Vizion One, Inc. v. District of Columbia Department of Health Care Finance , 170 A.3d 781 ( 2017 )

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DISTRICT OF COLUMBIA COURT OF APPEALS
Nos. 14-AA-1023 and 14-AA-1024
VIZION ONE, INCORPORATED, PETITIONER,
v.
DISTRICT OF COLUMBIA
DEPARTMENT OF HEALTH CARE FINANCE, RESPONDENT.
On Petitions for Review of Decisions of the
District of Columbia Office of Administrative Hearings
(DHCF-147-14 and DHCF-191-14)
(Argued January 17, 2017 Decided October 5, 2017)
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 Loren L. AliKhan, 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
2
Health Care Finance ("DHCF"). The first decision (Appeal No. 14-AA-1023)
invo lved DHCF's suspension of Medicaid payments to Vizion One based on a
"credible allegation of fraud"; Yizion One appealed that decision to OAH but the
ALJ dismissed the appeal on the ground that it was untime ly. The second decision
(Appeal No. 14-AA-l 024) concerned DHCF's "termination for convenience" of
Yizion 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 affinn OAH 's decision in Appeal No. 14-AA- I 024, 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 N0.14-AA-1023: DHCF'S TEMPORARY
SUSPENSION OF VIZION ONE'S MEDICAID PAYMENTS
I. FACTUAL SUMMARY
A. DHCF's Letter of February 20, 2014, Vizion One' s Response, and
DHCF's Reply of March 26, 2014
3
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," and that this information constituted "a
credible allegation of fraud for which an investigation is pending under the
Medicaid program." 1 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
1
It was later revealed that two Vizion One employees had been arrested and
indicted. One allegedly had coached Medicaid beneficiaries how to falsely qualify
for personal care services that Medicaid reimbursed, and both employees allegedly
had paid Medicaid beneficiaries to sign timesheets, or to allow their names to be
signed even though no personal care services had been provided to these Medicaid
beneficiaries.
2
42 C.F.R. § 455.23 (a)( 1) (2012) provides:
(a) Basis for suspension. ( l) The State Medicaid agency
must suspend all Medicaid payments to a provider
after the agency determines there is a credible
allegation of fraud for which an investigation is
pending under the Medicaid program against an
indi vidual or entity unless the agency has good cause
to not suspend payments or to suspend payment only
in part.
4
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 wi th
(OAH] .... for a hearing before an [ALJ] within fifteen ( 15) calendar days of
receipt of th is notice." 3 The letter makes no mention of a "good cause"
determination under 42 C.F.R. § 455.23 (a)( I) (2012).
At the time when Vizion One was notified that its Medicaid payments were
suspended, it operated a multi mi Ilion dollar business with 1100-1200 clients, and
over 1,000 personal care aides, nurses, and other staff. T he fede ral regul ation
under which DHCF suspended payment to Vizion One specified that (I) "[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)( I)); (2) "[a] provider may request, and must be granted
3
42 C.F.R. § 455.23 (a)(3) and (b )(2)(vi) specify:
(a) ... (3) A provider may request, and must be granted,
adm inistrative review where State law so requires.
(b) ... (2) The notice must include or address all of the
fo llowing: . . . (vi) Set forth the applicable State
administrative appeals process and corresponding
citations to State law.
5
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
6
One's arguments and evidence for lifting the suspension, based on the "good
cause" exception in 42 C.F.R. § 455.23 (a)( l ), including the negative impact on
Vizion One's ability to service its 1100 to l 200 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, 20 14. 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 "unti l
further notice." The letter advised Vizion One of its "right to request an appeal of
7
[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 I0, 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 l O;
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.efax l @dc.gov address to OAH at 6:29 p.m. on
April I 0, 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
8
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 l 4-
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 fu rther 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, "[c]erti ficate of
service of a pleading, or order, establishes a deadline for response and [it] 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,
9
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,
20 14, 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 I 0, 2014. Exhibit 0 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 adj udication), sent on June 20, 2014, Vizion One argued that its appeal
was "clearly timely fi led." Specifically, Vizion One referenced DHCF's Exhibit 0
IO
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.'1 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 schedu led 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
.i OAH Rule 2812.5 provides:
When a party may or must act within a specified
time period after service, and service is made by Uni ted
States mail, commercial carrier, or District of Columbia
Government inter-agency mail, five (5) calendar days are
added after the period would otherwise expire, unless a
statute or regulation provides otherwise.
ll
jurisdictional filing is the date that the mailing regarding the denial of the good
cause exception was actually postmarked." That afternoon the ALJ released his
final order in which he dismissed the case involving the suspens ion of Vizion
One's Medicaid payments (Appeal No. 14-AA- I 023) "for lack of jurisdiction"; the
ALJ did not consider any other issues ra ised and discussed by the parties.
The ALJ acknowledged that " DHCF has not promulgated separate hearing
regulations that app ly to temporary suspens ion 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 deadli nes for
providers to file a hearing request." However, the ALJ referenced "the provisions
of several similar DHCF regu lations addressing hearing procedures" - specifically
29 DCMR § 1303.4 pertaining to filing a notice of appeal relating to a notice of
proposed exclusion or tennination, that is, den ial 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
12
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 OAI-1
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 2812.5,
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
13
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, 20 14 letter's March 3 1, 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
14
days from the date of the notice sent to request a hearing by fi ling a notice of
appeal," and "[c]ontrary to [the ALJ's] ru ling, [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 postmarked." (emphasis altered).
Consequently, Vi zion One maintains, DHCF's Exhibit 0 establishes that the
March 26 letter was postmarked March 3 1, meaning that it was "sent" on March
31, and "Vizion One was thus required to have filed its not ice of appeal by not
later than April 15, 2014."
In its opposition to Vizion One's motion for recons ideration, DHCF
supports the ALJ's final order dismissing Vizion One's appeal on jurisdictional
grounds. DHCF further maintains that there is no constitutional or statutory right
to appeal the results of DHCF's administrative rev iew of a suspension of Medicaid
payments based on fraud , and DHCF also fau lts Vizion One for raising new
arguments, including those re lating to the March 3 1 postmark.
15
II. THE PARTIES' ARGUMENTS ON APPEAL
In its mam brief, Vizion One raised and argued the following issue:
"Whether Vizion One timely filed a Notice requesting a hearing related to the
government's February 20, 2014[,] termination of their Medicaid Payments."
Vizion One contends that " its hearing request was indeed timely, because the time
period for [it] to appeal the DHCF's second notice began on March 31, 20 I4, the
date stamped by the U.S. Post Office on the Certificate of Mailing, and not March
26, 20 14, the date typed on the notice letter" (emphasis in original).
In response to Vizion One 's appellate arguments, DHCF generally supports
the ALJ's ruling and contends that Vizion One's appeal of both the February 20,
2014, and March 26, 2014, letters - regarding the suspension of Vizion One's
Medicaid payments - was untimely because 29 DCMR §§ 1303.5 and I307.8
required Vizion One to file its request for a hearing "within fifteen ( 15) days of the
date of the notice," and "fifteen ( 15) days from the date of the notice sent,"
respectively. (emphasis in original). Since Vizion One did not challenge the
ALJ's conclusion in its main appellate brief, DHCF asserts, "any such argument
16
should be deemed forfeited," and, at any rate, Yizion One's notice arguments -
made during the adm inistrative process - "lack merit."
Vizion One's reply brief emphasizes the lack of clarity as to the rules
governing the timeline for filing a request for an OAH hearing - due in part to the
absence of local regulations governing the suspension of Medicaid payments and
due in part to other conflicting local regulations which the ALJ cited. Therefore,
Yizion One argues, "the record reflects that the ALJ could not establish credible
time frames," and " DHCF ... acted in a sua sponte manner, violative of [Yizion
One's] due process rights, contrary to the C.F.R. in determining good cause .... "
ITI. STANDARD OF REVIEW
This court reviews legal conclusions de nova. See Yates v. United States
Dep 't of the Treaswy, 149 A.3d 248, 250 (D.C. 2016); Bartholomew v. District of
Columbia Office of Tax & Revenue, 78 A.3d 309, 316 (D.C. 2013). "We sustain
OAH's legal conclusions unless they are [a]rbitrary, capricious, an abuse of
discretion, or otherwise not in accordance with law." Yates, supra, 149 A.3d at
250 (internal citations omitted). Here, the ALJ concluded that OAH did not have
17
jurisdiction to address Vizion One's challenge to DHCF's s uspension of its
Medicaid payments because Vizion One's request for an OAH hearing was
untimely. OAH's detennination is a legal conclusion requiring de nova review.
rv. APPLICABLE CASE LA w AND LEGAL PRINCIPLES
In Gatewood v. District of Columbia Water & Sewer Auth., 82 A.3d 41(D.C. 2013), this court "examine[d] the relationship between administrative-filing
deadlines and jurisdictional limitations" and reiterated, in accordance with
Supreme Court precedent, that "nonjurisdictional rules and deadlines may be
extended or waived." Id. at 46 (citations omitted). Earlier, in In re Na.H. , 65 A.3d
111 (D.C. 2013), a child neglect case involving the timeliness of a motion for
review of a magistrate judge's decision, this court recognized that, " [r]ecent
Supreme Court decisions have sought to establish and clarify the distinction
between deadlines that are truly jurisdictiona l and those that are more properly
characterized as procedural or ' claim-processing rules."' Id. at 115. We also
stated that, " [u]nlike statutory deadlines that Congress intended to limit a court' s
jurisdiction, claim-processing rules are court-promulgated rules, adopted by the
[c]ourt for the orderly transaction of its business." Id. at I 16.
18
Mathis v. District of Columbia Housing Auth., 124 A.3d I 089 (D.C. 2015),
reiterated the Supreme Court's pronouncement that "[f]iling deadlines in particular
are quintessential claim processing rules, which seek [only] to promote the orderly
progress of litigation, and generally do not have jurisdictional force." Id. at 1102
(internal quotation marks and citation omitted). Mathis also reiterated that
"O]urisdictional rules may not be tolled, because noncompliance deprives this
court of jurisdiction even to consider equitable arguments; claim-processing rules,
on the other hand, may be tolled if equity compels such a result." Id. at 110 I
(citation omitted). Moreover, "whether a timing rule should be tolled turns on
whether there was unexplained or undue delay and whether tolling would work an
injustice to the other party." Id. at 1104; see also Brewer v. District of Columbia
Office of Emp. Appeals, 163 A.3d 799, 802 (D.C. 2017) ("Whether equitable
tolling is appropriate ' is a fact-speci fie question that turns on [] balancing the
fairness to both parties."' (citing Mathis, supra, 124 A.3d at 1104) (internal
quotation marks omitted).
19
V. DHCF'S MEDICAID PROGRAM REGULATIONS
The Medicaid Program regulations in Title 29, Chapter 13 of the District's
Municipal Regulations are structured on the type of action to be taken by the
administrative agency - for example, exclusion of Medicaid provider from
reimbursement, 29 DCMR § 130 I ( 1984), termination of Medicajd provider
agreement, 29 DCMR § 1302, notice of proposed exclusion or termination relating
to § 1302, 29 DCMR § 1303, suspension for conviction of program-related
offense, 29 DCMR § 1304, suspension of Medicaid payments for overpayments,
29 DCMR § 1305, suspension of Medicaid payments for overpayments -
proceeding, 29 DCMR § 1306, and suspension of Medicaid payments for
overpayment - evidence and notice, 29 DCMR § 1307. Noticeably absent from
Title 29, Chapter 13 of the DCMR are regulations concerning the suspension of
Medicaid payments due to a credible allegation of fraud and related regulations
pertaining to notice, proceeding and evidence in that kind of suspension.
20
VI. ANALYSIS
We first address DHCF's argument that Vizion One "forfeited" any
argument challenging the ALJ's "conc lusion that the timeliness of the application
for a hearing is measured from the date of the notice, rather than the date of
service." We conclude that Vizion One's claim that it timely filed a request for
hearing before an OAH ALJ was neither waived nor forfe ited. 5 See Tindle v.
United Sates, 778 A.2d I 077, I 082 (D.C. 200 I) ("[T]he Supreme Court of the
United States and this court have distinguished between 'claims' and 'arguments,'
holding that although 'claims' not presented in the trial court wi ll be forfeited (and
thus subject to plain error review standard), parties on appeal are not limited to the
precise arguments they made in the trial court.") (internal quotation marks
omitted). As early as June 2, 20 14, Vizion One challenged DHCF 's statement that
it would move to dismiss Yizion One's appeal, pointing out that DHCF had not yet
filed proof that the March 26, 2014, letter had been mailed. The burden was on
DHCF to present proof that it had properly given notice of suspension of Medicaid
payments - due to a credible allegation of fraud - to Vizion One by filing a
5
"[F]orfeiture is the failure to make the timely assertion of a right," and
"waiver is the intentional relinquishment or abandonment of a known right."
United States v. Olano, 507 U.S. 725, 733 ( 1993) (internal citations omitted).
21
certificate of mail ing or by providing a description of its mailing procedures. See
Bobb v. Howard Univ. Hosp. , 900 A.2d 166, 168 (D.C. 2006). Vizion One
continued to assert its timeliness claim even after the ALJ issued its final order.
Although Vizion One did not make explicit arguments in this court
concerning j urisdictional limitations, claim-processing rules, and equitable tolling,
it implicitly broached equitable tolling in its request for reconsideration of the
ALJ's final order by contending that DHCF's good cause determination should
have been made prior to the suspension of Vizion One's Medicaid payments, by
invoking the certificate of mailing filed by DHCF showing that the March 26 letter
to Vizion One was mailed on March 31 rather than March 26, and by arguing that
the March 26 letter triggered the time for fi ling an appeal with OAH, thus
implicitly argui ng that the March 3 l date controlled the timing of the request for a
hearing rather than the date on the March 26 letter. Furthermore, even though
Vizion One did not make an explicit argument in the trial court, we have
previously said that "[t]he principle that 'normally' an argument not raised in the
trial court [or before an ALJ] is waived on appeal is, however, one of discretion
rather than jurisdiction," especially if the " issue is purely one of law." McC/intic v.
22
McClintic, 39 A.3d 1274, 1277 n.1 (D.C. 2012) (quoting District of Columbia v.
Helen Dwight Reid Educ. Found. , 766 A.2d 28, 34 n.3 (D.C. 200 1)).
We are confronted with a legal issue in th is case, and our review is de novo,
Yates, supra, 149 A.2d at 250. In that regard, we owe no deference to OAH's
interpretation of DHCF's regu lations. We have said previously that "OAH is a
generalist body with no subject-matter expertise in the provision of health care
services in the District." Medstar Health, Inc. v. District of Columbia Dep 't of
Health, 146 A.3d 360, 371 -72 (D.C. 2016) (citation omitted). "OAH ... is 'vested
with the responsibi lity for deciding administrative appeals involving a substantial
number of different agencies' and thus lacks the subject-matter expertise justifying
the deference to agency interpretations of statutes or regul ations." District of
Columbia Dep 't of the Env 't v. East Capitol Exxon, 64 A.3d 878, 88 1 (D.C. 20 13)
(citation om itted).
In sum, (I) given our case law regard ing jurisdictional li mitations, claim-
processing ru les, and equitable tolling in administrative cases, (2) Vizion One's
arguments before the ALJ, (3) the absence of DHCF regulations specifically
addressing the appeals process in cases of suspension of a provider's Medicaid
23
payments, and (4) Vizion One's persistent claim before the ALJ and on appeal that
its request for a hearing was timely, we believe that our standard of review, case
law, and fairness weigh in favor of addressing the merits of the timeliness issue. In
addition, this court often has reiterated "the strong judicial and societal preference
fo r determining cases on the merits." Abell v. Wang, 697 A.2d 796, 800 (D.C.
1997) (citation omitted); see also Walker v. Smith, 499 A.2d 446, 448-49 (D.C.
1985) ("We adhere to the strong judicial policy favoring adjudication on the merits
of a case.") (citations omitted).
Based on the record in this case, we firs t conclude that the ALJ erred by
ruling Vizion One had to file its request for a hearing, in response to the February
20 letter, no later than March 14. That was error because Vizion One, acting on
the in formation in the February 20 letter, invoked the adm inistrative process and
filed a timely submission with DHCF regarding the good cause determination that
DHCF had not yet made (as revealed by the content of the February 20 letter). The
applicable federal regulation. 42 C.F.R. § 455.23 (a)(I) clearly stated that a State
Medicaid agency had to suspend a provider's Medicaid payments after receiving a
credible allegation of fraud "unless the agency has good cause to not suspend
payments or to suspend payment in part onl y." See supra note 2. DHCF's own
24
internal guidance discussed the process for making the good cause determination
prior to issuing the suspension letter. However, it was not until its March 26 letter
that DHCF stated that it had made the good cause determination and its position
remained the same. Therefore, the ALJ should have used DHCF's March 26,
2014, letter to calculate the timing of Vizion One's administrative review.
Second, regardless of whether the February 20 or March 26 letter started the
timing for Vizion One's administrative review process, the fifteen-day time period
is an administrative-filing deadline that may be tolled. At the time the ALJ
decided the timeliness issue, this court had already ( 1) "examine[d] the relationship
between administrative-filing deadlines and jurisd ictional limitations," (2) set forth
legal principles for determining whether a rule is jurisdictional or a claim-
processing rul e, and (3) determined that "nonjurisdictional rules and deadlines may
be extended or waived." Gatewood, supra, 82 A.3d at 46 (citations omitted). In re
Na.H., supra, 65 A.3d at 116, clearly stated that statutory deadlines are
jurisdictional limitations, but not claim-processing rules. Here, there is no statute
imposing a deadline for the filing of an appeal with OAH. Therefore, in light of
our prior decisions and contrary to the ALJ's conclusion, we hold that the DHCF
regulations pertaining to the time for filing a request for a hearing before an OAH
25
ALJ, on which the ALJ relied, are "quintessential claim[-]processing rules, which
seek [only] to promote the orderly progress of litigation, and generally do not have
jurisdictional force." Mathis, supra, 124 A.3d at 1102; see also Sebelius v. Auburn
Reg'/ Med. Ctr., 568 U.S. 145, 161 (2013) ("the 180-day [federal] statutory
deadline for administrative appeals to the Provider Reimbursement Review Board
is not jurisdictional''). Because DHCF's filing regulations are claim-processing
rules, they may be " tolled if equity compels such a resu lt." Mathis, supra, 124
A.3d at 1102; see also Sebelius, supra, 568 U.S. at 161 -62 (the Court held that "the
equitable tolling presumption approved for suits brought in court does not similarly
apply to administrative appeals of the kind here considered"; however, a
concurring justice declared that the Court has "never suggested that the
presumption in favor of equitable tolling is generally inapplicable to administrative
deadlines.") (J. Sotomayor concurring).
Here, equity compelled the tolling of the deadline for Vizion One's filing of
a request for a hearing. We see no injustice that DHCF would suffer because of
equitable tolling. Rather, balancing the fairness to both parties reveals a greater
negative impact on Vizion One and its multi-million dollar business with over
1100 employees than on DHCF, the agency that bears the responsibility to make
26
the required good cause determination under 42 C.F.R. § 455.23 and its own
internal policies. See Brewer, supra, 163 A.3d at 802. Due to the criminal
behavior of several low-level employees, Vizion One experienced the sudden
cessation of all income flowing from Medicaid, even though it sti ll had obligations
to clients under its care.
Third, we conclude that the ALJ erred by relying on two Medicaid program
regulations that were not identified in either DHCF 's letter of February 20, 2014,
or March 26, 2014. The federal regulation, 42 C .F.R. § 455.23 (b)(2)(vi), clearly
stated that the notice of temporary suspension of Medicaid payments due to a
credible allegation of fraud "must . . . set forth the applicable [District of
Columbia] administrative appeals process and corresponding citations to [District
of Columbia] law." Failure to follow the federal regulation implicates the fairness
of the process extended to Vizion One. Given the structure and specificity of
DHCF's Medicaid regulations, discussed earlier in this opinion, a Medicaid
provider could not readily determine that 29 DCMR § 1303.4 and 29 DCMR §
1307 .8, on which the ALJ relied, applied to suspension of Medicaid payments due
to a credible allegation of fraud.
27
One other aspect of the ALJ's ruling needs to be discussed briefly - the
ALJ's interpretation of OAH Rule 28 12.5. "[W]e owe deference to an agency's
interpretation of its own regulation." Coto v. Citibank FSB, 9 12 A.2d 562, 567 n. 7
(D.C. 2006). However, if an agency's interpretation is not in accordance with its
regulatory language or purpose, or if it is unreasonable, we owe no deference to
that interpretation. East Capitol Exxon, supra, 64 A.3d at 880-81. Here, the ALJ
ruled that OAH 's regulation providing for the addition of five calendar days to a
specified ti me period for service is inapplicable "because [b]oth the DHCF hearing
regulations [on which the ALJ relied] and the [March 26, 20 14] [n]otice itself
informed [Vizion One] that the hearing request must be filed within 15 days after
the notice was issued." Thus, the ALJ interpreted the concluding language of
OAH Rule 2812.5 - which reads "unless a statute or regulation provides
otherwise" - as including language in "a letter" which references no regulation
even though the plain words of the exception specify "a statute or regulation." The
ALJ's interpretation is simply inconsistent with the language of OAH Rule 2812.5.
Hence, we owe no deference to that interpretation, and disregarding OAH Rule
2812.5 in this case clearly would implicate the fairness of the process extended to
Vizion One.
28
In addition, neither 29 DCMR § 1303.4 nor 29 DCMR § 1307.8 mirrors the
exact language in the ALJ's ruling - "within 15 days after the notice was issued."
Apparently the ALJ considered "issued" to mean the date placed on the March 26
letter, but he offered no rationale for such a conclusion. 6 Equally significant,
nothing in OAH Rule 2812 even remotely suggests that another agency's rules,
here the referenced DHCF rules, negate or make inapplicable OAH's rule for
calculating filing request deadlines. Jn short, we see nothing in OAH Rule 2812
that precludes the application here of the additional five-day rule in subsection
2812.5. Reliance so lely on the date of the letter as the trigger for the start of the
time period arbitrarily limits the time to appeal based on when DHCF decides to
6
In his order denying Vizion One's motion for reconsideration, and without
the benefit of an evidentiary hearing and findings of fact, the ALJ stated:
DHCF has apparently sent its notice to [Vizion One] by
both regular mail and certified mai l. The issuance date
listed on the second notice was March 26, 2014, and the
fact that a certified mail copy was sent on March 31,
2014[,] does not rebut any inference that the notice was
mailed on its issuance date . . . [Vizion One] has not
provided any evidence as to when [it] received the
second notice by regular mail, which evidence could
provide circumstantial evidence as to when the notice
was actually mailed.
An evidentiary hearing could have answered the questions implicit in the
above statement of the ALJ, particularly whether DHCF sent its March 26 letter to
Vizion One twice.
29
date the letter, rather than on when the letter is mailed, as indicated by the
certificate of mai Iing.
In sum, we hold that Vizion One timely appealed DHCF's temporary
suspension of its Medicaid payments. Accordingly, we vacate the ALJ's order
dismissing Vizion One's appeal of the suspension of its Medicaid payments
(Appeal 14-AA-1023) and remand that case to the OAH for further proceedings,
including an evidentiary hearing, on the merits of Vizion One's appeal.
PART TWO: APPEAL NO. 14-AA-1024: DHCF'S TERMINATION
OF VIZION ONE'S MEDICAID PROVIDER AGREEMENT
I. FACTUAL SUMMARY
A. DHCF's Letters of April 11, 2014, and May 23, 2014, and Vizion One's
Appeal
Following its notification of continued suspension of Vizion One's Medicaid
payments and "pursuant to § 1303. l of Title 29 Dfatrict of Columbia Municipal
Regulations," DHCF notified Vizion One, by letter dated Apri I 11, 2014, of its
intent "to terminate the Home Health Agency Medicaid Provider Agreement
30
between DHCF and Vizion One [], and [to] cease reimbursement to Vizion One []
for services provided to Medicaid beneficiaries." According to the letter, the
termination would be effective ninety days from the April I Ith notification. The
notification letter specified that "within 30 days of the date of [the letter], Vizion
One "ha[d] the right to submit written argument and documentary evidence against
the decision to terminate [Vizion One's] provider agreement."
Subsequently, by letter dated May 23, 2014, DCHF notified Vizion One that
"effective July 15, 2014, DHCF will terminate the Home Health Agency and
Elderly and Physically Disabled Waiver Medicaid Provider Agreements between
DHCF and Vizion One." The letter specified that the "termination is for
convenience, not for cause." Nevertheless, DHCF included in the termination for
convenience notification a response to Vizion One's May 9, 2014, letter contesting
DHCF's noti ft cation of its intent to terminate Vizion One's provider agreements.
DHCF's letter of May 23 also advised Vizion One that it had "the right to request
an appeal of [the termination decision] by filing a written request within fifteen
( 15) calendar days [of the termination] notice wi th [OAH]." Vizion One timely
filed a notice of appeal with OAH on June 3, 2014.
31
B. Vizion One's Pre-Hearing Brief, DHCF's Motion to Dismiss or for
Summary Adjudication and Vizion One's Opposition
At a status hearing before the ALJ on July 9, 2014, the parties discussed
both appeals. Vizion One suggested that it provide the ALJ with preliminary
briefing. The ALJ agreed and indicated that DHCF could lodge a responsive
pleading, and thereafter a hearing would be held.
Vizion One filed a pre-hearing brief on July 29, 2014, arguing that DHCF
filed its notice of tennination for convenience in bad faith and in retaliation for
Vizion One's legal actions against the District, in federal court. 7 Vizion One
7
On May I, 2014, Vision One filed a motion to intervene in a lawsuit in the
United States District Court for the District of Columbia Court, ABA, Inc. v.
District of Columbia; the lawsuit was brought by other providers whose health care
payments had been suspended. Initially, the District Court issued a temporary
restraining order that required the District to pay for Medicaid services rendered to
beneficiaries. However, at the preliminary injunction phase of the litigation, the
District Court dismissed the case, without prejudice, and denied Vizion One's
motion to intervene "as moot." 40 F. Supp. 3d 153, 174 (D.D.C. 2014).
Subsequently, on May 23, 2014, Vizion One filed a lawsuit in the District Court
against the District, challenging DHCF's suspension of its Medicaid payments, as
well as DHCF's termination of its provider agreement, on procedural and
substantive due process grounds and challenging the applicable federal regulations
as unconstitutionally vague and overbroad. The District Court stayed Vizion
One's claims for monetary damages pending the outcome of these appeals. See
Vizion One, Inc. v. District of Columbia, No. 14-883 (RMC), 2015 U.S. Dist.
LEXlS 90361 (D.D.C. July 13, 2015).
32
asserted, in part, that DHCF "effectively destroyed" its "$46 million dollar
business" by suspending provider Medicaid payments for fi ve months while
requmng Vizion One to continue operating its business. DHCF's responsive
pleading, filed on August 22, 2014, was styled a motion to dismiss, or m the
alternative, for summary adjudication. DHCF contended that OAH lacked
jurisdiction to adjudicate claims of bad faith and retaliation, and further, that the
appeal challenging the termination for convenience should be dismissed for failure
to state a claim upon which relief can be granted. Vizion One's responsive
opposition to DHCF's motion maintained that OAH had jurisdiction, and that it
was not only asserting "a termination for convenience rooted in bad faith[,]" but
"also a termination for convenience rooted in a due process violation, and
effectively a de facto termination for cause." In addition, Yizion One argued that,
"An interpretation of the applicable federal law and regulation that would allow
DHCF to terminate providers for cause under the rubric of a termination for
convenience is counter-intuitive to fundamental principles of due process and the
stated intention and objectives of the governing legislation."
In response to DHCF's motion and Vizion One's opposition, the ALJ issued
a fin al order granting summary adjudication in favor of DHCF on September 9,
33
2014. The ALJ determined that DHCF had interpreted OAH's jurisdiction too
narrowly and that OAH has jurisdiction to adjudicate DHCF's tennination of
Vizion One's Medicaid provider agreement, whether the termination is for cause or
for convenience. The ALJ also concluded that nothing in DCHF's regulations or
otherwise establishes OAH's lack of jurisdiction over Vizion One's claim of bad
faith. However, the ALJ granted DHCF's motion for summary adjudication,
essentially because DHCF's termination for convenience constituted a contractual
right under the provider agreement, and because Vizion One did not meet its
burden of proof with respect to establishing bad faith on the part of DHCF or a
violation of Vizion One's due process rights by DHCF. Vizion One filed a timely
petition for review on September 12, 2014.
The ALJ issued a final order granting summary adjudication to DHCF.
After determining that OAH had jurisdiction to review Vizion One's claim that
DHCF acted in bad faith in terminating its Medicaid provider agreement, the ALJ
considered the merits of the termination of the provider agreement for
convenience. The ALJ found, in part, that the facts did not support the assertion
that DHCF acted in bad faith; Vizion One did not establish that DHCF was
motivated by a desire to punish Vizion One for exercising its legal rights; and
34
Vizion One did not present evidence showing that DHCF was motivated to drive it
out of business. The ALJ also declared that Vizion One did not demonstrate that
DHCF violated its due process rights. Vizion One filed a timely appeal.
II. THE PARTIES' ARGUMENTS ON APPEAL
Vizion One primarily argues that the "termination for convenience removed
protections for [Vizion One] that were clearly articulated in the federal laws, and
allowed the government to effectively institute a de facto tennination for cause by
circumventing the federal statute." Vizion One contends that without an analysis
of the Affordable Care Act, the ALJ "simply could not rule as a matter of law that
DHCF's perceived contract rights prevailed over [Vizion One's] statutory due
process rights, particularly when [DHCF] collectively terminated the specific
providers who were suspected of 'credible allegations of fraud."'
DHCF supports the ALJ's decision. It relies, in part, on the presumption
that government officials act in good faith. DHCF also contends that its
termination of Vizion One's Medicaid provider agreement "did not preclude
Vizion One from challenging DHCF's suspension of its Medicaid Provider
35
payments,,, and that "Vizion One forfeited any right to be terminated only for
cause when it agreed to the termination for convenience clause in its Medicaid
Provider Agreement with DHCF.,, DHCF claims, in sum, that Vizion One did not
present clear and convincing evidence showing that DHCF acted in bad faith .
III. ANALYSIS
Our analys is of DHCF's termination of Vizion One's Medicaid provider
agreement is governed by the following legal principles. "The standard governing
proof in a case ... based on allegations of governmental bad faith is quite high."
Urban Dev. Solutions, LLC v. District of Columbia, 992 A.2d 1255, 1267 (D.C.
2010). "[A] party claiming that the government acted in bad faith must present a
reviewing court with well-nigh irrefragable proof to that effect," or "clear and
convincing evidence.,, id. (internal quotation marks and citation omitted).
'"Well-nigh irrefragable' proof ... refers to evidence that cannot be refuted or
disproved ... ,,, Am-Pro Protective Agency, Inc. v. United States, 281 F.3d 1234,
1240 (Fed. Cir. 2002). To establish bad faith, a party must present "evidence of
some specific intent to injure the [petitioner]." Urban Dev. Solutions, supra, 992
A.2d at 1267 (citation omitted). We follow the presumption that "government
36
officials are presumed to act in good faith. " District of Columbia v. Kora &
Williams Co1p., 743 A.2d 682, 695 (D.C. 1999).
Here, Vizion One's provider agreement explicitly stated that "[DHCF] or the
provider may terminate this Agreement for convenience by giving 90 days written
notice or intent to terminate the Agreement to the paity ." Vizion One contractually
agreed to the termination of convenience provision, and the ALJ did not err or
abuse his discretion by relying on that provision and concluding that unless Vizion
One could show bad faith on DHCF's part, DHCF lawfully terminated Vizion
One's provider agreement.
Our review of the record in this case supports the ALJ's determination that
Vizion One did not present clear and convincing evidence that DHCF was
motivated by "an intent to injure" Vizion One when it invoked the termination for
convenience provision of the provider agreement. As DHCF argues, Vizion One
was able to continue its challenge to DHCF's suspension of its Medicaid payments,
and we discern no violation of Vizion One ' s statutory due process rights.
Moreover, we see no record evidence that DHCF used the termination for
convenience clause to circumvent its obligation to prove its fraud allegation against
37
Vizion One. Consequently, we hold as a matter of law that Vizion One did not
present "clear and convincing proof necessary to overcome the presumption that
[DHCF] acted properly and in good faith." Am-Pro Protective Agency, Inc., supra,281 F.3d at 1243.
Accordingly, for the foregoing reasons, we affinn OAH ' s decision in Appeal
No. 14-AA-1024, the Medicaid provider agreement tennination case, but we
vacate OAH's decision dismissing Appeal No. 14-AA-l 023, the suspension of
Vizion One's Medicaid payments case, and remand that case to OAH for further
proceedings, including an evidentiary hearing, on the merits of Vizion One's
appeal.
So ordered.