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Vizion One, Inc. v. District of Columbia Department of Health Care Finance

Court of Appeals of Columbia District

October 5, 2017

Vizion One, Incorporated, Petitioner,
v.
District of Columbia Department of Health Care Finance, Respondent.

          Argued January 17, 2017

         On Petitions for Review of Decisions of the District of Columbia Office of Administrative Hearings (DHCF-147-14, DHCF-191-14)

          Donald M. Temple for petitioner.

          Stacy L. Anderson, Senior Assistant Attorney General, with whom Karl A. Racine, Attorney General for the District of Columbia, Todd S. Kim, Solicitor General, and Lor en L. AH Khan, Deputy Solicitor General, were on the brief, for respondent.

          Before THOMPSON and EASTERLY, Associate Judges, and REID, Senior Judge.

          REID, SENIOR JUDGE

         In these consolidated appeals petitioner, Vizion One, Incorporated ("Vizion One"), challenges decisions of an Administrative Law Judge ("ALJ") of the Office of Administrative Hearings ("OAH"). The decisions concerned actions taken against Vizion One by respondent, D.C. Department of Health Care Finance ("DHCF"). The first decision (Appeal No. 14-AA-1023) involved DHCF's suspension of Medicaid payments to Vizion One based on a "credible allegation of fraud"; Vizion One appealed that decision to OAH but the ALJ dismissed the appeal on the ground that it was untimely. The second decision (Appeal No. 14-AA-1024) concerned DHCF's "termination for convenience" of Vizion One's Medicaid Provider Agreement. The ALJ (1) rejected Vizion One's arguments that DHCF had terminated the provider agreement in bad faith and had violated Vizion One's due process rights, and (2) granted DHCF's cross-motion for summary adjudication and dismissed the case with prejudice. For the reasons stated below we affirm OAH's decision in Appeal No. 14-AA-1024, but we vacate OAH's decision dismissing Appeal No. 14-AA-1023 and remand that case to OAH for further proceedings, including an evidentiary hearing, on the merits of Vizion One's appeal.

         PART ONE: APPEAL NO. 14-AA-1023: DHCF'S TEMPORARY SUSPENSION OF VIZION ONE'S MEDICAID PAYMENTS FACTUAL SUMMARY

         A. DHCF's Letter of February 20, 2014, Vizion One's Response, and DHCF's Reply of March 26, 2014

          The record reveals the following. On February 21, 2014, DHCF hand delivered a letter, dated February 20, 2014, to Vizion One. The letter stated that DHCF "was informed that the owner, operator, or employee(s) of Vizion One [] ha[d] been arrested for health care fraud, [1] and that this information constituted "a credible allegation of fraud for which an investigation is pending under the Medicaid program.'" Hence, under 42 C.F.R. § 455.23 (a), DHCF was "withholding all Medicaid payments due to [Vizion One] as a provider of home health services under the District [of Columbia's] Medicaid program."[2] The payments were suspended, effective February 20, 2014. DHCF stated that "[i]n addition to [its] right to request administrative review by DHCF, [Vizion One] ha[d] the right to appeal [the suspension] decision by filing a written request with [OAH] .... for a hearing before an [ALJ] within fifteen (15) calendar days of receipt of this notice."[3] The letter makes no mention of a "good cause" determination under 42 C.F.R. § 455.23 (a)(1) (2012).

         At the time when Vizion One was notified that its Medicaid payments were suspended, it operated a multimillion dollar business with 1100-1200 clients, and over 1, 000 personal care aides, nurses, and other staff. The federal regulation under which DHCF suspended payment to Vizion One specified that (1) "[t]he State Medicaid agency must suspend all Medicaid payments to a provider after the agency determines there is a credible allegation of fraud . . . unless the agency has good cause to not suspend payments or to suspend payment only in part[, ]" (42 C.F.R. § 455.23 (a)(1)); (2) "[a] provider may request, and must be granted administrative review where State [including the District of Columbia] law so requires[, ]" § 455.23 (a)(3); and (3) the notice of suspension must "[s]et forth the applicable State administrative appeals process and corresponding citations to State law[, ]" § 455.23 (b)(2)(vi). While the letter informed Vizion One that it had the right to request an administrative review "within five (5) days of th[e] notice" and "the right to appeal this decision by filing a written request with the District of Columbia Office of Administrative Hearings" "within fifteen (15) calendar days of receipt of this notice, it was silent as to the District's "good cause" determination, the appeals process, and contained no citations to District law regarding the appeals process.

         Vizion One timely invoked its right to an administrative review by submitting a written letter by email to DHCF on February 25, 2014. The letter asserted Vizion One's difficulty in preparing a response because DHCF had "seized" "virtually [Vizion One's] entire set of records." Vizion One declared that "no owner or management employee . . . ha[d] been arrested for, or charged with, health care fraud[, ]" but that "one or more lower level former or current employees ha[d] been charged with colluding with several patients to defraud the Medicaid program, and [ [they] were arrested." The rest of the response set forth Vizion

         One's arguments and evidence for lifting the suspension, based on the "good cause" exception in 42 C.F.R. § 455.23 (a)(1), including the negative impact on Vizion One's ability to service its 1100 to 1200 clients and meet its $900, 000 per week payroll.

         About one month later, DHCF sent Vizion One another letter, dated March 26, 2014, responding to Vizion One's "letter dated February 25, 2014[, ] regarding DHCF's decision to suspend Medicaid payments to Vizion One[]." DHCF addressed the letter to attorneys at Vizion One's first law firm; a "certificate of mailing" appears to be postmarked March 31, 2014. The March 26 letter stated that "an employee of Vizion One []" had been arrested and indicted on charges of "conspiracy to commit health care fraud in a scheme to defraud DC Medicaid out of more than $124, 000, " and that the indictment and seizure of Vizion One's records was "sufficient to meet the CFR standard for a credible allegation of fraud." The letter further stated: "We have reviewed your response to our notice of suspension of payments to Vizion One, Inc. and we have considered the good cause exception and whether to suspend payment in part and our position has not changed, " DHCF declared that Vizion One's suspension would continue "until further notice." The letter advised Vizion One of its "right to request an appeal of [DCHF's] decision by filing a written request within fifteen days of this notice with [OAH]." The letter again contained no citations to District law regarding the appeals process.

         B. Vizion One's Appeal to OAH

         In response to the March 26, 2014, letter, the attorney representing Vizion One at the time sent a letter on April 10, 2014, to DHCF appealing the temporary suspension. The certificate of service attached to the attorney's letter indicates it was sent by mail to DHCF. A five-page fax (including cover, the attorney's letter, and a copy of DHCF's March 26, 2014, letter) was sent to OAH, also on April 10; the fax contained a time stamp of 5:19 p.m. An email stating, in part, that "[a] fax has arrived, " was sent from a dcnet.efaxl@dc.gov address to OAH at 6:29 p.m. on April 10, 2014. OAH stamped the email as received on April 11, 2014, at 9:05 a.m.

         On Friday May 30, 2014, Vizion One electronically filed a Motion for Summary Adjudication. The motion challenged the District's temporary suspension of Vizion One's Medicaid payments and its failure to find "good cause" for only a partial suspension of payments. Vizion One further alleged that DHCF failed "to properly implement and enforce federal laws and to adequately safeguard [Vizion One's] rights, " and that "DHCF should have determined that good cause existed upon which to impose a partial, rather than complete, suspension of payments."

         Subsequently, at a status hearing before the ALJ on June 2, 2014, DHCF announced its intent to file a motion to dismiss on the ground that the appeal in 14-AA-1023 was untimely, Vizion One's current counsel raised a question as to the calculation of the fifteen-day period for filing an appeal. He stated, "I think that, as a premise, the 15-day period is likely [calculated] from the time the notice is received, rather than the time it was transmitted." He further asserted that "counsel [for DHCF] ha[d] not augmented on the record that [the] notice was received by [Vizion One's first] counsel ... on the 26th [of March]." He asked that the record be clarified. Counsel for Vizion One remarked that "three days are generally added to the notice period of time." The ALJ responded saying, "[certificate of service of a pleading, or order, establishes a deadline for response and [if] it's delivered by mail, . . . five days are added to the deadline for response." The ALJ suggested a hearing and counsel for Vizion One requested a hearing. On June 2, 2014, the ALJ issued an order scheduling an evidentiary hearing on June 23, 2014, and instructing the parties to "be prepared at that time to present all evidence and argument they have regarding the issues in this case." In a subsequent order, dated June 18, 2014, the ALJ scheduled additional hearing dates on June 24 and 30, 2014, again instructing the parties that they "shall be prepared at that time to present all evidence and argument they have regarding the issues in this case."

         In its June 16, 2014, response to Vizion One's motion (styled as consolidated cross-motion for summary adjudication and opposition to petitioner's motion for summary adjudication), DHCF claimed that Vizion One's appeal was time-barred; its appeal of the February 20, 2014, letter should have been filed no later than March 14, 2014; the March 26, 2014, letter constituted "unambiguous notice" of the time limit for filing the appeal; and the appeal was untimely because OAH did not receive it until 6:29 p.m. on April 10, 2014. Exhibit O to DHCF's response contained the certificate of mailing for the March 26 letter, apparently postmarked on March 31, 2014. In its reply (opposition and reply to respondent's cross-motion for summary adjudication and opposition to petitioner's motion for summary adjudication), sent on June 20, 2014, Vizion One argued that its appeal was "clearly timely filed." Specifically, Vizion One referenced DHCF's Exhibit O and maintained that under OAH Rule 2812.5, it had twenty days, rather than fifteen from March 26, 2014, in which to file its OAH appeal.[4] The remainder of its reply addressed DHCF's arguments relating to its suspension of Medicaid payments and its rejection of the good cause exception as applicable to Vizion One's case.

         C. The OAH ALJ's Final Order

         On the morning of the issuance of the ALJ's June 23, 2014, final order, the ALJ issued an order cancelling the scheduled evidentiary hearing; he explained that OAH lacked jurisdiction because Vizion One's hearing requests were untimely. Vizion One immediately (and prior to the issuance of the ALJ's final order) filed a motion for reconsideration of the ALJ's interim order canceling the hearing, reiterating that "the trigger date for [Vizion One's] fifteen (15) day jurisdictional filing is the date that the mailing regarding the denial of the good cause exception was actually postmarked, 1' That afternoon the ALJ released his final order in which he dismissed the case involving the suspension of Vizion One's Medicaid payments (Appeal No. 14-AA-1023) "for lack of jurisdiction"; the ALJ did not consider any other issues raised and discussed by the parties.

         The ALJ acknowledged that "DHCF has not promulgated separate hearing regulations that apply to temporary suspension of Medicaid payments to Medicaid providers, under 42 C.F.R. § 455.23, " and that DHCF's internal policy relating to suspension of payments in case of fraud "does not set forth any deadlines for providers to file a hearing request." However, the ALJ referenced "the provisions of several similar DHCF regulations addressing hearing procedures" - specifically 29 DCMR § 1303.4 pertaining to filing a notice of appeal relating to a notice of proposed exclusion or termination, that is, denial of reimbursement or termination of provider agreement (notice of appeal must be filed "within fifteen (15) days of the date of the notice of termination or exclusion"), and 29 DCMR § 1307.8 relating to filing a notice of appeal where there has been suspension of Medicaid payments due to overpayment ("provider has fifteen (15) days from date of the notice sent... to request a hearing by filing a notice of appeal"). After referencing these provisions, the ALJ concluded that "DHCF has met its burden to show that both the First Notice and the Second Notice contained unambiguous information about the action taken and the right to request a hearing, " and that the February 20, 2014, notice "advised [Vizion One] that it must file its hearing request with OAH fifteen (15) days after [it] received the First Notice, "

         The ALJ further declared that the March 26, 2014, notice, which provided the results of the administrative review, "advised [Vizion One] that it must file its hearing request with OAH within fifteen days after the notice was issued." The ALJ cited OAH Rule 2809.5 (a) which specifies that "the filing date is the date on which the fax is received in the Clerk's office between the hours of 9:00 a.m. and 5:00 p.m." In response to Vizion One's argument relating to OAH Rule 2S12.5, the ALJ declared that the rule was inapplicable to the February 20, 2014, notice because it was personally served (by hand), not by mail. Furthermore, the ALJ relied on the exclusionary clause at the end of OAH Rule 2812.5 ("unless a . . . regulation provides otherwise") in stating that the additional five days in the rule did not apply to the March 26, 2014, notice because "[b]oth the DHCF hearing regulations [cited above] and the [March 26, 2014, ] [n]otice itself informed [Vizion One] that the hearing request must be filed within 15 days after the notice was issued." The ALJ recognized that Vizion One had requested reconsideration of the ALJ's cancellation of a scheduled hearing and had "assert[ed] as fact that the [March 26, 2014, ] notice was actually issued on March 31, 2014, " but the ALJ declared that Vizion One "[did] not include any evidence to support the assertion." Thus, the ALJ dismissed the appeal as untimely.

         D. Vizion One's Request for Reconsideration

         Vizion One lodged a motion for reconsideration on July I, 2014, essentially taking issue with the ALJ's separation of the February 20, 2014, letter from that dated March 26, 2014, and the ALJ's conclusion that an appeal of the February 20 letter had to be filed by March 14, 2014. Vizion One also took issue with the ALJ's statement that Vizion One "proffered no evidentiary support regarding the March 26, 2014 letter's March 31, 2014 postmark." Specifically, Vizion One argued that DHCF's internal policy regarding suspension of Medicaid payments in cases of fraud, required the good cause exception to be made prior to the issuance of the notice of suspension, and hence, the letter dated March 26 triggered the time for filing an appeal with OAH. Moreover, Vizion One argued that the ALJ erred in his interpretation of 29 DCMR § 1307.8, which states that the "provider has fifteen days from the date of the notice sent to request a hearing by filing a notice of appeal, " and "[c]ontrary to [the ALJ's] ruling, [29 DCMR § 1307.8] do[es] not require this fifteen (15) day time frame to start running from the date that a letter is dated, or from the date of 'issuance.' . . . [but this time frame] runs from the date on which the notice was actually 'sent' or ...


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