Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD
Civil Remedies Division
In the Case of: Mathis Nursing Home, Petitioner,
- v. -
Health Care Financing Administration.
Date: February 12, 1997
Docket No. C-96-427
Decision No. CR461
DECISION
I dismiss Petitioner's request for hearing because Petitioner
did not make it timely, and because Petitioner has not
established good cause for failing to make a request for a
hearing timely.
I. Background
On August 23, 1996, Petitioner, Mathis Nursing Home, a
skilled nursing facility (SNF), made a request for a hearing
from a determination by the Health Care Financing
Administration (HCFA). The case was assigned to me for a
hearing and a decision. HCFA moved to dismiss Petitioner's
request for a hearing. Petitioner opposed HCFA's motion.
II. Issues, findings of fact and conclusions of law
The issues in this case are whether Petitioner: made a
request for a hearing timely from a determination by HCFA to
impose a remedy; or established good cause for not having
made a request for a hearing timely from a determination by
HCFA to impose a remedy. In deciding these issues, I make
the following findings of fact and conclusions of law
(Findings). I discuss these Findings in detail, below.
1. On April 18, 1996, HCFA notified Petitioner that
it intended to impose remedies against Petitioner,
including a denial of payments for new admissions,
effective May 5, 1996.
2. On August 6, 1996 HCFA advised Petitioner that
payment for new admissions would be denied effective May
5, 1996, and up until and including July 17, 1996.
3. On August 23, 1996, Petitioner requested a
hearing.
4. Petitioner made its request for a hearing more
than 60 days from the date that HCFA notified Petitioner
of HCFA's determination to impose a remedy against
Petitioner.
5. The reason that Petitioner did not make its
request for a hearing prior to August 23, 1996 is that
an employee of the corporation that owns Petitioner
failed to exercise his or her responsibility to make a
hearing request.
6. A SNF is entitled to a hearing from a
determination by HCFA to impose a remedy against the
SNF.
7. An entity must make its request for a hearing
within 60 days from the date that it receives notice of
HCFA's determination to impose a remedy.
8. If an entity does not make its request for hearing
timely, it is no longer entitled to a hearing.
9. Where an entity fails to make a request for a
hearing timely, it may be given a hearing if it
establishes good cause for failing to make its request
timely.
10. HCFA's April 18, 1996 notice to Petitioner is a
notice of HCFA's intent to impose remedies against
Petitioner, and not merely a notice that Petitioner
might impose remedies.
11. The 60-day period within which Petitioner had to
request a hearing in order to be entitled to a hearing
began on the date of Petitioner's receipt of HCFA's
April 18, 1996 notice.
12. Petitioner made its request for a hearing
untimely, and Petitioner is not entitled to a hearing.
13. Petitioner has not established good cause for
failing to request a hearing timely.
III. Discussion
A. The facts (Findings 1 - 5)
On April 18, 1996, HCFA notified Petitioner that, on January
25, 1996, the Texas Department of Human Services had
conducted a survey to determine whether Petitioner was in
compliance with federal requirements governing participation
of nursing homes in Medicare and Medicaid. HCFA Ex. 3. 1/
HCFA told Petitioner that the Texas Department of Human
Services had concluded that Petitioner was not in substantial
compliance with those requirements. Id. at 1. HCFA noted
that, in response to the January 25, 1996 survey, Petitioner
had submitted a plan of correction and had alleged that it
was complying with participation requirements. However, the
Texas Department of Human Services had concluded, on the
basis of a resurvey conducted on March 27, 1996, that
Petitioner remained out of compliance with participation
requirements. Id. HCFA advised Petitioner that it concurred
with the finding that Petitioner remained out of compliance
with participation requirements. Id.
Petitioner was advised that HCFA had determined to impose
remedies against Petitioner if Petitioner did not correct the
outstanding deficiencies. HCFA told Petitioner that it would
terminate Petitioner's participation in Medicare. HCFA Ex.
3. HCFA advised Petitioner also that, effective May 5, 1996,
Petitioner would be denied payment for new admissions. Id.
HCFA advised Petitioner that, in addition to imposing the
remedies of termination and denial of payment for new
admissions, it also might determine to impose against
Petitioner a civil money penalty of $200 per day, beginning
on January 25, 1996, and continuing until Petitioner achieved
substantial compliance with participation requirements. Id.
The April 18, 1996 notice advised Petitioner that, if it
disagreed with HCFA's determination, it could request a
hearing. HCFA Ex. 3 at 2. Petitioner was told explicitly
that it had 60 days from receipt of the notice within which
to request a hearing. Id.
Shortly after the notice was sent to Petitioner, Petitioner
submitted a plan of correction. P. Ex. 1. It is unclear
whether Petitioner submitted its plan of correction to the
Texas Department of Human Services or to HCFA, inasmuch as
Petitioner did not offer as evidence any transmittal which
may have accompanied the plan of correction. Also, it is not
clear on what date Petitioner submitted its plan of
correction, although the plan of correction was signed and
dated by Petitioner's administrator on April 19, 1996. P.
Ex. 1 at 1.
On July 11, 1996, HCFA sent an additional notice to
Petitioner. HCFA Ex. 4. This notice reminded Petitioner
that, if it did not achieve substantial compliance with
participation requirements by July 25, 1996, its provider
agreement would be terminated. Id. Additionally, HCFA
stated that its records indicated that Petitioner had not
requested a hearing concerning HCFA's determination of
noncompliance. Id. HCFA told Petitioner that Petitioner
should notify HCFA immediately if HCFA's records were
incorrect. Id.
There is no evidence of a response by Petitioner to HCFA's
July 11, 1996 letter. Petitioner did not assert that it
wanted a hearing, nor did it advise HCFA that HCFA's records
were incorrect.
On August 6, 1996, HCFA wrote again to Petitioner. HCFA Ex.
5. In this notice, HCFA advised Petitioner that the Texas
Department of Human Services had reported that Petitioner had
corrected its noncompliance with participation requirements.
Id. HCFA advised Petitioner that, because Petitioner had
not corrected its deficiencies in a timely manner, the remedy
of denial of payment for new admissions would be imposed for
the period beginning May 5, 1996 through July 17, 1996. Id.
Additionally, HCFA told Petitioner that it might determine
to impose against Petitioner a civil money penalty of $200
for each day of noncompliance from January 25, 1996 up to and
including July 17, 1996, for a total penalty of $35,000. Id.
However, HCFA advised Petitioner that it had not yet
determined whether to impose the civil money penalty. Id.
HCFA told Petitioner that, if it determined to impose the
civil money penalty, it would notify Petitioner of the
determination. Id.
On August 23, 1996, Petitioner requested a hearing. HCFA Ex.
6. Petitioner stated that it was appealing the findings of
noncompliance stemming from the January 25, 1996 and March
27, 1996 surveys of Petitioner. Id. at 1. Petitioner
asserted that HCFA's April 18, 1996 notice had been received
by Petitioner and that Petitioner had forwarded the notice to
Petitioner's corporate office in Dallas, Texas. Id. at 2.
According to Petitioner, the person who was responsible for
requesting a hearing on Petitioner's behalf took no action
and later resigned at the request of management. Id.
Petitioner averred that its corporate owners did not discover
the existence of the April 18, 1996 notice until they saw a
reference to that notice in HCFA's August 6, 1996 notice to
Petitioner. Id. Petitioner asserted that, upon learning of
the April 18, 1996 notice, Petitioner immediately hired
outside counsel, who requested a hearing as soon thereafter
as was practicable. Id. Thus, according to Petitioner, its
failure to request a hearing timely was not the result of
conscious indifference, but, rather, was inadvertent and
caused by the performance of one employee. Petitioner
requested that the time within which it could request a
hearing be extended. Id.
From this recitation of the evidence, I find the following.
First, Petitioner did not request a hearing within 60 days of
its receipt of HCFA's April 18, 1996 notice. Petitioner has
acknowledged receiving the notice and not requesting a
hearing within 60 days of receipt of the notice. Second,
Petitioner's failure to request a hearing within 60 days of
receipt of the notice was due to a failure to exercise
diligence by a employee in Petitioner's headquarters. 2/
B. Governing law (Findings 6 - 9)
The right of a SNF to a hearing from a determination by HCFA
is governed by regulations contained in 42 C.F.R. Parts 488
and 498. Pursuant to 42 C.F.R. § 488.408, a provider may
request a hearing from a determination by HCFA of
"noncompliance leading to an enforcement remedy." Pursuant
to 42 C.F.R. § 498.3(b)(12), a SNF may request a hearing
concerning "the finding of noncompliance leading to the
imposition of enforcement actions specified in § 488.406 of
this chapter, . . . ." In Fort Tryon Nursing Home, DAB
CR425 (1996), I held that these two regulations meant the
same thing. I held that the regulations entitle a SNF to a
hearing from a determination by HCFA that actually results in
the imposition of an enforcement remedy against the SNF.
Those actions by HCFA that constitute enforcement remedies
are specified in 42 C.F.R. § 488.406. They include denial of
payment for new admissions, termination, and the imposition
of a civil money penalty. 42 C.F.R. §§ 488.406(a),
(a)(2)(ii), (a)(3).
The right to a hearing from a determination by HCFA to impose
a remedy is a time-limited right. An affected party must
file a written request for a hearing within 60 days from the
date it receives notice of HCFA's determination. 42 C.F.R. §
498.40(a)(2). An administrative law judge may dismiss a
request for a hearing that is not made timely. 42 C.F.R. §
498.70(c).
An administrative law judge may extend an entity's deadline
for making a request for a hearing where that party has not
made a request timely. 42 C.F.R. § 498.40(c)(2). An entity
must establish good cause for not having made its request
timely. Id.
The regulation does not define the term "good cause." I find
that the term means circumstances that are beyond the ability
of the entity who requests a hearing to control, which
intervene to prevent that entity from making a timely hearing
request. Hospicio San Martin, DAB CR387 at 3 (1995), aff'd,
DAB 1554 (1996).
C. Application of the law to the facts (Findings 10 -
13)
As I discuss above, HCFA's first notice to Petitioner that
announced HCFA's intent to impose a remedy is dated April 18,
1996. HCFA Ex. 3. In that notice, HCFA announced its intent
to impose remedies. These included termination, if
Petitioner did not attain substantial compliance by July 25,
1996, and denial of payment for new admissions, beginning on
May 5, 1996. Id. at 1 - 2. On August 6, 1996, HCFA
confirmed that it had imposed the remedy of denial of payment
for new admissions beginning on May 5, 1996, and advised
Petitioner that it would continue in effect up until and
including July 17, 1996. HCFA Ex. 5. The sequencing of
these notices raises the question of whether the period of
time during which Petitioner was entitled to request a
hearing began to run effective with its receipt of the April
18, 1996 notice announcing HCFA's determination to impose
remedies; with imposition of denial of payment for new
admissions on May 5, 1996; or on August 6 1996, the date that
HCFA confirmed that it had imposed denial of payment for new
admissions against Petitioner.
I conclude that, under 42 C.F.R. § 498.40(a), the period of
time within which Petitioner was entitled to request a
hearing began to run with Petitioner's receipt of the April
18, 1996 notice in which HCFA announced its determination to
impose remedies. It is true that the notice announces the
imposition of remedies ¾ consisting of possible termination
and denial of payment for new admissions ¾ as events which
would occur in the future. It is true also that had HCFA
rescinded completely its determination to impose a remedy,
then Petitioner would not have been entitled to a hearing.
Fort Tryon at 5. But, the regulation plainly establishes
that, where HCFA determines to impose a remedy at a future
date, then the time within which an entity has to request a
hearing ¾ assuming that HCFA later imposes the remedy ¾
begins to run with HCFA's first notice to the entity which
announces HCFA's determination.
Petitioner now asserts that the April 18, 1996 notice was not
a notice of a determination to impose a remedy, but was, in
fact, only a notice of HCFA's determination that it might
impose a remedy. According to Petitioner, the April 18, 1996
notice merely informs Petitioner that, if Petitioner did not
attain substantial compliance with participation
requirements, HCFA would consider terminating Petitioner's
participation in Medicare, imposing a civil money penalty
against Petitioner, and denying Petitioner payment for new
admissions. See HCFA Ex. 3. Petitioner asserts that HCFA
did not actually determine to impose a remedy against
Petitioner until August 6, 1996, when it advised Petitioner
that it would impose a denial of payment for new admissions
for the period beginning May 5, 1996 through July 17, 1996.
See HCFA Ex. 5.
I disagree with Petitioner's characterization of the April
18, 1996 and the August 6, 1996 notices. Petitioner's
argument to the contrary, the April 18, 1996 notice plainly
constituted a determination by HCFA to impose two remedies
against Petitioner. These remedies consisted of termination
and denial of payment for new admissions. HCFA Ex. 3 at 1 -
2. HCFA later determined not to impose termination. HCFA
Ex. 5. But, the denial of payment for new admissions went
into effect on May 5, 1996 and, on August 6, 1996, HCFA
ratified its previous determination to impose denial of
payment for new admissions. HCFA Ex. 3 at 2; HCFA Ex. 5.
Petitioner did not submit its request for a hearing timely
and, thus, is not entitled to a hearing. As I find above,
HCFA's April 18, 1996 notice was a notice of HCFA's
determination to impose remedies against Petitioner. In
order to be entitled to a hearing from that determination,
Petitioner was obligated to request a hearing within 60 days
of its receipt from the notice. Petitioner did not request a
hearing until August 23, 1996, more than 60 days from its
receipt of the notice.
I have concluded that the April 18, 1996 notice constitutes
HCFA's notice of imposition of remedies. The fact that the
one remedy that HCFA imposed, denial of payment for new
admissions, was not imposed until a later date, does not
derogate from my conclusion that the April 18, 1996 notice
triggered the time within which Petitioner could request a
hearing. As I hold above, at Part II.B. of this decision,
the trigger date is the date of receipt of the notice of
HCFA's intent to impose a remedy, and not the date when the
remedy is imposed. 3/
I do not conclude that HCFA's August 6, 1996 notice gave
Petitioner hearing rights in addition to those which were
created by the April 18, 1996 notice. HCFA Ex. 5. The
August 6, 1996 notice does not constitute a determination by
HCFA to impose a remedy against Petitioner. Rather, it is an
advisory notice which tells Petitioner that HCFA had ratified
its previous determination, stated in the April 18, 1996
notice, to impose the remedy of denial of payment for new
admissions, effective May 5, 1996. It tells Petitioner also
that HCFA was rescinding its previous determination to
terminate Petitioner's participation in Medicare. Finally,
it tells Petitioner that HCFA had not yet determined whether
to impose a civil money penalty against Petitioner.
I do not find that Petitioner established good cause for not
requesting a hearing timely. There is no evidence that
Petitioner was precluded from requesting a hearing timely by
circumstances that were beyond its ability to control. As
Petitioner admits, the failure to request a hearing was due
to a failure by the corporate employee (who was charged with
the responsibility to request a hearing) to carry out his or
her assigned duties. The failure by that employee to carry
out his or her assigned duties carries the same consequences
that would result if an individual who is the subject of an
adverse determination by HCFA fails to timely request a
hearing due to error on that individual's part. In either
event, the failure to request a hearing is a consequence of
avoidable human error and not of an event that was beyond the
ability of the individual, or the corporation, to control.
IV. Conclusion
I conclude that Petitioner did not request a hearing timely.
I conclude further that Petitioner did not establish good
cause for its failure to request a hearing timely.
Therefore, I dismiss Petitioner's request for a hearing.
________________________
Steven T. Kessel
Administrative Law
Judge
* * * Footnotes * * *
1. HCFA submitted seven exhibits (HCFA Ex. 1 - 7)
in support of its motion to dismiss Petitioner's request for
a hearing. Petitioner submitted two exhibits (P. Ex. 1 - 2)
in opposition to HCFA's motion. Additionally, Petitioner
submitted as attachments to its brief in opposition to HCFA's
motion correspondence from HCFA to Petitioner dated April 18,
1996, July 11, 1996, and August 6, 1996. These letters were
submitted also by HCFA as HCFA Ex. 3 - 5. I conclude that
there is no need to designate the correspondence submitted by
Petitioner as exhibits, because that correspondence
duplicates exhibits submitted by HCFA. Finally, Petitioner
submitted a verification signed by Joseph Bell. I am
designating the verification as P. Ex. 3. Neither party has
objected to my receiving any of the exhibits into evidence.
Therefore, I receive into evidence HCFA Ex. 1 - 7 and P. Ex.
1 - 3.
2. HCFA disputes this fact, asserting that
Petitioner's explanation for the untimely hearing request is
not credible. However, for purposes of this decision, I am
making findings of fact in a manner most favorable to
Petitioner.
3. That the date which triggers the time period
within which a hearing may be requested is the date of an
entity's receipt of HCFA's notice of the determination to
impose a remedy means that, in the case where HCFA tells a
provider that a remedy may be imposed in the future,
contingent on events that have not yet occurred, such as the
entity's not attaining compliance with participation
requirements by a date certain, the entity may have no choice
but to request a hearing without knowing whether the remedy
actually will be imposed. And, the requirement that an
entity request a hearing possibly in advance of the date when
the remedy is to be imposed may mean that the entity will
ultimately be found to have no right to a hearing should HCFA
eventually determine not to impose the threatened remedy.