SUBJECT:

Salisbury Center,

Petitioner,

Centers for Medicare & Medicaid Services.

DECISION

Petitioners, Hammonds Lane Center (Docket No. C-01-634, Decision Number CR913), Spa Creek Center (Docket No. C-01-635, Decision No. CR914), Rose View Center (Docket No. C-01-636, Decision No. CR915), and Salisbury Center (Docket No. C-01-637, Decision No. CR916), do not have a right to a hearing regarding the denial of payment for new admissions (DPNAs) imposed on each facility by the Centers for Medicare & Medicaid Services (CMS) ⁽¹⁾ (or the appropriate State survey agency, as authorized by CMS, 42 C.F.R. § 488.402(f)), as they did not file their hearing requests within the 60-day period provided for in the applicable appeals procedures set forth in 42 C.F.R. § 498.40(a) (having been explicitly informed of the 60-day deadline for doing so) and have not shown good cause for me to extend the time for filing. 42 C.F.R. § 498.40(c). Accordingly, for the reasons set forth below, I dismiss each hearing request. ⁽²⁾

I. BACKGROUND

On April 24, 2001, the Petitioners in these four cases submitted a letter: 1) requesting a hearing regarding legal issues relating to CMS' DPNAs in each case; and 2) admitting that the request was being submitted more than 60 days from each Petitioner's receipt from CMS, or a State survey agency on CMS' behalf, of a notice letter imposing the DPNA. On the same date, and recognizing that each Petitioner had filed out of time, Petitioners submitted a companion motion requesting that I extend the time for them to file a request for hearing.

Petitioners admit that the hearing requests in these cases were filed from two and a half to seven months beyond the 60-day filing period, that in each case there are no material factual issues in dispute, and that the cases involve only a legal issue. Regarding this "legal issue," Petitioners assert in their request for hearing that CMS changed its "revisit policy." Petitioners state that, prior to this "change" in the revisit policy, CMS allowed facilities that had corrected deficiencies and resumed substantial compliance before a State survey agency conducted an on-site revisit, to be considered in compliance as of the date the facility was found by the State survey agency to be in compliance (which the State could find to be a date preceding the resurvey date). According to Petitioners, after the change, CMS no longer accepted State survey agency recommendations determining facilities to be back in substantial compliance prior to the resurvey date. Petitioners note that CMS has since returned to the practice of permitting a State survey agency to find that a facility has resumed compliance (at least with respect to relatively minor deficiencies) as of the date the facility indicated in a plan of correction, even if the revisit survey did not occur until a later date. Petitioners state that each of the Petitioners had DPNAs imposed as a result of this change to the revisit policy even though, in each case, the pertinent State survey agency found as a matter of fact that each Petitioner in question had resumed compliance prior to the resurvey date. Petitioners assert that in the case of three of the four Petitioners: the compliance date established was prior to September 22, 2000, the date of the revised revisit policy; in each case the State survey agency found that the Petitioner in question had resumed compliance when it indicated it would; and, in each case, CMS disregarded the State survey agency's finding of compliance.

Petitioners then raise four general legal arguments: 1) Petitioners assert that they will show the revisit policy violated the Social Security Act (Act) and its implementing regulations; 2) Petitioners assert that they will show the revisit policy was flawed because it should have been published according to the notice and comment procedures of the Administrative Procedure Act; 3) Petitioners assert that the revisit policy unfairly imposed a significant retroactive financial burden on at least three of the four Petitioners; and 4) Petitioners assert that CMS' deprivation of a regulated entity's property on the basis of retroactive application of a new policy offends due process of law. Petitioners conclude by asserting that there appears to be no factual or legal dispute that all the Petitioners actually achieved substantial compliance as of the date they alleged, which was before the date the DPNA would have been effective, but for the change in the revisit policy. Petitioners also note that while I may not have the authority to declare CMS' rules or practices ultra vires or unconstitutional, I can manage my docket to preserve the issues for decision in a judicial forum. I agree with Petitioners that I do not have the authority to address these general legal issues and I do not consider them here.

Petitioners' companion motion requests that I extend the time for filing for good cause. Petitioners acknowledge that each notice letter from CMS (or from the State survey agency acting for CMS) imposing a DPNA was issued more than 60 days before the mailing of the hearing request - in fact, in each case, the notice letter was issued months before the mailing of the hearing request. However, Petitioners assert that, in the interim: 1) Genesis Health Ventures (according to Petitioners, the parent of all four Petitioners) was in continual discussions with CMS; and 2) the Maryland State survey agency had requested that CMS not retroactively apply the policy to the Petitioners in Maryland. Petitioners state that at the time they received their notice letters they made reasoned evaluations of the cited deficiencies and the likelihood that their corrective actions would result in a finding of substantial compliance and decided that, under CMS' original revisit policy, requests for hearing in these cases would not be necessary. Petitioners state that the import of CMS' policy change only became apparent after the 60-day appeal period had run for each Petitioner. Thus, Petitioners argue that this is not a case where prospective petitioners sat on their rights or misunderstood CMS' position. Instead, Petitioners stress that CMS changed its position after Petitioners' 60-day appeal periods had run.

CMS filed a motion to dismiss in each case (CMS Br. in Docket Nos. C-01-634, 635, 636, or 637), to which Petitioners replied (P. Br. in Docket Nos. C-01-634, 635, 636, or 637). CMS submitted exhibits in each case (Docket No. C-01-634, CMS Exs. 1 - 9; Docket No. C-01-635, CMS Exs. 1 - 6; Docket No. C-01-636, CMS Exs. 1 - 8; and Docket No. C-01-637, CMS Exs. 1 - 8). In the absence of objection, I admit all of CMS' exhibits into evidence. Petitioners had previously submitted 13 exhibits with their "motion to extend time to file request for hearing." In the absence of objection, I admit P. Exs. 1 - 13 into evidence in Docket Nos. C-01-634 - 637.

II. ISSUES

a. Whether Petitioners hearing requests were timely filed?

b. Whether there is good cause to extend the time for Petitioners to file hearing requests?

In this decision, I am not considering the general legal issues raised by Petitioners in their hearing request regarding their challenge to CMS' revisit policy. I only discuss the revisit policy as it relates to whether or not there is good cause to extend the time for Petitioners to file hearing requests. ⁽³⁾

III. APPLICABLE LAW

Procedures for requesting a hearing to appeal CMS' imposition of remedies are set forth at Subpart D of 42 C.F.R. Part 498. As pertinent to this case, these regulations require that:

The affected party or its legal representative or other authorized official must file the request in writing within 60 days from receipt of the notice of initial, reconsidered, or revised determination unless that period is extended in accordance with paragraph (c) of this section.

42 C.F.R. § 498.40(a)(2).

The regulations permit a facility to request an extension:

If the request was not filed within 60 days -

(1) The affected party or its legal representative or other authorized official may file with the ALJ a written request for extension of time stating the reasons why the request was not filed timely.

(2) For good cause shown, the ALJ may extend the time for filing the request for hearing.

42 C.F.R. § 498.40(c).

The regulations state that an administrative law judge may dismiss a hearing request that is not timely filed and where the time for filing has not been extended. 42 C.F.R. § 498.70(c).

IV. FINDINGS OF FACT AND CONCLUSIONS OF LAW (FINDINGS)

I make Findings to support my decision. I set forth each Finding below as a separately numbered heading. I discuss each Finding separately.

1. Petitioners are not entitled to a hearing because they did not file timely hearing requests.

To be considered timely filed, a hearing request must be filed within 60 days from receipt of an adverse notice of determination from CMS. 42 C.F.R. § 498.40(a)(2). A party is not entitled to a hearing if it does not file its hearing request timely. In their joint hearing request, the four Petitioners admit that their joint hearing request was not filed timely. Petitioners' April 24, 2001 Hearing Request at 1. My review of the dates of the notice letters these Petitioners received shows that, in fact, Petitioners submitted their hearing request dated April 24, 2001, more than 60 days after their receipt of their respective notices from CMS, or the State survey agency on CMS' behalf, imposing the DPNAs. Docket No. C-01-634, CMS Ex. 2 (Notice dated July 13, 2000); Docket No. C-01-635, CMS Ex. 1 (Notice dated July 25, 2000); Docket No. C-01-636, CMS Ex. 3 (Notice dated August 16, 2000); Docket No. C-01-637, CMS Ex. 2 (Notice dated December 4, 2000). Thus, Petitioners' hearing requests are untimely filed, by between approximately two and a half to seven months, and, in the absence of good cause to extend the time for filing a hearing request (as discussed below), Petitioners are not entitled to hearings.

2. Petitioners have not established good cause for me to extend the time for them to file their hearing requests.

An administrative law judge may dismiss an untimely hearing request where a party fails to file a hearing request timely and has not shown good cause for the judge to extend the time for the party to file a hearing request. 42 C.F.R. § 498.70(c). I find that none of the four Petitioners has established good cause for me to extend the time for them to file their hearing requests.

There is no statutory or regulatory definition of "good cause." However, good cause has been held to mean a circumstance or circumstances that would prevent a party from requesting a hearing timely and is beyond a party's ability to control. Sunchase Nursing Center, DAB CR717 (2000); Hospicio San Martin, DAB CR387, aff'd, DAB No. 1554 (1996); Mathis Nursing Home, DAB CR461 (1997). Petitioners' decisions as to whether or not to appeal these cases timely were not beyond their ability to control.

In all four cases, Petitioners were clearly and unambiguously informed of CMS' determinations to impose remedies and of their right to request a hearing to challenge the determinations. The language utilized in these notices was unconditional. In Docket No. C-01-634, Petitioner was notified:

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 42 C.F.R. § 498.40, et seq. A written request for a hearing must be filed no later tha[n] 60 days from the date of receipt of this letter.

Docket No. C-01-634, CMS Ex. 2, at 2. Essentially identical clear and unambiguous notices were sent in the three other cases, Docket No. C-01-635, CMS Ex. 1, at 2; Docket No. C-01-636, CMS Ex. 3, at 2; and Docket No. C-01-637, CMS Ex. 2, at 2.

I am not persuaded that the arguments raised by Petitioners (see Section I) are relevant to the issue of the timeliness of Petitioners' hearing request. Petitioners each knew that they had 60 days in which to appeal the remedies, but determined not to do so. Petitioners made conscious legal decisions not to contest the DPNAs, which, Petitioners assert, was premised on their expectation and belief that the corrective actions they were taking would result in a finding of substantial compliance prior to the remedies actually being imposed. Thus, Petitioners determined that requesting a hearing to contest their DPNAs would not be necessary. Such conscious decision-making is simply not the circumstance beyond a party's control that constitutes good cause.

These cases are similar to the case of Nursing Inn of Menlo Park, DAB CR799 (2001), aff'd DAB No. 1812 (2002), where the petitioner focused its attention on preparing a plan of correction and not on preparing an appeal. I note the language of an appellate panel of the Departmental Appeals Board in that case, quoting from the administrative law judge's (ALJ) decision:

As the ALJ stated, Nursing Inn "made a conscious decision to focus on its POC and the resurvey rather than prepare an appeal." ALJ Decision at 6. Nursing Inn must bear the consequences of that conscious decision.

DAB No. 1812, at 9.

Similarly, Petitioners in these cases had the ability to appeal these decisions and made conscious legal decisions not to do so. I do not find such conscious decision-making to constitute good cause to extend the time for the Petitioners to submit hearing requests. Thus, I dismiss these hearing requests as untimely.

Marion T. Silva

Administrative Law Judge

1. CMS was formerly known as the Health Care Financing Administration or HCFA. In this decision, any references in the record to the Health Care Financing Administration or HCFA have been changed to the Centers for Medicare & Medicaid Services or CMS.

2. On May 11, 2001, Petitioners requested that these cases be consolidated for hearing, asserting generally that there were no material facts in dispute with respect to any of the Petitioners and that all four cases turned on a common issue of law. CMS opposed consolidation. I am denying Petitioners' request to consolidate these cases under one docket number. Each facility is different and each case involves different facts, different surveys and survey cycles, different survey agencies (Petitioners in Docket Nos. C-01-634, C-01-635, and C-01-637, are all located in Maryland and were surveyed by the Maryland State survey agency, and Petitioner in Docket No. C-01-636 is located in Pennsylvania and was surveyed by the Pennsylvania State survey agency), and different notices. The facilities apparently have in common only a corporate parent, counsel, and the fact that they all filed their hearing requests late. However, in the interest of efficiency, as I am deciding the cases based on the fact that their hearing requests were filed late, they argue the same reasons for filing their hearing requests late, and I have not found good cause to extend their time for filing based on those reasons, I am issuing these four decisions in one document for ease of discussion.

3. I note that Petitioners have argued that as a matter of judicial administration the practical consequences of denying petitioners in their position an extension will be that facilities will file appeals in any case in which a DPNA remedy is proposed, and that there will thus be a large number of appeals and subsequent CMS motions to dismiss as moot. However, their argument is not relevant to my decision, which is based solely on the circumstances existing in these cases.