AristaCare at Whiting, ALJ Ruling 2021-3 (HHS CRD May 13, 2021)

ACKNOWLEDGMENT, DENIAL OF MOTION FOR AN EXTENSION OF TIME TO FILE HEARING REQUEST, AND DISMISSAL OF HEARING REQUEST

Because Petitioner did not show good cause for filing an untimely hearing request, I deny Petitioner’s motion to extend the date for filing and dismiss Petitioner’s hearing request.  

I.  Procedural History

The Civil Remedies Division received Petitioner’s May 6, 2021 hearing request challenging the Centers for Medicare & Medicaid Services’ (CMS) December 16, 2020 initial determination imposing civil money penalties (CMP) on Petitioner due to findings of substantial noncompliance with Medicare requirements for skilled nursing facilities (SNF).  The Civil Remedies Division also received Petitioner’s Motion for Leave to File Late Request for Hearing along with a declaration from Petitioner’s Administrator, Leiby Blau.

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II.  Legal Framework

The Medicare program “provides basic protection against the costs of . . . related post‑hospital . . . care” for individuals over the age of 65 who are eligible for Social Security retirement benefits and for individuals under 65 who meet other criteria.  42 U.S.C. § 1395c.  Post-hospital care includes extended care services provided at an SNF.  42 U.S.C. §§ 1395f(a)(2)(B), 1395x(h)-(i).

For Medicare program purposes, an SNF is an institution that is primarily engaged in providing skilled nursing care and/or rehabilitation services for its residents but is not primarily engaged in the care and treatment of mental diseases.  42 U.S.C. §§ 1395x(j), 1395i-3(a)(1).  Because an SNF is a “provider of services” in the Medicare program, each SNF that participates in the program must file a provider agreement with the Secretary of Health and Human Services (Secretary).  42 U.S.C. §§ 1395cc(a), 1395x(u).  Further, a participating SNF must meet a variety of ongoing requirements related to how it provides services, maintains the rights of its residents, and administers its facility.  42 U.S.C. § 1395i-3(a)(3), (b)-(d); 42 C.F.R. pt. 483, subpt. B.

When an SNF fails to meet a statutory or regulatory participation requirement, then the SNF has a “deficiency.”  42 C.F.R. § 488.301; see 42 U.S.C. § 1395i-3(h)(1).  “Noncompliance” means “any deficiency that causes a facility to not be in substantial compliance.”  42 C.F.R. § 488.301; see also 42 U.S.C. § 1395i-3(h)(3).  To maintain “substantial compliance,” an SNF’s deficiencies may “pose no greater risk to resident health or safety than the potential for causing minimal harm.”  42 C.F.R. § 488.301.

Broadly, noncompliance that subjects an SNF to enforcement remedies is divided into two levels.  One level is comprised of deficiencies that immediately jeopardize the health or safety of residents and the other level is composed of deficiencies that do not.  42 U.S.C. § 1395i-3(h)(1).  “Immediate jeopardy” exists when “the provider’s noncompliance with one or more requirements of participation has caused, or is likely to cause, serious injury, harm, impairment, or death to a resident.”  42 C.F.R. § 488.301.

The Secretary contracts with state agencies to conduct surveys to determine whether SNFs are in substantial compliance.  42 U.S.C. §§ 1395aa(a), 1395i-3(g); 42 C.F.R. § 488.10.  These surveys can be unannounced surveys that occur at least once every 15 months or can be in response to a complaint.  42 U.S.C. § 1395i-3(g).  When the results of a survey show that an SNF is not in substantial compliance with program participation requirements, the Secretary may impose enforcement remedies on the SNF.  42 U.S.C. § 1395i-3(h)(2); 42 C.F.R. § 488.406.  When CMS selects an enforcement remedy to impose on an SNF, it determines the scope (i.e., the number of residents affected or potentially affected) and severity (i.e., the degree of harm or potential harm) for each

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deficiency.1   See 42 C.F.R. § 488.404(a)-(b); see also 42 U.S.C. § 1395i‑3(h)(2)(B)(ii)(III)(bb). 

One such remedy is a CMP.  42 U.S.C. § 1395i-3(h)(2)(B)(ii).  CMS may impose a per‑instance CMP for each instance of an SNF’s noncompliance, or a per‑day CMP for the number of days an SNF is not in substantial compliance.  42 U.S.C. § 1395i‑3(h)(2)(A), (h)(2)(B)(ii)(I); 42 C.F.R. § 488.430(a). 

If CMS imposes a CMP based on a finding of substantial noncompliance, then the SNF may request a hearing to challenge CMS’s initial determination of noncompliance that led to the imposition of an enforcement remedy and/or the level of noncompliance (if a successful challenge to the level would affect the range of CMP amounts imposed on the SNF).  42 U.S.C. §§ 1320a-7a(c)(2), 1395i‑3(h)(2)(B)(ii); 42 C.F.R. §§ 488.330(e)(3)(ii), 488.408(g)(1), 488.434(a)(2)(viii), 498.3(b)(13)-(14), (d)(10); see also 5 U.S.C. §§ 554, 556.  However, CMS’s choice of remedies is not reviewable.  42 C.F.R. §§ 488.438(e)(2), 488.408(g)(2), 498.3(b)(13).  The SNF must request the hearing within 60 days from receipt of CMS’s initial determination.  42 C.F.R. § 498.40(a)(2).  For good cause shown, an administrative law judge (ALJ) may extend the date for filing a hearing request.  42 C.F.R. § 498.40(c)(2).        

III.  Background

Petitioner is an SNF located in New Jersey that participates in the Medicare program.  On September 28, 2020, the New Jersey State Department of Health and Senior Services (state agency) completed a survey of Petitioner’s facility.  The state agency found substandard quality of care and substantial noncompliance with 42 C.F.R. § 483.12(a)(1) at the immediate jeopardy level.  The state agency concluded that Petitioner abated the immediate jeopardy situation during the survey; however, Petitioner continued to be in substantial noncompliance with Medicare requirements.  On December 1, 2020, the state agency conducted a revisit to Petitioner’s facility and determined that Petitioner had returned to substantial compliance on November 27, 2020.  Initial Det. at 1‑2.

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Petitioner requested Informal Dispute Resolution (IDR) with the state agency in response to the state agency’s findings.  See Blau Decl. ¶ 13; P. Mot. for Leave at 2.    

On December 16, 2020, CMS emailed an initial determination imposing CMPs on Petitioner to Petitioner’s Administrator.  Initial Det. at 1.  Petitioner’s Administrator received the initial determination on December 17, 2020.  See Blau Decl. ¶ 6; Hearing Req. at 2.

The initial determination was on CMS letterhead and was written in a letter format addressed to Petitioner’s Administrator.  Under the address but above the salutation, CMS provided the following as the subject of the letter: 

RE:
Enforcement Cycle Starting Survey Date:  September 28, 2020
Period Immediate Jeopardy Period:  September 20, 2020 through
September 23, 2020 (3 Days)
Revisit:  December 1, 2020
Substantial Compliance Achieved:  November 27, 2020
Civil Money Penalty (CMP) - IMPOSED: A $9,485.00 Per Day
CMP has been imposed for the three (3) days of Immediate
Jeopardy and Substandard Quality of Care which was found to
have occurred on September 20, 2020 through September 23, 2020,
for a total of $37,940.00, described at Federal Tag: F0600 -- S/S: J --
§ 483.12(a)(1) -- Free From Abuse And Neglect. The total accrued CMP is $37,940.00.
Nurse Aide Training and Competency Program (NATCEP)
Prohibition:  September 28, 2020 through September 27, 2022

Initial Det. at 1.

In the body of the letter, CMS reiterated that it was imposing a $9,485 per‑day CMP for three days (September 20‑23, 2020) of immediate jeopardy and substandard quality of care, for a total CMP of $37,940.  Initial Det. at 2.  CMS provided notice of Petitioner’s right to request independent informal dispute resolution (IIDR) and to request a hearing before an ALJ.  Under a section with the heading “APPEAL RIGHTS,” CMS explained how Petitioner could file a hearing request and stated:  “Your appeal must be filed no later than 60 days from the date of receipt of this letter.”  Initial Det. at 6.    

In a final section with the heading “REMINDER,” CMS provided five enumerated reminders related to various timeframes with “which your facility must comply,” including:

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3.  A request for appeal must be made in writing, per the instructions noted above, within 60 calendar days of the date of your receipt of this notice, regardless of whether an IDR or an IIDR has been requested or is in process.  An IDR/IIDR will not stop the time clock for appealing an action.

Initial Det. at 7.

IV.  Petitioner’s Statement of Good Cause

In its motion seeking leave to file an untimely hearing request, Petitioner makes two primary arguments to show good cause:  1) Petitioner’s facility was distracted by efforts to protect residents from contracting or dying from COVID‑19 and 2) Petitioner was proceeding through the IDR process and did not know that it needed to file a request for an ALJ hearing until the IDR process was completed.  P. Mot. for Leave at 2-3.

In support of these bases for good cause, Petitioner’s Administrator declared that, for the 60‑day period after receiving the initial determination imposing CMPs, Petitioner had six COVID‑19 positive employees, admitted 13 residents with COVID‑19, and, during this time, avoided other residents acquiring COVID‑19.  Blau Decl. ¶¶ 7‑9.  The Administrator declared that, in addition to successfully “battling Covid-19 daily,” Petitioner was also awaiting an IDR hearing.  Blau Decl. ¶¶ 12‑13.  The Administrator further declared that Petitioner submitted over 100 pages of argument and supporting evidence for the IDR hearing.  Blau Decl. ¶ 17.  The IDR decision was rendered in late April 2021.  Blau Decl. ¶ 14.  Finally, the Administrator declared:  “I was unaware that we must file a Request for Hearing in the Departmental Appeals Board to contest the CMS penalty when we had a contemporaneous IDR hearing scheduled.”  Blau Decl. ¶ 17.

Petitioner summed up its good cause argument as follows: 

The pandemic was clearly outside of the Petitioner’s control and they had to dedicate incredible efforts in order to control it and protect the most vulnerable among our population.  The Petitioner should not be penalized from challenging this CMP in a hearing, ad [sic] a result of these factors outside of their control.  There is no prejudice to CMS, as they will have every opportunity to present any evidence supportive of the
deficiencies and associated CMP.

P. Mot. for Leave at 5.

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V.  Analysis

A hearing request must be filed within 60 days of receiving an initial determination.  42 C.F.R. § 498.40(a)(2).  If a hearing request was not filed within 60 days, an SNF may file a request for an extension of time to file the hearing request explaining why the request was not filed timely.  42 C.F.R. § 498.40(c)(1).  An ALJ may extend the date for filing the hearing request for “good cause shown.”  42 C.F.R. § 498.40(c)(2).

The regulations do not define what the term “good cause” means.  Further, the Departmental Appeals Board (DAB) has not definitively defined that term either.  Day Op of North Nassau, Inc., DAB No. 2818 at 6-7 (2017) (citing several cases).  Therefore, I will consider all of the facts and circumstances based on the information before me. 

Petitioner’s Administrator admits to having received the initial determination on December 17, 2020.  See Blau Decl. ¶ 6; Hearing Req. at 2.  Therefore, Petitioner does not dispute that it has filed its hearing request more than two months late. 

While it is likely that Petitioner’s facility has been engaged in significant efforts to care for residents during the COVID‑19 pandemic, Petitioner’s second reason for asserting good cause, its IDR request, undermines a finding of good cause.    

Although Petitioner’s Administrator and staff were under pressure to appropriately handle the COVID‑19 situation at Petitioner’s facility, Petitioner’s Administrator makes it clear that Petitioner requested IDR with the state agency and prosecuted that matter by writing, compiling, and submitting for the IDR hearing over a hundred pages of argument and evidence.  Further, Petitioner participated in a hearing related to the IDR.  Blau Decl. ¶¶ 13, 14, 17.  In comparison, filing a hearing request for an ALJ hearing would have only been a fraction of the time Petitioner spent on the IDR case, and Petitioner assuredly could have used the arguments developed for the IDR to meet the basic requirements for a hearing request.  See Initial Det. at 6. 

Further, Petitioner’s Administrator states he did not know he needed to file a request for an ALJ hearing while an IDR hearing was pending and that he expected to request an ALJ hearing if Petitioner did not prevail with the IDR hearing.  Blau Decl. ¶¶ 17‑18.  However, the Administrator’s assertion of ignorance is at odds with the “REMINDER” section in the initial determination, which expressly stated that Petitioner must file a timely request even if an IDR had been requested or was in process.  CMS warned that an “IDR/IIDR will not stop the time clock for appealing an action.”  Initial Det. at 7.

In a case with some similarities to this one, the DAB rejected a petitioner’s claim of good cause to file an untimely hearing request due to a pending IIDR proceeding and an alleged misunderstanding as to the need to file a timely hearing request.

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Moreover, the regulations provide, and CMS’s March 10, 2016 letter plainly advised West Side, that the IIDR process is distinct from and in addition to a facility’s right to a formal administrative appeal; that CMS retains ultimate authority for survey findings and the imposition of CMPs; and that participation in IIDR will not toll a hearing request deadline.  42 C.F.R. §§ 488.331(a)(3), (b) and 488.431(a),(d); CMS Ex. 1, at 3‑4 (“OPPORTUNITY FOR INDEPENDENT INFORMAL DISPUTE RESOLUTION”); at 4‑5 (“APPEAL RIGHTS”); at 6 (“An IDR/IIDR that has not been completed will not stop the time clock for an action, nor will it prevent the imposition of any enforcement remedy ….”).  In light of West Side’s constructive and actual notice of the separate formal appeal and informal dispute resolution processes for contesting the survey findings, it was incumbent on West Side to timely file its hearing request to protect its right to a formal appeal, whether or not the IIDR was completed prior to the deadline for filing the hearing request.

West Side House LTC Facility, DAB No. 2791 at 7 (2017) (emphasis added).

Based on my review of this matter, Petitioner’s Administrator appears to have mistakenly failed to act on the December 16, 2020 initial determination when it was received.  Because Petitioner was able to produce extensive written arguments and evidence for the IDR, I am unable to conclude that Petitioner could not simply file a brief hearing request on the same subject as the IDR.  Although Petitioner was dealing with the COVID‑19 pandemic, the reasons why Petitioner could not file a timely hearing request are insufficiently detailed to overcome my conclusion that Petitioner’s involvement in the IDR process would have assisted Petitioner in timely filing the hearing request.    

VI.  Dismissal

An ALJ may dismiss a hearing request when the SNF “did not file a hearing request timely and the time for filing has not been extended.”  42 C.F.R. § 498.70(c).  Because Petitioner’s hearing request is late by more than two months and I have not extended the date for filing, I dismiss Petitioner’s hearing request.

• 1. CMS or the state agency designates the scope and severity level using a letter from A through L based on a scope and severity matrix published in the State Operations Manual, Ch. 7, § 7400.3.1 (Rev. 185, Eff. Nov. 16, 2018).  Levels A, B, or C indicate a deficiency that presents no actual harm but has the potential for minimal harm, which means the facility technically remains in substantial compliance.  42 C.F.R. § 488.301.  Levels D, E, or F indicate a deficiency that presents no actual harm but has the potential for more than minimal harm that does not amount to immediate jeopardy.  Levels G, H, or I indicate a deficiency that involves actual harm that does not amount to immediate jeopardy.  Finally, levels J, K, and L indicate a deficiency that constitutes immediate jeopardy to resident health or safety.