departmental appeals board dab2269 - family health services of drake county inc. (09.03.1009)

8/7/2019 Departmental Appeals Board DAB2269 - Family Health Services of Drake County Inc. (09.03.1009)

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Department of Health and Human Services DEPARTMENTAL APPEALS BOARD

Appellate Division

)In the Case o f: ) DATE: September 3, 2009

)Family Heal th Services o f )

Darke County, In c . , ))

P e t i t i o n e r , ) Civ i l Remedies CR1862) App. Div. Docket No. A-09-45)) Decis ion No. 2269- v . - ))

Centers fo r Medicare & )Medicaid Serv ice s . )- - - - - - - - - - - - - - - - ~ - - - - - - - - - )

FINAL DECISION ON REVIEW OFADMINISTRATIVE LAW JUDGE DECISION

Family Heal th Serv ices o f Darke County (Family Heal th ) , aFedera l ly Qua l i f i ed Health Center (FQHC), appealed th e November14, 2008 dec i s ion of Admin i s t ra t ive Law Judge (ALJ) Steven T.Kessel in Family Health Serv ices of Darke County, In c . , DABCR1862 (2008) (ALJ Remand Decis ion) , and h is February 10, 2009Revised Decision (ALJ Revised Dec i s ion) . l The Centers fo rMedicare & Medicaid Serv ices (CMS) appealed th e ALJ RevisedDecis ion .

Sect ion 491.5(a) (3) ( i i i ) o f 42 C.F.R. r equ i res t ha t , if FQHCMedicare " se rv ices a re fu rn i shed a t permanent u n i t s in more thanone l o ca t i o n , each u n i t i s independently considered fo r . . .approval as an FQHC." Pr io r to 2002, Family Health opera ted a

1 The ALJ i s sued both dec is ions under Docket No. C-08-366.


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2 CMS-approved FQHC in one loca t ion . 2 In 2002, Family Heal th addeda second permanent u n i t in an add i t iona l loca t ion ; in 2004, itadded a t h i rd permanent u n i t in a t h i rd loca t ion . At i s sue herea re th e e f f e c t ive da te s fo r FQHC Medicare pa r t i c ipa t ion fo r ~ h e second and t h i rd loca t ions . In th e ALJ Remand Decision, th e ALJupheld CMS's determina t ion adopting an e f f e c t i v e date o fSeptember 8, 2005 fo r both add i t iona l loca t ions . In th e RevisedDecision, th e ALJ modif ied th e e f f e c t i v e dates to June 30, 2005(second l oca t ion) and August 29, 2005 ( th i rd loca t ion) .Family Heal th argues t h a t th e ALJ should have adopted e a r l i e re f f e c t ive da tes , s pe c i f i c a l l y December 19, 2002 and Apr i l 1,2004 fo r th e second and t h i rd loca t ions r espec t ive ly .Pe t i t i one r Reques t fo r Review (P. RR) a t 2. CMS argues t h a t th eALJ was c o r re c t i n o r ig ina l ly upholding September 8, 2005 as th ee f f e c t ive date and should not have modif ied t h a t da te . CMS RRa t 2.Family Heal th prev ious ly appealed t h i s di spu te to th e Board.See DAB No. CR1518 (ALJ's i n i t i a l decision) and DAB No. 2092(Board 's remand dec i s ion) . In DAB-No. 2092, th e Board remandedth e case because th e i n i t i a l record before th e ALJ wasi n s u f f i c i e n t t o suppor t th e ALJ's summary judgment upholding ane f f e c t ive da te o f September 8, 2005. The Board d i rec ted th e AL Jto develop the record , and he did so .Based on th e developed record , we conclude t h a t th e AL J has nowc or r e c t ly determined t h a t Family Heal th 's arguments in suppor t o fe a r l i e r e f f e c t ive da te s a re without mer i t and t ha t CMS d id n otabuse its d i sc re t i o n in adopting September 8, 2005 as th ee f f e c t ive date fo r th e two loca t ions . We base t h i s conclusionon th e fol lowing cons ide ra t ions .

The governing r egu la t ions provide t h a t th e e f f e c t ive dateo f approval fo r an FQHC i s th e date on which CMS accepts a2 Family Health qua l i f i e s as an FQHC under sec t ion

1861(aa) (4) o f th e Soc ia l Secur i ty Act because it rece ives agran t under sec t ion 330 of the Public Heal th Serv ice (PHS) Act(42 U.S.C. 254b) . See a l so 42 C.F.R. 405.2401(b)(de f in i t ion o f FQHC). Sect ion 330 gran t s a re admin i s te red byth e Heal th Resources and Services Administ ra t ion (HRSA), acomponent of the Department o f Health and Human Services .


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signed agreement which assures t h a t the FQHC meets a l lFederal requirements .

Pr io r to 2005, Family Heal th d id not reques t CMS approvalfo r these two permanent u n i t s as FQHC Medicare l o ca t i o n s o rprov ide t he regu la to ry assurances o f compliance with FQHCMedicare requirements .

On r e c e i p t of these reques ts and assurances in 2005, CMSfo l lowed its es tab l i shed process fo r approvingFQHCl o ca t i o n s . The e f f e c t i v e date of pa r t i c ipa t ion r e su l t i n gfrom t h i s process was September 8 , 2005.

In l i g h t o f Family Heal th ' s f a i l u r e t o reques t CMS approva lo r make assurances o f FQHC compliance p r i o r to 2005, FamilyHeal th 's pre-2005 dea l ings with CMS about th e loca t ions a renot , as Family Health a l l eged , grounds fo r concluding t h a tCMS abused its d i sc re t ion by dec l in ing to approve e a r l i e re f f e c t ive da te s o f pa r t i c ipa t ion .

We t h e r e f o r e conclude t h a t th e e f f e c t i v e date i s September 8,2005, as the ALJ or ig ina l ly determined ( in the ALJ RemandDecis ion) , and reve rse h is determina t ion ( in the ALJ RevisedDecis ion) o f e f f e c t i v e da te s o f June 30, 2005 and August 29,2005.

Standard o f ReviewWhether summary judgment i s appropr ia te i s a l e g a l i s sue t ha t weaddress de novo. Lebanon Nursing and Rehab i l i t a t ion Center , DABNo. 1918 (2004) . Summary judgment i s appropr ia te if the re a reno genuine d ispu tes o f f a c t mate r i a l to th e r e s u l t . Evere t tR eh ab i l i t a t i o n and Medical Center , DAB No. 1628, a t 3 (1997).Family Heal th i den t i f i e s no dispu ted mate r i a l f a c t s on appea lbefore the ALJ o r th e Board. See ALJ Remand Decision a t 2, n .2 .The s tandard o f review on a disputed conclusion o f law i swhether th e AL J dec is ion i s erroneous.BackgroundFQHC Medicare reimbursement i s paid on a p e r - v i s i t b a s i s by aMedicare f i s c a l in te rmediary . CMS Ex. 1, a t 3, c i t i ng 42 C.F.R.


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4 405.2460 e t seq.3 The f i s c a l in te rmediary ca lcu la t es an FQHC'sp e r - v i s i t reimbursement r a t e from cos t s repor ted on th e FQHC'sannual co s t r ep o r t . 4 CMS Ex. 1, a t 4; 42 C.F.R. 405.2462 e tseq . During the per iod a t i s sue , CMS's na t iona l FQHC f i s c a lin te rmediary was United Government Serv ices (UGS).An e n t i t y i s e l i g i b l e fo r Medicare reimbursement fo r FQHCs e r v i ce s as o f " the da te on which CMS accep t s a signed agreementwhich as sures t ha t th e . . . FQHC meets a l l Federa lRequirements." 42 C.F.R. 489.13(a) (2) ( i ) ; see a l so 42 C.F.R. 405.2434(b) . CMS or ig ina l ly approved Family Health as an FQHCin th e Medicare program e f f e c t i v e October 1, 1991. CMS Ex. 1 ,.a t 4 . At t ha t t ime, Family Heal th was loca ted a t 5735 MeekerS t r e e t , Greenvi l le , Ohio. Id . In 2002 and 2004, Family Heal thadded two ad d i t i o n a l loca t ions to its opera t ion , f i r s t a tCent ra l Avenue, Greenvi l le , Ohio, and then a t North Main St r e e t ,Arcanum, Ohio. P e t i t i o n e r (P.) Ex. 1, a t 2-4. Therea f t e r ,Family Heal th included th e cos t s from these loca t ions in itsFQHC cos t r epor t s submit ted to UGS, claimed FQHC Medicarereimbursement fo r pa t i e n t v i s i t s a t th e two loca t ions , and wasre imbursed fo r those v i s i t s . CMS Ex. 1, a t 4.In a UGS au d i t o f Family Heal th 's cos t r epor t fo r th e f i s c a l yea rending (FYE) March 31, 2003, th e aud i to r discovered t h a t "FamilyHeal th had included s i t e v i s i t s from non-FQHC c e r t i f i e d s i t e s onits cos t r epor t fo r the 5725 Meeker Road l oca t ion . " CMS Ex.29,a t 2 . UGS subsequent ly determined t h a t Family Health hadinc luded v i s i t s from the two unapproved s i t e s a t i s sue in itscos t r epor t s fo r FYE March 31, 2004, 2005, and 2006. Id . InJanuary 2005, "a UGS au d i to r no t i f i e d Family Health t ha t while it

3 C i t a t i o n s o f exh ib i t s are to th e record in C-08-366.4 F i s ca l i n t e rmedia r i e s are CMS con t rac to r s t h a t process

Medicare Par t A claims; c a r r i e r s are CMS con t rac to r s t h a tprocess Par t B c la ims. CMS Ex. 18, a t 6. General ly , P a r t A"provides b a s i s pro tec t ion aga ins t t he cos t s o f hosp i t a l ,r e l a t e d pos t -hosp i t a l , home hea l th s e rv ices , and hospice care.... " 42 U.S.C. 1395c. FCQH se rv ices a re funded underMedicare P a r t B. 42 U.S.C. 1395k(a) (2 ) (D). However, " [s ] incepayment fo r s e rv ices covered under th e FHQC benef i t s i s made ona c os t - r e l a t e d bas i s , [FQHC] cla ims are processed by a f i s c a lin te rmediary ." 61 Fed. Reg. 14,640, 14,656 (Apri l 3, 1996).


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5 was pe rmiss ib l e to f i l e one cos t r epor t fo r mul t ip l e FQHCl o ca t i o n s , it was necessary to f i l e a CMS 855A ap p l i ca t i o n(855A) fo r th e Cent ra l Avenue and Main S t re e t loca t ions . " P. Ex.2, a t 1.In May 2005 and success ive months, Family Health f i l ed form 855Aand o th e r documents reques ted by UGS needed to complete th eap p l i ca t i o n s fo r t he two loca t ions . CMS Exs. 2, 6. OnSeptember 19, 2005, CMS no t i f i e d Family Heal th t ha t it had"accepted [Family Health 's] r eques t fo r approval as a [FQHC] inth e Medicare program" fo r t he Cent ra l Avenue and North Mainl o ca t i o n s and t ha t th e "ef fect ive date of pa r t i c ipa t ion i sSeptember 8, 2005." CMS Exs. '4 , 8.Family Heal th reques ted a hear ing before an ALJ, arguing t h a tth e e f f e c t ive da te s should be a t l e a s t as e a r l y as th e da tes CMSbegan re imbursing it fo r FQHC se rv ices a t these l o ca t i o n s .CMS moved fo r summary d ispos i t ion , which Family Heal th opposed.The, ALJ granted CMS's motion, upholding CMS's determina t ion o fSeptember 8, 2005 as the e f f e c t i v e date fo r Medicarep a r t i c i p a t i o n fo r th e two loca t ions . DAB No. CR1518, a t 1 .Family Heal th appealed th e ALJ's dec is ion to th e Board. TheBoard remanded th e case to th e ALJ because he er red in f a i l i ngto cons ide r whether undisputed mate r i a l f a c t s a l leged by FamilyHeal th could suppor t e a r l i e r e f f e c t i v e da te s and because heer red in concluding t h a t t he regu la t ions a t i s sue ves ted non-reviewable d i sc re t i o n in CMS to se t e f f e c t i v e da te s fo r FQHCapproval fo r Medicare FQHC reimbursement . DAB No. 2092, a t 2 .We a l so noted t ha t -

[ t ]he ALJ's review in t h i s case was mate r i a l l y hampered byth e f a c t t h a t CMS, in i t s i n i t i a l f i l i ng and p r i o r tomoving fo r summary d ispos i t ion , d id not respond to th efac tua l a sse r t ions and arguments made by Family Heal th inits Request fo r Hear ing. Afte r Family Health repea tedt he se arguments in its br i e f i n oppos i t ion to CMS'smotionfo r summary d i s p o s i t i o n , th e ALJ s pe c i f i c a l l y reques ted CMSto f i l e a r ep ly b r i e f to address "arguments ra i sed byPe t i t i one r which were not addressed by CMS in its i n i t i a lbr ief" ( l e t t e r t r ansmi t t ed August 17, 2006). CMS d id n o t doso .


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6 Id . a t 5. Moreover, on appeal before the Board, CMS d id no tf i l e a b r i e f . Id . a t n.S . Therefore , p r i o r to th e Board ' sremand of t h i s case , CMS never disputed the fac t s a l l eged byFamily Health and f i l ed no response to Family Heal th 's argumentsconcerning th e s ign i f i cance of those f ac t s . In add i t ion ,r e levan t documents were no t then in the record .In response to th e Board's remand, the ALJ remanded the case toCMS pursuant to 42 C.F.R. 498.78(b) . Order da ted June 15,2007. On January 17, 2008, eMS i s sued a "Reconsidered Decis ionfo r I n i t i a l Medicare FQHC C er t i f i ca t i on Effec t ive DatesFollowing Remand from ALJ" in which it "determined t h a t thee f f ec t i ve date of pa r t i c ipa t i on of [ the two locat ions] i sSeptember 8 , 2 0 0 5 . " CMS Ex. 1, a t 2.Family Heal th appealed CMS's reconsidera t ion decis ion to th e ALJ.The ALJ i n i t i a l l y upheld CMS's determinat ion of September 8,2005. ALJ Remand Decision a t 1 . Therea f t e r , he i s sued aRevised Decis ion adopt ing e f f ec t i ve da tes o f June 30, 2005 andAugust 29, 2006, th e r e spec t ive da tes Family Health f i l e d CMSAt te s t a t i on Sta temen ts fo r the two loca t ions . ALJ RevisedDecis ion ' a t 1. Family Health appea ls both of these dec i s ions ;CMS a p p e a l ~ the ALJ Revised Decis ion .AnalysisFor th e fo l lowing reasons , we determine t h a t the e f f ec t i ve datefo r FQHC Medicare pa r t i c ipa t i on fo r both loca t ions i s September8, 2005. 5

1 . CMS approved the two locat ions as Medicare-el ig ibleFQHC s i t e s pursuant to applicable regulat ions and i t spubl ished FQHC approval process . The ef fect ive dateresul t ing from th i s process was September 8, 2005.

In 2005, Family Health reques ted CMS approval of these tw ol oca t ions as FQHC Medicare s i t e s by f i l i ng 8SSAs and At te s t a t i on

5 We have fu l ly considered a l l arguments ra i sed by FamilyHeal th on appeal and reviewed the f u l l record , r ega rd less ofwhether we have spec i f i ca l ly addressed pa r t i cu la r a s s e r t i ons o rdocuments in t h i s decis ion .


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Statements fo r each loca t ion . 6 On rece ip t o f Family Heal th ' s200S r eques t s , CMS fol lowed i t s es tab l i shed process fo rapproving FQHC loca t ions and th e e f f e c t i v e date r e su l t i n g fromt h i s process was September 8, 200S. Below we di scuss ther e levan t r egu la t ions and CMS po l i c i e s , and t h e i r ap p l i ca t i o n toth e f a c t s o f t h i s case .Subpar t A of Pa r t 491 o f 42 C.F.R. es tab l i shes "FQHCs Condit ionsfo r Coverage" fo r FQHC Medicare reimbursement. Sect ion491.S(a) (3) ( i i i ) s t a t e s :

Permanent unit in more than one location. If. . .se rv ices a re fu rn i shed a t permanent u n i t s in more than onel o ca t i o n , each u n i t i s independen t ly considered fo r . . .approval as an FQHC.

Family Heal th does not di spu te t ha t the Cent ra l Avenue and NorthMain loca t ions a re permanent u n i t s t h a t requi red sepa ra t eapproval by CMS. See P. RR a t S.Sect ions 40S.2430 and 40S.2434 address th e FQHC approvalrequ i rements and process . For approval , an en t i t y i s requ i redto "assure[] CMS t h a t it meets the Federa l ly q u a l i f i e d h ea l t hcen t e r requ i rements spec i f i ed in t h i s subpar t and p a r t 491, asdescr ibed in 40S.2434(a) . " 42 C.F.R. 40S.2430(a) (1 ) ( i i ) .When t h i s and o ther s ec t ion 40S.2430(a) (1) requ i rements a re met,"CMS sends th e en t i t y two copies of the agreement . . The en t i t ymust s ign and re tu rn both copies of the agreement to CMS." 42C.F.R. 40S.2430(a) (3) . " I f CMS accep t s the agreement f i l ed byth e [FQHC], CMS r e tu rns to th e cen te r one copy o f the agreementwith th e n o t i ce o f acceptance spec i fy ing the e f f e c t ive date (see 489.11) , as determined under 40S.2434." 42 C.F.R. 40S.2430(a) (4 ) .

6 As discussed in subsequent sec t ions o f t he dec i s ion ,Family Heal th took o ther ac t ions in re fe rence to t he se l o ca t i o n sp r i o r to 200S and rep re sen t s t ha t it bel ieved t ha t t he se ac t ionswere a t t e s t a t i o n s and reques ts fo r CMS approval o f th e l o ca t i o n sas FQHC s i t e s . However, CMS has now a r t i c u l a t e d reasonablegrounds fo r t r e a t i ng th e pre-200S ac t ions as inadequate toc ons t i t u t e reques t s and a t t e s t a t i ons fo r FQHC approval .


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8 Sect ion 405.2434(b) provides t h a t th e e f f e c t i v e da te o f t h i sagreement (with one i r r e l e v a n t except ion) i s " the da te CMSaccepts the s igned agreement , which assures t h a t a l l Federa lrequirements a re met." Simi la r ly , sec t ion 489.13(a) (2) ( i)p rov ides t ha t , fo r an agreement with an FQHC, the e f f e c t ive da te" is t he da te CMS accep t s th e signed agreement which assure s t h a tth e ... FQHC meets a l l Federa l requirements ."Sect ion 405.2434 s e t s fo r th s tandards fo r the "con ten t and te rmso f th e agreement ." CMS t r ea t s a document t i t l e d "At tes ta t ionSta temen t fo r Federa l ly Qual i f ied Health Centers" (A t tes ta t ionStatement) ( s e t fo r th in Exhib i t 177 o f CMS's Sta te Opera t ionsManual (SOM)) as th e agreement requi red by sec t ion 405.2430.CMS Ex. 22, a t 2-3 (sec t ion 2826B o f SOM as o f May 21, 2004);CMS Ex. 21, a t 2 (sec t ion 2826 o f SOM as o f March 14, 2002); CMSEx. 7 (A t tes ta t ion Statement) .As th e n a t io n a l FQHC Medicare f i s c a l in te rmediary , UGS wasre spons ib l e fo r i n i t i a l l y process ing documents fo r FQHC-approvalr eques t s . 7 CMS Ex. 1, a t 2. In 2005, Family Health reques tedCMS's approval of th e add i t iona l loca t ions as FQHCs by f i l i ngwith UGS 855As, At tes t a t ion Statements , and o ther suppor t ingdocuments t h a t UGS reques ted . CMS Exs. 2 and 6. The l a s treques ted documents were submit ted September 6, 2005. CSM Exs.2, a t 3; and 6 , a t 3. UGS reviewed and ve r i f i e d Family H ea l th ' sdocumenta t ion and, on September 8, 2005, informed CMS t h a t ithad "found no evidence to ind ica te th e app l ica t ion should bedenied."a CMS Exs. 2, a t 1, and 6, a t 1 . CMS s t a t e d t ha t it

7 Family Health argues t h a t CMS has improperly "delegated"th e FQHC approval process to th e f i s c a l in te rmediary . P. RR a t14. This argument i s without mer i t . The record shows t h a t ,while th e f i s c a l in te rmediary p rocesses th e documents andv e r i f i e s f a c t s requi red for the FQHC determina t ion , CMS makesthe de te rmina t ion . See CMS Exs. 4, 8.

a UGS s ta ted in its September 8, 2005 l e t t e r s to CMS t h a tit had enc losed cop ies o f th e completed 855A app l ica t ions and"suppor t ing documentat ion" and t h a t it had ve r i f i e d th e da tae lemen ts on th e app l ica t ion ; checked ind iv idua l s andorgan iza t ions on th e app l ica t ion to ver i fy t h a t none werec u r re n t l y sanc t ioned , excluded, o r t he sub jec t o f a pendingf raud review; and ve r i f i e d th e loca t ion of the app l ican t ando f f i c e r s and ownership . CMS Exs. 2, a t 1 and 6, a t 1. CMS a l so(Continued. . . )


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9 " rou t ine ly uses th e date o f [UGS's] reconunendation l e t t e r as th ee f f e c t ive da te so t h a t any delay by CMS in reviewing th eapp l i ca t ion wi l l not de lay th e FQHC's admission i n to th eMedicare program." CMS Ex. 1, a t 2; see a l so CMS Ex. 22, a t 5(CMS St a t e Operat ions Manual s t a t i ng : " I f th e ap p l i ca t i o n i scomplete and a l l requirements have been met when the [RegionalOffice] reviews th e app l ica t ion , th e [Regional Office] w i l l uset he da te o f t he in te rmed ia ry ' s reconunendation l e t t e r as th ee f f e c t ive d a t e . " ) CMS, the re fo re , used th e September 8, 2005da te o f UGS's recommendation as th e e f f e c t i v e date fo r FamilyH ea l th ' s tw o add i t iona l loca t ions . Id .Family Heal th has not shown any e r r o r in CMS's process ing o f its2005 ap p l i ca t i o n s fo r approval but argues t ha t CMS abused itsd i sc re t i o n by n o t t r e a t i ng e a r l i e r even t s as s u f f i c i e n t toc ons t i t u t e app l ica t ions fo r approval of th e ad d i t i o n a l s i t e s asFQHC permanent un i t s . We expla in next why we r e j e c t t h a targument .

2. The ALJ correct ly found that CMS did not abuse i t sdiscret ion by refusing to recognize Family Health's or CMS'sact ions prior to 2005 as bases for approving ear l i eref fect ive dates .

Family Heal th makes a number o f arguments in suppor t o f itsp o s i t i o n t h a t CMS abused its d i sc re t ion when it re fused toapprove e a r l i e r ' e f f e c t i v e da tes . These arguments are based oneven t s occurr ing before 2005. In th e ALJ's and th e Board ' sp r i o r reviews o f t h i s case (DAB No. CR1518 and DAB No. 2092),CMS d id no t d ispu te fac t s r e l i e d by Family Health o r addresst h e i r s ig n i f i c an ce . As discussed below, th e subsequentdevelopment of the record shows why these fac t s provide nogrounds fo r a l t e r ing CMS's e f f e c t i v e date determina t ion o fSeptember 8, 2005.Family Heal th r e l i e s on the fo l lowing undisputed f a c t s . FamilyHeal th added th e loca t ions a t i s sue to its opera t ion a f t e r l o c a l

(Continued. . .)r ep resen t s t h a t UGS "obtained informat ion from [HRSA] i nd ica t ingtha t " th e tw o loca t ions "were given FQHC s t a tus by HRSA inNovember 2002 and March 2004 r espec t ive ly . " CMS Ex. 1, a t 2.


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10 doc to rs , in 2002 and 2004, asked to J01n Family Heal th . FamilyHeal th d id not have room a t its Meeker Road f a c i l i t y fo r th edoc to rs , so th e docto rs remained in t h e i r r espec t ive p ra c t i c el o ca t i o n s on Cen t ra l Avenue and Main St r e e t . For each l o ca t i o n ,Family Heal th obtained a change of scope to its PHS gran t .A f t e r consu l t ing with its Medicare Par t B ca r r i e r , Palmet to GBA(Palmet to) , regarding the f i r s t add i t iona l loca t ion , FamilyHeal th f i l ed 855Bs and 855Rs with Palmet to for the doc torsp ra c t i c i n g a t th e loca t ions ; included th e cos t s o f the loca t ionsin its annual FQHC cos t r epor t s f i l e d with UGS; sought FQHCMedicare re imbursement fo r v i s i t s o f Medicare b e n e f i c i a r i e s toth e l o ca t i o n s ; and was re imbursed fo r FQHC se rv ices a t t he sel o ca t i o n s on a p e r - v i s i t b a s i s .As exp la ined below, these fac t s do not suppor t Family H ea l th ' sp o s i t i o n . Ins tead , these fac t s and th e evidence developed onremand show t ha t , p r io r to 2005: ( I ) Family Health d id n otreques t CMS's approval o f these loca t ions as FQHC s i t e s ; (2)Family Heal th d id not submit the requi red assurances to secureapprova l o f th e s i t e s ; (3) CMS d id not approve t he se l o ca t i o n sas FQHC s i t e s ; and (4) Family Health did not reasonab ly r e ly onadvice from CMS about secur ing such approvals .

a. Failure to request approvalFamily Health a s s e r t s t ha t it "request [ed] approval o f th eCen t ra l Avenue and Main S t re e t loca t ions asFQHCs" in 2002 and2004 by submi t t ing 855Bs and 855Rs to Palmet to , its Medicarec a r r i e r , and t ha t eMS abused its d i sc re t ion in dec l in ing tot r e a t Family Heal th ' s submissions as reques ts fo r approval and ab a s i s fo r accep t ing , p r i o r to 2005, an FQHC agreement with itfo r t he se l o ca t i o n s . P. RR a t 9, 11; P. Reply a t 5 . Ci t ing 42C.F.R. 424.510{a) , Family Health s t r e s s e s tha t , p r io r t o 2006,CMS r egu la t ions did not r equ i re e n t i t i e s to use any par t i cu l a rCMS form in reques t ing approval o f FHQqs o r FHQC l o ca t i o n s . 9 P.

9 Sect ion 424.510{a), which was not e f f e c t i v e u n t i l 2006,prov ides t h a t "prov iders and supp l ie r s must submit enrol lmentin fo rmat ion on t he app l i cab le enrol lment ap p l i ca t i o n . "


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11 RR a t 1, 3 a t n .1 , and 8. The ALJ re j ec ted s imi la r arguments,concluding t h a t f i l i ng o f an 855A was requ i red . 10 ALJ RemandDecis ion a t 4 .A review of the con ten t and purpose of th e 855B and 855R andFamily H ea l th ' s use o f th e forms shows t ha t the ALJ c o r re c t l yre j e c t e d Family Heal th ' s p o s i t i o n .

Both forms r e l a t e to Par t B reimbursement paid by Medicarec a r r i e r s ; they a re unre l a t ed to FQHC Medicare re imbursementpa id by f i s c a l i n t e rmedia r i e s . CMS Ex. 1, a t 3-4 ; see a l so61 Fed. Reg. a t 14,655.

The 855B i s t i t l e d "Appl icat ion fo r Health Care Suppl i e r slJh a t w i l l B i l l Medicare C ar r i e r s . CMS Ex. 20, a t 1 . FQHCs

use th e 855B t o e n ro l l fo r Pa r t B reimbursement paid byc a r r i e r s fo r non-FQHC se rv ices . l l CMS Ex. 1, a t 3; 61 Fed.Reg. 14,640, a t 14,655 {Apri l 3, 1996}. Form 855Bi n s t ruc t s FQHCs to apply fo r such ca r r ie r -pa id

10 We do not review th e ALJ's conc lus ion , s ince , asdiscussed he re in , we f ind t h a t Family Health , pr io r t o 2005,never reques ted FQHC approval fo r these loca t ions by any means,much l e s s by f i l i ng an 855A. We note , however, t ha t th e ALJ'sconclus ion seems to have been based in pa r t on h i s a s se r t i o nt h a t th e 855A i t s e l f "addressed . . . spec i f i c [FQHC]pa r t i c ipa t ion requirements ." ALJ Remand Decision a t 4 . The AL Jc i t e s no support in th e record fo r t h i s asse r t ion . See CMS Ex.18 {blank CMS 855a} .

11 In the preamble to t he fede ra l r egu la t ion adopt ing th eFQHC ru l e s , CMS discussed "the b i l l i ng mechanism fo r non-FQHCse rv ices" provided by FQHCs. 61 Fed. Reg. 14,640, a t 14,655.{Examples o f such se rv ices inc lude physic ian v i s i t s o fhosp i t a l i zed FQHC p a t i e n t s o r th e t echn ica l component o f x- rayse rv ices . Id . a t 14,646.} CMS s t a t e d t h a t

[ i ]n orde r to b i l l fo r non-FQHC se rv ices a c l i n i c must havea separa te Par t B b i l l i ng number. The FQHC must ob ta in theb i l l i n g number from th e Medicare Par t B c a r r i e r .

Id . a t 14,655.
http:///reader/full/required.10http:///reader/full/required.10http:///reader/full/required.10


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12 reimbursement as a "Mul t i -Spec ia l ty C l in i c . " CMS Ex. 20,a t 10.

The 855R i s t i t l e d "Medicare Federa l Heal th Care Benef i t sEnrol lment Appl ica t ion - Reassignment of Medicare Benef i t s . "CMS Ex. 1, a t 3. The 855R i s used to rea s s ign Medicarereimbursement . Here, the doc to rs jo in ing Family Heal thused 855Rs to rea s s ign t h e i r r i g h t s to P a r t B payments toFamily Heal th . Id .

Based on these cons id era t ions , the ALJ c o r re c t l y concluded t h a tFamily Heal th ' s f i l i ng o f 855Bs and 855Rs did not c o n s t i t u t ereques t s fo r approval o f these loca t ions as FQHCs and t h a t CMSd id not abuse its d i sc re t ion in dec l in ing to t r e a t them as such.ALJ Remand Decision a t 5, 7-10. The 855Bs and 855Rs a reunre la ted to any aspec t o f CMS's process fo r approving FQHCl oca t ions . Moreover, Family Health f i l ed the forms with itsMedicare c a r r i e r , Palmet to , which it knew o r should have knownhad no ro le in process ing reques ts fo r approval o f FQHCl oca t ions . Fina l ly , Family Heal th po in t s to noth ing on t he seforms t h a t would have given Palmet to any reason to be l ieve t h a tFamily Health was reques t ing anything beyond approval to b i l lPalmetto fo r non-FQHC P a r t B se rv ices .Family Heal th r e l i e s on th e case o f H a r r i e t t Cohn Center , DABNo. 1817 (2002) , which considered 42 C.F.R. 489.13(a} {2} ( i) inthe context of c e r t i f i c a t i o n o f a community menta l h ea l t hcen t e r . Family Health argues t h a t , under Cohn, CMS should haveapproved t he se loca t ions as of the da tes Family Health f i l ed th e855Bs and 855Rs. P. RR. a t 11-12. We disagree and f ind th efac t s in Cohn were mate r i a l l y d i f f e r e n t . Family Heal th ' sre l i ance on Cohn i s based on its asse r t ion t ha t Family Healtha c tua l ly had "supp l ied CMS with provider agreements , inc ludinga t t e s t a t i o n s ... e f f e c t i v e 12/19/02 and 4/01 /04 ." Id . a t 11,c i t i ng th e 855Bs and 855Rs f i l ed for these loca t ions . Asdiscussed above, these 855Bs and 855Rs were not agreements o ra t t e s t a t i o n s r e levan t to qua l i fy ing fo r FQHC reimbursement .Family Heal th a l so argues t ha t , by r e ly ing on Family H ea l th ' sf a i l u r e t o f i l e 855As, CMS v io l a t ed the Admin is t ra t ive ProcedureAct , 5 U.S.C. 551 e t seq . P. RR a t 11-13. Family Healthr ep resen t s , t h a t p r i o r to 2006, CMS "es tab l i shed a p ra c t i c e o faccept ing FQHC reques ts without requir ing submissions o f a CMS


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13 855A .... " and t h a t CMS cannot change t h a t p ra c t i c e withoutengaging in no t ice and comment rulemaking. 12 Id . a t 12. Thisargument has no mer i t . F i r s t , Family Health c i t e s no suppor t inth e record fo r its r ep resen ta t ion about CMS's p ra c t i c e p r i o r to2006, and CMS den ies it. See CMS Response a t 29, c i t i ng CMS Ex.21, a t 7. Second, as d i scussed above, noth ing in the record onremand sugges t s t ha t , a t th e t ime it f i l ed th e 855Bs and 855Rs,Family Heal th was reques t ing CMS's approval fo r these l o ca t i o n sas FQHC u n i t s . Thus, t h i s i s not a mat te r of CMS's a rb i t r a r i l yr e fus ing to accommodate Family Heal th ' s i nadve r t en t use o f a"wrong form." Rather , in f i l i ng 855Bs and 855Rs Family Heal thused th e r i g h t forms and f i l ed them with th e r i gh t Medicareco n t r ac to r fo r complete ly d i f f e r e n t purposes ( i . e . , qua l i fy ingfo r non-FQHC P a r t B reimbursement and reass igning phys ic ianpayments) . Moreover, Family Health has never exp la ined why, ifit considered these forms to be reques ts fo r FQHC approval o fits add i t iona l loca t ions , it d id no t submit them to UGS, itsf i s c a l in te rmediary , to which Family Health submit ted its FQHCcos t r e p o r t s . Nor does Family Health rep re sen t t ha t it everasked CMS o r UGS about how to obta in FQHC approval fo r t he se 'l oca t ions . Given these circumstances, CMS can hardly be sa id tohave abused its d i sc re t ion in dec l in ing to t r e a t these f i l i ngsas reques t s fo r FHQC approval .

b. Failure to provide assurancesSect ion 405.2430{a) (1) ( i i ) of 42 C.F.R. r equ i res an e n t i t yapplying fo r FQHC approval to "assure[ ] CMS t ha t it meets th eFede ra l ly q u a l i f i e d hea l th cen te r requirements s p ec i f i ed in t h i ssu b p a r t and p a r t 491, as descr ibed in 405.2434{a) ." FamilyHeal th argues t h a t it gave such assurances p r i o r to 2005. P. RRa t 5-6, 9. It r e l i e s on the genera l assurances o f compliancewith Medicare requirements in th e 855Bs and 855Rs and th e FQHCA t t e s t a t i o n Statement t ha t it executed in 1992 when it f i r s tapp l i ed fo r ~ Q H C Medicare reimbursement . P. RR a t 5-6, 9.Family Heal th a s s e r t s t ha t i t s 1992 At tes t a t ion Statement shouldbe s u f f i c i e n t because none of the At tes t a t ion Sta temen ts were

12 Family Health i ncor rec t ly c i t e s DAB No. 2092 in suppor to f t h i s a s se r t i o n . P. RR a t 12, c i t i ng DAB No. 2092 a t 12,n .10 . The Board s ta ted only t ha t th e FQHC approval processinc luded "a reques t by th e FQHC ' t o pa r t i c ipa t e in th e Medicareprogram. " ' DAB No. 2092, c i t i ng 42 C.F.R. 405.2430{a).


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14 " s i t e s pe c i f i c , " i.e., i de n t i f i e d th e address o f th e l o ca t i o n onth e Statement . P. RR a t 6.The ALJ c o r re c t l y r e j e c t e d Family Heal th ' s pos i t ion . ALJ RemandDecision a t 7-10. FQHCs a re sub jec t t o spec i f i c uniquerequi rements s e t out in 42 C.F.R. Par t 405, subpar t X, and P a r t491. 13 Unlike most o ther e n t i t i e s t h a t are re imbursed on th eb a s i s o f cos t r epor t s , an FQHC i s approved by CMS on th e b a s i so f th e FQHC's s e l f - a t t e s t a t i o n to CMS t h a t it meets th eapp l icab le requirements , not on th e b as i s o f surveys to confi rmcompliance. 61 Fed. Reg. a t 14,641; CMS Ex. 21, a t 2 (SOM 2825 s t a t i ng , "The ' [S ta te Agency] survey and c e r t i f i c a t i o nprocess does not apply to FQHCs."). CMS's r egu la t ions r e f l e c tthe c r i t i c a l ro le o f FQHC assurances by both r equ i r ing them andadopt ing s tandards fo r them. 42 C.F.R. 405.2430(a) (1) ( i i )and 405.2434(a) . In th e SOM, CMS provided FQHCs with spec i f icassurance language and requi red the assurances to be made underpena l ty o f per ju ry . CMS Ex. 19, a t 6. The A t t e s t a t i o nSta temen t s e t out in the SOM prov ides :

I c e r t i f y t ha t I have reviewed each Federalrequirement in 1861(aa) (4 ) o f the Soc ia l Secur i tyAct and th e f edera l ly qua l i f i ed h ea l t h cen t e rrequirements spec i f i ed in 42 CFR Par t 405 Subpart X,and Par t 491, as descr ibed in 405.2434(a) and t h a t

(name o f f a c i l i t y ) i s cur ren t ly incompliance with these requirements and r egu la t ions . Iagree to inform CMS o f any changes t ha t r e s u l t innoncompliance .

This language i s c l e a r ly designed to ensure t h a t th e persongiv ing the assurances i s knowledgeable about FQHC requirementsand has considered whether th e loca t ion a t i s sue meets thoserequ i rements . CMS the re fo re reasonably informed Family Heal th

13 Requirements in 42 C.F.R. 405, subpar t X address th e FQHCagreement , charges and refunds t o benef i c i a r i e s , t rea tment o fb e n e f i c i a r i e s , t e rmina t ion of the agreement , re ins t a t ement ,pub l ic no t ice , change in ownership, scope o f se rv ices , andpreven t ive pr imary se rv ices . Par t 491 of 42 C.F.R. addressesphys ica l p l a n t and environment requirements , organ iza t iona ls t ruc tu r e , s t a f f i ng , prov i s ion of se rv ices , pa t i e n t h ea l t hrecords , and program eva lua t ion .


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15 in its r econs ide ra t ion l e t t e r t h a t CMS does no t "cons ider [ the855B assurance] spec i f i c enough to assure CMS t h a t an FQHCmeets , and w i l l cont inue to comply with , the FQHC requirementsspec i f i ed in 405 Subpart X and Par t 491, as descr ibed in 42C.F.R. 405.2434(a) . " CMS Ex. 1, a t 4.Simi la r ly , CMS reasonably decl ined to r e ly on th e At te s t a t i onSta temen t Family Health executed in 1992 fo r its Meeker S t r e e tl oca t ion . As CMS as s e r t s , "[a] supp l ie r cannot a t t e s t t ha t as i t e l oca t ion t h a t i s no t y e t in ex i s t ence i s in compliance withFQHC requi rements . " CMS Response a t 21. Moreover, th e f a c tt h a t none of th e At t e s t a t i on Statements i den t i f i ed a p a r t i c u l a rs i t e i s i r r e l evan t sinc'e each was f i l ed in conjunc t ion wi th ar eques t fo r th e approval of a s pe c i f i c loca t ion .

Family Health argues t h a t the 1992 At tes t a t ion Statement shouldbe s u f f i c i e n t because it inc ludes an assurance t h a t FamilyHeal th w i l l r epo r t "any change t ha t r e su l t s in noncompliance."P. Response a t 9, c i t ing P. Ex. 5, a t 2. Family Heal th reasonst h a t th e 1992 assurance would have r equ i red it, as t he e n t i t yopera t ing a l l of th e loca t ions , to r epo r t noncompliance a t anyof its s i t e s . This po in t i s no t persuas ive . CMS i s responsib lefo r seeing t h a t a l l FQHC s i t e s a re in compliance with Medicarerequi rements . The preamble to th e FQHC ru l e s s t a t e s t h a tsec t ion 491.5(a) (3) ( i i i ) requires separa t e assurances fo r eachl oca t ion and exp la ins CMS's reasons for requi r ing s i t e - spec i f i capprovals . 61 Fed. Reg. a t 14,641 ( s t a t ing "each s i t e mustindependent ly a t t e s t to meeting th e [Medicare] cond i t ions . " )Moreover, in th e 1992 l e t t e r expla in ing how to apply to qua l i fyas an FQHC, CMS ( then the Health Care Financing Adminis t ra t ion)expla ined t o po t en t i a l FQHCs t h a t the e n t i t y would have to f i l es pec i f i c forms inc luding th e enclosed " a t t e s t a t i on ' s t a t emen t . "P. Ex. 5, a t 8. It went on to expla in t h a t -

[o]ne of each of these forms must be completed fo r eachen t i t y (s i te ) t ha t wishes to be approved as an FQHC. Thisi s t rue r ega rd less of whether the e n t i t y i s opera ted asp a r t of ... a group of e n t i t i e s ( i . e . , mul t ip l e c l in i cs i t e s ) .

Id . Family Health does not deny t h a t it received t h i s l e t t e r(which it submit ted fo r th e record) p r i o r to th e t ime a t i s suehere .


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16 c . Lack o f approval by eMS

Ci t ing numerous documents, Family Health a s s e r t s t ha t th e ALJer red in co'ncluding t h a t CMS had not approved th e loca t ions asFQHCs p r i o r t o 2005. P. RR a t 4, 10. The ALJ explained whythose documents d id not cons t i tu t e acceptance by CMS o f an FQHCagreement with Family Heal th . ALJ Remand Decision a t 7-9 .Brie f ly , those documents and reasons include th e fo l lowing .

Family Health r e l i e s on documents showing t ha t HRSAmodif ied the scope o f its PHS gran t to inc lude t he sel oca t ions . See, e . g . , P. Exs. 7, 10, 14, 16; CMS Exs. 2,a t 32; 6, a t 31. As th e ALJ s t a t ed , these Changes in Scopewere reques ted by Family Health fo r t he purpose o f" jus t i f [ i ng ] th e inc lus ion of each of th e tw o loca t ionswithin the PHS g r an t . " ALJ Remand Decis ion a t 7. He a l sopoin ted out t h a t th e change reques ts were f i l ed with andmade by HRSA, not CMS. Id . The changes were aprecond i t ion to th e l oca t ions ' FQHC Medicare e l i g i b i l i t yb u t no t p a r t o f th e CMS approval process i t s e l f . 14

Family Heal th r e l i e s on documents assoc ia t ed with itsf i l i ng o f 855Bs and 855Rs with Palmet to , inc ludingPa lme t to ' s no t ices t h a t Family Heal th had been given a"Medicare group provider i de n t i f i c a t i on number (PIN)" as a"Mul t i -Spec ia l ty Group" fo r th e two loca t ions . P. Exs. 13,15. As discussed above, Palmet to approved only FamilyH ea l th ' s r e c e i p t o f Par t B reimbursements fo r non-FQHC14 The HRSA Change in Scope check l i s t , which FQHCs use to

ob ta in such changes, s pe c i f i c a l l y s t a t e s :I f th e hea l th cen te r rece ives cos t -based reimbursement fromMedicare by v i r tue o f being a FQHC, the h ea l t h cen t e r w i l lno t i f y th e CMS Regional Off ice regarding any approved s i t echanges.

P. Exs. 7, a t 11; 14, a t 12. For both s i t e s , Family Heal thasse r t ed t h a t it would do so . Id . ; see a l so CMS Ex. 23. YetFamily Heal th of fe red no evidence t h a t it d id so . See, e . g . , P.Ex. I , a t 6-10 ( s t a t ing tha t Family Health assured HRSA t h a tit would no t i fy th e CMS Regional Off ice o f th e changes b u tdesc r ib ing only its f i l i ng of 855Bs and 855Rs with Palmet to . )
http:///reader/full/itself.14http:///reader/full/itself.14http:///reader/full/itself.14


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17s e r v i ce s . Palmet to had no au th o r i t y to process FQHCapprovals and no reason to th ink t h a t Family Health wasreques t ing FQHC approval . Family Health should have knownt h a t UGS, th e na t iona l FQHC f i s c a l in te rmediary , was th econ t rac to r with au th o r i t y to process FQHC approval s .

Family Health r e l i e s on correspondence with UGS about itsco s t r e p o r t s . The f i r s t l e t t e r , dated September 26, 2003,informs Family Health t h a t UGS has found from its " i n i t i a lreview" t h a t Family Heal th ' s FYE03 cos t repor t "meets th eminimum s tandards fo r accep tab i l i ty" and t h a t it w i l lcon tac t Family Health if it needs add i t iona l in fo rmat ion .P. Ex. 17. The second l e t t e r , dated November 3, 2003, a l soconcerns UGS's " i n i t i a l review" o f th e FYE03 cos t repor tand informs Family Health t ha t th e " ten ta t ive se t t l ementamount fo r t h i s per iod" i s $13,000 payable to FamilyHeal th . P. Ex. 18. Both o f these l e t t e r s concern " i n i t i a lreviews" and " t e n t a t i v e se t t l emen ts . " Nei ther i nd ica test h a t UGS o r CMS has determined t h a t th e cos t s i de n t i f i e d i nth e FYE03 cos t r epor t have been f i na l ly approved, much l e s stha t CMS was approving th e add i t ion o f the Cent ra l Avenuel o ca t i o n . 15 CMS subsequent ly determined t ha t the $13,000payment and payments in subsequent years were i n e r ro r . Weagree wi th the ALJ t ha t th e t e n t a t i v e se t t l ement paymentsd id "not v e s t r igh ts in [Family Health] to [an e a r l i e r ]pa r t i c ipa t ion date fo r th e two loca t ions .... " ALJRemand Decis ion a t 8.

15 CMS submit ted an a f f i d a v i t from a manager a t Nat iona lGovernment Services (NGS) , which "acquired th e Medicare Par t ACont rac t from its a f f i l i a t e , [UGS] , in January 2007." CMS Ex.29, a t 1 . She s t a t ed , t h a t upon discover ing th e "non-FHQCc e r t i f i e d s i t e i s sue" in 2003, f u r th e r "guidance from CMS hadbeen sought regard ing p roper handl ing of the se rv ices rendered"and t h a t "[p]ending CMS i n s t ruc t ion , th e FI decided to inc ludeth e s i t e v i s i t s from th e non-FQHC c e r t i f i e d s i t e s ( in t h i s case ,Centra l Avenue and North Main S t re e t loca t ions) on th e cos trepor t s so le ly fo r purposes of se t t l i ng t he cos t r epor t s and toi s sue no t ices o f reopening so t h a t th e FI could l a t e r excludeth e n o n -c e r t i f i e d s i t e v i s i t s if CMS i n s t ruc ted t ha t th e v i s i t sshould be excluded." Id . a t 3. Family Health of fe red noevidence to rebu t t h i s s ta tement .


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18 Therefore , th e ALJ c o r re c t l y found t h a t CMS's ac t ions pr io r t o2005 d id not c o n s t i t u t e approval o f the loca t ions as FQHCs.

3. The ALJ did not err by reject ing Family Health'sequitable arguments.

Family Health made a number of equ i tab le arguments in support o fits proposed e f f e c t ive da te s t h a t th e ALJ prope r ly re j ec ted . 16RR a t 7. We di scuss them below.Both p a r t i e s agree t ha t using an e f f e c t i v e date o f September 8,2005 i n s t ead o f th e e a r l i e r dates for which Family Health arguesw i l l have a s ign i f i c a n t f inanc ia l impact on Family Heal th .Family Heal th a l l eg es t ha t t h i s e f f e c t i v e date would crea te th e" r i s k t h a t Family Health could be shu t down, l eavingapproximate ly one t h i rd o f Darke County 's popula t ion in amedical shor tage area without a ' s a f e ty ne t ' medica l prov ider . "P. Ex. 1, a t 15. Family Health fu r the r a l l eg es t ha t th e twol o ca t i o n s and se rv ices provided the re always met th e f edera lr egu la to ry s tandards fo r FQHC serv ices ( id . a t 17) and t h a t itwas not t ry ing to c i rcumvent "any o v e r a l l CMS po l icy o r gain anyp a r t i c u l a r advantage" from i t s ac t ions (RR a t 7 ) .Nei ther the Board nor th e ALJ have th e au th o r i t y to r e l y on suchfac to rs in dec id ing the e f f e c t i v e dates o f pa r t i c ipa t ion as anFQHC fo r t he se loca t ions . See ALJ Remand Decis ion a t 9, c i t i ng

16 We do not , however, aff i rm th e ALJ's re l i ance onSchweiker v Hansen, 450 U.S. 785 (1981) fo r th e propos i t ion t h a t"an agency i s not requi red to accept a func t iona l equiva lent o fan ap p l i ca t i o n which i s not th e prec i se form and conduct t h a tth e agency requ i res . " ALJ Remand Decis ion a t 6. In Schweiker,a Soc ia l Secur i ty worker i ncor rec t ly advised a woman t h a t shewas i n e l i g i b l e fo r benef i t s , and, as a r e s u l t o f t h i s adv ice ,she d id not f i l e a wri t t en app l ica t ion . The Soc ia l Secur i ty Actprov ides t h a t benef i t s a re ava i lab le only to a person who "hasf i l ed an app l ica t ion" (42 U.S.C. 402(g) (1) (D)) and th eimplementing r egu la t ions provided t h a t only w r i t t en ap p l i ca ti o n ss a t i s f y th e s t a tu to ry requirement (20 C.F.R. 404.601 (1974)) .The Court held t h a t it could not gran t the woman b e n e f i t s underan es toppe l theory in con t raven t ion of these s t a tu to ry andr egu la to ry requirements . Schweiker , 450 U.S. a t 790. Here, th eALJ i de n t i f i e d no s t a tu to ry o r regu la to ry s tandard r equ i r ing th euse o f th e 855A in 2002 o r 2004.


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19 Heckler v . Community Health Services of Crawford County, 467U.S. 51 (1984). As the Board pointed out in DAB No. 2092, CMScould cons ider these f ac to r s in eva lua t ing how to proceed int h i s mat te r (DAB No. 2092, a t 16) . CMS rep re sen t s t ha t , a f t e rth e ALJ's remand, it d id consider Family Heal th ' s a s se r t i o n t h a t" i t would be forced out of business" if it were not g ivene a r l i e r e f f e c t ive da tes . CMS Ex. 30, a t 4 .Family Health a l so a s s e r t s t ha t it "researched th e i s sue ,contac ted CMS, and r e l i e d on the CMS NewsFlash to guide itse f f o r t s to prope r ly add" th e two loca t ions . RR a t 8, c i t i ng P.Ex. 1 ( a f f i da v i t of its Execut ive Direc to r ) ; P. Ex. 3 (a f f idavi to f its Medicare Bi l l ing Clerk) . To t he ex ten t Family Heal th i sr a i s ing an es toppe l defense , it has no meri t s ince the ALJ andth e Board a re bound by th e e f f e c t i v e da te provis ions of 42C.F.R. 489.13 and have no au thor i ty to waive them. ALJ RemandDecis ion a t 9, see a l so Regency on th e Lake, DAB No. 2205(2008) .In any even t , es toppe l aga ins t the federa l government, ifava i l ab le a t a l l , i s presumably unava i lable absent "a f f i rmat ivemisconduct" by th e fede ra l government. Off ice of PersonnelManagement v . Richmond, 49 6 U.S. 414, a t 421 (1990) . Cer ta in lyes toppe l i s unava i lable where the par ty f a i l s to show even th et r a d i t i o n a l elements of es toppe l , such as reasonable r e l i a n c e .Heck ler , 467 U.S. a t 60 ( f i sca l in te rmediary gave prov ide ri n c o r r e c t advice b u t provider fa i l ed to show reasonabler e l i a nc e ) . Here, as CMS po in t s out , even assuming Family Heal thr e l i e d , as it sa id it di d , on informat ion from a Par t B c a r r i e r ,Palmetto , and a CMS Provider Enrol lment NewsFlash, t ha t re l i ancewas not reasonable in l i g h t of the governing r egu la t ions ando th e r informat ion Family Health had. eMS Response a t 24-29.Family H ea l th ' s Medicare Bi l l ing Clerk (Clerk) r ep resen t s t ha t ,fo r th e Ce.ntral Avenue loca t ion , she contac ted Palmet to "andasked about th e app l ica t ions needed to add [two new doctors] toth e Family Health Cent ra l Avenue loca t ion ." P. Ex. 3, a t 3.The Clerk does not s t a t e t ha t she asked Palmet to how to ob ta inapproval of the loca t ion as an FQHC s i t e . The Clerk s t a t e s t h a tPalmetto i n s t ru c t e d h er to submit an 855R and t ha t no mentionwas made o f an 855A. 17 Id . As CMS pointed ou t in its

17 For th e Cent ra l Avenue loca t ion , Palmet to subsequent lya l so informed Family Health t ha t , before the new doc tors could(Continued... )


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20 r econs idera t ion l e t t e r , Palmet to gave th e co r r ec t advice if th eques t ion was how to add new physic ians to a group. CMS Ex. 1,a t 4.CMS r ep resen t s (and Family Heal th does not d i spu te) t h a t th eNewsFlash (P. Ex. 30) was i s sued by Nationwide Mutual InsuranceCompany, th e Medicare c a r r i e r fo r Ohio pr io r t o Palmetto . CMSResponse a t 27; see a l so P. Ex.2, a t 5. CMS a s s e r t s t ha t th eNewsFlash "was not in tended to i n s t ruc t s i t e loca t ions on how toe n ro l l as FQHCs." Id . Rather , th e purpose was to informs u p p l i e r s about new CMS forms (855I , 855B, and 855R) t h a t wouldbe used by ca r r i e r s as o f November 2001. Id . Family Heal thknew o r should have known a t th e t ime t h a t c a r r i e r s were not th ee n t i t i e s t h a t handled FQHC approval . Family Health has shown nob a s i s fo r concluding t ha t it reasonably r e l i e d on th e c a r r i e r ' sNewsFlash fo r guidance on qua l i fy ing th e add i t iona l loca t ionsfo r FHQC reimbursement through a f i s c a l in te rmediary .Therefo re , the ALJ prope r ly re j ec ted Family Heal th ' s equ i tab learguments .

4 . The ALJ erred in concluding that the e f f e c t i v e datesfor these locat ions were June 30, 2005 and August 29, 2005rather than September 8, 2005.The ALJ i s sued a Revised Decis ion in which he concluded t ha t th ee f f e c t ive da tes fo r th e Cent ra l Avenue and Main S t r e e t l o ca t i o n sshould be June 30, 2005 and August 29, 2005, r espec t ive ly .These were th e da te s t ha t Family Health f i l ed At tes t a t ionStatements wi th UGS fo r th e re spec t ive 10ca t ions . 18 Revised

(Continued. . .)be "enro l led as a member of a group, a CMS 855B ap p l i ca t i o nneeds to be completed, so t h a t th e group can be added to oursystem f i l e s . " CMS Ex. 13, a t 14. Family Health did so , andPalmetto approved the Cen t ra l Avenue loca t ion as a "mul t i -s pe c i a l t y group." P. Ex. 13. This in i t s e l f should have p u tFamily Health on no t ice t h a t th e s i t e had no t thereby beenapproved as an FQHC.

18 In the ALJ Remand Decis ion , th e ALJ er roneously s ta tedt h a t Family Health submit ted th e At tes t a t ion Statements fo r bothl o ca t i o n s toUGS on September 8, 2005. ALJ Remand Decis ion(Continued... )
http:///reader/full/10cations.18http:///reader/full/10cations.18http:///reader/full/10cations.18


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21 Decision a t 2. The ALJ s t a t e d t h a t he was r ev i s ing th e dec i s ionbased on h is read ing o f DAB No. 2092, which he concludedrequ i red him to t r e a t the da tes " tha t UGS had every th ing itneeded to c e r t i f y the two f a c i l i t i e s " as th e e f f e c t i v e da tes .Id .The ALJ's ru l ing r e f l ec t s a misunders tanding o f DAB No. 2092.That dec i s ion d id not hold t h a t CMS could not r e ly on itsi n t e rp r e t a t i on of the r egu la t ions and its po l i c i e s i ndetermining e f f e c t i v e da te s fo r FQHCs. Rather , t he dec i s ionfound t h a t , given th e absence o f re l evan t .documents in th erecord and CMS's f a i l u r e to respond to Family Heal th ' sarguments, it was i nappropr i a t e to conclude on summary judgmentt h a t CMS had in fac t r e l i e d on reasonable i n t e rp r e t a t i ons o f th eregu la t ions o r fo l lowed its po l i c i e s . In con t ras t , th e presen trecord shows t h a t Family Heal th f i r s t reques ted FQHC approvalfo r Medicare fo r these loca t ions in 2005; t ha t , t he r e a f t e r , CMSfo l lowed its es tab l i shed process fo r approving FQHC l o ca t i o n s ;and t h a t th e e f f e c t ive da te resu l t ing from t h i s process wasSeptember 8, 2005.Rather than di spu te t h i s , Family Heal th ' s cha l l enge to th e ALJRevised Decision merely r e a s se r t s its arguments fo r s e t t i n g th ee f f e c t ive da tes in 2002 and 2004. We have a l ready exp la ined whyt he se arguments are without mer i t . We do not di scuss themfu r t h e r .Conclusion

We reverse the f indings o f fac t and conc lus ions o f law (FFCLs)in the ALJ Revised Decision.

(Continued... )a t 3. Afte r the dec is ion was i s sued, CMS moved to cor rec t t h i ss ta tement o f f a c t . The AL J then i s sued the Revised Decis ion ,changing th e e f f e c t i v e da te s to th e da te s Family Heal th f i l edth e A t t e s t a t i o n Statements . CMS maintains t h i s cor rec t ion o ff a c t should not have changed th e ALJ's o r i g i n a l conclusion t h a tth e e f f e c t ive date was September 8, 2005.


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22 We adopt th e ALJ's conclusion in th e ALJ Remand Decision t h a tSeptember 8, 02005 was th e e f f e c t i v e date fo r each l o ca t i o n . Wemodify th e FFCLs in the ALJ Remand Decis ion to read as fo l lows:

1. In o rde r to rece ive FQHC Medicare reimbursementfo r FQHC se rv ices provided a t a permanent u n i t ,an en t i t y must r eq u es t CMS's approval fo r th eu n i t and assure CMS t h a t th e un i t meetsapp l i cab le FQHC Medicare requirements .

2. CMS c o r re c t l y determined the e f f e c t i v e da te fo rpa r t i c ipa t ion as FQHCs in Medicare o f th e twou n i t s "at i ssueOto be September 8, 2005.

/ s /Jud i th A. Bal l a rd

/ s /Stephen M. Godek

/ s /Les l ie A. SussanPres id ing Board Member

departmental appeals board dab2269 - family health services of drake county inc. (09.03.1009)

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