SUBJECT:

Premium Diagnostic Laboratory, Inc.,

Petitioner,

Centers for Medicare & Medicaid Services

DECISION DISMISSING
REQUEST FOR HEARING

I dismiss the request for hearing filed in this case by Petitioner, Premium Diagnostic Laboratory, Inc. I do so pursuant to 42 C.F.R. § 498.70(b) because there is no initial determination from which an appeal may be taken and, therefore, Petitioner has no right to a hearing.

I. Background

Petitioner is an independent laboratory. By letter dated March 30, 2000, CMS (formerly known as HCFA) issued a notice of noncompliance and of proposed sanctions to Petitioner for violation of certain Clinical Laboratory Improvement Amendments of 1988 (CLIA) requirements. In this notice, CMS indicated it was taking action to revoke Petitioner's CLIA certificate and to cancel Petitioner's approval to receive Medicare payments for services it performed after April 14, 2000. The notice further indicated that Petitioner could request a hearing from an administrative law judge of the Departmental Appeals Board of this determination. Petitioner timely requested a hearing. This case was assigned to me for a hearing and a decision. However, by letter dated June 29, 2001, CMS notified Petitioner that, based on additional information submitted since the filing of its hearing request, CMS had determined that it would not pursue any sanctions against the laboratory and was withdrawing its determination to revoke the laboratory's CLIA certificate. By letter dated June 29, 2001, counsel for CMS stated that "since there is no longer a basis for a hearing," CMS was requesting that this matter be dismissed for cause pursuant to 42 C.F.R. § 498.70(b) because, in the absence of a CMS determination and sanction, Petitioner had no right to a hearing.

On July 9, 2001, after receipt of CMS letter, I issued an Order giving Petitioner the opportunity to show good cause why this matter should not be dismissed pursuant to 42 C.F.R. § 498.70(b) since CMS had withdrawn its determination and proposed sanctions against Petitioner.⁽¹⁾ On July 18, 2001, I received Petitioner's response to that Order. Essentially, Petitioner argues against dismissal because it had been forthcoming with CMS and had supplied CMS long ago with a credible allegation of compliance which either was not reviewed or not considered credible. Petitioner asserts that it was essentially held guilty and suffered severe consequences from CMS's action, both financially and professionally. As a result, Petitioner contends that CMS's action amounts to an abuse of its discretion and Petitioner needs a judicial decision in order to obtain further judicial review. Petitioner also cited Article 9, sections 4 and 5, of the United Nations Covenant on Civil and Political Rights in support of its contention.

II. Issue, findings of fact and conclusions of law

A. Issue

The issue before me is whether Petitioner continues to have a right to a hearing where CMS has withdrawn its determination to impose sanctions against Petitioner.

B. Findings of fact and conclusions of law

I make findings of fact and conclusions of law (Findings) to support my decision in this case. I set forth each finding below as a separately numbered hearing. I discuss each finding in detail.

1. CMS rescinded the initial determination that it made against Petitioner.

CMS's June 29, 2001 notice to Petitioner plainly rescinds the initial determination that CMS made in this case. The notice specifically states -

We hereby withdraw our determination to revoke your laboratory's CLIA certificate and will notify Medicare to reinstate payment for the period April 4, 2000 until April 13, 2000, the date your laboratory closed and ceased operating.

June 29, 2001 letter from Wayne Moon, Director, CLIA Operations, to Premium Diagnostic Laboratory, Inc.

2. Petitioner has no right to a hearing where CMS has rescinded its initial determination to impose sanctions.

The applicable regulations allow a laboratory dissatisfied with an "initial determination" by CMS to request a hearing conducted in accordance with 42 C.F.R. Part 498, Subpart D. 42 C.F.R. § 493.1844 (a)(1) - (3); 42 C.F.R. § 493.1844(b). The regulations define what are considered to be "actions that are initial determinations" for which a hearing may be requested as, among other things, the revocation of a laboratory's CLIA certificate by CMS because of noncompliance with CLIA requirements and the denial or cancellation of the laboratory's approval to receive Medicare payments for its services. 42 C.F.R. § 493.1844. The scope of an administrative law judge's review in these cases is to determine whether there was a basis for CMS's determination-was the laboratory out of compliance with one or more CLIA requirement conditions. There is no right to a hearing where there is no determination to impose a sanction.

In this case, CMS's rescission of its determination to impose sanctions against Petitioner extinguished that determination. The consequence of CMS's action was to eliminate completely the sanctions determination which was the basis for Petitioner's hearing request. Since no sanctions determination exists now, there is no "initial determination" which would give Petitioner a right to a hearing. Lakewood Plaza Nursing Center, DAB CR691 (2000), aff'd DAB No. 1767 (2001). As the Appellate Panel in Lakewood stated, "[o]nce the initial determination and resulting remedy are rescinded ab initio, there is literally no further remedial action that the ALJ can take under the regulations." Lakewood Plaza Nursing Center, DAB No. 1767 (2001), at 6. Thus, the result is as if no determination had ever been made. I note that, even if CMS had not rescinded its determination and sanctions, the scope of my review would be limited to whether there was a basis for CMS's determination. If I had found there was no basis for CMS's findings and overturned CMS's determination, I could not have provided any greater relief to Petitioner than that which has occurred as a result of CMS's withdrawing its determination and sanctions.

3. Dismissal of Petitioner's hearing request is appropriate.

Dismissal of a hearing request is appropriate where a party has no right to a hearing. 42 C.F.R. § 498.70(b). Here, dismissal is appropriate inasmuch as Petitioner has no right to a hearing because there is no "initial determination" for which a hearing may be requested. Therefore, I dismiss Petitioner's hearing request.

Steven T. Kessel

Administrative Law Judge

1. After issuance of the July 9, 2001 Order to Show Cause, I received a copy of a letter from Petitioner to CMS dated July 5, 2001, indicating that Petitioner opposed the dismissal as "grossly unjust to us."