SUBJECT: Park Manor Nursing Home,

Petitioner,

Centers for Medicare & Medicaid Services

RULING ON CMS MOTION TO REOPEN THE BOARD'S DECISION

For the reasons stated below, we deny the CMS motion that the Board reopen its decision in Park Manor Nursing Home, DAB No. 1926 (2004).

Background

In its decision, the Board reversed the ALJ's conclusion that Park Manor was not in substantial compliance with 42 C.F.R. § 483.10(b)(11) from March 22, 2001 through June 10, 2001. The Board also set aside the CMP imposed by CMS for that period. On July 7, 2004, CMS filed a motion to reopen and revise the June 17, 2004 decision for the purpose of remanding the case to the ALJ so that findings of fact and conclusions of law could be made concerning alleged deficiencies not addressed by the ALJ. Park Manor filed a response to CMS's motion, and both parties filed reply briefs. ⁽¹⁾

The Board "may" reopen its decision, within 60 days of the date of notice of the decision, upon its own motion or the petition of either party. 42 C.F.R. § 498.100(a). The applicable regulations do not specify a standard for granting a request to reopen, but provide for additional procedures if the Board revises its decision based on new evidence. § 498.102. Procedures applicable to other types of disputes adjudicated by the Board provide that the Board may reconsider a decision when a party promptly alleges a clear error of fact or law. 45 C.F.R. § 16.13. This is a common standard for an adjudicatory body to apply to determine whether to exercise its discretion to reconsider its own decision. We apply the same standard in considering requests to reopen under 42 C.F.R. § 498.100(a). See Mimiya Hospital, Board Dkt. No. A-02-22, Ruling on Petition to Reopen (October 3, 2002) (attached to Glen Rose Medical Center Nursing Home, DAB No. 1852 (2002)).

Park Manor initiated the administrative proceedings by appealing the imposition of a $250 per day civil money penalty (CMP) and a denial of payment for new admissions (DPNA), which CMS based on findings in several surveys. After informal dispute resolution proceedings, CMS withdrew its reliance on many of the deficiency findings in the Statements of Deficiencies (SODs) and, accordingly, stipulated to a reduction in the CMP from $250 to $150 per day. In addition, the ALJ set aside the DPNA in a prehearing ruling, because CMS had withdrawn the findings on which it was based.

The parties presented evidence at the hearing concerning five alleged deficiencies. The ALJ made only one finding of noncompliance -- namely, that Park Manor was not in substantial compliance with the participation requirement in 42 C.F.R. § 483.10(b)(11) (tag F157 in the SOD), although the ALJ did not accept all of CMS's allegations under this tag. The ALJ nonetheless determined that the amount of the CMP imposed -- $150 per day -- was reasonable for this noncompliance. In addition, the ALJ stated that it was "unnecessary that I decide whether Petitioner was complying with requirements other than those stated at 42 C.F.R. § 483.10(b)(11) because Petitioner's noncompliance with this one regulation is sufficient to justify civil money penalties of $150 per day." Park Manor timely requested review by the Board.

After reversing the ALJ's findings on tag F157, the Board considered whether it was appropriate to set aside the CMP or to remand the case to the ALJ for further proceedings. Regarding this question the Board stated:

Park Manor argued in its request for review that we should reverse the ALJ's finding of noncompliance and set aside the decision in its entirety. In response, CMS did not state that, if the finding of noncompliance were reversed, the case should be remanded to the ALJ for findings on the other four alleged deficiencies for which the parties submitted evidence. Each of those alleged deficiencies was assigned a lower level of seriousness (levels D or E). None was at a level of seriousness that would have required that a CMP be imposed. In addition, we note that these other alleged deficiencies represent only a small fraction of the survey agency's original deficiency findings, many of which were overturned, modified, or effectively withdrawn by CMS during IDR and the ALJ proceedings. Based on these findings, CMS had imposed a denial of payment for new admissions that was in effect from July 15 to July 23, 2001.

Given these circumstances, we do not think that further proceedings would serve the remedial purpose of the regulations, which is to provide the facility with an incentive to come into and remain in compliance. Accordingly, we have determined here that reversal of the CMP is more appropriate than further proceedings to address the remaining deficiencies.

DAB No. 1926, at 11-12 (citations and footnote omitted).

In support of its motion to reopen, CMS argued, first, that the Board committed an error of law because the Board "effectively overruled CMS's choice of remedy -- a CMP -- and also effectively reduced the CMP to zero while a basis for imposing it still existed." Motion at 2; CMS Reply at 7. According to CMS, a basis for imposing a CMP still existed because the findings of noncompliance that the ALJ did not address in his decision were not addressed in Park Manor's request for review, were not before the Board, and were not reversed or modified by any tribunal. Citing 42 C.F.R. Part 498, CMS argued that findings of noncompliance that result in imposition of remedies are initial determinations that are binding unless reopened by the original decision maker or reversed by a reviewing authority. CMS asserted that "Park Manor did not say a thing in its DAB appeal about any of the findings of noncompliance the ALJ did not address; nor did Park Manor object to the ALJ's procedure deferring ruling on these deficiencies." CMS Reply at 2. Therefore, CMS contended, Park Manor may not now oppose a remand for the ALJ to address the remaining findings of noncompliance.

Ruling

As the Board's decision pointed out, Park Manor argued in its request for review that the Board should set aside the ALJ Decision. That decision included general conclusions that were not specific to tag F157. Park Manor's request for review and supporting brief also specifically: 1) challenged the ALJ's conclusion that a CMP was appropriate for the period March 22, 2001 through June 10; 2) argued in the alternative that, if the Board upheld the finding under tag F157, only a minimum of $50 per day would be reasonable; and 3) asserted that no remedy should be imposed because, but for CMS's findings that were later withdrawn, CMS would not have imposed any remedy.

Since the ALJ did not make any findings on the tags other than F157, Park Manor was not required to take specific exception to the CMS findings on those tags, as CMS now suggests, in order to preserve its position that no CMP was authorized. Nor was it required to allege procedural error by the ALJ in order to preserve its position on the substantive issues. ⁽²⁾

Further, we disagree with CMS that the fact that Park Manor did not specifically state in its request for review that it opposed a remand means that Park Manor failed to properly raise any issue regarding the relief that should be granted by the Board if it reversed the ALJ's finding on tag F157. This argument places form over substance. If CMS had asserted before the Board that the other findings remained viable as a ground for upholding the CMP, the Board could not properly set aside the ALJ's conclusions that the CMP amount was reasonable and that a CMP for the specified time period was appropriate, without addressing CMS's alternative grounds. Nor does the fact that the prayer for relief in Park Manor's request for review also asked the Board to "take such further action as is warranted under the circumstances" mean that the Board was obliged to remand in the context here. Since this prayer also raised the question of what action was warranted, a relevant response from CMS would have been to request a remand or to ask the Board to address the other findings if it overturned the ALJ's findings on tag F157. Moreover, if CMS intended to rely on its other findings to support the CMP amount it imposed and the period for which it imposed it, one would have expected CMS to raise those findings in response to Park Manor's alternative arguments. Since CMS did not do so, the Board reasonably determined that CMS was no longer relying on the other noncompliance findings, all of which were at a level of seriousness such that CMS would not have been required to impose any remedy if they were the only findings CMS had made in the first instance.

CMS is also mistaken in viewing each finding of noncompliance as constituting a separate "initial determination" under Part 498. Here, CMS made one determination to impose a remedy, supporting that determination with multiple findings of noncompliance, and Park Manor's appeal of that determination resulted in an ALJ decision for which Park Manor sought Board review. CMS's view that each of its findings are separate initial determinations that are binding unless reopened or reconsidered by CMS or specifically reversed by an ALJ or the Board is, as Park Manor pointed out, an unreasonable reading of Part 498 as a whole.

The procedures in Part 498 also clearly contemplate that the issues on appeal may be modified for various reasons, and the long term care regulations as a whole recognize that some findings may be resolved through informal means, such as through informal dispute resolution at the State level. Even if CMS has not formally reopened a determination to impose a remedy, if it has withdrawn particular findings on which it originally relied for its determination, it cannot fairly or reasonably view those findings as continuing to be binding (and in practice has not done so).

Moreover, treating an ALJ determination that it was not necessary to address noncompliance findings in order to uphold the CMS remedy as somehow limiting the authority of the Board to address those findings would be highly prejudicial to the parties and is inconsistent with what the Board has done (and CMS has argued was appropriate) in other cases. For example, in Western Care Management, DAB No. 1921 (2004), where the Board found in favor of the petitioner on some issues, the Board determined to address additional findings CMS had put forward as a basis for upholding the amount of the CMP there, rather than to remand the case to the ALJ. CMS specifically opposed remand there, in effect asking the Board instead to exercise its authority to modify the ALJ decision if it did not fully agree with all of the ALJ's analysis.

Here, in contrast, the Board determined that, before the Board, CMS was no longer relying on the other findings. Contrary to what CMS argued, this simply is not tantamount to the Board reducing a CMP to zero after finding that noncompliance exists or substituting its own judgment for that of CMS regarding the choice of remedy.

Finally, while CMS argued that the Board erred as a matter of fact in determining that CMS had withdrawn its reliance on the other findings, CMS pointed to nothing in its brief on appeal (other than its recital of the case background) even mentioning the other findings, much less relying on those findings as an additional basis for imposing the CMP or in support of the reasonableness or duration of the CMP. That CMS may now regret its litigation choices does not establish a clear error of fact in the Board's decision justifying that we reopen and revise our decision. An argument that could have been made during Board proceedings, but was not, is not a basis for reopening.

Based on the record before it, the Board reversed the ALJ Decision in its entirety, after considering whether a remand to the ALJ for further findings was needed. This determination was based not only on CMS's not having relied on the other findings, but on other sound reasons as well. Thus, we affirm that determination here and deny the CMS request to reopen.

Cecilia Sparks Ford

Donald F. Garrett

Judith A. Ballard
Presiding Board Member

1. Park Manor moved to strike CMS's reply on procedural grounds. While there is some merit to Park Manor's objection, we decline to strike the CMS reply since, even considering it, we rule in Park Manor's favor.

2. The status of those other findings was, and is, that they were disputed, but not finally resolved. Contrary to what CMS stated, this situation did not result from the Board having "endorsed" the procedural approach of ALJs in resolving only those noncompliance findings material to the outcome of the decision. The Board has merely held, consistent with what CMS argued, that this is not reversible error. See, e.g., Beechwood Sanitarium, DAB No. 1824, at 19 (2004). That fewer noncompliance findings than those originally relied on by CMS for its determination may lead to the same outcome flows from the CMS regulations, authorizing it to impose remedies based on any noncompliance finding and requiring that the ALJs and Board uphold a CMP amount so long as it is reasonable.