3, 2022, The Joint Commission surveyed Petitioner again, at Petitioner’s request.  P. Br. at 21.  The Joint Commission advised Petitioner that it had 60 days to submit Evidence of Standards Compliance related to a deficiency identified under 42 C.F.R. § 482.42.  The Joint Commission granted Petitioner an accreditation decision of “accredited” effective May 4, 2022.  The Joint Commission also informed Petitioner that it would recommend to CMS Medicare certification effective May 12, 2022, with the caveat that CMS makes the final determination regarding Medicare enrollment and effective date under 42 C.F.R. § 489.13.  CMS Exs. 10-11; P. Br. at 12-13.  

CMS informed Petitioner by letter dated June 8, 2022, signed by RN Para, that Petitioner was accepted for participation in Medicare as a hospital effective May 12, 2022, based on accreditation by The Joint Commission.  However, CMS advised Petitioner that Petitioner’s enrollment in Medicare was not completed and was subject to further action on Petitioner’s enrollment application by the MAC.  CMS advised Petitioner of the right to request reconsideration of the effective date of Medicare participation.  CMS Exs. 12, 13 (Provider Tie-In Notice); P. Br. at 13. 

Petitioner requested reconsideration by letter dated June 10, 2022.  Petitioner indicated that it requested reconsideration of the CMS determination contained in the April 13, 2022 CMS letter, which was signed by RN Para.  Petitioner requested that the effective date of its participation under 42 C.F.R. § 489.13 be changed to March 17, 2022.  CMS Ex. 14 at 1. 

By letter dated June 15, 2022, CMS issued a reconsidered determination decision based on Petitioner’s June 10, 2022 request for reconsideration.  The reconsidered

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determination signed by Michael C. Potjeau, Acting Acute & Continuing Care Branch Manager, CMS-Chicago, Survey & Operations Group, upheld the April 13, 2022 denial of certification of Petitioner to participate in Medicare as a hospital.  CMS explained that it determined, based on The Joint Commission survey of March 1 through 4, 2022, that Petitioner was not in compliance with the conditions of participation established by 42 C.F.R. §§ 482.25, 482.42, and 482.57, and Petitioner’s submitted evidence did not show that it was compliant at the time of the survey.  CMS advised Petitioner of the right to request a hearing before an ALJ.  CMS Ex. 15. 

The MAC notified Petitioner by letter dated June 24, 2022, that Petitioner was enrolled in Medicare with billing privileges effective May 12, 2022.  The MAC advised Petitioner that Petitioner could request reconsideration of the determination.  The MAC did not specifically identify the determinations subject to reconsideration.  The letter reflects at least two determinations.  First, that Petitioner met enrollment requirements and was enrolled in Medicare.  The second determination was the effective date of Petitioner’s Provider Transaction Access Number (PTAN), i.e., billing privileges.  Because the first determination was favorable, I infer reconsideration of that determination was not likely to be requested.  However, the effective date of billing privileges, is arguably not favorable to Petitioner, and more likely the basis for a request for a reconsidered determination.  CMS Ex. 16.  I have received no evidence that Petitioner actually filed a request for reconsideration related to the June 24, 2022 MAC initial determination.  However, based on my review of the June 15, 2022 reconsidered determination and a subsequent reconsidered determination dated June 28, 2022, CMS reconsidered its initial determinations related to the effective date of Petitioner’s Medicare hospital provider agreement, and Medicare enrollment and billing privileges at least twice. 

CMS issued a reconsidered determination dated June 28, 2022, in response to Petitioner’s June 27, 2022, request for reconsideration.³  In its June 28, 2022 letter, which was also signed by Michael Potjeau, CMS acknowledged receipt of Petitioner’s June 27, 2022 request for reconsideration of the CMS determination dated June 8, 2022, which established May 12, 2022 as the effective date of Petitioner’s participation in Medicare as a hospital.  DAB E-File C-22-742 # 1_a at 2 (document page counter).  CMS upheld its June 8, 2022 determination. 

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Petitioner filed a request for hearing before an ALJ on August 11, 2022.  The case was docketed as C-22-721 and assigned to me to hear and decide.  Petitioner indicates in the request for hearing that Petitioner sought review of the June 15, 2022 CMS reconsidered determination.  Petitioner argues that its effective date of Medicare participation should be March 17, 2022.  

Petitioner filed a second request for hearing on August 19, 2022.  Petitioner states that it seeks review of a June 28, 2022 reconsidered determination of CMS upholding its June 8, 2022 initial determination establishing May 12, 2022 as the effective date of Petitioner’s participation in Medicare.  The second request for hearing was docketed as C-22-742 and assigned to me to hear and decide.  On August 23, 2022, I consolidated C‑22-721 with C‑22-742 and dismissed C-22-721.⁴ 

CMS filed CMS Exs. 1 through 18 on November 21, 2022.  Petitioner filed P. Exs. 1 through 9 on December 21, 2022.  CMS Exs. 1 through 18 and P. Exs. 1 through 9 are admitted as evidence.  Also admitted and considered as evidence are DAB E-File # 1_a and 1_n from docket C-22-742.  On January 20, 2023, CMS filed a motion for summary judgment and supporting brief (CMS Br.).  Petitioner filed a motion for summary judgment and supporting brief (P. Br.) on January 20, 2023.  On February 19, 2023, Petitioner filed a response in opposition (P. Reply) to the CMS motion for summary judgment.  CMS filed a response in opposition (CMS Reply) to Petitioner’s motion for summary judgment on February 21, 2023. 

I accept, for purposes of summary judgment, that Petitioner has provided services to Medicaid recipients since March 17, 2022, expecting reimbursement from Medicare or Medicaid.  P. Br. at 2. 

DISCUSSION

1. A. Applicable Law

The Medicare program is established by Title XVIII of the Social Security Act (Act) (42 U.S.C. §§ 1395-1395lll), and includes Medicare Parts A, B, C, and D.  The Medicare

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program pays for covered health care items and services furnished to Medicare beneficiaries by qualified providers and suppliers.⁵  Act §§ 1811-1860D-43.  Qualified providers and suppliers are those who have a provider agreement or supplier approval, if required; are enrolled in Medicare; and are granted billing privileges.  42 C.F.R. pt. 424, subpt. P; pt. 489. 

Congress required the Secretary of the U.S. Department of Health and Human Services (the Secretary) to prescribe regulations for the administration of Medicare, Medicaid, and other federal health care programs.  Act §§ 1866(h)(1), (j)(1)(a), (8); 1871(a) (42 U.S.C. §§ 1395cc(h)(1), (j)(1)(a), 1395hh).  The Secretary’s regulations for entering agreements with providers, a group that includes hospitals such as Petitioner, are found at 42 C.F.R. pt. 489.  The conditions of participation for hospitals are found at 42 C.F.R. pt. 482.  The basic requirements for participation as a provider are set forth at 42 C.F.R. § 489.10.  The regulations require that a state survey agency⁶ determine whether a provider meets the conditions for participation and make a recommendation to CMS.  42 C.F.R. § 489.10(d).  However, the regulation also allows a provider to be deemed to meet participation requirements based upon accreditation by an approved accrediting organization, such as The Joint Commission.  42 C.F.R. § 489.13(a)(1)(ii).  When CMS determines that a prospective provider meets the requirements for participation, CMS notifies the provider and includes two copies of the provider agreement that the provider must sign and return.  CMS then returns one copy of the provider agreement with a notice to the provider of the acceptance and effective date of the agreement.  42 C.F.R. § 489.11.  The effective date of the provider agreement is determined pursuant to 42 C.F.R. § 489.13.  The regulation states that this effective date may not be earlier than the latest date when CMS determines all applicable federal requirements are met.  42 C.F.R. § 489.13(b).  The effective date of Medicare enrollment and billing privileges is also determined under 42 C.F.R. § 489.13(b).  42 C.F.R. § 424.520(a). 

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Congress provided a right to a hearing on the record (an oral hearing) for certain enrollment determinations.  Act § 1866(h)(1), (j)(8).  The Secretary has issued regulations that establish the right to a hearing and judicial review of certain enrollment determinations.  Appeal and review rights are specified by 42 C.F.R. § 498.5.  CMS initial determinations that the Secretary has provided are subject to ALJ review are listed in 42 C.F.R. § 498.3(b) and administrative actions that are not initial determination and are not subject to review are listed in 42 C.F.R. § 498.3(d).  42 C.F.R. § 498.3(a).  Initial determinations that are subject to ALJ review include whether a prospective provider qualifies as a provider (42 C.F.R. § 498.3(b)(1)); the effective date of a provider agreement or supplier approval (42 C.F.R. § 498.3(b)(15)); and the denial or revocation of a provider’s enrollment in Medicare under 42 C.F.R. §§ 424.530 or 424.535 (42 C.F.R. § 498.3(b)(17)(i)).  However, the CMS or MAC finding that a hospital accredited by a CMS approved accrediting organization is “not in compliance with a condition of participation” and a finding that the “hospital is no longer deemed to meet the conditions of participation” is an administrative determination and not an initial determination and not subject to appeal under 42 C.F.R. pt. 498.  42 C.F.R. § 498.3(d)(9).  If CMS refuses to enter a provider agreement because a prospective provider cannot give satisfactory assurance of compliance with Medicare requirements, that is also an administrative determination that is not subject to appeal under 42 C.F.R. pt. 498.  42 C.F.R. § 498.3(d)(3).  Initial determinations are subject to ALJ review after a reconsidered determination is issued by a MAC or CMS.  42 C.F.R. § 498.5(a), (l)(1)-(2).  No provision of 42 C.F.R. § 498.5 provides for a reconsidered determination, ALJ review, or an appeal to the Board for an administrative determination such as one under 42 C.F.R. § 498.3(d)(3) or (9). 

The hearing before an ALJ is a de novo proceeding.  Anesthesiologists Affiliated, et al., DAB CR65 (1990), aff’d, 941 F.2d 678 (8th Cir. 1991); Emerald Oaks, DAB No. 1800 at 11 (2001); Beechwood Sanitarium, DAB No. 1906 (2004); Cal Turner Extended Care, DAB No. 2030 (2006); The Residence at Salem Woods, DAB No. 2052 (2006).  The Board has previously ruled upon the allocation of the burden of persuasion and the burden of coming forward with the evidence in cases subject to 42 C.F.R. pt. 498.  The Board has held that CMS must make a prima facie showing of the basis for its action.  “Prima facie” means that the evidence is “(s)ufficient to establish a fact or raise a presumption unless disproved or rebutted.”  Black’s Law Dictionary 1228 (8th ed. 2004); see also Hillman Rehab. Ctr., DAB No. 1611 at 8 (1997), aff’d Hillman Rehab. Ctr. v. U.S. Dept. of Health and Human Services, No. 98-3789 (GEB), slip op. at 25 (D.N.J. May 13, 1999).  To prevail, a petitioner must overcome CMS’s showing by a preponderance of the evidence.  Batavia Nursing and Convalescent Ctr., DAB No. 1904 (2004); Batavia Nursing and Convalescent Inn, DAB No. 1911 (2004), aff’d, Batavia Nursing & Convalescent Ctr. v. Thompson, 129 Fed. Appx. 181 (6th Cir. 2005); Emerald Oaks, DAB No. 1800; Cross Creek Health Care Ctr., DAB No. 1665 (1998); Hillman Rehabilitation Ctr., DAB No. 1611. 

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1. B. Issue

Whether the effective date of Petitioner’s provider agreement and enrollment in Medicare and billing privileges may or should be changed from May 12, 2022 to March 17, 2022. 

1. C. Findings of Fact, Conclusions of Law, and Analysis

My conclusions of law are set forth in bold text followed by my findings of undisputed fact and analysis. 

1. Jurisdiction and Determinations Subject to Review

I conclude, for purposes of determining my jurisdiction and scope of review, that although I have no evidence that Petitioner requested reconsideration of the MAC’s June 24, 2022 notice of initial determination, Petitioner’s two reconsideration requests of June 10 and 27, 2022 and the CMS reconsidered determinations dated June 15 and 28, 2022, are sufficient to preserve Petitioner’s right to ALJ review of the effective date of Petitioner’s Medicare hospital provider agreement and Medicare enrollment and billing privileges.  The June 15 and 28, 2022 reconsidered determinations are the determinations subject to my review, not the initial determinations or the reopened and revised determinations of the MAC or CMS.  Neb Grp. of Ariz. LLC, DAB No. 2573 at 7 (2014). 

Petitioner’s primary argument before me is that CMS is bound by the March 17, 2022 recommended effective date of The Joint Commission.  Petitioner argues that CMS erred by rejecting the findings of The Joint Commission survey and The Joint Commission recommendation that Petitioner be certified to participate in Medicare effective March 17, 2022.  CMS notified Petitioner of its determination rejecting The Joint Commission’s findings and recommendation by letter dated April 13, 2022.  The reason stated by CMS was that CMS concluded Petitioner was not in compliance with three conditions of participation.  CMS Ex. 9.  On June 10, 2022 Petitioner requested reconsideration by CMS.  CMS Ex. 14 at 1.  On June 15, 2022, CMS issued a reconsidered determination decision upholding the April 13, 2022 CMS denial of certification of Petitioner to participate in Medicare as a hospital.  CMS explained that it determined, based on The Joint Commission survey of March 1 through 4, 2022, that Petitioner was not in compliance with the conditions of participation established by 42 C.F.R. §§ 482.25, 482.42, and 482.57, and Petitioner’s submitted evidence did not show that it was compliant at the time of the survey.  CMS erroneously advised Petitioner it had the right to request a hearing before an ALJ.  CMS Ex. 15.  The advice Petitioner had the right to ALJ review was given in error because the rejection of The Joint Commission findings and recommendation was an administrative determination and not an initial determination pursuant to 42 C.F.R. § 498.3(d)(9), which provides: 

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(d)  Administrative actions that are not initial determinations. 

Administrative actions that are not initial determination (sic) (and therefore not subject to appeal under this part) include but are not limited to the following:

* * * *

(9) The [CMS] finding that a hospital accredited by the Joint Commission on Accreditation of Hospitals or the American Osteopathic Association is not in compliance with a condition of participation, and a finding that that hospital is no longer deemed to meet the conditions of participation.

There is no right under 42 C.F.R. § 498.5 to reconsideration, ALJ review, or appeal to the Board for an administrative determination listed in 42 C.F.R. § 498.3(d).  The April 13, 2022 CMS determination rejecting the findings of The Joint Commission survey of March 1 through 4, 2022, was an administrative determination and not subject to my review.  The fact CMS provided reconsideration does not make the April 13, 2022 administrative action an initial determination.  The CMS advice in the reconsidered determination that Petitioner had a right to request ALJ review conferred no right to ALJ review of the reconsidered determination.  I am bound to follow the Act and regulations, and I have no authority to declare statutes or regulations invalid or ultra vires.  1866ICPayday.com, L.L.C., DAB No. 2289 at 14 (2009) (noting that “[a]n ALJ is bound by applicable laws and regulations and may not invalidate either a law or regulation on any ground.”). 

Initial determinations that are subject to ALJ review include whether a prospective provider qualifies as a provider (42 C.F.R. § 498.3(b)(1)); the effective date of a provider agreement or supplier approval (42 C.F.R. § 498.3(b)(15)); and the denial or revocation of a provider’s enrollment in Medicare under 42 C.F.R. §§ 424.530 or 424.535 (42 C.F.R. § 498.3(b)(17)(i)).  Initial determinations are subject to ALJ review after a reconsidered determination is issued by a MAC or CMS.  42 C.F.R. § 498.5(a), (l)(1)-(2).  CMS issued an initial determination on June 8, 2022, accepting Petitioner for participation in Medicare as a hospital effective May 12, 2022, subject to approval of Petitioner’s Medicare enrollment application.  CMS Ex. 12.  The MAC issued an initial determination on June 24, 2022, enrolling Petitioner in Medicare and granting billing privileges effective May 12, 2022.  CMS Ex. 16.  The acceptance of Petitioner as a provider, enrolling Petitioner in Medicare, and granting billing privileges are all favorable determinations.  However, the effective date is an initial determination that was upheld by a reconsidered determination on June 28, 2022, that is unfavorable to Petitioner and the determination that Petitioner did not qualify to participate in Medicare on an earlier date is grounds for requesting ALJ review.  42 C.F.R. §§ 498.3(b)(15), 498.5(a)(2).  

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2. Summary judgment is appropriate in this case.

Petitioner is entitled to a hearing on the record before an ALJ under the Act.  Act §§ 1866(h)(1) (entitled to a hearing to the same extent as described in Act § 205(b)), (j)(8); Crestview Parke Care Ctr. v. Thompson, 373 F.3d 743, 748-51 (6th Cir. 2004).  However, when summary judgment is appropriate, no hearing is required.  The Board has long accepted that summary judgment is an acceptable procedural device in cases adjudicated pursuant to 42 C.F.R. pt. 498.  See, e.g., Crestview Parke, 373 F.3d at 748‑51; Ill. Knights Templar Home, DAB No. 2274 at 3-4 (2009); Garden City Med. Clinic, DAB No. 1763 (2001); Everett Rehab. & Med. Ctr., DAB No. 1628 at 3 (1997).  The Board has accepted that Fed. R. Civ. P. 56 and related cases provide useful guidance for determining whether summary judgment is appropriate.  I advised the parties in the Standing Order that summary judgment is an available procedural device and that the law as it has developed related to Fed. R. Civ. P. 56 will be applied.  Standing Order ¶ D(3).  Summary judgment is appropriate when there is no genuine dispute as to any issue of material fact for adjudication and/or the moving party is entitled to judgment as a matter of law.  See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986); Mission Hosp. Reg’l Med. Ctr., DAB No. 2459 at 5 (2012) (and cases cited therein); Experts Are Us, Inc., DAB No. 2452 at 5 (2012) (and cases cited therein); Senior Rehab. & Skilled Nursing Ctr., DAB No. 2300 at 3 (2010) (and cases cited therein). 

CMS requested summary judgment.  Petitioner opposes summary judgment for CMS but requests summary judgment in its favor.  Petitioner argues that CMS is not entitled to summary judgment as there is a genuine dispute of material fact as to whether the noncompliance found by The Joint Commission during the March 1 through 4, 2022 survey was standard-level or condition-level.  Petitioner also argues it should not be denied the opportunity to cross-examine RN Para, who determined that the noncompliance was condition-level and not standard-level.  Petitioner argues that it is entitled to summary judgment because CMS failed to make a prima facie showing of condition-level noncompliance.  P. Reply at 16-17. 

The undisputed material facts are set forth in detail following Conclusions of Law 3 through 6. 

The gist of Petitioner’s arguments in this case are that CMS is bound to grant Petitioner an effective date of its provider agreement, and Medicare enrollment and billing privileges of March 17, 2022, the date first recommended to CMS by The Joint Commission.  Petitioner’s arguments in this regard must be resolved against Petitioner based on the Act and regulations.  Issues that must be resolved against Petitioner as matters of law, as discussed in more detail hereafter, include:  the undisputed facts establish a prima facie basis for the CMS effective date determination; The Joint Commission recommendation of March 17, 2022 as the effective date Petitioner’s

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participation in Medicare was only a recommendation and not binding on CMS; the rejection of The Joint Commission recommendation was an administrative action not subject to review and solely within the discretion of CMS; and CMS may only accept a provider for participation if a survey acceptable to CMS by a state agency or accrediting organization establishes that the provider that wants to participate as a hospital meets the conditions of participation under 42 C.F.R. pt. 482.  The effective date of Petitioner’s Medicare provider agreement and Medicare enrollment and billing privileges, i.e., whether the effective date should be earlier than May 12, 2022, is subject to review.  However, Petitioner has identified no genuine disputes of material fact and all Petitioner’s arguments must be resolved against Petitioner as matters of law.  Accordingly, I conclude that summary judgment is appropriate in favor of CMS and Petitioner’s motion for summary judgment must be denied. 

3. 3. CMS is not bound to defer to the accreditation recommendation of The Joint Commission.
4. 4. CMS’s rejection of The Joint Commission recommendation of accreditation effective March 17, 2022, is an administrative determination and not subject to ALJ review or appeal to the Board.
5. 5. The MAC and CMS determined that, as of May 12, 2022, Petitioner met all applicable federal requirements to participate as a hospital in Medicare. 42 C.F.R. § 489.13(b). 
6. 6. The effective date of Petitioner’s provider agreement and Medicare enrollment and billing privileges is May 12, 2022, the date Petitioner was determined to meet all federal requirements by CMS.

   (i.)  Undisputed Material Facts

The material facts are not in dispute. 

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(ii.)  Analysis

Based on the undisputed material facts that I have found, I conclude that May 12, 2022, is the earliest date Petitioner met all federal requirements to participate in Medicare as a hospital.  Therefore, May 12, 2022, is the effective date of Petitioner’s provider agreement and Medicare enrollment and billing privileges.  42 C.F.R. §§ 424.520(a); 489.10(a), (d); 489.13(a)(ii), (b)-(c). 

The Secretary’s regulations for entering agreements with providers, a group that includes hospitals such as Petitioner, are found at 42 C.F.R. pt. 489.  The conditions of participation for hospitals are found at 42 C.F.R. pt. 482.  The basic requirements for participation as a provider are set forth at 42 C.F.R. § 489.10.  The regulations require that a state survey agency determine whether a provider meets the conditions for participation and make a recommendation to CMS.  42 C.F.R. § 489.10(d).  However, the regulation also allows a provider to be deemed to meet participation requirements based upon accreditation by an approved accrediting organization, such as The Joint Commission.  42 C.F.R. § 489.13(a)(ii).  If CMS determines that a provider meets the requirements for participation, CMS notifies the provider and includes two copies of the provider agreement that the provider must sign and return.  CMS then returns one copy of the provider agreement with a notice to the provider of the acceptance and effective date of the agreement.  42 C.F.R. § 489.11.  The effective date of the provider agreement is determined pursuant to 42 C.F.R. § 489.13.  The regulation states that this effective date may not be earlier than the latest date when CMS determines all applicable federal

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requirements are met.  42 C.F.R. § 489.13(b)-(c).  Section 489.13(b) of 42 C.F.R. provides: 

(b)  All health and safety standards are met on the date of survey.  The 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, or on the effective date of the accreditation decision, as applicable, if on that date the provider or supplier meets all applicable Federal requirements as set forth in this chapter.  (If the agreement or approval is time-limited, the new agreement or approval is effective on the day following the expiration of the current agreement or approval.)  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—

(1) Enrollment requirements established in part 424, subpart P, of this chapter. 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;

(2) The requirements identified in §§ 489.10 and 489.12; and

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

42 C.F.R. § 489.13(b) (italics in original, bold added).  Under 42 C.F.R. § 489.13(c), there is the same requirement that CMS determine that all federal requirements listed in 42 C.F.R. § 489.13(b) are met before a provider agreement may be effective.  Some elaboration of the three federal requirements is appropriate. 

(1)  Requirement for Medicare Enrollment and Billing Privileges.  The procedures for application to enroll in Medicare and to receive billing privileges as a provider or supplier are set forth in 42 C.F.R. pt. 424.  A provider or supplier must be enrolled in Medicare to receive billing privileges to file claims with Medicare and

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be paid for care and services for Medicare beneficiaries.  42 C.F.R. § 424.505.  The requirements for enrolling are at 42 C.F.R. § 424.510.  CMS does not enroll a provider or supplier who must be surveyed by the state agency until the survey is complete and the state agency certifies the provider or supplier meets participation requirements or conditions of participation or the provider or supplier receives accreditation from an authorized accrediting organization.  42 C.F.R. § 424.510(a)(1).  For providers or suppliers who are subject to 42 C.F.R. pt. 489, i.e., those who must have an agreement with the Secretary, the effective date for billing privileges is determined under 42 C.F.R. § 489.13.  42 C.F.R. §§ 424.510(b)-(c), 424.520(a).  Therefore, the effective date for Medicare enrollment and billing privileges and the provider agreement are the same. 

(2)  Survey or Accreditation Requirement.  The requirement for a survey of a provider such as Petitioner prior to a provider agreement and billing privileges being granted is established by 42 C.F.R. § 489.10(d), with the alternative of accreditation established by 42 C.F.R. § 483.13(a)(1)(ii). 

(3)  Requirement to Meet Conditions of Participation.  The hospital conditions for participation that Petitioner must meet are published at 42 C.F.R. pt. 482.  

In summary, the requirements CMS had to find Petitioner met in order for Petitioner to be eligible for a provider agreement and to be enrolled in Medicare with billing privileges were:  (1) Petitioner met the enrollment requirements under 42 C.F.R. pt. 424; and (2) Petitioner met the conditions of participation for a hospital under 42 C.F.R. pt. 482 as shown by a state agency or accrediting organization survey.  Until CMS found Petitioner met both requirements, Petitioner could not be sent a provider agreement under 42 C.F.R. § 489.11 or be granted enrollment and billing privileges under 42 C.F.R. pt. 424. 

The undisputed facts show that Petitioner applied to enroll in Medicare on December 13, 2021.  CMS Ex. 1; Jt. Stip. ¶ 3.  The Joint Commission surveyed Petitioner on March 1 through 4, 2022.  The Joint Commission granted Petitioner accreditation effective March 17, 2022, and recommended to CMS that Petitioner be accepted for Medicare participation effective March 17, 2022.  Jt. Stip. ¶ 8; CMS Ex. 6; P. Br. at 11, 15-16. 

CMS rejected The Joint Commission’s recommendation and notified Petitioner on April 13, 2022, that Petitioner did not meet the requirements to participate in Medicare based on the March 2022 survey, based on noncompliance with three conditions of participation under 42 C.F.R. pt. 482.  CMS Ex. 9; P. Br. at 12.  Therefore, as of April 13, 2022, CMS had no acceptable survey findings by the state agency or an accrediting organization or an accreditation based on which to send Petitioner a provider agreement or to enroll Petitioner in Medicare with billing privileges. 

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The Joint Commission conducted a second survey of Petitioner at Petitioner’s request.  The Joint Commission recommended to CMS that Petitioner be accepted to participate in Medicare effective May 12, 2022.  P. Br. at 12-13, 21; CMS Ex. 11.  

CMS accepted The Joint Commission’s second survey and recommendation that Petitioner be accepted to participate in Medicare effective May 12, 2022.  After accepting The Joint Commission’s second survey, CMS had a basis for sending Petitioner a provider agreement and enrolling Petitioner in Medicare.  However, The Joint Commission recommended to CMS that Petitioner be accepted to participate in Medicare effective May 12, 2022 based on the second survey rather than March 17, 2022.⁷ 

On June 8, 2022, CMS informed Petitioner that Petitioner was accepted to participate as a hospital effective May 12, 2022.  CMS Exs. 12-13.  Subsequently, CMS advised Petitioner that Petitioner was enrolled with billing privileges, also effective May 12, 2022.  CMS Ex. 16. 

CMS cannot grant a prospective provider a provider agreement or enrollment and billing privileges until CMS determines that the prospective provider meets the regulatory conditions of participation or conditions for coverage for the specific type of provider for which the prospective provider seeks to participate.  42 C.F.R. § 489.10(a).  Whether the prospective provider meets the conditions of participation or conditions for coverage may only be determined through a survey of the provider by the state agency or through accreditation by an approved accrediting body.  42 C.F.R. §§ 489.10(d), 489.13(a)(1)(ii).  In this case, CMS rejected The Joint Commission’s first accreditation of Petitioner and first recommendation that Petitioner be allowed to participate in Medicare effective March 17, 2022.  Pursuant to regulation, Petitioner has no right to review of the April 13, 2022 administrative action of CMS rejecting The Joint Commission’s accreditation of Petitioner effective March 17, 2022.  42 C.F.R. § 498.3(d)(9).  The Joint Commission’s second survey did not occur until May 3, 2022.  Ultimately, The Joint Commission gave Petitioner a new accreditation with a recommendation to CMS that Petitioner be permitted to participate in Medicare effective May 12, 2022.  Because CMS rejected the first survey and recommendation of The Joint Commission, CMS had no survey that it could use to find that Petitioner met conditions of participation until the second survey

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and accreditation by The Joint Commission.  Therefore, as a matter of law CMS could not enter a provider agreement with Petitioner or enroll Petitioner in Medicare with billing privileges any earlier than May 12, 2022.  42 C.F.R. § 489.10(a).  Pursuant to 42 C.F.R. § 489.13(b) and (c), the effective date of Petitioner’s provider agreement and Medicare enrollment and billing privileges could not, as a matter of law, be earlier than May 12, 2022, the latest date when CMS determined that all applicable federal requirements were met, including compliance with conditions of participation and Medicare enrollment requirements.  42 C.F.R. § 489.13(b).  

In 2010, CMS amended 42 C.F.R. § 489.13 to clarify that a provider may not bill for care and services provided before CMS determines that all applicable federal requirements are met.  CMS explained in rulemaking that eliminated 42 C.F.R. § 489.13(d) and reorganized the remainder of the section to eliminate and clarify provisions that caused the Board confusion in a separate case: 

[T]he 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.  Any other reading of the regulations could result in a provider or supplier being permitted to bill the Medicare program for services provided at a time when its compliance with Medicare’s requirements is unknown and possibly deficient.  For example, in the event a State survey precedes the CMS contractor’s review of the enrollment application of a prospective provider or supplier, it might be possible that the application originally submitted to the CMS contractor is not complete or accurate, or both, and the applicant must provide additional information to the CMS contractor to demonstrate compliance with the enrollment requirements.  It 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. 

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75 Fed. Reg. 50,042, 50,401 (Aug. 16, 2010).⁸ 

Petitioner’s effective date of its provider agreement, Medicare enrollment and billing privileges can be no earlier than May 12, 2022, because that is the date CMS determined that Petitioner met all federal requirements, including those in 42 C.F.R. pt. 424 and 482, as required by 42 C.F.R. § 489.13(b) and (c).  

Petitioner advances multiple arguments which are grouped as follows for ease of discussion. 

The Substantial Evidence Test Does Not Apply in this Forum

Petitioner argues that the CMS determination by RN Para dated April 13, 2022, is unsupported by substantial evidence.  P. Br. at 23-24; P. Reply at 3-6.  The substantial evidence test does not apply to ALJ review, which is not appellate review but, rather, the opportunity for a trial de novo.  The substantial evidence test has no application in this forum.  Emerald Oaks, DAB No. 1800 at 9-10.  Furthermore, my de novo review is limited to a reconsidered determination according to the Board.  Neb Grp. of Ariz. LLC, DAB No. 2573 at 7.  Therefore, whether CMS properly made the April 13, 2022 administrative determination is not an issue before me. 

Accreditation Recommendation Not Binding on CMS

According to Petitioner, The Joint Commission’s accreditation effective March 17, 2022, “is the end of any question regarding [Petitioner’s] compliance with Medicare conditions and requirements” citing 42 U.S.C. § 1395bb(a)(1) (Act § 1865(a)(1)).  P. Br. at 1.  Petitioner argues that it is entitled to be deemed to meet Medicare conditions of participation, unless CMS makes an independent finding that Petitioner had “significant deficiencies identified through a statutory and regulatory process.”  P. Br. at 3, 15-17; P. Reply at 3, 13-14.  Petitioner’s interpretation of section 1865(a)(1) of the Act and implementing regulations is faulty but reflects that even Petitioner recognizes that the Secretary and CMS are not bound by an accreditation determination by an approved accrediting organization but, rather, must make a determination as to whether to accept the accreditation.  Section 1865(a)(1) of the Act provides that “[i]f the Secretary finds that accreditation of a provider entity. . . by the American Osteopathic Association or any

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other national accreditation body demonstrates that all the applicable conditions or requirements” of Medicare or met or exceeded, the Secretary shall in the case of providers⁹ other than skilled nursing facilities, or may in the case of skilled nursing facilities, treat the requirements of Medicare as having been met.  Act § 1865(a)(1) (emphasis added).  The plain language of this section does not provide that the Secretary is bound by the accreditation of an accrediting organization.  Rather, the section requires that the Secretary affirmatively find that the accreditation “demonstrates that all of the applicable conditions or requirements” of Medicare are met or exceeded.  Act § 1865(a)(1).  The statute does not even establish a presumption that all Medicare requirements are met based upon an accreditation.  My reading is consistent with the plain language of section 1865(c) of the Act, which provides that “if the Secretary finds that a provider entity has significant deficiencies (as defined in regulations pertaining to health and safety),” the Secretary has no discretion and Congress has specified that the provider will “be deemed not to meet the conditions or requirements” of Medicare even if a national accreditation body accredited the provider under section 1865(a)(1) of the Act.  Therefore, even though an approved accrediting organization informs the Secretary that a provider meets all conditions or requirements for participation, the Secretary must still affirmatively find that accreditation demonstrates all conditions and requirements are in fact met.  If on review of the accreditation the Secretary finds there are significant deficiencies related to health and safety, the Secretary must deem the provider not to meet the conditions or requirements of Medicare.¹⁰ 

Petitioner cites Slavcoff v. Harrisburg Polyclinic Hospital, 375 F. Supp. 999, 1001 (M.D. Pa. 1974) and Kelley v. Apria Healthcare, LLC, 232 F. Supp. 3d 983, 1000 (E.D. Tenn. 2017) to support its construction of section 1865(a)(1) of the Act.  P. Br. at 5, 17; P. Reply at 14.  Slavcoff involved the dismissal for lack of jurisdiction of a civil rights action brought by a physician against a private nonprofit hospital.  The district court observed that the hospital was accredited by the Joint Commission on Hospital Accreditation.  The court commented that the effect of the accreditation under 42 U.S.C. § 1395bb (Act § 1865) was to automatically cause the hospital to meet the definition of

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hospital found at 42 U.S.C. § 1395x(e) (Act § 1861(e)).  The decision reflects that the hospital had been accredited and participating in Medicare.  375 F. Supp. at 1001.  The district court’s comment at most stands for the proposition that a hospital participating in Medicare based on accreditation by an accrediting organization is a hospital within the meaning of the Act and nothing more.  The district court did not address whether the Secretary is required by Congress to accept the accreditation determination of an accrediting organization.  Therefore, Slavcoff does not lend any weight to Petitioner’s effort at statutory interpretation.  

Kelley involved a negligence action against an oxygen and oxygen equipment supplier brought by the son of a patient killed by a fire.  One of the issues addressed by the district court was whether joint commission standards incorporated by reference in Tennessee law establish a standard of care for negligence per se.  The court concluded that was the case – the rationale is not important here.  The court commented, to bolster its reasoning, that the Secretary “must treat health organizations as accredited under federal law if they are accredited by the Joint Commission.”  232 F. Supp. 3d at 1000.  The district court made the assertion without any analysis of whether the Secretary is bound by Congress under section 1865 of the Act to accept the accreditation determination of an accrediting organization when deciding whether to grant a provider agreement or Medicare enrollment and billing privileges.  The issue was not actually before the court.  Therefore, I also conclude that Kelley lends no weight to Petitioner’s statutory interpretation. 

The regulations under which the Secretary delegated authority to CMS, also do not require that CMS accept an accreditation determination by an accrediting organization when CMS determines whether to offer a provider agreement on behalf of the Secretary or enroll a provider in Medicare and grant billing privileges. 

Pursuant to 42 C.F.R. § 488.1,

Deemed status means that CMS has certified a provider or supplier for Medicare participation, based on all of the following criteria having been met:  The provider or supplier has voluntarily applied for, and received, accreditation from a CMS-approved national accrediting organization under the applicable Medicare accreditation program; the accrediting organization has recommended the provider or supplier to CMS for Medicare participation; CMS has accepted the accrediting organization’s recommendation; and CMS finds that all other participation requirements have been met. 

42 C.F.R. § 488.1 (italics in original, bold added).  An accrediting organization “may recommend” that CMS grant deemed status to a provider or supplier if the accrediting organization finds the provider or supplier demonstrates full compliance with all CMS-

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approved accreditation program requirements.  CMS may deem that the provider or supplier complies with applicable Medicare conditions or requirements based on the accreditation organization’s recommendation.  42 C.F.R. § 488.4(a).  Pursuant to 42 C.F.R. § 488.7(a), “CMS may determine that a provider or supplier does not meet the applicable Medicare conditions or requirements on the basis of its own investigation of the accreditation survey or any other information related to the survey.”  (Emphasis added.) 

Validation Survey Is Only One Basis for CMS to Reject Accreditation

CMS has the authority to require a validation survey of an accredited provider or supplier, to “validate the accrediting organization’s CMS-approved accreditation process.”  42 C.F.R. § 488.9(a).  However, 42 C.F.R. § 488.9 does not suggest that its provisions supersede the provisions of 42 C.F.R. § 488.7(a) which clearly permit CMS to decide a provider does not meet conditions or requirements of Medicare based on CMS review or any other information related to the accreditation survey, with or without a validation survey.  

Petitioner argues that because of The Joint Commission’s accreditation, Petitioner can only be deemed not to meet hospital conditions of participation based on a validation survey.  P. Br. at 6-9, 17-19; P. Reply at 3, 7-9.  The language of 42 C.F.R. § 488.10(d) could, but should not, be misread to support Petitioner’s position: 

[Act] Section 1865(c) provides that an accredited institution that is found after a validation survey to have significant deficiencies related to health and safety of patients will no longer meet the applicable conditions or requirements.

42 C.F.R. § 488.10(d).  The plain language interpretation of the section is that if a validation survey finds significant deficiencies related to health and safety, an accredited provider no longer meets Medicare conditions or requirements.  The regulation does not say CMS may only reject a recommendation of accreditation by an accrediting organization if there is a validation survey that finds significant health and safety deficiencies.  There is no regulatory requirement that CMS order a validation survey before exercising the authority granted in 42 C.F.R. § 488.7(a), consistent with my interpretation is the plain language of Act § 1865(c).  Under section 1865(c) of the Act, Congress has specified that a provider is deemed not to meet the conditions of participation if the Secretary finds significant deficiencies pertaining to health and safety.  The section does not require that the Secretary’s findings be based on a validation survey or specify a particular basis or factual predicate for the findings.  Congress authorized the Secretary to use validation surveys by state agencies as discussed in sections 1864(c) and 1865(d) and (e) of the Act, and granted the Secretary discretion in how to use validation surveys.  Congress did not require that the Secretary direct a validation survey to

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determine whether a provider recommended for accreditation had significant deficiencies before rejecting the recommended accreditation.  

The Undisputed Evidence is Prima Facie Evidence of a Basis for
Granting an Effective Date of May 12, 2022 and not March 17, 2022. 

Petitioner makes various arguments, all of which must be resolved against Petitioner as matters of law. 

Petitioner’s primary argument is that it is entitled as a matter of law under 42 C.F.R. § 489.13 to an effective date of March 17, 2022, for its provider agreement and Medicare enrollment and billing privileges based on The Joint Commission’s positive accreditation decision.  P. Br. at 2, 9-10, 15-17, 24-25; P. Reply at 3, 14.  Petitioner asserts that “by operation of the plain terms of [section 1865(a)(1)(A) of the Act], CMS shall treat [Petitioner] as meeting conditions and requirements of the Medicare program” based on The Joint Commission’s accreditation decision.  P. Br. at 17.  I conclude that Petitioner’s interpretation of section 1865 of the Act and 42 C.F.R. § 489.13 and their application to the undisputed facts is in error. 

There is no factual dispute that The Joint Commission first recommended accreditation of Petitioner effective March 17, 2022.  Jt. Stip. ¶ 8.  There is also no dispute that The Joint Commission clearly advised Petitioner that it was recommending the effective date to CMS and did not suggest that CMS was bound by that date.  CMS Ex. 6 at 1.  Therefore, the undisputed fact is that The Joint Commission did not indicate that CMS or the Secretary were bound by its recommendation.  Nevertheless, Petitioner’s argument is that the Secretary and CMS are bound by The Joint Commission’s accreditation of Petitioner effective March 17, 2022, under section 1865(a)(1)(A) of the Act, which applies to providers other than skilled nursing facilities and provides in pertinent part that “the Secretary shall treat [the accredited provider or supplier] as meeting” the conditions or requirements for participation in Medicare “with respect to which the Secretary made such finding.”  The Secretary’s finding referred to is clearly the finding required of the Secretary by section 1865(a)(1) of the Act, i.e., the Secretary’s finding that accreditation of a provider “demonstrates that all of the applicable conditions or requirements” for participation in Medicare are met or exceeded.  The plain language of the statute requires the Secretary (or his delegate, CMS), to, on a case-by-case basis, determine whether an accrediting body’s accreditation establishes that the provider meets all conditions and requirements of participation.  If so, the Secretary or CMS will so find and grant the provider agreement and Medicare enrollment and billing privileges.  However, if after review of the accreditation decision, the Secretary or CMS determines that it has not demonstrated the provider meets all conditions and requirements for participation, the Secretary and CMS are not bound to grant but must deny the provider’s participation in Medicare.  This interpretation is consistent with the requirement of section 1865(c) of the Act that the Secretary must deem a provider not to meet the conditions or requirements of

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Medicare participation if the Secretary finds that the provider has significant deficiencies.  Section 1865(c) of the Act specifically refers to section 1865(a)(1) of the Act and clearly shows that, if after reviewing an accreditation, the Secretary or CMS determines that a provider has significant deficiencies, Congress requires that the Secretary treat the provider as deemed not to meet conditions or requirements of Medicare participation.  While section 1865(c) of the Act specifically requires non-deemed status for a provider with significant deficiencies, it does not suggest, contrary to Petitioner’s argument (P. Br. at 18-19), that the Secretary is without discretion to determine non-deemed status under the discretion granted by section 1865(a)(1) of the Act, even for nonsignificant deficiencies if the Secretary or CMS find, based on those deficiencies, that the requirements for Medicare participation are not met. 

Poor drafting of 42 C.F.R. § 489.13(b) and (c) may have led to Petitioner’s misinterpretation of those provisions.  The interpretation and application of 42 C.F.R. § 489.13(b) and (c) must be consistent with the language of section 1865 of the Act, which is controlling.  An ALJ and the Board are bound by applicable statutes and regulations and may not ignore or refuse to apply a statute or regulation even on constitutional grounds.  Experts Are Us, Inc., DAB No. 2322 at 10 (2010); see also Sentinel Medical Laboratories, Inc., DAB No. 1762 at 9 (2001), aff’d sub nom., Teitelbaum v. Health Care Financing Admin., No. 01-70236 (9th Cir. Mar. 15, 2002), reh’g denied, No. 01-70236 (9th Cir. May 22, 2002).  However, an ALJ and the Board must consider challenges to the way a statute or regulation is interpreted or applied by the agency in a particular case.  Experts Are Us at 10.  The Board has recognized that a fundamental principle of statutory or regulatory construction is that “every word and every phrase of the text must be given effect so that no word or phrase is rendered superfluous or to have no consequence.”  Ridgeview Hosp., DAB No. 2593 at 7 (2014), citing 2A Norman J. Singer and J.D. Shambie Singer, Sutherland Statutes and Statutory Construction § 46:6 (7th ed.); Tex. Office of the Attorney Gen., DAB No. 2124 at 10 (2007); and North Ridge Care Ctr., DAB No. 1857 (2002) (the Board applies or interprets statutes or regulations so that no provision is rendered superfluous).  If a regulation is susceptible to more than one interpretation, the Board generally defers to CMS’s interpretation so long as it is a reasonable reading and not inconsistent with the regulatory language or the statute and the party affected had notice.  See, e.g., Ark. Dep’t of Health & Human Res., DAB No. 2201 at 12 (2008); Missouri Dep’t of Soc. Servs., DAB No. 2184 (2008).  The Board has recognized that language used in different parts of a statute or regulation on a related subject that may be considered ambiguous should be read harmoniously to achieve the overall purpose.  Woodstock Care Ctr., DAB No. 1726 at 23 (2000). 

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In rulemaking in 2010, CMS states the following regarding the regulatory history¹¹ for 42 C.F.R. § 489.13, which was first adopted in 1997:  

Compliance with the applicable health and safety standards is determined through an onsite survey by a State survey agency, CMS, or a CMS contractor, or, in accordance with section 1865 of the Act, CMS may “deem” an entity to have satisfied these requirements if it has been accredited by a national accreditation program approved by CMS. 

75 Fed. Reg. 50,400 (emphasis added).  CMS explained that under 42 C.F.R. § 489.13 the effective date for a provider or supplier accredited by a CMS-approved national accrediting organization is “the date on which [Federal] enrollment requirements have been met.”  CMS states it has always considered the requirement to be that a provider or supplier, whether surveyed by a state agency or accredited by an accrediting organization, be compliant with all applicable health and safety standards, i.e., conditions of participation for a hospital under 42 C.F.R. pt. 482, and all other federal requirements for participation in Medicare.  CMS explains that other federal requirements include submission of a Medicare enrollment application, the other enrollment requirements of 42 C.F.R. pt. 424, subpt. P, Office of Civil Rights requirements, and any other requirements for a specific provider or supplier type.  Id. at 50,400-01.  This bit of regulatory history clearly shows that CMS never considered that it is bound to accept accreditation of an accrediting organization, or the effective date of accreditation recommended by such an organization. 

CMS has also indicated in rulemaking of 42 C.F.R. § 488.7 that it is not bound to follow either an accrediting organization’s recommendation or a state agency recommendation.  

[CMS] may determine that a provider or supplier does not meet the Medicare conditions on the basis of our own analysis of the accreditation survey or any other information related to the survey. 

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80 Fed. Reg. 29,796, 29,819-20 (May 22, 2015).  

I conclude based on the plain language of section 1865(a) and (c) of the Act and 42 C.F.R. § 489.13 and construing the provisions of the statute and regulation together in harmony, that the Secretary and CMS are not bound by an accreditation recommendation; and the Secretary and CMS have discretion to reject an accreditation recommendation upon a finding that the conditions of participation are not met.  My conclusion is consistent with the Board’s analysis in Wesley Medical Center, LLC, DAB No. 2580 at 5‑9 (2014).¹²  The Act, regulation, and rulemaking all provided Petitioner notice of the Secretary’s and CMS’s discretion. 

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Petitioner argues that the CMS position that it may substitute the decision of its employee for that of a CMS approved accreditation organization “without investigation, explanation, analysis, and/or additional evidence or information,” and that that employee’s decision is not subject to review because it is not an initial determination is unsustainable as a violation of due process.  P. Reply at 1-2.¹³  Petitioner argues that The Joint Commission’s March 1 through 4, 2022 survey found only standard-level deficiencies and no condition-level deficiencies, which is true.  Petitioner argues that CMS has not made a prima facie showing that Petitioner had condition-level violations under 42 C.F.R. pt. 482 as of March 17, 2022.  Petitioner reasons that absent evidence it had condition-level deficiencies on March 17, 2022, CMS had no basis to reject The Joint Commission accreditation of Petitioner effective March 17, 2022.  P. Br. at 1, 17-19, 23;

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P. Reply at 2, 7-12, 14-17.  Petitioner also argues that CMS cannot ignore Petitioner’s plan of correction in response to the first survey findings of standard-level violations under 42 C.F.R. pt. 482, that was accepted by The Joint Commission.  P. Br. at 19-21.  Petitioner argues that the record shows that the determination by CMS refusing to accept the March 17, 2022 accreditation awarded by The Joint Commission “with no independent findings or investigation by CMS” was arbitrary and capricious.  P. Br. at 21, 25-27.  Petitioner’s arguments are not supported by the undisputed facts. 

It is not disputed that RN Para’s email (CMS Ex. 8) shows that The Joint Commission survey was rejected based on her review of the survey findings and her evaluation that the findings showed noncompliance with specific hospital conditions of compliance, specifically 42 C.F.R. §§ 482.25, 482.42, and 482.57.  RN Para’s email explained to Petitioner that the CMS regional office was recommending denial of Petitioner’s initial certification by The Joint Commission, for specific reasons she described in detail.  RN Para invited Petitioner to provide additional information or further clarification but there is no evidence before me that Petitioner took advantage of that offer.  CMS Ex. 8.  Petitioner does not dispute that it received the email from RN Para.  P. Br. at 11-12.  RN Para’s email shows that she made findings and conclusions based on The Joint Commission’s report and those findings were different than those of The Joint Commission and reflected more significant noncompliance with conditions of participation established by 42 C.F.R. pt. 482.  Petitioner also does not deny that on April 13, 2022, RN Para notified Petitioner of the CMS determination that, based on The Joint Commission survey of March 1 through 4, 2022, Petitioner did not qualify to participate in Medicare because the survey showed Petitioner was not in compliance with the conditions of participation for a hospital established by 42 C.F.R. §§ 482.25, 482.42, and 482.57.  CMS Ex. 9; P. Reply at 8-9.  Although the administrative determination is not subject to my review, Petitioner’s argument that the CMS initial determination was arbitrary and capricious because CMS made no independent findings or investigation is without merit.  The undisputed evidence shows that RN Para did make an independent determination based on the survey of The Joint Commission that Petitioner did not meet all conditions of participation.  I also note that because RN Para provided Petitioner notice of her findings and gave Petitioner an opportunity to submit additional evidence or consideration and CMS then reconsidered the administrative determination, Petitioner received more process than it was due under 42 C.F.R. pt. 498 as discussed above. 

Petitioner argues that the May 3, 2022 survey by The Joint Commission validated that Petitioner met Medicare conditions of participation as of March 17, 2022.  P. Br. at 21‑23.  Petitioner does not deny that following its second survey on May 3, 2022, The Joint Commission recommended to CMS that Petitioner be granted accreditation effective May 12, 2022, not March 17, 2022.  P. Br. at 21; CMS Ex. 11.  However, Petitioner argues that The Joint Commission never revoked or withdrew its prior recommendation for accreditation effective March 17, 2022.  Petitioner argues that CMS has presented no evidence to the contrary.  P. Br. at 22; P. Reply at 11.  This fanciful

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argument is of no merit.  Clearly, the evidence shows that The Joint Commission issued both letters with the practical effect that the second recommended effective date superseded the earlier recommendation.  Petitioner has offered no evidence that creates a genuine dispute of material fact in this regard. 

Petitioner also argues that if upheld, the May 12, 2022 effective date deprives Petitioner of compensation of approximately $17 million for care and services it provided during the two months from March 17 to May 12, 2022.  P. Br. at 25-27; RFH.  Petitioner’s arguments may be construed to be a request for equitable relief.  However, I have no authority to grant equitable relief.  US Ultrasound, DAB No. 2302 at 8 (2010).  I am bound to follow the Act and regulations, and I have no authority to declare statutes or regulations invalid or ultra vires.  1866ICPayday.com, L.L.C., DAB No. 2289 at 14 (noting that “[a]n ALJ is bound by applicable laws and regulations and may not invalidate either a law or regulation on any ground.”).  

Petitioner argues that it expected reimbursement from Medicaid for care and services delivered after March 17, 2022, based on The Joint Commission’s accreditation.  P. Br. at 25-26.  Petitioner’s arguments may be construed to be that CMS should be estopped from denying Petitioner’s request for a March 17, 2022 effective date for its provider agreement and Medicare enrollment and billing privileges.  However, estoppel against the federal government, if available at all, is presumably unavailable absent “affirmative misconduct,” such as fraud.  See, e.g., Pac. Islander Council of Leaders, DAB No. 2091 at 12 (2007); Office of Pers. Mgmt. v. Richmond, 496 U.S. 414, 421-22 (1990).  Petitioner points to no evidence of affirmative misconduct such as fraud by the MAC or CMS. 

If On Further Review

If on further review, the Board concludes that the decision of RN Para rejecting The Joint Commission’s accreditation based on the March 1 through 4, 2022 survey is not an administrative determination and is subject to review as if RN Para’s action was an initial determination for which review of the related reconsidered determination is necessary, then remand will be necessary for further record development.  Specifically, it will be necessary to consider the sufficiency of the March 1 through 4, 2022 survey by The Joint Commission; Petitioner’s corrective action reflected in CMS Ex. 5 and P. Exs. 4 through 8; The Joint Commission’s determination in less than a day that Petitioner’s corrective actions were sufficient; and RN Para’s action including her determination that the standard-level noncompliance identified by The Joint Commission surveyors was in fact condition-level noncompliance.  It will be necessary to obtain the testimony of The Joint Commission surveyors from the March 1 through 4, 2022 survey, The Joint Commission representative who reviewed Petitioner’s corrective action, RN Para, Mr. Potjeau, and knowledgeable witnesses identified by Petitioner who participated in Petitioner’s corrective actions. 

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CMS Ex. 4 is the final accreditation report of The Joint Commission based on its March 1 through 4, 2022 survey of Petitioner.  CMS Ex. 5 and P. Exs. 4 through 8 document Petitioner’s corrective actions, which were accepted by The Joint Commission as showing Petitioner corrected the standard-level noncompliance identified by the survey.  CMS Exs. 8 and 9 show that RN Para determined that the standard-level noncompliance identified by The Joint Commission was condition-level noncompliance.  If the basis for CMS’s rejection of The Joint Commission’s accreditation based on the March 1 through 4 survey is reviewable, there are genuine issues of material fact that cannot be resolved without testimony and a hearing would be required to receive the testimony.  

III.  CONCLUSION

For the foregoing reasons, the effective date of Petitioner’s provider agreement and Medicare enrollment and billing privileges is May 12, 2022. 

¹  86 Fed. Reg. 70,500-02 (Dec. 10, 2021); 87 Fed. Reg. 25,642-44 (May 2, 2022).  The complete list of CMS approved accrediting organizations is at https://www.cms.gov/Medicare/Provider-Enrollment-and-Certification/SurveyCertificationGenInfo/Downloads/Accrediting-Organization-Contacts-for-Prospective-Clients-.pdf. 

²  Citations are to the October 2021 revision of the Code of Federal Regulations (C.F.R.), which was in effect at the time of the initial determination, unless otherwise stated.  An appellate panel of the Departmental Appeals Board (Board) concluded in Mark A. Kabat, D.O., DAB No. 2875 at 9-11 (2018) that the applicable regulations are those in effect at the time of the initial determination. 

³  CMS did not place the June 28, 2022 reconsidered determination in evidence.  However, Petitioner filed the document with its request for hearing in C-22-742.  Departmental Appeals Board Electronic Filing System (DAB E-File) C-22-742 # 1_a.  CMS also did not place in evidence Petitioner’s June 27, 2022 request for reconsideration.  However, Petitioner filed the document with its request for hearing.  DAB E-File C‑22-742 # 1_n. 

⁴  Petitioner filed a third request for reconsideration on October 24, 2022, in response to an August 24, 2022 CMS letter amending CMS’s June 8, 2022 determination.  CMS replied on October 26, 2022, indicating that all issues were presently subject to review by an ALJ; CMS would not change the determination that Petitioner’s effective date was May 12, 2022; and CMS declined further review.  P. Ex. 9. 

⁵  A “supplier” furnishes services under Medicare and includes physicians or other practitioners and facilities that are not included within the definition of the phrase “provider of services.”  Act § 1861(d) (42 U.S.C. § 1395x(d)).  A “provider of services,” commonly shortened to “provider,” includes hospitals, critical access hospitals, skilled nursing facilities, comprehensive outpatient rehabilitation facilities, home health agencies, hospice programs, and a fund as described in sections 1814(g) (42 U.S.C. § 1395f(g)) and 1835(e) (42 U.S.C. § 1395n(e)) of the Act.  Act § 1861(u) (42 U.S.C. § 1395x(u)).  Petitioner, a hospital, is a provider under the Act. 

⁶  Pursuant to 42 C.F.R. § 489.13(a)(1)(i), the survey may also be conducted by CMS surveyors. 

⁷  Arguably, The Joint Commission’s recommendation to CMSthat Petitioner be permitted to participate in Medicare effective May 12, 2022, rather than March 17, 2022, may have been an issue for The Joint Commission and Petitioner to have addressed.  I also note there is no evidence and no allegation by Petitioner that it requested a validation survey by the state agency related to the March 1 through 4, 2022 survey, or that it was prevented from doing so. 

⁸  The 2010 change to 42 C.F.R. § 489.13 eliminated any confusion about the possibility of retroactive certification of a provider and retroactive billing, which were suggested or implied to be possible in the Board’s decisions in Puget Sound Behav. Health, DAB No. 1944 (2004) and Renal Care Partners of Delray Beach, LLC, DAB No. 2271 (2009).  

⁹  A hospital such as Petitioner is a provider entity within the meaning of section 1865(a)(4) of the Act and 42 C.F.R. § 488.1. 

¹⁰  In section 1865(c) of the Act Congress mandates that the Secretary deem a provider not to meet conditions of participation if there are significant health and safety deficiencies.  The statute does not prohibit the Secretary from exercising discretion in the best interest of Medicare and its beneficiaries and not entering a provider agreement and granting enrollment and billing privileges, even if deficiencies related to health and safety are not significant. 

¹¹  Each agency submitting a proposed or final rule for publication in the Federal Register must provide a preamble to inform the reader of the basis and purpose of the regulation or proposal.  1 C.F.R. § 18.12.  In promulgating regulations, the Secretary must publish the proposed regulation in the Federal Register and allow no fewer than 60 days for public comment.  Act § 1871.  

¹²  In Wesley, CMS rejected the accreditation organization’s accreditation and effective date based on the adequacy of the survey process followed by the accrediting organization.  DAB No. 2580 at 3-4.  The Joint Commission’s accreditation of Petitioner effective March 17, 2022 was rejected by CMS in this case because CMS found on review of The Joint Commission’s March 2022 survey that Petitioner was not in compliance with conditions of participation not due to some defect in the survey process.  I note that the Board did not address in Wesley, whether 42 C.F.R. § 498.3(d)(9) precluded review of the CMS administrative determination rejecting the accreditation even though the ALJ specifically concluded that the administrative determination of CMS was not reviewable.  Wesley Medical Center, LLC, DAB CR3033 at 4-5 (2013).  The Board remanded in Wesley with direction for the ALJ to develop the record and consider the accrediting organization’s survey protocol, among other things.  On remand the ALJ reiterated that there was no jurisdiction because there was no right to review of the administrative determination of CMS rejecting an accreditation.  Wesley Medical Center, LLC, DAB CR4772 at 3-4 (2017).  Following remand, the Board again reviewed the case and upheld the action of CMS approving a later effective date than the petitioner wanted.  The Board on remand again failed to address the application and effect of 42 C.F.R. § 498.3(d)(9).  However, in a footnote the Board acknowledged the jurisdictional issue, suggesting the ALJ was in error, but asserting that there was no prejudice from the error as the Board went ahead and decided the merits even though the Board failed to first specifically resolve whether there was jurisdiction.  Wesley Medical Center, LLC, DAB No. 2820 at 8 n.4 (2017) (Wesley II).  The Board’s analysis in this regard is not persuasive.  The appellate panel decision in Wesley II may also be read to be inconsistent with comments of another appellate panel of the Board in Apollo Behavioral Health Hospital, L.L.C., DAB No. 2561 at 5-6, 10 (2014) (administrative action listed in 42 C.F.R. § 498.3(d) is not an initial determination subject to review under 42 C.F.R. pt. 498). 

¹³  Petitioner argues it should not be denied the opportunity to cross-examine RN Para who determined that the noncompliance was condition-level and not standard-level.  P. Reply at 16-17.  However, because summary judgment is appropriate in favor of CMS, no cross-examination is necessary.