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Department of Health and Human Services DEPARTMENTAL APPEALS BOARD Appellate Division |
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| IN THE CASE OF | |
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DATE: August 14, 2002 |
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Centers for Medicare & Medicaid
Services
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Docket No. A-02-35
Civil Remedies CR842 Decision No. 1840 |
| DECISION | |
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FINAL DECISION ON REVIEW OF Petitioner, Riverview Village (Riverview), appealed a December 6, 2001 decision by Administrative Law Judge (ALJ) Carolyn Cozad Hughes. Riverview Village, DAB CR842 (2001) (ALJ Decision). Riverview requested a hearing before an ALJ based upon a determination by the Centers for Medicare & Medicaid Services (1) (CMS) imposing a civil monetary penalty (CMP) on Riverview. In her decision, the ALJ found that Riverview's hearing request was not timely filed and dismissed it. Riverview alleged that the ALJ Decision was erroneous. Based on the following analysis, we conclude that the ALJ erred when she dismissed Riverview's request for hearing as untimely. We therefore remand this case to the ALJ for further action consistent with this decision. In doing so we make no findings or conclusions relative to the substantive merits of the case, nor do we hold that Riverview would necessarily be entitled to an in-person hearing. Background Riverview is a nursing facility certified to participate in the Medicare and Medicaid programs as a provider of services. By notice dated December 14, 2000, CMS advised Riverview that, based on deficiencies found during a standard survey and a complaint investigation, it was imposing a $200 per day CMP against Riverview, effective November 22, 2000. On its face, the notice indicated that CMS sent it to Petitioner by both certified mail and facsimile (hereafter, FAX). The notice set out Riverview's right to a hearing and specifically advised it that "a written request for a hearing must be filed no later than 60 days from the date of receipt of this letter." CMS Ex. 1, at 1-3 (unnumbered). The notice also specifically stated that the "[p]rocedures governing this process are set out at 42 CFR 498.40, et seq." Id. at 3 (unnumbered). The CMS FAX machine produced a receipt which indicated that Riverview received the FAX on December 14, 2000. CMS Ex. 2; ALJ Decision at 1-2. By letter to the Civil Remedies Division (CRD) of the Departmental Appeals Board (Board) (and copied to CMS), dated February 14, 2001, Riverview requested a hearing. CMS Ex. 4. Riverview sent the letter by certified mail. Copies were delivered to both the CRD and CMS on February 20, 2001. CMS Ex. 5, at 1. Before the ALJ, CMS sought dismissal of Riverview's hearing request as untimely. CMS argued that Riverview did not file its hearing request within 60 days of receipt of CMS' notice on December 14th. CMS calculated that the hearing request was due on or before February 12, 2001; that is, 60 days after the date of its December 14, 2000 FAX. Riverview argued that CMS could not serve notice by FAX. Thus, according to Riverview, the presumption of receipt five days after mailing (in this case, December 19th) controlled, giving Riverview until February 17, 2001 to file. However, Riverview asserted that, since February 17 was a Saturday, it had until Monday, February 19, 2001, to file its hearing request. The parties also disputed whether the effective date of filing is the date of mailing or the date of receipt. See ALJ Decision at 1-2. The ALJ Decision The ALJ based her decision on the two findings of fact
and conclusions of law (FFCLs) quoted and discussed below.
In reaching this FFCL, the ALJ stated that she was relying
upon section 205(b) of the Social Security Act (Act) and 42 C.F.R.
ALJ Decision at 3 (emphasis in original). The ALJ determined that 42 C.F.R. � 488.434 specified the manner in which CMS notifies an affected party of its decision to impose a CMP. The ALJ noted that the regulation omitted reference to mailing, merely providing that CMS "sends a written notice of the penalty . . . ." The ALJ then cited the preamble to the final rule adopting section 488.434 to demonstrate that the regulatory drafters sought to provide CMS flexibility in its method of providing notice to providers. The preamble provided:
59 Fed. Reg. 56,116, 56,200-01 (Nov. 10, 1994). ALJ Decision at 2-3. Accordingly, the ALJ concluded that, since at least 1994, the regulations specifically authorized CMS to serve notice of a CMP by FAX. Id. at 3. The ALJ then rejected Riverview's reliance on what the ALJ characterized as the more general rule at 42 C.F.R. � 498.20(a). Riverview cited section 498.20(a) for its position that CMS may not serve an initial notice by FAX. In pertinent part, section 498.20(a) provides that CMS "mails notice of an initial determination to an affected party." The ALJ reasoned that section 498.20(a) did not preclude CMS from serving notice in another fashion, particularly in light of the specific service rule in CMP cases (42 C.F.R. � 488.434). Moreover, the ALJ interpreted a DAB Appellate Panel's decision in Cary Health and Rehabilitation Center, DAB No. 1771 at 10-12 (2001), as additional support for the proposition that a hearing request must be filed within 60 days of receiving CMS' notice regardless of the manner in which that notice is conveyed. The ALJ stated that Cary recognized, in principle, the validity of sending a notice of a remedy by FAX. ALJ Decision at 3-4. In FFCL B, the ALJ found that Riverview received the faxed notice on December 14, 2000.
Reaching this FFCL, the ALJ distinguished Cary from the facts in this case. The ALJ noted that under 42 C.F.R. �� 498.40(a) and 498.22(b)(3), notice is presumed received five days after the notice date unless there is a showing of earlier receipt. The ALJ recounted that the petitioner in Cary argued that it had not received the faxed copy of CMS' notice. Further, CMS had not provided evidence of the petitioner's receipt of the faxed notice. Here, however, while Riverview took the position that it had not received CMS' notice "pursuant to 42 C.F.R. � 498.22(b)(3) until December 19, 2000," Riverview did not deny that CMS had faxed the notice to Riverview on December 14, 2000. ALJ Decision at 4. The ALJ rejected Riverview's assertion that CMS was required to prove when Riverview had received the notice. Citing Wellington Oaks Care Center, DAB No. 1626 (1997), the ALJ stated that where a petitioner did not deny receiving notice, it may be assumed to have received it. The ALJ determined that this holding alone provided a sufficient basis to find that Riverview had received notice on December 14th. However, the ALJ also found that CMS had provided evidence which affirmatively demonstrated Riverview's receipt of the notice. ALJ Decision at 4-5. Although the parties raised it, the ALJ did not reach the issue of whether the effective date of filing was the date of mailing or the date of receipt. The ALJ reasoned that, using either date, Riverview failed to file its hearing request within 60 days after first receiving notice of CMS' initial determination. ALJ Decision at 2, n.1. Standard of Review Our standard of review of an ALJ decision on a disputed issue of law is whether the ALJ decision is erroneous. Our standard of review on a disputed issue of fact is whether the ALJ decision as to that fact is supported by substantial evidence on the record as a whole. Beechwood Sanitarium, DAB No. 1824 (2002). The standard of appellate review of a dismissal of a request for hearing where dismissal is committed by regulation to the discretion of the ALJ is whether the ALJ has abused his or her discretion. Osceola Nursing and Rehabilitation Center, DAB No. 1708 at 2 (1999). As discussed below, we conclude that the ALJ's dismissal of Riverview's hearing request was erroneous because the hearing request was filed timely. The Regulations The regulation at 42 C.F.R. � 488.434, entitled "Civil money penalties: Notice of Penalty," provides in relevant part:
The regulation at 42 C.F.R. � 498.20(a) provides:
The regulation at 42 C.F.R. � 498.40 is entitled Request for Hearing and provides, in relevant part:
The regulation at 42 C.F.R. � 498.22(b)(3) pertinently provides that the date of receipt will be presumed to be five days after the date on the notice unless there is a showing that it was received earlier or later. Riverview's Argument Riverview challenged the ALJ's conclusion that it was required to file its request for a hearing within 60 days of receipt of the CMS notice regardless of the manner in which notice was conveyed. Riverview argued that the plain language of the regulations at 42 C.F.R. �� 498.20(a), 498.40(a)(2) and 498.22(b)(3) requires that notice of a CMP must be mailed to a facility and that the 60-day deadline begins to run five days after the date of the mailed notice unless a party can demonstrate that the mailed notice was received by the facility at an earlier or later date. Thus, Riverview reasoned, the ALJ's conclusion that the time for filing begins to run on the date of receipt, without regard to the manner of delivery by CMS, was erroneous. Riverview Br. at 2-3. Riverview also argued that the ALJ's conclusion that 42
C.F.R. Additionally, Riverview asserted that the ALJ had misapplied the Cary decision, since the Cary panel never squarely reached the issue of whether service by FAX could substitute for service by mail. More importantly, Riverview stated, the appellate panel in Cary confirmed Riverview's position that Part 498 established the procedures for hearings on CMS determinations. In support of its position that the notice procedures at 42 C.F.R. � 498.20(a) controlled, Riverview also cited ALJ decisions in Sedgwick Health Care Center, DAB CR596 (1999); Jackson Manor Health Care, Inc., DAB CR545 (1998); and Hillcrest Health Facility, DAB CR489 (1997). In each of these cases, the ALJ stated that a party must file a hearing request within 65 days from the date of mailing of a notice of determination by CMS. Riverview argued that the plain terms of the regulation at 42 C.F.R. � 498.20(a) must be followed. Thus, according to Riverview, a facility must be allowed 65 days (the date of the notice plus five days for mail delivery) to file its hearing request, unless CMS can demonstrate that the mailed notice of the CMP was received by the facility within less than five days after the date of the notice. Riverview Br. at 4-9. Alternatively, Riverview argued, even if a faxed initial determination was sufficient to start the 60-day appeal period, the ALJ abused her discretion by dismissing Riverview's appeal since Riverview had acted reasonably in filing its request within 60 days of receipt of CMS' mailed notice. Riverview relied on the ruling of ALJ Steven Kessel in Northgate Healthcare Center, Docket No. C-01-071, Ruling Denying Motion to Dismiss (April 30, 2001) (Riverview Ex. 4). There, HCFA had provided two notices, faxed and mailed, to the petitioner, thereby establishing "two distinct deadlines" for filing an appeal. The ALJ in that case determined that the second notice "arguably" extended the time for filing and at a minimum, placed the petitioner in an ambiguous situation. Riverview suggested that the situation in its case and others, like Northgate, was in stark contrast to situations in other cases where CMS' notice stated specifically that the petitioner's appeal was due 60 days from receipt of the FAX or otherwise specified the due date upon which CMS would rely to determine timeliness of an appeal. (2) Riverview maintained that it did not agree with CMS' underlying position that a FAX was sufficient to trigger the time for filing an appeal. However, Riverview noted, had CMS put language in the faxed notice alerting Riverview that CMS intended to start the clock on the appeal process as of receipt of the FAX, Riverview would at least have been cognizant of what CMS would consider a timely filed appeal. Riverview Br. at 13-15. |
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| ANALYSIS | |
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Riverview filed a timely request for hearing. A. Summary of decision We hold that as a general rule, Part 498, which provides that CMS' notice of its initial determination to impose remedies against a facility will be sent by mail, controls when calculating the due date for the filing of a request for hearing. We do not rule out the use of a FAX for notice purposes where the FAX clearly and unambiguously specifies that it is the notice document. However, under Part 498, when a facility receives both a FAX and a mailed notice it would be reasonable for it to assume, in the absence of any specific admonition to the contrary, that the FAX is a "courtesy" copy and the mailed notice is the operative document for the purpose of calculating the period within which a hearing must be requested. At the very least, the sending of both a FAX and a mailed notice, combined with the arguable overlap between the regulations in Parts 488 and 498 regarding notices of remedies, presents a confusing and ambiguous situation for a facility in attempting to determine when it must request a hearing, and we will not deprive a facility of its right to a hearing under such circumstances. Furthermore, under the circumstances of this case, where we do not have proof of an earlier date the facility received the notice mailed on December 14, 2001, we apply the 5-day rule, and find that, given the 60th day after the presumed date of receipt fell during a weekend (followed by a Federal Holiday), the request for hearing was due on February 20, 2001. Thus, Riverview's request for hearing was timely filed since both CMS and the Board received the request on the due date. Finally, we remand the case to the ALJ for further proceedings consistent with these holdings. We make no findings regarding the merits of Riverview's case. B. CMS' mailed notice, not the facsimile, triggered the period for Riverview to request a hearing. Absent a request for extension, a facility must file its hearing request within 60 days of receipt of a notice of imposition of remedies from CMS. In its notice to Riverview, CMS specifically informed Riverview that the request for hearing was governed by Part 498, which specifically states that such notice will be served by mail. CMS, however, then urged both the ALJ and this Board to apply regulations at Part 488, which arguably allows service by FAX. While the ALJ agreed with CMS that Part 488 was the more "specific" rule to apply and that Part 498 was the more "general" rule, we hold that under the circumstances presented here, Part 498 controls a determination as to whether the hearing request was timely filed. Under the particular circumstances here, Riverview could reasonably treat the faxed copy as a "courtesy copy" and the mailed copy as "official" notice for purposes of calculating a subsequent appeal deadline, since the regulatory authority governing the hearing request relies only on mailing to calculate the request for hearing deadline. CMS' actions in notifying Riverview of the CMP by both FAX and mail created confusion relative to Riverview's appeal. The notice informed Riverview that an appeal was due within 60 days of receipt. In this case, the ALJ and CMS relied on the specific language of 42 C.F.R. � 488.434 to establish the FAX as sufficient notice of the CMP. However, the notice itself did not reference that regulation. Instead, the notice plainly stated that appeals "Procedures governing this [appeal] process are set out in 42 C.F.R. � 498.40, et seq." See Notice of Imposition of Remedies (December 14, 2000) (CMS Ex. 1) at 3 (unnumbered). Thus, rather than directing Riverview's attention to the specific regulation which arguably permits serving notice of a CMP by FAX, the notice directed Riverview to the regulation which specifically states that the appeal process is governed by the mailing of the notice. Riverview could reasonably conclude that the timing of an appeal would be controlled by the mailed notice. Further, not having explained why it provided notice by both FAX and certified mail, CMS would have us conclude that it acted without purpose in mailing the notice. Arguably, CMS would have provided official notice by FAX had it faxed the notice to Riverview and unequivocally notified Riverview that it was calculating the filing deadline from the date of the notice by FAX (thus effectively relegating the mailed notice to the status of a courtesy copy). In Nursing Inn of Menlo Park, DAB CR799 (2001); aff'd Nursing Inn of Menlo Park, DAB No. 1812 (2002), CMS' notice of remedies (including a CMP) specifically informed the facility that "since this notice is being sent to you by facsimile, your appeal must be filed no later than sixty (60) days from the date indicated on this notice." DAB CR799 at 4. Under the circumstances of that case, the ALJ found that the FAX triggered the hearing request and that petitioner did not file a timely hearing request. DAB CR799 at 6. In a situation more parallel to that presented here, ALJ Kessel, in his Northgate Healthcare Center Ruling, held that when notified by both FAX and subsequent letter, the facility could use the date of receipt of the letter as the trigger for calculating the period during which a request for hearing must be filed. See Riverview Ex. 4. The Cary decision provides little support for CMS' position. First, the Board in Cary explicitly found that Part 498 governs the process of requesting a hearing. Second, Cary presented no issue to the Board requiring us to consider whether FAX service can substitute for mail service in terms of calculating the date to request a hearing under Part 498. Third, the notice issue in Cary focused on a denial of payment for new admissions. Thus, there was no analysis of the potential application of the regulation at section 488.434 in the context of the general regulations governing hearing procedures at Part 498. Fourth, petitioner in Cary disputed receipt of the FAX notice. Id. at 11. Here, there is no dispute that Riverview received the FAX. Rather, the issue is the impact of the notice by FAX when notice was also provided by certified mail. Fifth, petitioner in Cary simply ignored a specific notice of its appeal rights because it believed that the notice was objectionable. Id. at 13. When it did file an appeal, it was significantly past the 60-day deadline. Here, Riverview did not ignore its notice. Rather it has demonstrated legitimate confusion regarding the document upon which it relied to base its hearing request. Here, by mailing the notice as well as faxing it, CMS acted in a manner inconsistent with its position that the deadline for submission of Riverview's appeal should have been calculated based on receipt of the FAX. Even viewing CMS' actions in the most favorable light, in the context of this case, CMS created some ambiguity with respect to how notice to a party of CMS' imposition of a remedy and the party's right to a hearing is effectuated. Given the reference in section 498.20(a) to mailing notice of an initial determination, CMS cannot rely on the section 488.434 provision for serving such a notice by FAX or other means to defeat Riverview's right to a hearing. Based on these factors, we hold that FFCL A in which the ALJ concluded that Riverview was required to file its hearing request within 60 days of receipt of the notice, regardless of the manner of service, was erroneous. We vacate FFCL A and substitute in its place the following FFCL:
C. Riverview's request for review was timely filed. Having found FFCL A erroneous it follows that, for purposes of establishing the deadline for an appeal, the timing of Riverview's receipt of the faxed notice is immaterial. (3) Accordingly, we vacate FFCL B. Before proceeding with our analysis of this issue, we note that, as an attachment to its Reply Brief, Riverview submitted an affidavit from its attorney to support its arguments regarding the date on which Riverview's request for hearing was mailed. On July 5, 2002, CMS objected to the inclusion of that affidavit in the record. Riverview's affidavit is irrelevant to our analysis. We have not considered it and will not admit it into the record of this case. Our determination in regard to FFCL A necessarily establishes that the correct date of receipt for calculating the filing deadline is December 19, 2000, the date Riverview presumably received the mailed notice, absent any proof of earlier receipt of the mailed notice. See 42 C.F.R. � 498.40(a). The ALJ recognized that the parties disputed whether the effective date of filing an appeal is the date of mailing (Riverview's position) or the date of receipt (CMS' position). The ALJ did not reach this issue because, she concluded, "using either date Petitioner failed to file its hearing request within 60 days after first receiving CMS' initial determination." ALJ Decision at 2, n.1. There is no evidence showing that Riverview received the mailed notice before December 19th. Therefore, the date by which the hearing request must have been filed was 60 days from December 19th. However, the 60th day, February 17, 2001, was a Saturday. Monday, February 19, 2001 was Presidents' Day, a Federal Holiday on which mail was not delivered and Federal Offices were closed. Consequently, the "60th" day for Riverview's purposes would have been February 20, 2001. Thus, the issue then becomes when Riverview's request for a hearing was filed with the CRD. Both the CRD and CMS did, in fact, receive the request for hearing on Tuesday, February 20, 2001. Taking the position that the date of receipt constituted filing, CMS argued that the request was untimely under both parties' theory of receipt of notice of the imposition of the CMP remedy as it was filed on the 67th day after the receipt of the faxed notice and the 63rd day after the December 19th receipt of the mailed notice. CMS Br. at 24-25. CMS' arguments are without merit. Neither the regulations governing a provider request for a hearing before an ALJ, 42 C.F.R. � 498.40, et seq., nor the regulations governing a party's right to appeal from an ALJ Decision, 42 C.F.R. � 498.80, et seq., define the term "filed." However, the Civil Remedies Division's Procedures (sent to Riverview with the CRD's February 28, 2001 Acknowledgment of Appeal) provide -- "Unless the judge directs otherwise, a party's submission . . . is filed when a party places it with the U.S. Postal Service (regular mail) or delivers it by other means to the Civil Remedies Division." (4) Civil Remedies Division Procedures at 2. The Appellate Division Guidelines -- Appellate Review of Decisions of Administrative Law Judges Affecting a Provider's Participation in the Medicare and Medicaid Programs contain virtually identical language. See Guidelines at 1-2. We see no reason to change our long-standing approach, let alone to do so without notice. (5) Thus, a request for hearing is properly filed with the Civil Remedies Division when mailed. (6) Moreover, even if we were to accept CMS' argument, that receipt constituted filing, Riverview's request for a hearing was still timely filed since both CMS and the CRD received the request on Tuesday, February 20, 2001, the day it was due. This was the earliest it could have been received even if sent by the USPS equivalent of next day delivery on February 16, 2001. (7) Based on our analysis above, we vacate the ALJ's FFCL B and insert in its place the following FFCL (8) --
Conclusion Based on the preceding analysis, we reverse the FFCLs upon which the ALJ relied in reaching her decision. In doing so, we vacate FFCLs A and B and substitute the following FFCLs --
We remand the record in this case to the ALJ for further action consistent with this decision. |
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| JUDGE | |
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Cecilia Sparks Ford M. Terry Johnson Marc R. Hillson |
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| FOOTNOTES | |
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1. CMS was previously named the Health Care Financing Administration (HCFA). See 66 Fed. Reg. 35,437 (July 5, 2001). We use "CMS" in this decision unless we are quoting documents that refer to HCFA. 2. See Nursing Inn of Menlo Park, DAB CR799 (2001), aff'd; Nursing Inn of Menlo Park, DAB No. 1812 (2002); Parkview Care Center, DAB CR785 (2001); and Homestead of Hugo, DAB CR819 (2001). 3. We agree with the ALJ that where a "Petitioner does not deny receiving a notice, it may have been assumed to have received it." ALJ Decision at 5. The ALJ determined that on that basis alone, she could find that Riverview received the FAX on December 14th. However, the ALJ then proceeded to document for the decision that CMS in fact had a paper trail establishing Riverview's receipt of the FAX on December 14th. Id. 4. Although Riverview's request for hearing was sent by certified mail, Riverview, inexplicably, failed to provide USPS documentation establishing when the letter was in fact mailed. However, since it was received on February 20th, it had to have been mailed before February 19th. 5. Filing accomplished only by receipt would be particularly unworkable as mail for our offices is currently being delayed by being shipped to remote locations for irridation. 6. Similarly, the Board's procedural regulations for grant and other programs consider a document filed when postmarked. See 45 C.F.R. � 16.20(e). 7. See also 45 C.F.R. � 16.19. 8. In view of our holdings above, we need not reach Riverview's exceptions alleging that it had shown good cause for the alleged late filing and that the ALJ had abused her discretion by dismissing Riverview's appeal. |
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