CASE | DECISION |JUDGE | FOOTNOTES

Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD
Civil Remedies Division
IN THE CASE OF  


SUBJECT:

Roy Hollins/Western Reference Laboratory,

Petitioner,

DATE: June 12, 2003
                                          
             - v -

 

Centers for Medicare & Medicaid

 

Docket No.C-03-221
Decision No. CR1055
DECISION
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DECISION

Petitioner's request for hearing dated December 9, 2002, is dismissed pursuant to 42 C.F.R. § 498.70(c) because it was not timely filed. Petitioner has not shown good cause to extend the time for filing an appeal.

I. PROCEDURAL HISTORY

The Centers for Medicare & Medicaid Services (CMS) notified Western Reference Laboratory (WRL) by letter dated May 10, 2002, that it was imposing sanctions against the laboratory, including revocation of WRL's operating certificate and a civil money penalty, due to condition-level deficiencies found during a survey. CMS Exhibit (Ex.) A. The laboratory and one of its operators filed timely appeals. (1) The appeals were scheduled for a joint hearing, but prior to hearing the requests for hearing were withdrawn and on August 6, 2002, I issued orders dismissing both cases.

In response to CMS's Notice dated May 10, 2002, stating that if WRL's CLIA (2) certification was revoked Petitioner Hollins would be prohibited from owning, operating or directing a laboratory for at least two years from the date of revocation, Petitioner Hollins requested a hearing through counsel in a letter dated December 9, 2002. (3) The request for hearing was received and assigned to me for hearing and decision on February 13, 2003. A Notice of Case Assignment and Prehearing Case Development Order was issued at my direction on February 13, 2003.

On March 5, 2003, CMS moved to dismiss the request for hearing in this case for untimely filing. Petitioner filed his response to the motion to dismiss on March 24, 2003.

II. FINDINGS OF FACT AND CONCLUSIONS OF LAW

A. FINDINGS OF FACT

The following findings of fact are based upon the admissions and the undisputed assertions of the parties in their briefs, the request for hearing, and the admitted exhibits:

1. By letter dated May 10, 2002, CMS notified Petitioner that, based on the deficiencies cited by the State agency on the survey that ended on February 13, 2002, CMS would impose sanctions against WRL and that if the WRL CLIA certificate was revoked, Petitioner as an owner would be banned from owning, operating, or directing another laboratory for at least two years. CMS Ex. A.

2. CMS sent the May 10, 2002 notice to Petitioner at WRL and to another address by certified mail. CMS Ex. A.

3. Petitioner is presumed to have received the May 10, 2002 notice on May 15, 2002, absent evidence that it was, in fact, received earlier or later.

4. By letter dated December 9, 2002, Petitioner requested a hearing to challenge the imposition of sanctions of which CMS gave notice by letter dated May 10, 2002.

5. Petitioner's request for hearing bears the date December 9, 2002, nearly seven months after his presumed receipt of the May 10, 2002 CMS notice of intent to impose sanctions.

B. CONCLUSIONS OF LAW

1. Petitioner's request for hearing dated December 9, 2002, was filed more than 60 days after Petitioner received the May 10, 2002 CMS notice of intent to impose sanctions.

2. Petitioner's request for hearing was not timely filed.

3. Petitioner has cited no cause beyond his control as grounds for the late filing of his request for hearing.

4. Petitioner has not shown good cause to justify an extension of the time to file a request for hearing in this case.

5. Dismissal of a late filed request for a hearing is appropriate pursuant to 42 C.F.R. § 498.70(c) when the time for filing has not been extended.

III. DISCUSSION

A. ISSUES

(1) Whether good cause exists to extend the time for filing the request for hearing in this case.

(2) Whether the request for hearing must be dismissed as it was untimely filed.

B. APPLICABLE LAW

The Clinical Laboratory Improvement Amendments of 1988 establishes requirements for all laboratories that perform clinical diagnostic tests on human specimens and provides for federal certification of such laboratories. Pub. L. No. 100-578, amending § 353 of the Public Health Service Act, codified at 42 U.S.C. § 263a et seq. The purpose of CLIA is to ensure the accuracy and reliability of laboratory tests, and hence the public health of all Americans. H.R. Rep. No. 899, 100th Cong., 2d Sess. 8 (1988), reprinted in 1988 U.S.C.C.A.N. 3828, 3829. CMS certification of a laboratory under CLIA is dependent upon whether the laboratory meets the conditions for certification set out in the statute and regulations. 42 U.S.C. § 263a(f)(1)(E); 42 C.F.R. § 493.1 et seq. Pursuant to CLIA, the Secretary of Health and Human Services (Secretary) has broad enforcement authority, including the ability to suspend, limit, or revoke the certificate of a laboratory that is out of compliance with one or more requirements for certification.

The Secretary has exercised his authority under 42 U.S.C. § 263a(f) and issued regulations implementing CLIA. 42 C.F.R. Part 493. The regulations specify standards and the specific conditions of certification that a laboratory must meet to achieve compliance. The regulations confer broad authority on CMS to ensure that laboratories perform as Congress intended, including authority to inspect and sanction laboratories that fail to comply with the regulatory requirements. CMS has the delegated authority to suspend, limit, or revoke the CLIA certificate of a laboratory that is out of compliance with one or more CLIA conditions and may also impose alternative sanctions such as a directed plan of correction or monitoring by the state. 42 C.F.R. § 493.1806.

Pursuant to the enforcement provisions, CMS may impose principal or alternative sanctions against a laboratory when it finds that a laboratory has a "condition-level" deficiency. 42 C.F.R. § 493.1804(b)(2). Principal sanctions include suspension, limitation, or revocation of a CLIA certificate. 42 C.F.R. § 493.1806(b). Alternative sanctions include a directed plan of correction, state on-site monitoring, and civil money penalty. 42 C.F.R. § 493.1806(c). Cancellation and or suspension of Medicare payments are also authorized. 42 C.F.R. § 493.1807(a).

CLIA provides at 42 U.S.C. § 263a(i)(1) that a laboratory's certificate may be suspended, revoked, or limited only after reasonable notice and opportunity for hearing to "the owner or operator of the laboratory . . . ." The Secretary's regulations provide that a laboratory or prospective laboratory dissatisfied with an initial determination listed in 42 C.F.R. § 493.1844(b) is entitled to a hearing before an Administrative Law Judge (ALJ). 42 C.F.R. § 493.1844(a). CMS's decision to suspend, limit, or revoke a laboratory's certificate due to noncompliance with CLIA requirements is an initial determination that is subject to appeal and a hearing by an ALJ. However, the CMS determination that condition-level deficiencies pose immediate jeopardy is not subject to appeal or review. 42 C.F.R. §§ 493.1844(b)(1) and (c)(6). Generally, the suspension, limitation, or revocation of a CLIA certificate is not effective if appealed, until the ALJ issues a decision. However, when CMS declares immediate jeopardy, there is no delay in the suspension, limitation, or revocation of the offending laboratories CLIA certificate. 42 C.F.R. § 493.1844(d)(2).

In addition to sanctions that may be imposed directly against a laboratory, the CLIA statute provides the following with respect to the owners and operators of noncompliant laboratories:

(3) Ineligibility to own or operate laboratories after revocation.

No person who has owned or operated a laboratory which has had its certificate revoked may, within 2 years of the revocation of the certificate, own or operate a laboratory for which a certificate has been issued under this section.

42 U.S.C. § 263a(i)(3). This statutory disability (4) appears to arise by operation of law immediately upon revocation of a laboratory's certification. The statute requires no action by the Secretary for the two-year ban to take effect, no discretion is granted the Secretary, and there is no appeal right specified. The Secretary has not promulgated regulations implementing this provision of the statute. (5) Therefore, the regulations do not specifically provide a right to a hearing to an owner, operator, or director to challenge the application of the two-year statutory ban, which is also not listed in the regulations as an initial decision of CMS or the Secretary. 42 C.F.R. § 493.1844(b). The regulations (6) only grant a right to a hearing to owners, operators, or directors to challenge the CMS decision to sanction the laboratory and the basis for that decision. Id.

CLIA hearings are conducted in accordance with the procedures set forth at 42 C.F.R. Part 498. 42 C.F.R. § 493.1844(a)(2). The regulations are clear regarding the requirements for timely filing a request for hearing. Title 42 C.F.R. § 493.1844(f) provides:

Any laboratory dissatisfied with the suspension, limitation, or revocation of its CLIA certificate, with the imposition of an alternative sanction under this subpart, or with cancellation of the approval to receive Medicare payment for its services, is entitled to a hearing before an ALJ as specified in paragraph (a)(2) of this section and has 60 days from the notice of sanction to request a hearing.

Title 42 C.F.R. § 498.40(2) provides:

The affected party or its legal representative or other authorized official must file the request (for hearing) in writing within 60 days from receipt of the notice of initial, reconsidered, or revised determination unless that period is extended . . . .

The 60-day period runs from the date of receipt by the affected party, which is presumed to be five days after the date of the notice unless it is shown that the notice was received earlier or later. 42 C.F.R. §§ 498.40(a)(2) and 498.22(b)(3). I have the discretion to extend the period for filing a request for hearing if the petitioner files a "written request for extension of time stating the reasons why the request was not filed timely," and I find good cause for the late filing is shown. 42 C.F.R. § 498.40(c). Although the legislative history for 42 C.F.R. § 498.40 is not helpful in understanding the application of these regulatory provisions in this case, (7) the requirement for timely filing a written request for hearing is commonly viewed as the means by which administrative finality can be achieved, i.e., if there is no deadline for filing and an affected party may file at anytime, the record on an action may never be closed. The regulations do not define the term "good cause" that I must find to extend the period for appeal, but an appellate panel of the Departmental Appeals Board (Board) has held that "good cause" means circumstances beyond the provider's control. Hospicio San Martin, DAB No.1554 (1996).

I am authorized to dismiss a request for hearing if it was not timely filed and I have not granted an extension of the period to file. 42 C.F.R. § 498.70(c). Pursuant to 42 C.F.R. § 493.1844(d)(4), an ALJ decision is final unless a party requests review by the Board within 60 days.

C. ANALYSIS

The facts dispositive of the motion to dismiss are not in dispute. A complaint and recertification survey was completed at WRL on February 13, 2002. The State agency that conducted the survey concluded that WRL was not in compliance with several condition-level requirements of CLIA and declared that an immediate jeopardy situation existed. CMS determined that sanctions were necessary including a civil money penalty, a directed plan of correction, cancellation of Medicare payments, and suspension and revocation of WRL's CLIA certificate. CMS notified WRL, its director, owners and operator of the proposed sanctions by letter dated May 10, 2002. CMS Ex. A at 1-4. The CMS May 10, 2002 letter advised the owners, operator, and director of the right to request a hearing by an ALJ within 60 days of the notice. The notice further provided that any hearing would commence within 60 days of receipt of the request for hearing if requested. The notice further advised that, in the event of revocation, WRL's owners, operator, and director would be prohibited from owning operating or directing a laboratory for at least two years from the date of the revocation. Id. at 4-5. The May 10, 2002 notice included Petitioner Hollins as an addressee at the laboratory and to receive a copy by certified mail at another address. Petitioner Hollins does not dispute that he received the notice within five days of the date of the notice, as presumed by the regulations. 42 C.F.R. § 498.40(a)(2) citing § 498.22(b)(3).

CMS notified WRL, its director, owners, and operator by letter dated July 3, 2002, that sanctions were being imposed because WRL had not corrected the condition-level deficiencies of which it was previously noticed. CMS acknowledged receipt of a letter from WRL's legal counsel, but specified that it failed to provide clarification of issues of ownership among other issues. CMS acknowledged receipt of a request for expedited hearing from WRL and its operator, Dr. Lily LaPointe, M.D. Petitioner Hollins was again listed as an addressee with a copy provided by certified mail at another address. CMS Ex. B. Petitioner Hollins does not dispute that he also received this letter.

In his request for hearing dated December 9, 2002, Petitioner alleges that on August 2, 2002, he delivered a letter to CMS in which he contended that he was not an owner or operator of WRL during the period of the survey and he requested to reserve his right to appeal the CMS determination that he was an owner. He acknowledges that by CMS letter dated September 17, 2002, he was advised that the WRL CLIA certificate had been revoked. He alleges that he was advised in late November 2002, that CMS continued to view him as an owner and subject to the two-year statutory ban imposed by 42 U.S.C. § 263a(i)(3).

The May 10, 2002 CMS notice of intent to impose sanctions, which included complete advise as to appeal rights, triggered the running of the 60-day period for filing appeals in this case. (8) Pursuant to the regulation, the May 10 notice was presumably received on Wednesday, May 15, 2002. (9) The first working day following the expiration of the 60-day period for filing a request for hearing was Monday, July 15, 2002. Accordingly, any request for hearing filed after July 15, 2002, was untimely and may only be accepted upon a showing of good cause. Petitioner's December 9, 2002 request for hearing was filed nearly five months late. Further, Petitioner's August 2, 2002 letter in which he requested to reserve his right to appeal, was 18 days late. Hence, even if Petitioner argued that the August 2, 2002 letter should be considered a constructive request for hearing, it was untimely and a showing of good cause to extend the time for appeal would be necessary.

Petitioner argues in his response to the CMS motion that he was mislead by WRL to believe that the laboratory's appeal also protected him "from the proposed sanctions." Petitioner's Brief (P. Br.) at 1. Petitioner further alleges that he was mislead by CMS to believe that he had a "real opportunity to address the issue of (his) ownership in WRL outside of the appeals process." P. Br. at 2. Petitioner does not allege that he did not receive the CMS notices dated May 10, 2002 and July 3, 2002. He also does not allege that he was told by CMS not to exercise his right to request a hearing.

I have considered all the evidence presented and the parties' arguments and conclude that good cause to extend the time for filing a request for hearing has not been shown. Petitioner was fully advised of his right to request a hearing and the impact if sanctions were approved against WRL. "Good cause" for an extension means a cause beyond the Petitioner's control. Hospicio San Martin, supra, at 5. The cause for Petitioner's late filing in this case was not beyond his control but rather represents either a deliberate choice by him to negotiate with CMS rather than request a hearing or his negligent failure to exercise his rights. I find no evidence that CMS misled Petitioner, but rather that CMS consistently told him the same thing, i.e. CMS believed him to be an owner and nothing Petitioner had presented changed that. In light of the thoroughness of the May 10, 2002 CMS notice, I also find it not credible that Petitioner was mislead by WRL to believe that his interests were protected by the WRL or LaPointe requests for hearing. (10)

IV. CONCLUSION

For the foregoing reasons, I conclude that Petitioner's request for hearing was untimely filed and good cause to extend the period for requesting a hearing has not been shown.






JUDGE
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Keith W. Sickendick

Administrative Law Judge

 

FOOTNOTES
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1. The June 28, 2002 request for hearing on behalf of WRL was docketed as C-02-687. The June 20, 2002 request for hearing by Dr. Lily LaPointe was docketed as C-02-688. Both cases were assigned to me for hearing and decision on July 15, 2002.

2. Clinical Laboratory Improvement Amendments of 1988, codified at 42 U.S.C. § 263a (CLIA).

3. On March 21, 2003, Petitioner's counsel withdrew from representation and Petitioner is now pro se.

4. Black's Law Dictionary 461, 1341 (6th ed. 1990) defines disability as the "want of legal capability to perform an act" while a sanction is "a penalty or punishment provided as a means of enforcing obedience to a law." Disability seems the more apt characterization of the "ineligibility" to own or operate imposed by the statute. Furthermore, the regulations are very specific in listing the sanctions that CMS may impose and the two-year ban or ineligibility provided by the statute is not included. 42 C.F.R. §§ 493.1 and 493.1806 - 1807.

5. However, the Secretary has provided by regulation that a laboratory's CLIA certificate may be suspended, limited or revoked if it is determined that an owner or operator has owned or operated a laboratory which had its CLIA certificate revoked within the preceding two years. 42 C.F.R. § 493.1840(a)(8).

6. Section 263a(i)(1)(C) of 42 U.S.C. provides a hearing to an owner or operator to challenge the revocation of a CLIA certificate. Therefore, in order to construe 42 C.F.R. § 493.1844(a) consistently with the requirements of the statute, I conclude that the term "laboratory" in the regulation should be construed to include any individual who CMS is treating as an owner or operator.

7. 52 Fed. Reg. 22,446 (June 12, 1987).

8. Section 498.1844 of 42 C.F.R. sets forth appeal procedures for CLIA cases. Subsection (2) of section 493.1844(a) provides that hearings are conducted in accordance with procedures set forth in 42 C.F.R. Chapter IV, Part 498, subpart D. A request for hearing must be filed within 60 days from receipt of the notice of initial determination; the date of receipt is presumed to be 5 days after the date on the notice unless there is a showing that it was received earlier or later. 42 C.F.R. § 498.40(a)(2) citing § 498.22(b)(3).

9. I take administrative notice of a United States government calendar for 2002.

10. I conclude that neither the Act nor the regulations provide a right to request a hearing to challenge the application of the two-year statutory ban on owning or operating a laboratory. However, if a right to hearing was found to exist, Petitioner's request for hearing was still untimely. Petitioner admits that he received the September 17, 2002 CMS letter advising him that the ban applied to him from August 6, 2002 to August 6, 2004 (P. Br. at 2) and he attached a copy of the letter to his December 9, 2002 request for hearing. Petitioner presumptively received the September 17 notice by September 23, 2002, and the 60-day period for filing a request for hearing expired on November 22, 2002. Thus, Petitioner's December 9, 2002 request for hearing was 17 days late and good cause for extending the time to file has not been shown for the reasons already discussed.

CASE | DECISION | JUDGE | FOOTNOTES