SUBJECT:

Texarkana Kidney Disease Hypertension Center,

Petitioner,

Centers for Medicare & Medicaid Services.

DECISION DISMISSING

I dismiss the hearing request of Petitioner, Texarkana Kidney Disease Hypertension Center. I do so because: Petitioner has no right to a hearing inasmuch as it failed to file a timely hearing request; and Petitioner has not established good cause for its failure to file a timely hearing request.

I. Background and undisputed facts

The Centers for Medicare & Medicaid Services (CMS) offered 11 exhibits in support of its motion (CMS Exhibit (Ex.) 1 - CMS Ex. 11). Petitioner offered nine exhibits in reply to CMS's motion (P. Ex. A - P. Ex. I). I receive all of these exhibits into the record.

The following facts are undisputed. Petitioner participated in the Medicare program as a certified supplier of end stage renal disease (ESRD) services. On March 30, 2005, CMS notified Petitioner that it would terminate Petitioner's participation in Medicare effective April 14, 2005, based on Petitioner's failure to comply with applicable Medicare conditions of coverage. CMS Ex. 4. The notice letter advised Petitioner that it had a right to a hearing before an administrative law judge to challenge CMS's determination.

It stated:

If you believe this determination is not correct, you may request a hearing before an administrative law judge of the Department of Health and Human Services, Departmental Appeals Board. Procedures governing this process are set out in regulations at 42 C.F.R. � 498.40 et seq. A written request for a hearing must be filed no later than 60 days from the date of receipt of this letter.

Id. at 2. The letter further gave Petitioner specific content and mailing instructions concerning any hearing request that Petitioner might file. Id. Finally, it gave Petitioner the names of two individuals, and their phone numbers, whom Petitioner could contact if it had any questions. Id.

CMS avers, and Petitioner does not dispute, that it faxed the March 30, 2005 letter to Petitioner on that date. It avers additionally, and Petitioner does not dispute, that it sent a hard copy of the letter to Petitioner by FedEx, and that Petitioner received it on March 31, 2005. CMS Ex. 4, at 3.

The parties subsequently engaged in negotiations concerning Petitioner's status with the intent of reaching some agreement that would obviate the need to impose the remedy of termination of participation. During the weeks that transpired after CMS's issuance of the March 30, 2005 letter, Petitioner requested, and CMS acceded to, extensions of the deadline for imposition of the remedy. On April 11, 2005, Petitioner's counsel sent an e-mail to CMS asking that it grant Petitioner an "emergency extension" of termination of participation so as to enable Petitioner's owner to sell the facility. P. Ex. B, at 1. Petitioner's counsel followed this request for an emergency extension with a letter to CMS's counsel dated April 12, 2005. P. Ex. C. In that letter Petitioner's counsel averred that negotiations were ongoing for the sale of the facility to a third party. Counsel for Petitioner stated that she hoped that CMS would extend the termination date so as to enable negotiations for the sale of the facility to be completed. Id.

On April 13, 2005, CMS notified Petitioner that it was extending the date of termination of participation from April 14 to April 21, 2005. CMS Ex. 8, at 1. CMS took this action "in the interest of assuring adequate access to care for patients . . . ." Id. This letter again gave Petitioner the names and telephone numbers of two persons to contact if it had any questions about CMS's action. Id.

In a letter dated April 20, 2005, CMS again extended the date of imposition of termination, from April 21 to May 6, 2005. CMS Ex. 9, at 4. Once again, CMS gave Petitioner the names and telephone numbers of individuals whom Petitioner could contact should it have questions about CMS's action. Id.

On April 28, 2005, counsel for CMS wrote to counsel for Petitioner advising her that CMS would proceed to terminate Petitioner's participation in Medicare effective May 6, 2005. CMS Ex. 11, at 2. CMS's counsel advised Petitioner's counsel that CMS concluded that a management agreement proposed by Petitioner as a way of averting termination of participation was unacceptable to CMS.

On May 5, 2005, CMS sent an additional letter to Petitioner in which it advised Petitioner that it was extending the date of termination to May 8, 2005, "in order to allow for a more orderly transfer of patients" from Petitioner's facility to another facility. CMS Ex. 10, at 1. CMS granted no additional extensions of the termination deadline and it terminated Petitioner's Medicare participation effective May 8, 2005.

None of the letters that CMS sent to Petitioner after March 30, 2005 advised Petitioner that CMS was extending the deadline for Petitioner to request a hearing challenging CMS's determination to terminate Petitioner's participation in Medicare. CMS Ex. 8 - CMS Ex. 11. Nor did any of the letters contain language stating that CMS had reconsidered the merits of its decision to terminate Petitioner's participation in Medicare. Id.

Petitioner filed a hearing request on June 27, 2005. It filed the request 89 days from its receipt of CMS's March 30, 2005 notice of termination of participation.

II. Issues, findings of fact and conclusions of law

A. Issues

The issues in this case are whether:

1. Petitioner is entitled to a hearing to challenge CMS's determination to terminate Petitioner's participation in Medicare; and

2. Good cause exists for granting Petitioner a hearing if it is not entitled to one.

B. Findings of fact and conclusions of law

I make findings of fact and conclusions of law (Findings) to support my decision in this case. I set forth each Finding, below, as a separate heading. I discuss each Finding in detail.

1. Petitioner filed its hearing request untimely and, therefore, it is not entitled to a hearing.

Regulations governing hearings in cases involving Medicare participation determinations are set forth at 42 C.F.R. Part 498. An affected party is entitled to a hearing to challenge a determination by CMS to terminate that party's participation in Medicare only if it complies with the timeliness and content requirements of 42 C.F.R. � 498.40. In order to be timely a request must be filed by an affected party within 60 days of its receipt from CMS of CMS's notice of an initial determination or of a reconsidered or revised determination. 42 C.F.R. � 498.40(a)(2).

The expressions "initial determination," "reconsidered determination" and "revised determination" are terms of art. An action taken by CMS does not confer a right to a hearing on an affected party unless it falls within the meaning of one of these three terms.

CMS's March 30, 2005 notice to Petitioner was notice of CMS's initial determination. The regulations do not give a generic meaning to the expression "initial determination." But, the regulations contain a very explicit list of what actions by CMS comprise initial determinations. 42 C.F.R. �� 498.3; 498.5. Such actions include a determination by CMS that a supplier of services - such as an ESRD - no longer meets conditions of Medicare coverage. 42 C.F.R. � 498.5(e). It is evident, and the parties do not disagree, that CMS's March 30, 2005 letter to Petitioner contained a finding that Petitioner no longer met the criteria for coverage of an ESRD. That letter notified Petitioner of an initial determination by CMS and Petitioner had 60 days from its receipt of the letter - or, until May 29, 2005 - to request a hearing from that initial determination.

Petitioner did not request a hearing within 60 days of its receipt of the March 30, 2005 letter. Consequently, it is not entitled to a hearing in order to challenge CMS's initial determination to terminate its participation in Medicare. 42 C.F.R. � 498.40(a).

Petitioner does not dispute that it failed to request a hearing timely after receiving CMS's March 30, 2005 notice of its initial determination. But, according to Petitioner, subsequent notices from CMS, especially the letter of April 28, 2005 from CMS's counsel, were also "determinations" - either initial, revised, or reconsidered - and these notices thus conferred hearing rights in addition to that which was conferred by the March 30, 2005 notice. See CMS Ex. 11. By Petitioner's reckoning, it had 60 days from its receipt of the April 28, 2005 letter within which to request a hearing and, therefore, it filed its June 27, 2005 hearing request timely.

I disagree with this analysis. None of the notices that CMS sent to Petitioner on dates subsequent to March 30, 2005 constitute initial, revised, or reconsidered determinations that conferred hearing rights. The sole notice that conferred these rights was the March 30, 2005 notice.

First, none of the notices that CMS sent to Petitioner after March 30, 2005 communicated new initial determinations. The regulations expressly state that initial determinations are only those items that are itemized as initial determinations at 42 C.F.R. �� 498.3 and 498.5. An agreement by CMS to extend a deadline for imposing a remedy is not one of the itemized actions that comprise initial determinations. Id. Moreover, the various extensions granted by CMS to Petitioner are not the kind of actions that are defined by the regulations to be initial determinations. See 42 C.F.R. �� 498.3 and 498.5. The initial determination in this case embodied a finding by CMS as to Petitioner's compliance with Medicare participation criteria. The extensions granted by CMS to Petitioner did not revisit that finding in any sense of the word. Expressly, and implicitly, they were made to accommodate the interests of Petitioner or of the beneficiaries who were treated by Petitioner. But, they did not reflect any substantive change in CMS's thinking about Petitioner's compliance status.

Nor were any of the extensions granted by CMS after March 30, 2005 reconsidered determinations. "Reconsideration" is a process by which CMS reviews an initial determination, based on an affected party's request, in order to hear challenges to the initial determination. 42 C.F.R. � 498.22. It is an intermediate review process that falls between an initial determination and an administrative hearing, and which CMS affords to certain affected parties. Only the following parties are entitled to reconsideration: a prospective provider or supplier whose request for certification has been denied; or, a hospital seeking to qualify to claim payment for all emergency services furnished in a calendar year. 42 C.F.R. � 498.22(a). Such a party may have its initial determination reconsidered by CMS, but only if it files a written request for reconsideration within 60 days of its receipt of the initial determination. 42 C.F.R. � 498.22(b)(3).

Petitioner is not a prospective provider or supplier, nor is it a hospital seeking reimbursement for emergency services. As a matter of law it is not entitled to reconsideration of the initial determination. Nor did Petitioner request reconsideration of the initial determination described in CMS's March 30, 2005 letter. Consequently, it had no right to reconsideration and none of the notices that CMS sent to Petitioner after March 30, 2005 may be characterized as a reconsidered determination. Moreover, and as a matter of substance, the contents of CMS's post-March 30 communications to Petitioner are not in the nature of a reconsidered determination. Nothing in those notices suggests that CMS had revisited the findings that were the basis for its initial determination and either sustained them or found them to be in error.

Finally, none of the notices sent by CMS to Petitioner after March 30, 2005 constitute a revised determination. The regulations do not state specifically what constitutes a revised determination. However, it is apparent that what the regulations mean by a revised determination is an action by CMS to further revise a reconsidered determination. See 42 C.F.R. �� 498.25; 498.30; 498.32. Here, there could have been no revised determination because there was no reconsidered determination. Furthermore, and as I have discussed above, there was nothing in the notices that CMS sent to Petitioner after March 30, 2005 that suggested that CMS had re-thought its findings leading to its initial determination. Rather, CMS made it plain to Petitioner that it was extending its deadline for termination of participation simply as a courtesy to Petitioner or to the beneficiaries that Petitioner treated, without reconsidering the merits of its initial determination.

2. Petitioner has not established good cause for extension of the time within which it may request a hearing.

The regulation governing hearing requests in cases involving CMS provides that an administrative law judge may grant a party an extension of time within which to file its hearing request, but only if that party establishes good cause for not filing its request timely. 42 C.F.R. � 498.40(c). The term "good cause" is not defined by the regulation but it has been held to consist of circumstances that are beyond a party's ability to control, but for which that party would have been able to file its hearing request timely.

Good cause plainly does not exist here. Petitioner argues that it was misled by the several extensions of the termination of participation date that CMS granted to it into believing that its deadline for requesting a hearing also was being extended by CMS. I do not find that argument to be persuasive. The extensions of the termination of participation date that were granted by CMS say nothing whatsoever about extensions of the deadline for requesting a hearing. They are simply silent as to that issue. CMS Ex. 8 - CMS Ex. 11. I find that there is nothing in these extensions that is ambiguous or which would have misled a reasonable person into believing that CMS was extending the deadline for requesting a hearing simultaneous with its granting of extensions of the termination date.

Moreover, even assuming for argument's sake that there was some ambiguity in these documents, they explicitly provided Petitioner with a way in which any ambiguity could be resolved. On two occasions CMS supplied to Petitioner the names and telephone numbers of two individuals who Petitioner could call if it had any questions about what CMS was doing or what Petitioner had to do to preserve its right to a hearing. CMS Ex. 4, at 2; CMS Ex. 8, at 1. Petitioner did not avail itself of that opportunity.

Finally, I note that Petitioner is not appearing pro se in this case and it cannot contend that it was the victim of its naivete. Petitioner had counsel, who had access to the regulations governing hearings and who could have ascertained exactly what CMS intended by its notices of extension. ⁽¹⁾

3. I dismiss Petitioner's hearing request because Petitioner did not file its hearing request timely and because Petitioner has not established good cause for its failure to file a timely hearing request.

Petitioner is not entitled to a hearing in this case because it did not file its hearing request timely. Nor has Petitioner established good cause for its failure to file a timely request. Consequently, I must dismiss Petitioner's hearing request. 42 C.F.R. �� 498.70(b), (c).

Steven T. Kessel

Administrative Law Judge

1. Counsel for CMS avers that, in early or mid-June 2005 she received a telephone call from the individual who represented Petitioner at that time. According to CMS's counsel, Petitioner's then-counsel wanted to know whether CMS would mail a "final" notice to Petitioner. CMS's brief in support of its motion at 4. Petitioner does not deny that this call was made. The call strikes me as odd inasmuch as CMS's letters to Petitioner of April 28 and May 5, 2005 unambiguously tell Petitioner that settlement discussions had failed and that termination of participation was being effectuated. CMS Ex. 10; CMS Ex. 11. One not-unreasonable explanation for the call is that Petitioner's then counsel, realizing that she had missed the deadline for requesting a hearing, was hoping that CMS might send an additional notice that granted hearing rights to Petitioner.