Belvedere Nursing and Rehabilitation Center, ALJ Ruling 2024-12 (HHS-CRD August 14, 2024)

DISMISSAL

For the reasons set forth below, I conclude that, because the Centers for Medicare & Medicaid Services (CMS) imposed no remedies, Petitioner, Belvedere Nursing and Rehabilitation Center, is not entitled to Administrative Law Judge (ALJ) review in this matter.  I therefore dismiss the Petitioner’s hearing requests pursuant to 42 C.F.R. § 498.70(b).

Discussion

Petitioner has no right to a hearing because the Centers for Medicare & Medicaid Services did not impose a remedy.¹

Petitioner is a long-term care facility located in Hot Springs, Arkansas, that participates in the Medicare program.  Based on a survey, completed on December 21, 2023, CMS determined that the facility did not comply with multiple health and Life Safety Code requirements, including 42 C.F.R. § 483.25(d)(1) (quality of care:  failure to prevent accidents), cited at scope and severity level G (isolated instance of substantial

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noncompliance that causes actual harm but does not pose immediate jeopardy to resident health and safety).

CMS did not find substandard quality of care, which requires a finding of immediate jeopardy, a pattern of widespread actual harm, or a widespread potential for more that minimal harm.  42 C.F.R. § 488.301.

CMS initially imposed remedies:  termination of the facility’s provider agreement unless the facility achieved substantial compliance by June 21, 2024; and denial of payment for new admissions, effective January 24, 2024.  CMS Ex 1.

Thereafter, CMS determined that the facility had corrected its deficiencies and achieved substantial compliance, effective January 20, 2024.  In a letter dated March 7, 2024, CMS advised the facility that it had rescinded the remedies.  CMS Ex. 2.

Petitioner then appealed, challenging only the G-level deficiency, 42 C.F.R. § 483.25(d).

CMS now moves to dismiss Petitioner’s appeal, arguing that the facility is not entitled to a hearing because no remedies have been imposed.

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), (d).  The regulations specify which actions are “initial determinations” and set forth examples of actions that are not.  With an exception not applicable here, a finding of noncompliance that results in CMS imposing a remedy specified in 42 C.F.R. § 488.406 is an initial determination for which a facility may request an ALJ hearing.  42 C.F.R. § 498.3(b)(13), (16).  But a facility has no right to a hearing unless CMS imposes one of the specified remedies.  San Fernando Post Acute Hosp., DAB No. 2492 at 7-8 (2012); Columbus Park Nursing and Rehab. Ctr., DAB No. 2316 at 7 (2010); Lutheran Home – Caledonia, DAB No. 1753 (2000); Schowalter Villa, DAB No. 1688 (1999).

The remedy, not the citation of a deficiency, triggers the right to a hearing.  Schowalter Villa, DAB No. 1688 at 3.  Where CMS withdraws the remedies or otherwise declines to impose one, Petitioner has no right to a hearing.  See, e.g., Fountain Lake Health & Rehab., Inc., DAB No. 1985 at 5-6 (2005); Fla. Health Sciences Ctr., Inc., DAB No. 2263 at 5-6 (2009) (holding that, when the remedy has been rescinded, a hospital has no right to a hearing to contest the findings of noncompliance set forth in the statement of deficiencies, notwithstanding its claim that the statement of deficiencies is a generally accessible public record that caused tangible harm to its reputation and financial status); 59 Fed. Reg. 56,116, 56,158 (1994).

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Petitioner nevertheless argues that it is entitled to review so long as CMS’s findings are accessible to the public and could be used to support other actions against the facility, citing Grace Healthcare of Benton v. United States Dept. of Health and Human Services, 603 F.3d 412 (8th Cir. 2009).  In fact, according to Petitioner, based on the survey findings, the state attorney general is investigating the facility for Medicaid fraud and adult maltreatment.  “The facility should have an opportunity to dispute these findings[,] which were cited at a scope and severity [level] of actual harm to three residents.”  P. Br. at 5.

I note, first, that the state attorney general’s investigation is based on the state agency’s survey findings, to which the attorney general no doubt has access, without having to rely on any publicly accessible CMS documents.  The attorney general may, of course, conduct his own, independent investigation, without regard to CMS’s determinations. Presumably, if the attorney general’s investigation leads to an adverse action against the facility, Petitioner would be afforded an opportunity to defend itself at the state level.  It may not use this forum to challenge that investigation.

Moreover, Grace Healthcare ultimately did not go so far as Petitioner claims.  First, unlike here, the facility there was unquestionably entitled to review of CMS’s determinations.  CMS had imposed remedies – $3,500 per-day for two days of immediate jeopardy and the loss of the facility’s nurse aide training program – for six deficiencies cited at the immediate jeopardy level.  The ALJ reviewed just one of the immediate jeopardy findings, and the Board affirmed, referring to its “general rule” that the ALJ need not address findings that are not material.  The court found that substantial evidence did not support the one noncompliance finding at the immediate jeopardy level, although it agreed that substantial evidence “would doubtless support” a lower-level violation.²

The court expressed concern that the remaining five immediate jeopardy determinations had not been reviewed, finding that the Board had misapplied its “general rule” not to require that all findings be addressed (but the court did not say that the rule was invalid).  Acting on this concern, the court initially remanded the matter to CMS with instructions to expunge references to the immediate jeopardy determinations from all records accessible by the public.  589 F.3d 926 (8th Cir. 2009), modified per curiam, 603 F.3d. 412 (8th Cir. 2009).  Significantly, however, following a petition for rehearing, the court

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rescinded that part of its order, and CMS was not required to expunge the findings.  603 F.3d at 423; see NMS Healthcare of Hagerstown, DAB No. 2603 at 10 n.9 (2014).

In any event, I may not invalidate a statute or regulation on any ground.  NMS Healthcare, DAB No. 2603 at 7 (citing Jewish Home of Eastern Pa., DAB No. 2380 at 9 (2011)); Fla. Health Sciences Ctr., Inc., DAB No. 2263 at 6 (citing Sentinel Medical Labs, Inc., DAB No. 1762 at 9 (2001), aff’d sub nom., Teitelbaum v. Health Care Financing Admin., No. 01-70236 (9th Cir. 2002), reh’g denied, No. 01-70236 (May 22, 2002)).

Because CMS has imposed no remedies, Petitioner has no right to an ALJ hearing, and this matter must be dismissed.  42 C.F.R. § 498.70(b).  I therefore grant CMS’s motion.

Endnotes

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

²  Even if Petitioner were otherwise entitled to review of the finding of substantial noncompliance here, the finding of actual harm (level G) would not be reviewable.  The regulations authorize a review of scope and severity if:  1) a successful challenge would affect the range of the CMP; or 2) CMS has made a finding of substandard quality of care that results in the loss of approval of the facility’s nurse aide training program.  42 C.F.R. §§ 498.3(b)(14), 498.3(d)(10).  Neither of those conditions apply here.  In Grace Healthcare, the immediate jeopardy determination was reviewable because a successful challenge affected the range of the CMP.