Health Law Daily Noncompliance citations are not appealable where CMS does not impose a remedy
Friday, September 27, 2019

Noncompliance citations are not appealable where CMS does not impose a remedy

By Jessica Y. Washington, J.D.

The effect of a noncompliance finding on a nursing facility’s five-star rating or public reputation does not trigger a right to appeal.

There is no right to an administrative law judge (ALJ) hearing to contest noncompliance findings in the absence of a CMS-imposed remedy or enforcement action pursuant. Generations at Regency Center, a skilled nursing facility (SNF), filed a hearing request to challenge the Illinois Department of Public Health’s complaint survey that found the SNF not to be in substantial compliance with CMS program participation requirements. The state agency did not impose a civil money penalty against the SNF in conjunction with the complaint survey and brought no enforcement action against the SNF. While the state agency’s findings found the SNF’s compliance deficiency to be eligible for informal dispute resolution, it did not provide for any appeal remedy (Generations at Regency Center v. CMS, Docket No. A-19-13, Decision No. 2950, July 5, 2019).

The Departmental Appeals Board (DAB) noted in its findings that neither it nor ALJs have the authority to ignore unambiguous statutes or regulations on the basis that they are unconstitutional. The DAB further noted that the statutory regulations controlling the matter at hand unambiguously state that an initial determination under 42 C.F.R. §498.3(b)(13) only includes noncompliance findings leading to the imposition of enforcement actions as specified by 42 C.F.R. §488.406 or §488.820. Absent a specifically-stated statutory enforcement remedy granting a right to hearing, as is the case here, no such right exists.

The SNF argued that publication of the noncompliance deficiency would damage its five-star rating and the protected property rights it has in its business. Its concerns included the loss of consumer confidence in its services, the inability to obtain favorable lending terms, exclusion from insurer and managed care networks, and loss of referrals. The DAB rejected the SNF’s arguments, citing precedent that held that "potential harm to a facility’s reputation or financial status that may flow from the publication of deficiency findings does not trigger appeals rights" under the applicable statutory regulations. Further, the DAB found the SNF’s concerns regarding the effect of the survey findings on its five-star rating and reputation to be "collateral consequences" that do not amount to a constitutionally protected property interest.

Companies: Generations at Regency Center; Schowalter Villa; Arcadia Acres, Inc.; Carmel Convalescent Hospital; Florida Health Sciences Center d/b/a Tampa General Hospital; San Fernando Post Acute Hospital; Fountain Lake; Columbus Park Nursing & Rehabilitation Center; High Tech Home Health, Inc.; Sentinel Medical Labs, Inc.; Bryn Mawr Care, Inc.

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