24-7 Medical Transportation Service, LLC, ALJ Ruling 2024-3 (HHS CRD November 2, 2023)

DISMISSAL

A Centers for Medicare & Medicaid Services (CMS) contractor denied the enrollment application of 24-7 Medical Transportation Services, LLC (Petitioner), as a supplier in the Medicare Program.  CMS upheld the denial on reconsideration.  Petitioner filed a request for a hearing (RFH) before an administrative law judge (ALJ) to dispute the denial, but Petitioner did so ten days beyond the statutory deadline.  Petitioner’s owner mistakenly counted workdays rather than calendar days when calculating the period of time to file the RFH.  However, a mere mistake does not amount to good cause for extending the filing deadline, especially when the reconsidered determination provided clear notice that Petitioner needed to file the RFH within 60 calendar days of receiving that determination.  Therefore, I dismiss Petitioner’s RFH as untimely. 

The RFH indicates that Petitioner corrected the problems identified by CMS in the previous denial determinations, and Petitioner submitted with the RFH a document to show compliance.  Further, in the RFH, Petitioner made no attempt to argue that CMS incorrectly denied the enrollment application.  Because the appeals process is for disputing the validity of CMS’s reconsidered determination, and Petitioner’s RFH only attempts to show corrections made and current compliance, Petitioner should consider filing a new enrollment application. 

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I. Procedural History and Background

On March 21, 2023, Petitioner applied to enroll in the Medicare program as an Ambulance Service Supplier.  Electronic Filing System (E-File) Doc. No. 1a at 2.  Petitioner’s enrollment application provided an address in Ivy Glen as its practice location.  On April 11, 2023, an inspector went to Petitioner’s practice location to confirm compliance with Medicare requirements.  The inspector determined that Petitioner was not “operational” under the regulations because Petitioner was not open for business, had no customer activity, and the practice location was at a private residence with no business signage.  On April 18, 2023, a CMS contractor denied Petitioner’s enrollment application because it was not operational at its practice location.  E-File Doc. No. 1a at 2. 

Petitioner timely requested reconsideration of the denial of enrollment.  E-File Doc. No. 1a at 1.  Petitioner stated in the request that there was no need for Petitioner’s personnel to be at the practice location and that Petitioner would need to halt its operations to be present for an unannounced site inspection.  E-File Doc. No. 1a at 2.  Petitioner also stated in the request “that its signage was placed inside the location to prevent confusion for its dispatcher if there were potential clients coming in. . . .”  E-File Doc. No. 1a at 2. 

On July 17, 2023, a CMS hearing officer issued an unfavorable reconsidered determination.  E-File Doc. No. 1a.  The hearing officer indicated that Petitioner did not meet the definition of being “operational” in 42 C.F.R. § 424.502 because the Ivy Glen location was not open for business, had no appearance of customer activity, had no business signage, and appeared to be a private residence.  E-File Doc. No. 1a at 3.  The hearing officer stated that, based on the reconsideration request, another inspector went to Petitioner’s address on May 26, 2023, and confirmed that Petitioner’s practice location was a private residence with no business signage or customer/employee activity.  E-File Doc. No. 1a at 3.  The reconsidered determination included a notice of appeal rights: 

FURTHER APPEAL RIGHTS – ADMINISTRATIVE LAW JUDGE (ALJ): 

If you are satisfied with this decision, you do not need to take further action. 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.

E-File Doc. No. 1a at 3. 

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On October 2, 2023, Petitioner filed with the Civil Remedies Division a RFH along with a copy of the reconsidered determination and a supporting document.  E-File Doc. Nos. 1, 1a, 1b.  In the RFH, Petitioner stated that it took “prompt and comprehensive action to address and resolve these issues,” “implemented a series of corrective actions,” and “secured a dedicated office facility that complies with all CMS requirements.”  E-File Doc. No. 1.  Petitioner believes “that the steps we have taken will significantly improve our compliance with CMS requirements” and “kindly request[s] a reevaluation of our . . . provider enrollment application in light of the corrective actions we have taken.”           E-File Doc. No. 1.  Attached as a supplemental document to the RFH was a deed of lease executed on August 11, 2023, for a suite in a building for “General office use and related services associated with said core business. . . .”  E-File Doc. No. 1b at 1. 

On October 3, 2023, I acknowledged receipt of Petitioner’s RFH and ordered Petitioner to show cause why I should not dismiss the RFH as untimely.  E-File Doc. No. 2.  In the show cause order, I stated: 

Petitioner seeks a hearing to dispute CMS’s unfavorable reconsidered determination dated July 17, 2023.  That determination stated Petitioner could request a hearing if it disagreed with the determination; however, it cautioned that “you must file your appeal with the Civil Remedies Division of the Departmental Appeals Board within 60 calendar days after receipt of this decision.”  This deadline is consistent with the requirements in the Social Security Act and its implementing regulations.  42 U.S.C. §§ 405(b)(1), 1395cc(h)(1)(A), (j)(8); 42 C.F.R. § 498.40(a)(2). 

Under the regulations, I must presume that the date of receipt of the reconsidered determination is five days after the date on the reconsidered determination, unless there is a reasonable showing to the contrary. 42 C.F.R. § 498.22(b)(3). Accordingly, I must presume that Petitioner received the determination on July 24, 2023. Petitioner was, therefore, required to file a request for a hearing no later than September 22, 2023. As indicated above, Petitioner did not file its hearing request until October 2, 2023, which is 10 days after the deadline.

Untimely hearing requests are subject to dismissal. 42 C.F.R. § 498.70(c). I may extend the time for filing only upon a showing of “good cause.” 42 C.F.R. § 498.40(c).

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E-File Doc. No. 2.¹ 

Petitioner timely responded and stated that Petitioner’s owner mistakenly counted only the weekdays as part of the 60-day filing deadline.  Petitioner’s owner also stated that “I was under external stress and attended family emergencies which clouded my judgment and caused me to submit [the RFH] when I did without noticing the calendar days in the text.”  Petitioner’s owner apologized and indicated that financial stress on Petitioner is building; therefore, Petitioner needs to move forward with the appeal.  E-File Doc. No. 3. 

II. Discussion

The Social Security Act authorizes the Secretary of Health and Human Services (Secretary) to create regulations governing the enrollment of providers and suppliers to furnish health care items and services to Medicare program beneficiaries.  See 42 U.S.C. § 1395cc(j).  For purposes of the Medicare program, an ambulance service is considered a supplier.  42 C.F.R. §§ 410.40(b)(1), 498.2 (definition of Supplier); see also 42 U.S.C. § 1395x(d), (s)(7), (u). 

Under the Secretary’s regulations, a supplier must enroll in the Medicare program to receive payment for covered Medicare items or services provided to beneficiaries.  42 C.F.R. § 424.505.  To enroll, a supplier must complete and file an enrollment application with CMS and meet all of the requirements to be a supplier.  42 C.F.R. §§ 424.510, 424.530.  The enrollment application includes identification of the supplier’s practice location.  42 C.F.R. §§ 424.502 (definition of Enroll/Enrollment (paragraph 3)); 424.510(d)(2)(ii).  As part of the enrollment process, CMS may conduct on-site inspections of a supplier’s practice location.  42 C.F.R. §§ 424.510(d)(8), 424.517.  CMS may deny enrollment when an on-site review determines that a supplier is not operational to furnish Medicare-covered items or services.  42 C.F.R. §§ 424.510(d)(6), 424.530(a)(5)(i). 

The regulations specify the requirements to be operational as follows: 

Operational means the provider or supplier has a qualified physical practice location, is open to the public for the purpose of providing health care related services, is prepared to submit valid Medicare claims, and is properly staffed, equipped, and stocked (as applicable, based on the type of facility or organization, provider or supplier specialty, or the

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services or items being rendered), to furnish these items or services.

42 C.F.R. § 424.502. 

In the present case, Petitioner filed a RFH based on a denial of its enrollment application for failing to meet the requirement of being operational as defined in the regulations.  However, as explained in the show cause order, Petitioner filed the RFH late.  Petitioner’s owner does not dispute that the RFH is late when one uses calendar days as the method of calculating the due date.  Petitioner’s owner indicates unidentified personal problems caused a distraction that led to a failure to properly note that the reconsidered determination specified that Petitioner had 60 calendar days from receipt of the reconsidered determination to file the RFH. 

As stated in the show cause order, a RFH to dispute a denial of enrollment “must be filed within sixty days after notice of such decision is received by the individual making such request.”  42 U.S.C. §§ 405(b)(1), 1395cc(h)(1), (j)(8); see also 42 C.F.R. § 498.40(a)(2).  The presumed receipt date for the reconsidered determination is five days after mailing.  42 C.F.R. §§ 498.22(b)(3), 498.40(a)(2).  An ALJ may extend the due date for a RFH “[f]or good cause shown.”  42 C.F.R. § 498.40(c)(2). 

The regulations do not define what constitutes “good cause” to extend the filing deadline for a hearing request 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)).  However, a basic definition of “good cause” means “[a] legally sufficient reason.”  Black’s Law Dictionary 11th ed. (2019) (defined under the second definition of the word “cause”).  Therefore, good cause is more than just explaining why a request for hearing is late.  See Brookside, DAB No. 2094, at 7 n.7 (“Here, we need not decide exactly the scope of the ALJ’s discretion under [42 C.F.R. § 498.40(c)] since (under any reasonable definition of that term) the ALJ reasonably determined that [the provider] did not show ‘good cause.’”). 

While I have no reason to doubt that Petitioner’s owner had distracting situations arising during the period of time to file the RFH, Petitioner’s statement is vague as to those problems and how those problems caused the late filing.  As a result, Petitioner’s explanation does not provide a legal excuse for failing to timely file a hearing request because Petitioner’s owner appears to have simply made a mistake despite the clear statement in the reconsidered determination that Petitioner had 60 calendar days to file the RFH.  See Kids Med (Delta Medical Branch), DAB No. 2471 at 7-8 (2012) (errors causing the late filing of a RFH are not good cause).  Dismissal of a RFH is appropriate when the reconsidered determination clearly explained the filing requirements and deadlines to the petitioner.  See Vanguard Vascular & Vein, PLLC, DAB No. 2523, at 3-4

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(2013) (upholding dismissal when the reconsidered determination correctly explained in “unambiguous and conspicuous language” that the petitioners had 60 calendar days from their receipt of the reconsidered determination to request a hearing before an ALJ); 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).  Because Petitioner has not made a showing of good cause for filing its hearing request ten days after the expiration of the 60-day deadline, I cannot extend the filing deadline for the RFH. 

As noted above, Petitioner’s RFH does not dispute the basis for the denial of Petitioner’s enrollment application but focuses on Petitioner’s later efforts to correct the problems noted in the reconsidered determination.  Petitioner even submitted a copy of a lease for Petitioner’s new office space.  However, the purpose of a proceeding before an ALJ is to determine whether the denial of the enrollment application is supported under the facts and law of that case.  See 42 C.F.R. §§ 498.3(b)(17) (denial of enrollment is an appealable initial determination), 498.5(l) (prospective suppliers dissatisfied with a reconsidered determination are entitled to a hearing before an ALJ).  For this reason, a supplier’s RFH must “[i]dentify the specific issues, and findings of fact and conclusions of law with which the [supplier] disagrees; and [s]pecify the basis for contending that the findings and conclusions are incorrect.”  42 C.F.R. § 498.40(b).  Petitioner’s RFH does not provide this information. 

Rather, Petitioner’s RFH is similar to a corrective action plan (CAP).  However, prospective suppliers are not entitled to submit a CAP to CMS based on the denial of enrollment under 42 C.F.R. § 424.530(a)(5).  Instead, CAPs may only be submitted when the denial of the enrollment application is based on noncompliance with enrollment requirements.  42 C.F.R. § 424.530(a)(1).  Further, ALJs have no role in reviewing a CAP.  42 C.F.R. § 405.809(b)(2); DSM Imaging, Inc., DAB No. 2313 at 8 (2010). 

Given Petitioner’s RFH, Petitioner should consider filing a new enrollment application.  The regulations provide the following concerning the resubmission of an enrollment application: 

Resubmission after denial. A provider or supplier that is denied enrollment in the Medicare program cannot submit a new enrollment application until the following has occurred if the denial:

(1) Was not appealed, the provider or supplier may reapply after its appeal rights have lapsed.
(2) Was appealed, the provider or supplier may reapply after notification that the determination was upheld.

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42 C.F.R. § 424.530(b).  If Petitioner believes that it is in its best interests to file a new enrollment application, Petitioner may consider contacting the relevant CMS contractor to discuss the most efficient and expeditious manner in which Petitioner could submit, and have the contractor evaluate, the new application. 

III.  Order

I dismiss Petitioner’s RFH for untimeliness. 

Endnotes

¹  In the show cause order, I explained that, when calculating the due date for the RFH, five days from July 17, 2023, fell on a Saturday.  Therefore, the presumed receipt date of the reconsidered determination would be Monday, July 24, 2023.  Civil Remedies Division Procedures § 11(a).