SUBJECT:

Central Continuing Care,

Petitioner,

Centers for Medicare & Medicaid Services.

DECISION

I enter summary judgment sustaining the determination of the Centers for Medicare & Medicaid Services (CMS) to impose civil money penalties against Petitioner of $200 per day for each day of a period that began on October 14, 2004 and which ran through November 22, 2004. The total civil money penalties that I sustain are $8,000 based on 40 consecutive days of noncompliance by Petitioner with Medicare participation requirements. The three central elements of my decision are that:

• Petitioner opted not to challenge deficiency findings and the remedy determination that were made based on results of the first and third surveys of a three-survey cycle. The findings of noncompliance and the remedy determination are now administratively final and binding.

• CMS is authorized to impose civil money penalties of $200 per day for the period at issue because Petitioner did not challenge CMS's remedy determination that resulted in the imposition of these penalties.

• In light of the administratively final deficiency and remedy determination that Petitioner did not challenge, Petitioner's challenge of a deficiency finding that was made at the second of the three surveys is moot because it is irrelevant to deciding whether CMS's remedy determination is authorized.

I. Background and undisputed facts

Petitioner is a skilled nursing facility in Mount Airy, North Carolina. It participates in the Medicare program. Its participation in Medicare is governed by sections 1819 and 1866 of the Social Security Act (Act) and by regulations at 42 C.F.R. Parts 483 and 488.

Petitioner was surveyed in October and November 2004 to determine whether it was complying with Medicare participation requirements. The first of these surveys was completed on October 14, 2004 (October 14 survey). CMS Ex. 1. ⁽¹⁾ There was a second survey, which was completed on October 27, 2004 (October 27 survey). CMS Ex. 2. A third survey was completed on November 18, 2004 (November 18 survey). CMS Ex. 3. At each of these surveys, the surveyors found that Petitioner was not complying substantially with Medicare participation requirements. The report of the October 14 survey identifies two deficiencies. CMS Ex. 1. The report of the October 27 survey identifies one deficiency. CMS Ex. 2. The report of the November 18 survey identifies one additional deficiency that posed the potential for more than minimal harm. CMS Ex. 3.

CMS determined to impose remedies against Petitioner. In letters dated November 19, 2004 and December 21, 2004, CMS advised Petitioner that it was imposing civil money penalties of $200 per day for each day of Petitioner's noncompliance with participation requirements beginning with October 14, 2004. CMS Ex. 4 - CMS Ex. 6. ⁽²⁾ On January 10, 2005, CMS advised Petitioner that it had determined that Petitioner attained compliance with Medicare participation requirements on November 23, 2004. CMS Ex. 7. Consequently, the civil money penalties of $200 per day were determined to run from October 14 - November 22, 2004.

On January 12, 2005, Petitioner filed a hearing request. The request, which was signed by Petitioner's then-administrator, states in relevant part:

We wish to appeal the . . . [deficiency] cited on October 27, 2004 and related . . . [civil money penalty] . . . .

The specific issues that we are contesting are whether a deficiency should have been cited, that we were in substantial compliance with the regulations prior to the complaint investigation taking place, and the amount, extent, and duration of the . . . [civil money penalty].

Petitioner's hearing request.

The case was assigned to me for a hearing and a decision. On January 27, 2005, I issued an initial pre-hearing order which directed the parties to make pre-hearing exchanges of proposed exhibits, witnesses' testimony, and briefs. Acknowledgment and Initial Pre-hearing Order (Order). I specifically instructed each party that its pre-hearing brief must contain any argument that it intended to make. Id. at 4.

CMS filed a pre-hearing exchange on May 26, 2005. With its exchange, CMS filed a motion to dismiss Petitioner's request for hearing on the ground that it was moot. Essentially, CMS argued that Petitioner's challenge to the deficiency finding that was issued after the October 27, 2005 survey was made irrelevant by Petitioner's failure to file hearing requests addressing the deficiencies that were found at the October 14 and November 18 surveys. On July 7, 2005, Petitioner filed a pre-hearing exchange which included a four-page pre-hearing brief. In its brief, Petitioner addressed only the single deficiency finding that was made at the October 27 survey. Petitioner's pre-hearing brief says nothing about the deficiencies that were cited at the October 14 and November 18 surveys. Petitioner's pre-hearing brief at 1 - 4. Nor did Petitioner reply to CMS's motion.

On July 22, 2005, I had faxed to Petitioner, with a copy sent also by regular mail, a letter advising it that it had not replied to the motion. I gave Petitioner additional time within which to file a reply. On August 1, 2005, Petitioner faxed a reply. In its reply, Petitioner asked simply that I deny the motion to dismiss its hearing request without stating any reason that I should do so.

II. Issue, findings of fact and conclusions of law

A. Issue

The issue in this case is whether CMS is authorized to impose civil money penalties of $200 per day against Petitioner, for each day of the period that began on October 14, 2004 and which ran through November 22, 2004, in light of Petitioner's failure to challenge deficiency findings made at the October 14 and November 18 surveys.

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 separate heading. I discuss each Finding in detail.

1. CMS's motion should be treated as a motion for summary judgment rather than as a motion to dismiss Petitioner's hearing request.

CMS characterizes its motion as a motion to dismiss Petitioner's hearing request. That is not entirely an accurate description of what CMS would have me do. It is more accurate to treat CMS's motion as a motion for summary judgment than as a motion to dismiss Petitioner's hearing request.

What CMS is arguing is that there are undisputed facts pertaining to the October 14 and November 18 surveys which establish to be administratively final the deficiency findings that were made at these surveys and the remedy determination that CMS made based on the deficiency findings. According to CMS, Petitioner's challenge to the deficiency finding that was made at the October 27 survey is irrelevant to deciding the issue of whether penalties of $200 per day may be imposed for each day of the period that is at issue here. That is because the penalties may be justified entirely based on the administratively final determinations made from the October 14 and November 18 surveys.

From the foregoing analysis, it is apparent that CMS's motion is not really a motion to dismiss Petitioner's hearing request. CMS does not argue that Petitioner has no right, under applicable regulations, to a hearing based on that request. It argues only that a hearing about the single deficiency that is challenged by Petitioner would be meaningless inasmuch as CMS is authorized to impose civil money penalties against Petitioner based solely on the findings and determination that have become administratively final.

Consequently, I treat CMS's motion as a motion for summary judgment rather than as a motion to dismiss. There is no prejudice to Petitioner. CMS put Petitioner on notice of its arguments. Petitioner had an opportunity to respond to them.

2. CMS's findings of deficiency and remedy determinations based on the October 14 and November 18 surveys are now administratively final.

The undisputed facts that I cite at Part I of this decision establish that Petitioner is not challenging the deficiency findings that were made at the October 14 and November 18 surveys or the remedy determination that CMS made based on those findings. Petitioner failed to do so in its hearing request. It failed also to do so in its pre-hearing exchange. It failed to do so even after CMS moved to dismiss Petitioner's hearing request. Consequently, those findings and the remedy determination that CMS made based on them are now administratively final.

Petitioner may not argue that it was uninformed by CMS about the remedy determination. Nor may it argue that its hearing rights were not explained to it. Petitioner failed to challenge the findings and remedy determination that were made based on the October 14 and November 18 surveys despite being given written notice of the determination and of its hearing rights. The notices that Petitioner received from CMS explained the basis for CMS's remedy determinations. The November 19, 2004 notice letter from CMS to Petitioner (amended on November 22, 2004) not only explicitly advised Petitioner of CMS's remedy determination but it also explained to Petitioner how to request a hearing. CMS Ex. 4, at 3 - 4.

3. CMS is authorized to impose civil money penalties of $200 per day against Petitioner for each day of the October 14 - November 22, 2004 period based on the administratively final deficiency findings and remedy determinations resulting from the October 14 and November 18 surveys.

CMS may impose civil money penalties against Petitioner as a consequence of its administratively final remedy determination. The penalty amounts of $200 per day are now final as are the determinations that there were deficiencies on which to base the penalties. In its hearing request, Petitioner asserted that it was challenging the "amount . . . and duration of the Civil Monetary Penalty." It is clear from the context of that statement that Petitioner was referring only to the October 27 survey when it made that statement, because nothing in the request relates to the October 14 or November 18 surveys. CMS determined that the deficiencies that were identified at the October 14 survey were not corrected by Petitioner until November 23, 2004. Petitioner has not challenged this determination. By virtue of that, there exists an unbroken period from October 14, 2004 through November 22, 2004, during which Petitioner was deficient. CMS may impose civil money penalties of $200 per day for each day of this period.

4. Petitioner's challenge to the deficiency finding that was made at the October 27 survey is made moot by the administratively final deficiency and remedy determinations that Petitioner did not challenge.

Petitioner's challenge to the deficiency finding that was made at the October 27 survey is not relevant to deciding whether CMS may impose the civil money penalties that are at issue in this case. Those penalties, their amount and their duration, are based on deficiencies that Petitioner did not challenge. Moreover, CMS's unchallenged remedy determination provides a basis for CMS to impose civil money penalties of $200 per day for each day of the period between October 14 and November 22, 2004. Petitioner's challenge to the October 27 survey finding is therefore moot. No remedy is based on this finding and no decision that I make about it would alter or defeat the civil money penalty remedy CMS determined to impose based on the October 14 and November 18 surveys.

Steven T. Kessel

Administrative Law Judge

1. CMS submitted 20 proposed exhibits (CMS Ex. 1 - CMS Ex. 20) in support of its case in chief and its motion to dismiss Petitioner's hearing request. I receive these exhibits into the record for purposes of this decision. Petitioner submitted 17 proposed exhibits (CCC Ex. 1 - CCC Ex. 17). I also receive these exhibits into the record.

2. CMS amended its November 19, 2004 letter with a letter that is dated November 22, 2004. CMS Ex. 5.