SUBJECT:

Portland Community Care Center, West

Petitioner,

Health Care Financing Administration

DECISION DISMISSING REQUEST FOR HEARING

I grant the motion of the Health Care Financing Administration (HCFA) to dismiss the request for hearing filed by Petitioner, Portland Community Care Center. I do so pursuant to 42 C.F.R. � 498.70(c) because Petitioner's hearing request as to HCFA's imposition of denial of payment for new admissions (effective September 21, 1998) was not filed within sixty days of HCFA's Notice of Imposition of Remedies as required by 42 C.F.R. � 498.40(a)(2).

I. Background and undisputed material facts

Petitioner is a skilled nursing facility located in Portland, Indiana, that participates in the Medicare and Medicaid programs. On May 22, 1998, the Indiana State Department of Health, the State survey agency, performed a standard survey of Petitioner. The State survey agency found that Petitioner was not in substantial compliance with participation requirements at the time of the survey. A revisit survey of the facility was performed on August 7, 1998, and the State survey agency found that Petitioner continued to be noncompliant. As a result of this and based on the State survey agency's recommendations, HCFA issued a Notice of Imposition of a Remedy on August 31, 1998, informing Petitioner that it was imposing a mandatory denial of payment for new admissions (DPNA) against the facility, effective September 21, 1998, due to Petitioner's continuous noncompliance. HCFA Brief, Attachment 1. The letter further informed Petitioner that if it had not attained substantial compliance by November 22, 1998, its participation in the federal programs would be terminated. The notice than specifically stated:

[i]f you disagree with the finding of noncompliance which resulted in the imposition of Mandatory Denial of Payment for New Medicare and Medicaid Admissions you or your legal representative may request a hearing before an administrative law judge of the Department of Health and Human Services Departmental Appeals Board . . . .

A written request for a hearing must be filed by November 9, 1998.

HCFA Brief, Attachment 1 at 2 (emphasis original to document).

On October 14, 1998, the State survey agency performed a revisit survey of Petitioner and found it continued to be out of compliance with the participation requirements. HCFA Brief, Attachment 3. Another revisit survey on November 15, 1998, again found the facility to be noncompliant. Id. In a letter dated November 18, 1998, the State survey agency informed the facility that it was recommending to HCFA that the previously imposed remedy of mandatory DPNA continue and that HCFA terminate the facility's provider agreement due to six months of continuous noncompliance, as required under the applicable regulations. Id. On February 5, 1999, another revisit survey was performed and the State survey agency found that the facility was still noncompliant. HCFA Brief, Attachment 4. The State survey agency therefore recommended to HCFA that the DPNA be continued and that HCFA terminate the facility's provider agreement. Id. at 2.

On March 5, 1999, HCFA issued a notice, "Notice of Termination and Continuation of Remedies," to the facility. HCFA Brief, Attachment 5. The notice specifically stated that as a result of the facility's failure to attain substantial compliance, the remedy of mandatory denial of payment, previously imposed on August 31, 1998, would continue and that Petitioner's provider agreement would be terminated March 24, 1999, due to the facility's continuous noncompliance with participation requirements. Id. The Notice instructed the facility that:

[i]f you disagree with the finding of noncompliance which resulted in the imposition of termination, you or your legal representative may request a hearing . . . A written request for a hearing must be filed May 14, 1999.

HCFA Brief, Attachment 5 at 2 (emphasis original to document).

On March 16, 1999, Petitioner requested a hearing before me on both the DPNA and termination remedies. HCFA Brief, Attachment 6. After receiving further information from Petitioner regarding the February 5, 1999 revisit survey, HCFA, by letter dated May 27, 1999, informed Petitioner that it was in substantial compliance with program requirements as of February 5, 1999. As a result of this determination, HCFA rescinded the termination remedy and discontinued the DPNA. The DPNA was thus effective from September 21, 1998 until February 5, 1999, the date the facility was determined to have achieved substantial compliance.

HCFA then moved to dismiss the hearing request in accordance with 42 C.F.R. � 498.70, arguing that Petitioner had failed to request a hearing on the imposition of the DPNA within 60 days of its receipt of HCFA's notice of imposition as required by 42 C.F.R. � 498.40(a)(2). HCFA also claimed that Petitioner's hearing request should be dismissed because it is deficient under the requirements of 42 C.F.R. � 489.40(b). Finally, HCFA contended that since Petitioner disputed only the results of the last survey on February 5, 1999, and HCFA later determined that the facility was in substantial compliance on that date and rescinded the termination, Petitioner had failed to dispute any issue of fact or law in its hearing request.

Petitioner does not dispute the following facts:

Petitioner did not seek review of the DPNA imposed prior to the February 5, 1999 survey;

Petitioner agrees that there are no issues remaining for hearing on the termination remedy because HCFA rescinded the termination; and

Petitioner agrees that the DPNA was discontinued as of February 5, 1999.

Petitioner's Response at 1.

II. Issue, findings of fact and conclusions of law

A. Issue

The issue in this case is whether Petitioner timely requested a hearing on HCFA's imposition of the mandatory DPNA remedy.

B. Findings of fact and conclusions of law

I make the following findings of fact and conclusions of law (Findings) to support my decision. I discuss my Findings in detail, below.

1. In order to challenge the DPNA remedy imposed by HCFA's August 31, 1998 Notice letter at a hearing before an administrative law judge, Petitioner had until November 9, 1998, to file its request for hearing.

2. Petitioner did not file a timely request for a hearing on HCFA's determination to impose the remedy of mandatory DPNA.

a. HCFA's March 5, 1999 Notice of Termination and Continuation of Remedies did not impose a new DPNA remedy to which a right to a hearing attached.

b. HCFA's March 5, 1999 Notice of Termination and Continuation of Remedies was not a revision or reconsideration of its August 31, 1998 determination to impose the DPNA remedy.

3. Pursuant to 42 C.F.R. � 498.70(c), I am authorized to dismiss for cause a hearing request which was not timely filed.

A long-term care facility's hearing rights in any case involving HCFA are established by federal regulations. A facility has a right to a hearing to contest any "initial determination" by HCFA that is described at 42 C.F.R. � 498.3(b). An appealable initial determination includes:

a finding of noncompliance [with participation requirements] that results in the imposition of a remedy specified in [42 C.F.R.] � 488.406 . . . .

42 C.F.R. � 498.3(b)(12). The remedies that are specified at 42 C.F.R. � 488.406 include denial of payment for all new admissions. 42 C.F.R. � 488.406(a)(2)(ii).

The undisputed facts of this case are that on August 31, 1998, HCFA determined to impose a remedy of denial of payment for all new admissions against Petitioner. That determination created a hearing right which Petitioner had until November 9, 1998, to exercise. Moreover, HCFA's notice of the imposition of the DPNA remedy is clear and unambiguous and complies in all respects with the notification requirements as set forth in 42 C.F.R. � 488.402(f)(1). The regulatory requirement for the manner and timing of hearing requests is equally unambiguous and states that a petitioner "must file the request [for hearing] within 60 days from the receipt of the initial, reconsidered, or revised determination unless that period is extended in accordance with paragraph (c) of this section." 42 C.F.R. � 498.40(a)(2) (emphasis added). There is no evidence in the record that Petitioner filed its request for hearing on the imposition of the DPNA by that date. Moreover, Petitioner does not dispute that it failed to file its hearing request by November 9, 1998. Similarly, there is no evidence in the record nor does Petitioner allege that it ever filed a request for an extension of time for filing its hearing request. Rather, Petitioner's sole contention is that its March 16, 1999 request for hearing constituted a timely filed request for hearing on "the new remedy of continued DPNA imposed in [HCFA's] notice of March 5, 1999."

I find no basis in the law or the facts to support Petitioner's contention. The regulatory requirements for imposition of mandatory denial of payment for all new admissions make clear that the remedy will continue and payments will resume only on the date that the facility achieves substantial compliance. 42 C.F.R. � 488.417(c) and (e). In accord with these requirements, HCFA's August 31, 1998 Notice which imposed the DPNA remedy informed Petitioner that the remedy would take effect on September 21, 1998, and "must remain in effect until your facility has been determined to be in substantial compliance or your provider agreement is terminated."⁽¹⁾ HCFA Attachment 1 at 2.

I have carefully reviewed HCFA's March 5, 1999 Notice of Termination and Continuation of Remedies" and find no basis for concluding that Petitioner could have reasonably believed that this Notice was imposing a "new remedy of continued DPNA" for which Petitioner had the right to appeal. Since, at the time of the March 5, 1999 Notice, HCFA had determined that Petitioner had not achieved substantial compliance as of the February 5, 1999 revisit, that Notice simply reiterated the regulatory requirement that the DPNA would continue in effect until such time as the facility achieved substantial compliance or its provider agreement was terminated. Consequently, there was no imposition of a new remedy, nor was there a revision or a reconsideration of the determination to impose the DPNA for which a right to a hearing would apply. The only new remedy imposed in this notice to which a right to a hearing attached was the termination of the provider agreement and the notice so informed Petitioner. HCFA Attachment 5 at 2. Petitioner clearly tried to circumvent its failure to timely file a request for hearing on the August 31, 1998 imposition of the DPNA by arguing that the latter timely filing of its March 16, 1999 request for hearing on the termination somehow should include the DPNA.

I also reject Petitioner's argument that Carmel Convalescent Hospital, DAB No. 1584 (1996) supports its position that its March 16, 1999 hearing request in response to HCFA's March 5, 1999 Notice of Termination and Continuation of Remedies was timely as to the DPNA remedy. First of all, the Board declined to review my decision that the petitioner's request for a hearing was timely. But, more importantly, in my decision in Carmel, DAB CR389 (1995), I specifically determined under the circumstances there that HCFA's July 7, 1994 letter was a revised determination and therefore, under 42 C.F.R. � 498.40(a)(2), the petitioner's August 22, 1994 hearing request was timely because it was filed within 60 days of the receipt of the revised determination. I, however, specifically find here that HCFA's March 5, 1999 Notice was not a revised or reconsidered determination as to the previously imposed DPNA remedy.

In so finding, I am authorized to dismiss for cause pursuant to 42 C.F.R. � 498.70(c) a request for hearing that is not timely filed. I therefore grant HCFA's motion to dismiss Petitioner's request for a hearing.⁽²⁾

Mimi Hwang Leahy

Administrative Law Judge

1. On May 27, 1999, HCFA informed the facility that after review of additional information presented by Petitioner, it had determined that Petitioner had achieved substantial compliance with the program requirements on February 5, 1999. Therefore, HCFA rescinded the termination and the DPNA was effective from September 21, 1998 until February 5, 1999.

2. HCFA alternatively argued that Petitioner's March 16, 1999 request for hearing should be dismissed because it failed to meet the requirements of 42 C.F.R. � 498.40(b). I need not reach that issue since I have determined that Petitioner's request for hearing was untimely as to the DPNA remedy and grant HCFA's motion to dismiss on that basis.