Brenham Healthcare Center, ALJ Ruling 2027-1 (HHS CRD October 13, 2026)

ORDER OF DISMISSAL

Petitioner, Brenham Healthcare Center, filed a request for hearing before an administrative law judge (ALJ), in response to an August 12, 2025 revised notice letter from the Texas Health and Human Services Commission (state agency) sent after a May 14, 2025 survey that found Petitioner was not in substantial compliance with federal participation requirements.  The letter stated Petitioner must submit a Plan of Correction and explained that the state agency would impose a Denial of Payment for New Admissions (DPNA) and terminate its provider agreement if Petitioner did not achieve substantial compliance by certain dates.

Because there was no enforcement remedy imposed by CMS in the August 12, 2025 notice, I find there is no right to a hearing.  Accordingly, I dismiss the request for hearing.

Background

Petitioner is a skilled nursing facility located in Brenham, Texas that participates in the Medicare program.  The state agency completed a survey of the facility on May 14, 2025.  Based on the survey findings, the state agency determined that the facility was not in

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substantial compliance with Medicare program requirements.  CRD E-File Docket (Dkt.) No. 1a.

On August 12, 2025, the state agency issued a revised notice to Petitioner, stating Petitioner must submit a Plan of Correction within 10 days of receipt of the letter.  Id.  In addition to directing Petitioner to submit a Plan of Correction, the state agency explained if substantial compliance was not achieved by August 14, 2025, the state agency would impose a DPNA, and if substantial compliance was not achieved by November 14, 2025, the state agency would terminate its provider agreement.  Id.  The letter informed Petitioner or its legal representative “may request a hearing before an administrative law judge” within 60 days of receipt of the notice or “no later than October 11, 2025.”  Id.  On June 26, 2025, the state agency sent Petitioner an email stating a follow-up survey had been conducted on June 17, 2025, and that “[Petitioner’s] deficiencies/tags have been cleared.”  CRD E-File Dkt. No. 18b.

On October 9, 2025, Petitioner filed a request for hearing before an ALJ, contesting “any and all noncompliance determinations asserted by CMS to support of [sic] its imposition of the remedies at issue in this proceeding.”  CRD E-File Dkt. No. 1 at 4.  On October 10, 2025, Judge LeBlanc issued an Acknowledgment and Pre-hearing Order.  CRD E-File Dkt. No. 2.

On June 1, 2026, Petitioner filed a motion to withdraw as counsel and a motion to stay proceedings.  CRD E-File Dkt. No. 8.  On June 2, 2026, Judge LeBlanc granted a 90-day extension of the current prehearing exchange deadlines.  CRD E-File Dkt. No. 9.  On June 18, 2026, new counsel for the Petitioner entered a notice of appearance.  CRD E-File Dkt. No. 14.  On June 23, 2026, this case was transferred to me.  CRD E-File Dkt. No. 16.

On July 1, 2026, CMS filed a motion to dismiss and two exhibits, arguing that Petitioner had no right to a hearing, because no enforcement remedies had been imposed on Petitioner.  CRD E-File Dkt. No. 18.  On August 31, 2026, CMS filed a motion to stay deadlines while the motion to dismiss was pending.  CRD E-File Dkt. No. 19.   On September 3, 2026, I granted the motion to stay.  CRD E-File Dkt. No. 20.  Petitioner did not file a reply to the motion to dismiss.

Discussion

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.

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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.1   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 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).

The state agency’s August 12, 2025 revised notice was not an appealable initial determination because, while it included findings of noncompliance and imposed a remedy with a prospective effective date if Petitioner did not return to compliance, the remedies were never imposed.  See 42 C.F.R. §§ 488.408(g)(1), 498.3(b)(13).  In fact, prior to the August notice letter, on June 26, 2025, the state agency informed Petitioner it had returned to compliance by June 17, 2026, so neither the DPNA nor the termination of provider agreement was imposed.  See CRD E-File Dkt. No. 18b.  Thus, the August 12, 2025 notice was not an appealable initial determination, because it did not impose an enforcement remedy.  See Columbus Park Nursing & Rehab. Ctr., DAB No. 2316 at 7 (2010), appeal dismissed, 940 F.Supp.2d 805 (N.D. Ill 2013).  Because Petitioner does

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not have a right to appeal the August 12, 2025 notice, its October 9, 2025 hearing request is subject to dismissal on that basis.  42 C.F.R. § 498.70(b).

III.  Conclusion

For the reasons set forth above, I dismiss Petitioner’s request for hearing pursuant to 42 C.F.R. § 498.70(b).