The Brightpointe, DAB No. 3157 (2024)

FINAL DECISION ON REVIEW OF ADMINISTRATIVE LAW JUDGE DECISION

The Brightpointe (Petitioner), a skilled nursing facility (SNF) in Texas, appeals the decision of the Administrative Law Judge (ALJ) dismissing its request for hearing.  The Brightpointe, Ruling Dismissing Request for Hearing, Docket No. C-24-144 (February 22, 2024) (ALJ Dismissal).  The ALJ concluded that Petitioner 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 affirm the ALJ Dismissal.

Legal Background

To participate in the Medicare program, a SNF must be in “substantial compliance” with Medicare participation requirements in 42 C.F.R. Part 483, subpart B.  See Social Security Act (Act) § 1819(h); 42 C.F.R. §§ 483.1, 488.400.  A SNF is not in “substantial compliance” when it has a “deficiency”—that is, a failure to meet a participation requirement—that creates at least the potential for more than minimal harm to one or more residents of the SNF.  42 C.F.R. § 488.301 (defining “Substantial compliance” and “Deficiency”).  Under agreements with the Centers for Medicare & Medicaid Services (CMS), state survey agencies conduct periodic onsite surveys of SNFs to verify compliance with the Medicare participation requirements.  Id. §§ 488.10(a), 488.11, 488.308; see also Act §§ 1819(g)(1)(A), 1864(a).

Surveyors report survey findings in a Statement of Deficiencies (Form CMS-2567), identifying the severity and the scope of each deficiency.  42 C.F.R. §§ 488.325(f)(1), 488.331(a).  The Statement of Deficiencies identifies each deficiency with a “Tag” number that corresponds to the relevant regulatory requirement and CMS guidance on that requirement.  See generally State Operations Manual (SOM), CMS Pub. 100-07, Ch. 7, Survey and Enforcement Process for Skilled Nursing Facilities and Nursing Facilities.¹  Additionally, the Statement of Deficiencies indicates the survey agency’s evaluation of

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the “seriousness” of any cited deficiency.  See 42 C.F.R. § 488.408; SOM, Ch. 7, § 7400.3.1.  “Seriousness” is a function of “severity” (i.e., no actual harm, potential for more than minimal harm, actual harm, or immediate jeopardy) and “scope” (i.e., whether the noncompliance is isolated, a pattern, or widespread) of the noncompliance at issue, where the highest level of severity is one that puts one or more residents in “immediate jeopardy.”  42 C.F.R. §§ 488.404(b), 488.438(a); see also SOM, Ch. 7, § 7400.3.  “Immediate jeopardy” is defined as “a situation in which the provider’s noncompliance with one or more requirements of participation has caused, or is likely to cause, serious injury, harm, impairment, or death to a resident.”  42 C.F.R. § 488.301.

CMS may impose enforcement “remedies” on a SNF that is not in substantial compliance with one or more participation requirements.  See Act § 1819(h); 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.  42 C.F.R. §§ 488.406(a)(3), 488.408(d)(1)(iv), 488.430(a).  Additionally, CMS may impose a denial of payment for all new admissions (DPNA).  Id. § 488.406(a)(2), (b)(2).  CMS has the option of imposing a DPNA whenever a facility is not in substantial compliance and is required to impose a DPNA if a facility remains not in substantial compliance for three months after a survey identifies the noncompliance.  See Act § 1819(h)(2)(B)(i); 42 C.F.R. § 488.417(a), (b).  A facility may appeal a noncompliance determination that resulted in the imposition of a CMS remedy by requesting a hearing before an ALJ.  See 42 C.F.R. §§ 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); see Crawford Healthcare & Rehab., DAB No. 2738, at 2 (2016).

A SNF may also informally dispute state survey findings by participating in an informal dispute resolution (IDR) process.  See 42 C.F.R. § 488.331(a)(1); see also SOM, Ch. 7, § 7212; Tex. Gov’t. Code § 531.058.  Failure of the State or CMS “to complete informal dispute resolution timely cannot delay the effective date of any enforcement action against the facility.”  42 C.F.R. § 488.331(b)(1); accord SOM, Ch. 7, § 7212.3.  Additionally, IDR “findings are in the manner of a recommendation” to the State, and the State will make the final IDR decision and notify the facility of that decision.  SOM, Ch. 7, § 7212.3; see also https://hhs.texas.gov/doing-business-hhs/vendor-contractor-information/informal-dispute-resolution-process.  Moreover, for dually participating or Medicare-only facilities, IDR findings are in the manner of recommendations to CMS and, “if CMS has reason to disagree with those findings, it may reject the conclusions from [IDR] and make its own binding determinations of noncompliance.”  SOM, Ch. 7, § 7212.3; see also 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.”).  Finally, a SNF may informally dispute cited deficiencies through an “independent informal dispute resolution” (IIDR) if CMS imposes a CMP against the SNF and the CMP is subject to being collected and placed in an escrow account pending a final administrative decision.

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See 42 C.F.R. §§ 488.331(a)(3), 488.431(a)-(c); SOM, Ch. 7, § 7213.  However, a facility may not use both dispute resolution processes at § 488.331 and § 488.431 for the same deficiency citation arising from the same survey unless the IDR pursuant to section 488.331 was completed prior to CMS imposing the CMP.  See CMS Ex. 1, at 8; see also 42 C.F.R. §§ 488.331(a)(3), 488.431(a)(5).

A SNF must file its request for an 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 that it was received earlier or later.  Id. §§ 498.40(a)(2), 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).  “[R]equesting or participating in a 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.”  Rutland at 6.  “If good cause is not shown, an ALJ has the discretion to deny a request to extend the filing deadline.”  New Grove Manor, DAB No. 3090, at 2 (2023) (citing West Side House LTC Facility, DAB No. 2791, at 6 (2017)).  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).

Any party may request review of the ALJ’s dismissal by the Departmental Appeals Board (Board) within 60 days from receipt of the dismissal.  Id. §§ 498.80, 498.82(a).

Case Background²

Petitioner is a SNF in Conroe, Texas.  By letter dated October 4, 2023, the Texas Health & Human Services Commission (state agency) notified Petitioner that it had performed an abbreviated survey on September 21, 2023, and “found conditions in the facility that presented immediate jeopardy to resident health and safety” and that Petitioner was “not in substantial compliance with federal participation requirements.”³  CMS Ex. 1, at 1.  The state agency notified Petitioner that, as authorized by CMS, an Optional Denial of Payment for New Admissions (ODPNA) was being imposed effective October 19, 2023, meaning no Medicare or Medicaid payments will be made for residents admitted on or after the ODPNA effective date.  Id. at 2.  The state agency explained that the “ODPNA will continue until your facility achieves substantial compliance or your provider agreement is terminated.”  Id.  The state agency further indicated that it was recommending CMS impose additional remedies, including Termination of the Provider

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Agreement and a CMP.  Id.  The state agency informed Petitioner that it had the opportunity to dispute the cited deficiencies through the state IDR process.  Id. at 4.  On October 13, 2023, Petitioner submitted its request for IDR to the state agency.  See Petitioner’s Request for ALJ Hearing (RFH) at 2; see also P. Ex. B.⁴

By notice dated October 18, 2023, CMS notified Petitioner that based on the September survey, Petitioner was not in substantial compliance with the following three participation requirements, each at a scope and severity level of “J,” constituting immediate jeopardy:

• § 483.10(g)(14)(i)-(iv), (g)(15) – Notify of Changes (Tag F580);
• § 483.25 – Quality of Care (Tag F684); and
• § 483.35(a)(3)-(4), (c) – Competent Nursing Staff (Tag F726).

CMS Ex. 1, at 6.  CMS explained that “although the conditions that represented immediate jeopardy had been removed,⁵ the facility continued to be not in substantial compliance.”  Id.  CMS notified Petitioner that its Medicare provider agreement would be terminated effective March 21, 2024, unless Petitioner achieved substantial compliance before that date.  Id. at 6-7.  Additionally, CMS imposed a Per-Instance CMP of $19,460 for Tag F684.  Id. at 7.  CMS informed Petitioner that it was imposing a DPNA beginning October 19, 2023, and continuing until substantial compliance is achieved or its provider agreement is terminated, noting the state agency provided notice of this remedy in its October 4, 2023 letter.  Id. at 8.

In the October 18, 2023 notice, CMS advised Petitioner that it may request IIDR within 10 days from receipt of CMS’s notice but stated that Petitioner was “not required to request an IIDR” and that Petitioner “may choose to continue an Informal Dispute Resolution (IDR) request already made to [the] State Survey Agency.  You may not use both dispute resolution processes at [42 C.F.R.] § 488.331 and § 488.431 for the same deficiency citation arising from the same survey unless the IDR . . . at § 488.331 was completed prior to CMS imposing the CMP.”  Id.  CMS cautioned Petitioner that the state agency “is not required to adopt the IIDR recommendations,” the state agency may “disagree[] with the IIDR recommendation,” CMS “may adversely modify the survey findings upon its review of the IIDR,” and “[t]he IIDR process is not a formal evidentiary hearing and does not grant further appeal rights.”  Id.

Additionally, CMS’s notice included Petitioner’s right to request a hearing, prominently captioned “FILING AN APPEAL,” which advised Petitioner of its appeal rights and the

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appeal deadline.  Id. at 8-9 (bold in original, underline omitted).  CMS advised Petitioner that, “[i]f you disagree with the determination of noncompliance . . . you or your legal representative may request a hearing before an [ALJ] of the U.S. Department of Health and Human Services, Departmental Appeals Board.  Procedures governing this process are set out in 42 CFR § 498.40, et. seq.”  Id. at 8.  CMS further warned Petitioner:  “You must file your hearing request electronically by using the Departmental Appeals Board’s Electronic Filing System (DAB E-File) . . . no later than December 17, 2023 (60 days from the date of receipt of this letter via fax).”  Id. at 9 (emphasis in original).  The October 18, 2023 notice was addressed to Petitioner’s “Administrator” and sent “by Fax Only.”  See id. at 6.  CMS provided the name, telephone number, and email address of a CMS employee Petitioner could contact if it had any questions.  See id. at 10.

On November 9, 2023, the survey team returned to Petitioner’s facility and again found the facility was out of compliance, identifying two new D-level tags concerning the requirements in 42 C.F.R. § 483.21(b).  Id. at 16; RFH at 2.  Petitioner asserts that the surveyors also indicated the non-compliance identified in the September survey was “cleared.”  RFH at 2.⁶

On or about November 10, 2023, the agency performing the IDR review, Michigan Peer Review Organization (MPRO), completed its review and recommended to the state agency that the deficiency cited at Tag F580 be deleted and the deficiencies cited at Tags F684 and F726 be reduced to scope and severity levels of “D.”  See P. Ex. B at 7, 10, 14, 19.  There is nothing in the record to indicate when or how the results of the IDR review were transmitted to the parties.

Petitioner asserted that on November 27, 2023, the state agency notified Petitioner that as a result of the November 9, 2023 inspection, “the previous recommended penalties would continue from the October 4, 2023 notice.”  RFH at 2.⁷  Petitioner learned through a telephone conversation with an individual at the state agency that as of December 8, 2023, the state agency’s regional program manager had not received the IDR recommendations.  See P. Ex. C at 1.  On December 20, 2023, after the 60-day appeal deadline passed, Petitioner learned through another telephone conversation, this time with an employee at the Dallas Survey & Enforcement Division of CMS, that the state agency had rejected the IDR recommendation by decision dated December 18, 2023, and upheld the original “J” level Tags.  See id.  Petitioner asserts that two days after that phone call, on December 22, 2023, it received a copy of the state agency’s December 18, 2023 decision, via the U.S. Postal Service.  See id.⁸

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By notice dated December 13, 2023, CMS notified Petitioner that based on the November survey, Petitioner was not in substantial compliance with the following two participation requirements, each at a scope and severity level of “D”:

• § 483.21(b)(1)(3) – Develop/Implement Comprehensive Care Plan (Tag F656); and
• § 483.21(b)(3)(i) – Services Provided Meet Professional Standards (Tag F658).

CMS Ex. 1, at 16.  CMS informed Petitioner that the state agency reported “that the deficiencies cited during the September 21, 2023, and November 9, 2023, surveys . . . have been corrected.  Your facility achieved substantial compliance with the requirements for Medicare participation on December 8, 2023.”  Id.  CMS imposed enforcement remedies consisting of the DPNA already imposed and in effect from October 19, 2023, through December 7, 2023, and the $19,460 Per-Instance CMP already imposed; and rescinded the Termination of the Provider Agreement.  Id. at 16-17.  Finally, CMS notified Petitioner if it wished to appeal the findings of noncompliance from the November 9 survey, it must file a request for hearing by February 11, 2024.  Id. at 17.

On December 21, 2023, Petitioner filed its request for an ALJ hearing.  See RFH.

ALJ Proceedings and Dismissal

Petitioner requested a hearing “concerning the allegations of noncompliance from all of the surveys that led to the imposition of the adverse action contained in the above-described CMS notices enclosed with this appeal.”  RFH at 3 (and attached the state agency notice dated October 4, 2023, and CMS notices dated October 18, 2023, and December 13, 2023).  Petitioner argued that the “facts, conditions, and occurrences at the facility” did not support the deficiencies that Petitioner was cited for and that it “disputes the findings and conclusions of the survey team.”  Id. at 3-6.

Petitioner acknowledged that its request for hearing was late but asserted that it had good cause to extend the filing due date because the state agency failed to notify Petitioner until after the hearing request deadline passed that it rejected the IDR recommendation, further asserting that because of the state agency’s “underhanded tactics, Petitioner had no notice that the favorable outcome received from MPRO was being ignored.”  See id. at 5-6.  Petitioner clarified that it “did not appeal by the December 17, 2023 deadline found in the original notice from CMS, because at the time Petitioner believed it had received the relief due to them under MPRO’s decision.”  Id. at 2.  Petitioner further argued the appeal was filed only four days late, and CMS would “suffer no prejudice” and to hold otherwise would deny due process to the Petitioner.  Id. at 6.

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CMS filed a motion to dismiss, arguing “Petitioner did not file a timely request, as required by 42 C.F.R. § 498.40(a)(2) or establish good cause to extend the time within which it could be filed, as required by 42 C.F.R. § 498.40(c).”  CMS Mot. to Dismiss at 1.  CMS asserted Petitioner’s hearing request was untimely because, as established in CMS’s notice of noncompliance, Petitioner had until “Monday December 18, 2023” (December 17, 2023 was a Sunday) to file its appeal, but “Petitioner filed its request for a hearing on December 21, 2023, three days after the December 18, 2023 deadline.”  Id. at 2.  CMS further asserted that Petitioner’s assumption that the state agency would adopt the IDR recommendation did not establish good cause because “the IDR process established by 42 C.F.R. § 488.331 does not toll the federal appeal process because it is a separate procedure in addition to the appeal rights provided to facilities under federal regulations,” and “participation in state IDR has been repeatedly held by the Board not to be good cause for granting an extension of time for filing a request for hearing.”  Id. at 3-4.

In its response, Petitioner reiterated that it “did not appeal by the December 17, 2023 deadline found in the original notice from CMS, because on December 17, Petitioner believed that [it] had received all relief sought because of MPRO’s decision.”  P.’s Resp. to CMS’s Mot. to Dismiss at 3.  Petitioner argued that it was not until “December 20, 2023, [that] Petitioner was made aware [the state agency] had prepared a December 18, 2023 notice letter, giving Petitioner until the day before that letter to appeal its flawed decision not to follow the well-reasoned decision of MPRO.”  Id. at 3 (emphasis omitted).  Petitioner further argued the state agency’s “wrongful conduct” and “actions created the need for this appeal, which is a circumstance outside the control of Petitioner,” therefore establishing good cause for the late appeal.  Id. at 4-5.  Lastly, Petitioner “ask[ed] for a finding of good cause for justice and because [CMS] will not be prejudiced by the late filing of the appeal.”  Id. at 6.⁹

On February 22, 2024, the ALJ dismissed Petitioner’s hearing request “because Petitioner failed to file it timely, and because Petitioner has not established good cause for its failure

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to do so.”  ALJ Dismissal at 1.¹⁰  The ALJ found that “Petitioner does not deny that it received CMS’s notice on October 18, 2023[, and] Petitioner did not file a hearing request until December 21, 2023, three days after the 60-day filing deadline.”  Id.  Regarding whether Petitioner established good cause, the ALJ explained that while the regulation at 42 C.F.R. § 498.40 does not define “good cause,” the Board has held that “this term meant something beyond a party’s ability to control that prevented it from filing a timely hearing request.”  Id. at 2 (citing Hospicio San Martin, DAB No. 1554 (1996)).  The ALJ found Petitioner’s good cause argument unpersuasive and determined that Petitioner did not establish good cause, stating:

Petitioner’s receipt of the IDR recommendations after the deadline for filing its hearing request provides it with no excuse for its untimely filing.  The IDR process is independent from CMS’s determination. 42 C.F.R. § 488.331. There is nothing in the regulations to suggest that participation in IDR tolls the deadline for filing a hearing request.  Consequently, a party may not rely on an ongoing IDR process as a reason not to file its request timely.

In fact, nothing in the IDR process prevented Petitioner from filing its hearing request.  Petitioner knew, as of October 18, 2023, that CMS had made noncompliance findings and that it was imposing remedies based on those findings.  The report of those findings – supplied along with the October 18 notice – gave Petitioner all the information that it needed to file [a] hearing request. Petitioner might have expected that IDR would result in some recommended modifications of CMS’s determination – as indeed, it did – but that did not prevent Petitioner from protecting its rights by filing a hearing request.

Id. at 2-3 (citations omitted).

Petitioner did not ask the ALJ to vacate the dismissal in accordance with 42 C.F.R. § 498.72.  Petitioner timely appealed the dismissal to the Board.  P.’s Req. for Review of Dismissal (RR).

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).

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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, No. 9:07-CV-80940 (S.D. Fla. Aug. 15, 2008).

Analysis

Before the Board, Petitioner argues the ALJ “fundamentally misunderstood the argument made by Petitioner regarding the good cause to permit the late filing of its request for hearing” because Petitioner “had already received the results of its request for IDR” but was instead arguing that it was the state agency’s “bad faith failure of notice” that caused “the late filing.”  RR at 1.  Petitioner reiterates it “did not appeal by the December 17, 2023 deadline found in the original notice from CMS, because on December 17, Petitioner believed that it had received all relief sought because of MPRO’s decision,” but “unbeknownst to Petitioner, [the state agency] had made a contrary decision and then failed to provide notice regarding the same until after the deadline” to file its hearing request.  Id. at 4.  Petitioner further argues the dismissal should be overturned because the ALJ incorrectly stated that Petitioner was awaiting the results of IDR review, was unaware of the IDR recommendation, and that Petitioner could not have known of the IDR results until after the appeal deadline, which Petitioner argues are all false and asserts it was the state agency’s “actions [that] necessitated the appeal after the deadline had passed.”  Id. at 5-6.  Petitioner further repeats its previous good cause arguments.  See id. at 6-8.  Petitioner also asserts its appeal was only a few days late, CMS “will suffer no prejudice,” “[t]o hold otherwise would be to deny due process to the Petitioner,” and “ask[s] for a finding of good cause for justice.”  Id. at 8.

As discussed below, Petitioner’s arguments on appeal are without merit.  Petitioner does not dispute the ALJ’s finding that it received CMS’s notice via fax on October 18, 2023.   ALJ Dismissal at 1.  Petitioner also acknowledges that its request for hearing was due 60 days later, or on December 18, 2023, and does not dispute that it filed its request on December 21, 2023, three days after the deadline.  Id.; see RR at 4.  Thus, Petitioner does not dispute the ALJ’s finding that “Petitioner failed to file [its hearing request] timely.”  ALJ Dismissal at 1.  Accordingly, the only issue before us is whether the ALJ abused the discretion conferred by section 498.70(c) in dismissing Petitioner’s request for hearing that was not timely filed, and in finding no good cause shown to support an extension pursuant to section 498.40(c)(2).  We find no abuse of discretion and uphold the ALJ Dismissal.

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A. The ALJ’s finding of no good cause to extend the appeal due date was not an abuse of discretion.

Section 498.40(a) requires an “affected party entitled to a hearing” to file its request for a hearing “in writing within 60 days from receipt of the notice of initial . . . determination unless that period is extended” by the ALJ.  Section 498.40(c), in turn, provides as follows:

(c) Extension of time for filing a request for hearing.  If the request was not filed within 60 days—

(1) The affected party or its legal representative or other authorized official may file with the ALJ a written request for extension of time stating the reasons why the request was not filed timely.

(2) For good cause shown, the ALJ may extend the time for filing the request for hearing.

42 C.F.R. § 498.40(c).  The Board has never attempted to provide an authoritative or complete definition of the term “good cause,” as stated in section 498.40(c)(2).  See, e.g., New Grove Manor at 11.  It is a decision that is committed to the ALJ’s broad discretion on a case-by-case basis.  Id. (citing Waterfront Terrace at 5).  Here, we need not decide the precise scope of “good cause” because the ALJ’s factual findings support the ALJ’s good cause determination “under any reasonable definition” of that term, and because Petitioner’s asserted reasons for failing to file a timely hearing request do not—under our prior decisions—warrant an extension of the filing deadline.  See id.

As an initial matter, both the CMS notice and applicable Medicare regulations put Petitioner on clear, unmistakable notice of the filing deadline that applied if it wished to appeal CMS’s initial determination.  As the ALJ noted, and Petitioner does not dispute, the CMS “notice explicitly told Petitioner that if it desired a hearing to challenge CMS’s determination, it must file its request within 60 days of its receipt of the faxed notice,” and specifically “told Petitioner that the 60th day was December 17, 2023.”  ALJ Dismissal at 1.  Additionally, CMS’s notice included a section discussing Petitioner’s right to request a hearing, which told Petitioner it had the right to request a hearing before an ALJ if it disagreed with the determination, and that the “[p]rocedures governing [the appeal] process are set out in 42 CFR § 498.40, et seq.”  CMS Ex. 1, at 8.  Section 498.40, as noted, clearly states the 60-day filing deadline that applies, and that the deadline may be extended only by the ALJ.  See 42 C.F.R. § 498.40(a), (c)(2).CMS further warned Petitioner:  “You must file your hearing request electronically by using the Departmental Appeals Board’s Electronic Filing System (DAB E-File) . . . no later than December 17, 2023 (60 days from the date of receipt of this letter via fax).”  Id. at 9 (emphasis in original).  Therefore, the CMS notice provided Petitioner

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with “clear notice of its right to request a hearing and the deadline for making such a request.”  Hillcrest Healthcare, L.L.C., DAB No. 1879, at 7 (2003); see also Rutland at 7-8 (rejecting the facility’s argument that the CMS notice letter was ambiguous as to its appeal rights and not clear that IDR was not a formal appeal because the notice letter stated “in plain, unmistakable terms how it could request an ALJ hearing to appeal the determination . . . and the deadline for doing so”).  Petitioner does not assert that the CMS notice was unclear with respect to the filing deadline but argues it had good cause for missing the deadline.

In rejecting Petitioner’s good cause argument, the ALJ stated:

Petitioner’s receipt of the IDR recommendations after the deadline for filing its hearing request provides it with no excuse for its untimely filing. The IDR process is independent from CMS’s determination. 42 C.F.R. § 488.331. There is nothing in the regulations to suggest that participation in IDR tolls the deadline for filing a hearing request. Consequently, a party may not rely on an ongoing IDR process as a reason not to file its request timely.

ALJ Dismissal at 2.

Petitioner argues the ALJ misstated the facts and misunderstood Petitioner’s argument.   Petitioner maintains that it was not arguing that awaiting IDR results constituted good cause because Petitioner had “received the favorable IDR results long before the deadline for appeal,” but was instead arguing that it was the state agency’s “bad faith failure of notice” that caused “the late filing” and “necessitated the appeal after the deadline had passed.”  RR at 1, 6.  Petitioner makes clear that it did not appeal by the December 17, 2023 deadline found in the original notice from CMS, because by “mid-November” Petitioner had received the IDR results and “was pleased with the remedies recommended” and Petitioner believed that it had received “all of the relief that it would have sought in an appeal.”  Id. at 7.  However, “unbeknownst to Petitioner, [the state agency] had made a contrary decision and then failed to provide notice regarding the same until after the deadline” to file its hearing request.  Id. at 4.  Specifically, Petitioner argues there is good cause because the state agency failed to give timely notice of its decision rejecting the IDR recommendation to Petitioner, and this delay was “wrongful” and “created the need for this appeal” by overturning the favorable IDR results.  Id. at 6-7.

We agree with the ALJ that Petitioner’s reliance on the ongoing IDR process and delayed receipt of the state agency’s decision not to adopt the IDR recommendation does not constitute good cause for extending the appeal filing deadline.  While Petitioner asserts it had “received the IDR results” in fact, Petitioner had only received the IDR recommendations, not the results from the state agency.  Petitioner argues that the state agency “never [gave] timely notice of the decision that necessitated the filing of this

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appeal” and asserts this delay was “wrongful conduct” of the state agency that establishes good cause.  See RR at 4, 7.  But Petitioner’s own evidence indicates that as of December 8, 2023, Petitioner knew the state agency regional program manager had not received the IDR recommendations from MPRO.  See P. Ex. C at 1.  Accordingly, when the appeal deadline passed, Petitioner did not know whether or not there had been a final state agency decision on the IDR recommendations, much less a decision by CMS to rescind or modify the remedies imposed in the October 18 notice.  Yet, Petitioner took no action to protect its appeal rights before the December 18 deadline.  Petitioner does not cite any authority requiring the state agency to provide notification of its decision on an IDR recommendation within a certain period.  Petitioner’s argument is centered around the flawed premise that the state agency’s decision, rather than the CMS initial determination, necessitated the filing of an appeal.

CMS provided Petitioner clear instructions in its October 18, 2023 notice that its request for hearing was required to be filed within 60 days from its receipt of the notice, which Petitioner failed to do.  When the state agency notified Petitioner of its decision not to adopt the IDR recommendation is ultimately immaterial because, as explained above, the state IDR process is independent of the formal appeal process under Part 498 regulations and has “no bearing on a CMS initial determination or the deadline for requesting a hearing on that determination.”  See New Grove Manor at 15 (citing Rutland at 6; Cary Health & Rehab Ctr., DAB No. 1771, at 27 (2001) (explaining that the state IDR process is separate from and in addition to the appeal rights provided to facilities under federal regulations)).  Additionally, the IDR regulations are explicit in stating that the use of the IDR process does not delay the effective date of any enforcement actions.  42 C.F.R. § 488.331(b)(1) (“Failure of the State . . . to complete informal dispute resolution timely cannot delay the effective date of any enforcement action against the facility.” (emphasis added)).

Moreover, CMS is not bound to follow or defer to an IDR recommendation, and “CMS has the ultimate authority for the survey findings and imposition of CMPs.”  Kindred Transitional Care & Rehab - Greenfield, DAB No. 2792, at 21-22 (2017); see also Capitol House Nursing & Rehab Ctr., DAB No. 2252, at 5-8 (2009) (explaining that CMS is not required to accept informal dispute resolution results, and a revised Statement of Deficiencies issued by a state agency based on informal dispute resolution does not trigger appeal rights under Part 498); SOM, Ch. 7, § 7212.3 (“[W]hen an outside entity conducts the informal dispute resolution process, the results may serve only as a recommendation of noncompliance or compliance to the State.  The State will then make the final informal dispute resolution decision and notify the facility of that decision.”).

Accordingly, the ALJ’s decision rejecting Petitioner’s arguments for good cause based on an alleged delay by the state agency in sending notice of its decision to not adopt the IDR recommendation was not an abuse of discretion.

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i. Petitioner’s effort to establish good cause alleging that circumstances beyond its control caused Petitioner to miss the appeal due date fails.  

Petitioner asserts that prior decisions have “held that good cause exists when a party identifies ‘circumstances beyond a party’s ability to control.’”  RR at 6.  Petitioner argues that the state agency’s “actions” and “wrongful conduct” in not giving timely notice of its decision to reject the IDR recommendation “is a circumstance outside the control of Petitioner” that establishes good cause.  See id. at 6-7.

First, we have already explained the reasons for rejecting Petitioner’s attempt to rely on an alleged delay by the state agency in notifying Petitioner of its decision after the 60-day appeal deadline expired.  Additionally, to support its argument that “[t]he DAB has previously held that good cause exists when a party identifies ‘circumstances beyond a party’s ability to control,’” Petitioner cites four ALJ decisions, not Board decisions.  RR at 6 (citing Oak Park Healthcare Ctr., DAB CR1917 (2009); Heritage Ctr., DAB CR1219 (2004); Hillcrest Healthcare, L.L.C., DAB CR976 (2002); Hammonds Lane Ctr., DAB CR913 (2002)).  The cases Petitioner cites considered assertions that circumstances beyond the party’s control established good cause for a late filing, but none of the ALJs in those cases actually found good cause had been established.¹¹  As already noted, the Board has not viewed the question of the proper definition as settled.  See New Grove Manor at 11 & 12 n.11; Hillcrest at 5; Glen Rose Medical Ctr. Nursing Home, DAB No. 1852, at 7 n.5 (2002).¹²  Regardless, we need not precisely define the meaning of “good cause” here because Petitioner’s contentions, addressed herein, would not justify extending the hearing request deadline under any reasonable definition of “good cause.”  See New Grove Manor at 11.

The ALJ found “Petitioner knew, as of October 18, 2023, that CMS had made noncompliance findings and that it was imposing remedies based on those findings.”  ALJ Dismissal at 3.  Petitioner asserted that it did not file its appeal by the deadline because the state agency’s review of the favorable IDR recommendation was still pending, and it “would have been a waste of resources for Petitioner.”  See RR at 7 (asserting that at the time of the deadline for this appeal, “Petitioner had received all of the relief that it would have sought in an appeal” from the IDR recommendation, and

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“[f]iling an appeal at that time would have been a waste of resources for Petitioner”).  Petitioner “perceived a cost-benefit tradeoff between continued participation in IDR and invocation of the formal appeal process.”  Hillcrest, DAB No. 1879, at 7.  Petitioner’s assertion that it believed that it had received “all of the relief that it would have sought in an appeal” was factually untrue, as it had received no relief, simply a favorable recommendation.  While Petitioner might have hoped that the state agency would agree with the IDR recommendation, and CMS would follow that recommendation, Petitioner had no assurance that either the state agency or CMS would in fact do so, and to conclude otherwise was unreasonable.  With Petitioner’s apparent consideration of this “cost-benefit tradeoff,” its “tactical choice” to wait for the state agency to decide “came the possibility that the time for filing a hearing request . . . would expire,” as it did here.  Hillcrest, DAB No. 1879, at 7.  An appellant’s inaction on appeal in making such a strategic decision does not constitute good cause.  See id.

Petitioner fails to establish that its late filing was due to circumstances it could not control.  As the ALJ found, “nothing in the IDR process prevented Petitioner from filing its hearing request,” and while “Petitioner might have expected that IDR would result in some recommended modifications of CMS’s determination . . . that did not prevent Petitioner from protecting its rights by filing a hearing request.”  ALJ Dismissal at 3.  Petitioner lost its right to a hearing due to its own deliberate choices.  Moreover, when Petitioner learned on December 8, 2023, that the state agency had not received the IDR recommendations, Petitioner could have filed a request for hearing.  Instead, Petitioner contacted CMS on December 20, 2023, after the appeal deadline passed, and learned that the state agency had issued a decision on December 18, 2023, indicating the state agency was not going to “abide” by the IDR recommendations, but it had not yet been sent.  See P. Ex. C.  Petitioner received a copy of the state agency’s decision on December 22, 2023, not by fax but via the U.S. Postal Service.  ALJ Decision at 4; see also P. Ex. C.  The fact that the state agency’s decision was made on December 18, 2023, on the day the request for hearing was due, does not constitute a “wrongful delay” or “bad faith failure to provide notice” as alleged by Petitioner.

Accordingly, the ALJ’s decision rejecting Petitioner’s arguments for good cause based on “circumstances beyond its control” was not an abuse of discretion.

ii. The ALJ’s dismissal of Petitioner’s untimely request for hearing was authorized by 42 C.F.R. § 498.70(c) and not an abuse of discretion.

The Board has repeatedly held that, absent a showing of good cause for an extension, an ALJ’s dismissal of a late request for hearing is a lawful exercise of authority committed to the ALJ’s discretion.  See, e.g., Christina Paylan, M.D., DAB No. 3112 (2023); New Grove Manor at 2 (“If good cause is not shown, an ALJ has the discretion to deny a request to extend the filing deadline.”); Transnet Home Grp., DAB No. 3027, at 1-2 (2020) (affirming dismissal under section 498.70(c), which “permits – but does not

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require – an ALJ to dismiss a hearing request” filed late and without good cause for an extension under section 498.40(c)(2)); West Side House at 6 (concluding the ALJ did not abuse discretion in determining that the SNF did not show good cause to extend the time to request a hearing).

Having agreed with the ALJ’s findings that there was no good cause for Petitioner’s untimely filed request for hearing, we reject Petitioner’s assertion that the ALJ committed “clear error” in dismissing its request for hearing.

B. To the extent Petitioner asks the Board to vacate the ALJ Dismissal and remand this case for hearing and decision for constitutional or equity reasons, the Board has no authority to do so.

Petitioner asserts its “appeal was filed only 3 days after the deadline,” and “[w]ith such an insignificant delay,” we should “find[] good cause for justice and because [CMS] will not be prejudiced by the late filing of the appeal.”  RR at 8.  Petitioner asserts “[t]o hold otherwise would be to deny due process to the Petitioner.”  Id.

Petitioner’s claim of “den[ial of] due process” if this case were not allowed to proceed is without merit.  To the extent Petitioner requests that we disregard the filing deadline established by regulation, we are unable to do so as the Board may not overturn or refuse to follow a regulation for constitutional reasons.  See, e.g., John A. Hartman, D.O., DAB No. 2911, at 24 (2018).  In any event, Petitioner was afforded due process in accordance with Part 498 regulations.  As already noted, CMS’s October 18, 2023 notice was clear and unambiguous in informing Petitioner of its right to request a hearing and the 60-day deadline for making such a request and directly referred Petitioner to the procedures set out in 42 C.F.R. § 498.40.  CMS Ex. 1, at 8-9.  Petitioner failed to meet the regulatory deadline, and its hearing request was subsequently dismissed pursuant to 42 C.F.R. § 498.70(c).  As a provider in the Medicare program, Petitioner is “not in the position of an uninformed layperson” and is expected to understand the program rules and regulations, including filing deadlines.  See Waterfront at 7 (citing Heckler v. Cmty. Health Servs. of Crawford Cnty., Inc., 467 U.S. 51, 63 (1984) (holding that those who participate in the Medicare program are supposed to understand program rules)); see also Cary Health at 19 n.7 (explaining that when the petitioner is “a provider that has executed a contract to receive federal funds for services that it provides on condition that it adheres to regulatory conditions of participation,” justification existed “for holding the provider to some responsibility for being familiar with the rules,” including filing deadlines).

To the extent Petitioner’s assertion could be understood as a request to grant equitable relief, the Board, being bound by the applicable regulations, cannot do so.  See Union Pharmacy & Med. Supplies, Inc., DAB No. 3062, at 7 (2022) (“[T]o the extent that Petitioner seeks equitable relief from the ALJ’s dismissal, the Board has consistently held

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that the Board and the ALJ are not empowered to grant equitable relief.” (citing cases)).  If the Board could simply decline to follow the 60-day deadline for such reasons despite the failure to show good cause, a determination committed to the ALJ’s discretion by regulation, then “the time frame for . . . appeals would become almost meaningless.”  Cary Health at 28.

Conclusion

We affirm the ALJ Dismissal.

Endnotes

¹ The SOM is available at https://www.cms.gov/Regulations-and-Guidance/Guidance/Manuals/Internet-Only-Manuals-IOMs-Items/CMS1201984 (last visited Oct. 17, 2024).

² The background section is drawn from the ALJ Dismissal and the record before the ALJ.  As noted below, several documents referred to by Petitioner are not in the record nor were they presented to the ALJ.  Notwithstanding, we find that the contents of the record are sufficient to address Petitioner’s contentions, and thus we proceed with our review.

³ The Statement of Deficiencies (Form CMS-2567) for the September 21, 2023 survey is not in the record.

⁴ Petitioner’s IDR request is not in the record, but the IDR report is contained at P. Ex. B.

⁵ We note that the IDR review indicates that for all three of the cited deficiencies, “Immediate Jeopardy (IJ) situation was identified on 9/15/2023 9:10 am. While the IJ was removed on 09/19/2023 at 1:09 p.m., the facility remained out of compliance at a severity level of actual harm that is not immediate and a scope of isolated due to the facility’s need to evaluate the effectiveness of the corrective systems.”  See P. Ex. B at 2, 8, 13.

⁶ The Statement of Deficiencies (Form CMS-2567) for the November 9, 2023 survey is not in the record.

⁷ The state agency’s November 27, 2023 notice is not in the record.

⁸ The state agency’s December 18, 2023 decision is not in the record.

⁹ While Petitioner included the findings of the November 9, 2023 survey in its request for hearing, Petitioner did not further address the related CMS December 13, 2023 notice in subsequent filings with the ALJ and, before the Board, does not assert that the ALJ erred in not addressing the December 13 notice.  Accordingly, the Board need not and does not consider that issue further.  See 42 C.F.R. § 498.82(b) (“A request for review of an ALJ decision or dismissal must specify the issues, the findings of fact or conclusions of law with which the party disagrees, and the basis for contending that the findings and conclusions are incorrect.”); see also Guidelines – Appellate Review of Decisions of Administrative Law Judges Affecting a Provider’s Participation in the Medicare and Medicaid Programs, “Completion of the Review Process,” ¶ (a), which is available at https://www.hhs.gov/about/agencies/dab/different-appeals-at-dab/appeals-to-board/guidelines/participation/index.html?language=en (“The Board will not consider issues not raised in the request for review . . . .”); Putnam Center, DAB No. 2850, at 2 & n.4 (2018) (finding that because the facility did not challenge the ALJ’s decision to uphold CMS’s immediate jeopardy determination, the Board need not address it), aff’d, 770 F. App’x 630 (4th Cir. 2019).

¹⁰ 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 Petitioner’s request for hearing pursuant to this regulation.

¹¹ We note that ALJ decisions are not precedential and are relevant to Board analysis only for the inherent value of any persuasive analysis therein.  See Columbus Nursing & Rehab. Ctr., DAB No. 2247, at 8 n.3 (2009) (citing Singing River Rehab. & Nursing Ctr., DAB No. 2232, at 11 n.7 (2009)).  Except for Hillcrest, CR976, the cases cited involve different factual scenarios and as indicated above, all of them found no good cause based on those facts.  The Board issued a decision in Hillcrest, DAB No. 1879, and agreed with the ALJ’s analysis then and now, as noted in this decision.

¹² The ALJ in this case also stated that the Board has held that “good cause” “meant something beyond a party’s ability to control that prevented it from filing a timely hearing request” and cited Hospicio as support.  ALJ Dismissal at 2.  However, in Hospicio, the Board applied the definition of “good cause” cited by the ALJ in that case only after stating that Petitioner did not dispute the application of this definition below.  See Hospicio at 4‑5.