SUBJECT:

Brookside Rehabilitation and Care Center,

Petitioner,

Centers for Medicare & Medicaid Services.

DECISION AND ORDER DISMISSING CASE

This matter is before me on the Motion to Dismiss filed by the Center for Medicare & Medicaid Services (CMS). The Motion is based on the untimeliness of the request for hearing filed by Petitioner, Brookside Rehabilitation and Care Center, on January 19, 2006. Because the Motion to Dismiss is supported by the facts of this case and the settled law of this forum, I GRANT the Motion and DISMISS Petitioner's request for hearing, on the authority of 42 C.F.R. � 498.70(c). My reasons for doing so are set out below.

I. Procedural Background

Petitioner Brookside is a long-term care facility located in Burnsville, North Carolina. Petitioner characterizes the community as a very small town in the Appalachians. Brookside participates in the Medicare and Medicaid programs, and its participation obliges it to remain in substantial compliance with the programs' requirements. A compliance survey of Brookside was completed by state authorities on or about September 21, 2005, and on October 12, 2005. CMS notified Brookside by letter and facsimile transmission (fax) that penalties would be imposed on the facility based on citations for noncompliance deriving from the survey. Brookside did not file its request for hearing as contemplated by 42 C.F.R. � 498.40(a)(2) until January 19, 2006. Its request for hearing acknowledged that it was being filed "considerably later than 60 days following the date of the CMS Notice."

The parties' responses to the "60-day" Order of February 2, 2006 recognized the untimeliness of Petitioner's request for hearing as an issue requiring resolution before the merits of the case could be addressed, and a schedule for doing so was established on April 19, 2006. That schedule was later amended on June 1, 2006. CMS's Motion to Dismiss was filed accordingly, and the cycle of briefing on it has been completed.

II. Discussion

The parties' exchanges have been marked by candor and frankness on virtually every point, and it is clear that they well understand the principles and rules that govern the result I announce here. Three of those principles can be summarized at an early point in this discussion.

The first principle is the most general: no facility in Brookside's position should be casually deprived of a legally-created right to seek review of an adverse CMS action. That principle has been distilled by the Departmental Appeals Board (Board) into this admonition: an Administrative Law Judge (ALJ) "should not lightly conclude that a petitioner has failed in its effort to take advantage of its opportunity for a hearing." The Carlton at the Lake, DAB No. 1829, at 8 (2002).

The second principle is that an ALJ must exercise discretion in assessing the reason or reasons for defects such as untimeliness in a hearing request. The regulation governing this appeal provides that "[f]or good cause shown, the ALJ may extend the time for filing the request for hearing." 42 C.F.R. � 498.40(c)(2). The concept of "good cause" has never been defined in this forum or before the Board as anything other than circumstances beyond the ability of the party-litigant to control. Hillcrest Healthcare, L.L.C., DAB No. 1879 (2003); Glen Rose Medical Center Nursing Home, DAB No. 1852 (2002); Hospicio San Martin, DAB No. 1554 (1996); The Heritage Center, DAB CR1219 (2004); Hillcrest Healthcare, L.L.C., DAB CR976 (2002). I have applied that definition to the facts of this case.

The third principle is an extension of the second, and it holds that a facility's acts or failures to act when faced with a CMS action creating a right of appeal to this forum are by definition not beyond the ability of that facility to control, and thus cannot constitute good cause for filing its hearing request late. Concourse Nursing Home, DAB No. 1856 (2002); Nursing Inn of Menlo Park, DAB No. 1812 (2002); Cary Health and Rehabilitation Center, DAB No. 1771 (2001); The Heritage Center, DAB CR1219 (2004); Carrington South Health Care Center, DAB CR1071 (2003); EagleCare, Inc., d/b/a Beech Grove Meadows, DAB CR923 (2002).

Those three principles have guided my analysis in reaching the following findings and conclusions. Each finding or conclusion is set out below, numbered and presented in boldface text.

A. CMS sent notice of its action to Petitioner on October 12, 2005.

The survey of Petitioner's facility concluded on September 21, 2005. At first, CMS informed Petitioner that it would impose a substantial civil money penalty (CMP) for instances of noncompliance asserted to have begun on July 27, 2005; this proposal was communicated to Petitioner by CMS's letter of October 7, 2005. Within a week, however, CMS revised its assessment of the date on which Petitioner's noncompliance had begun.

CMS wrote again to Petitioner on October 12, 2005 and announced that it would impose a CMP of $5000 per day beginning July 29, 2005 and continuing though September 4, 2005, and would impose a CMP of $200 per day beginning on September 5, 2005 and continuing until Petitioner had achieved substantial compliance. This letter was an "initial, reconsidered, or revised determination" by CMS. 42 C.F.R. �� 488.406, 498.3(b)(13). CMS sent one copy of its October 12, 2005 letter to Petitioner by mail, but a copy was also sent to Petitioner by fax. It was this October 12, 2005 letter, and not CMS's earlier letter to Petitioner, that constituted the agency action from which Petitioner's right to appeal arose. 42 C.F.R. �� 498.5, 498.40.

B. Petitioner received CMS's notice letter on or about October 17, 2005.

The regulation governing appeals pursuant to 42 C.F.R. Part 498 provides that a CMS notice letter is presumed to be received "5 days after the date on the notice unless there is a showing that it was, in fact, received earlier or later." 42 C.F.R. � 498.22(b)(3). There is some evidence in this record to support a finding that Petitioner received CMS's notice letter by fax on October 12, 2005, but I need not make such a finding. In light of Riverview Village, DAB No. 1840 (2002), it seems prudent to rely on the regulatory presumption of delivery not later than Monday, October 17, 2005. That is not to say, however, that the fax of CMS's notice is of no significance in this chronology. As will become more apparent below, the fax was a supplemental warning to Petitioner, obvious and unmistakable, that it faced serious administrative sanctions and that its time for response was limited.

C. Petitioner's hearing request was filed on January 19, 2006.

Petitioner transmitted its hearing request to the Civil Remedies Division in a seven-page letter on January 19, 2006. The hearing request was dated January 19, 2006, and was received by the Civil Remedies Division on January 25, 2006. The explicit holding of Riverview Village, DAB No. 1840, affirms that hearing requests are considered filed when they are mailed. Thus, Petitioner's hearing request was filed on January 19, 2006.

D. Petitioner's hearing request was filed more than 60 days after its receipt of CMS's notice letter, and was therefore not timely.

A party whom CMS proposes to sanction may appeal CMS's proposed action, but it must do so by filing a hearing request in compliance with 42 C.F.R. � 498.40. The terms of 42 C.F.R. � 498.40(a)(2) require that a hearing request must be filed "within 60 days of the notice of . . . revised determination unless that period is extended in accordance with paragraph (c) of this section." This regulatory language is firmly supported by the explicit statutory requirement to the same effect at section 205(b)(1) of the Social Security Act (Act), 42 U.S.C. � 405(b)(1).

That regulation and that statute, when applied to Petitioner's receipt of CMS's notice letter on or about October 17, 2005, establish the last date on which Petitioner's hearing request would have been timely as Friday, December 16, 2005. No order extending the 60-day period for filing the request for hearing has been entered in this case, and Petitioner did not seek such an extension of time prior to filing its request for hearing.

Petitioner's hearing request was filed on January 19, 2006. The hearing request as filed on that date does not itself reflect an explicit request for an extension. Respondent's hearing request was filed more than 60 days after its receipt of CMS's notice letter, and was therefore not timely.

E. No good cause has been shown for Petitioner's failure to file its hearing request timely.

In explaining its late filing, Petitioner points to a change in the management of its facility in late October 2005, and to the new administrator's failure to find CMS's October 12, 2005 letter until he received a copy of it on or about December 21, 2005 from the state survey agency. Petitioner's position, in short, is that it was simply unaware that CMS had taken an action which required prompt action on its part if it wished to appeal that action.

Petitioner concedes, however, that the new administrator Christopher Kmet was aware of the September 21, 2005 survey because he was hired on October 25, 2005 to replace the former administrator Wayne Adams, whose employment was terminated as a consequence of the survey's findings. There is no reason apparent on this record to suppose that former administrator Adams did not receive CMS's letter of October 12, and it is certain that he did receive CMS's letter of October 7.

It is apparent that Petitioner understood quite clearly in late October 2005 that it had an option of pursuing informal dispute resolution with the state agency, and that it exercised that option. It is also apparent that as early as November 17, 2005, the state survey agency had returned to Petitioner's facility for a revisit survey, and that as early as November 30, 2005, Petitioner was aware of CMS's satisfaction that Petitioner had returned to substantial compliance with program requirements. CMS's letter of November 30 made one other point as well: significantly, it reminded Petitioner that a CMP was still to be imposed for the period during which its facility had not been in compliance.

It is likewise apparent that at least two copies of CMS's October 12 letter had reached Petitioner, one by fax on October 12 and one by mail not more than five days later, and that Petitioner had certainly been aware of impending sanctions by CMS since CMS's first letter of October 7, 2005.

Given the events set out above and the sequence in which they occurred, it is simply not possible to characterize Petitioner's failure to perfect its appeal of CMS's October 12 letter as caused by circumstances lying beyond its ability to control. No outside force disrupted Petitioner's facility: no natural disaster or manmade emergency interrupted or delayed its functioning. There is no suggestion that every one of CMS's notices without exception went astray, or that Petitioner's facility was unaware of the general nature of the events that grew out of the compliance survey on September 21, 2005. In short, what this record shows is that the facility's new administrator, on duty within eight days of the facility's presumed receipt of CMS's notice letter and fully aware of the problems cited in the survey one month earlier, took no timely action to protect the facility's right to appeal.

Petitioner suggests that CMS's letter of October 12 was insufficient to provide adequate notice of the proposed action. Petitioner first argues that because the notice letter was delivered to the soon-to-be-discharged administrator Adams, it was not properly delivered to the facility's "real" management. That argument is untenable here, for it was made and disposed of in Rosewood Manor, Incorporated, DAB CR544 (1998), which held that a notice letter is properly delivered if it is sent to "the affected party" or "the facility" as contemplated by 42 C.F.R. �� 488.434(a) and 498.20(a). The October 12 letter was addressed:

Mr. Wayne Adams, Administrators (sic)
Brookside Rehab & Care
310 Pensacola Road
Burnsville, NC 28714

and it was manifestly delivered properly. The rationale of Rosewood Manor requires the rejection of Petitioner's argument. Furthermore, a rational examination of Petitioner's other argument concerning Adams -- that he may have deliberately concealed CMS's October 12 letter from his successor and the facility's "real" management -- exposes it as seriously deficient in two fundamental ways. First, it is deficient because it is utterly without evidentiary support anywhere in this record. Second, it cannot have escaped Petitioner's attention that to raise such a rickety strawman is to concede that the strawman's presence in the facility would amount to fairly flagrant violations of 42 C.F.R. �� 483.75(d)(1) and (d)(2).

In assessing Petitioner's suggestion that some confusion at the facility may have obscured the importance of the notice letter's content, it is to be observed that a CMS notice letter is fully compliant with the fair notice requirements of 42 C.F.R. �� 488.434(a)(2)(viii) and 488.436, and with section 1866(h)(1) of the Social Security Act, 42 U.S.C. � 1395cc(h)(1), if it makes clear reference to the procedures established by 42 C.F.R. � 498.40 et seq. The Heritage Center, DAB CR1219; Hamilton County Nursing Home, DAB CR716 (2000). The October 12 letter manifestly did so.

Although the Heritage-Hamilton assessment of the "fair notice" requirements is not the complete answer to Petitioner's effort to avoid the consequences of its late filing, it is a reasonable assessment of what CMS was obliged to convey to Petitioner. I apply it here, in part because its notion of placing some obligation on a provider to keep itself at least minimally informed of its duties and responsibilities found powerful support in Cary Health and Rehabilitation:

5. It is instructive to recall that the party in the role of "claimant" here is not an individual insurance recipient or program beneficiary but a provider that has executed a contract to receive federal funds for services that it provides on condition that it adheres to regulatory conditions of participation. Hence, considerably more justification is present in this situation for holding the provider to some responsibility for being familiar with the rules on survey and enforcement and on the appeal process. Correspondingly, as reflected in the discussion of the absence of good cause for late filing, there is considerably less justification for such a party and its counsel to respond to federal notices with inaction.

Cary Health and Rehabilitation Center, DAB No. 1771, at 21, n.5.

The implication of that observation in the present situation is unmistakable: a provider must not simply throw up its hands and hope for the best when it receives notice of impending and adverse agency action. It must act by choosing from many tactical and strategic options, it must do so within regulatory time schemes, and it will be expected to have taken minimal care to avoid misplacing the documents crucial to its choices. When those principles are applied to the instant case, it is plain that the misplacing or overlooking of CMS's notice letter did not constitute or set in motion a set of circumstances beyond this Petitioner's ability to control. It did not create "good cause" for Petitioner's late filing, and no other "good cause" for that late filing, or for extending that filing date, has been shown.

III. Conclusion

For the reasons set forth above, CMS's Motion to Dismiss is GRANTED, pursuant to 42 C.F.R. � 498.70(c). Petitioner's request for hearing is untimely and the time for filing has not been extended. Accordingly, Petitioner Brookside Rehabilitation and Care Center's request for hearing should be, and it is, DISMISSED.

Richard J. Smith

Administrative Law Judge