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Introduction. Procedural Due Process, is a necessity to check and balance the power of the administrative agency, the headless fourth branch" of the government. Without a right to a hearing there is no political accountability or constitutional legitimacy.Kenneth C. Davis and Richard Pierce, Adm
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1. No Meaningful Review Under the Due Process Clause: The Aftermath of Shalala v. Illinois Council on Long Term Care, Inc. Ruqaiijah Yearby, J.D., M.P.H.
Assistant Professor,
Institute for Health Law
Loyola University Chicago School of Law
25 East Pearson
Chicago, IL 60611
312.915.6446
ryearby@luc.edu
2. Introduction Procedural Due Process, is a necessity to check and balance the power of the administrative agency, the “headless fourth branch” of the government. Without a right to a hearing there is no political accountability or constitutional legitimacy.
Kenneth C. Davis and Richard Pierce, Administrative Law Treatise (3rd ed 1994)
Procedural Due Process in Medicare Compliance hearings for nursing homes is essential to maintain the industry that in 2000 provided care to 1.6 million elderly and disabled persons and by 2050, 6.6 million people are projected to receive care in nursing homes. The U.S. Department of Health and Human Services’ (“HHS”) has unduly restricted nursing homes’ rights by denying them access to Medicare Compliance hearings when they deprive the nursing home of property. When the nursing home is granted a right to a hearing, it is limited to a meaningless process. I argue that the denial of nursing homes’ procedural Due Process rights by HHS is a Constitutional and statutory violation that the Supreme Court erroneously affirmed by its decision in Shalala v. Illinois Council on Long Term Care, Inc. [hereinafter Ill. Council]. Procedural Due Process in Medicare Compliance hearings for nursing homes is essential to maintain the industry that in 2000 provided care to 1.6 million elderly and disabled persons and by 2050, 6.6 million people are projected to receive care in nursing homes. The U.S. Department of Health and Human Services’ (“HHS”) has unduly restricted nursing homes’ rights by denying them access to Medicare Compliance hearings when they deprive the nursing home of property. When the nursing home is granted a right to a hearing, it is limited to a meaningless process. I argue that the denial of nursing homes’ procedural Due Process rights by HHS is a Constitutional and statutory violation that the Supreme Court erroneously affirmed by its decision in Shalala v. Illinois Council on Long Term Care, Inc. [hereinafter Ill. Council].
3. Road Map Medicare Compliance Hearings
The Problem
Legal Framework
Ill. Council
Reality of Current Hearing Process
Solutions This presentation will show that the U.S. Department of Health and Human Services’ (“HHS”) has unduly restricted nursing homes’ procedural Due Process rights by denying them access to Medicare compliance hearings. I argue that the Constitution, the Administrative Procedure Act (“APA”), and the Medicare Act and regulations mandate that nursing homes be afforded procedural Due Process rights before the loss of the property, namely Medicare payments. Thus, the denial of nursing homes’ rights by HHS is a Constitutional and statutory violation that the Supreme Court erroneously affirmed by its decision in Shalala v. Illinois Council on Long Term Care, Inc. [hereinafter Ill. Council]. This presentation will show that the U.S. Department of Health and Human Services’ (“HHS”) has unduly restricted nursing homes’ procedural Due Process rights by denying them access to Medicare compliance hearings. I argue that the Constitution, the Administrative Procedure Act (“APA”), and the Medicare Act and regulations mandate that nursing homes be afforded procedural Due Process rights before the loss of the property, namely Medicare payments. Thus, the denial of nursing homes’ rights by HHS is a Constitutional and statutory violation that the Supreme Court erroneously affirmed by its decision in Shalala v. Illinois Council on Long Term Care, Inc. [hereinafter Ill. Council].
4. Medicare Compliance Hearing Process Survey and Certification
Appeal of Noncompliance
Appeal of Administrative Law Judge decision
Federal Review
5. Problem: No property and No procedural Due Process No right to a hearing when no remedy imposed
Limited hearing process including written direct testimony and in-person cross examination
6. Legal Framework Constitution
Administrative Procedure Act
Medicare Act and regulations Constitution=> rt to a meaningful review when government deprives individual of property
Goldberg=> rt to a meaningful review when deprived of property
Matthews => three part test determines type of hearing granted to prevent erroneous deprivation of property
Administrative Procedure Act =>
554 => rt to a full-evidentiary hearing
556 =>rt to in-person witness testimony
These rights to a hearing remain subordinate to each agency’s governing statute, which often limit the structure of the hearing process and the right to federal review
Medicare Act and regulations
42 USC 405(b), (g) right to a hearing when dissatisfied with findings
498.60-66 rt to a full-evidentiary hearingConstitution=> rt to a meaningful review when government deprives individual of property
Goldberg=> rt to a meaningful review when deprived of property
Matthews => three part test determines type of hearing granted to prevent erroneous deprivation of property
Administrative Procedure Act =>
554 => rt to a full-evidentiary hearing
556 =>rt to in-person witness testimony
These rights to a hearing remain subordinate to each agency’s governing statute, which often limit the structure of the hearing process and the right to federal review
Medicare Act and regulations
42 USC 405(b), (g) right to a hearing when dissatisfied with findings
498.60-66 rt to a full-evidentiary hearing
7. Illinois Council Supreme Court reviewed the case to determine whether the Medicare compliance hearing process provided meaningful review. If so, then nursing homes were foreclosed from immediate federal review even for Constitutional issues. An association of nursing Homes challenged the constitutionality of the Medicare regulations based in part on the lack of procedural Due Process protections
Case filed in federal court, bypassed HHS
Under Medicare Act, all claims arising under Medicare Act must be presented to agency first and the receive a final action
If these steps were not meet then the federal court had no jurisdiction over the case
Thus before reviewing the nursing homes claims, the Court had to determine if it had jurisdiction
An association of nursing Homes challenged the constitutionality of the Medicare regulations based in part on the lack of procedural Due Process protections
Case filed in federal court, bypassed HHS
Under Medicare Act, all claims arising under Medicare Act must be presented to agency first and the receive a final action
If these steps were not meet then the federal court had no jurisdiction over the case
Thus before reviewing the nursing homes claims, the Court had to determine if it had jurisdiction
8. Illinois Council (cont.) Nursing Homes arguments:
No right to challenge noncompliance findings at a hearing
No opportunity to challenge constitutionality of regulations without exhausting administrative process
9. Illinois Council (cont.) HHS responses:
All nursing homes have a right to challenge noncompliance findings at a hearing
Nursing homes have a right to full evidentiary hearings, so exhaustion requirement is warranted
The Supreme Court upheld this provision in Ill. Council because the Secretary of HHS (“Secretary”) asserted that nursing homes were afforded the right to procedural Due Process protections, which included “the right of any dissatisfied nursing home to a full evidentiary hearing to challenge any findings of noncompliance.”
Notwithstanding the assertions made in Ill. Council, HHS has not provided any of the procedural Due Process rights that the Court relied upon in its ruling in Ill. Council. When no remedy is imposed, the case is summarily dismissed without a final ruling. Hence, as a practical matter it is impossible for nursing homes to gain access to federal review to challenge this Constitutional issue because they never fulfill the finality requirement of the Social Security Act.
Because nursing homes never obtain a final ruling when no remedy is imposed, the Supreme Court’s decision requiring a final decision before federal review has effectively denied nursing homes procedural Due Process to challenge any issue, including Constitutional issues.The Supreme Court upheld this provision in Ill. Council because the Secretary of HHS (“Secretary”) asserted that nursing homes were afforded the right to procedural Due Process protections, which included “the right of any dissatisfied nursing home to a full evidentiary hearing to challenge any findings of noncompliance.”
Notwithstanding the assertions made in Ill. Council, HHS has not provided any of the procedural Due Process rights that the Court relied upon in its ruling in Ill. Council. When no remedy is imposed, the case is summarily dismissed without a final ruling. Hence, as a practical matter it is impossible for nursing homes to gain access to federal review to challenge this Constitutional issue because they never fulfill the finality requirement of the Social Security Act.
Because nursing homes never obtain a final ruling when no remedy is imposed, the Supreme Court’s decision requiring a final decision before federal review has effectively denied nursing homes procedural Due Process to challenge any issue, including Constitutional issues.
10. Reality of Current Hearing Process No right to a hearing unless remedy imposed
No full evidentiary hearings
11. Problems with the Reality No right to a hearing unless remedy imposed
Noncompliance used in future surveys to determine severity of remedies
Noncompliance posted on internet
Survey findings used to determine Medicare fraud and abuse and insurance rates
These findings serve as the basis for the imposition of remedies for future incidents of noncompliance. HHS regularly uses these findings of noncompliance that are not adjudicated for future actions as mandated by the federal regulations.
The Medicare regulations HHS is mandated to consider the nursing home’s history of noncompliance in determining which remedies to impose. HHS also uses the findings to determine Medicare fraud and abuse claims, which result in the loss of Medicare payments and substantial fines. There is no opportunity to challenge the facts underlying these unreviewable claims at a hearing.
In Goldberg, the Supreme Court ruled that the deprivation of property by an administrative agency required due process of law. According to the Court, Due Process of law meant that individuals be granted a right to a hearing when deprived of a Constitutionally protected right, namely a right to property. Nursing homes found out of compliance with the Medicare Act and regulations not provided with a hearing are deprived of property even though no remedy is imposed.
Therefore, HHS’ practices are depriving nursing homes of the property of Medicare payments without any form of a hearing violates the Fifth Amendment, which requires a right to a hearing when individuals are deprived of property, namely Medicare payments. Not only does this violate the Due Process of Clause of the Fifth Amendment, but it also contravenes the rights granted under the Medicare Act because it causes the nursing home injury.
HHS stated no right to a hearing because it does not cause the nursing home injury, however, it does cause nursing homes injury, reputation and financial harm. Although no remedy is imposed, the allegations of noncompliance remain posted on the internet. The findings are also reported to the nursing home ombudsman, the physicians and skilled nursing facility administration licensing board, and the State Medicaid fraud and abuse control units. As part of the public record, these findings harm the reputation of the facility.
It also causes financial harm. The findings are used to impose hasher remedies if there are future violations of the Medicare compliance regulations. Insurance companies also use the information to determining yearly insurance premiums for nursing homes. Hence, nursing homes are harmed by the denial of a right to challenge noncompliance findings when no remedy is imposed.
These findings serve as the basis for the imposition of remedies for future incidents of noncompliance. HHS regularly uses these findings of noncompliance that are not adjudicated for future actions as mandated by the federal regulations.
The Medicare regulations HHS is mandated to consider the nursing home’s history of noncompliance in determining which remedies to impose. HHS also uses the findings to determine Medicare fraud and abuse claims, which result in the loss of Medicare payments and substantial fines. There is no opportunity to challenge the facts underlying these unreviewable claims at a hearing.
In Goldberg, the Supreme Court ruled that the deprivation of property by an administrative agency required due process of law. According to the Court, Due Process of law meant that individuals be granted a right to a hearing when deprived of a Constitutionally protected right, namely a right to property. Nursing homes found out of compliance with the Medicare Act and regulations not provided with a hearing are deprived of property even though no remedy is imposed.
Therefore, HHS’ practices are depriving nursing homes of the property of Medicare payments without any form of a hearing violates the Fifth Amendment, which requires a right to a hearing when individuals are deprived of property, namely Medicare payments. Not only does this violate the Due Process of Clause of the Fifth Amendment, but it also contravenes the rights granted under the Medicare Act because it causes the nursing home injury.
HHS stated no right to a hearing because it does not cause the nursing home injury, however, it does cause nursing homes injury, reputation and financial harm. Although no remedy is imposed, the allegations of noncompliance remain posted on the internet. The findings are also reported to the nursing home ombudsman, the physicians and skilled nursing facility administration licensing board, and the State Medicaid fraud and abuse control units. As part of the public record, these findings harm the reputation of the facility.
It also causes financial harm. The findings are used to impose hasher remedies if there are future violations of the Medicare compliance regulations. Insurance companies also use the information to determining yearly insurance premiums for nursing homes. Hence, nursing homes are harmed by the denial of a right to challenge noncompliance findings when no remedy is imposed.
12. Problems with the Reality No right to a hearing unless remedy imposed
Noncompliance used in future surveys to determine severity of remedies
Noncompliance posted on internet
Survey findings used to determine Medicare fraud and abuse and insurance rates
HHS stated no right to a hearing because it does not cause the nursing home injury, however, it does cause nursing homes injury, reputation and financial harm. Although no remedy is imposed, the allegations of noncompliance remain posted on the internet. The findings are also reported to the nursing home ombudsman, the physicians and skilled nursing facility administration licensing board, and the State Medicaid fraud and abuse control units. As part of the public record, these findings harm the reputation of the facility.
It also causes financial harm. The findings are used to impose hasher remedies if there are future violations of the Medicare compliance regulations. Insurance companies also use the information to determining yearly insurance premiums for nursing homes. Hence, nursing homes are harmed by the denial of a right to challenge noncompliance findings when no remedy is imposed.
HHS stated no right to a hearing because it does not cause the nursing home injury, however, it does cause nursing homes injury, reputation and financial harm. Although no remedy is imposed, the allegations of noncompliance remain posted on the internet. The findings are also reported to the nursing home ombudsman, the physicians and skilled nursing facility administration licensing board, and the State Medicaid fraud and abuse control units. As part of the public record, these findings harm the reputation of the facility.
It also causes financial harm. The findings are used to impose hasher remedies if there are future violations of the Medicare compliance regulations. Insurance companies also use the information to determining yearly insurance premiums for nursing homes. Hence, nursing homes are harmed by the denial of a right to challenge noncompliance findings when no remedy is imposed.
13. Problems with the Reality (cont.) No full evidentiary hearings
No opportunity to clarify genuine issues of material fact
No opportunity for ALJ to determine the veracity or credibility of the witness
No process to make evidentiary objections
14. Solutions Hearing for all noncompliance findings regardless of remedy
Full Evidentiary Hearings
Constitutional challenges receive expedited review Hearing for all major charges of noncompliance regardless of remedy
During hearing process warnings are posted on internet concerning quality of care
Full Evidentiary Hearings with in person direct testimony
Allow Constitutional challenges to be concluded in two weeks then file in federal court
Hearing for all major charges of noncompliance regardless of remedy
During hearing process warnings are posted on internet concerning quality of care
Full Evidentiary Hearings with in person direct testimony
Allow Constitutional challenges to be concluded in two weeks then file in federal court