SUBJECT:

Patricio Quines, as owner/operator of 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, Patricio Quines. 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

CMS (formerly known as the Health Care Financing Administration or HCFA) alleged that Petitioner was an owner/operator of Premium Diagnostic Laboratory, Inc. (Premium), an independent laboratory. By letter dated March 30, 2000, CMS issued a notice of noncompliance and of proposed sanctions to Premium for violation of certain Clinical Laboratory Improvement Amendments of 1988 (CLIA) requirements. In this notice, CMS indicated it was taking action to revoke Premium's CLIA certificate and to cancel its approval to receive Medicare payments for services it performed after April 14, 2000. On October 11, 2000, CMS notified Petitioner that it was holding him concurrently liable as an owner/operator of Premium Diagnostic Laboratory, Inc., in connection with the sanction action against Premium. CMS stated in an earlier letter dated September 11, 2000 that this meant that once the revocation action in Premium was final, the CLIA prohibition against the laboratory's owners, operators and director from owning, operating or directing any laboratory for a period of at least two years from the date of the revocation would apply to Petitioner.

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 Premium (and sent Petitioner a copy) that based on additional information, CMS had determined that it would not pursue any sanctions against Premium and was withdrawing its determination to revoke the laboratory's CLIA certificate. By letter dated June 29, 2001, CMS told Petitioner that CMS was not pursuing its action against Petitioner inasmuch as the determination to impose sanctions against Petitioner was corollary to CMS's sanction action against Premium. June 29, 2001 letter from Wayne Moon, Director of CLIA Operations, to Patricio Quines. In a separate cover 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 has no right to a hearing.

On July 1, 2001, Petitioner responded to CMS's letter asserting his opposition to CMS's withdrawal of its determinations and sanctions. Petitioner stated that while the action was welcome, it did not address the specific issues raised in Petitioner's Motion for Summary Judgment. In that motion Petitioner argued that CMS had no right to take such a corollary action in the first instance against Petitioner where there was no evidence that Petitioner was ever an owner or operator of Petitioner.

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 all its determinations and proposed 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 heading. I discuss each finding in detail.

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

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

Enclosed is our notification to Premium Diagnostic Laboratory that we have made the determination to not pursue revocation of the laboratory's CLIA certificate. As a result, since out action against you was a corollary to the sanction against Premium Diagnostic Laboratory, we are not pursuing our action against you, which was initiated on September 11, 2000.

June 29, 2001 letter from Wayne Moon, Director, CLIA Operations, to Patricio Quines.

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

In its original notice of remedy determination, CMS alleged that Petitioner was an owner and or operator of Premium Diagnostic Laboratory. Regulations which implement CLIA provide for a right to a hearing for a laboratory that is the subject of a determination by CMS to impose sanctions against it. 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). However, the regulations do not articulate a right to a hearing for an individual who is sanctioned in the capacity of owner and operator of a laboratory. Had this case been heard on the merits, I might have decided first whether Petitioner had a right to a hearing in his capacity as the alleged owner and or operator of a laboratory.

However, it is unnecessary for me to address that issue in this case. That is because Petitioner plainly does not have a right to a hearing inasmuch as CMS determined to rescind its sanction determination against Petitioner.

Even if Petitioner had a right to a hearing in his capacity as the alleged owner or operator of Premium that right would extend only to challenging a sanction determination made by CMS. In this case, CMS's rescission of its determinations to impose sanctions against Premium extinguished those determinations. The consequence of CMS's action was to eliminate completely the sanction determination which was the basis for Petitioner's hearing request. Since no sanction determination exist 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.

Petitioner opposes the motion to dismiss and contends that I should consider his motion for summary judgment and render a decision on the merits because the issues addressed in the motion may continue to trouble him in the future. In his motion, Petitioner contends that CMS's action against him was in error as CMS never had any jurisdiction over him as he never held a CLIA certificate, nor was he ever an owner or operator of Premium. However, the scope of my review in these matters is very clearly proscribed and, unless there is an "initial determination" subject to review by an administrative law judge under the regulations, I have no authority to hear the matter. To decide the issues presented by Petitioner outside the context of a dispute over which I have jurisdiction would be advisory at best and well beyond the permissible scope of my review.

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