Department of Health and Human Services

DEPARTMENTAL APPEALS BOARD
Civil Remedies Division

In the Case of:

Aida Cantu, DATE: February 24, 1997
Petitioner,
- ver Docket No. C-96-204

Decision No. CR462
The Inspector General.

DECISION
By letter dated June 28, 1995, Aida Cantu, the Petitioner
herein, was notified by the Inspector General (I.G.), U.S.

Department of Health and Human Services (HHS), that it had
been decided to exclude her for a period of five years from
participation in the Medicare, Medicaid, Maternal and Child
Health Services Block Grant and Block Grants to States for
Social Services programs.' The I.G. explained that the five-
year exclusion was mandatory under sections 1128(a)(2) and
1128(c) (3) (B) of the Social Security Act (Act) because
Petitioner had been convicted of a criminal offense relating
to neglect or abuse of patients in connection with the
delivery of a health care item or service.

Petitioner filed a request for review of the I.G.'s action.
The I.G. moved for summary disposition.”

1 In this decision, I use the term "Medicaid" to
refer to these State health care programs.

2? Petitioner's hearing request is dated April 15,
1996. In her hearing request, Petitioner states that she
never received the I.G.'s notice. In her brief, the I.G. did
not challenge Petitioner's statement and neither party
addressed the issue of timeliness in their briefs. For this
reason, and also because I find for the I.G. on the merits, I
make no findings as to whether Petitioner's request for
hearing is timely or untimely.
2

Because I have determined that there are no material and
relevant factual issues in dispute and the only matter to be
decided is the legal significance of the undisputed facts, I
have decided the case on the basis of the parties' written
submissions in lieu of an in-person hearing. I grant the
I.G.'s motion for summary disposition.

I affirm the I.G.'s determination to exclude Petitioner from
participation in the Medicare and Medicaid programs for a
period of five years.

APPLICABLE LAW

Sections 1128(a)(2) and 1128(c)(3)(B) of the Act make it
mandatory for any individual who has been convicted of a
criminal offense relating to neglect or abuse of patients in
connection with the delivery of a health care item or service
to be excluded from participation in the Medicare and
Medicaid programs for a period of at least five years.

PETITIONER'S ARGUMENT

Petitioner asserts that, although a nurse's aide had reported
to her witnessing an elderly patient being pushed by another
employee and had also stated that she had noticed old bruises
on the patient, Petitioner herself did not see any bruises or
other signs of abuse when checking on this patient.
Consequently, Petitioner did not believe that she had any
proof or reasonable cause for acting on this information.
Petitioner contends further that she checked the patient a
week later and saw faded bruises. Because she did not
believe these bruises related to the incident reported by the
nurse aide, she did not report them. Petitioner maintains
also that she was not advised at the time she entered her
guilty plea that she could be excluded from participation in
the Medicare and Medicaid programs under section 1128 (a) (2)
of the Act as a consequence of such plea.

FINDINGS OF FACT AND CONCLUSIONS OF LAW

1. At all times relevant herein, Petitioner was a licensed
vocational nurse at a Medicaid certified nursing facility,
Harlingen Good Samaritan Center, in Harlingen, Texas. P. Ex.

3 In this case, Petitioner submitted a letter brief,
with attached documents. I refer to Petitioner's letter
brief as "P. Brief." I have marked Petitioner's documents
collectively as "P. Ex. 1." The I.G. submitted a brief, five
3

2. On June 12, 1993, a criminal information was filed
against Petitioner by the State of Texas charging her with
one count of failure to report abuse and neglect of a patient
(M.C.), in violation of Texas Health & Safety Code Ann. Art.
242.131, a misdemeanor. I.G. Exs. 1, 6.‘

3. The criminal information alleged that Petitioner
knowingly failed to report that M.C., a resident of the
Harlingen Good Samaritan Center, was physically abused or
neglected and that Petitioner had reason to know of this.
I.G. Ex. 1.

4. Petitioner waived her right to a jury trial and pled
guilty in open court to the offense which gave rise to the
criminal information. I.G. Exs. 2, 3.

5. On November 30, 1994, the Texas State court deferred
adjudication of guilt, placed Petitioner on probation for
ninety days, and fined her $400.00. I.G. Ex. 3.

6. On November 21, 1995, the Texas State court entered an
order setting aside the conviction and dismissing the charge
of failure to report abuse and neglect against Petitioner.
I.G. Ex. 4.

7. Petitioner's guilty plea, which was accepted by the State
court, falls within the definition of "convicted of a
criminal offense" listed in section 1128(i) (3) of the Act.

8. The deferred adjudication arrangement Petitioner entered
into with the court falls within the definition of "convicted
of a criminal offense" listed in section 1128(i) (4) of the
Act.

9. The fact that the court set aside Petitioner's conviction
and dismissed the charge does not affect Petitioner's
conviction.

10. Petitioner's criminal conviction for failure to report
the alleged abuse at issue was an offense relating to neglect
or abuse of a patient and is connected with the delivery of a

exhibits (I.G. Exs. 1-5), and one attachment to her brief. I
refer to the I.G.'s brief as "I.G. Brief." I have marked the
attachment as "I.G. Ex. 6." Neither party has objected to
the other party's exhibits. In the absence of objection, I
admit both parties' exhibits into evidence.

* To protect the identity of the nursing home
resident, I am using the resident's initials.
4

health care item or service within the meaning of section
1128(a) (2) of the Act.

11. Under section 1128(a)(2) of the Act, the fact that a
conviction within the meaning of section 1128(i) has occurred
mandates exclusion and an administrative law judge is not
authorized to look behind the conviction.

12. The five-year exclusion imposed and directed against
Petitioner by the I.G. is for the minimum period required by
the Act.

13. Neither the I.G. nor an administrative law judge is
authorized to reduce the length of a mandatory five-year
period of exclusion.

14. The I.G. properly excluded Petitioner from participation
in the Medicare and Medicaid programs for five years, as
required by sections 1128(a)(2) and 1128(c) (3) (B) of the Act.

DISCUSSION

To justify excluding an individual pursuant to section
1128(a) (2) of the Act, the I.G. must prove: (1) that the
individual charged has been convicted of a criminal offense;
(2) that the conviction is related to the neglect or abuse of
patients; and (3) that the patient's neglect or abuse to
which an excluded individual's conviction is related occurred
in connection with the delivery of a health care item or
service.

I find that the facts show that Petitioner was convicted of a
criminal offense within the meaning of sections 1128(a) (2)
and 1128(i) of the Act. Petitioner pled guilty to the
offense of failure to report abuse and neglect and the State
court accepted her plea. Moreover, the term "convicted of a
criminal offense" includes also those circumstances in which
the individual enters into a deferred adjudication
arrangement with the court. Here, the Texas State court
deferred adjudication of Petitioner's guilt, placed her on
probation, and assessed a fine. The fact that the court, on
November 21, 1995, set aside Petitioner's conviction and
dismissed the charge does not affect Petitioner's conviction.
There is nothing in the Act that prohibits the I.G. from
excluding a Petitioner after a case has been dismissed
following a deferred adjudication. For the purposes of the
Act, it is the fact of the conviction itself that gives the
I.G. the authority to exclude. Here, Petitioner has been
convicted within the meaning of sections 1128(i)(3) and (4)
of the Act. Accordingly, I find that Petitioner was
convicted within the meaning of the Act.
5

Although Petitioner is not alleged to have abused anyone, the
State of Texas has a legitimate interest in requiring health
care workers to report incidents of suspected patient abuse.
Towards this end, the State has a mandatory reporting
requirement which Petitioner was convicted of violating. As
an employee at the Harlingen Good Samaritan Center,
Petitioner had a duty to maintain the health, safety, and
well-being of patients at that facility. Petitioner's
failure to report the alleged abuse in this case constituted
an act of "neglect" within the meaning of section 1128(a) (2)
of the Act. Petitioner thus breached her duty of care to a
patient (M.C.) of that Center, which directly impacted the
health, safety, and well-being of that patient. Thus,
Petitioner's offense was related to the neglect or abuse of a
patient within the meaning of section 1128(a)(2). See Dawn
Potts, DAB CR120 (1991); Vicky L. Tennant, R.N., DAB CR134
(1991); Gl E. Bandel, DAB CR261 (1993); Carolyn Westin, DAB
CR229 (1992), aff'd, DAB 1381 (1993).

Finally, to justify an exclusion pursuant to section
1128(a)(2), I must find that the patient neglect or abuse to
which an excluded individual's conviction is related occurred
in connection with the delivery of a health care item or
service. Here, Petitioner was a nursing home employee who
under State law had a duty to report incidents of suspected
abuse or neglect which may have adversely affected a
Harlingen Good Samaritan Center patient's well-being.
Therefore, I conclude that Petitioner's failure to report the
alleged abuse directly related to the duty of care she owed
to that patient and occurred in connection with the delivery
of a health care item or service within the meaning of
section 1128(a)(2). See Vicky L. Tennant, R.N., DAB CR134
(1991).

In her defense, Petitioner asserts that, since she did not
personally observe the alleged abuse, and did not have any
proof or "reasonable cause" to pass along the information she
had been given, she is not culpable. Petitioner contends
also that her criminal proceeding was unfair because she was
not advised that her guilty plea might subject her to
exclusion under section 1128(a)(2) of the Act. Once it is
determined, however, that a conviction relating to the abuse
or neglect of a patient has occurred, exclusion is mandatory
under section 1128(a) (2) of the Act as a purely derivative
action. The I.G. is not permitted to look beyond the fact of
conviction. Peter J. Edmonson, DAB CR163 (1991), aff'd, DAB
1330 (1992). The intent of the individual committing the
offense is not relevant under section 1128(a). DeWayne
Franzen, DAB CR58 (1989), aff'd, DAB 1165 (1990). Assertions
by a petitioner that he or she is actually:innocent, that his
or her trial was unfair, or that the statutory five-year
minimum mandatory exclusion specified in’section 1128 (a)
6

should be modified because of mitigating circumstances cannot
be addressed in this forum. Edmonson, DAB 1330 at 4-5; Janet

Wallace, L.P.N., DAB CR155 (1991), aff'd, DAB 1326 (1992);
Richard G. Philips, D.P.M., DAB CR133 (1991), aff'd, DAB 1279

(1991). Mitigating factors are not relevant unless the I1.G.
relies upon aggravating factors to exclude a petitioner for
more than five years. 42 U.S.C. § 1001.102(c). The
Petitioner was excluded for only the minimum period, with no
aggravating factors cited. Thus in the case at hand, I am
without authority to consider Petitioner's assertions that
she is innocent and that the criminal proceedings were
unfair.

CONCLUSION

Sections 1128(a) (2) and 1128(c)(3)(B) of the Act mandate that
Petitioner herein be excluded from the Medicare and Medicaid
programs for a period of at least five years because she was
convicted of a criminal offense related to the neglect or
abuse of patients in connection with the delivery of a health
care item or service. The five-year exclusion is therefore
sustained.

/s/

Joseph K. Riotto
Administrative Law Judge


Department of Health and Human Services

DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

In the Case of:
Mathis Nursing Home, Date: February 12, 1997
Petitioner,

Docket No. C-96-427
Decision No. CR461

-v-

Health Care Financing
Adninistration.

wee eye Se eee eS

DECISION

I dismiss Petitioner’s request for hearing because Petitioner
did not make it timely, and because Petitioner has not
established good cause for failing to make a request for a
hearing timely.

I. Background

On August 23, 1996, Petitioner, Mathis Nursing Home, a
skilled nursing facility (SNF), made a request for a hearing
from a determination by the Health Care Financing
Administration (HCFA). The case was assigned to me for a
hearing and a decision. HCFA moved to dismiss Petitioner’s
request for a hearing. Petitioner opposed HCFA’s motion.

II. Issues, findings of fact and conclusions of law

The issues in this case are whether Petitioner: made a
request for a hearing timely from a determination by HCFA to
impose a remedy; or established good cause for not having
made a request for a hearing timely from a determination by
HCFA to impose a remedy. In deciding these issues, I make
the following findings of fact and conclusions of law
(Findings). I discuss these Findings in detail, below.

1. On April 18, 1996, HCFA notified Petitioner that it
intended to impose remedies against Petitioner,
including a denial of payments for new admissions,
effective May 5, 1996.
2

2. On August 6, 1996 HCFA advised Petitioner that
payment for new admissions would be denied effective May
5, 1996, and up until and including July 17, 1996.

3. On August 23, 1996, Petitioner requested a hearing.

4. Petitioner made its request for a hearing more than
60 days from the date that HCFA notified Petitioner of
HCFA’s determination to impose a remedy against
Petitioner.

5. The reason that Petitioner did not make its request
for a hearing prior to August 23, 1996 is that an
employee of the corporation that owns Petitioner failed
to exercise his or her responsibility to make a hearing
request.

6. A SNF is entitled to a hearing from a determination
by HCFA to impose a remedy against the SNF.

7. An entity must make its request for a hearing within
60 days from the date that it receives notice of HCFA’s
determination to impose a remedy.

8. If an entity does not make its request for hearing
timely, it is no longer entitled to a hearing.

9. Where an entity fails to make a request for a
hearing timely, it may be given a hearing if it
establishes good cause for failing to make its request
timely.

10. HCFA’s April 18, 1996 notice to Petitioner is a
notice of HCFA’s intent to impose remedies against
Petitioner, and not merely a notice that Petitioner
might impose remedies.

11. The 60-day period within which Petitioner had to
request a hearing in order to be entitled to a hearing
began on the date of Petitioner’s receipt of HCFA’s
April 18, 1996 notice.

12. Petitioner made its request for a hearing untimely,
and Petitioner is not entitled to a hearing.

13. Petitioner has not established good cause for
failing to request a hearing timely.
III. Discussion

A. The facts (Findings 1 - 5)

On April 18, 1996, HCFA notified Petitioner that, on January
25, 1996, the Texas Department of Human Services had
conducted a survey to determine whether Petitioner was in
compliance with federal requirements governing participation
of nursing homes in Medicare and Medicaid. HCFA Ex. 3.!

HCFA told Petitioner that the Texas Department of Human
Services had concluded that Petitioner was not in substantial
compliance with those requirements. Id. at 1. HCFA noted
that, in response to the January 25, 1996 survey, Petitioner
had submitted a plan of correction and had alleged that it
was complying with participation requirements. However, the
Texas Department of Human Services had concluded, on the
basis of a resurvey conducted on March 27, 1996, that
Petitioner remained out of compliance with participation
requirements. Id. HCFA advised Petitioner that it concurred
with the finding that Petitioner remained out of compliance
with participation requirements. Id.

Petitioner was advised that HCFA had determined to impose
remedies against Petitioner if Petitioner did not correct the
outstanding deficiencies. HCFA told Petitioner that it would
terminate Petitioner’s participation in Medicare. HCFA Ex.
3. HCFA advised Petitioner also that, effective May 5, 1996,
Petitioner would be denied payment for new admissions. Id.
HCFA advised Petitioner that, in addition to imposing the
remedies of termination and denial of payment for new
admissions, it also might determine to impose against
Petitioner a civil money penalty of $200 per day, beginning
on January 25, 1996, and continuing until Petitioner achieved
substantial compliance with participation requirements. Id.

1 HCFA submitted seven exhibits (HCFA Ex. 1 - 7) in
support of its motion to dismiss Petitioner’s request for a
hearing. Petitioner submitted two exhibits (P. Ex. 1 - 2) in
opposition to HCFA’s motion. Additionally, Petitioner
submitted as attachments to its brief in opposition to HCFA’s
motion correspondence from HCFA to Petitioner dated April 18,
1996, July 11, 1996, and August 6, 1996. These letters were
submitted also by HCFA as HCFA Ex. 3 - 5. I conclude that
there is no need to designate the correspondence submitted by
Petitioner as exhibits, because that correspondence
duplicates exhibits submitted by HCFA. Finally, Petitioner
submitted a verification signed by Joseph Bell. I am
designating the verification as P. Ex. 3. Neither party has
objected to my receiving any of the exhibits into evidence.
Therefore, I receive into evidence HCFA Ex. 1 - 7 and P. Ex.
1- 3.
4

The April 18, 1996 notice advised Petitioner that, if it
disagreed with HCFA’s determination, it could request a
hearing. HCFA Ex. 3 at 2. Petitioner was told explicitly
that it had 60 days from receipt of the notice within which
to request a hearing. Id.

Shortly after the notice was sent to Petitioner, Petitioner
submitted a plan of correction. P. Ex. 1. It is unclear
whether Petitioner submitted its plan of correction to the
Texas Department of Human Services or to HCFA, inasmuch as
Petitioner did not offer as evidence any transmittal which
may have accompanied the plan of correction. Also, it is not
clear on what date Petitioner submitted its plan of
correction, although the plan of correction was signed and
dated by Petitioner’s administrator on April 19, 1996. P.
Ex. 1 at 1.

On July 11, 1996, HCFA sent an additional notice to
Petitioner. HCFA Ex. 4. This notice reminded Petitioner
that, if it did not achieve substantial compliance with
participation requirements by July 25, 1996, its provider
agreement would be terminated. Id. Additionally, HCFA
stated that its records indicated that Petitioner had not
requested a hearing concerning HCFA’s determination of
noncompliance. Id. HCFA told Petitioner that Petitioner
should notify HCFA immediately if HCFA’s records were
incorrect. Id.

There is no evidence of a response by Petitioner to HCFA’s
July 11, 1996 letter. Petitioner did not assert that it
wanted a hearing, nor did it advise HCFA that HCFA’s records
were incorrect.

On August 6, 1996, HCFA wrote again to Petitioner. HCFA Ex.
5. In this notice, HCFA advised Petitioner that the Texas
Department of Human Services had reported that Petitioner had
corrected its noncompliance with participation requirements.
Id. HCFA advised Petitioner that, because Petitioner had not
corrected its deficiencies in a timely manner, the remedy of
denial of payment for new admissions would be imposed for the
period beginning May 5, 1996 through July 17, 1996. Id.
Additionally, HCFA told Petitioner that it might determine to
impose against Petitioner a civil money penalty of $200 for
each day of noncompliance from January 25, 1996 up to and
including July 17, 1996, for a total penalty of $35,000. Id.
However, HCFA advised Petitioner that it had not yet
determined whether to impose the civil money penalty. Id.
HCFA told Petitioner that, if it determined to impose the
civil money penalty, it would notify Petitioner of the
determination. Id.
5

On August 23, 1996, Petitioner requested a hearing. HCFA Ex.
6. Petitioner stated that it was appealing the findings of
noncompliance stemming from the January 25, 1996 and March
27, 1996 surveys of Petitioner. Id. at 1. Petitioner
asserted that HCFA’s April 18, 1996 notice had been received
by Petitioner and that Petitioner had forwarded the notice to
Petitioner’s corporate office in Dallas, Texas. Id. at 2.
According to Petitioner, the person who was responsible for
requesting a hearing on Petitioner’s behalf took no action
and later resigned at the request of management. Id.

Petitioner averred that its corporate owners did not discover
the existence of the April 18, 1996 notice until they saw a
reference to that notice in HCFA’s August 6, 1996 notice to
Petitioner. Id. Petitioner asserted that, upon learning of
the April 18, 1996 notice, Petitioner immediately hired
outside counsel, who requested a hearing as soon thereafter
as was practicable. Id. Thus, according to Petitioner, its
failure to request a hearing timely was not the result of
conscious indifference, but, rather, was inadvertent and
caused by the performance of one employee. Petitioner
requested that the time within which it could request a
hearing be extended. Id.

From this recitation of the evidence, I find the following.
First, Petitioner did not request a hearing within 60 days of
its receipt of HCFA’s April 18, 1996 notice. Petitioner has
acknowledged receiving the notice and not requesting a
hearing within 60 days of receipt of the notice. Second,
Petitioner’s failure to request a hearing within 60 days of
receipt of the notice was due to a failure to exercise
diligence by a employee in Petitioner’s headquarters.”

B. Governing law (Findings 6 - 9)

The right of a SNF to a hearing from a determination by HCFA
is governed by regulations contained in 42 C.F.R. Parts 488
and 498. Pursuant to 42 C.F.R. § 488.408, a provider may
request a hearing from a determination by HCFA of
“noncompliance leading to an enforcement remedy.” Pursuant
to 42 C.F.R. § 498.3(b) (12), a SNF may request a hearing
concerning “the finding of noncompliance leading to the
imposition of enforcement actions specified in § 488.406 of
this chapter, ... .-” In Fort Tryon Nursing Home, DAB
CR425 (1996), I held that these two regulations meant the

2? HCFA disputes this fact, asserting that
Petitioner's explanation for the untimely hearing request is
not credible. However, for purposes of this decision, I am
making findings of fact in a manner most favorable to
Petitioner.
6

same thing. I held that the regulations entitle a SNF to a
hearing from a determination by HCFA that actually results in
the imposition of an enforcement remedy against the SNF.
Those actions by HCFA that constitute enforcement remedies
are specified in 42 C.F.R. § 488.406. They include denial of
payment for new admissions, termination, and the imposition
of a civil money penalty. 42 C.F.R. §§ 488.406(a),

(a) (2) (44), (a) (3)-

The right to a hearing from a determination by HCFA to impose
a remedy is a time-limited right. An affected party must
file a written request for a hearing within 60 days from the
date it receives notice of HCFA’s determination. 42 C.F.R. §
498.40(a)(2). An administrative law judge may dismiss a
request for a hearing that is not made timely. 42 C.F.R. §
498.70(c).

An administrative law judge may extend an entity’s deadline
for making a request for a hearing where that party has not
made a request timely. 42 C.F.R. § 498.40(c)(2). An entity
must establish good cause for not having made its request
timely. Id.

The regulation does not define the term “good cause.” I find
that the term means circumstances that are beyond the ability
of the entity who requests a hearing to control, which
intervene to prevent that entity from making a timely hearing
request. Hospicio San Martin, DAB CR387 at 3 (1995), aff’d,
DAB 1554 (1996).

Cc. Application of the law to the facts (Findings 10 -

413)

As I discuss above, HCFA’s first notice to Petitioner that
announced HCFA’s intent to impose a remedy is dated April 18,
1996. HCFA Ex. 3. In that notice, HCFA announced its intent
to impose remedies. These included termination, if
Petitioner did not attain substantial compliance by July 25,
1996, and denial of payment for new admissions, beginning on
May 5, 1996. Id. at 1 - 2. On August 6, 1996, HCFA
confirmed that it had imposed the remedy of denial of payment
for new admissions beginning on May 5, 1996, and advised
Petitioner that it would continue in effect up until and
including July 17, 1996. HCFA Ex. 5. The sequencing of
these notices raises the question of whether the period of
time during which Petitioner was entitled to request a
hearing began to run effective with its receipt of the April
18, 1996 notice announcing HCFA’s determination to impose
remedies; with imposition of denial of payment for new
admissions on May 5, 1996; or on August 6 1996, the date that
HCFA confirmed that it had imposed denial of payment for new
admissions against Petitioner.
7

I conclude that, under 42 C.F.R. § 498.40(a), the period of
time within which Petitioner was entitled to request a
hearing began to run with Petitioner’s receipt of the April
18, 1996 notice in which HCFA announced its determination to
impose remedies. It is true that the notice announces the
imposition of remedies — consisting of possible termination
and denial of payment for new admissions — as events which
would occur in the future. It is true also that had HCFA
rescinded completely its determination to impose a remedy,
then Petitioner would not have been entitled to a hearing.
Fort Tryon at 5. But, the regulation plainly establishes
that, where HCFA determines to impose a remedy at a future
date, then the time within which an entity has to request a
hearing — assuming that HCFA later imposes the remedy —
begins to run with HCFA’s first notice to the entity which
announces HCFA’s determination.

Petitioner now asserts that the April 18, 1996 notice was not
a notice of a determination to impose a remedy, but was, in
fact, only a notice of HCFA’s determination that it might
impose a remedy. According to Petitioner, the April 18, 1996
notice merely informs Petitioner that, if Petitioner did not
attain substantial compliance with participation
requirements, HCFA would consider terminating Petitioner’s
participation in Medicare, imposing a civil money penalty
against Petitioner, and denying Petitioner payment for new
admissions. See HCFA Ex. 3. Petitioner asserts that HCFA
did not actually determine to impose a remedy against
Petitioner until August 6, 1996, when it advised Petitioner
that it would impose a denial of payment for new admissions
for the period beginning May 5, 1996 through July 17, 1996.
See HCFA Ex. 5.

I disagree with Petitioner’s characterization of the April
18, 1996 and the August 6, 1996 notices. Petitioner’s
argument to the contrary, the April 18, 1996 notice plainly
constituted a determination by HCFA to impose two remedies
against Petitioner. These remedies consisted of termination
and denial of payment for new admissions. HCFA Ex. 3 at 1 -
2. HCFA later determined not to impose termination. HCFA
Ex. 5. But, the denial of payment for new admissions went
into effect on May 5, 1996 and, on August 6, 1996, HCFA
ratified its previous determination to impose denial of
payment for new admissions. HCFA Ex. 3 at 2; HCFA Ex. 5.

Petitioner did not submit its request for a hearing timely
and, thus, is not entitled to a hearing. As I find above,
HCFA’s April 18, 1996 notice was a notice of HCFA’s
determination to impose remedies against Petitioner. In
order to be entitled to a hearing from that determination,
Petitioner was obligated to request a hearing within 60 days
of its receipt from the notice. Petitioner did not request a
8

hearing until August 23, 1996, more than 60 days from its
receipt of the notice.

I have concluded that the April 18, 1996 notice constitutes
HCFA’s notice of imposition of remedies. The fact that the
one remedy that HCFA imposed, denial of payment for new
admissions, was not imposed until a later date, does not
derogate from my conclusion that the April 18, 1996 notice
triggered the time within which Petitioner could request a
hearing. As I hold above, at Part II.B. of this decision,
the trigger date is the date of receipt of the notice of
HCFA’s intent to impose a remedy, and not the date when the
remedy is imposed.’

I do not conclude that HCFA’s August 6, 1996 notice gave
Petitioner hearing rights in addition to those which were
created by the April 18, 1996 notice. HCFA Ex. 5. ‘The
August 6, 1996 notice does not constitute a determination by
HCFA to impose a remedy against Petitioner. Rather, it is an
advisory notice which tells Petitioner that HCFA had ratified
its previous determination, stated in the April 18, 1996
notice, to impose the remedy of denial of payment for new
admissions, effective May 5, 1996. It tells Petitioner also
that HCFA was rescinding its previous determination to
terminate Petitioner’s participation in Medicare. Finally,
it tells Petitioner that HCFA had not yet determined whether
to impose a civil money penalty against Petitioner.

I do not find that Petitioner established good cause for not
requesting a hearing timely. There is no evidence that
Petitioner was precluded from requesting a hearing timely by
circumstances that were beyond its ability to control. As
Petitioner admits, the failure to request a hearing was due
to a failure by the corporate employee (who was charged with
the responsibility to request a hearing) to carry out his or
her assigned duties. The failure by that employee to carry

3 That the date which triggers the time period within
which a hearing may be requested is the date of an entity’s
receipt of HCFA’s notice of the determination to impose a
remedy means that, in the case where HCFA tells a provider
that a remedy may be imposed in the future, contingent on
events that have not yet occurred, such as the entity’s not
attaining compliance with participation requirements by a
date certain, the entity may have no choice but to request a
hearing without knowing whether the remedy actually will be
imposed. And, the requirement that an entity request a
hearing possibly in advance of the date when the remedy is to
be imposed may mean that the entity will ultimately be found
to have no right to a hearing should HCFA eventually
determine not to impose the threatened remedy.
9

out his or her assigned duties carries the same consequences
that would result if an individual who is the subject of an
adverse determination by HCFA fails to timely request a
hearing due to error on that individual’s part. In either
event, the failure to request a hearing is a consequence of
avoidable human error and not of an event that was beyond the
ability of the individual, or the corporation, to control.

Iv. Conclusion
I conclude that Petitioner did not request a hearing timely.
I conclude further that Petitioner did not establish good

cause for its failure to request a hearing timely.
Therefore, I dismiss Petitioner’s request for a hearing.

/s/

Steven T. Kessel
Administrative Law Judge


Department of Health and Human Services

DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

In the Case of:
Sharwood Health Center, DATE: February 10, 1997
Petitioner,

Docket No. C-96-390
Decision No. CR460

-v-

Health Care Financing
Administration.

DECISION

Below, I explain my reasons for dismissing this case pursuant to
42 C.F.R. § 498.70 (a), (b), and (c).

The only document in this case purporting to be a hearing request
is a letter from Petitioner dated July 29, 1996. This case was
docketed by the Departmental Appeals Board (DAB) following the
receipt of Petitioner's letter dated July 29, 1996. Petitioner's
letter requested a hearing on matters contained in a June 4, 1996
letter from the Illinois Department of Public Health (IDPH),
which summarized the recommendations made by the IDPH to the
Health Care Financing Administration (HCFA). After receiving
IDPH's recommendations, HCFA issued its own determinations by
notices dated August 9, 1996 and September 9, 1996. HCFA's
August 9, 1996 notice contained HCFA's determination to impose
three enforcement remedies against Petitioner; HCFA's September
9, 1996 notice contained HCFA's determination to rescind two of
the three previously imposed enforcement remedies, and to impose
a civil money penalty (CMP) remedy as well.

On October 18, 1996, I directed the issuance of an order for
Petitioner to show cause why this case should not be dismissed
for the following three reasons set forth in the order:

1. "There is no indication that
Petitioner filed a hearing request
containing the information specified by
regulation within 60 days after its
receipt of HCFA's August 9, 1996 Notice.
42 C.F.R. § 498.40(a) and (b).";
2

2. "In addition, Petitioner's status
report dated October 4, 1996, indicates
that HCFA has rescinded the remedies
imposed in its August 9, 1996 notice.
Therefore, it would appear that if
Petitioner had any right to a hearing
pursuant to its hearing request dated
July 29, 1996, such right has been
extinguished by HCFA's rescission of the
remedies. See e.g., Arcadia Acres, Inc.,
v. HCFA, DAB CR424 (1996)."; and

3. "According to Petitioner's status
report, HCFA has issued a Notice which
imposed a civil monetary penalty (CMP)
and which informed Petitioner of its
right to request a hearing to contest the
imposition of the CMP. If Petitioner
files a request to contest HCFA's
imposition of a CMP, the Departmental
Appeals Board's practice is to docket the
matter as a separate action."

Petitioner responded to my order to show cause by contending that
"Sharwood's July 29, 1996 correspondence was a valid request for
a hearing pursuant to 42 C.F.R. § 498.40." Sharwood's Response
to the Tribunal's Sua Sponte Motion to Dismiss (P. Response), 2!;
see, Sharwood's Memorandum of Law in Support of Its Response to
the Tribunal's Sua Sponte Motion to Dismiss (P. Brief).
Petitioner argued also that its letter dated July 29, 1996
includes a challenge to HCFA's imposition of said CMP and,
therefore, I already have jurisdiction over the CMP matter.
E.g., P. Response, 3; P. Brief, 7. In addition, Petitioner took
the position that "[e]ven if HCFA's September 9, 1996 letter had
rescinded all of the remedies it had previously imposed,

Sharwood's right to appeal would remain intact." P. Brief, 5.”

1 Petitioner has requested the opportunity to present
oral argument on whether the case should be dismissed. P.
Response, 3. I find no need for granting Petitioner's request
for oral argument. There has been no allegation or showing that
Petitioner has some argument which it cannot set down on paper.

2? petitioner supports this argument in part by
attributing to me a view I did not express in Arcadia Acres, Inc.
and with which Petitioner disagrees. (According to Petitioner,
my decision in Arcadia Acres, Inc. "indicates" that a remedy
imposed by HCFA must actually be implemented in order for a
provider to acquire or retain hearing rights. P. Brief, 5.) My
decisions in Arcadia Acres, Inc. and like cases do not contain
such a view.

3

HCFA asked that Petitioner's request for hearing dated July 29,
1996 be dismissed by noting that said hearing request was filed
prematurely and in response to the recommendations of HCFA's
agent, the IDPH, for HCFA to impose certain remedies. HCFA
argued, moreover, that no cause of action lies in any event with
respect to those enforcement remedies which were imposed by HCFA
and then withdrawn by HCFA prior to their effectuation dates.
Reply to Petitioner's Memorandum in Response to Judge Leahy's
Notification of Possible Dismissal (HCFA Brief); see, HCFA Exs. 2
- 4.

FINDINGS OF FACT AND CONCLUSIONS OF LAW (FFCLs)

Relevant laws, regulations, and decisions

1. The administrative appeal rights provided by 42 C.F.R. Part
498, including hearings before an administrative law judge, are
not available unless HCFA has issued an initial determination as
defined by the regulations. 42 C.F.R. § 498.3(a); 42 C.F.R. §
498.20 (specifying contents of HCFA's notice of initial
determination).

2. Absent an extension of time granted by the administrative law
judge for good cause shown, a written request for hearing must be
filed by an affected party within 60 days after it has received
HCFA's notice of its initial determination. 42 C.F.R. § 498.40;
see also, section 205(b) of the Social Security Act (Act), as
incorporated by section 1866(h) of the Act (re termination of
Medicare provider agreements) .

3. To be considered a request for hearing within the meaning of
the regulations, the document must identify the specific issues
and the findings of fact and conclusions of law with which the
affected party disagrees, and specify the basis for contending
that the findings and conclusions are incorrect. 42 C.F.R. §
498.40(b).

3 with their briefs, the parties have filed various
documents. Petitioner has filed those documents it has marked as
Petitioner's Exhibits (P. Ex.) A through F. I note that
Petitioner did not comply with the directions set forth in the
Civil Remedies Division Procedures concerning the marking of
exhibits. However, I have chosen not to require Petitioner to
re-mark the exhibits in order to avoid increasing the costs in
this litigation. HCFA has filed those documents it has marked
as HCFA Exhibits (HCFA Ex.) 1 through 4.
4

4. The administrative law judge has the authority to dismiss
hearing requests that are not "timely filed," including those
which were filed prematurely or prior to the receipt of HCFA's
notice of initial determination. 42 C.F.R. § 498.70(c); Canton
Healthcare Center v. HCFA, DAB CR443 at 14 (1996).

5. The administrative law judge has the authority to dismiss
hearing requests where the requesting parties do not have a right
to a hearing. 42 C.F.R. § 498.70(b).

6. The administrative law judge has the authority to dismiss a
hearing request where there has been a previous determination
which became final because the affected party did not timely
request a hearing with respect to that determination. 42 C.F.R.
§ 498.70(a).

7. Even where HCFA has issued a notice of initial determination
by HCFA and an affected party has timely filed a request for
hearing with respect to said notice, HCFA has the right to
rescind the disputed initial determination on its own initiative
within 12 months of the date of the notice. 42 C.F.R. §§ 498.30
and 498.32; Arcadia Acres, Inc., v. HCFA, DAB CR424 at 10 - 11
(1996); Country Club Center, II _v. HCFA, DAB CR433 at 7, 8
(1996); Rolling Acres Care Center v. HCFA, DAB CR437 at 8, 10
(1996).

8. Where the request for hearing is based on HCFA's having made
an initial determination to impose an enforcement remedy
specified by regulation (see, 42 C.F.R. § 498.3(b)(12) and its
incorporation of 42 C.F.R. § 488.406), HCFA's rescission of its
previously imposed enforcement remedy cancels any previously
existing hearing rights to challenge said remedy or its bases.
Arcadia Acres, Inc.,; Country Club Center, II; Rolling Acres Care
Center; Fort Tryon Nursing Home v. HCFA, DAB CR425 (1996).

Petitioner's July 29, 1996 letter and IDPH's recommendations to
HCFA

9. On April 5, 1996, IDPH issued a letter to Petitioner,
identifying the findings of noncompliance made by the IDPH
pursuant to a survey completed on April 2, 1996 and the
enforcement remedies recommended by IDPH for imposition by HCFA.
HCFA Ex. 1.

10. On June 4, 1996, IDPH issued a letter to Petitioner,
summarizing IDPH's recommendations to HCFA based on the surveys
conducted by IDPH on April 2 and May 30, 1996. P. Ex. A.

11. The June 4, 1996 letter from IDPH does not purport to be or
constitute an initial determination by HCFA. FFCLs 1, 10; P. Ex.
A.
5

12. The June 4, 1996 letter from IDPH did not give rise to any
hearing rights under 42 C.F.R. Part 498. FFCLs 1, 10, 11.

13. The only document in this case purporting to be a hearing
request is Petitioner's letter dated July 29, 1996. P. Ex. B.

14. Petitioner's letter dated July 29, 1996 stated that
Petitioner was requesting a hearing before an administrative law
judge of the Departmental Appeals Board pursuant to the IDPH's
letter dated June 4, 1996. P. Ex. B at 1.

15. Petitioner's letter dated July 29, 1996 acknowledged that
IDPH's June 4, 1996 letter was "recommending to the Health Care
Financing Administration . . . that certain enforcement actions
be imposed." P. Ex. B at 1.

16. Petitioner has no right to a hearing on those matters set
forth in its letter dated July 29, 1996. FFCLs 1, 10 - 15.

17. Petitioner's July 29, 1996 request for a hearing must be
dismissed in the absence of any law or regulation permitting
Petitioner to challenge IDPH's recommendations to HCFA. 42
C.F.R. § 498.70(b); FFCLs 1, 16.

Petitioner's July 29, 1996 letter and HCFA's initial
determinations dated August 9 and September 9, 1996

18. At the time Petitioner requested a hearing by letter dated
July 29, 1996, HCFA had not yet issued any initial determination
subject to administrative reviews. FFCLs 9 - 15.

19. On August 9, 1996, HCFA issued a notice of its initial
determinations. P. Ex. Cj; 42 C.F.R. § 498.20.

20. HCFA's notice letter dated August 9, 1996 stated that a CMP
may be imposed and did not contain any initial determination by
HCFA to impose a CMP against Petitioner. P. Ex. C.

21. HCFA's notice letter dated August 9, 1996 contained HCFA's
initial determination to impose the following three remedies
based on the findings of noncompliance made at the surveys of
Petitioner:

Directed inservice training effective
August 29, 1996, and to be completed by
September 15, 1996;

Denial of Payment for new Medicare and
Medicaid admissions (DPNA) effective
August 29, 1996, and
6

Termination of Petitioner's provider
agreements absent compliance by October
3, 1996.

P. Ex. C.

22. The contents of HCFA's August 9, 1996 notice gave rise to
Petitioner's right to request a hearing for the review of HCFA's
findings of noncompliance that resulted in HCFA's imposition of
the specified remedies. 42 C.F.R. §§ 498.3(a) and (b) (12),
498.20(a), 498.40.

23. HCFA's notice letter dated August 9, 1996, correctly advised
Petitioner that Petitioner may exercise its hearing rights in
accordance with the procedures specified in 42 C.F.R. § 498.40.
P. Ex. C at 3. .

24. By letter dated September 9, 1996, HCFA rescinded the DPNA
and termination remedies imposed by its August 9, 1996 notice,

but not the directed inservice training remedy also imposed by

its August 9, 1996 notice. P. Exs. C and E.

25. By letter dated September 9, 1996, HCFA notified Petitioner
also that HCFA was imposing a CMP totalling $7,350, for 147 days
of alleged noncompliance at the rate of $50 per day. P. Ex. E.

26. HCFA's letter dated September 9, 1996, informed Petitioner
that it had a right to request a hearing to contest HCFA's
imposition of a CMP within 60 days of Petitioner's receiving said
letter. P. Ex. E.

27. Based upon HCFA's August 9, 1996 notice, Petitioner had the
right to timely request a hearing for the review of HCFA's
findings of noncompliance that resulted in HCFA's imposition of
the directed inservice training remedy, which was not rescinded
by HCFA. 42 C.F.R. §§ 498.3(b) (12) and 488.406; 42 C.F.R. §
498.40; FFCLs 21 - 24.

28. Petitioner's letter dated July 29, 1996, even if arguably
intended to challenge an initial determination Petitioner thought
HCFA might issue after that date (but see, FFCLs 14 - 16), was
premature and therefore untimely filed to any extent it might
relate to HCFA's August 9, 1996 or September 9, 1996
determinations. FFCLs 2, 4, 21; 42 C.F.R. §§ 498.40 and
498.70(c).

29. Petitioner's letter dated July 29, 1996, even if arguably
intended to challenge an initial determination Petitioner thought
HCFA might issue after that date (but see, FFCLs 14 - 16), does
not constitute a hearing request within the meaning of the
regulations for the purpose of challenging HCFA's August 9, 1996
7

or September 9, 1996 determinations. 42 C.F.R. § 498.40(b)j; P.
Ex. B; FFCL 3.

30. No hearing rights were created by HCFA's written
acknowledgements that it had received and then forwarded to the
DAB Petitioner's letter dated July 29, 1996. See, P. Ex. C at 3
and E at 2; 42 C.F.R. Part 498.

31. No hearing rights were created by the DAB's written
acknowledgement that Petitioner's letter dated July 29, 1996 had
been received and docketed as a case. P. Ex. C at 3; 42 C.F.R. §
498.70.

32. Petitioner's filing of its letter dated July 29, 1996 did
not validly preserve any right of review for the outstanding
initial determinations contained in HCFA's August 9 and September
9, 1996 notices. FFCLs 5-6, 13, 25 - 31; 42 C.F.R. §§ 498.20(b),
498.40, 498.70.

33. Petitioner's letter dated July 29, 1996, which seeks a
hearing, must be dismissed. 42 C.F.R. § 498.70(a), (b) or (Cc).
FFCLs 13, 17, 18 - 32.

DISCUSSION

A. There is no right to a hearing on recommendations made by the
IDPH to HCFA.

Petitioner alleges that its July 29, 1996 letter constitutes "a
valid request for a hearing pursuant to 42 C.F.R. § 498.40." P.
Response at 2. I conclude that Petitioner's contention is
without factual or legal support.

By letter dated April 5, 1996, IDPH notified Petitioner of its
findirys from the April 2, 1996 survey and informed Petitioner
that IDPH was recommending that two remedies be imposed: directed
inservice training and a CMP effective April 2, 1996. HCFA Ex.
1. Nothing purporting to be a hearing request references the
IDPH's April 5, 1996 letter or its contents.

By letter to Petitioner dated June 4, 1996, the IDPH stated that
it was recommending to HCFA that four remedies (directed
inservice training, DPNA, CMP, and termination) be imposed by
HCFA based on the results of surveys conducted by IDPH on April
2, 1996 and May 30, 1996. P. Ex. A.
8

On July 29, 1996, Petitioner, by counsel, sent a letter to HCFA
stating in relevant part:

In correspondence dated June 4, 1996
(copy enclosed), our client . . . was
notified that the Illinois Department of
Public Health ("IDPH") was recommending
to the Health Care Financing
Administration . . . that certain
enforcement actions be imposed. Pursuant
to the June 4, 1996 notice, Sharwood
requests a hearing before an
Administrative Law Judge of the
Department of Health and Human Services,
Departmental Appeals Board, because it
considers such determinations to be in
error including, but not limited to, the
findings that the facility was not in
substantial compliance with Medicare and
Medicaid program requirements, denial of
payments for new admissions, imposition
of a civil money penalty, directed
inservice, and termination from
participating in the Medicare and
Medicaid programs.

Pp. Ex. B.

There is no statutory or regulatory authority for providing
hearings in this forum to adjudicate recommendations made by
HCFA's agent to HCFA. The regulation codified at 42 C.F.R. §
498.40, as well as other regulations such as 42 C.F.R. § 498.3,
which also govern the administrative hearing process, require at
the very minimum an initial determination made by HCFA. When
Petitioner submitted its letter dated July 29, 1996 to request a
hearing, HCFA tad not yet made any initial determination in this
case. See, P. Exs. B and C.

The language I have quoted above from Petitioner's July 29, 1996
letter leaves no doubt that Petitioner was well aware that the
IDPH letter dated June 4, 1996 constituted recommendations to
HCFA and that Petitioner was seeking a hearing on those
recommendations made by IDPH. Re-emphasizing the same awareness
in its brief to me, Petitioner stated again that "Sharwood
further considered the recommendation that the remedies of denial
of payments for new admissions, imposition of a civil money
penalty, directed inservice training, and termination from
participating in the Medicare/Medicaid programs to be in error."
P. Brief, 1 (emphasis added). I find it significant also that
Petitioner did not file a request for hearing with respect to the
IDPH's April 5, 1996 letter, which also contained only the IDPH's
recommendations or proposals to HCFA. In fact, there is no law
9

or regulation which permits Petitioner to request a hearing to
challenge recommendations made to HCFA. FFCL 17.

B. Petitioner's filing of its letter dated July 29, 1996 did not
entitle it to a hearing on those initial determinations which
HCFA issued on August 9 and September 9, 1996.

1. Petitioner's arguments on the legal
effect of its July 29, 1996 request for
hearing

After Petitioner filed its request for hearing dated July 29,
1996 to challenge the IDPH's recommendations, HCFA issued its
initial determinations. The issuance of these initial
determinations by HCFA was accompanied by notices to Petitioner
of its right to request a hearing, including the time period for
filing such a request. As discussed below, I reject Petitioner's
arguments that the filing of its July 29, 1996 request for
hearing entitles Petitioner to an adjudication of those initial
determinations made by HCFA on August 9 or September 9, 1996.

In a letter dated August 9, 1996, HCFA notified Petitioner that,
based on the IDPH's recommendations contained in the dated June
4, 1996 letter (which referenced the results of the April 2
survey), as well as the results of a revisit survey completed on
May 30, 1996, HCFA has decided to impose the following remedies
against Petitioner:

-- Directed inservice training effective
August 29, 1996, and to be completed by
September 15, 1996;

-- DPNA effective August 29, 1996; and

-- termination of Petitioner's Medicare
and Medicaic provider agreements unless
compliance is attained by October 3,
1996.
10

P. Ex. C.4 HCFA's August 9, 1996 letter notified Petitioner
also that, with respect to Petitioner's hearing rights concerning
HCFA's imposition of the above cited three remedies:

you or your legal representative may
request a hearing before an
administrative law judge of the...
Departmental Appeals Board. Procedures
governing this process are set out in
Federal regulations at 42 C.F.R. [§]
498.40, et seq.

P. Ex. C, 3.

The notification of hearing rights provided by HCFA in its August
9, 1996 letter is proper because the three remedies HCFA had
decided to impose (i.e., inservice training, DPNA, and
termination of provider agreement) are among those listed in 42
C.F.R. § 488.406 and, additionally, HCFA had made findings of
noncompliance which led to the imposition of those three
remedies. See, 42 C.F.R. § 498.3(b)(12). Therefore, HCFA's
August 9, 1996 notice contained HCFA's initial determinations.
HCFA's issuance of these initial determinations entitled
Petitioner to request a hearing within the time period and in the
manner specified by regulation. 42 C.F.R. §§ 498.3(a) and
498.40.

However, HCFA's subsequent actions limited the issues for which
Petitioner was entitled to seek a hearing. By letter dated
September 9, 1996, HCFA informed Petitioner that HCFA had decided
not to impose the remedies of DPNA and termination. P. Ex. E.
HCFA's rescission actions had the effect of extinguishing

4 In addition, HCFA's Augist 9, 1996 letter notified
Petitioner as follows of the possibility that HCFA may in the
future impose a CMP, and that Petitioner will have appeal rights
if a CMP is imposed:

the IDPH has also recommended imposition
of a civil money penalty (CMP) in the
amount of $50 per day effective April 2,
1996. We concur with the State's
recommendation and may impose the CMP. .
. . . You will receive a separate letter
relating to this CMP at a later date,
including your appeal rights, if the CMP
is_actually imposed.

P. Ex. C (emphasis added).
11

Petitioner's right to challenge HCFA's prior decision to impose
those two remedies. FFCL 8.°

Because HCFA did not rescind its imposition of the directed
inservice training remedy, Petitioner continued to have the right
(up to 60 days after its receipt of HCFA's August 9, 1996 notice)
to request a hearing on HCFA's findings of noncompliance that
resulted in its imposition of the inservice training remedy.°

In addition, HCFA's issuance of its September 9, 1996 notice
letter entitled Petitioner to request a hearing to challenge the
CMP determination made by HCFA. 42 C.F.R. § 498.3(b)(12) and
(13). In the letter dated September 9, 1996, HCFA notified
Petitioner that HCFA had decided to impose a CMP in the total
amount of $7,350 for the period from April 2 through August 27,
1996. HCFA's September 9, 1996 letter stated also:

As you are aware, we previously
acknowledged your July 29, 1996 request
for a hearing in our August 9, 1996
notice. However, since we are now

$ In urging against dismissal of its case, Petitioner

argues in its brief that there are various differences between
the facts in Arcadia Acres and this case. (I dismissed Arcadia
Acres' hearing request because HCFA had rescinded all remedies it
had imposed against Arcadia Acres.) The differences with this
case pointed out by Petitioner, such as HCFA's actual imposition
of a CMP against Petitioner, are without any legal consequence to
my conclusion that Petitioner's July 29, 1996 request for a
hearing on the IDPH's recommendations does not entitle Petitioner
to a hearing on those recommendations, or on HCFA's August 9 or
September 9, 1996 determinations to impose a directed inservice
training remedy and a CMP, respectively.

® As noted earlier, one of my reasons for directing
Petitioner to show cause why the case should not be dismissed was
my impression that HCFA had rescinded all previously imposed
remedies by its letter dated September 9, 1996. I had stated
this impression in the show cause order in order to allow the
parties to comment on it. One of the documents submitted by
Petitioner in response to my order, P. Ex. E, establishes that my
impression was in error, as HCFA did not rescind the inservice
training remedy.

In its brief to me, Petitioner does not state whether
it wants to challenge HCFA's August 9, 1996 determination to
impose the directed inservice training remedy. I discuss the
inservice training remedy in this decision only because
Petitioner's July 29, 1996 letter had objected to the IDPH's
recommendation to impose this remedy.
12

imposing the CMP, you may request a
hearing before an ALJ within 60 days of
your receipt of this notice.

P. Ex. E.

The show cause order I issued on October 18, 1996 also reminded
Petitioner of its opportunity to request a hearing on HCFA's
imposition of a CMP by stating as follows:

According to Petitioner's status report,
HCFA has issued a Notice which imposed a
civil monetary penalty (CMP) and which
informed Petitioner of its right to
request a hearing to contest the
imposition of the CMP. If Petitioner
files a request to contest HCFA's
imposition of a CMP, the Departmental
Appeals Board's practice is to docket the
matter as a separate action.

Despite the notices of hearing rights provided in HCFA's letters
dated August 9 and September 9, 1996, the reminder of
Petitioner's hearing rights contained in my show cause order, and
the contents of the relevant regulations codified at 42 C.F.R.
Part 498, Petitioner has chosen to rely on its July 29, 1996
request concerning the IDPH's June 4, 1996 letter.

Petitioner's response to my show cause order indicates that it
wants an adjudication of HCFA's initial determinations, but only
pursuant to its July 29, 1996 request. Petitioner argues, for
example, that "{w]hile Sharwood may be entitled to file an
additional request for a hearing under HCFA's September 9, 1996
correspondence {which imposed the CMP], this Tribunal currently

has jurisdiction over the claim... ." BP. Resporse, 3.
Petitioner argued also that I should not be "[r]equiring the
Petitioner to refile a request for an appeal... . ." after

HCFA issued its CMP determination on September 9, 1996. P.
Brief, 7.

There is no legal or factual support for Petitioner's arguments.
The regulations make very clear that HCFA's initial
determinations become final and binding if no hearing request is
filed to challenge those determinations. 42 C.F.R. §§ 498.20(b),
498.70(a). Under the regulations, in order to challenge the
findings of noncompliance which led to HCFA's imposition of the
directed inservice training remedy, Petitioner needed to file,
within 60 days after its receipt of HCFA's August 9, 1996 notice,
a request for hearing by identifying the specific issues,
findings, or conclusions in dispute and by specifying the basis
for contending that the findings or conclusions are incorrect.

42 C.F.R. § 498.40(a), (b). In order to challenge the findings
13

of noncompliance which led to HCFA's imposition of the CMP
remedy, Petitioner needed to file, within 60 days after its
receipt of HCFA's September 9, 1996 notice, a request for hearing
by identifying the specific issues, findings or conclusions in
dispute, and by specifying the basis for contending that the
findings or conclusions are incorrect. Id. Petitioner has
failed to do either of these things.

Instead, Petitioner asserts hearing rights on the basis of a
document which does not refer to any initial determination made
by HCFA and which predated the issuance of any initial
determination by HCFA. I have never read the regulations as
entitling any affected entity to a hearing merely because it had
filed a document containing the words "request" and "hearing."
See, Canton Healthcare Center _v. HCFA, DAB CR443 at 13 - 16. I
conclude in this case that Petitioner's filing of its July 29,
1996 letter did not entitle Petitioner to a hearing on the merits
of the determinations made by HCFA on August 9 and September 9,
1996.

2. Petitioner's arguments on judicial
economy and efficiency

Petitioner argues that, if it had filed a hearing request after
receipt of HCFA's August 9 or September 9, 1996 notices, a case
arising from such a hearing request would likely be assigned to
me as well. P. Brief, 7. Petitioner contends that, given the
foregoing possibility, my requiring it to file another hearing
request would contravene the goals of judicial efficiency and
economy. P. Brief, 7 - 8. I find that Petitioner's arguments
are immaterial and without merit. These arguments are based on
Petitioner's erroneous supposition that, in the present case, I
have jurisdiction to adjudicate the matters raised in
Petitioner's July 29, 1996 request for hearing, as well as those
determinations made by HCFA on August 9 and September 9, 1996.

As discussed elsewhere in this decision, I do not have the
authority to hear and decide the merits of those recommendations
challenged by Petitioner in its July 29, 1996 request for
hearing. Nor did Petitioner's filing of its July 29, 1996 letter
entitle it to a hearing on the merits of HCFA's initial
determinations dated August 9 or September 9, 1996. These
jurisdictional flaws created by Petitioner require dismissal of
the above-captioned action in its entirety.

3. Petitioner's references to letters
which acknowledged receipt of the July
29, 1996 request for hearing

Petitioner referenced also the fact that it has received written
acknowledgements of its July 29, 1996 request from HCFA as well
as the DAB. P. Response, 2. Reading of the documents cited by
14

Petitioner shows that acknowledgements of Petitioner's July 29,
1996 request were made thusly by HCFA and the Departmental
Appeals Board:

We [i.e., HCFA] are in receipt of your
legal counsel's request for a hearing
dated July 29, 1996. We have forwarded
his request for hearing to the
Departmental Appeals Board of the
Department of Health and Human Services.
That Department will contact you
concerning your request for hearing.

P. Ex. C at 3 (HCFA's August 9, 1996 notice);

As you are aware, we previously
acknowledged your July 29, 1996 request
for a hearing in our August 9, 1996
notice.

P. Ex. E at 2 (HCFA's September 9, 1996 notice); and

This is to acknowledge receipt by the
Civil Remedies Division of Petitioner's
July 29, 1996 request for hearing and the
related August 9, 1996 notice of adverse
action by the Health Care Financing
Administration (HCFA).{’] Petitioner
based its request on a June 4, 1996
letter from the Illinois Department of
Public Health (included with the hearing
request) which recommended the actions
ultimately taken by HCFA.

Departmental Appeals Board acknowledgement letter dated August
13, 1996 (P. Ex. D, 1).

I do not find these acknowledgements to have any bearing on the
legal validity of Petitioner's request dated July 29, 1996. In
these documents, there were acknowledgements that Petitioner's
request had been received and processed. There was no
acknowledgment that Petitioner's request for hearing was legally
valid. No one employed by HCFA or the DAB had expressed any
legal opinions in these acknowledgement letters concerning

7 HCFA had transmitted a copy of its August 9, 1996
notice in forwarding Petitioner's July 29, 1996 request to the
Departmental Appeals Board. Petitioner's July 29, 1996 request
predated the existence of HCFA's August 9, 1996 notice, and
Petitioner's July 29, 1996 request states only that a copy of the
IDPH's June 4, 1996 letter was enclosed. P. Ex. B, 1.
15

Petitioner's request. More importantly, it is the administrative
law judge's responsibility to consider and decide whether a
request for hearing should be dismissed. 42 C.F.R. § 498.70.
The actions described in these acknowledgement letters (i.e.,
HCFA's receiving and forwarding Petitioner's request to the DAB,
and the DAB's docketing it and assigning it to me) enabled me to
raise the issue of whether the hearing request should be
dismissed. The regulation specifies that I may raise on my own
initiative the issue of whether a hearing request should be
dismissed for cause. 42 C.F.R. § 498.70. In this case,
Petitioner may have attached undue significance to the letters
acknowledging the receipt and processing of its request for
hearing.

CONCLUSION

For the foregoing reasons, I conclude that dismissal of the
entire case is appropriate and necessary. Accordingly, I now
dismiss the hearing request and the case pursuant to the
alternative grounds specified in 42 C.F.R. § 498.70(a), (b), and

(c).

/s/

Mimi Hwang Leahy
Administrative Law Judge