SUBJECT:

Bethel Health Care Center,

Petitioner,

Centers for Medicare & Medicaid

DECISION

I have determined that Petitioner, Bethel Health Care Center, is not entitled to a hearing in this case. Therefore, I dismiss Petitioner's request for hearing and enter summary judgement affirming the determination of the Centers for Medicare & Medicaid Services (CMS) to impose a per-instance civil money penalty of $2,000 based on the August 6, 2001 survey findings.

I. Procedural History

Petitioner is a long-term care facility certified to participate as a provider under Title XVIII (Medicare) and Title XIX (Medicaid) of the Social Security Act (Act) (42 U.S.C. � 302-1397jj). Petitioner was the subject of a complaint survey by the Connecticut Department of Public Health (CDPH) which concluded on August 6, 2001. Petitioner was found not in substantial compliance with six Medicare program participation requirements: four D-level deficiencies which presented the potential for more than minimal harm to resident health and safety (F Tags 205, 206, 207 and 279); and two G-level deficiencies which resulted in actual harm to a resident on an isolated basis (F Tags 309 and 327). CMS notified Petitioner on September 4, 2001, that due to the cited deficiencies it intended to take enforcement action against Petitioner including: termination of Petitioner's provider agreement effective February 6, 2002; denial of payment for new Medicare admissions (DPNA) effective November 6, 2001; and a per-instance civil money penalty (PICMP) of $2,000.

On October 22, 2001, CDPH conducted a revisit survey of Petitioner's facility and found that all deficiencies had been corrected and that Petitioner was in substantial compliance with all Medicare participation requirements. By notice dated November 20, 2001, CMS informed Petitioner that the DPNA and termination of Petitioner's provider agreement had been rescinded, although the $2,000 PICMP remained in effect.

By letter dated October 17, 2001, Petitioner timely filed its hearing request contesting CMS's findings of non-compliance based only on the two G-level deficiencies, F Tags 309 and 327. The case was assigned to me for hearing and disposition.

Petitioner filed an unopposed motion for stay of proceedings in this matter on March 5, 2002, stating that the parties had agreed to seek mediation through the Alternative Dispute Resolution (ADR) Division of the Departmental Appeals Board (DAB). By letter dated December 4, 2002, Petitioner notified me that the parties were unsuccessful in reaching a settlement through ADR, and requested that this case proceed to hearing. Petitioner filed an amended request for hearing dated December 18, 2002, to which CMS did not object. In its amended request for hearing, Petitioner continued to limit its appeal to the two G-level deficiencies, F Tags 309 and 327, with no reference to contesting either the four D-level deficiencies or CMS's determination to impose a $2,000 PICMP.

On January 6, 2003, I convened a telephone prehearing conference to discuss the specific issues to be litigated in this matter, and, with the parties' agreement, this matter was scheduled for hearing from May 6 - 9, 2003.

Based on the premise that Petitioner's hearing request did not satisfy the requirements of 42 C.F.R. � 498.40(b) by failing to preserve for adjudication the four D-level deficiencies and the determination to impose a PICMP, CMS moved for summary disposition of all issues related to the August 6, 2001 survey. CMS's motion for summary disposition (CMS's Motion) ⁽¹⁾ was filed on January 24, 2003.

In its motion, CMS noted that Petitioner's hearing request raises no issues which would require an evidentiary hearing, and that the issues are subject to summary disposition. CMS's Motion at 2. CMS argues that: (1) Petitioner's failure to contest the four D-level deficiencies from the August 6, 2001 survey result in the uncontested deficiencies being final and binding against Petitioner; (2) any one of the four D-level deficiencies are sufficient to constitute Petitioner's failure to be in substantial compliance with the Medicare participation requirements and provide a basis for the imposition of the $2,000 PICMP; (3) the litigation of the two G-level deficiencies, even if Petitioner were to prevail, would not result in any change in the remedies imposed; and (4) Petitioner does not have a right to appeal a deficiency unless the deficiency results in the imposition of an enforcement remedy. Id. at 5 - 10.

Petitioner filed a reply (P. Reply) ⁽²⁾ on February 10, 2003, in which it stated that, by regulation, CMS is required to consider a facility's history in determining the amount of future money penalties. P. Reply at 5. Petitioner argued that it "has a right to appeal from wrongful determinations of deficiencies if a successful appeal would affect the range of the civil money penalty that CMS can collect." Id. Petitioner stated that it is "striving to limit the range of civil money penalty CMS can collect" and that it "is appealing a determination that CMS admits it will consider in determining the range of civil penalty it can collect in virtually all future interaction it will have with Petitioner." Id. at 3. Petitioner noted that it has been harmed, as the deficiencies noted during the August 2001 survey are a matter of public record and can be found on the internet or through a Freedom of Information request, in addition to the requirement that Petitioner post the survey results within the facility 24 hours per day, seven days per week. Id. at 4. Petitioner asserted that this requirement has affected its ability to operate and conduct business (i.e. perception of Petitioner's reputation by current and potential staff, medical professionals, family members of residents, staff moral, ability to hire and maintain staff, increased risk of future liability, and potential for liability premiums to sky rocket since insurance companies request a copy of the survey findings). Id.

From a review of the record before me prior to convening a second prehearing conference, it appeared that Petitioner intended to contest only the two G-level deficiencies and not the imposition of the PICMP, the amount of the PICMP, or the four D-level deficiencies. In its first request for hearing, filed October 17, 2001, Petitioner stated that it was contesting the two G-level deficiencies. In its amended request filed December 18, 2002, ⁽³⁾ it appeared that Petitioner was still only appealing the two G-level deficiency findings. However, in its reply to CMS's motion for summary disposition, Petitioner seemed to be arguing that the PICMP was at issue to the extent that it will affect future levels of CMPs imposed since Petitioner will have a history of having G-level deficiency citations. P. Reply at 5. Petitioner stated further that its "reasonable approach to appeal only the false and erroneous findings should not now be used against it so as to prevent a resolution of the issues at hand." Id. at 3.

Since Petitioner has presented itself as a pro se litigant ⁽⁴⁾, it was unclear if Petitioner understood the implications of appealing just the two G-level deficiencies and not the other four D-level deficiencies or CMS's determination to impose a PICMP. A second prehearing conference was convened on March 20, 2003, ⁽⁵⁾ to review the parties' written submissions and to obtain clarification from Petitioner as to what issues it intended to appeal when it filed both its initial request for hearing and its subsequent amended request. During the prehearing conference, Petitioner conceded that it did not wish to appeal the four D-level deficiencies or CMS's determination to impose a $2,000 PICMP, rather it intended to appeal only the two G-level deficiencies. ⁽⁶⁾ There is nothing before me which indicated that Petitioner was deficient in its ability to protect or advocate its own rights in these proceedings.

II. Applicable law and regulations:

The requirements that long-term care facilities must meet to participate in the Medicare and Medicaid programs are set forth in sections 1819 and 1919 of the Act and Chapter 42, Parts 483, 488 and 498 of the Code of Federal Regulations (C.F.R.). A long-term care facility participating in the Medicare program must be in substantial compliance with relevant Medicare requirements. Hillman Rehabilitation Center, DAB No. 1611 (1997), aff'd Hillman Rehabilitation Center v. United States, Department of Health and Human Services, Health Care Financing Administration, No. 98-3789 (GEB), slip op. at 25 (D.N.J. May 13, 1999). The term "substantial compliance" means a level of compliance with the requirements of participation such that any identified deficiencies pose no greater risk to resident health and safety than the potential for causing minimal harm. 42 C.F.R. � 488.301. If a facility is not in substantial compliance with participation requirements, CMS may impose one or more of the enforcement remedies listed in 42 CFR � 488.406, which include denial of payment for new admissions and the imposition of a civil money penalty (CMP). 42 C.F.R. � 488.406(a)(2)(ii) and (a)(3); see Act, section 1819(h).

The regulation at 42 C.F.R. � 488.408 classifies the remedies CMS may impose for noncompliance into three categories based on "how serious the noncompliance is." Category 2 remedies are imposed "when there are - (i) [w]idespread deficiencies that constitute no actual harm with a potential for more than minimal harm but not immediate jeopardy; or (ii) [o]ne or more deficiencies that constitute actual harm that is not immediate jeopardy." 42 C.F.R. � 488.408(d)(2)(i) and (ii). Category 2 remedies allow CMS to impose a DPNA and a PICMP of $1,000 - $10,000. 42 C.F.R. � 488.408(d)(1)(i) and (iv).

A facility affected by an initial determination, and seeking review of that determination on appeal, is entitled to a hearing before an administrative law judge (ALJ) of the DAB. 42 C.F.R. �� 488.408(g), 498.3(b)(13) and (b)(14). A facility may not appeal the choice of remedies by CMS or the factors CMS considered when selecting remedies. 42 C.F.R. � 488.408(g)(2). The regulation at 42 C.F.R. � 498.3 authorizes ALJs to review only the initial determinations made by CMS. Subsection (b)(13) of 42 C.F.R. � 498.3, provides an affected party a right to appeal from a finding that results in a penalty, one of which is a CMP. A facility may challenge the level of noncompliance found by CMS only if a successful challenge would affect the amount of the CMP or impact upon the facility's nurse aide training program. 42 C.F.R. � 498.3(b)(14)(i) and (ii). A review of the seriousness of a deficiency finding is precluded unless a successful appeal would affect the range of the CMP imposed or eliminate a finding of substandard quality of care that resulted in the loss of approval of nurse aide training. Id.

The content and timing requirements for requests for hearing are specified under 42 C.F.R. � 498.40. An affected party who wishes to contest an initial determination by CMS has 60 days from receipt of notice of the determination to file its request for hearing. ⁽⁷⁾ Additionally, the request "must"--

(1) Identify the specific issues, and the findings of fact and conclusions of law with which the affected party disagrees; and

(2) Specify the basis for contending that the findings and conclusions are incorrect.

42 C.F.R. � 498.40(b) (emphasis added).

Additionally, subsection (a) of section 498.40 provides an automatic 60-day period for the preparation and filing of the document which sets forth a petitioner's issues with supporting bases. If the 60-day period is not sufficient for a petitioner,subsection (c) of the same regulation permits the petitioner to make a request for an extension of time with a showing of good cause. 42 C.F.R. � 498.40(c). A petitioner has an opportunity to make a request under a separate regulation for the ALJ to exercise his or her discretion by adding new issues for adjudication. 42 C.F.R. � 498.56(a). ⁽⁸⁾

The regulations mandate that Petitioner must preserve issues for appeal, otherwise, the determinations and findings on which they are based become final, non-reviewable, and binding on the affected facility by operation of law unless reversed or modified. 42 C.F.R. �� 498.20(b), 498.70(a). Enforcement actions that are not preserved for appeal become final and binding upon the affected party. 42 C.F.R. � 498.20(b); see also, Meadow Wood Nursing Home, DAB CR862 (2002), aff'd DAB No. 1841 (2002); EagleCare, Inc. d/b/a/ Beech Grove Meadows, DAB CR923 (2002); Orchard Grove Extended Care Center, DAB CR541 (1998); Belmont Nursing & Rehabilitation Center, DAB CR507 (1997).

III. Issue, Findings of Fact and Conclusions of Law

A. Issue

Whether Petitioner has a right to a hearing on the two cited deficiencies for which it has requested a hearing, when the four uncontested deficiencies arising from the same survey are sufficient to support the remedy imposed, without reliance on the two cited deficiencies Petitioner is appealing.

B. Findings of fact and conclusions of law

I make findings of fact and conclusions of law (Findings) to support my decision in this case. I state each Finding, below, as a separate heading. I discuss each Finding in detail.

1. Petitioner's initial and amended requests for hearing did not seek review of any of the four cited D-level deficiencies nor CMS's determination to impose a remedy, and they have now become final.

Petitioner was cited for six deficiencies in the August 2001 survey, with scope and severity levels of D and G. Petitioner filed a timely request for hearing, but only challenged the two G-level deficiencies cited as F Tags 309 and 327. The four remaining deficiencies that were uncontested by Petitioner were: 42 C.F.R. � 483.12(b)(1) and (2) (F Tag 205), 42 C.F.R. � 483.12(b)(3) (F Tag 206), 42 C.F.R. � 483.12(c) (F Tag 207), and 42 C.F.R. � 483.20(k) (F Tag 279), all have scope and severity levels of D. Petitioner has affirmatively stated that it does not seek review of the four D-level deficience or CMS's determination to impose a $2,000 PICMP and thus it has not preserved any challenge to the four D-level deficiencies cited during the August 2001 survey.

The uncontested deficiencies establish that Petitioner was not in substantial compliance with Medicare program participation requirements. It is not necessary that every deficiency charged against Petitioner be sustained, as long as those actually sustained are sufficient to establish a reasonable basis for the PICMP imposed. See Lakeland Continuing Care Center, DAB CR683 (2000); Kelsey Memorial Hospital, DAB CR583 (1999) (where non-inclusive but sufficient number of deficiencies were held to sustain penalties). Even one deficiency that poses a risk to resident health or safety greater than the potential for causing minimum harm would sustain a determination by CMS that the facility was not in substantial compliance with participation requirements. 42 C.F.R. 488.301; see also Lake City Extended Care Center, DAB No. 1658 (1998); Brighton Pavilion, DAB CR510 (1997). Here, the four uncontested deficiencies provide a sufficient basis for CMS to impose the PICMP. The State surveyors categorized each of these deficiencies at a scope and severity of level of D, posing no actual harm with the potential for more than minimal harm. Petitioner has not challenged this determination. I agree with CMS that these deficiencies, by themselves, demonstrate the potential for more than minimal harm. CMS made what has become a final and binding determination that the facility was not in substantial compliance with Medicare participation requirements.

I find that none of the issues and arguments presented by Petitioner invalidate CMS's determination that a basis existed to impose the PICMP remedy against Petitioner. Pursuant to 42 C.F.R. � 488.430, CMS imposed the PICMP against Petitioner because the August 2001 survey findings adopted by CMS indicated that Petitioner was out of compliance with Medicare participation requirements. All portions of CMS's initial determination which are not appealed to an ALJ must become final and binding upon the affected party. 42 C.F.R. � 498.20(b). Even when the findings or decisions made by CMS are subject to review by an ALJ, the affected party must file a timely request for hearing in order to invoke the ALJ's jurisdiction. 42 C.F.R. �� 498.40, 498.44, 498.74. Otherwise, those findings or determinations will become final, non-reviewable, and binding upon the affected entity by operation of law. 42 C.F.R. �� 498.20(b), 498.70(a); see also Orchard Grove Extended Care Center, DAB CR541 (1998) (Petitioner failed to preserve in its hearing request issues for review and adjudication). Here, Petitioner did not contest CMS's determination of deficiencies under F Tags 205, 206, 207 and 279, so CMS's determination on those four tags is final and binding on Petitioner, and under 42 C.F.R. � 488.402, CMS has the authority to impose a PICMP.

2. The $2,000 PICMP imposed on Petitioner by CMS, is fully supported by the four D-level deficiencies, without reliance on the appealed deficiency findings alleged in F Tags 309 and 327.

Having determined that a basis exists for imposition of remedies, an ALJ has authority to review the amount of the PICMP, but may not set a penalty of zero, nor reduce the penalty to zero. 42 C.F.R. � 488.438(e). Here, Petitioner asserted during both prehearing conferences that it is not concerned with the amount of the PICMP, only with clearing the record with regard to the cited deficiencies for which it appealed. Additionally, CMS was authorized to impose a PICMP in the range of $1,000 - $10,000. 42 C.F.R. � 488.408(d)(1)(iv). I need not review the reasonableness of the PICMP as Petitioner has not appealed the amount of the PICMP. However, had Petitioner raised the challenge as to the reasonableness of the PICMP imposed by CMS, I would find that the amount is reasonable. The remedy imposed is within the lower end of the penalty range CMS is allowed to impose, and the uncontested four D-level deficiencies fully support the $2,000 PICMP. However, even if I were to decide that the $2,000 PICMP was unreasonable, and reduced the PICMP to the minimum $1,000, Petitioner would still be found not to be in substantial compliance with Medicare participation requirements based on the uncontested and the now final and binding four D-level deficiency findings.

3. Summary disposition is appropriate in this case because Petitioner has not demonstrated any dispute over genuine issues of material fact.

Unless the parties raise a genuine issue of material fact, I may decide a case on summary judgment, without an evidentiary hearing. Livingston Care Center, DAB No. 1871 (2003); Crestview Parke Care Center, DAB No. 1836 (2002); Everett Rehabilitation and Medical Center, DAB No. 1628, at 3 (1997); Carmel Convalescent Hospital, DAB No. 1584, at 27 (1996). In Livingston Care Center, an appellate panel of the DAB stated that:

CMS is entitled to summary judgment if it has (1) made a prima facie showing that [the facility] was not in substantial compliance with one or more participation requirements, and (2) demonstrated that there is no dispute about any material fact supporting its prima facie case and that it is otherwise entitled to judgment as a matter of law. CMS is not entitled to summary judgment if [the facility] has proffered evidence that would permit an ALJ to conclude that it was in substantial compliance with Medicare participation requirements during the relevant time.

Livingston Care Center at 6.

In attempting to defeat a motion for summary judgment, a party may not rely on the denials of its pleadings, but is required to tender evidence of specific facts in the form of affidavits and/or admissible discovery material, in support of its contention that a dispute exists. Crestview at 6 (citing Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586 n.11 (1986)). Where a non-moving party raises some factual disputes, the ALJ determines whether those facts are material by resolving all legitimate factual disputes in favor of the non-moving party, in this case, Petitioner. If, after so resolving all factual disputes, CMS establishes that the substantial failure to comply with the participation requirements as a whole justifies the penalties imposed, the disputed facts are not material and CMS is entitled to summary judgment.

In this case, Petitioner's request for hearing raises no material issues capable of affecting the outcome of this case. It is necessary that the hearing request preserve or present a genuinely justiciable issue in the context of sections 498.3 and 498.5. It is the remedy, and not the citation of a deficiency, that generates the right to a hearing. There have been numerous cases where a Petitioner's request for hearing has been dismissed when Petitioner was unable to establish that the contested survey findings and deficiency determinations resulted in a remedy. See The Lutheran Home-Caledonia, DAB No. 1753 (2000); Walker Methodist Health Center, DAB CR869 (2002); Charlesgate Nursing Center, DAB CR868 (2002); D.C. Association for Retarded Citizens, DAB CR776 (2001); Alpine Inn Care, Inc., DAB CR728 (2000); Woodland Care Center, DAB CR659 (2000); Fort Tryon Nursing Home, DAB CR425 (1996); Schowalter Villa, DAB No. 1688 (1999); and Arcadia Acres, Inc., DAB No. 1607 (1997).

Given that the four D-level deficiencies are final and support the proposition that Petitioner was not in compliance with Medicare participation requirements, then litigating the two G-level deficiencies, even if Petitioner prevailed, would not alter the outcome of this case. The PICMP would remain based on the four uncontested D-level deficiency findings. A petitioner does not have a right to review of a deficiency unless the deficiency results in the imposition of an enforcement remedy. The regulation at 42 C.F.R. � 498.3(b)(14) precludes me from reviewing the two G-level deficiency ratings unless a successful appeal would affect the range of the CMP imposed. See EagleCare, DAB CR923 (2002); Orchard Grove Extended Care Center, CR541 (1998). The ALJ in EagleCare ruled that a petitioner has no right to a hearing where even a successful challenge to the only deficiency that was appealed would not be capable of changing the remedies that were imposed. EagleCare, DAB CR923 (2002). Here, the time to appeal the four D-level deficiencies and CMS's determination to impose a $2,000 PICMP expired on November 14, 2001. Additionally, Petitioner failed to raise these issues in its original hearing request of October 17, 2001, and in its amended hearing request of December 18, 2002. Thus, even if Petitioner prevailed on its challenge to the two G-level deficiencies, the record as a whole would continue to support CMS's determination to impose a PICMP.

4. There is no reason to invoke my discretionary authority to allow Petitioner to amend its hearing request, or to add new issues to those already before me in this case.

I can exercise discretion under 42 C.F.R. � 498.40(c)(2) to allow Petitioner to amend its hearing request to include objections to some or all of the other F Tag citations, or to use my discretion to add additional issues to this case pursuant to section 498.56(a). ⁽⁹⁾ However, based on the telephone prehearing conference of March 20, 2003, it is clear to me that Petitioner does not wish to contest the four D-level deficiencies. Petitioner has already amended its hearing request once. I do not find that Petitioner has been disadvantaged by any circumstance beyond its ability to control; rather, Petitioner was fully aware of its choices and the consequences of those choices. As such, I decline to exercise discretion on either basis.

The record before me establishes that Petitioner has had every opportunity to articulate the issues it wished to contest in its hearing request and during the two telephone conferences. To the extent that there might be any question that Petitioner was not aware of the consequences of not appealing the other four D-level deficiencies and CMS's imposition of the $2,000 PICMP, I find that Petitioner has received additional information concerning these consequences on several occasions. Although there was ample opportunity, Petitioner has not requested modification or addition of any issue. Additionally, Petitioner has not asserted compliance with the four D-level deficiency findings in either of its requests for hearing, during the two prehearing conferences, or in its reply brief in opposition to CMS's motion for summary disposition. Nor has Petitioner argued that the amount of the PICMP is unreasonable.

IV. Conclusion

For the reasons set forth above, I grant CMS's motion for summary disposition and I order that this case be dismissed without prejudice. ⁽¹⁰⁾

Alfonso J. Montano

Administrative Law Judge

1. This abbreviation denotes CMS's filing, titled " Motion for Summary Disposition and Supporting Memorandum of the Centers for Medicare and Medicaid Services." CMS's filing included five attachments which I accept into evidence.

2. Petitioner's reply brief, titled " Reply in Opposition to Motion for Summary Disposition and Supporting Memorandum of Bethel Health Care Center" did not include any exhibits.

3. CMS had raised concerns about the sufficiency of the hearing request with Petitioner which resulted in Petitioner amending its original request for hearing to identify the grounds upon which Petitioner ought to challenge the two G-level deficiencies. See CMS's Motion at 4.

4. Petitioner was represented by its administrator, Ms. Flight. However, the facility was owned by Mr. Gildea who is an attorney in a non-health care field. Mr. Gildea submitted a Notice of Appearance at my request, had input into Petitioner's reply brief before me, and participated in the prehearing conference on March 20, 2003.

5. Two telephone prehearing conferences were held to review with the parties the specific issues to be litigated in this matter. Both prehearing conference summaries issued on my behalf on January 21, 2003 and July 8, 2003, are incorporated into this decision by reference.

6. During the March 20, 2003 conference call, Ms. Flight, Petitioner's representative, stated that Petitioner was not concerned with the amount of the PICMP imposed by CMS, and believed that CMS did have a basis for the four D-level deficiency findings. See Summary of Second Prehearing Conference dated July 8, 2003, at 4.

7. I do not address the issue of whether Petitioner's initial request for hearing, dated October 17, 2001, conformed with the content and specificity requirements of 42 C.F.R. � 498.40, as CMS did raise the issue informally with Petitioner and Petitioner amended its hearing request on December 18, 2002, without objection from CMS.

8. This regulation also permits ALJs, on their own initiative, to add new issues for adjudication.

9. I note that Petitioner did not request the addition of new issues by me in order to continue its litigation against CMS.

10. Subsequent to the March 20, 2003 prehearing conference, CMS filed a document stipulating that it did not object to a dismissal, without prejudice, of the findings that Petitioner, Bethel Health Care Center, was not in compliance with Medicare participation requirements set out at 42 C.F.R. �� 483.25 and 483.25(j), identified as F Tags 309 and 327.