Collinwood Nursing and Rehabilitation, ALJ Ruling 2026-31 (HHS-CRD July 13, 2026)

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 after the state agency and 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 (SNF).  CMS moved for dismissal of the hearing request.  Petitioner opposed the motion. 

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). 

Page 2

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). 

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).  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). 

Page 3

The SNF must request the hearing within 60 days from receipt of the 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 October 24, 2025, Petitioner filed a request for hearing to dispute CMS’s imposition of a CMP and a DPNA.  On October 28, 2025, the Civil Remedies Division acknowledged the hearing request and issued a Standing Prehearing Order. 

On June 25, 2026, CMS filed a Motion to Dismiss (CMS Motion).  CMS submitted six exhibits in support of the motion (CMS Exs. 1-6).  On July 3, 2026, Petitioner timely filed a Response to Respondent’s Motion to Dismiss (P. Response).  Petitioner submitted three exhibits (P. Exs. 1-3). 

III.  Findings

June 6, 2025 State Agency Letter

By notice letter dated June 6, 2025, the state agency stated that a survey had been conducted on May 22, 2025 and found that the facility was not in substantial compliance with multiple program requirements and that the most serious deficiency constituted immediate jeopardy.  CMS Ex. 2. 

The letter also informed Petitioner that the state agency was imposing a denial of payment for new admissions starting on June 21, 2025.  CMS Ex. 2.  Petitioner was also advised that if it did achieve substantial compliance by November 22, 2025, its provider agreement would be terminated.  Id.  The letter also notified Petitioner that it had 60 days to appeal. 

Petitioner did not file any appeal following receipt of the June 6, 2025 letter. 

June 18, 2025 CMS Letter

By notice letter dated June 18, 2025, CMS notified Petitioner that based on the noncompliance found during the May 22, 2025 survey, CMS was imposing CMPs.  CMS Ex. 5.  The deficiencies were cited as follows: 

• 42 C.F.R. § 483.12(a)(1) – Free from abuse and neglect, S/S J, Tag F600
• 42 C.F.R. § 483.12(c)(2)-(4) – Investigate/Prevent/Correct Alleged Violation, S/S D, Tag F610

Page 4

• 42 C.F.R. § 483.21(b)(1)(3) – Develop/Implement Comprehensive Care Plan, S/S J, Tag F656
• 42 C.F.R. § 483.40(b)(1) – Treatment/Services Mental/Psychosocial Concerns, S/S K, Tag F742
• 42 C.F.R. § 483.45(g)(h)(1)(2) – Label/Store Drugs and Biologicals, S/S D, Tag 761

A CMP of $8,140 per day for 3 days was imposed from January 5, 2025 through January 7, 2025 and a CMP of $275 per day was imposed beginning on January 8, 2025 through May 20, 2025.  A CMP of $10,765 was imposed for one day on May 21, 2025. Id.  A CMP of $275 was imposed beginning on May 22, 2025 and continued until further notice from CMS.  Id.  The letter also notified Petitioner that it had 60 days to appeal.  Id. 

Petitioner did not file any appeal following receipt of the June 18, 2025 letter. 

October 1, 2025 CMS Letter

By notice letter dated October 1, 2025, CMS notified Petitioner that the state agency had conducted a revisit survey and substantial compliance had been achieved on June 16, 2025.  CMS Ex. 6.  As a result, CMS confirmed that the total amount of CMP was $78,635.  CMS also informed Petitioner that the mandatory termination and DPNA did not go into effect.  Id.  The letter also notified Petitioner that it had 60 days to appeal.  Id. 

Petitioner filed a request for hearing on October 24, 2025. 

Petitioner failed to timely challenge the imposition of the CMPs. 

Petitioner filed a hearing request on October 24, 2025 stating that it is appealing the findings of noncompliance.  Petitioner then identified specific issues with each of the above tags with which it disagreed.  Petitioner also stated that it was appealing the duration of the remedies and the duration of the noncompliance. 

On June 25, 2026, CMS filed a Motion to Dismiss along with six exhibits.  CMS argues that Petitioner missed the deadline to challenge the remedies imposed in the June 6, 2025 notice letter and the June 18, 2025 letter.  CMS asserts that any appeal of the June 6, 2025 letter was due by August 5, 2025 and any appeal of the June 18, 2025 letter was due by August 18, 2025.  CMS further argues that the only issue in the October 1, 2025 letter is the date Petitioner returned to substantial compliance.  I agree. 

Petitioner responded to CMS’ motion and argues essentially that equity and judicial economy allows for a 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). 

Page 5

The regulations mandate that the affected party “file the request in writing within 60 days from receipt of the notice . . . unless that period is extended.”  42 C.F.R. § 498.40(a).  On motion of a party, or his/her own motion, the ALJ may dismiss a hearing request where that request was not timely filed and the time for filing was not extended.  42 C.F.R. § 498.70(c). 

Here, Petitioner unquestionably failed to meet any of the deadlines for appealing the agency determinations: 

• No one disputes that the facility received the state agency’s June 6, 2025 notice which means Petitioner’s hearing request was due 60 days later or by August 5, 2025.
• No one disputes that the facility received CMS’s June 18, 2025 notice letter, which means that, to challenge the additional remedies CMS imposed, Petitioner’s hearing request was due no later than August 18, 2025. 

Petitioner did not file anything until October 24, 2025, well after the deadlines had passed to appeal the June 6, 2025 and June 18, 2025 notice letters.  Absent a showing of good cause for my extending the times in which to file, those matters should be dismissed pursuant to 42 C.F.R. § 498.70(c). 

The regulations do not define “good cause” but leave that determination to the discretion of the ALJ.  Looking to regulations governing certain Social Security benefit appeals (which also derive from section 205(b) of the Act), many ALJs have ruled that “good cause” means circumstances beyond a party’s ability to control.  See, e.g., Shadow Creek Medical Clinic, ALJ Ruling No. 2017-5 (2016); Oak Park Healthcare Ctr., DAB CR1917 (2009); Hillcrest Healthcare, LLC, DAB CR976 (2002), aff’d, DAB No. 1879 (2003); Hammonds Lane Ctr., et al., DAB CR913 (2002), aff’d, DAB No. 1853 (2002); Glen Rose Medical Ctr., DAB CR918 (2002), aff’d, DAB No. 1852 (2002); Parkview Care Ctr., DAB CR785 (2001); Hospicio San Martin, DAB CR387 (1995), aff’d, DAB No. 1554 (1996); 20 C.F.R. § 404.933(c); but see Ghodratollah Sarrafi, ALJ Ruling No. 2020-1 (2019) (suggesting that Medicare providers and suppliers should be held to a higher standard than Social Security disability recipients).  The Board has consistently agreed that where a party, by inadvertence or tactical choice, makes no effort to preserve its hearing rights, it must accept the consequences of its inaction – loss of its right to a hearing.  Rutland at 5; Hammonds Lane Ctr. at 1; Hillcrest Healthcare, LLC, DAB No. 1879.  Petitioner does not make a good cause argument for the late filing. 

As a result, the record is clear.  Petitioner, if it wanted to challenge the findings detailed in the June 6, 2025 or June 18, 2025 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 the notice letters.  42 C.F.R. § 498.40(b)(1),(2);

Page 6

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 October 24, 2025, well after the 60-day period had expired. 

Petitioner additionally argues that notice in the October 1, 2025 letter stating a 35% reduction of the CMP will take effect if no appeal is filed means that CMS itself did not intend for an appeal to be filed until after the October 1, 2025 letter.  However, similar language appeared in the June 18, 2025 letter imposing CMPs.  Additionally, as noted above, each letter contained language informing Petitioner that appeals for disagreements with the determinations of noncompliance must be filed within 60 days from date of receipt of the letter.  The appeal language was clear and unambiguous. 

Petitioner also argues that the DAB’s e-filing site indicates that an appeal is not necessary until the CMS final notice because an appealing party can only select CMS (not an individual state agency) as the federal party and the examples provided for what a party is appealing do not list a state agency appeal.  First, a list of examples is not intended to be comprehensive, so that argument fails.  Second, the state agencies act on behalf of CMS.  The Secretary contracts with state survey agencies to conduct periodic surveys to determine whether skilled nursing facilities are in substantial compliance.  Act § 1864(a); 42 C.F.R. § 488.20.  Each facility must be surveyed annually, with no more than fifteen months elapsing between surveys.  Facilities must be surveyed more often, if necessary, to ensure that identified deficiencies are corrected.  Act § 1819(g)(2)(A); 42 C.F.R. §§ 488.20(a); 488.308.  The state agency must also investigate all complaints.  Act § 1819(g)(4). 

Thus, no good cause justifies Petitioner’s failing to request hearings timely.  The state agency and CMS sent notices that told Petitioner exactly what it had to do to appeal and, in plain language, warned that appeals had to be filed within 60 days of receiving the notices. 

The October 1, 2025 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 a 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.  Mimya, DAB 1833 at 8.  Here, there can be no challenge to duration or amount of the CMP imposed from January 5, 2025 through January 7, 2025, the duration or amount of the CMP imposed from January 8, 2025 through May 20, 2025 or the duration or amount of the

Page 7

CMP imposed on May 21, 2025.  The 60 day timeframe to appeal all of these determinations ran before Petitioner filed its hearing request on October 24, 2025. 

Petitioner did, however, maintain the right to challenge the duration of the $275 per day CMP imposed beginning on May 22, 2025 running through June 15, 2025 when it filed its hearing request. 

VI.  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 15, 2025 for the CMP imposed beginning on May 22, 2025. 

As a result, the standing order issued on October 28, 2025 applies.  CMS must file a pre-hearing exchange with the CRD within 60 days of the date listed on this order.  Petitioner must file its pre-hearing exchange within 95 days of the date listed on this order.