Asbury Place at Maryville, ALJ Ruling 2023-11 (HHS CRD August 4, 2023)

DECISION DENYING RESPONDENT’S MOTION TO DISMISS

I deny Respondent Centers for Medicare & Medicaid Services’ (CMS) Motion to Dismiss the hearing filed by Petitioner, Asbury Place at Maryville (“Asbury Place” or “Petitioner”).  I find that Petitioner’s hearing request is timely.

I.       Procedural History

Following its request for hearing, Petitioner filed “Asbury Place At Maryville’s Motion To Find Its June 6, 2022 Notice of Hearing Was Timely Filed, Or In The Alternative, Motion For Extension” (Petitioner’s Motion).  Petitioner included with its Motion two exhibits marked as Exhibit A and Exhibit B.  CMS subsequently filed a Motion To Dismiss Petitioner’s request for hearing along with five exhibits that it identified as CMS Exhibits 1 - 5.  Petitioner then opposed CMS’s Motion To Dismiss.  I receive these exhibits into the record for purposes of ruling on CMS’s Motion To Dismiss and Petitioner’s Motion.

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II.       Findings of Facts

Petitioner is a long-term care facility in Tennessee.  Based on findings from a survey conducted by the Tennessee State Survey Agency (“SSA”) from February 14 to March 2, 2022 (“March 2nd Survey”), CMS determined that Petitioner was not in substantial compliance with federal regulations.  Subsequently, on March 31, 2022, CMS issued an imposition notice informing Petitioner that it would be imposing various remedies as a result (“Imposition Notice”).  CMS Ex. 2.  The Imposition Notice indicated that the “State Survey Agency” was carbon copied, though they were not on the email.  CMS Ex. 2 at 5; CMS Ex. 3.  The Imposition Notice informed Petitioner that it was required to file a request for a hearing within 60 days of receipt if it wished to contest the findings of the March 2nd Survey.  CMS Ex. 2 at 4.  Additionally, a banner at the top of the Imposition Notice read, in bold letters, “(Receipt of this Notice is presumed to be March 31, 2022 - Date Notice E-mailed).”  Id. at 1 (emphasis in original).

Though the Imposition Notice included the physical address of Asbury Place, it was sent only via Outlook email to Sally Williford at her email address, Sally.Williford@asbury.org, on March 31, 2022, at 2:00 P.M.  CMS Ex. 3.  Notably, the body of the email to which the Imposition Notice was attached stated: “Please reply to this email and confirm receipt of the attached imposition notice for the survey of 3/2/22.”  CMS Ex. 3.  CMS’s email system received automated confirmation that the email had been successfully delivered to Petitioner’s email system two minutes and twenty-six seconds later.  CMS Ex. 4.  CMS has also provided a Declaration from the Lead IT Specialist at the Department of Health and Human Services (HHS), Office of the Chief Information Officer, Email Operations, Mr. Imran Shah.  CMS Ex. 5.   Mr. Shah declares that, based on his “training and experience,” had Ms. Williford’s email been deactivated before the email was sent and no email re-route configurations were set for the recipient, then CMS’s email would have been returned as undeliverable.  Id. at 2.

CMS has not provided any evidence that anyone employed by Petitioner actually opened the email, received notice of its delivery, or confirmed receipt to its March 31, 2022 email.  To the contrary, Petitioner submitted a Declaration from Ms. Melissa Fury, the Vice President of Operations for Petitioner.  P. Ex. A.  Ms. Fury declares that Ms. Williford’s employment at the facility ended on March 29, 2022, two days before CMS issued its Imposition Notice to Petitioner.  Id. at 1.  Ms. Fury further declares that Ms. Williford’s email was “turned-off” on March 29, 2022.  Id.  On March 30, 2022, because Ms. Williford was no longer employed by Petitioner, Ms. Fury notified the four individuals at the SSA with whom Ms. Williford had been previously corresponding regarding the March 2nd Survey.  Id. at Ex. 1.  Specifically, Ms. Fury stated the following:

Sally Ann Williford is no longer with Asbury Place Maryville.  Jeff White (cc’d on this email) is the interim NHA effective 03/29/22 (notification was sent yesterday).

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Please send any additional communications regarding TN56601 to Jeff and to me so that we can be certain to respond accordingly.

Id.¹

Then approximately two months later, on June 6, 2022, counsel for Petitioner emailed CMS and stated that the facility “received its Federal 2567 on March 16, 2022, from a survey ending on March 2, 2022, but has not yet received an Imposition Notice from CMS,” and sought confirmation as to whether an Imposition Notice had been sent.  P. Ex. B.  CMS responded later the same day attaching the Imposition Notice and stating that the “imposition notice was issued to Administrator on March 31, 2022.”  Id.  Ms. Fury declares that “the first time that anyone at Asbury Place saw the March 31, 2022 Imposition Notice” was on June 6, 2022, from CMS’s response to counsel for Petitioner’s inquiry.  P. Ex. A. at 2.  She also states that “[n]o one at Asbury Place saw the March 31, 2022 Imposition Notice when it was sent on March 31, 2022, because it was sent to a former employee’s defunct e-mail address.”  Id.

Petitioner requested a hearing before an administrative law judge on the same day that CMS responded to counsel for Petitioner’s inquiry, June 6, 2022.

III.       Conclusions of Law and Analysis²

In its Motion, Petitioner asserts that its June 6th Request for Hearing was timely filed.  I agree with Petitioner and address Petitioner’s arguments and CMS’s arguments in opposition below.

1. Petitioner’s hearing request is timely as it was filed within 60 days from when Petitioner received CMS’s Imposition Notice on June 6, 2022.

Regulations governing hearings in cases in which CMS is a party state that a party that receives an adverse determination from CMS (“affected party”) may file a hearing request within 60 days of its receipt of that determination.  42 C.F.R. § 498.40(a)(2).  Importantly, the 60-day period is tethered to actual receipt and not constructive receipt of the determination.  See id; 42 C.F.R. § 498.22(b)(3) (“date of receipt will be presumed to be 5 days after the date on the notice unless there is a showing that it was, in fact,

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received earlier or later.” (emphasis added)).  The fundamental question at issue here is whether CMS’s emailing a notice of an initial adverse determination – here the Imposition Notice – to the email address of a former employee constitutes the affected party’s receipt of that determination pursuant to 42 C.F.R. § 498.40(a)(2) for purposes of commencing the 60-day period within which the affected party must request a hearing absent good cause for delay.

The applicable notice provision in this matter states the following: “CMS or the OIG, as appropriate, mails notice of an initial determination to the affected party, setting forth the basis or reasons for the determination, the effect of the determination, and the party’s right to reconsideration, if applicable, or to a hearing.”  42 C.F.R. § 498.20(a)(1).  The Board has determined in another matter that a notice of adverse determination may be sent by fax and that the term “mails” in 42 C.F.R. § 498.20(a)(1) does not require a notice to solely be sent via U.S. mail.  See Fairway Med. Clinic & Shadow Creek Med. Clinic, DAB No. 2811 at 8 (2017) (stating that “[w]e do not rule out the use of a FAX for notice purposes where the FAX clearly and unambiguously specifies that it is the notice document.”).  For the sake of disposition of the Motion to Dismiss, I will assume that similarly CMS may email an adverse initial determination to an affected party to satisfy its regulatory notice obligations, though I do not explicitly so find.³

Here, CMS chose to send Petitioner the Imposition Notice through an email addressed solely to the former administrator who was no longer affiliated with Petitioner.  Therefore, I find that the March 31st email does not constitute notice to Petitioner.  CMS has provided evidence that its email attaching the Imposition Notice addressed to Petitioner’s former administrator was delivered somewhere to Petitioner’s email servers.  See CMS Exs. 4, 5.  This alone, however, is insufficient to impute notice to Petitioner in this matter based on the facts and circumstances of this case.  To find the HHS email logs evidencing delivery sufficient to constitute receipt by Petitioner would be akin to finding that an affected party had received notice on the day a notice sent via U.S. Mail was delivered to a mailbox associated with an old mailing address of record after informing the agency of a new mailing address.  See generally Gregory v. Commissioner, 839 F. App’x 745 (3d Cir. 2020) (holding that the IRS mailing a Statutory Notice of Deficiency (SNOD) to taxpayers’ old mailing address was insufficient to commence 90-day timeline for requesting a hearing to challenge the SNOD where the taxpayers had informed the IRS agent conducting the tax audit of the change of address and included an updated address on two forms even though those forms stated that a change of address must be made through a separate process).

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On the current record, it is unclear what exactly happened to the email other than that it was addressed to Sally Williford who was no longer employed by Petitioner at the time.  In addition, Petitioner states that Sally Williford’s email had been disabled, HHS’s email logs do not have a record of an undeliverable notification, and Petitioner states that it did not in fact see the Imposition Notice until June 6, 2022 when CMS emailed the Imposition Notice to counsel for Petitioner in response to counsel’s communications with CMS.  See CMS Exs. 4, 5; P. Ex. A.  The record contains no further evidence of any attempted communications with Petitioner regarding the Imposition Notice until counsel for Petitioner reached out to CMS on June 6, 2022.  See P. Exs. A, B; CMS Motion to Dismiss.  There is also no evidence in the record indicating that Petitioner otherwise confirmed receipt of the March 31, 2022 Imposition Notice despite CMS’s request that Petitioner do so in the email transmitting the Imposition Notice.  CMS Ex. 3.

It is also without dispute that Petitioner had emailed the four individuals at the SSA, who had been in contact with Petitioner regarding the March 2nd Survey, and who had issued the CMS form 2567 to Petitioner.  See P. Ex. A at 1; CMS Motion to Dismiss at 2 (“[T]he SSA issued a CMS-2567 to the facility . . . .”) (citing CMS Ex. 1); P. Opposition to Motion to Dismiss at 2 (“On March 16, 2022, CMS’s Agent sent a letter to Asbury Place with the results of the aforementioned Survey.”).  Petitioner informed the SSA that (1) Ms. Williford was no longer at Asbury Place, and (2) all future communications regarding the March 2nd Survey should be directed to the interim nursing home administrator Jeff White and to Melissa Fury.  See P. Ex. A at Ex. 1.

CMS asserts that the SSA is not CMS’s agent with regard to the March 2nd Survey, and cites only Palm Garden of Gainesville, DAB CR1088 at 10 (2003) in support.  Palm Garden of Gainesville, however, only stands for the proposition that “state agencies who work in consort with CMS in enforcing Medicare participation requirements are not general agents or in privity with CMS in all situations.”  Id. at 10 (emphasis added).  In this matter, Petitioner reasonably expected that the SSA was the appropriate entity to inform about Ms. Williford’s departure and to whom future communications about the March 2nd Survey should be directed.  Based on the current record, it was the only entity that had been in communication with Petitioner about the March 2nd Survey to date.  The SSA conducted the March 2nd Survey, transmitted the CMS Form 2567 Statement of Deficiencies resulting from the March 2nd Survey, and had been the entity communicating with Petitioner with respect to the plan of correction for the March 2nd Survey.

CMS argues essentially that an affected party’s receipt of a notice simply requires that an email be delivered to any email address affiliated with the affected party’s email domain, because an affected party is in possession and control of its email servers:

[T]he evidence shows not only that the notice was successfully emailed to Petitioner’s email system, but that it

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remained within that system (and under Petitioner’s control) and was not returned as undeliverable. While Petitioner contends that it deactivated Williford’s account two days before CMS sent the notice, Petitioner must demonstrate that it did not receive the notice at all; whether Williford specifically did or not is immaterial. 42 C.F.R. § 498.22(b)(3). Again, HHS’ email logs, combined with Declarant Shah’s explanation, demonstrate that, whether CMS’ March 31st notice went into Williford’s inbox or elsewhere in Petitioner’s email system according to its predefined rules, it was in Petitioner’s possession and under its control.

Motion to Dismiss at 7.

That an affected party controls property where a notice was delivered is not inherently sufficient to impute notice to the affected party.  Implicit in the term “mails” used in 42 C.F.R. § 498.20(a)(1) (“CMS or the OIG, as appropriate, mails notice of an initial determination to the affected party”) is that notice is to be given via a method and addressed to a recipient reasonably anticipated by the affected party as a manner by which official notifications from CMS would be communicated.  “Receipt” does not occur when a notice merely made its way electronically or physically somewhere to property controlled by an affected party.  For example, in Marian Estates, the facility was found to have received the notice when the receptionist signed for it, not simply because the notice was delivered to the property controlled by Petitioner.  Petitioner was found to have received the notice because delivery of CMS official communications via U.S. mail is an understood method for transmission of such notices (based on the plain reading of the regulation and absent any agreement between the parties to the contrary), which triggers a specific process at the entity for review and dissemination of delivered mail to an appropriate individual at the affected party.  DAB CR1960 at 3 (2009).    If here, CMS had chosen to mail the notice to Petitioner and Petitioner chose not to open and examine the mailing, then Petitioner would have been presumed to have received the notice five days from the date the notice was mailed.  See 42 C.F.R. § 498.22(b)(3).

CMS has not put forth any support that Petitioner had a duty to monitor all of its email servers – or all property for which it may be in possession and control (such as its parking lot) – for possible notices from CMS.  CMS’s argument is even more attenuated when the affected party specifically informed the SSA where to direct future communications.  CMS has also not put forth any argument or support that Petitioner had an obligation to provide CMS directly with an updated email address – or any email address at all – for official notices from CMS.

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Where CMS elects to deliver notice other than via U.S. mail or to a former employee – especially where an affected party has communicated the appropriate individual(s) at the entity to receive specific transmissions, CMS bears the risk where delivery of the notice of an initial adverse determination is not, in actuality, received by an appropriate individual affiliated with the affected party.  Petitioner informed the SSA who had performed the survey and transmitted the CMS Form 2567 of the two specific individuals to whom future communications related to the survey should be directed (P. Ex A at Ex. 1), and there is no evidence in the record that either of these individuals or counsel for Petitioner received the Imposition Notice before June 6, 2022.  Therefore, absent evidence that an appropriate individual affiliated with Petitioner in fact received the notice prior to June 6, 2022, I find that Petitioner received the Imposition Notice on June 6, 2022, commencing the 60-day period to request a hearing.  Accordingly, Petitioner’s Request for Hearing was timely filed.

IV.       Conclusion

Petitioner’s Request for Hearing was timely filed; CMS’s Motion to Dismiss is denied.  I will issue a new scheduling order setting forth the deadlines for the Parties’ briefs and subsequent filings.

Endnotes

¹  It is unclear from the record what “notification” the email is referencing.

²  My conclusions of law are set forth in bold and followed by pertinent findings of fact and analysis.

³  42 C.F.R. § 498.20(a)(1) was finalized on June 12, 1987, long before the widespread use of electronic mail.  As such the term “mails” in this provision certainly did not contemplate the use of electronic mail for purposes of satisfactorily providing notice to an affected party of an adverse determination.  52 Fed. Reg. 22446 (Jun. 12, 1987).