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Department of Health and Human Services

DEPARTMENTAL APPEALS BOARD

Civil Remedies Division


IN THE CASE OF  
Sedgewick Health Care Center, Petitioner Date: 1999 May 27
- v. -  
Health Care Financing
Administration
Docket No. C-99-014
Decision No. CR596
DECISION
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The Motion To Vacate Dismissal of Case filed by the Petitioner is DENIED, because Petitioner has not shown good cause therefor.

I. BACKGROUND

This case is before me on Petitioner's Motion to vacate my February 17, 1999 Order dismissing this case for abandonment.

On July 7, 1998, the Health Care Financing Administration (HCFA) notified Petitioner that it had determined to impose certain remedies, based upon Petitioner's failure to comply with participation requirements for nursing homes participating in the Medicare and/or Medicaid programs. Petitioner, through counsel, filed its initial request for hearing on August 31, 1998. The Departmental Appeals Board (DAB) Civil Remedies Division acknowledged receipt of Petitioner's hearing request by letter dated October 19, 1998, and attached my Order of even date to its acknowledgment letter.

In my October 19, 1998 Order, the parties were directed to file written statements within 60 days of the date of the Order, expressing their views as to how this case should proceed. The 60-day period expired on December 18, 1998.

On December 18, 1998, counsel for HCFA filed a Motion to Dismiss this case for abandonment, pursuant to 42 C.F.R. � 498.69. Petitioner failed to respond to my October 19, 1998 Order or to HCFA's Motion To Dismiss.

On February 17, 1999, I ordered this case dismissed pursuant to 42 C.F.R. � 498.69. In my February 17, 1999 Order, I cited Petitioner's continuing failure to respond to either my October 19, 1998 Order or to HCFA's Motion To Dismiss as reasons for concluding that Petitioner had abandoned its request for hearing. Petitioner filed a Motion To Vacate Dismissal of Case (Motion to Vacate) on March 24, 1999. On or about March 26, 1999, HCFA filed its Objection To Petitioner's Motion To Vacate Dismissal Of Case.


ISSUES
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The issues in this case are whether Petitioner: (1) is entitled to a hearing; and (2) has shown good cause for vacating the dismissal of its hearing request.


FINDINGS OF FACT AND CONCLUSIONS OF LAW
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I make findings of fact and conclusions of law (Findings) to support my decision in this case. I state each finding below as a separate heading. I discuss each Finding in detail.

1. In order to be entitled to a hearing from a determination by HCFA, an entity must file its hearing request no more than 65 days from the date of HCFA's mailing to that party of the notice of HCFA's determination.

The regulations which govern hearings involving HCFA require that an entity file a hearing request no more than 65 days from the date HCFA mails notice of a determination, in order to be entitled to a hearing from that determination. Specifically, an entity must make its request within 60 days from its receipt of the notice of HCFA's determination. 42 C.F.R. � 498.40(a)(2). Receipt of a notice of a determination is presumed to occur five days from the date of mailing of the notice. Id.; 42 C.F.R. � 498.22. See In the Matter of: Jackson Manor Health Care, Inc. v. Health Care Financing Administration, DAB CR545 (1998).

2. Petitioner did file timely a hearing request.

In its Motion to Vacate, Petitioner asserted that its request for hearing had been filed timely, and that genuine issues of law and fact exist. See Motion to Vacate, at 3.

HCFA issued its notice to Petitioner on July 7, 1998. Petitioner, through counsel, sent its request for a hearing by letter dated August 31, 1998, or 55 days after HCFA mailed Petitioner its notice. Therefore, Petitioner timely requested a hearing to contest HCFA's determination, and complied with the requirements of 42 C.F.R. � 498.40(a)(2).

3. An administrative law judge (ALJ) may vacate any dismissal of a hearing request if a party (a) files a request to that effect within 60 days from receipt of the notice of dismissal, and (b) establishes good cause for vacating the dismissal.

An ALJ may vacate a dismissal of a request for hearing, if the party files a request to that effect within 60 days from receipt of the dismissal notice, and shows "good cause" for vacating the dismissal. 42 C.F.R. � 498.72. The term "good cause" is not defined by the regulation. See 42 C.F.R. � 498.72.

In cases involving requests for hearing pursuant to 42 C.F.R. � 498.40, the term "good cause" has been interpreted as a circumstance or circumstances beyond an entity's ability to control which prevented that entity from making a hearing request timely. Cf. Hospicio San Martin, DAB CR387 (1995), at 2; Hillcrest Health Facility, Inc., DAB CR489 (1997), at 3; Mathis Nursing Home, DAB CR461 (1997), at 6 (involving failure to timely file request for hearing). Avoidable human error has not been held to constitute "good cause" for reinstating a hearing request dismissed for untimeliness. Mathis Nursing Home, DAB CR461 (1997), at 9.

In a case where an entity files a request to vacate dismissal of a hearing request, the burden is on the entity to show that it was prevented, by a circumstance or circumstances beyond its ability to control, from complying with an ALJ's orders. Avoidable human error will not constitute "good cause" for reinstating a hearing request dismissed due to abandonment. Cf. Mathis Nursing Home, DAB CR461 (1997), at 9.

4. Petitioner did timely file a request to vacate the dismissal of its hearing request.

I issued an Order Dismissing Case on February 17, 1999. Petitioner, through counsel, filed its request for to vacate dismissal of its hearing request by Motion dated March 24, 1999, or 35 days after the date of my Order. Therefore, Petitioner timely filed its request, and complied with the requirements of 42 C.F.R. � 498.72.

5. Petitioner has not established "good cause" for vacating the dismissal of its hearing request.

In support of its Motion to Dismiss, HCFA asserted that Petitioner's counsel had failed to return her telephone calls on December 15 and 17, 1998, respectively. HCFA also contended that the DAB currently is using acknowledgment orders and the parties' timely responses to the directives contained therein, in lieu of a prehearing conference. Therefore, HCFA reasoned, Petitioner's failure to respond to my October 19, 1998 Order was tantamount to a failure to appear at a prehearing conference without showing good cause, and constituted one of two situations, under 42 C.F.R. � 498.69, in which an ALJ may consider a hearing request to be abandoned by the affected party.

Petitioner sets forth, as its first argument in support of its Motion to Vacate, a chronology of events describing a misunderstanding between itself and its counsel as to which matters Petitioner had authorized representation by its counsel. Specifically, Petitioner asserted that it failed to respond to my October 19, 1998 Order due to an unfortunate misunderstanding between Petitioner and its counsel, whereby Petitioner's counsel believed that Petitioner had directed it not to pursue certain matters, including the instant case. Further, Petitioner's counsel stated that she elected not to return telephone calls from HCFA's counsel on December 15 and 17, 1998, respectively, due to her misunderstanding of her client's instructions. Petitioner's counsel asserted that it first learned that Petitioner wanted to pursue this case on December 21, 1998, that is, after HCFA filed its Motion to Dismiss, but prior to Petitioner's receipt thereof.

The misunderstanding between Petitioner and its counsel, while regrettable, appears to constitute avoidable human error, rather than a circumstance or circumstances beyond its ability to control. For example, Petitioner's counsel could have returned the telephone call to HCFA's counsel and sought clarification from its client as to whether Petitioner wished representation on this particular matter. Petitioner also could have responded to my October 19, 1998 Order by requesting a stay of proceedings, and sought clarification from her client while awaiting my disposition of the stay request.

Next, counsel for Petitioner stated that she received HCFA's Motion To Dismiss on December 23, 1998, and attempted to contact HCFA's counsel that day by telephone. Petitioner's counsel also stated that HCFA counsel returned her telephone call on December 30, 1998, at which time she advised HCFA's counsel that Petitioner wanted to pursue the matter. The parties' counsel also discussed "normal procedures" of the DAB Civil Remedies Division, and Petitioner's counsel maintained that HCFA counsel advised that the DAB Civil Remedies Division would issue a "show cause" order, seeking Petitioner's response to HCFA's Motion to Dismiss, before ruling on HCFA's Motion to Dismiss. See Motion To Vacate, at 3.

As in the first instance regarding the misunderstanding between Petitioner and its counsel, the circumstances described constitute avoidable human error, rather than a circumstance or circumstances beyond Petitioner's ability to control. Petitioner (or its counsel) may not rely upon representations by HCFA counsel as to the "normal procedures" of the DAB Civil Remedies Division. If, after HCFA filed its Motion to Dismiss, Petitioner's counsel needed clarification as to the "normal procedures" of the DAB Civil Remedies Division, she could have sought advice from the DAB staff, or requested the ALJ to convene a conference call between the parties. Petitioner took neither action.

Finally, Petitioner argued that my February 17, 1999 Order dismissing this case was issued without a "show cause" notice having been sent pursuant to 42 C.F.R. � 498.69(b)(2). Petitioner's counsel asserted that she independently verified that the language of 42 C.F.R. � 498.69(b)(2) provides for an ALJ's issuance of a "show cause" order prior to dismissing a request for hearing for abandonment.

The language contained at 42 C.F.R. � 498.69(b) states that an ALJ may consider a hearing request to be abandoned if a party (or its representative) fails to appear at a prehearing conference or hearing without good cause, or fails to respond to a "show cause" notice or order with a showing of good cause (emphasis added). The provisions of 42 C.F.R. � 498.69(b) do not require an ALJ to issue a "show cause" order prior to determining that a hearing request has been abandoned. Rather, the section provides that an ALJ may construe (or consider) a party's failure to respond to an order to "show cause" as tantamount to abandonment.

Further, the word "abandoned" is not a defined term for purposes of 42 C.F.R. � 498.69. Accordingly, an ALJ may consider the specific circumstance or circumstances in a particular case when determining whether or not to dismiss a hearing request for abandonment, and is not limited to the circumstances set forth in 42 C.F.R. � 498.69(b).

In the instant case, my determination to dismiss the case for abandonment is supported by the record. First, the parties were directed, in my October 19, 1998 Order, to file written statements within 60 days of the date of the Order, expressing their views as to how this case should proceed. The 60-day period expired on December 18, 1998. Petitioner failed to respond to my Order. Nor did Petitioner respond to HCFA's December 18, 1998 Motion To Dismiss. Petitioner's failure to respond to either my Order or HCFA's Motion to Dismiss constituted sufficient reasons for me to conclude that Petitioner had abandoned its request for hearing. Indeed, given the circumstances of this case, I may construe Petitioner's failure to respond to my Order and HCFA's Motion to Dismiss as abandonment of the hearing request and as an assent to the dismissal, respectively.

That Petitioner's counsel failed to ascertain her client's wishes regarding pursuit of the request for hearing in this case, may have relied upon representation of opposing counsel as to DAB procedures, or inadvertently misinterpreted applicable regulations do not constitute "good cause" for vacating my dismissal order. Petitioner may not assert "good cause" based upon the avoidable failures of its counsel to discharge responsibilities on Petitioner's behalf. See In the Matter of: Jackson Manor Health Care, Inc. v. Health Care Financing Administration, DAB CR545 (1998).


ANALYSIS
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CONCLUSION
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For reasons set forth above, Petitioner (or its counsel), in its Motion to Vacate, set forth a series of events which constitute, on their face, avoidable human error. Petitioner failed to cite any circumstance or circumstances beyond their ability to control, such as to constitute "good cause" for vacating the dismissal of its hearing request.


JUDGE
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Steven T. Kessel
Administrative Law Judge


FOOTNOTES
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CASE | DECISION | ISSUES | FINDINGS OF FACT AND CONCLUSIONS OF LAW | ANALYSIS | CONCLUSION | JUDGE | FOOTNOTES