SUBJECT:

Nursing Inn of Menlo Park,

Petitioner,

Centers for Medicare & Medicaid

REQUEST FOR HEARING

Having considered the parties' arguments and exhibits, I dismiss Petitioner's hearing request as it relates to Centers for Medicare and Medicaid Services's (CMS) notice of September 16, 1999 (Notice). Petitioner did not file its request timely as to that notice as is required by 42 C.F.R. § 498.40(a)(2). Petitioner has not established good cause for extending the time within which it may file its request for hearing.

I. Background

Nursing Inn of Menlo Park (Petitioner) is a long-term care facility that is located in Menlo Park, California. It participates in the Medicare program (Medicare) and is subject to the laws and regulations that govern participation in the program. The California Department of Health Services (State) surveyed Petitioner's facility on two occasions in 1999 in order to determine whether Petitioner was complying substantially with Federal requirements that govern the conditions of participation of nursing facilities in Medicare (Conditions). The first survey occurred on August 13, 1999. On September 16, 1999, CMS notified (Notice) Petitioner that it concurred with the findings of the State that Petitioner was not complying substantially with Medicare Conditions. CMS further advised that it determined to impose the remedies of denial of payment for new admissions and civil money penalties (CMP). The State resurveyed Petitioner's facility on December 10, 1999. On January 7, 2000, CMS notified Petitioner that again it concurred with the findings of the State that Petitioner was still not complying substantially with Medicare Conditions. Petitioner filed a request for hearing on February 24, 2000 and the case was assigned to me. CMS moved to dismiss the request for hearing by Petitioner. Petitioner opposed CMS's motion. I refer to the parties's briefs as CMS Br. and P. Br., respectively. Both parties filed Reply Briefs which I refer to as CMS R. Br. and P. R. Br.

CMS offered four exhibits in support of its motion (CMS Ex. A - CMS Ex. D) which I renumber as CMS Exs. 1 - 4, respectively. Petitioner offered one exhibit (an affidavit of Dan Alger) in opposition to CMS's motion which I have numbered as P. Ex. 1. Neither party objected to the other's exhibits, accordingly, I receive into evidence CMS Exs. 1 - 4 and P. Ex. 1.

II. Issues, findings of facts and conclusions of law

A. Issues

The issues in this case are:

1. Whether a basis exists for me to dismiss Petitioner's request for hearing as it relates to CMS's Notice of September 16, 1999.

2. Whether Petitioner has shown good cause to extend the time in which to file a request for hearing related to CMS's Notice of September 16, 1999.

B. Findings of fact and conclusions of law

I make findings of fact and conclusions of law (Findings) to support my decision. I set forth each Finding below as a separately numbered heading. I discuss each Finding in detail.

1. CMS's September 16, 1999 Notice to Petitioner unambiguously informed Petitioner of CMS's determination to impose a remedy and of Petitioner's right to request a hearing to challenge that determination.

On September 16, 1999, CMS sent its Notice to Petitioner. CMS Ex. 1. CMS referred to the August 13, 1999 survey in the Notice. CMS advised Petitioner that it had found deficiencies because Petitioner was not complying with certain itemized Conditions. In the Notice, CMS informed Petitioner that as a result of the deficiencies, CMS was imposing the following remedies:

• Denial of payment for new admissions . . . effective October 1, 1999.

• Civil Money Penalties . . . in the amount of $1,000 per day, effective August 13, 1999.

• Denial of Nurse Aide Training (after the current class).

Id. at 2.

CMS advised Petitioner that it must submit an allegation of compliance and an acceptable plan of correction (POC) showing how it would correct the deficiencies identified by CMS by promptly addressing each of the cited deficiencies in the CMS 2567L form dated August 13, 1999. Id. at 2. CMS also informed Petitioner that if it did not achieve substantial compliance with all participation requirements by February 13, 2000, CMS would terminate Petitioner's Medicare provider agreement. Id. at 2.

CMS specifically advised Petitioner that it had a right to a hearing to challenge CMS's determination. It told Petitioner that:

Appeal Rights

If you disagree with our certification/finding, of noncompliance that is based upon our determination that The Nursing Inn was not in substantial compliance with controlling Medicare participation requirements at 42 C.F.R. Part 483 as documented during the survey completed on August 13, 1999, you or your legal representative may request a hearing before an administrative law judge of the Department of Health and Human Services' Departmental Appeals Board since this certification/finding non-compliance led to the actual imposition of an enforcement remedy specified at 42 C.F.R. 488.406. You may appeal⁽¹⁾ the certification/finding of noncompliance which led to a enforcement action, but you cannot appeal the enforcement remedy itself. 42 C.F.R § 488.408(g).

Procedures governing the appeals process are set out in 42 C.F.R. - Part 498, Subpart D. A written request for a hearing must be filed no later than sixty (60) calendar days from the date of receipt of this notice. (We remind you that, as indicated above, since this notice is being sent to you by facsimile, your appeal must be filed no later than sixty (60) days from the date indicated on this notice.) Please note that your appeal must be filed, in writing, no later than sixty (60) calendar days from the date you receive this notice.

CMS Ex. 1 at 3.

Petitioner does not dispute that it received the September 16, 1999 CMS Notice, nor does it dispute that it understood that CMS intended to immediately impose certain remedies. P. Br. at 2. Petitioner argues that CMS's immediate imposition of remedies was "startling news" in that "[U]ntil that point, CMS and the Daly City Office of Licensing and Certification (Daly City) had always followed the policy that, except where immediate jeopardy had been declared CMPs were not imposed where facilities were successful in correcting alleged deficiencies before a predetermined date for the completion of corrections." P. Br. at 2. However, Petitioner does not describe any effort to discuss or clarify this "policy" matter with CMS or Daly City. Instead, Petitioner describes how it obtained independent nursing consultants to supervise the preparation of the POC and had various conversations with Daly City relative to the POC and the scheduling of a revisit survey. Petitioner maintains that --

[I]n light of [Daly City's] numerous assurances that a revisit would be forthcoming, [Petitioner] elected to temporarily postpone any further efforts to prepare for any appeal. Rather it decided to focus its efforts on the considerable task of implementing its [POC] as promised, and to assess the benefits of an appeal after the exit conference of the revisit survey.

P. Br. at 3.

On October 6-7, 1999, Petitioner elected to try to resolve the deficiencies through the State's informal dispute resolution (IDR) process. P. Br. at 4; CMS Ex. 4. The IDR process results were returned to Petitioner in a letter dated October 7, 1999. All but one of the 22 F-tagged deficiencies remained unchanged. From that date, Petitioner still had approximately 39 days remaining to file its request for hearing.

Petitioner asserts that "despite numerous and continuous assurances to the contrary, Daly City failed to conduct its revisit survey until December 1999, approximately 4 months after the initial survey and beyond the time in which Nursing Inn could timely file an appeal." P. Br. at 4. The revisit survey also found that Petitioner was not in substantial compliance and the State recommended that CMS continue the previously imposed remedies.

Nowhere does Petitioner contend that it was misled by CMS's employees by word or deed. Indeed, CMS's Notice of September 16, 1999 was not a conditional statement. The Notice plainly and unambiguously told Petitioner that CMS was imposing the remedy of denial of payment of new admissions based on the noncompliance that CMS identified at the August 13, 1999 survey. In equally unambiguous language, the Notice told Petitioner that it had a right to a hearing to contest CMS's determination, but only if Petitioner requested a hearing within 60 days of its receipt of CMS's Notice.

The statement in the Notice that "[W]e have determined . . . to impose the following remedies[.]" is not conditional language. CMS Ex. 1 at 1. Moreover, the fact that the Notice explained to Petitioner that it had a right to request a hearing is a clear statement that CMS had determined to impose a remedy. Under applicable regulations, a right to a hearing exists only in the circumstance where CMS determines to impose a remedy. 42 C.F.R. §§ 498.3 and 498.5. CMS would not have advised Petitioner that it had a right to request a hearing unless it had determined to impose a remedy.

It is true that the Notice told Petitioner that the remedy of denial of payment for new admissions would not go into effect until October 1, 1999, 14 days after the date of the Notice. But, that language does not suggest that there was anything conditional about CMS's determination to impose a remedy.

While Petitioner makes a cursory argument that CMS should be responsible for the "acts of its agents", Petitioner does not allege that Daly City ever represented that the remedies imposed by CMS would not be effective or would be held in abeyance until a resurvey was completed. To the contrary, Petitioner only asserts that Daly City assured Petitioner that a revisit was forthcoming. Such a commitment, even if made, by Daly City does not stay the 60-day period in which Petitioner must file an appeal. As noted in CMS's reply brief, a resurvey has nothing at all do with the hearing process and clearly does not toll the requirements that a hearing request be timely filed. CMS R. Br. at 8.

Finally, Petitioner's argument that "[The first time Petitioner] had an opportunity to evaluate the benefits of appeal did not present itself until CMS finally notified the facility of the status of the surveys and the values of the accrued penalties" is not persuasive. P. Br. at 5. The September 16, 1999, Notice unequivocally stated that certain penalties were being imposed. There was no indication in the Notice that the determination to impose penalties was subject to change.

Petitioner's brief clearly establishes that Petitioner made a conscious decision to focus its efforts on preparing a POC rather than focusing its efforts on preparing an appeal. P. Br. at 3. Petitioner was on notice of the requirement to file an appeal, and the consequences if it chose not to appeal within 60 days. This dismissal is the consequence of Petitioner's decision.

2. Petitioner is not entitled to a hearing because it did not file a timely hearing request.

Petitioner did not file its hearing request as to the September 16, 1999 Notice within the required time frame and, therefore, it is not entitled to a hearing. A party is entitled to a hearing if it makes its request within 60 days from the date that it receives an adverse determination from CMS. 42 C.F.R. § 498.40(a)(2). CMS's Notice advised the Petitioner that it was being sent via facsimile and it was effective the same day. CMS Ex. 1 at 1. Petitioner sent a letter on its business stationery to Daily (sic) City which referred to the August 13, 1999 survey and was date-stamped by Daly City as being received on September 17, 1999. CMS Ex. 3. Petitioner filed its hearing request on February 24, 2000. That appeal was filed more than 160 days from the date of its receipt of CMS's September 16, 1999 Notice.

3. Petitioner did not establish good cause for its failure to file a timely hearing request.

An affected party may request an extension of time to file a request for hearing upon a showing of good cause. 42 C.F.R. § 498.40(c)(1). An Administrative Law Judge may dismiss an untimely hearing request where a party fails to demonstrate good cause for not filing the request timely. 42 C.F.R. § 498.70(c). I find that Petitioner did not establish good cause for filing its hearing request in a untimely manner.

Petitioner argues that its actions were reasonable and diligent at all times and had the State merely performed its responsibilities and duties in a diligent manner, Petitioner would have had sufficient opportunity to thoroughly evaluate the merits and benefits of a lengthy, time-consuming, and costly appeal. As previously stated, this argument is not persuasive since the evidence clearly established that Petitioner made a conscious decision to focus on its POC and the resurvey rather than prepare an appeal.

There is nothing in the facts or allegations by Petitioner that indicate that the State or CMS represented by word or deed that a POC or a subsequent survey would toll the period in which Petitioner was permitted to file an appeal. Nor, for that matter, has Petitioner alleged that it was confused about CMS's determination or misunderstood the September 16, 1999 Notice.

CMS's arguments and citation to relevant case law are compelling. Petitioner has not advanced persuasive evidence to establish good cause for its failure to execute its clear obligation to request a hearing within the requisite 60 day period.

I do not make any findings here about the practices that were followed in 1999 by either the State or by CMS. It is not necessary for me to do so inasmuch as the September 16, 1999 Notice so unambiguously announced CMS's determination. There was no language in the Notice that suggested that CMS would make a final remedy determination only after it reviewed Petitioner's POC. Petitioner had no reason to assume that CMS would supersede the plain language of the Notice with some unwritten practice that it may have followed in other instances.

III. Conclusion

I find that Petitioner's request for hearing as it relates to the September 16, 1999 Notice was not filed in a timely manner. Accordingly, Petitioner's request for hearing as it relates to the September 16, 1999 Notice is dismissed. However, the Petitioner did file a timely request for hearing as it relates to the CMS's Notice dated January 7, 2000.

The parties are directed to confer and suggest three dates and times to convene a prehearing conference to schedule the resolution of the remaining issues in this case.

Alfonso J. Montano

Administrative Law Judge

1. The words "appeal" and "request for hearing" found in 42 C.F.R. Part 498 subparts A and D, respectively are synonymous in the regulations.