Transnet Home Group, DAB No. 3027 (2020)

FINAL DECISION ON REVIEW OF ADMINISTRATIVE LAW JUDGE DECISION

Transnet Home Group (Petitioner) requested a hearing before an Administrative Law Judge (ALJ) to challenge a determination by the Centers for Medicare and Medicaid Services (CMS) to deny its application for Medicare enrollment.  The ALJ found that the hearing request was untimely and that Petitioner had not shown “good cause” to extend the filing deadline.  Transnet Home Group, CRD Docket No. C-20-577, “Ruling Dismissing Request for Hearing” (July 10, 2020) (ALJ Ruling).  Petitioner appeals the dismissal but has shown no legal or factual error by the ALJ or any abuse of discretion.  We therefore uphold the dismissal of Petitioner’s request for hearing.

Legal Background

Regulations in 42 C.F.R. Part 498 govern the administrative appeal rights of health care “providers” and “suppliers” that receive adverse determinations by CMS relating to Medicare enrollment.  See 42 C.F.R. §§ 498.3(a) and (b)(17), 498.5(l).  A provider or supplier may appeal an initial determination by CMS to deny or revoke Medicare enrollment by first requesting that CMS “reconsider” the initial determination.  Id. §§ 498.5(l)(1), 498.22.  If the provider or supplier requests reconsideration in accordance with the regulations, CMS “[m]akes a reconsidered determination, affirming or modifying the initial determination and the findings on which it is based.”  Id. § 498.24(c).  A provider or supplier dissatisfied with CMS’s “reconsidered determination” may then request a hearing before an administrative law judge to review that determination.  Id. §§ 498.5(l)(2), 498.40(a).

The Part 498 regulations require that a hearing request be made within a specified time period or be subject to dismissal.  Section 498.40(a)(2) provides that a party desiring to appeal an adverse reconsidered determination must file a hearing request within 60 days of “receipt” of CMS’s notice of reconsidered determination.  Section 498.40(a)(2) expressly cross-references section 498.22(b)(3), which provides that an “affected party” is presumed to have received notice of CMS’s initial, reconsidered, or revised determination “5 days after the date on the notice unless there is a showing that [the

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notice] was, in fact, received earlier or later.”  Section 498.40(c) provides that if a hearing request is “not filed within 60 days,” the affected party “may file with the ALJ a written request for extension of time stating the reasons why the request was not filed timely.”  42 C.F.R. § 498.40(c)(1).  An ALJ “may extend the time for filing” upon a showing of “good cause.”  Id. § 498.40(c)(2).  Section 498.70(c) permits – but does not require – an ALJ to dismiss a hearing request if the “affected party did not file [the] hearing request timely and the time for filing has not been extended.”    

Case Background

Unless otherwise indicated, the facts stated in this background section are undisputed.  Petitioner, a mental health treatment facility, filed an application to enroll in the Medicare program.  See CMS’s July 2, 2020 Motion to Dismiss (MTD) at 1.  On June 28, 2019, Palmetto GBA, a CMS contractor, denied the application.  Id., Att. A at 3.  On July 1, 2020, Petitioner requested reconsideration.  Id., Att. A at 1-2.  Eight days later, Petitioner’s owner, Trent Thomas, emailed a Palmetto employee to ask where he could direct an inquiry about the status of the reconsideration request.  See July 9, 2020 email attached to Pet.’s Response to MTD.  (The employee responded that Thomas could phone Palmetto’s “Provider Contact Center,” which would then redirect him to the appropriate person.  Id.)

By letter dated September 29, 2019, Palmetto issued a reconsidered determination sustaining the enrollment denial.  The September 29, 2019 letter – which constitutes CMS’s notice of reconsidered determination – was signed by a Palmetto enrollment analyst and addressed to Petitioner at its business address in Greensboro, North Carolina. 

Approximately six months later, on March 31, 2020, Petitioner filed a request for hearing to challenge the enrollment denial.  CMS responded with a motion to dismiss the case on the ground that Petitioner’s hearing request was untimely filed and that good cause was lacking to extend the filing deadline.  MTD at 1.  In support of the motion, CMS asserted that, under 42 C.F.R. § 498.22(b)(3), the presumed date of receipt of the notice of reconsidered determination was October 4, 2019, and thus Petitioner’s deadline to file the hearing request was December 3, 2019 (that is, 60 days from the presumed date of receipt).  Id. at 2.  CMS further asserted that Petitioner had not shown that it received the notice of reconsidered determination after October 4, 2019, failed to offer any explanation for the lateness of its request for hearing, and did not argue for an extension.  Id. at 2-3.

In response to the motion to dismiss, Petitioner contended that its hearing request was timely because the notice of reconsidered determination “was not delivered to [it] until February 2020.”  Pet.’s Response to Motion to Dismiss (MTD Resp.) at 2.  Petitioner alleged that, after filing the reconsideration request, it made “repeated calls” to Palmetto to inquire about the status of the request but that no one at Palmetto “would supply any

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answer as to the status of the reconsideration” and in fact no one (presumably, at Palmetto) “could even find the actual letter sent for reconsideration.”  Id. at 1.  “Finally,” said Petitioner, in December 2019, the Palmetto enrollment analyst who signed the notice of reconsidered determination “was contacted,” and she “indicated she was handling the reconsideration and . . . would send out a letter of response.”  Id.  Petitioner alleged that it received no response from this or any other Palmetto employee until February 2020, when “a[n] email was received with a determination letter attached.”  Id. 

In support of these allegations, Petitioner submitted copies of email messages that its owner, Trent Thomas, purportedly sent or received from Palmetto during January and February 2020.  A January 8, 2020 email from Thomas to the enrollment analyst asked for an “update on the appeal from [T]ransnet [H]ome [G]roup,” and a January 29, 2020 email from Thomas to the enrollment analyst inquired about “the status of [Transnet’s] application” (emphasis added).  In a February 27, 2020 email, a Palmetto “customer service advocate” responded to a February 24th emailed inquiry from Thomas about the status of an application by Petitioner to become a Medicare Part B provider.1   The customer service advocate informed Thomas that Palmetto was “not able to find an application for Part B in process” and recommended that Transnet “resubmit [its] application.”  The same day, Thomas wrote back to say, among other things, that he had been “waiting for” a reconsideration “since September of 2019”; that the enrollment analyst responsible for the matter informed him during a December 13, 2019 “conversation” that Petitioner would receive a “response letter from this reconsideration the next day”; and that he “still [had] not received a response from this reconsideration.”  Id. 

Petitioner asserted in its response to the motion to dismiss that the Palmetto employee who “finally sent” the notice of reconsidered determination was the customer service advocate with whom its owner corresponded on February 27, 2020.   MTD Response at 2.  Petitioner did not produce an email or other record of this alleged transmittal of the reconsidered determination.   

The ALJ’s Ruling on CMS’s Motion to Dismiss

Applying the presumption in 42 C.F.R. § 498.22(b)(3) that Petitioner received the notice of reconsidered determination five days aftr the date on the notice, the ALJ held that Petitioner had until December 3, 2019 to file a request for hearing.  ALJ Ruling at 1.  The ALJ held that Petitioner’s hearing request was untimely because it was not filed with the Departmental Appeals Board’s Civil Remedies Division until March 31, 2020.  Id. at 2. 

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The ALJ found no “persuasive evidence overcoming the presumption that [Petitioner] received the notice of reconsideration” by October 4, 2019, noting that Petitioner failed to offer a declaration or affidavit “affirmatively” denying that it had received the reconsidered determination by that date, and that Petitioner’s allegations “subsume[d] the possibility that [it] may have received the [notice of reconsidered determination] but misplaced it.”  Id.  The ALJ further found that Petitioner had not shown “good cause” to extend the filing deadline because it exercised “no diligence in seeking to learn the outcome.”  Id. at 2-3.  In support of that finding, the ALJ stated that, apart from an email sent to Palmetto in early July 2019 (shortly after filing the reconsideration request), Petitioner provided no evidence that it inquired again about the status of his application until January 2020 (six months later).  Id.  Surely,” said the ALJ, “Petitioner would have made inquiries about the status of the determination at an earlier date had it been unaware of the outcome and had it been concerned about that outcome.”  Id.  

Petitioner’s Request for Review

Petitioner filed a timely but brief (one-page) request for review of the ALJ’s ruling.  In that filing, Petitioner asserts that the ALJ did not discuss the “important fact” that, during “weekly” calls to Palmetto during the latter half of 2019, its employees were unable to retrieve a record, or information about the status, of Petitioner’s reconsideration request using either its National Provider Identifier (NPI) or a Document Control Number (DCN).  Petitioner submits that a “quick check of the process now in place when a denied recipient calls Palmetto GBA regarding the status of a reconsideration will substantiate” its allegation.  (Petitioner admits Palmetto was able to track down the information using a postal service tracking number.)  

Petitioner further asserts that after “repeated” unreturned calls to the enrollment analyst who signed the September 29, 2019 reconsidered determination, its owner had a conversation with her in December 2019.  Petitioner stated that the analyst indicated during this call that she “was working on [Transnet’s] reconsideration” and “would forward . . . the determination when complete.”  According to Petitioner, “[n]o mention” was made “of a completed request with a determination or what that determination was.”  Petitioner asserts that, after hearing nothing further from the analyst after that call, its owner “escalated” the matter to an unnamed Palmetto “supervisor,” who “finally forwarded [to him] a copy of the determination.” 

Standard of Review

In general, Board review of an ALJ’s decision or ruling is limited to determining whether or not:  (1) disputed factual findings are supported by “substantial evidence in the record as a whole”; (2) the decision’s or ruling’s necessary legal conclusions are correct (that is, are consistent with applicable statutes and regulations); and (3) a “prejudicial error of procedure (including an abuse of discretion under the law or applicable regulations) was

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committed.”  See Guidelines – Appellate Review of Decisions of Administrative Law Judges Affecting a Provider’s or Supplier’s Enrollment in the Medicare Program, “Completion of the Review Process,” ¶ (c) (“Guidelines”) (available at https://www.hhs.gov/about/agencies/dab/different-appeals-at-dab/appeals-to-board/guidelines/enrollment/index.html).

Because 42 C.F.R. § 498.70(c) gives an ALJ discretion to dismiss, or not to dismiss, a hearing request when the regulation’s conditions for dismissal are met, the Board reviews a dismissal under that regulation for abuse of discretion.  MedStar Health, Inc., DAB No. 2684, at 5 (2016).  Likewise, the Board reviews a finding about whether good cause exists to extend a filing deadline for abuse of discretion.  Id. 

The Board “will review only those parts of the record before the ALJ which are cited by the parties or which the Board considers necessary to decide the appeal.”  Guidelines, “Completion of the Review Process,” ¶ (a).  The Board “will not consider issues not raised in the request for review” or “issues which could have been presented to the ALJ but were not.”  Id.

Analysis

1.       The ALJ properly dismissed Petitioner’s request for hearing because Petitioner provided insufficient evidence to overcome the presumption of receipt under section 498.22(b)(3).

An ALJ may dismiss a request for hearing if the “affected party did not file [the] hearing request timely” and has not shown “good cause” to “extend the time for filing.”  42 C.F.R. §§ 498.70(c), 498.40(a)(2).  In deciding whether a hearing request has been timely filed, an ALJ must apply 42 C.F.R. § 498.22(b)(3) – that is, an ALJ must presume that Petitioner received the reconsidered determination five days after the date on the notice unless the affected party demonstrates that the date of receipt was later (or earlier).

Absent other evidence, the mere assertion that the affected party did not receive a reconsidered determination by mail is insufficient to rebut the presumption of receipt under section 498.22(b)(3).  See Medstar Health at 7 (holding that the mere denial of receipt by an “authorized official” not claiming personal knowledge of the situation, without more, is insufficient to rebut the presumption).  Absent evidence sufficient to establish the actual date notice was first received, the five-day presumption controls.  See id. (“Since Petitioner failed to establish when it actually received notice of the . . . reconsideration determination, the ALJ properly applied [the regulatory presumption] to conclude that Petitioner’s . . . hearing request was not timely filed.”).

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Here, applying section 498.22(b)(3), the ALJ found that Petitioner’s hearing request was not timely because it was filed more than 60 days after October 4, 2019, the presumed date of receipt of the September 29, 2019 notice of reconsidered determination, and because Petitioner had offered “no persuasive evidence” that it first received that notice after October 4, 2019.  We decline to disturb that finding for two main reasons.  First, Petitioner’s request for review does not mention the finding or explicitly question the stated bases for it.  Most notably, Petitioner does not question the ALJ’s view that its evidence was insufficient or unconvincing in the absence of a declaration or affidavit affirmatively denying that it received the notice of reconsidered determination by October 4, 2019.  Indeed, nowhere in its request for review does Petitioner dispute the possibility, posited by the ALJ, that it received the notice by that date but then lost or misplaced it.2

Second, we agree with the ALJ that Petitioner offered insufficient evidence to rebut the presumption of receipt on (or by) October 4, 2019.  Its attempted rebuttal ultimately rested on an allegation that it did not receive the notice of reconsidered determination until a Palmetto employee transmitted a copy of the notice by email in February 2020.  But Petitioner inexplicably failed to provide a copy of the transmittal email (despite its apparent ability to produce other emails sent or received from Palmetto) or even to specify the date that it was received.  In addition, Petitioner has made inconsistent statements about who emailed it the reconsidered determination:  in its response to the motion to dismiss, Petitioner alleged that a Palmetto customer service advocate sent the reconsidered determination, but its request for review states that it was the enrollment analyst’s “supervisor” who did so.    

The points made by Petitioner on appeal only serve to highlight the shortcomings of its presentation to the ALJ.  As noted, Petitioner complains that the ALJ failed to consider the “important fact” that when it (allegedly) phoned Palmetto to inquire about the status of its reconsideration request, Palmetto was unable, at least initially, to locate a record of the request.  The ALJ did not address this allegation, but any error in failing to do so was harmless because the fact that Palmetto may have been unable to retrieve a record of the reconsideration request in response to Petitioner’s telephone inquiries does not tend to prove that Petitioner first received the notice of reconsidered determination after October 4, 2019.  Furthermore, Petitioner’s allegations regarding his telephone contacts with Palmetto were vague.  In its response to the motion to dismiss, Petitioner asserted

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that it made “repeated calls” to Palmetto, but that Palmetto was unable to find a record of the reconsideration request during those calls.  MTD Response at 1.  However, Petitioner did not say (or say clearly), for example, who made those particular calls, the dates they were made, who the caller spoke with, what questions the caller asked, what information the caller provided to Palmetto, or what Palmetto employees said during the calls.  The February 27, 2020 email from Palmetto’s customer service advocate likewise fails to substantiate Petitioner’s allegation.  That email indicates only that Palmetto was unable to locate an active enrollment application (an “application in process”), not a reconsideration request. 

Petitioner’s allegation that its owner spoke in December 2019 with the enrollment analyst who signed the notice of reconsidered determination also does not help its case.  To begin, Petitioner is vague about how it came to learn of the enrollment analyst’s identity or about its reason for speaking with that employee.  Moreover, Petitioner has given discrepant accounts of the conversation.  According to the account in the request for review, the analyst told Petitioner’s owner that she was “working on” the reconsideration request and that “she would forward the determination when complete.”  The implication here is that no reconsidered determination had yet been made by Palmetto (as of the date of their conversation) and therefore Petitioner could not have received the notice of reconsidered determination by October 4, 2019.  However, Petitioner never clearly made such a claim before the ALJ, and its own evidence tends to undercut it.  In the email he purportedly sent to Palmetto on February 27, 2020, Petitioner’s owner stated that the enrollment analyst told him only that a “response” to the reconsideration request would be sent “the next day,” and not that she was still “working on” the reconsidered determination” or that she would be sending it “when complete.”

In sum, the record before the ALJ and Petitioner’s request for review show that Petitioner offered little more than unconvincing and uncorroborated allegations without ever establishing the actual date of receipt of the reconsidered determination.  Absent sufficient evidence establishing the actual date of receipt, the ALJ properly presumed, in accordance with 42 C.F.R. § 498.22(b)(3), that Petitioner received the reconsidered determination by October 4, 2019.  See Medstar Health at 7; Cary Health & Rehab. Ctr., DAB No. 1771, at 11 (2001) (holding that the regulatory presumption that a notice was received five days after the date on the notice is controlling unless there is a “contrary showing”).  We therefore sustain the ALJ’s related finding that Petitioner’s hearing request was untimely because it was filed more than 60 days after the presumed date of receipt.

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2.       The ALJ properly declined to extend Petitioner’s hearing request deadline because Petitioner did not request an extension of time and made no showing of “good cause” to extend the deadline.

Finally, we affirm the ALJ’s decision declining to extend Petitioner’s deadline to request a hearing.  As an initial matter, Petitioner did not submit a written request for an extension of time as permitted under the regulations.  See 42 C.F.R. § 498.40(c)(1).  Even if such a request had been made, the ALJ found a lack of good cause because Petitioner was not diligent in inquiring about the outcome of its reconsideration request, noting that Petitioner had provided no contemporaneous record of any such inquiry between early July 2019 and January 2020, a period of six months.  Petitioner does not mention this finding in its request for review or argue that it established “good cause” for an extension of time.  Nor does Petitioner suggest that its alleged “weekly” phone calls to Palmetto (the dates of which were never specified) and conversation with Palmetto’s enrollment analyst demonstrate adequate diligence.  Even assuming these contacts occurred – and Petitioner proffered no contemporaneous evidence of them – they show that Petitioner did not inquire about the reconsidered determination any earlier than mid-December 2019, more than five months after its previous inquiry to Palmetto in early July 2019.  That Petitioner’s delay in inquiring about the matter was five months rather than six does not substantially undercut the ALJ’s finding that Petitioner was insufficiently diligent.  Consequently, the ALJ’s decision not to extend Petitioner’s filing deadline due to a lack of good cause was not an abuse of discretion.    

Conclusion

For the reasons stated above, we affirm the dismissal of the request for hearing filed by Petitioner on March 31, 2020.

• 1.According to the Palmetto customer service advocate’s message, the application about which Petitioner inquired was filed in July 2019.  It is unclear how this could be the same application whose denial is the subject of the reconsidered determination because Palmetto denied the latter application prior to July 2019 (on June 28, 2019).  Petitioner provided no clarification in its response to the motion to dismiss.
• 2.In holding that Petitioner had not rebutted the presumption of receipt on October 4, 2019, the ALJ appeared to misinterpret a statement by Petitioner that “no one could even find the actual letter sent for reconsideration.”  ALJ Ruling at 2 (quoting Pet.’s response to CMS’s motion to dismiss).  The ALJ thought this statement was referring to Petitioner’s inability to locate the reconsidered determination; however, the statement is more likely an allegation that Palmetto was unable to find Petitioner’s reconsideration request.  We consider the misinterpretation to be harmless error given that the record as a whole supports the ALJ’s conclusion that Petitioner did not rebut the presumption of receipt.