Willow Rose Rehab & Health Care Center, DAB CR6351 (2023)

DECISION

Petitioner, Willow Rose Rehab & Health Care Center, is a long-term care facility located in Rock Island, Illinois, that participates in the Medicare program.  In November 2021, the Illinois Department of Public Health (state agency) conducted two surveys (a November 2 complaint investigation and a November 18 annual survey) and determined that the facility was not in substantial compliance with Medicare program requirements.  Based on the survey findings, the state agency imposed a “Discretionary Denial of Payment for New Admissions,” and the facility lost its authority to conduct a “Nurse Aide Training and Competency Evaluation Program.”  Petitioner did not timely appeal. 

Based on the survey findings, the Centers for Medicare & Medicaid Services (CMS) subsequently imposed an additional remedy:  a civil money penalty (CMP) of $1,410 per day for 39 days of substantial noncompliance (from October 28 through December 5, 2021), for a total penalty of $54,990.  Petitioner timely appealed the CMP. 

CMS now moves for summary judgment, which Petitioner opposes.  For the reasons set forth below, I grant CMS’s motion.  I find that the November survey findings, which

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Petitioner did not timely appeal, are final and binding and cannot be disputed.  Based on those undisputed findings, the penalty imposed – $1,410.00 per day – is reasonable. 

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 November 2, 2021 complaint investigation.  On November 2, 2021, state agency surveyors completed a complaint investigation survey of the facility.  The surveyors found that the facility was not in substantial compliance with Medicare participation requirements, specifically:

• 42 C.F.R. § 483.10(g)(14) (Tag F580 – resident rights:  notification of changes) cited at scope and severity level G (isolated instance of substantial noncompliance that causes actual harm but does not pose immediate jeopardy to resident health and safety);
• 42 C.F.R. § 483.21(b)(2) (Tag F657 – comprehensive care plans:  timing, development, and revisions) cited at scope and severity level D (isolated instance of substantial noncompliance that causes no actual harm with the potential for more than minimal harm); and
• 42 C.F.R. § 483.25(d) (Tag F689 – quality of care:  accident prevention) cited at scope and severity level G. 

CMS Ex. 5. 

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The November 18, 2021 annual survey.  State agency surveyors returned to the facility and completed the facility’s annual certification survey on November 18, 2021.  They again found that the facility was not in substantial compliance with Medicare program requirements, specifically:

• 42 C.F.R. § 483.12(a)(1) (Tag F600 – freedom from abuse, neglect, and exploitation) cited at scope and severity level D;
• 42 C.F.R. § 483.12(b)(1)-(3) (Tag F607 – freedom from abuse, neglect, and exploitation:  develop and implement policies and procedures) cited at scope and severity level F (widespread substantial noncompliance that causes no actual harm with the potential for more than minimal harm);
• 42 C.F.R. § 483.12(c)(1)(4) (Tag F609 – freedom from abuse, neglect, and exploitation:  reporting allegations of abuse and neglect) cited at scope and severity level D;
• 42 C.F.R. § 483.12(c)(2)-(4) (Tag F610 – freedom from abuse, neglect and exploitation:  reporting and investigation) cited at scope and severity level F;
• 42 C.F.R. § 483.21(b)(2)(i)-(iii) (Tag F657 – comprehensive care plans:  timing, development, and revision) cited at scope and severity level E (pattern of substantial noncompliance that causes no actual harm with the potential for more than minimal harm) (repeat deficiency);
• 42 C.F.R. § 483.25 (Tag F684 – quality of care) cited at scope and severity level E);
• 42 C.F.R. § 483.25(d) (Tag F689 – quality of care:  accident prevention) cited at scope and severity level D (repeat deficiency);
• 42 C.F.R. § 483.60(i)(1)(2) (Tag F812 – food and nutrition services:  food safety) cited at scope and severity level F; and
• 42 C.F.R. § 483.70 (Tag F835 – administration) cited at scope and severity level F.

CMS Ex. 16. 

Following a survey completed on December 10, 2021, CMS determined that the facility returned to substantial compliance on December 6, 2021.  CMS Ex. 3.

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State agency-imposed remedies.  Based on the deficiencies cited during the November 2, 2021 survey, the state agency imposed one remedy:  Discretionary Denial of Payment for new Medicare and Medicaid Admissions (DPNA).  CMS Ex. 1 at 2.  Section 488.417(a) authorizes the state to impose this remedy. 

Based on the November 18 survey findings, the state agency found substandard quality of care, which resulted in the facility’s losing its authorization to operate a Nurse Aide Training and Competency Evaluation Program (NATCEP).  CMS Ex. 2 at 6. 

Notices.  In a notice letter, dated November 12, 2021, the state agency advised the facility that it was not in substantial compliance and that, pursuant to 42 C.F.R. § 488.417(a), the state agency was imposing a DPNA, effective November 27, 2021.  CMS Ex. 1 at 2. 

A section of the notice letter – prominently captioned “FORMAL APPEAL RIGHTS” – advised Petitioner of its right to request a hearing before an administrative law judge (ALJ) “[i]f you disagree with the action imposed on your facility.”  The notice cited the regulations governing the appeals process, 42 C.F.R. § 498.40 et seq., and cautioned that a “written request for a hearing must be filed no later than sixty (60) days from the date of receipt of this notice.”  CMS Ex. 1 at 3 (emphasis in original).  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 the findings and conclusions are incorrect.  Id. 

In a second notice letter, dated November 29, 2021, the state agency advised the facility that the November 18 revisit identified additional deficiencies, and that the remedy already imposed (the DPNA) remained in effect.  CMS Ex. 2 at 1.  The letter also advised the facility that, based on the November 18 survey findings, the state agency found substandard quality of care and the facility would lose its NATCEP.  Id. at 6. 

The November 29 notice letter included a section prominently captioned:  “Appeal Rights for Loss of NATCEP” and explained that the facility had the right “to contest the finding of Substandard Quality of Care that leads to a two-year ban on NATCEP.”  Again, the notice warned that the request “must be filed within 60 days from receipt of this notice” and cited the regulations governing the appeals process, 42 C.F.R. § 498.40 et seq.  Id. at 6-7.  It 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.  The closing instruction emphasized that “a request for a hearing must be filed no later than sixty (60) days from the date of receipt of this notice.”  Id. at 7 (emphasis in original). 

Petitioner did not appeal within 60 days of receiving either notice. 

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In a third notice letter, dated December 21, 2021, the state agency advised the facility that, based on a December 10 reinspection, the facility returned to substantial compliance on December 6, 2021, and the DPNA would be discontinued, effective that date.  The letter also told the facility that CMS would advise it of any additional remedies.  CMS Ex. 3. 

In a notice letter, dated May 10, 2022, CMS reminded the facility of the state agency’s findings of substantial noncompliance, the remedies the state agency had imposed, and the notices of the facility’s appeal rights.  In addition to those remedies, CMS advised the facility that it was imposing a CMP of $1,410 per day for 39 days of substantial noncompliance (October 28 through December 5, 2021), for a total penalty of $54,990.  CMS Ex. 4 at 2.  The notice letter also advised the facility of its rights to appeal that determination. 

In a letter dated July 7, 2022, Petitioner appealed, challenging all of the deficiency findings for the November 3 and 18, 2021 surveys as well as the CMP imposed. 

The parties’ submissions.  CMS has filed a motion for summary judgment and pre-hearing brief (CMS Br.) with 57 exhibits (CMS Exs. 1-57).  Petitioner filed its own prehearing brief and response to CMS’s motion (P. Br.) with eight exhibits (P. Exs. 1-9). 

ISSUES

As an initial matter, I explain why Petitioner is not entitled to a hearing challenging the November 2 and 18, 2021 survey findings. 

The remaining issue before me is whether CMS is entitled to summary judgment, finding that the CMP imposed is reasonable.  

DISCUSSION

1. Petitioner is not entitled to a hearing challenging the November 2 and 18, 2021 survey findings because it did not file timely hearing requests, and no good cause justifies extending the time for filing.¹ 

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

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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.  Rutland Nursing Home, DAB No. 2582 at 2 (2014). 

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); New Grove Manor, DAB No. 3090 at 2 (2023); West Side House LTC Facility, DAB No. 2791 at 2, 5 (2017); Concourse Nursing Home, DAB No. 1856 (2002); Cary Health and Rehab Ctr, DAB No. 1771 at 8-9 (2001). 

The date of receipt of these notices is presumed to be five days after the date on the notice, “unless there is a showing that it was, in fact, received earlier or later.”  42 C.F.R. § 498.22(b)(3). 

Here, Petitioner unquestionably failed to meet either of the deadlines for appealing the state agency determinations.  It has not challenged the presumption that it received the November 12 notice on November 17, 2021, nor that it received the November 29 notice on December 6, 2021 (the 60th day fell on the weekend).  Its appeals were therefore due no later than January 17, 2022 (the 60th day fell on a Sunday) and February 4, 2022, respectively. 

Petitioner did not file anything until July 7, 2022, five to six months after the deadlines for challenging the November 2 and 18 survey findings 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). 

An affected party or its legal representative may file a request for an extension of time, explaining why the request was not filed timely, and, for good cause, the ALJ may extend the time.  42 C.F.R. § 498.40(c).  Petitioner has neither requested an extension nor alleged good cause for its failing to meet the filing deadlines.  In fact, except to declare, without explanation, that it “timely filed its appeal request within 60 days,” Petitioner did not respond to CMS’s argument that it did not timely appeal the survey findings.  See CMS Br. at 4-5; P. Br. at 1.

In the notices sent on November 12 and 29, 2021, the state agency used standard language to advise the facility of its appeal rights and deadlines.  The Board and reviewing courts have repeatedly determined that such language is “clear and unambiguous” and provides explicit instructions as to what the facility must do to preserve its hearing rights.  West Side House, DAB No. 2791 at 6; 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 Mimiya Hosp., Inc.

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v. U.S. Dep’t. of Health & Human Servs., 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 (2009); Concourse Nursing Home, DAB No. 1865 at 3, 10 11, aff’d Concourse Rehab. & Nursing Ctr. v. Thompson, 155 F. App’x 28 (2nd Cir. 2002) (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 (2002) (“We are at a loss to understand how [the facility] can claim that it found the wording of the notice confusing.”).²  

Thus, Petitioner failed to appeal timely the November 2 and 18, 2021 determinations that the facility was not in substantial compliance with Medicare program requirements.  Those determinations are therefore final and binding.  42 C.F.R. § 498.20(b). 

Based on the deficiencies found during the November 2 and 18, 2021 surveys, I find that, from October 28 through December 5, 2021, the facility was not in substantial compliance with multiple program requirements, and that the CMP must be at least $113 per day.  See 42 C.F.R. §§ 488.408(e), 488.438; 45 C.F.R. § 102.3; 86 Fed. Reg. 62938 (Nov. 15, 2021). 

2. CMS is entitled to summary judgment because Petitioner has produced no evidence establishing that the penalty imposed is unreasonable.

Because Petitioner timely appealed CMS’s determination to impose a $1,410 per day CMP, I consider whether the amount of the CMP is reasonable. 

I find that this issue can be resolved on summary judgment because the material facts are settled, and CMS is entitled to judgment as a matter of law.  See Bartley Healthcare Nursing & Rehab., DAB No. 2539 at 3 (2013) (citing Celotex Corp. v. Catrett, 477 U.S. 317, 322-25 (1986)); Ill. Knights Templar Home, DAB No. 2274 at 3-4 (2009), and cases cited therein.  Petitioner has tendered no evidence of specific facts showing that a dispute exists.  See Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586 n.11 (1986); see also Vandalia Park, DAB No. 1939 (2004); Lebanon Nursing & Rehab. Ctr., DAB No. 1918 (2004).  An evidentiary hearing would thus serve no purpose.  See Fal-

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Meridian, Inc. v. U.S. Dep’t of Health & Human Servs., 604 F.3d 445, 449 (7th Cir. 2010) (“All it means for a decision to be based on a grant of summary judgment is that there are no issues that would benefit from being resolved in an evidentiary hearing.”) (emphasis added). 

To determine whether the CMP is reasonable, I apply the factors listed in 42 C.F.R. § 488.438(f):  1) the facility’s history of noncompliance, including repeat deficiencies; 2) the facility’s financial condition; 3) factors specified in 42 C.F.R. § 488.404; and 4) the facility’s degree of culpability, which includes neglect, indifference, or disregard for resident care, comfort or safety.  The absence of culpability is not a mitigating factor.  The factors in 42 C.F.R. § 488.404 include:  1) the scope and severity of the deficiency; 2) the relationship of the deficiency to other deficiencies resulting in noncompliance; and 3) the facility’s prior history of noncompliance in general and specifically with reference to the cited deficiencies. 

I consider whether the evidence supports a finding that the amount of the CMP is at a level reasonably related to an effort to produce corrective action by a provider with the kind of deficiencies found, and in light of the above factors.  I am neither bound to defer to CMS’s factual assertions nor free to make a wholly independent choice of remedies without regard for CMS’s discretion.  Barn Hill Care Center, DAB No. 1848 at 21 (2002); Community Nursing Home, DAB No. 1807 at 22 et seq. (2002); Emerald Oaks, DAB No. 1800 at 9 (2001); CarePlex of Silver Spring, DAB No. 1638 at 8 (1999).  

I determine whether a penalty is reasonable based on the per-day penalty, not the total accrued penalty.  Crawford Healthcare and Rehab., DAB No. 2738 at 20 (2016). 

The burden is on the facility to demonstrate that a reduction is necessary to make the CMP amount reasonable.  Heritage Plaza Nursing Ctr., DAB No. 2017 at 22 (2017).  

Penalties are inflation-adjusted and change annually.  The amount is determined as of the date the penalty is assessed, in this case, May 10, 2022.  CMS Ex. 4.  CMS imposed a penalty of $1,410 per day, which is at the low to very low end of the penalty range ($113 to $6,774).  42 C.F.R. §§ 488.408(d), 488.438; 45 C.F.R. § 102.3; 86 Fed. Reg. 62928, 62938 (Nov. 15, 2021). 

Based on the relevant factors, this relatively low CMP is reasonable. 

The facility has a less than stellar history, and deficiencies cited during the November 2 and 18 surveys had been cited before: 

• For the survey completed on October 29, 2019, the facility was out of substantial compliance with multiple program requirements, including 42 C.F.R. § 483.21(b)(2) (Tag F657 – comprehensive care plans:  timing, development, and

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revisions), cited at scope and severity level E; and 42 C.F.R. § 483.25(d) (Tag F689 – quality of care:  accident prevention), cited at scope and severity level E.  These deficiencies were cited during both the November 2 and November 18 surveys.  The facility was also out of substantial compliance with 42 C.F.R. § 483.60(i)(1)(2) (Tag F812 – food and nutrition services:  food safety), cited at scope and severity level F, as it was during the November 18, 2021 survey. 

Other significant deficiencies were cited at scope and severity level F (indicating that the deficiency was widespread):  42 C.F.R. § 483.35(a)(1)(2) (Tag F725 – nursing services:  sufficient staff); and 42 C.F.R. § 483.35(b)(1)-(3) (Tag F727 –nursing services:  registered nurses). 

CMS Ex. 53 at 2. 

• For the survey completed in September 2018, the facility was out of substantial compliance with multiple program requirements, including those cited during the November 2021 surveys.  Specifically:  42 C.F.R. § 483.12(a)(1) (Tag F600 – freedom from abuse, neglect, and exploitation), cited at scope and severity level D; 42 C.F.R. § 483.25 (Tag F684 – quality of care), cited at scope and severity level G (which means someone suffered actual harm); 42 C.F.R. § 483.25(d) (Tag F689 – quality of care:  accident prevention), cited at scope and severity level E; and 42 C.F.R. § 483.60(i)(1)(2) (Tag F812 – food and nutrition services:  food safety), cited at scope and severity level F. 

The facility was also out of substantial compliance with 42 C.F.R. § 483.35(b)(1)-(3) (Tag F727 –nursing services:  registered nurses), cited at scope and severity level F, as it was during the October 2019 survey.  And the facility had additional G-level deficiencies:  42 C.F.R. § 483.21(b)(3)(i) (Tag F658 – comprehensive care plans:  meeting professional standards of quality); 42 C.F.R. § 483.25(a)(1)(2) (Tag F685 – quality of care:  vision and hearing); 42 C.F.R. § 483.25(g)(1)-(3) (Tag F692 – quality of care:  assisted nutrition and hydration); 42 C.F.R. § 483.25(g)(4)(5) (Tag F693 – quality of care:  eating skills and enteral methods) and 42 C.F.R. § 483.45(a)(b)(1)-(3) (Tag F755 – pharmacy services:  procedures and drug regimen reviews). 

CMS Ex. 53 at 2. 

The facility’s history, alone, justifies a substantial increase in the penalty amount. 

With respect to the facility’s financial condition, it is well-settled that the facility has the burden of proving, by a preponderance of the evidence, that paying the CMP would render it insolvent or would compromise the health and safety of its residents.  Van Duyn Home and Hosp., DAB No. 2368 (2011); Gillman Care Ctr., DAB No. 2357 (2010). 

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Petitioner has not claimed that it is unable to pay the penalty without compromising its solvency or the health and safety of its residents. 

Applying the remaining factors, Petitioner suggests that, because there was no finding of immediate jeopardy, the penalty should be lower.  P. Br. at 14.  This does not follow.  The penalty range for findings of immediate jeopardy is $6,888 to $22,584.  86 Fed. Reg. 62928, 62938 (Nov. 15, 2021).  Had CMS found immediate jeopardy, the minimum penalty would have been at least four to five times higher than the penalty that was imposed. 

As listed above, the facility’s resident rights and quality-of-care deficiencies, cited during the November 2 survey, caused actual harm to residents, for which the facility is culpable.  Between the November 2 and the November 18 surveys, the facility did not correct its care planning deficiency (in fact, the scope and severity increased from level D to level E) or its accident prevention deficiency.  Three of the deficiencies cited during the November 18 survey were widespread.  Based on the scope and severity of these deficiencies, as well as Petitioner’s failing to correct its problems with care planning and accident prevention, I conclude that the CMP is reasonable. 

Finally, as CMS points out – and Petitioner has not disputed – Petitioner has not challenged the duration of its substantial noncompliance.  CMS Br. at 24. 

CONCLUSION

The facility did not timely file hearing requests to challenge the November 2 and 18, 2021 survey findings.  Those findings are therefore final and binding.  From October 28 through December 5, 2021, the facility was not in substantial compliance with Medicare program requirements.  The penalty imposed $1,410.00 per day – is reasonable. 

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Endnotes

¹  My findings of fact/conclusions of law are set forth, in italics and bold, in the discussion captions of this decision.  

²  Nor has Petitioner argued that it was confused by CMS’s May 10, 2022 notice letter.  In any event, that letter could have had no impact on Petitioner’s failing to appeal the survey findings timely since the appeal deadlines had long since passed by the time Petitioner received it.  See Quality Total Care, L.L.C. d/b/a/ The Crossings, DAB No. 2242 at 8 (2009) (finding irrelevant complaints about a purportedly confusing notice received after the 60-day deadline had expired).