Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD
Civil Remedies Division
In the Case of: Hillcrest Health Facility, Inc., Petitioner,
- v. -
Health Care Financing Administration.
Date: August 6, 1997
Docket No. C-97-251
Decision No. CR489
DECISION DISMISSING REQUEST FOR HEARING
I grant the motion of the Health Care Financing Administration
(HCFA) to dismiss the hearing request of Petitioner, Hillcrest
Health Facility, Inc., from a determination by HCFA dated July
19, 1996 to impose a civil money penalty against Petitioner. I
do so because the hearing request is untimely and because
Petitioner has not shown good cause for its failure to make a
timely hearing request. My granting of HCFA's motion means that
HCFA may collect from Petitioner a civil money penalty of $1,500
per day, beginning on March 1, 1996, and continuing until August
7, 1996. This decision does not affect Petitioner's right to a
hearing from determinations by HCFA of February 3, 1997 and March
28, 1997 to impose civil money penalties against Petitioner.
I am separating this case, and my decision, from the cases which
involve Petitioner's hearing requests from HCFA's February 3,
1997 and March 28, 1997 determinations. These remaining cases
will be consolidated under a new docket number. I will advise
the parties in the near future of the procedures to be followed
in the remaining case. There is no reason to retain this
decision as an interlocutory order in the remaining case. By my
separating this decision from the remaining case, Petitioner will
be able to appeal this decision now, if it wishes to take an
appeal, rather than awaiting my decision in the remaining case.
On March 5, 1997, Petitioner requested hearings from two
determinations by (HCFA) to impose civil money penalties against
Petitioner. These two determinations consist of determinations:
(1) of July 19, 1996, to impose a civil money penalty of
$1,500 per day against Petitioner beginning on March 1,
1996. The total civil money penalty at issue under this
determination is $182,500; and
(2) of February 3, 1997, to impose a civil money penalty
of $450 per day against Petitioner beginning on November
7, 1996. The total civil money penalty at issue under
this determination is $72,900.
On March 28, 1997, HCFA determined to impose a third civil money
penalty against Petitioner, of $250 per day, commencing on
January 30, 1997. HCFA asserts that this civil money penalty
continued to accrue until April 18, 1997. Petitioner has also
requested a hearing from this determination and has requested
that the hearing be consolidated with the hearings concerning the
first two determinations.
HCFA moved to dismiss Petitioner's request for a hearing from
HCFA's July 19, 1996 determination. HCFA has not asserted that
the requests for hearings from HCFA's February 3, 1997 and March
28, 1997 determinations should be dismissed.
HCFA submitted 13 exhibits (HCFA Ex. 1 - 13) to support its
motion. Petitioner has not objected to my considering these
exhibits in deciding HCFA's motion. In opposing HCFA's motion,
Petitioner submitted three exhibits (P. Ex. 1 - 3). HCFA has not
objected to my considering their exhibits. I am receiving HCFA
Ex. 1 - 13 as evidence in support of HCFA's motion, and P. Ex. 1
- 3 in support of Petitioner's opposition to the motion.
I make findings of fact and conclusions of law (Findings) in
support of my decision. I state each Finding below, as a
separate heading, and I discuss each Finding in detail.
1. In order to be entitled to a hearing from a
determination by HCFA, a party must file its hearing
request no more than 65 days from the date of HCFA's
mailing to that party of the notice of HCFA's
determination.
The regulations which govern hearings involving HCFA require that
a party file a hearing request no more than 65 days from the date
of mailing of notice of a determination by HCFA in order to be
entitled to a hearing from that determination. Specifically, a
party that is entitled to a hearing from a determination by HCFA
must make its request within 60 days from its receipt of the
notice of the determination. 42 C.F.R. § 498.40(a)(2). Receipt
of a notice of a determination is presumed to occur five days
from the date of mailing of the notice. Id.; 42 C.F.R. § 498.22.
2. A party may receive from an administrative law judge
an extension of time for filing a request for a hearing
from a determination by HCFA only where that party
establishes good cause for not filing timely its hearing
request.
If a party does not make a timely hearing request, that party is
not entitled to a hearing. See 42 C.F.R. § 498.40(a)(2). An
administrative law judge may dismiss a request for a hearing in a
case involving HCFA if the party requesting a hearing has not
filed its request timely and has not established good cause for
failing to file its request timely. 42 C.F.R. § 498.70(c).
A party requesting a hearing may receive from an administrative
law judge an extension of time for filing a hearing request if
that party establishes good cause for not filing a hearing
request timely. 42 C.F.R. § 498.40(c)(2). The regulation does
not define the term "good cause." The term "good cause"
has been
held to mean a circumstance or circumstances beyond a party's
ability to control which prevented a party from making a timely
hearing request. Hospicio San Martin, DAB CR387, at 2, (1995).
3. Petitioner did not file timely its hearing request
from HCFA's July 19, 1996 determination to impose a
civil money penalty against Petitioner and, therefore,
Petitioner is not entitled to a hearing from that
determination.
On July 19, 1996, HCFA provided Petitioner with notice of the
determination which is at issue here. Petitioner did not request
a hearing from this determination until March 5, 1997, more than
65 days from the date of mailing of this notice. Consequently,
Petitioner is not entitled to a hearing from HCFA's July 19, 1996
determination. See 42 C.F.R. § 498.40(a)(2).
4. Petitioner did not establish good cause for its
failure to file timely its hearing request from HCFA's
July 19, 1996 determination to impose a civil money
penalty against Petitioner.
Petitioner did not establish good cause for its failure to file
timely a hearing request from HCFA's July 19, 1996 notice.
Petitioner has not established the presence of any circumstance
that was beyond Petitioner's ability to control which prevented
Petitioner from filing timely a hearing request.
Petitioner contends that its failure to file timely a hearing
request from HCFA's July 19, 1996 determination was a consequence
of Petitioner being misled by representatives of the Mississippi
State survey agency into believing that it need not file a
hearing request from the determination. Petitioner asserts that
it was told by agents of the Mississippi State survey agency that
a moratorium was in effect on the imposition of civil money
penalties by HCFA. Petitioner contends that it was led to
believe by these asserted representations that no adverse
consequences would accrue to it from the survey which was the
basis for HCFA's July 19, 1996 determination. From this,
Petitioner asserts that it concluded that it was unnecessary for
it to request a hearing from HCFA's July 19, 1996 determination.
Petitioner has not offered sworn statements of any of its
officers or employees to support its fact contentions. With one
exception, Petitioner has not identified the particulars of the
conversations in which the Mississippi State survey agency
representatives allegedly told Petitioner that there was a
moratorium in effect on the imposition of civil money penalties
by HCFA.
In its brief in opposition to HCFA's motion, Petitioner asserts
that, after an informal dispute resolution meeting conducted by
the Mississippi State survey agency on May 29, 1997, Petitioner
was:
contacted and advised that none of the
deficiencies were going to be changed, but that
it was useless to carry the matter forward
since there was a moratorium on . . . [civil
money penalties] and any further appeal would
have no effect on outcome.
Petitioner's brief at 3. It is unclear what communication
Petitioner is referring to, inasmuch as Petitioner has not
identified it more precisely than the assertion in its brief.
Petitioner has not introduced any documents or statements to
prove that the asserted communication occurred.
There is credible evidence which refutes Petitioner's account of
this purported communication with the Mississippi State survey
agency. On June 6, 1996, the Mississippi State survey agency
wrote to Petitioner to advise Petitioner of the results of an
informal dispute resolution proceeding that occurred on May 31,
1996. HCFA Ex. 8. In that letter, the Mississippi State survey
agency told Petitioner that the deficiency that had been
identified in Petitioner's operations was warranted. Id. The
letter is silent as to any moratorium on the imposition of civil
money penalties by HCFA. There is no suggestion in the letter
that a civil money penalty would not be imposed against
Petitioner based on the finding of a deficiency. Id.
Petitioner asserts that its conclusion that a civil money penalty
would not be imposed against it was reinforced by Petitioner's
reading of policy statements in the State Operations Manual
(SOM). Petitioner asserts that the SOM makes it clear that HCFA
vests a great deal of authority in State survey agencies to
decide whether to recommend to HCFA to impose remedies against
long-term care facilities such as Petitioner. According to
Petitioner, the statements that Petitioner attributes to
representatives of the Mississippi State survey agency to the
effect that a civil money penalty would not be imposed were given
added weight by Petitioner's understanding from its reading of
the SOM that HCFA would defer to the recommendation of the
Mississippi State survey agency.
Petitioner contends also that the SOM and associated documents
state that there was a moratorium on the imposition of civil
money penalties which was in effect on July 19, 1996. Petitioner
argues that it was reasonable for Petitioner to conclude that it
was subject to the moratorium, especially in light of the
purported statements that Petitioner attributes to
representatives of the Mississippi State survey agency.
Finally, Petitioner argues that it was misled into not filing a
hearing request from HCFA's July 19, 1996 determination evidenced
by the fact that it had vigorously pursued its rights up through
informal dispute resolution by the State survey agency.
Petitioner asserts that it would not have abandoned pursuing its
rights had it concluded that it might be subject to liability.
HCFA disputes Petitioner's contentions concerning the alleged
statements made by representatives of the Mississippi State
survey agency. As evidence that the State survey agency
employees would not have made the statements that Petitioner
alleges them to have made, HCFA points to the fact that, on four
occasions prior to July 19, 1996, the Mississippi State survey
agency advised Petitioner in writing that it would be
recommending to HCFA that HCFA impose a civil money penalty of
$1,500 per day against Petitioner. HCFA Ex. 4 - 6; 10. By
contrast, there is nothing in writing from the Mississippi State
survey agency to Petitioner to suggest that Petitioner would not
have a civil money penalty imposed against it. HCFA argues that
it is not reasonable to conclude that State survey agency
employees would contradict orally the express written notices
that were sent to Petitioner by the Mississippi State survey
agency.
HCFA asserts that, even if for argument's sake, representatives
of the Mississippi State survey agency had made misleading
statements to Petitioner concerning Petitioner's potential
liability for a civil money penalty, HCFA provided Petitioner
with written notice, effective July 19, 1996, that HCFA had
determined to impose a civil money penalty against Petitioner of
$1,500 per day. HCFA Ex. 11. HCFA avers that the July 19, 1996
notice superseded anything that representatives of the
Mississippi State survey agency might have told Petitioner.
Furthermore, the July 19, 1996 notice explicitly told Petitioner
that it had appeal rights from HCFA's determination which
Petitioner had to exercise within 60 days of its receipt of the
notice. HCFA Ex. 11 at 2 - 3.
I am not satisfied from the evidence presented by Petitioner that
representatives of the Mississippi State survey agency ever told
Petitioner that a civil money penalty would not be imposed, or
suggested to Petitioner that it could safely ignore HCFA's July,
19, 1996 notice of its determination to impose a civil money
penalty. Petitioner has offered no credible evidence to
substantiate its assertions of statements by representatives of
the Mississippi State survey agency. The closest Petitioner has
come to identifying a communication that supports its contentions
is to assert that the Mississippi State survey agency told
Petitioner, in conjunction with its notice to Petitioner of the
results of an informal dispute resolution, that there was no
point in Petitioner pursuing its hearing rights because there was
a moratorium in effect on the imposition of civil money
penalties. But, contrary to Petitioner's assertion, the
documentation of a communication between the Mississippi State
survey agency and Petitioner concerning the results of informal
dispute resolution contains nothing to suggest that a civil money
penalty would not be imposed. HCFA Ex. 8.
Furthermore, Petitioner's assertions of what it purportedly was
told by representatives of the Mississippi State survey agency
are belied by the notices that were sent to Petitioner by the
Mississippi State survey agency. HCFA Ex. 4 - 6; 10. These
notices say nothing about a moratorium on the imposition of civil
money penalties. To the contrary, they advise Petitioner
expressly that the Mississippi State survey agency would
recommend that HCFA impose a civil money penalty against
Petitioner. Id.
I do not find that Petitioner had good cause for not requesting a
hearing timely from HCFA's July 19, 1996 determination to impose
a civil money penalty against Petitioner even assuming that
representatives of the Mississippi State survey agency told
Petitioner that a civil money penalty would not be imposed
against it. Petitioner had no reasonable basis to rely on oral
representations in disregard of what it received in writing from
the Mississippi State survey agency. Whatever Petitioner might
have been told orally by representatives of the Mississippi State
survey agency, it was given specific written notice by that
agency on four separate occasions that the agency intended to
recommend that HCFA impose a civil money penalty against
Petitioner. HCFA Ex. 4 - 6; 10. At the very least, the clear
discrepancy between what Petitioner avers it was told orally and
what it was told in writing put Petitioner on notice that it
faced potential liability.
Furthermore, anything that the Mississippi State survey agency
might have communicated to Petitioner plainly was superseded by
HCFA's July 19, 1996 notice to Petitioner. That notice
unequivocally told Petitioner that HCFA had determined to impose
a civil money penalty of $1,500 per day against Petitioner. And,
the July 19, 1996 notice stated in clear and unmistakable terms
that Petitioner was obligated to request a hearing within 60 days
from Petitioner's receipt of the notice. Thus, even if
Petitioner was misled, prior to July 19, 1996, into believing
that no civil money penalty would be imposed by HCFA, that
misunderstanding would have been resolved by HCFA's July 19, 1996
notice to Petitioner.
I find nothing in the excerpts from the SOM offered by Petitioner
to support Petitioner's assertions that it was misled into not
requesting a hearing. The language of the SOM cited to by
Petitioner would not have given Petitioner a reasonable basis to
conclude that a civil money penalty would not be imposed against
it, even assuming that the Mississippi State survey agency
representatives made the oral representations that Petitioner
attributes to them.
First, the SOM does no more than restate a process that is stated
in regulations whereby a State survey agency makes a
recommendation to HCFA concerning whether to impose a civil money
penalty against a long term care facility. See 42 C.F.R. §
488.400 et seq. The SOM states simply that HCFA will act on a
recommendation by a State survey agency and will defer to that
recommendation except in the most extraordinary circumstances.
What happened in this case is consistent with both the SOM and
the regulations. The Mississippi State survey agency made a
recommendation to HCFA that HCFA impose a civil money penalty
against Petitioner, and HCFA accepted that recommendation. All
of the notices that are in evidence plainly notify Petitioner of
this process. HCFA Ex. 4 - 6; 10; 11.
Second, the SOM and associated documents neither state nor
suggest that civil money penalties would not be imposed against
long-term care facilities, such as Petitioner, during the period
which included July 19, 1996, the date of HCFA's notice to
Petitioner of HCFA's determination to impose a civil money
penalty against Petitioner. Petitioner cites to communications
between HCFA and State survey agencies, dated January 7, 1997, in
which HCFA advised State survey agencies that a moratorium on the
imposition of some civil money penalties would be lifted. P. Ex.
3. In these documents, HCFA recites that, prior to January,
1997, civil money penalties were not processed for long-term care
facilities who manifested deficiencies at certain, specified,
lower levels of severity. P. Ex. 3 at 5. These documents do not
state that a moratorium ever was in effect on the imposition of
all civil money penalties.
Assuming that Petitioner was aware of a moratorium on the
imposition of some civil money penalties by HCFA, the most that
Petitioner could have concluded, reasonably, was that HCFA might
exercise discretion in some cases not to impose civil money
penalties for some lower level deficiencies. When Petitioner
received HCFA's July 19, 1996 notice that HCFA had determined to
impose a civil money penalty against Petitioner, the only
reasonable conclusion that Petitioner could have reached is that
HCFA had determined that the deficiencies that were manifested by
Petitioner were not of such a low level as to fall within
whatever moratorium HCFA might have imposed.
I am unpersuaded by Petitioner's argument that it would not have
abandoned its pursuit of its rights but for its being misled by
representatives of the Mississippi State survey agency. It is
evident that Petitioner committed a judgment error in not
requesting a hearing timely from HCFA's July 19, 1996
determination. But, the issue here is not whether Petitioner
erred, or even whether it misunderstood the process. What is at
issue is whether any communications to Petitioner, either from
the State survey agency or from HCFA, were so deficient or
misleading as to cause Petitioner not to file a hearing request
timely. There is no evidence of communications that would have
so misled Petitioner.
________________________
Steven T. Kessel
Administrative Law Judge