SUBJECT:

Mimiya Hospital,

Petitioner,

Centers for Medicare & Medicaid Services

DECISION

I find that Mimiya Hospital (Petitioner) has filed an untimely hearing request as to the notice letter dated May 26, 2000 from the Centers for Medicare & Medicaid Services (CMS) and therefore I dismiss Petitioner's request for hearing. In addition, I find that Petitioner does not have a right to a hearing based on CMS's August 30, 2000 notice because the August 30, 2000 notice was not an initial determination.

I. Background

Petitioner is a skilled nursing facility in Santurce, Puerto Rico. It participates in the Medicare program (Medicare) and is subject to the laws and regulations that govern participation in this program. On April 6, 2000, the Puerto Rico Department of Health (PRDOH) conducted a compliance survey at Petitioner's facility to determine whether Petitioner was complying substantially with federal requirements that govern the participation of nursing facilities in Medicare. On May 26, 2000, CMS notified Petitioner that it concurred with PRDOH's findings that Petitioner was not complying substantially with the requirements for Medicare participation. CMS further notified Petitioner that it had determined to impose the remedies of denial of payment for new admissions (DPNA), effective May 28, 2000, denial of nurse aide training for two years and imposition of CMPs. On August 30, 2000, CMS notified Petitioner it had achieved substantial compliance as of June 23, 2000. The August 30, 2000 letter also notified Petitioner of the total amount of CMP that had been imposed. Petitioner filed a request for hearing on October 22, 2000. The case was thereafter assigned to me.

CMS moved for summary judgment on the issue of untimeliness. Petitioner opposed CMS's motion. Both parties submitted briefs. I refer to the briefs as CMS Br. and P. Br., respectively. CMS submitted a reply brief that I will refer to as CMS R. Br. CMS offered two exhibits (CMS Exs. 1 - 2) with its brief. Petitioner offered four exhibits (P. Exs. 1 - 4) with its brief. CMS's exhibits 1 and 2 are the same as Petitioner's exhibits 3 and 4. Neither party objected to the exhibits of the other party. I admit into evidence CMS Exs. 1 - 2 and P. Exs. 1 - 2.

My decision is based upon the arguments of the parties, the exhibits, and the applicable law and regulations.

II. Issues, findings of facts and conclusions of law

A. Issues

The issues in this case are:

1. Whether Petitioner has filed a timely hearing request based on CMS's May 26, 2000 notice; and,

2. Whether the August 30, 2000 notice contained any initial determinations for which a request for hearing may be granted.

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. Petitioner failed to timely file a hearing request in response to CMS's May 26, 2000 notice. CMS's May 26, 2000 notice to Petitioner unambiguously informed Petitioner of CMS's initial determination to impose a remedy and of Petitioner's right to request a hearing to challenge that determination.

On May 26, 2000, CMS sent its notice to Petitioner. CMS Ex. 1. CMS referred to the April 6, 2000 survey in the May 26, 2000 notice. CMS advised Petitioner that it had found deficiencies because Petitioner was not complying with certain requirements of participation. In the May 26, 2000 notice, CMS informed Petitioner that as a result of the deficiencies, CMS was imposing the following remedies:

• Denial of payment for new admissions . . . effective May 28, 2000.

• Civil Money Penalties . . . in the amount of $3,050 per day, from April 4, 2000 through April 25, 2000

• Civil Money Penalties . . . in the amount of $100 per day from April 26, 2000 (the date of the first revisit survey that determined that although Petitioner had removed the immediate jeopardy, it still had not achieved substantial compliance) until Petitioner achieves substantial compliance.

• 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) within 10 days showing how it would correct the deficiencies identified by CMS by promptly addressing each of the cited deficiencies found during the April 6, 2000 survey. Id. CMS also informed Petitioner that if it did not achieve substantial compliance with all participation requirements by September 30, 2000, CMS would terminate Petitioner's Medicare provider agreement. Id.

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

If you disagree with this determination, 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. Procedures governing this process are set out in 498.40, et. seq.

A written request for a hearing must be filed no later than 60 days from the date of receipt of this letter.

CMS Ex. 1, at 3.

The Social Security Act (Act) requires that a request for review "must be filed within 60 days" after receipt of the notice of CMS' underlying determination. Act, section 205(b). The regulations echo the statutory requirement: "The affected party must file the request in writing within 60 days from receipt of the notice . . . unless the period is extended." 42 C.F.R. § 498.40(a)(2).

Petitioner's request for hearing as a result of the May 26, 2000 notice was due on July 31, 2000. Petitioner's request for hearing dated October 22, 2000 was filed more than 82 days after the date it was due.

Petitioner does not dispute that it received CMS's May 26, 2000 notice, nor does it dispute that it understood that CMS intended to immediately impose certain remedies. P. Br. at 2. Petitioner appears to have weighed the costs of litigation versus paying the CMP as defined by CMS in its May 26, 2000 notice. P. Br. at 3.

It is manifestly clear that Petitioner did not file a timely request for hearing and I so find.

Petitioner argues that the May 26, 2000 notice did not mention the opportunity to take a 35% reduction in the CMP if it waived, in writing, its right to a hearing within 60 days of the notice letter and that Petitioner did not learn of this option until CMS's second notice dated August 30, 2000. As a result of this deficiency, Petitioner requests that I find the May 26, 2000 letter null and void. I cannot do as Petitioner requests because Petitioner was clearly on notice that deficiencies had been found, sanctions were being imposed, and that it had a right to request a hearing within 60 days of the date of the notice to challenge CMS's determination. Petitioner's defective notice argument is a matter that I do not have jurisdiction to decide once I have made the threshold finding that the hearing request is untimely.⁽¹⁾

2. Petitioner did not file a written request for an extension of time to file a hearing request.

The regulations provide that "[t]he affected party must file the request in writing within 60 days from receipt of the notice . . . unless the period is extended." 42 C.F.R. § 498.40(a)(2). To extend the period for filing, the affected party "may file a written request for extension of time stating the reasons why the request was not filed timely." 42 C.F.R. § 498.40 (c)(1). I may extend the time for filing the request "for good cause shown." 42 C.F.R. § 498.40(c)(2). Here, however, I need not reach the issue of good cause because Petitioner has not satisfied the threshold requirement of filing a written request for extension.

As stated in Homestead of Hugo, DAB CR819 (2001), an Administrative Law Judge is no more free to ignore the regulations' procedural requirements than the judge could ignore the substantive rules. Alden Nursing Center - Morrow, DAB CR784, at 5 (2001). See Schweiker v. Hansen, 450 U.S. 785, 790 (1981) ("A court is no more authorized to overlook the valid regulation requiring that applications be in writing than it is to overlook any other valid requirement for the receipt of benefits.")

3. The August 30, 2000 CMS notice did not contain any initial determinations for which a hearing may be requested.

If a Petitioner wishes to contest an initial determination, it must follow the regulations at 42 C.F.R. § 498.40. Unless a determination is an initial determination as specified under 42 C.F.R. § 498.3(d) then there is no jurisdiction for an appeal. The August 30, 2000 notice did not contain any additional initial determinations as specified in 42. C.F.R. § 498.3(d). The August 30, 2000 letter simply notified Petitioner that it had been found to be in substantial compliance following the second revisit survey. It also indicated the total amount of the CMP. There were no new findings of deficiencies nor any new sanctions imposed to which hearing rights would attach. However, the August 30, 2000 letter did mistakenly repeat the standard appeal language. This, by itself, does not afford Petitioner a right to a hearing. Therefore, I find that Petitioner did not have a right to a hearing based on the August 30, 2000 notice because this notice was not an initial determination.

III. Conclusion

I find that Petitioner's request for hearing as it relates to the May 26, 2000 notice was not filed in a timely manner. Accordingly, Petitioner's request for hearing as it relates to the May 26, 2000 notice is dismissed. In addition, I find that the August 30, 2000 notice did not contain an initial determination for which a hearing may be requested.

Jose A. Anglada

Administrative Law Judge

1. 42 C.F.R. § 488.434(a)(2)(viii) provides, in pertinent part, that when CMS sends a written notice of a penalty to a facility, the notice that CMS sends includes, "[i]nstructions for responding to the notice, including a statement of the facility's right to a hearing, and the implication of waiving a hearing, as provided in [42 C.F.R.] § 488.436." Section 488.436, referred to above, provides in pertinent part:

(a) Waiver of hearing. The facility may waive the right to a hearing, in writing, within 60 days from the date of the notice imposing the civil money penalty.

(b) Reduction of penalty amount. (1) If the facility waives its right to a hearing in accordance with the procedures specified in paragraph (a) of this section, CMS or the State reduces the civil money penalty amount by 35 percent.

42 C.F.R. § 488.436(a) and (b).

The May 26, 2000 notice did not inform Petitioner that should it waive its right to a hearing, in writing, within 60 days from the date of the notice, then CMS would reduce the CMP amount by 35%. The May 26, 2000 notice refers Petitioner to 42 C.F.R. 498.40 et. seq. as the procedures governing the appeal process. CMS Ex. 1, at 3. Nothing in that section points Petitioner to the direction of efficiently settling and disposing of the matter by opting for a 35% reduction of the CMPs in lieu of requesting a hearing. Although I do not have authority to decide this deficient notice issue because the hearing request was untimely filed, it is evident to me that, with respect to 42 C.F.R. §§ 488.434(a)(2)(viii) and 488.436, CMS clearly failed to include the 35% language and failed to inform Petitioner of this option in the May 26, 2000 notice letter. In the interest of fairness, CMS should consider whether it should now allow Petitioner to pay the total CMP amount reduced by 35%.