Department of Health and Human Services DEPARTMENTAL APPEALS BOARD Civil Remedies Division |
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IN THE CASE OF | |
Meadowbrook Manor, |
DATE: April 25, 2001 |
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Health Care Financing Administration
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Docket No.C-00-647
Decision No. CR764 |
DECISION | |
DECISION On October 30, 2000, the Health Care Financing Administration (HCFA) filed a motion to dismiss Petitioner's June 30, 2000 hearing request for untimeliness, accompanied by a brief (HCFA Br.) and six proposed exhibits (HCFA Exs. 1-6.). I am admitting these exhibits into evidence as HCFA Exs. 1-6. On November 29, 2000, Petitioner filed a brief in opposition (P. Br.) and six proposed exhibits (P. Exs 1-5 and 10). I am admitting these exhibits into evidence as P. Exs. 1-5 and 10. On December 20, 2000, HCFA submitted a reply brief (HCFA R. Br.), accompanied by the affidavit of Lesley Stevens, which I am admitting into evidence as HCFA Exhibit 7.(1) On January 4, 2001, Petitioner responded to HCFA's reply (P. R. Br.), and submitted two additional exhibits, which I am admitting into evidence as P. Exs. 11 and 12. P. Ex. 11 is the affidavit of Petitioner's counsel, Matthew J. Murer.(2)
After consideration of the written arguments and documentary
evidence submitted by the parties, I grant HCFA's motion to dismiss. In
doing so, I find that the hearing request was untimely filed and that
the time for filing a request for hearing should not be extended, as Petitioner
has not shown good cause for its failure to file a timely hearing request.(3) Undisputed Facts Petitioner is a skilled nursing facility, located in Bolingbrook,
Illinois, which participates in the Medicare and Medicaid programs. On
February 4, 2000, the Illinois Department of Public Health (IDPH) informed
Petitioner that an inspection of its facility on January 27, 2000, revealed
that it was not in compliance with federal requirements for nursing homes
participating in the Medicare and Medicaid programs. P. Ex. 1. Consistent
with those findings, IDPH notified Petitioner that a civil money penalty
(CMP) and other remedies were being imposed, as authorized by HCFA. The
IDPH letter stated on page 3 (P. Ex. 1, at 3) that a CMP was being imposed,
wheras at page 4 (P. Ex. 1, at 4) it indicated that a CMP was being recommended
for imposition by HCFA. Subsequently, on March 7, 2000, IDPH sent
Petitioner an amendment to the February 4, 2000 notice. P. Ex. 3. The
March 7, 2000 notice was identical to the February 4, 2000 notice in all
respects, except that it listed the CMP as a remedy recommended
to HCFA for imposition, as opposed to saying IDPH itself was imposing
the remedy. P. Ex. 3, at 3. However, on March 2, 2000, HCFA had notified
Petitioner, by facsimile and by mail, that it concurred with IDPH's recommendations
and was imposing the CMP and other remedies. P. Ex. 2. HCFA further informed
Petitioner that if it disagreed with that determination it could request
a hearing before an administrative law judge (ALJ) within 60 days of receipt
of the notice, pursuant to 42 C.F.R. § 498.40. Id. at 3. Petitioner
filed a request for hearing on June 30, 2000. P. Ex. 5. Issues The issues in this case are:
Applicable Law and Regulations In cases involving HCFA, a party is entitled to a hearing
only if that party files its request for hearing within the time limits
established by 42 C.F.R. § 498.40(a)(2), unless the time period for filing
is extended. In order to be entitled to a hearing, a party must file its
request within 60 days from its receipt of a notice of a determination
by HCFA imposing 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). An ALJ may extend the time within which a hearing
request may be filed based on a showing of good cause justifying an extension
of time. 42 C.F.R. § 498.40(c)(2). An ALJ may dismiss a request for hearing
which is not timely filed. 42 C.F.R. § 498.70(c). Findings and Discussion I make findings of fact and conclusions of law (Findings) to support my decision to dismiss. Each Finding is noted below, in bold face and italics, followed by a discussion of the Finding.
HCFA sent Petitioner the notice of deficiencies by facsimile
on March 2, 2000, as well as by mail. P. Ex. 2. The regulatory presumption
is that Petitioner received the notice not later than March 7, 2000. 42
C.F.R. § 498.22(b)(3). Petitioner does not dispute receipt of HCFA's notice
of imposition of remedies. In fact, Petitioner admits having received
HCFA's letter imposing sanctions on March 2, 2000. P. Ex. 11, at 1, paragraph
4. Nonetheless, it was not until June 30, 2000, more than 110 days after
receipt of HCFA's determination, that Petitioner filed a request for hearing
before an ALJ. 42 C.F.R. § 498.40(a)(2) expressly provides that:
The filing of Petitioner's request was clearly beyond the 60 days stipulated in the regulations. Also, 42 C.F.R. § 498.22(b)(3) provides that the "receipt of the notice of [an] initial determination . . . will be presumed to be 5 days after the date on the notice unless there is a showing that it was, in fact, received earlier or later." As stated above, Petitioner received HCFA's notice on March 2, 2000. Thus, the time for seeking a hearing expired on May 1, 2000.
Petitioner has requested an extension
of time to file its request for hearing. Such request is permissible pursuant
to 42 C.F.R. § 498.40(c)(1). However, I have discretion to grant Petitioner's
application for leave to file untimely only upon a showing of good cause.
42 C.F.R. § 498.40(c)(2). For the reasons set forth below, I find that
Petitioner has failed to establish good cause for late filing. 42 C.F.R.
§ 498.40(c)(2). Petitioner's Arguments Petitioner contends that there was good cause for its
delay in requesting a hearing. Petitioner asserts that IDPH misled it
by providing the amended notice, which notice stated that it replaced
the previous notice of February 4, 2000 and indicated that the CMP "should
only be listed under the remedies recommended to HCFA for imposition."
P. Br. at 4. Petitioner goes on to say that IDPH confirmed that no remedy
existed when its representative was telephonically informed by IDPH on
March 23, 2000 that no remedies were being imposed. Id. In support
of its contention Petitioner offered an affidavit by one of the attorneys
representing the facility in this matter, Mr. Murer. P. Ex. 11. The thrust
of this sworn statement by Mr. Murer is that on or about March 23, 2000,
he contacted Lesley Stevens by telephone at IDPH and, in response to his
inquiry, Ms. Stevens informed him that the February 4, 2000 notice had
been amended to indicate that IDPH was only recommending that a CMP be
imposed. Id. According to Mr. Murer, Ms. Stevens also stated that
at that time no CMP was being imposed. Id. Thus, Petitioner concludes
that its failure to request a hearing within the required 60 days was
caused by the written and verbal representations made by IDPH that no
remedies were being imposed. P. Br. at 4-8. Petitioner places reliance on the holding in the case
of Hospicio San Martin, DAB CR387, at 21 (1995), aff'd, DAB
No. 1554 (1996), insofar as it defines good cause for late filing as including
circumstances beyond a party's ability to control. Petitioner reasons
that the misleading amended notice issued by IDPH on March 7, 2000, together
with the telephonic representations of Ms. Stevens, constituted circumstances
beyond the facility's control causing it to make an untimely filing of
its request for hearing. P. Br. at 4. Petitioner further argues that its
attorneys' familiarity with the Departmental Appeals Board's rulings led
them to conclude that, in the absence of an imposed remedy, a provider
has no appeal right. P. Br. at 5-6. Petitioner argues also that dismissal of the case is inappropriate,
because such a sanction is not reasonably related to its alleged misconduct.
P. Br. at 9. Petitioner relies on the cases of Osceola Nursing and
Rehabilitation Center, DAB No. 1708 (1999) and Rodgers v. Curators
of the University of Missouri, 135 F.3d 1216 (8th Cir. 1998), to support
its view that "dismissal with prejudice is an extreme sanction and should
only be used in cases of willful disobedience of a court order . . . or
persistent failure to prosecute a claim." Rodgers, 135 F.3d, at
1219; P. Br. at 9. Petitioner suggests that the conclusion reached by
the appellate panel of the Departmental Appeals Board in Osceola,
to the effect that dismissal should be a remedy of last resort, is binding
here. Petitioner suggests that the case of Stough v. Mayville Community
Schools,138 F.3d 612 (6th Cir. 1998), cited with approval by the appellate
panel in Osceola, adopted a four-prong test that makes dismissal
here an inappropriate sanction. That test requires the judge to address
the following factors:
Stough, 138 F.3d, at 615. HCFA's Arguments HCFA contends that Petitioner did not file a timely request
for hearing and that no good cause exists for an extension of time. It
specifically opposes Petitioner's position that there were circumstances
present beyond the facility's ability to control which prevented it from
making a timely hearing request. HCFA Br. at 6; Hospicio San Martin,
DAB CR387 (1995), aff'd, DAB No. 1554 (1996); Mathis Nursing
Home, DAB CR436 (1997); Wellington Oaks Care Center, DAB CR456
(1997), aff'd, DAB No. 1626 (1997). In the present case, HCFA
asserts that Petitioner made an error in judgment in choosing to believe
that the CMP imposed by HCFA in its March 2, 2000 letter had been rescinded.
The logic of HCFA's reasoning is that such mistaken belief does not amount
to circumstances beyond the facility's ability to control. As an additional argument, HCFA asserts that there is
an absence of evidence that it authorized IDPH to either impose or rescind
the CMP. HCFA Br. at 7. Discussion The fundamental issue to be decided here is whether Petitioner
has shown good cause to extend the time period in which it should be allowed
it to file a request for hearing beyond the 60 days provided in the regulations.
42 C.F.R. § 498.40(c)(1) and (2). Inasmuch as what constitutes good cause
is not defined in the regulations, I must look to case law for guidance
in pursuit of a definition. Appellate panels of the Departmental Appeals
Board have held that "good cause" means circumstances beyond an entity's
ability to control which prevented it from making a timely request for
hearing. Hospicio San Martín, DAB No. 1554 (1996). In view of the foregoing, I examine the facts of this case to determine what circumstances, if any, beyond Petitioner's control prevented it from filing a timely hearing request. The thrust of Petitioner's argument in addressing this issue is two pronged:
The facts of this case reveal that on February 4, 2000,
IDPH sent Petitioner a notice and statement of deficiencies, pursuant
to a January 27, 2000 inspection, which found that the facility was not
in substantial compliance with federal participation requirements. P.
Ex. 1. At page 3 of that notice, IDPH informed Petitioner that a CMP was
being imposed. However, that same notice, at page 4,
informed Petitioner that the CMP was being recommended for imposition
by HCFA. IDPH corrected the contradictory information provided to
Petitioner by letter of March 7, 2000. IDPH noted that the February 4,
2000 notice was being amended to show that the CMP should have been listed
only as a remedy recommended to HCFA for imposition. P. Ex. 3, at 3. More
specifically, the affidavit of Ms. Stevens refers to the above incident
as being an inadvertent typographical error that was corrected by the
letter dated March 7, 2000. She added that the amended letter served as
clarification that the CMP was a remedy that was being recommended to
HCFA for imposition, but was not being imposed by IDPH. HCFA Ex. 7, at
2. Ms. Stevens' statement is supported by the affidavit of
Petitioner's counsel, Mr. Murer. At page one of his sworn statement, Mr.
Murer says that: "Ms. Stevens stated that it amended the February 4, 2000
correspondence and that the Department was only recommending that a CMP
be imposed." P. Ex. 11, at 1, paragraph 6. Petitioner claims that its
attorneys were knowledgeable regarding Departmental Appeals Board rulings.
P. Br. at 5. Consequently, neither the amendment nor its import should
have been surprising to Petitioner. Thus, when Ms. Stevens informed Mr.
Murer that "at this time" (id.) no CMP was being imposed, Petitioner
knew or should have known that such statement could only be taken to mean
that at that point in time IDPH was not imposing a CMP inasmuch as that
was only within HCFA's province. Ms. Stevens is unequivocal in her affidavit
to the effect that at no time did she tell Mr. Murer that a CMP was not
being imposed by HCFA. HCFA Ex. 7, at 3, paragraph 7. Mr. Murer candidly
admits as much in his own statement when he asserts that he did not ask
Ms. Stevens specifically whether HCFA was imposing a CMP, but only whether
any CMPs were being imposed. P. Ex. 11, at 2, paragraph 7. At that point
in time, Ms. Stevens was unaware that HCFA had adopted its determination
of February 4, 2000. HCFA Ex. 7, at 3, paragraph 6. It is understandable,
therefore, that when she told Mr. Murer that no CMP was being imposed
she meant that IDPH was not imposing a CMP at that time. Such imposition
would have to come from HCFA. In view of the foregoing, I cannot agree
with Mr. Murer that as a result of his discussion with Ms. Stevens on
March 23, 2000, he had reason to understand that no CMP was being imposed
by either IDPH or HCFA. See Hillcrest Health Facility, Inc.,
DAB CR489 (1997). The above conclusion is further reinforced by the fact
that on March 2, 2000, Petitioner received HCFA's notice of imposition
of remedies indicating concurrence with the determination by IDPH to assess
a CMP and faxed that notice to Mr. Murer. P. Ex. 11, at 1, paragraph 4.
This was a fact known to him on March 23, 2000, when he spoke with Ms.
Stevens over the telephone. On the other hand, Ms. Stevens was unaware
of the HCFA notice, and, thus, her dialog with Mr. Murer must be viewed
in the context of her lack of knowledge that HCFA had already chosen to
impose a CMP. HCFA Ex. 7, at 3, paragraph 6. I find Mr. Murer's silence
as to his knowledge that HCFA had already notified Petitioner that it
had imposed a CMP at the time he spoke with Ms. Stevens to be puzzling.
Moreover, Mr. Murer could have contacted HCFA on Petitioner's behalf and
sought clarification of the March 2, 2000 notice. Petitioner's attorneys
were or should have been aware that HCFA's authority as to the imposition
of a CMP is preponderant. In conclusion, I find that Petitioner has advanced no
cogent reason to justify inaction. In this regard, it had no reason to
believe that HCFA's March 2, 2000 notice could be ignored or that it was
superseded by the IDPH notice of March 7, 2000. HCFA's March 2, 2000 notice
letter told Petitioner unambiguously that it had 60 days from the date
of its receipt of the notice to file a written request for a hearing.
P. Ex. 2, at 3. It strains credulity that Petitioner was driven to ignore
HCFA's admonishment that it had 60 days to seek a hearing due to its tortured
interpretation of IDPH's simple correction of its obvious mistake in referencing
the CMP as being actually imposed rather than recommended. Such error
in judgment is not a matter beyond Petitioner's control which prevented
it from filing a timely request for hearing. Finally, Petitioner's interpretation
is inconsistent with the language of the pertinent notices in this case
as well as with the regulatory criteria. Petitioner's second point of contention derives mainly
from its reading of the holding in Osceola. Except to the extent
that Osceola states that in dismissing a hearing request an ALJ
may not abuse his or her discretion, that decision is inapplicable here.
In Osceola, the ALJ dismissed a request for hearing pursuant to
42 C.F.R. § 498.69 due to abandonment. The ALJ's dismissal was a sanction
against Petitioner based on a perceived disregard for the judge's orders. In this case I am not imposing a sanction, but merely
concluding that Petitioner does not have a right to a hearing. Petitioner
cites authorities treating the subject of dismissal as a sanction for
a party's misconduct. For example, it places reliance on the appellate
panel's reference to the four-prong test in Stough. Such reliance
is misplaced. In reviewing ALJ dismissals for untimeliness, appellate
panels of the Departmental Appeals Board have never weighed matters such
as the dismissed party's willfulness or bad faith. Also, it is ludicrous
to require a judge to forewarn a party that it faces dismissal if it files
a request for hearing untimely. Appellate panels of the Departmental Appeals Board have unequivocally stated that the panels' standard of review for ALJ decisions is whether an ALJ abused his or her discretion in finding no good cause to extend a filing deadline. See Cary Health and Rehabilitation Center, DAB No. 1771 (2001). The regulatory criteria applicable to the cases cited by Petitioner are set forth at 42 C.F.R. § 498.69. What I consider here instead is whether a party that has missed the 60-day deadline for requesting a hearing is deserving of an extension of time to file its hearing request for good cause shown, pursuant to 42 C.F.R. § 498.40(c)(2). If an ALJ was required to carry the burden set forth in Stough when considering dismissal, where, as here, a party is not entitled to a hearing, it would render meaningless the 60-day statutory limit to file a request for hearing. Conclusion Based on the applicable law and undisputed facts, I conclude that Petitioner's hearing request was untimely filed and that good cause does not exist to extend the time period for filing. HCFA's motion to dismiss is granted. |
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JUDGE | |
José A. Anglada Administrative Law Judge
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FOOTNOTES | |
1. HCFA labeled this exhibit as HCFA Ex. A. I have redesignated this document as HCFA Ex. 7 in order to better conform to the Civil Remedies Division's procedures. I have also redesignated the attachments to HCFA Ex. 7 as HCFA Ex. 7 attachments A and B. 2. P. Ex. 10 is also an affidavit by Mr. Murer. 3. On October 2, 2000, I issued an Order directing Petitioner to show cause why it had not submitted certain documents within 60 days of my initial Order in this case dated July 13, 2000, which failure suggested that Petitioner had abandoned its request for a hearing. Petitioner's response was sufficient to show that it had not abandoned its hearing request. | |