Franklin Park Nursing Home, CR No. 393 (1995)

$05:Civil Money Penalty

Department of Health and Human Services

DEPARTMENTAL APPEALS BOARD

Civil Remedies Division


In the Case of:

Franklin Park Nursing Home,

Petitioner,

- v. -

Health Care Financing Administration.

DATE: September 13, 1995
Docket No. C-94-301
Decision No. CR393


DECISION

I am issuing my ruling dismissing Petitioner's hearing request for
cause under 42 C.F.R. 498.70(b) and, in the alternative, my
decision to resolve the case in full by entering summary judgment
in favor of the Health Care Financing Administration (HCFA).


I. Background

This case came before me pursuant to the filing of Petitioner's
hearing request (Hearing Request) dated February 18, 1994. The
Hearing Request referred to the January 27, 1994 determination by
HCFA that Petitioner's participation as a skilled nursing facility
in the Medicare program and as a nursing facility in the Medicaid
program should terminate effective April 7, 1994. HCFA stated in
its notice letter that its determination was based on the results
of a "complaint survey" conducted by the New York State Health
Department on January 7, 1994. Notice Letter at 1. According to
Petitioner, its licensees "disagree that the residents were in
'imminent danger' at the time the New York State Department of
Health ordered the evacuation of the Nursing Home's residents."
Hearing Request at 1.

After a preliminary prehearing conference, I stayed proceedings in
the case at Petitioner's request, based upon Petitioner's
representations concerning its pending negotiations with the New
York State Department of Health and other proceedings relevant to
this case. See letter to counsel dated May 31, 1994. During a
conference call on June 6, 1995, the parties' counsel updated me on
the status of this case. June 14, 1995 Order and Summary of
Prehearing Conference. At that time, HCFA argued also that all
issues in the case have become moot. HCFA stated that: the State
of New York had suspended Petitioner's certificate to operate a
nursing home even before HCFA had sent the notice of termination
dated January 27, 1994; Petitioner had voluntarily terminated doing
business; and Petitioner had surrendered its State license. Id. at
3.

Petitioner, by counsel, acknowledged that it has been closed since
January of 1994, and Petitioner did not disagree with HCFA's
allegations and its assertion that the case is moot. Id. at 3.
However, Petitioner refused to withdraw its hearing request,
indicating that it would withdraw its hearing request only if HCFA
issues a written waiver of remedies, in order to relieve
Petitioner's former operators from any personal liability they may
have. Id. at 3 - 4. Petitioner held fast to its refusal to
withdraw and its demand for a written release from HCFA even after
I had made clear that personal liability has never been and cannot
become an issue in this case. Id.. Therefore, I invited HCFA to
file a motion to dismiss the action or any other motion appropriate
to its assertions of mootness. Id. at 4.

In accordance with my scheduling order, HCFA timely filed its brief
(HCFA Br.) and supporting evidence for the dismissal of
Petitioner's Hearing Request. 1/ Petitioner had until August 14,
1995, to file a response under my order. Petitioner has not filed
any response or sought an extension of time.

By order dated September 1, 1995, I considered Petitioner to have
waived its opportunity to respond and closed the record for the
reasons stated therein. With respect to any new facts contained in
HCFA's brief and exhibits, I consider them to be uncontested by
Petitioner. I note, in addition, that Petitioner had been placed
on notice at the outset of this case that failure to follow orders
might have serious adverse consequences. See April 6, 1994 Order
to Show Cause Why Hearing Request Should Not Be Dismissed, and May
18, 1994 Order and Notice of Second Prehearing Conference.

Having reviewed the contents of the record before me, I agree with
HCFA that there exists no real issue of fact or law in controversy.
Moreover, Petitioner does not have any legitimate expectation of
relief in this forum. Accordingly, I rely on 42 C.F.R.
498.70(b) and dismiss the action because, for the reasons set forth
below in part II of this Decision, Petitioner is not a "proper
party or does not otherwise have a right to a hearing." 42 C.F.R.
498.70(b). In the alternative, if I were to assume that
Petitioner's filing of a hearing request entitled it to an
adjudication on the merits, I would also decide the case in HCFA's
favor by entering summary judgment against Petitioner. I set forth
in part III, below, my findings and conclusions for entering
summary judgment against Petitioner and in favor of HCFA.


II. Ruling and Order Dismissing Petitioner's Hearing Request under
42 C.F.R. 498.70(b)

I rule that Petitioner's Hearing Request must be dismissed, based
on the following findings of fact and conclusions of law (FFCL):

1. Prior to January 7, 1994, Petitioner was participating as
a skilled nursing facility in the Medicare program and as a nursing
facility in the Medicaid program. See Notice Letter; Hearing
Request; HCFA Br. at 4.

2. On January 7, 1994, the New York State Department of
Health conducted a survey of Petitioner. See Notice Letter;
Hearing Request.

3. On January 7, 1994, the New York State Department of
Health ordered Petitioner to complete the removal and transfer of
all residents within 96 hours, and it prohibited Petitioner from
admitting additional patients until it receives written permission
from the New York State Department of Health to return nursing home
residents to Petitioner's premises. HCFA Ex. 1 at 4 - 5.

4. There was no event that took place after January 11, 1994
(i.e., 96 hours after the New York State Department of Health
issued its January 7, 1994 order) that could have resulted in
Petitioner's submission of any legitimate claim for reimbursement
of services. HCFA Br. at 12; FFCL 3.

5. On January 27, 1994, HCFA notified Petitioner of its
initial determination that, effective April 7, 1994, Petitioner's
provider agreement would be terminated, based on the results of the
survey conducted on January 7, 1994 by the New York State
Department of Health. Notice Letter.

6. Since January 1994, Petitioner has been closed for
business. June 14, 1995 Order and Summary of Prehearing Conference
at 3; FFCL 3.

7. A provider may, on its own, terminate itsprovider
agreement with HCFA. 42 C.F.R. 489.52.

8. A provider's cessation of business is deemed to be a
termination by the provider, effective with the date on which it
stopped providing services to the community. 42 C.F.R. 489.52
(b)(3).

9. The reasons for a provider's cessation of business are
irrelevant under 42 C.F.R. 489.52(b)(3). Hospicio en el Hogar
Mayaguez, Inc., DAB CR370, at 10 (1995).

10. On or about January 11, 1994, Petitioner, on its own,
terminated its right to participate in the Medicare program. FFCL
3, 6 - 9.

11. HCFA would not have terminated Petitioner's right to
participate in the Medicare program until April 7, 1994, the date
specified in HCFA's notice letter. Notice Letter at 2.

12. On February 18, 1994, Petitioner requested a hearing
before an administrative law judge. Hearing Request.

13. Any provider dissatisfied with an initial determination
by HCFA to terminate its provider agreement is entitled to a
hearing before an administrative law judge. 42 C.F.R. 498.5(b).

14. On January 27, 1994, when HCFA issued its determination,
Petitioner was not a provider within the meaning of the law. 42
C.F.R. 498.2; FFCL 10.

15. On February 18, 1994, when Petitioner filed its Hearing
Request, Petitioner was not a provider within the meaning of the
law. 42 C.F.R. 498.2; FFCL 10.

16. On February 18, 1994, Petitioner did not have any hearing
rights. 42 C.F.R. 498.5(b); FFCL 13 - 15.

17. All hearing requests must identify the specific issues
and the findings of fact and conclusions of law with which the
individual or entity disagrees. 42 C.F.R. 498.40(b)(1).

18. In its Hearing Request, Petitioner stated that it
disagreed that "the residents were in 'imminent danger' at the time
the New York State Department of Health ordered the evacuation of
the Nursing Home's residents." Hearing Request at 1.

19. HCFA's notice letter dated January 27, 1994 did not make
any finding that Petitioner's residents were in "imminent danger."
Notice Letter at 2.

20. HCFA's notice letter dated January 27, 1994 stated that
the issue of "immediate and serious threat" to patients had been
rendered moot by Petitioner's discharge of all patients, even
though HCFA had earlier considered this issue as a possible basis
for terminating Petitioner's provider agreement. Notice Letter at
2.

21. Even assuming that Petitioner was a provider on February
18, 1994, Petitioner's Hearing Request did not raise any genuine
dispute for hearing. 42 C.F.R. 498.40(b)(1); FFCL 17 - 20.

22. A hearing request must be dismissed for cause when the
party requesting the hearing is not a proper party or does not
otherwise have a right to a hearing. 42 C.F.R. 498.70(b).

Accordingly, I dismiss Petitioner's Hearing Request under 42 C.F.R.
498.70(b).


III. Findings and Decision to enter Summary Judgment against
Petitioner and in favor of HCFA

In the alternative, if I were to assume that Petitioner's filing of
a Hearing Request entitled it to an adjudication on the merits, I
would enter summary judgment against Petitioner and in favor of
HCFA. Because there exist no facts of decisional significance
genuinely in dispute, the only matters to be decided are the legal
implications of the undisputed material facts. I conclude that
Petitioner has not had the right to participate in the Medicare
program as a provider during any period that may have been placed
into controversy by Petitioner's attempt to challenge HCFA's
January 27, 1994 determination to end Petitioner's provider
agreement on April 7, 1994.

Under this alternative analysis, I hereby incorporate all of the
FFCL 1 - 22 in the preceding part of this Decision. In addition,
I issue also the following FFCL:
23. As a matter of law, HCFA's issuance of a notice of
termination dated January 27, 1994 could not have had the effect of
altering or negating Petitioner's own prior termination of its
provider agreement on or about January 11, 1994. 42 C.F.R.
489.52(b)(3); FFCL 3, 6 - 10, 14.

24. For any entity to participate either as a skilled nursing
facility in the Medicare program or as a nursing facility in the
Medicaid program, it must comply with all State and local licensing
requirements. Sections 1819(d)(2)(A) and 1919(d)(2)(A) of the
Social Security Act.

25. By order dated January 7, 1994, the New York State
Department of Health suspended Petitioner's operating certificate.
HCFA Br. at 9; HCFA Ex. 1.

26. During October of 1994, Petitioner consented to the
State's revocation of its operating certificate, and Petitioner
surrendered said certificate to the New York State Department of
Health. HCFA Ex. 2 at 3.

27. As a matter of law, Petitioner has been ineligible to
participate as a Medicare or Medicaid provider since January 7,
1994. FFCL 24 - 26.

28. Whatever the merits of Petitioner's disagreement in
February of 1994 with the "imminent danger" found by the New York
State Department of Health (Hearing Request), Petitioner was not
and could not have remained a program provider on or after April 7,
1994, when HCFA would have terminated Petitioner's provider
agreement based on the results of the January 7, 1994 survey. FFCL
6 - 11, 14, 18, 23 - 27.

29. Whatever the merits of any fact alleged in HCFA's January
27, 1994 notice letter, Petitioner was not and could not have
remained a program provider on or after April 7, 1994, when HCFA
would have terminated Petitioner's provider agreement based on the
results of the January 7, 1994 survey. FFCL 5 - 11, 14, 23 - 27.

30. The record does not contain any evidence or allegation
that Petitioner has been harmed by HCFA's decision to terminate
Petitioner's provider agreement effective April 7, 1994. FFCL 4,
6, 10, 11, 27.

31. The record does not contain any evidence which might
entitle Petitioner to relief in this action.

Accordingly, summary judgment is hereby entered against Petitioner
and in favor of HCFA.


IV. Conclusion

I grant HCFA's motion and dismiss Petitioner's Hearing Request. In
the alternative, I enter summary judgment in favor of HCFA and
against Petitioner.

________________________
Mimi Hwang Leahy
Administrative Law Judge

1. HCFA submitted two exhibits with its brief. I hereby admit
into evidence HCFA's Exhibits 1 and 2. They shall be referenced
herein as HCFA Ex. 1 and 2.