Petitioner, the Highlands at Brighton (Petitioner or facility), is a long-term care facility certified to participate in the Medicare and Medicaid programs. Based on an abbreviated survey, the New York State Department of Health (State Agency) determined that the facility was not in compliance with program requirements. The facility subsequently corrected its deficiencies, and the Centers for Medicare & Medicaid Services (CMS) declined to impose any of the enforcement remedies provided for in 42 C.F.R. § 488.406.

However, when deficiencies were found during the facility's subsequent annual survey, CMS imposed a remedy - the denial of payment for new admissions (DPNA). Here, I consider whether CMS's imposition of a remedy based on deficiencies found during the annual survey gives the facility the right to a hearing to contest the deficiencies cited during the earlier, abbreviated survey.

I conclude that the facility is not entitled to a hearing to contest deficiencies cited during the earlier survey, and I grant CMS's motion to dismiss.

I. Statement of Facts

The parties agree on the following:

On February 7, 2001, the State Agency completed an abbreviated Medicare/Medicaid survey and determined that the facility was not in compliance with program participation requirements. By letter dated February 20, 2001, the State Agency notified Petitioner that it was not in substantial compliance, citing deficiencies under 42 C.F.R. § 483.20(d) (Tag F-279 - Resident Assessment) and 42 C.F.R. § 483.25(h)(2) (Tag F-324 - Quality of Care/Accidents). CMS Exhibit (Ex.) A; Petitioner's (P.) Ex. A. On April 2, 2001, the State Agency revisited the facility, determined that the deficiencies had been corrected, and so informed Petitioner by letter dated April 4, 2001. The State Agency advised CMS that the facility had achieved substantial compliance. It did not recommend that any remedies be imposed, and CMS did not impose any remedies. CMS Ex. B; P. Ex. B.

At least every twelve months, the State Agency conducts a full survey of participating facilities to determine whether they are in substantial compliance with program participation requirements. Social Security Act (Act), § 1864(a); 42 C.F.R. § 488.20. On May 11, 2001, the State Agency conducted its standard full survey of the facility, and found that it was not in substantial compliance. In a letter dated May 23, 2001, the State Agency reminded Petitioner that compliance with federal requirements "is necessary for continued participation in the Medicare/Medicaid programs." The letter also advised that the State Agency had decided not to give the facility an opportunity to correct before it imposed remedies, and that it was recommending that CMS impose a DPNA effective fifteen days from the facility's receipt of the notice letter. CMS Ex. C; P. Ex. C. By letter dated May 30, 2001, CMS advised Petitioner that it was not in substantial compliance with program requirements, and that, because the facility had been out of substantial compliance for two consecutive surveys, the State Agency recommended imposition of a DPNA, along with other remedies, including termination of its provider agreement. The letter advised Petitioner of its right to request a hearing. CMS Ex. D; P. Ex. D.

The State Agency returned to the facility on June 20, 2001, found that the facility had corrected its deficiencies, and, by letter dated June 21, 2001, so notified the facility. CMS Ex. E; P. Ex. E. By letter dated June 21, 2001, CMS advised Petitioner that it accepted the State Agency's recommendations, that its decision to terminate the facility's provider agreement was rescinded, and that the DPNA was lifted, effective June 20, 2001. CMS Ex. F; P. Ex. F. The DPNA was apparently in effect for several days.

In a letter dated July 24, 2001, Petitioner requested an ALJ hearing to challenge the deficiencies cited in the February 7, 2001 survey. In its hearing request, Petitioner explicitly did not dispute the deficiencies cited in the May 11, 2001 survey. CMS has moved for dismissal, arguing that the facility has no right to a hearing because CMS imposed no penalty as a result of the February survey.

II. Findings

The parties agree that a long-term care facility has no right to hearing when the State Agency cites deficiencies, but CMS declines to impose any of the enforcement remedies provided for in 42 C.F.R. § 488.406.

The hearing rights of a long-term care facility are established by federal regulations at 42 C.F.R. Part 498. A provider dissatisfied with an initial determination is entitled to further review, but administrative actions that are not initial determinations are not subject to appeal. 42 C.F.R. § 498.3(d). The regulations specify which actions are "initial determinations" and set forth examples of actions that are not. A finding of noncompliance "that results in the imposition of a remedy specified in 42 C.F.R. § 488.406" is an initial determination, for which a facility may request an Administrative Law Judge (ALJ) hearing. 42 C.F.R. § 498.3(b)(13). Unless the finding of noncompliance results in the imposition of a specified remedy, the finding is not an initial determination. 42 C.F.R. § 498.3(d)(10)(ii). Thus, under the plain language of the regulations, there exists no hearing right if CMS has not imposed one of the remedies specifically listed in 42 C.F.R. § 488.406. Schowalter Villa, DAB No. 1688 (1999).

The statute specifies remedies that CMS or the State Agency may use when it finds a long-term care facility is not in substantial compliance with program requirements. Act, sections 1819(h) and 1919(h); see 42 C.F.R. § 488.400. The regulations obviously allow a facility to appeal a certification of noncompliance, leading to the imposition of an enforcement remedy, but they preclude appealing CMS's choice of remedy or review of the factors considered by CMS in selecting the remedy.

A facility may not appeal the choice of remedy, including the factors considered by CMS or the State in selecting the remedy, specified in § 488.404.

42 C.F.R. § 488.408(g)(2).

Here, because it does not contest the findings from the May 11, 2001 survey, Petitioner concedes that it was not in substantial compliance with program requirements, and thus CMS had a basis for imposing one of the remedies specified in 42 C.F.R. § 488.406. In selecting a remedy or deciding whether to impose a remedy at all, CMS considers the seriousness of the deficiencies. 42 C.F.R. § 488.404. The regulation then sets forth a number of factors, including "[t]he facility's prior history of noncompliance in general and specifically with reference to the cited deficiencies." 42 C.F.R. § 488.404(c)(2). CMS apparently considered the findings of the February 7, 2001 survey when it decided to impose a remedy. However, under the plain language of the regulation, I have no authority to review either CMS's decision to impose a remedy, its choice of remedy, or its application of the § 488.404 factors in reaching its decision. 42 C.F.R. §§ 488.404(a); 488.408(g)(2).

As noted above, Petitioner does not claim that it was in substantial compliance with program requirements at the time of the May 11, 2001 survey. Instead, Petitioner points to the State Agency and CMS's common practice of providing deficient facilities the opportunity to correct prior to imposing remedies. Petitioner is correct that the State Operations Manual (SOM) affords CMS discretion to grant a facility the opportunity to correct, and provides guidelines for determining when its exercise of that discretion might be appropriate. However, as CMS points out, the SOM plainly states that such an opportunity "is not assured." SOM, § 7304. I am not persuaded that the State Agency's practice of affording facilities an opportunity to correct precludes CMS from exercising its authority to impose a penalty without affording an opportunity to correct. See 59 Fed. Reg. 56,171 (Nov. 10, 1994)("[ N]either the Act nor the Constitution require that providers have the opportunity to correct deficiencies before sanctions are imposed."). See also Beechwood Sanitarium, DAB No. 1824, at 15 (2002).

III. Conclusion

Petitioner does not dispute that it was out of substantial compliance with program requirements at the time of the May 11, 2001 survey. I have no authority to review CMS's decision to impose a remedy, its choice of remedy, nor the method by which it reached its determination. Petitioner is therefore not entitled to an ALJ hearing. I grant CMS's motion to dismiss and order this case dismissed.