Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD
Appellate Division
In the Case of:
Regency Manor Healthcare Center, Nederland Healthcare Center, Coronado Healthcare Center, and Paris Healthcare Center, Petitioners,
- v. -
Health Care Financing Administration.
Civil Remedies Docket Nos. C-96-039, C-96-304, C-98-79 and C-98-80
App. Div. Docket Nos. A-98-77, A-98-78, A-98-79, and A-98-80
Decision No. 1672
FINAL DECISION ON REVIEW OF
ADMINISTRATIVE LAW JUDGE DISMISSAL
On appeal, Petitioners contested all of the grounds for dismissal of their respective cases.
The standard of review on a disputed issue of law is whether the ALJ decision is erroneous. As discussed below, we conclude, based on the rationale in DAB 1669, that the ALJ did not err in dismissing these cases pursuant to section 498.70(c). Specifically, we find that the ALJ's determination was based on the plain language of section 498.40(b), which mandates that a hearing request identify the specific issues and the findings of fact and conclusions of law that the petitioner disputes, as well as specify the basis for its position. Section 498.70(c), which authorizes dismissal for lack of a timely filed hearing request, clearly refers to the request for hearing described in section 498.40(b). Since Petitioners' letters failed to meet the requirements of section 498.40(b), the ALJ properly dismissed their cases pursuant to section 498.70(c). In view of our conclusion that the cases were properly dismissed pursuant to section 498.70(c), we need not determine whether the cases were also properly dismissed pursuant to section 498.70(b) ) (or whether dismissal pursuant to section 498.70(c) was warranted in the case of Paris Healthcare Center on additional grounds).
Accordingly, we uphold the ALJ's order of dismissal as to Petitioners.
Applicable Authority
To qualify to participate in the Medicare and Medicaid programs as a skilled nursing facility, a facility must be certified as meeting certain requirements imposed by statute, as well as requirements that the Secretary of Health and Human Services has determined to be necessary for the health and safety of individuals to whom services are furnished. The survey and certification process for skilled nursing facilities, established under section 1819(g) of the Act and implemented by the regulations at 42 C.F.R. Part 488, is the means by which HCFA and its agents assess compliance with the requirements for participation in Medicare and Medicaid. The statute and regulations specify remedies that may be utilized by HCFA when a skilled nursing facility is not in substantial compliance with the participation requirements. See Social Security Act, .. 1819, 1919; 42 C.F.R. Part 488, Subpart F. Under these regulations, the facility may appeal the findings of noncompliance leading to the imposition of an enforcement remedy, but not the choice of remedy. The facility may also appeal the level of noncompliance found by HCFA if a successful challenge would affect the range of the civil money penalty. See section 488.408(g), 498.3(b)(12), 498.3(b)(13).
Section 498.40, captioned "Request for hearing," states as follows:
(a) Manner and timing of request. (1) An affected party entitled to a hearing under . 498.5 may file a request for hearing . . .
(2) The affected party or its legal representative . . . must file the request in writing within 60 days from receipt of the notice of the initial, reconsidered, or revised determination unless that period is extended in accordance with paragraph (c) of this section. . . .
(b) Content of request for hearing. The request for hearing 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.
(c) Extensions of time for filing a request for hearing. If the request was not filed within 60 days--
(1) The affected party or its legal representative . . . may file with the
ALJ a written request for extension of time stating the reasons why the request was not filed timely.
(2) For good cause shown, the ALJ may extend the time for filing the request for hearing.
Section 498.70 gives the ALJs authority to dismiss, for cause, a hearing request entirely or as to any stated issue sua sponte or on the motion of a party under the following circumstances:
(a) Res judicata. . . .
(b) No right to hearing. The party requesting a hearing is not a proper party or does not otherwise have a right to a hearing.
(c) Hearing request not timely filed. The affected party did not file a hearing request timely and the time for filing has not been extended.
Procedural Background
In a letter to Regency Manor Healthcare Center (Regency) dated November 13, 1995, HCFA notified Regency that it had decided to terminate the facility's Medicare participation agreement and impose the remedy of denial of payment for new admissions. Regency submitted a letter dated November 27, 1995 which stated in relevant part:
Pursuant to a letter dated November 13, 1995, from Diane Wade, with regard to the above referenced matter, we hereby request a hearing in accordance with 42 CFR Section 498.40 et seq, to contest the finding of non-compliance which led to the enforcement action.
In a letter to Nederland Healthcare Center (Nederland) dated May 23, 1996, HCFA notified Nederland that it had decided to impose a civil money penalty of a specified amount for specified dates. Nederland submitted a letter dated May 28, 1996 which stated in its entirety:
Regarding the above-referenced facility, we hereby request a hearing to contest the remedies, certification issues and any and all remedies and adverse actions recommended as a result of the survey conducted on August 31, 1995 including any and all follow-up surveys which led to the enforcement of this action.
In a letter to Coronado Healthcare Center (Coronado) dated June 3, 1996, HCFA notified Coronado of its decision to terminate the facility's Medicare participation agreement and to impose the remedy of denial of payment for new admissions. Coronado submitted a letter dated June 14, 1996 which stated in its entirety:
Regarding the above-referenced facility, we hereby request a hearing to contest the remedies, certification issues and any and all remedies and adverse actions recommended as a result of the survey conducted on February 22, 1996, including any and all follow-up surveys which led to the enforcement of this action.
In a letter to Paris Healthcare Center (Paris) dated August 23, 1996, HCFA notified Paris that HCFA was continuing the denial of payment for new admissions remedy already imposed by an earlier HCFA notice dated June 5, 1996. Subsequently, by letter dated September 13, 1996, HCFA notified Paris that it was rescinding the denial of payment for new admissions remedy and imposing a civil money penalty. In the interim, Paris submitted a letter dated September 5, 1996 which stated in relevant part:
This is to request a hearing to contest the remedies, certification issues and any and all remedies and adverse actions recommended as a result of the survey conducted on February 22, 1996, including any and all follow-up surveys which led to the enforcement of this action.
HCFA forwarded Regency's November 27, 1995 letter, Nederland's May 28, 1996 letter, Coronado's June 14, 1996 letter, and Paris' September 5, 1996 letter to the Civil Remedies Division, Departmental Appeals Board, which docketed the cases and assigned them to ALJ Leahy. The ALJ stayed two of the cases, Nederland and Coronado, pending HCFA's consideration of settlement proposals. Petitioners subsequently filed in each of the four cases a motion to strike HCFA's determination letters (both the initial letter and any subsequent letters) on the ground that they constituted "deficient notice" and as such violated the Administrative Procedure Act. In the motions, which were substantially similar, Petitioners acknowledged that 498.40(b) requires a provider to identify in its request for hearing the specific issues and findings of fact and conclusions of law with which it disagrees. Petitioners indicated, however, that they were unable to comply fully with these requirements "given the material deficiencies of HCFA's determination notice."
On February 24, 1997, ALJ Leahy and ALJ Jill Clifton issued a ruling denying the motions to strike in these and several other cases in which similar motions had been filed. The ruling stated that Petitioners had "shown no basis on which the relief requested can be granted by an administrative law judge." At 2. The same document also observed that, in nine of the cases, including the four at issue here, "the documents purporting to be hearing requests do not appear to satisfy the requirements specified in 42 C.F.R. . 498.40" and ordered petitioners "to show cause why the actions should not be dismissed for failure to comply with 42 C.F.R. . 498.40(b)." Id. (Prior to the issuance of this order, HCFA had moved to dismiss several of the cases, including Regency, for failure to comply with section 498.40(b).) The order stated that "[t]he presiding administrative law judge in each of these cases will review the filings submitted by the parties and issue her rulings, based on the unique circumstances of each [case]. Hearing request adequacy will be determined following a case-by-case analysis." At 2-3.
The February 24, 1997 order further stated that Petitioners' motions to strike and briefs in support thereof appeared to be relevant to the issue of the adequacy of the documents requesting hearings and would be considered as responding to the order. The order nevertheless gave Petitioners an opportunity to file a supplemental brief containing any new and material arguments. The order also provided for a response brief by HCFA. Following receipt of the parties' briefs, ALJ Leahy issued an order dismissing the cases assigned to her. These appeals followed.
Following the receipt of written briefs in these cases, the Board asked Petitioners to support the request in their last brief for an opportunity to appear before the Board "to present evidence and oral arguments." Letter to parties dated August 24, 1998. Following the issuance of DAB 1669 (and before Petitioners responded to the August 24, 1998 letter), the Board mailed a copy of that decision to Petitioners and provided an opportunity for Petitioners to file a written statement as to why the Board should not uphold the ALJ order of dismissal as to Petitioners based on the rationale in the decision. Letter to parties dated September 9, 1998. No response was filed by Nederland, Coronado, or Paris. Regency responded on October 1, 1998, arguing that its case was distinguishable from DAB 1669 on the facts.
Analysis
As indicated above, the Board in DAB 1669 upheld the ALJ order of dismissal at issue here as to another facility, Birchwood Manor Healthcare Center. The Board there stated in pertinent part:
Section 498.40(b) clearly states that a request for hearing "must" contain certain information. Since this information is mandatory, it necessarily follows that a document lacking this information is not a request for hearing. Moreover, the term "hearing request" in section 498.70(c) clearly refers to the request for hearing described in section 498.40(b), since it is a basic canon of statutory (and hence regulatory) construction that identical terms within the same statute (or regulation) bear the same meaning. [Citation omitted.] Thus, section 498.70(c) not only authorizes dismissal where an otherwise acceptable hearing request is filed after the 60-day deadline in section 498.40(a)(2) but also where a document filed within the 60 days does not constitute a request for hearing within the meaning of section 498.40(b). There is no dispute that Petitioner's October 21, 1996 letter did not identify the specific issues in the case or the findings of fact and conclusions of law with which Petitioner disagreed, nor did it specify the basis for contending that the findings and conclusions were incorrect. Accordingly, the ALJ did not err in dismissing the case in question here pursuant to section 498.70(c) on the ground that there was no timely hearing request. [Footnote omitted.]
DAB 1669, at 9-10. Moreover, the Board noted that "there are compelling reasons for adherence to the clear requirements of the regulations." Id. at 10. Those reasons included ensuring that HCFA had an opportunity to prepare adequately for a hearing, that the ALJ could rule correctly on the relevance of evidence sought to be introduced at the hearing, and that the case not proceed to hearing if only legal issues were disputed. In addition, the Board observed that, "if the ALJ were to permit the petitioner to identify the issues in dispute after accepting a deficient submission as a hearing request, this would substantially delay the resolution of the case." Id. at 11.
The Board in DAB 1669 also rejected the petitioner's argument that its failure to comply with the requirements of section 498.40(b) was excused by deficiencies in HCFA's notice of its initial determination, characterizing that argument "spurious" in the face of what it found to be the detailed notice given by HCFA. Id. at 14.
Furthermore, the Board in DAB 1669 found that the petitioner's reliance on the Board's decision in Carmel Convalescent Hospital, DAB 1548 (1996), was misplaced. While the Board stated in DAB 1548 that "Petitioner cannot lose its hearing rights . . . merely because of the wording of the reasons it gives for its appeal in its hearing request," that decision involved a dismissal of petitioner's hearing request under section 498.70(b) rather than section 498.70(c). The Board accordingly concluded in DAB 1669 that DAB 1548 "does not stand for the proposition that a petitioner is entitled to a hearing although its purported hearing request does not identify any findings or conclusions with which the petitioner disagrees or state any reasons for its disagreement." DAB 1669, at 19.
In DAB 1669, the Board also noted that, as the ALJ had recognized, "fairness required that a case not be dismissed for failure to comply with section 498.40(b) within the required 60 days [for filing an appeal] where there was good cause for such failure." Id. at 20. However, the Board agreed with the ALJ that there was no good cause to allow the case to remain pending.
Finally, in DAB 1669, the Board rejected the petitioner's argument that two rulings rendered by another ALJ supported its position since the ALJ there concluded that he lacked authority to dismiss the cases based on the content of the hearing requests at issue in those two cases. The Board pointed out that the petitioner had--
ignored statements in these rulings to the effect that a document could conceivably be "so lacking in content" as to not constitute an actual hearing request, and that under those circumstances the case could be dismissed under section 498.70(c) if the party filing the document did not submit a proper request within the requisite time frame and did not obtain an extension of time for doing so. See Heritage Healthcare Center v. HCFA, Docket No. C-98-061, Ruling Denying Parties' Motions for Summary Disposition at 11-12 (April 28, 1998); Pinehurst Rehabilitation & Specialty Center v. HCFA, Docket No. C-96-120, Ruling Denying Respondent's Motion to Dismiss at 4 (May 12, 1998).
DAB 1669, at 23-24 (n.15).
Three of the four petitioners here did not respond to the Board's invitation to file briefs showing why the Board should should not uphold the ALJ order of dismissal as to Petitioners based on the rationale in DAB 1669. Thus, there is no dispute that the facts and the applicable law in those cases are substantially the same as in DAB 1669. Regency's response alleged, however, that the facts in its case were materially different from the facts in that decision. Specifically, Regency asserted that the initial determination letter to which its purported hearing request referred identified only one survey finding as the basis for HCFA's determination. Regency argued that the ALJ and HCFA should therefore have been "able to discern the finding that served as the basis for [Regency's] hearing request." Regency's Written Statement dated October 1, 1998, at 3.
Regency's argument has no merit. HCFA's November 13, 1995 letter specifically identifies only one regulation--42 C.F.R. . 483.30(a)(1) and (2)--with which Regency was out of compliance. However, it is possible that HCFA was relying on other deficiencies as well as the basis for its decision to terminate Regency's Medicare participation agreement. See Desert Hospital, DAB 1623 (1997) (holding that HCFA's initial determination was based on all of the deficiencies in the statement of deficiencies although HCFA's determination letter did not list all of these deficiencies). Moreover, even the one regulation cited by HCFA contains two separate requirements, and Regency did not allege that both these requirements were found to have been violated based on a single finding of fact. Thus, Regency's November 27, 1995 letter cannot be said to identify the disputed findings as required by section 498.40(b).
Furthermore, Regency's letter does not give any reasons for disputing even the one finding of non-compliance on which Regency alleged HCFA relied. As discussed above, the plain language of section 498.40(b) mandates that a hearing request not only identify "the specific issues and the findings of fact and conclusions of law that the petitioner disputes," but also that it "specify the basis for its position." As Regency utterly failed to do the latter, dismissal pursuant to section 498.70(c) was clearly warranted based on the analysis in DAB 1669.
We note that, although not raised in response to the Board's inquiry why the cases should not be dismissed based on the rationale in DAB 1669, Petitioners in their prior briefing raised one argument that was not raised and addressed in DAB 1669. We do not find this argument persuasive, however. Petitioners in effect argued that the ALJ's holding that a document that does not contain all of the information specified in section 498.40(b) does not constitute a hearing request was undermined by the ALJ's statement that a petitioner could meet the requirements of section 498.40(b) where HCFA's determination letter is deficient by merely asserting that the letter contains specified procedural flaws or related legal problems. We see no contradiction between the holding and the latter statement. Clearly, if HCFA's notice is deficient, a petitioner should not be penalized for its inability to furnish all of the information required by section 498.40(b). Here, however, Petitioners' purported hearing requests not only failed to contain all of the information specified in section 498.40(b) but also failed to state any respect in which HCFA's determination letters were deficient. (Such a statement would in any event be insufficient as a hearing request in light of the ALJ's finding, which Petitioners did not dispute on appeal, that HCFA's determination letters were not deficient.)
Conclusion
We therefore make the following findings of fact and conclusions of law, relying on the analysis in DAB 1669:
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Cecilia Sparks Ford
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Donald F. Garrett
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M. Terry Johnson
Presiding Board