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CMS Administrator Vacates Board's Ruling Dismissing Appeal Due To Untimely Filing Of Hearing Request

The Provider filed an appeal from a revised Notice of Program Reimbursement (NPR). The Provider contended that the appeal was timely filed based on the Board's instructions. The Board's instructions presume an NPR is received within five days of the date of its issuance and that an appeal is filed within 180 days from receipt of the NPR. A provider may submit evidence to rebut that its final determination was received after the presumed five-day period. The Provider argued that according to the Board's instructions, only a provider may rebut the five-day presumption and contended that any evidence submitted by the Intermediary rebutting the five-day presumption should not be considered.

The Board held that the Intermediary's certified mail receipt, which showed the Provider received its NPR the day following the issuance date of the NPR, was the best evidence of the Provider's date of receipt of the NPR. The Board concluded the Provider's request for hearing was not timely filed and dismissed the Provider's appeal.

The CMS Administrator noted there was a history of inconsistency in the interpretation of the receipt date. In the June 25, 2004 proposed rule, CMS addressed this inconsistency and proposed the receipt date be presumed to be five days after the postmark date unless the Provider could rebut the five-day rule by showing the receipt date was after the five-day period. The Administrator found the Provider reasonably calculated its date of receipt of the NPR and timely filed its hearing request.

In addition, the Intermediary's argument that the certified mail receipt should be recognized as the date of receipt was not supported under the plain language of the instructions, which allows providers to submit documentation to show the date of receipt was beyond the five-day presumption period. The CMS Administrator vacated the Board's determination and remanded the case to the Board for reinstatement.

Marion Gen. Hosp. v. Blue Cross/Blue Shield of Miss., CMS Adm'r Dec., vacating, PRRB Case No. 05-0448 (C.M.S. Adm'r Nov. 18, 2005).

CMS Administrator Vacates Board's Ruling Granting Provider's Exemption From The Skilled Nursing Facility Routine Cost Limits As A New Provider

St. Joseph Health Service Transitional Care Unit (Provider or TCU) is a separately Medicare-certified hospital-based skilled nursing facility (SNF) established by St. Joseph Health Services, Inc. (SJH). SJH owns and operates St. Joseph Living Center (Living Center), a free-standing residential care/assisted living facility. The Living Center has operated since December 1987. The Provider was established in 1996, and timely filed a new provider exemption (NPE) from the SNF routine cost limits (RCL). The Centers for Medicare and Medicaid Services (CMS) determined the Living Center provided skilled nursing services and, because SJH owned and operated the Living Center, CMS denied the Provider's exemption request finding the Provider operated as a SNF for more than three years prior to being Medicare certified. The Provider argued the Living Center did not provide skilled nursing services equivalent to that of a SNF.

The Board held TCU was an entirely new facility that supplied a broad scope of skilled nursing care and rehabilitative services to patients with relatively intense post-acute needs. In contrast, the Living Center accommodated residents that did not require medical or rehabilitative care. Although the Living Center provided occasional injections to its residents, the Board held the plain language of 42 U.S.C. � 1385i-3(a) prohibits equating a facility that only occasionally furnishes a skilled nursing service to one that is primarily engaged in furnishing skilled nursing services. Finally, the Board held the NPE was designed to address situations such as the Provider's where the occupancy rate during the initial years of providing skilled nursing services reflected an underutilization of services. The Board concluded the Provider qualified for an exemption from the SNF RCL as a new provider. The Intermediary's determination was reversed.

The CMS Administrator noted CMS' policy required both NFs and SNFs to provide the same range of nursing and specialized rehabilitative services. Therefore, the TCU would not be eligible for an exemption from the SNF RCLs as a new provider, since TCU operated as a SNF for more than three years prior to its Medicare certification. However, in St. Elizabeth's Med. Ctr. of Boston v. Thompson, 396 F.3d 1228 (D.C. Cir. 2005), the U.S. Court of Appeals held the record did not show the NF was "primarily engaged" in providing skilled nursing or rehabilitative services and reversed CMS' determination that the NF was a SNF or equivalent. The CMS Administrator found this decision was binding on the present case and remanded the appeal to CMS to apply the court's criteria in St. Elizabeth's to TCU's exemption request. The CMS Administrator vacated the Board's ruling.

St. Joseph's Health Servs. of R.I. v. BlueCross BlueShield Ass'n/BlueCross BlueShield of RI, CMS Adm'r Dec., vacating, PRRB Hearing Dec. No. 2005-D40 (C.M.S. Adm'r July 13, 2005).

CMS Administrator Vacates Board's Ruling And Finds Board Does Not Have Jurisdiction Over Appeal Filed From Revised NPR

The Provider requested that the Intermediary reopen its cost report to increase the disproportionate share hospital (DSH) adjustment for paid Medicaid days and Medicaid HMO days. The Intermediary reopened the cost report and issued a revised Notice of Program Reimbursement (NPR) that adjusted Medicaid paid days as requested by the Provider. The Provider then appealed its DSH calculation relating to Medicaid eligible but unpaid patient days from the revised NPR. The Provider stated it did not request reopening for Medicaid unpaid days because the Intermediary would have denied the reopening request due to the prohibition for such reopenings pursuant to HCFAR 97-2. The Board Majority found the Board had jurisdiction over the Medicaid eligible days issue. After the Intermediary's review of the additional documentation submitted by the Provider, the parties stipulated to the correct number of Medicaid eligible days. The Board accepted the parties' stipulated amount of Medicaid eligible days for the Provider's DSH calculation.

The CMS Administrator held the Board did not have jurisdiction over the appeal. The regulation considers a revised NPR a separate and distinct determination from which to file an appeal. However, the appeal was limited to matters corrected by the revised NPR and did not reopen the entire cost report to appeal. The Administrator determined the revised NPR addressed only Medicaid paid days as the Provider did not request all Medicaid eligible days be counted in the reopening. The CMS Administrator concluded the Provider may not appeal unpaid Medicaid eligible days from the revised NPR and vacated the Board's decision.

St. Rita's Med. Ctr. v. Blue Cross Blue Shield Ass'n/AdminaStar Fed., CMS Adm'r Dec., vacating, PRRB Hearing Dec. No. 2005-D41 (C.M.S. Adm'r July 25, 2005); Rome Mem'l Hosp. v. Blue Cross Blue Shield Ass'n/Empire Medicare Servs., CMS Adm'r Dec., vacating, PRRB Hearing Dec. No. 2005-D42 (C.M.S. Adm'r July 25, 2005).

CMS Administrator Declines To Review Board's Ruling Affirming Intermediary's Allocation Methodology Of FICA Payroll Costs To Employee Benefits Cost Center

The Providers claimed employment taxes in their Employee Benefits cost centers. The Intermediary did not adjust any of these costs on the Providers' Notices of Program Reimbursement (NPR). The Providers appealed the NPRs to the Board and requested their employment-related taxes be reclassified to the Administrative and General (A&G) cost center. The Intermediary subsequently reclassified a portion of the employment taxes but refused to reclassify Federal Unemployment Tax Act (FICA) taxes. The Providers contended that pursuant to instructional letters from CMS, FICA taxes should be classified in the A&G cost center. In addition, CMS precedents supported that employment based taxes such as state and federal unemployment tax and Worker's Compensation should be classified in the A&G cost center as they are not fringe benefits. The Providers argued there was no basis to distinguish FICA taxes from these other taxes. The Intermediary argued that: (1) a final CMS letter clarified that payroll-related taxes should not be allocated through the A&G cost center since that would result in a less accurate cost finding methodology; (2) allocating FICA taxes on the basis of accumulated cost through the A&G cost center results in an improper shifting of costs and; (3) it was appropriate to allocate FICA taxes as employee benefits to cost centers with payroll expenses since FICA taxes are payroll based.

The Board determined the FICA tax was an employee fringe benefit and should be classified to the Employee Benefits cost center. Using the Providers' allocation method would result in the allocation of costs to cost centers that do not contain any employees or direct salary expense. The Board held the CMS letters could be accorded great weight; however, the letters have inconsistent points of view by the same writer and are thus unpersuasive. Finally, the Board found the Intermediary's methodology for allocating FICA costs was more accurate and appropriate than the method proposed by the Providers. The Board affirmed the Intermediary's classification of FICA taxes to the Employee Benefits cost center. The CMS Administrator declined to review the Board's determination.

Pleasant Care 97/98 Payroll Tax Cost Group v. Mutual Of Omaha Ins. Co., CMS Adm'r Dec., declining to review, PRRB Hearing Dec. No. 2005-D43 (C.M.S. Adm'r Aug. 2, 2005).

CMS Administrator Vacates Board's Ruling On Provider's New Provider Exemption Request To The Skilled Nursing Facility Routine Cost Limits Stating Board Did Not Have Jurisdiction Due To Lack Of A CMS Final Determination

The Provider requested an exemption to the SNF routine cost limits (RCL) as a new provider. The Provider's new Intermediary forwarded the package with a favorable recommendation to CMS. CMS informed the Intermediary the Provider's request was not complete and requested that additional documentation regarding three issues related to the exemption request be submitted within forty-five days of CMS' letter. The Provider requested an explanation of why its exemption request was incomplete regarding two items of requested documentation and submitted documentation in response to CMS' third request. The Provider then requested its exemption request and documentation be resubmitted to CMS. CMS denied the Provider's exemption request. The Board noted that the remaining issue before the Board was whether the Provider submitted a complete and timely response to CMS' third documentation request. The Board found the Provider's initial submission was not properly processed between the old and new intermediaries. The Board also found the submission was complete and noted neither the former nor current intermediary indicated the Provider's exemption request was incomplete. The Board held CMS' request addressed interpretation of the documentation rather than completeness of the exemption request, so the forty-five-day response period was not applicable. In addition, the Board found CMS' request for clarification did not make the Provider's application for an exemption request incomplete. The Board reversed CMS' denial of the Provider's exemption request to the SNF RCL as a new provider.

The CMS Administrator found the Provider's exemption request was complete. However, the Administrator held the Board did not have jurisdiction to rule on the merits of the Provider's request as CMS had not rendered a final determination. The CMS Administrator vacated the Board's determination and remanded the appeal to CMS for a final determination.

Covenant Shores Health Ctr. v. BlueCross BlueShield Ass'n\AdminaStar Fed. Il., CMS Adm'r Dec., vacating, PRRB Hearing Dec. No. 2005-D44 (C.M.S. Adm'r Aug. 11, 2005).

CMS Administrator Declines To Review Board's Ruling Affirming CMS' Denial Of Provider's End Stage Renal Disease Exception Request

The Provider furnished end state renal disease (ESRD) services and was reimbursed for outpatient dialysis services under the "composite rate" system. The Provider filed a timely exception request for an atypical services exception to the revised ESRD composite rate. CMS denied the Provider's ESRD exception request due to lack of supporting documentation. The Provider contended: (1) its documentation showed it met the atypical service intensity criteria; and (2) the exception request should have been deemed approved as CMS did not notify the Provider of CMS' determination within sixty days after it was filed.

The Board found the Provider's ESRD exception request did not contain a number of items as required by the regulations. In addition, some of the documentation submitted was for the wrong cost reporting period. The Board Majority held that according to the regulation, the sixty-day time period referred to when CMS must render its determination, not when notice is to be completed. Therefore, the Provider's exception request could not be deemed approved. The Board affirmed CMS' denial of the Provider's ESRD exception request. The CMS Administrator declined to review the Board's determination.

UMass Mem'l Med. Ctr. v. BlueCross BlueShield Ass'n\Associated Hosp. Serv., CMS Adm'r Dec., declining to review, PRRB Hearing Dec. No. 2005-D45 (C.M.S. Adm'r Aug. 3, 2005).

CMS Administrator Declines To Review Board's Ruling Affirming Intermediary's Denial Of Provider's New Provider Exemption Request From The Skilled Nursing Facility Routine Cost Limits

The Provider purchased the right to operate seventeen nursing home beds from another facility and requested an exemption from skilled nursing facility (SNF) routine cost limits (RCL) as a new provider. The Intermediary recommended the Provider's exemption request be approved. CMS denied the Provider's request stating the Provider operated as a SNF under previous ownership. In previous appeals, the Board determined the acquisition of bed rights from an unrelated facility did not justify a conclusion that the facility that originally operated the beds could be considered the previous owner of a provider. However, the Provider is located in the Ninth Circuit and the Board deferred to the ruling in Providence Health System-Washington v. Thompson, No. 02-35912 (9th Cir. Dec. 17, 2003), which in part held that the sale of bed rights qualified as a change of ownership and the denial of a provider's exemption request was reasonable in light of the state of Washington's de facto moratorium to limit SNF beds.

The Provider asserted that skilled services had not been provided by the institution under past or present ownership for a period of more than three years. The Provider also contended the twenty month break in the previous facility's service should be considered with respect to this criteria. However, the Board found the break in service was not a consideration as the previous owner clearly participated in the Medicare and Medicaid programs within the thirty-six month period preceding the Provider's operation. The Board concluded the Provider was not entitled to a new provider exemption from the SNF RCL and affirmed the Intermediary's determination. The CMS Administrator declined to review the Board's determination.

Evergreen Hosp. Med. Ctr. and SNF v. BlueCross BlueShield Ass'n\Premera Blue Cross, CMS Adm'r Dec., declining to review, PRRB Hearing Dec. No. 2005-D46 (C.M.S. Adm'r Sept. 16, 2005).

CMS Administrator Reverses Board's Ruling Relating To DSH Treatment Of Provider's Dually Eligible Subacute Unit Patients Who Have Exhausted Medicare Part A Skilled Nursing Facility Benefits

During the fiscal years at issue, the Provider operated a subacute care unit located in an area of the hospital subject to the Prospective Payment System (PPS), but not part of the Provider's skilled nursing facility (SNF). The Provider claimed patient days associated with dually eligible subacute unit patients who had exhausted their Medicare Part A SNF benefits in the Medicaid proxy of its disproportionate share hospital (DSH) calculation. The Board found the decision in Alhambra Hosp. v. Thompson, 259 F.3d 1071 (9th Cir. 2001), which required the inclusion of subacute days in the DSH calculation, was controlling. The Board also found CMS' current policy was consistent with Congress' intent in relation to treatment of subacute days. However, as CMS' policy applied to fiscal years subsequent to the fiscal years at issue, the Board concluded the Provider's subacute patient days should be included in the calculation of the Medicaid proxy in the determination of the Provider's DSH adjustment. The Board reversed the Intermediary's determination.

The CMS Administrator found the Medicaid proxy specifically excludes patients entitled to Medicare Part A and limits inclusion in the proxy for patients who are only Medicaid eligible. The language prevents inclusion of the Provider's dually eligible subacute unit patients who had exhausted their Medicare Part A SNF benefits in the Medicaid proxy. The Administrator held it was the status of the Medicare patient, as opposed to coverage of the patient on a specific day, as to whether the patient day was included in the numerator of the Medicaid proxy. The CMS concluded the Intermediary properly excluded the dually eligible subacute unit patient days from the Provider's DSH percentage. The CMS Administrator reversed the Board's determination.

Alhambra Hosp. v. BlueCross BlueShield Ass'n\United Gov't Services, CMS Adm'r Dec., rev'g, PRRB Hearing Dec. No. 2005-D47 (C.M.S. Adm'r Sept. 30, 2005).

CMS Administrator Declines To Review Board's Ruling Affirming Intermediary's Application Of The 1984 Reasonable Compensation Equivalent Limits To The Provider's 1991 Cost Reporting Period

The Provider claimed hospital-based physicians compensation on its cost report for fiscal year (FY) 1991. The Intermediary applied the reasonable compensation equivalent (RCE) limits published in the Federal Register in 1985, applicable to FYs beginning on or after January 1, 1984, and disallowed portions of the Provider's claimed compensation. The Provider contended the RCE regulations required that the RCE limits be published in the Federal Register prior to the period in which the cost limits would be applied. As the last cost limits published were applicable to 1984, no cost limits existed for FY 1991. In addition, application of the 1984 cost limits to FY 1991 shifted the cost of hospital-based physicians from the Medicare program to non-Medicare patients. The Intermediary argued that since CMS chose not to revise the RCE limits, the 1984 RCE limits were applicable for the Provider's 1991 cost year.

The Board held the regulation did not require that the RCE limits be updated either annually or at any other stipulated interval. The 1985 Federal Register notice only stated the RCE limits applied to cost reporting periods beginning on or after January 1, 1984. The commentary in the Federal Register indicated the Secretary originally intended to update the RCE limits annually, but the final regulation did not include an annual update as a requirement. The Board concluded the 1984 RCE limits remanded effective until revised by CMS. Therefore, these limits applied to the Provider's 1991 cost reporting period. The Board affirmed the Intermediary's application of the 1984 RCE limits to the Provider's hospital-based physician costs for FY 1991. The CMS Administrator declined to review the Board's determination.

Long Beach Mem'l Hosp. v. BlueCross BlueShield Ass'n\Empire Medicare Services, CMS Adm'r Dec., declining to review, PRRB Hearing Dec. No. 2005-D48 (C.M.S. Adm'r Sept. 6, 2005).

CMS Administrator Vacates Board's Jurisdictional Ruling For Those Providers Without The Prerequisite Dissatisfaction Requirement Needed for An Appeal

The Providers employed Restorative Nursing Aides (RNAs) in the physical therapy department solely to continue the treatment of the physical therapy plan of rehabilitation developed by the Registered Physical Therapist. The Providers claimed RNA salaries in the physical therapy ancillary cost center on their as-filed cost reports. The Intermediary reclassified these costs to the routine cost center based upon patient days. The Board found the Providers did not make a separate charge for RNA services. Under the Providers' charge structure, a patient who received physical therapy services but not restorative therapy services could be charged the same amount as a patient who received both types of services. The Board concluded the Providers had no bases for allocating the RNA costs to the physical therapy department. The Board affirmed the Intermediary's reclassification of RNA salary costs. The CMS Administrator declined to review the Board's determination.

The Providers appealed to the Central District of New York. The court agreed with the Providers that the RNA costs were properly classified in the ancillary physical therapy cost center. The court found the Board's interpretation of Provider Reimbursement Manual � 2200 was arbitrary and capricious and reversed the Board's decision. The case was remanded to the Board to determine the participating providers in the group and the appropriate amounts of reimbursement. The Board noted that since the appeal record contained a Schedule of Providers, it was not necessary to furnish a list of providers in the group. The Board remanded the Providers to the Intermediary for a determination of the amount of reimbursement. The CMS Administrator found that for seventeen of the cost years, the Providers did not claim the costs at issue in the ancillary PT cost center, but claimed costs in the routine cost center. For these seventeen cost years, the Intermediary did not make a disallowance. The Administrator found the Providers failed to request all costs for which they were entitled and, therefore, failed to meet the dissatisfaction prerequisite for filing an appeal. The CMS Administrator vacated the jurisdictional decision of the Board regarding these seventeen Providers and remanded the case to the Intermediary for the six remaining cost years for reimbursement consistent with the court's order.

Pleasant Care Corp. � Restorative Nursing Aides Group v. Mutual of Omaha Ins. Co., CMS Adm'r Dec., vacating, PRRB Hearing Dec. No. 2003-D50 (C.M.S. Adm'r July 11, 2005).

CMS Administrator Declines To Review Board's Ruling Affirming Intermediary's Classification Of Provider's Home Health Agency As A New Provider For Determining The Per-Beneficiary Limits

In early 1993, Nix Health Care Systems (Provider), an acute care hospital, contracted with Outreach Health Services (Outreach), a home health agency (HHA), to establish and operate Nix Home Care as a branch of Outreach at the Provider's location. The parties intended to transition the ownership and operation of the HHA to the Provider. In May 1995, the Provider obtained a new license to operate an HHA and a new provider number. Nix Home Care was paid as a new provider for Medicare reimbursement under the HHA prospective payment system (PPS) for purposes of determining the per-beneficiary limit. The Provider contended the HHA had a twelve-month cost reporting period ending August 12, 1994, and therefore qualified to be reimbursed as an old provider. The Provider argued the change from a branch operated by Outreach to a hospital-based HHA was, at most, a change in corporate structure. The Provider contended 42 U.S.C.A. � 1395x(v)(1)(L)(vi)(I), which states a home office that alters its corporate structure is not to be considered a new provider for purposes of the application of the per-beneficiary limits, was controlling.

The Intermediary argued 42 U.S.C.A. � 1395x(v)(1)(L)(vi)(I) states if an existing free-standing HHA becomes provider-based through a change in ownership after federal fiscal year (FY) 1994, the agency should be considered a new agency for purposes of the application of the per-beneficiary limits. The Intermediary contended that under the process published in the August 11, 1998 Federal Register, the Provider could have requested a change in its designation from a new provider to an old provider. The Board found Nix Home Care operated a branch of Outreach, as opposed to being a component of the Provider, until the Provider obtained a license to operate an HHA and obtained a provider number. Therefore, the Provider did not have a twelve-month cost reporting period ending in FY 1994, did not have historical costs from which to establish an old provider rate, and did not qualify as an old provider. As the Provider went through the certification process and was assigned a base period as a new provider after FY 1994, the Board held the Provider did not meet the requirements in the August 11, 1998 Federal Register to be considered an old provider. The Board concluded the Intermediary properly calculated the Provider's reimbursement as a new provider for purposes of determining the per-beneficiary limit and affirmed the Intermediary's determination. The CMS Administrator declined to review the Board's determination.

Nix Health Care System v. BlueCross BlueShield Ass'n\Trailblazer Health Enterprises, LLC, CMS Adm'r Dec., declining to review, PRRB Hearing Dec. No. 2005-D54 (C.M.S. Adm'r Sept. 21, 2005).

CMS Administrator Declines To Review Board's Ruling Affirming Intermediary's Disallowance Of Provider's Loss On Sale Of Assets

The Provider hired a consultant to determine whether it could continue to be a viable independent hospital or whether it should affiliate with another entity. Thereafter, the Provider was sold, and the sale included the hospital, a skilled nursing facility, and an assisted living facility. On its cost report, the Provider claimed a loss as a result of the sale. The Provider contended the sale met the regulatory criteria for a bona fide sale, because the transaction was made between unrelated parties and the parties bargained in good faith. The Intermediary noted the consultant's report did not include the skilled nursing facility or assisted living facility in the asset evaluation, although these facilities were included in the purchase price. On its cost report, the Provider allocated the purchase price only to fungible assets, and nothing was allocated to property, plant, or equipment. The Intermediary found that as the Provider sold its tangible assets for far less than their fair market value and net book value, none of the purchase price should be allocated to intangible assets. The Intermediary concluded since the Provider did not receive reasonable compensation for its assets, the sale was not bona fide and there was no loss on sale.

The Board found the transaction did not meet the criteria for a bona fide sale because the sale price for the assets did not equal the cash and cash equivalents received by the Provider. In addition, the only valuation furnished by the Provider for the skilled nursing facility and assisted living facility was witness testimony. Finally, the evidence demonstrated the Provider did not receive fair market value as consideration for the assets transferred in the sale transaction. The Board concluded the Provider failed to demonstrate the transaction was a bona fide sale and was, therefore, not entitled to reimbursement for a loss on sale. The Board affirmed the Intermediary's determination. The CMS Administrator declined to review the Board's determination.

Muhlenberg Hosp. Ctr. v. BlueCross BlueShield Ass'n\Veritus Medicare Servs., CMS Adm'r Dec., declining to review, PRRB Hearing Dec. No. 2005-D55 (C.M.S. Adm'r Sept. 25, 2005).

CMS Administrator Reverses Board's Ruling That Included Ohio's Hospital Care Assurance Program Patient Days In Providers' Disproportionate Share Hospital Calculations

The Providers participated in Ohio 's Hospital Care Assurance Program (HCAP). HCAP: (1) reimburses providers for uncompensated patient care costs; (2) is funded on both federal and state levels; (3) was traditionally included as part of the Ohio State Plan approved under Title XIX; and (4) covers individuals who are not recipients of the Medicaid program. The Providers contend HCAP days should be included in the disproportionate share hospital (DSH) Medicaid proxy calculation as HCAP is an approved State Plan under Title XIX. The Intermediary argued that although HCAP is an approved State Plan under Title XIX, HCAP days do not automatically qualify under the DSH Medicaid proxy. The Intermediary stated that when the statute and regulation are read collectively, Medicaid eligibility is required to have the days included in the Medicaid proxy. The Intermediary concluded that since HCAP patients were not eligible for Medicaid, they were not "eligible for assistance under the state plan," and, therefore, inpatient days of care rendered to them could not be included in the Medicaid proxy.

The Board found the federal DSH statute controlling and did not find the Ohio statute intended to limit the federal statute. The federal statute does not limit coverage to Medicaid patients only, but includes patients who qualify for medical assistance under Ohio 's HCAP State Plan. Therefore, the Board concluded HCAP patient days should be included in the Medicaid proxy calculation to determine the Provider's DSH adjustments. The Board reversed the Intermediary's determination.

The Administrator held that as the term "medical assistance" was used in close proximity to various statutory provisions relevant to this issue, "identical words used in different parts of the same act are intended to have the same meaning." Pursuant to the statute, in order for a day to be counted, the individual must be eligible for medical assistance under a State Plan approved under Title XIX, i.e., the federal Medicaid program. The CMS Administrator found the patient days at issue were related to individuals that were not eligible for medical assistance under an approved Title XIX State Plan. Therefore, HCAP days should not be included in the Medicaid proxy of the DSH calculation. The Administrator noted that although the Ohio State Medicaid DSH program may involve some federal financial participation based on uncompensated care provided to individuals, uncompensated care does not constitute "medical assistance," and is by definition for individuals not eligible for Medicaid. The CMS Administrator concluded the Intermediary properly excluded HCAP days from the DSH Medicaid proxy calculation. The CMS Administrator reversed the Board's determination.

Ashtabula County Med. Ctr. v. BlueCross BlueShield Ass'n\AdminiStar Fed., Inc., CMS Adm'r Dec., rev'g, PRRB Hearing Dec. No. 2005-D49 (C.M.S. Adm'r Oct. 11, 2005).

CMS Administrator Declines To Review Board's Ruling Affirming Intermediary's Reclassification Of Providers' Common Space Costs

The Providers included common area square footage costs in the Administrative and General (A&G) cost center and subsequently allocated these costs to other cost centers based on accumulated costs. The Intermediary reclassified the costs to the Plant Operations, Maintenance, and Repair cost center pursuant to the American Hospital Association (AHA) publication, "Cost-Finding and Rate-Setting for Hospitals." The Board noted that neither Medicare regulations nor guidelines address how to allocate common area space on the cost report. Therefore, the Board based its determination on the most logical and accurate method of allocating common area space.

The Board found costs associated with square footage were the same for each square foot in the building as opposed to the unrelated statistic of accumulated cost. As referenced in the AHA publication, there are two acceptable methods for determining common space square footage: (1) The Gross Method � common space is assigned to the physically adjacent cost centers where possible, and to the Plant, Maintenance, and Repair cost center when specific identification is not possible; and (2) The Net Method � common space is eliminated from the cost finding statistic, costs are distributed based on the remaining square feet in the allocation process. The Board found either the gross method or the net method was more accurate in allocating common area space than the Providers' method, because both of the gross and net methods allocate costs to the department based on square footage, which more appropriately reflects the manner in which these costs were incurred. The Board noted the record was not clear as to whether the Intermediary assigned any of the common area costs to the adjacent departments or assigned all the costs to the Plant Operations, Maintenance, and Repair cost center. The Board held the Intermediary must modify its implementation of the gross method if common area costs were not first assigned to adjacent departments before the remaining costs were assigned to the Plant Operations, Maintenance, and Repair cost center or, in the alternative, implement the net method. The Board affirmed, with the modification noted above, the Intermediary's reclassification of the Providers' common area square footage costs from the A&G cost center to the Plant Operation, Maintenance, and Repair cost center. The CMS Administrator declined to review the Board's determination.

Sun Terrance Health Care Center v. BlueCross BlueShield Ass'n\Empire Medicare Servs., and Sun City Ctr. 96 Square Foot Allocations v. BlueCross BlueShield Ass'n\Empire Medicare Services, CMS Adm'r Dec., declining to review, PRRB Hearing Dec. Nos. 2005‑D51 and 2005‑D52 (C.M.S. Adm'r Oct. 3, 2005).

CMS Administrator Vacates Board's Ruling On Provider's Exemption Request From The Skilled Nursing Facility Routine Cost Limits As Board Did Not Have Jurisdiction To Render A Decision Without A Final Determination By CMS

The Provider requested a new provider exemption from Medicare's cost limits for its newly certified skilled nursing facility (SNF). CMS requested additional information regarding the Provider's respite program and, based on the information submitted by the Provider, denied the Provider's exception request stating the documentation was not sufficient. The Board found the Provider's documentation clearly showed the respite program provided services to individuals who received home care and did not meet the needs of individuals who required inpatient services. Although some skilled services were furnished through the respite program, the intermittent services rendered did not represent the standard that a SNF facility must be primarily engaged in providing SNF services. The Board also found the information submitted by the Provider was sufficient to determine the Provider did not operate as a SNF. A complete listing of medical services furnished by the Provider, as requested by CMS, was not necessary to determine the Provider did not operate as a SNF or the equivalent through its respite program. The Board concluded the Provider did not operate as a SNF and was entitled to a new provider exemption from the SNF routine cost limits. The Board reversed CMS' determination.

The CMS Administrator held the Provider met the document completeness requirements to enable CMS to make a determination on the merits of the Provider's exemption request. The Administrator further ruled that CMS had not rendered a final determination, therefore, the Board did not have the authority to rule on the merits of the Provider's request. The CMS Administrator vacated the Board's determination and remanded the case to CMS for a determination on the Provider's exemption request from the skilled nursing facility routine cost limits.

Goleta Valley Community Hosp. a\k\a Goleta Valley Cottage Hosp. v. BlueCross BlueShield Ass'n\United Gov't Servs., CMS Adm'r Dec., vacating, PRRB Hearing Dec. No. 2005-D53 (C.M.S. Adm'r Oct. 3, 2005).

CMS Administrator Reverses Board's Inclusion Of Observation Bed Days And Swing-Bed Days In Calculating The Provider's Available Beds For Disproportionate Share Hospital Payment

The Provider included observation bed days and swing-bed utilization as patient days for purposes of calculating its disproportionate share hospital (DSH) patient percentage. The Intermediary excluded days of services rendered to patients who occupied observation beds and swing-beds, which reduced the Provider's bed count to ninety-seven available beds, and disallowed all the DSH payments. The Provider met all other criteria to qualify for a DSH payment.

The Board found that 42 C.F.R. � 412.105 and PRM � 2405.3.G required the beds at issue to be included in the count. Both the Board and federal courts rejected the Intermediary's position that patient days must include services reimbursable under the prospective payment system (PPS) in order to be counted as a patient day. The Board concluded the observation beds and swing-beds should be considered available beds in determining the Provider's eligibility for DSH reimbursement. As the Provider met the requirement for 100 available beds, the Provider was eligible for DSH reimbursement. The Board reversed the Intermediary's determination.

The CMS Administrator noted that observation bed days are only counted when these patients are formally admitted to a routine patient care area paid under inpatient PPS (IPPS). When a patient in a swing bed hospital requires a hospital level of care and subsequently requires a reduced level of care at a SNF or NF level, the situation is treated as a discharge from the hospital and an admission to the SNF or NF, even if the patient does not physically move. In the 2004 IPPS preamble, the Secretary clarified its position that observation beds and swing beds were not to be included in the bed count. The Secretary noted that several courts have upheld this policy. HCFA Memorandum F.A.-31 also clarified CMS' policy. In the 2005 final rule for IPPS, the Secretary specifically excluded observation beds and swing beds from the counts of available beds and patient days unless the observation bed patient was admitted for acute inpatient care. The CMS Administrator found the exclusion of observation beds and swing beds from the bed count was consistent with the law, manual provisions, and CMS policy. Beds not recognized as an inpatient operating cost under IPPS must be excluded from the available bed count. The CMS Administrator reversed the Board's determination.

Central Tex. Med. Ctr. v. BlueCross BlueShield Ass'n\TrailBlazer Health Enters., LLC, CMS Adm'r Dec.,rev'g, PRRB Hearing Dec. Nos. 2005-D56, 2005-D57, 2005-D58, 2005-D59 (C.M.S. Adm'r Oct. 24, 2005).

CMS Administrator Reverses Board's Ruling, Which Approved Provider's Exception Request To The End Stage Renal Disease Composite Rate Based On Isolated Essential Facility Criteria

Mary Imogene Bassett Hospital (Hospital) furnishes renal dialysis services and opened a satellite dialysis facility. The Hospital qualified as an Isolated Essential Facility (IEF), and the satellite facility applied for an exception to the End Stage Renal Disease (ESRD) composite rate as an IEF. CMS denied both the exception request and reconsideration of its decision. CMS found: (1) the Hospital's surrounding geographical area had changed and the existence of the Hospital and thirteen other ESRD facilities in the satellite facility's geographical area disqualified the satellite facility from qualifying for an IEF exception; (2) the application for the exception was deficient; (3) 50% of the satellite facility's patients drove themselves; (4) the Hospital and the satellite facility were only twenty-four miles apart; and (5) 16% of the same patients that had previously received dialysis services at the Hospital now received services at the satellite facility.

The Board held the satellite facility's exception request should be based on the nearest non-related facility, which was 86.7 miles away in its analysis of the satellite facility's exception request. The Board found it was unreasonable for patients to bear the time and expense to use the facilities upon which CMS based its denial, some as far as 53.7 miles away, given the rural roads and harsh weather conditions within this geographic area. The Board concluded: (1) the satellite facility qualified for an IEF exception to the ESRD composite payment rate; and (2) the satellite facility's excess costs were justifiable, reasonable, and specifically related to the IEF criteria. The Board reversed CMS' denial of the satellite facility's exception request to the ESRD composite rate as an IEF.

The CMS Administrator held the satellite was not the only supplier of dialysis services in its geographical area. The Administrator concluded the satellite did not demonstrate it was isolated under the controlling regulation. The CMS Administrator also found the satellite did not demonstrate that a substantial number of its patients would face additional hardship if they had to rely on other ESRD providers for dialysis and concluded the satellite did not demonstrate it was essential under the controlling regulation. CMS did not review the reasonableness of the excess costs in its denial of the satellite facility's ESRD exception request, because the satellite did not meet the isolated and essential criteria. The Administrator reversed the Board's ruling.

Mary Imogene Bassett Hosp.-Oneonta Satellite Dialysis Facility (ESRD Period Ending 07/01/01) v. BlueCross BlueShield Ass'n\Empire Medicare Servs., CMS Adm'r Dec., rev'g, PRRB Hearing Dec. 2005-D60 (C.M.S. Adm'r Oct. 26, 2005).

CMS Administrator Reverses Board's Rulings And Subjects Providers' Employee Physical Therapists To The Salary Equivalency Guidelines

The Providers employed physical therapists who are paid based on the number of home care visits they performed. The Intermediary applied Medicare's salary equivalency guidelines (Guidelines) to these services and reduced the Providers' allowable program costs and reimbursement. The Board held the Guidelines did not apply to the Providers' employee physical therapists even though they were paid on a fee-for-service basis. In support, the Board cited to In Home Health, Inc. v. Shalala, which was affirmed by the Eighth Circuit. The Board also found the Guidelines could not be used to prove the Providers' costs were substantially out of line, a criteria of the prudent buyer concept. The Board concluded the Intermediary's application of the Guidelines to the compensation of employee physical therapists paid on a per-visit basis was improper. The Board reversed the Intermediary's adjustment.

The Administrator found that where compensation, at least in part, is based on a fee-for-service, the payments are treated as nonsalaried payments under HCFA Pub. 15‑1 � 1403; and the relationship, as a nonemployment relationship for Medicare reimbursement purposes. The salary arrangements in these appeals were not consistent with prudent practices associated with full-time employment and created the same opportunity for abuses as the contractor relationships Congress was concerned about controlling. Section 1861(v)(1)(A) of the Social Security Act gives the Secretary "broad discretion" to determine reasonable costs, and the Administrator found the application of the Guidelines under these facts was reasonable. Although the statute applies to situations where there is an outside contractor relationship, it does not define "under arrangement" as limiting the application of the Guidelines to only nonemployees or outside contractors, nor does it specifically exclude employment situations. The statute refers to the form of compensation rather than the legal relationship between the provider and therapist. The Administrator further ruled that the 1998 amendments to 42 C.F.R. � 413.106(c)(5) were a clarification of longstanding Medicare policy of applying the Guidelines to fee-for-service arrangements. The regulation reflects that the Guidelines were a proxy for what a prudent and cost conscious buyer would pay for a given service. The CMS Administrator reversed the Board's decisions.

Erwine's Home Health Care, Inc. v. BlueCross BlueShield Ass'n\Cahaba Gov't Benefits Admins., and Colorado Home Care, Inc. v. BlueCross BlueShield Ass'n\Cahaba Gov't Benefits Admins., CMS Adm'r Decs., rev'g, PRRB Hearing Dec. Nos. 2005‑D61 and 2005‑D63 (C.M.S. Adm'r Oct. 24, 2005).

CMS Administrator Declines To Review Board's Ruling Allowing Provider's Use Of Grossing Up Methodology Of Cost Finding For Drugs Charged To Patients

The Provider, a skilled nursing facility (SNF), operated under a Medicaid plan that did not allow SNFs to bill Medicaid for drugs charged to Medicaid recipients. Therefore, costs and billing data for Medicaid patients receiving drugs were not collected. The Provider filed its cost report using the "gross up" method of cost finding in order to allocate overhead expenses to the "drugs charged to patients" cost center. The Intermediary disallowed the Provider's use of the gross up methodology because: (1) the Provider did not obtain approval from the Intermediary prior to using this methodology; and (2) the Provider's records were not sufficient to verify the cost and charge data.

The Board found the grossing up methodology was consistent with 42 U.S.C.A. � 1395x(v)(1)(A). The Board held the documentation used by the Provider to gross up its Medicaid costs and charges was appropriate. The pharmacy data was the best data available and produced a reasonable cost to charge ratio. The Board found the grossing up methodology was clearly a more accurate determination of reimbursement than the alternate method of not allowing an allocation of overhead to a cost center. In addition, the Intermediary did not specify any other methodology that may have been more appropriate. The Board concluded the Provider properly used the grossing up methodology of cost finding for drugs charged to patients. The Board reversed the Intermediary's determination. The CMS Administrator declined to review the Board's ruling.

Shady Lawn Nursing Home v. BlueCross BlueShield Ass'n\TriSpan Health Servs., CMS Adm'r Dec, declining to review, PRRB Hearing Dec. No. 2005-D62 (C.M.S. Adm'r Oct. 5, 2005).

CMS Administrator Declines To Review Board's Ruling Reversing Intermediary's Adjustment To Provider's Supervisory Physical Therapy Rate

The Provider furnished physical therapy services to its patients utilizing an outside supplier. On its cost report, the Provider increased the Adjusted Hourly Salary Equivalency Amount (AHSEA) by 30% for costs associated with contracted physical therapy supervisors. The Intermediary reduced the increase over the base AHSEA to 15%.

The Board held 42 C.F.R. � 106(e)(1) establishes a supervisory allowance to be added to the base salary equivalency guidelines for services furnished under arrangement. Both the regulation and PRM � 1412.5 place the burden of proof on the Intermediary to establish a reasonable hourly differential for supervisory therapists. The Board held the Intermediary failed to document a reasonable differential and instead used an arbitrary differential with no support for reasonableness. The Board also held that since the BLS survey documented a 44% salary differential in 1978, a 15% differential in 1995 would be unreasonably low. In St. Joseph Med. Ctr. v. Blue Cross of S. Cal., PRRB Hearing Dec. No. 81-D13 (Feb. 12, 1981), a 35% increase was considered reasonable, and the Board found the 30% increase at issue in this appeal was not proven to be unreasonable by the Intermediary. Finally, the Board noted that in its final position paper the Intermediary argued the Provider did not furnish documentation to support the supervisory hours claimed on the cost report. However, as the Intermediary did not question supervisory hours when it allowed the 15% increase of the base physical therapy rate, the Board did not review the validity of the Provider's supervisory classification. The Board concluded the Intermediary's adjustment to the Provider's salary differential for supervisory physical therapists was arbitrary as the Intermediary did not submit any supporting references. The Board reversed the Intermediary's determination. The CMS Administrator declined to review the Board's ruling.

Alamitos West Convalescent v. BlueCross BlueShield Ass'n\United Gov't Servs., CMS Adm'r Dec., declining to review, PRRB Hearing Dec. No. 2005-D64 (C.M.S. Adm'r Oct. 5, 2005).

CMS Administrator Declines To Review Board's Ruling Disallowing Interest Expense Incurred In Connection With Provider's Deferred Compensation Plan

The Provider implemented a Deferred Compensation Trust Plan (Plan) that received approval from CMS. One of the provisions of the Plan stated the annual contribution liability should be considered a note payable until such time as it and the related interest are paid in full. Compensation was to be paid to the sponsor of the Plan for reasonable administrative and custodial costs, and interest was to be paid on all sponsor liabilities when liquidated. The Provider claimed interest expense related to the Plan on its cost report, which the Intermediary denied. The Provider contended the primary criteria for interest was whether funds were borrowed and that, under the Plan, once the Provider committed to making a contribution, the liability constituted a borrowing until it was funded. The Provider argued that part of the funding mechanism approved by CMS allowed for a delayed deposit that generated interest. The Provider also stated its repayment plan and the periodic withholding of its Medicare payment showed the need to defer payment of its contribution. Finally, the Provider stated that even if no borrowing was found to occur, the costs were allowable as administrative and custodial costs. The Intermediary contended the interest expense could have been avoided if the contribution had been paid annually instead of being held and creating a liability that was not payable until the latest date authorized by Medicare regulations.

The Board found that, pursuant to Medicare regulations, the Plan called for employer contributions to be paid one year after the fiscal year in which the liability accrued. The funding mechanism was not based on the needs of the Provider but instead was based upon a Plan provision that allowed the employer to postpone funding the agreement. The note payable was an obligation at the control of the Provider and did not establish that funds were actually borrowed. The Board held: (1) the record did not show that any money changed hands when the initial liability was created; (2) the Provider did not have a financial need to postpone funding the Plan at year end; (3) there was no justification for the high interest assessed; (4) there was no evidence to support a relationship between costs claimed to be administrative and service fees, and the interest claimed, as the Provider already paid an annual service fee for the Plan; (5) the Plan approved by CMS was for a different provider; and (6) the Plan did not constitute a determination of covered costs. The Board concluded the interest incurred was an expense that could have been avoided and was, therefore, not a necessary or proper cost. The Board affirmed the Intermediary's determination. The CMS Administrator declined to review the Board's ruling.

Hill Country Health Servs., Inc. v. Blue Cross Blue Shield Ass'n\Palmetto Gov't Benefits Admins., CMS Adm'r Dec., declining to review, PRRB Hearing Dec. No. 2005-D65 (C.M.S. Adm'r Oct. 19, 2005).

CMS Administrator Reverses Board's Ruling Including Research Time In Provider's Full-Time Equivalent Resident Count Used To Calculate The Indirect Medical Education Adjustment

The Provider maintained a graduate medical education program during fiscal year 1996, the fiscal year at issue and the Provider's base year for calculating indirect medical education (IME). The Intermediary excluded resident time spent in research activities from the full-time equivalent (FTE) resident count. The Provider contended: (1) resident time spent in research activities as part of an approved residency program was included in the IME calculation; (2) the statute does not disallow research activities regardless of whether they were related to patient care; (3) the regulation requires that residents who work in non-hospital settings be engaged in patient care activities in order to be included in the IME count; and (4) the August 1, 2001 amendment to the IME regulation established new recordkeeping requirements and could not be retroactively applied.

The Board agreed that the controlling regulation does not exclude research time from resident time or require that resident time be related to patient care. The Board also found the 2001 IME amendment was a change in policy excluding non-patient care research time from the resident count and could not be applied retroactively to the Provider's fiscal year 1996. The Board cited to Riverside Methodist Hosp. v. Thompson, No. C2-02-94 (S.D. Ohio July 31, 2003) in support of its position. The Board concluded the Intermediary improperly excluded research time from the FTE resident count used to calculate the Provider's IME adjustment. The Board reversed the Intermediary's determination.

The CMS Administrator found that historically, under the reasonable cost system and the inpatient prospective payment system (IPPS) methodology, only the indirect costs of teaching programs related to patient care were intended for Medicare reimbursement. Therefore, resident time spent exclusively in research activities not related to patient care must be excluded from the IME FTE count. In order to be included in the FTE count, the regulation at 42 C.F.R. � 412.105(f) requires that resident time be in an IPPS or outpatient area of the hospital. The Administrator found the record did not demonstrate that the residents were assigned to either of these areas. The record showed the service area for the time in question was research. The Provider did not submit documentation to show the percentage of time residents saw patients during the research rotation or how the research was related to patient care. The CMS Administrator reversed the Board's determination.

Rhode Island Hosp. v. BlueCross BlueShield Ass'n\Arkansas BlueCross & BlueShield, CMS Adm'r Dec., rev'g, PRRB Hearing Dec. No. 2005-D67 (C.M.S. Adm'r Nov. 10, 2005).

CMS Administrator Declines To Review Board's Ruling Affirming: Intermediary's Adjustment To Physical Therapy Square Footage And Owners' Compensation Costs, And Reversing Intermediary's Denial Of Provider's Routine Cost Limits Exception Request

The Provider is a freestanding skilled nursing facility (SNF) and leases its space from a separate and unrelated hospital. The Board held the Intermediary's adjustment limiting physical therapy square footage to half of the square feet identified as physical therapy/occupational therapy was a more reasonable approach in determining the Provider's physical therapy cost center. The Board affirmed the Intermediary's square footage statistic determination. The CMS Administrator declined to review the Board's ruling.

The Provider claimed owners' compensation on its cost report, classifying the costs as either management or director fees. The Board held the Provider did not submit documentation to support its contention that the services provided by the owners were necessary for the operation of the facility. The Board affirmed the Intermediary's adjustment to the Provider's claimed owners' compensation. The CMS Administrator declined to review the Board's ruling.

The Provider timely requested an exception to the routine cost limits (RCLs). The Intermediary reviewed the Provider's exception request and upon finding it incomplete, in a letter dated May 25, 1999, requested that the Provider submit additional documentation within forty-five days. When the Provider did not furnish the requested documentation, the Intermediary wrote to the Provider on July 14, 1999, denying the Provider exception request. The Board concluded that since the Provider contended it did not receive the Intermediary's May 25, 1999 letter, and without proof of delivery of the letter at issue, the Intermediary improperly denied the Provider's RCL exception request. The Board reversed the Intermediary's denial of the Provider's request for an exception to the RCLs. The CMS Administrator declined to review the Board's ruling.

The Manor House at Riverview v. BlueCross BlueShield Ass'n\AdminaStar Federal-Indiana, CMS Adm'r Dec., declining to review, PRRB Hearing Dec. No. 2005-D68 (C.M.S. Adm'r Nov. 3, 2005).

CMS Administrator Declines To Review Board's Ruling Affirming Intermediary's Adjustment Of Provider's Audit Fees

The Provider signed an engagement letter with its auditors and claimed external audit fees on its cost report. The Intermediary disallowed the portion of the audit fees relating to the year at issue and a portion of the fees for which there was no supporting documentation. The Board found the controlling regulation, 42 C.F.R. � 413.24(b)(2), and Accounting Principles Board (APB) Statement No. 4 require that an expense be incurred before it can be accrued. Therefore, audit service fees for future years could not be accrued in the current fiscal year. The Board noted that although the Intermediary's position was inconsistent over cost reporting periods, the regulation was controlling. The Board affirmed the Intermediary's adjustment of the Provider's audit fees. The CMS Administrator declined to review the Board's ruling.

Columbia Montour Home Health Services v. BlueCross BlueShield Ass'n\Cahaba Gov't Benefits, CMS Adm'r Dec., declining to review, PRRB Hearing Dec. No. 2005-D69 (C.M.S. Adm'r Nov. 2, 2005).

CMS Administrator: Reverses Board's Ruling And Subjects Compensation Of Employee Physical Therapists To The Salary Equivalency Guidelines, And Affirms Board's Ruling Regarding Reclassification Of Interest Expense

The Provider rendered physical therapy home health services utilizing employee physical therapists paid on a per-visit basis. The Intermediary argued fee-for-service therapists were subject to the Salary Equivalency Guidelines (SEGs) and that costs should not exceed what a prudent and cost conscious buyer would pay. The Board found the opinion in In Home Health v. Shalala, 188 F.3d 1043 (8th Cir. 1999) (holding that the SEGs only applied to outside contractors) compelling. The Board held that use of the SEGs was not a substitute for the prudent analysis required by the regulation. The Board reversed the Intermediary's adjustment. The Administrator found that where compensation, at least in part, is based on a fee-for-service, the payments are treated as nonsalaried payments under HCFA Pub. 15-1 � 1403, and the relationship, as a nonemployment relationship for Medicare reimbursement purposes. The salary arrangements in this appeal were not consistent with prudent practices. Section 1861(v)(1)(A) of the Social Security Act gives the Secretary "broad discretion" to determine reasonable costs and the Administrator found the application of the Guidelines under these facts was reasonable. The CMS Administrator reversed the Board's decision.

The Provider is related to a home support entity with whom it shares a number of expenses based upon a statistical formula. The Provider had a bank line-of-credit, with the home support entity as the guarantor of the loan. The loan proceeds were used to cover cash flow deficiencies in the Provider's operating cash account as the Provider's revenues did not cover its cash expenses. The account was not used to pay the home support entity's day-to-day direct expenses. The Intermediary disallowed the entire amount of the interest expense. The Board found the home support entity promptly paid the Provider for its share of common expenses. The Board concluded the interest expense was allowable and should not be treated as a shared expense. The Board reversed the Intermediary's determination. The CMS Administrator summarily affirmed the Board's ruling.

Potomac Home Health Care v. BlueCross BlueShield Ass'n\Cahaba Gov't Benefit Admins., CMS Adm'r Dec., rev'g in part, aff'g in part, PRRB Hearing Dec. No. 2005-D70 (C.M.S. Adm'r Nov. 22, 2005).

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