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                              Spring Meadows Health Care Center, ALJ Ruling 2023-8 (HHS CRD June 22, 2023)
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Spring Meadows Health Care Center, ALJ Ruling 2023-8 (HHS CRD June 22, 2023)








  
  
    

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





Spring Meadows Health Care Center,
(CCN: 445402),

Petitioner,

v.

Centers for Medicare & Medicaid Services
Docket No. C-23-258 Ruling No. 2023-8June 22, 2023

        
              
    

      **DISMISSAL**

Petitioner, Spring Meadows Health Care Center (aka Bedrock HC at Spring Meadows, LLC), is a long-term-care facility, located in Clarksville, Tennessee, that participates in the Medicare program.  Following surveys completed on July 25, 2022, and September 9, 2022, the Centers for Medicare and Medicaid Services (CMS) determined that the facility was not in substantial compliance with Medicare program requirements and imposed remedies.  In notices dated August 5, 2022, September 7, 2022, and September 26, 2022, the state survey agency and CMS advised the facility of the survey findings and the remedies imposed.  The notices explained the facility’s appeal rights.

On February 1, 2023, Petitioner filed its first document in this case – a “Motion for Extension of Time to File Hearing Request.”  Pursuant to 42 C.F.R. § 498.70(c), CMS moves to dismiss, arguing:  1) the facility has not yet filed a valid hearing request; 2) even assuming that its February 1 filing could be considered a hearing request, it is untimely; and 3) no good cause justifies extending the times for filing.

For the reasons discussed below, I grant CMS’s motion.

**Page 2**

Background

The Social Security Act (Act) sets forth requirements for nursing facilities to participate in the Medicare program and authorizes the Secretary of Health and Human Services to promulgate regulations implementing those statutory provisions.  Act § 1819.  The Secretary’s regulations are found at 42 C.F.R. Part 483.  To participate in the Medicare program, a nursing facility must maintain substantial compliance with program requirements.  To be in substantial compliance, a facility’s deficiencies may pose no greater risk to resident health and safety than “the potential for causing minimal harm.”  42 C.F.R. § 488.301.

The Secretary contracts with state survey agencies to conduct periodic surveys to determine whether skilled nursing facilities are in substantial compliance.  Act § 1864(a); 42 C.F.R. § 488.20.  Each facility must be surveyed annually, with no more than fifteen months elapsing between surveys.  Facilities must be surveyed more often, if necessary, to ensure that identified deficiencies are corrected.  Act § 1819(g)(2)(A); 42 C.F.R. §§ 488.20(a); 488.308.  The state agency must also investigate all complaints.  Act § 1819(g)(4).

**The July 25 survey and notices**.  Here, on July 25, 2022, the Tennessee Health Facilities Commission (state agency) completed a complaint investigation and recertification survey, finding that the facility was not in substantial compliance with multiple program requirements and that its deficiencies posed immediate jeopardy to resident health and safety.  CMS Ex. 1.  In a notice letter dated **August 5, 2022**, the state agency advised Petitioner that the facility was not in substantial compliance.  CMS Ex. 2.  The notice also advised Petitioner that the state agency would deny payment for new admissions and impose a directed plan of correction; it would recommend that CMS impose additional remedies: a per-instance civil money penalty (CMP) and, if the facility did not achieve substantial compliance by January 25, 2023, mandatory termination.  CMS Ex. 2 at 3, 4, 7.

A section of the notice letter – prominently captioned “**Appeal Rights**” – advised Petitioner of its right to request a hearing before an ALJ “[i]f you disagree with the determination to impose remedies made on the basis of noncompliance identified at the December 14, 2020 survey [sic].”1  The letter cited the regulations governing the appeals process, 42 C.F.R. § 498.40, *et seq.*, explained the procedures for filing an appeal, and warned:  “Your appeal must be filed no later than 60 days from the date of receipt of this letter.”  CMS Ex. 2 at 8.

**Page 3**

In a notice letter, dated **September 7, 2022**, CMS reiterated the results of the July 25, 2022 survey:  that the facility was not in substantial compliance with participation requirements and that conditions in the facility “**constituted immediate jeopardy and substandard quality of care that was determined to exist on January 22, 2022, and was removed on July 25, 2022**.”  CMS Ex. 3 at 1 (emphasis in original).  The letter advised that CMS was imposing additional remedies:  mandatory termination if the facility did not achieve substantial compliance by January 25, 2023; denial of payment for new admissions; and a $17,210 per instance civil money penalty (CMP) for the deficiency cited under Tag F689 (which corresponds with 42 C.F.R. § 483.25(d) – quality of care:  failure to prevent accidents).  CMS Ex. 3 at 2.

A section of the September 7 notice letter – prominently captioned “**APPEAL RIGHTS FOR THE JULY 25, 2022 SURVEY**” – advised the facility of its right to request a hearing before an ALJ “[i]f you disagree with [the] enforcement remedies imposed on your facility” and cited the regulations governing the appeals process, 42 C.F.R. § 498.40 *et seq*.  The letter emphasized that the “**written request for hearing must be filed no later than sixty (60) days after receiving this letter**” and explained where the appeal should be directed.  CMS Ex. 3 at 4, 5 (emphasis in original).  CMS sent the letter via e‐mail and advised that “Receipt of this Notice is presumed to be September 7, 2022 – Date Notice E-mailed.” CMS Ex. 3 at 1.

**The September 9 survey**.  On September 9, 2022, CMS completed a federal comparative Life Safety Code (LSC) survey.2  Based on those survey findings, CMS determined that the facility was not in substantial compliance with Medicare LSC requirements.  CMS Ex. 4.  In a notice letter dated **September 26, 2022**, CMS advised Petitioner that the facility was not in substantial compliance and that CMS was therefore imposing remedies:  denial of payment for new admissions; a CMP of $830 per day beginning on September 9; and mandatory termination, effective January 25, 2023, if the facility remained out of substantial compliance.  CMS Ex. 5 at 1-3.

A section of the notice letter – prominently captioned “**APPEAL RIGHTS FOR THE SEPTEMBER 9, 2022 SURVEY**” – advised Petitioner of its right to request a hearing before an administrative law judge (ALJ) “[i]f you disagree with the enforcement remedies imposed on your facility.”  The notice cited the regulations governing the appeals process, 42 C.F.R. § 498.40 *et seq*., and again cautioned that a “written request for a hearing must be filed no later than sixty (60) days after receiving this letter.”  CMS Ex. 5 at 4.  The notice explained that the appeal should identify the specific issues, findings of fact, and conclusions of law with which the facility disagrees and should specify the basis for contending that CMS’s findings and conclusions are incorrect.  CMS

**Page 4**

Ex. 5 at 5.  CMS sent the letter via e-mail.  The letter advised the facility that “Receipt of this notice is presumed to be September 26, 2022 – Date notice e-mailed.”  CMS Ex. 5 at 1.

In a letter dated December 12, 2022, the state agency advised Petitioner that, based on its onsite revisits, it determined that the facility achieved substantial compliance with all program requirements on September 12, 2022.  CMS Ex. 6.

In a letter dated December 16, 2022, CMS reiterated that, based on a December 7 revisit, it also determined that the facility returned to substantial compliance effective September 12, 2022.  CMS Ex. 7.

In a letter dated December 21, 2022, CMS confirmed that the total CMP is $19,700, representing the per-instance penalty of $17,210 plus $830 per day for three days.  The letter advised the facility that payment was due on January 5, 2023, and warned that, if payment was not received, CMS would charge interest and would instruct the Medicare contractor and the state Medicaid agency to deduct the CMP and any accrued interest from sums owed.  CMS Ex. 8.

On **February 1, 2023**, Petitioner filed what it captioned “Motion for Extension of Time to File Hearing Request.”  The document does not purport to be a hearing request and, curiously, asks for a 30-day extension of time to file its written request.  P. Motion at 7.  As explained below, even if I granted 30-day extensions, Petitioner’s hearing requests would be untimely.

CMS now moves to dismiss this matter, arguing that Petitioner has not filed a valid hearing request and, even if the document it filed were a hearing request, it is untimely.

Discussion

***Petitioner is not entitled to a hearing because it did not file timely hearing requests, and no good cause justifies extending the times for filing.3***

**Invalid hearing request**.  CMS is correct that Petitioner’s submission does not satisfy regulatory requirements.  To be valid, a request for hearing *must* identify the specific issues and the findings of fact and conclusions of law with which the Petitioner disagrees and must specify the basis for contending the findings and conclusions are incorrect.  42 C.F.R. § 498.40(b).  Petitioner’s February 1 submission does not even purport to meet these criteria.

**Page 5**

Nevertheless, the Departmental Appeals Board has directed ALJs to consider even significantly deficient filings “adequate to preserve a right to a hearing.”  *Carlton at the Lake*, DAB No. 1829 at 9 (2002); *Alden Nursing Ctr. – Morrow*, DAB No. 1825 (2002) (affording the ALJ “discretion” to accept as “adequate to preserve a right to hearing” requests that fail to identify the specific issues and findings of fact and conclusions of law with which the affected party disagrees and fail to specify the bases for contending the findings and conclusions are incorrect.).

Thus, even though it does not satisfy the regulatory requirements set forth in 42 C.F.R. § 498.40(b), I treat Petitioner’s February 1 letter as a hearing request for the limited purpose of establishing the date it filed its appeal.

**Untimely hearing request**.  Section 1866(h) of the Social Security Act authorizes administrative review of determinations that a provider fails to comply substantially with Medicare program requirements “to the same extent as is provided in section 205(b) of the [Act].”  Under section 205(b), the Secretary of Health and Human Services must provide reasonable notice and opportunity for a hearing “upon request by [the affected party] who makes a showing in writing that his or her rights may be prejudiced” by the Secretary’s decision.  The hearing request “*must* be filed within sixty days” after receipt of the notice of CMS’s determination.  Act § 205(b) (emphasis added).  The 60-day time limit is thus a statutory requirement.  *See Cary Health and Rehab. Ctr.*, DAB No. 1771 at 8-9 (2001).

Similarly, the regulations mandate that the affected party “file the request in writing within 60 days from receipt of the notice . . . unless that period is extended.”  42 C.F.R. § 498.40(a).  On motion of a party, or his/her own motion, the ALJ may dismiss a hearing request where that request was not timely filed and the time for filing was not extended.  42 C.F.R. § 498.70(c).

Here, Petitioner unquestionably failed to meet any of the deadlines for appealing the agency determinations:

No one disputes that the facility received the state agency’s August 5 notice on **August 5, 2022**, which means that, to challenge the July 25, 2022 survey findings, Petitioner’s hearing request was due no later than **October 4, 2022**.
	No one disputes that the facility received CMS’s September 7 notice on **September 7, 2022**, which means that, to challenge the additional remedies CMS imposed based on the August 5 survey, Petitioner’s hearing request was due no later than **November 7, 2022** (the 60th day, November 6, was a Sunday).**Page 6**

No one disputes that the facility received CMS’s September 26 notice letter on **September 26, 2022**, which means that, to challenge the September 9 survey findings, Petitioner’s hearing request was due no later than **November 25, 2022**.Petitioner did not file anything until **February 1, 2023**, from two to four months after the deadlines had passed.  Absent a showing of good cause for my extending the times in which to file, the matter should be dismissed pursuant to 42 C.F.R. § 498.70(c).

**No good cause**.  The regulations do not define “good cause” but leave that determination to the discretion of the ALJ.  Looking to regulations governing certain Social Security benefit appeals (which also derive from section 205(b) of the Act), many ALJs have ruled that “good cause” means circumstances beyond a party’s ability to control.  *See, e.g., Shadow Creek Medical Clinic*, ALJ Ruling No. 2017-5 (2016);*Oak Park Healthcare Ctr.*, DAB CR1917 (2009); *Hillcrest Healthcare, LLC*, DAB CR976 (2002), *aff’d*, DAB No. 1879 (2003); *Hammonds Lane Ctr., et al.*, DAB CR913 (2002), *aff’d*, DAB No. 1853 (2002); *Glen Rose Medical Ctr.*, DAB CR918 (2002), *aff’d*, DAB No. 1852 (2002); *Parkview Care Ctr.*, DAB CR785 (2001); *Hospicio San Martin*, DAB CR387 (1995), *aff’d*, DAB No. 1554 (1996); 20 C.F.R. § 404.933(c); *but see Ghodratollah Sarrafi*, ALJ Ruling No. 2020-1 (2019) (suggesting that Medicare providers and suppliers should be held to a higher standard than Social Security disability recipients).4

For its part, the Departmental Appeals Board has avoided articulating a “good cause” standard.  *Rutland Nursing Home*, DAB No. 2582 at 5 (2014); *Hammonds Lane Ctr., et al*., DAB No. 1853 n.3; *Wellington Oaks Care Ctr.*, DAB No. 1626 (1997).5  In any

**Page 7**

event, the Board has consistently agreed that where a party, by inadvertence or tactical choice, makes no effort to preserve its hearing rights, it must accept the consequences of its inaction – loss of its right to a hearing.  *Rutland* at 5; *Hammonds Lane Ctr*. At 1; *Hillcrest Healthcare, LLC*, DAB No. 1879.  Thus, the Board has sustained dismissals where the facility missed a filing deadline because it opted to pursue other avenues (*Rutland*, *Hillcrest*); waited for the results of a waiver (*Kids Med*, DAB No. 2471 (2012)); relied on a defunct policy that might have allowed it to correct without incurring a penalty (*Hammonds*); and opted to focus on its plan of correction and resurvey rather than to pursue an appeal (*Nursing Inn of Menlo Park*, DAB No. 1812 (2002)).

Here, Petitioner offers a litany of excuses for failing to file timely.

It was waiting for the state agency to respond to its Plan of Corrections (July 25 survey/August 5 notice);Because the per-diem penalty was “open-ended,” the facility “reasonably believed” that it could not dispute CMS’s enforcement remedies until the state agency approved its plan of correction (September 9 survey/September 26 notice);The September 26 and December 21 notices were “ambiguous and confusing” and “caused confusion regarding the timeframe for Petitioner to submit its hearing request.”6P. Response at 7-8. These complaints do not establish good cause.

Opting to pursue a plan of corrections does not toll the period for requesting a hearing, and Petitioner could not reasonably have expected that it would.  As the Board noted in *Nursing Inn of Menlo Park*, nothing in the notices suggests that some other action by the facility, such as preparing and submitting a plan of corrections to the state agency, would stay the 60-day deadline for requesting a hearing.  DAB No. 1812 at 4.  Nor does the state’s delay in reviewing the plan of corrections justify the facility’s failing to request a hearing within 60 days, as required by the statute and regulation.  *See, e.g., Rutland*, DAB No. 2582 at 7 (holding that the state’s delays in completing the IDR (Independent Dispute Resolution) process do not justify the facility’s failing to file its appeal timely).

Similarly, nothing in any of the notices here suggests that the facility could not request a hearing until it was certain of the final penalty amounts, and the facility could not

**Page 8**

reasonably have thought so.  CMS often imposes per-day penalties, which continue to accrue while an appeal is pending.  In those circumstances, it sends notice letters, and facilities are required to request review within 60 days, even if the CMP continues to accrue.  I am aware of no support – and Petitioner cites none – for the proposition that a facility may not appeal until a final penalty amount has been determined.

Petitioner points to *Quality Total Care, L.L.C.*, DAB No. 2242 at 2 and claims that there the Board acknowledged that imposing an open-ended penalty could be considered in determining whether good cause exists to extend the time to file a hearing request.  P. Response at 8.  In that case (as here), the facility complained that the notice letter did not set the final amount of the CMP and claimed that the facility did not receive “adequate notice” of its liability for the CMP until a month later.  The facility argued that CMS’s failure to “issue a clear position in regard to the magnitude of the potential penalty” constituted good cause for the late filing.  *Quality Total Care, L.L.C.*, DAB No. 2242 at 6.

The Board characterized Petitioner’s argument as “unsupported by law or the evidence in the record,” and explained that “in order to promptly inform facilities about remedies they face, CMS necessarily issues initial determinations without end dates for per-day CMPs . . . because those end dates depend on the facility’s corrective actions and a state agency’s review of those corrective actions.”  *Quality Total Care, L.L.C.*, DAB No. 2242 at 7.  While the Board did not say that the absence of an end date could *never* be a factor, it found that “clearly” the absence of an end date for that facility should not be a factor.  *Id*.

Employing what appears to be a *non sequitur* of an argument, Petitioner here attempts to distinguish itself from the facility in *Quality Total Care* by suggesting that CMS’s September 9 LSC survey, imposing per-day CMPs, prevented it from appealing the July 25 survey findings or responding to the September 7 notice that a per-instance penalty would be imposed.  Petitioner asserts that it “did not know, and could not have reasonably foreseen, that [CMS] would later issue an open-ended per-diem CMP” based on a separate survey.  P. Response at 8-9.

Nothing about the subsequent LSC survey precluded the facility from timely requesting review of the July 25 survey findings and the penalty imposed.  Nor did the notices CMS sent create any justification for the facility failing to appeal timely.  *See Quality Total Care* at 7-8 (rejecting as “unsupported and unpersuasive” the facility’s claim that CMS’s notices “made it impossible” to decide whether to appeal the matter”).7

**Page 9**

Finally, in the notices sent in this case, the state agency and CMS used standard language to advise the facility of its appeal rights and deadlines.  The Board and reviewing courts have repeatedly determined that this language is “clear and unambiguous” and provides explicit instructions as to what the facility must do to preserve its hearing rights.  *West Side House LTC Facility*, DAB No. 2791 at 6 (2017); *Rutland*, DAB No. 2582 at 8 (observing once again that “language CMS used in its notice letter (or similar language) adequately notifies facilities of the requirement to request a hearing within the 60-day regulatory time frame”); *Waterfront Terrace, Inc.*, DAB No. 2320 at 3, 6 (2010); *Mimiya Hosp.*, DAB No. 1833 at 4, 6 (2002), *aff’d*, 331 F.3d 178 (1st Cir. 2003) (concluding that a CMS letter stating that a “written request for a hearing must be filed no later than 60 days from the date of receipt of this letter” contained “explicit directions” on how to seek review of CMS’s determination); *Quality Total Care*, DAB No. 2242 at 2; *Concourse Nursing Home*, DAB No. 1856 at 3, 10 11 (2002), *aff’d*, 155 F. App’x 28 (2nd Cir. 2005) (finding that the notice letter was “perfectly clear” and provided “clear notice of the enforcement action pending against it, the basis for this action . . . and [the facility’s] right to appeal the action to HHS within 60 days”); *Nursing Inn of Menlo Park*, DAB No. 1812 at 4 (“We are at a loss to understand how [the facility] can claim that it found the wording of the notice confusing.”).

Thus, no good cause justifies Petitioner’s failing to request hearings timely.  The state agency and CMS sent notices that told Petitioner exactly what it had to do to appeal and, in plain language, warned that appeals had to be filed within 60 days of receiving the notices.  The facility did not file anything to preserve its appeal rights until long after the filing deadlines had passed.

**Conclusion**

Petitioner did not file its hearing requests within sixty days of receiving the August 5, 2022, September 7, 2022, and September 26, 2022 notice letters.  No good cause justifies my extending the times for filing.  I therefore dismiss this matter pursuant to 42 C.F.R. § 498.70(c).

Endnotes

1  This date was obviously a mistake.  Petitioner nevertheless understood that the remedies were imposed for deficiencies found during the July 25 survey and has not claimed to have been misled in this regard.  In any event, CMS’s September 7, 2022 notice letter clarified any potential misunderstanding.

2  The purpose of a federal comparative survey is to evaluate the performance of the state surveyors as well as the performance of the facility in meeting Medicare participation requirements.  *Lopatcong Ctr.*, DAB No. 2443 at 3 (2012).

3  I make this one finding of fact/conclusion of law.

4  The Social Security regulations instruct the administrative law judge to consider:  1) the circumstances that kept the respondent from making the request on time; 2) whether any agency action misled him; 3) whether the respondent understood the requirements for filing; and 4) whether the respondent had any physical, mental, educational, or linguistic limitation that prevented him from filing a timely request or from understanding or knowing about the need to file a timely request for review.  20 C.F.R. § 404.911.

5  As noted above, the regulation gives the *ALJ* discretion to extend the time for filing.  42 C.F.R. § 498.40(c).  (“For good cause shown, the ALJ *may* extend the time for filing the request for hearing.”).  While the SSA standard is likely the most-widely used for section 205(b) hearings – and its application thus least likely to be considered an abuse of discretion – it is not the only standard an ALJ might reasonably apply, particularly given the absence of controlling regulations or other guidance.  In reviewing an ALJ’s dismissal, the Board does not decide *de novo* its own view of good cause; rather it determines whether the ALJ abused his/her discretion.  “Abuse of discretion” is thus the appropriate standard for reviewing an ALJ’s finding of good cause.

6  Obviously, the December 21 letter could have had no impact on Petitioner’s failing to appeal timely since the appeal deadlines had passed by the time Petitioner received it.  *See**Quality Total Care, L.L.C.*, DAB No. 2242 at 8 (2009) (finding irrelevant complaints about a purportedly confusing notice received after the 60-day deadline had expired).

7  I note that the notices CMS sent in *Quality Total Care* included a retraction of an earlier notice, which is arguably more potentially confusing than any of the notices here.  The ALJ there noted that the facility’s real problem was that it did not read the notices carefully enough, and the Board agreed.  *Quality Total Care, L.L.C.*, DAB No. 2242 at 9.
  
          /s/
        Carolyn Cozad Hughes

                      Administrative Law Judge Back to top
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