SUBJECT:

Citadel Health Care,

Petitioner,

Centers for Medicare & Medicaid Services

DECISION DISMISSING REQUEST FOR HEARING

I dismiss the hearing request that was filed by Mr. Lowell Fox on behalf of Petitioner, Citadel Health Care. I do so because Mr. Fox has made no showing that Petitioner authorized him to request a hearing on its behalf or to represent its interests.

I. Background and undisputed material facts

The facts that I recite in this background section are not disputed. Petitioner is a skilled nursing facility that is located in St. Joseph, Missouri. On February 1, 2001, the Centers for Medicare & Medicaid Services ("CMS" and then known as the Health Care Financing Administration) sent a notice to Mr. Fox as Administrator of Petitioner. It stated that a survey was completed of Petitioner on January 11, 2001 at which time Petitioner was found not to be complying substantially with federal participation requirements. CMS stated that it was imposing a remedy against Petitioner consisting of denial of payment for new Medicare and Medicaid admissions. CMS advised Petitioner that it had a right to request a hearing before an administrative law judge.

Mr. Fox filed a request for hearing on August 25, 2001. CMS moved to dismiss the hearing request. Attached to the motion to dismiss were five exhibits labeled A - E which I have renamed as CMS exhibits 1 - 5 (CMS Exs. 1 - 5). Mr. Fox filed a response without any accompanying exhibits. No objections were made to any of the exhibits and I admit into evidence CMS Exs. 1 - 5.

Effective May 18, 2001, ownership of Petitioner was transferred to a new owner, Citadel Holdings, L.L.C. (Citadel Holdings). CMS Ex. 2 at 1. A consent agreement was entered into between Citadel Holdings and the Missouri Department of Social Services, Division of Aging. CMS Ex. 2, Attachment 2. Pursuant to this agreement, a probationary license was issued to Citadel Holdings which enabled it to operate Petitioner as a skilled nursing facility conditioned on agreements which included the following stipulations and agreements by Citadel Holdings:

• It would designate a licensed administrator who was not affiliated with Petitioner's previous operator as an agent, officer, director or other principal; and,

• None of the officers, directors, agents, or principals of Petitioner (formerly known as Wright Rest Manor, Inc.) would participate in operation of the facility.

Id. at 11.

Mr. Fox is not an agent, officer, director, or other principal of Citadel Holdings nor is he presently the licensed administrator of Petitioner. Mr. Fox remains the owner of the building in which Petitioner is located.

On May 25, 2001 an additional survey was made of Petitioner to determine compliance with participation requirements and Petitioner was again determined not to be complying substantially with participation requirements. CMS Ex. 2 at 2. CMS sent notices to Mr. Fox on June 13, and June 26, 2001 advising him of its intent to impose remedies against Petitioner including termination of Petitioner's participation in Medicare. CMS Ex. 3; CMS Ex. 4. On July 25, 2001, CMS sent an additional notice to Mr. Fox in which it advised him that, at a revisit of July 10, 2001, it was determined that Petitioner had attained compliance with Medicare participation requirements. The notice advised Mr. Fox that, consequently, CMS would not terminate Petitioner's participation in Medicare. CMS Ex. 5.

In August, 2001, CMS first learned that ownership and operation of Petitioner had changed. On August 25, 2001, Mr. Fox requested a hearing on Petitioner's behalf to challenge the February 1, 2001 determination by CMS to deny Petitioner payment for new Medicare admissions.

II. Issues, findings of fact and conclusions of law

A. Issue

The issue in this case is whether Petitioner has filed a valid request for hearing.

B. Findings of fact and conclusions of law

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

1. Mr. Fox is not an affected party, a legal representative of an affected party, or another authorized official who may file a hearing request.

Regulations governing hearings in cases involving CMS provide that an affected party entitled to a hearing, or that party's legal representative, or other authorized official may file a hearing request. 42 C.F.R. § 498.40(a)(2); (a)(2). The regulations define "affected party" as "a provider, prospective provider . . . that is affected by an initial determination or by any subsequent determination or decision under this part . . . ." 42 C.F.R. § 498.2. The regulations do not define "legal representative" or "other authorized official." However, it is very clear what these terms mean from the plain language of the regulations. An affected party's "legal representative" or "other authorized official" is a lawyer or other person that has been authorized by an affected party to file a hearing request on that party's behalf.

Petitioner clearly was the subject of CMS's adverse determination of February 1, 2001 and it was entitled to file a request for a hearing in order to challenge that determination. However, only an authorized legal representative or other authorized official could file a request on Petitioner's behalf. A request filed by an unauthorized person or entity would not be a valid hearing request.

Mr. Fox has offered nothing to show that he was vested with the authority to file a hearing request on Petitioner's behalf as of August 25, 2001, the date when he filed his request. He has not established that he had any official position with Petitioner at that time. He has not contended that he was authorized by Petitioner after May 18, 2001 to serve as Petitioner's legal representative or as an authorized official of Petitioner. Indeed, the evidence offered by CMS, consisting of the consent agreement that Citadel Holdings entered into as prerequisite for obtaining an operator's license, establishes that Mr. Fox had no management role with Petitioner after May 18, 2001. CMS Ex. 2, Attachment 2, at 11.

Mr. Fox offers several arguments to support his contention that he should be permitted to file a hearing request on behalf of Petitioner. I do not find any of these arguments to be persuasive.

First, Mr. Fox asserts that the issues he raised in his August 25, 2001 hearing request are, in some undefined way, related to issues that were subsumed in a previous hearing request involving Petitioner. He asserts that this case has "the same root issues" as the previous case and that "it was obvious to both sides that all of the issues raised in the first appeal filing were also included in the current . . . [case]." Petitioner's response to CMS's motion to dismiss at 1.

It is not entirely clear what Mr. Fox is alleging here, but he seems to be saying that he should be entitled to request a hearing to re-raise issues that were involved in a previous case. If that is his argument he has not established any justification for it. The "first appeal filing" that Mr. Fox alludes to apparently is a case that was docketed previously as CRD Docket No. C-01-003. The hearing request in that case was dismissed on January 18, 2002 in an order issued by Administrative Law Judge Jose A. Anglada. The reason that Judge Anglada gave for dismissing that case was that Petitioner had failed to meet various deadlines that had been set by the judge and had abandoned its hearing request. Nothing in Judge Anglada's order suggests that issues that were part of that case would be preserved for a subsequent case or that Mr. Fox was authorized to represent Petitioner's interests in a subsequent case.

Second, Mr. Fox challenges various surveys that were conducted of Petitioner as being conducted in a "flawed, callous, malicious, damaging, and even more flagrantly derogatory manner." Petitioner's response to CMS's motion to dismiss at 2. These assertions arguably go to the merits of Petitioner's hearing request and do not address the issue of whether Mr. Fox is authorized to file a request on Petitioner's behalf. For that reason, they are not a relevant response to the motion to dismiss the hearing request.

Third, Mr. Fox asserts that CMS's argument that he is not permitted to be an authorized agent, director or principal of Petitioner is incorrect. Petitioner's response to CMS's motion to dismiss at 3. Mr. Fox cites to "certain covenants" of the "new provider's contract." Possibly, he is referring to a lease between Citadel Holdings or Petitioner and its landlord (Mr. Fox did not make the lease an exhibit to his response but quoted from an undisclosed document). The language he quotes from alludes to termination of the lease in the event that Petitioner loses its authority to make Medicare claims or in the event that Petitioner's State license is terminated.

I find this language - assuming that it accurately reflects the relationship between Petitioner and its landlord - to be irrelevant to the issue of whether Mr. Fox may file a hearing request on Petitioner's behalf. There is nothing in the quoted language which would authorize Mr. Fox to file such a request.

Fourth, Mr. Fox asserts that the May 25, 2001 survey of Petitioner was not a "full survey." Petitioner's response to CMS's motion to dismiss at 3. Mr. Fox has not explained how this assertion, even if it is correct, would justify his filing a hearing request on Petitioner's behalf.

Mr. Fox does not assert that he is entitled to file a hearing request because CMS referred to him as Petitioner's "Administrator" in various notices to Petitioner, including notices that were sent in February, May, and June 2001. However, I would have found that argument to be without merit had Mr. Fox made it. The undisputed facts of this case are that CMS was not aware of the transfer of Petitioner's ownership prior to August 2001. Moreover, even if CMS had been aware of the transfer and had continued to send notices to him that referred to him as Petitioner's "Administrator" that incorrect designation would not have conferred authority on Mr. Fox to act on Petitioner's behalf. Whether Mr. Fox may act on behalf of Petitioner depends on whether Petitioner conferred authority on Mr. Fox to act on its behalf and not on any designation that CMS may have given to Mr. Fox.

2. I must dismiss the hearing request in this case inasmuch as it was not filed by Petitioner, its legal representative, or an authorized official.

There is nothing in the regulations governing hearings that would allow a hearing in the circumstance where the request is filed on a facility's behalf by someone who is not an authorized representative of that facility. An administrative law judge may dismiss a hearing request where the individual or entity who requests the hearing is not a proper party or does not otherwise have a right to a hearing. 42 C.F.R. § 498.70(b). Mr. Fox is not a proper party, nor is he authorized to request a hearing on behalf of Petitioner. I therefore dismiss the hearing request that was filed by Mr. Fox.

I note, furthermore, that there is an issue in this case of the timeliness of the hearing request that CMS did not raise. Under applicable regulations, an affected party must file a hearing request within 60 days of receiving notice from CMS of an adverse determination. 42 C.F.R. § 498.40(a)(2). CMS made its determination to deny Petitioner payment for new Medicare admissions on February 1, 2001. CMS Ex. 1. Mr. Fox did not file a hearing request to challenge that determination until August 25, 2001. Failure to file a hearing request timely in this case would appear to be an additional ground for dismissing the request. See 42 C.F.R. § 498.70(c).

Steven T. Kessel

Administrative Law Judge