SUBJECT:

St. Charles Health Care,

Petitioner,

Centers for Medicare & Medicaid Services.

DECISION

I dismiss the hearing request of Petitioner, St. Charles Health Care. The Centers for Medicare & Medicaid Services (CMS) imposed a loss of approved Nurse Aide Training and Competency Evaluation Program (NATCEP) and Competency Evaluation Program (CEP) due to a finding of substandard quality of care. As Petitioner does not currently have a NATCEP/CEP program currently in place and has not had such a program in place for eight years, Petitioner has not suffered an injury for which relief can be granted and has no right to an appeal.

I. Background

The essential facts of this case are not in dispute. CMS offered three exhibits to support its motion to dismiss, CMS Exhibit (Ex.) A, CMS Ex. B, and CMS Ex. C. Petitioner accompanied its response to CMS's motion to dismiss with five exhibits. Three of Petitioner's exhibits (P. Ex. A, P. Ex. B, and P. Ex. C) were already before me. P. Ex. D-1 and P. Ex. D-2 were newly proposed exhibits. Neither party has objected to my receiving these exhibits into the record. Therefore, I admit CMS Exs. A - C and P. Exs. D-1 and D-2 into the record.

Petitioner is a nursing facility that is certified to participate in the Medicare and Medicaid programs. On March 11 and 12, 2003, Petitioner was surveyed for compliance with federal participation requirements. The surveyors concluded that Petitioner had deficiencies which constituted immediate jeopardy, but the conditions that constituted immediate jeopardy had been removed by April 1, 2003. Petitioner was found to have failed to comply substantially with the participation requirement that is stated at 42 C.F.R. § 483.13(c)(1)(ii), (iii)(2)(3), and (4). CMS Ex. A. This failure was determined to constitute Substandard Quality of Care. Id. By notice dated March 25, 2003, CMS imposed a termination of Petitioner's provider agreement, effective September 12, 2003.Id. Additionally, CMS imposed a denial of payments for new admissions (DPNA), effective April 9, 2003, if the facility remained out of compliance at the time of of its next revisit. Id. Further, CMS informed Petitioner that sections 1819(f)(2)(B) and 1919(f)(2)(B) of the Social Security Act (Act) prohibit approval of any NATCEP and CEP offered by or in any facility which within the previous two years was subject to an extended or partially extended survey (determination of Substandard Quality of Care). Id. On May 19, 2003, Petitioner filed a request for a hearing.

On July 31, 2003, CMS sent Petitioner a letter in which it informed Petitioner that it had attained substantial compliance with participation requirements. CMS Ex. B. As a result of achieving substantial compliance, both the termination remedy and the DPNA remedy were rescinded. Id. The July 31, 2003 letter from CMS did not mention the loss of approval of a NATCEP/CEP program... . .

The case was assigned to me for a hearing and a decision. CMS moved to dismiss Petitioner's hearing request and Petitioner opposed the motion.

II. Issues, findings of fact and conclusions of law

A. Issues

The issues in this case are whether:

1. Petitioner has a right to a hearing; and, if not, whether;

2. I must dismiss Petitioner's hearing request.

B. Findings of fact and conclusions of law

I make findings of fact and conclusions of law (Findings) to support my decision in this case. I set forth each Finding below as a separate heading. I discuss each Finding in detail.

1. Petitioner has no right to a hearing.

A facility does not have a right to a hearing to challenge every action by CMS with which it disagrees. Only certain actions create hearing rights. In general, a participating nursing facility will have a right to a hearing if CMS makes an initial determination to impose a remedy against that facility. 42 C.F.R. § 498.3(b)(13). The possible remedies that CMS might impose against a facility are specified at 42 C.F.R. § 488.406(a). No right to a hearing exists pursuant to 42 C.F.R. § 498.3(b)(13), unless CMS determines to impose - and actually imposes - one of the specified remedies. Lutheran Home - Caledonia, DAB CR674 (2000), aff'd DAB No. 1753 (2000); Schowalter Villa, DAB CR568 (1999), aff'd DAB No. 1688 (1999); Arcadia Acres, Inc., DAB CR424 (1996), aff'd DAB No. 1607 (1997). Indeed, the Secretary of Health and Human Services (Secretary) specifically rejected a proposal to grant hearing rights for deficiency findings that were made without the imposition of remedies. 59 Fed. Reg. 56116, 56158 (Nov. 10, 1994).

Petitioner does not have a right to a hearing. The undisputed facts establish that CMS determined that Petitioner was deficient and warned Petitioner that it would impose remedies. Petitioner achieved substantial compliance resulting in CMS rescinding the proposed remedies of termination and DPNA. CMS Ex. B. The loss of approval of a NATCEP/CEP program was not rescinded. However, since Petitioner did not currently have a NATCEP/CEP program in place, and has not had a NATCEP/CEP program in place for eight years, Petitioner did not incur the loss of approval of an existing program. CMS Ex. C. Therefore, Petitioner did not suffer an injury for which relief can be granted and has no right to an appeal.

A participating facility's authorization to conduct NATCEP is governed by sections 1819(f)(2)(B) and 1919(f)(2)(B) of the Act and by regulations at 42 C.F.R. §§ 483.150 - 483.154. ⁽¹⁾ The regulations provide that a State may not authorize a facility to conduct NATCEP if that facility has been subjected to an extended or partial extended survey as is described at sections 1819(g)(2)(B)(i) or 1919(g)(2)(B)(i) of the Act. 42 C.F.R. § 483.151(b)(2)(iii). An "extended survey" occurs where a facility is found to have furnished a substandard quality of care during a standard survey. 42 C.F.R. §§ 488.301, 488.310. A "partial extended survey" occurs where a facility is found to have provided care of a substandard quality at an abbreviated standard survey. 42 C.F.R. § 488.301. "Substandard quality of care" is defined at 42 C.F.R. § 488.301 to mean:

one or more deficiencies related to participation requirements under § 483.13, . . . which constitute either immediate jeopardy to resident health or safety; a pattern of or widespread actual harm that is not immediate jeopardy; or a widespread potential for more than minimal harm, but less than immediate jeopardy, with no actual harm.

Thus, a finding of an immediate jeopardy level deficiency under 42 C.F.R. § 483.13 (or other regulations that are not relevant to this case) will trigger a partial extended survey. And, a facility's NATCEP authorization must be revoked, under operation of law, where a partial extended survey is conducted at that facility. Alden Park Strathmoor, DAB CR1116 (2003).

It is the remedy, and not the citation of a deficiency, that generates the right to a hearing. Eaglecare, Inc., d/b/a Beech Grove Meadows, DAB CR923 (2002); Schowalter Villa, DAB No. 1688 (1999); Arcadia Acres, Inc., DAB No. 1607 (1997). See also The Lutheran Home-Caledonia, DAB No. 1753 (2000), Walker Methodist Health Center, DAB CR869 (2002), Charlesgate Nursing Center, DAB CR868 (2002), D.C. Association for Retarded Citizens, DAB CR776 (2001), Alpine Inn Care, Inc., DAB CR728 (2000), Woodland Care Center, DAB CR659 (2000), and Fort Tryon Nursing Home, DAB CR425 (1996).

In each of these cases, the failure or inability of the petitioner to demonstrate that the appealed survey findings and deficiency determinations had resulted in a remedy actually in effect was fatal to its appeal. It is the penalty, not the deficiency citation, that is the source of the appeal right. In each of these case, the appeal was dismissed. The appellate panels of the Departmental Appeals Board and the administrative law judges who decided these cases have uniformly adhered to the doctrine that a citation of deficiency which does not result in the imposition of a remedy, or which results in the imposition of a remedy later rescinded or reduced to zero, does not create the right to appeal. A careful reading of the regulatory language now set out at 42 C.F.R. §§ 498.3(b)(13), (14), and (16) makes the application of that doctrine to this case clear.

The regulation at 42 C.F.R. § 498.3(b)(13) confers appeal rights in the case of " . . . a finding of noncompliance that results in the imposition of a remedy specified in [42 C.F.R.] § 488.406 of this chapter, except the State monitoring remedy." The regulations confer appeal rights on a skilled nursing facility, such as Petitioner, when the issue is "[t]he level of noncompliance found by [CMS] . . . but only if a successful challenge on this issue would affect . . . (i) [t]he range of civil money penalty amounts that [CMS] could collect . . . or (ii) [a] finding of substandard quality of care that results in the loss of approval for a . . . nurse aide training program," or NATCEP. 42 C.F.R. §§ 498.3(b)(14)(i), (ii) (emphasis added). Further, the regulation at 42 C.F.R. § 498.3(b)(16) states that "[t]he finding of substandard quality of care that leads to the loss by a [nursing facility] of its nurse aide training program" is appealable. (Emphasis added). The plain language of the regulations makes it clear that a substandard quality of care finding is appealable when it results in a facility's loss of a NATCEP/CEP currently in existence.

In the instant case, where Petitioner does not have a NATCEP/CEP program in existence, Petitioner has not suffered such a loss and there is simply nothing to litigate. If Petitioner were allowed to proceed and it prevailed on the merits of the case, there would be no relief that I could grant.

Petitioner argues that its liberty interest has been implicated because the survey results would have an impact on its reputation. Petitioner's argument is without merit and does not give Petitioner a right to a hearing.

2. I must dismiss Petitioner's hearing request because Petitioner has no right to a hearing.

I must dismiss Petitioner's hearing request in this case because it has no right to a hearing. 42 C.F.R. § 498.70(b).

Anne E. Blair

Administrative Law Judge

1. Generally, section 1819 of the Act applies to a facility's participation in the Medicare program and section 1919 of the Act applies to a facility's participation in a State Medicaid program.