Department of Health and Human Services DEPARTMENTAL APPEALS BOARD Civil Remedies Division |
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IN THE CASE OF | |
Palm Grove Convalescent Center, |
DATE: January 23, 2002 |
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Centers for Medicare & Medicaid
Services
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Docket No.C-00-271 Decision No. CR858 |
DECISION | |
DECISION For reasons set forth below, the Centers for Medicare
& Medicaid Services' (CMS) Motion to Dismiss the request for hearing
filed by Petitioner, Palm Grove Convalescent Center, is granted and Petitioner's
Motion for Summary Judgment is denied. I. Background By letter dated October 18, 1999, CMS determined that
the effective date of Petitioner's reinstatement in the Medicare program
was July 30, 1999. By letter dated December 8, 1999, Petitioner appealed
the October 18, 1999 determination. In its appeal, Petitioner contended
that it was entitled to reinstatement at the close of the second reasonable
assurance survey, June 4, 1999, rather than the date when CMS found compliance,
July 30, 1999. On July 25, 2000, CMS submitted a Motion to Dismiss for
Lack of Jurisdiction accompanied by three exhibits marked A - C. I have
remarked these exhibits as CMS exhibits 1 - 3 (CMS Exs. 1 - 3) to conform
to Civil Remedies Division procedures. On July 25, 2000, Petitioner submitted
a Motion for Summary Judgment accompanied by eight exhibits (P. Exs. 1
- 8). Both parties filed response and reply briefs. Petitioner's reply
brief was accompanied by three additional exhibits marked exhibits 1 -
3 but which I have remarked as exhibits 9 - 11 (P. Exs. 9 - 11). CMS objected
to P. Exs. 10 and 11. I gave CMS an opportunity to respond to Petitioner's
reply brief and to discuss in detail CMS's objections to P. Exs. 10 and
11. CMS filed a response to Petitioner's reply brief on October 23, 2000
along with an attachment. I decline to admit into evidence P. Exs. 10
and 11 as these exhibits are immaterial to the issue before me and I admit
into evidence CMS Exs. 1 - 3 and P. Exs. 1 - 9. II. Issue The issue here is whether the October 18, 1999 notice
contained an initial determination for which a request for hearing may
be granted. III. Discussion Petitioner is a skilled nursing facility located in Garden
Grove, California. The Medicare agreement held by Petitioner was involuntarily
terminated on December 5, 1998 due to Petitioner's failure to maintain
substantial compliance with the Medicare participation requirements applicable
to nursing homes. 42 C.F.R. � 493.53(a)(2). Before Petitioner could be
reinstated in the Medicare program following the involuntary termination,
it had to apply for readmission and CMS had to find that the reason for
termination of the previous agreement had been removed and there was reasonable
assurance that it would not recur. Social Security Act (Act), section
1866(c)(1); 42 C.F.R. � 489.57. In this case, Petitioner had to establish
the ability to maintain substantial compliance with Medicare requirements
by successfully completing a reasonable assurance process. This process
requires a provider seeking reinstatement to undergo two surveys, one
at the beginning and one at the end of a specified reasonable assurance
period. See State Operations Manual � 2016; CMS Ex. 2. Reinstatement
would be granted only if these surveys show that the facility was in substantial
compliance with the nursing home requirements at the beginning and end
of the reasonable assurance period. Petitioner applied for readmission following the involuntary
termination and the California Department of Health Services (DHS), a
State survey agency, completed the first of two required surveys on April
12, 1999. This survey found that Petitioner was not in substantial compliance
with the requirements at 42 C.F.R. Part 483. Petitioner promptly submitted
a plan of correction. After a review, CMS accepted the plan as credible
evidence of corrective action and determined that under the specific circumstances
it was reasonable to exercise discretion to conclude that Petitioner had
achieved substantial compliance with the applicable federal requirements,
effective April 30, 1999. P. Ex. 3. The DHS completed the second reasonable assurance survey
on June 4, 1999. By letter dated July 9, 1999, CMS found that Petitioner
was not in substantial compliance with the requirements of 42 C.F.R. Part
483 but in the exercise of discretion permitted Petitioner (under the
then controlling policy) to submit a plan of correction. CMS Ex. 2; P.
Ex. 3. By letter dated October 18,1999, CMS stated that it had reviewed
the plan of correction submitted by Petitioner and determined that Petitioner
was in substantial compliance as of July 30, 1999, the date when all corrective
action called for by the plan of correction was completed. CMS Ex. 2;
P. Ex. 4. CMS further found that Petitioner was complying with all other
pertinent requirements of Title XVIII of the Act, and otherwise fulfilled,
or made satisfactory arrangements to fulfill, all of the statutory and
regulatory responsibilities of its previous agreement. Finally, CMS concluded
that, under the governing regulation at 42 C.F.R. � 489.13, the effective
date of Petitioner's reinstatement to the Medicare program was July 30,1999.
Id. I find that I lack jurisdiction over Petitioner's hearing
request and I therefore grant CMS's Motion to Dismiss. "The authority to provide an ALJ [Administrative Law Judge]
hearing using the procedures in Part 498 is derived from statutory and
regulatory provisions." Specialty Hospital of Southern California,
La Mirada, DAB No. 1730, at 16 (2000). The regulations which define
the Departmental Appeal Board's (DAB's) jurisdiction, pursuant to 42 C.F.R.
Part 498, make clear that CMS's decisions on reinstatement following involuntary
terminations are discretionary and are not subject to appeal. An action
taken by CMS which is not one of the initial determinations listed at
42 C.F.R. � 498.3(b) is not subject to appeal under Part 498 of the regulations.
Affordable Skilled Nursing, DAB CR562 (1998). Administrative actions
that are not initial determinations and not subject to an appeal are listed
at 42 C.F.R. � 498.3(d). Section 42 C.F.R. � 498.3(d)(4) specifies that
the finding that an entity that had its provider agreement terminated
may not file another agreement because the reasons for terminating the
previous agreement have not been removed or there is insufficient assurance
that the reasons for the exclusion will not reoccur is not an initial
determination. CMS contends that, under 42 C.F.R. � 498.3(d), a finding
by CMS that there is "insufficient assurance" that the reasons for termination
will not recur is not an "initial determination" that is subject to appeal
to the Board. I agree. It has been held that the regulations explicitly
establish that CMS determinations concerning reasonable reassurance and
readmission "are considered not to be determinations subject to reconsideration
and appeal. Rather these decisions are classified as administrative actions
over which CMS retains discretionary authority." Heartland Manor at
Carriage Town, DAB No. 1664 at 4 (1998) citing 42 C.F.R. � 498.3(d)(4);
see State Operations Manual � 2016 ("[t]he reasonable assurance
decision is an administrative action (not an initial determination) and
is not subject to appeal process" under Part 498.) For its part, Petitioner asserts that 42 C.F.R. � 498.3(d)(4)
is not applicable to its case. It maintains that this subsection does
not apply because CMS accepted Petitioner back into the Medicare program
and the issue therefore involves the effective date of the new provider
agreement. On this issue, Petitioner also asserts that Heartland Manor
at Carriage Town, supra, is not relevant because that case
involved a provider which was denied re-entry into the Medicare program
following termination while Petitioner's case involves the effective date
of its provider agreement. Petitioner contends that its claim is subject to 42 C.F.R.
� 498.3(b)(14)(1999), now recodified at 42 C.F.R. � 498.3(b)(15), which
states that the effective date of a Medicare provider agreement is an
initial determination, subject to DAB review. I find no merit in these
arguments. This provision pertains only to the effective date of an agreement
sought by a "prospective provider" and has no application in the case
of an entity, such as Petitioner, that has been involuntarily terminated
as a Medicare provider. This point is clarified in the Notice of Proposed
Rulemaking (NPRM) which was published on October 8, 1992 prior to the
adoption of 42 C.F.R. � 498.3(b)(14)(1999). The NPRM explains that this
new paragraph was intended to "specifically provide the appeal rights
specified in sections 498.3(b)(1) and (4) and 498.5(a) and (b) to prospective
providers and suppliers who are dissatisfied with a finding of noncompliance
. . . as of the date of the initial survey." 57Fed. Reg. 46363. Section
498.3(b)(14)(1999) reflects that a finding that a prospective provider
does not qualify as a new Medicare provider at a date prior to the date
of admission approved by CMS is in effect a denial, however temporary,
of the initial application. There is no indication that section 498.3(b)(14)(1999)
was intended to grant the same rights to previously terminated providers
seeking reinstatement. Petitioner's attempt to distinguish Heartland Manor at Carriage Town, supra, also falls short. Heartland Manor at Carriage Town recognized that CMS determinations concerning reasonable assurance and readmission are considered not to be initial determinations subject to reconsideration and appeal. This case is applicable because if the DAB review of the denial of an application for readmission is not permitted, clearly the DAB lacks jurisdiction to adjudicate the sub-issue of the effective date of readmission. It is clear that under 42 C.F.R. � 498.3(d)(4) providers
which have been stripped of their Medicare provider agreements for failing
to comply with the applicable participation requirements have no right
to challenge CMS's denial of an application for readmission. It would
be inconsistent with section 498.3(d)(4) to grant the right to a hearing
on the effective date of readmission. Moreover, CMS's decision not to
reinstate an involuntarily terminated entity as of the date of a reasonable
assurance survey represents a denial of readmission whether or not reinstatement
is granted as of a later date. Petitioner's motion for summary judgment also requests
review of the effective date of Petitioner's reinstatement to Medi-Cal,
California's Medicaid program. Part 498 however does not give an ALJ any
authority to intervene in the decisions regarding admission or readmission
of entities as participants in State Medicaid programs. In addition, Petitioner contends that the July 30,1999 date of reinstatement was incorrect because it "was required to submit a plan of correction citing a later date when the corrections would be made because DHS issued the Statement of Deficiencies in an untimely manner and [Petitioner] did not have the opportunity to contest the merits of the surveyor's findings." Petitioner's Motion at 4. Petitioner's argument that it should be certified at a date that is earlier than July 30, 1999 is, in effect, an assertion of estoppel. I do not have the authority to hear and decide claims of estoppel against CMS or the Secretary. Vermillion Behavioral Health Center, DAB CR751, at 4 (2001); The Rivers Health Care Resources, Inc., DAB CR446 (1996); SRA, Inc. D/B/A St. Mary Parish Dialysis Center, DAB CR341 (1994); T.L.C. Mental Health Center, DAB CR636 (1999); Therapeutic Rehabilitation Centers, Inc., DAB CR531 (1998); Harriet Cohn Center, DAB CR797 (2001). III. Conclusion CMS's Motion to Dismiss the request for hearing filed by Petitioner is granted and Petitioner's Motion for Summary Judgment is denied. |
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JUDGE | |
Joseph K. Riotto Administrative Law Judge |
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