Date: January 25, 1999

In the Case of:

Schowalter Villa,

Petitioner,

- v. -

Health Care Financing Administration.

Docket No. C-98-493
Decision No. CR568

In this decision, I grant the motion to dismiss filed by the Health Care Financing Administration (HCFA). In doing so, I have considered HCFA's motion, the six exhibits provided by HCFA (HCFA Ex. 1 through 6), and Petitioner's written response. I issue only the following two formal findings of fact and conclusions of law:

1. I am without the authority to review or redress Petitioner's objections to having been banned from providing a nurse-aide training program.

2. I am without the authority to review or redress Petitioner's objection to having been left with a bad compliance record even after HCFA has rescinded the imposition of all enforcement remedies under 42 C.F.R. § 488.406.

HCFA has shown that, even though it had earlier informed Petitioner that two enforcement remedies listed in 42 C.F.R. § 488.406 would be imposed, HCFA later rescinded those remedies. HCFA Ex. 1, 2, 4. However, Petitioner had filed the hearing request underlying this case before receiving HCFA's notification that neither remedy would be effectuated. HCFA Ex. 3. HCFA's counsel then inquired whether Petitioner wished to withdraw its hearing request in light of the changed circumstances. HCFA Ex. 5. Petitioner indicated to HCFA that it wished to continue this action since it remained subject to a ban on nurse-aide training and was concerned about its compliance history, or "historic record."⁽¹⁾ HCFA Ex. 6.

HCFA bases its motion to dismiss on the long line of administrative decisions interpreting the manners in which the regulations limit the administrative law judge's reviewing authority. See, e.g., Country Club Center II, DAB CR433 (1996), aff'd DAB 1614 (1997); Rafael Convalescent Hospital, DAB CR444 (1996), aff'd DAB 1616 (1997); Arcadia Acres, Inc., DAB CR424 (1996); University Towers Medical Pavilion, DAB CR436 (1996). The regulation at 42 C.F.R. § 498.3(a) provides administrative review of HCFA determinations for only those matters listed in subpart (b) of that regulation, and 42 C.F.R. § 498.3(b)(12), in turn, provides hearing rights to skilled nursing facilities and nursing facilities only for:

a finding of noncompliance that results in the imposition of a remedy specified in §488.406 of this chapter, except the State monitoring remedy, and the loss of the approval for a nurse-aide training program.

The regulation at 42 C.F.R. § 488.406 lists those enforcement remedies which HCFA may impose at its discretion and give rise to hearing rights. The enforcement remedies listed in 42 C.F.R. § 488.406 do not include any ban on nurse-aide training. The regulation at 42 C.F.R. § 498.3(d)(10)(iii) further reiterates that "the loss of the approval for a nurse-aide training program" is not an "initial determination" subject to administrative review.

Consequently, citing the plain language of 42 C.F.R. § 498.3(b)(12), 42 C.F.R. § 498.3(d)(10)(iii), and 42 C.F.R. § 488.406, the administrative law judges and appellate panels of the Departmental Appeals Board have uniformly held that a petitioner loses its right to a hearing if HCFA rescinds the remedies it had previously imposed. In reliance on the same regulations, they have reached also the conclusion that there exists no hearing right if HCFA has not imposed one of the remedies specifically listed in 42 C.F.R. § 488.406, or if the facility seeks to challenge only the prohibition against providing a nurse-aide training program. Moreover, as the administrative decisions and the regulation at 42 C.F.R. § 498.3(b)(12) make clear, a facility does not have a right to correct its compliance record through the hearing process provided by 42 C.F.R. Part 498 if none of the remedies listed in 42 C.F.R. § 488.406 has been imposed by HCFA (or if they had been rescinded by HCFA).

Petitioner does not dispute that the administrative case law is as described by HCFA in its motion. Nor does Petitioner disagree that this case must be dismissed for the reasons stated by HCFA. However, Petitioner professes to disbelieve that the Secretary of the United States Department of Health and Human Services has promulgated hearing regulations which do not permit a facility to challenge a ban on its nurse-aide training or a finding of noncompliance that creates a bad record, even after HCFA has rescinded the enforcement remedies.

I conclude that the plain language of the relevant regulations do not permit an interpretation different than what I have set forth above and in decisions for cases such as Country Club Center II, Arcadia Acres, Inc., and University Towers Medical Pavilion. Accordingly, I grant HCFA's motion to dismiss and order this case dismissed.

Mimi Hwang Leahy
Administrative Law Judge

1. The record before me contains no official notice letter from HCFA stating that Petitioner has been banned from providing nurse-aide training, or that its historic record will continue to show the level of deficiency of concern to Petitioner. However, HCFA's motion to dismiss does not dispute the existence of the ban on nurse-aide training, and it does not assert that the compliance record HCFA maintains for Petitioner is other than what Petitioner has described in its letter to HCFA (HCFA Ex. 6).