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Department of Health and Human Services DEPARTMENTAL APPEALS BOARD Civil Remedies Division |
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| IN THE CASE OF | |
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Cary Health and Rehabilitation Center, |
DATE:
July 18, 2000
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Health Care Financing
Administration
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Docket No.C-00-062 Decision No. CR685 |
| DECISION | |
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I dismiss the hearing request filed by Petitioner, Cary
Health and Rehabilitation Center. I do so because
Petitioner did not file a timely hearing request and has not shown good
cause for its failure to file a timely hearing request. As part of this
decision, I deny Petitioner's motion for an extension of time within which
to file a hearing request. Additionally, since I have dismissed Petitioner's
hearing request, no basis exists for me to consider the merits of Petitioner's
motion for summary disposition, nor is there any need for me to reach
the merits of HCFA's motion to limit the issues to be heard and decided. I. Undisputed material facts and procedural history
of this case
Petitioner is a long-term care facility which is located
in Cary, North Carolina. The following facts are material
to this case and are not disputed.
On January 7, 1999, Petitioner was surveyed by the North
Carolina State survey agency. The purpose of this survey was to determine
whether Petitioner was complying with federal requirements governing participation
of long-term care facilities in Medicare and other federally-funded health
care programs. At this survey, the surveyors concluded that Petitioner
was not complying substantially with several participation requirements. The surveyors revisited Petitioner's facility on March
5, 1999. At this revisit, the surveyors determined that Petitioner continued
not to be complying substantially with several federal participation requirements. On March 24, 1999, HCFA sent a notice to Petitioner (HCFA
Ex. A). This notice advised Petitioner that, if it did not achieve substantial
compliance within three months of January 7, 1999, the remedy of denial
of payments for new admissions would be mandatory. Under the heading of
"Remedies Imposed" (emphasis in original), the notice contained
the following statement:
HCFA Ex. A at 2. The March 24, 1999 notice also advised
Petitioner that, civil money penalties would be imposed against Petitioner
in the amounts of $100 per day for each day of Petitioner's noncompliance
with participation requirements, if Petitioner did not attain substantial
compliance with participation requirements by April 4, 1999. Id. Finally, the March 24, 1999 notice advised Petitioner
of its right to request a hearing to contest HCFA's remedy determination.
The notice told Petitioner that:
HCFA Ex. A at 3.
The North Carolina State survey agency surveyors revisited
Petitioner for a second time on April 26 - 27, 1999. At this revisit,
the surveyors again determined that Petitioner was not complying substantially
with federal participation requirements. On June 14, 1999, HCFA sent a second notice to Petitioner.
HCFA Ex. B. In the June 14, 1999 notice, HCFA advised
Petitioner that continued noncompliance was identified at the April 26
- 27 revisit. Id. at 2. It advised Petitioner additionally that
HCFA had determined to impose civil money penalties in the amount of $100
per day for each day of Petitioner's noncompliance with participation
requirements beginning with January 7, 1999 and continuing until Petitioner
attained substantial compliance with participation requirements. Id.
It advised Petitioner of its right to request a hearing from the determination
to impose civil money penalties, using language that is substantially
identical to that which was used by HCFA to advise Petitioner of its right
to request a hearing in its March 24, 1999 notice to Petitioner. Id.
at 3. Again, Petitioner was told that it had 60 days within which to request
a hearing. Id. The North Carolina State survey agency surveyors conducted
a third revisit of Petitioner on June 29, 1999. Once again, the surveyors
found that Petitioner was not complying substantially with federal participation
requirements. HCFA sent an additional notice to Petitioner on June 30,
1999. HCFA Ex. C. HCFA advised Petitioner that, in light of its continued
noncompliance with participation requirements, Petitioner's participation
in Medicare would be terminated effective July 18,
1999 unless Petitioner attained substantial compliance with participation
requirements by that date. On July 16, 1999, Petitioner was revisited for a fourth
time by North Carolina State survey agency surveyors. At this visit, the
surveyors found that Petitioner was complying substantially with all participation
requirements. On August 5, 1999, HCFA notified Petitioner that it had
attained substantial compliance and that HCFA would not be terminating
Petitioner's participation in Medicare. HCFA sent an amended notice to
Petitioner on August 6, 1999 which restated this determination. HCFA Ex.
D.
Petitioner filed a request for a hearing on August 31,
1999. HCFA Ex. E. Among other things, the hearing request challenged HCFA's
determination to impose the remedies of civil money penalties and denial
of payment for new admissions. Id. at 2. Petitioner filed its hearing
request approximately four months after HCFA sent its March 24, 1999 notice
to Petitioner and 78 days after HCFA sent its June 14, 1999 notice to
Petitioner.
HCFA filed a motion to dismiss Petitioner's hearing request
on the ground that Petitioner had not filed it timely. Alternatively,
HCFA moved to limit the issues in the case. HCFA attached six exhibits
to its motions (HCFA Ex. A - HCFA Ex. F). Petitioner opposed HCFA's motions.
Petitioner also moved for summary disposition and moved for an extension
of time within which to file its hearing request. Petitioner attached
11 exhibits to its motion for summary disposition (P. Ex. 1 - P. Ex. 11).
Additionally, Petitioner submitted the declaration of Daryl R. Griswold
with its motion to extend the time within which it could file a hearing
request. Petitioner did not designate Mr. Griswold's declaration as an
exhibit. I am identifying the declaration as P. Ex. 12 for purposes of
creating a record in this case. I hereby admit HCFA Ex. A - HCFA Ex. F
and P. Ex. 1 - P. Ex. 12. II. Issues, findings of fact and conclusions of
law
The issues in this case are:
I make findings of fact and conclusions of law (Findings)
to support my decision in this case. I set forth each finding below as
a separately numbered heading. I discuss each Finding in detail.
In cases involving HCFA, a party is entitled to a hearing
only if that party files its request within the time limits established
by 42 C.F.R. § 498.40(a)(2). In order to be entitled to a hearing, a party
must file its request within 60 days from receipt of a notice of a determination
by HCFA to impose a remedy. Id. The date of receipt of a notice
is presumed to be five days after the date on the notice unless there
is a showing of actual receipt on an earlier or later date. Id.;
42 C.F.R. § 498.22(b)(3). HCFA sent two notices of remedy determinations to Petitioner
which gave Petitioner opportunities to request hearings. The first of
these notices was the March 24, 1999 notice. HCFA Ex. A. That notice informed
Petitioner of HCFA's intent to impose the remedy of denial of payments
for new admission effective April 8, 1999. The second notice which gave
Petitioner the opportunity to request a hearing was HCFA's June 14, 1999
notice. HCFA Ex. B. That notice informed Petitioner of HCFA's intent to
impose the remedy of civil money penalties of $100 per day for each day
of Petitioner's noncompliance with participation requirements beginning
with January 7, 1999. A third notice which HCFA sent to Petitioner informing
Petitioner of HCFA's intent to impose a remedy against Petitioner did
not, in fact, give Petitioner an opportunity for a hearing. This was HCFA's
June 30, 1999 notice. HCFA Ex. C. That notice informed Petitioner that
its participation in Medicare would be terminated effective July 18, 1999
if Petitioner did not attain substantial compliance with participation
requirements by that date. Petitioner would have been able to request
a hearing to challenge that determination had the remedy been imposed.
However, HCFA determined that Petitioner attained substantial compliance
prior to July 18, 1999 and HCFA rescinded its determination to impose
the remedy of termination of participation. Hence, Petitioner had no opportunity
for a hearing to challenge HCFA's June 30, 1999 determination. Petitioner has not asserted that it received either the
March 24, 1999 notice or the June 14, 1999 notice
in less than or more than five days from the notice dates. Therefore,
in order to have hearing rights, Petitioner had 65 days from March 24,
1999 and 65 days from June 14, 1999 to request hearings. Petitioner did
not request a hearing until August 31, 1999. That is more than 65 days
from the date of each of the two notices. August 31, 1999 is more than
four months after March 24, 1999 and 78 days after June 14, 1999.
Petitioner argues that the two notices which gave it the
opportunity to request hearings were confusing, ambiguous, and failed
to comply with regulatory requirements governing notices. In effect, Petitioner
asserts that these notices failed to communicate HCFA's remedy determinations
to Petitioner and, therefore, Petitioner is excused from its obligation
to file hearing requests within the time limit established by 42 C.F.R.
§ 498.40(a)(2). Petitioner makes the following specific arguments about
the March 24, 1999 notice. First, Petitioner asserts that the notice is
void because it fails to give Petitioner 15 days' notice of HCFA's intent
to impose the remedy of denial of payment for new admissions. Petitioner
argues that regulations require a minimum of 15 days' notice for imposition
of such a remedy. See 42 C.F.R. § 488.402(f)(4). In fact, HCFA did give Petitioner 15 days' notice of its
intent to impose the remedy of denial of payment for new admissions. The
notice was dated March 24, 1999. The remedy did not go into effect until
April 8, 1999, 15 days after the notice date. HCFA avers that it faxed
the notice to Petitioner on March 24, 1999. Petitioner does not deny that
it received the fax on that date. Thus, Petitioner received the faxed
notice 15 days prior to the effective date of the remedy. HCFA states in its reply brief that it is amending the
effective date of the denial of payment for new admissions to April 13,
1999, to assure that Petitioner had 15 days' notice of the imposition
of that remedy. Petitioner argues that HCFA has no authority to do so
under the regulations. The issue of whether HCFA may retroactively amend the
date of implementation of the denial of payment for new admissions is
moot. As I discuss above, HCFA in fact gave Petitioner the requisite 15
days' notice of its implementation of the remedy. Moreover, whether HCFA
has the authority to amend its notice is not an issue which I hear or
decide in this case because I conclude that Petitioner neither has a right
to a hearing nor has shown good cause to be given an extension of time
for filing its hearing request. As I discuss in more detail below, Petitioner
is not excused from requesting a hearing timely by the possibility that
HCFA may not have complied with regulations which govern the issuance
of notices. Second, Petitioner contends that the March 24, 1999 notice
does not actually tell Petitioner that HCFA was imposing the remedy of
denial of payment for new admissions. Petitioner argues that the notice
uses "conditional language" in that it says that HCFA would be imposing
the remedy of denial of payment of new admissions if Petitioner did not
attain substantial compliance within three months of January 7, 1999.
Petitioner argues that HCFA merely told Petitioner that it might be
imposing a remedy and did not tell Petitioner that it was imposing
a remedy. Consequently, according to Petitioner, there
was no remedy determination and there was no need for Petitioner to request
a hearing based on the March 24, 1999 notice. I am not persuaded by this argument. The March 24, 1999
notice to Petitioner clearly and specifically informs Petitioner of HCFA's
intention to impose the remedy of denial of payment for new admissions.
HCFA Ex. A. The notice is not ambiguous in announcing the remedy that
HCFA intended to impose and the circumstances under which that remedy
would be imposed. Moreover, the notice plainly tells Petitioner that it
had 60 days from receipt of the notice within which to request a hearing
from HCFA's determination. The fact that the notice may have conditioned the imposition
of denial of payment for new admissions on Petitioner's continued noncompliance
with participation requirements is no defect. There is nothing in the
regulations which precludes HCFA from telling a party that a remedy will
be imposed on a specified date if that party continues to fail to comply
with participation requirements. Indeed, telling a party that a remedy
will be imposed prospectively if the party continues not to comply with
participation requirements is consistent with the remedial purpose of
inducing compliance. The possibility that HCFA might have imposed a remedy
in a way that did not comply with the requirements of regulations did
not excuse Petitioner from its obligation to request a hearing timely.
Petitioner might have asserted HCFA's alleged failure to comply with regulations
as a basis for challenging HCFA's remedial action. But, there is nothing
in the regulations which govern hearings to suggest that such alleged
failure by HCFA constitutes a basis for excusing a party from its obligation
to request a hearing within the specified time frame. Third, Petitioner argues that its hearing request challenging
the determination that is made in HCFA's March 24, 1999 notice is exempt
from the time limit requirements of 42 C.F.R. § 498.40(a). Petitioner
asserts that it made its hearing request pursuant to 42 C.F.R. § 488.408(g).
According to Petitioner, a hearing request that is made pursuant to this
section is not governed by 42 C.F.R. § 498.40(a). It asserts that 42 C.F.R.
§ 498.40(a) was written to govern only certain limited
types of hearing requests to which HCFA is a party. These are hearing
requests which are permitted by 42 C.F.R. § 498.5 - which, in the case
of a provider such as Petitioner, would involve the issue of termination
of participation - and hearing requests to challenge the imposition of
civil money penalties made pursuant to 42 C.F.R. § 488.432(a).
I am not persuaded by this argument. Although 42 C.F.R.
§ 498.40(a) does not expressly govern hearing requests about denials of
payment for new admissions, it is clear that the intent of the regulations
in 42 C.F.R. Part 498, including 42 C.F.R. § 498.40(a), is to apply to
such requests. Therefore, Petitioner's hearing request challenging the
determination made in the March 24, 1999 notice is governed by the time
limit requirements of 42 C.F.R. § 498.40(a). Clearly, the Secretary intended that all hearing
requests by long-term care facilities which challenge deficiency findings
be made pursuant to the regulations at 42 C.F.R. Part 498 and, in particular,
42 C.F.R. § 498.40. That is made evident by the introduction to 42 C.F.R.
Part 498. 42 C.F.R. § 498.1. Moreover, it is made evident by the provisions
of 42 C.F.R. § 498.3. This regulation defines those "initial determinations"
that HCFA makes which eventually lead to hearing rights pursuant to 42
C.F.R. § 498.5. Pursuant to 42 C.F.R. § 498.3(b)(12), an initial determination
includes:
Denial of payment for new admissions is one of the remedies
specified in 42 C.F.R. § 488.406. 42 C.F.R. § 488.406(a)(2)(i)(A),
(B). So also is the imposition of a civil money penalty. 42 C.F.R. § 488.406(a)(3). I find Petitioner's assertions about the June 14, 1999
notice also to be without merit. Petitioner contends that "there were
inconsistencies in HCFA's communications about the imposition of a civil
monetary penalty which understandably confused . . . [Petitioner] regarding
its obligation to file a request for hearing by a certain date." Petitioner's
brief in opposition to HCFA's motion at 9. Petitioner observes that the
notices from HCFA to Petitioner give conflicting information about the
circumstances and timing of the imposition of civil money penalties against
Petitioner. There are some inconsistencies in the notices. However,
the June 14, 1999 notice to Petitioner clearly and unambiguously told
Petitioner that HCFA had determined to impose civil money penalties against
Petitioner. HCFA Ex. B. Further, it told Petitioner that it must
file a hearing request within 60 days from receipt of that notice in order
to be entitled to a hearing. There is nothing in the notices which HCFA
sent to Petitioner after June 14, 1999 which states or suggests that civil
money penalties would not be imposed or that Petitioner had some other
time frame within which to request a hearing concerning the imposition
of civil money penalties against it. In particular, the June 30,
1999 notice does not state that Petitioner was free
to ignore the June 14 notice or the filing deadline specified by that
notice. See HCFA Ex. C.
Governing regulations provide at 42 C.F.R. § 498.40(a)(2),
that a party requesting a hearing must file its request timely unless
the period for filing the request is extended. An administrative law judge
may extend the time within which a hearing request may be filed based
on a showing of good cause to justify an extension of time. 42 C.F.R.
§ 498.40(c)(2). The term "good cause" is not defined in the regulations.
However, that term has been applied in other cases. Generally, good cause
is defined to mean a circumstance beyond a party's ability to control
but for which that party would have been able to file its hearing request
timely. Hospicio San Martin, DAB CR387 at 2 (1995). Petitioner has not established good cause in this case
for extending the time within which it may file its hearing request. It
has made no showing that circumstances that were beyond its ability to
control prevented it from filing hearing requests timely, either with
respect to HCFA's March 24, 1999 notice or with respect to HCFA's June
14, 1999 notice. Petitioner submitted the declaration of Daryl R. Griswold
to support its contention that good cause exists for not having filed
a hearing request within the time limits that are specified by 42 C.F.R.
§ 498.40(a). P. Ex. 12. Mr. Griswold is Senior Vice President and General
Counsel for Centennial HealthCare Corporation. Centennial HealthCare Corporation
owns and operates Petitioner through a subsidiary, Transitional Health
Partners. Id. at 1. Mr. Griswold avers that he read HCFA's March
24, 1999 notice as only a conditional imposition of a denial of payment
for new admissions. Id. at 3. He avers further that he expected
that Petitioner would receive an additional notification from HCFA if
Petitioner did not achieve substantial compliance with participation requirements
by April 8, 1999. He contends that he was unaware that Petitioner was
obligated to file a hearing request within 60 days of its receipt of Petitioner's
March 24, 1999 notice inasmuch as he thought that this notice was only
a conditional notice. Id. This is tantamount to an assertion by Mr. Griswold that
he was misled by the March 24, 1999 notice into believing that the notice
was not a notice of a remedy determination. And, it is effectively an
assertion that Petitioner did not believe it had to file a hearing request
to challenge any determination that was made in the March 24, 1999 notice
inasmuch as Petitioner concluded that the March 24, 1999 notice was only
a conditional notification. I am not persuaded by these assertions. As I discuss above,
at Finding 1, I find nothing within the March 24, 1999 notice that would
mislead a reasonable individual or entity into believing that it did not
have to file a hearing request within 60 days if it intended to challenge
the determinations made in that notice. The March 24, 1999 notice did
tell Petitioner that the remedy of denial of payment for new admissions
would be imposed effective April 8, 1999 if Petitioner continued to be
out of compliance with participation requirements. But, that notice made
it clear that the remedy determination was predicated on findings that
Petitioner was deficient in meeting participation requirements. And, it
contained an explicit statement advising Petitioner to request a hearing
within 60 days of its receipt of the March 24, 1999 notice if it wanted
to challenge those findings. Mr. Griswold does not offer any explanation why Petitioner
did not request a hearing within 60 days from HCFA's June 14, 1999 notice
other than to say that Petitioner's parent "became very preoccupied with
notification received from HCFA in June of 1999 that HCFA would be terminating
. . . [Petitioner's] provider agreement." P. Ex. 12 at 3 - 4. However,
HCFA did not notify Petitioner that it might terminate Petitioner's participation
until June 30, 1999, more than two weeks subsequent to the June
14, 1999 notice that told Petitioner that HCFA was imposing civil money
penalties. See HCFA Ex. C. I do not understand how Petitioner or
its parent corporations' preoccupation with the possibility that Petitioner's
participation in Medicare might be terminated served to prevent Petitioner
from filing timely a hearing request from the June 14 or March 24, 1999
notices. And, as I discuss in Finding 1, there is certainly nothing in
the June 30, 1999 notice which would mislead a reasonable party into believing
that its obligation to request a hearing within 60 days of its receipt
of previous notices had been tolled. Mr. Griswold also alludes to the fact that until mid-July,
1999, Petitioner was involved in an informal dispute resolution process
with the North Carolina State survey agency. P. Ex. 12 at 4. It appears
that he may be suggesting that Petitioner was misled into believing that
it would not have to request a hearing until after this process was completed.
I am not persuaded by this assertion, if, in fact, that is what Petitioner
is saying. Informal dispute resolution is available to long-term care
facilities as a vehicle to resolve findings of noncompliance with participation
requirements that is separate from, and in addition to, the formal hearing
process. However, informal dispute resolution does not toll the requirement
that a hearing request be filed timely. Nor is there anything about the
process which would mislead a long-term care facility into believing that,
if it engages in informal
dispute resolution, it is excused from the requirement that it file a
hearing request timely.
An administrative law judge may dismiss a hearing request
where the request is not filed timely and the time for filing the request
has not been extended. 42 C.F.R. § 498.70(c). These criteria exist here.
Therefore, I dismiss Petitioner's hearing request.
As I discuss above, at Part I.B. of this decision, Petitioner
moved for summary disposition of this case. I have dismissed Petitioner's
hearing request. Therefore, no basis exists for me to consider the merits
of Petitioner's motion for summary disposition.
Further, I need not reach the merit's of HCFA's motion to limit the issues to be heard and decided inasmuch as I have dismissed Petitioner's hearing request. |
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| JUDGE | |
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Steven T. Kessel Administrative Law Judge
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