Opinion ID: 2995061
Heading Depth: 2
Heading Rank: 2

Heading: Secretary’s Interpretation

Text: 42 C.F.R. sec. 413.30(e) contains an exemption to the Medicare RCLs for a new provider. A new provider is defined as a provider of inpatient services that has operated as the type of provider (or the equivalent) for which it is certified for Medicare, under present and previous ownership, for less than three full years./2 The Provider Reimbursement Manual (PRM), a set of instructions issued by the Secretary that constitutes an administrative interpretation of the Medicare statute and regulations, see Shalala v. Guernsey Mem’l Hosp., 514 U.S. 87, 101-02 (1995) (referring to PRM provisions as interpretive rules), provides further guidance on new provider exemptions. PRM sec. 2604.1 reiterates the definition of new provider contained in the regulation, and then states that a provider which relocates could be granted new provider status if it meets certain conditions./3 In denying that MSC was a new provider, the PRRB relied solely on the fact that MSC had acquired CON rights from Shores. In determining the length of time a provider has operated, the Secretary considers the previous ownership of the SNF’s CON rights. The operating history of the SNF from which any CON rights were obtained is imputed to the acquiring provider. In the instant case, this interpretation caused the PRRB to conclude that MSC had been operating since 1979, the year Shores opened, since MSC and Shores provide the same type of service. Instead of MSC being a new provider, the PRRB decided that MSC was a relocated part of Shores.