SUBJECT:

Sharon R. Anderson, D.P.M.,

Petitioner,

The Inspector General

DECISION

I find that Petitioner's hearing request was untimely filed. Therefore, for reasons stated more fully below, I dismiss her request for hearing.

I. Background

After the parties had submitted initial briefing on the I.G.'s motion to dismiss, this case was reassigned to me.⁽¹⁾ On May 7, 2001, I ordered the parties to make a further response to the threshold question concerning the authority of an administrative law judge to hear and decide this matter. I reiterated specific facts in the record which caused me to question whether I had jurisdiction to hear this case. I asked the parties to address these facts and the question of whether Petitioner's appeal was timely filed.

A. Background facts

On January 12, 1983, August 9, 1983, and October 21, 1983, Petitioner executed three Health Education Assistance Loan (HEAL) promissory notes for $9,300, $9,000, and $6,000, respectively. I.G. Ex. 9. The terms and the provisions of the promissory notes are identical except in their amount. Id. The terms of the loans require repayment to the lender to commence ten months after Petitioner ceases being a full-time student, except for any period of legitimate deferment. Id. The terms further provide that if payment does not occur in accordance with the terms and provisions of the note, the lender could declare the HEAL loan in default. Id. The terms also require Petitioner to promptly notify, in writing the lender or any other holder of the notes of any change of name, address, school enrollment status and change in eligible deferment status. Id. Petitioner received several deferments and extensions for her loans and her repayment period began on March 30, 1987, with her first payment scheduled for May 14, 1987. I.G. Ex. 10.

On November 16, 1990, Petitioner filed a Chapter 7 bankruptcy case in the Central District of California. I.G. Ex. 11. Petitioner was declared in default of her HEAL loans by the Public Health Service (PHS) on December 24, 1990. On March 29, 1991, Petitioner obtained the discharge of all "dischargeable debts" which, pursuant to federal law, did not include her HEAL debt. By letter dated November 26, 1991, PHS notified Petitioner that because her HEAL debt was not subject to discharge in her bankruptcy case, she was required to enter into a repayment plan in order to liquidate the HEAL debt. I.G. Ex. 12. She did not comply. I.G. Ex. 18. By letter dated January 28, 1992, PHS informed Petitioner that her HEAL debt was being referred to a private collection agency and, as she had been previously informed, if payment in full was not made or a payment plan negotiated, her account would be referred to the Department of Justice for enforced collection. I.G. Ex. 16. She did not respond. I.G. Ex. 18. On two more subsequent occasions, PHS warned Petitioner that her debt was delinquent and that she must begin immediate repayment to avoid further collection action. I.G. Exs. 17 and 8. In the last of these warnings, PHS again expressly offered Petitioner several alternatives. Petitioner was given instructions for establishing a repayment agreement which required either a good faith payment to accompany Petitioner's proposed monthly payment amount or the establishment of an offset agreement with PHS to have Petitioner's Medicare and/or Medicaid reimbursements directly forwarded to PHS and applied to her debt. The letter further warned Petitioner that if she was unwilling or unable to negotiate an offset or repayment agreement with 60 days of that notice, PHS would immediately refer her case to the Office of the Inspector General for initiation of an exclusion from participation in the Medicare program and any State health care program until her entire debt was repaid. I.G. Ex. 8. Petitioner failed to respond to either of these notices. I.G. Ex. 18. On August 25, 1993, PHS informed Petitioner that since Petitioner had not responded to any of its previous attempts to establish a repayment or offset agreement, and because her account was delinquent, it was exercising its option and declaring the notes due and payable and referring the debt to the Department of Justice for enforced collection. I.G. Ex. 18.

On September 20, 1993, the I.G. notified Petitioner that effective October 20, 1993, she was indefinitely excluded from participation in the Medicare and Medicaid programs, pursuant to section 1128(b)(14) of the Social Security Act (Act), based on her failure to repay her delinquent HEAL debt or to enter into an agreement to repay the debt. I.G. Ex. 5. The notice specifically informed Petitioner that she could request a hearing before an administrative law judge and that the request must be made in writing to the Departmental Appeals Board's Civil Remedies Division within 60 days from her receipt of the I.G.'s letter. Id. Petitioner did not file a request for a hearing and, pursuant to section 1128(b)(14) of the Act, she was excluded until such time as her debt was paid in full.

At the same time, the Department of Justice instituted suit on behalf of the United States in the Unites States District Court for the Central District of California against Petitioner to recover the amounts she owed on her HEAL debt plus additional interest and costs. On February 23, 1994, a default judgment was entered against Petitioner. I.G. Exs. 19 and 20.

On June 20, 1994, Petitioner entered into a Settlement Agreement (Agreement) with the United States to repay the loan. Petitioner, in consideration of the I.G.'s staying the effect of the exclusion, agreed -

• to acknowledge her indebtedness to the United States;



• to make payments of at least $220 per month, due on the 10^th day of each month, beginning July 1994 and continuing until otherwise notified by amendment to this Agreement by the Department of Justice;



• to waived all procedural rights, should default occur, including, but not limited to notice, hearing, appeal and administrative and judicial review, with respect to the immediate reinstatement of the exclusion pursuant to section 1128(b)(14) of the Act and section 1892 of the Act;



• to promptly withdraw any appeal regarding the exclusion either presently before an administrative law judge of the DAB or agree not to request a hearing pursuant to section 1128(b)(14) and section 1892 of the Act, and waive all procedural rights should the stay of the exclusion be lifted; and

• that the Agreement contains a complete description of the bargain between the parties regarding the stay of the exclusion and that Petitioner represents that the Agreement was entered into with knowledge of the events described and was voluntarily entered into to resolve the litigation in the United States District Court.

In return, the United States,⁽²⁾ specifically the I.G., agreed -

• to stay the effect of Petitioner's exclusion from Medicare and Medicaid while Petitioner is in compliance with the terms of the agreement, thereby allowing Petitioner to receive reimbursement from those programs;



• to direct the appropriate State agencies to stay the effect of the exclusion of the Petitioner's eligibility to receive reimbursement under any State health care program;



• to allow Petitioner to repay her debt on a monthly basis; and



• to allow Petitioner to be eligible for full reinstatement into the Medicare and State health care programs upon notice to the I.G. by PHS that Petitioner has satisfied the entire underlying HEAL obligation and any interest due.

I.G. Ex. 6.

The Agreement was executed and Petitioner was notified on July 11, 1994 that, effective with the date of that letter, Petitioner's exclusion had been stayed. Pet. Ex. 1. On May 16, 1997, the United States Attorney sent a letter to Petitioner at the same address indicated on the Agreement, notifying her that she hd been declared to be in default of the Agreement's first scheduled payment on July 10, 1994 and numerous monthly payments thereafter. I.G. Ex. 22. That letter further informed her that because she was delinquent in payment in an amount over $5,600, the stay of her exclusion would be lifted by the I.G. unless payment was received by June 16, 1997. Id.

By letter dated March 31, 2000, this Department's Program Support Center (PSC) informed Petitioner that she was in default of the Agreement and that the stay of her exclusion would be lifted if payment of $2,000 was not made within 14 days. I.G. Ex. 23. The I.G. notified Petitioner, in writing, on May 16, 2000 that because she had defaulted on her repayment agreement, her exclusion had been reinstated, effective May 1, 2000, and would remain in effect until such time as the debt is completely paid.⁽³⁾ I.G. Ex. 1

On June 21, 2000, Petitioner submitted a cashier's check in the amount of $32,000 to the PSC, thereby satisfying in full her delinquent HEAL debt. I.G. Ex. 2. By letter dated July 12, 2000, the I.G. informed Petitioner that, effective July 12, 2000, her participation in Medicare, Medicaid, and all other federal health care programs was reinstated. I.G. Ex. 3. By letter dated August 14, 2000, Petitioner filed a request for a hearing. I.G. Ex. 4.

B. Applicable Law

The I.G. is required to provide individuals excluded under section 1128(b)(14) of the Act with notice of their exclusion. 42 C.F.R. § 1001.2002. That notice must contain: (1) the basis for the exclusion; (2) the length of the exclusion and, where applicable, the factors considered in setting the length; (3) the effect of the exclusion; (4) the earliest date on which the I.G. will consider a request for reinstatement; (5) the requirements and procedures for reinstatement; and (6) the appeal rights available to the excluded individual. 42 C.F.R. § 1001.2002(b) and (c). Excluded individuals are afforded an opportunity to request a hearing before an administrative law judge provided they make a request in writing within 60 days after receiving the notice of exclusion. 42 C.F.R. §§ 1001.2007(b) and 1005.2(c). A petitioner's date of receipt of the notice of exclusion letter is presumed to be five days after the date of such notice unless there is a reasonable showing to the contrary. 42 C.F.R. § 1005.2(c). The regulations do not permit extensions of time beyond the 60-day period nor do they provide a "good cause" exception to that deadline. 42 C.F.R. §§ 1001.2007 and 1005.2(c). Administrative law judges are required to dismiss a hearing request where a petitioner's hearing request is not filed in a timely manner. 42 C.F.R. § 1005.2(e)(1).

II. Findings of fact and conclusions of law

1. Petitioner's request for a hearing was filed untimely.

2. I must dismiss Petitioner's request for a hearing. 42 C.F.R. § 1005.2(e)(1).

III. Discussion

Federal regulations explicitly state that a request for a hearing must be filed within 60 days after a petitioner receives the I.G.'s Notice of Exclusion (Notice). 42 C.F.R. § 1005.2(c). The 60-day time period does not begin to run until the excluded individual has received the requisite Notice. Under federal regulations, a petitioner is presumed to have received the Notice five days after it was sent, absent a reasonable showing to the contrary. 42 C.F.R. § 1005.2(c). The applicable regulation contains no exceptions to the 60-day filing deadline. Moreover, the regulations leave me no discretion; I must dismiss a hearing request where the Petitioner's hearing request is not filed in a timely manner. 42 C.F.R. § 1005.2(e)(1).

Petitioner does not dispute that on September 20, 1993, she was notified by the Office of the Inspector General that she would be indefinitely excluded from participation in the Medicare and Medicaid programs, effective October 20, 1993, until she repaid her HEAL debt. Petitioner's Opposition to I.G.'s Motion to Dismiss (P. Opp.) at 1-2; I.G. Ex. 5. The Notice was complete and conforming in all respects: it stated the basis of the exclusion; the length of the exclusion; the effect of the exclusion; the earliest date on which the I.G. would consider a request for reinstatement; the requirements and procedures for reinstatement; and the appeal rights available to the excluded individual. 42 C.F.R. § 1001.2002(b) and (c). Thus, taking into account the presumed period for receipt of the Notice, Petitioner is deemed to have received the Notice on September 25, 1993. Petitioner was, therefore, required to submit her hearing request by November 24, 1993. She did not. Consequently, because Petitioner chose not to file a hearing request, the exclusion became final after the 60-day filing period elapsed.

Petitioner contends that as an excluded individual she is entitled under the Act to "reasonable notice and opportunity for a hearing . . . ." Section 1128(f) of the Act. Petitioner also, by citing 42 C.F.R. § 1001.2007 and § 1005.2, recognizes that an excluded individual has only a specified period of 60 days from the receipt of the notice to file a request for a hearing. P. Opp. at 4. She also states that she is aware that my jurisdiction is circumscribed. Id. However, Petitioner has chosen to deliberately ignore the September 20, 1993 Notice of Exclusion from the I.G. By this Notice, Petitioner was given reasonable notice and opportunity for a hearing. She was further informed that she had 60 days from the receipt of that Notice to file her appeal. She affirmatively chose not to do so. Her exclusion then became final and any request for a hearing filed after that date was untimely. Thus, her August 14, 2000 request for hearing is, without question, untimely, and I have no authority to hear this matter.

It was only after Petitioner's exclusion became final and binding on her and, perhaps, when she realized that she would not be able to receive Medicare and Medicaid reimbursement for her services, that she attempted to remedy the situation by entering into a settlement with the United States. While she contends otherwise, the I.G. was a party to this agreement and the stated consideration for this agreement was that the I.G. would stay the effect of Petitioner's exclusion as long as she complied with the payment schedule. I.G. Ex. 6 at 1. Petitioner entered into this agreement well after her exclusion became final as an administrative action of the Department. The terms of the agreement are clear; Petitioner agreed that should she default on her repayment she would not request a hearing, that she waived all procedural rights, including but not limited to notice, hearing, appeal and administrative and judicial review, and she voluntarily executed the agreement in order to stay the effect of the exclusion. Id. I conclude that even if Petitioner had timely filed a request for hearing, she voluntarily waived her right to further notice and any appeal rights when she executed the June 24, 1994 Agreement with the United States and, then, subsequently defaulted on her obligations under the Agreement. I.G. Ex. 6; see also I.G. Exs. 22, 23, and 1.

IV. Conclusion

I find that Petitioner was provided proper notice of her exclusion on September 20, 1993, and that she was specifically informed that she had 60 days in which to file a request for hearing. A request for hearing from that Notice should have been filed on or before November 24, 1993. Petitioner did not file a request for hearing within that period. Petitioner's request for hearing, filed on August 14, 2000, is untimely. Therefore, I must dismiss that hearing request on the basis that she failed to file her request for hearing within 60 days of her receipt of the I.G.'s Notice, as required by the regulations.

Alfonso J. Montano

Administrative Law Judge

1. The I.G. submitted a December 7, 2000 motion to dismiss accompanied by four exhibits (I.G. Exs. 1 - 4). Petitioner submitted a response brief on January 16, 2001 accompanied by three exhibits (P. Exs. 1 - 3). The I.G. submitted a reply brief on February 16, 2001 accompanied by 22 exhibits (I.G. Exs. 5 - 27). On March 5, 2001, Petitioner by letter indicated that since the only issue she was instructed to argue and brief was whether an Administrative Law Judge had jurisdiction to hear this matter, that she, unlike the I.G., did not present any evidence or argument speaking to the substantive aspects of her appeal. After the case was reassigned to me and review of the party's submissions, I issued an Order for Further Response on May 7, 2001.

2. The agreement specifically indicated that the U. S. Attorney received the concurrence of this Department (PHS and the I.G.) to the terms of the agreement.

3. Petitioner contends that she did not receive the May 16, 2000 letter until June 15, 2000 because it was sent to her "ten-year-old address." Petitioner's August 14, 2000 letter to Ms. Williams. There is no indication, other than Petitioner's statement, that she specifically informed the I.G.'s office of her new address; however, there is some indication that, because she was a Medicare provider, the Centers for Medicare & Medicaid Services may have had her current address. I.G. Exs. 25, 26, and 27.