Michigan Health Clinics, P.C., ALJ Ruling 2026-34 (HHS CRD August 10, 2026)

RULING

Although initially assigned to a different administrative law judge (ALJ), this case has been reassigned to me because of Petitioner’s efforts to consolidate it with two matters that have been pending before me (C-26-73; C-26-414).  Obviously, a judge is not authorized to consolidate, with one of her own cases, a case that has been assigned to another judge.

Notwithstanding Petitioner’s efforts to conflate the three cases, this matter is, in fact, independent of the other two and its resolution is straightforward.  Petitioner, Michigan Health Clinics, P.C., is a clinical laboratory, located at 4707 McLeod Drive, East, Saginaw, Michigan.  The lab was certified under the Clinical Laboratory Improvement Amendments of 1988 (CLIA), 42 U.S.C. § 263a (CLIA #23D2181522).  David Stockman, M.D., is the laboratory director.  Following a second revisit survey, completed on July 23, 2025, the Centers for Medicare & Medicaid Services (CMS) determined that the laboratory failed to meet multiple condition-level requirements for CLIA certification and imposed sanctions.

Petitioner appealed.

CMS moves to dismiss the appeal as untimely filed.  I grant CMS’s motion to dismiss.  I find that Petitioner is not entitled to a hearing because its hearing request was not timely filed, and Petitioner has not shown good cause for my extending the time for filing.

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Background

Statutory and regulatory background.  In order to ensure the accuracy and reliability of laboratory tests and thus the health and safety of those tested, CLIA creates a federal certification process for laboratories that perform clinical diagnostic tests on human specimens.  Pub. L. No. 100-578, amending section 353 of the Public Health Service Act, codified at 42 U.S.C. § 263a; see H.R. Rep. No. 100-899, at 8, reprinted in 1988 U.S.C.C.A.N. 3828, 3829.  To be certified, a laboratory must meet the conditions of certification set out in the statute and regulations.  42 U.S.C. § 263a(f); 42 C.F.R. pt. 493.  A condition represents a major division of laboratory services or required environmental protections; each condition is broken down into more detailed standards that laboratories must meet to comply with the overall condition.  42 C.F.R. § 493.2; Victor Valley Cmty. Hosp./Clinical Lab’y & Tomasz Pawlowski, M.D., DAB No. 2340 at 4 (2010); White Lake Fam. Med., P.C., DAB No. 1951, at 2-3 (2004); RNA Lab’ys, Inc., & Ter-Zakarian Med. Clinic, DAB No. 1820 at 3 (2002).

The statute gives the Secretary of Health and Human Services broad enforcement authority, which the Secretary has delegated to CMS.  CMS or its designee conducts periodic inspections to determine a laboratory’s compliance with CLIA requirements.  42 C.F.R. § 493.1777.  If CMS determines that a lab does not comply with one or more CLIA conditions, it may suspend or revoke the lab’s CLIA certificate, and it may impose alternative sanctions (directed plan of correction, state monitoring, civil money penalty).  42 U.S.C. §§ 263a(h)(2), 263a(i)(4); 42 C.F.R. §§ 493.1804(b)(1)(ii), 493.1806, 493.1807; The Malaria & Rheumatic Disease Rsch. Inst., Inc., DAB No. 2872 at 4 (2018) (citing Ward Gen. Prac. Clinic, DAB No. 1624 at 2 (1997)).

A laboratory is entitled to a hearing before an ALJ to contest CMS’s imposing CLIA remedies, although not all of CMS’s determinations can be appealed.  See 42 C.F.R. § 493.1844(c).  The CLIA regulations incorporate, by reference, the hearing procedures and the request for review provisions of 42 C.F.R. Part 498, subparts D and E.  42 C.F.R. § 1844(a).

Pursuant to 42 C.F.R. § 498.40(a)(2), a request for hearing must be filed within 60 days “from receipt of the notice of initial, reconsidered, or revised determination unless that period is extended . . . .”  See Charles S. Pewitt, D.O., DAB No. 3009 at 11-12 (2020); Cary Health & Rehab. Ctr., DAB No. 1771 at 8-9 (2001).  The date of receipt is presumed to be five days after the date on the notice unless there is a showing that it was, in fact, received earlier or later.  42 C.F.R. §§ 498.22(b)(3), 498.40(a)(2).  See New Grove Manor, DAB No. 3090 at 2 (2023).

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If I find good cause, I may extend the time for filing the request for hearing.  42 C.F.R. § 498.40(c)(2).  However, if the hearing request is not timely, and the time for filing has not been extended, I may dismiss the appeal for cause.  42 C.F.R. § 498.70(c).  Christina Paylan, DAB No. 3112 at 2 (2023); W. Side House LTC Facility, DAB No. 2791 at 6 (2017).

Discussion

1. Petitioner is not entitled to a hearing because it did not file a timely hearing request and has failed to show good cause for my extending the time for filing.1

The August 25, 2025 notice letter.  In a letter, dated August 25, 2025, and addressed to Lab Director Stockman, CMS advised Petitioner of the July 23, 2025 survey findings.  The notice advised Petitioner of the sanctions CMS imposed, including suspending the lab’s CLIA certificate, directing a plan of correction,2 and cancelling the lab’s approval to receive Medicare payments.  E-File #1a at 2-4.

The letter warned that the lab could not avoid the imposed sanctions by closing, discontinuing testing, voluntarily withdrawing from the CLIA program, or changing its certificate to a lower level of testing.  Id. at 4.

The August 25 letter also advised Petitioner of its appeal rights, citing the governing regulations:  42 C.F.R. § 493.1844(a)(1)-(2) and 42 C.F.R. §§ 498.40 through 498.78.  The letter warned:

If you believe this imposition of sanctions to be incorrect, the laboratory may request a hearing before a Departmental Appeals Board (DAB) Administrative Law Judge (ALJ) in the Civil Remedies Division.  If you want to appeal, you must file a request for a hearing (which must be accompanied by a copy of this letter) no later than sixty (60) calendar days after receipt of this letter using the DAB Electronic Filing System.

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Id. at 4 (citations omitted).  The letter then explained how to use the electronic filing system and advised that “[p]arties that can file documents electronically must use DAB E-File.”  Id. (emphasis added).  The letter provided a link to the DAB website, where “[i]nformation on using DAB-E-File” could be found.  Id.

As indicated on the face of the notice letter, CMS sent the August 25 via email, and Petitioner would have received it on that date.  E-File #1a at 1.  Its hearing request was due 60 days later – on October 24, 2025.

The October 21, 2025 notice letter.  Surveyors returned to the McLeod Drive location on October 2, 2025, intending to conduct a revisit survey.  They found that the lab was no longer in operation.  The signage had been removed, and they were unable to enter.  They contacted Lab Director Stockman, who told them that the lab was no longer testing at the McLeod Drive location and that he intended to close it.  E-file #9a at 4-7 (notice letter); E-File #9a at 9; see E-File #9a at 12-37 (Oct. 2, 2025 Statement of Deficiencies).

In a follow-up notice letter, dated October 21, 2025, and addressed to Lab Director Stockman, CMS advised Petitioner that corrective actions outlined in the lab’s directed plan of correction were not implemented.  The notice also advised Petitioner of the failed October 2, 2025 survey, noted that Petitioner had not notified CMS that it was changing locations, as required by 42 C.F.R. § 493.57(a), and reminded Petitioner that it could not avoid sanctions by closing.  E-File #9a at 4-5.

Based on the lab’s failure to implement the Directed Plan of Correction, CMS imposed an additional sanction:  revocation of the laboratory’s CLIA certificate, effective November 5, 2025, until November 5, 2027.  Id. at 5.

Like the August 25 notice letter, the October 21 notice letter advised Petitioner of its appeal rights.  Again citing the governing regulations:  42 C.F.R. § 493.1844(a)(1)-(2) and 42 C.F.R. §§ 498.40 through 498.78, the letter explained that the request for a hearing must be filed “no later than sixty (60) calendar days after receipt of this letter.”  The letter again directed Petitioner to file its request using the DAB e-filing system and provided a link to the DAB website.  Id. at 6.

Because CMS emailed the notice letter to Petitioner on October 21, 2025, its hearing request was due 60 days later – on December 22, 2025 (December 20 was a Saturday).  Id. at 9; see 42 C.F.R. §§ 498.22(b)(3), 498.40(a)(2).

Contrary to Petitioner’s implication, Petitioner’s appeal rights stemming from the October 21 initial determination were limited to that determination:  whether, based on the thwarted October 2, 2025 revisit, the lab had corrected its deficiencies by implementing the directed plan of correction.  The notice did not alter the July 23, 2025 survey findings; it did not extend the time for appealing the August 25 initial determination.  See, e.g., Taos Living

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Ctr., DAB No. 2293 at 11 (2009) (finding that a notice based on a subsequent survey did not revise the earlier determination or extend the deadline for appealing the earlier determination); Quality Total Care, L.L.C., DAB No. 2242 at 9 (2009) (noting that a subsequent notice letter reminded the facility about the standards for appealing an earlier determination).

The appeal.  Six and a half months after the August 25, 2025 notice was issued – on March 10, 2026 – Petitioner submitted its hearing request, using the DAB E-File system.  The request does not mention that it was filed more than four months late and does not offer good cause to extend the time for filing.  E-File #1.

The request was filed almost three months after the deadline for appealing the October 21 determination, which would have made it untimely, had Petitioner included that determination in its appeal.  But it did not.  A hearing request must identify the specific issues and the findings of fact and conclusions of law with which the affected party disagrees, and it must specify the basis for contending that the findings and conclusions are incorrect.  42 C.F.R. § 498.40(b).  Petitioner’s hearing request does not even mention the October 21 initial determination.  Thus, notwithstanding the late filing, Petitioner did not appeal the October 21 determination, which is therefore final and binding.  See Donelson Place Care & Rehab. Ctr., DAB No. 3046 at 15, 30 (2021); Rockcastle Health & Rehab. Ctr., DAB No. 2891 at 17 n.22 (2018) (explaining that the deficiencies and CMPs that Petitioner did not appeal are final); Taos Living Ctr., DAB No. 2293 at 10 (2009).

Petitioner does not deny that the October 21 notice was emailed to the lab, and, indeed, CMS sent both the August 25 and the October 21 notices to the same email address.  Compare E-File #1a at 1, with E-File #9a at 4.  Lab Director Stockman declares that he “only now” located the notice and complains that it was not sent to his personal email address.  He does not explain the lab’s procedures for disseminating notices received by email.  In any event, the day that the notice arrived at Petitioner’s office – not the day the lab director “found” it – is the date of receipt.  Christina Paylan, M.D., DAB No. 3112 at 7 (2023).  Where, for example, a physician failed to appeal, within 60 days of the date CMS emailed a notice to her office, she claimed that she herself had not received the notice and that her staff had not relayed the email to her.  The Departmental Appeals Board agreed that her hearing request was untimely and that she had not shown good cause for extending the time for filing.  Id. at 4.  See Christina Paylan, M.D., ALJ Ruling 2023-6 (March 31, 2023).

Petitioner moves to strike CMS’s Motion to Dismiss because, in that motion, CMS did not address the October 21, 2025 notice letter.  E-File #9.  But CMS had no reason to address the October 21 determination because Petitioner did not appeal it, and that determination is not before me.  Petitioner’s Motion to Strike is therefore without merit, and I deny it.

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With respect to the case that is before me – Petitioner’s late appeal of the August 25, 2025 determination – in an order dated March 13, 2026, the ALJ then assigned to the case noted that the hearing request did not appear to have been filed timely and directed the parties to brief the timeliness issue.  E-File #2.

On March 19, 2026, CMS filed a motion to dismiss, pointing out the obvious:  that Petitioner’s hearing request was filed months after CMS issued its notice letter and that Petitioner furnished no evidence or explanation for the very late filing.  E-File #4.

Petitioner concedes that it received the August 25, 2025 notice letter and that it did not file its hearing request until March 10, 2026.  E-File #6 at 1.  Nevertheless, Petitioner argues that good cause exists for extending the time for filing “due to extraordinary external circumstances beyond Petitioner’s control, combined with procedural confusion in related proceedings and complete lack of responsive guidance from the federal government.”  E-File #6 at 2.  Petitioner points to the “historic 43-day government shutdown,” which ran from October 1 through November 12, 2025, and claims that “[i]n late October 2025” (it does not specify the exact date), it “made a timely, good-faith effort to comply by mailing its Request for Hearing by regular mail.”  Id.

In fact, the “government shutdown” was, more accurately, a partial shutdown.  The fatal flaw in Petitioner’s argument is that the Departmental Appeals Board’s Medicare operations were not shut down.  Prominently posted on the DAB website at the time was the following notice:

Due to lapse in funding, the Departmental Appeals Board has temporarily ceased processing and reviewing certain appeals involving non-Medicare programs.  Parties may continue to file new appeals and must comply with all existing deadlines in pending cases.  Filings in affected cases will be processed once normal operations resume.

Cases involving the Medicare program . . . are not impacted and will continue to be processed as normal.

About the Departmental Appeals Board (DAB), U.S. Dep’t of Health & Hum. Servs., https://web.archive.org/web/20251107015637/https://www.hhs.gov/about/agencies/dab/index.html. (last visited Aug. 5, 2026) (emphasis in italics added).  Because the notice letter provided a link to the HHS website, Petitioner knew or should have known that the DAB continued to process Medicare appeals, including CLIA appeals.

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CMS’s notice letter plainly and unambiguously advised Petitioner that its hearing request was due within 60 days from receipt of the notice and that, absent a showing that it was unable to file documents electronically, its appeal had to be filed using the DAB electronic filing system.  No good cause justifies Petitioner’s ignoring these explicit instructions.  See The Bridgepointe, DAB No. 3157 at 10-11 (2024); Lakeland Healthcare Ctr., DAB No. 3147 at 7 (2024); New Grove Manor, DAB No. 3090 at 12 (2023) (finding that where the petitioner received “clear notice of its right to request a hearing and the deadline for making such a request,” the ALJ appropriately found no good cause for its failing to appeal timely); Hillcrest Healthcare, L.L.C., DAB No.1879 at 7 (2003).3

MI Health Clinic, C-26-73.  Lab Director Stockman was well aware of the filing deadlines and the process for appealing CMS’s August 25, 2025 determination and was capable of using the DAB electronic filing system.  We know this because he did so (during the partial government shutdown) in another case involving one of the labs he directed.

Lab Director Stockman is also the director of a lab located on Fortune Boulevard in Saginaw, Michigan (CLIA #23D2243041).  In a notice letter, dated October 21, 2025, CMS advised the Fortune Boulevard lab of September 8, 2025 survey findings and the sanctions it was imposing, based on those findings.  MI Health Clinic, C-26-73, E-File #1a.  That notice letter included language – identical to the language of the August 25 letter sent to Director Stockman at the McLeod Drive lab – setting forth the lab’s appeal rights, describing how to appeal, and emphasizing the 60-day deadline.  Id. at 5.  On November 4, 2025, the Fortune Blvd. lab timely appealed, using the DAB E-File system.

This establishes that Lab Director Stockman was well-aware of the appropriate appeals process and was not deterred by any purported government shutdown.  Yet, even after filing the Fortune Blvd. appeal, Petitioner waited another four months before filing its appeal in this case.

Petitioner’s claim of filing by mail.  Notwithstanding its conceding that it filed its hearing request on March 10, 2025 (E-File #6 at 1), Petitioner now claims, for the first time, that, in fact, Lab Director Stockman sent an appeal to the DAB by regular mail.  In support,

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Petitioner submits a copy of an October 27, 2025 email that Lab Director Stockman sent to CMS’s Division of Clinical Laboratory Improvement and Quality (DCLIQ), which refers to a hearing request that he claims to have mailed “early last week” and includes three versions of the document he purportedly filed as his hearing request.  E-File #8a at 4-5, 17-18, 19-24.

I find this unconvincing for several reasons:

• First, that Petitioner waited so long before even mentioning any prior hearing requests casts doubt on whether any were mailed.
• Second, Petitioner’s claim is vague to the extreme, providing no specific information as to when its lab director (or someone else) mailed the request and from where.  It produces no mailing receipt or other evidence suggesting that someone actually mailed the appeal.
• Third, Petitioner does not even specify which of the three versions it produced was the actual document mailed. They are different from each other, and none matches the request Petitioner filed electronically on March 10, 2026.  Presumably, had Petitioner already filed its hearing request by mail, it would have resubmitted the same document electronically.

Moreover, a presumption of regularity attaches to the actions of the government (including the Civil Remedies Division of the DAB).  Cardiac Imaging Assocs., A Med. Corp., DAB No. 3133 at 12-13 (2024) (quoting U.S. Postal Serv. v. Gregory, 534 U.S. 1, 10 (2001)).  Unless Petitioner demonstrates otherwise, the DAB is entitled to a presumption of administrative regularity.

All appeals are docketed when CRD receives them.  Civil Remedies Division Procedures at 2 (¶ 2d).

CRD staff also scan and catalogue all mail received, including appeals.  Any appeal that arrives by mail is first scanned and then uploaded into the CRD electronic filing system (CRDACTS).  During the partial government shutdown, CRD staff continued to work and to process mail, following CRD’s standard procedures.  CRD management has reviewed:

• all scanned mail received from September 22 through November 7, 2025 (encompassing the time Petitioner purports to have mailed its appeal);
• the CRDACTS mail log for the same period; and
• all misdirected letters for the same period.

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The review confirmed that CRD did not receive any mail from Petitioner during the times it purports to have mailed its appeal.

I note also that all three versions of the hearing request Petitioner purportedly mailed are unsigned, contrary to CRD requirements.  CRD Procedures at 2 (¶ 2c) (“An ALJ may dismiss a hearing request if it is not signed”).

Petitioner’s motion to vacate all sanctions in this and two other pending cases.  Petitioner complains about the timing of the inspections and alleges that they were scheduled in retaliation for the lab’s successful appeal of state recoupment demands.  Petitioner implies that the surveys were scheduled for nefarious reasons because the surveyor who was involved in that appeal was also involved in the July 23 and October 2 inspections.  See E-File #11-14.  In Petitioner’s view, the inspections should never have occurred.

I found Petitioner’s motion and accompanying submissions to be confusing but irrelevant.  Petitioner does not allege that CMS was a party to the state recoupment proceedings, and no evidence suggests that it was.  So why would it be motivated to retaliate?  And CMS, not the state agency, and certainly not an individual surveyor, determines when inspections occur.  CMS has broad authority to inspect labs whenever it deems it necessary.  42 C.F.R. § 493.1777(b) (authorizing CMS or its agent to conduct inspections with such frequency as CMS determines to be necessary); see 42 C.F.R. §§ 493.563 (validation inspections), 493.573 (continuing federal oversight), 493.1773(a) (“a laboratory issued a certificate must permit CMS or a CMS agent to conduct an inspection”).

Neither the timing nor CMS’s reasons for inspecting a lab are reviewable.  42 C.F.R. § 493.1844(b), (c), (f); Charles S. Pewitt, D.O., DAB No. 3009 at 2 (holding that actions not listed in section 493.1844(b) are not appealable)

Finally, it is well-settled that “where objective evidence establishes the existence of a deficiency, it would make little difference whether or not a particular surveyor was biased against a particular facility.”  Liberty Lab’y, Inc., DAB No. 2562 at 3 (2014) (quoting Canal Med. Lab., DAB No. 2041 at 5-6 (2006)); Edison Med. Lab., Inc. v. Health Care Fin. Admin., 250 F.3d 735 (3rd Cir. 2001) (unpublished table decision).  This principle does not change because Petitioner failed to preserve its right to a hearing.

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Conclusion

Because Petitioner did not file its hearing request within 60 days of receiving CMS’s notice letter, and no good cause justifies my extending the time of filing, I dismiss Petitioner’s hearing request.  42 C.F.R. § 498.70(c).