DEPARTMENTAL APPEALS BOARD
Department of Health and Human Services
SUBJECT: Louisiana Department of DATE: March 15, 1990 Health and
Hospitals Petition for Reconsideration of Decision No. 1109
RULING ON PETITION FOR RECONSIDERATION
In Decision No. 1109 the Board upheld disallowances by the Health Care
Financing Administration (HCFA) of federal financial participation
claimed for several periods by the Louisiana Department of Health and
Hospitals (State) under Title XIX (Medicaid) of the Social Security Act
(Act). The State claims disallowed represented the federal share of
Louisiana State sales taxes on pharmaceutical drug items and durable
medical goods furnished to Medicaid recipients. The sales taxes on
these items were paid directly to the Louisiana Department of Revenue by
the State Medicaid agency. We upheld the disallowances on the ground
that payment of the sales taxes by the State did not constitute actual
expenditures for medical assistance under section 1903(a)(1) of the Act,
as interpreted by section 2493 of the State Medicaid Manual.
The State petitioned for reconsideration of Decision No. 1109 pursuant
to 45 C.F.R. 16.13. We find that the State did not meet the standard in
the regulation since it did not promptly allege a clear error of fact or
law.
I. The State did not petition for reconsideration promptly.
A. The Regulation and the Manual
The regulation (45 C.F.R. 16.13) is brief. The Board has the power to
reconsider a decision "where a party promptly alleges a clear error of
fact or law." The regulation gives no definition of what "promptly"
means. The Board's Practice Manual is more definite on when a party
should file a request for reconsideration but still suggests no absolute
deadline for such a request.
There is no specified time limit for submitting a request for
reconsideration, but it is obvious that the sooner a party
submits the request, the less likely it is that there will be an
issue of untimeliness; there should be no problem if the
reconsideration request is submitted within 30 days after receiving
the Board's decision.
Practice Manual, p. 16.
Counsel for the State were of course well aware of this provision. In
fact, approximately half of their Petition for Reconsideration is
devoted to the issue of the Timeliness of This Petition. This section
begins as follows:
The Board has set no time limit for submission of reconsideration
petitions, although its manual states that petitions submitted
within 30 days of decision would ordinarily raise no question of
timeliness.
The Board has said that since our rules have no definite time limit, and
give no definition of what "promptly" means, the Board "must
accept the
general legal principle of considering in each case what is reasonable
under the circumstances." Ruling on Request for Reconsideration of
Decision No. 493 (1984), p. 1. We therefore review the circumstances of
this particular reconsideration request.
B. The background of the reconsideration request
Decision No. 1109 was issued on October 19, 1989. On September 21, 1989,
HCFA issued a "follow-on" disallowance covering a period after the
disallowances appealed in Decision No. 1109. The State appealed this
new disallowance, saying that it concerned the same issues before the
Board in the other disallowances. The Notice of Appeal arrived at the
Board on October 20th, one day after Decision No. 1109 was issued.
When the Board acknowledged the appeal in the new case (Board Docket No.
89-223), we stated that, under the circumstances, it would seem
appropriate to issue a summary decision based on Decision No. 1109, as
we had done in similar cases. This procedure, said the Board, would
protect the rights of the State. Eventually the State informed the
Board that Louisiana had retained private counsel, and requested time
for new counsel to review the record before we proceeded with a summary
decision. After telephone conferences with counsel for both parties,
the Board notified present counsel for the State that they could have
additional time to reply to the Board's suggestion of a summary decision
in Docket No. 89-223.
The reconsideration petition gives the following version of what
happened after that:
On December 20, the State informed the Board that it wished to
simultaneously file a petition for reconsideration and a brief
opposing the disallowance in Docket No. 89-223. Thereafter, the
Board set the date of February 23, 1990, for submitting the brief
in the second case, and the State is submitting both that brief and
this Petition for Reconsideration prior to that date.
This recital of the facts overlooks entirely the intervening ruling and
comments of the Board in its response on December 27th to the December
20th letter of the State. We had the following to say, in part, about
reconsideration of Decision No. 1109:
The request to treat the briefs to be filed in Docket No. 89-223 as
a request for reconsideration of Decision No. 1109 is denied. This
constitutes no ruling on either the merits or timeliness of any
such request the State may choose to file.
C. The actual time involved
The time elapsed from the date that Decision No. 1109 was issued
(October 19, 1989) until the State submitted its reconsideration request
(February 22, 1990) was 126 days. This far exceeds any previous time
which the Board has found, even under the most unusual circumstances, to
meet the requirement that a reconsideration request be filed promptly.
Even if we start counting when current counsel for the State were
retained (which was no later than November 17), 1/ we have an elapsed
period of 97 days, hardly prompt action by counsel familiar with our
requirements and alerted to them.
The delay, and the circumstances surrounding it, would be reason enough
alone to deny the request for reconsideration. However, as discussed
below, the request also fails on other grounds.
II. The State did not allege a clear error in its reconsideration
petition.
A. The Regulation and the Manual
The Regulation (45 C.F.R. 16.13) is also very brief on what a
reconsideration request should contain; it requires that the petitioner
"allege a clear error of fact or law." The Board's Practice Manual
spells out what should be included in the request.
If a party perceives that the Board has, indeed, made a clear error
in the decision, that party may request reconsideration . . . in
writing. The request should focus on the specific alleged error and
set forth all of your reasons . . . .
Manual, p. 16, emphasis added.
B. The lack of allegation of clear error
The State completely disregarded the requirement for showing a "clear"
error in its reconsideration petition. In fact, the State came close to
saying that the Board did not err at all in Decision No. 1109 on the
basis of what counsel presented to it, let alone commit a clear error.
The petition states:
[T]he Board's analysis was responsive to the arguments advanced in
the State's original presentation. But that presentation was
unduly narrow . . . .
Counsel seek to change the Board's practice and treat the
reconsideration request as if it were just another appeal, not one which
has been briefed and argued, with an evidentiary hearing.
The Board made this clear in the ruling of December 27, 1989:
The Board's Practice Manual states that a request for
reconsideration "should focus on the specific alleged error and set
forth all your reasons."
In any event, the standard in reconsideration differs from that in
the normal appeal before us. Reconsideration requires a prompt
allegation of "a clear error of fact or law." 45 C.F.R. 16.13.
The State nowhere in its petition claims that the Board made a clear
error in Decision No. 1109. 2/ On this basis alone, the petition for
reconsideration should be denied, even if it had been filed promptly.
III. The State's arguments for accepting the petition
The reconsideration petition is perhaps more significant in what it
omits than in what it contains. Counsel made no contention that it was
impossible--or even impractical--to prepare and submit a complete
reconsideration request before filing the briefs in Docket No. 89-223,
the appeal from the later disallowance. 3/ Counsel persisted in arguing
that these proceedings should be handled their way, because it was more
orderly or more efficient.
In their December 20th letter to the Board counsel asked the Board to
treat the briefs to be filed in Docket No. 89-223 as a request for
reconsideration of Decision No. 1109. Counsel stated as follows:
In ordinary circumstances, we understand that a request for
reconsideration would be submitted within 30 days of the date of
the decision. However, in view of the subsequent issuance of two
separate disallowances relating to Decision 1109, we think the
course we have suggested here would expeditiously resolve the
entire matter.
Emphasis added.
Despite the December 27th ruling denying the State's request to treat
the State's brief to be filed in the follow-on case (89-223) as a
request for reconsideration, the State still argued in its
reconsideration petition that "[t]he course the State has followed is
more efficient for all parties" and "assures an orderly as well as
a
consistent treatment of the two like matters." The State also claimed
that consideration of the petition would not "burden the Board or the
Agency" and the State's approach "would minimize the burdens on the
Board and the Agency (as well as the State)."
In an analogous argument, the State claimed that "the timing of this
Petition for Reconsideration does not prejudice HCFA." We have
previously rejected the argument that the Board should accept a
reconsideration request as timely because HCFA was not prejudiced by the
delay. Even assuming that to be so in this case, the timeliness
requirement in the Board's regulation serves purposes other than
preventing prejudice to a party. The Board itself, and the Department
generally, have an interest in assuring the finality of Board decisions
within a reasonable period. See Ruling on Request for Reconsideration
of Decision No. 788 (1987), n.1.
The arguments presented by the State for accepting its reconsideration
request are all based on the State's position that it would be better
for all parties to handle the reconsideration petition with the appeal
of the follow-on disallowances in 89-223 and 90-29. The State does not
claim that the reconsideration petition could not have been submitted
earlier, nor does it offer any acceptable reason for failing to allege a
clear error of law in its petition. The decision of what is expeditious
and orderly is something for the Board to decide.
Conclusion
The request of the State for reconsideration of Decision No. 1109 was
not filed promptly, nor did it set out a clear error of fact or law, as
required by regulation. The State has not offered any satisfactory
reason for accepting such a request at such a late date. The request
for reconsideration is therefore denied.
_____________________________ Judith A.
Ballard
_____________________________ Norval D. (John)
Settle
_____________________________ Alexander G.
Teitz Presiding Board Member
1. We do not know the exact date present counsel for the State were
retained. However, the Chief Attorney for the State Department of
Health and Hospitals wrote the Board on November 17 that present counsel
"will be pursuing judicial review in our behalf."
2. We did permit the State to brief Docket No. 89-223, rather than
issue a summary decision. In doing so, we requested the State to
concentrate its briefing on any difference between this appeal and those
decided in Decision No. 1109. We specifically asked the State not to
simply reargue Decision No. 1109. We refused to preclude the State on
the doctrine of collateral estoppel raised by HCFA, but did so without
prejudice to the right of HCFA to renew this argument. See Board letter
to parties, January 19, 1990.
3. There was an even later disallowance based on presumably the same
facts as the disallowances upheld in Decision No. 1109; this appeal was
docketed as No. 90-29 and was consolidated with 89-223, there being no
objection by the