SUBJECT:

Windsor Place Health Care Center,

Petitioner,

Centers for Medicare & Medicaid Services

DECISION

By motion dated March 7, 2002, Windsor Place Health Care Center (Petitioner) asked that I vacate my December 20, 2001 dismissal order and reinstate its case to the active docket. For the reasons set forth below, Petitioner's motion is denied.

Introduction

Petitioner is a nursing facility certified to participate in the Medicare and Medicaid programs as a provider of services. Following a February 6, 2001 survey, the Texas Department of Human Services (State agency), concluded that Petitioner was not in substantial compliance with certain Medicare/Medicaid participation requirements, and recommended sanctions. The Centers for Medicare & Medicaid Services (CMS, formerly the Health Care Financing Administration (HCFA)) agreed and decided to impose the following: denial of payment for new admissions, state monitoring, and a civil money penalty. By letter dated March 16, 2001, Petitioner appealed CMS's determination and requested a hearing. The case was assigned to me, and on March 21, 2001, I issued an order requiring the parties to confer and file, within 60 days, one of several documents, including "a joint or unopposed motion to stay proceedings" so that the parties could engage in settlement negotiations. The order cautioned that "[a]ctive, diligent pursuit of settlement is expected of each party during a stay for settlement negotiations."

On May 18, 2001, Petitioner filed what it characterized as an "unopposed motion" to stay proceedings for a period of 60 days. However, in the text of the motion, Petitioner conceded that, contrary to the explicit language of my order, he was "unable to confer with HCFA's counsel to determine whether HCFA objects to this Motion." HCFA's counsel denies consenting to the motion (See CMS's Response to Petitioner' Motion to Reinstate Case on the Active Docket, at 1), and, for its part, responded to my order by filing a notice of issues and proposed briefing schedule. HCFA's filing of this document represents the only time either party complied with any of my orders during the nine months this case was pending.

By orders dated June 20, 2001, I denied Petitioner's request for a stay and set an October 8, 2001 deadline for the parties to exchange exhibits, witness lists, and other documents. Although given ample time - nearly 120 days - neither party complied with that order. Instead, after the deadline had passed, in a motion mailed October 9, 2001, and received October 15, 2001, ⁽¹⁾ Petitioner requested a stay for an additional 90 days because of global settlement negotiations. By order dated October 23, 2001, I denied Petitioner's motion, noting that "we have long considered that global settlement negotiations are not good reasons to delay cases." I gave the parties an additional 10 days in which to comply with my June 20, 2001 order.

Petitioner did not submit any exchanges, but instead, on November 2, 2001, filed a motion styled "Petitioner's unopposed motion to dismiss without prejudice to reinstatement." I dismissed the matter on December 20, 2001, pursuant to 42 C.F.R. § 498.68(a). In the dismissal order, I reminded the parties that, under 42 C.F.R. § 498.72, an administrative law judge (ALJ) may vacate a dismissal "if a party files a request to that effect within 60 days from receipt of the notice of dismissal and shows good cause for vacating the dismissal." The regulations do not allow for dismissals "with" or "without prejudice."

In a letter dated January 4, 2002 (received January 29, 2002), Petitioner informed my office that it received the dismissal order, dated December 20, 2001, but pointed out an error in the case number - the digit signifying the year filed was incorrect, C-00-506 instead of C-01-506. In that letter, Petitioner stated

While I am certain that this is simply a typographical error, based on the severity of an Order of Dismissal, I figured it would be appropriate to bring this to your attention and seek clarification of the information.

We responded by sending an amended dismissal order with the correct cause number on February 1, 2002.

Petitioner filed its Motion to Reinstate on March 7, 2002. CMS vigorously opposes the motion.

Discussion

The dismissal of a hearing request is binding unless vacated by the ALJ or the Departmental Appeals Board. 42 C.F.R. § 498.71(b). I may vacate my dismissal "if a party files a request to that effect within 60 days from receipt of the notice of dismissal and shows good cause for vacating the dismissal." 42 C.F.R. § 498.72. CMS argues that I have no authority to vacate the dismissal here because Petitioner's motion was filed more than 60 days after its receipt of the December 20, 2001 dismissal. In the alternative, CMS claims that Petitioner has not shown good cause for my vacating the dismissal.

1. Petitioner did not file a timely request to vacate the dismissal.

With respect to the timeliness issue, I lack jurisdiction to vacate my December 20, 2001 dismissal. The regulation leaves no room for discretion: I may vacate if the request is filed within 60 days. 42 C.F.R. § 498.72. Petitioner concedes that it timely received the December 20, 2001 dismissal, and does not dispute that its request to vacate was not filed within 60 days of that receipt. Instead, Petitioner claims to have been misled by the error on the face of the December order and the issuance of the amended order.

I have no doubt that Petitioner well understood that the December order terminated this matter and removed it from my jurisdiction. The order itself refers to Petitioner's October 9, 2001 motion to extend the October 8, 2001 deadline. It refers to my November 1, 2001 order giving the parties ten days from the date of that order to submit their final exchanges, and it refers to Petitioner's November 2, 2001 motion to dismiss "without prejudice to reinstatement in lieu of submitting its final exchanges." Certainly these specifics left no doubt as to which case had been dismissed. Indeed, in its January 4, 2002 letter, Petitioner acknowledged that it understood to which case the dismissal referred.

It is long-settled that revising a judgment "in an immaterial way does not affect the time within which litigants must pursue an appeal." Federal Trade Commission v. Minneapolis-Honeywell Regulator Co., 344 U.S. 206, 211-212, 73 S.Ct. 245, 249, L.Ed 245 (1952).

Minneapolis-Honeywell presented a question of jurisdiction: whether a petition for certiorari was filed within the period allowed by law. There, the Court of Appeals for the Seventh Circuit issued a decision on July 5, 1951, that reversed "Count III" of a complaint brought by the Federal Trade Commission (Commission). The Commission subsequently asked the court to affirm and enforce Parts I and II, which were uncontested. On September 15, the Seventh Circuit issued what it called its "Final Decree" which reiterated the dismissal of Count III, and then went on to affirm Parts I and II. On December 14, the Commission filed its petition for certiorari. In rejecting the petition as untimely, the Supreme Court stated:

[W]e cannot hold that the time for filing a petition for certiorari was enlarged simply because [the Commission's written request for affirmance of Parts I and II] may have prompted the court below to take some further action which had no effects on the merits of the decision that we are now asked to review in the petition for certiorari.

Id. The Court went on to articulate the test for determining when a second order renews the running time for appeal: only when the lower court changes a substantive matter or resolves a genuine ambiguity in the earlier judgment.

The test is a practical one. The question is whether the lower court, in its second order, has disturbed or revised legal rights and obligations which, by its prior judgment, had been plainly and properly settled with finality.

Id. See also Zink v. United States, 929 F.2d 1015, 1020 (5^th Circuit 1991) and cases cited therein. The Minneapolis-Honeywell Court also specifically rejected the Commission's suggestion that the lower court's captioning its second order "Final Decree" enlarged the time limits.

While Petitioner attempts to persuade me that I should not follow the unambiguous directions of the Supreme Court on this issue, it cites no contravening authority, and offers no persuasive explanation as to why I should not follow that court's reasoning. Petitioner does not suggest that its January 4 letter, pointing out the typographical error, constituted a request to vacate within the meaning of 42 C.F.R. § 498.72, and nothing in the "amended order" suggests the necessary finding of good cause to vacate nor that the dismissal was vacated. Petitioner has not shown that its January 4 letter enlarged its time to file a request to vacate. As with the Commission's written request for affirmance of Parts I and II, it simply "prompted . . . further action [in this case, issuance of the same order with the correct docket number] which had no effects on the merits of the decision." If anything, the situation here, correcting an obvious typographical error in the case caption, is less significant than the Seventh Circuit's changes in Minneapolis-Honeywell.

2. Petitioner has not shown good cause for vacating the dismissal.

Even if I accepted that I have jurisdiction to vacate my earlier dismissal, I am not authorized to do so absent a showing of good cause. 42 C.F.R. § 498.72. The term "good cause" is not defined in the regulations, but has been interpreted to mean a circumstance beyond a party's ability to control. Nacogdoches Convalescent Center, DAB CR680 (2000); Hospicio San Martin, DAB CR387 (1995), aff'd, DAB No. 1554 (1996). Petitioner objects to that interpretation, but offers no support for an alternative.

Petitioner has not demonstrated circumstances beyond its ability to control. In fact, the opposite is true: the circumstances here are the direct result of the Petitioner's deliberate actions and inactions. This matter pended on my docket for nine months. During that time, I saw no evidence that Petitioner intended to move this case forward, either through active, diligent pursuit of settlement, or by even the most basic preparation for hearing. ⁽²⁾ Instead, those nine months were characterized by delay and refusal to comply with even the simplest of my orders. Certainly, Petitioner has never suggested any interest in pursuing a hearing. In requesting dismissal, Petitioner conceded that the matter "has been on the ALJ's docket for quite some time," but asserted that --

with the notion of imminent settlement pending it does not make sense to continue to push this case to a formal hearing. This dismissal without prejudice will allow the parties the additional time needed to resolve these final matters without further clogging the ALJ's docket or the need to continually extend the various deadlines that would arise if the case were to remain on the active docket.

Petitioner's Motion to Dismiss, at 2. Even now, Petitioner has not suggested any interest in actively pursuing its appeal. It asks for reinstatement "[b]ased on the uncertainty of the viability of continued settlement negotiations." Petitioner's Motion to Reinstate.

Petitioner voluntarily withdrew its request only when pressed to the wall, claiming - apparently unilaterally - agreement between the parties that any prospective failure in its settlement efforts would constitute good cause to reinstate. Petitioner's position presents two obvious problems: 1) CMS denies any such agreement, and 2) more important, the parties may not by agreement decide what constitutes good cause. That determination is left to the discretion of the ALJ. 42 C.F.R. § 498.72. And I find no good cause here.

My role in the appeals process is to provide petitioners the opportunity to have their appeals heard and decided. See 42 C.F.R. Part 498, Subpart D. The integrity of the process depends on the parties' good faith pursuit of those appeals. Petitioner's apparent expectation that the ALJ "continually extend the various deadlines that . . . arise" may benefit Petitioner, who is not required to pay a CMP until after the issuance of a final administrative decision (42 C.F.R. § 488.442), but disadvantages those parties who legitimately desire to pursue their claims. As Petitioner has acknowledged, its actions "clog. . . the ALJ's docket." Moreover, Congress intended that sanctions have meaning and be "reasonably related to an effort to produce corrective action." See CarePlex of Silver Spring, DAB No. 1683, at 8 (1999). Lengthy delays in adjudication of these cases only undermine that goal to the detriment of those this entire process was designed to protect - nursing home residents.

Congress obviously recognized the problem and anticipated timely adjudication of these matters, providing the hearing officials with broad authority to sanction those that delay the proceedings:

The official conducting a hearing under this section may sanction a person, including any party or attorney, for failing to comply with an order or procedure, failing to defend an action, or other misconduct as would interfere with the speedy, orderly, or fair conduct of the hearing.

(Emphasis added) Act, sections 1819(h)(2)(B), 1128A(c)(4).

I recognize that many cases are settled without need for hearing and consider laudable the parties' efforts to reach settlement in the appropriate cases. ⁽³⁾ However, nothing precludes the parties from pursuing settlement while at the same time preparing for their hearing, and the possibility of settlement does not excuse petitioners from their obligation to pursue diligently their appeals. At a minimum, they must comply with reasonable orders. If the parties truly agreed that the time was not ripe for preparing for hearing, they could appropriately ask that the case be remanded to CMS. No one did that here.

Conclusion

Petitioner did not file its request to vacate within 60 days of its receipt of the notice of dismissal. I therefore lack jurisdiction to vacate. Moreover, even if I otherwise had jurisdiction, Petitioner has not shown good cause for me to vacate my dismissal order.

Petitioner's request to vacate my dismissal of its hearing request and reinstate its case to the active docket is therefore denied.

Carolyn Cozad Hughes

Administrative Law Judge

1. I consider the filing date the date indicated in the certificate of service. Because of the impact of the anthrax crisis on the U.S. mail in late 2001/early 2002, we sometimes experienced lengthy delays between the date "filed" and the date a document arrived at the Civil Remedies Division offices.

2. Petitioner's hearing request stated generally that "Windsor Place disagrees with and disputes each and every individual and specific allegation of noncompliance," "disputes and disagrees with the allegations that the facility was not in substantial compliance," "disputes and disagrees with [the state agency's] determination that the allegations of noncompliance warranted the scope and severity assigned." As its bases for contending that the findings and conclusions were incorrect, Petitioner asserts "the allegations are false and . . . they have not been established by any evidence." CMS raised the issue as to the adequacy of that request under 42 C.F.R. 498.40(b) ("The request for hearing must - 1) identify the specific issue, and the findings of fact and conclusions of law with which the affected party disagrees; and 2) specify the basis for contending that the findings and conclusion are incorrect.") The hearing request is, nonetheless, adequate to withstand a motion to dismiss. Carlton at the Lake, DAB No. 1829 (2002); Alden Nursing Center - Morrow, DAB No. 1825 (2002). However, that the request is so general suggests further that Petitioner had not then determined what this case was about, and Petitioner has taken no subsequent action to suggest that, since filing, it has given any thought to the merits of this case.

3. Indeed, the DAB provides its own Alternate Dispute Resolution (ADR) process to assist the parties with settlement, which Petitioner made no effort to pursue.