Falls Community Hospital & Clinic, ALJ Ruling 2024-10 (HHS-CRD July 9, 2024)

DISMISSAL

Respondent, Falls Community Hospital & Clinic, is a Rural Emergency Hospital, located in Marlin, Texas, and is subject to federal price transparency rules.  CMS determined that the hospital violated those rules and, in notices dated January 9, April 19, and July 20, 2023, advised the hospital of its determination and the proposed penalty.  The July 20 notice explained the hospital’s appeal rights.  More than nine months later, on May 9, 2024, the hospital filed a document titled “Motion to Extend Right of Appeal for Good Cause and Request for Hearing.”  CMS moves to dismiss the hearing request, arguing that the hospital’s appeal was untimely and that no good cause justifies extending the time for filing.

For the reasons discussed below, I grant CMS’s motion.

Background

Section 2718(e) of the Public Health Service Act requires that each hospital operating within the United States annually establish, update, and make public lists of its standard

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charges for the items and services it provides.  42 U.S. Code § 300gg-18.  The statute’s implementing regulations are found at 45 C.F.R. § 180 et seq.

The Centers for Medicare and Medicaid Services (CMS) evaluates whether a hospital has complied with the transparency requirements.  If CMS concludes that it has not, CMS acts to address the noncompliance.  Among the actions available, CMS may impose a civil money penalty (CMP).  45 C.F.R. §§ 180.70(b)(3); 180.90.  If CMS imposes a CMP, it must provide the hospital with written notice, sent via certified mail or other form of traceable carrier.  45 C.F.R. § 180.90(b).  The notice must include a statement of the hospital’s right to a hearing and a warning that if the hospital fails to request a hearing within 30 calendar days of the issuance of the notice, CMS may impose that penalty and any subsequent penalties pursuant to continuing violations, without affording the hospital further appeal rights.  45 C.F.R. § 180.90(b)(2)(vii), (viii).

Unless it can show good cause for failing to do so, the hospital has no right to appeal the penalty if it does not request a hearing in accordance with 45 C.F.R. § 150.405.  45 C.F.R. § 180.110(b).

The notices.  Here, in a “Hospital Price Transparency Warning Notice,” dated January 9, 2023, CMS advised the hospital that, based on its review of the hospital’s website, the hospital did not comply with the requirements of 45 C.F.R. part 180.  The notice warned that, if the hospital did not correct its deficiencies, CMS could take “further compliance actions as specified in 45 C.F.R. part 180 subpart C.”  CMS Ex. 1 at 3, 4.

In a second notice letter, dated April 19, 2023, labeled “Hospital Price Transparency Notice of Violation and Request for Corrective Action Plan,” CMS advised the hospital that, based on its second review of the hospital’s website, CMS determined that the hospital still did not comply with the requirements of 45 C.F.R. §180.40.  CMS Ex. 3 at 3.  The notice directed Petitioner to submit a corrective action plan within 45 days of the date of the notice.  CMS Ex. 3 at 4.

Finally, in a notice dated July 20, 2023, CMS advised the hospital that it was imposing a CMP, as described in 45 C.F.R. § 180.90, because the hospital did not comply with the price transparency requirements under 45 C.F.R. Part 180.  CMS Ex. 5 at 3.  A section of the July 20 notice letter – prominently captioned “Appeal Rights” – advised Petitioner of its right to appeal CMS’s CMP determination by requesting a hearing before an Administrative Law Judge (ALJ) of the Departmental Appeals Board.  The letter explained the procedures for filing an appeal and warned:  “To request a hearing, your hospital must submit its hearing request within 30 calendar days of the issuance of the notice of imposition of CMP in accordance with the procedures outlined in 45 C.F.R. § 150.401 et seq.”  CMS Ex. 5 at 7 (emphasis in original).

CMS sent the letter via FedEx, and it was delivered on July 21, 2023.  CMS Ex. 6.

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On May 9, 2024, almost ten months after the notice letter was issued, the hospital finally filed what it captioned “Motion to Extend Right of Appeal for Good Cause and Request for Hearing.”

CMS now moves to dismiss this matter, arguing that Petitioner’s hearing request is not timely, and no good cause justifies extending the time for filing.

Discussion

Respondent, Falls Community Hospital & Clinic, is not entitled to a hearing because it did not timely request a hearing, and no good cause justifies extending the time for filing.1

The hospital concedes, as it must, that it did not request a hearing within 30 days of the notice.  Hearing Request at 2.2

I may extend the time for filing only if I find that the hospital “was prevented by events or circumstances beyond its control from filing its request within the time specified.”  42 C.F.R. § 150.405(b).

The hospital’s assertions of good cause are unsupported, lack specificity, and don’t seem to explain, much less justify, its months-long delay in requesting a hearing.  It asserts that it became a rural emergency hospital and the transition process was characterized by “systematic failures that contributed to the breakdown in communication at the [h]ospital and led to missed communications from CMS.”  “[E]xtreme hardships [including “excessive” employee turnover and financial difficulties] hindered the proper handling of CMS communications,” and “current leadership was never made aware of the warning notices or requests for corrective action plan.”  Hearing Request at 3.

Inasmuch as it completed the transition on February 8, 2023, a full six months before its appeal was due, I see no direct correlation between that process and the hospital’s failing to request a hearing by the August 21, 2023 appeal deadline.3

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In any event, CMS properly sent the July 20 notice by means of a “traceable carrier.”  It was delivered to the hospital on July 21, 2023.  CMS Ex. 6; see 45 C.F.R. § 180.90(b).

Requesting a hearing is hardly an extensive or cumbersome process, and a hospital’s purported internal organizational problems do not constitute good cause.  Moreover, the Departmental Appeals Board has explicitly rejected the notion that the staff’s failing to convey to management the notice of an agency’s action constitutes “good cause” within “any reasonable definition.”  Christina Paylan, M.D., DAB No. 3112 at 7-8 (2023); Brookside Rehab. & Care Ctr., DAB No. 2094 at 7-8 (2007).

And the unrefuted evidence establishes that, in fact, hospital management was well aware of CMS’s notice letters.  In September 2023, the hospital’s then administrator told a CMS employee that the hospital had received the notice letters.  CMS Ex. 8 at 1-2 (Richard Decl. ¶ 4).  On May 8, 2024, the CMS employee spoke to the same individual, who was now the hospital’s CEO; she again confirmed that the hospital was aware of the notices and said that its attorneys would be “reaching out” shortly.  CMS Ex. 8 at 2 (Richard Decl. ¶ 5).  The hospital filed its appeal on the following day.

I find that no good cause justifies Respondent Falls Community’s failing to request a hearing timely.  CMS sent a notice that told the hospital exactly what it had to do to appeal and, in plain language, warned that appeals had to be filed within 30 days.  The notice was properly served, and the hospital received it.  Yet, the facility did not file anything to preserve its hearing rights until long after the filing deadline had passed.

Conclusion

Respondent Falls Community did not file its hearing request within 30 days of receiving CMS’s July 20, 2023 notice letter.  No good cause justifies my extending the time for filing.  Respondent therefore has no right to appeal.  45 C.F.R. § 180.110(b).  I dismiss this matter pursuant to 45 C.F.R. § 150.411(a).