Grandview Nursing and Rehabilitation, ALJ Ruling 2025-15 (HHS-CRD April 29, 2025)

ORDER GRANTING IN PART AND DENYING IN PART CMS’S MOTION TO DISMISS

Petitioner filed a request for a hearing before an administrative law judge more than 60 days after the Centers for Medicare & Medicaid Services (CMS) provided notice to Petitioner that it was imposing civil money penalties (CMP) and other enforcement remedies on Petitioner based on noncompliance with Medicare requirements for skilled nursing facilities.  CMS moved for dismissal of the hearing request.  Petitioner opposed the motion.  For the reasons stated below, CMS’s motion is granted in part and denied in part.  

I.    Legal Framework

The Medicare program “provides basic protection against the costs of . . . related post‑hospital . . . care” for individuals over the age of 65 who are eligible for Social Security retirement benefits and for individuals under 65 who meet other criteria.  42 U.S.C. § 1395c.  Post-hospital care includes extended care services provided at a skilled nursing facility (SNF).  42 U.S.C. §§ 1395f(a)(2)(B), 1395x(h)-(i).

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For Medicare program purposes, an SNF is an institution that is primarily engaged in providing skilled nursing care and/or rehabilitation services for its residents but is not primarily engaged in the care and treatment of mental diseases.  42 U.S.C. §§ 1395x(j), 1395i-3(a)(1).  Because an SNF is a “provider of services” in the Medicare program, each SNF that participates in the program must file a provider agreement with the Secretary of Health and Human Services (Secretary).  42 U.S.C. §§ 1395cc(a), 1395x(u).  Further, a participating SNF must meet a variety of ongoing requirements related to how it provides services, maintains the rights of its residents, and administers its facility.  42 U.S.C. § 1395i-3(a)(3), (b)-(d); 42 C.F.R. pt. 483, subpt. B. 

When an SNF fails to meet a statutory or regulatory participation requirement, then the SNF has a “deficiency.”  42 C.F.R. § 488.301; see 42 U.S.C. § 1395i-3(h)(1).  “Noncompliance” means “any deficiency that causes a facility to not be in substantial compliance.”  42 C.F.R. § 488.301; see also 42 U.S.C. § 1395i-3(h)(3).  To maintain “substantial compliance,” an SNF’s deficiencies may “pose no greater risk to resident health or safety than the potential for causing minimal harm.”  42 C.F.R. § 488.301. 

Broadly, noncompliance that subjects an SNF to enforcement remedies is divided into two levels.  One level is comprised of deficiencies that immediately jeopardize the health or safety of residents and the other level is composed of deficiencies that do not.  42 U.S.C. § 1395i-3(h)(1).  “Immediate jeopardy” exists when “the provider’s noncompliance with one or more requirements of participation has caused, or is likely to cause, serious injury, harm, impairment, or death to a resident.”  42 C.F.R. § 488.301. 

The Secretary contracts with state agencies to conduct surveys to determine whether SNFs are in substantial compliance.  42 U.S.C. §§ 1395aa(a), 1395i-3(g); 42 C.F.R. § 488.10.  These surveys can be unannounced surveys that occur at least once every 15 months or can be in response to a complaint.  42 U.S.C. § 1395i-3(g).  When the results of a survey show that an SNF is not in substantial compliance with program participation requirements, the Secretary may impose enforcement remedies on the SNF.  42 U.S.C. § 1395i-3(h)(2); 42 C.F.R. § 488.406.  When CMS selects an enforcement remedy to impose on an SNF, it determines the scope (i.e., the number of residents affected or potentially affected) and severity (i.e., the degree of harm or potential harm) for each deficiency.  See 42 C.F.R. § 488.404(a)-(b); see also 42 U.S.C. § 1395i‑3(h)(2)(B)(ii)(III)(bb). 

One such remedy is a CMP.  42 U.S.C. § 1395i-3(h)(2)(B)(ii).  CMS may impose a per‑instance CMP for each instance of an SNF’s noncompliance, or a per‑day CMP for the number of days an SNF is not in substantial compliance.  42 U.S.C. § 1395i‑3(h)(2)(A), (h)(2)(B)(ii)(I); 42 C.F.R. § 488.430(a). 

If CMS imposes a CMP based on a finding of substantial noncompliance, then the SNF may request a hearing to challenge CMS’s initial determination of noncompliance that led

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to the imposition of an enforcement remedy and/or the level of noncompliance (if a successful challenge to the level would affect the range of CMP amounts imposed on the SNF).  42 U.S.C. §§ 1320a-7a(c)(2), 1395i‑3(h)(2)(B)(ii); 42 C.F.R. §§ 488.330(e)(3)(ii), 488.408(g)(1), 488.434(a)(2)(viii), 498.3(b)(13)-(14), (d)(10); see also 5 U.S.C. §§ 554, 556.  However, CMS’s choice of remedies is not reviewable.  42 C.F.R. §§ 488.438(e)(2), 488.408(g)(2), 498.3(b)(13). 

The SNF must request the hearing within 60 days from receipt of CMS’s initial determination.  42 C.F.R. § 498.40(a)(2).  For good cause shown, an administrative law judge may extend the filing date for a hearing request.  42 C.F.R. § 498.40(c)(2).  Untimely hearing requests are subject to dismissal.  42 C.F.R. § 498.70(c).  Either party may request, within 60 days of receiving a dismissal, that an administrative law judge vacate a dismissal if there is good cause to do so.  42 C.F.R. § 498.72. 

II.    Procedural History

On August 27, 2024, Petitioner filed a request for hearing to dispute CMS’s imposition of CMPs.  On August 28, 2024, the Civil Remedies Division acknowledged the hearing request and issued Judge Thomas’s Standing Prehearing Order. 

On October 24, 2024, CMS filed a Motion to Dismiss (CMS Motion).  CMS submitted 12 exhibits in support of the motion (CMS Exs. 1-12).  On November 13, 2024, Petitioner timely filed a Response to Respondent’s Motion to Dismiss (P. Response).  Petitioner did not submit any exhibits.  CMS filed a reply on November 20, 2024 (CMS Reply).  On April 8, 2025, this case was reassigned to me from Judge Thomas.

III.  Findings

February 22, 2024 PDOH Letter

By notice letter dated February 22, 2024, the Pennsylvania Department of Health (PDOH) stated that a complaint survey had been completed on February 12, 2024 and found that the most serious deficiency constituted immediate jeopardy.  CMS Ex. 5.  The immediate jeopardy deficiency was cited as follows:

• 42 C.F.R. § 483.24(a)(3) Cardio-pulmonary resuscitation, S/S K.

The letter also informed Petitioner that PDOH was recommending civil money penalties (CMP) for the immediate jeopardy deficiency as well as a deficiency found at Tag F689.  Petitioner was also notified that if it did not correct the deficiencies by May 12, 2024, CMS would be required to impose a mandatory denial of payment for new Medicare and Medicaid admissions (MDPNA).  CMS Ex. 5.

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Petitioner did not file any appeal following receipt of the February 22, 2024 letter. 

March 5, 2024 CMS Letter

By notice letter dated March 5, 2024,1 CMS notified Petitioner that based on the noncompliance found during the February 12, 2024 survey, CMS was imposing CMPs.  The deficiencies were cited as follows:

• 42 C.F.R. § 483.24(a)(3) – Cardio-pulmonary resuscitation, S/S K, Tag F678
• 42 C.F.R. § 483.25(d)(1)(2) – Free of Accident Hazards / Supervision / Devices, S/S G, Tag F689

A CMP of $10,820 per day for two days was imposed for the immediate jeopardy from February 10 through February 11, 2024, and a CMP of $890 per day was imposed beginning on February 12, 2024.  Petitioner was informed that accrual of the CMP would continue until substantial compliance was achieved.  The letter also notified Petitioner that it had 60 days to appeal.  CMS Ex. 6. 

Petitioner did not file any appeal following receipt of the March 5, 2024 letter. 

March, April, June PDOH Letters

PDOH issued notice letters on March 22nd, April 24th, June 5th.  On March 22, 2024, PDOH issued a notice letter informing Petitioner that additional deficiencies were identified during a survey completed on March 12, 2024.  The letter reminded Petitioner that it had until May 12, 2024, to come into substantial compliance or a MDPNA would be imposed.  By letter dated April 24, 2024, PDOH informed Petitioner that it continued to be out of compliance with the deficiencies found during the February and March surveys.  And the letter dated June 5, 2024, notified Petitioner that it continued to be out of compliance with the deficiencies cited during the February and April surveys.  No appeal was filed with regard to any of these letters. 

June 5, 2024 CMS Letter

By notice letter dated June 5, 2024, CMS notified Petitioner that abbreviated surveys were conducted on March 12, April 12 and May 21, 2024.  CMS informed Petitioner that the CMPs imposed for the deficiencies cited in the March 5, 2024 letter were reduced by 35% because an appeal was not filed.

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CMS also notified Petitioner that substantial compliance still had not been achieved and that additional deficiencies were found as follows: 

• 42 C.F.R. § 483.35(a)(3) and (a)(4), (c) – competent Staff, S/S G, Tag F726
• 42 C.F.R. § 483.25(d)(1)(2) – Free of Accident Hazards / Supervision / Devices, S/S G, Tag F689
• 42 C.F.R. § 483.25 – Quality of Care, S/S E, Tag F684

A CMP of $1,525 per day for 29 days was imposed from March 12 through April 9, 2024.  The CMP was increased to $1,785 per day beginning April 10, 2024.  The letter also informed Petitioner that a MDPNA went into effect on March 12, 2024.  Petitioner was advised that if it disagreed with the imposition of remedies based on the March 12th or April 12th surveys, it could file an appeal within 60 days.  CMS Ex. 9.  

Petitioner did not file an appeal following receipt of the June 5, 2024 letter. 

June 28, 2024 CMS Letter

By notice letter dated June 28, 2024, CMS informed Petitioner that it had achieved substantial compliance at the June 20, 2024 revisit survey.  The letter further stated that the MDPNA ran from May 12 to June 19, 2024.  The June 28, 2024 notice letter then recited those remedies CMS had previously determined to impose against Petitioner in the March 4, 2024 letter and the June 5, 2024 letter.  Lastly, the letter informed Petitioner of the total amount of the CMP that ran from April 10 through June 19, 2024.  CMS Ex. 11.  

Following receipt of the June 28, 2024 notice letter, Petitioner filed a request for hearing on August 27, 2024.  

Petitioner failed to timely challenge the imposition of an MDPNA and the CMPs. 

Petitioner filed a hearing request on August 27, 2024 stating that Petitioner is appealing F678, F689, F835, F580, F692, F726, F745.2  Petitioner then identified specific issues with each of the above tags with which it disagreed.  Petitioner’s hearing request explicitly challenges only findings of noncompliance that were first referenced in the March 5 and June 5, 2024 notice letters.  However, Petitioner’s hearing request refers to the June 28, 2024 notice letter and attaches that letter.  See August 27, 2024 Hearing Request.

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On October 24, 2024, CMS filed a Motion to Dismiss along with 12 exhibits.  CMS argues that Petitioner missed the deadline to challenge the remedies imposed in the March 5, 2024 notice letter and the June 5, 2025 letter.  CMS asserts that any appeal of the March 5, 2024 letter was due by May 4, 2024 and any appeal of the June 5, 2024 letter was due by August 4, 2024.  CMS further argues that the only issue in the June 28, 2024 letter is the date Petitioner returned to substantial compliance.  I agree. 

Petitioner responded to CMS’s motion and argues that equity and judicial economy allow for an SNF to challenge the latest initial determination rather than each initial determination as they are issued.  The case law does not support Petitioner’s contention.  See Mimiya Hospital, DAB No. 1833 (2002).  Further, the case law that Petitioner does cite actually supports CMS’s position.  Petitioner also references good cause for failing to file a request for hearing following the earlier initial determinations but does not lay out an argument for what circumstances prevented it from making a timely filing. 

As a result, the record is clear.  Petitioner, if it wanted to challenge the findings detailed in the earlier notice letters, was required to file a hearing request in which Petitioner identified the deficiencies it was challenging and stated the basis for its challenge within 60 days of receipt of CMS’s notice.  42 C.F.R. § 498.40(b)(1), (2); Cary Health & Rehab. Ctr., DAB 1771 at 7-20 (2001).  However, Petitioner did not file a written request for hearing challenging the deficiency findings until August 27, 2024, well after the 60-day period had expired.

The June 28, 2024 notice contained an initial determination as to when Petitioner returned to substantial compliance for which a hearing may be requested.

The Board has held that an SNF may challenge the duration of the CMP beyond the date of the original notice once it receives notice of the full duration of the CMP.  Mimiya, DAB 1833 at 8.  Here, there can be no challenge to the duration or amount of the immediate jeopardy CMP.  Similarly, there can be no challenge to the duration or amount of the CMP imposed from February 12, 2024 to March 11, 2024 or the duration or amount of the CMP imposed from March 12, 2024 to April 9, 2024.  Similarly, there can be no challenge to the CMP imposed beginning April 10, 2024 and ending on June 19, 2024.  The 60-day timeframe to appeal all of these determinations ran before Petitioner filed its hearing request on August 27, 2024.  Petitioner did, however, maintain the right to challenge the duration of the MDPNA and the duration of the $1,785 per day CMP imposed beginning on April 10, 2024 and ending on June 19, 2024 when it filed its hearing request. 

CMS argues that the there was no challenge to the duration of the CMP in Petitioner’s August 27, 2024 hearing request.  I disagree.  Petitioner specifically states that the time out of compliance was excessive and unwarranted.

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IV.   Dismissal

An ALJ may dismiss a hearing request when the SNF “did not file a hearing request timely and the time for filing has not been extended.”  42 C.F.R. § 498.70(c).  As explained above, I grant CMS’s motion to dismiss in part and deny in part.  The only issue remaining for hearing is whether Petitioner reached substantial compliance on or before June 19, 2024.  The date of substantial compliance affects the duration of the MDPNA and the duration of the CMP imposed on April 10, 2024. 

As a result, the stay previously entered in this case is lifted.  The standing order issued on August 28, 2024 applies.  CMS must file a pre-hearing exchange with the CRD within 90 days of the date listed on this order.  Petitioner must file its pre-hearing exchange within 125 days of the date listed on this order.