$05:Civil Money Penalty
Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD
Civil Remedies Division
In the Case of:
Rolling Acres Care Center,
Petitioner,
- v. -
Health Care Financing Administration.
Date: September 26, 1996
Docket No. C-96-205
Decision No. CR437
DECISION
Pending before me is the threshold issue of whether Petitioner, a nursing home
participating in the
Medicare and Medicaid programs, has a right to a hearing on the decision of
the Health Care Financing
Administration (HCFA), which prohibits Petitioner from participating in any
nurse aide training and
competency evaluation program.
Petitioner filed a request for hearing after having received HCFA's notice
letter dated October 19, 1995,
informing Petitioner of HCFA's determination that certain actions adverse to
Petitioner would take effect
on specified dates due to the results of surveys conducted by the Ohio Department
of Health (ODH) for
HCFA. Petitioner's hearing request challenged the survey findings and HCFA's
conclusion that certain
alleged deficiencies constituted substandard quality of care. However, after
another survey was conducted,
HCFA rescinded all of the earlier specified adverse actions except for the prohibition
against Petitioner
conducting nurse aide training and competency evaluations for a period of two
years, effective the date of
the "extended survey." The prohibition resulted from HCFA's determination
that Petitioner had provided a
substandard quality of care and was, therefore, subjected to an "extended
survey."
HCFA filed a motion to dismiss Petitioner's hearing request on the grounds
that the ban on nurse aide
training and competency evaluations is not appealable, and the rescission of
other remedies has eliminated
Petitioner's hearing rights on all other matters. 1/ In its brief in opposition
to dismissal, 2/ Petitioner stated
that it seeks a hearing "due to the denial of its ability to participate
in any fashion in the nurse aide
training/competency evaluation program . . . as the sole and direct result of
a unilateral finding of
substandard care by a single surveyor from the Ohio Department of Health . .
. ." P. Br. at 1. Petitioner
alleges also that the survey findings have placed it "on the road to severe
and automatic penalty." Id.
Recently, I decided that the regulations prohibit an appeal of a ban on nurse
aide training and competency
evaluations. Country Club Center, II, DAB CR433 (1996). In said case as well
as in Arcadia Acres, Inc.,
DAB CR424 (1996), and University Towers Medical Pavilion, DAB CR436 (1996),
I decided that a
provider does not have the right to a hearing where HCFA has found deficiencies
but has decided not to
impose any enforcement actions or remedies listed in 42 C.F.R. 488.406. I reach
the same conclusion
here for the same reasons. Therefore, I grant HCFA's motion to dismiss the hearing
request.
Findings of Fact and Conclusions of Law (FFCL)
Background facts and law
1. Petitioner is a 101-bed long-term care facility located in North Lima, Ohio,
which is certified as a
skilled nursing facility (SNF) under the Medicare program and as a nursing facility
(NF) under the
Medicaid program. P. Br., 2; P. Ex. 2; HCFA Br., 10; HCFA Ex. 12.
2. A SNF or a NF must not use as a full-time nurse aide for more than four months
any individual who has
not completed a state approved training and competency evaluation program. Sections
1819(b)(5)(A) and
1919(b)(5)(A) of the Social Security Act (Act).
3. Under the Medicare and Medicaid programs, a nurse aide training and competency
evaluation program
may be approved for only a period of two years. 42 C.F.R. 483.151(d).
4. To participate in the Medicare and Medicaid programs, there is no requirement
that a NF or SNF
provide its own nurse aide training and competency evaluation program.
5. NFs and SNFs which do not conduct their own nurse aide training and competency
evaluations must
either hire those nurse aides who are already trained and tested, or send their
aides for training at other
facilities or at vocational and technical schools with approved programs. HCFA
Ex. 10.
6. In the State of Ohio, there are 573 approved nurse aide training programs,
which train approximately
1,000 nurse aides each month. HCFA Ex. 10.
7. In the State of Ohio, nurse aide competency evaluations may be conducted
at any licensed or certified
nursing facility which has not lost its approval to perform such evaluations.
HCFA Ex. 10.
8. Nurse aide testing is done every month at 10 regional sites located throughout
Ohio. HCFA Ex. 10.
9. If a nurse aide is employed by or has a job offer from a facility, the Medicare
and Medicaid programs
will issue reimbursement for the cost of training and evaluating the aide, regardless
of whether such
services were provided by the employing facility. 56 Fed. Reg. 48901, 48916
(1991).
10. In 1995, Petitioner was not approved to offer a nurse aide training and
competency evaluation program
because Petitioner had not applied for approval. HCFA Ex. 10.
11. Petitioner does not conduct any nurse aide training or competency evaluation
program. P. Br., 3;
HCFA Br. 20.
12. As a provider under the Medicare and Medicaid programs, Petitioner is subject
to three types of
surveys by HCFA or its agent:
a. standard surveys, which take place once every 15 months;
b. extended surveys, which are conducted when a facility is found to have provided
substandard
quality of care under a standard survey; and
c. surveys conducted due to complaints or because HCFA has reasons to question
a facility's
compliance.
P. Br., 2 (citing 42 U.S.C. 1395i-3(g)(2)(A), 1395i-3(g)(2)(B)(i), 1395i-3(g)(2)(D),
1396r(g)(2)(A),
1396(g)(B)(i), 1396(g)(2)(D)).
13. The Act prohibits approval of a nurse aide training and testing program
offered by a NF or SNF if the
facility has been subject to an extended or partial extended survey, as defined
under section
1819(g)(2)(B)(i) of the Act, within the past two years, unless the surveys find
substantial compliance with
program requirements. Sections 1819(f)(2)(B)(iii)(I)(b) and 1919(f)(2)(B)(iii)(I)(B)
of the Act.
14. On July 24, 1995, ODH completed an annual standard survey of Petitioner.
P. Ex. 2; HCFA Ex. 1 at 1.
15. By letter dated August 3, 1995, ODH notified Petitioner of the following
information based on the July
24, 1995 survey:
a. that, Petitioner was not in substantial compliance with participation requirements
for the Medicare
and Medicaid programs and has been cited for four deficiencies which constitute
substandard quality of
care as defined in 42 C.F.R. 488.301;
b. that, if Petitioner fails to submit an acceptable plan of correction and
achieve substantial
compliance by the deadlines indicated in the notice letter, ODH would recommend
that HCFA impose two
specified remedies against Petitioner;
c. that, pursuant to 42 C.F.R. 488.331, Petitioner has the right use an informal
dispute resolution
process to question the deficiencies for which it has been cited; and
d. that, if Petitioner conducted a nurse aide training and competency evaluation
program and has
been subject to an "extended survey" or a "partial extended survey"
or a remedy specified therein,
Petitioner would not be able to conduct any nurse aide training and competency
evaluations for a period of
two years.
HCFA Ex. 3.
16. An "extended survey" means "a survey that evaluates additional
participation requirements subsequent
to finding substandard quality of care during a standard survey." 42 C.F.R.
488.301.
17. "Substandard quality of care" means "one or more deficiencies
related to participation requirements
under 483.13, [r]esident behavior and facility practices, 483.15, [q]uality
of life, or 483.25, [q]uality of
care of this chapter, 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." 42 C.F.R.
488.301.
18. On August 11, 1995, Petitioner requested informal dispute resolution under
42 C.F.R. 488.331 to
address the citations from the July 24, 1995 survey. HCFA Ex. 5.
19. By letter dated August 24, 1995, ODH informed Petitioner that, pursuant
to the informal dispute
resolution process, ODH had decided not to change the citations for any of the
deficiencies found in the
July 24, 1995 survey. HCFA Ex. 7.
20. On September 8, 1995, ODH completed a survey of Petitioner due to a complaint
of patient neglect
and found that one quality of care deficiency had remained uncorrected from
the July 24, 1995 survey.
HCFA Ex. 4.
21. On September 13, 1995, Petitioner submitted a plan of correction to address
the deficiencies cited from
the July 24, 1995 survey. HCFA Br., 12.
22. On September 22, 1995, Petitioner submitted a plan of correction to address
the citations from the
September 8, 1995 survey. HCFA Ex. 4.
23. On September 22, 1995, Petitioner submitted also a request for informal
dispute resolution under 42
C.F.R. 488.331 to address the deficiency cited from the September 8, 1995 complaint
survey. HCFA Ex.
5.
24. On September 26, 1995, ODH completed its review of the September 8, 1995
survey findings under
the informal dispute resolution process and affirmed the citation of deficiencies
from said survey. HCFA
Ex. 6 at 4.
25. On September 28, 1995, ODH completed a revisit survey and determined that
Petitioner had corrected
the quality of care deficiencies from the July 24, 1995 and September 8, 1995
surveys, but Petitioner was
not in substantial compliance with certification requirements due to violations
of a Life Safety Code
Standard. HCFA Ex. 8 at 7 - 8; HCFA Ex. 9; P. Ex. 2; HCFA Br., 12.
26. On or about October 12, 1995, Petitioner timely submitted a plan of correction
to address the citations
from the September 28, 1995 survey. HCFA Ex. 8 at 7 - 8; HCFA Ex. 9.
27. By letter dated October 19, 1995, HCFA notified Petitioner as follows:
a. based on the results of the July 24, 1995 and September 28, 1995 surveys,
HCFA was imposing
the remedies of:
1. denying Petitioner payments for new admissions under the Medicare and Medicaid
programs effective November 10, 1995. P. Ex. 2; and
2. terminating Petitioner's Medicare and Medicaid participation on January
26, 1996, if
substantial compliance has not been achieved by then. Id.;
b. the survey completed on July 24, 1995 had become an "extended survey,"
because said survey
found substandard quality of care. P. Ex. 2; HCFA Br., 10;
c. in accordance with section 1819(f)(2)(B)(iii)(I)(b) of the Act, Petitioner
is prohibited from
conducting any nurse aide training and/or competency evaluation program for
two years from July 24,
1995. P. Ex. 2;
d. HCFA instructed ODH to conduct another revisit survey to ascertain if substantial
compliance had
been achieved based on Petitioner's allegations. P. Ex. 2.
28. On November 9, 1995, ODH completed a follow-up survey to verify Petitioner's
compliance and
determined that Petitioner had corrected its deficiencies and come into substantial
compliance with
program requirements. HCFA Ex. 11.
29. As a consequence of the November 9, 1995 survey results, HCFA accepted ODH's
recommendation to
rescind the remedies described in FFCL 27a, above. Therefore, neither the denial
of payments for new
Medicare and Medicaid admissions nor the termination of Petitioner's provider
agreements took effect.
HCFA Ex. 12.
30. On December 5, 1995, Petitioner submitted a request for hearing, to contest
the findings from the July
24, 1995 and September 28, 1995 surveys, and to contest HCFA's October 19, 1995
determination to deny
Medicare and Medicaid payments for new admissions effective November 10, 1995,
to terminate
Petitioner's participation in the programs effective January 26, 1996, and to
prohibit Petitioner from
conducting nurse aide training and competency evaluations for two years from
July 24, 1995. Hearing
Request.
Findings on Petitioner's asserted facts
31. HCFA's notice letter did not designate the prohibition against conducting
nurse aide training and
competency evaluations as one of the remedies for which Petitioner may request
a hearing. See P. Br., 7;
P. Ex. 2.
32. Petitioner has adduced no support for its contention that a notice dated
October 18, 1995 informed
Petitioner that it could no longer serve as a testing site for nurse aide evaluation
programs. See P. Br., 3.
33. The record contains no fact supporting Petitioner's allegation that it
was serving as a test site for other
entities' nurse aide evaluation programs prior to HCFA's imposition of the ban
against Petitioner or that
Petitioner would be serving as a test site for such programs absent the ban
imposed by HCFA. See P. Br.
3, 6.
34. The record contains no fact supporting Petitioner's contention that, as
a result of the ban against
conducting nurse aide training and competency evaluations, Petitioner has had
"a valuable business
relationship severed, [and] has lost contact with nurse aides whom it might
desire to employ . . . ." P. Br.,
3; FFCL 4 - 11, 33, 34.
35. The record contains no fact supporting Petitioner's fear that it might
be found to have provided
substandard quality of care in three consecutive standard surveys, which would
then cause HCFA to deny
payments under the programs and ODH to impose state monitoring as remedies under
42 C.F.R. 488.414.
P. Br., 10.
36. The two pages of a plan of correction submitted by Petitioner for a June
2, 1996 survey (P. Ex. 5) are
part of another action pending before me, DAB Docket Number C-96-350, in which
Petitioner challenges
the findings from said survey and the resultant determinations by HCFA to impose
a civil monetary penalty
as well as other remedies.
37. In another action filed by Petitioner, DAB Docket Number C-96-350, Petitioner
is entitled to a hearing
on the merits of the June 2, 1996 survey and the resultant civil monetary penalty
already imposed by
HCFA, as well as any other issues specified by the regulations. 42 C.F.R. 498.3(b),
488.438(e); FFCL
38, below.
Conclusions on Petitioner's right to a hearing
38. As relevant to the facts of this case, a NF or SNF is entitled to a hearing
to challenge HCFA's findings
of deficiencies only if HCFA has imposed a remedy or enforcement action listed
in 42 C.F.R. 488.406 as
a result of the findings of deficiencies. 42 C.F.R. 498.3(b)(12); Arcadia Acres,
Inc.; Fort Tryon Nursing
Home, DAB CR425 (1996); University Towers Medical Pavilion; Country Club Center,
II.
39. HCFA's rescission of previously imposed remedies cancels any previously
existing hearing rights to
challenge the rescinded remedy or its bases. Id.
40. Having previously decided to impose two remedies listed in 42 C.F.R. 488.406
(ban on payment for
new Medicare and Medicaid admissions and termination of Petitioner's provider
agreements) against
Petitioner, HCFA decided to rescind these two remedies. FFCL 29.
41. A loss of nurse aide training and competency evaluations is not a remedy
or enforcement action listed
in 42 C.F.R. 488.406.
42. The regulations specifically state that, for NFs and SNFs, the loss of
nurse aide training and
competency evaluations programs is not an administrative determination which
is subject to the hearing
rights or other appeals procedures specified in 42 C.F.R. Part 498. 42 C.F.R.
498.3(d)(11).
43. The fact that the ban on nurse aide training and competency evaluations
is sometimes called a
"remedy" (see citations at P. Br., 7) does not give rise to hearing
rights under 42 C.F.R. Part 498 of the
regulations. FFCL 41, 42.
44. Under the regulations, a provider wishing to question the ban on nurse
aide training and competency
evaluations only has the right to request participation in the informal dispute
resolution process available
under 42 C.F.R. 488.331. FFCL 18, 23; 59 Fed. Reg. 56229 (1994).
45. There is no right to review under 42 C.F.R. Part 498 where HCFA finds that
a provider has
deficiencies but is in compliance with the conditions of participation. 42 C.F.R.
498.3(a), 498.3(d)(1).
46. Petitioner is not entitled to an evidentiary hearing to dispute the two-year
ban on conducting nurse aide
training and competency evaluations. FFCL 41 - 45.
47. Petitioner is not entitled to an evidentiary hearing to dispute the deficiencies
found during the surveys
of July 24, September 8, or September 28, 1995. FFCL 29, 38, 39, 44, 45.
48. I do not have the discretion to deviate from the plain language of the regulations
which preclude me
from hearing and deciding the merits of issues raised by Petitioner in its request
for hearing. See FFCL 30,
38 - 47.
Discussion
I have set forth an explanation of the regulatory framework in Country Club
Center, II, Arcadia Acres,
Inc., and University Towers Medical Pavilion. I adopt and incorporate the rationale
from those cases. I
summarize below the most significant legal principles in the context of the
arguments submitted by
Petitioner.
In this as well as in all of the foregoing cases, the disposition of a motion
to dismiss filed by HCFA turned
on whether the hearings rights and procedures of 42 C.F.R. Part 498 were applicable
to the determinations
challenged by the providers. A hearing before an administrative law judge is
part of the administrative
review and appeals process set forth at 42 C.F.R. Part 498. A provider's right
to obtain a hearing or other
review under 42 C.F.R. Part 498 depends on whether it is an "affected party"
within the meaning of the
regulations. 42 C.F.R. 498.20, 498.40. An "affected party" means a
provider or other entity that is
affected by an "initial determination or by any subsequent determination
or decision issued under this part
[part 498 of 42 C.F.R.] . . . ." 42 C.F.R. 498.2.
In this case as well as in the foregoing cases, HCFA had decided to rescind
various remedies which were
appealable under 42 C.F.R. Part 498 prior to their effectuation. Thus, I reached
the same conclusion here
as I had in the other cases: when HCFA rescinds previously appealable remedies,
the provider loses the
status of an "affected party" because it no longer has an "initial
determination" or any subsequent
determination that is appealable under the regulations. Because the providers
in all these cases were
attempting to secure hearings on the merits of the survey findings issued by
HCFA, I re-emphasize here
also that a provider's right to challenge survey findings arises only when the
findings have resulted in the
imposition of an appealable remedy specified by regulation. This is the same
conclusion reached by
Administrative Law Judge Steven Kessel in the case of Fort Tryon Nursing Home.
As in the case of Country Club Center, II, HCFA rescinded the previously appealable
remedies but
decided to use the survey results as a basis for prohibiting Petitioner from
conducting any nurse aide
training and competency evaluation programs for a period of two years. This
prohibition is not a
determination subject to review under 42 C.F.R. Part 498. FFCL 41, 42. Therefore,
as in Country Club
Center, II, Petitioner herein also cannot obtain a hearing on the merits of
the survey results which led to the
prohibition against providing nurse aide training and competency evaluations.
Petitioner has requested a hearing to contest the prohibition against providing
nurse aide training and
competency evaluations by alleging that it has suffered detriments or losses
as a result of the prohibition.
However, Petitioner had not applied for approval to provide nurse aide training
and competency
evaluations prior to HCFA's imposing the prohibition for two years. Nor is there
evidence of record to
support Petitioner's contention that it was being used as a testing site for
other facilities' nurse aide training
and evaluation programs or that HCFA has prohibited Petitioner from serving
even as a test site. Nor has
Petitioner proved its contention that, due to HCFA's prohibition against Petitioner's
conducting a nurse aide
training and competency evaluation program, it has lost contact with potential
job applicants or has had to
sever business deals to serve as a test site. FFCL 4 - 11, 31 - 34. Therefore,
even if the loss of property
rights or interests were relevant to the issue of whether Petitioner is entitled
to a hearing under 42 C.F.R.
Part 498, I would conclude that Petitioner has failed to establish such losses.
To provide support for its hearing request, Petitioner has cited certain language
from the Federal Register
to show that the Department of Health and Human Services considers the ban on
nurse aide training and
competency evaluations to be a "remedy." P. Br., 7. Petitioner argues
that HCFA is playing "legal
gymnastics" by arguing against a hearing when the ban on nurse aide training
and competency evaluations
is a remedy because it "looks like a remedy, acts like a remedy, and walks
like a remedy
. . . ." Id. However, the issue has never been whether the ban is a "remedy,"
but whether the ban is a
remedy which the regulations has designated as an appealable remedy. See FFCL
38 - 47. Petitioner is
well aware, as demonstrated by its quotation from the Federal Register, that
the Secretary of Health and
Human Services intentionally made the informal dispute resolution process the
only means for challenging
the denial or withdrawal of the approval for conducting nurse aide training
and competency evaluations. P.
Br., 8. 3/
Petitioner complains that HCFA is not providing sufficient due process by permitting
only an informal
dispute resolution proceeding when nurse aide training and competency evaluations
have been banned. P.
Br., 9. Whatever the merits of Petitioner's complaints on the due process decisions
made by the Secretary
of Health and Human Services, I am required to give effect to the regulations
as written. I cannot
disregard the unambiguous limitations imposed by the regulations. I adjudicate
these cases under a
delegation from the Secretary of Health and Human Services. In this capacity,
I am required to follow all
substantive rules and regulations duly promulgated by the Secretary. See Dyer
v. Secretary of Health and
Human Services, 889 F.2d 682, 685 (6th Cir. 1989).
There is no regulation which supports Petitioner's legal arguments. The regulations
I have considered are
dispositive on the issue of whether Petitioner may challenge in this forum the
merits of HCFA's decision to
ban nurse aide training and testing by Petitioner. For example, the language
of the regulation codified at
42 C.F.R. 498.3(d)(1) does not leave me with any discretion to grant Petitioner
the hearing it requests.
The critical fact is that the Secretary of Health and Human Services has declined
to define the prohibition
against nurse aide training and competency evaluations as a remedy or enforcement
action subject to a
hearing in this forum. 42 C.F.R. 498.3(c)(11), 488.406; FFCL 41, 43, 44, 45.
Since HCFA has
rescinded the two enforcement actions imposed under 42 C.F.R. 88.406, there
is no determination by
HCFA subject to the hearing rights specified in 42 C.F.R. Part 498. FFCL 40,
41, 45. Therefore,
Petitioner also cannot challenge the survey findings which resulted in the ban
on nurse aide training and
testing, and which resulted in HCFA's earlier (but now rescinded) determination
to impose two of the
enforcement actions specified in 42 C.F.R. 488.406. FFCL 46 - 48.
Petitioner complains that, without an on-the-merits hearing on the survey findings,
Petitioner is at risk for
suffering future harm of greater magnitude should HCFA later find that Petitioner
has provided
substandard quality of care in a total of three consecutive standard surveys.
However, Petitioner herein has
other hearing requests pending which challenge the substandard quality of care
findings from a later
survey, a survey which resulted in HCFA imposing a civil monetary penalty and
other appealable remedies
against Petitioner. FFCL 36, 37. Also pending before me for hearing is another
case filed by Petitioner
(DAB Docket No. C-96-273), wherein Petitioner challenges, inter alia, the deficiencies
found during an
"abbreviated standard survey" conducted on February 12, 1996 and HCFA's
imposition of a remedy
specified in 42 C.F.R. 488.406. If Petitioner prevails in its other action (DAB
Docket No. C-96-350),
there would be no findings of substandard quality of care in consecutive standard
surveys; in such an event,
Petitioner would not need to fear sanctions resulting from three consecutive
surveys finding substandard
quality of care. At this time, Petitioner's fears of having three consecutive
standard surveys find
substandard quality of care are premature at best.
Conclusion
For the foregoing reasons, I conclude that I lack jurisdiction to hear and
decide Petitioner's challenge to the
two-year ban on nurse aide training and competency evaluations imposed by HCFA.
In addition, I
conclude that, as a matter of law, the case presents no appealable issue within
the purview of 42 C.F.R.
498.3(b). Based on the survey findings contested by Petitioner, HCFA has made
no resultant
determination subject to a hearing and adjudication by me; the request for hearing
cannot challenge the
deficiencies simpliciter. Therefore, I cannot reach the merits of the survey
findings.
Accordingly, the case is hereby dismissed pursuant to 42 C.F.R. 498.70(b) on
the basis that Petitioner
does not have a right to a hearing.
Mimi Hwang Leahy
Administrative Law Judge
1. HCFA has filed a supporting brief (HCFA Br.), 13 exhibits (HCFA Ex. 1 through
13), and a reply
brief (HCFA Reply). I admit HCFA's exhibits for the purpose of deciding the
motion to dismiss.
2. Petitioner has filed a brief (P. Br.) and five exhibits (P. Ex. 1 through
5). I admit Petitioner's exhibits
for the purpose of deciding the motion to dismiss.
3. Petitioner quoted thusly from the Federal Register:
While the Act does not provide for any formal appeals for denial or withdrawal
of a NATCEP [nurse
aide training and competency evaluation program], we believe that providers
ought to have some
opportunity to challenge this disapproval. Therefore, we expect providers to
appeal their NATCEP
disapproval within the timeframe established for dispute resolution
. . . We are limiting the appeals of these matters to the informal dispute resolution
process because
we do not believe the loss of a NATCEP is a remedy of the same magnitude or
type as other statutory
remedies for which a more formal appeals mechanism is available. . . . We believe
the informal dispute
resolution process satisfies essential elements of due process here since a
provider will have notice of the
intended denial of its NATCEP and the opportunity to meet with agency officials
to challenge the findings
that gave rise to the denial.
P. Br., 8 - 9 (quoting from 59 Fed. Reg. 56229 (1994)) (emphasis supplied by
Petitioner).