New Grove Manor, DAB No. 3090 (2023)

FINAL DECISION ON REVIEW OF ADMINISTRATIVE LAW JUDGE ORDER OF DISMISSAL

New Grove Manor (New Grove), a skilled nursing facility (SNF), appeals an Administrative Law Judge’s (ALJ’s) order dismissing its request for hearing.  New Grove Manor, ALJ Ruling, Docket No. C-22-573 (June 16, 2022) (ALJ Dismissal).  The ALJ concluded that New Grove was not entitled to a hearing because it filed its request late and without good cause to extend the time for filing.  For the reasons explained below, we sustain the ALJ Dismissal.

Legal Background

To participate in the Medicare program, SNFs like New Grove must be in “substantial compliance” with Medicare participation requirements in 42 C.F.R. Part 483, subpart B.  Social Security Act (Act) § 1819(h); 42 C.F.R. §§ 483.1, 488.400.  A SNF is not in “substantial compliance” when the Centers for Medicare and Medicaid Services (CMS) determines it has a “deficiency” (a failure to meet a participation requirement) that creates at least the potential for more than minimal harm to one or more residents.  42 C.F.R. § 488.301 (defining “Substantial compliance” and “Deficiency”). “Noncompliance” means “any deficiency that causes a facility not to be in substantial compliance.”  Id.  Compliance is verified through onsite surveys performed by state survey agencies under agreement with the Secretary of Health and Human Services.  Act §§ 1819(g), 1864(a); 42 C.F.R. §§ 488.10, 488.11.  A state survey agency reports any deficiencies it finds in a Statement of Deficiencies.  42 C.F.R. §§ 488.325(f)(1), 488.404.

CMS is authorized to impose various remedies on facilities found to be not in substantial compliance with participation requirements.  42 C.F.R. §§ 488.400, 488.402(b)-(c), 488.406.  Remedies may include a civil money penalty (CMP) for any “instance of noncompliance.”  Id. §§ 488.408(d)(1)(iv), 488.408(e)(1)(iv), 488.430(a).  CMS sets the amount of the CMP based, in part, on the “seriousness” of the noncompliance.  Id. §§ 488.404(a)-(b), 488.438(f)(3).  “Seriousness” is a function of the scope of the noncompliance (whether it is “isolated,” constitutes a “pattern,” or is “widespread”) and its severity (whether it created a “potential for more than minimal harm,” resulted in

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“[a]ctual harm,” or placed residents in “immediate jeopardy”).  Id. § 488.404(b).  A facility may challenge a noncompliance determination that resulted in the imposition of a CMS remedy by requesting a hearing before an ALJ.  Id. §§ 488.408(g)(1), 498.3(b)(13), 498.5(b).  A facility may also contest the reasonableness of the amount of a CMP.  Id. § 488.438(e), (f); Crawford Healthcare and Rehabilitation, DAB No. 2738, at 2 (2016).

A SNF may also participate in an “informal dispute resolution” (IDR) process, “to dispute survey findings upon the facility’s receipt of the [surveyor’s] official statement of deficiencies.”  42 C.F.R. § 488.331(a)(1)-(2).  Failure of the State or CMS “to complete informal dispute resolution timely cannot delay the effective date of any enforcement action against the facility.”  Id. § 488.331(b)(1).  Accord Rutland Nursing Home, DAB No. 2582, at 6 (2014) (“[T]he state IDR process is separate from and in addition to the appeal rights provided to facilities under federal regulations and does not affect CMS’s initial determination unless CMS determines to reopen or revise the initial determination.”).  Further, “requesting or participating in any state IDR does not toll the regulatory deadline for requesting an ALJ hearing or constitute good cause for failing to timely request an ALJ hearing.”  Id.

A facility must file its request for ALJ hearing in writing within 60 days of receipt of the notice of initial determination.  42 C.F.R. § 498.40(a)(2).  The date of receipt is presumed to be five days after the date on the notice, absent a showing it was received earlier or later.  Id. § 498.22(b)(3).  If the request for hearing is not filed within 60 days, an ALJ may, on written request, extend the filing deadline for “good cause shown.”  Id. § 498.40(c).  If good cause is not shown, an ALJ has the discretion to deny a request to extend the filing deadline.  See West Side House LTC Facility, DAB No. 2791, at 6 (2017) (concluding the ALJ did not abuse discretion in determining that the facility failed to establish good cause for an extension of time to file a request for hearing).  An ALJ may dismiss a request for hearing, on the ALJ’s own motion or the motion of a party, if the request was untimely and the ALJ has not extended the time for filing.  42 C.F.R. § 498.70(c).  A party dissatisfied with an ALJ’s dismissal may ask the ALJ to vacate the dismissal by filing a request to that effect within 60 days from receipt of the dismissal and showing good cause for vacating the dismissal.  Id. § 498.72.  A party may request Board review of the dismissal within 60 days from receipt of the dismissal order.  Id. §§ 498.80, 498.82(a).

Case Background¹

New Grove is located in Essex County, New Jersey.  From January 25 to January 27, 2022, the Office of Long-Term Care at the New Jersey State Department of Health (NJDOH) performed a survey of New Grove and determined it was not in substantial

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compliance with Medicare participation requirements.  ALJ Dismissal at 1.

By letter dated March 9, 2022, CMS notified New Grove that based on the report of the complaint survey findings in January 2022 and the results of a February 18, 2022 “revisit offsite review,” it determined that New Grove was not in substantial compliance with 42 C.F.R. § 483.12 (captioned “Freedom from abuse, neglect, and exploitation”).  March 9, 2022 CMS noncompliance letter (CMS Notice).  The notice informed New Grove that CMS was imposing remedies, to include a per-instance CMP of $16,845 based on an alleged violation of 42 C.F.R. § 483.12(a)(1), which prohibits a facility from “us[ing] verbal, mental, sexual, or physical abuse, corporal punishment, or involuntary seclusion[.]”  Id. at 1-2.  The notice stated that if New Grove disagreed with CMS’s determination, it had the right to request a hearing before an ALJ.  Id. at 5.  The notice provided instructions for how to file such an appeal, including that “[y]our appeal must be filed no later than 60 days from the date of receipt of this letter.”  Id.  Further down on that page, the notice repeated:  “An appeal/request for hearing must be filed no later than sixty (60) calendar days from the date of your receipt of this letter.”  Id.  Then, under a bolded heading titled “REMINDER,” the notice listed “specific timeframes to which your facility must comply[.]”  Id. at 5-6.  The reminder cautioned:

A request for hearing must be made . . . within 60 calendar days of the date of your receipt of this notice, regardless of whether an IDR or an IIDR[²] has been requested or is in process.”

Id. at 6 ¶ 3 (italics added).  The CMS Notice added that requests for IDR (or IIDR) “will not delay the imposition of any enforcement remedy,” and that “[i]f you elect to dispute deficiencies through the [IDR] process . . . , this will not extend the 60-day period to file your appeal before the Departmental Appeals Board.”  Id. at 4-5 (italics added); see also id. at 6 (similar language).

The CMS Notice, dated March 9, 2022, stated that it was sent “via Email” to New Grove’s administrator.  CMS Notice at 1.  The notice provided CMS’s phone and email contact information for New Grove if it “ha[d] any questions regarding this matter.”  Id. at 6.

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Request for Hearing and ALJ Dismissal

On June 7, 2022, New Grove filed a request for ALJ hearing (RFH).  Referring to the one violation cited in the CMS Notice, New Grove “disput[ed] the validity of the citation [Tag] F600 . . . alleging that [New Grove] failed to keep residents free from abuse and neglect.”  RFH at 2.³  New Grove also challenged the reasonableness of the amount of the CMP.  Id. at 1.  New Grove admitted its filing was late but asserted it had “good cause” to appeal late and asked the ALJ to “relax the filing deadline.”  Id. at 5-6.  New Grove wrote:

The [CMS Notice] was not the first communication that [New Grove] received with reference to the relevant survey.  There was vast confusion on the part of the NJDOH regarding the IDR.  In fact, the primary reason for the late submission is that the facility initially received correspondence from [NJ]DOH with incorrect information regarding the IDR.  [New Grove] received both the letter regarding IDR and the [CMS Notice] on 3/10/22.  After the administrator called [NJ]DOH to clarify, a new letter was issued by [NJ]DOH (on 4/28/22) with updated information and clarification regarding the timeline for IDR.  The understanding of the administrator based upon his calls with the NJDOH was that [New Grove] would be receiving an updated/revised letter from CMS, as well, re-setting the timeline for appeal.  When no letter arrived, the administrator intended to follow up with [CMS], however, the facility experienced a new COVID outbreak during the first week of May and the administrator’s focus was understandably diverted from the instant penalty and rightfully focused upon outbreak management and the safety of all residents at that time.

As soon as the COVID outbreak and related staffing were under control, the administrator re-visited this issue.  Since no new letter appears forthcoming from CMS, [New Grove] respectfully requests, with good cause shown, to relax the filing deadline for a Request For Hearing, so that [it] may present the meritorious defenses set forth in this Request For Hearing.

Id.  New Grove thus advanced two theories of good cause:  (1) New Grove reasonably believed that the state IDR process was ongoing and was awaiting a revised letter from CMS setting a later appeal deadline; and (2) it urgently needed to attend to and manage a COVID-19 outbreak.  New Grove submitted no evidence in support of its good cause

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arguments or the above factual assertions.

The ALJ, sua sponte, issued a ruling denying New Grove’s request for extension and dismissing its request for hearing.  ALJ Dismissal at 1.⁴  The ALJ found that New Grove received the CMS Notice by email on March 9, 2022, and that the request for hearing and an extension was not filed until “90 days later,” “well beyond the 60-day deadline for filing.”  Id. at 4.  The ALJ dismissed the request for hearing because New Grove had “not shown good cause for an extension of the filing deadline, much less . . . for an additional month.”  Id. at 5.

The ALJ rejected both theories of good cause.  The ALJ stated that to the extent New Grove relied on the fact that a state IDR proceeding was still in progress to justify its late filing, that argument had no merit.  ALJ Decision at 5 (citing West Side House LTC Facility, DAB No. 2791, at 9; Rutland Nursing Home, DAB No. 2582, at 9).  The ALJ added that New Grove provided no details as to how the alleged “vast confusion” regarding the IDR timeline “prevented it from being able to file a timely request for hearing.”  Id. at 4.  As for New Grove’s claim that it believed CMS would send a revised letter “re-setting the timeline for appeal,” the ALJ stated that given that the CMS Notice clearly stated the 60-day deadline that applied, and “repeatedly informed Petitioner that a pending IDR or IIDR request would not be a basis to file a [late] request for hearing,” it was “unclear how Petitioner reached . . . an ‘understanding’ that CMS would nonetheless issue a new initial determination.”  Id. at 4-5.  Concerning New Grove’s claim that its administrator had intended to follow up with the CMS employee, the ALJ noted that New Grove did not claim that it ever contacted the CMS employee.  Id. at 5.

The ALJ also rejected as unpersuasive New Grove’s allegation that it had good cause for filing a late appeal because it had to devote its resources to containing a COVID-19 outbreak.  ALJ Dismissal at 5.  The ALJ noted that New Grove provided no evidence of an outbreak “during the first week of May [2022],” as alleged.  Id.  The ALJ also took notice of COVID-19 data reported by New Grove to the National Healthcare Safety Network (NHSN), which, the ALJ found, refuted New Grove’s assertion.  Id. at 5, n.3 (citing https://data.cms.gov/covid-19/covid-19-nursing-home-data/data) (noting the data indicated a New Grove “facility report of no new COVID-19 infections during the reporting period ending May 8, 2022, which was the 11^th consecutive week with no new resident or staff infections;” and a “report of one new infection of both a resident and staff member during the subsequent reporting period ending May 15, 2022”).  The ALJ also stated that New Grove did not explain specifically how, or in what way, the COVID-19 events that did occur prevented New Grove’s administrator from filing a request for hearing or a request for extension of time before the stated filing deadline.  Id. at 5.

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Standard of Review

The Board reviews a disputed finding of fact to determine whether it is supported by substantial evidence on the record as a whole, and a disputed conclusion of law to determine whether it is erroneous.  See Guidelines – Appellate Review of Decisions of Administrative Law Judges Affecting a Provider’s Participation in the Medicare and Medicaid Programs (Guidelines), “Completion of the Review Process,” ¶ (c).⁵  The Board reviews an ALJ’s “good cause” determination under 42 C.F.R. § 498.40(c)(2) for abuse of discretion.  See Waterfront Terrace, Inc., DAB No. 2320, at 5 (2010).  “The standard of review for an ALJ’s exercise of discretion to dismiss a hearing request where such dismissal is committed by regulation to the discretion of the ALJ is whether the discretion has been abused.”  High Tech Home Health, Inc., DAB No. 2105, at 8 (2007), aff’d, Civ. No. 07-80940 (S.D. Fla. Aug. 15, 2008).

New Grove’s Arguments to the Board

New Grove did not ask the ALJ to vacate the dismissal in accordance with 42 C.F.R. § 498.72.  New Grove instead timely appealed the dismissal to the Board.

New Grove seeks “reversal” of the ALJ’s dismissal, which it says “was not supported by the facts or law” and was “an abuse of discretionary power.”  Brief in support of request for review (RR) at 1-3.  New Grove does not dispute the ALJ’s finding that it received the CMS Notice via email, as indicated on the notice.⁶  ALJ Dismissal at 4, n.2.  Yet, whereas the ALJ found the date of receipt of the notice was March 9, 2022, New Grove says it received it a day later.  RR at 7.  This disagreement is ultimately immaterial, as in

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either case the request for hearing was due on May 9, 2022,⁷ and New Grove acknowledges that its request for hearing was due May 9, 2022, id. at 4, and does not dispute that it filed its request on June 7, 2022, 29 days later.  Thus, New Grove does not dispute the ALJ’s finding that it filed its request for hearing “well beyond the 60-day deadline for filing.”  ALJ Dismissal at 4.  Accordingly, the only issue before us is whether the ALJ abused discretion in concluding New Grove failed to show “good cause” to support an extension of its filing deadline under section 498.40(c), and in deciding to dismiss New Grove’s request for hearing under section 498.70(c).

On the issue of “good cause,” New Grove argues that factors outside of its control caused it to miss the filing deadline, RR at 10, and that “[t]he ALJ did not properly apply the good cause standard.”  Id. at 8.  New Grove reiterates the “good cause” theories it proffered to the ALJ, though in reverse order, placing more emphasis on its “good cause” theory based on COVID-19.  It disputes the ALJ’s finding that there was no evidence to support its claim of a COVID-19 outbreak “in the first week of May 2022” that prevented it from meeting its filing deadline.  RR at 4-7 (citing ALJ Dismissal at 5, n.3).  It also repeats its assertion that the first confirmed case of COVID-19 at the facility (staff or residents) occurred on May 9, 2022, the appeal deadline.  Id. at 4.  Yet New Grove now expands its discussion to address the scope and duration of this outbreak, to include a period of weeks occurring before and after the filing deadline.  It alleges that it “was struck with a COVID-19 outbreak in the first two weeks of May, 2022;” that “between May 8 and May 23, 2022, eleven (11) staff members and residents showed symptoms of and/or tested positive for COVID-19;” and that the “outbreak did not end when the final person tested positive on May 23, 2022 as the facility continued testing, isolation, and transmission-based precautions.”  RR at 5-6, 10.  New Grove also asserts that immediately before the onset of the outbreak, it was “bracing” for an outbreak based on increased “community transmission” levels in Essex County, including implementation of various COVID-19 “safeguards,” all of which, it says, diverted its attention from the filing deadline.  Id. at 4, 6, 13.  New Grove also submits for the first time evidence, including the declaration of its administrator, Joseph Rosenberg, LNHA, to the Board.

New Grove also reiterates its argument that it “demonstrated good cause for the late filing based on its communications with CMS and [NJ]DOH regarding the [IDR] process in March 2022.”  RR at 7.  New Grove challenges the ALJ’s rejection of this reason for its

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late filing, and states that while in the process of attempting to clarify the IDR timeline, its administrator “was advised by [NJ]DOH that [New Grove] would be receiving an updated penalty letter from CMS, thereby resetting the appeal deadline.”  Id. at 2.  New Grove again states that when it did not receive the expected updated CMS letter, it planned to contact CMS about the letter but was prevented from doing so by the onset of the COVID-19 outbreak.  Id. at 7-8, 10.⁸

Analysis

As discussed below, New Grove’s arguments on appeal have no merit.  We first explain why we decline to admit the evidence New Grove has submitted for the first time at the Board level.  Next we address whether the ALJ abused the discretion conferred by section 498.40(c) in denying New Grove’s request for extension of time to file its request for hearing, for lack of “good cause shown,” and in dismissing New Grove’s request for hearing.  We find no abuse of discretion and uphold the ALJ Dismissal.

1. We decline to admit the evidence New Grove submitted to the Board.

New Grove submitted eight exhibits on which it relies to bolster the “good cause” theories it argued before the ALJ.  RR at 4-10.  Below, we identify and briefly describe each exhibit:

Exhibits 1 and 2 are “Activity Level Reports” from NJDOH showing COVID-19 activity in New Jersey counties (including Essex County) for the weeks ending April 30 and May 7, 2022.  Exhibit 3 is a May 10, 2022 email from New Grove to city government employees, referring to an attached “line listing of 2 covid cases,” one case involving a facility staff member who last worked on May 6, 2022, and the other, a resident who had symptoms on May 10.  Exhibit 4 is proffered as the attachment referred to in that email, though it is unclear whether Exhibit 4 is the attachment, as it is a list of numerous individuals whose identities are redacted.  It indicates, among other things, that one staff member tested positive on May 9, 2022, and two staff members and eight residents tested positive over the next 14 days.  Exhibits 5 and 6 are letters from the state IDR coordinator to New Grove’s administrator, each one referring to an IDR proceeding scheduled to

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occur on a later date.  Exhibit 7 is a sworn declaration from New Grove’s administrator, who began serving in that capacity in June 2021.  The declaration was signed on August 15, 2022, though it recites alleged events occurring before New Grove filed its hearing request, in particular matters related to IDR and COVID-19 allegedly occurring from March to May 2022.  Exhibit 8 is a chart that appears to show weekly COVID-19 data New Grove reported to NHSN, covering the period from May 1 to July 31, 2022, as discussed by the ALJ.

With exceptions not relevant here, the Board “may” admit evidence “in addition to” what was presented to the ALJ if the evidence is “relevant and material to an issue before it.”  42 C.F.R. § 498.86(a).  “This provision ‘is permissive and does not require the Board to admit additional evidence even if it is material and relevant.’”  Kensington Diagnostics LLC, DAB No. 2992, at 16 (2020) (citation omitted); see also Community Nursing Home, DAB No. 1807, at 28 (2002) (similar statement).  In deciding whether to admit new evidence, the Board may decline to accept the evidence if the proponent fails to show “good cause” for not producing it to the ALJ.  North Las Vegas Care Ctr., DAB No. 2946, at 16 (2019) (citing Community Nursing Home at 28, Guidelines, “Development of the Record on Appeal,” ¶ (g)); see also Sunview Care & Rehab Ctr. LLC, DAB No. 2713, at 15 (2016) (declining to consider relevance or materiality of evidence submitted to the Board upon determining that petitioner did not establish good cause).

We do not admit the evidence into the record because, even assuming for purposes of discussion that the evidence is admissible, New Grove has not shown good cause for not presenting the evidence to the ALJ.  The exhibits are proffered in support of the same “good cause” arguments New Grove asserted in its request for hearing, and they were, or the information contained therein unquestionably was, in New Grove’s control, or known by New Grove, or could have been produced at that time.  And, although the facility administrator’s declaration is dated August 15, 2022, the developments the declaration addresses as support for good cause and which are pertinent to the good-cause question before us occurred before the appeal due date and were known to the administrator.  Furthermore, the state IDR coordinator’s letters, dated April 1, 2022, and March 10, 2022 (Exhibits 5 and 6), merely notified New Grove about IDR proceedings scheduled to be held on June 9, 2022, and May 26, 2022, respectively, that is, well after the deadline for filing a request for hearing.

As explanation for why it did not present the evidence to the ALJ, New Grove states that, “[a]s with any Request for Hearing,” it “did not submit any supporting Exhibits as it would ordinarily be given an opportunity to do so in the pre-hearing stage.”  P. Suppl. Br. at 4.⁹  New Grove adds:  “However, in this case, the ALJ dismissed the case without

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requesting any additional documentation or evidence regarding the COVID-19 outbreak.”  Id. (citing ALJ Dismissal at 5).  New Grove also argues that the ALJ drew erroneous conclusions from the NHSN data the ALJ cited in the dismissal, and therefore New Grove “had no choice but to respond with evidence in its Request for Review to contest the ALJ’s position.”  Id. (citing ALJ Dismissal at 5, n.3).

New Grove misapprehends the rules governing its request for hearing.  Regardless of whether it would have presented evidence to the ALJ later in the proceeding, no authority prohibited New Grove from submitting evidence with its request for hearing, if it believed the evidence supported its “good cause” arguments.  As CMS notes, CMS Resp. Br. at 17, the Civil Remedies Division’s filing guidelines (which are available on DAB-E-File, the electronic filing system New Grove used to file its request for hearing) invite parties to include any “supporting documentation” with their requests for hearing.¹⁰  More to the point, New Grove clearly knew its filing was late and knew it must show “good cause” to justify this fact.  See RFH at 5-6.  It was thus incumbent on New Grove to submit any evidence which it believed supported the good cause arguments with its request for hearing to avoid dismissal and preserve its right to merits review by the ALJ.

New Grove’s reliance on The Windsor Place, DAB No. 2209 (2008), aff’d, Windsor Place v. United States Dept. of Health & Human Servs., 649 F.3d 293 (5th Cir. 2011), is also misplaced as The Windsor Place is distinguishable from the instant case.  See P. Suppl. Br. at 4.  In The Windsor Place, the Board reviewed an ALJ’s decision (not, as here, a dismissal on procedural grounds), and remanded the case to the ALJ to reconsider one determination of noncompliance with participation requirements in light of affidavits submitted by The Windsor Place (Windsor) to the Board.  The Windsor Place at 22-25.  The Board held that Windsor showed good cause for not presenting the affidavits to the ALJ, as they were submitted as a direct response to arguments and evidentiary allegations concerning a noncompliance finding made for the first time by CMS in post-hearing briefing.  Id. at 25.  The Board concluded Windsor was justified in submitting affidavits that responded specifically to the new allegations, and thus had a “reasonable basis” for believing the evidence it had presented to the ALJ “adequately responded” to the original agency allegations.  Id.

Here, the relevant question now, as it was when the case was before the ALJ, is whether New Grove had good cause for filing its hearing request late.  Since the ALJ considered the questions of timeliness and good cause, and dismissed the late request for hearing on the ALJ’s own motion, CMS did not make any arguments concerning these questions before the ALJ.  On appeal of the ALJ Dismissal to the Board, New Grove first submitted a brief (with exhibits) and then a supplemental brief first; only thereafter did CMS file an

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opposition brief responsive to New Grove’s arguments about good cause to submit evidence for the first time to the Board.  New Grove responded with a reply brief.  Accordingly, this case does not present a situation where CMS raised new arguments or evidentiary allegations that could justify the opposing party’s submission of evidence not previously offered to the ALJ.

We also reject as unpersuasive New Grove’s argument that it had no choice but to submit new evidence so that it could rebut the ALJ’s “erroneous conclusions” regarding COVID-19 data New Grove had reported to NHSN.  New Grove itself opened the door to the COVID-19 discussion by arguing that a COVID-19 outbreak supported “good cause” for requesting a hearing late, but failed to substantiate those arguments with an offer of evidence to the ALJ.  Because New Grove raised the arguments about COVID-19 but did not substantiate its arguments with any evidence, the ALJ then exercised discretion in taking notice of publicly-available data that New Grove itself had reported to CMS to assess the basis for the “good cause” theory that New Grove had advanced.  The ALJ’s reference to this data did not change the fact that New Grove bore the burden to show “good cause” under section 498.40(c), yet failed to so.  To the extent New Grove now disputes the meaning of the NHSN data the ALJ considered, New Grove has availed itself of the opportunity to address the data in its briefs submitted to the Board.

For the reasons set forth above, we decline to admit the evidence submitted to the Board.  Even if we admitted the evidence, however, the evidence would not affect our conclusion, below, that dismissing the request for hearing under these circumstances was not an abuse of discretion.

2. The ALJ did not abuse discretion in concluding that New Grove did not show good cause to justify an extension of time under 42 C.F.R. § 498.40(c).

It is well-recognized that the Board has never attempted to provide an authoritative or complete definition of the term “good cause,” as stated in section 498.40(c).  See West Side House LTC Facility, DAB No. 2791, at 6; Kids Med (Delta Medical Branch), DAB No. 2471, at 6 (2012) (citing Brookside Rehab. & Care Ctr., DAB No. 2094, at 8, n.7 (2007)).  It is a decision that is committed to the ALJ’s broad discretion on a case-by-case basis.  See Waterfront Terrace, Inc., DAB No. 2320, at 5.  Here, we need not precisely define the term’s meaning because New Grove’s reasons for failing to timely submit its request for hearing would not justify extending the filing deadline under any reasonable definition of “good cause.”  See Brookside at 8, n.7.  The ALJ’s decision to then dismiss the late request for hearing was well within the bounds of discretionary power under section 498.70(c), which states that the ALJ “may dismiss a hearing request” where “[t]he affected party did not file a hearing request timely and the time for filing has not been extended.”

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As an initial matter, both the CMS Notice and applicable Medicare regulations put New Grove on clear, unmistakable notice of the filing deadline that applied if it wished to appeal CMS’s initial determination.  As the ALJ noted, the CMS Notice was unambiguous in stating the filing deadline and the regulatory basis for the deadline.  A section of the notice titled “APPEAL RIGHTS” told New Grove it had the right to request a hearing before an ALJ if it disagreed with the determination, and that the “appeal rights are set out in the Federal regulations at 42 C.F.R. § 498.40, et seq.”  CMS Notice at 5.  That regulation, as noted, clearly states the 60-day filing deadline that applies, and that the deadline may be extended only by the ALJ.  42 C.F.R. § 498.40(a), (c)(2).  The notice continued:  “Your appeal must be filed no later than 60 days from the date of receipt of this letter.”  CMS Notice at 5.  And still further, it stated:  “An appeal/request for hearing must be filed no later than sixty (60) calendar days from the date of your receipt of this letter.”  Id.  Finally, the last section of the notice, titled “REMINDER,” reiterated:  “A request for appeal must be made . . . within 60 calendar days of the date of your receipt of this notice.”  Id. at 6.  Therefore, the CMS Notice provided no basis for New Grove to argue it was unaware of its filing deadline.  See Hillcrest Healthcare, L.L.C., DAB No. 1879, at 7 (2003) (finding no good cause for failure to file a timely appeal, in part because Hillcrest received “a clear notice of its right to request a hearing and the deadline for making such a request”).

New Grove does not assert that the CMS Notice was unclear with respect to the filing deadline.  However, it argues it had good cause for missing the deadline because “multiple factors outside of its control . . . caused it to file its hearing request beyond the 60 days the regulations provide.”  RR at 10.¹¹  As noted above, New Grove argues (1) it was struck by a COVID-19 outbreak in the “first two weeks of May, 2022,” and immediately beforehand was “bracing” for one; and (2) it concluded, based on its communications with persons at NJDOH, that CMS would be sending a “revised” “Penalty Letter” resetting New Grove’s deadline to file.  As we next explain, these reasons, alone or together, are meritless.

1. We reject New Grove’s claim that it suffered a COVID-19 outbreak that provided good cause for the late filing of its request for hearing.

As the ALJ correctly observed, New Grove’s request for hearing was vague with respect to the alleged outbreak “in the first week of May 2022,” or precisely how any such outbreak prevented New Grove from meeting the filing deadline (or requesting an

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extension in advance).  ALJ Dismissal at 5.  The ALJ also correctly noted the absence of any submitted evidence that might bolster these assertions, and aptly pointed to historical, publicly-available data reported by New Grove to the NHSN, which flatly refuted any assertion of an actual outbreak in the period leading up to the May 9, 2022 deadline.  Id. at 5, n.3.  That data concerning New Grove for the period in question is embedded in the following link, https://data.cms.gov/covid-19/covid-19-nursing-home-data/data.  The data confirm the accuracy of the ALJ’s finding that, for the week ending May 8, 2022 – one day before the deadline – there were no reported COVID-19 infections for New Grove staff and residents; and in the week from May 9 to May 15, 2022, there was one staff infection and one resident infection.  ALJ Dismissal at 5, n.3.  We note that this data also show that for each of the ten weeks prior to the week ending May 8, 2022, there were no reported cases of COVID-19 at New Grove.  Accordingly, the ALJ had reason to reject this “good cause” argument.

On appeal, New Grove purports to challenge the ALJ’s factual conclusions with respect to the alleged outbreak, but instead confirms the minimal extent of its COVID-19 exposure during the relevant time period, that is, the time period leading up to the appeal deadline.  New Grove admits that in the weeks leading up to and ending May 8, 2022, there were no confirmed cases of COVID-19 at its facility.  RR at 4.  New Grove further admits that the first confirmed case among New Grove staff occurred on May 9, 2022, the day of the filing deadline, and that the first confirmed case among residents occurred on May 10, 2022, after the deadline had passed.  Id.  These admissions significantly undercut New Grove’s attempt to rely on COVID-19 developments at the facility as a reason why it had to devote its time and resources to those developments, as opposed to preparing and submitting a request for hearing by the appeal deadline (or submitting a timely request for extension of time to file a request for hearing).

New Grove also does not bolster its “good cause” argument by asserting that in the period immediately prior to May 9, 2022, upon learning of increased “community transmission” levels of COVID-19 in Essex County and New Jersey, it “began bracing [itself] for an outbreak in the facility” and implemented proactive measures that “diverted time and attention away from the appeal deadline.”  See RR at 4, 6.  This is a new factual assertion that New Grove did not proffer to the ALJ when making its good cause arguments; ALJs cannot be deemed to have abused their discretion with respect to arguments they did not have opportunity to consider.  More important, these facts add no weight to New Grove’s theory of good cause.  By its own admission, New Grove was not yet experiencing the alleged “outbreak” that it originally asserted to the ALJ was an independent cause for missing its filing deadline, but rather was “bracing” for one.  To state the obvious, evidence of increased COVID-19 transmission rates in a local community is not evidence of COVID-19 inside the facility.  Further, there is no reasonable basis to conclude that a SNF’s implementation of COVID-19 testing and other standard precautionary measures – initiated well into 2022 and before any outbreak had occurred – could serve as such a distraction or a drain on facility resources that the SNF

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could not meet a filing deadline for which it had been given 60 days’ notice.  Moreover, even if New Grove’s administrator believed these precautionary measures were so time-consuming that New Grove may be unable to meet its deadline, the administrator provides no credible explanation for why New Grove did not or could not submit a timely request for extension of time.

Still further, New Grove weakens its own claims with respect to the actual impact of the alleged period of outbreak preparation, by admitting it did not learn of the increased “community transmission” levels (which it says first spurred the precautionary measures) until May 7, 2022, only two days before its request for hearing was due.  See P. Suppl. Br. at 5 (“May 8, 2022 was the day before the Request for Hearing was due . . . and one day after the facility discovered that there were high COVID-19 transmission levels in the surrounding community.”).  Thus, even if we agreed that the preventive measures New Grove says it implemented before May 9, 2022, could reasonably have interfered with its ability to meet its filing deadline, that period was limited to May 7 to 9, 2022.

We lastly reject New Grove’s attempt to strengthen its “good cause” argument by asserting that there were multiple additional cases of COVID-19 at New Grove in the period after its filing deadline.  See RR at 5-6 (asserting that 11 New Grove staff or residents showed symptoms of or tested positive for COVID-19 from May 8 to May 23, 2022, and that six residents and two staff members tested positive in the week ending May 22, 2022).  The Board is not unsympathetic to the myriad challenges a SNF must address when multiple COVID-19 cases are detected at its facility.  However, as CMS correctly points out, CMS Resp. Br. at 14, 16, the additional incidences of COVID-19 to which New Grove refers (and which the NHSN data confirm were reported) occurred after its May 9, 2022 filing deadline, and thus are irrelevant to whether New Grove had good cause for not filing its request for hearing by the filing deadline.

2. New Grove’s communications with NJDOH do not provide good cause for New Grove to fail to meet the filing deadline.

The ALJ dismissed, as lacking “good cause,” New Grove’s assertion that it failed to meet its 60-day filing deadline, in part, because of “vast confusion” regarding its IDR timeline and because its administrator had reached an “understanding” from conversations with a NJDOH representative that CMS would issue a “revised/updated” “Penalty Letter” that reset the filing deadline.  ALJ Dismissal at 5.  The ALJ stated New Grove did not explain specifically how the administrator reached this “understanding,” and concluded that reaching this understanding was not a good reason for missing the filing deadline, given how clearly the deadline was spelled out in the CMS Notice and regulations.  Id.  The ALJ also found unpersuasive New Grove’s stated reason (the alleged COVID-19 outbreak) for not contacting CMS to confirm its filing deadline or clarify the matter of the expected letter resetting the appeal due date.  Id.

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We agree with the ALJ, and reject this “good cause” theory as meritless.  No aspect of New Grove’s IDR proceeding or its communications with state IDR representatives provides a reasonable basis for New Grove to fail to meet its filing deadline.  Initially, it bears repeating, the CMS Notice was abundantly clear with respect to the filing deadline that applied if New Grove wished to appeal the initial determination, and the notice directed New Grove to the governing regulation, which provides that the only way to extend the 60-day deadline would be to obtain an ALJ’s approval of such an extension.  See CMS Notice at 5 (citing 42 C.F.R. § 498.40), 6; accord Heckler v. Cmty. Health Servs. of Crawford Cnty., Inc., 467 U.S. 51, 63-64 (1984) (holding that those who participate in the Medicare program are expected to understand program rules).  New Grove was thus on actual and constructive notice of the deadline and how it could get its appeal deadline extended.

Furthermore, on appeal New Grove is vague and internally contradictory with respect to how, precisely, its communications with persons at NJDOH led it to conclude CMS would send a “revised” initial determination letter that “reset” the appeal deadline.  New Grove appears to assert, on one hand, that it reached this conclusion because NJDOH told New Grove’s administrator that NJDOH would send a letter to clarify the IDR timeline, and that NJDOH then sent such a letter, but New Grove did not also “receive an updated Penalty Letter from CMS.”  See RR at 7; P. Suppl. Br. at 10; P. Reply at 6.  On the other hand, New Grove asserts that NJDOH told the administrator that CMS would send a revised initial determination letter that reset the filing deadline.  See RR at 2, 10; P. Suppl. Br. at 2.¹²  Thus, even as to the source of New Grove’s conclusion that CMS would send a new, “revised” letter, New Grove’s inconsistent statements, at minimum, call into question the reliability of those statements.

Yet regardless of how New Grove reached this conclusion, it was unreasonable to do so.  As regulations, Board precedent, and CMS manual guidance make clear, the timeline of state IDR proceedings, and any changes to that timeline, are independent from the formal appeal process under Part 498 regulations and have no bearing on a CMS initial determination or the deadline for requesting a hearing on that determination.  See Rutland Nursing Home, DAB No. 2582, at 6 (“[T]he state IDR process is separate from and in addition to the appeal rights provided to facilities under federal regulations and does not affect CMS’s initial determination unless CMS determines to reopen or revise the initial determination.”); Cary Health & Rehab. Ctr., DAB No. 1771, at 27 (2001) (facility’s participation in a state informal dispute resolution process does not toll the federal appeal process); see also 42 C.F.R. § 488.331(b)(1) (“Failure . . . to complete [IDR] timely

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cannot delay the effective date of any enforcement action against the facility.”); SOM § 7212.3 (similar language).  And, as we have stated, the CMS Notice itself was clear that the deadline to request an ALJ hearing was independent from and unaffected by IDR or IIDR proceedings.  See CMS Notice at 4, 6 (stating that the 60-day deadline applied “regardless of whether an IDR . . . has been requested or is in process,” and that requests for IDR “will not delay the imposition of any enforcement remedy”).  Thus, if New Grove concluded that CMS would send a revised letter with a revised appeal deadline, based only on NJDOH’s adjustment of its IDR timeline, it was an unreasonable conclusion to reach.  Similarly, if (as New Grove now variously asserts) an NJDOH representative in fact told the administrator that CMS would send a revised notice with a new filing deadline, NJDOH does not have authority to speak on CMS’s behalf, and it was unreasonable for New Grove to think that it did or otherwise to rely on this information from NJDOH as a credible or conclusive source of authority concerning the imposition of a CMP or other sanction that CMS would impose.  In short, there was no factual or legal basis for New Grove to base its decision with respect to the timing of its formal appeal process on its communications with NJDOH surrounding a separate state IDR process.

New Grove’s inaction with respect to its filing deadline is even more unreasonable given that the “revised” letter that it says it expected to receive from CMS never arrived.  In this regard, we agree with the ALJ that New Grove’s explanation for not following up with CMS regarding the expected letter (or any confusion regarding the appeal deadline) was not credible.  To the extent that New Grove continues to rely on the alleged COVID-19 outbreak as the reason for failing to follow up with CMS, we have already rejected this reason as a basis for “good cause” for New Grove’s late filing.  It is even less persuasive as an explanation for not reaching out to CMS for clarification or more information.  If, as New Grove claims, it was awaiting a revised letter that would set a later appeal due date for a decision on sanctions to be imposed on New Grove, it would be reasonable to expect New Grove to take action when no revised letter arrived.

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Conclusion

We uphold the ALJ Dismissal.

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Endnotes

¹  The background section is drawn from the ALJ Dismissal and the record before the ALJ.

²  “Independent informal dispute resolution” (IIDR) is a form of IDR whereby SNFs and other facilities may informally dispute official survey findings separate from any formal administrative appeal.  See 42 C.F.R. § 488.431(a)(3); 76 Fed. Reg. 15,106, 15,114, 15,115 (Mar. 18, 2011) (Final Rule) (describing IIDR as an addition to the “existing [IDR] process at [section] 488.331(a) which remains as an option . . . to use to dispute cited deficiencies”); CMS State Operations Manual (SOM), CMS Pub. 100-07, Ch. 7, §§ 7212 and 7213 (describing IDR and IIDR processes, respectively).  Based on the submissions before us, New Grove apparently was participating in IDR.  However, our analysis does not turn on any specific differences between IDR and IIDR or the narrow question of whether New Grove was participating in IDR or IIDR.

³  New Grove also contested the validity of the other two violations that allegedly were cited in the surveyor’s Statement of Deficiencies, but not listed as instances of noncompliance in the CMS Notice.  RFH at 2, 4‑5.

⁴  The ALJ Dismissal does not cite 42 C.F.R. § 498.70(c), which authorizes an ALJ to dismiss a late request for hearing where the time for filing has not been extended.  However, there is no question, or dispute, that the ALJ dismissed New Grove’s request for hearing pursuant to this regulation.

⁵  The Guidelines are available at:  https://www.hhs.gov/about/agencies/dab/different-appeals-at-dab/appeals-to-board/guidelines/participation/index.html?language=en.

⁶  Generally speaking, the regulations in 42 C.F.R. Part 498 contemplate notice by mail.  See Riverview Village, DAB No. 1840, at 8 (2002).  However, the Board has recognized the validity of CMS notice by means other than mail (e.g., facsimile), where the method of notice used was capable of accomplishing the essential due process purpose of notice and in fact accomplished notice.  See Fairway Med. Clinic & Shadow Creek Med. Clinic, DAB No. 2811, at 8-9 (2017) (“While the word ‘mails’ as used in [42 C.F.R. §] 498.20(a) may be interpreted as intended to refer to U.S. postal mail, we do not conclude that the term can only refer to U.S. government postal mail, to the exclusion of all other means of notice.”), aff’d sub nom. Murtaza Mussaji, D.O., P.A. v. United States Dep’t of Health & Human Servs., 741 F. App’x. 222 (5th Cir. July 23, 2018).  New Grove raises no argument about CMS’s use of email to transmit the notice that included information about New Grove’s right to request a hearing before an ALJ.

⁷  Where a filing deadline falls on a federal “non-workday,” such as a weekend day or legal holiday, the deadline is the next federal workday.  See Guidelines, “Additional Rules Applicable to Both Electronic and Non-Electronic Filing,” ¶ (a).  Thus, if New Grove received the CMS Notice on March 9, 2022, as the ALJ stated, its request for hearing would have been due Monday, May 9, 2022 (61st day), because the 60th day was Sunday, May 8, 2022.  Even had New Grove received the CMS Notice on March 10, 2022, as it alleges, the 60-day filing due date was May 9, 2022.  Although here we consider the Board’s Guidelines in examining New Grove’s appeal to the ALJ, we do so only to explain that the disagreement is of no consequence.  At bottom, it is undisputed that New Grove filed its request for hearing almost a month late.

⁸  New Grove also challenges CMS’s determination that it did not substantially comply with section 483.12, and it complains that the ALJ ignored the merits of its appeal and “only focus[ed] on the late filing of the Request for Hearing.”  RR at 3, 10-14.  New Grove presumably submitted a request for hearing that included arguments about the merits of its appeal, anticipating the possibility that the ALJ would accept its explanation of good cause for late filing and permit its appeal to go forward.  However, the ALJ committed no error in not addressing the merits.  The threshold questions before the ALJ were whether the appeal was timely and, if untimely, whether New Grove established good cause to extend the filing deadline.  Having found no good cause for the late filing, the ALJ dismissed the request for hearing as authorized by 42 C.F.R. § 498.70(c).  The Board’s review is limited to reviewing the ALJ Dismissal for abuse of discretion.

⁹  After this appeal was docketed, the Board asked New Grove to submit a supplemental brief addressing whether New Grove had good cause to submit the evidence for the first time before the Board.  After New Grove filed its supplemental brief, CMS submitted its brief in opposition to the request for review.  New Grove then submitted a reply brief. 

¹⁰  See Civil Remedies Division Instructions, “Filing the Request for Hearing and Supporting Documentation,” available at https://dab.efile.hhs.gov/appeals/to_crd_instructions?locale=en.

¹¹  New Grove quoted this phrase from the Board’s decision in Medstar Health, Inc., DAB No. 2684, at 8 (2016).  However, it was the ALJ in that case who endorsed this “good cause” standard.  The Board affirmed the ALJ’s dismissal but stated that the Board “need not determine whether the ALJ was correct” as to that standard.  Id.  In any event, as we make clear below, it was well within New Grove’s ability to meet its filing deadline, and the reasons it asserts for missing the deadline are insufficient.

¹²  Although we do not admit the evidence New Grove submitted on appeal, we note that its administrator, on whose written testimony New Grove relies heavily to support its assertions regarding communications with NJDOH regarding IDR, does not attest that NJDOH stated CMS would send a revised letter that “reset” New Grove’s filing deadline.  See P. Ex. 7, at ¶¶ 14-15.