SUBJECT:

The Oaks

Petitioner,

Centers for Medicare & Medicaid Services.

DECISION

I dismiss the hearing request of Petitioner, The Oaks. The Centers for Medicare & Medicaid Services (CMS) imposed a loss of approved Nurse Aide Training and Competency Evaluation Program (NATCEP) and Competency Evaluation Program (CEP) due to a finding of substandard quality of care. As Petitioner does not currently have a NATCEP/CEP in place and has not had such a program in place for four years, Petitioner has not suffered an injury for which relief can be granted and has no right to an appeal.

I. Background

The essential facts of this case are not in dispute. Petitioner is a nursing facility that is certified to participate in the Medicare and Medicaid programs. On March 4, 2004, Petitioner was surveyed for compliance with federal participation requirements. On May 5, 2004, a follow-up survey was conducted to verify if the facility had achieved substantial compliance with the applicable federal regulations. The surveyors determined that Petitioner was not yet back in compliance. On May 21, 2004, Petitioner filed a request for a hearing. On June 22, 2004, a second re-visit survey was conducted and the surveyors determined that the facility had returned to substantial compliance as of June 10, 2004.

CMS advised the facility by letter dated June 23, 2004, that based on its noncompliance with the participation requirements, payment for all new Medicare and Medicaid admissions (DPNA) would be denied effective July 8, 2004. The notice letter informed the facility that its Medicare/Medicaid agreement would be terminated on September 4, 2004, unless the facility achieved substantial compliance before that date. The notice letter also informed the facility that its noncompliance with 42 C.F.R. � 483.25(c) constituted Substandard Quality of Care (SQC) under 42 C.F.R. � 488.301 and, as a result, CMS withdrew approval of any NATCEP/CEP pursuant to sections 1819(f)(2)(B) and 1919(f)(2)(B) of the Social Security Act (Act). On July 15, 2004, CMS sent Petitioner a letter in which it informed Petitioner that it had attained substantial compliance with participation requirements. CMS Ex. A. As a result of achieving substantial compliance, both the termination remedy and the DPNA remedy were rescinded. The letter made no mention of the loss of approval of a NATCEP/CEP. Id.

The case was assigned to me for a hearing and a decision. On November 10, 2004, CMS moved to dismiss Petitioner's hearing request, citing its rescission of proposed remedies, and Petitioner opposed the motion by memorandum dated December 10, 2004. CMS offered one exhibit, CMS Exhibit (Ex.) A, and the affidavit of Candace Andrus-Ware, to support its motion to dismiss. Petitioner accompanied its response to CMS's motion to dismiss with one exhibit, Petitioner (P.) Ex. A. Neither party has objected to my receiving these exhibits into the record. Therefore, I admit CMS Ex. A, the Candace Andrus-Ware affidavit, and P. Ex. A into the record.

II. Issues, findings of fact and conclusions of law

A. Issues

The issues in this case are whether:

1. Petitioner has a right to a hearing; and, if not;

2. I must dismiss Petitioner's hearing request.

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 set forth each Finding below as a separate heading. I discuss each Finding in detail.

1. Petitioner has no right to a hearing.

A facility does not have a right to a hearing to challenge every action by CMS with which it disagrees. Only certain actions create hearing rights. In general, a participating nursing facility will have a right to a hearing if CMS makes an initial determination to impose a remedy against that facility. 42 C.F.R. � 498.3(b)(13). The possible remedies that CMS might impose against a facility are specified at 42 C.F.R. � 488.406(a). No right to a hearing exists pursuant to 42 C.F.R. � 498.3(b)(13), unless CMS determines to impose - and actually imposes - one of the specified remedies. The Lutheran Home - Caledonia, DAB CR674 (2000), aff'd, DAB No. 1753 (2000); Schowalter Villa, DAB CR568 (1999), aff'd, DAB No. 1688 (1999); Arcadia Acres, Inc., DAB CR424 (1996), aff'd, DAB No. 1607 (1997). Indeed, the Secretary of Health and Human Services (Secretary) specifically rejected a proposal to grant hearing rights for deficiency findings that were made without the imposition of remedies. 59 Fed. Reg. 56116, 56158 (Nov. 10, 1994).

A participating facility's authorization to conduct a NATCEP/CEP is governed by sections 1819(f)(2)(B) and 1919(f)(2)(B) of the Act and by regulations at 42 C.F.R. �� 483.150 - 483.154. ⁽¹⁾ The regulations provide that a State may not authorize a facility to conduct a NATCEP/CEP if that facility has been subjected to an extended or partial extended survey as is described at sections 1819(g)(2)(B)(i) or 1919(g)(2)(B)(i) of the Act. 42 C.F.R. � 483.151(b)(2)(iii). An "extended survey" occurs where a facility is found to have furnished a substandard quality of care during a standard survey. 42 C.F.R. �� 488.301, 488.310. A "partial extended survey" occurs where a facility is found to have provided care of a substandard quality at an abbreviated standard survey. 42 C.F.R. � 488.301. "Substandard quality of care" is defined at 42 C.F.R. � 488.301 to mean:

one or more deficiencies related to participation requirements under [42 C.F.R.] � 483.25, . . . which constitute either immediate jeopardy to resident health or safety; a pattern of or widespread actual harm that is not immediate jeopardy; or a widespread potential for more than minimal harm, but less than immediate jeopardy, with no actual harm.

Thus, a finding of an immediate jeopardy level deficiency under 42 C.F.R. � 483.25 (or other regulations that are not relevant to this case) will trigger either an extended or a partial extended survey. And, a facility's NATCEP/CEP authorization must be revoked, under operation of law, where a partial extended survey is conducted at that facility. Alden Park Strathmoor, DAB CR1116 (2003).

As stated above, it is the remedy, and not the citation of a deficiency, that generates the right to a hearing. Eaglecare, Inc., d/b/a Beech Grove Meadows, DAB CR923 (2002); Schowalter Villa, DAB No. 1688 (1999); Arcadia Acres, Inc., DAB No. 1607 (1997). See also 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); and Fort Tryon Nursing Home, DAB CR425 (1996). In each of these cases, the failure or inability of the petitioner to demonstrate that the appealed survey findings and deficiency determinations had resulted in a remedy actually in effect was fatal to its appeal. It is the penalty, not the deficiency citation, that is the source of the appeal right, and, in each of these cases, the hearing request was dismissed. The appellate panels of the Departmental Appeals Board (Board) and the administrative law judges who decided these cases have uniformly adhered to the doctrine that a citation of deficiency which does not result in the imposition of a remedy, or which results in the imposition of a remedy later rescinded or reduced to zero, does not create the right to an hearing. A careful reading of the regulatory language set out at 42 C.F.R. �� 498.3(b)(13), (14), and (16) makes the application of that doctrine to this case clear.

Petitioner in this case does not have a right to a hearing. The undisputed facts establish that CMS determined that Petitioner was deficient and warned Petitioner that it would impose remedies. Petitioner achieved substantial compliance resulting in CMS rescinding the proposed remedies of termination and DPNA. CMS Ex. A. The loss of approval of a NATCEP/CEP was not rescinded. Id. However, since Petitioner did not currently have a NATCEP/CEP in place, and has not had a NATCEP/CEP in place since 2000, Petitioner did not incur the loss of approval of an existing program. Affidavit of Candace Andrus-Ware. Therefore, Petitioner did not suffer an injury for which relief can be granted and has no right to an appeal.

The regulation at 42 C.F.R. � 498.3(b)(13) confers appeal rights in the case of " . . . a finding of noncompliance that results in the imposition of a remedy specified in [42 C.F.R.] � 488.406 of this chapter, except the State monitoring remedy." The regulations confer appeal rights on a skilled nursing facility, such as Petitioner, when the issue is "[t]he level of noncompliance found by CMS . . . but only if a successful challenge on this issue would affect . . . (i) [t]he range of civil money penalty amounts that CMS could collect . . . or (ii) [a] finding of substandard quality of care that results in the loss of approval for a . . . nurse aide training program," or NATCEP/CEP. 42 C.F.R. �� 498.3(b)(14)(i), (ii) (emphasis added). Further, the regulation at 42 C.F.R. � 498.3(b)(16) states that "[t]he finding of substandard quality of care that leads to the loss by a [nursing facility] of the approval of its nurse aide training program" is appealable. (Emphasis added). The plain language of the regulations makes it clear that a substandard quality of care finding is appealable when it results in a facility's loss of a NATCEP/CEP currently in existence.

Petitioner asserts that it remains entitled to an evidentiary hearing on the findings of substandard quality of care because nursing facilities often struggle to find and keep good employees. Petitioner contends that, although it has not had to exercise its right to develop a NATCEP in the recent past, it may suffer a labor shortage necessitating it to develop such a program in the next two years. To support its argument, Petitioner points to the language differences in 42 C.F.R. � 498.3(b)(14)(ii) (finding of "substandard quality of care that results in the loss of approval for a SNF or NF of its nurse aide training program ") and 42 C.F.R. � 498(b)(16) ("the finding of substandard quality of care that leads to the loss . . . of the approval of its nurse aide training program"). See P. Memorandum. Petitioner contends that the phrase "leads to the loss" should be strictly construed to refer to a facility that attempts to gain approval of a program not previously in existence. Id. I do not read the phrases "results in the loss" and "leads to the loss" to be any different. Both phrases strictly construed lead to the obvious conclusion that a right to a hearing is available to a nursing facility with an existing NATCEP/CEP and not to a facility without one.

Petitioner also argues that a February 15, 2001 directive from CMS to Associate Regional Administrators for state survey agencies instructs surveyors that when a determination of substandard quality of care is made, that leads to the loss of NATCEP, the determination gives rise to a right to hearing under Part 498. P. Memorandum; P. Ex. A. I read the document marked as P. Ex. A to be completely in accord with the regulations and prior Board decisions. A right to a hearing attaches when a facility loses approval for a NATCEP/CEP the facility already operates. Petitioner's argument is without merit and does not give Petitioner a right to a hearing.

2. I must dismiss Petitioner's hearing request because Petitioner has no right to a hearing.

In the instant case, where Petitioner does not have a NATCEP/CEP program in existence, Petitioner has not suffered such a loss and there is simply nothing to litigate. If Petitioner were allowed to proceed and it prevailed on the merits of the case, there would be no relief that I could grant.

Accordingly, I must dismiss Petitioner's hearing request in this case because it has no right to a hearing. 42 C.F.R. � 498.70(b).

Anne E. Blair

Administrative Law Judge

1. Generally, section 1819 of the Act applies to a facility's participation in the Medicare program and section 1919 of the Act applies to a facility's participation in a State Medicaid program.