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[DO NOT PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT
________________________
No. 19-11015
Non-Argument Calendar
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D.C. Docket No. 8:17-cv-02007-CEH-TGW
CROSS TERRACE REHAB INC, LLC,
a Delaware Limited Liability Company,
d.b.a. Cross Terrace Rehabilitation Center,
Plaintiff - Appellant,
versus
SECRETARY, DEPARTMENT OF HEALTH AND
HUMAN SERVICES,
Defendant - Appellee.
________________________
Appeal from the United States District Court
for the Middle District of Florida
________________________
(January 17, 2020)
Before WILLIAM PRYOR, ROSENBAUM, and GRANT, Circuit Judges.
PER CURIAM:
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Plaintiff-Appellant Cross Terrace Rehab Inc, LLC (“Cross Terrace”), is a
provider of skilled nursing services. It requested hearings before an administrative
law judge (“ALJ”) to contest the denial of several claims for benefits for services
provided to Medicare beneficiaries. The ALJ dismissed the requests after Cross
Terrace failed to appear for the scheduled hearings and, in the ALJ’s view, failed to
establish good cause for its absence. The Medicare Appeals Council (“Council”)
issued a decision affirming the ALJ, which represented the final decision of the
Secretary of the Department of Health and Human Services (“Secretary”). Cross
Terrace then pursued judicial review, and the district court affirmed. Cross Terrace
now appeals to this Court. We affirm as well.
I.
We begin by outlining the relevant framework for administrative review of
Medicare claims. The Centers for Medicare and Medicaid Services (“CMS”)
administer the Medicare Program pursuant to the Social Security Act. When CMS
denies a Medicare provider’s claim for reimbursement, the provider may request
redetermination, reconsideration, and then, if those requests are denied, an
evidentiary hearing before an ALJ, who is part of the Office of Medicare Hearings
and Appeals (“OMHA”). See 42 U.S.C. § 1395ff;
42 C.F.R. §§ 405.920, 405.040,
405.960, 405.1000. The provider may request review of the ALJ’s decision from
the Council.
42 C.F.R. § 405.1100(a). The Council’s decision, if unfavorable, is the
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final step in the administrative process.
Id. § 405.1130. Then, the provider generally
may seek judicial review in federal court.
42 U.S.C. § 405(g).
This appeal is about the ALJ hearing step. A request for an ALJ hearing must
be in writing and must include, among other information, the names of the
“beneficiary whose claims is being appealed”; the “appellant, when the appellant is
not the beneficiary”; and “the designated representative, if any.”
42 C.F.R.
§ 405.1014(a)(1)(i)–(iii). When an ALJ hearing request is received, the Secretary
issues a notice of hearing advising of the proposed time and place of the hearing.
Id.
§ 405.1020(c)(1). In response, all parties must reply by (1) acknowledging whether
they plan to attend; (2) “If the party or representative is an entity or organization,
specifying who from the entity or organization plans to attend the hearing, if anyone,
and in what capacity, in addition to the individual who filed the request for hearing”;
and (3) listing the witnesses who will be providing testimony at the hearing. Id.
§ 405.1020(c)(2).
A party has the right to appear before the ALJ to present evidence, including
witness testimony, and to state his or her position. Id. § 405.1036(a)(1), (c). The
party “may also make his or her appearance by means of a representative.” Id.
§ 405.1036(a)(2). The regulations provide that a party may appoint a representative,
who need not be an attorney, “to represent the party in a Medicare claim or claim
appeal.” Id. §§ 405.902; 405.910(a). To do so, the party must meet several listed
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requirements, see id. § 405.910(c); otherwise, the appointment is defective and “the
prospective appointed representative lacks the authority to act on behalf of the
party,” id. § 405.910(d)(2). However, a billing agent of a corporate provider may
appear on its behalf as its agent without being appointed as its representative.
Medicare Claims Processing Manual, Ch. 29, § 270.1.1, available at:
https://www.cms.gov/Regulations-and-Guidance/Guidance/Manuals/downloads/cl
m104c29.pdf (“Billing clerks or billing services employed by the provider or
supplier to prepare and/or bill the initial claim, process the payments, and/or pursue
appeals act as the agent of the provider or supplier and do not need to be appointed
as representative of the provider/supplier.”) (last visited Jan. 7, 2020).
Upon a showing of “good cause,” the ALJ may change the time or place of
the hearing. The ALJ “can find good cause” if information available to the ALJ
supports the party’s contention that “[t]he party or his or her representative is unable
to attend or to travel to the scheduled hearing because of a serious physical or mental
condition, incapacitating injury, or death in the family.”
42 C.F.R. § 405.1020(f)(1).
More generally, in evaluating good cause, the ALJ considers “the party’s reason for
requesting the change, the facts supporting the request, and the impact of the
proposed change on the efficient administration of the hearing process.”
Id.
§ 405.1020(g)(1).
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“An ALJ dismisses a request for a hearing” when, among other listed
circumstances, “[n]either the party that requested the hearing nor the party’s
representative appears at the time and place set for the hearing” and the “ALJ
determines the party did not demonstrate good cause for not appearing.” Id.
§ 405.1052(a)(1). The party may appeal that dismissal to the Council, which is
empowered to “deny review or vacate the dismissal and remand the case to the ALJ
or attorney adjudicator for further proceedings.” Id. § 405.1108(b). The “denial of
a request for review of a dismissal issued by an ALJ,” according to the regulations,
“is binding and not subject to further review unless reopened and vacated by the
Council.” Id. § 405.1116.
II.
As we have noted, Cross Terrace is a provider of skilled nursing services. As
relevant here, it sought payment from the Secretary for skilled nursing services that
it furnished to five Medicare beneficiaries. After these claims were denied both
initially and upon reconsideration, Cross Terrace requested individualized hearings
before an ALJ.
On its written requests for hearings before an ALJ, Cross Terrace listed Joyce
Plourde, Cross Terrace’s appeals manager, as its “representative.” Cross Terrace
also checked a box indicating that the “appellant will accompany the representative
at the hearing.” Elizabeth Vargas signed as the “appellant” on behalf of Cross
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Terrace. On March 22, 2106, OMHA issued a Notice of Hearing for each of the five
beneficiaries, setting a joint telephonic hearing for the morning of April 28, 2016.
Cross Terrace prepared and submitted a Response to Notice of Hearing for
each of the cases. The Responses listed Cross Terrace as the “Recipient” of the
Notices of Hearing and Plourde as the “Recipient’s Representative.” Cross Terrace
checked the box stating that it “will be present at the time and place shown on the
Notice of Hearing.” Cross Terrace also included an “appearance list,” in which it
was instructed to “identify the names of participants and their relationship to [Cross
Terrace] including their job title or position.” Without clearly designating their
relationship or position, Cross Terrace listed four individuals who “plan to
participate in the hearing”: Michael Kornhauser, Esq., Joyce Plourde, Donna Conde,
and Neimar Campos. Cross Terrace did not complete a valid appointment of
representative for Plourde or anyone else.
On the date of the hearing, April 28, no one appeared on behalf of Cross
Terrace. Later that day, Kornhauser called the ALJ to tell her that Plourde did not
appear due to a medical emergency. The following day, Kornhauser wrote a letter
to the ALJ. He advised that he had been retained by Cross Terrace with respect to
the five appeals and that Plourde, “the individual who is handling this matter,” had
experienced a health scare which caused her to miss the hearing. Kornhauser
requested that the ALJ reschedule the hearing.
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The ALJ issued orders dismissing each of the five cases. According to the
orders of dismissal, ALJs dismiss a request for a hearing “if neither the party that
requested the hearing nor the party’s representative appears at the time and place set
for the hearing” without good cause. The ALJ found good cause to excuse Plourde’s
absence but stated that “[t]here was no explanation as to why the other three
scheduled attendees did not appear at the hearing.” The ALJ dismissed the cases
because “good cause has not been established for the other three attendees.”
Cross Terrace appealed to the Council, arguing that the ALJ’s finding of good
cause for the absence of Plourde, Cross Terrace’s “sole representative,” required
overturning the dismissals. In Cross Terrace’s view, the three other participants
were simply “potential witnesses” who were not given advance notice of the hearing
because Plourde “was fully apprised of the underlying issues and prepared to handle
the hearing on her own.” Cross Terrace noted that the regulations permit dismissal
only upon the failure to appear of either “the ‘party’, namely Cross Terrace, or the
‘party’s representative’, namely, Joyce Plourde,” and not “unnecessary witnesses.”
The Council issued a decision denying Cross Terrace’s requests for review.
The Council found that the “ALJ properly dismissed the requests for hearing because
a party or its representative did not appear on the date of the scheduled hearing.”
While the Council noted that Cross Terrace had established good cause for the failure
of its representative to attend the hearing, it concluded that the ALJ could reasonably
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have inferred from the record that Kornhauser “would participate in the scheduled
hearing on behalf of the appellant.” In support of that inference, the Council noted
that Kornhauser was listed as a possible participant with the title “Esq.,” and that
Kornhauser informed the ALJ before the dismissal orders that he had been “retained
to represent the appellant in these appeals.” The Council also noted that Cross
Terrace did not explain why Kornhauser or the other two listed individuals were
unable to appear at the hearing, given Plourde’s medical condition. Concluding that
Cross Terrace failed to present good cause for its failure to appeal, the Council found
that the ALJ properly dismissed Cross Terrace’s requests for hearing.
III.
Cross Terrace then filed this action in federal district court to reverse the
Council’s decision, invoking the court’s jurisdiction under
42 U.S.C. §§ 405(g) and
1395ff. The Secretary agreed that the district court had jurisdiction under § 405(g)
to review whether “[t]he final administrative decision, as rendered by the Council,
comports with applicable legal standards” and was arbitrary and capricious or an
abuse of discretion.
Following briefing by the parties, a magistrate judge recommended that the
Council’s decision be affirmed because Cross Terrace had failed to establish good
cause for the failure to appear by all listed participants. The magistrate judge also
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noted that there was no indication in the record regarding Plourde’s health scare and
that “a rescheduled hearing would not be fair to the other claimants waiting in line.”
Over Cross Terrace’s objections, the district court adopted the magistrate
judge’s recommendation and affirmed the Council’s decision. The court noted that
Plourde was scheduled to appear as a corporate agent, not as an appointed
representative, and that at least one other Cross Terrace employee was listed as a
scheduled participant. In these circumstances, according to the court, the ALJ
reasonably found that, despite Plourde’s absence, Cross Terrace failed to establish
good cause for its failure to appear through an agent. The court rejected Cross
Terrace’s argument that the other three listed participants were “fact witnesses,”
reasoning that Cross Terrace attached these labels after the fact to justify its
argument. Finally, the court found any error by the magistrate judge in referring to
“equity” was harmless and that the magistrate judge’s comments about Plourde’s
medical condition were dicta since the ALJ’s finding of good cause for Plourde’s
absence was uncontested.
Cross Terrace now appeals to this Court. We have jurisdiction under
42
U.S.C. § 405(g). 1 See Bloodsworth v. Heckler,
703 F.2d 1233, 1237 (11th Cir. 1983)
1
We asked the parties to brief whether the Council’s decision affirming the ALJ’s
dismissal of Cross Terrace’s requests for an ALJ hearing was a “final decision . . . made after a
hearing” that is subject to judicial review under § 405(g). Cross Terrace responds that the hearing
requirement is a matter of administrative exhaustion that may be waived by the Secretary. The
Secretary, though it originally conceded jurisdiction both in the district court and in its brief on
appeal, now claims that we lack jurisdiction to review the Secretary’s decision in this case. On
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(“[A]n Appeals Council review determination, on whatever grounds, is perceived as
the appropriately ‘final decision’ from which to take an appeal to the district court
under section 405(g).”).
IV.
The parties agree that our review of the Secretary’s decision is deferential.
Specifically, they agree that we may not disturb the Secretary’s decision unless it is
arbitrary, capricious, or an abuse of discretion. At bottom, our function in
conducting this review is to determine whether there was a reasonable basis for the
decision in light of the relevant legal standards and the facts known to the agency at
the time the decision was made. E.g., Motor Vehicle Mfrs. Ass’n of U.S., Inc. v.
State Farm Mut. Auto Ins. Co.,
463 U.S. 29, 43 (1983); Sierra Club v. Van Antwerp,
526 F.3d 1353, 1360 (11th Cir. 2008).
Cross Terrace contends that the district court erred in affirming the dismissal
of its ALJ hearing requests for several reasons: the failure of fact witnesses to appear
at an ALJ hearing is not a basis for dismissal; a corporate entity may represent itself
at an ALJ hearing, and Plourde was the only person designated as a corporate agent;
the Secretary and the district court improperly expanded who can present evidence
December 19, 2019, we issued an order finding that the hearing requirement was a “non-
jurisdictional exhaustion requirement” that the Secretary waived by originally indicating that
judicial review was available under § 405(g). See Smith v. Berryhill,
139 S. Ct. 1765, 1773 (2019)
(stating that “an ALJ hearing is not an ironclad prerequisite for judicial review”).
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or appear on behalf of a party to an ALJ hearing, or both; and the magistrate judge
improperly relied on equity and erred by reweighing the evidence regarding
Plourde’s absence. Cross Terrace’s arguments, at bottom, amount to a claim that the
only person authorized to represent Cross Terrace at the hearing was Plourde, so it
was entitled to a new hearing upon showing good cause for her absence.
After careful review, we cannot conclude that the agency’s decision to dismiss
Cross Terrace’s request for a hearing was arbitrary, capricious, or an abuse of
discretion.
Under the relevant regulations, an ALJ is permitted to dismiss a request for a
hearing when “[n]either the party that requested the hearing nor the party’s
representative appears at the time and place set for the hearing” and the “ALJ
determines the party did not demonstrate good cause for not appearing.”
42 C.F.R.
§ 405.1052(a)(1). While Cross Terrace asserts that Plourde was the “party’s
representative,” we disagree. As used in the regulations, the term “representative”
refers to a person appointed as a representative under the requirements set forth in
42 C.F.R. § 405.910(c). Cross Terrace did not take the steps to appoint Plourde as
a “representative” under that regulation. Rather, Plourde was scheduled to appear
as a corporate agent of the “party,” Cross Terrace, as permitted by the Medicare
Claims Processing Manual. Accordingly, although Cross Terrace listed Plourde as
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its “representative” when requesting an ALJ hearing, she was not a “representative”
as that specific term is used throughout the regulations.
Thus, the question is whether it was reasonable for the Secretary to conclude
that “the party that requested the hearing,” Cross Terrace, failed to appear at the time
and place set for the hearing without good cause. It’s undisputed that Cross Terrace
established good cause for Plourde’s absence. But that does not necessarily mean
that good cause was established for Cross Terrace’s absence altogether. A review
of Cross Terrace’s pre-hearing submissions shows why.
When it initially requested ALJ hearings, Cross Terrace checked a box
indicating that the “appellant will accompany the representative at the hearing,”
suggesting that someone other than Plourde, who was listed as its representative,
would also be present at the hearing on Cross Terrace’s behalf. That expectation
was further reinforced by Cross Terrace’s response to the notices of hearing. In its
response, Cross Terrace was required to (a) “specif[y] who from the entity . . . plans
to attend the hearing, if anyone, and in what capacity” and (b) “list[] the witnesses
who will be providing testimony at the hearing.”
42 C.F.R. § 405.1020(c)(2). Cross
Terrace listed three individuals, in addition to Plourde, who “plan[ned] to participate
in the hearing.” It did not designate the capacity in which these individuals intended
to participate or submit a separate list of witnesses. Thus, the ALJ was informed
that multiple people were expected to appear for Cross Terrace at the hearing.
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Cross Terrace failed to appear through any of the four scheduled participants,
however, and it supplied good cause only for the absence of Plourde, not the others.
Accordingly, the Secretary could have reasonably concluded that dismissal was
appropriate because Cross Terrace “did not demonstrate good cause for not
appearing.”
42 C.F.R. § 405.1052(a)(1).
While nothing in the record clearly shows whether these other participants
could have appeared on Cross Terrace’s behalf at the hearing, we cannot say it was
unreasonable for the Secretary to expect that, notwithstanding Plourde’s justifiable
absence, Cross Terrace would still appear at the hearing through a corporate agent
or representative. Cross Terrace complains that the listed participants other than
Plourde were simply fact witnesses, but it did not designate pre-hearing the capacity
in which the other three individuals would be appearing, only supplying the
“witness” characterization after the ALJ’s dismissal orders. It was within the
Secretary’s discretion to accept Cross Terrace’s after-the-fact characterizations, and
we are not persuaded that its decision not to do so was unreasonable.
For these reasons, Cross Terrace has not shown that the Secretary’s decision
to deny Cross Terrace’s requests for review of the ALJ’s dismissal of its requests for
a hearing lacked a legal basis or that it was arbitrary, capricious, or an abuse of
discretion. Accordingly, we affirm the district court’s judgment affirming the
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Secretary’s decision finding that the ALJ properly dismissed Cross Terrace’s
requests for an ALJ hearing.
AFFIRMED.
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