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                              The Reserve at Richardson, ALJ Ruling 2022-5 (HHS CRD June 23, 2022)
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The Reserve at Richardson, ALJ Ruling 2022-5 (HHS CRD June 23, 2022)








  
  
    

  
      
Department of Health and Human Services 
    DEPARTMENTAL APPEALS BOARD
          Civil Remedies Division





The Reserve at Richardson
(CCN: 676448),
Petitioner,

v.

Centers for Medicare & Medicaid Services.
Docket No. C-22-339Ruling No. 2022-5June 23, 2022

        
              
    

      ORDER DENYING MOTION TO VACATE DISMISSAL

On April 1, 2022, I issued a dismissal (Dismissal) of Petitioner’s request for an administrative law judge hearing because it was untimely.  *The Reserve at Richardson*, ALJ Ruling No. 2022-3 (HHS CRD Apr. 1, 2022).  Petitioner filed a motion (P. Motion) to vacate the Dismissal.  The Centers for Medicare & Medicaid Services (CMS) opposes the motion.  As explained below, I deny the motion to vacate because Petitioner has not established good cause for me to do so.

I.     Background

On February 22, 2022, Petitioner, a skilled nursing facility (SNF), requested a hearing to dispute CMS’s imposition of civil money penalties (CMPs).  Petitioner also requested that I find good cause for Petitioner’s late filing of the hearing request.  Petitioner submitted multiple documents with the hearing request.  On February 28, 2022, the Civil Remedies Division acknowledged the hearing request and issued my Standing Prehearing Order.

**Page 2**

On March 15, 2022, CMS moved for dismissal of the hearing request as untimely.  CMS submitted an exhibit in support of the motion (CMS Ex. 1).  On March 25, 2022, Petitioner responded to CMS’s motion and submitted an exhibit in support of its response (P. Ex. 1).  On April 1, 2022, I issued the Dismissal, which contained the following findings based on the documents submitted by the parties.1

Petitioner is an SNF located in Richardson, Texas, that participates in the Medicare program.  *See* RFH at 28.
	Petitioner contracted with a management company to manage Petitioner’s facility.  The management company hired the facility administrator, L.L.,2 in May 2021.  L.L. was required to inform Lauren Golden, a manager with the entity that owns Petitioner, of correspondence regarding surveys and enforcement.  RFH at 108 (Decl. of Lauren Golden at ¶¶ 2-3); P. Ex. 1 ¶¶ 2-3.
	Based on a survey of Petitioner’s facility that ended on October 16, 2021, the state survey agency drafted a Statement of Deficiencies (SOD) indicating that Petitioner was not in substantial compliance with several Medicare participation requirements, including one deficiency that posed immediate jeopardy to the health and safety of residents.  RFH at 28-97.
	On November 1, 2021, the state survey agency emailed the SOD and other information to Petitioner’s administrator.  On November 2, 2021, L.L. forwarded that email to Lauren Golden and others.  RFH at 105-106, 108 (Decl. of Lauren Golden at ¶ 4); P. Ex. 1 ¶ 3.**Page 3**

Based on a CMS survey completed on November 2, 2021, CMS drafted a SOD indicating that Petitioner was not in substantial compliance with several Life Safety Code (LSC) provisions.  RFH at 99-103.
	On November 19, 2021, an LSC re-visit survey occurred and no LSC deficiencies were found.  The state survey agency emailed information concerning the re-visit to L.L., who forwarded that information to Lauren Golden and others.  RFH at 108 (Decl. of Lauren Golden at ¶ 6), 118-119, 121.
	In a November 19, 2021 notice, CMS advised Petitioner that it was imposing the following enforcement remedies based on the deficiencies found in both the October 16 and November 2, 2021 surveys:  a $6,850 per-day CMP for 18 days from September 28, 2021 through October 15, 2021; a $250 per-day CMP beginning on October 16, 2021, and continuing until further notice; termination of Petitioner’s provider agreement unless Petitioner achieved substantial compliance before April 16, 2022; and denial of payment for new admissions (DPNA) beginning on November 16, 2021, and continuing until Petitioner achieves substantial compliance or is terminated.  CMS Ex. 1 at 4-5.
	The November 19, 2021 notice was addressed to Petitioner’s administrator and stated that it was:  “Delivered by Fax Only.”  CMS Ex. 1 at 2.
	The November 19, 2021 notice stated at the top of the first page:  “**This serves as official notice pursuant to 42 CFR Part § 488.**”  CMS Ex. 1 at 2 (emphasis in original).
	The November 19, 2021 notice provided Petitioner with information as to its right to request a hearing to dispute the imposition of enforcement remedies and that:  “**You must file your hearing request . . . no later than January 18, 2022 (60 days from the date of receipt of this letter via fax).**”  CMS Ex. 1 at 6 (emphasis in original).
	Along with the November 19, 2021 notice, CMS provided the November 2, 2021 survey SOD.  CMS Ex. 1 at 12-16.
	CMS’s facsimile transmittal sheet for the November 19, 2021 enforcement notice shows that it was sent to Petitioner’s administrator at fax number (469) 906-5376 on November 19, 2021, and comprised 16 pages.  CMS Ex. 1 at 1.
	CMS’s fax to Petitioner’s administrator resulted in a “Confirmation receipt” showing that 16 pages were sent on November 19, 2021, to fax number “4699065376.”  The receipt indicated:  “Result:  Success.”  CMS Ex. 1 at 17.**Page 4**

On December 8, 2021, L.L. emailed CMS because she said she never received the SOD for the November 2, 2021 survey.  RFH at 20.
	In a December 9, 2021 email from CMS to L.L., CMS thanked L.L. for contacting CMS and stated:  “You should have received a fax to the number below with enforcement letter and [the SOD] attached [no later than] Nov. 18th.  However, I enclosed [the SOD], if you can send [the plan of correction] to me I will approve and get it processed.”  RFH at 20.  The fax number referenced in the email was (469) 906-5376.  RFH at 21; P. Ex. 1 ¶ 4.
	On December 9, 2021, L.L. forwarded CMS’s email to Lauren Golden and others.  *See* RFH at 20, 108 (Decl. of Lauren Golden at ¶ 5); P. Ex. 1 ¶ 4.
	In a January 26, 2022 notice, CMS advised Petitioner that it had achieved substantial compliance with Medicare participation requirements on December 16, 2021.  As a result, CMS summarized the enforcement remedies imposed on Petitioner as follows:  a $6,850 per day CMP for 18 days from September 28, 2021 through October 15, 2021; a $250 per day CMP for 61 days beginning on October 16, 2021 and continuing through December 15, 2021; and a DPNA from November 16, 2021 through December 15, 2021.  The termination of Petitioner’s provider agreement never took effect and was rescinded.  RFH at 24.
	The January 26, 2022 notice stated that CMS’s records showed that Petitioner had not filed an appeal, which had been due by January 18, 2022.  RFH at 24.
	The January 26, 2022 notice was addressed to Petitioner’s administrator and stated that it was:  “Delivered by Fax Only.”  RFH at 24.
	CMS’s fax transmittal sheet for the January 26, 2022 notice shows that it was sent to Petitioner’s administrator at fax number (469) 906-5376 on January 26, 2022.  RFH at 23.
	On or before February 7, 2022, L.L. was terminated from the position as administrator of Petitioner’s facility.  L.L. was terminated based on performance issues.  RFH at 109 (Decl. of Lauren Golden at ¶ 7), 126 (Decl. of Craig Corriston ¶ 3).
	Craig Corriston, Regional Vice President of Operations for the management company, temporarily served as administrator of Petitioner’s facility.  Mr. Corriston went to Petitioner’s facility on February 7, 2022, and cleaned out L.L.’s desk.  While doing so, Mr. Corriston found CMS’s January 26, 2022 notice indicating that CMS imposed a CMP on Petitioner.  Mr. Corriston did not know of**Page 5**

the CMP.  He contacted Ms. Golden and she stated that she did not know of the CMP.  RFH at 109 (Decl. of Lauren Golden at ¶¶ 7-9), 126-127 (Decl. of Craig Corriston ¶¶ 3-5).

Petitioner filed a hearing request on February 22, 2022.  RFH at 1.*The Reserve*, ALJ Ruling No. 2022-3 at 4-6.  In the Dismissal, I concluded that CMS provided sufficient proof that it successfully served Petitioner with a notice on November 19, 2021 (November 19 Notice), that it was imposing enforcement remedies on Petitioner.  *The Reserve*, ALJ Ruling No. 2022-3 at 8-11.

Following issuance of the April 1, 2022 Dismissal, on May 27, 2022, Petitioner timely moved to vacate the Dismissal.  Petitioner submitted 12 marked exhibits (P. Exs. 1-12).  CMS opposed the motion.

II.    Analysis

When an administrative law judge dismisses a hearing request, a party may request that the administrative law judge vacate that dismissal if there is good cause for doing so.  42 C.F.R. § 498.72.

In its motion to vacate, Petitioner states that it “requests that the [administrative law judge] vacate its decision because CMS did not properly serve Petitioner with the November 19, 2021 notice at issue.”  P. Motion at 1.  I discuss each of Petitioner’s many arguments in support of its motion below.3

***CMS may serve the notice of initial determination to impose enforcement remedies by facsimile.***Petitioner argues that, when CMS imposes a CMP on a skilled nursing facility (SNF), CMS must comply with the notice requirements in 42 C.F.R. § 488.434(a) and with the service requirements for initial determinations in 42 C.F.R. § 498.20(a).  Specifically, Petitioner points to § 498.20(a) and *Riverview Village*, DAB No. 1840 (2002), which indicate that CMS will mail, and not fax, the initial determination to the SNF.  P. Motion at 2-3, 5.  Petitioner also cites an administrative law judge decision, *Corpus Christi Nursing and Rehabilitation Center*, DAB No. CR3640 (2015), that indicates CMS has no authority to issue initial determination notices by fax and must mail them.  P. Motion

**Page 6**

at 5-7.  Petitioner argues that the facts in the present matter are almost identical to those in *Corpus Christi* and urges me to vacate the dismissal and remand this matter to CMS to correct the defective service of the November 19 Notice and the January 26, 2022 notice (January 26 Notice).  P. Motion at 8.

I disagree with Petitioner’s argument.  I stated the following in the Dismissal:

CMS’s use of a fax machine is permissible under 42 C.F.R. § 488.434(a), and CMS specified in bold on the first page of the November 19, 2021 notice that it was being served pursuant to 42 C.F.R. Part 488.  59 Fed. Reg. 56,116, 56,200-01 (Nov. 10, 1994) (Eliminating the requirement in Part 488 to use return receipt mail to send enforcement notices so that other means, “such as telefax,” could be used.); CMS Ex. 1 at 1.  Further, CMS’s use of a fax machine to send notice of the imposition of enforcement remedies is consistent with long-standing CMS policy.

The notice shall be in writing and shall be addressed directly to the provider/facility; or to an individual, an officer, managing or general agent, or other agent authorized by appointment or law to receive the notice.  The notice shall be dispatched through first-class mail, or other reliable means.  Other reliable means refers to the use of alternatives to the United States mail in sending notices.  Electronic communication,**such as facsimile transmission,**is equally reliable and on occasion more convenient than the United States mail.  If electronic means **such as facsimile transmission** are employed to send notice,**the sender should maintain a record of the transmission to assure proof of transmission if receipt is denied.**

State Operations Manual, Ch. 7, § 7305.4 (Rev. 63, Eff. Sep. 10, 2010) (emphasis added).  Therefore, this policy anticipates that the fax machine’s confirmation receipt will be proof that CMS successfully transmitted the notice to the SNF if the SNF denies receipt.

**Page 7**

*The Reserve*, ALJ Ruling No. 2022-3 at 8-9.  Those statements are consistent with previous Departmental Appeals Board (DAB) decisions that interpret the service provisions in the regulations.

Petitioner cited *Riverview Village* to support the following proposition:  “[B]ecause 498.20(a) required the notice to be mailed, CMS could not rely on the provisions for serving such a notice by fax.”  P. Motion at 5.  However, Petitioner’s summary of the holding in*Riverview* is incorrect.  *See Fairway Med. Clinic & Shadow Creek Med. Clinic*, DAB No. 2811 at 10 (2017) (“[T]he [DAB] did not hold in *Riverview* that the only valid form of notice recognized under Part 498 is notice by mail.”).

In *Riverview*, CMS sent notice that it was imposing a CMP by both certified mail and facsimile, and the notice indicated that the facility had 60 days from receipt of the notice to file a hearing request.  The DAB concluded that the SNF’s hearing request was timely because CMS sent the notice by two methods, which created an ambiguity as to which date of receipt started the 60-day period to file a hearing request.

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.

*Riverview*, DAB No. 1840 (emphasis added).

*Riverview* is distinguishable from the present case.  The DAB’s decision to favor the mailed notice was based on the circumstances in that case, which are not present here.  As stated above, the DAB expressly did not interpret the regulations to prohibit CMS

**Page 8**

from serving the notice by facsimile so long as the notice clearly specified that the faxed version was the notice document.

Petitioner also cited an administrative law judge decision for the proposition that CMS could only properly serve its notices by mail based on the clear use of the word “mails” in 42 C.F.R. § 498.20(a).  *See* *Corpus Christi*, DAB No. CR3640.  However, the DAB later interpreted that regulation in the opposite manner:

While the word “mails” as used in subsection 498.20(a) may be interpreted as intended to refer to U.S. postal mail, we do not conclude that the term can only refer to U.S. government postal mail, to the exclusion of all other means of notice.  In a modern era of electronic mailing and messaging, the term “mails” is not unambiguous.  The core question for due process is **whether the transmission method is as capable of accomplishing the essential purpose of notice**.

*Fairway*, DAB No. 2811 at 8-9 (emphasis added).

In *Fairway*, CMS had revoked the certificate of a clinical laboratory using a faxed notice; therefore, the DAB had to decide, without reference to the CMP notice requirements in 42 C.F.R. § 488.434(a), whether 42 C.F.R. § 498.20(a) permitted CMS to serve a notice of initial determination by facsimile.  *Fairway*, DAB No. 2811 at 7.  In upholding the faxed notice, the DAB stated that “the relevant inquiry, then, is whether Petitioners were actually given notice and made aware of what sanction CMS was imposing and of their appeal rights, in accordance with Part 498, subpart D regulations.”  *Fairway*, DAB No. 2811 at 10.  Based on the documents submitted by the parties in this case, I found that Petitioner received the November 19 Notice of the enforcement remedies CMS imposed on Petitioner, which included a notice of its right to request a hearing.  *The Reserve*, ALJ Ruling No. 2022-3 at 4-6, 8-11.

***CMS provided sufficient proof that Petitioner received the November 19 Notice and Petitioner did not provide credible evidence to rebut that proof.***As discussed below, Petitioner made various arguments in its motion to vacate as to why I should not have found that Petitioner received the November 19 Notice that CMS sent by facsimile.  I will not reiterate the detailed discussion of the evidence in the Dismissal I issued.  However, due to the number and diversity of arguments, I address each separately below.

Petitioner argues that I incorrectly determined that CMS’s proof of service (i.e., a facsimile confirmation receipt) of the November 19 Notice by fax was sufficient to show

**Page 9**

that Petitioner actually received the notice.  Petitioner asserts that CMS’s proof of fax transmission is not proof of receipt.  P. Motion at 9.

In support of this argument, Petitioner argues that the November 19 Notice indicated that the hearing request was due 60 days following the date of receipt and not following the date of transmission.  P. Motion at 9.  Petitioner cites an administrative law judge decision that was affirmed by the DAB, *Nursing Inn of Menlo Park* , DAB CR799 (2001), *aff’d,* *Nursing Inn of Menlo Park*, DAB No. 1812 (2002), and argues that CMS’s service by fax in that case was only upheld because the notice expressly stated the following:  “[S]ince 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.”  P. Motion at 9.  Petitioner says CMS’s November 19 Notice is not sufficiently specific in that regard.

Petitioner is incorrect.  The November 19 Notice expressly states at the top of the first page that it is “Delivered by Fax Only.”  CMS Ex. 1 at 2.  Under the section of the notice titled “Filing an Appeal,” CMS stated the following in bolded text:

**You must file your hearing request electronically by using the Departmental Appeals Board’s Electronic Filing System (DAB E-File) . . . no later than January 18, 2022 (60 days from the date of receipt of this letter via fax).******

CMS Ex. 1 at 6.  The November 19 Notice again stated this information in relation to a written hearing request:  “A written request for a hearing must be filed no later than January 18, 2022 (60 days from the date of receipt of this letter via fax).”  CMS Ex. 1 at 6.  Sixty days after November 19, 2021 is January 18, 2022.  It is difficult to see how the November 19 Notice failed to inform Petitioner that CMS expected Petitioner to receive the faxed notice on the same day as it was sent because CMS calculated a date certain on which the hearing request was due.

In general, citation to *Menlo Park* does not appear to help Petitioner.  The administrative law judge and DAB both noted that the notice letter specifically informed the facility that the deadline ran 60 days from receipt of the notice and that, because the notice was sent by fax only, receipt was the same day.  My Dismissal was consistent with *Menlo Park*.

Next, Petitioner cites *Karthik Ramaswamy*, *M.D.*, DAB No. 2563 (2014) (en banc), *aff’d, Ramaswamy v. Burwell*, 83 F. Supp. 3d 846 (E.D. Mo. 2015), for the proposition that CMS has previously taken the position that a fax transmission sheet was insufficient evidence to prove that a Medicare contractor received enrollment information submitted by a physician.  P. Motion at 10.  The decision states, in relevant part:

CMS disputed before the [administrative law judge] that Petitioner’s evidence sufficed to show its fax was actually

**Page 10**

received by WPS or that it contained all the necessary information, given that WPS had no record of its receipt, that Petitioner did not claim to have any acknowledgment of receipt from WPS, and that Petitioner did not follow up with WPS to verify the receipt or adequacy of this submission for about 5 months.  CMS’s position in its MSJ, however, was not so much that the [administrative law judge] should resolve these factual issues in its favor but that they could not form a basis for altering the applicable effective date which had been set as a matter of law and could not be altered on equitable grounds however unfortunate Petitioner’s experience may have been.

*Ramaswamy*, DAB No. 2563 at 6 (citation omitted).

I do not find CMS’s litigation position in *Ramaswamy* to be relevant to this case.  As indicated above, CMS raised the issue of the faxed documents in the context of arguing that administrative law judges lack jurisdiction to consider an enrollment matter when neither CMS nor a Medicare contractor issued a reconsidered determination.  The DAB agreed and was unable to reach the question as to whether CMS’s position concerning the physician’s claim about faxing the documents was legally correct.

Petitioner also argues that *Cary Health and Rehabilitation Center*, DAB No. 1771 (2001), stands for the proposition that 42 C.F.R. § 498.22(b)(3) has the effect of placing the burden of proof on the party asserting a date of receipt of a CMS notice.  P. Motion at 10-11.  Petitioner argues that its denial of receipt of the November 19 Notice is sufficient to overcome CMS’s proof of a successful fax transmission.  P. Motion at 11.

*Cary* is distinguishable from the current case.  *Cary* involved a notice that had been sent both by fax and mail, and much of the analysis turned on the relative evidence concerning when the notice was received rather than if it was received.  Further, the DAB mentioned that a fax cover sheet addressed to the facility with only a date and time was insufficient proof of receipt.  However, as mentioned above, the present case involves a notice that expressly states that it was being delivered only by fax.  Further, CMS produced a fax  “Confirmation receipt” showing that 16 pages were sent on November 19, 2021, to Petitioner’s fax number.  CMS Ex. 1 at 17.  The receipt indicated:  “Result:  Success.”  CMS Ex. 1 at 17.  Based on a review of the evidence in this case, I found this evidence sufficient to show receipt by Petitioner.  As explained in the Dismissal, I did not afford weight to the statements from Petitioner’s former Administrator, L.L., that she did not receive the faxed November 19 Notice.

Petitioner requests that I revisit the determination as to L.L.’s credibility concerning the lack of receipt of the November 19 Notice.  P. Motion at 12.  Petitioner relays the history

**Page 11**

of the surveys conducted at the facility leading to the imposition of enforcement remedies and asserts that an SNF administrator would not have expected a notice from CMS by November 19, 2021, because Petitioner had neither received the survey results from the November 2, 2021 survey nor submitted a plan of correction to CMS.  P. Motion at 13.  Petitioner says that appeal rights cannot precede the actual results of the survey.  P. Motion at 14.

Petitioner’s argument is not reasonable.  CMS often issues enforcement notices that have an indefinite duration for a per-day CMP because SNFs do not all return to substantial compliance immediately.  As discussed below, the regulations provide for CMS to do this and to issue a second notice when the SNF returns to compliance, thus ending the per-day CMP.  Further, in the present case, CMS sent the November 2, 2021 SOD with the November 19 Notice.  CMS Ex. 1.  L.L. should have expected this because the November 2 survey was a Federal Comparative Monitoring Survey conducted by CMS and not the state agency.  CMS Ex. 1 at 2, 12.

In an unrelated argument, Petitioner also asserts that just because the fax transmission of the January 26 Notice was successful, this does not prove that Petitioner received the November 19 Notice.  Petitioner also says that the fax transmission of the January 26 Notice failed to include a final page (i.e., the fifth page as indicated on the fax cover sheet or the fourth page of the notice itself) and that this proves the unreliability of fax transmissions.  P. Motion at 14.

I am unpersuaded by Petitioner’s argument.  As stated in Findings 21 and 22 in my Dismissal, L.L.’s supervisor found the January 26 Notice on February 7, 2022, in L.L.’s desk after L.L. had been terminated.  No one except L.L. was aware that the January 26 Notice had been received.  *The Reserve*, ALJ Ruling No. 2022-3 at 6.  As a result, Petitioner has no way of knowing what happened to the final page of the January 26 Notice after L.L. received it.

Much of my concern in this matter and a reason why I do not believe Petitioner has successfully rebutted CMS’s evidence of a successful fax transmission for the November 19 Notice is due to L.L.’s handling of the January 26 Notice.  Petitioner has made no effort to explain why L.L. alerted no one about that notice and why it was filed away in her desk.  L.L.’s declaration avoids discussing the January 26 Notice.  *See* P. Ex. 3.  The January 26 Notice shows that CMS could successfully fax notices to Petitioner, that L.L. was capable of misplacing notices from CMS, and that L.L. might fail to inform managers overseeing her performance of a CMS notice.

In yet another argument, Petitioner asserts that the December 9, 2021 email exchange between L.L. and a CMS official casts doubt on whether CMS faxed the November 19 Notice.  Petitioner points out that the CMS official stated in response to the query about the November 2 survey results that Petitioner “should have received a fax to the number

**Page 12**

below with enforcement letter and [SOD] attached [no later than] Nov. 18th.”  P. Ex. 6 at 1.  Petitioner quibbles that the email indicates a “no later than” date one day before CMS purports to have faxed the November 19 Notice.

I am not persuaded that this minor detail is sufficient reason to cast doubt on CMS’s fax confirmation receipt.  In his email, the CMS official did not provide a specific date when the notice had been faxed.  He only stated that he believed it was faxed no later than November 18.  Obviously, he was off by one day.  As indicated in my Dismissal, I am more concerned that neither Petitioner’s former administrator nor the other management officials to whom she forwarded the December 9 email appear to have taken any action to inquire as to the enforcement letter that he referenced.  *The Reserve*, ALJ Ruling No. 2022-3 at 10.  I continue to have difficulty believing that L.L., as well as the management officials to whom she forwarded the December 9 CMS email, would all simply disregard a statement that an enforcement letter had been issued nearly three weeks earlier if they had not known about it.4

Petitioner also indicates that L.L. had no reason to think that CMS had issued an enforcement letter because she had not received the SOD for the November 2 survey yet.  However, as stated above (and made clear in a November 9, 2021 email from CMS (P. Ex. 6 at 1-2)), CMS conducted that survey itself and one would expect CMS to issue the SOD along with the enforcement letter in such a circumstance.  At the very least, it was unreasonable for L.L. to assume that CMS would send those documents separately.

Finally, Petitioner argues that L.L.’s termination from her employment at Petitioner’s facility should bolster her credibility because she was under no obligation to assist Petitioner in this appeal and had no incentive to create false stories about not receiving CMS’s November 19 Notice.  Petitioner also states that L.L. was terminated for reasons that had nothing to do with the CMS notices.  P. Motion at 15-16; P. Exs. 2, 10.  Craig Corriston, Vice President for the company providing management services to Petitioner, provided a supplemental declaration in which he said he fired L.L. for her rude, condescending, and threatening speech toward several families of residents and because L.L. hired unqualified individuals for positions at the facility.  P. Ex. 10.  He said that he determined that L.L.’s performance was negatively impacting the facility’s performance.  P. Ex. 10 ¶ 4.  Ms. Golden says much the same in her supplemental declaration.  P. Ex. 2 ¶¶ 5-6.

**Page 13**

The additional details of L.L.’s performance and termination neither enhance her credibility nor make it more likely that she was doing her job properly.  If L.L. spoke in a threatening manner to the residents’ families, I am not prepared, based on the record before me, to conclude that she is otherwise a person of high character.

As indicated above, Petitioner gives no explanation for L.L.’s failure to inform anyone or take any action regarding the January 26 Notice, other than to put it in her desk.  Just as with the December 9, 2021 email from the CMS official, L.L. was not fazed by the January 26 Notice’s statement that a CMP had previously been imposed.  It is possible that L.L.’s actions caused Petitioner to lose its right to appeal the CMP.  In such a circumstance, it is not difficult to see why it would be in her interest to sign a declaration indicating that she never received the November 19 Notice.

***Petitioner did not appeal the duration of the non-immediate jeopardy CMP that CMS imposed, which was the only issue that Petitioner could have appeal based on the January 26 Notice.***In its motion, Petitioner appears to argue that, at the very least, its hearing request is timely to dispute the imposition of the $250 per-day CMP that commenced (as stated in the November 19 Notice) as of October 16, 2021, but did not end until December 15, 2021 (as stated in the January 26 Notice).  CMS Ex. 1 at 4; P. Ex. 9 at 2.

Petitioner asserts that the CMP notice provision at 42 C.F.R. § 488.434(a)(2) requires that the notice indicate the amount of the penalty per day, the date on which the penalty begins to accrue, and “[w]hen the penalty stops accruing, if applicable[.]”  P. Motion at 2.  Based on an unpublished administrative law judge order (i.e., *The Villa at Mountain View*, Dkt No. C-22-219 (Apr. 28, 2022)), Petitioner then urges that, when CMS issues a notice imposing a CMP without an end date to the CMP, it deprives the SNF of adequate notice.  P. Motion at 3.  As a result, the 60-day filing deadline for an SNF does not begin until CMS issues a second notice that fully states the duration (i.e., end date) for the CMP (and a DPNA).  P. Motion at 4.

Petitioner asserts that it is in the same position as the SNF in *Mountain View* because the November 19 Notice provided for a $250 per-day CMP and the DPNA for an indefinite period beginning on October 16, 2021.  P. Motion at 4.  Further, it was not until CMS’s January 26 Notice “that CMS first provided Petitioner with notice . . . regarding the duration of the $250 per-day CMP and the duration for [the] DPNA.”  P. Motion at 5.  Petitioner ends this argument as follows:  “Because Petitioner filed its request for hearing within the 60-day deadline window [following the January 26 Notice], Petitioner requests that [the administrative law judge] would find that the appeal was timely with regard to the per-day CMP and DPNA.”  P. Motion at 5.

**Page 14**

As discussed below, *Mountain View* conflicts with a DAB decision.  I will apply the DAB’s interpretation of the regulations.

The Social Security Act requires that the Secretary provide SNFs with notice and an opportunity for a hearing to dispute CMPs imposed on the SNFs.  42 U.S.C. §§ 1320a-7(c)(2), 1395i-3(h)(2)(B)(ii)(I).  The regulations state that CMS sends written notice of the CMP imposed on the SNF, which must include the following:  the date on which the penalty begins, “[w]hen the penalty stops accruing, if applicable,” and a statement as to the SNF’s right to a hearing and the opportunity to waive that right to receive a reduction in the CMP.  42 C.F.R. § 488.434(a)(2)(v), (vi), (viii).  The regulations account for the fact that per-day CMPs accrue “for the number of days of noncompliance until the date the facility achieves substantial compliance” and, if substantial compliance did not occur by the time CMS sent the notice imposing a CMP, then CMS must send a second notice, when the SNF has achieved substantial compliance, stating “[t]he amount of the penalty per day” and “[t]he number of days involved.”  42 C.F.R. § 488.440(b), (d)(1).

As mentioned above, an SNF must file a hearing request within 60 days of receiving CMS’s notice imposing a CMP.  42 C.F.R. §§ 488.431(d)(1), 498.40(a)(2).

In the present case, CMS’s November 19 Notice established a closed period of immediate jeopardy noncompliance and an indefinite period of non-immediate jeopardy noncompliance.  This is because the November 19 Notice was issued before Petitioner returned to substantial compliance but after it had removed the immediate jeopardy situation.  Because CMS did not know if or when Petitioner would return to substantial compliance, the non-immediate jeopardy per-day CMP and DPNA were also indefinite.

As mentioned above, the November 19 Notice advised Petitioner of its right to appeal the CMPs and the DPNA.

Petitioner did not timely request a hearing to dispute the imposition of the CMPs or the DPNA.  However, the January 26 Notice provided Petitioner with the date it returned to substantial compliance and the end date to the non-immediate jeopardy CMP and the DPNA.

Petitioner is correct that this factual scenario is similar to the one in *Mountain View*.  In that case, CMS issued a notice that it was imposing a CMP for a closed period based on immediate jeopardy noncompliance and a CMP for non-immediate jeopardy noncompliance for an indefinite period.  Based on CMS’s notice, the SNF timely waived its right to a hearing and requested to receive a reduction in the CMP amount.  However, CMS later issued a second notice indicating the date on which the facility returned to substantial compliance, which also became the end date for the per-day CMP for the non-immediate jeopardy noncompliance.  Based on this new information, the facility

**Page 15**

withdrew its waiver of its hearing rights and filed a request for hearing.  CMS moved for dismissal of the hearing request as untimely.  *Mountain View*, Dkt No. C-22-219 at 2-3.

The administrative law judge decided that Petitioner had no basis to withdraw its waiver of hearing rights for the per-day CMP based on the immediate jeopardy noncompliance because that period was stated in CMS’s original notice.  However, the administrative law judge allowed the facility to challenge the non-immediate jeopardy deficiencies because CMS’s original notice did not provide the end date for the per-day CMP based on those deficiencies.  *Mountain View*, Dkt No. C-22-219 at 4-6.

The DAB, when faced with a similar situation, determined that SNFs have narrower rights to appeal based on a CMS notice that provides the end date for CMPs.  In *Mimiya Hospital*, DAB No. 1833 (2002), CMS issued a CMP notice for a set period based on immediate jeopardy noncompliance and an indefinite period for non-immediate jeopardy noncompliance.  The facility did not request a hearing until after a subsequent CMS notice that provided the date on which Petitioner returned to substantial compliance.  An administrative law judge dismissed that hearing request as untimely.  *Mimiya*, DAB No. 1833 at 5-6.  On appeal, the DAB agreed that the hearing request was properly dismissed as to the challenge of the immediate jeopardy noncompliance because CMS’s original notice provided sufficient information as to whether Petitioner should dispute those deficiencies.  *Mimiya*, DAB No. 1833 at 5-6.  Further, the DAB determined that the non-immediate jeopardy noncompliance was also properly noticed in CMS’s original notice and the facility’s appeal of those deficiencies was untimely.  As stated in the decision, only the duration of the non-immediate jeopardy noncompliance was timely appealed and could be adjudicated:

As Mimiya’s October 22, 2000 request for a hearing came within 60 days of the August 30, 2000 letter, we find that Mimiya’s request for a hearing on the issue of when it achieved substantial compliance was timely.  In so finding, we emphasize that the deficiency finding in the April survey which established the beginning date for the $100 per day CMP was set out in the May 26, 2000 notice and was not timely appealed by Mimiya; thus only the duration of the period for which the $100 per day CMP was assessed, and not the underlying violation itself, remains an issue for a hearing.

*Mimiya*, DAB No. 1833 at 7.  A federal court affirmed the DAB as follows:

Although Mimiya did not exercise its right to request a hearing, CMS complied with the requirements of due process by giving Mimiya notice of the deficiencies and the amount of the penalty, and an opportunity to be heard.

**Page 16**

*Mimiya Hosp., Inc. SNF, v. U.S. Dep’t of Health & Human Servs.*, 331 F.3d 178, 181 (1st Cir. 2003).

Applying *Mimiya* to the present case, I conclude that Petitioner needed to request a hearing to dispute the deficiencies on which the CMPs and DPNA were based by January 18, 2022.  However, based on the January 26 Notice, Petitioner had 60 days to request a hearing to dispute the duration of the non-immediate jeopardy per-day CMP and the DPNA.  While Petitioner’s hearing request provided eight specified matters that Petitioner disputed, none of them indicates a dispute with the duration of the per-day CMP regarding the non-immediate jeopardy noncompliance or the DPNA.  *See* RFH at 13.  Therefore, Petitioner did not appeal the only issue that it could have challenged following receipt of the January 26 Notice.

III.   Conclusion

I conclude that Petitioner has not shown good cause for me to vacate my Dismissal of Petitioner’s hearing request.  42 C.F.R. § 498.72.  Therefore, I deny Petitioner’s motion to vacate.

Endnotes

1  When Petitioner uploaded the request for hearing (RFH) in the DAB E-File System, the .pdf document it uploaded comprised the RFH, Petitioner’s motion as to the timeliness of the RFH, and multiple exhibits.  In the Dismissal, I cited all documents from the RFH by the .pdf page counter number without reference to exhibit numbers because the exhibit markings were confusing (e.g., RFH at 10).  The findings in the Dismissal, which are republished above, cite to the RFH, CMS Ex. 1, and to P. Ex. 1.  It is important to note that Petitioner later filed 12 marked exhibits with its motion to vacate the Dismissal.  Confusingly, Petitioner submitted as a new exhibit, another P. Ex. 1, which is the same document that is marked as CMS Ex. 1.  Also, the new P. Ex. 3 is the same document as the original P. Ex. 1.  Finally, Petitioner did not resubmit as part of the newly filed marked exhibits all of the documents included with its RFH.  Except for the findings from the Dismissal republished in this Order, and when referring to the document marked as CMS Ex. 1, I cite to Petitioner’s new exhibits.  When necessary, I cite to the RFH in the same manner as I did in the Dismissal.

2  Because the exhibits in this case indicate that the facility administrator suffered an adverse employment action, I use the administrator’s initials in the interests of privacy.

3  In its “Introduction” paragraph, Petitioner’s motion asserts that I granted Petitioner an extension to file its hearing request late but then dismissed the hearing request after CMS moved for dismissal.  While the Civil Remedies Division acknowledged receipt of Petitioner’s hearing request and issued my Standing Prehearing Order, I never affirmatively granted Petitioner’s request to file an untimely hearing request.

4  Lauren Golden is one of the managers who received a copy of the December 9 CMS email.  Petitioner submitted a supplemental declaration from Ms. Golden in response to my Dismissal.  Despite this, Ms. Golden did not address why she did not react to the statement from the CMS official in the December 9 email that Petitioner should have received an enforcement letter.  *See* P. Exs. 2, 4.
  
          /s/
        Scott Anderson

                      Administrative Law Judge Back to top
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