DEPARTMENT OF HEALTH AND HUMAN SERVICES
Departmental Appeals Board
Civil Remedies Division
In the Case of: John Vanderhorst, Petitioner,
- v. -
The Inspector General.
DATE: May 19, 1989
Docket No. C-93
DECISION
This case is before me on Petitioner's request for a hearing challenging his
exclusion from participation as
a provider in the Medicare and Medicaid programs. I am dismissing the request
because it was not timely
filed and I do not have good cause to allow a late filing.
By letter dated July 29, 1985, the Inspector General ("I.G.") notified
Petitioner that he was being
suspended from participation in these programs for twenty years, pursuant to
Section 1128(a) of the Social
Security Act, 42 U.S.C. 1320a-7(a). The reason provided for Petitioner's exclusion
was his conviction in
federal court of an offense related to his participation in the Medicare program.
Petitioner requested a
hearing by submitting a Petition for Modification of Ineligibility Determination,
postmarked February 1,
1989, protesting the length of his exclusion.
On April 21, 1989, the I.G. moved to dismiss the Petitioner's hearing request,
arguing that it was not timely
filed, and that Petitioner had not shown good cause for the untimely filing.
On or about April 25, 1989,
Petitioner submitted to the I.G. a motion to dismiss his hearing request without
prejudice. This motion to
dismiss without prejudice was not received by me until May 9, 1989. On May 2,
1989, the I.G. filed his
response to Petitioner's Motion to Dismiss, objecting to the dismissal being
without prejudice and asserting
that the case should be dismissed with prejudice.
ISSUES
1. Whether Petitioner's hearing request was timely filed.
2. Whether Petitioner had "good cause" for not timely filing his request for hearing.
3. Whether dismissal of Petitioner's hearing request should be with or without prejudice.
APPLICABLE LAWS AND REGULATIONS
1. Section 1128 of the Social Security Act: As of the date of Petitioner's
suspension, Section
1128(a) of the Social Security Act, 42 U.S.C. 1320a-7(a), required the Secretary
of Health and Human
Services (the Secretary) to suspend from participation in the Medicare and Medicaid
programs any
physician or other individual who had been convicted of a criminal offense related
to that person's
participation in the delivery of medical care or services under titles XVIII
(Medicare), XIX (Medicaid), or
XX (block grants to states) of the Act. The law did not prescribe a minimum
suspension. The law was
revised in August 1987 to require a minimum exclusion from participation in
the Medicare and State health
care programs (including Medicaid) of five years for any individual or entity
"convicted of a criminal
offense related to the delivery of an item or service under title XVIII or under
any State health care
program," Pub. L. 100-93 (August 18, 1987), 42 U.S.C. 1320(a)(1) and (c)(3)(B).
Both the law in effect as of the date of Petitioner's exclusion and the current
law provide that an excluded
individual is entitled to an administrative hearing as to the exclusion. The
law in effect as of Petitioner's
exclusion provided at 42 U.S.C. 1320a-7(e) that an excluded individual is entitled
to a hearing "to the same
extent as is provided in section 205(b) of the Social Security Act." Virtually
identical language is
contained in the 1987 revision at 42 U.S.C. 1320a-7(f)(1). Section 205(b)(1)
of the Social Security Act, 42
U.S.C. 405(b)(1), provides that a person entitled to an administrative hearing
by virtue of an adverse
decision shall be given reasonable notice and opportunity to be heard, and provides
further that the hearing
decision shall be based "on evidence adduced at the hearing." The
statute specified that in order to be
entitled to a hearing, a party requesting a hearing must file the request within
60 days from the date the
exclusion notice is received.
2. Part 498 of 42 C.F.R.: Regulations adopted by the Secretary implementing
the law similarly
require, at 42 C.F.R. 498.40(a)(2), that the party requesting the hearing must
file the request within 60 days
from receipt of the exclusion notice. However, 42 C.F.R. 498.40(c)(2) provides
that "for good cause
shown," the administrative law judge to whom the case is assigned may extend
the time for filing the
hearing request.
FINDINGS OF FACT AND CONCLUSIONS OF LAW
1. On July 29, 1985, Petitioner was incarcerated at the U.S. Federal Prison
Camp, Terre
Haute, Indiana.
2. On July 29, 1985, the I.G. sent written notice to Petitioner, pursuant
to 42 U.S.C. 1320a-
7(c) and 42 C.F.R. 1001.123, advising him that he would be suspended from participating
in the Medicare
and Medicaid programs. I.G. Ex. 1.
3. The notice was received by Petitioner at the Federal Prison Camp in Terre Haute, Indiana.
4. Petitioner's request for hearing, styled "Petition for Modification
of Ineligibility
Determination," was postmarked February 1, 1989.
5. Petitioner had been released from incarceration for approximately 18 months
when he
filed his request for hearing.
6. Petitioner's hearing request was not filed within 60 days from Petitioner's
receipt of the
notice of suspension and Petitioner has not shown good cause for an extension
of the filing deadline.
7. Petitioner is not entitled to a hearing, and his untimely request should
be dismissed with
prejudice.
ANALYSIS
A. Petitioner's Entitlement to a Hearing.
As previously noted, both the Petitioner and the I.G. have moved that Petitioner's
hearing request be
dismissed, and ordinarily I would simply dismiss the case without discussion.
However, since the
Petitioner has requested that the dismissal be without prejudice to him and
the I.G. has objected, insisting
upon a dismissal with prejudice, I must consider the threshold issue of whether
Petitioner is entitled to a
hearing.
The undisputed facts of this case establish that Petitioner did not file his
hearing request within the 60 day
limitations period established by statute and regulation. The Secretary is therefore
under no obligation to
grant Petitioner a hearing. However, the Secretary has established circumstances
where a petitioner may
be granted a hearing, even though he is not entitled to one. The question is
whether "good cause" exists in
order to justify a discretionary grant of a hearing.
The regulations do not define "good cause." The regulations governing
Social Security disability hearings,
which are also conducted pursuant to 42 U.S.C. 405(b), do set forth examples
of what would constitute
"good cause" for missing the filing deadline in Social Security disability
cases. These examples are
enumerated at 20 C.F.R. 404.911(b)(1)-(9). All of these examples describe circumstances
where the party
requesting the hearing endeavors in good faith to request a hearing, but nonetheless
fails to meet the
statutory and regulatory deadline. These examples are not inclusive of all of
the circumstances which
would qualify for a "good cause" exception.
The I.G. contends that Petitioner's hearing request, filed more than three
years after he received the notice
of suspension, was not timely filed. The I.G. argues that, consequently, Petitioner
is not entitled to a
hearing and that I should dismiss the hearing request with prejudice. Petitioner
has merely requested a
dismissal of the proceeding without prejudice. Based upon the exhibits, pleadings
and the applicable
regulations, I conclude that the Petitioner's request was not timely filed,
that there was no "good cause"
which would justify the lateness of filing, and that Petitioner's hearing request
should be dismissed with
prejudice.
Petitioner was the owner and chief operating officer of Vanderhorst Ambulance
Service, Inc. In the
Information filed by the United States Attorney for the Northern District of
Ohio, Western Division (I.G.
Ex. 3), the U.S. Attorney charged that Vanderhorst Ambulance Service, Inc. transported
dialysis patients in
the Toledo, Ohio area between January 1, 1980 and December 31, 1982, and that
Petitioner fraudulently
claimed that such patients were "Bed Confined, Moveable by Stretcher Only,"
when they were not. The
U.S. Attorney further alleged that the false Medicare claims fraudulently billed
by Petitioner were in the
approximate amount of $490,000.00. Under the terms of the Plea Agreement which
Petitioner executed on
July 6, 1983 (I.G. Ex. 2), Petitioner agreed "not to engage in the business
of transporting patients for a fee,
that is the Ambulance business, as either an owner or employee for a period
of five years from the date of
sentencing. . . ."
Petitioner entered a plea of guilty and was convicted of five counts of filing
false Medicare claims in
violation of 18 U.S.C. 287. As a result of his conviction, he was incarcerated
at the Federal Prison Camp
located in Terre Haute, Indiana, when he was notified of his exclusion. Petitioner
received the I.G.'s notice
of suspension shortly after the mailing date of July 29, 1985. He was out of
prison for one and one half to
two years before his counsel filed his request for hearing, which was postmarked
February 1, 1989.
The regulations provide, at 42 C.F.R. 498.40(a)(2), that a party must file
a hearing request within 60 days
from "receipt of the notice" in order to be entitled to a hearing.
Petitioner did not comply with this
regulation when he filed his hearing request on February l, 1989, more than
three years after he received
the suspension notice from the I.G. Petitioner has acknowledged that he received
the notice of suspension
shortly after it was mailed on July 29, 1985 and that he had been out of prison
for over a year and a half
before he requested the hearing, yet he has offered no reason for the delay,
much less "good cause" to
justify it. Thus, it is appropriate to grant a motion to dismiss his request
for hearing as not being timely
filed.
B. Whether the Dismissal Should be With or Without Prejudice.
Petitioner has asked in his motion to dismiss the hearing request that the
dismissal should be without
prejudice. The I.G. concurs that dismissal is appropriate, but strenuously objects
to a dismissal without
prejudice, arguing that Petitioner's request for hearing is untimely and further,
that there is no good cause
for his delay in making the request. Therefore, the I.G. contends, the case
should be dismissed with
prejudice.
The notice of exclusion which Petitioner received in 1985 from the I.G. specified
that Petitioner had 60
days within which to request a hearing. He did not do so. Moreover, he was out
of prison for more than a
year and a half before he made his request for a hearing to review the exclusion.
No request for extension
of time for filing his hearing request was made, nor has Petitioner shown good
cause for his delay. Indeed,
there seems little reason for Petitioner's delay in initiating the hearing request
process, particularly since he
has not been hindered by his incarceration for quite some time. At this point,
even after Petitioner has
already been excluded nearly four years, Petitioner still has not decided whether
he wants a hearing. Under
these circumstances, it is appropriate to dismiss this case with prejudice.
CONCLUSION
Based on the law and record of this proceeding I conclude that Petitioner's
hearing request was not timely
filed within the requirements of 42 C.F.R. 498.40(a)(2), and that good cause
does not exist to excuse the
late filing. The I.G.'s motion to dismiss this proceeding with prejudice is
therefore granted, and the
Petitioner'
motion to dismiss, insofar as he requests dismissal without prejudice, is denied.
____________________________
Steven T. Kessel
Administrative Law Judg
RETURN RECEIPT REQUESTED
Addressees:
George R. Royer, Esquire
Attorney at Law
Suite C
421 North Michigan
Toledo, Ohio 43624
and
Ted K. Yasuda, Esquire
Assistant Regional Counsel
DHHS-Region V
105 West Adams - 19th Floor
Chicago, Illinois 60603
cc: Office of Inspector General
Office of Investigations
Room 3-C-1, Meadows East Building
Baltimore, Maryland 21207
Regional Inspector General
Office of Investigation
Attn: Michael Dyer
105 West Adams, 23rd Floor
Chicago, Illinois 60603