The Bishop Spencer Place, 2025-9 (HHS-CRD February 3, 2025)

RULING DISMISSING REQUEST FOR HEARING

The Bishop Spencer Place (Petitioner or “the facility”) is a skilled nursing facility (SNF) located in Kansas City, Missouri, that participates in the Medicare program. Following an abbreviated survey that was completed on July 29, 2024, the Missouri Department of Health and Senior Services (state agency) determined that the facility was not in substantial compliance with Medicare program requirements and provided notice that the Centers for Medicare & Medicaid Services (CMS) had authorized the imposition of a denial of payment for new admissions (DPNA) if it did not return to compliance by August 29, 2024. The state agency also reported that it was recommending to CMS that Petitioner’s provider agreement be terminated if it did not achieve substantial compliance by January 29, 2025. The facility appealed, requesting a hearing before an administrative law judge (ALJ) to challenge the “finding of noncompliance, as well as the level of noncompliance assigned.”

Thereafter, on October 23, 2024, the state agency determined that Petitioner had returned to substantial compliance on August 28, 2024, and the DPNA was not effectuated. The following day, on October 24, 2024, CMS again informed Petitioner that the DPNA had not been effectuated. At that time, CMS imposed a per-instance civil monetary penalty (PICMP) of $12,340 for immediate jeopardy noncompliance. Despite receiving explicit and detailed instructions from CMS on how to request a hearing to challenge the

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imposition of a PICMP, Petitioner did not request a hearing to challenge the imposition of the PICMP.

On January 6, 2025, CMS moved to dismiss (CMS MTD) Petitioner’s hearing request for lack of jurisdiction.1 On January 16, 2025, Petitioner opposed the motion (P. Opp.). As explained below, I dismiss the request for hearing.

Applicable Law

The Social Security Act (Act) sets requirements for SNF participation in the Medicare program. The Act authorizes the Secretary of the United States Department of Health & Human Services (Secretary) to promulgate regulations implementing those statutory provisions. Act § 1819 (42 U.S.C. § 1395i-3). The Secretary’s regulations are found at 42 C.F.R. Part 483.

A facility must maintain substantial compliance with program requirements in order to participate in the program. To be in substantial compliance, a facility’s deficiencies may pose no greater risk to resident health and safety than “the potential for causing minimal harm.” 42 C.F.R. § 488.301. “Noncompliance means any deficiency that causes a facility to not be in substantial compliance.” Id.

The Secretary contracts with state agencies to conduct periodic surveys to determine whether SNFs are in substantial compliance with the participation requirements. Act § 1864(a) (42 U.S.C. § 1395aa(a)); 42 C.F.R. §§ 488.10, 488.20. The Act and its implementing regulations require that facilities be surveyed on average every 12 months, and more often if necessary, to ensure that identified deficiencies are corrected. Act § 1819(g)(2)(A) (42 U.S.C. § 1395i-3(g)(2)(A)); 42 C.F.R. §§ 488.20(a), 488.308.

When a survey uncovers noncompliance by an SNF, CMS or the state may impose enforcement remedies, to include, but not limited to, a DPNA or CMP, against the SNF and must give the SNF notification of the noncompliance and imposition of remedies.2 42 C.F.R. §§ 488.402(b), (f), 488.406(a). A finding of noncompliance that leads to the imposition of an enforcement action specified in 42 C.F.R. § 488.406 is an initial determination. 42 C.F.R. § 498.3(b)(13). SNFs have a right to appeal a “certification of noncompliance leading to an enforcement remedy.” 42 C.F.R. § 488.408(g)(1); see also

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42 C.F.R. §§ 488.330(e), 498.3. To appeal such an initial determination, the SNF must request an ALJ hearing within 60 days of receiving the notice of initial determination. 42 C.F.R. § 498.40(a)(2).

On motion of a party, an ALJ may dismiss a hearing request where “[t]he party requesting a hearing is not a proper party or does not otherwise have a right to a hearing.” 42 C.F.R. § 498.70(b).

Relevant Facts and Background

By letter dated August 14, 2024, the state agency notified Petitioner of the results of an abbreviated survey. DAB E-File Document # 1a (herein “State Agency Notice”). Based on the survey, the state agency determined that Petitioner was not in substantial compliance with Medicare program requirements. State Agency Notice at 1. After giving instructions for filing a plan of correction, the state agency informed Petitioner that it had been authorized to impose a DPNA effective August 29, 2024.3 State Agency Notice at 2. The state agency also noted if CMS determined that “termination or any other remedy is warranted, [it] will be provided with a separate formal notification of that determination.”4 State Agency Notice at 2. The state agency reported that it had recommended to CMS that Petitioner’s provider agreement “be terminated on 01/29/2025 if substantial compliance is not achieved by that time.” State Agency Notice at 3. The state agency concluded by explaining Petitioner’s right to request an ALJ hearing if it “disagree[d] with this action imposed on [its] facility” and giving instructions on how to file such a request. State Agency Notice at 4.

On October 13, 2024, Petitioner, through counsel, requested a hearing to challenge the state agency’s August 14, 2024 “finding of noncompliance, as well as the level of noncompliance assigned.”

On October 23, 2024, the state agency determined that Petitioner had returned to compliance, effective August 28, 2024, and that the remedy of a DPNA was not effectuated. CMS Ex. 2. Thereafter, on October 24, 2024, CMS sent Petitioner a notice

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imposing a PICMP. CMS Ex. 3. In the notice, CMS informed Petitioner that it found it was not in substantial compliance with a Medicare participation requirement based on the state agency’s July 29, 2024 survey. CMS Ex. 3 at 1; see CMS Ex. 1 (Form CMS-2567). CMS reminded Petitioner that the state agency previously had notified it of the imposition of a DPNA effective August 29, 2024, but explained that, because Petitioner had returned to substantial compliance on August 28, 2024, the DPNA did not go into effect. CMS Ex. 3 at 5. CMS also notified Petitioner that it was imposing a PICMP against Petitioner. CMS Ex. 3 at 2. In the section of the letter detailing appeal rights, CMS explained that “[t]he following remedies are being imposed . . . [a] [civil monetary penalty].” CMS Ex. 3 at 3. In the next sentence, CMS provided detailed instructions for how to request, within 60 days of receiving the notice, an ALJ hearing to appeal “this action imposed on [the] facility.” CMS Ex. 3 at 3.

Petitioner did not request a hearing to challenge the imposition of the sole remedy listed in CMS’s October 24, 2024 notice, the PICMP.

Analysis

At the time Petitioner filed its October 13, 2024 hearing request, the state agency’s August 14, 2024 notice was an appealable initial determination because it included findings of noncompliance that led to the imposition of an enforcement remedy. 42 C.F.R. §§ 488.408(g)(1), 498.3(b)(13). However, the only remedy imposed in that notice was a DPNA with prospective effective date if Petitioner did not return to compliance by August 29, 2024, and both the state agency and CMS later informed Petitioner that the DPNA had not been effectuated. CMS Exs. 2 at 1; 3 at 5. Ultimately, the August 14, 2024 state agency notice was not an appealable initial determination because, while it included a finding of noncompliance, it did not impose an enforcement remedy. See Columbus Park Nursing & Rehab. Ctr., DAB No. 2316 at 7 (2010). Because Petitioner does not have a right to appeal the August 14, 2024 notice, its October 13, 2024 hearing request is subject to dismissal on that basis. 42 C.F.R. § 498.70(b).

Claiming that “[a] facility has the right to appeal a noncompliance determination when there is no basis for the deficiency finding,” Petitioner argues that it “is entitled to challenge the blemish placed on its record.” P. Opp. at 2-3. Petitioner clarified, “[t]he immediate jeopardy determination is precisely what [it] is challenging.” P. Opp. at 2. Petitioner further argues that its request for hearing “was not mooted out by the subsequent imposition of a [PICMP] because the immediate jeopardy determination was not withdrawn or expunged.” P. Opp. at 3.

At the time Petitioner requested a hearing, the sole notice that had been issued was the state agency’s August 14, 2024 notice, and that notice informed Petitioner that a DPNA

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would take effect on August 29, 2024, if it did not return to compliance by that date. That is the notice Petitioner appealed. Less than two months later, CMS issued its own notice imposing an actual remedy, the PICMP, at which time it rescinded the DPNA because Petitioner had returned to compliance before the DPNA took effect. CMS Ex. 3. In rescinding the DPNA, the CMS notice effectively mooted the state agency’s notice.5 CMS Ex. 3 at 5.

The regulations do not contemplate SNFs filing prospective hearing requests before remedies are imposed. Rather, a request for an ALJ hearing must be filed within 60 days of receiving the notice of initial determination. 42 C.F.R. § 498.40(a)(2). Petitioner did not file a request for an ALJ hearing within 60 days of receiving CMS’s October 24, 2024 notice imposing a PICMP, or at any time thereafter. Therefore, Petitioner has not requested a hearing to challenge the imposition of a PICMP.

To the extent Petitioner specifically seeks to challenge the immediate jeopardy determination that it claims presents a “blemish” on its record, it cannot do so unless it is challenging the imposition of an enforcement remedy.6 However, Petitioner did not request a hearing to challenge the imposition of the PICMP.7

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Conclusion

Petitioner did not appeal a finding of noncompliance that led the imposition of an enforcement remedy, and Petitioner cannot otherwise challenge the immediate jeopardy determination. Accordingly, I order that this case be dismissed. 42 C.F.R. § 498.70(b).