Department of Health and Human Services DEPARTMENTAL APPEALS BOARD Civil Remedies Division |
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IN THE CASE OF | |
Lopatcong Center, |
DATE: January 3, 2001 |
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Health Care Financing Administration
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Docket No.C-00-558 Decision No. CR726 |
DECISION | |
The Health Care Financing Administration (HCFA)
moved to dismiss the hearing request of Petitioner Lopatcong Center. Petitioner
opposed HCFA's motion. Having considered the parties' arguments and exhibits,
I dismiss Petitioner's hearing request. Petitioner did not file its request
timely as is required by 42 C.F.R. � 498.40(a)(2). Petitioner has not established
good cause for extending the time within which it may file its hearing request. HCFA offered four exhibits in support of its motion (HCFA
Ex. 1 - HCFA Ex. 4). Petitioner offered four exhibits in opposition to
HCFA's motion (P. Ex. A - P. Ex. D). I receive into evidence HCFA Ex.
1 - HCFA Ex. 4 and P. Ex. A - P. Ex. D. I. Issues, findings of fact and conclusions of law
The issue in this case is whether a basis exists for me to dismiss Petitioner's hearing request.
I make findings of fact and conclusions of law (Findings)
to support my decision. I set forth each Finding below as a separately
numbered heading. I discuss each Finding in detail.
Petitioner is a nursing facility that is located in Phillipsburg,
New Jersey. It participates in the Medicare program and is subject to
the laws and regulations that govern participation in the program.
HCFA surveyed Petitioner's facility on two occasions in 1999
in order to determine whether Petitioner was complying substantially with
federal requirements that govern participation of nursing facilities in
the Medicare program. The first survey occurred on August 27, 1999. A
revisit survey occurred on November 24, 1999. At each of these surveys,
HCFA determined that Petitioner was not complying substantially with participation
requirements. On December 10, 1999 HCFA sent a notice to Petitioner.
HCFA Exs. 1 and 2; P. Ex. A. HCFA referred to the November 24, 1999 survey
in the notice. HCFA advised Petitioner that, at that survey, it had found
that Petitioner was not complying with certain itemized participation
requirements. It informed Petitioner that:
Id. at 1. HCFA advised Petitioner that it must
submit a plan of correction showing how it would correct the deficiencies
identified by HCFA within 10 days of receiving a copy of the report of
the November 24, 1999 survey. Id. Also, HCFA informed Petitioner
that if it did not achieve substantial compliance with all participation
requirements by April 15, 2000, HCFA would have to terminate Petitioner's
Medicare provider agreement. Id. at 2. HCFA additionally advised Petitioner that it had a right
to a hearing to challenge HCFA's determination. It told Petitioner that:
HCFA Exs. 1 and 2 at 2. Petitioner argues that HCFA's December 10, 1999 notice
did not state a final remedy determination that triggered an obligation
by Petitioner to request a hearing if it wished to preserve its hearing
rights. According to Petitioner, the notice did not articulate a remedy
determination but, rather, stated a proposal by HCFA to impose remedies
conditioned on Petitioner's failure to attain compliance with participation
requirements by certain specified dates. Petitioner asserts that the notice
told Petitioner that HCFA would impose the remedy of denial of payment
for new admissions only if Petitioner failed to file an acceptable
plan of correction with HCFA. I disagree. The December 10, 1999 notice was not a conditional
statement. The notice plainly and unambiguously told Petitioner that HCFA
was imposing the remedy of denial of payment of new admissions based on
the noncompliance that HCFA identified at the November 24, 1999 survey.
In equally unambiguous language, the notice told Petitioner that it had
a right to a hearing to contest HCFA's determination, but only if Petitioner
requested a hearing within 60 days of its receipt of Petitioner's notice. The statement in the notice that "we are imposing" the
remedy of denial of payment for new admissions is not conditional language.
HCFA Exs. 1 and 2 at 1. Moreover, the fact that the notice explained to
Petitioner that it had a right to request a hearing is a clear statement
that HCFA had determined to impose a remedy. Under applicable regulations,
a right to a hearing exists only in the circumstance where HCFA determines
to impose a remedy. 42 C.F.R. �� 498.3 and 498.5. HCFA would not have
advised Petitioner that it had a right to request a hearing unless it
had determined to impose a remedy. It is true that the notice told Petitioner that the remedy
of denial of payment for new admissions would not go into effect until
December 26, 1999, 16 days after the date of the notice. But, that language
does not suggest that there was anything conditional about HCFA's determination
to impose a remedy. At most, it suggested that there was some possibility
that HCFA might be persuaded between December 10, 1999 and December 26,
1999 to rescind its determination.
Petitioner did not file its hearing request timely and,
therefore, it is not entitled to a hearing. A party is entitled to a hearing
if it makes its request within 60 days from the date that it receives
an adverse determination from HCFA. 42 C.F.R. � 498.40(a)(2). Ordinarily,
"receipt" is presumed to occur five days from the date that a notice is
mailed to a party. Id.; see 42 C.F.R. � 498.22(b)(3).
A party is not entitled to a hearing if it does not file
its hearing request timely. Petitioner filed its hearing request on June
5, 2000. That is more than 60 days from the date of its receipt of HCFA's
December 10, 1999 notice.
An administrative law judge may dismiss an untimely hearing
request where a party fails to demonstrate good cause for not filing the
request timely. 42 C.F.R. � 498.70(c). I do not find that Petitioner established
good cause for not filing its hearing request timely. Petitioner argues that, if HCFA's December 10, 1999 notice
was not a conditional notice, then it misled Petitioner into believing
that it was a conditional notice. Petitioner argues
that the language of the notice was ambiguous and misleading. Petitioner
asserts additionally that its misunderstanding of the notice was reinforced
by practices employed by HCFA and State survey agencies that led it to
believe that the notice communicated a conditional proposal to impose
remedies and not a remedy determination. Petitioner argues also that the
notice, if it communicated a remedy determination, contradicted the criteria
for notices expressed in the State Operations Manual (SOM), a document
that HCFA publishes as guidance for State survey agencies. Finally, Petitioner
contends that HCFA is, in effect, manipulating its notices so as to obtain
"free" medical care from facilities such as Petitioner. I am not persuaded by these arguments. First, and contrary
to Petitioner's contentions, the December 10, 1999 notice was in no respect
ambiguous or misleading. I have discussed the operative language of the
notice above at Finding 1. I conclude that it plainly and unambiguously
told Petitioner that HCFA had determined to impose a remedy. There was
nothing in the notice to suggest that HCFA's remedy determination was
conditional. As I have discussed at Finding 1, the notice told Petitioner
that the remedy of denial of payments of new admissions would become effective
on December 26, 1999, 16 days after the date of the notice. The notice
left open some possibility that HCFA might decide after reviewing a plan
of correction submitted by Petitioner that Petitioner had attained compliance
with participation requirements prior to December 26, 1999. HCFA had the
discretion to rescind its remedy determination in that event. But, the
notice did not suggest that HCFA was in any respect hesitant about imposing
the remedy or that its determination to do so was preliminary and not
final. The notice plainly told Petitioner that, absent some affirmative
action by HCFA to rescind its determination, the denial of payment for
new admissions would go into effect on December 26, 1999. Second, I am not persuaded that either HCFA's practices
or the practices of State survey agencies detracted in any respect from
the plain meaning of the notice. Petitioner argues that some State survey
agencies and, at times, HCFA, have followed a practice of making remedy
determinations conditional. Petitioner contends that it has been the past
practice of these agencies to review a facility's plan of correction before
making a "final" remedy determination. It suggests that it was misled
by this asserted practice into believing that the December 10, 1999 notice
was a conditional determination and not a final remedy determination. I do not make any findings here about the practices that
were followed in 1999 by either State survey agencies or by HCFA. It is
not necessary for me to do so inasmuch as the December 10, 1999 notice
so unambiguously announced HCFA's determination. There was no language
in the notice that suggested that HCFA would make a final remedy determination
only after it reviewed Petitioner's plan of correction. Petitioner had
no reason to assume that HCFA would supersede the plain language of the
notice with some unwritten practice that it may have followed in other
instances. Third, I find that HCFA followed the criteria for notices
set forth in the SOM. Petitioner argues that its belief that some other
notice would be forthcoming from HCFA as a final determination was reinforced
by language in the SOM. The SOM states that, where HCFA makes a determination
to impose a remedy, it sends an initial notice first, followed by a formal
notice in which the remedy is actually imposed. Petitioner asserts that
it assumed that HCFA's December 10, 1999 notice was the initial
notice and not a formal notice of HCFA's intent to impose a remedy.
Petitioner's assumption that the December 10, 1999 notice was an initial
notice is clearly incorrect. HCFA clearly points out in its reply brief,
that, in accordance with the SOM, it sent Petitioner an initial notice
on October 15, 1999 followed by the final notice on December 10, 1999.
HCFA Reply at 9 and HCFA Ex. 4. Thus, HCFA's December 10, 1999 notice contained nothing
to suggest that HCFA's plainly stated determination should be interpreted
otherwise and, certainly, the plain language of HCFA's notice gave Petitioner
no basis to disregard that notice. Finally, I am not persuaded by Petitioner's contention
that HCFA manipulated regulations to cut off Petitioner's right to a hearing.
Petitioner asserts that it was "manipulated" into foregoing its hearing
rights, thereby giving HCFA a windfall of "free" medical care during the
period between December 1999 and April 2000. Petitioner contends that
HCFA did so by first, proposing to impose a remedy at a future date, then
ignoring Petitioner's good faith response to HCFA's proposal until after
the 60-day request period had expired, and then telling Petitioner that
its proposed corrections were accepted. Petitioner avers that it filed
its proposed plan of correction within 10 days of receipt of HCFA's notice
and then waited until April 2000 to learn of HCFA's response. By then,
according to Petitioner, any opportunity to request a hearing had elapsed. Petitioner's argument would be persuasive if there was some language in the December 10, 1999 notice to the effect that HCFA would hold in abeyance its remedy determination while it evaluated Petitioner's plan of correction. If that were the case, then Petitioner might have a basis to assert that it was left dangling while it awaited HCFA's response to its plan of correction. But, there is nothing in the notice which suggests that the remedy determination would be held in abeyance. The December 10, 1999 notice was not a proposal to impose a remedy. It was a determination to impose a remedy. Petitioner could have avoided any adverse consequences of failing to request a hearing simply by requesting a hearing within the 60 day period specified by the regulations. |
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JUDGE | |
Steven T. Kessel Administrative Law Judge
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