Raydiant Health Care of Brandon, ALJ Ruling 2023-4 (HHS CRD November 28, 2022)

DISMISSAL

For the reasons set forth below, I conclude that Petitioner, Raydiant Health Care of Brandon, is not entitled to Administrative Law Judge (ALJ) review in these matters.  I therefore dismiss the Petitioner’s hearing requests pursuant to 42 C.F.R. § 498.70(b).

Petitioner’s hearing requests must be dismissed pursuant to 42 C.F.R. § 498.70(b), because the representative filing them is not authorized to represent the facility, and, in any event, I have no authority to review the sole issue that the appeals raise.¹

Petitioner, Brandon Facility Operations, d/b/a Raydiant Health Care of Brandon, is a long-term care facility located in Brandon, Florida, that participates in the Medicare program.  Based on surveys completed on February 10, April 22, and June 10, 2022, the Centers for Medicare & Medicaid Services (CMS) determined that the facility did not comply substantially with Medicare program requirements.  Based on its substantial

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noncompliance, CMS terminated the facility’s program participation, effective July 6, 2022 (see 42 C.F.R. §§ 488.456(b)(1)(i) and 489.53) and imposed other remedies, including a civil money penalty.

In a letter date dated June 7, 2022, addressed to the facility’s administrator, CMS advised the facility that, based on surveys completed February 10, 2022, and April 22, 2022, the facility was not in substantial compliance with Medicare program requirements and that CMS was imposing remedies.  The letter advised Petitioner of its right to request a hearing before the Departmental Appeals Board.  In a submission dated August 8, 2022, Petitioner requested review.  The case was docketed as C-22-709.

In a letter dated June 21, 2022, addressed to the facility’s administrator, CMS advised the facility that, based on a June 10, 2022 survey, the facility was still not in substantial compliance with program requirements and that remedies, including termination, would be imposed.  The letter advised Petitioner of its right to request a hearing before the Departmental Appeals Board.  In a submission, filed on August 19, 2022, Petitioner requested review.  The case was docketed as C-22-741.

The hearing requests are virtually identical.  They are odd because the entity that filed  them claims to have to no current association with the facility.  It maintains that it (Brandon Facility Operations) sold the facility to “to a new, unrelated operator, Brandon Health Opco, LLC,” on April 1, 2022, and asks me to find that it is not liable for any of the remedies imposed.

CMS moves to dismiss both cases pursuant to section 498.70(b), arguing that I do not have the authority to review the sole issue Petitioner raises.  I agree.

The hearing rights of a skilled nursing facility are established by federal regulations at 42 C.F.R. Part 498.  A facility dissatisfied with an initial determination is entitled to further review, but administrative actions that are not initial determinations are not subject to appeal.  42 C.F.R. § 498.3(a), (b), and (d).  The regulations specify which actions are “initial determinations” and set forth examples of actions that are not.  The termination of a provider agreement is an initial determination that may be appealed, as is a finding of substantial noncompliance that leads to CMS’s imposing a remedy.  42 C.F.R. § 498.3(b)(8), (13).  Petitioner has not challenged the termination or the findings of substantial noncompliance.  The sole issue it raises – the facility’s ownership, and, thus, Brandon Facility Operations’ liability for the penalties – is not an initial determination, and therefore not reviewable in this forum.  This is not the appropriate forum in which to sort out the facility’s purported ownership issues.

Moreover, the regulations provide that, when there is a change of ownership, the facility’s Medicare provider agreement is automatically assigned to the new owner, and the assigned agreement is subject to all applicable statutes and regulations and to the

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terms and conditions under which the agreement was originally issued.  42 C.F.R. § 489.18(c), (d).  Those terms and conditions include, but are not limited to, any existing plan of correction and compliance with applicable health and safety standards.  A facility’s new owner thus necessarily “acquires the relevant compliance history/issues of the facility if it undertakes to assume the facility’s provider number.”  Kenton Healthcare, LLC, DAB No. 2186 at 31 (2008).

If Petitioner no longer owns the facility, it is not the proper entity to bring these appeals.  Although CMS’s notices were appropriately sent to the facility’s administrator, they were apparently, and inexplicably, conveyed to the old owner, and not the current owner.  The facility is the affected party here and entitled to review if it had filed acceptable and timely appeals.  The person filing these appeals is apparently no longer associated with the facility and has not been properly appointed to act as its representative.  Because he was not authorized to act on the facility’s behalf, his hearing requests must be dismissed.  See 42 C.F.R. §§ 498.2; 498.5(b); 498.10.

I therefore grant CMS’s motions.

Endnotes

¹  I make this one finding of fact/conclusion of law.