Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD
Appellate Division
In the Case of:
Arcadia Acres, Inc.
Petitioner,
- v. -
Health Care Financing Administration.
DATE: January 22, 1997
Civil Remedies CR424
App. Div. Docket No. A-96-183
Decision No. 1607
FINAL DECISION ON REVIEW OF
ADMINISTRATIVE LAW JUDGE
DECISION
Arcadia Acres, Inc. (Petitioner) appealed a June 26, 1996
decision by
Administrative Law Judge (ALJ) Mimi Hwang
Leahy. See Arcadia Acres,
Inc., DAB CR424 (1996) (ALJ
Decision). Petitioner, a nursing home
providing long-
term care, had requested an evidentiary hearing before
the ALJ on the merits of the Health Care Financing
Administration's
(HCFA) determination that Petitioner was
not in substantial compliance with
federal requirements
for nursing homes participating in the Medicare and
Medicaid programs when Petitioner was surveyed on
November 21, 1995 and
January 18, 1996. See ALJ Decision
at 1 and 4. HCFA moved to
dismiss Petitioner's hearing
request on the basis that no remedy was in fact
imposed
against Petitioner based on those survey results, and the
ALJ
granted the motion.
The ALJ Decision contains a full discussion of the
background, which we
summarize here. By letter dated
December 12, 1995, Petitioner was notified
that it was
not in substantial compliance with federal Medicare and
Medicaid requirements based on a November 21, 1995 survey
of
Petitioner's facility. Id. In addition, Petitioner
was informed
that it must submit a plan of correction to
the Ohio Department of Health
(ODH) addressing each cited
deficiency and, if Petitioner failed to correct
its
deficiencies by January 10, 1996, ODH would recommend to
HCFA that
the remedy of denial of payment for new
admissions (DPNA) be imposed
effective January 30, 1996.
ALJ Decision at 4. By letter dated
January 29, 1996,
ODH notified Petitioner that a survey conducted on
January 18, 1996, found that Petitioner was not in
compliance with
applicable Medicare and Medicaid
requirements, and that ODH was recommending
to HCFA that
the remedies of DPNA and termination of Petitioner's
Medicare and Medicaid provider agreements be imposed
effective February
21, 1996 and May 21, 1996,
respectively. Id. at 5. By letter
dated March 4, 1996,
HCFA notified Petitioner it was imposing ODH's
recommended remedy of DPNA effective March 24, 1996.
HCFA's letter
stated that this remedy was to continue
until either Petitioner was
determined to be in
substantial compliance or its provider agreement
terminated effective May 21, 1996. Based on a February
27, 1996
revisit survey, however, Petitioner was found to
be in substantial
compliance with program participation
requirements. Therefore, by
letter dated April 1, 1996,
HCFA notified Petitioner that no remedies would
be
imposed. Petitioner, nevertheless, maintained that it
had a
right to challenge the cited deficiencies and
refused to withdraw the March
15, 1996 hearing request
that it filed in response to HCFA's March 4, 1996
letter.
The ALJ made 49 findings of fact and conclusions of law
(FFCLs). Of
particular relevance here, are the reasons
for the ALJ's determination that
a hearing was not
required. Essentially, the ALJ determined that
HCFA's
March 4, 1996 notice letter contained an appealable
initial
determination within the meaning of 42 C.F.R.
� 498.3(b)(12), and that the
issues raised by
Petitioner's request for a hearing were limited to the
matters contained in HCFA's March 4, 1996 notice letter.
Thus, the
ALJ determined that Petitioner had the right
to file its hearing request
contesting the findings of
noncompliance that resulted in HCFA's imposition
of
remedies. The ALJ also concluded that the March 4 notice
letter
had no force or effect after HCFA issued its April
1, 1996 notice rescinding
the remedies imposed in the
March 4, 1996 notice. The ALJ determined
that the
applicable regulations provided for no right to a hearing
to
contest the deficiencies cited in the March notice
since any remedies were
rescinded by the April notice.
The ALJ determined that the appeals procedures of 42
C.F.R. Part 498 do
not apply to any finding by HCFA that
a provider is in compliance with the
conditions of
participation but has deficiencies. Consequently, the
ALJ concluded that, as of April 1, 1996, there was no
determination
issued by HCFA to Petitioner that was
subject to the hearing rights
specified under 42 C.F.R.
Part 498. Accordingly, the ALJ dismissed
Petitioner's
hearing request.
In its appeal Arcadia excepted to 12 FFCLs and asserted
that it had a
constitutional due process right to a
hearing to contest the deficiencies
that ODH cited and
that HCFA accepted in its March 4 notice, even though
Petitioner had been found to be in substantial compliance
with program
requirements and Petitioner was notified
that no enforcement action would be
imposed. Petitioner
did not dispute that HCFA was unaware of the
February 27,
1996 re-survey finding substantial compliance at the time
the March 4, 1996 notice of remedies was sent.
Petitioner argued that deficiencies cited in the November
21, 1995 survey
were the direct result of ongoing
renovation to the facility.
Petitioner disputed the
January 18th re-survey findings that it was not in
substantial compliance, and argued that the contrast
between the alleged
deficiencies and the reality of the
excellent condition of the facility is
the primary
impetus for its appeal. Petitioner urged that a hearing
was necessary since there could be a later action based
on these survey
findings and that it would otherwise have
no recourse for erroneous
survey findings.
The record here consists of the record before the ALJ,
the ALJ Decision,
the parties' briefs on appeal, and the
transcript of a November 12, 1996
oral argument by
telephone before the Presiding Board Member. Our
standard for review of an ALJ decision on a disputed
factual issue is
whether the decision is supported by
substantial evidence in the
record. Our standard for
review on a disputed issue of law is whether
the decision
is erroneous.
We conclude that Petitioner offered no argument or
evidence which
persuades us that the ALJ's factual
findings were not supported by
substantial evidence or
that her legal conclusions were erroneous. The
ALJ's
analysis was based on the applicable regulations. We
agree
that those regulations do not require that
Petitioner receive a hearing
under the circumstances here
for the reasons stated by the ALJ. We
therefore
summarily affirm in its entirety the ALJ Decision
dismissing
Arcadia's request for a hearing. In doing so
we affirm and adopt each
FFCL.
Donald F. Garrett
M. Terry Johnson
Cecilia Sparks
Ford
Presiding Board
Member