Autumn Meadows of Cahokia, ALJ Ruling 2026-12 (HHS CRD February 25, 2026)

RULING ON MOTION TO DIMISS

I deny the Centers for Medicare & Medicaid Services’ (CMS) motion to dismiss.

I.  Background

On June 10, 2025, the Illinois Department of Public Health (state agency) completed a survey of Petitioner’s skilled nursing facility (SNF) and concluded that Petitioner was not in substantial compliance with Medicare participation requirements.  In a June 18, 2025 notice, the state agency informed Petitioner that CMS authorized the imposition of a denial of payment for new admissions (DPNA) on Petitioner, effective July 3, 2025, and the state agency recommended that CMS impose other enforcement remedies.  CMS Ex. 1 at 1-2.  On August 14, 2025, Petitioner requested a hearing.  The Civil Remedies Division docketed the case under C-25-872 and issued my Standing Order.

On September 15, 2025, CMS moved for a stay of the prehearing submission schedule established by my Standing Order because the state agency continued to conduct surveys at Petitioner’s facility.  As a result, CMS had not yet issued a notice as to whether CMS would impose additional enforcement remedies, whether the DPNA went into effect and the duration of the DPNA, and whether Petitioner is terminated.  I granted the stay to permit CMS time to consider these matters and issue its notice.

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On October 31, 2025, Petitioner filed a second request for hearing in response to a variety of state agency surveys and notices.  Specifically, a September 2, 2025 notice stated that CMS authorized the state agency to require that Petitioner inform Medicare and Medicaid beneficiaries, “admitted on, or after, this date of restriction,” of the DPNA.  CMS Ex. 4 at 2.  The notice also gave Petitioner 60 days to file a hearing request.  CMS Ex. 4 at 3-4.  The second hearing request also requested consolidation with the original case.  The Civil Remedies Division docketed the second hearing request under C-26-64.  On November 12, 2025, I consolidated C-25-872 and C-26-64 consolidated under C-26-64.

II.  Analysis

CMS moves to dismiss Petitioner’s hearing requests.  CMS argues that it has not yet acted on the state agency’s recommendations and only the state agency, and not CMS, has issued notices in this matter.  CMS states that an SNF may only appeal a certification of noncompliance when CMS imposes an enforcement remedy; therefore, I have no jurisdiction in this case because CMS has not imposed any remedies yet.  CMS also indicated that it is uncertain that the DPNA went into effect.

Petitioner opposes the motion to dismiss, pointing out that the state agency’s June 18, 2025 notice expressly stated that a DPNA was imposed, effective July 3, 2025, and that CMS authorized the state agency to notify Petitioner of the DPNA.  Petitioner also states that the June 18, 2025 notice provided Petitioner with appeal rights, warning Petitioner to file a request for hearing within 60 days.  Petitioner is concerned that dismissal of its hearing requests would preclude it from appealing any future enforcement remedies based on the June 10, 2025 survey.

CMS replied that Petitioner’s agreement to CMS’s request for a stay, in September 2025, was proof that, absent a notice from CMS, no appealable event had occurred.  CMS also stated that, while the state agency represented in its notices to Petitioner that CMS concurred with its recommended imposition of a DPNA, Petitioner has not shown that it was a remedy imposed by CMS.

I must decide whether Petitioner has a right to a hearing.  See 42 C.F.R. § 498.70(b).

CMS contracts with state agencies to survey and investigate complaints against Medicare participating SNFs.  42 U.S.C. §§ 1395aa(a), 1395i-3(g); 42 C.F.R. § 488.10.  When the survey or investigation show that an SNF is not in substantial compliance with Medicare participation requirements, CMS may impose remedies on the SNF.  42 U.S.C. § 1395i-3(h)(2); 42 C.F.R. § 488.406.  Imposing a remedy, such as a DPNA, based on a finding of noncompliance is an appealable initial determination.  42 C.F.R. §§ 488.408(g)(1), 498.3(b)(13); see also 42 U.S.C. § 1395i-3(h)(2)(D); 42 C.F.R. §§ 488.402(f)(iv);

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488.406(a)(2)(ii); 488.417.  “CMS or the State (as authorized by CMS)” provides notice to an SNF of the imposed remedy.  42 C.F.R. § 488.402(f)(1) (emphasis added).

CMS’s internal policy is consistent with the regulations.  State agencies may provide notice of a DPNA when CMS authorizes the DPNA.  State Operations Manual (SOM), CMS Pub. 100-07, Ch. 7, §§ 7305.1.1(d), 7305.1.3(j), 7305.2.1(a).  Further, a DPNA imposed in a state agency notice, as authorized by CMS, will take effect without further notice from CMS.  SOM § 7305.1.1(e).  Indeed, if an SNF fails to timely request a hearing based on a state agency notice that informs the SNF of a CMS authorized DPNA, then the SNF loses its right to challenge the deficiencies on which the DPNA is based even if the SNF later requests a hearing based on a subsequent CMS notice imposing civil money penalties.  Taos Living Ctr., DAB No. 2293 at 9-10 (2009).

In the present case, the state agency sent a notice to Petitioner stating that CMS authorized the imposition of a DPNA to be effective within approximately two weeks.  CMS Ex. 1 at 2.  Later, the state agency sent a notice stating that CMS authorized the state agency to tell Petitioner that it must inform all Medicare and Medicaid beneficiaries, who were admitted to Petitioner’s facility after the DPNA went into effect, that a DPNA was now in effect.  CMS Ex. 4 at 2.  Each of those notices stated that Petitioner could request a hearing to challenge the imposition of an enforcement remedy.  CMS Ex. 1 at 3-4; CMS Ex. 4 at 3-4.  Therefore, Petitioner properly requested hearings to preserve its right to dispute the survey findings of noncompliance with Medicare requirements.

CMS is uncertain whether the DPNA took effect.  If CMS did not impose a DPNA, then I would dismiss the hearing request.  Brighton Convalescent Ctr., ALJ Ruling No. 2017-1 at 3 (HHS CRD Oct. 27, 2016).  However, CMS must prove that the DPNA has not taken effect because CMS is the proponent of an order of dismissal.  5 U.S.C. § 556(d).  CMS did not provide such proof, and CMS Exhibit 4 shows that a DPNA has taken effect.

III.  Order

1. CMS’s motion to dismiss is denied.

2. The prehearing submission schedule in this case is stayed until further order.

3. CMS will file notice every four weeks of the status of CMS’s final notice.