Life Care Center of Kirkland, Ruling No. 2020-3 (2020)

RULING DENYING EMERGENCY MOTION TO REMOVE HEARING TO THE BOARD

Life Care Center of Kirkland (Kirkland) has submitted a motion titled “Emergency Motion to Remove Hearing to the Board” (Motion) asking the Board to either “remove” its appeal presently pending before an Administrative Law Judge (ALJ) of the Civil Remedies Division to the Board for hearing and decision on an expedited basis, or, alternatively, order the ALJ to set the case for hearing and decision “as soon as is practicable, even if that result means ‘jumping the line,’ or ‘bumping’ previously scheduled cases.”  Motion at 1.  Kirkland requested a hearing before an ALJ to challenge the Centers for Medicare and Medicaid Services (CMS)’s determination that Kirkland did not comply with multiple Medicare participation requirements, for which CMS imposed a civil money penalty of over $600,000.  For the reasons set out below, we deny Kirkland’s motion.

Background

On April 8, 2020, Kirkland requested a hearing before an ALJ, disputing CMS’s determination alleging noncompliance with various federal nursing facility health and safety regulations in connection with Kirkland’s response to the COVID-19 pandemic.  Motion at 2.  This case represents the first nursing facility appeal before the Departmental Appeals Board of a CMS enforcement action alleging health and safety violations involving the pandemic.

The parties do not disagree that, by ruling and scheduling order issued May 4, 2020, the ALJ:

(1) granted Kirkland’s motion for expedited evidentiary hearing;
(2) set a schedule for the parties to submit their pre-hearing exchanges (July 8, 2020 for CMS and August 7, 2020 for Kirkland);
(3) set a schedule for the resolution of various pre-hearing matters (joint settlement status report; evidentiary objections; summary judgment motions; joint

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stipulations of fact; joint statement of issue(s); pre-hearing briefs and evidence) by September 6, 2020;   
(4) scheduled a one-week video teleconference hearing to begin on April 5, 2021, which the ALJ indicated was the earliest date on which he could convene a hearing; and
(5) deferred ruling on Kirkland’s motion for expedited decision, but stated that he would issue a decision post-hearing as promptly as his workload permits.

CMS’s opposition at 5-6; Motion at 4. 

On May 5, 2020, Kirkland filed its motion with the Board because it remains dissatisfied with the schedule for pre-hearing case development, hearing, and decision set by the ALJ.  Kirkland desires adjudication of this appeal sooner than reasonably could be expected were the appeal to remain before the ALJ.  It asks the Board to remove the appeal to the Board for hearing and decision on an expedited basis.  It seeks alternative relief in the form of a Board order directing the ALJ to expedite his established schedule.

On June 4, 2020, CMS filed its opposition.  CMS urges the Board to deny the motion and “permit the ALJ to handle the hearing pursuant to the well-established administrative appeal process and carefully-crafted ALJ scheduling order.”  CMS’s opposition at 1-2. 

Discussion

I. We decline to remove this appeal for expedited hearing and decision.

A. Section 498.76 does not establish removal of a hearing to the Board as a matter of right; the regulation contemplates Board discretion in determining whether removal of a hearing to the Board is appropriate.

The regulations in 42 C.F.R. Part 498 govern this case.  Section 498.76, which is found in Part 498, subpart D, authorizes the Board to remove to itself a pending request for hearing.  It states:

(a)  At any time before the ALJ receives oral testimony, the Board may remove to itself any pending request for a hearing.
(b)  Notice of removal is mailed to each party.
(c)  The Board conducts the hearing in accordance with the rules that apply to ALJ hearings under this subpart.

42 C.F.R. § 498.76 (emphasis added).  The regulation thus authorizes the Board to remove to itself a request for an evidentiary hearing before the ALJ commences the hearing but does not by its terms establish a right to removal.  Section 498.76 is reasonably read as contemplating Board discretion in determining whether a hearing

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should be removed in a given case.  With our discretion in mind, we next consider Kirkland’s motion for removal.

B. Kirkland has not made its case for the “extreme” or “extraordinary” remedy of removal.

To date the Board has not set out specific criteria or standards for determining when removal of a hearing to the Board would be appropriate.  However, the Board has stated that removal of a hearing is an “extreme measure.”  Pac. Regency Arvin, Ruling on Request for Removal of Hearing to Board, App. Dkt. No. A-2000-16 (Nov. 23, 1999), at 3.The Board Rulings cited herein are provided to the parties as attachments to this ruling on Kirkland’s motion.  Most recently, the Board has declined to remove to itself in order to issue written decisions in three nursing facility appeals in which ALJ hearings already had been held but no ALJ decision had yet been issued.  Signature Healthcare of East Louisville, Donelson Place Care and Rehab. Ctr., Signature Health Care of Pikeville, Denial of Motion for ALJ Decision or Removal and Release of Escrow Funds, App. Dkt. Nos. A-18-55, A-18-56, A‑18-57 (May 22, 2018).  Noting that section 498.76 contemplates removal for hearing before the ALJ receives oral testimony, the Board stated that, “if any circumstances might exist that nevertheless call for removal of a case after hearing, such circumstances do not arise here, especially given that the ALJ has stated his intent to issue decisions in these appeals within 60 to 90 days.”  Id. at 4.  The Board therefore denied the facilities’ request for “extraordinary remedies” that included removal of the post-hearing cases to the Board for decision.  Id. at 1.

We need not now delineate the specific criteria for determining whether a case at its nascent stage awaiting development and hearing before an ALJ, such as this one, should be removed to the Board.  However, in view of our prior determinations that removal is an “extreme” or “extraordinary” remedy, it is appropriate for us to hold Kirkland to a heavy burden to persuade us why we should exercise our removal authority under section 498.76.  Kirkland has not borne that burden.

Kirkland urges the Board to remove the appeal for expedited hearing and decision because this case is an “extraordinary” one arising from “the most significant public health emergency this nation has faced since the 1918 influenza pandemic,” “the mere pendency” of which, Kirkland says, “caus[es] grave, and possibly irreparable, disruption to the entire long term care system” in the country.  Motion at 1, 6.  Kirkland submits that expedited Board hearing and decision would not interfere with or impede CMS’s legitimate enforcement prerogatives and plainly would serve the public interest.  Id. at 1.

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We do not disagree with Kirkland that this case arises during an extraordinary, and perhaps unprecedented, public health crisis.  But we do not agree that the public health crisis necessitates immediate Board involvement in the resolution of this appeal by way of removal.Kirkland’s motion discusses, among other things, allegations that CMS surveyed its facility before it published COVID-19 survey criteria and before the development of coronavirus testing (Motion at 2), and that CMS cited Kirkland for a reporting violation even though there was no applicable state or federal reporting requirement (id. at 3).  Kirkland denies that it failed to comply with any applicable requirement and asserts CMS used the survey and enforcement process to “scapegoat” Kirkland based on events and circumstances that Kirkland could not reasonably have foreseen and that were beyond Kirkland’s control.  Id. at 6.  The motion further asserts that surveyors are “following CMS’s lead in this case” by citing facilities for immediate-jeopardy-level violations merely because of the existence or the spread of the novel coronavirus.  Id.  These assertions are not germane to the motion before us, however.  Our ruling should not be construed as limiting Kirkland from making such arguments, or CMS from responding to them, as the parties believe appropriate, before the ALJ and in accordance with any ALJ instructions.  Whether such arguments go to issues the ALJ may properly decide and whether they have any merit as to such issues are matters for the ALJ to determine.  If anything, the unprecedented circumstances and novel issues presented by this important case are good reasons to deny the removal action Kirkland seeks.  Allowing the case to proceed before the ALJ would promote the full, thorough development of a record on which the ALJ must decide this case and which the Board could later be asked to review on appeal.  In our view, doing so would better serve Kirkland’s interests and certainly allow more thoughtful resolution of issues that Kirkland argues may impact other providers in similar circumstances.  Most importantly, we believe that would be fair to both parties.

Kirkland’s motion also raises concerns about how, as a practical matter, removing the case from the ALJ would promote full development of the record and efficient adjudication.  Given that this case arises from events that occurred only months ago and is at an early stage on appeal, even were we to assume the ALJ’s role in developing the record, reviewing factual disputes, and deciding this case, we would still need to allow the parties to submit pre-hearing briefs and evidence, hold an evidentiary hearing, rule on any evidentiary objections and dispositive motions, allow an opportunity for post-hearing briefing, and address other pre-decisional matters as they may arise, before we can proceed to decision – all of the actions the ALJ also would need to take.

We decline to remove this case to the Board for expedited hearing and decision.  Kirkland has not made its case for the “extreme” or “extraordinary” remedy of removal and, in our view, removal would not serve the needs of this case.

II. We decline to order the ALJ to further expedite his schedule.

As noted, the ALJ granted Kirkland’s motion to expedite the hearing, but set the hearing to begin in early April 2021, the earliest date the ALJ stated his calendar permitted, and deferred ruling on the motion to expedite the issuance of a decision.  Kirkland asks that,

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if we decline to remove this case, we grant alternative relief in the form of an order instructing the ALJ to expedite his schedule for hearing and decision.  CMS frames Kirkland’s request for alternative relief as interlocutory in nature.  CMS’s opposition at 1 (asserting that Kirkland cannot “justify the Board’s interlocutory review of and intervention of the ALJ’s scheduling order”).          

Just as we need not delineate the specific criteria for determining when removal of a hearing to the Board would be appropriate, we need not determine whether Kirkland’s request for alternative relief is indeed an interlocutory appeal of the ALJ’s May 4, 2020 ruling and scheduling order.  Nevertheless, even were we to assume that Kirkland’s request is equivalent to an interlocutory appeal, the Part 498 regulations to which we are bound do not expressly authorize Board review of interlocutory appeals.The Part 498 regulations contemplate two levels of review of agency action – de novo review and decision (or dismissal) by an ALJ, and then appellate review of the ALJ decision (or dismissal) by the Board.  In accordance with 42 C.F.R. § 498.80, either party – CMS or Kirkland – would have a right to request Board review of the ALJ’s decision.  The Part 498 regulations include no provision expressly authorizing Board involvement in an appeal properly before an ALJ, such as this one, before the ALJ issues a decision appealable under section 498.80 (except as permitted by section 498.76, which, as we have said, does not establish a right to removal).  The Board has “declined to assume that it may take [interlocutory] appeals in the absence of express authority to do so.”  Perry Cnty. Nursing Ctr., Ruling Denying Request for Expedited Review and for Stay of Hearing, Ruling 2012-5, App. Dkt. No. A-12-67 (May 9, 2012), at 2 (quoting Cooper Univ. Hosp., Cooper Surgery Ctr. and Rancocas Endoscopy Ctr., Ruling Denying CMS’s Motion for Emergency Stay, Request for Review of ALJ Rulings, and Request for Removal, App. Dkt. No. A-09-72 (Mar. 24, 2009)).

Moreover, even were we to assume that Kirkland’s request for alternative relief is a request for interlocutory relief we may properly rule on, Kirkland simply fails to make a case for why disrupting the schedule the ALJ has established for resolution of this appeal is necessary or appropriate.  Kirkland’s burden to persuade us of the need for expediting the ALJ’s schedule is as heavy as its burden for persuading us of the need for removal.  See id. (stating that, “[i]nterlocutory appeals, if permissible at all, would require an extraordinary showing that the issues presented could not wait for review until after the completion of the normal process below and issuance of an ALJ decision” and that the movant must show “that some irreparable harm or significant prejudice would be caused by allowing the normal proceedings to go forward”); see also Del Rosa Villa, Ruling Denying Request for Interlocutory Review of Denial of Stay of Proceedings or Postponement of Hearing, Ruling 2011-2, App. Dkt. No. A-11-20(Dec. 2, 2010), at 2 (“The Board has historically disfavored” interlocutory appeals, and, for it “to consider an interlocutory appeal, a party would have to show that an interlocutory decision would promote efficient adjudication of the dispute and that the party would suffer irreparable harm by waiting for a final decision to appeal an ALJ’s ruling.”) (quoting Appellate

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Division Practice Manual, available at https://www.hhs.gov/about/agencies/dab/different-appeals-at-dab/appeals-to-board/practice-manual/index.html).    

The Part 498 regulations confer authority over pre-hearing development and hearing‑related matters to the ALJ.  See generally 42 C.F.R. Part 498, subpart D.  The ALJ’s authority over such matters includes, specifically, the authority to set and change the date and time for hearing.  See 42 C.F.R. §§ 498.52, 498.53.  Furthermore, the Part 498 regulations impose no time constraint on the issuance of an ALJ decision on a long-term care facility’s appeal of CMS’s enforcement action.  They state only that the ALJ is to issue a written decision “[a]s soon as practical after the close of the hearing.”  Id. § 498.74(a). 

The ALJ’s schedule for pre-hearing briefing and development of Kirkland’s appeal appears to be reasonably calculated to afford the parties a full and fair opportunity to present their cases to the ALJ.  Moreover, as CMS noted, in accordance with the schedule set by the ALJ, the earliest possible date on which the ALJ could begin the hearing, calendar permitting, would be October 6, 2020, 30 days after the date on which the parties’ briefs are due.  CMS’s opposition at 6.  The ALJ’s schedule for commencing a hearing in early April 2021 does not appear to be unreasonable in light of the ALJ’s responsibilities, and Kirkland does not assert otherwise.The ALJs in the Civil Remedies Division are required by regulation to issue decisions on certain types of appeals within established timeframes, which could affect their decision schedules.  Notably, they are Part 498 appeals of denial of enrollment of providers and suppliers.  See 42 C.F.R. § 498.79 (ALJ must issue a decision, dismissal order or remand to CMS no later than the end of the 180-day period beginning from the date the appeal was filed).  The ALJs also are bound to decision timing requirements in Part 1005 appeals.  42 C.F.R. § 1005.20(c) (ALJ must issue a decision within 60 days after the time for submission of briefs has expired).  We have no reason to believe the ALJ would not, or would be unable to, commence the hearing as scheduled.  Nor do we question that, after taking any post-hearing actions the ALJ may determine are appropriate (e.g., permitting the parties to review the hearing transcript and raise any objections, and to submit post-hearing briefs), the ALJ would proceed to decision as soon as practical, his schedule permitting, as the ALJ indicated he would. 

Kirkland simply fails to make a case for efficiencies or some other benefit to be gained by ordering the ALJ to dispense with his set schedule to develop, hear, and decide this case as quickly as Kirkland demands.  Kirkland does not show that it, or its appeal, would be harmed by allowing the case to proceed before the ALJ as scheduled.       

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III. The Part 498 regulations do not contemplate intervention in Board proceedings by individuals or entities other than the parties to the case.

Kirkland submitted to the Board two items after it filed its motion, but before CMS’s response to the motion became due.  They are a declaration of the Executive Director of The Society for Post-Acute & Long-Term Care MedicineKirkland apparently submitted the declaration of the Executive Director of The Society for Post-Acute & Long-Term Care Medicine to the ALJ as well.  Our discussion herein should not be construed as an opinion or determination on whether either of the organizations’ submissions may be appropriate for consideration by the ALJ or even in another forum outside of the Departmental Appeals Board.  We have considered them only for the limited purpose of ruling on Kirkland’s motion. and a letter from the Chief Medical Officer of the American Health Care Association (with an attachment detailing the organization’s comments on CMS’s citation of Kirkland).The Society for Post-Acute & Long-Term Care Medicine is a medical society that represents a community that includes over 50,000 medical directors, physicians, non-physician practitioners and clinical specialists who work in various post-acute and long-term care settings.  The American Health Care Association represents approximately 10,000 of over 15,000 nursing homes in the country.

Unlike the regulations governing appeals under Part 16,“The Board may also allow other participation, in the manner and by the deadlines established by the Board, where the Board decides that the intervenor has a clearly identifiable and substantial interest in the outcome of the dispute, that participation would sharpen issues or otherwise be helpful in resolution of the dispute, and that participation would not result in substantial delay.”  45 C.F.R. § 16.16(b). the Part 498 regulations do not expressly address participation by an individual or entity not a party to the case.“Affected party means a provider, prospective provider, supplier, prospective supplier, or practitioner that is affected by an initial determination or by any subsequent determination or decision issued under this part, and ‘party’ means the affected party or CMS, as appropriate.  For provider or supplier enrollment appeals, an affected party includes CMS or a CMS contractor.”  42 C.F.R. § 498.2.  We need not decide here the broader question of whether the absence of a Part 498 regulation permitting participation by amici curiae or other non-parties precludes such participation in all Part 498 cases under all circumstances.  Even were we to assume that Part 498 contemplates non-party participation without limitation to those instances in which an ALJ decision (or dismissal) is properly appealed to the Board in accordance with section 498.80 (which is not the case here), the two organizations’ submissions do not help us decide Kirkland’s motion.

The organizations are understandably interested in the outcome of Kirkland’s appeal.  However, as with Kirkland’s motion, the organizations’ submissions raise questions appropriately reserved for Kirkland’s briefing on its challenge of CMS’s enforcement action before the ALJ.  See supra note 2.  Some of their comments address what CMS could do in future cases involving nursing facility regulatory compliance matters and implications on the long-term care sector, whereas the matter before the ALJ must

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necessarily be decided based on the relevant facts of the individual case and the existing legal authorities.  The submissions, even if considered, do little to persuade us of the need for the relief Kirkland seeks.  They provide no support for supplanting the schedule the ALJ has already set, as is well within his authority to do.

Conclusion

We deny Kirkland’s motion to remove its appeal to the Board for hearing and decision on an expedited basis, or, alternatively, order the ALJ to further expedite his schedule for hearing and decision.  We close this matter, docketed under Appellate Division docket number A-20-75, without prejudice to an appeal either party (or both parties) might wish to file after the ALJ issues his decision.