Skip to main content


U.S. flag
      An official website of the United States government
              Here’s how you know
        Here’s how you knowDot gov**Official websites use .gov**
                 A **.gov** website belongs to an official government organization in the United States.
                  HTTPS**Secure .gov websites use HTTPS**
                 A **lock** (A locked padlock) or **https://** means you’ve safely connected to the .gov website. Share sensitive information only on official, secure websites. 
  Menu Close
          HHS Search block
    Search
        








  
  
    

  
      

                                      About HHS
    
                        
                              
      
      
      Programs & Services
    
                        
                              
      
      
      Grants & Contracts
    
                        
                              
      
      
      Laws & Regulations Breadcrumb
    Home
                              About
                              Agencies
                              DAB
                              Decisions
                              ALJ Decisions
                              2022
                              Wallace Financial, ALJ Ruling 2023-2 (HHS CRD November 1, 2022)
 Navigate to:
  Departmental Appeals Board (DAB)
    
                                                  
                                                    
            
      
      
      
      About DAB
                                            
            
            Organizational Overview
    
                                                  
                              
            
      
      
      
      Who are the Judges?
    
                                                  
                              
            
      
      
      
      DAB Divisions
    
                                                  
                              
            
      
      
      
      Contact DAB
    
                                                  
                                                    
            
      
      
      
      Filing an Appeal Online
                                            
            
            DAB E-File
    
                                                  
                              
            
      
      
      
      Medicare Operations Division (MOD) E-File
    
                                                  
                                                    
            
      
      
      
      Different Appeals at DAB
                                            
            
            Appeals to DAB Administrative Law Judges (ALJs)
                          
            
            Forms
    
                                                  
                              
            
      
      
      
      Procedures
    
                                                                
                                                    
            
      
      
      
      Appeals to Board
                          
            
            Practice Manual
    
                                                  
                              
            
      
      
      
      Guidelines
    
                                                  
                              
            
      
      
      
      Regulations
    
                                                  
                              
            
      
      
      
      National Coverage Determination Complaints
    
                                                                
                                                    
            
      
      
      
      Appeals to the Medicare Appeals Council (Council)
                          
            
            Forms
    
                                                  
                              
            
      
      
      
      Fully Integrated Duals Advantage (FIDA) Demonstration Project
    
                                                  
                                                    
            
      
      
      
      Alternative Dispute Resolution Services
                                            
            
            Sharing Neutrals
    
                                                  
                              
            
      
      
      
      ADR Training
    
                                                  
                              
            
      
      
      
      Other ADR Services
    
                                                  
                                                    
            
      
      
      
      DAB Decisions
                                            
            
            Board Decisions
    
                                                  
                              
            
      
      
      
      DAB Administrative Law Judge (ALJ) Decisions
    
                                                  
                              
            
      
      
      
      Medicare Appeals Council (Council) Decisions
    
                                    
                              
            
      
      
      
      Stakeholder Feedback
    
                                                  
                                                    
            
      
      
      
      Careers
                                            
            
            Open Career Opportunities
    
                                                  
                              
            
      
      
      
      Internships & ExternshipsText resize icon

                    




Wallace Financial, ALJ Ruling 2023-2 (HHS CRD November 1, 2022)








  
  
    

  
      
Department of Health and Human Services 
    DEPARTMENTAL APPEALS BOARD
          Civil Remedies Division





The Inspector General of the
Social Security Administration,
Petitioner,

v.

Wallace Financial,

Respondent
Docket No. C-22-757Decision No. 2023-2November 1, 2022

        
              
    

      ORDER DISMISSING CASE

Respondent, Wallace Financial, is a Michigan insurance agency whose stated mission is to help its clients meet their financial goals through insurance products.  *See* P. Motion at 3.  The Social Security Administration Office of the Inspector General (OIG) has imposed a civil money penalty (CMP) on Respondent Wallace, citing section 1140 of the Social Security Act.  The OIG charges the company with disseminating solicitations that conveyed the false impression that they were authorized by the Social Security Administration (SSA).

Respondent appeals, and the OIG moves to dismiss the appeal as untimely.

I grant the OIG’s motion and dismiss this appeal pursuant to 20 CFR § 498.202(f)(1).  I find that Respondent did not timely file its appeal and did not show good cause for the untimely filing.

Page 2

Background

In a notice, dated February 14, 2022, the OIG advised Respondent and its Chief Executive Officer (CEO) that the OIG was proposing to impose a $15,006 civil money penalty (CMP) against the company.  The letter explained that section 1140 of the Social Security Act authorizes the penalty.  That section and its implementing regulations, 20 C.F.R. §§ 498.100-224, prohibit the misuse of SSA-related words, letters, and symbols in advertisements, solicitations, or other communications “in a manner conveying the false impression that such item is approved, endorsed, or authorized by the [Social Security Administration].”  P. Ex. 1 at 1.  The letter charged that, in violation of section 1140, Wallace Financial had disseminated, via the United States Postal Service, 5,002 misleading solicitations, conveying the false impression that they were official SSA communications or were otherwise approved, endorsed, or authorized by SSA.  *Id*.

The letter advised Respondent – in bold – that it had the right to appeal the penalty and set forth the procedures for appealing:

Within 60 (sixty) days of receipt of this notice, Wallace Financial has the right to request a hearing before an Administrative Law Judge (ALJ) of the United States Department of Health and Human Services Departmental Appeals Board.  The written request should include specific issues in this Notice of Proposed Civil Monetary Penalty with which the company disagrees and the basis for its contention.  The procedures for requesting a hearing can be found at 20 C.F.R. part 498.

P. Ex. 1 at 3.  The letter also invited Wallace Financial to provide any information relating to the proposed CMP that it wanted the OIG to consider.  However, it emphasized that “**[c]ontacting the SSA-OIG does not extend the 60-day appeal period.  The SSA-OIG does not have the authority to extend the 60-day appeal period.**”  P. Ex. 1 at 3 (emphasis in original).

Respondent received the notice letter on March 1, 2022.  P. Ex. 2.  It did not request a hearing within 60 days.

In an email and in a letter, both dated **August 8, 2022**, Respondent’s CEO asked the OIG for a “delayed appeal.”  P. Exs. 5, 6.  The OIG Counsel subsequently provided Respondent with a copy of the regulations governing section 1140 appeals, sent Respondent a link to the Departmental Appeals Board website, and forwarded its requests

Page 3

for a delayed appeal to this office.  P. Exs. 7, 8.

In an amended order, dated September 13, 2022, I noted that Respondent’s hearing request appeared to be untimely and advised the parties that the OIG may file a motion to dismiss, if it maintains that Respondent filed an untimely hearing request.  I gave Respondent ten days to respond to the motion, citing 20 C.F.R. § 498.213.  Amended Acknowledgment and Pre-hearing Order at 4 (¶ 5) (Sept. 13, 2022) (P. Ex. 9).

On September 23, 2022, SSA filed a motion to dismiss, arguing that the appeal was untimely and that Respondent had not shown good cause for the late filing.  With its motion, the OIG submitted nine exhibits (P. Exs. 1-9).  Wallace Financial’s response was due October 3, 2022.  On October 4, 2022, its CEO submitted a short letter explaining that she had miscalculated the deadline for responding to the SSA’s motion and, for that reason, filed a day late.  However, the filing did not address any of the issues raised in the OIG’s motion to dismiss nor otherwise explain why this case should not be dismissed.  Respondent has not supplemented that submission in the time that has passed since then.

Discussion

A respondent may request a hearing to challenge a proposed CMP but must do so within the time permitted.  20 C.F.R. § 498.109(b) and (c).  I am required to dismiss an untimely hearing request, unless the respondent shows good cause for the untimely filing.  20 C.F.R. § 498.202(f)(1).

Notwithstanding the notice letter’s explicit instructions to file the appeal with the Departmental Appeals Board and its advising that the SSA-OIG did not have the authority to extend the 60-day appeal period, Respondent sent its requests for a delayed appeal to the SSA-OIG.  Nevertheless, I will assume that Respondent acted in good faith when it misdirected its appeal and will consider August 8, 2022, the filing date.  *See* 20 C.F.R. § 404.911(b)(8).  The request was nevertheless significantly late, filed **160 days after Respondent received SSA’s notice**.

The question is whether Respondent has established good cause for the late filing.

The regulations that govern these proceedings do not define “good cause” but leave that determination to my discretion.  *See, e.g., Taos Living Ctr.*, DAB No. 2293 at 12 (2009) (holding that the ALJ “has discretion to extend the period . . . to file . . . if . . . the ALJ finds ‘good cause’ for the late filing”).

Page 4

ALJs who have addressed the issue have repeatedly adopted the reasoning in *Hillcrest Healthcare, L.L.C.*, DAB CR976 (2002), *aff’d*, DAB No. 1879 (2003).  There, the ALJ looked to the definition of good cause found in 20 C.F.R. Parts 404 and 416 and found that those sections establish the principle that two types of situations warrant a finding of good cause:  1) the events that prevented timely filing were beyond the affected party’s ability to control; and 2) actions taken by the agency misled the party into not filing the request timely.  *Hillcrest*, DAB CR976; *see, e.g.*, *NBM Healthcare, Inc.*, DAB CR2500 (2012), *aff’d,* DAB No. 2477 (2012); *Michael Reiner, M.D.*, DAB CR2547 (2012); *Oak Park Healthcare Ctr.*, DAB CR1917(2009); *SSA v. Parham*, DAB CR1600 (2007); *Knox Cty. Nursing Home*, DAB CR1588 (2007); *Casa del Sol Senior Care Ctr.*, DAB CR1418 (2006); *The Heritage Ctr.*, DAB CR1219 (2004); *Roy Hollins/Western Reference Lab.*, DAB CR1055(2003); *Hammonds Lane Ctr.*, DAB CR913 (2002), *aff’d*, DAB No. 1853 (2002).

For its part, the Departmental Appeals Board “has never attempted to provide an authoritative or complete definition of the term.”  *Hillcrest*, DAB No. 1879 at 5.  Nevertheless, it has not rejected the widely-held ALJ view and has not reversed any ALJ dismissal that applied that reasoning, although it has generally cited other reasons for affirming the dismissal.  *See Casa del Sol*, DAB CR1418 (2006) (noting that the Board has not “disabused us of this approach to considering ‘good cause’” despite its having ample opportunity to do so).  For example, the Board has ruled that, where a party consciously chooses, for reasons of its own, not to request a hearing, it must accept the consequences of its inaction – loss of its right to a hearing.  *Hammonds*, DAB No. 1853.  *See Hillcrest*, DAB No. 1879 at 5 (holding that when the affected party received a “clear notice of its right to request a hearing and the deadline for making such a request,” neither its efforts to resolve its dispute through the Independent Dispute Resolution process nor its efforts to correct its deficiencies instead of filing an appeal constituted good cause “under any reasonable definition.”).

Because no one in this case – or elsewhere – has proposed an alternative, I see no reason to depart from the widely and consistently applied standard for determining good cause:  that the events that prevented timely filing were beyond the affected party’s ability to control.  Respondent here has made no such showing.

Neither has Respondent established good cause “under any reasonable definition.”  It has offered two, not wholly consistent, reasons for the late filing.  In the August 8, 2022 email, the company’s CEO suggested two reasons for the late filing:  1) she was trying to “reach someone” at the direct mail company that Wallace Financial employed “to learn how and from whom they got compliance;” and 2) she was undergoing “a serious Thyroid medication adjustment during that period as well.”  P. Ex. 5.  In the August 8,

Page 5

2022 letter, the CEO alluded to, without explaining, “significant medical reasons,” and without mentioning any efforts to contact the direct mail company.  P. Ex. 6.

Consistent with the Board’s conclusion in *Hillcrest*, the CEO’s reaching out to a company that could help with its defense and potentially resolve the matter without an appeal, does not justify Respondent’s failing to file its hearing request on time.  Nothing would have prevented the company from filing the appeal within 60 days and contacting the direct mail company.

Nor does Respondent’s allusion to a “medication adjustment” create good cause.  First, Respondent provides no corroborating evidence of the CEO’s medical issues and has not explained why they prevented her from filing the appeal, an easy process, as shown by the simple email and short note that ultimately generated this action.  Respondent does not claim that the CEO was hospitalized, bedridden, or unable to communicate nor that she was the only person who could have filed the appeal.  It has not explained why her purported incapacity – even if established (which it was not) – would have precluded another company employee from filing the appeal or prevented the company from hiring counsel.

Moreover, Respondent admits that, during the time in which it could have filed its appeal, the CEO was trying to “reach someone” at the direct marketing company that Wallace Financial employed.  This cuts against the suggestion that she was so incapacitated that she could not have filed the appeal.

Conclusion

The OIG sent Respondent Wallace Financial a straight-forward notice advising the company that it could request a hearing by filing its request within 60 days of receiving the notice.  Respondent did not file its appeal until 160 days after it received the notice and has not shown good cause for the untimely filing.  I therefore grant the OIG’s motion to dismiss and dismiss this matter.  20 C.F.R. § 498.202(f)(1).
  
          /s/
        Carolyn Cozad Hughes

                      Administrative Law Judge Back to top
    Contact HHS
    
                        
                                            
      
      
      Careers
    
                        
                                            
      
      
      HHS FAQs
    
                        
                                            
      
      
      Nondiscrimination NoticeHHS Archive
    
                        
                                            
      
      
      Accessibility Statement
    
                        
                                            
      
      
      Privacy Policy
    
                        
                                            
      
      
      Viewers & PlayersBudget/Performance
    
                        
                                            
      
      
      Inspector General
    
                        
                                            
      
      
      Web Site Disclaimers
    
                        
                                            
      
      
      EEO/No Fear ActFOIA
    
                        
                                            
      
      
      The White House
    
                        
                                            
      
      
      USA.gov
    
                        
                                            
      
      
      Vulnerability Disclosure Policy
        Sign Up for Email Updates

Receive the latest updates from the Secretary, Blogs, and News Releases.

Sign Up
  HHS Headquarters
          200 Independence Avenue, S.W.
                  Washington, D.C. 20201
                  Toll Free Call Center: 1-877-696-6775​ Disclaimer Policy: Links with this icon () mean that you are leaving the HHS website. The Department of Health and Human Services (HHS) cannot guarantee the accuracy of a non-federal website.
                  Linking to a non-federal website does not mean that HHS or its employees endorse the sponsors, information, or products presented on the website. HHS links outside of itself to provide you with further information.
                  You will be bound by the destination website's privacy policy and/or terms of service when you follow the link.
                  HHS is not responsible for Section 508 compliance (accessibility) on private websites. For more information on HHS's web notification policies, see Website Disclaimers.
 Continue
                  Go back