Charles S. Pewitt, D.O., d/b/a Jackson Medical Center, ALJ Ruling 2020-6 (HHS CRD Feb. 14, 2020)

RULING

I deny the request for an extension of time to file a request for hearing filed by Petitioner, Charles S. Pewitt, D.O., d/b/a Jackson Medical Center,1 because Petitioner did not establish good cause to extend the time for filing.  42 C.F.R. §§ 498.40(a)(2), (c); 498.70(c).  Therefore, I dismiss Petitioner’s request for hearing as untimely.

I.  Background and Procedural History

Petitioner is a medical practice that operated its own laboratory.  Request for Hearing at 1.  Charles S. Pewitt, D.O., served as the laboratory director.  Centers for Medicare & Medicaid Services Exhibit (CMS Ex.) 1 at 1.  Petitioner participated in the Medicare

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program and held a CLIA certificate under the provisions of the Clinical Laboratory Improvement Amendments of 1988, 42 U.S.C. § 263a et seq.   

On July 30, 2019, the Missouri Department of Health & Senior Services (state agency) completed a routine recertification survey of Jackson Medical Center and found that it was not in substantial compliance with four conditions of participation for the CLIA program and that Petitioner’s deficiencies posed immediate jeopardy to patient health and safety.  CMS’s September 25, 2019 Proposed Sanctions Notice submitted as P. Ex. A2 (Proposed Sanctions Notice) at 1.   

On August 1, 2019, the state agency informed Petitioner that it failed to meet four conditions of CLIA participation, and explained that “[b]ecause of the seriousness of these deficiencies, [the] laboratory no longer meets the requirements to perform testing under CLIA.”  CMS Ex. 1 at 2.  The state agency explained that it had recommended that CMS impose sanctions, to include revocation of Petitioner’s CLIA certificate.  CMS Ex. 1 at 2.  The state agency directed Petitioner to submit a credible allegation of compliance and evidence of correction within 10 calendar days, and explained that sanctions would not be imposed if Petitioner submitted a verifiable credible allegation of compliance and acceptable evidence of correction.  CMS Ex. 1 at 2-3.  

On September 3, 2019, CMS informed Petitioner that its response to the August 1, 2019 letter, which was received on August 9, 2019, did not constitute a credible allegation of compliance and acceptable evidence of correction.  CMS Ex. 2.  CMS afforded Petitioner another opportunity to submit a credible allegation of compliance and acceptable evidence of correction within 10 days of receipt of its notice.  CMS Ex. 2 at 7.  In a submission received on September 12, 2019, Petitioner again alleged that it had returned to compliance and had corrected the deficiencies.  Proposed Sanctions Notice at 2.

In a letter dated September 25, 2019, CMS notified Petitioner that it had reviewed Petitioner’s second allegation of compliance and correction and determined that it was “unacceptable.”  Proposed Sanctions Notice at 2.  CMS proposed sanctions that included the revocation and suspension of Petitioner’s CLIA certificate, a civil money penalty, and cancellation of Petitioner’s approval to receive Medicare payments.  CMS also proposed alternative sanctions, to include a directed portion of a plan of correction, that would require Petitioner to submit a “list of the names and addresses of all physicians and

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patients who have used some or all of the laboratory’s services since June 28, 2017.”  Proposed Sanctions Notice at 14-15 (emphasis omitted).   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.”  Proposed Sanctions Notice at 16.  CMS informed Petitioner that it had 10 days from the date of the notice, or until October 4, 2019, to submit in writing any evidence or information as to why the sanctions should not be imposed.  Proposed Sanctions Notice at 17.  CMS also explained Petitioner’s appeal rights, to include that it may file a request for an administrative law judge (ALJ) hearing and that such a request “must” be filed “within sixty (60) days from [the] receipt of [CMS’s] notice.”3   Proposed Sanctions Notice at 16.  Petitioner accepted the opportunity to submit a third allegation of compliance and credible evidence of correction, and CMS received that submission on October 4, 2019.  CMS’s October 8, 2019 Notice Imposing Sanctions submitted as P. Ex. B (Sanctions Imposition Notice) at 1.

In its October 8, 2019 notice, CMS determined that Petitioner’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.”  Sanctions Imposition Notice at 1 (emphasis omitted).  CMS further explained that “[t]he submission also fails to provide assurance of the laboratory’s ability to provide accurate and reliable patient results.”  Sanctions Imposition Notice at 1.  CMS determined that Petitioner’s October 4, 2019 allegation of compliance and evidence of correction were “unacceptable.”  Sanctions Imposition Notice at 2.  CMS thereafter stated the following:

Accordingly, as the laboratory has failed to meet all CLIA conditions and based on the failure of the owners and director of the laboratory to comply with the certificate requirements and performance standards as evidenced by the deficiencies cited at the survey . . . , we are taking action to impose the following sanctions against Jackson Medical Center’s CLIA certificate as proposed in our September 25, 2019 letter:

• Revocation of the laboratory’s CLIA certificate effective November 25, 2019.
• Suspension of the laboratory’s CLIA certificate effective October 4, 2019.

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• Civil Monetary Penalty of $20,521 per day for each day of non-compliance effective October 1, 2019 until October 4, 2019, the date of suspension of the laboratory’s CLIA certificate.
• Directed Portion of a Plan of Correction effective October 1, 2019 – The laboratory is directed to submit to this office by October 18, 2019 a list of the names and addresses of all physicians and patients who have used some or all of the laboratory’s services since June 28, 2017 . . . .
• Cancellation of the laboratory’s approval to receive Medicare payments for any services performed on or after October 1, 2019. . . .

Sanctions Imposition Notice at 10-11 (emphasis omitted).  CMS instructed Petitioner to “refer to our September 25, 2019 letter for the laboratory’s appeal rights and instructions on how to file an appeal,” and reminded Petitioner that in order for an appeal to be timely, “it must be requested by no later than November 25, 2019 as noted in the September 25, 2019 letter.”  Sanctions Imposition Notice at 11 (emphasis omitted).  CMS explained that “[i]f an appeal request is not filed, revocation of Jackson Medical Center’s CLIA certificate will be effective November 25, 2019.”  Sanctions Imposition Notice at 11 (emphasis omitted).  Unlike the September 25, 2019 notice that allowed Petitioner “ten days . . . to submit in writing any evidence and/or information as to why the sanctions detailed above should not be imposed” (Proposed Sanctions Notice at 17), CMS did not afford Petitioner the same opportunity when it imposed the sanctions on October 8, 2019.

On October 23, 2019, after Petitioner failed to timely comply with the directed portion of a plan of correction that was due on October 18, 2019, CMS sent Petitioner an email message stating:  “Jackson Medical Center had a Directed Plan of Correction due on October 18, 2019.  Please advise.”  CMS Ex. 3 at 1.  In a response that same day, Petitioner explained that it “plan[ned] to submit the report [that] evening.”  CMS Ex. 3 at 1.  In a subsequent email message, Petitioner explained that it was awaiting Dr. Pewitt’s signature on the “Corrective Action response.”  CMS Ex. 4 at 1.  Petitioner informed CMS 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.

Even though CMS had already imposed sanctions on October 8, 2019, and had not offered Petitioner a fourth opportunity to submit a credible allegation of compliance and acceptable evidence of correction, Petitioner nonetheless submitted a “Corrective Action Plan” on October 25, 2019.  CMS Ex. 5.  Petitioner and CMS continued to communicate regarding the directed portion of a plan of correction, and Petitioner completed its

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submission on November 11, 2019.4  CMS Exs. 6, 7.  On December 3, 2019, CMS sent Petitioner a letter that informed it that, inter alia, the appeal period had expired.  CMS’s December 3, 2019 Final Sanctions Notice submitted as P. Ex. C (Final Sanctions Notice) at 1.

On December 18, 2019, Petitioner, through counsel, submitted a request for an ALJ hearing that was accompanied by a motion for leave (P. Motion) to file the request for hearing out of time.  Petitioner also submitted three exhibits consisting of letters that CMS issued on September 25, October 8, and December 3, 2019.  On December 31, 2019, I directed CMS to file a response.  CMS filed a response on January 23, 2020, along with seven supporting exhibits (CMS Exs. 1-7).

II.  Issues

The general issue here is whether I should grant Petitioner’s request for an extension of time to file a request for hearing.  The specific issues that I must decide are whether Petitioner has filed a timely request for hearing, and if not, whether Petitioner has good cause to file a late request for hearing. 

III.  Analysis

Administrative hearings in cases involving challenges to determinations to impose sanctions pursuant to CLIA, including revocation of a CLIA certificate, are governed procedurally by regulations at 42 C.F.R. Part 498; see 42 C.F.R. § 493.1844(a), (b).  Under these regulations, a party affected by an adverse determination must file its request for hearing no later than 60 days from the date that it receives notice from CMS.  42 C.F.R. § 498.40(a)(2).  Receipt of the notice is presumed to be five days after the date of notice unless shown otherwise.  42 C.F.R. § 498.40(a)(2); 42 C.F.R. § 498.22(b)(3).  An affected party may request that an ALJ extend the date to file a hearing request; however, the affected party must show good cause in order for the ALJ to grant such a request.  42 C.F.R. § 498.40(c).  If a hearing request is untimely and there is no good cause to extend the filing date, then an ALJ may dismiss the hearing request.  42 C.F.R. § 498.70(c); see, e.g., Fairway Med. Clinic & Shadow Creek Med. Clinic, DAB No. 2811 at 14 (2017) (an

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ALJ has the “discretionary authority to conclude, ultimately, that dismissal is proper for untimely appeal and for lack of credible explanation of good cause for late filing.”).

A.  Petitioner did not file a timely hearing request.

Petitioner does not dispute that it received CMS’s September 25, 2019 letter proposing sanctions that same day.  Nor does Petitioner dispute that the September 25, 2019 letter informed it that in order to request an ALJ hearing, it must do so within 60 days of its receipt of the letter.  Petitioner also does not dispute that CMS informed it, on October 8, 2019, that its response to the notice of proposed sanctions was unacceptable, and that CMS would be imposing the proposed sanctions.  Nor does Petitioner dispute that, in its October 8, 2019 notice imposing sanctions, CMS reminded Petitioner that “[f]or an appeal request to be timely,” it must file such an appeal by November 25, 2019.  As Petitioner did not file a hearing request prior to the November 25, 2019 deadline, Petitioner did not timely file a request for hearing.

B.  Petitioner did not establish good cause for an extension of the regulatory deadline for filing a hearing request.

If an affected party establishes that there is good cause to extend the filing date for a hearing request, then an ALJ may accept an otherwise untimely hearing request.  42 C.F.R. § 498.40(c).  The regulations do not define what constitutes “good cause” to extend the filing deadline, and the Departmental Appeals Board “has never attempted to provide an authoritative or complete definition of the term ‘good cause’ in section 498.40(c)(2).”  Brookside Rehab. & Care Ctr., DAB No. 2094 at 7 n.7 (2007) (citing Glen Rose Med. Ctr. Nursing Home, DAB No. 1852 at 7 n.5 (2002)).  Rather, an adjudicator must consider the relevant circumstances of each case to determine whether there is “good cause” to extend the filing deadline.  See NBM Healthcare, Inc., DAB No. 2477 at 4 (2012) (“[T]he facts of this case do not show good cause under ‘any reasonable definition of that term.’”).

In support of its claim that there is good cause to extend the time to file a request for hearing, Petitioner argues that it “submitted evidence of correction to CMS prior to the imposition of sanctions and believed that no further action was required.”  P. Motion at 1 (emphasis added).  Petitioner is mistaken.  After proposing sanctions on September 25, 2019, and allowing Petitioner a third opportunity to submit a credible allegation of compliance and evidence of an acceptable plan of correction, CMS imposed sanctions on October 8, 2019.  Sanctions Imposition Notice at 1, 11 (explaining that Petitioner’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,” and that “we are

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taking action to impose the following sanctions . . . as proposed in our September 25, 2019 letter.”) (emphasis omitted).  CMS imposed the proposed sanctions on October 8, 2019, and it reminded Petitioner that it could timely request a hearing to challenge those sanctions.  Sanctions Imposition Notice at 11.  Petitioner’s belief that no further action was required because it had submitted evidence of correction prior to the imposition of sanctions was both misguided and mistaken.5  See P. Motion at 1.

While Petitioner blames CMS’s computer security requirements and its need to send encrypted emails as the basis for its failure to submit a timely request for hearing, Petitioner’s difficulties with submitting the directed portion of the plan of correction that was imposed as an alternative sanction are wholly irrelevant and do not establish good cause for extending the filing deadline.  When it imposed sanctions on October 8, 2019, CMS imposed an alternative sanction that Petitioner submit a directed portion of a plan of correction within 10 days, by October 18, 2019.  Sanctions Imposition Notice at 11.  CMS directed Petitioner to submit the following as a directed portion of a plan of correction: 

The laboratory is directed to submit to this office by October 18, 2019 a list of the names and addresses of all physicians and patients who have used some or all of the laboratory’s services since June 28, 2017.  We request that this list be provided as an electronic file, in an EXCEL database format if possible.  This list may be used to advise the laboratory’s clients of the nature of its non-compliance and the nature and effective date of sanction actions imposed against the laboratory.

Sanctions Imposition Notice at 11 (emphasis omitted); see Proposed Sanctions Notice at 15 (ordering a directed portion of a plan of correction as an alternative sanction).  Despite this explicit directive, Petitioner did not provide this information by the mandated deadline.  Sanctions Imposition Notice at 11; see 42 C.F.R. § 493.1832(b)(2)(i) (requiring that a directed portion of a plan of correction be submitted within 10 calendar days of the notice of the alternative sanction). 

After Petitioner did not submit the directed portion of a plan of correction by October 18, 2019, as ordered on October 8, 2019, CMS sent Petitioner an email message on October 23, 2019, that stated the following:  “Jackson Medical Center had a Directed Plan of Correction due on October 18, 2019.  Please advise.”  CMS Ex. 3.  Petitioner did not

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initially submit the required information until October 25, 2019.  CMS Exs. 4-6.  Owing to CMS’s computer security requirements, CMS was unable to access the flash drive that Petitioner submitted containing this information, and it directed Petitioner to re-submit this information via encrypted email messages.  CMS Ex. 6.  Petitioner complied with that request and submitted its final file via encrypted email on November 11, 2019.  CMS Ex. 7; see P. Motion at 2 (reporting that it “attempted to send . . . the list of all patients it determined to be affected,” and that because “the copies of the 1880 patient letters were too voluminous to send as email attachments, [it] sent a flash driv[e] containing the letters to [CMS] by FedEx delivery.”). 

Petitioner argues that due to the security procedures required by CMS and its efforts to submit scores of encrypted email messages, it “did not timely file a request for appeal because it was under the mistaken impression that CMS accepted its corrective action.”  P. Motion at 3.  However, Petitioner points to no evidence that CMS invited it to submit “corrective action” (other than the directed portion of the plan of correction), had accepted such “corrective action,” or had otherwise informed Petitioner that it need not  request a hearing to challenge the remedies imposed for its condition-level noncompliance resulting in immediate jeopardy.  Further, and significantly, CMS specifically requested that Petitioner submit a directed portion of a plan of correction, and not “corrective action.”  CMS Ex. 3; see Sanctions Imposition Notice at 11.  When CMS imposed sanctions, it specifically mandated that, pursuant to 42 C.F.R. § 493.1832(b)(2), Petitioner provide information about its patients so that CMS could effectuate individual notifications, as necessary.  CMS clearly explained that a directed portion of a plan of correction was an alternative sanction, and CMS gave no indication that such a submission constituted “corrective action” that would obviate the need to request a hearing.  Proposed Sanctions Notice at 15.  Further, after CMS imposed sanctions, it reminded Petitioner that it should file a timely request for hearing by November 25, 2019, in order to challenge the remedies imposed.  Sanctions Imposition Notice at 11.

Petitioner’s reason for failing to file a timely hearing request does not constitute good cause to extend the filing deadline.  Petitioner’s claim that “CMS’s proscribed manner and method of communication and IT systems has prejudiced [it], created an undue burden, is procedurally deficient, and has violated [Petitioner’s] right to due process” is not only unsupported, but is irrelevant to the question of whether there is good cause to accept a late request for hearing.  CMS unambiguously informed Petitioner that it had imposed sanctions on October 8, 2019, and that Petitioner had until November 25, 2019, to request a hearing.  CMS did not afford Petitioner another opportunity to submit a credible allegation of compliance and acceptable evidence of correction when it imposed sanctions, and the technical difficulties Petitioner had in complying with the alternative sanction of a directed portion of the plan of correction are wholly irrelevant to why it

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failed to timely submit a request for hearing.6   Dismissal of a hearing request is appropriate where the determination clearly explained the filing requirements and deadlines to the petitioner.  Waterfront Terrace, Inc., DAB No. 2320 at 6, 8 (2010) (holding that no good cause existed to justify extending the filing deadline where the notice letter reasonably informed the petitioner of its appeal rights).

CMS’s September 25 and October 8, 2019 letters clearly informed Petitioner of its appeal rights, and explained that a hearing request needed to be filed no later than 60 days from the receipt of the September 25 notice.  Proposed Sanctions Notice at 16, 17; Sanctions Imposition Notice at 11.  Further, the letters explicitly advised that the deadline for filing a timely hearing request was November 25, 2019.   Proposed Sanctions Notice at 16, 17; Sanctions Imposition Notice at 11.  Petitioner does not deny that it was provided clear notice of the right to appeal and detailed instructions for submitting its request.  I conclude that Petitioner’s explanations for the untimely filing of its hearing request do not fall within any reasonable definition of the term “good cause” as set out in 42 C.F.R. § 498.40(c)(2).  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.  Hammonds Lane Ctr., DAB No. 1853 at 1 (2002); Hillcrest Healthcare, L.L.C., DAB No. 1879 (2003).  Because Petitioner has made no showing of good cause for an extension of the deadline for the filing of a request for hearing, I cannot extend the filing deadline for the hearing request based on good cause.

IV.  Conclusion

Petitioner has not shown that an extension of the filing deadline is warranted based on good cause.  Therefore, I deny Petitioner’s motion for an extension of the filing deadline.   I dismiss Petitioner’s hearing request pursuant to 42 C.F.R. § 498.70(c).

1. The Civil Remedies Division listed the petitioner as Charles S. Pewitt, D.O., at the time it docketed this case.  Because Petitioner indicated in its request for hearing that the party name is “Charles S. Pewitt, D.O., Jackson Medical Center” and explained that Charles S. Pewitt, D.O. does business under the name Jackson Medical Center, I have re-captioned the appeal as listed above.  Petitioner’s Memorandum in Support of Request for Appeal (Request for Hearing) at 1.
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2. Petitioner affixed what appears to be a sticker bearing an alphabetical designation to the first page of each exhibit; I refer to the documents by the conventions I have assigned (i.e., Proposed Sanctions Notice; Sanctions Imposition Notice; Final Sanctions Notice).  Because Petitioner did not paginate these documents, I refer to the native page numbers that appear on those documents.
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3. CMS served the notice via facsimile and email. Proposed Sanctions Notice at 1.
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4. Petitioner had initially submitted the requested patient information via a USB media device (i.e., a “flash drive”), but due to computer security requirements, CMS requested that Petitioner re-submit this information via encrypted email messages.  Owing to the apparently voluminous amount of information, Petitioner provided the information in 257 separate encrypted email messages.  CMS Exs. 6, 7.
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5. I note that one significant sanction, the suspension of Petitioner’s CLIA certificate, had already gone into effect as of October 4, 2019.  Sanctions Imposition Notice at 11.  Likewise, the CMP took effect on October 1, 2019.  Sanctions Imposition Notice at 11.
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6. It is noteworthy that Petitioner did not comply with the deadline prescribed to submit the directed portion of the plan of correction and only submitted it after CMS contacted Petitioner by email five days after the deadline. CMS Exs. 3, 4.
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