Brenham Healthcare Center, ALJ Ruling 2027-4 (HHS CRD October 15, 2026)

ORDER OF DISMISSAL

Petitioner, Brenham Healthcare Center, filed a request for hearing before an administrative law judge (ALJ), in response to a May 15, 2025 notice letter from the Centers for Medicare & Medicaid Services (CMS) sent after an April 25 and April 29, 2025 survey found Petitioner was not in substantial compliance with federal participation requirements.  The letter explained that CMS 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 May 15, 2025 notice, I find there is no right to a hearing.  Accordingly, I dismiss the request for hearing.

I.  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 April 25, 2025, and a follow-up survey on April 29, 2025.  Based on the survey findings, the state agency determined that the facility was not in substantial compliance with Medicare program requirements.  CRD E-File Docket (Dkt.) No. 1a.

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On May 15, 2025, CMS issued a notice to Petitioner, stating it concurred with the findings of the state agency.  Id.  CMS explained that if substantial compliance was not achieved by May 30, 2025, the state agency would impose a DPNA, and if substantial compliance was not achieved by October 25, 2025, CMS would terminate its provider agreement.  Id.  The letter informed Petitioner that it 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 July 14, 2025.”  Id. (emphasis omitted).

On July 14, 2025, Petitioner filed a request for hearing before an ALJ, contesting the finding of noncompliance and the imposition of remedies.  CRD E-File Dkt. No. 1.  On July 15, 2025, the Civil Remedies Division issued an Acknowledgment and Pre-hearing Order on my behalf.  CRD E-File Dkt. No. 2.  On July 24, 2025, CMS determined that Petitioner had returned to compliance, effective April 30, 2025, and that neither the DPNA nor the termination of the provider agreement would be effectuated.  CRD E-File Dkt. No. 12b.

On June 1, 2026, Petitioner’s counsel filed a motion to withdraw as counsel and a motion to stay proceedings.  CRD E-File Dkt. No. 9.  On June 3, 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. Nos. 12, 12a-b.  On June 17, 2026, I issued an order denying Petitioner’s counsel’s motion to withdraw, requiring either a notice of appearance of new counsel or confirmation of Petitioner’s current address.  CRD E-File Dkt. No. 14.  In this order, I also granted a 90-day extension to respond to the motion to dismiss and stayed all deadlines pending resolution of the motion to dismiss.  Id.

On June 18, 2026, new counsel for the Petitioner entered a notice of appearance.  CRD E-File Dkt. No. 16.  Per my June 17, 2026 order, Petitioner had until September 21, 2026 to reply to the motion to dismiss.  To date, Petitioner has not filed a reply to the motion to dismiss.

II.  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.

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

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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 May 15, 2025 notice was not an appealable initial determination.  See 42 C.F.R. §§ 488.408(g)(1), 498.3(b)(13).  On July 24, 2025, the state agency informed Petitioner it had returned to compliance effective April 30, 2025, so neither the DPNA nor the termination of provider agreement was imposed.  See CRD E-File Dkt. No. 12b.  Thus, the May 15, 2025 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, 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 not have a right to appeal the May 15, 2025 notice, its July 14, 2025 hearing request is subject to dismissal on that basis.  42 C.F.R. § 498.70(b).

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III.  Conclusion

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