East Alabama Medical Center, DAB CR6437 (2024)

DECISION

Petitioner, East Alabama Medical Center (East Alabama), challenges the denial by Respondent, the Centers for Medicare & Medicaid Services (CMS), of its request to designate its cancer center an on-campus provider-based facility.  As explained herein, I find in favor of CMS and affirm the denial.

I.  Background

East Alabama is a Medicare-certified hospital located in Opelika, Alabama.  CMS Exhibit (Ex.) 3 at 1.  Near East Alabama’s main campus is the Annex, a 93-acre parcel of property located approximately one mile away when traveling by car or on foot.  CMS Ex. 9.  East Alabama sited several outpatient facilities in the Annex, among them the newly built Spencer cancer center (Spencer facility), the subject of the appeal before me.  CMS Ex. 8 at 1. 

On August 24, 2018, East Alabama asked CMS to designate the Spencer facility as part of East Alabama’s campus, even though it is located more than 250 yards from the main inpatient building.  CMS Ex. 7 at 1; 42 C.F.R. § 413.65(a)(2).  East Alabama reiterated this request on December 7, 2018.  CMS Ex. 8.  On February 5, 2019, CMS’s Regional Office in Atlanta, Georgia denied the request, stating:

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The Annex does not appear to be within the reasonable boundary of what constitutes the main provider’s campus. According to Google maps, this property is approx. 1190 yards from the main campus measuring from the closest corner of the building on the main campus to the Annex area.

* * *

Although the main provider owns the 93-acre property, as indicated in your letter, there are other parcels that the main provider does not own or control.

CMS Ex. 6 at 1-2.  CMS advised East Alabama its response was not an initial determination subject to appeal.  Id.  CMS invited East Alabama to submit a Provider-Based Attestation¹ along with the required supporting documentation.  Id.  On June 27, 2019, CMS made an on-site visit to East Alabama.  CMS Ex. 2 at 32.  Following the visit, East Alabama submitted a Provider-Based Attestation and documentation to support its request that CMS deem the Spencer facility on-campus and provider-based.  CMS Exs. 3, 5.

On December 2, 2019, CMS denied East Alabama’s request to designate the Spencer facility an on-campus provider-based department.  CMS Ex. 4.  East Alabama submitted a request for reconsideration on January 30, 2020.  CMS Ex. 2.  CMS upheld its denial in a reconsidered determination.  CMS Ex. 1.  On May 26, 2020, East Alabama filed a request for hearing in the Civil Remedies Division, resulting in my designation to hear and decide this case.

II.  Admission of Exhibits and Decision on the Record

1. Admission of exhibits

CMS submitted a motion for summary judgment and memorandum in support thereof (CMS Br.).  East Alabama submitted a response in opposition (P. Br.).  CMS submitted ten proposed exhibits (CMS Exs. 1-10) while East Alabama submitted five proposed exhibits (P. Exs. 1-5).  There being no objection from either party, these exhibits are entered into the record.

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2. A decision on the record is appropriate because neither party proposed any witness testimony.

Neither party offered written direct testimony of witnesses as part of its pre-hearing exchange, meaning an in-person hearing is not necessary.  Pre-hearing Order ¶¶ 8-10; Civ. Remedies Div. P. §§ 16(b), 19(b).  I therefore decide this case based on the record before me, namely the parties’ written submissions and arguments.  Civ. Remedies Div. P. § 19(d).  CMS’s motion for summary judgment is denied as moot.

III.    Issue

Whether CMS properly determined East Alabama’s cancer center did not qualify as an on-campus provider-based department under 42 C.F.R. § 413.65(a)(2), (b).

IV.     Jurisdiction

I have jurisdiction to hear and decide this case.  42 C.F.R. § 498.3(b)(2); Union Hosp., Inc., DAB No. 2463 at 2 (2012).

V. Discussion

1. Applicable law
   1. Providers and provider-based entities

The Medicare program pays participating hospitals and other healthcare “providers” for health care services they furnish to program beneficiaries.  Soc. Sec. Act (Act) §§ 1811, 1812(a) (providing Medicare program benefits include payment for inpatient hospital services); 42 C.F.R. Part 419 (establishing prospective payment systems for hospital outpatient department services); 42 C.F.R. § 400.202 (defining the term “provider,” for Medicare program purposes, to include hospitals).

For Medicare payment purposes, CMS recognizes a hospital may own and operate other types of healthcare facilities or organizations, such as physicians’ offices, located on or off the hospital’s campus.  Final Rule, 65 Fed. Reg. 18,434, 18,504 (Apr. 7, 2000).  In certain circumstances, CMS permits a hospital to treat such subordinate entities as “provider-based” and to bill their services to Medicare as outpatient hospital services.  See Shady Grove Adventist Hosp., DAB No. 2221 at 3-5 (2008) (citing Proposed Rule, 63 Fed. Reg. 47,552, 47,587-88 (Sept. 8, 1998)), aff’d sub nom. Adventist Healthcare, Inc. v. Sebelius, AW-09-00559, 2010 WL 3038917 (D. Md. Jul. 30, 2010).

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2. Regulatory requirements for CMS to deem a facility projvider-based

The Act does not define the term “provider-based.”  In 2000, CMS’s predecessor agency, the Health Care Financing Administration (HCFA), promulgated 42 C.F.R. § 413.65 to establish requirements by which a provider could seek to have a subsidiary entity considered “provider-based” for billing purposes.²  65 Fed. Reg. at 18,504.  HCFA explained it intended to limit the ability to seek higher levels of Medicare reimbursement (and increases in beneficiary liability) to entities which were “clearly and unequivocally an integral and subordinate part of a provider.”  Id. at 18,506.

The regulation permits a “main provider”³ to seek a determination by CMS that a facility on its “campus”⁴ is “provider-based” and thus entitled to bill as a provider.  To do so, the main provider must submit an attestation to CMS asserting the entity for which it seeks provider-based status meets the criteria set forth at 42 C.F.R. § 413.65(d), namely that the facility and the main provider are operated under the same license, their clinical services and financial operations are “integrated,” they hold themselves out to the public as the same entity, and, applicable to hospitals, the subordinate facility meets the obligations of hospital outpatient departments and hospital-based entities described at 42 C.F.R. § 413.65(g).  42 C.F.R. § 413.65(b)(3).

If a facility is not located on a main provider’s campus, the provider may still seek provider-based status for that offsite facility.  In that case, however, the main provider must demonstrate to CMS that its subordinate facility meets the criteria set forth at 42 C.F.R. § 413.65(e) in addition to the criteria set forth at 42 C.F.R. § 413.65(d).

3. The “on-campus” requirement

The on-campus requirement is met where a subordinate facility is located within 250 yards of the main provider.  42 C.F +.R. § 413.65(a)(2).  If the facility is not within 250 yards of the main provider, the appropriate CMS Regional Office can nevertheless exercise discretion to deem such a facility to be on-campus.  CMS acknowledges a campus encompasses “not only institutions that are located in self-contained, well-

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defined settings, but other locations, such as in central city areas, where there may be a group of buildings that function as a campus but are not strictly contiguous and may even be crossed by public streets.”  65 Fed. Reg. 18,434, 18,511 (Apr. 7, 2000).  CMS’s regional offices are therefore given the discretion to make case-by-case determinations as to whether a facility located outside the 250-yard boundary can nevertheless be considered part of a main provider’s campus and therefore provider-based.  Id. 

4. Review of CMS’s determination

After a main provider submits an attestation consistent with 42 C.F.R. § 413.65(b)(3)(i) or (ii), CMS reviews the attestation and makes an initial determination as to whether the main provider has shown its facility qualifies as an on- or off-campus provider-based facility.  42 C.F.R. §§ 413.65(b)(3)(iii), (iv), 498.3(b)(2).  If the main provider is dissatisfied with CMS’s initial determination, it may request reconsideration of the determination in accordance with 42 C.F.R. § 498.22.  It may then seek further review by an ALJ and the appellate division of the Departmental Appeals Board (DAB).  Union Hosp., DAB No. 2463 at 2 (citing 42 C.F.R. §§ 498.3(b)(2), 498.22, 498.82).

ALJ review is conducted under the procedures set forth at 42 C.F.R. pt. 498.  Such review is de novo, that is, “a fresh look by a neutral decision-maker at the legal and factual basis for” CMS’s action.  Life Care Ctr. of Bardstown, DAB No. 2479 at 32 (2012) (citation omitted); Residence at Salem Woods, DAB No. 2052 (2006); Cal Turner Extended Care, DAB No. 2030 (2006); Beechwood Sanitarium, DAB No. 1906 (2004); Emerald Oaks, DAB No. 1800 at 11 (2001).

2. Relevant Facts

In 2013, East Alabama purchased 93 acres of land that include the Annex property.  CMS Ex. 8 at 2.  The Annex and the main campus are physically divided by a railroad track and forested land that East Alabama states “cannot be feasibly developed.”  CMS Ex. 7 at 3.  Built on 15.66 acres of land, the Spencer facility is one of several outpatient facilities located on the Annex property.  P. Br. at 5.  East Alabama first built an oncology facility on its main campus in 1992 and expanded that facility in 2006.  Id. at 4.  East Alabama subsequently built the Spencer facility to replace the oncology center.  CMS Ex. 7 at 2.  The Spencer facility began treating patients in 2019.  P. Br. at 5.

East Alabama initially sought CMS’s approval of on-campus provider-based status for the Spencer facility through less formal communications than those set forth by regulation.  It first sent an “On-Campus Designation Request” to CMS on August 24, 2018.  CMS Ex. 7.  On December 7, 2018, it reiterated its request in an “On-Campus Exception Request under 42 C.F.R. § 413.65(a)(2).”  CMS Ex. 8.  East Alabama attached several exhibits containing maps of East Alabama’s campus, a map of the Spencer facility, and aerial photographs of the main campus and the Annex.  Id. at 6-12.

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On February 5, 2019, CMS responded and explained it did not consider the Spencer facility to be located on East Alabama’s main campus but provided instructions for East Alabama to submit an attestation as contemplated by 42 C.F.R. § 413.65(b).  CMS Ex. 6 at 1.  At East Alabama’s request, CMS representatives visited its campus and the Spencer facility on June 27, 2019.  CMS Ex. 2 at 32.  East Alabama provided CMS’s representatives a tour of the main building and the Annex and made a formal presentation concerning its request that the Spencer facility be given on-campus provider-based status.  Id. at 32-52.

East Alabama subsequently submitted a Provider-Based Attestation to the Regional Office.  CMS Ex. 3.  The provider indicated the Spencer facility was 777 yards from the medical records building on its main campus and 1,046 yards from the main building.  Id. at 1.  East Alabama asserted and certified the Spencer facility was part of its main provider campus within the meaning of 42 C.F.R. § 413.65(a)(2) and that it otherwise met the provider-based requirements of subsections 413.65(d) and (g).  Id. at 2.

CMS denied East Alabama’s request on December 2, 2019, explaining the Spencer facility was located approximately 1,073 yards from East Alabama’s main building and that a patient could only reach the facility by car along busy streets.  CMS Ex. 4 at 1-2.  CMS also observed the East Alabama’s main campus and the Spencer facility were separated by railroad tracks and other parcels of land that were not part of the main hospital campus.  Id. at 1.

3. Analysis⁵
   1. The Spencer facility is not located on East Alabama’s main “campus” because it is not immediately adjacent to the main building and the distance between the two buildings exceeds 250 yards.  

There is no dispute the Spencer facility is located more than 250 yards from East Alabama’s main building.  CMS measured the straight-line distance between them to be 1,073 yards.⁶  CMS Ex. 1 at 2.  In its “On-Campus Designation Request” and “On-Campus Exception Request,” East Alabama acknowledged the Spencer facility was located more than 1,000 yards from the main building.  CMS Ex. 3; CMS Ex. 8 at 1.  Even the shortest distance claimed by East Alabama is over 700 yards.  CMS Ex. 3 at 1; CMS Ex. 7 at 3.  I need not resolve the issue of which party’s calculation more accurately

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reflects the actual distance between the main provider and the Spencer facility; the Spencer facility is not located within 250 yards of East Alabama’s main building and is therefore not automatically considered part of East Alabama’s main “campus” as that term is defined by 42 C.F.R. § 413.65(a)(2).

2. CMS reasonably exercised its discretion to determine the Spencer facility is not a part of East Alabama’s campus.

CMS asserts it properly exercised the discretion afforded to it under 42 C.F.R. § 413.65 to deny East Alabama’s request for on-campus provider-based status for the Spencer facility and that in fact I have no authority to review that exercise of discretion.  CMS Br. at 8-9.  Yet in nearly the next sentence, CMS concedes my review includes determining whether a “legally sufficient factual basis” exists for its decision.  Id. at 9, citing United Med. Home Care, Inc., DAB No. 2194 at 15 (2008).⁷  CMS then reiterates its claim that I have no authority to review its decisions.  Id. at 9-10 (“CMS utilized its discretionary authority. . . [t]his Tribunal’s inquiry should end here.”  But CMS proceeds to defend the reasonableness of its exercise of discretion.  Id. at 10.

I do not find CMS’s claim that I must simply acknowledge it exercised its discretion and end any further inquiry to be reasonable or consistent with the Act, its implementing regulations, or indeed, the concept of administrative adjudication.  Certainly, no point would be served in appointing independent and impartial fact finders to adjudicate controversies involving agency determinations if CMS’s view is correct.  CMS’s position is inconsistent with its own concession that my review extends to determining whether its determination is supported by a legally sufficient factual basis.  Id. at 9.  CMS’s position is also inconsistent with the record it amassed in this case and cited to support the reasonableness of its determination.  In other words, CMS undermined its claim that it did not need to justify its exercise of discretion by articulating the factual basis behind it when it articulated the factual basis behind it.

East Alabama meanwhile contends CMS improperly exercised its discretion under 42 C.F.R. § 413.65(a) in denying its request to deem the Spencer facility part of its main campus.  P. Br. at 12-13.  East Alabama claims CMS was obliged to state in “clear and thoroughly articulated terms” why approval of provider-based status would be to the detriment of Medicare program beneficiaries or otherwise run counter to the objective of

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42 C.F.R. § 413.65 – to grant provider-based status in situations where the facility or organization is “clearly and unequivocally an integral and subordinate part of a provider.”  Id. at 12, 17-25, quoting St. Vincent’s Catholic Med. Ctrs. of N.Y., DAB CR1734 at 5 (2008);⁸ see also 65 Fed. Reg. at 18,506.  East Alabama specifies the reasons CMS did proffer for its denial were not rational or cogent.  Id. at 17-19.

East Alabama’s claim that CMS had to articulate why provider-based status approval would prove a detriment to Medicare beneficiaries or otherwise run counter to the regulation’s intent is nowhere found in the regulation and, in fact, turns the regulation’s intent on its head.  The regulation does not require CMS to grant provider-based approval absent specific findings militating against approval.  Rather, 42 C.F.R. § 413.65 is intended to limit subsidiary entities from seeking the higher levels of Medicare reimbursement associated with provider-based status unless they were “clearly and unequivocally an integral and subordinate part of a provider.”  65 Fed. Reg. at 18,506.  Moreover, 42 C.F.R. § 413.65(a)(2) does not mandate specific findings CMS must articulate in the exercise of its discretion; it simply affords CMS the latitude to extend on-campus provider-based status to a facility even when its location does not meet the regulatory safe harbor meaning of “on-campus” – i.e., within 250 yards of the main provider’s buildings.

Certainly, as CMS concedes, it must provide a factual basis for the exercise of its discretion.  CMS Br. at 9.  East Alabama claims CMS relied “almost entirely on the mere distance between East Alabama’s main campus and the [Spencer facility]” to deny its request.  P. Br. at 1-2, 20.  But the record before me provides ample evidence to demonstrate CMS seriously considered East Alabama’s request and articulated credible reasons to deny on-campus provider-based status to the Spencer facility.

CMS’s analysis does not amount to a mere distance calculation, as East Alabama claims, but goes on to assess the ease of access between the two facilities to determine whether the Spencer facility was “clearly and unequivocally an integral and subordinate part of [East Alabama].”  65 Fed. Reg. at 18,506.  In its reconsidered determination, CMS did observe the property on which the Spencer facility was located (the Annex) is located over 300 yards beyond the outside boundary of the main campus,⁹ while the Spencer

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facility itself was 1,073 yards from East Alabama’s main building.  CMS Ex. 1 at 2.  But CMS considered far more information than that.  The Regional Office acknowledged and considered evidence proffered by East Alabama’s counsel.¹⁰ Id.  And while not obligated to do so, a representative from the Regional Office conducted a site visit to East Alabama, which included a presentation and tour of the main campus and Annex.  CMS Ex. 2 at 32-52.

Based on this visit and consideration of the documentation provided by East Alabama, CMS made particularized findings as to how accessibility between the Spencer facility and the main building did not reflect the true integration expected of an “on-campus” facility, stating:

Quick and efficient staff and patient movement would be difficult between the main provider buildings and The Facility.  Using a vehicle, and upon leaving [East Alabama’s] main building as described above, staff and patients would need to travel approximately one mile along busy streets to reach The Facility.  In addition, staff and patients must pass one or two buildings that are not affiliated with [East Alabama], cross a bridge that spans the railroad tracks, and a forested area to reach The Facility.

The navigation described is not considered reasonable patient movement on a main provider’s campus.  CMS concludes that it is also not reasonable to expect staff and sick patients to walk approximately one mile from [East Alabama’s] main building to The Facility past one or more unaffiliated buildings, over a bridge and past a forested area along such busy roads as Linch Avenue and Dunlop Drive.  A sick patient could not be expected to walk, be rolled in a wheelchair or on a stretcher easily between the main buildings and The Facility.  Moreover, it is acknowledged in

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your request for reconsideration that staff and patients must use a vehicle to reach The Facility from [East Alabama’s] main building.

CMS Ex. 1 at 2. 

CMS also observed there were no sidewalks or crosswalks on the roads between the two facilities, creating a “potentially dangerous situation” for patients and staff that attempt to walk between the facilities.  Id. at 2 n.2.

East Alabama now contends CMS mischaracterized the nature of the drive between the main building and the Spencer facility and improperly assumed its patients would walk between the two locations.  P. Br. at 21, 22.  East Alabama also claims CMS simply failed to consider transportation resources available to its patients and made baseless assertions about how patients might travel between the facilities.  Id. at 21.  CMS responds that East Alabama did not demonstrate the ambulatory services mentioned in its Provider-Based Attestation would be readily available to patients at the Spencer facility.  CMS Br. at 13 n.5.

First, I am unpersuaded CMS should not have considered the ease of access by foot between East Alabama’s main building and the Spencer facility, as East Alabama contends.  P. Br. at 22.  On-campus provider-based status is intended to apply to facilities located on the same “campus,” which by regulation ordinarily means within 250 yards of a provider’s main building.  42 C.F.R. § 413.65(a)(2).  Outside that relatively small radius, it is reasonable for CMS to consider whether a patient (or member of facility staff pushing a wheelchair or stretcher) could feasibly walk from the provider’s main building to a facility that the provider asserts is functionally on its own campus.  Walkability between a provider’s main building and another facility located more than 250 yards away is at least relevant to whether CMS should deem that facility “clearly and unequivocally an integral and subordinate part of that provider.”  65 Fed. Reg. at 18,506.

East Alabama otherwise claims CMS “intentionally ignored” evidence concerning the transportation resources it made available to its patients to travel between the main building and the Spencer facility.  P. Br. at 21.  But as East Alabama appears to concede, CMS did consider this factor, noting in its reconsidered determination that East Alabama claimed it would provide accessible patient transportation but that the provider’s website provided no information about “regularly available patient transportation between the two sites.”  P. Br. at 21; CMS Ex. 1 at 2 n.1.¹¹

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Finally, East Alabama broadly asserts CMS’s reasoning for denying provider-based status to the Spencer facility is inadequate because it fails to establish why approving East Alabama’s request would harm Medicare beneficiaries or flout the purpose of the regulatory rule concerning provider-based designation.  P. Br. at 22-24.  As I have already explained, the regulation does not require CMS to grant provider-based status absent a clear articulation of beneficiary harm.¹²  The regulatory rule cited by Petitioner is in fact intended to limit providers from simply deeming any off-campus facility to be provider-based to enhance reimbursement rates.  65 Fed. Reg. at 18,506.

The factors CMS considered and to which East Alabama objects – the need to cross a bridge that spans railroad tracks and a forested area, traversing parcels of land not part of East Alabama’s main campus, and the visibility of buildings unaffiliated with East Alabama, including a Honda dealership – may or may not be germane to patient safety but are in fact relevant to the issue CMS actually considered – whether the Spencer facility could reasonably be considered an integral part of East Alabama’s main campus even though it was more than 250 yards away.  As East Alabama repeatedly points out, there is more to that assessment than mere distance.  CMS considered factors that reasonably suggest the Spencer facility was not in fact an integrated part of East Alabama’s main campus.

East Alabama also claims denial of its request will cause it hardship from lost revenue and decrease access to quality care for cancer patients in its community.  P. Br. at 23-24.  I am sympathetic to these claims, but neither factor is a basis under the regulations CMS must consider to deem a facility provider-based for purposes of Medicare reimbursement.  East Alabama’s request sounds in equity, and I am unable to afford it relief on that basis.  See James Shepard, M.D., DAB No. 2793 at 9 (2017); US Ultrasound, DAB No. 2302 at 8 (2010); see also John A. Hartman, D.O., DAB No. 2911 at 21 (2018) (“The authority to balance equitable considerations with risks to the program and beneficiaries rests with CMS, while our role is to evaluate if CMS’s action is legally authorized.”).

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Ultimately, while East Alabama urges me to substitute my judgment and determine CMS improperly exercised its discretion to deny its request to deem the Spencer facility on-campus and provider-based, P. Br. at 13, my role is to determine whether CMS established a “legally sufficient factual basis” to justify its determination.  United Med. Home Care, Inc., DAB No. 2194 at 15.  CMS has done so here.  It established the Spencer facility was not within 250 yards of East Alabama’s main building and therefore did not meet the regulatory requirement to be considered part of the provider’s main campus.  42 C.F.R. § 413.65(a)(2).  CMS demonstrated it exercised its discretion to consider whether to nevertheless deem the Spencer facility as part of East Alabama’s campus.  It also established a factual basis for its decision to deny East Alabama’s request.  As such, I must affirm CMS’s denial of East Alabama’s request for on-campus provider-based status of the Spencer facility.

VI.     Conclusion

For the foregoing reasons, I affirm CMS’s determination denying on-campus provider-based status to East Alabama’s Spencer facility.

Endnotes

¹  A Provider-Based Attestation is a voluntary application to support a provider’s claim that a hospital’s facility or organization is sufficiently integrated with the main provider to be treated as an integral and subordinate part of the provider.  42 C.F.R. § 413.65(b)(3)(i), (ii); see also CMS Ex. 3.

²  “Provider-based status” means a “relationship between a main provider and a provider-based entity or a department of a provider, remote location of a hospital, or satellite facility, that complies with the provisions of this section.”  42 C.F.R. § 413.65(a)(2).

³  A “main provider” is “a provider [such as a hospital] that either creates, or acquires ownership of, another entity to deliver additional health care services under its name, ownership, and financial and administrative control.”  42 C.F.R. § 413.65(a)(2).

⁴  A “campus” is “the physical area immediately adjacent to the provider’s main buildings, other areas and structures that are not strictly contiguous to the main buildings but are located within 250 yards of the main buildings, and any other areas determined on an individual case basis, by the CMS regional office, to be part of the provider’s campus.”  42 C.F.R. § 413.65(a)(2).

⁵  My findings of fact and conclusions of law appear in bold and italics.

⁶  To calculate distance between a main provider and the facility for which it seeks on-campus provider-based status, CMS measures from any point of a physical facility that serves as the site of patient services to the facility seeking on-campus provider-based status.  81 Fed. Reg. 79,562, 79,703 (Nov. 14, 2016).  Here, CMS measured the distance from East Alabama’s main inpatient building to the Spencer facility.  See CMS Br. at 7 n.2; CMS Ex. 1 at 2.

⁷  East Alabama correctly observes CMS’s citations suggesting extreme deference on my part refer to the specific context of whether CMS elects to impose penalties on individuals or entities enrolled to bill the Medicare program.  P. Br. at 13-14 (observing cases cited by CMS discuss the lack of ALJ and Board discretion to review CMS’s exercise of discretion to impose civil money penalties).  Yet in those circumstances, if challenged before an ALJ, CMS must demonstrate a factual basis for the precedent conditions necessary to allow it to exercise its discretion.  And even in the case of civil money penalties, the regulations require me to evaluate the reasonableness of the amounts selected by CMS if contested by the penalized party.

⁸  East Alabama urges me to rely on the ALJ decision in St. Vincent’s for its persuasive value, contending its reasoning aptly fits the circumstances of this case.  P. Br. at 17.  The ALJ in St. Vincent’s ultimately remanded the matter to CMS for further proceedings because in his view, CMS failed to “state in clearly and thoroughly articulated terms why approval would be to the detriment of beneficiaries of the program or in some way run counter to the regulatory purpose of 42 C.F.R. § 413.65.”  DAB CR1734 at 8 (emphasis in original).  But ALJ decisions are only persuasive to the extent they conform to law and regulation.  For the reasons explained herein, I decline to apply the formulation proffered by the ALJ in St. Vincent’s and cited by East Alabama.

⁹  East Alabama contends “[CMS’s] conclusion focuses narrowly on [the Spencer facility]” but “should have focused on the relationship between the larger Annex (i.e., the “area”) and the main buildings.  P. Br. at 20-21; see also P. Br. at 10.  But the regulation does not require CMS to contemplate whether a parcel of land is part of a provider’s campus.  Instead, 42 C.F.R. § 413.65(b)(3)(iii) provides that “[w]henever a provider submits an attestation of provider-based status for an on-campus facility or organization . . . CMS will . . . make a determination as to whether the facility or organization is provider-based.” (emphasis added); see also 42 C.F.R. §§ 498.3(b)(2), 498.5 (determinations appealable to the DAB include CMS’s determination “[w]hether a prospective department of a provider, remote location of a hospital, satellite facility, or provider-based entity qualifies for provider-based status under § 413.65 of this chapter.”).

¹⁰  The Regional Office considered East Alabama’s evidence that supported the requirements in 42 C.F.R. § 413.65(d), and other factors, such as the reasons East Alabama chose to expand its oncology department and its difficulties in determining where to locate the facility.  CMS Ex. 1 at 2-3.

¹¹   East Alabama attempted to remedy this shortcoming after its request was denied by modifying its website to state “we can provide medical transportation for you to the main facility.”  CMS Ex. 10.  But as CMS points out, this does not establish regularly available transportation.  Nor does it specify to what degree medical or non-medical transportation could be provided.  CMS Br. at 13 n.5.  Moreover, East Alabama has since removed that statement from its website and now makes no mention of transportation services to the Spencer facility at all.  See e.g., Cancer care, East Alabama Health, https://www.eastalabamahealth.org/find-a-service/cancer-care/ (last visited Feb. 12, 2024).  It therefore appears East Alabama’s claim to provide regular transportation services was an ad hoc effort to qualify the Spencer facility for on-campus provider-based status and not an established, routinely provided aspect of its patient services.

¹²   Though assessed in the context of whether the Spencer facility could reasonably be considered part of East Alabama’s campus, CMS has in fact demonstrated that walking between them would be inadvisable and require navigation that “is not considered reasonable patient movement on a main provider’s campus.”  CMS Ex. 1 at 2.  East Alabama appears to concede that walking between the two sites would be plainly unreasonable as well, P. Br. at 22, which lends support to CMS’s conclusion that the Spencer facility was not a clearly and unequivocally integral and subordinate part of the same campus as East Alabama.  65 Fed. Reg. at 18,506.