Pharmacy Specialist Group III Inc. d/b/a Faith Pharmacy, ALJ Ruling 2026-30 (HHS-CRD July 13, 2026)

RULING DENYING MOTION TO VACATE

Petitioner, Pharmacy Specialist Group III Inc. d/b/a Faith Pharmacy, filed a request for an administrative law judge (ALJ) hearing on March 31, 2026.  On April 24, 2026, I found that Petitioner did not have a right to a hearing and dismissed the request for hearing.  See 42 C.F.R. § 498.70(b).  Petitioner now asks that I vacate that dismissal pursuant to 42 C.F.R. § 498.72.  For the reasons discussed below, I deny Petitioner’s request. 

Background

On October 30, 2025, Novitas Solutions issued its initial determination.  Petitioner requested reconsideration of the initial determination.  On January 13, 2026, Chags Health Information Technology, LLC (C-HIT), a Medicare administrative contractor, received Petitioner’s request for reconsideration.  On February 9, 2026, C-HIT informed Petitioner that it would not be able to accept Petitioner’s request for reconsideration because its request for reconsideration was untimely.  C-HIT’s notice further indicated that Petitioner failed to show good cause for Petitioner’s late request and that Petitioner’s failure to timely request reconsideration was deemed a waiver of all rights to further administrative review.  Petitioner filed its March 31, 2026 request for an ALJ hearing

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with the Departmental Appeals Board, Civil Remedies Division.  As of the date Petitioner filed its request for a hearing, no reconsidered determination had been issued.  Because no reconsidered determination had been issued, I found that Petitioner did not have a right to a hearing and dismissed the hearing request. 

On or around June 19, 2026, Petitioner asked that I vacate the dismissal. 

Discussion

I may vacate a dismissal if the requesting party files a request within 60 days from receipt of the notice of dismissal and shows good cause for my doing so.  42 C.F.R. § 498.72. 

The regulations do not define “good cause” but leave that determination to the discretion of the ALJ.  Looking to regulations governing certain Social Security benefit appeals, many ALJs have ruled that “good cause” means circumstances beyond a party’s ability to control.  See, e.g., Shadow Creek Med. Clinic, ALJ Ruling No. 2017-5 (2016); Oak Park Healthcare Ctr., DAB CR1917 (2009); Hillcrest Healthcare, LLC, DAB CR976 (2002), aff’d, DAB No. 1879 (2003); Hammonds Lane Ctr., DAB CR913 (2002), aff’d, DAB No. 1853 (2002); Glen Rose Med. Ctr. Nursing Home, DAB CR918 (2002), aff’d, DAB No. 1852 (2002); Parkview Care Ctr., DAB CR785 (2001); Hospicio San Martin, DAB CR387 (1995), aff’d, DAB No. 1554 (1996); 20 C.F.R. § 404.933(c); but see Ghodratollah Sarrafi, M.D., ALJ Ruling 2020-1 (2019) (suggesting that Medicare providers and suppliers should be held to a higher standard than Social Security disability recipients). For its part, the Departmental Appeals Board has avoided articulating a “good cause” standard.  Burien Nursing & Rehab. Ctr., DAB No. 2870 at 5 (2018); Rutland Nursing Home, DAB No. 2582 at 5 (2014); Hammonds Lane Ctr., DAB No. 1853 n.3; Wellington Oaks Care Ctr., DAB No. 1626 (1997). 

I find that good cause does not exist in this case.  As explained below, the only action that would permit me to vacate the dismissal is if Petitioner were able to show that a reconsidered determination was issued by CMS or one of its contractors.  Petitioner has not done so here or even alleged that a reconsidered determination exists.  Instead, Petitioner’s request to vacate the dismissal only misstates the reason behind my April 21, 2026 dismissal by stating that I dismissed the case “due to Petitioner’s filing of a late and defective request for reconsideration.”  Departmental Appeals Board Electronic Filing System Doc. No. 4a. 

CMS’s revocation of a provider’s Medicare enrollment is an “initial determination” that the provider may appeal by requesting CMS’s reconsideration of the adverse determination.  42 C.F.R. §§ 498.3(a), (b)(17)(i), 498.5(l)(1). 

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The Social Security Act authorizes the Secretary of Health and Human Services to establish regulations for enrolling providers and suppliers in the Medicare program.  42 U.S.C. § 1395cc(j)(1)(A).  The regulations provide that “[a] provider or supplier may appeal the initial determination . . . to revoke current billing privileges by following the procedures specified in part 498 of this chapter.”  42 C.F.R. § 405.803.  The regulations also require that a provider or supplier dissatisfied with an initial determination related to the revocation of Medicare billing privileges request reconsideration, and, if “dissatisfied with a reconsidered determination,” seek a hearing before an ALJ.  42 C.F.R. § 498.5(l)(1), (2) (emphasis added). 

The Board has long held that “the regulations plainly require that CMS or one of its contractors issue a ‘reconsidered determination’ before the affected party is entitled to request a hearing before an ALJ.”  Rollington Ferguson, M.D., DAB No. 2949 at 3 (2019) (quoting Cap. Dist. Behav. Health Psychs., PLLC, DAB No. 2866 at 4 (2018) (quoting Hiva Vakil, M.D., DAB No. 2460 at 5 (2012))).  Because CMS did not issue a reconsidered determination in this matter, Petitioner does not have a right to request a hearing; therefore, Petitioner’s request for hearing must be dismissed.  42 C.F.R. § 498.70(b). 

Conclusion

Section 498.72 allows me to vacate a dismissal if the Petitioner establishes good cause.  Because Petitioner has not established good cause, I deny its request to vacate the dismissal. 

Served by DAB E-File.