SUBJECT:

D.C. Association for Retarded Citizens,

Petitioner,

Health Care Financing Administration

DECISION

I grant the motion of the Health Care Financing Administration (HCFA) to dismiss the request for hearing by the D.C. Association for Retarded Citizens (Petitioner). I do so because Petitioner no longer has a right to a hearing in this case.

BACKGROUND

Petitioner is an Intermediate Care Facility for the Mentally Retarded (ICF/MR) that participates in the Medicaid program. On January 19, 2000, HCFA sent a notice to Petitioner's administrator in which HCFA announced its intent to terminate Petitioner's participation in the Medicaid program on March 19, 2000. HCFA informed the Petitioner that termination was being imposed because Petitioner had failed to meet federal participation requirements for ICFs/MR.

Petitioner was resurveyed on March 15, 2000, and found to be in substantial compliance with all participation requirements. Petitioner filed a request for hearing on March 19, 2000. By letter dated April 4, 2000, HCFA notified the Petitioner that the termination action had been halted.

On September 7, 2000, HCFA filed a motion to dismiss Petitioner's hearing request, asserting that because HCFA had rescinded the termination and had not imposed any other remedies, the Petitioner no longer had a right to a hearing. Petitioner filed a reply brief opposing the motion to dismiss.

ISSUE

The issue in this case is whether Petitioner continues to have a right to a hearing in light of HCFA's decision to rescind the termination.

FINDING OF FACT AND CONCLUSIONS OF LAW

I make the following finding of fact and conclusions of law to support my decision in this case. 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.

The hearing rights of an ICF/MR are established by federal regulations. HCFA may impose remedies of denial of payments for new admissions and termination of a facility's Medicaid agreement. 42 C.F.R. §§ 442.117, 442.118. Once HCFA makes a decision to impose such remedies, an ICF/MR facility then has the right to appeal HCFA's decision. 42 C.F.R. § 498.5 (j).

An administrative law judge has authority to hear certain initial determinations by HCFA that are described at 42 C.F.R. § 498.3(b). An appealable initial determination includes:

HCFA's cancellation, under section 1910(b) of the Act, of an ICF/MR's approval to participate in Medicaid.

42 C.F.R. § 498(b)(9).

A termination is such an initial determination. However, there are no provisions in 42 C.F.R. § 498.3(b) or elsewhere in the regulations for a hearing in a case where HCFA does not determine to impose a remedy against an ICF/MR.

Petitioner argues that a determination by HCFA to cancel an ICF/MR's approval to participate in the Medicaid program is in and of itself a determination that creates a right to a hearing. According to Petitioner, regardless of HCFA's rescission, it has a right to a hearing as to HCFA's findings that the facility failed to meet program requirements and HCFA's decision to terminate Petitioner's participation in the Medicaid program.

Petitioner's arguments are unpersuasive. HCFA initially decided to cancel Petitioner's participation in the Medicaid program. That determination created a hearing right which Petitioner exercised. However, subsequently, and prior to the scheduled termination date, HCFA decided to rescind the determination to cancel Petitioner's participation in the Medicaid program. That subsequent determination by HCFA extinguished any hearing right that Petitioner had. Once HCFA made the determination to rescind all remedies, Petitioner no longer had any right to a hearing. See Schowalter Villa, DAB CR 568 at 2 (1999), aff'd, DAB No. 1688 (1999). I note that HCFA's termination action was rescinded before it went into effect.

Petitioner further argues that ICFs/MR and skilled nursing facilities/nursing facilities (SNF/NFs) are distinctly different, and are therefore subject to different treatment under the regulations. Petitioner cites various differences between ICFs/MR and SNF/NFs. For example, ICFs/MR are subject to different survey, certification, enforcement, and remedies than SNF/NFs. Additionally, Petitioner argues that other Departmental Appeals Board decisions (denying petitioners' hearing requests) dealing with the same issue refer to SNF/NFs, and are not applicable to ICFs/MR. Therefore, the Petitioner contends that the 42 C.F.R. Part 498 appeals procedures that apply to SNF/NFs do not apply to ICFs/MR.

Based on my review of the plain language of the relevant regulations, the case law, and the arguments advanced by HCFA, I conclude that HCFA's determination to rescind the termination remedy in this case extinguished Petitioner's right to a hearing in this matter.

Alfonso J. Montano

Administrative Law Judge