SUBJECT:

Sunchase Nursing Center,

Petitioner,

Health Care Financing Administration

The Health Care Financing Administration (HCFA) moves to dismiss the hearing request filed by Petitioner, Sunchase Nursing Center. Petitioner opposes the motion. I dismiss the hearing request. I do so pursuant to 42 C.F.R. § 498.70(c) which gives an administrative law judge discretion to dismiss a hearing request in a case involving HCFA where the party requesting a hearing did not file a hearing request timely and where that party has not shown good cause for its failure to file a hearing request timely. Petitioner did not file a hearing request timely. 42 C.F.R. § 498.40(a)(2). Petitioner has not made a showing of good cause for filing an untimely hearing request. 42 C.F.R. § 498.40(c).

HCFA submitted seven exhibits (HCFA Ex. 1 - HCFA Ex. 7) to support its motion. Petitioner submitted two exhibits (P. Ex. A and P. Ex. B) to oppose HCFA's motion. Additionally, Petitioner submitted a document which it entitled "Response to Motion for Disclosure of Interest" which alleges facts to oppose HCFA's contention that Petitioner's counsel does not represent the present owner of the facility. I am designating that document as P. Ex. C. I admit into evidence HCFA Ex. 1 - HCFA Ex. 7 and P. Ex. A - P. Ex. C.

On my own motion, I am admitting into evidence two additional documents. The first document, which I identify and receive into evidence as ALJ Ex. 1, consists of a ruling dated March 25, 1999, issued by Administrative Law Judge Mimi Hwang Leahy in another case involving the same parties who are before me here. That case was docketed in the Departmental Appeals Board Civil Remedies Division as Sunchase Nursing Center, Docket No. C-98-465. The second document, which I identify and receive into evidence as ALJ Ex. 2, consists of a letter dated October 20, 1998, from the Arkansas Department of Human Services to Petitioner's Administrator. As was true of ALJ Ex. 1, ALJ Ex. 2 was also part of the record in Docket No. C-98-465.

I. Issue, findings of fact and conclusions of law

A. Issue

The issue in this case is whether a basis exists for me to dismiss Petitioner's hearing request.

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.

1. Petitioner did not file its hearing request timely, and, therefore, has no right to a hearing.

A party is not entitled to a hearing unless it files its hearing request within a specified time limit. A party who requests a hearing must make its request within 60 days of receiving a notice of a determination from HCFA in order to be entitled to a hearing. 42 C.F.R. § 498.40(a)(2). A notice is presumed to be received five days from its date of mailing unless there exists evidence to show that it was received on some other date. 42 C.F.R. § 498.22(b)(3). Thus, unless facts establish otherwise, a party will be entitled to a hearing if it files a hearing request within 65 days of the date that HCFA mailed a notice of a determination to that party.

a. The facts

The undisputed facts which are relevant to the timing of Petitioner's hearing request in this case are as follows. On September 17, 1998, a survey was conducted of Petitioner's facility by the Arkansas Department of Human Services, Division of Medical Services, Office of Long Term Care (Arkansas State survey agency). This survey was made as a revisit to verify whether Petitioner had corrected previously identified failures to comply substantially with federal participation requirements. The surveyors who conducted this survey concluded that Petitioner was not complying substantially with federal participation requirements. Their findings included a determination that Petitioner's noncompliance was so egregious as to place residents of Petitioner's facility in a state of immediate jeopardy. Both the Arkansas State survey agency and HCFA sent notices to Petitioner as a consequence of these findings. These notices were as follows:

• On September 18, 1998, the Arkansas State survey agency sent a notice to Petitioner advising Petitioner that the Arkansas State survey agency was recommending to HCFA and to the Arkansas State Medicaid agency that remedies be imposed against Petitioner. These proposed remedies included civil money penalties, termination of Petitioner's participation agreement effective October 10, 1998, and denial of payment for new admissions. HCFA Ex. 1.

• On September 21, 1998, HCFA sent a notice to Petitioner in which it advised Petitioner that it intended to terminate Petitioner's Medicare participation agreement effective October 10, 1998 and that it was imposing civil money penalties of $3,050 per day against Petitioner, retroactive to September 15, 1998. HCFA Ex. 3. The notice also advised Petitioner that payment would be denied for new admissions to Petitioner's facility beginning effective September 23, 1998. This notice contained a section entitled "Appeal Rights" which specifically informed Petitioner that it had until November 20, 1998 - 60 days from the date that the notice was faxed to Petitioner - to request a hearing before an administrative law judge.

• On October 8, 1998, the State survey agency sent an amended notice to Petitioner. HCFA Ex. 2. The amended notice advised Petitioner that the Arkansas State survey agency had found immediate jeopardy level deficiencies at Petitioner's facility at the September 17, 1998 survey. It went on to state, however, that the Arkansas State survey agency had found that the immediate jeopardy was removed on September 17, 1998. The notice told Petitioner that the Arkansas State survey agency was recommending to HCFA and the Arkansas State Medicaid agency that remedies be imposed against Petitioner. These proposed remedies included civil money penalties of $3,050 per day for the period which ran from September 14, 1998 through September 16, 1998, civil money penalties of $100 per day for the period which began on September 17, 1998, and termination of Petitioner's participation agreement effective October 31, 1998. Id.

• On October 20, 1998, HCFA sent a notice to Petitioner which amended HCFA's September 21, 1998 notice. HCFA Ex. 4. The notice contained a highlighted and capitalized statement in which HCFA advised Petitioner that the October 20, 1998 notice revised HCFA's September 21, 1998 notice to Petitioner. In the text of the notice HCFA advised Petitioner that it had accepted the Arkansas State survey agency's recommendations concerning the imposition of civil money penalties. It also advised Petitioner that it intended to terminate Petitioner's participation in Medicare effective November 4, 1998. As with HCFA's previous notice to Petitioner, the October 20, 1998 notice advised Petitioner that payment had been denied for new admissions to Petitioner's facility effective September 23, 1998. Also, as with HCFA's previous notice, this notice contained a section entitled "Appeal Rights." In this section, HCFA advised Petitioner that it could request a hearing before an administrative law judge no later than December 19, 1998, 60 days after the date on which HCFA faxed its October 20, 1998 notice to Petitioner. Id.

• On January 29, 1999, HCFA sent an additional notice to Petitioner. HCFA Ex. 5. In this notice, HCFA advised Petitioner that the Arkansas State survey agency had reported that outstanding deficiencies at Petitioner's facility had been corrected. The notice stated that payment for new admissions had been denied to Petitioner for the period which began on September 23, 1998 and which ran through October 24, 1998. The January 29, 1999 notice also recited that HCFA had imposed civil money penalties against Petitioner and that Petitioner had not requested a hearing concerning the imposition of these remedies. Id. at 1. Petitioner was told that the entire amount of the civil money penalties was due and payable to HCFA on February 23, 1999.

On February 3, 1999, Ms. Debbie Thetford Nye, Esq. wrote to HCFA in response to HCFA's January 29, 1999 letter. P. Ex. B. Ms. Nye asserted:

It has been the facility's continuous inquiry and intention that while notice of recommended remedies was received from the State Survey Agency, there was no final notification of the imposition of the remedies by the Health Care Financing Administration for this September survey.

Id. Ms. Nye asserted additionally that Petitioner had stated this contention in a conference call that transpired before Administrative Law Judge Leahy and counsel for HCFA. This conference call occurred in the case involving Petitioner which was docketed at the Civil Remedies Division of the Departmental Appeals Board with Docket Number C-98-465. Ms. Nye contended that, at this conference call, counsel for HCFA had replied to the assertion by averring that no civil money penalties had been imposed against Petitioner for the September 1998 survey. Therefore, according to Ms. Nye, Judge Leahy had ruled that there was nothing involving the September 1998 survey that could be part of the case that was pending before her. Ms. Nye averred that she had contacted Ms. Leslie Weyn, a staff attorney at the Civil Remedies Division, to ascertain whether in fact the remedy of civil money penalties had been imposed.

Ms. Nye contended that, as of February 3, 1999, Petitioner believed that there were no civil money penalties for which Petitioner owed payment. She concluded by asserting that "if in fact the civil money penalty had been imposed" then Petitioner would "seek permission to file a delayed appeal and include the issue within its ongoing appeal."

On April 7, 1999, Ms. Nye filed a letter with the Departmental Appeals Board Civil Remedies Division. She requested a hearing "to appeal the finding of noncompliance and immediate jeopardy which led to the imposition of a civil money penalty and denial of payment for new admissions effective September 23, 1998."

b. Analysis

Petitioner did not file a hearing request timely and is not entitled to a hearing. The notices that HCFA sent to Petitioner on September 21, and October 20, 1998 plainly advised Petitioner of its right to request a hearing and advised Petitioner of the deadlines by which Petitioner could request a hearing. HCFA Ex. 3; HCFA Ex. 4. Petitioner would have been entitled to a hearing had it filed a hearing request within 60 days of its receipt of either of those two notices. 42 C.F.R. § 498.40(a)(2). It did not do so. Petitioner did not file a hearing request until April 7, 1999. And, even if Ms. Nye's February 3, 1999 letter were construed to be a hearing request, that letter was not submitted within 60 days of Petitioner's receipt of the September 21, and October 20, 1998 notices.

Petitioner seems now to argue that it didn't actually receive HCFA's October 20, 1998 notice. Also, Petitioner seems to argue that HCFA bears a burden of producing affirmative evidence - independent of a copy of the notice that it sent to Petitioner - that the notice was actually received by Petitioner. In its response to HCFA's motion, Petitioner asserts that:

The October 20, 1998 letter from HCFA was not a letter the facility can identify as having received and noted it to be an imposition of a civil money penalty. . . [HCFA's] counsel has not stated with certainty its proof that the facility acknowledged receipt of the October 20, 1998 letter.

Petitioner's response to motion to dismiss at 4.

I find these arguments to be without merit. First, Petitioner misstates the law. The regulations create a presumption that a notice that HCFA sends to a party is received by that party. 42 C.F.R. § 498.22(b)(3). It is Petitioner's burden to prove that it did not receive a notice if it denies that it received that notice.

Second, Petitioner offered no affirmative evidence that it failed to receive the notice. I note particularly that Petitioner did not provide a declaration or affidavit from any of its officers or employees in which any of those individuals asserted that the notice was not received by Petitioner.

Finally, even if Petitioner did not receive the October 20, 1998 notice it has not denied receiving HCFA's September 21, 1998 notice. As was the case with the October 20, 1998 notice, HCFA's September 21, 1998 notice plainly told Petitioner that HCFA was imposing remedies and that Petitioner had a right to request a hearing.

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

A party that has not filed a hearing request timely may ask for an extension of time within which to file its request. 42 C.F.R. § 498.40(c)(1). An administrative law judge may grant a request for an extension where the party who requests the extension establishes good cause for not having filed its hearing request timely. 42 C.F.R. § 498.40(c)(2). An administrative law judge may dismiss a hearing request where the request has not been filed timely and where the party making the request fails to demonstrate good cause for its failure to file a hearing request timely. 42 C.F.R. § 498.70(c).

The term "good cause" for not filing a hearing request timely is not defined in the regulations. It has been held to mean a circumstance or circumstances that prevent a party from requesting a hearing timely and that are beyond the party's ability to control. Hospicio San Martin, DAB CR387 (1995) aff'd DAB No. 1554 (1996); Jackson Manor Health Care, Inc., DAB CR545 (1998); Mathis Nursing Home, DAB CR461 (1997). Avoidable human error is not "good cause" for failing to file a hearing request timely. Jackson Manor Health Care, Inc., DAB CR545, at 9 - 10; Mathis Nursing Home, DAB CR461, at 9.

Petitioner did not establish good cause for failing to file a hearing request timely. It has described no circumstance beyond its ability to control which would have prevented it from filing a hearing request timely. As I discuss above, at Finding 1, Petitioner did not satisfy me that it failed to receive HCFA's September 21, 1998 and October 20, 1998 notices. It has not demonstrated that any language in either of these notices was ambiguous or misled Petitioner into concluding that it did not need to protect its rights by requesting a hearing. And, Petitioner has not established that it was misled into concluding that it did not need to request a hearing by other statements made to it by or on behalf of HCFA.

Petitioner asserts, generally, that it was misled into believing that it did not have to file a hearing request inasmuch as HCFA had not advised it clearly that it was imposing remedies against Petitioner. More specifically, Petitioner argues that HCFA's September 21, 1998 and October 20, 1998 notices were vague and confusing and did not state that HCFA was imposing remedies against Petitioner. Additionally, Petitioner argues that it was led to believe at a prehearing conference in another case, Civil Remedies Docket No. C-98-465, that no remedies had been imposed against it by HCFA. Finally, Petitioner asserts in its April 7, 1999 hearing request that it had received a document dated October 20, 1998, from the Arkansas State survey agency, which informed Petitioner that "recommended remedies would not be forwarded to HCFA unless a revisit survey found the facility remained out of compliance." Petitioner evidently is suggesting that it relied on this alleged October 20, 1998 notice as holding Petitioner harmless from the imposition of any remedy by HCFA unless additional deficiencies were identified at Petitioner's facility in the future.

I find Petitioner's general assertion that it was misled into believing that it did not have to file a hearing request to be without merit. I also find each of the arguments that Petitioner makes to support its overall assertion to be without merit. Petitioner offered no persuasive evidence to show that it was misled into not filing a hearing request timely in this case.

I do not find that there is any material ambiguity in either the September 21, 1998 notice or the October 20, 1998 notice. Each of these notices clearly and unequivocally tells Petitioner that HCFA had determined to impose remedies against Petitioner which included civil money penalties. HCFA Ex. 3; HCFA Ex. 4. Each of these notices also plainly tells Petitioner that it had a right to request a hearing to contest HCFA's determinations. And, each notice cautions Petitioner that it must request a hearing within 60 days in order to be entitled to one.

I am not persuaded by Ms. Nye's February 3, 1999 letter, or by arguments that Petitioner makes in opposing HCFA's motion to dismiss, that either HCFA or its counsel misled Petitioner into not requesting a hearing timely. In her letter, Ms. Nye asserts that Petitioner was misled by HCFA or its counsel in two respects. P. Ex. B. First, Ms. Nye contends that HCFA never actually imposed remedies based on the findings of the September 17, 1998 survey of Petitioner. Rather, according to Ms. Nye, the State survey agency made only recommendations on which HCFA failed to act. Id. Second, Ms. Nye asserts that counsel for HCFA represented at a prehearing conference that occurred before Administrative Law Judge Leahy in the case that was docketed as C-98-465 that no remedies had been imposed by HCFA. The implication of this second assertion is that Petitioner did not request a hearing timely because it was lulled by HCFA's counsel into believing that it did not have to request a hearing.

Ms. Nye gave no basis in her February 3, 1999 letter to assert that Petitioner had received only recommendations from the State survey agency about remedy determinations and had not received any determinations from HCFA to impose remedies. P. Ex. B. Nor has Petitioner provided any evidence in response to HCFA's motion to dismiss to support this contention. Despite Petitioner's assertion, the evidence supports the conclusion that HCFA explicitly informed Petitioner of its remedy determination. HCFA's September 21, 1998 and October 20, 1998 notices plainly told Petitioner that HCFA had determined to impose remedies and plainly advised Petitioner of its right to request a hearing. HCFA Ex. 3; HCFA Ex. 4.

The prehearing conference that Ms. Nye refers to in her February 3, 1999 letter took place on January 12, 1999. ALJ Ex. 1, at 2. The conference thus occurred nearly a month after the deadline for requesting a hearing in response to the October 20, 1998 notice had expired. Given that fact, nothing said by HCFA's counsel at that prehearing conference could have misled Petitioner into not requesting a hearing timely.

Furthermore, Ms. Nye's assertion that HCFA's counsel represented at the January 12, 1999 prehearing conference that no remedies had been imposed by HCFA as a consequence of the September 17, 1998 survey was explicitly rejected by Administrative Law Judge Leahy. ALJ Ex. 1, at 2 - 3. I do not find Ms. Nye's assertion of what was said by HCFA's counsel at the prehearing conference to be persuasive in light of the fact that it was rejected by the Administrative Law Judge who presided over that conference. Id.

Petitioner asserts that it was misled into believing that no remedies were being imposed against it as a result of the September 17,1998 survey by correspondence that it received from the Arkansas State survey agency dated October 20, 1998 (ALJ Ex. 2). In its brief, Petitioner represents that the October 20 notice from the Arkansas State survey agency stated or implied that recommended remedies would not be forwarded to HCFA unless a revisit survey found Petitioner's facility to remain out of compliance. P. response to motion to dismiss at 2. My review of the October 20 notice reveals no such representation by the Arkansas State survey agency. To the contrary, that notice is silent on the subject of any civil money penalties or denial of payment for new admissions. Instead, the October 20 notice appears to be little more than a form letter acknowledging receipt of Petitioner's allegation of compliance and plan of correction submitted in response to the findings of noncompliance from the September 17, 1998 survey. Moreover, in contrast to the October 8, 1998 notice (HCFA Ex. 2), the October 20, 1998 notice does not specifically reference or amend the earlier correspondence from the Arkansas State survey agency which stated that recommendations for the imposition of remedies were being forwarded to HCFA. Therefore, if Petitioner in fact understood the October 20, 1998 notice from the Arkansas State survey agency to have rescinded its earlier recommendations for the imposition of remedies, I find such an understanding to have been unreasonable based on the content of that notice. And, in any event, as I have explained above, the HCFA notice plainly and unambiguously stated that HCFA had determined to impose remedies against Petitioner and informed Petitioner of its right to request a hearing.

3. It is unnecessary for me to decide HCFA's assertion that Ms. Nye is not authorized to file a hearing request on behalf of Petitioner.

HCFA argues as an alternative ground for dismissal of Petitioner's hearing request that Ms. Nye is not authorized to act as counsel for Petitioner. HCFA's theory is that the facility which is the subject of this case changed ownership on April 1, 1999 and that HCFA has learned that Ms. Nye does not represent the facility's new owner.

It is not necessary for me to address the issue of whether Ms. Nye is authorized to represent Petitioner. The issue is moot because I conclude that Petitioner did not file its hearing request timely and because Petitioner did not establish good cause for its failure to file its hearing request timely.

Steven T. Kessel

Administrative Law Judge