SUBJECT:

Casa Del Sol Senior Care Center,

Petitioner,

Centers for Medicare & Medicaid Services.

REQUEST FOR HEARING

I dismiss the hearing request of Petitioner, Casa Del Sol Senior Care Center, as it relates to a survey of the facility that was completed on December 9, 2005. I find that Petitioner did not timely request a hearing concerning the survey findings, and it has not made a showing of good cause for its failure to do so.

I. Background and Undisputed Material Facts

The facts of this case are not disputed. Petitioner is a skilled nursing facility that is located in Las Cruces, New Mexico. It participates in the Medicare program, and its participation is subject to regulations which govern the participation of skilled nursing facilities in Medicare at 42 C.F.R. Parts 483, 488, and 498. On December 9, 2005, a survey was conducted of Petitioner's facility by the New Mexico Department of Health in order to determine whether Petitioner was complying substantially with Medicare participation requirements. As a result of the surveyors' findings, the Centers for Medicare & Medicaid Services (CMS) concluded that Petitioner failed to comply substantially with participation requirements.

The issues in this case turn on the adequacy of notice made by CMS to Petitioner in letters setting forth the proposed remedies and appeal rights and Petitioner's responses to those letters. I conclude, as explained fully below, that the correspondence between CMS and Petitioner evidences that Petitioner was clearly and adequately notified that CMS intended to impose a period of denial of payment for new admissions (DPNA). The correspondence shows also that Petitioner made assumptions to its detriment concerning the date on which it regained substantial compliance.

CMS's first notice letter to Petitioner is dated February 1, 2005. In it, CMS indicated that, based on Petitioner's failure to comply with four conditions of participation, CMS would impose on Petitioner, inter alia, a per instance civil money penalty (CMP) of $5,000, and DPNA, effective February 15, 2005. The notice explained:

If you waive your right to a hearing (IN WRITING) no later than April 2, 2005 (sixty days from receipt of this letter via fax), the total amount of the civil money penalty will be reduced by 35%. (Bold type in original).

Concerning the DPNA, the notice explained:

DENIAL OF PAYMENT FOR NEW ADMISSIONS: Payment will be denied for all new Medicare and Medicaid admissions, effective February 16, 2005 . . . This denial of payment will continue until your facility achieves substantial compliance or your provider agreement is terminated, whichever comes first. (Bold type in original).

Concerning the time for perfecting the appeal for a hearing before an administrative law judge, the notice indicated that: "A written request for hearing must be filed no later than April 2, 2005 (60 days from the date of receipt of this letter via fax)."

CMS sent Petitioner a second notice letter, this one dated February 9, 2005. In bold type across the top of the letter, it states "This letter supercedes the CMS letter dated February 1, 2005 to revise DPNA effective date." The explanations from the February 1, 2005 letter were changed slightly. Now, CMS explained concerning the CMP:

If you waive your right to a hearing (IN WRITING) no later than April 10, 2005 (sixty days from receipt of this letter via fax), the total amount of the civil money penalty will be reduced by 35%. (Bold type in original).

Concerning the DPNA, CMS explained:

DENIAL OF PAYMENT FOR NEW ADMISSIONS: Payment will be denied for all new Medicare and Medicaid admissions, effective February 24, 2005 . . . This denial of payment will continue until your facility achieves substantial compliance or your provider agreement is terminated, whichever comes first. (Bold type in original).

And, concerning the time for perfecting an appeal, CMS wrote: "A written request for hearing must be filed no later than April 10, 2005 (60 days from the date of receipt of this letter via fax)."

Petitioner responded to CMS in a letter dated March 21, 2005. Petitioner wrote:

This letter will serve as our notification that Casa Del Sol Senior Care Center hereby waives its right to a hearing to appeal the CMP imposed on our facility from the December 9, 2004 [2005] survey. This in no way constitutes agreement or admission of guilt on the part of the facility as to the facts that were alleged or conclusions set forth in the CMS-2567 Statement of Deficiencies.

* * *

We agree to pay the reduced rate of 35% less than the original imposed penalty.

CMS sent Petitioner a letter dated May 3, 2005, that explained that Petitioner had corrected its deficiencies and achieved substantial compliance. Concerning the DPNA, CMS noted:

"Denial of Payment" for new admissions: ALREADY IMPOSED AND IN EFFECT from February 24, 2005 through March 28, 2005. Your intermediary will be notified (via a copy of this letter) to resume making payments for covered services beginning March 29, 2005. (Bold type in original).

CMS's letter further indicated: "Per-instance Civil Money Penalty ALREADY IMPOSED in the amount $5,000.00." (Bold type in original).

Petitioner filed a request for hearing dated June 7, 2005, in which Petitioner explained:

We file this written request for hearing in response to a notice letter from the Centers for Medicare and Medicaid Services ("CMS") dated February 9, 2005 . . . The facility sent its credible allegation of compliance and date of compliance within the ten day period as required. The plan of correction date was February 9, 2005 and that was the date upon which the facility corrected.

* * *

On March 29, 2005, the survey agency re-entered the facility for a revisit and cleared the facility, finding it in compliance. Given that the facility had corrected as of February 9, 2005, Petitioner elected to take the waiver for civil money penalties because it had been led to believe, to its detriment, that DPNA would not be imposed because of its timely correction. It was not until, May 3, 2005 that Petitioner was notified in writing by CMS that DPNA was being imposed for the period between February 24, 2005 and March 29, 2005. This notification was not timely in that it did not precede the appeal date of April 10, 2005.

* * *

It is Petitioner's position that untimely notices on the part of the State Survey Agency and CMS denied Petitioner due process rights by failing to properly apprise Petitioner of the remedies being imposed. Thus, in light of procedural defects on the part of CMS and its agent, the state survey agency, it is Petitioner's position that this appeal is properly filed.

CMS filed Respondent's Motion To Dismiss Petitioner's Hearing Request (CMS's Motion), dated July 20, 2005, in which CMS argues for the dismissal based on the untimeliness of Petitioner's request for a hearing, or alternatively, for Petitioner having waived its right to a hearing.

Petitioner filed its Application For Leave To File Untimely Appeal And Response To Respondent's Motion To Dismiss Petitioner's Appeal (Petitioner's Response), dated August 19, 2005.

II. Issues, findings of fact and conclusions of law

A. Issues

The issues in this case are whether:

1. Petitioner filed a timely request for a hearing to challenge the noncompliance findings that were made at the December 9, 2005 survey; and

2. If Petitioner's request for hearing was not timely filed, whether Petitioner has established good cause for its failure to file a timely request for a hearing to challenge the noncompliance findings that were made at the December 9, 2005 survey.

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. Petitioner failed to timely file a request for hearing to challenge the noncompliance findings that were made at the December 9, 2005 survey.

The regulations governing administrative hearings in cases involving CMS's determinations of noncompliance afford providers a hearing on any remedies imposed before an administrative law judge if the provider requests a hearing within 60 days of its receipt of notice of the remedy determination from CMS. 42 C.F.R. § 498.40(a)(2). Petitioner is not entitled to a hearing concerning the noncompliance findings made at the December 9, 2005 survey because it did not file a hearing request within the 60-day period.

CMS sent a revised notice of remedy determination to Petitioner concerning the December 9, 2005 survey on February 9, 2005. In order to perfect its request for a hearing within the 60-day period, Petitioner would have had to request a hearing not later than April 10, 2005. Petitioner sent a letter to CMS dated March 21, 2005, in which Petitioner waived its right to appeal the CMP part of the proposed remedies. Petitioner filed its request for hearing on June 7, 2005. In the request for hearing, Petitioner asserted that its request was "timely under the circumstances of the survey cycle." Petitioner does not dispute, however, that the request for hearing was filed outside of the 60-day period for timely filing a request for hearing. Petitioner's Response at 2.

2. Petitioner has not established good cause for its failure to challenge timely the noncompliance findings that were made at the December 9, 2005 survey.

The regulations provide that an administrative law judge may extend the time for filing a hearing request beyond the 60-day period when a petitioner establishes good cause for not filing a request timely. 42 C.F.R. § 498.40(c)(2). The administrative law judge has discretion to dismiss a hearing request that is untimely filed, where the deadline for filing the request has not been extended. 42 C.F.R. § 498.70(c). In this case there is no dispute that Petitioner did not file a timely request to challenge the noncompliance findings stemming from the December 9, 2005 survey. Petitioner has, however, advanced several arguments in support of my finding good cause to extend the time for filing beyond the 60-day period.

The term "good cause" is not defined at 42 C.F.R. § 498.40 or anywhere else in 42 C.F.R. Part 498. In a case cited by both parties, Hillcrest Healthcare, L.L.C., DAB CR976 (2002), the administrative law judge described an approach to defining good cause the synthesis of which is that a good cause for extending the time for filing is one that was beyond the petitioner's control. Although rational and consistent with the Part 498 regulations, this approach has not been adopted by an appellate panel of the Departmental Appeals Board (Board). The Board has not provided an authoritative or complete definition of the term "good cause" in section 498.40(c)(2). Wesley Long Nursing Center, Inc., DAB No. 1937, at 7 n.7 (2004). Neither, however, has the Board, despite ample opportunity, disabused us of this approach to considering "good cause." Id. citing Glen Rose Medical Center Nursing Home, DAB No. 1852 (2002); Hillcrest Healthcare, L.L.C., DAB No. 1879 (2003). Accordingly, I am guided by the principle that "good cause" may be found among those causes that are beyond the control of a petitioner.

Nevertheless, in the instant matter, Petitioner has failed to persuade me that anything transpired beyond Petitioner's control that caused it to untimely file its request for a hearing. Petitioner asserts that "[t]he Facility did not make an informed waiver of its right to appeal, where the CMS subsequently assesses penalties without prior notice to the Facility." Petitioner's Response at 3. And, "Petitioner was misled by the statements contained in the CMS letter of February 9, 2005." Id. at 4. And, Petitioner makes also constitutional arguments. I find that the notice provided to Petitioner was adequate, Petitioner was not misled, and the constitutional arguments are beyond the scope of my authority to review.

Petitioner professes surprise at the contents of CMS's May 3, 2005 letter, which Petitioner characterizes as "revising the range of penalties" and "CMS' attempt to enforce subsequent additional sanctions beyond the scope of those in [sic] described in the notice of substantial non-compliance." Petitioner's Response at 3. Petitioner mis-characterizes the notices from CMS. The February 9, 2005 letter from CMS clearly warns of the possibility that there will be a period of DPNA imposed:

DENIAL OF PAYMENT FOR NEW ADMISSIONS: Payment will be denied for all new Medicare and Medicaid admissions, effective February 24, 2005 . . . This denial of payment will continue until your facility achieves substantial compliance or your provider agreement is terminated, whichever comes first. (Bold type in original).

Moreover, CMS's May 3, 2005 notice does not revise the range of penalties, it defines them for the first time. In the February 9, 2005 letter, CMS warned of a DPNA period of indefinite duration; in the May 3, 2005 letter, CMS explained that the duration of the DPNA had been defined. No "subsequent additional sanctions," as Petitioner describes them, are proposed in the May 3, 2005 letter from CMS.

Petitioner claims also that it was misled by the following language in CMS's February 9, 2005 notice letter: "This denial of payment will continue until your facility achieves substantial compliance or your provider agreement is terminated." Petitioner explains:

The facility achieved substantial compliance on February 9, 2005, and timely provided credible evidence of compliance on that date, which was never contested and fully accepted by CMS. Based on the conditional language of the February 9, 2005 letter, Petitioner could have assumed that it was at risk for penalties until the date of its compliance, but not have concluded that it was at risk for the impositions of DPNA from February 24, 2005 to March 29, 2005. The Petitioner relied upon the CMS's statement that denial of payment would be cut off by substantial compliance, but this representation was not true. The misleading language of the February letter entitles the Petitioner to a reasonable extension of the appeal time period.

Petitioner's Response at 4 (bold type in original).

Petitioner's view of CMS's notice hinges entirely on Petitioner's self-serving assessment that "[t]he facility achieved substantial compliance on February 9, 2005." I find it unpersuasive. Petitioner's assertion that its plan of correction was "fully accepted" by CMS is unsupported, and Petitioner makes no proffer why it was reasonable for it to believe it had regained substantial compliance on February 9, 2005. Obviously, the determination that substantial compliance is regained is not achieved by a facility's mere declaration. CMS must verify that the deficiencies are corrected. Prior to verification by CMS, a facility's claim to have achieved substantial compliance is an opinion.

Petitioner appears to have assumed that its presentation of a plan of correction would toll the period of DPNA on February 9, 2005. But, Petitioner should have known that its plan was subject to confirmation at a revisit survey. Petitioner assumed the risk that when the revisit occurred, CMS would not agree with Petitioner's contention that substantial compliance was achieved on February 9, 2005. Petitioner should not have waived its right to challenge the CMP, and failed to file a timely request for hearing if it contemplated challenging the remedies under any of the patently foreseeable scenarios regarding the duration of the period of DPNA. The language in the CMS notices is unambiguous; I reject the notion that Petitioner was misled in any way.

Finally, I do not have the authority to review Petitioner's argument concerning the Due Process Clause of the U.S. Constitution.

CMS's motion is granted, and I dismiss Petitioner's request for a hearing pursuant to 42 C.F.R. § 498.70(c).

Anne E. Blair

Administrative Law Judge