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CMS Administrator Declines To Review Board's Ruling That Provider's Residency Program Did Not Qualify As A New Program

On December 31, 1995, St. Joseph Community Hospital (St. Joseph or Provider) merged with St. Mary Community Hospital (St. Mary) into Ancilla Health Care, Inc. (Ancilla). An acute care license was maintained for each facility. Ancilla was the sponsoring institution for an American Osteopathic Association (AOA) graduate medical education (GME) internship and family practice residency program at St. Mary. On June 27, 1997, St. Mary surrendered its license, and the AOA residency program was consolidated at St. Joseph.

The Provider contended the residency program at St. Joseph qualified as a new medical residency program pursuant to 42 C.F.R. � 413.86(g)(7) and HCFA Program Memorandum, Transmittal No. A-99-51 (Dec. 1, 1999). The Provider argued it did not have a residency program, and therefore no residents, prior to 1995. The Provider further argued that sponsorship of a residency program was not a determinating factor of new program status.

The Intermediary held the Provider's residency program was an established program relocated from St. Mary. Ancilla's correspondence to AOA regarding the residency program requested continuation of approval of its residency program now located at St. Joseph, not for initial accreditation. Ancilla noted in its request that the boards of the two hospitals were consolidated effective with the merger so the governance of the program remained the same. The Executive Committee of the Council on Postdoctoral Training (ECCOPT) recognized Ancilla as the sponsoring institution of the residency program and granted continuing approval of the residency program at St. Joseph/St. Mary. In addition, AOA's instructional publication states a new application is not required when there is only a change in the training site name.

The Board found that both the controlling regulation and HCFA Program Memorandum A-99-51 defined a new residency program by the existence of the program, not the facility at which the program was located. The Board held the residency program was certified and in existence prior to its relocation to St. Joseph. The Board also found the program's full-time equivalents (FTEs) were counted in prior years for cap purposes when the program was located at St. Mary. The Board concluded: (1) the residency program did not qualify as a new program under 42 C.F.R. � 413.86(g)(7), and (2) the Intermediary's adjustment of the intern and resident counts to the limits established for St. Mary was proper. The Board affirmed the Intermediary's determination. The CMS Administrator declined to review the Board's ruling.

St. Joseph Community Hosp. v. BlueCross BlueShield Ass'n\AdminaStar Fed. � Ind. , CMS Adm'r Dec., declining to review, PRRB Hearing Dec. No. 2005-D71 (C.M.S. Adm'r Nov. 10, 2005).

CMS Administrator Declines To Review Board's Ruling That Provider's Skilled Nursing Facility Routine Cost Limits Exemption Request Was Timely Filed

The Provider applied for an exemption to the routine cost limits (RCLs) for its skilled nursing facility (SNF) as a new provider. CMS found the Provider failed to support its exemption request due to lack of documentation. On October 20, 1999, the Intermediary requested the Provider submit a new SNF RCL exemption request with additional documentation within forty-five days from the date of the notification letter. On Monday, December 6, 1999, the Provider submitted its new exemption request via facsimile (received December 6, 1999), Federal Express (received December 7, 1999), and certified U.S. mail (received December 8, 1999).

The Intermediary denied the Provider's exemption request stating the Provider failed to timely file a new SNF RCL exemption request. The Intermediary contended the starting point for counting forty-five days was the date of its letter, October 20, 1999, making the due date December 3, 1999. In the alternative, the Intermediary contended that if the starting point was the day after the date stamped on its letter, the Provider was responsible to submit its request by Saturday, December 4, 1999. The Board held that pursuant to 42 C.F.R. � 1005.12, the proposed rule for 42 C.F.R. � 405.1801(d)(1) at 65 Fed. Reg. 35,716 (June 25, 2004), Rule 6(a) of the Federal Rules of Civil Procedure, and the practices of the CMS Administrator and the Board, the day following the date of notice is the starting point for computing a deadline. The Board noted the Intermediary did not cite any authority for its position that the starting point was the date stamped on its denial letter. The Board also found the Medicare statute states that when a deadline falls on a weekend, the submission deadline is automatically extended until the first business day thereafter. Again, the Board noted that CMS did not furnish any specific guidelines regarding this issue. The Board concluded the Provider's SNF RCL exemption request was timely filed. The Board reversed the Intermediary's determination and remanded the exemption request to the Intermediary to be considered on its merits. The CMS Administrator declined to review the Board's ruling.

Saddleback Mem'l Med. Ctr. v. BlueCross BlueShield Ass'n\United Gov't Servs., CMS Adm'r Dec, declining to review, PRRB Hearing Dec. No. 2005-D72 (C.M.S. Adm'r Nov. 11, 2005).

CMS Administrator Reverses Board's Ruling And Finds Provider Untimely Filed Its TEFRA Adjustment Request

The Provider requested an adjustment to its Tax Equity and Fiscal Responsibility Act (TEFRA) target amount for fiscal year 1994. The Provider mailed its request 181 days after the date of its Notice of Program Reimbursement (NPR) since the 180th day fell on a Sunday. The Intermediary denied the Provider's request due to untimely filing. The Provider contended its request was timely filed pursuant to Provider Reimbursement Manual � 3004.2 which required the request be submitted, as opposed to being received, within 180 days from the date of the NPR. The Provider recognized the regulation at 42 C.F.R. � 413.40, which requires receipt within 180 days was a higher authority, but asserts it should have been able to reasonably rely on the program instructions. The Provider also noted that prior to September 1, 1995 and during the cost reporting year at issue, the regulation required TEFRA adjustment requests be made within 180 days of an NPR. The Intermediary argued the regulation in place in 1997, when the Provider submitted its TEFRA adjustment request, was the applicable regulation. The manual instruction relied on by the Provider was issued in August 1994 and was tightened up by the regulation in September 1995.

The Board found it was appropriate to associate the regulation in effect during the Provider's cost reporting period. The TEFRA request process is based on the issuance of an NPR and can span several years in which there may be many regulatory changes. It would be unreasonable to require providers to rely upon multiple rules that may apply to a particular cost reporting period. The Board held that pursuant to the regulation and program instructions in effect during the cost reporting period at issue, the date a request was made is the same as the date a request was submitted. Finally, the Board noted the Provider's filing of the request on the 181st day because the 180th day fell on a Sunday was not in dispute. The Board reversed the Intermediary's decision.

The CMS Administrator found the preamble to the September 1, 1995 final regulation confirmed CMS' policy that a TEFRA adjustment request must be received by the Intermediary within 180 days from the date of the NPR. The Administrator found this clarified that CMS consistently interpreted the regulation to mean that "made" equaled "received by the intermediary." The language of the regulation was changed to more clearly reflect longstanding interpretation. The Administrator found the agency's interpretation was not erroneous or inconsistent with the governing regulation. The Provider's reliance on the manual instruction was not warranted as the manual, unlike the regulation, does not define "submitted." The CMS Administrator reversed the Board's ruling.

St. Mary's Hosp. v. BlueCross BlueShield Ass'n\Noridian Admin. Servs., CMS Adm'r Dec., rev'g, PRRB Hearing Dec. No. 2006-D1 (C.M.S. Adm'r Jan. 3, 2006).

Health Lawyers thanks Leslie Demaree Goldsmith of Ober, Kaler, Grimes & Shriver, in Baltimore, Maryland for writing these summaries.

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