CASE | DECISION | ISSUE, FINDINGS OF FACT AND CONCLUSIONS OF LAW | JUDGE

Decision No. CR627
Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD
Civil Remedies Division
IN THE CASE OF  

SUBJECT:

Jacinto City Healthcare Center,

DATE: November 12, 1999
        Petitioner,
             - v -
 
The Health Care Financing Administration.
Docket No. C-98-420

DECISION DISMISSING REQUEST FOR HEARING
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I grant the motion of the Health Care Financing Administration (HCFA) to dismiss the request for hearing filed by Petitioner, Jacinto City Healthcare Center. I do so because Petitioner no longer has a right to a hearing in this case.

Background and undisputed material facts

I take notice that Petitioner is a skilled nursing facility that participates in the Medicare program and which is located in Houston, Texas. On July 7, 1998, HCFA sent a notice to Petitioner's administrator in which HCFA announced its intent to impose remedies against Petitioner. HCFA told Petitioner that the remedies were being imposed because Petitioner had failed to remain in substantial compliance with federal participation requirements which govern long-term care facilities, including skilled nursing facilities that participate in the Medicare program. These remedies included a civil money penalty of $4,000 for Petitioner's alleged noncompliance with participation requirements on March 25, 1998 and civil money penalties of $2,500 per day for Petitioner's alleged noncompliance with participation requirements from March 26, 1998 through April 30, 1998. The total amount of the civil money penalties that HCFA determined to impose was $94,000.

On June 25, 1998, Petitioner requested a hearing. The hearing request predated HCFA's July 7, 1998 notice to Petitioner and it responded to an earlier notice that HCFA had sent to Petitioner. The case was assigned to me for a hearing and a decision. I concluded that Petitioner timely requested a hearing. I scheduled the hearing to take place in Houston, Texas, beginning on September 21, 1999.

Shortly prior to the scheduled hearing date, HCFA advised me and notified Petitioner that it had rescinded all of its proposed remedies. It asserted that Petitioner no longer had a right to a hearing. I postponed the scheduled hearing in order to allow HCFA to move to dismiss Petitioner's hearing request. HCFA filed its motion. Petitioner opposes the motion to dismiss.

ISSUE, FINDINGS OF FACT AND CONCLUSIONS OF LAW
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Issue:

The issue in this case is whether Petitioner continues to have a right to a hearing in light of HCFA's determination to rescind all of the remedies that it previously had determined to impose against Petitioner.

Finding of fact and conclusion of law:

I make the following finding of fact and conclusion of law (Finding) to support my decision that Petitioner no longer has a right to a hearing. I discuss my Finding in detail, below.

1. Petitioner has no right to a hearing in the absence of a determination by HCFA to impose a remedy against Petitioner.

A long-term care facility's hearing rights in any case involving HCFA are established by federal regulations. A facility has a right to a hearing to contest any "initial determination" by HCFA that is described at 42 C.F.R. § 498.3(b). An appealable initial determination includes:

a finding of noncompliance [with participation requirements] that results in
the imposition of a remedy specified in [42 C.F.R.] § 488.406 . . . .

42 C.F.R. § 498.3(b)(12). The remedies that are specified at 42 C.F.R. § 488.406 include civil money penalties. 42 C.F.R. § 488.406(a)(3). There is no provision in 42 C.F.R. §

498.3(b) or elsewhere in the regulations for a hearing in the case where HCFA does not determine to impose a remedy against a long-term care facility.

The undisputed fact of this case is that HCFA determined to impose civil money penalties against Petitioner. That determination created a hearing right which Petitioner exercised. However, subsequently, and prior to the scheduled hearing date, HCFA determined to rescind its civil money penalty determinations. That subsequent determination by HCFA extinguished any hearing right that Petitioner had. Once HCFA determined to rescind all remedies, Petitioner no longer had any right to a hearing.

Petitioner argues that it has a right to a hearing as a matter of law even in the absence of a remedy determination by HCFA. As support for this argument, Petitioner relies on 42 C.F.R. § 488.408(g)(1), which states that:

[a] facility may appeal a certification of noncompliance
leading to
an enforcement remedy.

(emphasis added). Petitioner's logic is that this language means that a long-term care facility has a right to a hearing where HCFA makes a finding of noncompliance that may result in the imposition of an enforcement remedy. Under this analysis, a right to a hearing does not depend on actual imposition of a remedy, but emanates instead from any finding that could result in imposition of a remedy.

I addressed a very similar argument in Fort Tryon Nursing Home, DAB CR425 (1996). I held there that the regulations created a right to a hearing only where a remedy actually was imposed. In Fort Tryon, I noted that any possible ambiguity that resulted from the phrase "leading to" in the regulations was addressed in comments to the regulations which made it clear that no hearing right existed in the absence of a determination to impose a remedy. DAB CR425 at 6; 59 Fed. Reg. 56,116, 56,158 (1994).

At the time that I issued my Fort Tryon decision, both 42 C.F.R. §§ 488.408(g)(1) and 498.3(b)(12) contained the "leading to" language. Subsequently, 42 C.F.R. § 498.3(b)(12) was revised to substitute the phrase "results in" for the phrase "leading to." If anything, the regulations are more clear in their intent now than they were when I issued the Fort Tryon decision. They preclude any hearing rights in the absence of a remedy.

Petitioner also argues that a conclusion by HCFA that a facility is deficient at an immediate jeopardy level is in and of itself a determination that creates a right to a hearing. According to Petitioner, it has a right to a hearing as to HCFA's finding that it was deficient at the immediate jeopardy level whether or not HCFA imposed a remedy based on that finding. I disagree with this analysis. The regulations do not permit hearings as to findings of deficiency except where those findings result in the imposition of a remedy or remedies against a facility.

Petitioner also asserts equitable considerations to support its contention that it continues to have a right to a hearing. It argues that it has been harmed by the stigma associated with HCFA's determinations that Petitioner was not complying substantially with participation requirements. Petitioner contends that it must be given a hearing in order to protect its reputation as a provider that complies with participation requirements. It argues that this case is distinguishable from other cases in which determinations were rescinded in that a long time period has transpired between the dates when findings of noncompliance were made and the date when HCFA finally determined to rescind all remedies. Petitioner contends that it has suffered damages by virtue of this lapse of time in that the persistence of HCFA's determinations of noncompliance by Petitioner with participation requirements may have created a public perception that Petitioner was not a facility that complied substantially with participation requirements.

The problem with this argument is that the right to a hearing in a case involving HCFA is confined only to that which is provided for by regulations. A party does not have an equitable right to a hearing if there is nothing in the regulations which grants that party a right to a hearing. As I have discussed above, there is no authority in the regulations which gives Petitioner a right to a hearing where HCFA no longer intends to impose a remedy against Petitioner. Therefore, Petitioner's argument that it has an equitable right to a hearing fails.

Alternatively, Petitioner asserts that it is entitled to a finding that HCFA's recission of its remedy determination also constitutes a recission of the underlying findings of deficiency. As a matter of logic, Petitioner's assertion that HCFA's recission of remedies means that HCFA has also rescinded any findings of deficiencies may or may not be correct. However, I have no authority to direct HCFA to issue a statement which rescinds findings of deficiencies. Indeed, I have no authority to address the merits of HCFA's findings inasmuch as Petitioner has no right to a hearing in this case.

JUDGE
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Steven T. Kessel;
Administrative Law Judge

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