Department of Health and Human Services DEPARTMENTAL APPEALS BOARD Civil Remedies Division |
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IN THE CASE OF | |
Lutheran Home - Caledonia, |
DATE: June 1, 2000 |
- v - |
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Health Care Financing Administration
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Docket No.C-99-077
Decision No. CR674 |
DECISION | |
This case has been reassigned to me. Pursuant
to 42 C.F.R. � 498.70(b), I grant the motion of the Health Care Financing
Administration (HCFA) to dismiss the request for hearing filed by Petitioner,
Lutheran Home - Caledonia. These findings and conclusions underlie my decision
to dismiss this case:
I. Background I take notice that Petitioner is a skilled nursing facility
located in Caledonia, Minnesota, participating in the Medicare and Medicaid
programs. There is no dispute that when Petitioner filed its request for
hearing, the filing had been done pursuant to 42 C.F.R. � 498.3(b), in
response to an appealable initial determination issued by HCFA. The initial
determination challenged by Petitioner consisted of HCFA's finding that
Petitioner had been out of substantial compliance with various Medicare
and Medicaid participation requirements and that, therefore, a CMP totaling
$127,450 would be collected from Petitioner for the period of alleged
noncompliance from July 20, 1998 and until August 20, 1998.(1)
Petitioner timely filed a request for hearing for the purpose of challenging,
inter alia, the citations of noncompliance adopted by HCFA following
two surveys of Petitioner conducted by HCFA's agent, the Minnesota Department
of Health (MDH). Those two surveys were conducted during July and August
1998. HCFA selected the CMP amount with use of the level of
noncompliance determined by the surveyors. After conducting the July 1998
survey, MDH found that the health of various residents had been placed
into "immediate jeopardy" by Petitioner's failure to comply substantially
with Medicare participation requirements. See 42 C.F.R. � 488.301
(definition of "immediate jeopardy"). Following the August 1998 resurvey,
MDH determined that, even though there was no longer "immediate jeopardy"
to residents, some aspects of Petitioner's noncompliance had caused "actual
harm" to residents. HCFA's adoption of the "immediate jeopardy" finding
resulted in HCFA's decision to set the CMP at $5000 per day for the corresponding
period of July 20 through August 13, 1998. See 42 C.F.R. � 488.438(a)(1)(i);
Attachment 1 of HCFA Brief. HCFA's adoption of the "actual harm" finding
resulted in HCFA's determination to set the CMP at $350 per day for the
remaining period of alleged noncompliance. See 42 C.F.R. � 488.438(a)(1)(ii);
Attachment 1 of HCFA Brief.
Id. at 2. By letter dated October 23, 1998, Petitioner timely appealed.
See Attachment 2 of HCFA Brief. During November of 1998, after
the DAB received Petitioner's hearing request, the above-captioned case
was docketed and assigned to me for appropriate proceedings. On December 8, 1998, HCFA notified Petitioner that, as
a result of a September 2 revisit finding that the facility had attained
substantial compliance, the CMP previously imposed was discontinued on
August 20, 1998. Attachment 3 of HCFA Brief.
Id. According to HCFA, its May 18, 1999 letter
did not rescind any of the findings of deficiency that had been made during
the July, 1998 and August, 1998 surveys. HCFA Brief at 3. Petitioner indicated
no disagreement with HCFA's representation that Petitioner had asked for
rescission of the "immediate jeopardy" findings in exchange for voluntarily
withdrawing its request for hearing. Id.
HCFA was unwilling to rescind those survey findings and, therefore, filed
its motion to dismiss in response to Petitioner's refusal to voluntarily
withdraw its request for hearing. Id. In the motion to dismiss, HCFA argues that, since no money
is currently being sought from Petitioner, Petitioner is effectively left
with no appealable remedies of any kind. HCFA acknowledges that a long
term care facility is entitled to request an administrative hearing if
HCFA's citation of noncompliance results in the imposition of certain
enforcement remedies, such as a CMP, against the facility. 42 C.F.R. �
498.3(b)(12) (incorporating parts of 42 C.F.R. � 488.406). However, HCFA
cites also the cases which hold that the facility's hearing rights are
extinguished if HCFA subsequently determines not to impose any of those
enforcement remedies which had entitled the facility to file an appeal.
See, e.g., Arcadia Acres, Inc., DAB CR424 (1996), aff'd,
DAB No. 1607 (1997); Schowalter Villa, DAB CR568 (1999), aff'd,
DAB No. 1688 (1999). In this case, HCFA contends that Petitioner has been
apprised of just such a rescission by HCFA's notice letter dated May 18,
1999, which stated that the previously imposed CMP of $127,450 has been
reduced to zero. Petitioner opposes HCFA's motion to dismiss by arguing
that there remains an appealable initial determination as defined by 42
C.F.R. � 498.3(b)(12) because HCFA has not rescinded the CMP remedy. Petitioner
especially relies on the portion of HCFA's May 18, 1999 notice letter
which refers to the reduction of the CMP amount and which acknowledges
the pendency of Petitioner's hearing request. Petitioner contends that
a reduction of the CMP amount to zero is not the equivalent of a rescission
of the CMP remedy since HCFA has created a "distinction that remains on
the public record still today."(2) Petitioner
further contends that granting the dismissal would violate due process
because the state survey agency, MDH, failed to grant it the opportunity
to dispute its survey findings by use of the Informal Dispute Resolution
process (IDR). According to Petitioner, it had wished to use the IDR process
to challenge the prohibitions placed upon its nurse's aide training program.
Finally, Petitioner believes that HCFA's reduction of the CMP to zero
is inconsistent with its refusal to withdraw the citations of noncompliance.
Petitioner wants me to deem HCFA's reduction of the CMP to zero as HCFA's
admission that no sufficient factual basis exists to support the CMP remedy. HCFA argues that it is irrelevant whether the agency used
the term "reduction" or "rescission." The result is indisputable that
no CMP has been imposed. Petitioner's argument emphasizes semantics over
substance. Secondly, Petitioner's complaint about its inability to contest
limitations on its nurse's aide training program is governed by 42 C.F.R.
� 498.3(b)(12), which prohibits appeals on such a basis. Finally, in light
of the seriousness and scope of deficiencies initially identified in the
survey, HCFA's reduction of the CMP can hardly be deemed an admission
that there is no factual basis to justify its imposition; moreover, this
issue is moot in light of the fact no CMP was ultimately imposed. Petitioner does not allege that it has paid any of the
$127,450 previously assessed by HCFA. HCFA's August 18, 1998 notice letter
informed Petitioner that, if it should file a request for hearing, no
CMP would be collected until the issuance of a final administrative decision
upholding imposition of the CMP. Attachment 1 of HCFA Brief at 2. This
information correctly reflects the parties' respective rights and obligations
under 42 C.F.R. � 488.432(a). II. Issue
III. Discussion
A long-term care facility has a right to contest, by use
of the hearing process, only those determinations issued by HCFA which
are of the types described in 42 C.F.R. � 498.3(b).(3)
As relevant to the facts of this case, a skilled nursing facility or nursing
facility may appeal:
42 C.F.R. � 498.3(b)(12), (15). A CMP is listed among
those remedies which trigger administrative appeal rights. 42 C.F.R. �
488.406(a)(3). In the event HCFA determines to impose the CMP remedy
for any finding of noncompliance, it is authorized to choose the rate(s)
of the CMP from the higher monetary range ($3,050 to $10,000 per day)
for those findings of noncompliance which are alleged to pose "immediate
jeopardy" to residents, or from the lower range ($50 to $3,000 per day)
for those findings of noncompliance which are alleged to pose lesser levels
of risks to residents. 42 C.F.R. � 488.438(a). Therefore, if an "immediate
jeopardy" finding has led to HCFA's selection of the higher CMP rate,
the affected facility may also request that the administrative law judge
review and reduce the level of noncompliance determined by HCFA. 42 C.F.R.
� 498.3(b)(13). It is HCFA's decision to impose the specified remedies,
and not the finding of noncompliance which triggers an adversely affected
facility's right to obtain an administrative hearing. The information
provided by the Secretary of Health and Human Services in promulgating
42 C.F.R. � 498.3(b)(12) explicitly rejected the proposal to make every
finding of noncompliance appealable:
59 Fed. Reg. 56158 (1994) (emphasis added). Therefore, if HCFA has made findings of noncompliance
against a facility but has issued none of the designated enforcement remedies
which trigger appeal rights under 42 C.F.R. � 498.3(b)(12), then the facility
cannot seek or obtain relief from this forum. The facility may obtain
administrative review of the noncompliance determinations only if they
have resulted in HCFA's imposing one of the enumerated remedies which
are considered by the Secretary to have caused an "injury calling for
an appeal." 59 Fed. Reg. 56158; 42 C.F.R. � 498.3(b)(12). In this and other cases, recipients of HCFA's noncompliance
citations have noted other injuries, which do not trigger appeal rights
under 42 C.F.R. � 498.3(b)(12). They ask for hearings to contest the validity
of those noncompliance citations by arguing that, even in the absence
of any enforcement remedy imposed by HCFA, the existence of those citations
cause other injuries which are in need of redress. In this case Petitioner
argues that, if its hearing request is dismissed, the unadjudicated noncompliance
citations will remain in the public record, and the loss of its nurse's
aide training program cannot be successfully contested under the IDR process.(4)
P. Brief at 7 (citing P. Ex.10), and 10. Similar arguments have been submitted
by other petitioners in like situations. In Arcadia Acres, for example, the petitioner noted
its obligation to make available to its residents all deficiency citations
issued by HCFA, even though HCFA had withdrawn the previously imposed
enforcement remedy. I took notice of these arguments interposed by that
petitioner in its effort to circumvent the limitations imposed by 42 C.F.R.
� 498.3(b)(12):
Arcadia Acres, Inc., CR424 at 2. Also in another case, I took notice that the facility
made the following arguments in opposing HCFA's motion to dismiss due
to the absence of any hearing rights under 42 C.F.R. � 498.3(b)(12):
Schowalter Villa, CR538 at 3. In these and like cases, I have rejected the foregoing
types of "injury" arguments because they seek to create hearing rights
for matters which lie beyond the parameters clearly delineated by the
plain language of 42 C.F.R. � 498.3(b). The regulation leaves no doubt
that a loss of nurse's aide training is not among those enforcement remedies
which trigger the right to a hearing in this forum.(5)
42 C.F.R. � 498.3(b)(12). In the absence of any enforcement remedy incorporated
by 42 C.F.R. � 498.3(b)(12), the merits of the underlying noncompliance
citations themselves cannot be reviewed in this forum, even if those citations
are in the public domain, and even if the facilities think that they will
be harmed by the existence of those citations. As made clear in the commentaries
to 42 C.F.R. � 498.3(b)(12), the only injury which is legally cognizable
in this forum (and therefore subject to redress by us) is the facility's
receipt of an enforcement remedy imposed by HCFA.(6)
59 Fed. Reg. 56158. My decisions in cases such as Arcadia Acres
and Schowalter Villa set forth these reasons as grounds for granting
HCFA's motions to dismiss the requests for hearing. These decisions were
affirmed in their entirety. Arcadia Acres, Inc., DAB CR424 (1996),
aff'd, DAB No. 1607 (1997); Schowalter Villa, DAB CR568,
aff'd, DAB No. 1688 (1999). For all these reasons, I reject Petitioner's arguments that HCFA's motion to dismiss should be denied because the noncompliance citations issued by HCFA are a matter of public record and Petitioner believes that it cannot use the state's IDR process to successfully dispute the prohibitions against providing training to nurse's aides.
Within 12 months of the date of an initial determination,
HCFA has the authority to reopen and revise that determination. 42 C.F.R.
�� 498.30 and 498.32. In this case, HCFA's notice of its initial determination
is dated August 21, 1998, and its letter containing the changes under
review was issued by HCFA on May 18, 1999. The content of the May 18,
1999 letter, together with its use of the phrase "significant revision"
to describe its actions, establish to my satisfaction that HCFA had acted
within its discretion to reopen and revise its initial determination under
42 C.F.R. �� 498.30 and 498.32. Consent was not needed from Petitioner
or me. Accordingly, the content and effect of HCFA's prior determination
dated August 21, 1998 have been superceded by the May 18, 1999 revisions.
42 C.F.R. � 498.20(b)(3). Petitioner uses the content of the May 12, 1999 revisions
to oppose HCFA's motion for dismissal, as well as to seek a ruling of
law concerning the merits of HCFA's findings of noncompliance. For example,
Petitioner contends that, by stating in its May 12, 1999 letter that the
CMP was reduced to zero, HCFA has admitted that its findings of noncompliance
lack adequate factual support. P. Brief at 13. Petitioner asserts also
that "HCFA's admission that the CMP should be zero is inconsistent with
its assertion that a factual basis exists for the CMP." P. Brief at 13. I am not persuaded by these arguments. Also, I decline
to find that HCFA has acted inconsistently or that HCFA has made an admission
that it has no adequate factual support for the noncompliance findings
that remain outstanding. I note by way of background that HCFA's revised letter
of May 18, 1999 does not contain any statement that there remains a factual
basis for imposing a CMP remedy against Petitioner. However, as HCFA has
explained without disagreement from Petitioner, Petitioner had asked for
rescission of the noncompliance findings on immediate jeopardy in exchange
for withdrawing its hearing request. HCFA Brief at 3. HCFA refused to
rescind those findings and then made clear in its brief that the May 18,
1999 letter does not rescind any finding of noncompliance. Id.
To oppose HCFA's arguments that this case should be dismissed for the
absence of any outstanding enforcement remedy within the meaning of 42
C.F.R. � 498.3(b)(12), Petitioner did not need to ask me to draw legal
conclusions about the merits of the noncompliance citations themselves.
Therefore, it would appear that, by arguing that HCFA's actions on May18,
1999 should be deemed an admission that the CMP remedy lacks adequate
factual support, Petitioner is attempting to attain the result that HCFA
refused to provide during their settlement discussions. Even though I do not criticize Petitioner for its intent
and will address the merits of its legal conclusions as presented, I take
notice that we have never considered a rescission of the noncompliance
findings to be a prerequisite for granting a motion to dismiss by reason
of 42 C.F.R. � 498.3(b)(12). In fact, as is clear from the decisions in
cases such as Arcadia Acres and Schowalter Villa, supra,
that the facilities opposed HCFA's motion to dismiss because HCFA did
not withdraw the citations of noncompliance. There would have been no
purpose to the facilities' maintaining their request for hearing if HCFA
had withdrawn the enforcement remedies as well as the underlying findings
of noncompliance. In these and like cases, HCFA prevailed on its motions
to dismiss after rescinding only the enforcement remedies. Thus, whether
HCFA has rescinded the noncompliance citations by implication or otherwise
is immaterial to the issue of whether Petitioner has lost its hearing
rights under 42 C.F.R. � 498.3(b)(12). Additionally, it is not uncommon for parties in litigation
to indicate that, even though they believe they will be able to prevail
on the evidence, they have decided to waive certain rights after having
taken other factors into consideration. Sometimes such a representation
appears to voluntarily withdraw hearing requests. At other times, unopposed
or joint motions to dismiss cases are filed without any explanation. We
have adopted no practice of construing any party's voluntary waiver of
rights as an admission that it lacks adequate factual support for its
position. Even standing alone, Petitioner's arguments concerning
HCFA's implied admissions are flawed. They assume incorrectly that HCFA
must seek to collect a CMP if it believes that the noncompliance findings
are well-founded. In fact, the regulation states only that "HCFA . . .
may impose civil money penalty for the number of days a facility
is [found] not in substantial compliance with one or more participation
requirements . . ." 42 C.F.R. � 488.430(a) (emphasis added). No law or
regulation requires HCFA to impose a CMP whenever it issues a finding
of noncompliance. Instead, if HCFA finds noncompliance, HCFA must apply
certain criteria to determine whether the CMP remedy should be imposed,
and, if so, in what amount. 42 C.F.R. �� 488.404 and 488.438(f). Such
criteria include the facility's financial condition, its compliance history,
and the degree of its culpability. According to HCFA's May 18, 1999 notice of revised determination,
HCFA applied those factors and came to the conclusion that no amount should
be assessed against Petitioner. HCFA's determination to revise the previously
imposed remedy is not appealable to an administrative law judge. See
42 C.F.R. � 498.3(a) and (d). Because administrative law judges are specifically
prohibited from reviewing "the exercise of discretion by HCFA . . . to
impose a civil money penalty . . ." (42 C.F.R. � 488.438(e)(2)(7)),
I find no basis for concluding that administrative law judges have been
vested with the authority to review HCFA's exercise of discretion to collect
no money from the facility. Even where hearing requests have been filed
in response to the imposition of a CMP remedy by HCFA, HCFA has the authority
to settle such cases before a final administrative decision is issued.
42 C.F.R. � 488.444(a). Petitioner herein does not disagree with HCFA's
representations that settlement discussions had been held prior to the
issuance of HCFA's revised determination dated May 18, 1999. HCFA's apparent
decision to alter its position during litigation also is a matter that
is beyond an administrative law judge's authority to review. See
42 C.F.R. � 498.3(b) and (d). For these reasons, I reject Petitioner's argument that
HCFA's motion to dismiss should be denied because HCFA's reduction of
the CMP to zero should be viewed as its admission that the noncompliance
findings are without sufficient factual support. See P. Brief at
13. I also reject Petitioner's argument that it is inconsistent
for HCFA to reduce the amount of the CMP to zero while maintaining that
a factual basis for imposing the CMP exists. Id. According to Petitioner,
its argument is supported by 42 C.F.R. � 488.438(e)(1), which precludes
the administrative law judge from "zeroing out a CMP if 'a basis for imposing
the CMP exist[s]'." Id. The regulatory provision
relied upon by Petitioner has no applicability to the situation here,
which involves HCFA's own changes to the CMP remedy it had previously
imposed. The provision is subsumed under the heading of "Review
of the penalty" and refers specifically to a limitation in the administrative
law judge's authority. 42 C.F.R. � 488.438(e) (emphasis added). For 42
C.F.R. � 488.438(e)(1) to apply at all, there must be an outstanding determination
by HCFA to impose the CMP of $50 or more before the administrative law
judge for review. Consistent with the prohibition against an administrative
law judge's reviewing HCFA's exercise of discretion to impose a CMP (42
C.F.R. � 488.438(e)(2)), the administrative law judge is prohibited also
from setting the CMP remedy already imposed by HCFA at "zero" if he or
she finds that there existed a basis(8)
for HCFA's imposition of the CMP remedy. 42 C.F.R. � 488.438(e)(1). Nothing
in the regulation cited by Petitioner limits HCFA's actions. Contrary
to the arguments presented by Petitioner, the words contained in 42 C.F.R.
� 488.438(e)(1) do not mean that HCFA is prohibited from reducing a previously
imposed CMP remedy to "zero" if it finds that the facility was out of
substantial compliance with one or more participation requirements. As noted earlier also, HCFA had reviewable authority to
settle CMP cases during litigation, and HCFA has unreviewable discretion
to determine (either initially or pursuant to the revision process) whether
a CMP should be imposed at all to remedy the noncompliance found during
survey. Therefore, by issuing the revised determination stating that the
CMP has been reduced to zero, HCFA has not "usurped authority not even
granted to the Administrative Law Judge" as argued by Petitioner. P. Brief
at 13. I find no inconsistency between any assertion by HCFA that a factual
basis exists for the imposition of a CMP remedy, and HCFA's reduction
of the CMP to "zero." See 42 C.F.R. �� 488.430(a), 488.438(e)(2)
and (f), 488.404, and 488.444(a).
Case law is clear that when HCFA rescinds all outstanding
remedies against a facility, the rescission determination has the effect
of eliminating any hearing rights the facility may have had under 42 C.F.R.
� 498.3(b)(12).(9) Schowalter Villa,
CR568 at 2. However, Petitioner contends that "HCFA has refused to rescind
the CMP." P. Brief at 14. HCFA did not specifically state in its May 18,
1999 letter that the CMP remedy was being "rescinded." I conclude that HCFA need not have stated affirmatively
in its May 18, 1999 letter that it had "rescinded" the CMP remedy. "Rescind" is the term reflective of the legal conclusion
that the DAB's administrative law judges and appellate judges have drawn
from those revisions issued by HCFA pursuant to 42 C.F.R. �� 498.30 and
498.32 which have had the effect of nullifying the previously imposed
remedies. "Rescind" summarized and described the actions taken by HCFA
in those cases. The fact that we have said "rescind" in our decisions
does not signify that the identical word had been used by HCFA in its
revised notice letters to the facilities. For example, I described the
content of one revised notice as, "HCFA had determined that the remedies
of DPNA and termination of Arcadia's participation agreement would
not be imposed." Arcadia Acres, CR424 at 6 (emphasis added).
Similarly, in summarizing the procedural background, the Appellate Panel
of the DAB noted also that "HCFA notified Petitioner that no remedies
would be imposed." Arcadia Acres, DAB No. 1607 at 2 (emphasis
added). In another decision, I noted that, after the facility submitted
its hearing request, "HCFA decided not to impose the two remedies
specified in its earlier letter . . . prior to the dates they would
have become effective." Country Club Center, DAB CR433 at 7
(1996) (emphasis added). The analysis used by Administrative Law Judge Steven T.
Kessel in one of his decisions further reinforces the conclusion that
it is not the use of the word "rescission" by HCFA or the judges which
controls the outcome of a motion to dismiss under 42 C.F.R. � 498.3(b)(12).
He noted that HCFA, having advised the facility that certain remedies
would be imposed and that it had a right to request a hearing, later notified
the facility that those remedies would not be imposed. Fort Tryon Nursing
Home, DAB CR425 at 3 (1996). Judge Kessel did not characterize HCFA's
later action as a "rescission" of the earlier determination. Instead,
he reasoned that "Petitioner does not have a right to a hearing inasmuch
as HCFA never imposed the remedies that were described in the notice."
Id. at 9. As for the fact that hearing rights were set forth in
HCFA's earlier notice letter and had been requested by the facility, he
concluded that "HCFA cannot confer a right to a hearing on a provider
where the provider has no right to a hearing under applicable regulations."
Id.
As is clear from the administrative decisions cited by
HCFA and the regulations at 42 C.F.R. � 498.3(b)(12), a facility does
not have a right to correct its compliance record by use of the hearing
process at 42 C.F.R. � 498.5 if HCFA, after having imposed one of the
remedies which triggered appeal rights, withdraws the remedy before its
effectuation. In this case, HCFA does not dispute that, when Petitioner
filed its request for hearing, there was an outstanding appealable determination
by HCFA to impose a CMP remedy set at the designated per diem rates. Petitioner
does not contend that HCFA had effectuated collection of the previously
assessed CMP amount. The parties before me disagree on the issue of whether
any CMP remedy remained in existence after HCFA had reduced the amount
to zero on May 18, 1999. To accept Petitioner's position that a CMP remains in
existence even though it is without any corresponding dollar amount, I
would first have to disregard the fact that "money" is an integral part
of the term "civil money penalty." To accept Petitioner's equation of
zero with an outstanding CMP remedy, I would need to also disregard the
fact that all of the other alternative remedies listed in 42 C.F.R. �
488.406(a) would require the affected facility to do something affirmative,
to relinquish some identifiable authority, or to undergo some tangible
detriment. Here, in contrast, the action alleged by Petitioner to be an
enforcement remedy consists of paying no money to HCFA. I take notice that 42 C.F.R. � 488.406(a) contains no
definition of a CMP. No regulation or statute states specifically that,
to be considered a CMP remedy, HCFA must assess and seek to collect some
amount of money. However, I take notice also that the regulation at 42
C.F.R. � 488.438 contains all of the possible amounts for the CMP remedy.
A CMP must be at least $50 per day, and no more than $10,000 per day,
set in increments of $50. 42 C.F.R. � 488.438(a). Moreover, any notice
issued by HCFA to impose the CMP remedy must state "[t]he amount of penalty
per day[,]" "[t]he date on which the penalty begins to accrue[,]" "when
the penalty stops accruing[,]" and "when the penalty is collected[.]"
42 C.F.R. � 488.434(a)(2)(iii), (v)-(vii). Other regulatory requirements further support the conclusion
that a CMP remedy must have a corresponding dollar amount which is being
sought from the facility. For example, there are specific instructions
on calculating the due date to be used for the collection of CMPs. 42
C.F.R. � 488.442(a). There are also instructions on how to collect the
CMP, such as "deduction of the penalty from amount owed" by HCFA to the
facility. 42 C.F.R. � 488.442(c). Similarly, there are very detailed directives
for calculating the rates of interest "assessed on the unpaid balance
of the penalty, beginning on the due date." 42 C.F.R. � 488.442(d). Additionally,
there exists the requirements about where the CMP and corresponding interests
collected by HCFA are to be deposited. If the CMP and corresponding interests
are collected from a Medicare-participating facility, the amount must
be deposited as "miscellaneous receipts of the United States Treasury;"
if collected from a Medicaid-participating facility, then the CMP and
corresponding interests must be "returned to the State." 42 C.F.R. � 488.442(e).
If collected by HCFA from a dually participating facility, then the CMP
with corresponding interests must be:
42 C.F.R. � 488.442(f). Considering all of the foregoing regulatory requirements
together makes obvious that, as a matter of law, there is no such thing
as a CMP remedy with a zero (0) dollar value. What constitutes a CMP has
been established by published regulations. The meaning of these regulations
cannot be changed by drawing a contrary interpretation from the words
used in HCFA's revised notice letter dated May 18, 1999. It is true that HCFA has repeatedly used the term "reduce"
in its May 18, 1999 letter to inform Petitioner that the agency no longer
seeks any amount of the previously imposed CMP of $127,450. However, once
a CMP remedy has been reduced to zero, the zero dollar amount no longer
constitutes a CMP remedy. If HCFA wishes to impose a CMP, the amount must
be set at a rate of at least $50 per day. No matter what words were used
by HCFA, neither party may view zero as a CMP remedy within the meaning
of the published regulations. In this case, HCFA had "reduced" the previously
imposed CMP remedy out of existence. HCFA appears to recognize that its choice of words has
generated unnecessary controversy. In its brief to me, HCFA now explains
its May 18, 1999 determination as a complete rescission of the CMP remedy.
HCFA Brief at 6. I agree with HCFA's implicit argument that a "reduction"
to zero results in nullification of the CMP remedy. HCFA's interpretation
is consistent with the regulations noted above, whereas Petitioner's interpretation
is not. For these reasons, I conclude as a matter of law that
no CMP remedy remains against Petitioner.
In opposing HCFA's motion to dismiss, Petitioner noted
the following statement in HCFA's May 18, 1999 letter:
P. Brief at 3. I do not interpret HCFA's words as meaning that litigation
cannot be brought to a closure. Having reduced the CMP to "$0.00 per day"
in the preceding sentence (Attachment 4 of HCFA's Brief), HCFA has stated
the irrefutable fact that Petitioner's earlier filed request for hearing
was still before me. Both parties should know that it is the administrative
law judge who has the authority to decide whether any on-merit hearing
will be held pursuant to the outstanding request for hearing. See
42 C.F.R. � 498.70. It goes without saying that, even if HCFA had indicated
a preference for letting the case continue under Petitioner's hearing
request, HCFA's preference is not binding on me. A motion to dismiss for
cause may be initiated by any party to the proceeding, or by the presiding
administrative law judge. 42 C.F.R. � 498.70. Accordingly, Petitioner
could not have concluded reasonably from the above quoted sentence that
its hearing rights would remain unaffected by HCFA's revised decision. At bottom, Petitioner opposes dismissal of this action
because it wishes an opportunity to test the merits of those findings
of noncompliance issued by HCFA, which HCFA has declined to rescind or
otherwise eliminate. For the reasons set forth above, I am unable to provide
the relief sought by Petitioner. However, Petitioner may use this Decision
to show that, by HCFA's choice, the citations of noncompliance issued
against Petitioner remain unproven allegations. IV. Conclusion I grant HCFA's motion to dismiss Petitioner's hearing request. |
|
JUDGE | |
Mimi Hwang Leahy |
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FOOTNOTES | |
1. In this Decision, I will discuss only the CMP remedy even though other enforcement actions had also been mentioned in HCFA's notice letters. There is no dispute that HCFA had rescinded an earlier determination to deny Petitioner payments for new Medicare admission. See Attachments 1 and 3 of HCFA Brief. Nor has either party relied on the imposition of a State monitoring remedy, which was discontinued by HCFA effective August 4, 1998. Id. No appeal rights had arisen from HCFA's imposition of the State monitoring remedy. 42 C.F.R. � 498.3(b)(12). 2. Although Petitioner goes on to explain certain inaccuracies it has noted on HCFA's website regarding survey dates, there is no further discussion in the record regarding any negative impact resulting from the public record on this matter. 3. While 42 C.F.R. � 498.3(b) specifically lists "initial determinations" that are appealable in this forum, other regulations also provide that a request for hearing may be filed by those affected by HCFA's "reconsidered determinations" or "revised determinations." 42 C.F.R. � 498.40(a); 42 C.F.R. � 498.2 (definition of "affected party"); 42 C.F.R. � 498.32(b)(1) (a revised determination is binding unless the affected party requests a hearing before an ALJ). Therefore, I consider the terms "initial," "reconsidered," and "revised," as denoting the sequence in which HCFA issued certain of its determinations. This sequence does not, by itself, attain hearing rights for the recipients of HCFA's determinations. Instead, the substance of any "initial," "reconsidered," or "revised," determination must be compared against the matters listed in 42 C.F.R. � 498.3(b). 4. IDR is a process made available
by the state surveying agency. Attachment 1 of HCFA Brief at 4. Unlike
the processing in this forum, IDR is not authorized by or conducted under
the provisions of 42 C.F.R. Part 498. Among Petitioner's complaints is
that:
P. Brief at 10. 5. I take notice that the regulations regarding the nurse's aide training and competency evaluation program were amended effective July 23, 1999, permitting appeals of HCFA determinations made on or after that date. See 42 C.F.R. � 498.3(b)(15). However, these regulatory amendments do not apply to this case, where HCFA issued its determinations of record on August 21, 1998 and May 18, 1999. 6. Upon HCFA's issuance of an enforcement remedy that entitles the facility to request a hearing, the facility acquires the right to challenge the merits of the survey findings that have resulted in the remedy. 42 C.F.R. � 498.3(b)(12). The facility may not challenge HCFA's choice of alternative remedies (e.g., imposing a CMP instead of a directed plan of correction). 42 C.F.R. � 498.3(d)(11). However, a facility cannot be subjected to the consequences of any remedy imposed by HCFA unless the facility has been out of substantial compliance with one or more program requirements. See generally, 42 C.F.R. � 488.400. Therefore, assuming that the facility has exercised its rights to challenge the merit of survey findings as provided by 42 C.F.R. � 498.3(b)(12), the remedy chosen and imposed by HCFA will be set aside as a matter of law if the evidence received at the hearing establishes that the facility was not out of substantial compliance with any participation requirement. 7. I interpret this provision to mean the discretion of HCFA to impose a CMP, as opposed to one of the other available remedies. 8. "Basis" means a facility's failure to be in substantial compliance with one or more participation requirements. 42 C.F.R. � 488.430(a). 9. In urging me to hear the merits of the July 28, 1998 survey findings, Petitioner has quoted some legal analysis from my December 11, 1996 ruling in Baltic Country Manor, Docket No. C-96-281. P. Brief at 5. Neither the ruling nor the quoted passages supports the outcome urged by Petitioner herein. In Baltic Country Manor, I was denying the facility's request to adjudicate certain noncompliance findings made in 1994 and 1995 after a survey conducted in 1996 led HCFA to impose a CMP remedy. I rejected the facility's overly broad interpretation of 42 C.F.R. � 498.3(b)(12) by pointing out that the 1994 and 1995 survey results were not legally relevant to the case because the CMP remedy imposed by HCFA corresponded only to dates and findings of the 1996 survey. My analysis and conclusions in Baltic Country Manor are consistent with the Schowalter Villa line of cases. |
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