SUBJECT:

Peter D. Farr, M.D.

Petitioner,

The Inspector General

DECISION

Peter D. Farr, M.D. (Petitioner) filed a request for hearing to appeal the decision of the Inspector General (I.G.) excluding him from participation in the Medicare, Medicaid, and all federal health care programs for a period of 10 years under section 1128(a)(1) of the Social Security Act (Act). The I.G. has moved to dismiss Petitioner's request for hearing as untimely. For the reasons set forth below, I find that Petitioner's hearing request was untimely filed. Further, I find that I am without authority to extend the deadline for filing a hearing request for "good cause," or otherwise to excuse its untimeliness. Therefore, I grant the I.G.'s motion and dismiss Petitioner's hearing request.

I. Background

By letter dated March 19, 1998, the I.G. sent a letter to Petitioner, which stated in relevant part:

[a]s a result of your recent conviction . . . the Department of Health and Human Services is required to exclude you from [participation] in the Medicare, Medicaid, and all Federal health care programs. (Emphasis in original.)

Further, in the March 19, 1998 letter, the I.G. informed Petitioner that -

[a]s provided in section 1128(c)(3)(B) of the Act, the minimum period of program exclusion shall be 5 years and, if aggravating circumstances warrant, the period may be increased. You have 30 days from the date of this letter to submit any information you want the [I.G.] to consider before a final determination regarding the length of your program exclusion is made.

By letter dated May 29, 1998, the I.G. advised Petitioner of his exclusion from participation from the Medicare, Medicaid, and all other federal health care programs because of his conviction in the United States District Court for the Northern District of Indiana of a criminal offense related to Medicaid fraud. This letter also informed Petitioner that the length of his exclusion was 10 years based on three aggravating circumstances. Finally, the May 29, 1998 letter stated, in relevant part:

[a] detailed explanation of the authority for this exclusion, its effect, and your appeal rights is enclosed and is incorporated as part of this notice by specific reference. You should read this document carefully, act upon it as necessary, and retain it for future reference.

I.G. Ex. 1.

Petitioner filed a hearing request on July 30, 2001, as discussed further below, Petitioner maintains that he did not appeal sooner for a number of reasons, including incarceration.

I held a prehearing telephone conference in this case on September 10, 2001. The I.G. was represented by counsel and Petitioner participated pro se and continues to appear pro se through the close of the briefing on the motion to dismiss. After discussing the case's procedural posture, I ordered that the parties brief the issue of whether Petitioner's hearing request was timely filed. A briefing schedule was established and set out in my written Order of September 18, 2001.

The I.G. submitted a brief in support of her motion to dismiss and a reply brief. The I.G. also submitted five proposed exhibits (I.G. Ex. 1 - I.G. Ex. 5). Petitioner filed a response to the I.G. brief and a surreply. Petitioner also submitted two proposed exhibits (P. Ex. 1, P. Ex. 2.). Neither party objected to my admitting any of the proposed exhibits into evidence. Therefore, the offered exhibits are admitted.

II. Issue

The legal issue before me is limited. It is, very simply, whether Petitioner's hearing request was filed in a timely manner, in compliance with the terms of 42 C.F.R. § 1005.2(c).

I have considered the parties' arguments and the applicable authorities very carefully, and the record before me requires that the issue must be resolved in the negative. Petitioner's hearing request was untimely filed, almost three years past the deadline established by regulation. However, because of the unusual facts in this case, and in light of some of the arguments advanced by Petitioner, it seems appropriate that I briefly explain that the regulations which govern Petitioner's appeal do not provide for a showing of "good cause" in situations of untimely filings. Therefore, I do not have the authority to consider a showing of "good cause" as an explanation for an untimely filing of a hearing request.

III. Applicable Law and Regulations

Section 1128(a)(1) of the Act requires the exclusion from participation in Medicare, Medicaid, and all other federal health care programs of any individual or entity convicted of a criminal offense related to the delivery of an item or service under Title XVIII of the Act (the Medicare program) or under any State health care program. This exclusion is mandatory and must be imposed for a minimum of five years according to section 1128(c)(3)(B) of the Act.

The I.G. is charged with effectuating exclusions based on sections 1128(a)(1) and 1128(c)(3)(B) of the Act. See 42 C.F.R. § 1001.101. If the I.G. decides that exclusion is warranted, the I.G. must send written notice of her decision to exclude to the affected individual or entity. 42 C.F.R. § 1001.2002. The individual or entity excluded may appeal the exclusion by filing a request for a hearing before an Administrative Law Judge (ALJ). 42 C.F.R. § 1001.2007. Section 1001.2007 of 42 C.F.R. establishes an explicit and discrete time limit for the filing of such a hearing request. Section 1001.2007(b) of 42 C.F.R. provides that -

[t]he excluded individual or entity has 60 days from the receipt of notice of exclusion provided for in § 1001.2002 to file a request for such a hearing.

The filing time limit is reiterated in the regulations that govern the conduct of an excluded party's appeal before the ALJ, which appear at 42 C.F.R. §§ 1005.1-1005.23. Specifically, 42 C.F.R. § 1005.2(c) provides, in relevant part:

[t]he request for hearing will be made in writing to the [Departmental Appeals Board (DAB)]; signed by the petitioner . . . or by his or her attorney; and sent by certified mail. The request must be filed within 60 days after the notice . . . is received by the petitioner . . . . For purposes of this section, the date of receipt of the notice letter will be presumed to be 5 days after the date of such notice unless there is a reasonable showing to the contrary. (Emphasis added.)

Section 1005.2(e) of 42 C.F.R. directs, in relevant part, that:

The ALJ will dismiss a hearing request where -

(1) The petitioner's . . . hearing request is not filed in a timely manner.

IV. Findings of Fact and Conclusions of Law

1. By letter dated March 19, 1998, the I.G. notified Petitioner of her intent (intent letter) to exclude Petitioner from participation in Medicare, Medicaid, and all federal health care programs. I.G. Ex. 3.

2. By letter dated May 29, 1998, the I.G. notified Petitioner of his exclusion (exclusion letter) from participation in Medicare, Medicaid, and all federal health care programs, effective 20 days from the date of the letter. I.G. Ex. 1.

3. The I.G. sent both the intent letter and the exclusion letter to Petitioner's address of record as listed in the United States District Court records, including the court judgment that was signed by Petitioner. See I.G. Ex. 4.

4. The I.G. notified Petitioner that he had 60 days from May 29, 1998, the date of the exclusion letter, to appeal his exclusion. I.G. Ex. 1.

5. I do not have the authority to find "good cause" for Petitioner's failure to file his hearing request within the 60-day period allowed by law.

6. I do not have the authority to extend the 60-day period for requesting a hearing.

7. Petitioner's hearing request must be dismissed. Findings 1-6.

V. Discussion

In this case, Petitioner practiced medicine in central Indiana during the 1990s. On September 4, 1996, a Federal Grand Jury sitting in the United States District Court for the Northern District of Indiana returned a 19-count indictment against Petitioner. On October 29, 1997, Petitioner plead guilty to three counts of the indictment: Illegal Kickbacks, in violation of 42 U.S.C. § 1320a-7b(b)(1); Medical Billing Fraud, in violation of 42 U.S.C. § 1320a-7b(a)(1); False or Fraudulent Claims, in violation of 18 U.S.C. § 287; the remaining counts of the indictment were dismissed. Petitioner was also sentenced to a term of 24 months' incarceration on October 29, 1997. I.G. Ex. 4.

The I.G. sent Petitioner two intent letters dated December 1, 1997 (P. Ex. 1) and March 19, 1998 (I.G. Ex. 3). By letter dated May 29, 1998, the I.G. sent Petitioner the final notice of his exclusion, which informed Petitioner that he had been excluded for 10 years. I.G. Ex. 1. All three letters were sent to the address shown as Petitioner's mailing and residence address listed in United States District Court records.

The May 29, 1998 exclusion letter, the determinative document here, included a notice to Petitioner that he had 60 days from receipt of the letter to request a hearing. Section 1005.2(c) provides a five day allowance for transmittal of the I.G.'s exclusion letter. Unless Petitioner could make "a reasonable showing to the contrary," he is presumed to have received the I.G.'s exclusion letter by June 3, 1998. Consequently, Petitioner had until August 3, 1998 to mail his request for hearing (since August 2, 1998 was on a Sunday). Petitioner filed his hearing request by letter dated July 30, 2001.

Petitioner argues that his incarceration from December 1997 to August 1999, and a number of other circumstances connected with his personal situation, his conviction and confinement, operate to excuse him from strict compliance with the timeliness requirements of the regulation. Petitioner also argues that the equitable circumstances in his case should warrant denial of the I.G.'s motion to dismiss.

The threshold question created by Petitioner's argument is: can the facts of his incarceration and attendant circumstances contribute to "a reasonable showing" that Petitioner did not receive the I.G.'s exclusion letter by June 3, 1998? Before addressing the issue of whether Petitioner might be excused for not timely filing his hearing request, I find that it is proper to first consider the question of whether it is reasonable to presume that Petitioner received the exclusion letter within the five-day period allowed for its transmittal. See Ronald J. Crisp, M.D., DAB CR724 (2000); Mira Tomasevic, M.D., DAB CR17 (1989).

In the abstract, that question may be important, particularly in light of my discussion below of an ALJ's lack of authority to extend the post-receipt filing period for good cause. It may very well be that "a reasonable showing" of non-receipt is the only device by which an apparently tardy petitioner can avoid the dismissal of a hearing request filed more than 65 days after the mailing of an exclusion notice. On the concrete facts before me in this case, though, asking the question produces an answer of no assistance to Petitioner.

While it is apparently uncontested that Petitioner was "in the custody of the United States Bureau of Prisons . . . not later than December 3, 1997," (I.G. Ex. 4, at 2) and was not released until August 29, 1999, Petitioner himself concedes that he was fully aware of the I.G.'s action. Petitioner acknowledges that:

[b]y letter dated May 29, 1998, the I.G. notified my wife Robin M. Farr, that I, Peter D. Farr, M.D., would be excluded . . . . The letter was mailed to my wife at 24432 Elmhurst Drive, Elkhart, Indiana . . . . Some time after receipt of that letter she advised me by phone that I had been excluded . . . but, I never received the letter nor a copy of the letter while I was residing at my new address, The Federal Prison Camp, Terre Haute, Indiana . . . . I never reviewed the exclusion letter until after I was out of prison . . . . The timeliness of this notice, as well as the failure to send the notice directly to me, was certainly detrimental to my ability to take effective action.

P. Response at 1, 2. Petitioner likewise concedes receipt of the I.G.'s initial intent letter of December 1, 1997. P. Surreply at 1, 2.

Not only does Petitioner admit being aware of the I.G.'s impending action, and admit being aware that it had in fact become final, but he explains why he chose not to act sooner to appeal the exclusion and why he waited to do so for nearly a year after he had been released from prison:

[s]econdly, there was actually no purpose in appealing at that time because I had no active license to practice medicine. Once I did receive my license it made sense to attempt an appeal.

P. Surreply at 2, 3.

Petitioner's license was reinstated on November 3, 2000. I.G. Ex. 5, at 6, 7.

Thus, assuming arguendo that the bare fact of Petitioner's incarceration might be a first step in "a reasonable showing" that he did not receive the exclusion notice in due course, there are at least three other points from which the 60-day time limit may be fairly calculated. The first is the unspecified date on which his wife told him about the I.G.'s action, and that date can reasonably be assumed to have been in early June 1998, since the address to which the notice letter was sent is admitted to have been valid. This first date could have been somewhat later, to be sure, but it was necessarily before Petitioner's release from prison. The second point is the date of Petitioner's release, August 29, 1999. The third point - and this benchmark requires a very generous reading of Petitioner's position - is the date on which his medical license was reinstated, November 3, 2000. In fact, Petitioner took no action toward appealing his exclusion within 60 days of any of those dates. He has failed to make a "reasonable showing to the contrary" of the presumption that he received the I.G.'s exclusion notice after June 3, 1998. For that reason his July 30, 2001 hearing request is untimely as a matter of law.

But, may I sift the record further in search of some fact or set of facts which would constitute "good cause" for extending the deadline for filing, or for excusing Petitioner's untimeliness altogether? The answer is that I may not. In appeals from exclusions authorized by section 1128(a)(1) of the Act, 42 C.F.R. § 1001.2007(b), and 42 C.F.R. § 1005.2, an ALJ does not possess the authority to find "good cause" for untimeliness in the perfection of an appeal.

Before the promulgation of the present regulations at 42 C.F.R. § 1005.1 et seq., appeals from I.G. exclusions were governed by the same regulatory scheme that still guides appeals from several other broad categories of health-program enforcement actions, 42 C.F.R. § 498.5. Before the promulgation of the present regulations, the general scheme permitted a late-filing party to attempt a showing of "good cause" for filing a hearing request late, and allowed the ALJ to extend the time for filing the hearing request "for good cause shown." 42 C.F.R. § 498.40(c). Under those regulations, a standard for "good cause" was established that still governs those other broad categories of appeals. See Hospicio San Martin, DAB No. 1554 (1996). Furthermore, ALJs have considered whether particular facts might justify late filings. See, e.g., Julio M. Soto, M.D., DAB CR418 (1996).

The present regulations did not adopt the language of 42 C.F.R. § 498.40(c) or any other language conferring discretion on the ALJ to address "good cause" in late filings. The instant language at 42 C.F.R. § 1005.2(e) is stark:

[t]he ALJ will dismiss a hearing where -

(1) The petitioner's . . . hearing request is not filed in a timely manner.

The difference in regulatory language is not trivial. In contrast to the explicit withholding of "good cause" authority from the ALJ, the DAB has been clearly granted such authority in appeals from ALJ decisions in precisely the instant class of litigation. 42 C.F.R. § 1005.21(a). ALJs retain such explicit authority in the broad class of cases still controlled by 42 C.F.R. §§ 498.5 and 498.40, and the DAB retains similar explicit authority in reviewing those decisions; see 42 C.F.R. §§ 498.82(a)(2) and 498.83(b)(2). And untimely appeals under the Clinical Laboratory Improvement Act and 42 C.F.R. § 493.1 et seq. may attempt "good cause" showings before an ALJ and the DAB by reason of 42 C.F.R. § 493.1844(a)(2)'s adoption of the procedures set out generally at 42 C.F.R. § 498.40 et seq.

In short, the mandatory language of 42 C.F.R. § 1005.2(e) is a deliberate and unique exception to the rule prevailing in virtually every other class of litigation, and at every level, in this forum. This deliberate and unique withholding of authority has been recognized repeatedly by ALJs in situations comparable to this one. Matrix Biokinetics, DAB CR846 (2001); John F. Pitts, R.Ph., DAB CR820 (2001); Sharon R. Anderson, D.P.M., DAB CR793 (2001); Hatuey M. Vega, M.D., DAB CR767 (2001); Clifford M. Sonnie, M.D., DAB CR732 (2001); Ronald J. Crisp, M.D., supra; Susan Melinda Brase,

R.N., DAB CR607 (1999); Ambulance Service, Inc., DAB CR557 (1998). There is no reason whatsoever now to distinguish that body of authority or to depart from it.

VI. Conclusion

For the reasons set forth above, I grant the I.G.'s motion to dismiss Petitioner's request for hearing. The hearing request filed by Petitioner, Peter D. Farr, M.D., on July 30, 2001 is untimely filed. Therefore, Petitioner's hearing request must be, and is, dismissed.

Richard J. Smith

Administrative Law Judge