Christina Paylan, M.D., ALJ Ruling 2023-6 (HHS CRD March 31, 2023)

DISMISSAL

Petitioner, Christina Paylan, M.D., is a physician, practicing in Florida.  After she was convicted of two felonies (obtaining a controlled substance by fraud and fraudulent use of personal information), the Centers for Medicare and Medicaid Services (CMS) placed her on its preclusion list.  Petitioner requested reconsideration, and, in a reconsidered determination dated December 15, 2022, a CMS hearing officer affirmed CMS’s action.  CMS’s determination and notice explained Petitioner’s appeal rights.  She did not timely appeal the determination, and, pursuant to 42 C.F.R. § 498.70(c), CMS moves to dismiss her hearing request as untimely.  

For the reasons discussed below, I grant CMS’s motion.  I agree that the hearing request is untimely and that Petitioner has not shown good cause for my extending the time for filing.

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Background

Effective January 1, 2019, CMS implemented a “Preclusion List” as part of its effort to “prevent fraud, waste, and abuse, and to protect Medicare enrollees,” particularly with respect to prescription drug abuse.  Medicare will not reimburse individuals and entities on the Preclusion List for items and services they supply (Part C) nor for prescriptions they write (Part D).  Pursuant to 42 C.F.R. § 422.2 (Part C) and 42 C.F.R. § 423.100 (Part D), CMS’s “Preclusion List” includes individuals and entities that, within the previous ten years, have been convicted of a felony under federal or state law that CMS deems detrimental to the best interests of the Medicare program.  42 C.F.R. §§ 422.2; 423.100 (defining “Preclusion List”). 

In a notice letter dated August 10, 2022, CMS advised Petitioner that it was placing her on the Preclusion List because, within the previous ten years, she was convicted of a felony that CMS determines is detrimental to the best interests of the Medicare program.  CMS Ex. 3 at 1.  Petitioner timely requested reconsideration.  CMS Ex. 4. 

In a notice and reconsidered determination, dated December 15, 2022, CMS upheld Petitioner’s placement on the preclusion list, and, on that day, CMS served the notice by email.  CMS Exs. 1, 2.¹

On February 21, 2023, Petitioner filed her request for hearing. 

CMS moves to dismiss the request as untimely (CMS Motion).  Petitioner opposes.  With its motion, CMS filed five exhibits (CMS Exs. 1-5).  With her brief in opposition (P. Opp.), Petitioner filed two affidavits, which she did not mark as exhibits. 

DISCUSSION

1. Petitioner is not entitled to a hearing to challenge CMS’s December 15, 2022 reconsidered determination because she did not timely file her hearing request, and no good cause justifies extending the time for filing.²

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Section 1866(h) of the Social Security Act authorizes administrative review of determinations that a provider fails to comply substantially with Medicare program requirements “to the same extent as is provided in section 205(b) of the [Act].”  42 U.S.C. § 1395cc(h)(1).  Under section 205(b), the Secretary of Health and Human Services must provide reasonable notice and opportunity for a hearing “upon request by [the affected party] who makes a showing in writing that his or her rights may be prejudiced” by the Secretary’s decision.  42 U.S.C. § 405(b)(1).  The hearing request “must be filed within sixty days” after receipt of the notice of CMS’s determination.  Id. (emphasis added).  The 60-day time limit is thus a statutory requirement.  See Cary Health and Rehab. Ctr., DAB No. 1771 at 8-9 (2001). 

Similarly, the regulations mandate that the affected party “file the request in writing within 60 days from receipt of the notice . . . unless that period is extended.”  42 C.F.R. § 498.40(a)(2).  If the request is not filed within 60 days, the party may file a written request for extension, which the ALJ may grant “for good cause shown.”  42 C.F.R. § 498.40(c). 

The notice.  The December 15 determination includes a section prominently captioned:  “FURTHER APPEAL RIGHTS – ADMINISTRATIVE LAW JUDGE (ALJ),” which advises the Petitioner of her right to request a hearing before an ALJ.  The notice advises: 

If you believe that this determination is not correct, you may request ALJ review for the reconsideration portion of this decision letter.  To request ALJ review, you must file your appeal with the Civil Remedies Division of the Departmental Appeals Board within 60 calendar days after the date of receipt of this decision. 

CMS Ex. 1 at 5.  The notice details the process for filing an appeal, specifies what must be included in the hearing request, and cites the regulations that govern such appeals – 42 C.F.R. §§ 498.40 through 498.79.   CMS Ex. 1 at 5-6. 

CMS served the notice by email, sending it to Petitioner’s email address, dr.paylan@bodytuck.com.  CMS Ex. 5.  A “read receipt” confirms that the email message was received and opened at 11:54 a.m. on December 15, 2022.  CMS Ex. 2. 

On February 21, 2022 – 68 days after her office received the notice – Petitioner requested a hearing.

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When Petitioner received the notice.  The regulations were drafted at a time when virtually all notices were served by U.S. mail.  Hence, they provide that the date of receipt is presumed to be five days after the date on the notice “unless there is a showing that it was, in fact, received earlier or later.”  42 C.F.R. § 498.22(b)(3).  Over time, as technology has made it possible, CMS has adopted more advanced (and, arguably, more reliable) methods of sending its notices, and the Departmental Appeals Board has found that these alternative methods are valid. 

In a modern era of electronic mailing and messaging, the term “mails” is not unambiguous.  The core question for due process is whether the transmission method is as capable of accomplishing the essential purpose of notice. 

Fairway Med. Clinic & Shadow Creek Med. Clinic, DAB No. 2811 at 9 (2017) (emphasis added).  As the Board explained, that “essential purpose” requires a “notice reasonably calculated, under the circumstances, to apprise interested parties of the pendency of the action and afford them the opportunity to present their objections.”  It does not require “rigid conformity in terms of the kind of notice that must be given.”  Fairway, DAB No. 2811 at 8 n.6 (quoting Mullane v. Central Hanover Bank & Trust Co., 339 U.S. 306, 314 (1950)) (citing Lehner v. United States, 685 F.2d 1187, 1190-1191 (9th Cir. 1982)). 

Thus, the Board has upheld the practices of sending notices by email, fax, or upload into a shared electronic folder and agreed that such notices are received on the date sent or filed.  See Ishtiaq A. Malik, M.D., DAB No. 2962 at 7-8 (2019) (finding that Petitioner received notice of his Medicare exclusion when the Inspector General emailed the notice to his attorney); Allan L. Silverstein, M.D., DAB No. 2908 at 7-8 (2018); LCD Complaint:  Bioengineered Skin Substitutes for the Treatment of Diabetic & Venous Stasis Ulcers of the Lower Extremities, DAB No. 2814 at 6-7 (2017). 

Petitioner does not challenge CMS’s practice of serving notice by email.  Instead, pointing at the “read receipt,” she argues that it does not establish that the decision letter was attached.  P. Opp. at 1.  The read receipt refers to the “Medicare Provider Enrollment Appeal Re:  Christina Paylan,” which suggests that the document was attached.  CMS Ex. 2.  More significant, the notice itself, sent at 10:38 a.m. on December 15, 2022, says:  “Please find the attached Medicare Provider Enrollment Appeal Decision for Christina Paylan.”  It includes an attachment, titled “Christina Paylan Final Decision.”  CMS Ex. 5.  This establishes that CMS served the reconsidered determination on December 15, 2022. 

Petitioner also complains that, although the notice may have been sent to her email address, she “did not click on the December 15, 2022 email,” and her staff did not

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alert her to it.  Paylan Affidavit at 1 (¶ 4).  At that time, she was winding down a political campaign, and her campaign manager, with the assistance of two staffers, reviewed her emails, filtering out those that required a response.  Abdo Affidavit at 1 (¶ 4).  

The date that the notice arrived at Petitioner’s office is the date of receipt.  That Petitioner’s employees neglected to advise Petitioner that the notice arrived does not change that.  Day Op of North Nassau, Inc., DAB No. 2818 (2017).  Petitioner bears full responsibility for the actions (or inaction) of her staff.  Quoting with approval an ALJ’s analysis, the Board has explained that a petitioner

cannot excuse [her] failure to file a hearing request timely on the ground that [her agent] failed to act appropriately.  For purposes of interacting with Medicare, [the employee] was Petitioner and whatever [the employee] did bore Petitioner’s imprimatur. 

Id. at 6; see Act § 1128A(l) (providing that “[a] principal is liable . . . for the actions of the principal’s agent acting within the scope of the agency.”) (emphasis added); Madison County Nursing Home, DAB No. 2895 at 8-9 (2018); Kindred Transitional Care & Rehab - Greenfield, DAB No. 2792 at 10, 12 (2017) (holding that a facility may not disavow the wrongdoing of its staff and may properly be held responsible for its staff’s actions); Springhill Senior Residence, DAB No. 2513 at 15 (2013); Gateway Nursing Ctr., DAB No. 2283 at 8 (2009); N.C. State Veterans Nursing Home, Salisbury, DAB No. 2256 (2009); Beverly Healthcare Lumberton, DAB Ruling No. 2008-5 (Denial of Petition for Reopening Decision No. 2156) at 6-7 (2008)); Emerald Oaks, DAB No. 1800 at 7 n.3 (2001) (noting that the facility “cannot disown the consequences of the inadequacy of the care provided by the simple expedient of pointing the finger at [the employee’s] fault, since she was the agent of her employer[,] empowered to make and carry out daily care decisions.”). 

Aside from blaming her staff for not telling her about the notice, which, as the Board determined in Day Op, does not establish good cause, Petitioner has not alleged good cause to justify my extending the period for her to appeal.  See Day Op, DAB No. 2818 at 5-7 (affirming as “more than reasonable” an ALJ’s refusal to find good cause based on its acting administrator’s alleged negligence or malicious conduct in failing to file a hearing request.)

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Conclusion

Because Petitioner’s hearing request was untimely, and because no good cause justifies my extending the time for filing, I dismiss this appeal pursuant to 42 C.F.R. § 498.70(c).  

Served via DAB E-File

Christina Paylan
101 94th Avenue
Treasure Island, Florida 33706
drpaylan@bodytuck.com

Erin Shear
Assistant Regional Counsel
Office of the General Counsel, Region IV
Department of Health & Human Services
Sam Nunn Atlanta Federal Center
61 Forsyth Street, S.W., Suite 5M60
Atlanta, Georgia 30303
erin.shear@hhs.gov

Endnotes

¹  On the same day (December 15, 2022), CMS sent copies of the reconsidered determination, by mail, to three addresses it had listed for Petitioner.  CMS Ex. 1 at 1, 7.

²  I make this one finding of fact/conclusion of law.