Section 1181.101. Facility’s right to a hearing

(a) A nursing facility has a right to appeal and have a hearing if dissatisfied with the Department’s decision regarding:

(1) The interim per diem rate established by the Department, unless a change in the interim per diem rate is made by the Department based on a revision to the net operating portion of the rate as a result of a revision to the applicable net operating cost reimbursement ceiling, in which case the facility may appeal only as to the issue of whether or not the ceiling used to revise the interim per diem rate is in fact the established ceiling for the facility’s geographical grouping and level of care.

(2) The findings of the auditors in the annual audit report.

(3) The determination by the comptroller of the difference between the allowable costs certified by the auditors in the annual audit report, and the total allowance amount as shown on the interim billing.

(4) The denial or nonrenewal of a provider agreement.

(i) A skilled nursing facility that has been either denied an MA Provider Agreement or renewal of the agreement or whose agreement has been terminated in whole or in part by the Department prior to its expiration date, has the right to a full evidentiary hearing before a hearing officer to contest the action.

(ii) Facilities participating in Medicare and the MA Program that are denied renewal of an MA Provider Agreement or have the agreement terminated by the Department because of termination or nonrenewal by Medicare are entitled to the review procedures specified for Medicare facilities in 42 CFR Part 498 (relating to appeals procedures for determinations that affect participation in the Medicare Program). The final decision entered as a result of the Medicare review procedures is binding for the purposes of participation in the MA Program.

(5) The MA Program enhancement payment consisting of the 2% inflation adjustment of the interim rate or interim cost settlement made by the Department for Fiscal Years 1992-1993, 1993-1994 and 1994-1995.

(i) The facility’s right to appeal shall be limited to the issue of whether:

(A) Its MA Program enhancement payment consisting of 2% inflation adjustment of the facility’s interim rate was calculated in accordance with § § 1181.67(1) and 1181.211 (relating to setting interim per diem rates; and cost reimbursement principles and method).

(B) Its interim cost settlement was calculated in accordance with § 1181.69(c) (relating to annual adjustment).

(ii) This paragraph does not otherwise limit a facility’s right to file an appeal under § 1101.84 (relating to provider right of appeal) or this section from interim rates established under § 1181.221 (relating to determining the interim per diem rate) or established as a result of a revision to the ceilings on net operating costs, or from audit findings or final cost settlement issued with respect to which an interim cost settlement is paid.

(6) The MA Program enhancement payment consisting of the 2% inflation adjustment of the interim rate made by the Department for the period July 1, 1995, through December 31, 1995. The nursing facility’s right to appeal shall be limited to the issue of whether its MA Program enhancement payment consisting of the 2% inflation adjustment of the nursing facility’s interim rate was calculated in accordance with § § 1181.67(1) and 1181.211.

(b) A nursing facility appeal is subject to § 1101.84.

(c) An appeal shall be taken within 30 days of the date that the facility is notified of the decisions in subsection (a). Findings contained in a facility’s audit report which are not appealed by the facility within the 30-day limit will not be considered as part of subsequent appeal proceedings.

(d) An appeal shall be mailed to the Executive Director, Office of Hearings and Appeals, Department of Human Services, Post Office Box 2675, DHS Complex, 6th Floor, Harrisburg, Pennsylvania 17105, with a copy to the Office of Legal Counsel. The appeal request shall specify the issues presented for review.

(e) The Audit Division of the Bureau of Long Term Care Programs may reopen a prior year’s audit if an appeal is filed.

(f) For cost reporting periods ending prior to October 1, 1985, if an analysis of the facility’s audit report by the Office of the Comptroller discloses that an overpayment has been made to the facility, the facility will be bound by § 1101.84(b)(4) and (5).

The provisions of this § 1181.101 codified July 24, 1981, effective July 25, 1981, 11 Pa.B. 2610; amended February 5, 1988, effective February 6, 1988, 18 Pa.B. 556; corrected July 8, 1988, effective February 6, 1988, 18 Pa.B. 3051; amended March 10, 1989, effective immediately and applies retroactively to January 1, 1989, 19 Pa.B. 1005; corrected March 31, 1989, effective immediately and applies retroactively to January 1, 1989, 19 Pa.B. 1405; amended July 17, 1992, effective immediately and applies retroactively to May 5, 1991, 22 Pa.B. 3749; amended July 21, 1995, effective immediately and apply retroactively to July 1, 1992, 25 Pa.B. 2893; amended August 23, 1996, effective immediately and apply to the time period from July 1, 1995, to December 31, 1995, 26 Pa.B. 4086. Immediately preceding text appears at serial pages (201425) to (201427).

Notation

Authority

The provisions of this § 1181.101 amended under sections 201, 403 and 443.1(2) and (3) of the Public Welfare Code (62 P. S. § § 201, 403 and 443.1(2) and (3)).

Notes of Decisions

No basis existed to allow Medical Assistance program provider to pursue separate appeals regarding disputed audit findings of Department of Public Welfare’s final cost settlement report regarding reimbursement claims; dismissal of appeal transferred from Board of Claims to Bureau of Hearings and Appeals was warranted since provider had other appeal before Bureau which provided adequate remedy to seek relief and the transferred appeal challenged same cost adjustments. Lancaster v. Department of Public Welfare, 916 A.2d 707, 712 (Pa. Cmwlth. 2006).

Thirty-day appeal rule for audit reports only applies in subsequent appeal proceedings for prior fiscal years. Twining Village v. Department of Public Welfare, 564 A.2d 1335 (Pa. Cmwlth. 1989).

A facility is not, in order to preserve an interim rates issue, required to file an appeal both from the final audit and settlement and from the interim rate establishment. Twining Village v. Department of Public Welfare, 564 A.2d 1335 (Pa. Cmwlth. 1989).

Petitioner’s identification of the issue for review as ‘‘Audit Report for the Fiscal Period Ended June 30, 1983’’ and failure to specifically identify the reimbursement issue regarding the zero-cost determination in its notice of appeal was not fatal since a zero-cost determination was the only issue of contention. Beverly Enterprises, Inc. v. Department of Public Welfare, 556 A.2d 995 (Pa. Cmwlth. 1989).

A corporation which merged with Medicare health provider and the provider’s parent company preserved the right to the interim rates by following the Department’s instruction to resubmit MA-11 reports using original cost bases for each facility prior to the stock purchase. Manor Health Care Corporation v. Department of Public Welfare, 551 A.2d 628 (Pa. Cmwlth. 1988).

This section authorizes Department of Public Welfare’s audit division to reopen any prior year’s audit if an appeal is filed. Quincy United Methodist Home v. Department of Public Welfare, 530 A.2d 1026 (Pa. Cmwlth. 1987).

While this section establishes an appeals procedure or State rate determinations for medicaid provider claims under 42 CFR 447.258, the Federal regulation does not prohibit a separate cause of action for breach of contract under State Law. Department of Public Welfare v. Divine Providence Hospital, 516 A.2d 82 (Pa. Cmwlth. 1986).

Nursing care facilities have the right to appeal any adjustments made by the Department based on audits performed after the facility filed its annual ‘‘cost report.’’ Harston Hall Nursing and Convalescent Home, Inc. v. Department of Public Welfare, 513 A.2d 1097 (Pa. Cmwlth. 1986).

Cross References

This section cited in 55 Pa. Code § 1101.69a (relating to establishment of a uniform period for the recoupment of overpayments from providers (COBRA)); and 55 Pa. Code § 1181.75 (relating to auditing requirements related to patient fund management).