Department of Health and Human Services DEPARTMENTAL APPEALS BOARD Civil Remedies Division |
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IN THE CASE OF | |
EagleCare, Inc., d/b/a/ Beech Grove Meadows, |
DATE: June 25, 2002 |
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Centers for Medicare & Medicaid Services
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Docket No.C-01-118
Decision No. CR923 |
DECISION | |
DECISION This matter is before
me on the Centers for Medicare & Medicaid Services (CMS's) Motion
to Dismiss, or, in the Alternative, for Partial Summary Judgment (Motion
to Dismiss). (1) I have determined that
Beech Grove Meadows (Petitioner) is not entitled to a hearing in this
case and, therefore, I grant the Motion and dismiss Petitioner's request
for hearing. My decision is based
on the memoranda and other pleadings filed by both parties, and on the
documents attached to those memoranda which I have admitted, in the absence
of objection from either party, to the record. Petitioner submitted three
proposed exhibits with its Opposition Memorandum (P. Memo) on April 30,
2001, and I have admitted them as Petitioner's Exhibits (P. Exs.) 1-3.
Although I have read and considered them, I have not admitted the three
printed decisions also attached to that pleading, as I do not regard them
as evidence proper. I have also admitted to the record the five attachments
CMS submitted with its Memorandum (CMS Memo) on March 16, 2001. CMS designated
these items as Attachments A-E, and I have admitted them as CMS Exhibits
(CMS Exs.) A-E, rather than remarking them with numbers to conform to
normal practice in this forum. I.
BACKGROUND Petitioner is a
skilled nursing facility located in central Indiana. During the summer
of 2000, the facility was the subject of an investigation and annual survey
by the Indiana State Department of Health (ISDH). On August 3, 2000, the
ISDH completed its survey, and reported several violations of regulatory
standards required of the facility by reason of its participation in the
Medicare and Medicaid programs. The violations were set forth in detail
in a standard survey report Form 2567-L (2567), which in the instant case
was 58 pages in length (CMS Ex. B), and in a document entitled "OSCAR
REPORT 30," which was two pages long. CMS Ex. C. As is usual in such survey reports, the deficiencies were organized by "F-Tags," with each F-Tag relating to the violation of a particular regulatory standard, and each assessed as to the scope and severity of the regulatory infraction. The F-Tags and deficiencies alleged by ISDH at Petitioner's facility are set out here in summary, together with the final revised assessment of each deficiency's level of scope and severity (ss):
There are two points
to be emphasized about this summary. First, the scope and severity assessments
set out above are at the revised levels announced in ISDH's September
18, 2000 letter to Petitioner. CMS Ex. A. Second, although both parties
to this litigation repeatedly refer to 10 reported deficiencies (e.g.
CMS Memo, at 2-3; P. Memo, at 2-3), there were and are in fact 11 reported
deficiencies. The parties' enumeration of the F-Tags and their discussions
of them in general seem to have overlooked the seventh deficiency tag
stated above, F-368. CMS Ex. B, at 37-40. On September 8, 2000, CMS notified Petitioner of its intention to act on the survey report by imposing certain penalties on Petitioner, including a civil money penalty (CMP) of $200 per day beginning on August 3, 2000 until the facility's deficiencies were corrected, and a denial of payment for new Medicare admissions (DPNA) effective November 3, 2000. P. Ex. 1. CMS's September 8, 2000 letter also informed Petitioner that its Nurse Aide Training and/or Competency Evaluation Program (NATCEP) would be suspended for two years from August 3, 2000. Id., at 2-3. Although this letter set out a variety of potential statutory and regulatory bases for such an action, including the case of an institution that "has been assessed a total civil money penalty of not less than $5,000.00," the reason stated on September 8, 2000, for CMS's suspension of Petitioner's NATCEP program was
Petitioner's having been subject to "an extended survey" based on "a finding
of substandard care." Id., at 3. On September 20,
2000, however, ISDH conducted a second, "revisit" survey of Petitioner's
facility and found that all deficiencies had been corrected and that Petitioner
had been in substantial compliance with all Medicare and Medicaid requirements
as of September 2, 2000. CMS notified Petitioner on October 6, 2000, that
it would not impose the DPNA, but would impose the CMP of $200 per day
for the 30 days from August 3, 2000 through September 1, 2000. CMS's notice
explicitly set the CMP amount at $6,000. CMS's October 6, 2000 notice
contained no explicit reference to the NATCEP suspension. CMS Ex. D; P.
Ex. 2. Petitioner timely
filed its hearing request on or about November 7, 2000, and attached to
it CMS's September 8, 2000 letter. P. Ex. 3. The hearing request is a
detailed document of five pages' length, but it neither refers to nor
incorporates by attachment CMS's October 6, 2000 letter, and it expressly
notes Petitioner's objection to the DPNA that CMS had decided against
imposing in its October 6, 2000 letter. Petitioner's detailed recitation
of the object and substance of its appeal is limited to the deficiency
charged in F-314; a close reading of Petitioner's hearing request reveals
a direct correlation among the residents' identities, dates and times
of observed deficiencies, and details of the surveyors' observations set
out at F-314 in the 2567 (CMS Ex. B, at 2-21) and Petitioner's responses
in its hearing request. P. Ex. 3, at 2-4. CMS filed its Notice of Issues for Which a Dismissal for Cause, or in the Alternative, Summary Judgment Will Be Requested (CMS Notice) on January 31, 2001. That Notice explained CMS's theory, to which it still adheres:
CMS Notice, at 1-2. CMS filed its Motion
to Dismiss on or about March 16, 2001. During the period established for
the exchange of memoranda on the issues raised in that Motion, this case
was reassigned to me. II.
ISSUE There is a single
legal issue before me, and I believe that it is a question of first impression.
The issue is: Whether Petitioner has a right to a hearing on the one deficiency
tag it has appealed, when the ten unappealed deficiency tags arising from
the same survey are sufficient to support the remedy imposed, without
reliance on the appealed deficiency tag? III.
CONTROLLING STATUTES AND REGULATIONS CMS's authority to impose penalties against non-compliant facilities derives from both statute and regulation. When CMS proposes to impose a CMP, it relies on section 1819(h)(2)(B) of the Social Security Act (Act) and the grant of authority conveyed to it by 42 C.F.R. ง 488.406(a)(3), which states:
When CMS proposes to prohibit approval of a facility's NATCEP, it relies on statutory language found at section 1819(f)(2)(B)(iii)(I) of the Act. The specific provisions that bear on this discussion are set out below, and they require that the Secretary of the Department of Health and Human Services (Secretary) "shall prohibit approval" of any NATCEP program if it is:
Subsection (b) above
refers to extended surveys or partial extended surveys prompted by a "substandard
quality of care" finding, while subsection (c) comprehends any CMP imposed
for whatever reasons based on deficiencies. CMS's September 8, 2000 letter
to Petitioner purported to rely on the language found in subsection (b),
but cited language found both in subsection (b) and in subsection (c). The range of CMP
which may be imposed is based upon the scope and severity of the deficiency
or deficiencies encountered. One alternative, not at issue here, is a
"per instance" CMP that can range from $1,000 to $10,000 per instance
of noncompliance. 42 C.F.R. ง 488.408(d)(iv). The alternative chosen by
CMS in the instant case is set out at 42 C.F.R. ง 488.408(d)(1)(iii),
which authorizes the imposition of "[c]ivil money penalties of $50-3,000
per day" in situations of "[w]idespread deficiencies that constitute no
actual harm with a potential for more than minimal harm but not immediate
jeopardy; or . . . [o]ne or more deficiencies that constitute actual harm
that is not immediate jeopardy." 42 C.F.R. งง 488.408(d)(2)(i), (ii).
Such CMPs are defined as falling in the lower range of available penalties,
both by reference to the upper and lower limits of the penalty amount
and the severity of the deficiency for which they are imposed. 42 C.F.R.
ง 488.438(a)(ii). Appeals from the
imposition of remedies are permitted under the circumstances set out in
42 C.F.R. งง 498.3 and 498.5. A facility may appeal an initial determination
of noncompliance if it results in the imposition of a penalty such as
a CMP, DPNA, or disapproval of a NATCEP, but it may not appeal deficiency
findings that do not form the basis for a remedy actually imposed by CMS.
A facility may appeal the level at which CMS assesses the noncompliance
only if a successful appeal would affect the range of CMP imposed, or
would eliminate a finding of substandard quality of care which had resulted
in the loss of NATCEP approval. 42 C.F.R. งง 498.3(b)(13), (14). Appeals are perfected according to the terms of 42 C.F.R. ง 498.40. The requirements are relatively straightforward on their face: within 60 days of its receipt of notice of the initial determination of deficiency (42 C.F.R. ง 498.40(a)(2)), the facility must file a request for hearing which must:
42 C.F.R. ง 498.40(b). The terms of 42
C.F.R. ง 498.40 are controlling on the question of whether potential issues
have been preserved for appeal. A facility affected by a final determination,
and seeking review of that determination on appeal, must invoke jurisdiction
in its hearing request. Otherwise, those determinations and the findings
on which they are based become final, non-reviewable, and binding on the
affected facility by operation of law. 42 C.F.R. งง 498.20(b), 498.70(a). IV.
FINDINGS OF FACT AND CONCLUSIONS OF LAW I find and conclude
as follows: 1. Petitioner is
a skilled nursing facility, and was the subject of an investigation and
survey completed by the ISDH on August 3, 2000. 2. The survey resulted
in 11 reported deficiencies, which were designated in the 2567 under the
following F-Tags: F-314, F-323, F-324, F-325, F-326, F-364, F-368, F-371,
F-465, F-498, and K-0076. CMS Ex. B. 3. Based on these
deficiency findings, CMS determined to impose the following remedies:
(a) a CMP of $200 per day beginning on August 3, 2000 and ending on September
1, 2000, for a total CMP of $6,000; and (b) a denial of approval of Petitioner's
NATCEP for a period of two years beginning on August 3, 2000. P. Exs.
1, 2; CMS Ex. D. 4. CMS first gave
Petitioner notice of its intention to impose remedies on September 8,
2000, and gave notice of the final amount of the CMP on October 6, 2000.
P. Exs. 1, 2; CMS Ex. D. 5. Petitioner timely
filed its hearing request on November 7, 2000, but limited its appeal
to the deficiency findings alleged in F-314. P. Ex. 3; CMS Ex. E. 6. Petitioner's
hearing request did not seek review of any of the other 10 reported deficiencies,
and they have now become final. 42 C.F.R. ง 498.20(b). 7. The remedies
imposed on Petitioner by CMS, the CMP of $6,000 and the loss of NATCEP
approval for two years, are fully supported by the 10 unappealed deficiencies,
without reliance on the appealed deficiency findings alleged in F-314.
42 C.F.R. งง 408(d)(1)(iii), 408.438(a)(ii), 488.438(f)(1). 8. There is no reason
to invoke my discretionary authority to allow Petitioner to amend its
hearing request, or to add new issues to those already before me in this
case. 42 C.F.R. งง 498.40(c)(2), 498.56(a). 9. On the facts
of this case, where there is no remedy to affirm or reverse, Petitioner
has no right to a hearing, and its request for hearing must be dismissed.
42 C.F.R. งง 498.3, 498.5. V.
DISCUSSION I begin this discussion
by pointing out what matters are not before me in this case. CMS has asked
that I grant partial summary judgment in its favor on the unappealed determinations
of deficiency. See CMS Memo, at 1, 5, 9; CMS Reply Memorandum
(CMS Reply), at 10. Petitioner, conceding that it did not appeal any of
the determinations other than those set out in F-314, asserts that "[t]he
other . . . alleged deficiencies not included in the scope of Petitioner's
request for hearing are not before the ALJ and, therefore, the ALJ does
not have jurisdiction to grant partial summary judgment as to those alleged
deficiencies." P. Memo, at 2, 13-14. On this point Petitioner is correct. The simple fact
is that, whether the unappealed determinations of deficiency number nine
or 10, they are precisely that: unappealed determinations. By operation
of law through the application of 42 C.F.R. ง 498.20(b), those determinations
are now final, non-reviewable, and binding, and I may neither affirm nor
disturb them. Orchard Grove Extended Care Center, DAB CR541 (1998).
CMS's suggestion that I enjoy jurisdiction to affirm by summary judgment
those unappealed determinations overlooks the fact that they are not before
me in this case, and that I cannot rule on matters not properly before
me. The only determinations of deficiency comprehended by Petitioner's
appeal are those set out in F-314. But if the unappealed
determinations are not before me for review, then it follows that the
penalties which they have invoked are likewise beyond review here. Insofar
as the now-final determinations of deficiency, taken together, constitute
a sufficient predicate for the CMP and NATCEP-loss imposed against Petitioner,
then the CMP and NATCEP-loss are not within my power to reduce, amend,
or set aside in this appeal. The unappealed determinations of deficiency
are, in this context, the equivalent of the non-inclusive but sufficient
number of deficiencies held to sustain penalties in Lakeland Continuing
Care Center, DAB CR683 (2000), and Kelsey Memorial Hospital,
DAB CR583 (1999). Here, as in those cases, it is not necessary that every
deficiency charged against Petitioner be sustained, as long as those actually
sustained are sufficient to establish a reasonable basis for the CMP actually
imposed. Since the unappealed deficiencies are now final, they have been
sustained ipso jure. And as sustained, they establish an entirely
sufficient basis for the imposition of a $200 per day CMP, the extension
of that CMP over a 30-day period for a total CMP of $6,000, and the denial-of-NATCEP
penalty based on the $6,000 CMP. This point is central
to the discussion that follows, so it may be well to pause briefly to
re-examine the exact character of the now-final deficiencies as they relate
to the scope and severity standards required to support a CMP of $200
per day. As noted above, 42 C.F.R. ง 488.408 classifies the remedies available
into three Categories "according to how serious the noncompliance is,"
and classifies CMPs of between $50 and $3,000 per day as Category 2 remedies.
42 C.F.R. ง 488.408(d)(1)(iii). The level of seriousness at which Category
2 remedies must be imposed is demonstrated "when there are - (i) [w]idespread
deficiencies that constitute no actual harm with a potential for more
than minimal harm but not immediate jeopardy; or (ii) [o]ne or more deficiencies
that constitute actual harm that is not immediate jeopardy." 42 C.F.R.
งง 488.408(d)(2)(i), (ii). Those standards, converted into the standard
notation employed in compliance surveys, mean that any deficiencies established
at scope and severity (ss) levels F and above can invoke Category 2 CMPs.
The now-final deficiencies include two at ss level F and one at ss level
G. F-364 is one of
the now-final deficiencies. This deficiency establishes non-compliance
with 42 C.F.R. งง 483.25(d)(1), (2) at ss level F which indicates there
were "widespread deficiencies" with a potential for actual harm short
of immediate jeopardy. F-371 is another now-final deficiency. This deficiency
establishes non-compliance with 42 C.F.R. ง 483.35(h)(2), also at ss level
F. And the now-final Tag F-325 establishes non-compliance with 42 C.F.R.
ง 483.25(i)(1) at ss level G, which means it is a deficiency in which
"actual harm" short of immediate jeopardy resulted. These three deficiencies,
all of which are now final by operation of 42 C.F.R. ง 498.20(b), are
sufficient to support CMS's imposition of Category 2 penalties on Petitioner.
I need not consider CMS's present assertion that the four E-level deficiencies
based on F-323, F-324, F-326, and F-465 also warrant Category 2 classification;
the one G-level citation and the two F-level citations, all three of which
are now final, fully support the imposition of a Category 2 CMP of between
$50 and $3,000 per day for 30 days. The two F-level deficiencies would
have supported a Category 2 classification even before the deficiency
based on Tag F-325 was enhanced from ss level D to ss level G on September
18, 2000. CMS Ex. A. It is equally significant that the Category 2 classification
was at no time dependent on F-314, either in terms of its having been
assessed at ss level H or in terms of its having been cited as a deficiency
at all. If no pressure sores had been observed at Petitioner's facility,
and no F-314 deficiency had been charged, the predicate for a Category
2 CMP would still have existed, and would still be final, non-reviewable,
and binding. No ruling I could conceivably enter in this case addressing
F-314 could disturb that predicate. But what of CMS's
specific determination to set the CMP at $200 per day? That amount is,
of course, well within the Category 2 "lower range" established by 42
C.F.R. งง 488.408(d)(1)(iii) and 488.438(a)(ii). In fact, it represents
only one-fifteenth of the upper limit of the range, and falls at roughly
the eighth percentile above the minimum mandatory imposition. The short
answer is that, notwithstanding ISDH's recommendation that the amount
be set at $100 per day, there is nothing unreasonable about the $200 figure
CMS chose, since it had Petitioner's history before it, and that history
reflected G-level and other violations in the immediate past. P. Ex. 1;
CMS Ex. C. The facility's history is explicitly included in the factors
CMS was obliged to consider in setting the CMP amount. 42 C.F.R. ง 488.438(f)(1).
Were I called upon to decide whether the $200 per day figure is reasonable,
I would declare that it is. But the short answer overlooks the stubborn
fact that CMS's determination to set the CMP at that level was made in
the context of the unappealed, final, and non-reviewable deficiency determinations
set out in F-323, F-324, F-325, F-326, F-364, F-368, F-371, F-465, F-498,
and K-0076. By operation of 42 C.F.R. ง 498.20(b), the violations, their
30-days' duration, and CMS's determination to assess the CMP at $200 per
day, are now absolutely binding. No ruling I might properly enter in this
case concerning F-314 could disturb them. With the establishment
of the CMP at $6,000, certain consequences follow. There are several closely-defined
events which require the denial of NATCEP approval, and one of them is
set out in section 1819(f)(2)(B)(iii)(I)(c) of the Act. It declares that
the Secretary "(I) shall prohibit approval of such a (NATCEP) program
. . . offered by or in a skilled nursing facility which, within the previous
2 years . . . (c) has been assessed a civil money penalty . . . of not
less than $5,000 . . . ." Petitioner has addressed this provision by suggesting
that because it was not expressly relied on in CMS's letter of September
8, 2000, its application is in some measure discretionary. CMS has responded
by arguing that the September 8th letter clearly cited and
quoted the provision; that as of September 8th, the duration
of Petitioner's period of noncompliance was still uncertain and that,
once the duration had reached a length which would support a CMP of $6,000,
imposition of the NATCEP-denial penalty was the Secretary's mandatory
obligation. CMS is correct. The statutory language is the classic formulation of an expression of mandatory obligation in its employment of the words "shall prohibit." Thus, once the "revisit" survey on September 20, 2000 established that Petitioner had returned to substantial compliance with all program requirements as of September 2, 2000, the total amount of the CMP could be calculated at $6,000, and that amount placed the Secretary under the mandatory, non-discretionary obligation to deny approval of Petitioner's NATCEP program. Even had the separate and independent basis for NATCEP-denial based on F-314 not existed, or had the citation based on F-314 been completely withdrawn, the final, binding, and non-reviewable CMP of $6,000 would have led ineluctably to the denial of approval of Petitioner's NATCEP under the requirement of section 1819(f)(2)(B)(iii)(I)(c) of the Act. No ruling that I might contemplate within my jurisdiction could deflect or defer the operation of the Secretary's mandatory obligation. Petitioner argues
that its November 7, 2000 hearing request (P. Ex. 3; CMS Ex. E) is fully
compliant with 42 C.F.R. ง 498.40 in seeking review of the deficiency
cited in F-314 (P. Memo, at 1, 5-6), and that its hearing request is therefore
adequate to challenge the NATCEP-denial imposed as the result of the survey
(Id., at 2, 7-10). Petitioner is correct in its argument concerning
the content and completeness of its hearing request, but it incorrectly
assumes a link between the adequacy of the language in its November 7,
2000 letter and the broader question of its right to a hearing in this
unusual jurisdictional context. If the only question
before me were whether Petitioner's hearing request satisfies the terms
of 42 C.F.R. ง 498.40, I should not hesitate to rule in Petitioner's favor.
The letter by which it sought to perfect its appeal is detailed and precise,
and fully compliant with the requirements that it identify the issues,
facts, and legal conclusions it contests and explain why it contests them.
P. Ex. 3; CMS Ex. E. It is more than adequate to meet the standard that
has evolved recently in Fairview Nursing Plaza, Inc., DAB No.
1715 (2000) and Alden-Princeton Rehabilitation and Health Care Center,
Inc., DAB No. 1709 (1999), even when that standard is read rigorously. It does not follow, however, that exemplary compliance with 42 C.F.R. ง 498.40 is enough to defeat CMS's Motion to Dismiss. Indeed, Petitioner's careful limitation of its appeal to F-314 has had the effect I have explained above, that of leaving in place and beyond the reach of this appeal all the other deficiency citations and remedies CMS imposed. In spite of Petitioner's argument to the contrary (see P. Memo, at 2, 8), the ultimate resolution of the F-314 debate could have no effect whatsoever on the extant combination of penalties it faces. The heart of Petitioner's argument deserves to be set out in full here, because it illuminates so concisely Petitioner's incorrect assumption of a link between the adequacy of its hearing request and the preservation of a justiciable issue in this case. At page 8 of its Memorandum, Petitioner asserts:
The discussion thus far shows that the precise opposite is in fact the case: not only the range of the CMP, but the actual final amount of the CMP itself, is final and cannot be affected by "a successful appeal of F314" based on Petitioner's hearing request. The statutory imposition of a mandatory disapproval of Petitioner's NATCEP is not subject to modification or reversal even if Petitioner were to prevail here and the violation of F-314 were "determined not to exist or . . . not constitute substandard quality of care." By looking at Petitioner's argument from a slightly different hypothetical perspective, it is possible to test its soundness: assuming arguendo that CMS were for whatever reason simply to revisit the facts underlying F-314 and decide to reduce the level of severity or scope at which the violation is cited, or to rescind the citation completely, what would be the result? Petitioner's argument would require the conclusion that the CMP would be subject to reduction and the NATCEP penalty would be subject to reversal. But as long as the unappealed deficiencies remain undisturbed, the CMP imposed thereon remains in effect as originally assessed, and the NATCEP action remains mandated by the level of the CMP. Even CMS's unilateral decision to rescind the F-314 citation could not reduce the remedies imposed in this case. In short, no matter how an appeal of the F-314 citation might conclude, it could not in any way reduce the penalty already imposed, and it obviously could not enhance it. With respect to the penalty assessed against Petitioner, F-314 is a nullity
and its effect on the remedy completely nugatory. Since the effect
of F-314 is neither to enhance nor reduce the penalty already imposed,
then there is no practical difference between the present facts and a
case in which CMS might decide to rescind entirely, or reduce to zero,
a CMP. In such a case, there simply remains nothing to litigate since
it is the remedy, and not the citation of a deficiency, that generates
the right to a hearing. Schowalter Villa, DAB No. 1688 (1999);
Arcadia Acres, Inc., DAB No. 1607 (1997). In fact, the situation
would be comparable to those in The Lutheran Home-Caledonia,
DAB No. 1753 (2000), Walker Methodist Health Center, DAB CR869
(2002), Charlesgate Nursing Center, DAB CR868 (2002), D.C.
Association for Retarded Citizens, DAB CR776 (2001), Alpine Inn
Care, Inc., DAB CR728 (2000), Woodland Care Center, DAB
CR659 (2000), and Fort Tryon Nursing Home, DAB CR425 (1996),
and the result would be the same. Petitioner would no longer have a right
to a hearing on the issues set out in its hearing request. The Lutheran
Home-Caledonia, Walker, Charlesgate, D.C. Association, and Alpine
decisions stand as the culmination of a series of cases that have examined
the nature of the right to a hearing pursuant to 42 C.F.R. งง 498.3 and
498.5. These cases, and the discussion of the Lutheran Home-Caldonia
issues at the administrative law judge (ALJ) level as well (Lutheran
Home-Caledonia, DAB CR674 (2000)), all distinguish between the sufficiency
of a hearing request when measured against 42 C.F.R. ง 498.40, and the
necessity that the hearing request preserve or present a genuinely justiciable
issue in the context of 42 C.F.R. งง 498.3 and 498.5. In each of these
cases, the failure or inability of the petitioner to demonstrate that
the appealed survey findings and deficiency determinations had resulted
in a remedy actually in effect was fatal to its appeal: in each case,
an appellate panel of the Departmental Appeals Board (Board) or the ALJ
reminded the petitioner that penalty, not citation, is the source of the
appeal right, and dismissed the appeal. These cases have uniformly adhered
to the doctrine that a citation of deficiency which does not result in
the imposition of a remedy, or which results in the imposition of a remedy
later rescinded or reduced to zero, does not create the right to appeal.
And a careful reading of the regulatory language now set out at 42 C.F.R.
งง 498.3(b)(13) and (14) makes the application of that doctrine to this
case patent. By its terms, the
regulation confers appeal rights in the case of " . . . a finding of noncompliance
that results in the imposition of a remedy specified in [42 C.F.R.] ง
488.406 of this chapter, except the State monitoring remedy." 42 C.F.R.
ง 498.3(b)(13). The regulation confers
appeal rights on a skilled nursing facility, such as Petitioner, when
the issue is "[t]he level of noncompliance found by [CMS] . . . but only
if a successful challenge on this issue would affect . . . (i) [t]he range
of civil money penalty amounts that [CMS] could collect . . . or (ii)
[a] finding of substandard quality of care that results in the loss of
approval for a . . . nurse aide training program," or NATCEP. 42 C.F.R.
งง 498.3(b)(14)(i), (ii). In the instant case, the finding of noncompliance
represented by F-314 has not resulted in the imposition
of a remedy not already final and binding, and the level of noncompliance
noted in F-314 has not resulted in the loss of NATCEP approval.
Those results have come about through the operation of distinct determinations
and remedies, are independent of F-314 in their legal and regulatory support,
and remain unaffected by the litigative fate of F-314. Thus the regulations
and the decisions cited above are in perfect accord when they say: on
the facts of this case, where there is no remedy to
affirm or reverse, there is no right to appeal under 42 C.F.R. งง 498.3
and 498.5. In reaching this
conclusion, I am mindful that it leaves Petitioner without an avenue to
seek appellate review of circumstances by which it alleges itself to be
aggrieved, and I do not reach my conclusion lightly. Lakewood Plaza
Nursing Center, DAB CR691 (2000), aff'd, DAB No. 1767 (2001);
Fairview Nursing Plaza, supra; Alden-Princeton Rehabilitation and
Health Care Center, supra. I have considered whether I might properly
exercise my discretion under 42 C.F.R. ง 498.40(c)(2) to allow Petitioner
to amend its hearing request to include objections to some or all of the
other F-Tag citations, or whether I might through a similar exercise of
discretion add additional issues to this case pursuant to 42 C.F.R. ง
498.56(a). For the reasons I shall summarize next, I decline to exercise
my discretion in either manner. First, it will be
recalled that Petitioner's hearing request was not filed until November
7, 2000. P. Ex 3. By that time it had received all of CMS's communications:
the first notice letter of September 8, 2000 (P. Ex. 1); the September
18, 2000 letter notifying Petitioner that some of the deficiencies' scope
and severity levels had been revised upward (CMS Ex. A), and CMS's final
letter of October 6, 2000, in which it declared that the originally-announced
remedies of DPNA and Medicare/Medicaid agreement termination would not
be imposed, and that the CMP would total $6,000 (CMS Ex. D; P. Ex. 2).
These documents were all in Petitioner's hands with ample time for review
and analysis. Petitioner has characterized
CMS's position in this litigation as "seeking to change the basis for
the NATCEP ban" from reliance on the substandard quality of care basis
set out in F-314 to the CMP-based theory it now espouses. It is true that
the language cited in CMS's September 8, 2000 letter does rely on terms
involving an extended survey, but the paragraph immediately preceding
the language in question recites all the potential grounds for a denial-of-NATCEP
remedy, and explicitly notes that "[f]ederal law . . . prohibits approval
of (NATCEP) . . . in a facility which . . . has been assessed a total
civil money penalty of not less than $5,000." P. Ex. 1, at 2-3. That letter
also points out that the CMP of $200 per day had begun to run on August
3, 2000 " . . . and would continue to accrue at the amount of $200 per
day until you have made the necessary correction . . ." Id.,
at 1. There can be no claim now by Petitioner that it was unaware of the
accruing CMP's potential for exceeding $5,000, and there can be no credible
assertion now by Petitioner that it was unaware, at any time after October
6, 2000, that the CMP had reached an amount sufficient to trigger the
NATCEP-loss remedy of which it had been warned. Petitioner's hearing request
was neither rushed nor casually drafted: as I have noted above it is,
with one exception, careful, detailed, and crafted with consummate skill
- and its entire thrust is directed at limiting the appeal to a review
of F-314's allegations. The only anomaly in the hearing request is its
reference to the withdrawn DPNA remedy. Otherwise, P. Ex. 3 is every bit
a thoughtful and deliberate choice of tactic, made at a time when it knew
- because it had been warned - that the CMP would trigger a NATCEP remedy. Nor did Petitioner act to invoke 42 C.F.R. งง 498.40(c)(2) or 498.56(a) once CMS filed its Notice on January 31, 2001, announcing its intention to raise the jurisdictional issue dispositive of this appeal. Whether an action of that sort would have been timely or allowed at that point need not be decided here, but the opportunity passed without apparent effort by Petitioner to redraw its position. There is simply nothing in the history of this litigation that suggests an element of "good cause," as that term is understood here, which would support my exercise of discretion to allow an amended hearing request. The test generally applied in assessing "good cause" requires that the ALJ's discretion may be exercised if a party has been disadvantaged by a circumstance or circumstances beyond the party's ability to control. Wellington Oaks Care Center, DAB No. 1626 (1997); Hospicio San Martin, DAB No. 1554 (1996). Nothing can be said to have occurred in the development of the parties' positions here that happened other than as a litigative choice, fully within each party's ability to control as to its own choices. It is not altogether clear to me 42 C.F.R. ง 498.56(a) could be used to add "new issues" as Petitioner asks, since the issues it would thereby seek to litigate are by definition "final." If the regulation is read as broadly as Petitioner would have it, then no decision of this forum or of the Board would be certain of eventual repose. In any event, I decline to exercise discretion on either basis.VI.
CONCLUSION For the reasons
set forth above, I grant CMS's Motion to Dismiss. The hearing request
filed by Petitioner on November 7, 2000 must be, and is, dismissed.
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JUDGE | |
Richard J. Smith Administrative Law Judge |
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FOOTNOTES | |
1. Effective July 5, 2001, the Health Care Financing Administration (HCFA) was renamed the Centers for Medicare & Medicaid Services (CMS). 66 Fed. Reg. 35,437 (2001). Although the agency's name change became effective subsequent to the events at issue in this case, it will simplify matters if I refer to the agency as CMS when discussing proceedings in this forum. |
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