SUBJECT: Glen Rose Medical Center Nursing Home,

Petitioner,

Centers for Medicare & Medicaid Services.

On October 30, 2001, the Center for Medicare and Medicaid Services (CMS) ⁽¹⁾ filed a motion brief seeking partial dismissal of Petitioner's April 2001 hearing request. CMS's brief was accompanied by six proposed exhibits. On October 26, 2001, Petitioner filed a brief in opposition (P. Br.), accompanied by one proposed exhibit. I am admitting CMS's exhibits into evidence without objection, as CMS Exhibits (CMS Ex.) 1-6. I also admit Petitioner's only exhibit as Petitioner's Exhibit (P. Ex.) 1.

After consideration of the written arguments and documentary evidence submitted by the parties, I grant CMS's motion for partial dismissal. 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, inasmuch as Petitioner has not shown good cause for its failure to do so.

I. Undisputed Facts

Petitioner is a skilled nursing facility located in Glen Rose, Texas, which participates in the Medicare and Medicaid programs. By notice dated January 19, 2001, CMS informed Petitioner that an inspection of its facility by the Texas Department of Human Services (TDHS) concluded on January 12, 2001, revealed that it was not in substantial compliance with federal requirements for nursing homes participating in the Medicare and Medicaid programs. CMS Ex. 1. Consistent with those findings, CMS notified Petitioner that the following remedies were being imposed:

•Termination of the provider agreement effective February 4, 2001;

•A civil money penalty (CMP) in the amount of $6,000 per day, based on a finding of "immediate jeopardy," commencing on January 12, 2001; and

•Denial of payment for new admissions (DPNA) effective January 21, 2001.

CMS Ex. 1, at 1.

Petitioner acknowledged receipt of the January 19, 2001 notice of initial determination on that same date. CMS Ex. 1, at 3. The notice advised Petitioner that if it disagreed with the determination of noncompliance, a written request for hearing had to be filed no later than March 20, 2001.

On February 9, 2001, CMS informed Petitioner that a resurvey of its facility, concluded on February 1, 2001 by TDHS, found that although the conditions that represented "immediate jeopardy" had been removed, the facility continued not to be in substantial compliance. Thus, the enforcement action reported in the letter of January 19, 2001 continued as before, except for the following changes:

•A new termination date of June 12, 2001, was established; and

•The $6,000 per day CMP based on "immediate jeopardy" would encompass the period beginning January 12, 2001 through January 18, 2001.

Based on the most recent survey of February 1, 2001, CMS established a new period of CMP in the amount of $1,500 per day commencing January 19, 2001. CMS informed Petitioner that if it disagreed with this determination of noncompliance, a written request for hearing had to be filed no later than April 10, 2001.

In view of the finding by TDHS that its facility was not in substantial compliance as a result of the survey concluded on February 1, 2001, Petitioner filed a request for hearing on April 9, 2001. CMS Ex. 4.

II. Issues

The issues in this case are:

1. Whether Petitioner filed a timely request for hearing; and

2. Whether Petitioner has shown good cause for extending the time period within which it should be allowed to file a request for hearing.

III. Applicable Law and Regulations

In cases involving CMS, 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 determination by CMS imposing a remedy. 42 C.F.R. § 498.40(2). 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. 42 C.F.R. § 498.22(b)(3). ⁽²⁾ An administrative law judge (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 a hearing which is not timely filed. 42 C.F.R. § 498.70(c).

IV. Findings

I make findings of fact and conclusions of law (Findings) to support my decision to partially dismiss Petitioner's hearing request. Each finding is noted below in bold face and italics, followed by a discussion of the findings.

A. Petitioner did not file a timely request for hearing.

CMS sent Petitioner the notice of initial determination by facsimile on January 19, 2001, as well as by mail. CMS Ex. 1. The regulatory presumption is that Petitioner received the notice not later than January 24, 2001. 42 C.F.R. § 498.22(b)(3). Petitioner does not dispute receipt of CMS's notice dated January 19, 2001. In fact, Petitioner acknowledged receipt of CMS's notice on January 19, 2001. CMS Ex. 1, at 3. Nonetheless, it was not until April 9, 2001, approximately 80 days after receipt of CMS's notice of initial determination, that Petitioner filed a request for hearing before an ALJ. ⁽³⁾

42 C.F.R. § 498.40(a)(2) expressly provides that:

[An] 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 . . . .

The filing of Petitioner's request was clearly beyond the 60 days stipulated in the regulations.

B. Petitioner has failed to establish good cause justifying an extension of time to file its request for hearing.

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 contends that the revised notice of determination dated February 9, 2001, based on the February 2001 resurvey, gave Petitioner a revised date for the filing of an appeal from the determination of noncompliance. Petitioner further argues that the revised notice did not specify whether the appeal rights attached to the determination of noncompliance that led to the DPNA, the $6,000 CMP, the $1,500 CMP, or the termination action. Consequently, Petitioner concludes that the only fair construction of 42 C.F.R. § 498.40(a) is that when CMS issues a revised determination and provides a new appeal deadline but does not specify to which remedy the appeal deadline applied, it applies to all remedies referred to in the revised notice letter. Finally, Petitioner asserts that it is clear from its hearing request that it intended to appeal the January 2001 survey, as well as the February 2001 survey.

Petitioner prays in the alternative that if I were to find that its hearing request was not timely filed, an extension be granted to file such request pursuant to 42 C.F.R. § 498.40(c). Petitioner contends that any failure to file a timely request for hearing was due to excusable neglect, and not the result of intentional purpose, or conscious indifference. Petitioner also asserts that although it may have received the notice of remedies on January 19, 2001, its attorney did not get it until after April 10. In support of its argument that good cause exists, Petitioner places reliance on Rule 60(b) of the Federal Rules of Civil Procedure (Fed. R. Civ. P.). Rule 60(b) provides that the Court may relieve a party or legal representative from a final judgement upon a showing of mistake, inadvertence, surprise, or excusable neglect. Petitioner suggests that based on federal case law, late filings can be accepted where there is inadvertence, mistake, or carelessness, as well as intervening causes beyond a party's control. Pioneer Investment Serv. v. Brunswick Assocs. Ltd., 507 U.S. 380 (1993). The standard to establish good cause proposed by CMS, argues Petitioner, is too narrow.

Additionally, Petitioner relies on Departmental Appeals Board (DAB) decisions in support of its argument regarding the narrow construction of the good cause standard it attributes to CMS. In Birchwood Manor Nursing Center, DAB No. 1669 (1998), Petitioner asserts that a motion to dismiss was sustained because the ALJ gave the party ample opportunity to file a hearing request. In West Side Care Center, Docket No. C-2000-0004, the ALJ determined that good cause was available to a party that received a total of 11 notices in a short time, resulting in confusion.

CMS contends that Petitioner did not file a timely request for hearing and that no good cause exists for an extension of time. CMS states that Petitioner was informed on January 19, 2001 that a CMP of $6,000 per day, beginning January 12, 2001, was being imposed; termination would take effect February 4, 2001; and the DPNA would be effective as of January 21, 2001. These were initial determinations, argues CMS, which Petitioner had the opportunity to appeal by March 20, 2001. Petitioner passed up this opportunity, and did not request a hearing until 80 days after issuance of the initial determination. CMS argues that Petitioner erroneously contends that because CMS's February 9, 2001 notice letter did not specify that the revised determination and new appeal deadline applied only to some of the remedies contained in the letter but not to others, it presumes the appeal deadline was extended. This presumption is incorrect, says CMS, because the February 9, 2001 letter clearly distinguished which remedies were being imposed as a result of Petitioner's removal of the "immediate jeopardy" findings and which remedies remained unchanged because it was still not in substantial compliance with Medicare requirements.

As concerns Petitioner's request to extend the time to file a request for hearing, CMS proposes that the standard for good cause set forth in the regulations (42 C.F.R. § 498.40(c)) has been defined by an appellate panel of the DAB in Hospicio San Martin, DAB CR387 (1995), aff'd, DAB No. 1554 (1996), and related cases to mean circumstances beyond the ability of the provider to control. Consequently, Petitioner's motion for relief from untimely filing should be denied for failure to advance reasons that establish the existence of circumstances beyond its ability to control.

V. Discussion

The threshold issue in this case is whether Petitioner filed a timely hearing request. The short answer to that is "no." The record is clear that Petitioner received an initial determination on January 19, 2001, and took no action regarding that notice within the 60 days provided. Nothing was forthcoming from Petitioner until April 9, 2001. Moreover, the request for hearing that was eventually filed was in conjunction with the February 9, 2001 notice. This is evident from Petitioner's admission that, inexplicably, it did not provide its legal representative with a copy of the initial determination dated January 19, 2001 until after April 10, 2001. P. Br. at 3, 4. Thus, when Petitioner filed its hearing request on April 9, 2001, its counsel had not seen the initial determination. It is not surprising, then, that Petitioner did not directly address the deficiencies noted in the

January 2001 survey, in its hearing request. As CMS correctly points out, there is no ambiguity in the February 9, 2001 notice that should have led Petitioner to reason that a revised deadline, superseding the March 20, 2001 deadline for appealing the January 19, 2001 notice of remedies, was established. Petitioner had no reason to believe that CMS's January 19, 2001 notice could be ignored, or that the time within which to request a hearing was tolled by the February 9, 2001 notice.

The remaining issue to be decided is whether Petitioner has shown good cause to extend the time period in which it should be allowed to file a request for hearing beyond the 60 days provided in the regulations. 42 C.F.R. §§ 498.40(c)(1), (2). The regulation does not define what constitutes good cause. This term has been defined, however, by the DAB to mean circumstances beyond an entity's ability to control. Hospicio San Martin, DAB No. 1554 (1996).

Petitioner, on the other hand, suggests that we should look to Fed. R. Civ. P. 60(b) for the appropriate standard for determining whether good cause exists. The standard set forth in that rule is one of mistake, inadvertence, surprise, or neglect. Petitioner places reliance on federal case law in support of the standard it proposes. It contends that in Marshall v. Monroe & Sons, 615 F.2d 1156 (6^th Cir. 1980), and United States v. Clark, 51 F.3d 42 (5^th Cir. 1995), the standard embodied in Fed. R. Civ. P. 60(b) has been applied to administrative appeals.

In Marshall, the Secretary of Labor issued citations against Monroe & Sons on December 12, 1973. Monroe responded on January 14, 1974. Monroe was also required to file an answer within 15 days of service of the complaint, but failed to do so. The Secretary of Labor obtained a dismissal based on that failure. When proceedings were commenced to collect a penalty of $1,380, Monroe retained counsel for the first time. Monroe's counsel wrote a letter to the Occupational Safety & Health Review Commission (OSHRC) explaining that his client had thought the letter to OSHRC continuing his notice of contest had taken care of the complaint. OSHRC granted reinstatement pursuant to Fed. R. Civ. P. 60(b). The court specifically stated that:

29 U.S.C. § 661(f) authorizes OSHRC to make such rules as are necessary for the orderly transaction of its proceedings and provides that unless OSHRC has adopted a different rule, its proceedings shall be in accordance with the Federal Rules of Civil Procedure. Fed. R. Civ. P. 60(b) provides for the granting of relief from a final judgment, order, or proceeding, on motion by one of the parties, for a number of specified reasons including mistake, inadvertence, surprise and excusable neglect. After a review of the legislative history of the Occupational Health and Safety Act, and of other authority in this area, we conclude that OSHRC has jurisdiction to grant relief from final orders pursuant to Fed. R. Civ. P. 60(b).

Marshall, 615 F.2d at 1158.

Consequently, inasmuch as Congress specified in the Occupational Safety and Health Act that the Federal Rules of Civil Procedure could be applied by OSHRC, that administrative adjudicatory body could legitimately apply those rules.

The situation in Marshall is in contrast to the case at hand where no such congressional mandate has been enacted with respect to the DAB. On the contrary, it has been established that the Federal Rules of Civil Procedure are inapplicable here. These proceedings are specifically governed by the Secretary's duly promulgated regulations at 42 C.F.R. Part 498. Birchwood Manor, DAB No. 1669 (1998).

The Clark case cited by Petitioner merits no discussion, since it is a criminal matter, totally unrelated to administrative proceedings. I note however that, in Clark, the 5^th Circuit held that there was no "dramatic ambiguity" present that would mandate the extraordinary determination that a finding of excusable neglect was appropriate.

Clark, 51 F.3d 42, 44 (5^th Cir. 1995).

The term "dramatic ambiguity" is borrowed from the Pioneer case. There, the United States Supreme Court reasoned that "dramatic ambiguity" in the Bankruptcy Court's Notice made a case for a finding of "excusable neglect," pursuant to Fed. R.Civ. P. 60(b). See 507 U.S. at 387, 398-399. Such is not the case here, where CMS informed Petitioner unequivocally that it was bound to perfect an appeal no later than March 20, 2001. Moreover, as stated earlier, Fed. R. Civ. P. 60(b) is not applicable to these proceedings. In the case before me, there is no evidence of confusion in either CMS's notice letter of initial determination dated January 19, 2001, or the notice dated February 9, 2001. The situation here is also in stark contrast to the one in West Side Care Center, cited by Petitioner. In that case, the ALJ found that the multitude of notices (a total of 11) created a circumstance beyond the party's control.

In view of the foregoing, I find that the standard for a finding of good cause for untimely filing in these proceedings is the standard established by the DAB in Hospicio San Martin. That standard requires that the party who files untimely show that it was prevented from filing timely due to circumstances beyond its ability to control. I am without authority to disregard the DAB's holding in that regard.

Petitioner contends that if it is found to have filed an untimely request for hearing, such untimeliness was due to mistake, inadvertence, or excusable neglect, and that it acted in good faith. Inasmuch as I have concluded that the standard advanced by Petitioner is inappropriate here, I must also find that it has not established the existence of circumstances beyond its ability to control which prevented it from making a timely request for hearing. The only remaining issue in this case is Petitioner's challenge to the non-immediate jeopardy finding of noncompliance which was the basis for a $1,500 a day CMP. ⁽⁴⁾

VI. 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. CMS's motion for partial dismissal is therefore granted.

José A. Anglada

Administrative Law Judge

1. When these proceedings began, CMS was previously named the Health Care Financing Administration. See 66 Fed. Reg. 35,437 (July 5, 2001).

2. In the case at hand, there is evidence of receipt of the notice on the issuance date of January 19, 2001. CMS Ex. 1, at 3.

3. Petitioner not only filed an untimely hearing request, but also failed to dispute any of the deficiency tags listed on the statement of deficiencies from the survey concluded on January 12, 2001.

4. By letter dated May 7, 2001, CMS notified Petitioner that the termination action had ceased. CMS Ex. 3.