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                              Charles S. Pewitt, D.O., d/b/a Jackson Medical Center, DAB No. 3009 (2020)
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Charles S. Pewitt, D.O., d/b/a Jackson Medical Center, DAB No. 3009 (2020)








  
  
    

  
      
Department of Health and Human Services 
    DEPARTMENTAL APPEALS BOARD
          Appellate Division





Charles S. Pewitt, D.O., d/b/a Jackson Medical Center
Docket No. A-20-66Decision No. 3009July 31, 2020

        
              
    

      FINAL DECISION ON REVIEW OF ADMINISTRATIVE LAW JUDGE RULING

Charles S. Pewitt, D.O., d/b/a Jackson Medical Center1
 appeals Ruling No. 2020-6 of an Administrative Law Judge (ALJ), issued February 14, 2020 (Ruling).  In her ruling, the ALJ dismissed Jackson's request for hearing to challenge the sanctions, which included the revocation of its certificate under the Clinical Laboratory Improvement Amendments of 1988 (CLIA), imposed by the Centers for Medicare & Medicaid Services (CMS), as untimely and not supported by good cause to extend the appeal deadline.  The Board affirms the Ruling.

Legal authorities

Under CLIA, laboratories that perform clinical diagnostic tests on human specimens must meet certain requirements and be federally certified.  *See* Pub. L. No. 100-578 (amending section 353 of the Public Health Service Act, codified at 42 U.S.C. § 263a *et seq*.).  By delegation of the Secretary of Health and Human Services' broad enforcement authority under CLIA, CMS inspects and sanctions laboratories that fail to comply with CLIA certification requirements.  *See generally* 42 U.S.C. § 263a; 42 C.F.R. Part 493, subparts Q ("Inspection") and R ("Enforcement Procedures").

The Part 493 regulations "set[] forth the conditions that all laboratories must meet to be certified to perform testing on human specimens under [CLIA]."  42 C.F.R. § 493.1.  Tests are categorized by complexity, and there are CLIA certification conditions (or requirements for "waived tests") specific to each category.  *See id*. §§ 493.5, 498.15, 493.17, 493.20, 493.25.  Each certification condition represents a general requirement that must be met, and CLIA standards are the specific components of the conditions.  *See Victor Valley Cmty. Hosp./Clinical Lab., et al.*, DAB No. 2340, at 2 (2010); *Edison Med. Labs., Inc.*, DAB No. 1713, at 2 (1999), *aff'd*, *Edison Med. Lab. v. Health Care Fin. Admin.*, 250 F.3d 735 (3d Cir. 2001) (Table of Decisions Without Reported Opinions).

Page 2

Noncompliance with one or more individual standards relating to a condition may be serious enough to cause a condition-level deficiency.  *See* 42 C.F.R. §§ 493.2, 493.1812 through 493.1816.

A failure to comply with even a single applicable condition is a ground for CMS to impose one or more principal or alternative sanctions.  *Id*. § 493.1806(a).  Principal sanctions are suspension, limitation, and revocation of a CLIA certificate (*id*. § 493.1806(b)), and, for laboratories participating in Medicare, cancellation of the laboratory's approval to receive Medicare payment for its services (*id*. § 493.1807(a)).  Alternative sanctions are a directed plan of correction, state onsite monitoring, and a civil money penalty (CMP).  *Id*. § 493.1806(c).  CMS may impose a directed plan of correction as one of the alternative sanctions for a condition-level deficiency.  *Id*. § 493.1832(a).  If CMS does not impose a directed plan of correction as an alternative sanction for a condition-level deficiency, it at least imposes a **directed portion** of a plan of correction whenever any of three alternative sanctions (state onsite monitoring, CMP, suspension of all or part of Medicare payments) are imposed.  *Id*.  A directed portion may require the noncompliant laboratory to submit to CMS information about the clients who have used the sanctioned laboratory's services, and CMS may then notify those clients about the sanctioned laboratory, because of the seriousness of the noncompliance (e.g., the existence of immediate jeopardy).  *See id*. § 493.1832(b)(2).

A laboratory may appeal CMS's "initial determinations" which are:  (1) the suspension, limitation, or revocation of a CLIA certificate by CMS because of noncompliance with CLIA requirements; (2) the denial of a CLIA certificate; (3) the imposition of alternative sanctions under Part 493, subpart R (but not the determination as to which alternative sanction or sanctions to impose); and (4) the denial or cancellation of approval to receive Medicare payments.  *Id*. § 493.1844(b).  Actions that are not listed in section 493.1844(b) are not appealable initial determinations.  *Id*. § 493.1844(c).  Actions that are not appealable initial determinations include CMS's determinations as to which alternative sanctions to impose, the denial of approval for Medicare payment for the services of a laboratory that does not have in effect a valid CLIA certificate, the amount of any CMP, and that a deficiency poses immediate jeopardy.  *Id*.

A laboratory that is dissatisfied with an "initial determination" may request a hearing before an ALJ of the Departmental Appeals Board.  *Id*. § 493.1844(a), (b).  Section 493.1844(f), captioned "*Appeal rights of laboratories*," provides in part:

*ALJ hearing*.  Any laboratory dissatisfied with the suspension, limitation, or revocation of its CLIA certificate, with the imposition of an alternative sanction under this subpart, or with cancellation of the approval to receive Medicare payment for its services, is entitled to a hearing before an ALJ as specified in paragraph (a)(2) of this section and has 60 days from the notice of sanction to request a hearing.

Page 3

Hearings are conducted in accordance with the regulations in 42 C.F.R. Part 498, subpart D.  *Id*. § 493.1844(a)(2).  A request for hearing must be filed, in writing, "within 60 days from receipt" of the notice of the determination.  *Id*. § 498.40(a)(2).  The date of receipt of the determination is "presumed to be 5 days after the date on the notice, unless there is a showing that it was, in fact, received earlier or later."  *Id*. § 498.22(b)(3) (cross‐referenced in section 498.40(a)(2)).  If the request was not filed within 60 days, on written request, the ALJ may extend the filing deadline for good cause shown.  *Id*. § 498.40(c).  An ALJ may dismiss a request for hearing on his or her own motion or the motion of a party if the request was untimely and the time for filing has not been extended.  *Id*. § 498.70(c).  A party dissatisfied with an ALJ's dismissal may request Board review of the dismissal within 60 days from receipt of the notice of dismissal.  *Id*. § 498.82(a).

Case background

By notice dated August 1, 2019,2
 the Missouri Department of Health and Senior Services (MDHSS)3
 notified Petitioner that, on recertification survey completed on July 30, 2019, it found that Petitioner was not in compliance with numerous CLIA requirements, including four condition-level requirements that posed immediate jeopardy to patient health and safety.  CMS Ex. 1, at 1-2 (citing 42 C.F.R. §§ 493.1230, 493.1250, 493.1403, 493.1409).  MDHSS stated that it was recommending that CMS impose sanctions, to

Page 4

include the principal sanctions of suspension and revocation of Petitioner's CLIA certificate; cancellation of Medicare and Medicaid payments; and a CMP of $20,521 per day of violation.  *Id*. at 2 (citing 42 C.F.R. §§ 493.1806, 493.1807, 493.1808, 493.1812, 493.1834).  MDHSS directed Petitioner to submit to MDHSS (with a copy to CMS) within ten days, by August 11, 2019, a credible allegation of compliance and evidence of correction showing that immediate jeopardy had been removed and that condition-level compliance had been achieved.  *Id*.  The notice explained what constitutes a credible allegation of compliance and an acceptable evidence of correction.  *Id*. at 3; 42 C.F.R. § 493.2 (defining "*Credible allegation of compliance*").

Petitioner submitted a response to MDHSS's August 1, 2019 notice, which CMS received on August 9, 2019.  CMS Ex. 2, at 2.  By notice dated September 3, 2019, CMS informed Petitioner that it had rejected the submission because it "[did] not constitute a credible allegation of compliance and acceptable evidence of correction . . . ."  *Id*.  However, CMS gave Petitioner another opportunity to submit a credible allegation of compliance and acceptable evidence of correction, due within ten days of receipt of the September 3, 2019 notice.  *Id*. at 7.

By its September 25, 2019 Notice of Proposed Sanctions, CMS informed Petitioner that it was rejecting an "unacceptable" submission made on September 12, 2019.  P. Ex. A (Proposed Sanctions Notice) at 2.4
  CMS proposed the following principal sanctions:

suspension of the CLIA certificate, effective October 4, 2019, based on the  immediate jeopardy finding;
	revocation of the CLIA certificate, effective November 25, 2019; and
	cancellation of approval to receive Medicare payments for any laboratory services performed on or after October 1, 2019.*Id*. at 14, 15.  CMS also proposed the following alternative sanctions:

a per-day CMP of $20,521 to continue to accrue starting October 1, 2019 until compliance with all condition-level requirements is verified or the CLIA certificate is suspended; and
	directed portion of a plan of correction effective October 1, 2019 (directing Petitioner to submit to CMS within ten calendar days the names and addresses of all physicians and patients who have used the laboratory's services since June 28, 2017).Page 5

*Id*.  CMS also notified Petitioner that no Medicaid program payment would be made for any laboratory services performed beginning September 29, 2019.  *Id*. at 15 (citing Social Security Act § 1902(a)(9)(C) and 42 C.F.R. §§ 440.2(b), 440.30(c)).  CMS cautioned that the "failure to comply with an alternative sanction is [an] independent basis for suspension, limitation or revocation of any type of CLIA certificate."  *Id*. at 16.  CMS gave Petitioner until October 4, 2019, to submit in writing any evidence or information as to why the sanctions should not be imposed.  *Id*. at 17.

The September 25, 2019 notice also included a notice of appeal rights, prominently captioned "**Appeal Rights**."  *Id*. at 15 (bolded and underlined in original).  The notice explained that Petitioner may file a request for hearing, which "must" be filed "**within sixty (60) days from [the] receipt of [CMS's] notice**" (*id*. (citing 42 C.F.R. § 493.1844(f)) (bolded in original)), "i.e., by **November 25, 2019**" (*id*. at 16 and 17 (bolded in original)).

Petitioner submitted another allegation of compliance and evidence of correction.  By its October 8, 2019 Sanctions Imposition Notice, CMS rejected Petitioner's October 4, 2019 submission as "unacceptable."  P. Ex. B at 1.  CMS wrote:  "Your laboratory's October 4, 2019 submission provides additional evidence of poor laboratory practice beyond what was cited at the survey and leads us to question the effectiveness of the laboratory's oversight mechanisms and the competency of personnel.  The submission also fails to provide assurance of the laboratory's ability to provide accurate and reliable patient results."  *Id*. (emphasis omitted).  Accordingly, CMS imposed the following sanctions:

suspension of the CLIA certificate, effective October 4, 2019;
	revocation of the CLIA certificate, effective November 25, 2019;
	per-day CMP of $20,521, effective October 1, 2019 until October 4, 2019, the date of suspension of the CLIA certificate;
	directed portion of a plan of correction, effective October 1, 2019 (directing Petitioner to submit by October 18, 2019 a list of the names and addresses of all physicians and patients who have used the laboratory's services since June 28, 2017); and
	cancellation of approval to receive Medicare and Medicaid payments for any services performed on or after October 1, 2019.*Id*. at 11 (CMS's emphases omitted).  Referring to its September 25, 2019 letter that included instructions on how to appeal should Petitioner choose to do so, CMS reiterated that any such appeal is due "no later than **November 25, 2019**."  *Id*. (bolded in original).  CMS also stated that Petitioner's CLIA certificate will be revoked effective November 25, 2019 if an appeal is not filed.  *Id*.

Page 6

Having received no return communication on the "Directed Plan of Correction" that was due October 18, 2019, on October 23, 2019, CMS emailed an individual acting as Jackson's "Technical Consultant," asking Petitioner to "advise" CMS on this matter.  CMS Ex. 3, at 1; CMS Ex. 5, at 8.  On the same day, the consultant responded by email, stating that Petitioner "plan[ned] to submit the report [that] evening."  CMS Ex. 3, at 1.  In another email to CMS later the same day, the consultant explained that she was "awaiting Dr. Pewitt's signature for the Corrective Action response," that the "patient list" that was due on October 18, 2019 was attached to the email, and that "[t]he latest Corrective Action submission and the Certified letters to the patient[s] will be submitted as soon as possible."  CMS Ex. 4, at 1.  On October 25, 2019, the consultant emailed to CMS a document the consultant referred to as the "attachments for the Corrective Action Plan."  CMS Ex. 5, at 1.  On October 29, 2019, the consultant emailed CMS asking for confirmation of receipt of a "flash drive" containing "scanned patient certified letters" sent to CMS the prior day.  CMS Ex. 6.  By October 30, 2019 email response, CMS acknowledged receipt of the flash drive "yesterday," but stated that, due to CMS's IT security restrictions, CMS personnel were not permitted "to insert a flash drive from an outside source into a CMS computer."  *Id*.  CMS asked Petitioner "to send the file zipped and encrypted."  *Id*.  On November 11, 2019, the consultant emailed to CMS the "last file" containing "Patient Letters #257."  CMS Ex. 7.

On December 3, 2019, CMS informed Petitioner that the time for filing a request for hearing had expired, with no appeal having been filed.  P. Ex. C, Final Sanctions Notice at 1.  Accordingly, wrote CMS, the "sanction action" was "final."  *Id*.

Request for hearing and ALJ's ruling

On December 18, 2019, Petitioner filed an appeal, moving for leave to file its request for hearing out of time.  CMS opposed the motion, urging the ALJ to dismiss the request for hearing filed late and without good cause.

The ALJ noted that Petitioner did not dispute receiving CMS's September 25, 2019 letter, which proposed sanctions and notified Petitioner that a request for hearing had to be filed within 60 days of receipt of the letter, on September 25, 2019.  Ruling at 6.  The ALJ also noted that Petitioner did not dispute that, by its October 8, 2019 letter, CMS informed Petitioner that its response to the notice of proposed sanctions was unacceptable, that CMS would be imposing the proposed sanctions, and that a request for hearing had to be filed by November 25, 2019.  *Id*.  The ALJ determined that the request for hearing, filed on December 18, 2019, was untimely.  *Id*.

The ALJ also determined that Petitioner did not establish good cause for extending the appeal due date.  *Id*. at 6-9.  Noting that the Board has not attempted to set out an authoritative or complete definition of the term "good cause" for purposes of 42 C.F.R. § 498.40(c)(2), thereby leaving the adjudicator to decide whether good cause is shown

Page 7

based on the relevant case-specific circumstances, the ALJ indicated she was exercising her discretionary authority to determine whether good cause is established here.  *Id*. at 5-6 (citing *Fairway & Shadow Creek*, DAB No. 2811, at 14 and *Brookside Rehab. & Care Ctr.*, DAB No. 2094, at 7 n.7 (2007)5
).  The ALJ first rejected Petitioner's assertion that good cause was established based on the submission of evidence of corrective action to CMS before the sanctions were imposed, purportedly under a reasonable belief that no further action would be required if the documents were submitted.  *Id*. at 6-7.  The ALJ determined that Petitioner's "belief . . . was both misguided and mistaken."  *Id*. at 7.  The ALJ pointed out that CMS allowed Petitioner three opportunities to submit a credible allegation of compliance and evidence of an acceptable plan of correction before imposing the proposed sanctions on October 8, 2019, and CMS never found any plan of correction submitted by Petitioner to be acceptable before that date (concluding instead that Petitioner's October 4, 2019 submission exposed more problems with the laboratory).  *Id*. at 6 (citing P. Ex. B, Sanctions Imposition Notice at 1, 11).  Moreover, the ALJ highlighted that CMS reminded Petitioner in the October 8, 2019 Sanctions Imposition Notice that it could request a hearing challenging those sanctions.  *Id*. at 7 (citing P. Ex. B at 11).

The ALJ also rejected Petitioner's argument "blam[ing] CMS's computer security requirements and its need to send encrypted emails" to CMS, offered as an explanation for not filing a timely appeal.  *Id*.  The ALJ reasoned that the "difficulties" Petitioner purportedly had in submitting information about the physicians and patients who had used the laboratory's services since June 28, 2017, owing to CMS's computer security requirements were "wholly irrelevant and [did] not establish good cause for extending the filing deadline."  *Id*.  That information, the ALJ said, was information CMS required as a directed portion of the plan of correction pursuant to 42 C.F.R. § 493.1832(b)(2), which CMS had decided to impose as an alternative sanction.  *Id*.

Further, the ALJ rejected the argument that, due to CMS's computer security procedures and the need to send encrypted emails, Petitioner operated under a mistaken impression that CMS had accepted its corrective actions.  CMS, the ALJ noted, "specifically requested that Petitioner submit a *directed portion of a plan of correction* and not 'corrective action,'" and "gave no indication that such a submission constituted 'corrective action' that would obviate the need to request a hearing."  *Id*. at 8 (ALJ's emphasis) (citing CMS Ex. 3; P. Ex. A, Proposed Sanctions Notice at 15; P. Ex. B, Sanctions Imposition Notice at 11).  And, the ALJ observed, after imposing the sanctions, CMS reminded Petitioner that if it wanted to appeal, it had to do so by November 25, 2019.  *Id*. (citing P. Ex. B, Sanctions Imposition Notice at 11).  The ALJ also observed that Petitioner pointed to nothing in the record indicating that CMS had invited further

Page 8

submission of "corrective action" plans, as opposed to requiring compliance with the directed portion of a plan of correction, had accepted such "corrective action," or otherwise had informed Petitioner that no appeal need be filed to challenge the remedies imposed.  *Id*.

Lastly, the ALJ addressed Petitioner's argument that "the restrictions imposed by CMS's proscribed manner and method of communication and IT systems has prejudiced [Petitioner], created an undue burden, is procedurally deficient, and has violated [Petitioner's] right to due process."  Motion for Leave to File Request for Appeal Out of Time and for Stay ¶ 15, at 3.  Rejecting those arguments, the ALJ stated that they were unsupported and irrelevant to the good cause question.  Ruling at 8.  Whatever "technical difficulties" Petitioner allegedly had in complying with the alternative sanction of a directed portion of the plan of correction, the ALJ said, they were "wholly irrelevant to why" Petitioner failed to appeal timely.  *Id*. at 8-9.

The ALJ concluded that, despite clear notice of the right to appeal and detailed instructions for filing a timely appeal, Petitioner did not timely appeal and that its "explanations" for late filing "do not fall within any reasonable definition of the term 'good cause'" in 42 C.F.R. § 498.40(c)(2).  *Id*. at 9.  Citing *Hammonds Lane Ctr., et al.*, DAB No. 1853, at 1 (2002)6
 and *Hillcrest Healthcare, L.L.C.*, DAB No. 1879 (2003), the ALJ stated, "The Board has consistently ruled that where, as here, a party consciously chooses for reasons of its own not to request a hearing, it must accept the consequences of its inaction."  *Id*.  The ALJ dismissed the hearing request.  *Id*. at 1, 9.

Standard of review

The Board reviews a disputed finding of fact to determine whether the finding is supported by substantial evidence on the record as a whole and a disputed conclusion of law to determine whether it is erroneous.  *Guidelines – Appellate Review of Decisions of Administrative Law Judges in Cases Under the Clinical Laboratory Improvement Amendments of 1988 (CLIA) and Related Statutes* (*Guidelines*), available at https://www.hhs.gov/about/agencies/dab/different-appeals-at-dab/appeals-to-board/guidelines/clia/index.html.

The Board reviews an ALJ's "good cause" determination under 42 C.F.R. § 498.40(c)(2) for abuse of discretion.  *See, e.g.*, *Waterfront Terrace, Inc.*, DAB No. 2320, at 5 (2010).  "The standard of review for an ALJ's exercise of discretion to dismiss a hearing request where such dismissal is committed by regulation to the discretion of the ALJ is whether the discretion has been abused."  *High Tech Home Health, Inc.*, DAB No. 2105, at 8

Page 9

(2007), *aff'd, High Tech Home Health, Inc. v. Leavitt*, Civ. No. 07-80940 (S.D. Fla. Aug. 15, 2008).

Discussion

**1. Submission of new evidence**

Petitioner appended to its brief in support of request for Board review (RR)) its technical consultant's December 4, 2019 email to CMS apparently as additional evidence in support of its argument that it attempted to obtain from CMS confirmation that CMS had received all of Petitioner's corrective action documents and that Petitioner reasonably believed it need not thereafter take any other action.  *See* RR ¶¶ 6-8, at 2.

With exceptions not relevant to this case, the Board may admit new evidence into the record in a Part 498 appeal if the Board determines that the additional evidence submitted to the Board is relevant and material to an issue before it.  42 C.F.R. § 498.86(a).  In deciding whether to accept new evidence, the Board will also consider whether the party offering the evidence has good cause for not submitting the evidence to the ALJ.  *Guidelines*, "Development of the Record on Appeal," ¶ (g).

The December 4 email indicates that Petitioner's technical consultant emailed CMS 14 days before Petitioner filed its request for hearing.  The email unquestionably was in existence and Petitioner presumably could have submitted it to the ALJ.  Petitioner does not offer any explanation of why it did not or could not submit the email to the ALJ.  But, more importantly, the email, even if now admitted, would not give us any reason to disturb the ALJ's determination that Petitioner failed to establish good cause for late filing.  In the absence of any good cause explanation for not submitting the December 4 email to the ALJ, and because the email is not material to the issue of good cause for filing the request for hearing late, we do not admit the December 4 email into the evidentiary record.7
  The email will, however, remain as part of the administrative record of this case.

Page 10

**2. Petitioner's arguments before the Board**

Petitioner does not dispute the ALJ's findings that, on September 25, 2019, CMS notified Petitioner that a request for hearing to challenge the sanctions CMS imposed was due on November 25, 2019, but that it filed its request for hearing after the due date.  Ruling at 6.  However, Petitioner denies that it "consciously" chose not to appeal, RR ¶ 6, at 2, asserting that it has good cause for an extended appeal due date because "it was told by CMS" that its corrective actions "would be acceptable and in reliance on that [it] submitted proof of its corrective action[s] and waited for CMS to confirm receipt," *id*. ¶ 2, at 1.8

As an explanation of why it believes it has good cause, Petitioner represents that, on October 14, 2019, its technical consultant emailed CMS "to confirm whether or not submitting a spreadsheet containing the names and addresses of all patients identified as being affected by the alleged deficiencies and mailing certified letters to each patient identified would remedy the cited deficiencies."  *Id*. ¶ 3, at 1.  Petitioner also represents that CMS responded by email on October 16, 2019, stating as follows:

CMS cannot provide a blanket approval for an allegation of compliance that has not been submitted.  But, your proposal appears to be reasonable.  The evidence we would expect to see is copies of all certified mail receipts as well as the signed returned receipts and a list of all patients including how the patient list was generated.

*Id*. ¶ 4, at 1-2.  Petitioner states that in reliance on the above CMS email it sent 1,880 letters to the "affected" patients and submitted the "list" to CMS.  *Id*. ¶ 5, at 2.  According to Petitioner, "through email communications" with CMS it was "led" to believe that CMS was continuing to review its corrective action records.  *Id*. ¶ 6, at 2.  Petitioner again recounts the efforts it made to "work around" CMS's IT security restrictions to "resubmit" a large volume of materials "in a format proscribed by CMS."  *Id*. ¶¶ 7, 8, at 2.  Petitioner states that it "attempted to elicit confirmation from CMS that it had received all of the submission and did not believe that anything further was required."  *Id*. ¶ 8, at 2.  As noted earlier, Petitioner submitted to the Board a December 4, 2019 email from its technical consultant to CMS as additional evidence of its attempt to obtain confirmation from CMS.

Page 11

**3. The ALJ's determination not to extend the appeal due date**

We find no abuse of discretion by the ALJ in finding no good cause to extend the date for filing a request for hearing.  The ALJ's decision to then dismiss the late request for hearing was well within the bounds of her discretionary authority under 42 C.F.R. § 498.70(c), which states that the ALJ "may dismiss a hearing request" where "[t]he affected party did not file a hearing request timely and the time for filing has not been extended."

Petitioner cannot reasonably and credibly claim that it believed, based on the cited communication with CMS, namely the email exchanges on October 14 and 16, 2019,9
 that simply submitting a spreadsheet containing the names and addresses of all patients identified as being affected by the alleged deficiencies and mailing certified letters to each patient would "remedy" all the noncompliance found at its laboratory and undo the sanctions that it was previously told had been imposed.  As the ALJ noted, on October **8**, 2019, well before these emails, CMS rejected Petitioner's last allegation of compliance and evidence of corrective actions (submitted on October 4, 2019) as unacceptable and notified Petitioner that the sanctions previously proposed were being imposed, some already going into effect October 8, 2019.  Ruling at 6-7, 7 n.5.  CMS reminded Petitioner again that, should Petitioner wish to appeal, it had to do so by November 25, 2019, and stated that the CLIA certificate would be revoked effective November 25, 2019 if an appeal is not filed by that date.  *Id*. at 6-7; P. Ex. B, Sanctions Imposition Notice.  Accepting that CMS responded on October 16 (as Petitioner represents), CMS did not in that email state that its prior imposition of sanctions was being rescinded, or that Petitioner may simply disregard its earlier notices about the proposed and imposed sanctions, or otherwise say anything Petitioner reasonably could have understood to mean that there would be no adverse enforcement consequences from the various uncorrected noncompliance findings, as long as Petitioner eventually produced the spreadsheet and sent letters to patients as required by one of the imposed alternative sanctions.

Moreover, as the ALJ observed, nowhere in its October 8, 2019 notice did CMS indicate that Petitioner would have yet another (fourth) opportunity to submit an allegation of compliance and evidence of corrective actions.  Ruling at 4.  That notice informed Petitioner that certain proposed sanctions (to include suspension of the CLIA certificate and cancellation of approval to receive Medicare and Medicaid payments) already had gone into effect and that the CMPs already had accrued, and that revocation would go into effect on November 25, 2019, the date a request for hearing would be due should

Page 12

Petitioner decide to appeal.  *The only open "corrective" action the October 8, 2019 notice contemplated was actual compliance with the sanction of the directed portion of a plan of correction* – the submittal of names and addresses of physicians and patients who had used the laboratory's services since June 28, 2017, due on October 18, 2019.  P. Ex. B, Sanctions Imposition Notice at 11.  CMS's October 16 email is only reasonably read as addressing the directed portion of a plan of correction that would come due two days later, on October 18.

In sum, the picture painted by the totality of record evidence of communication between Petitioner (through its consultant) and CMS after the issuance of the October 8, 2019 notice of imposition of sanctions (*see* CMS Exs. 3-7, email exchanges between October 23 and November 11, 2019) is this:  Petitioner appears to have devoted its time and resources to an attempt to submit documents concerning the directed portion of a plan of correction that would be acceptable to CMS, even if after the October 18, 2019 due date, rather than to the preservation of its right to challenge CMS's sanctions before an ALJ.  If Petitioner elected to spend its time and resources on completing the directed portion of a plan of correction, then, as the ALJ said, "it must accept the consequences of its inaction" (Ruling at 9) in not appealing despite having been told clearly and unambiguously, and twice (September 25, 2019 and October 8, 2019), that, in order to be timely, an appeal must be filed by November 25, 2019.  If Petitioner labored under a belief that satisfactory completion of the directed portion of a plan of corrective action was all that was required, such a mistaken belief is not attributable to CMS's actions.  We discern nothing in CMS's notices or emails of record that Petitioner (or its consultant) *reasonably* could have construed to mean that, so long as documentation about physicians and patients acceptable to CMS is eventually submitted, there would be no adverse enforcement consequences for the underlying uncorrected noncompliance.

Despite two clear advance notices of the appeal due date, Petitioner failed to secure its right to challenge the sanctions within the almost seven-week period it had after CMS issued its October 8, 2019 notice imposing sanctions.  Only after receiving CMS's December 3, 2019 fax notice that the sanctions imposed were "final" (P. Ex. C, Final Sanctions Notice), after the window of opportunity to challenge the sanctions had closed, did Petitioner file an appeal.  Petitioner's attempt to salvage its lost opportunity fails.10

Page 13

We agree with the ALJ that Petitioner's explanations concerning why it failed to timely appeal do not support good cause under any reasonable definition of that term.  Ruling at 9; *see Kids Med (Delta Medical Branch)*, DAB No. 2471, at 6, 8 (2012).  Where, as here, Petitioner received clear notice of its right to appeal and when it had to appeal, we see no ALJ abuse of discretion in not extending the due date for appeal.  *See Hillcrest Healthcare, L.L.C.*, DAB No. 1879, at 7 (finding no good cause for failure to file a timely appeal where Hillcrest received "a clear notice of its right to request a hearing and the deadline for making such a request"); *Waterfront Terrace*, DAB No. 2320, at 6-8 (the ALJ did not err or abuse her discretion in finding no good cause to extend the filing due date where the operative notice reasonably informed petitioner of its appeal rights).

Lastly, we note that appended to Petitioner's brief to the Board is a four-page letter Dr. Pewitt wrote to the attorney representing him and Jackson in this appeal on the date the request for Board review was filed.  The letter discusses, among other things, a former Jackson employee who allegedly was "not ready" for CMS's inspections, Dr. Pewitt's dissatisfaction with the services of the consultant retained to assist Jackson in connection with CMS's enforcement action, and the financial hardship on Dr. Pewitt's practice and Jackson as a result of the sanctions imposed.  Petitioner's attorney does not state that her client's letter to her is being offered to the Board as new evidence, and we do not treat it as such.  Nor does Petitioner's brief raise any argument based on anything specific Dr. Pewitt stated in his letter to the attorney.  In any case, the letter's contents do not give us any reason to disturb the ALJ's ruling on good cause or her dismissal.

Conclusion

We affirm the ALJ's Ruling.


          /s/
        Leslie A. Sussan

                      Board Member
          /s/
        Constance B. Tobias

                      Board Member
          /s/
        Susan S. Yim

                      Presiding Board Member
      1. We refer to Jackson Medical Center, the laboratory whose certificate was revoked, as Petitioner except as necessary to distinguish the laboratory from Dr. Pewitt, Jackson's Laboratory Director. back to note 1
                      2. All Missouri Department of Health and Senior Services (MDHSS) and CMS notices discussed in the background were sent to Petitioner by facsimile.  The first page of each notice bore a prominent statement:  "Confirmation of successful transmission of facsimile constitutes proof of receipt."  See, e.g., CMS Exs. 1, at 1; 2, at 1.  Part 498 contemplates notice of CMS action appealable to an ALJ by mail.  See 42 C.F.R. § 498.20(a) ("CMS . . . mails notice of an initial determination to the affected party.").  However, the Board also has recognized the validity of CMS notice by fax in an appeal of the revocation of CLIA certificates, where fax transmission was capable of accomplishing the essential due process purpose of notice and in fact accomplished notice.  See Fairway Med. Clinic & Shadow Creek Med. Clinic, DAB No. 2811, at 8-9 (2017) ("While the word 'mails' as used in subsection 498.20(a) may be interpreted as intended to refer to U.S. postal mail, we do not conclude that the term can only refer to U.S. government postal mail, to the exclusion of all other means of notice."), aff'd sub nom. Murtaza Mussaji, D.O., P.A. v. United States Dep't of Health & Human Servs., 741 F. App'x. 222 (5th Cir. July 23, 2018); see also Riverview Village, DAB No. 1840, at 8 (2002) (Part 498 generally contemplates notice by mail, but notice by fax could be valid "where the FAX clearly and unambiguously specifies that it is the notice document," but, where CMS sent notice by both mail and fax, the facility could reasonably view the fax notice as an additional, courtesy copy).  Petitioner does not dispute the receipt of CMS notice of appeal rights on the date of the fax. back to note 2
                      3. State survey agencies may perform CLIA surveys for CMS.  See 42 C.F.R. §§ 493.1773(a) (a laboratory issued a CLIA certificate must permit CMS or a "CMS agent" to conduct an investigation to assess compliance with CLIA requirements), 493.2 (as relevant here, defining "CMS agent" to include a state survey agency with which CMS arranges to inspect laboratories and assess their activities to determine their compliance with CLIA requirements; defining "State survey agency" as the "State health agency or otherwise appropriate State or local agency that has an agreement under section 1864 of the Social Security Act and is used by CMS to perform surveys and inspections"). back to note 3
                      4. Petitioner submitted to the ALJ three CMS notices, designated as Exhibits "A," "B" and "C."  The ALJ cited to those documents as Petitioner's exhibits A (September 25, 2019 notice of proposed sanctions (Proposed Sanctions Notice)), B (October 8, 2019 notice imposing sanctions (Sanctions Imposition Notice)), and C (December 3, 2019 notice of final sanctions (Final Sanctions Notice)), referring to the page numbers native to those documents.  Ruling at 2 n.2.  We cite to those documents as the ALJ cited them for consistency. back to note 4
                      5. Brookside appealed the Board's decision.  The appeal was dismissed.  Brookside Rehab. & Care Ctr. v. United States Dep't of Health & Human Servs., No. 07-1739 (4th Cir. Mar. 4, 2018)). back to note 5
                      6. The petitioners in that case appealed the Board's decision to the United States District Court for the District of Columbia, which affirmed the Board's decision.  Meridian L.P. v. Thompson, 305 F. Supp. 2d 116 (D.D.C. 2004). back to note 6
                      7. As we explain below, even if admitted, the December 4 email would not support Petitioner's position.  We also note that Petitioner now purports to rely on October 14, 2019 and October 16, 2019 emails between Petitioner's technical consultant and CMS which Petitioner did not submit to the ALJ and does not offer to the Board.  See RR ¶¶ 3-4, at 1-2.  "If it appears to the Board that additional relevant evidence is available, the Board will require that it be produced."  42 C.F.R. § 498.86(b).  We see no need to order the October 14 and October 16 emails produced because, even accepting that those emails state what Petitioner asserts they do, those emails would not cause us to question whether the ALJ abused her discretion in rejecting Petitioner's good cause arguments.  We will address Petitioner's arguments based on the October emails below. back to note 7
                      8. Dr. Pewitt intends to "seek a waiver from CLIA for certain testing to respond to the COVID 19 pandemic and to address the needs of his patients."  RR ¶ 9, at 2.  By April 28, 2020 email to Petitioner's attorney (with a copy to CMS), the Director of the Appellate Division of the Departmental Appeals Board pointed Petitioner to CMS's COVID-19 pandemic guidance concerning CLIA laboratories, available online.  The only matter properly before the Board is the appeal of the ALJ's dismissal.  We cannot and do not consider the request for a COVID-19 pandemic "waiver." back to note 8
                      9. Petitioner does not purport to quote the actual words of its technical consultant in her October 14 email to CMS as it purports to quote CMS's October 16 response to the October 14 email.  CMS in its response brief does not state anything about either email.  But even were we to assume that Petitioner's technical consultant emailed CMS on October 14 and that CMS responded on October 16 as Petitioner represents, those emails give us no reason to disturb the ALJ's determination that Petitioner failed to show good cause for failing to file a timely appeal. back to note 9
                      10. The consultant's December 4, 2019 email recounts the consultant's attempts to communicate with CMS about the "Directed Plan of Correction" in October and November 2019.  Near the end of that email the consultant acknowledged receipt of the December 3, 2019 notice of final sanctions and wrote, "According to instructions I received from you, the patient letters with certified receipts was what was needed to avoid the final sanctions."  Petitioner has not submitted evidence of any such "instructions" CMS supposedly gave.  If, by this statement, the consultant was referring to the October 16 email, we have already explained why we reject the arguments based on that email Petitioner purports to quote.  If Petitioner is claiming that, based on this statement by its consultant, it believed, as late as December 4, that complying with the "Directed Plan of Correction" was all that was needed, that claim is simply not reasonable.  In September and October 2019, CMS gave Petitioner clear notice that an appeal was due November 25, 2019, and, on December 3, 2019, the day before the technical consultant emailed CMS, informed Petitioner that the sanctions were "final" with no appeal having been filed. back to note 10 Back to top
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