Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-ca11-19-11015/USCOURTS-ca11-19-11015-0/pdf.json

Parties Involved:
Cross Terrace Rehab Inc, LLC
Appellant
Secretary, Department of Health and Human Services
Appellee

Document Text:

[DO NOT PUBLISH]

IN THE UNITED STATES COURT OF APPEALS

FOR THE ELEVENTH CIRCUIT

________________________

No. 19-11015

Non-Argument Calendar

________________________

D.C. Docket No. 8:17-cv-02007-CEH-TGW

CROSS TERRACE REHAB INC, LLC, 

a Delaware Limited Liability Company, 

d.b.a. Cross Terrace Rehabilitation Center,

 Plaintiff - Appellant,

versus

SECRETARY, DEPARTMENT OF HEALTH AND 

HUMAN SERVICES, 

 Defendant - Appellee.

________________________

Appeal from the United States District Court

for the Middle District of Florida

________________________

(January 17, 2020)

Before WILLIAM PRYOR, ROSENBAUM, and GRANT, Circuit Judges.

PER CURIAM: 

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Plaintiff-Appellant Cross Terrace Rehab Inc, LLC (“Cross Terrace”), is a 

provider of skilled nursing services. It requested hearings before an administrative 

law judge (“ALJ”) to contest the denial of several claims for benefits for services 

provided to Medicare beneficiaries. The ALJ dismissed the requests after Cross 

Terrace failed to appear for the scheduled hearings and, in the ALJ’s view, failed to 

establish good cause for its absence. The Medicare Appeals Council (“Council”) 

issued a decision affirming the ALJ, which represented the final decision of the 

Secretary of the Department of Health and Human Services (“Secretary”). Cross 

Terrace then pursued judicial review, and the district court affirmed. Cross Terrace 

now appeals to this Court. We affirm as well.

I.

We begin by outlining the relevant framework for administrative review of 

Medicare claims. The Centers for Medicare and Medicaid Services (“CMS”)

administer the Medicare Program pursuant to the Social Security Act. When CMS 

denies a Medicare provider’s claim for reimbursement, the provider may request 

redetermination, reconsideration, and then, if those requests are denied, an 

evidentiary hearing before an ALJ, who is part of the Office of Medicare Hearings 

and Appeals (“OMHA”). See 42 U.S.C. § 1395ff; 42 C.F.R. §§ 405.920, 405.040, 

405.960, 405.1000. The provider may request review of the ALJ’s decision from 

the Council. 42 C.F.R. § 405.1100(a). The Council’s decision, if unfavorable, is the 

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final step in the administrative process. Id. § 405.1130. Then, the provider generally 

may seek judicial review in federal court. 42 U.S.C. § 405(g).

This appeal is about the ALJ hearing step. A request for an ALJ hearing must 

be in writing and must include, among other information, the names of the 

“beneficiary whose claims is being appealed”; the “appellant, when the appellant is 

not the beneficiary”; and “the designated representative, if any.” 42 C.F.R. 

§ 405.1014(a)(1)(i)–(iii). When an ALJ hearing request is received, the Secretary 

issues a notice of hearing advising of the proposed time and place of the hearing. Id.

§ 405.1020(c)(1). In response, all parties must reply by (1) acknowledging whether 

they plan to attend; (2) “If the party or representative is an entity or organization, 

specifying who from the entity or organization plans to attend the hearing, if anyone, 

and in what capacity, in addition to the individual who filed the request for hearing”; 

and (3) listing the witnesses who will be providing testimony at the hearing. Id.

§ 405.1020(c)(2).

A party has the right to appear before the ALJ to present evidence, including 

witness testimony, and to state his or her position. Id. § 405.1036(a)(1), (c). The 

party “may also make his or her appearance by means of a representative.” Id.

§ 405.1036(a)(2). The regulations provide that a party may appoint a representative, 

who need not be an attorney, “to represent the party in a Medicare claim or claim 

appeal.” Id. §§ 405.902; 405.910(a). To do so, the party must meet several listed

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requirements, see id. § 405.910(c); otherwise, the appointment is defective and “the 

prospective appointed representative lacks the authority to act on behalf of the 

party,” id. § 405.910(d)(2). However, a billing agent of a corporate provider may 

appear on its behalf as its agent without being appointed as its representative. 

Medicare Claims Processing Manual, Ch. 29, § 270.1.1, available at: 

https://www.cms.gov/Regulations-and-Guidance/Guidance/Manuals/downloads/cl

m104c29.pdf (“Billing clerks or billing services employed by the provider or 

supplier to prepare and/or bill the initial claim, process the payments, and/or pursue 

appeals act as the agent of the provider or supplier and do not need to be appointed 

as representative of the provider/supplier.”) (last visited Jan. 7, 2020).

Upon a showing of “good cause,” the ALJ may change the time or place of 

the hearing. The ALJ “can find good cause” if information available to the ALJ 

supports the party’s contention that “[t]he party or his or her representative is unable 

to attend or to travel to the scheduled hearing because of a serious physical or mental 

condition, incapacitating injury, or death in the family.” 42 C.F.R. § 405.1020(f)(1). 

More generally, in evaluating good cause, the ALJ considers “the party’s reason for 

requesting the change, the facts supporting the request, and the impact of the 

proposed change on the efficient administration of the hearing process.” Id.

§ 405.1020(g)(1). 

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“An ALJ dismisses a request for a hearing” when, among other listed 

circumstances, “[n]either the party that requested the hearing nor the party’s 

representative appears at the time and place set for the hearing” and the “ALJ 

determines the party did not demonstrate good cause for not appearing.” Id.

§ 405.1052(a)(1). The party may appeal that dismissal to the Council, which is 

empowered to “deny review or vacate the dismissal and remand the case to the ALJ 

or attorney adjudicator for further proceedings.” Id. § 405.1108(b). The “denial of 

a request for review of a dismissal issued by an ALJ,” according to the regulations, 

“is binding and not subject to further review unless reopened and vacated by the 

Council.” Id. § 405.1116. 

II.

As we have noted, Cross Terrace is a provider of skilled nursing services. As 

relevant here, it sought payment from the Secretary for skilled nursing services that 

it furnished to five Medicare beneficiaries. After these claims were denied both 

initially and upon reconsideration, Cross Terrace requested individualized hearings

before an ALJ. 

On its written requests for hearings before an ALJ, Cross Terrace listed Joyce 

Plourde, Cross Terrace’s appeals manager, as its “representative.” Cross Terrace 

also checked a box indicating that the “appellant will accompany the representative 

at the hearing.” Elizabeth Vargas signed as the “appellant” on behalf of Cross 

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Terrace. On March 22, 2106, OMHA issued a Notice of Hearing for each of the five 

beneficiaries, setting a joint telephonic hearing for the morning of April 28, 2016.

Cross Terrace prepared and submitted a Response to Notice of Hearing for 

each of the cases. The Responses listed Cross Terrace as the “Recipient” of the 

Notices of Hearing and Plourde as the “Recipient’s Representative.” Cross Terrace 

checked the box stating that it “will be present at the time and place shown on the 

Notice of Hearing.” Cross Terrace also included an “appearance list,” in which it 

was instructed to “identify the names of participants and their relationship to [Cross 

Terrace] including their job title or position.” Without clearly designating their 

relationship or position, Cross Terrace listed four individuals who “plan to 

participate in the hearing”: Michael Kornhauser, Esq., Joyce Plourde, Donna Conde, 

and Neimar Campos. Cross Terrace did not complete a valid appointment of 

representative for Plourde or anyone else. 

On the date of the hearing, April 28, no one appeared on behalf of Cross 

Terrace. Later that day, Kornhauser called the ALJ to tell her that Plourde did not 

appear due to a medical emergency. The following day, Kornhauser wrote a letter 

to the ALJ. He advised that he had been retained by Cross Terrace with respect to 

the five appeals and that Plourde, “the individual who is handling this matter,” had 

experienced a health scare which caused her to miss the hearing. Kornhauser 

requested that the ALJ reschedule the hearing. 

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The ALJ issued orders dismissing each of the five cases. According to the 

orders of dismissal, ALJs dismiss a request for a hearing “if neither the party that 

requested the hearing nor the party’s representative appears at the time and place set 

for the hearing” without good cause. The ALJ found good cause to excuse Plourde’s 

absence but stated that “[t]here was no explanation as to why the other three 

scheduled attendees did not appear at the hearing.” The ALJ dismissed the cases

because “good cause has not been established for the other three attendees.”

Cross Terrace appealed to the Council, arguing that the ALJ’s finding of good 

cause for the absence of Plourde, Cross Terrace’s “sole representative,” required 

overturning the dismissals. In Cross Terrace’s view, the three other participants 

were simply “potential witnesses” who were not given advance notice of the hearing 

because Plourde “was fully apprised of the underlying issues and prepared to handle 

the hearing on her own.” Cross Terrace noted that the regulations permit dismissal 

only upon the failure to appear of either “the ‘party’, namely Cross Terrace, or the 

‘party’s representative’, namely, Joyce Plourde,” and not “unnecessary witnesses.”

The Council issued a decision denying Cross Terrace’s requests for review. 

The Council found that the “ALJ properly dismissed the requests for hearing because 

a party or its representative did not appear on the date of the scheduled hearing.” 

While the Council noted that Cross Terrace had established good cause for the failure 

of its representative to attend the hearing, it concluded that the ALJ could reasonably 

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have inferred from the record that Kornhauser “would participate in the scheduled 

hearing on behalf of the appellant.” In support of that inference, the Council noted 

that Kornhauser was listed as a possible participant with the title “Esq.,” and that 

Kornhauser informed the ALJ before the dismissal orders that he had been “retained 

to represent the appellant in these appeals.” The Council also noted that Cross 

Terrace did not explain why Kornhauser or the other two listed individuals were 

unable to appear at the hearing, given Plourde’s medical condition. Concluding that 

Cross Terrace failed to present good cause for its failure to appeal, the Council found 

that the ALJ properly dismissed Cross Terrace’s requests for hearing. 

III.

Cross Terrace then filed this action in federal district court to reverse the 

Council’s decision, invoking the court’s jurisdiction under 42 U.S.C. §§ 405(g) and 

1395ff. The Secretary agreed that the district court had jurisdiction under § 405(g) 

to review whether “[t]he final administrative decision, as rendered by the Council, 

comports with applicable legal standards” and was arbitrary and capricious or an 

abuse of discretion. 

Following briefing by the parties, a magistrate judge recommended that the 

Council’s decision be affirmed because Cross Terrace had failed to establish good 

cause for the failure to appear by all listed participants. The magistrate judge also 

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noted that there was no indication in the record regarding Plourde’s health scare and 

that “a rescheduled hearing would not be fair to the other claimants waiting in line.” 

Over Cross Terrace’s objections, the district court adopted the magistrate 

judge’s recommendation and affirmed the Council’s decision. The court noted that

Plourde was scheduled to appear as a corporate agent, not as an appointed 

representative, and that at least one other Cross Terrace employee was listed as a 

scheduled participant. In these circumstances, according to the court, the ALJ 

reasonably found that, despite Plourde’s absence, Cross Terrace failed to establish 

good cause for its failure to appear through an agent. The court rejected Cross 

Terrace’s argument that the other three listed participants were “fact witnesses,” 

reasoning that Cross Terrace attached these labels after the fact to justify its 

argument. Finally, the court found any error by the magistrate judge in referring to 

“equity” was harmless and that the magistrate judge’s comments about Plourde’s 

medical condition were dicta since the ALJ’s finding of good cause for Plourde’s 

absence was uncontested. 

Cross Terrace now appeals to this Court. We have jurisdiction under 42 

U.S.C. § 405(g).1

 See Bloodsworth v. Heckler, 703 F.2d 1233, 1237 (11th Cir. 1983) 

1 We asked the parties to brief whether the Council’s decision affirming the ALJ’s 

dismissal of Cross Terrace’s requests for an ALJ hearing was a “final decision . . . made after a 

hearing” that is subject to judicial review under § 405(g). Cross Terrace responds that the hearing 

requirement is a matter of administrative exhaustion that may be waived by the Secretary. The 

Secretary, though it originally conceded jurisdiction both in the district court and in its brief on 

appeal, now claims that we lack jurisdiction to review the Secretary’s decision in this case. On 

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(“[A]n Appeals Council review determination, on whatever grounds, is perceived as 

the appropriately ‘final decision’ from which to take an appeal to the district court 

under section 405(g).”).

IV.

The parties agree that our review of the Secretary’s decision is deferential. 

Specifically, they agree that we may not disturb the Secretary’s decision unless it is 

arbitrary, capricious, or an abuse of discretion. At bottom, our function in 

conducting this review is to determine whether there was a reasonable basis for the 

decision in light of the relevant legal standards and the facts known to the agency at 

the time the decision was made. E.g., Motor Vehicle Mfrs. Ass’n of U.S., Inc. v. 

State Farm Mut. Auto Ins. Co., 463 U.S. 29, 43 (1983); Sierra Club v. Van Antwerp, 

526 F.3d 1353, 1360 (11th Cir. 2008). 

Cross Terrace contends that the district court erred in affirming the dismissal 

of its ALJ hearing requests for several reasons: the failure of fact witnesses to appear 

at an ALJ hearing is not a basis for dismissal; a corporate entity may represent itself 

at an ALJ hearing, and Plourde was the only person designated as a corporate agent; 

the Secretary and the district court improperly expanded who can present evidence 

December 19, 2019, we issued an order finding that the hearing requirement was a “nonjurisdictional exhaustion requirement” that the Secretary waived by originally indicating that 

judicial review was available under § 405(g). See Smith v. Berryhill, 139 S. Ct. 1765, 1773 (2019) 

(stating that “an ALJ hearing is not an ironclad prerequisite for judicial review”).

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or appear on behalf of a party to an ALJ hearing, or both; and the magistrate judge 

improperly relied on equity and erred by reweighing the evidence regarding 

Plourde’s absence. Cross Terrace’s arguments, at bottom, amount to a claim that the 

only person authorized to represent Cross Terrace at the hearing was Plourde, so it 

was entitled to a new hearing upon showing good cause for her absence. 

After careful review, we cannot conclude that the agency’s decision to dismiss 

Cross Terrace’s request for a hearing was arbitrary, capricious, or an abuse of 

discretion. 

Under the relevant regulations, an ALJ is permitted to dismiss a request for a 

hearing when “[n]either the party that requested the hearing nor the party’s 

representative appears at the time and place set for the hearing” and the “ALJ 

determines the party did not demonstrate good cause for not appearing.” 42 C.F.R.

§ 405.1052(a)(1). While Cross Terrace asserts that Plourde was the “party’s 

representative,” we disagree. As used in the regulations, the term “representative” 

refers to a person appointed as a representative under the requirements set forth in 

42 C.F.R. § 405.910(c). Cross Terrace did not take the steps to appoint Plourde as 

a “representative” under that regulation. Rather, Plourde was scheduled to appear 

as a corporate agent of the “party,” Cross Terrace, as permitted by the Medicare 

Claims Processing Manual. Accordingly, although Cross Terrace listed Plourde as 

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its “representative” when requesting an ALJ hearing, she was not a “representative” 

as that specific term is used throughout the regulations. 

Thus, the question is whether it was reasonable for the Secretary to conclude 

that “the party that requested the hearing,” Cross Terrace, failed to appear at the time 

and place set for the hearing without good cause. It’s undisputed that Cross Terrace 

established good cause for Plourde’s absence. But that does not necessarily mean 

that good cause was established for Cross Terrace’s absence altogether. A review 

of Cross Terrace’s pre-hearing submissions shows why. 

When it initially requested ALJ hearings, Cross Terrace checked a box 

indicating that the “appellant will accompany the representative at the hearing,” 

suggesting that someone other than Plourde, who was listed as its representative, 

would also be present at the hearing on Cross Terrace’s behalf. That expectation 

was further reinforced by Cross Terrace’s response to the notices of hearing. In its 

response, Cross Terrace was required to (a) “specif[y] who from the entity . . . plans 

to attend the hearing, if anyone, and in what capacity” and (b) “list[] the witnesses 

who will be providing testimony at the hearing.” 42 C.F.R. § 405.1020(c)(2). Cross 

Terrace listed three individuals, in addition to Plourde, who “plan[ned] to participate 

in the hearing.” It did not designate the capacity in which these individuals intended 

to participate or submit a separate list of witnesses. Thus, the ALJ was informed 

that multiple people were expected to appear for Cross Terrace at the hearing. 

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Cross Terrace failed to appear through any of the four scheduled participants, 

however, and it supplied good cause only for the absence of Plourde, not the others. 

Accordingly, the Secretary could have reasonably concluded that dismissal was 

appropriate because Cross Terrace “did not demonstrate good cause for not 

appearing.” 42 C.F.R. § 405.1052(a)(1). 

While nothing in the record clearly shows whether these other participants 

could have appeared on Cross Terrace’s behalf at the hearing, we cannot say it was 

unreasonable for the Secretary to expect that, notwithstanding Plourde’s justifiable 

absence, Cross Terrace would still appear at the hearing through a corporate agent 

or representative. Cross Terrace complains that the listed participants other than 

Plourde were simply fact witnesses, but it did not designate pre-hearing the capacity 

in which the other three individuals would be appearing, only supplying the 

“witness” characterization after the ALJ’s dismissal orders. It was within the 

Secretary’s discretion to accept Cross Terrace’s after-the-fact characterizations, and 

we are not persuaded that its decision not to do so was unreasonable. 

For these reasons, Cross Terrace has not shown that the Secretary’s decision 

to deny Cross Terrace’s requests for review of the ALJ’s dismissal of its requests for 

a hearing lacked a legal basis or that it was arbitrary, capricious, or an abuse of 

discretion. Accordingly, we affirm the district court’s judgment affirming the 

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Secretary’s decision finding that the ALJ properly dismissed Cross Terrace’s 

requests for an ALJ hearing. 

AFFIRMED.

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